Court of Appeals of Texas, Twelfth District, Tyler
from the 2nd District Court of Cherokee County, Texas
consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
T. Worthen, Chief Justice.
Texas Supreme Court remanded this case to us to address the
City of Jacksonville's grounds for summary judgment that
remain unresolved after the Court determined that the City
was not entitled to governmental immunity because it engaged
in a proprietary function when it leased lakefront property
on Lake Jacksonville to James and Stacy Wasson. We affirm in part
and reverse and remand in part.
City created Lake Jacksonville in the late 1950s as the
City's reservoir to provide a municipal water supply. The
City owns the lots surrounding the lake and decided to lease
most of them for ninety-nine year terms for private
1990's, the Wassons assumed an existing ninety-nine year
lease on lot 43 and signed a ninety-nine year lease on lot 46
on the lake. The terms of both leases are identical in all
relevant respects. The Wassons constructed a large home on
lot 43 and a cabin on lot 46 in accordance with the
authorizations in the leases. The Wassons first used lots 43
and 46 as their primary residence.
leases incorporated, and the Wassons expressly agreed to
abide by, the Lake Jacksonville Rules and Regulations, as
well as the city ordinances pertaining to building,
sanitation, safety, use, and occupancy. Article VII, Section
10 of the rules and regulations states that failure to comply
with the use and occupancy regulations and ordinances is
grounds for forfeiture of the leases.
VII, Section 8 of the rules and regulations states in
relevant part that "[a]ll Lake Jacksonville lease lots
located outside of the city limits of the City of
Jacksonville shall be restricted to residential purposes
only. No business or commercial enterprise . . . shall be
allowed to occupy any structure or operate from any lease lot
outside the city limits." Lots 43 and 46 are located
outside the Jacksonville city limits. The city ordinance
pertaining to commercial activity authorizes limited home
occupations conducted within a residential dwelling, but the
authorized activities do not include those conducted by the
Wassons in this case. The ordinance further provides that any
business that does not fall within the authorized home
occupations constitutes a prohibited commercial activity,
thereby authorizing the City to issue a cease and desist
relocating to Tyler in 2009, the Wassons conveyed their
interest in the two lots to Wasson Interests, Ltd (WIL). WIL
rented the property to individuals for terms of a week or
less. In response, the City sent an eviction notice for both
lots, notifying WIL that its short-term rentals constituted a
commercial use of the property, which violated its rules and
regulations and zoning ordinances specified in WIL's
leases. The City agreed to excuse the past
violations and cancel the eviction. In exchange, WIL entered
into a reinstatement agreement with the City that imposed
more specific conditions concerning the property's
acceptable uses and occupancy limitations under the leases.
reinstatement agreement provides that WIL cease and desist
from all commercial activity on the property in violation of
the City's ordinances and the Lake Jacksonville Rules and
Regulations. The agreement also prohibited
the advertisement or rental of any structure situated on the
[properties] as a hotel, motel, inn, tourist house, tourist
court, lodging house, rooming house, bed and breakfast, a
vacation site, events site, multi-family or corporate retreat
site, containing guest rooms and which is occupied, or
intended or designed for occupancy by paying guests, whether
rent is paid in money, goods, labor or otherwise.
reinstatement agreement contained an exception stating that:
Nothing in this Agreement shall prohibit [WIL] from renting
the [properties] to a single family consisting of one or more
persons related by blood, marriage or legal adoption or a
group of not more than three unrelated persons for private
residential purposes, (same being defined as lease to a
lessee, the term of which must be in excess of thirty (30)
the City discovered an advertisement to rent the large home
on lot 43. On December 1, 2010, it sent notice to WIL that
its advertisement and rental terms violated the reinstatement
agreement, and as provided in the leases, that the City would
terminate the leases if WIL failed to cease all commercial
activity on the properties within ten days. Unsatisfied with
WIL's response, on May 3, 2011, the City sent a second
eviction notice based on WIL's alleged continued
commercial use of the property.
filed suit, alleging that the City breached the lease by
improperly terminating the lease and evicting WIL. WIL also
sought injunctive and declaratory relief. Following extensive
discovery, the City filed a combined motion for a traditional
and a no-evidence summary judgment, which the trial court
granted without stating a reason. After two appeals to this
Court and the Texas Supreme Court, the Texas Supreme Court
ultimately held that the proprietary-governmental dichotomy
applies to breach of contract suits against a municipality,
and that the City acted in its proprietary capacity when it
leased the lots to the Wassons. Because we have not addressed the
merits of the City's no-evidence motion for summary
judgment, the Texas Supreme Court remanded the cause to us as
part of this appeal.
