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City of Leon Valley Economic Development Corp. v. Little

Court of Appeals of Texas, Fourth District, San Antonio

March 22, 2017

CITY OF LEON VALLEY ECONOMIC DEVELOPMENT CORP., Appellant
v.
Larry LITTLE, Appellee

         From the 57th Judicial District Court, Bexar County, Texas Trial Court No. 2011-CI-17823 Honorable Antonia Arteaga, Judge Presiding

          Sitting: Patricia O. Alvarez, Justice, Luz Elena D. Chapa, Justice Irene Rios, Justice

          MEMORANDUM OPINION

          Luz Elena D. Chapa, Justice

         Leon Valley Economic Development Corporation (LVEDC) appeals the judgment in favor of Larry Little, rendered after a jury trial on Little's suit for breach of contract. LVEDC argues it is immune from suit and from liability. It also argues the evidence is legally and factually insufficient to support the jury's findings there was a contract, breach, and damages. Having previously held LVEDC is not immune from suit in this case, we now hold that it is immune from liability, and we therefore reverse the judgment and render judgment that Little take nothing.

         Background

         LVEDC is a Type B economic development corporation created by the City of Leon Valley in 2009 pursuant to the Development Corporation Act of 1979 (the Act). See Tex. Loc. Gov't Code Ann. §§ 501.001 - 507.202 (West 2015 & Supp. 2016). LVEDC was created to promote economic growth and development in the City of Leon Valley through the development of projects authorized by the Act and funded by 4B sales and use tax proceeds and bonds.

         Following recommendations made in a study prepared by the American Institute of Architects, the City of Leon Valley and LVEDC began considering the development of a "Town Center" to attract and retain business in the city. LVEDC started discussions with Larry Little, a local commercial real estate developer who owned some undeveloped property in a suitable area. A plan emerged to develop a Town Center project on approximately eight acres of land. In 2010, LVEDC and the Leon Valley city council, by two resolutions, approved a project plan for Little to develop the property, which would consist of three buildings with a total of 100, 000 square feet of primarily tax-generating retail space. LVEDC would acquire three pieces of property, at a cost of $850, 000. It would contribute the properties to the project and retain a $500, 000 interest in one of the buildings. LVEDC's commitment to the project would be financed by a Texas Leverage Fund loan from the Governor's Office of Economic Development & Tourism, and the loan would be repaid with 4B sales and use tax receipts. Little would own and finance the rest of the project and be the developer.

         LVEDC and Little engaged in negotiations over the terms of a Development Agreement, and LVEDC applied for the Texas Leverage Fund loan. In June 2011, the Governor's Office of Economic Development & Tourism issued a commitment to fund the $850, 000 loan, provided it was approved by LVEDC and the City of Leon Valley. However, the Development Agreement was never finalized and signed, the City refused to approve the loan, and the Town Center project fell through.

         Little filed this suit for breach of contract against LVEDC. In an earlier interlocutory appeal, this court held the trial court had subject matter jurisdiction over the case because LVEDC was not immune from the breach of contract suit. City of Leon Valley Econ. Dev. Corp. v. Little, 422 S.W.3d 37, 45 (Tex. App.-San Antonio 2013, no pet.) (Little I). On remand, the case was tried to a jury, and the trial court denied LVEDC's motion for a directed verdict that was based on immunity from liability. Little contends that he and LVEDC reached enforceable oral agreements that LVEDC would acquire and give him the three parcels of property (four acres), that he would develop and own the entire project, and that LVEDC's obligations under the agreements were not contingent on either LVEDC obtaining financing or the signing of a Development Agreement. He contends LVEDC breached its agreements by failing to give him the land needed to develop the project. The jury found that Little and LVEDC "intend[ed] to be bound by agreements relating to the Larry Little-Leon Valley Town Center project without the execution of a written agreement" and that LVEDC "fail[ed] to comply with the agreement." The trial court rendered judgment on the jury's verdict, which awarded Little the value of the land LVEDC "agreed to give" Little for the project, over $100, 000 for expenditures Little made in performance of the agreements, and over $1, 400, 000 in lost past and future profits. LVEDC timely appealed the judgment, arguing it is immune from suit and liability and that the evidence is legally and factually insufficient to support the jury's findings.

         Jurisdiction - Immunity From Suit

         In its first issue, LVEDC argues the trial court lacked subject matter jurisdiction over this case because LVEDC is immune from the suit. We addressed this issue in a previous interlocutory appeal from the trial court's denial of LVEDC's plea to the jurisdiction. Little I, 442 S.W.3d at 45. In Little I, we reasoned that because an economic development corporation is not a political subdivision of the state, it is not inherently entitled to governmental immunity from suit. Id. at 42; see Tex. Loc. Gov't Code Ann. § 501.055(b). We then concluded that section 505.106 of the Act does not grant a Type B economic development corporation immunity from a breach of contract suit. Little I, 442 S.W.3d at 43-45; see Tex. Loc. Gov't Code Ann. § 505.106(b).[1]

         We are ordinarily bound by a decision reached in a previous appeal in the same case, but have discretion to reconsider an issue if the court's original decision was erroneous. See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex. 2003). We decline to reconsider the issue and for the reasons stated in Little I, hold LVEDC is not immune from this breach of contract suit.

         Immunity From Liability

         LVEDC also argues we should reverse the judgment because it was immune from any liability arising from its acts in connection with the Town Center project. After Little rested at trial, LVEDC moved for an instructed verdict, arguing that, pursuant to section 505.106(a) of the Texas Local Government Code, it is immune from liability for all ...


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