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FALL 2010 NEWSLETTER LOCAL GOVERNMENT CASE LAW UPDATE
by Joshua Skinner

Texas Supreme Court

Colquitt v. Brazoria County, 2010 Tex. LEXIS 691 (Tex. 2010)

The Texas Tort Claims Act requires that a governmental entity obtain notice of a claim against it within six months of the incident giving rise to the claim. Such notice generally must be a formal, written notice that must reasonably describe the damage or injury claimed, the time and place of the incident and the incident. Actual notice, however, is also sufficient. In Colquitt, the Supreme Court held that service of a lawsuit within the six month period constitutes proper notice under the Act.

Tex. Dep’t of Crim. Justice v. McBride, 317 S.W.3d 731 (Tex. 2010)

A governmental entity does not waiver governmental immunity by conduct when it requests attorney’s fees and costs as part of its defense of a lawsuit.

McBride brought suit against the Texas Department of Criminal Justice. In the TDCJ’s answer, it denied the allegations and requested attorney’s fees and costs incurred in defending the case. Other than the fees and costs, the TDCJ asserted no claims for relief. McBride asserted that the request for fees waived governmental immunity and the court of appeals agreed. The Supreme Court reversed, holding that the TDCJ’s request for attorney’s fees and costs associated with defending the case did not constitute a waiver of governmental immunity by conduct.

Texas Courts of Appeals

City of Balch Springs v. Austin, 315 S.W.3d 219 (Tex. App. – Dallas 2010, no pet.)

An off-duty police officer driving a City police vehicle in furtherance of his employment as a security officer for a private employer is not within the course and scope of his employment for purposes of the waiver of immunity in the Texas Tort Claims Act, despite City policy that states that officers are “on-duty” twenty-four hours a day while within the City.

Purifoy, a police officer with the City of Balch Springs, was off-duty from his position with the City and had clocked in for his position as a security officer for Walmart. City policy permitted officers to use City police vehicles during private security work in order to assist in deterring crime. After clocking in at Walmart, Purifoy had driven to the City to get an available police vehicle and was driving back to Walmart when he was involved in a vehicular accident with Jimmy Wayne Hall, who died. Austin brought suit on behalf of Hall’s estate against the City. The City filed a plea to the jurisdiction, which the trial court denied. The City appealed. Austin argued that Purifoy was in the course and scope of his employment because the City had a policy that all officers were “on-duty” twenty-four hours a day while within the City.

The court of appeals granted governmental immunity, holding that it is well-established that merely because an employee is on-duty or on-call twenty-four hours a day does not mean that the person is always acting within the scope of his employment. Since Purifoy was acting pursuant to his private employment at the time of the accident, the City’s governmental immunity was not waived. The fact that Purifoy was driving a City vehicle does not change the analysis because the City had not required Purifoy to use the vehicle and he had chosen to use it in furtherance of his private employment.

City of Richardson v. Gordon, 316 S.W.3d 758 (Tex. App. – Dallas 2010, no pet.)

A plaintiff is not entitled to recovery of attorney’s fees against a governmental entity in a case seeking declaratory and injunctive relief where the entity amended its charter and mooted the alleged violation of the charter.

The City of Richardson had a charter provision requiring that all City Council meetings be held in open session. The Texas Open Meetings Act does not permit a City Council to meet in closed session if there is a charter provision requiring open meetings. Gordon brought suit seeking declaratory relief, injunctive relief and attorney’s fees. The City amended its charter so as to permit closed meetings in accordance with state law. The trial court denied the City’s plea to the jurisdiction and the City appealed. The court of appeals reversed the decision of the trial court and rendered judgment for the City, holding that the charter amendment mooted the controversy and, since the plaintiff could not succeed on his claims, he was not entitled to attorney’s fees.

Dallas Area Rapid Transit v. Oncor Elec. Delivery Co., 2010 Tex. App. LEXIS 5994
(Tex. App. – Dallas 2010, no pet.)

