City of Richmond, Texas v. Pecan Grove Municipal Utility District ( 2015 )

Opinion issued August 20, 2015
In The
Court of Appeals
For The
First District of Texas
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NO. 01-14-00932-CV
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CITY OF RICHMOND, TEXAS, Appellant
V.
PECAN GROVE MUNICIPAL UTILITY DISTRICT, Appellee
On Appeal from the 268th District Court
Fort Bend County, Texas
Trial Court Case No. 14-DCV-217359
MEMORANDUM OPINION
In this interlocutory appeal, 1 appellant, the City of Richmond, Texas, (the
“City”), challenges the trial court’s order denying its plea to the jurisdiction in the
suit of appellee, Pecan Grove Municipal Utility District (the “District”), against the
City for judgment declaring that the City’s annexation of certain property is void.2
In its sole issue, the City contends that the trial court lacks subject matter
jurisdiction over the District’s suit.
We vacate the order and dismiss the case.
Background
In its original petition, the District alleges that the City, as a home-rule
municipality, is authorized to annex land within its extraterritorial jurisdiction only
if the land is contiguous with its boundary. Geraldine Abb-Ivey petitioned the City
to annex a 5.5-acre tract of land (the “property”) owned by her and located at 1717
FM 359, asserting that the property was contiguous with the City’s boundary.
After the City determined that the property was not actually contiguous with its
boundary, it annexed a 10-foot-wide, 0.286-acre, strip of land (the “strip”), owned
by the Texas Department of Transportation (“TxDOT”), in order to connect the
property to its boundary. The District asserted that the City is statutorily
1
See TEX. CIV. PRAC. & REM CODE ANN. §.51.014(a)(8) (Vernon 2015)
(authorizing interlocutory appeal from order denying plea to jurisdiction by
governmental unit).
2
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001–.011 (Vernon 2015).
2
prohibited from annexing land that is less than 1,000 feet wide at its narrowest
point without a petition for annexation by the landowner 3 and TxDOT did not
petition for annexation. The District sought a declaration that the City’s
annexation of both the strip and the property is void.
The City filed an answer, generally denying the allegations, and a plea to the
jurisdiction, asserting that it was immune from suit and liability. The City asserted
that the District’s suit for declaratory relief is barred by governmental immunity
and a “quo warranto proceeding is required to set aside an annexation.” The City
argued that the District lacked standing to bring its suit because it “cannot show a
particularized injury due to, or any legal rights it may have that are or will be
affected by, the City’s annexation.” It further asserted that it had annexed the strip
only after receiving from TxDOT a “letter of no objection,” which serves as a
petition for annexation. Finally, the City specially excepted to the District’s
petition on the ground that it “did not allege a valid waiver of . . . immunity” or
“any basis to support [the District’s] standing to bring this suit.”
In its response to the City’s plea to the jurisdiction, the District argued that
the City’s immunity is statutorily waived because the District seeks a declaration
construing and invalidating an ordinance, 4 the City’s annexation of the strip is void
3
See TEX. LOC. GOV’T CODE ANN. § 43.054 (Vernon 2008).
4
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001–.011 (“Uniform Declaratory
Judgments Act”).
3
because TxDOT did not petition for annexation, and the City’s annexation of the
property is void because the property is not contiguous with the City’s territorial
limit without the strip. And it argued that because the District is “challenging the
City’s attempted annexation” on the ground that it is “void,” and “not voidable,” a
quo warranto proceeding is not required. The District further argued that it has
standing to challenge the annexation because it is a “competing potential service
provider to the annexed tracts” and an “affected sales tax collector.” And it
asserted that the annexation expanded the City’s extra-territorial jurisdiction,
which will require it to seek additional City approval for construction projects in
other areas.
To its response, the District attached Abb-Ivey’s Petition for Annexation; an
exhibit depicting the location of the annexed tracts; TxDOT’s June 13, 2014 letter
to the City stating that it had no objection to annexation of the strip; and the City’s
resolution and ordinance annexing the strip and the property. The District also
attached the affidavit of its engineer, Scott C. Saenger, who testified that the
property was “not contiguous with or adjacent to the city limits.” And it attached
the affidavit of G.E. Kluppel, the secretary of its board of directors, who testified
that the District was a “potential provider of utility services” to the property and
the “City’s annexation of this land preclude[d] the District from providing utilities
to it.”
