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Houston Community College System v. HV BTW, LP

Court of Appeals of Texas, Fourteenth District

July 2, 2019

HOUSTON COMMUNITY COLLEGE SYSTEM, Appellant
v.
HV BTW, LP, Appellee

          On Appeal from the 152nd District Court Harris County, Texas Trial Court Cause No. 2017-56765

          Panel consists of Justices Christopher, Bourliot, and Zimmerer.

          OPINION

          FRANCES BOURLIOT JUSTICE

         This is a dispute involving an easement agreement. In three issues, Houston Community College (HCC) challenges the trial court's grant of summary judgment in favor of HV BTW, LP (the Partnership) on the grounds that HCC is entitled to immunity from suit and the Partnership did not conclusively establish the easement agreement was properly executed by HCC. We conclude that HCC did not meet its burden to show its entitlement to immunity from suit. We further conclude that the trial court erred in rendering summary judgment in favor of the Partnership.

         Accordingly, we reverse and remand.

         Background

         HCC owns a vacant lot on Lumpkin Road in Houston, Texas (the Property). The Partnership owns an adjacent commercial building on Old Katy Road. In 2013, the Partnership approached HCC about obtaining an easement on the Property from Lumpkin Road.

         HCC agreed to grant the easement. HCC and the Partnership executed an "Easement Acquisition Agreement." An "Access Easement and Right of Way Agreement" was attached as an exhibit to the Easement Acquisition Agreement. We refer to these agreements collectively as the Easement Agreement or the Agreements. The Agreements were signed on behalf of HCC by its acting chancellor Renee Byas and approved as to form by HCC's general counsel. As set forth in the Easement Agreement, as consideration for the easement, The Partnership agreed to construct "at its sole cost and expense, certain parking facilities on the Property" in accordance with plans approved by HCC and the Partnership.[1] After the Agreements were signed, Byas left HCC. The Partnership alleges that it "spent over $500, 000 in engineering and permitting costs and fees, demolition costs, grading, and constructing drainage, curbs, and landscaping on the HCC Property." According to the Partnership, the only things left to be done are paving the road and parking lot and striping the parking lot.

         To do the paving work, the Partnership needed approval from CenterPoint Energy, which had a utility easement on the Property. To obtain the approval, CenterPoint required a signed "Consent to Encroach" from HCC. The Partnership submitted the consent form to HCC. HCC refused to sign it unless the Partnership agreed to a license agreement instead of an easement.

         The Partnership filed a lawsuit against HCC alleging breach of contract and seeking a declaration that the Partnership has an easement on the Property. The Partnership sought actual damages, specific performance, and attorney's fees. HCC filed a plea to the jurisdiction. The Partnership filed a motion for final summary judgment. The trial court rendered final summary judgment and ordered HCC to file an executed Access Easement and Right of Way Agreement in the Harris County real property records. The trial court also declared that the Partnership has an easement on the Property and awarded the Partnership attorney's fees.

         Discussion

         In three issues, HCC contends the trial court erred in implicitly denying its plea to the jurisdiction because, according to HCC, it is immune from suit as to the Partnership's claims. Alternatively, HCC argues the trial court erred in granting summary judgment in favor of the Partnership.

         I. No Error in Denying Plea to the Jurisdiction

         HCC argues it is entitled to immunity from suit as a political subdivision for which immunity has not been waived. The Partnership contends immunity has been waived under chapter 271 of the Local Government Code, which waives governmental immunity from suit for a governmental entity that enters into a contract for services. See City of Galveston v. CDM Smith, Inc., 470 S.W.3d 558, 563 (Tex. App.-Houston [14th Dist.] 2015, pet. denied).

         HCC, as a public community college, is a political subdivision of the state and, thus, protected by governmental immunity. See Thielemann v. Blinn Bd. of Trustees, No. 01-14-00595-CV, 2015 WL 1247018, at *2 (Tex. App.-Houston [1st Dist.] Mar. 17, 2015, no pet.) (mem. op.); see also Tex. Civ. Prac. & Rem. Code § 101.001(3)(A)-(B). Governmental immunity includes both immunity from liability, which bars enforcement of a judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether. Lubbock Cty. Water Control & Imp. Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297, 300 (Tex. 2014); CDM Smith, 470 S.W.3d at 563. A governmental entity that enters into a contract necessarily waives immunity from liability, voluntarily binding itself like any other party to the terms of agreement, but it does not waive immunity from suit. Church & Akin, 442 S.W.3d at 300; CDM Smith, 470 S.W.3d at 563. Unlike immunity from liability, immunity from suit deprives the courts of jurisdiction and thus completely bars the plaintiff's claim. Church & Akin, 442 S.W.3d at 300; CDM Smith, 470 S.W.3d at 563.