Governmental entities are entitled to governmental immunity from condemnation proceedings, unless immunity is otherwise explicitly waived.

Derouen v. Falls County Sheriff Dep’t, 2010 Tex. App. LEXIS 7271 (Tex. App. – Waco 2010, no pet.)

A plaintiff cannot circumvent the intentional tort exception to the waiver of immunity in the Texas Tort Claims Act by couching the claim in terms of negligence.

DeRouen alleged that police officers “negligently” applied handcuffs to her, causing injury. However, DeRouen also alleged that the officers had applied the handcuffs “negligently” in order to “teach her a lesson.” While there is a waiver of immunity under the Texas Tort Claims Act for the negligent use of tangible personal property, there is no waiver of immunity for intentional torts. The court held that DeRouen’s deposition testimony established an intentional tort and held that there was no waiver of immunity.

First-Citizens Bank & Trust Co. v. Greater Austin Area Telecommunications Network, 318 S.W.3d 560
(Tex. App. – Austin 2010, no pet.)

The waiver of governmental immunity for certain contract claims permits an assignee of rights under a contract to bring suit against the governmental entity in the place of the signatory to the agreement.

First-Citizens Bank brought suit against the Greater Austin Area Telecommunications Network and Austin Independent School District as assignee under a contract between the governmental entities and Complete Communication Services. The trial court dismissed the case, holding that the limited waiver of immunity for breach of contract claims does not apply to claims brought by an assignee. The court of appeals reversed, holding that governmental immunity was waived as to the claim, not as to a specific party bringing the claim.

Fulsom v. Mexia Indep. Sch. Dist., 2010 Tex. App. LEXIS 7757 (Tex. App. – Waco 2010, no pet. h.)

Governmental immunity is not waived for the tort of abuse of process because it is an intentional tort.

After filing a lawsuit against various entities and individuals, Fulsom was issued a criminal trespass warning by Mexia Independent School District, which prohibited Fulsom from entering on Mexia ISD property. Fulsom amended his petition and sued Mexia ISD for abuse of process. Mexia ISD filed a plea to the jurisdiction, asserting governmental immunity. The plea was granted by the trial court and upheld by the court of appeals.

Galveston Indep. Sch. Dist. v. Clear Lake Rehabilitation Hospital, 2010 Tex. App. LEXIS 7708
(Tex. App. – Houston [14th Dist.] 2010, no pet. h.)

The provision of medical coverage to employees by an independent school district is a governmental function for which the school district is entitled to governmental immunity, absent a statutory waiver of governmental immunity. The waiver of governmental immunity for breach of contract claims found in Local Government Code § 271.152 applies to claims by third-party beneficiaries. The burden of proving that a party is not a third-party beneficiary rests with the governmental entity in a plea to the jurisdiction.

Urroz, an employee with Galveston Independent School District, was placed on sick-leave and received medical treatment at Clear Lake Rehabilitation Hospital. Before Urroz began treatment at Clear Lake, however, his medical coverage was cancelled for failure to pay premiums. Despite cancellation of coverage, the third-party administrator for the medical coverage told Clear Lake that Urroz was covered. Galveston ISD denied Clear Lake’s demand for payment and Clear Lake sued Urroz, Galveston ISD and the third-party administrator. Galveston ISD filed a plea to the jurisdiction, which was denied by the trial court. Galveston ISD took an interlocutory appeal.

Galveston ISD argued that the provision of medical coverage to employees is a governmental, not proprietary, function, for which Galveston ISD is entitled to governmental immunity. Galveston ISD also argued that the waiver of governmental immunity for contracts found in Local Government Code § 271.152 does not apply because Clear Lake had not provided evidence that it was a third-party beneficiary under a written contract between Galveston ISD and Urroz. The court of appeals held that the provision of medical coverage by a public school district is a governmental function, but that the burden of proof in regard to the terms of the contract lay with Galveston ISD, not Clear Lake. The parties assumed that the waiver of immunity permits claims by third-party beneficiaries and the court of appeals indicated agreement with their assumption.