4
In its reply, the City asserted that the District had “suffered no harm due to
annexation,” and, through its correspondence with the City and the State of Texas,
the District had established that it had “no intention of providing services to any
development of the [p]roperty.” The City also asserted that the parties had agreed
to share in certain sales tax revenues under their 2007 Strategic Partnership
Agreement (“SPA”), which does not include the property or any tax revenues
generated by the development of the property. The City attached to its reply the
District’s February 22, 2013 letter to the Texas Department of Housing and
Community Affairs, stating that the District “[did] not know where water and
sewer services would come from” to service the property and “[did] not have extra
capacity to provide water or sewer service to the proposed development” on the
property. And it attached the SPA and a map of the area governed by the SPA.
The City also attached the affidavit of Brad Shodek, a professional land surveyor,
and vicinity maps showing that the property has been located within the City’s
extra-territorial jurisdiction since 1985.
After a hearing, the trial court denied the City’s plea to the jurisdiction.
Standard of Review
We review de novo a trial court’s ruling on a jurisdictional plea. See Ben
Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions
Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323 (Tex. 2006); City of Hous. v.
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Vallejo, 371 S.W.3d 499, 501 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).
A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of
subject matter jurisdiction. Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex.
2004); Villarreal v. Harris Cnty., 226 S.W.3d 537, 541 (Tex. App.—Houston [1st
Dist.] 2006, no pet.). A plea to the jurisdiction may be utilized to challenge
whether the plaintiff has met its burden of alleging jurisdictional facts or to
challenge the existence of jurisdictional facts. See Tex. Dep’t of Parks & Wildlife
v. Miranda, 133 S.W.3d 217, 226–27 (Tex. 2004).
When a plea to the jurisdiction challenges the pleadings, we determine
whether the pleader has alleged facts that affirmatively demonstrate the trial
court’s jurisdiction. Id. We construe the pleadings liberally in favor of the
pleader, accept all factual allegations as true, and look to the pleader’s intent.
Heckman v. Williamson Cnty., 369 S.W.3d 137, 150 (Tex. 2012).
Review of a plea challenging the existence of jurisdictional facts mirrors that
of a matter-of-law summary-judgment motion. Mission Consol. Indep. Sch. Dist.
v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012); City of Hous. v. Guthrie, 332 S.W.3d
578, 587 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (“[T]his standard
generally mirrors that of a summary judgment under Texas Rule of Civil Procedure
166a(c). . . . By requiring the [political subdivision] to meet the summary
judgment standard of proof . . . , we protect the plaintiffs from having to put on
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their case simply to establish jurisdiction.”); see also TEX. R. CIV. P. 166a(c). A
court may consider evidence as necessary to resolve a dispute over the
jurisdictional facts, even if the evidence “implicates both the subject matter
jurisdiction of the court and the merits of the case.” Miranda, 133 S.W.3d at 226.
We take as true all evidence favorable to the nonmovant and we indulge every
reasonable inference and resolve any doubts in the nonmovant’s favor. Id. at 228.
If the defendant meets its burden to establish that the trial court lacks jurisdiction,
the plaintiff is then required to show that there is a disputed material fact regarding
the jurisdictional issue. Id. at 227–28. If the evidence raises a fact issue regarding
jurisdiction, the plea cannot be granted and a fact finder must resolve the issue. Id.
On the other hand, if the evidence is undisputed or fails to raise a fact issue, the
plea must be determined as a matter of law. Id. at 228; Garcia, 372 S.W.3d at 635.
Standing
In its sole issue, the City argues that the trial court erred in denying its plea
to the jurisdiction because the District does not have standing to challenge the
annexation, the annexation of the property was lawful, and “[o]nly the Attorney
General may challenge the annexation.”
“A request for declaratory relief alone does not establish jurisdiction”;
rather, “the Uniform Declaratory Judgments Act . . . is ‘merely a procedural device
for deciding cases already within a court’s jurisdiction.’” Chenault v. Phillips, 914
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S.W.2d 140, 141 (Tex. 1996) (quoting State v. Morales, 869 S.W.2d 941, 947
(Tex. 1994), and citing TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001–.011).