         We review a plea challenging the trial court's jurisdiction de novo. State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007). When a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex. 2004); CDM Smith, 470 S.W.3d at 564. The standard of review for a jurisdictional plea based on evidence "generally mirrors that of a summary judgment under Texas Rule of Civil Procedure 166a(c)." Miranda, 133 S.W.3d at 228. Under this standard, we credit evidence favoring the nonmovant and draw all reasonable inferences in the nonmovant's favor. See id. The defendant must assert the absence of subject-matter jurisdiction and present conclusive proof that the trial court lacks subject-matter jurisdiction. Id. If the defendant discharges this burden, the plaintiff must present evidence sufficient to raise a material issue of fact regarding jurisdiction, or the plea will be sustained. Id.

         As discussed, under chapter 271 the legislature waived sovereign immunity as to local governmental entities that enter into contracts for goods or services for the purpose of adjudicating claims for breach of contract. Tex. Loc. Gov't Code §§ 271.151(2)(A), 271.152. Section 271.151(2)(A), in relevant part, defines the types of contracts subject to the waiver of immunity: "a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity." Id. § 271.151(2)(A). HCC argues that chapter 271 does not apply because the subject contract (1) does not provide for goods or services to HCC, (2) does not include certain essential terms, and (3) was not properly executed under the statute.[2] HCC further contends that the Partnership is not entitled to the remedy of specific performance under chapter 271 or to a declaration regarding the validity of the easement.

         A. Contract for Services

         HCC argues that the Easement Agreement is not a contract for services to HCC because "an easement is an interest in land" and HCC will not receive a direct benefit. The dispositive issue is whether the Partnership, in agreeing to construct parking facilities on the Property, agreed to provide a service to HCC.

         Chapter 271 does not define "services," but the supreme court has interpreted the term in this context as "broad enough to encompass a wide array of activities." Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829, 839 (Tex. 2010); CDM Smith, 470 S.W.3d at 566. It generally includes any act performed for the benefit of another under some arrangement or agreement whereby such act was to have been performed. CDM Smith, 470 S.W.3d at 566. The services provided need not be the primary purpose of the agreement. Kirby Lake Dev., 320 S.W.3d at 839; CDM Smith, 470 S.W.3d at 566.

         HCC cites three cases in support of the argument that the Easement Agreement does not provide for services to HCC. See Church & Akin, 442 S.W.3d at 297; Water Expl. Co. v. Bexar Metro. Water Dist., 345 S.W.3d 492 (Tex. App.-San Antonio 2011, no pet.); City of Garden Ridge v. Ray, No. 03-06-00197-CV, 2007 WL 486395 (Tex. App.-Austin Feb. 15, 2007, no pet.) (mem. op.). Each case is distinguishable from the facts of this case.

         In the first case, Church & Akin leased a marina from the Lubbock County Water Control and Improvement District. Church & Akin, 442 S.W.3d at 303. The lease prohibited Church & Akin from using the premises for any other purpose than as a marina without consent. Id. Church & Akin argued that by operating the marina it was providing a service to the Water District. Id. at 302. The supreme court disagreed because under the lease, the Water District did not obligate Church & Akin to operate a marina-it only restricted Church & Akin from using the premises for a different purpose without consent. Id. at 303. The court concluded, "When a party has no right under a contract to receive services, the mere fact that it may receive services as a result of the contract is insufficient to invoke chapter 271's waiver of immunity." Id.

         In the Water Exploration Company case, the San Antonio Court of Appeals held that the assignment by Water Exploration Company (WECO) of leases of groundwater property rights, wells, pumps, and easements to Bexar Metropolitan Water District (BexarMet) was not a contract for services because the nature of the property was a lease of real property even though WECO was required (1) to cure any failure to meet water quality standards or allow BexarMet to terminate the lease for any such failure, and (2) to maintain a minimum amount of water production with an option to cure any such failure. 345 S.W.3d at 496-98. The court construed these provisions as options to cure, not as services. Id. at 501. Because BexarMet had leased a real estate interest from WECO, BexarMet was responsible for operating, maintaining, repairing, and replacing existing facilities and constructing new ones and WECO's options to cure were contingent on the leased property being unusable, the court held that the leases did not trigger governmental immunity under chapter 271. Id.

         The Garden Ridge case involved a drainage culvert maintained by the City of Garden Ridge pursuant to an easement agreement granted in favor of the city. 2007 WL 486395, at *1. Ray sued the city for flooding related to the city's construction and maintenance of the culvert. Id. No statutory waiver applied to Ray's breach of contract claim. Id. at *1 n.1.

         The facts of this case are more akin to a case cited by the Partnership, Clear Lake City Water Authority v. Friendswood Development Co., 256 S.W.3d 735 (Tex. App.-Houston [14th Dist.] 2008, pet. dism'd), disapproved on other grounds by Rusk State Hosp. v. Black, 392 S.W.3d 88 (Tex. 2012). In that case, Friendswood Development agreed to arrange for the construction of water distribution lines, sanitary sewer lines, and drainage facilities to provide service to houses Friendswood Development proposed to build. Id. at 738-39. Clear Lake City Water Authority agreed to purchase or lease the completed facilities. Id. at 739. We concluded that Friendswood Development's agreement to construct the facilities and to build streets, roads, and bridges constituted a provision ...


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