Hoppenstein Prop. v. McLennan County Appraisal Dist., 2010 Tex. App. LEXIS 6771
(Tex. App. – Waco 2010, no pet.)

A commercial lease to a governmental entity does not fall within the limited waiver of governmental immunity for contracts, despite provisions of the lease requiring the landowner to remodel the facility being leased.

Hudson v. City of Houston, 2010 Tex. App. LEXIS 6607 (Tex. App. – Houston [1st Dist.] 2010, no pet.)

A municipality’s act of providing a defense and indemnity to its employees for liability claims through self-insurance is a proprietary function, for which the municipality is not entitled to governmental immunity.

Hudson brought suit against the City of Houston on behalf of Green, an assignee, alleging that the City failed to defend and indemnify Green in a tort lawsuit and asserting a Stowers claim. The City argued that it was entitled to governmental immunity and that Green had not properly sent notice of the suit so as to invoke the obligation to provide coverage. The court of appeals concluded that the provision of defense and indemnity to its employees for liability claims is a proprietary function, not a governmental function, and, hence, the City was not entitled to governmental immunity. However, the court of appeals affirmed dismissal of the City because Green had not properly sent notice to the City of the suit.

Note: Hudson would appear to conflict with Potter County v. Tuckness, 308 S.W.3d 425 (Tex. App. – Amarillo 2010, no pet.), which held that there was no waiver of governmental immunity for a breach of contract claim based on the entity’s denial of coverage for medical benefits.

McFadden v. Sanchez, 2010 Tex. App. LEXIS 6806 (Tex. App. – Austin 2010, no pet.)

A Rule 11 agreement among the parties restricting the defendants dispositive motions to the issues that had already been asserted barred the defendants from raising the derivative immunity defense in Section 101.106(a) of the Texas Tort Claims Act because it had not been asserted before the agreement. In addition, on-duty police officers engaged in maintenance of the peace are acting in the course and scope of their employment, despite engaging in arguably illegal conduct.

McFadden brought suit against various police officers alleging various tort claims, including malicious prosecution. The defendants filed a motion for summary judgment and plea to the jurisdiction. The parties then entered into a Rule 11 agreement limiting the defendants to the issues raised in the dispositive pleadings already on file. The defendants subsequently amended their dispositive motions and attempted to add new arguments, including the defense of Section 101.106(a) (i.e., that the plaintiff had previously brought suit against their employer as to the same subject matter).

The court of appeals held that the Rule 11 agreement barred the defendants’ reliance on Section 101.106(a). As to defendants’ argument that Section 101.106(f) barred McFadden’s claim, the court of appeals held that it was properly presented in the original dispositive pleadings, but that the defendants were not entitled to dismissal. While the court rejected the plaintiff’s argument that the officers were not acting in the course and scope of their employment, the court also held that the claim could not have been brought against their employer because it is an intentional tort.

Note: There is currently a split among the courts of appeals on the question of whether Section 101.106(f) requires that the suit could have been brought against the employer (i.e., governmental immunity would be waived) or merely that the suit is brought as a tort claim. As noted in McFadden, Illoh v. Carroll, 2010 Tex. App. LEXIS 6290 (Tex. App. – Houston [14th Dist.] 2010, pet. filed), and Menefee v. Medlen, 2010 Tex. App. LEXIS 4892 (Tex. App. – Fort Worth 2010, no pet.), a majority of courts have held that Section 101.106(f) requires that the suit could have been brought against the employer.

M.T.D. Envir., LLP v. City of Midland, 315 S.W.3d 606 (Tex. App. – Eastland 2010, pet. filed)

A provision of a contract between a contractor and a municipality that requires the contractor to release of all claims that might arise under the contract is void as to a claim for payment of an invoice for services rendered pursuant to the Payment for Goods and Services Act (Prompt Payment Act).

