Hays Street Bridge Restoration Group v. City of San Antonio
570 S.W.3d 697
| Tex. | 2019Background
- The Hays Street Bridge in San Antonio was restored under a City–state grant; the City and the Hays Street Bridge Restoration Group (Restoration Group) executed a 2002 MOU allocating responsibilities for raising the City’s 20% matching funds.
- The Restoration Group raised cash and in‑kind donations (including the Cherry Street parcel) and transferred them to the City to be applied “directly to the approved City . . . budget . . . for the Hays Street Bridge project.”
- The City completed restoration but later adopted an ordinance to sell the Cherry Street property to a developer as part of an incentive package; the Restoration Group sued, claiming the sale breached the MOU.
- At trial the jury found the MOU covered in‑kind donations and that the Cherry Street property was subject to the MOU; the trial court awarded only specific performance, ordering the City to apply funds (including the property) to the project budget.
- The City appealed; the court of appeals held the City was immune from suit because the functions were governmental and, the court said, the Local Government Contract Claims Act (the Act) did not waive immunity for claims seeking specific performance.
- The Texas Supreme Court granted review to decide (1) whether the City’s acts under the MOU were governmental or proprietary and (2) whether the Act waived immunity for a suit seeking specific performance rather than money damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the City acted in a governmental or proprietary capacity under the MOU | MOU supported local project and donations were discretionary; functions were proprietary | MOU implemented a state-funded bridge restoration and community revitalization so functions were governmental | City acted in a governmental capacity (immunity applies) |
| Whether governmental immunity bars suit for specific performance | The Act waives immunity to adjudicate contract claims and does not limit equitable remedies | Section 271.153 limits recoverable money damages and—court of appeals argued—does not waive immunity for specific performance | The Act waived immunity for adjudication of the contract claim and did not bar suits seeking specific performance; immunity thus waived for this equitable remedy |
| Whether §271.153 (limitations on awards) precludes non‑monetary relief | §271.153 limits only monetary awards; equitable relief is distinct from damages | §271.153’s silence on specific performance means it does not authorize such relief (per court of appeals) | §271.153 limits damages, not equitable remedies; it does not implicitly prohibit specific performance |
| Mootness: whether the City satisfied the judgment and mooted the appeal | City claimed post‑judgment compliance (sale and allocation) mooted dispute | Restoration Group disputed satisfaction and allocation of proceeds; factual disputes remain | Not moot: factual and legal disputes about satisfaction and allocation remain; motion denied |
Key Cases Cited
- Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (framework for proprietary vs governmental analysis in contract claims)
- Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142 (Tex. 2018) (clarifies focus on nature of contract and four‑factor test)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (sovereign immunity principles)
- Zachry Constr. Corp. v. Port of Houston Auth. of Harris Cty., 449 S.W.3d 98 (Tex. 2014) (Act’s "subject to" phrase incorporates other statute provisions to limit waiver)
- IT‑Davy, Inc. v. Texas Natural Res. Conservation Comm’n, 74 S.W.3d 849 (Tex. 2002) (immunity protects state from money judgments and other relief)
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (availability of legal remedy can foreclose equitable relief)