Judgment - Breach of Contract
first issue, WIL argues that it raised a fact issue on its
breach of contract and wrongful eviction claims, and that the
trial court erred when it granted summary judgment in favor
of the City.
review a summary judgment de novo. Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010). An appellate
court reviews a no-evidence summary judgment by reviewing
"the evidence presented by the motion and response in
the light most favorable to the party against whom the
summary judgment was rendered, crediting evidence favorable
to that party if reasonable jurors could, and disregarding
contrary evidence unless reasonable jurors could not."
Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 311
(Tex. 2009) (quoting Mack Trucks, Inc. v. Tamez, 206
S.W.3d 572, 582 (Tex. 2006)).
court must grant a no-evidence motion for summary judgment
if: (1) the moving party asserts that there is no evidence of
one or more specified elements of a claim or defense on which
the adverse party would have the burden of proof at trial;
and (2) the respondent produces no summary judgment evidence
raising a genuine issue of material fact on each of the
challenged elements. See Tex. R. Civ. P. 166a(i).
No-evidence motions must be sustained when the record
discloses one of the following situations: (a) a complete
absence of evidence of a vital fact; (b) the court is barred
by rules of law or of evidence from giving weight to the only
evidence offered to prove a vital fact; (c) the evidence
offered to prove a vital fact is no more than a mere
scintilla; or (d) the evidence establishes conclusively the
opposite of the vital fact. Jelinek v. Casas, 328
S.W.3d 526, 532 (Tex. 2010).
than a scintilla of evidence exists if the evidence rises to
a level that would enable reasonable and fair-minded people
to differ in their conclusions. Merrell Dow Pharms., Inc.
v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). When the
evidence offered to prove a vital fact is so weak as to do no
more than create a mere surmise or suspicion of its
existence, the evidence is no more than a scintilla and, in
legal effect, is no evidence. Jelinek, 328 S.W.3d at
532. When, as here, the summary judgment order does not
specify the grounds on which it was granted, we will affirm a
summary judgment ruling if any of the grounds asserted in the
motion are meritorious. See Lightning Oil Co. v. Anadarko
E & P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017).
essential elements of a breach of contract claim are (1) the
existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of the contract by
the defendant; and (4) damages sustained as a result of the
breach. See Caprock Inv. Corp. v. Montgomery, 321
S.W.3d 91, 99 (Tex. App.-Eastland 2010, pet. denied). A
breach of contract occurs when a party to the contract fails
or refuses to do something that it has promised to do. B
& W Supply, Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex.
App.-Houston [1st Dist.] 2009, pet. denied).
elements for wrongful eviction include (1) the existence of a
valid unexpired lease; (2) the tenant's occupancy of the
premises; (3) the landlord's eviction of the tenant; and
(4) damages suffered by the tenant attributable to the
eviction. St. Anthony's Minor Emergency Ctr., L.L.C.
v. Ross Nicholson 2000 Separate Prop. Tr., 567 S.W.3d
792, 797 n.4 (Tex. App.-Houston [14th Dist.] 2018, pet.
of the City's hybrid motion for summary judgment, it
alleged that there is no evidence to support WIL's breach
of contract and wrongful eviction claims. It thus became
WIL's burden to present evidence to raise a fact issue
that the City breached the leases or the reinstatement
agreement by evicting it without cause. To accomplish this,
WIL must produce more than a scintilla of evidence that it
did not materially breach the reinstatement agreement or the
leases. The City alleges that WIL breached the reinstatement
agreement in at least three respects: (1) WIL advertised the
properties for use as a vacation rental; (2) ...