M.T.D. Environmental, L.L.P. entered into a contract with the City of Midland to provide services to grind and haul yard waste materials. A dispute arose between M.T.D. and the City regarding the amount of work done and M.T.D. brought suit. The City filed a motion for summary judgment, asserting that, pursuant to the terms of the contract, M.T.D. had waived all claims for breach of contract. M.T.D. argued that the Payment for Goods and Services Act (Prompt Payment Act), Texas Government Code §§ 2251.001 et seq., renders the release void as to claims for payment of an invoice for work performed. Section 2251.004 specifically states that a person may not waive any right or remedy provided by the Prompt Payment Act and that any purported waiver is void. The trial court granted summary judgment, but the court of appeals, accepting M.T.D.’s argument, reversed and remanded for further proceedings.

Multi-County Water Supply Corp. v. City of Hamilton, 2010 Tex. App. LEXIS 7144
(Tex. App. – Houston 2010, no pet.)

There is no waiver of governmental immunity as to an alleged breach of a contract for a municipality to provide treated water at a contractually determined rate.

Multi-County Water Supply Corporation entered into a long-term contract with the City of Hamilton to purchase treated water from the City. After the City closed its water treatment facility and began contracting to purchase water from the Upper Leon River Municipal Water District, the City raised its rates. Multi-County brought suit to enjoin the City’s higher charges for treated water. The City filed a plea to the jurisdiction, which the trial court sustained. Multi-County appealed. The court of appeals affirmed, holding that there was no waiver of governmental immunity for Multi-County’s breach of contract claim.

Old S. Amusements, Inc. v. City of San Antonio, 2010 Tex. App. LEXIS 5450
(Tex. App. – San Antonio 2010, no pet.)

A municipality is entitled to governmental immunity from a conversion claim where it seized and sold gaming machines pursuant to the governmental function of police protection.

Quarterman v. Hampton, 2010 Tex. App. LEXIS 7378 (Tex. App. – Houston [1st Dist.] 2010, no pet.)

Section 101.106(e) of the Texas Tort Claims Act, which permits a governmental entity to move for dismissal of its employees if both the entity and employees are sued in a lawsuit under the Act, does not apply when a plaintiff brings the suit against the employees in their individual and official capacities, but does not name the entity as a defendant.

An inmate sued employees of the Texas Department of Criminal Justice (TDCJ) in their individual and official capacities alleging tort causes of action. The TDCJ, on behalf of the employees in their official capacities, filed a motion to dismiss the employees in their individual capacities pursuant to Section 101.106(e) of the Texas Tort Claims Act. The trial court denied the motion and the court of appeals affirmed. While the court of appeals acknowledged that there is precedent indicating that a suit against a public official in his official capacity is the same as a suit against the entity, the court concluded that official capacity suits were not equivalent to suits against the entity for purposes of Section 101.106. Since Section 101.106(e) states that an entity may move to dismiss its employees if both are served, a suit against the employees in their individual and official capacities, but not against the entity, does not implicate Section 101.106(e).

Smallwood v. State of Texas, 2010 Tex. App. LEXIS 7260 (Tex. App. – Waco 2010, no pet. h.)

There was no waiver of governmental immunity as to claim brought by inmate when he severed his thumb and some fingers on a metal cutting machine at the prison, but no government employee was involved and the machine did not lack an integral safety component.

Smallwood and another inmate were operating a metal cutting machine when the activated blade severed his thumb and some fingers. Smallwood brought suit against the Texas Department of Criminal Justice (TDCJ) alleging that his injury arose from a condition or use of tangible personal property because (1) the machine was defective, as safety devices had been removed; and (2) TDCJ employees misused the machine as the machine was improperly installed and inmates were improperly trained and supervised. TDCJ filed a plea to the jurisdiction, which was granted by the trial court. Smallwood appealed.