Standing is implicit in the concept of subject-matter jurisdiction, and subject-
matter jurisdiction is essential to the authority of a court to decide a case. Tex.
Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). Thus,
standing is never presumed and cannot be waived. Id. at 443–44.
The test for standing requires that there be a real controversy between the
parties that will actually be determined by the judicial declaration sought. Nootsie,
Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996).
Without a breach of a legal right belonging to the plaintiff, no cause of action can
accrue to its benefit. Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex. 1976). A party
has standing to sue if: (1) it has sustained, or is immediately in danger of
sustaining, some direct injury as a result of the wrongful act of which it complains;
(2) has a direct relationship between the alleged injury and claim sought to be
adjudicated; (3) has an individual stake in the controversy; (4) the challenged
action has caused it some injury in fact, either economic, recreational,
environmental, or otherwise; or (5) it is an appropriate party to assert the public’s
interest in the matter as well as its own interest. City of Bells v. Greater Texoma
Util. Auth., 790 S.W.2d 6, 11 (Tex. App.—Dallas 1990, writ denied); Billy B., Inc.
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v. Bd. of Trustees, 717 S.W.2d 156, 158 (Tex. App.—Houston [1st Dist.] 1986, no
writ).
We first address the City’s assertion that “this annexation may only be
challenged through quo warranto proceedings” brought by the attorney general. A
writ of quo warranto is an extraordinary remedy available to challenge a city’s
authority and its right to act. See Village of Lakeway v. Lakeway Mun. Util. Dist.
No. 1, 657 S.W.2d 912, 915 (Tex. App.—Austin 1983, writ ref’d n.r.e.). Quo
warranto proceedings are brought in the name of the State by the attorney general
or a district or county attorney. See TEX. CIV. PRAC. & REM. CODE ANN. § 66.002
(Vernon 2008); Walton v. City of Midland, 287 S.W.3d 97, 101 (Tex. App.—
Eastland 2009, pet. denied). In a quo warranto proceeding, the State acts to protect
itself and the public good, although it may bring a proceeding “at the instance of,
and for the benefit of, a private individual with a special interest.” Midland, 287
S.W.3d at 101.
Whether a party other than the State has standing to challenge an annexation
turns on whether the challenge complains of a violation of statutory procedure or
attacks a city’s authority to annex the area at issue. City of San Antonio v.
Summerglen Prop. Owners Ass’n, Inc., 185 S.W.3d 74, 83 (Tex. App.—San
Antonio 2005, pet. denied); see also Save Our Springs Alliance, Inc. v. Lazy Nine
Mun. Util. Dist., 198 S.W.3d 300, 310–11 (Tex. App.—Texarkana 2006, pet.
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denied) (distinguishing “voidable” acts based on procedural irregularities, which
must be challenged by quo warranto proceeding, from “void” acts, which may be
challenged through other legal proceedings). A quo warranto proceeding is the
“only proper method” to attack the validity of a city’s annexation of territory,
“unless the annexation is wholly void.” Alexander Oil Co. v. City of Seguin, 825
S.W.2d 434, 436 (Tex. 1991); Guthrie, 332 S.W.3d at 595–56.
Procedural irregularities in the exercise of a city’s annexation power do not
render an annexation void, but may render an annexation voidable. City of Port
Isabel v. Pinnell, 161 S.W.3d 233, 239 (Tex. App.—Corpus Christi 2005, no pet.);
City of Hous. v. Harris Cnty. Eastex Oaks Water & Sewer Dist., 438 S.W.2d 941,
944 (Tex. Civ. App.—Houston [1st Dist.] 1969, writ ref’d n.r.e.) (holding
proceedings constituting irregular exercise of power not void). A quo warranto
suit by the State on behalf of its citizens is the only proper method to challenge
procedural irregularities “such as a lack of [statutory] notice, [in]adequacy of a
service plan, lack of a quorum for a hearing, and other defects in the process of
adopting an annexation ordinance.” Town of Fairview v. Lawler, 252 S.W.3d 853,
856 (Tex. App.—Dallas 2008, no pet.).
