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Hughes v. Tom Green County

Court of Appeals of Texas, Third District, Austin

April 20, 2017

Charles J. Hughes, Appellant
v.
Tom Green County, Appellee

         FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 51ST JUDICIAL DISTRICT NO. A130194C, HONORABLE JAY GIBSON, JUDGE PRESIDING

          Before Justices Puryear, Pemberton, and Goodwin

          MEMORANDUM OPINION

          Melissa Goodwin, Justice

         Charles J. Hughes appeals from the trial court's order granting Tom Green County's plea to the jurisdiction. Hughes sued the County for breach of contract and unjust enrichment based on an agreement Hughes and the County entered into in connection with prior litigation and for violation of the Texas Open Meetings Act. See generally Tex. Gov't Code §§ 551.001-.146. Asserting its governmental immunity, the County filed a plea to the jurisdiction as to the claims based on the agreement. The trial court granted the plea, and Hughes filed this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8). For the reasons that follow, we affirm the trial court's order.

         BACKGROUND

         Hughes's uncle, Duwain E. Hughes, Jr., by his will, left certain mineral interests in trust for the lifetime benefit of two individuals and the remainder of the mineral interests to Southern Methodist University (SMU) for the purpose of establishing an endowed chair in the English Department. Duwain Hughes also left his home and rare book and music collections to the County, directed that his home be named as the "Duwain Hughes Branch of the Tom Green County Library, " and bequeathed his residuary estate to the County for the purpose of paying off any indebtedness against the home, for upkeep of the home, and for the purchase of new books. By April 1991, SMU was receiving funds in excess of the amount needed to fund the chair in English at the highest level authorized by the university-$1.5 million. The SMU Board of Trustees filed an application to release the restriction on the use of the funds, seeking authority to use the excess funds for other purposes "supporting and maintaining" the English Department (the SMU Litigation). In May 1991, the County intervened in the SMU Litigation claiming that the chair in English was fully funded, that the purpose of Duwain Hughes's bequest had been accomplished, and that the County was entitled to the excess funds as part of the residuary estate left to the County. In March 1993, Hughes intervened in the SMU Litigation alleging that because the County had sold Duwain Hughes's home, the residuary gift to the County had lapsed, and he and other heirs at law[1] were entitled to the mineral interests remaining after the English chair at SMU was fully funded.[2]

         The parties agreed to mediate the case in May 1994. One or two days prior to mediation, Hughes and the County entered into a Mutual Partial Assignments agreement (MPA), which is the basis of Hughes's breach of contract claim. In the MPA, Hughes and the County agreed, in essence, to split equally the proceeds of any settlement payment from SMU.[3] As further consideration, the County also agreed to name the main library in honor of Duwain Hughes or Frances Hughes Crews "if the commissioners consider[ed] the County's ultimate recovery in the [SMU Litigation] to be substantial enough for such recognition." Hughes and the County further agreed to continue to prosecute the SMU Litigation, and the preamble provided that the agreement was "in no way intended to eliminate or reduce in any fashion the causes of action, claims or rights held by the heirs-at-law or the County."

         Hughes and the County proceeded to mediation with SMU, at which the parties entered into a settlement agreement whereby SMU agreed to pay $1 million to the other parties. Subsequently, the parties executed a "Compromise and Settlement and Release of All Claims, " in which the parties confirmed SMU's agreement to pay the other parties $1 million, agreed to entry of judgment declaring that SMU has a vested fee title in the mineral interests, and agreed to release the restrictions on SMU's and the County's use of the funds left to them. In the "Compromise and Settlement and Release of All Claims, " the County, Hughes, and the other heirs released SMU from all of the claims they had asserted in the SMU Litigation. In July 1994, the County Commissioners ratified the parties' agreements in the SMU Litigation. In September 1994, the trial court in the SMU Litigation entered a final judgment in accordance with the terms of the parties' agreement. The County subsequently deposited the settlement proceeds in the Hughes Library Fund. It appears from the record that the County began planning for a new main library, sold the Duwain Hughes home at some point, and ultimately used money from the Hughes Library Fund to purchase the building that housed the main library at the time and remodel it to serve as the new main library.[4] In 2011, when the remodeling of the library building was completed, the County Commissioners determined that the "ultimate recovery in [the SMU Litigation was] not substantial enough to name Tom Green County's main library in honor of Duwain E. Hughes, Jr." and named the library after other library supporters.

         In 2013, Hughes filed suit against the County asserting claims for breach of the MPA, unjust enrichment, and violations of the Open Meetings Act.[5] See generally Tex. Gov't Code §§ 551.001-.146. Hughes alleged that the County had breached the MPA by failing and refusing to name the library after Duwain Hughes or Frances Hughes Crews and had unjustly accepted and retained the benefits of the MPA.[6] The County filed a plea to the jurisdiction seeking dismissal of all claims pertaining to the MPA on the basis of governmental immunity. Following a hearing, the trial court granted the motion, and Hughes filed this interlocutory appeal.

         APPLICABLE LAW AND STANDARD OF REVIEW

         Governmental immunity protects political subdivisions, including counties, from suit and from liability. See Tex. Civ. Prac. & Rem. Code § 101.001(3)(B) (defining "governmental unit" to include counties); Ryder Integrated Logistics, Inc. v. Fayette Cty., 453 S.W.3d 922, 926 (Tex. 2015) (per curiam); Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Texas Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323-24 (Tex. 2006). Immunity from suit protects governmental entities from suit unless the Legislature grants consent. Ryder, 453 S.W.3d at 926; Ben Bolt-Palito Blanco, 212 S.W.3d at 324. Immunity from liability shields governmental units from judgments. Ben Bolt-Palito Blanco, 212 S.W.3d at 324. By entering into a contract, the governmental entity waives its immunity from liability but not its immunity from suit. Id. A governmental entity that asserts claims for affirmative relief waives its immunity from suit as to related, defensive claims, to the extent necessary to offset the governmental entity's claims. Reata Constr. Corp. v. City of Dall., 197 S.W.3d 371, 373, 377 (Tex. 2006). For purposes of waiver of governmental immunity from suit, there is no reason to differentiate between a governmental entity as plaintiff and a governmental entity as plaintiff-intervenor. Id.

         Governmental immunity defeats a court's subject matter jurisdiction in a pending case and is therefore properly asserted in a plea to the jurisdiction. Engelman Irrigation Dist. v. Shields Bros., S.W.3d, No. 15-0188, 2017 Tex. LEXIS 294, at *9 (Tex. Mar. 17, 2017) (holding that sovereign immunity does not so implicate subject matter jurisdiction that it allows collateral attack on final judgment); Ryder, 453 S.W.3d at 927; Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). When a government entity challenges jurisdiction on the basis of immunity, "the plaintiff must affirmatively demonstrate the court's jurisdiction by alleging a valid waiver of immunity." Ryder, 453 S.W.3d at 927 (quoting Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003)). Whether a trial court has subject matter jurisdiction is a question of law that we review de novo. Houston Belt & Terminal Ry. Co. v. City of Hous., 487 S.W.3d 154, 160 (Tex. 2016).

         DISCUSSION

         Hughes asserts that the County waived its immunity from suit for breach of the MPA in two ways. First, Hughes contends that the County waived immunity by voluntarily intervening in the SMU litigation, settling the suit-from which it was not immune-and then breaching the terms of the settlement agreement. Second, Hughes argues that the ...


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