Court of Appeals of Texas, Third District, Austin
THE DISTRICT COURT OF SAN SABA COUNTY, 424TH JUDICIAL
DISTRICT NO. 9589, HONORABLE EVAN C. STUBBS, JUDGE PRESIDING
Chief Justice Rose, Justices Goodwin and Field
K. FIELD, JUSTICE
an interlocutory appeal from the trial court's order
granting the City of San Saba's plea to the jurisdiction
in part and denying the plea in part. In a single appellate
issue, the City contends that the trial court erred in
denying its plea to the jurisdiction as to the
Higginbothams' claim for the breach of a settlement
agreement. Because we conclude that the City did not waive
its governmental immunity by signing the settlement
agreement, we will reverse the trial court's order in
part and render judgment dismissing the Higginbothams'
February 2014, sewage backed up into the Higginbothams'
home. The Higginbothams sued both the City and San Saba
Pecan, LP, alleging that this incident was caused by San Saba
Pecan dumping pecan shells and residue into the public sewer
system. The Higginbothams further alleged that the City was
aware of San Saba Pecan's dumping activities and allowed
them to continue. The Higginbothams brought tort claims
against each defendant.
April 2014, the Higginbothams, the City, and San Saba Pecan
entered into a written agreement entitled "Agreement in
Anticipation of Resolution of Issues and Settlement"
(the Agreement). In the Agreement, the City and San Saba
Pecan agreed to equally split the cost of repairing the
Higginbothams' property. In return, the Higginbothams
agreed to release the City and San Saba Pecan from all
liability after the Higginbothams were satisfied with the
City later filed a plea to the jurisdiction requesting that
the trial court dismiss the Higginbothams' suit. In their
Second Amended Petition, the Higginbothams added a
breach-of-contract claim against each defendant. The
Higginbothams alleged that the City committed anticipatory
breach of the Agreement by filing the plea to the
jurisdiction. The Higginbothams asked for specific
performance and restitution. The City filed an amended plea
to the jurisdiction requesting dismissal of all the
trial court granted the City's plea to the jurisdiction
as to the Higginbothams' tort claims but denied the plea
as to their breach-of-contract claim. In its order, the trial
court reasoned that the City's decision to enter into the
Agreement was a proprietary function because it was an action
conducted in its private capacity for the benefit only of
those within its corporate limits. This interlocutory appeal
followed. See Tex. Civ. Prac. & Rem. Code §
sole appellate issue, the City contends that the trial court
erred in denying its plea to the jurisdiction as to the
Higginbothams' breach-of-contract claim. We review a
trial court's ruling on a plea to the jurisdiction de
novo. See McLane Co. v. Texas Alcoholic Beverage
Comm'n, 514 S.W.3d 871, 874 (Tex. App.-Austin 2017,
pet. denied) (citing Houston Belt & Terminal Ry. Co.
v. City of Houston, 487 S.W.3d 154, 160 (Tex. 2016)).
"We must grant the plea to the jurisdiction if the
[plaintiffs'] pleadings affirmatively negate the
existence of jurisdiction." Heckman v. Williamson
Cty., 369 S.W.3d 137, 150 (Tex. 2012).
the City is a subdivision of the state, it possesses
governmental immunity from suit, which bars the
Higginbothams' suit unless the City's immunity has
been waived clearly and unambiguously by the legislature.
See Wasson Interests, Ltd. v. City of Jacksonville,
489 S.W.3d 427, 429-30 (Tex. 2016) ("Political
subdivisions of the state-such as counties, municipalities,
and school districts-share in the state's inherent
immunity."); National Media Corp. v. City of
Austin, No. 03-16-00839-CV, 2018 WL 1440454, at *3 (Tex.
App.-Austin Mar. 23, 2018, no pet. h.) (mem. op.)
("Without this legislative waiver, courts have no
jurisdiction to adjudicate any claim against the
municipality."). However, immunity only protects cities
when they are performing governmental functions-"[a]cts
done as a branch of the state"-not when they are
performing proprietary functions-acts "not done as a
branch of the state, but instead for the private advantage
and benefit of the locality and its inhabitants."
See Wasson, 489 S.W.3d at 433 (cleaned up).
the parties disagree about which of the City's actions we
should consider when applying our proprietary-governmental
analysis. The City argues that the relevant action is
"the operation of a sewer system, " while the
Higginbothams argue that "[t]he City of San Saba was
performing a proprietary function, and not a governmental
function, when it entered the [A]greement . . . ." The
Higginbothams do not argue on appeal that the operation of a
sewer system is a proprietary function. Therefore, our
analysis turns on whether the relevant action by the City is
its entering into the Agreement and, if so, whether entering
into the Agreement was a proprietary function.
begin with the Texas Supreme Court's plurality opinion in
Texas A&M University-Kingsville v. Lawson, 87
S.W.3d 518 (Tex. 2002). In Lawson, the university
terminated the plaintiff's employment, and the plaintiff
sued the university. See id. at 518-19 (plurality
op.). The parties reached a settlement agreement.
Id. at 519. Later, the plaintiff brought an action
against the university for allegedly breaching the settlement
agreement. Id. The question before the Texas Supreme
Court was, "If a government entity agrees to settle a
lawsuit from which it is not immune, can it claim immunity
from suit for breach of the settlement agreement?"
Id. at 518. The plurality concluded that "when
a governmental ...