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City of Tyler v. Owens

Court of Appeals of Texas, Twelfth District, Tyler

July 10, 2019


          Appeal from the County Court at Law No. 3 of Smith County, Texas (Tr.Ct.No. 65, 094-A)

          Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.



         The Texas Supreme Court remanded this case to us to determine whether the City of Tyler acted in its governmental or proprietary capacity when it leased property on Lake Tyler to Carl Owens, Jr., Connie Owens, Michael Terry, and Sandi Terry (the Lessees) in light of Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142 (Tex. 2018) ("Wasson II").[1] Because we conclude that the City leased the property in its proprietary capacity, we affirm the trial court's order overruling the City's plea to the jurisdiction and remand for further proceedings consistent with this opinion.


         In 1946, the City constructed Lake Tyler. The City owns the land underneath the lake and the land surrounding the lake. The City subdivided portions of the land surrounding the lake for the construction of lake homes, buildings, and boat stalls. In 1953, the City leased the three contiguous lots that are the subject of this suit-Lots 18, 19, and 20 of the Peninsula Subdivision- to Dr. Howard Bryant. After a series of transfers and lease amendments, the Owenses, Kourt and Jamie Chatelain, and the Terrys became the current lessees of Lots 18, 19, and 20, respectively. The leaseholds do not extend into the lakebed.

         However, the City generally allows the lessees to construct piers and boat houses. The Tyler Code of Ordinances, which is incorporated into the leases, requires that the lessee submit the proposed construction plan according to specific guidelines, pay a fee, and consent to an on-site physical inspection. If satisfied with the construction plan, the Water Production and Water Quality Manager for the Tyler Water Utilities Division (Manager) will issue a building permit.

         The Chatelains' lot is a pie-shaped lot in a cove with limited lake frontage. The Chatelains had an old pier and boathouse in place when they acquired the lease for Lot 19, but they removed them. On September 24, 2015, the Chatelains requested that the City approve their proposed plans for a new pier and boathouse and issue a construction permit.

         On October 12, 2015, the Terrys, the lessees of Lot 20 whose leasehold shared the cove with the Chatelains, submitted a request for the City to authorize construction of a four-foot wide pier that would extend 160 feet into the cove. This pier would have essentially prevented the Chatelains' access to the lake. On October 23, 2015, the City denied the Terrys' request.

         On October 22, 2015, the City sent a letter to the Owenses informing them of the Chatelains' request to approve a new pier and boathouse. The letter stated that the proposed boathouse would encroach on the Owenses' frontage, but "[u]nfortunately, due to the layout of the shoreline and of the other boathouses in this area, there is no other location for the [Chatelains'] proposed boathouse that will still provide access to the lake to the [Chatelains'] neighbor to the east on [the Terrys'] Lot 20." Carl Owens called the Manager and asked for a meeting. At the meeting, Owens expressed his discontent with the Chatelains' proposed pier and boathouse location. Owens believed that the new boathouse would adversely affect his view of the lake and the value of his property.

         Consequently, in an attempt to maximize the interested parties' access to the lake, the Manager reoriented the location of the Chatelains' boathouse on their proposed construction plan and asked that the Chatelains resubmit their request. Thereafter, the Owenses' attorney sent a letter to the Chatelains demanding that they refrain from constructing the boathouse, alleging that the boathouse would encroach upon the Owenses' lot line extending from their property into the lake, and that the City never allowed a neighboring property owner to construct a boathouse across this extended property line. The Chatelains resubmitted their request in accordance with the Manager's suggestions. On February 10, 2017, the City issued a construction permit to the Chatelains.

         Subsequently, the Owenses filed suit against the City and the Chatelains, and the Terrys intervened. They each adopted the others' pleadings. They brought several claims, seeking to enjoin the Chatelains' construction of their boathouse, along with actual and exemplary damages, a declaratory judgment, injunctive relief, and attorney's fees. The trial court granted an ex parte temporary restraining order against the City and the Chatelains, temporarily halting the Chatelains' construction of their pier and boathouse.

         The City filed a plea to the jurisdiction, asserting that it had governmental immunity and it should be dismissed from the suit for lack of subject matter jurisdiction. The trial court thereafter held a hearing on the Lessees' application for temporary injunction and the City's plea to the jurisdiction.[2] The trial court denied the temporary injunction and the City's plea to the jurisdiction.[3] The City filed this interlocutory appeal challenging the trial court's denial of its plea to the jurisdiction.[4]

         Plea to the Jurisdiction

         In its first issue, the City contends that Wasson II does not apply to this case. In its second issue, the City argues that even if Wasson II applies to this case, the Lessees failed to plead and prove that the City engaged in proprietary actions in entering their leases. The City also argues in its second issue that it acted in its governmental capacity. Because these issues are related, we address them together.

         Standard of Review

         Governmental immunity from suit defeats a trial court's subject matter jurisdiction. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). Governmental immunity may be properly raised in a plea to the jurisdiction. Id. at 226. We review a trial court's ruling on a plea to the ...

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