The court of appeals affirmed. Noting that Smallwood and the other inmate were the only individuals using the machine at the time of the accident, the court held that in governmental immunity was only waived if a public official provided property lacking an integral safety component that led to the plaintiff’s injuries. The evidence presented demonstrated that the machine included safety features and the court held that TDCJ’s failure to provide better safety devices and warnings does not establish that the machine was defective for lack of an integral safety component. Hence, there was no waiver of governmental immunity. In addition, there was no waiver of immunity as to Smallwood’s negligent supervision or training allegation.

Smith v. Galveston County, 2010 Tex. App. LEXIS 8168 (Tex. App. – Houston [1st Dist.] 2010, no pet. h.)

The Texas Tort Claims Act does not waive governmental immunity for discretionary functions. Installation of a safety feature that was not part of the original design of a building is not a maintenance (ministerial) activity; it is a discretionary activity and governmental immunity is not waived.

Tex. Parks & Wildlife Dep’t v. Garland, 313 S.W.3d 920 (Tex. App. – Tyler 2010, no pet.)

The Texas Tort Claims Act does not apply to a claim based on an act or a failure to act of an individual who is an officer or employee of a state agency or of a political subdivision other than a county if the act or failure to act is in connection with a community service program or work program. Texas Code of Criminal Procedure article 42.20(b), which provides this exemption from the Tort Claims Act, is not unconstitutional.

Garland fell off a truck operated by a state employee while Garland was performing community service at Tyler State Park. Garland asserted that article 42.20(b) did not apply because driving was a ministerial function and, alternatively, that article 42.20(b) was unconstitutional. The court of appeals rejected both arguments, holding that there are no limitations on the types of actions covered by article 42.20(b) so long as they were in connection with a community service program or work program and that article 42.20(b) is not unconstitutional because it is rationally related to a legitimate state interest.

Univ. of Tex. Health Science Ctr. at San Antonio v. Webber-Eells, 2010 Tex. App. LEXIS 4957
(Tex. App. – San Antonio 2010, no pet.)

Section 101.106(f) of the Texas Tort Claims Act gives a plaintiff who has sued a public official thirty days from the date the official files a motion to dismiss to decide whether to continue with the suit against the official or substitute the official with the public entity employer. Failure to replead in compliance with Section 101.106(f) is not excused by substantial compliance nor by the trial court’s failure to rule on whether Section 101.106(f) even applies. A plaintiff must make a decision as to whether to replead within the thirty days and cannot wait for the benefit of a judicial decision on the question of whether the claim could have been brought against the governmental entity.

Webber-Eells brought suit in federal court against Dr. Sirinek alleging negligent medical treatment. Sirinek filed a motion to dismiss pursuant to Section 101.106(f) of the Texas Tort Claims Act. Section 101.106(f) states that if the public official was acting within the course and scope of his or her employment and the lawsuit could have been brought against the governmental entity, then the plaintiff has thirty days from the date of a motion to dismiss to dismiss the official and add the entity as the defendant or the claim against the official will be dismissed. Webber-Eells responded to the motion to dismiss by asserting that the lawsuit could not have been brought against the entity – University of Texas Health Science Center. However, since the district court did not rule on the motion within the period of thirty days, Webber-Eells filed an amended complaint conditionally asserting a claim against UTHSC. The district court dismissed the claim against Sirinek pursuant to Section 101.106(f) and the claim against UTHSC pursuant to the Eleventh Amendment, because it had to be brought in state court. Webber-Eells re-filed in state court against UTHSC.

UTHSC filed a motion to dismiss, asserting that Webber-Eells failed to comply with Section 101.106(f) in federal court because she did not dismiss her claims against Sirinek when she added UTHSC as a defendant. Webber-Eells defended her strategy by claiming that she substantially complied with Section 101.106(f). The court of appeals rejected Webber-Eells argument, holding that Section 101.106(f) requires strict compliance with its terms and that it was irrelevant that the district court had not ruled on Sirinek’s motion to dismiss.