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City of San Saba v. Higginbotham

Court of Appeals of Texas, Third District, Austin

May 1, 2018

City of San Saba, Appellant
v.
Dianne Higginbotham and Gary Higginbotham, Appellees

          FROM THE DISTRICT COURT OF SAN SABA COUNTY, 424TH JUDICIAL DISTRICT NO. 9589, HONORABLE EVAN C. STUBBS, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Goodwin and Field

          MEMORANDUM OPINION

          SCOTT K. FIELD, JUSTICE

         This is 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' breach-of-contract claim.

         BACKGROUND

         In 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.

         In 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).[1] 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 repairs.

         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 Higginbothams' claims.

         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 § 51.014(a)(8).

         DISCUSSION

         In its 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).

         Because 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).

         Here, 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.

         We 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 ...


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