A party other than the State may challenge an annexation as “void” on the
ground that a municipality has exceeded its authority, delegated to it by the
legislature, by attempting to (1) annex territory exceeding the statutory municipal
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size limits; (2) annex areas included in the extraterritorial jurisdiction of another
city; (3) annex areas not contiguous with current city limits; or (4) annex an area
with a boundary description that does not “close.” See Alexander Oil, 825 S.W.2d
at 438 (citations omitted); see also Laidlaw Waste Sys., 904 S.W.2d at 658
(holding private party may collaterally attack annexation exceeding the annexation
authority granted by statute); City of Balch Springs, Tex. v. Lucas, 101 S.W.3d
116, 120 (Tex. App.—Dallas 2002, no pet.) (stating private cause of action allowed
to challenge character or size of land annexed but not deficiencies in procedure of
adopting annexation ordinance).
In support of its assertion that the District’s challenge may only be asserted
through a quo warranto proceeding, the City relies on Lucas, in which certain
landowners petitioned for declaratory relief on the ground that the city was
attempting to annex their land without complying with the specific provisions of a
statutorily mandated municipal annexation plan. 101 S.W.3d at 119, 122; see TEX.
LOC. GOV’T CODE ANN. § 43.052 (Vernon 2008). The court held that because the
statutory provisions at issue did not limit the area or type of land that the city could
annex, but instead prescribed a planning process, the actions about which the
landowners complained were procedural. Lucas, 101 S.W.3d at 121. Thus, even if
the alleged improprieties were proven, the proposed annexation would be voidable,
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not void. Id. at 122. And the landowners lacked standing to bring a private cause
of action. Id.
In support of its assertion that a quo warranto proceeding is not required to
challenge the City’s annexation as void on the ground that the City exceeded its
authority to annex, the District relies on City of Missouri City v. State ex rel. City
of Alvin, 123 S.W.3d 606, 617 (Tex. App.—Houston [14th Dist.] 2003, pet.
denied). In Missouri City, the State, on behalf of the City of Alvin, filed a quo
warranto action against Missouri City, alleging that it had illegally annexed land in
Alvin’s territorial limits and violated statutory law by extending its territory into
Alvin’s extra-territorial jurisdiction without consent and annexing a strip of land
less than 1000 feet wide at its narrowest point. 123 S.W.3d at 608–09, 611; see
TEX. LOC. GOV’T CODE ANN. §§ 42.041, 43.0545 (Vernon 2008). Alvin filed a
petition in intervention seeking declaratory relief. Missouri City, 123 S.W.3d at
610. Missouri City asserted that a quo warranto proceeding was required to
challenge the annexation and Alvin could not maintain the action on its own. Id. at
610–11. The court, after noting that Alvin’s issues were “identical to those in the
quo warranto action,” held that Alvin “could have brought the challenge in its own
name” as a “private challenge to annexation is permitted when [an] annexation
ordinance is void because [a] municipality exceeded its authority to annex.” Id. at
617.
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Here, like Alvin in Missouri City, the District asserts that the City’s
annexation of the strip and property is void based on violations of statutory law
that limit the area and type of land that the City may annex. See TEX. LOC. GOV’T
CODE ANN. §§ 42.041 (municipality may not annex area in another municipality’s
extra-territorial jurisdiction without written consent), 43.0545 (prohibiting
annexation of area less than 1000 feet wide at narrowest point). Thus, the District
may challenge the City’s annexation in a private action. See Missouri City, 123
S.W.3d at 617.
However, as the City further asserted, the District, in order to establish
standing, must have suffered a particular burden or injury from the City’s
annexation. See Pinnell, 161 S.W.3d at 238. The District argues that it suffered a
particularized burden from the City’s annexation of the property because the
District was a “potential provider” of utility services to the property and the City’s
annexation “removes land that could have been served by the District.” The
evidence shows, however, that the District admitted in its February 22, 2013 letter
to the Texas Department of Housing and Community Affairs that it “[did] not
know where water and sewer services would come from” to service the property
and “[did] not have extra capacity to provide water or sewer service to the
proposed development” on the property. Thus, the City’s evidence conclusively
13
establishes that the District has not suffered an injury based on being a “competing
potential service provider to the annexed tracts.”
The District next argues that it was harmed because it and the City have an
“agreement to share in the sales tax revenues collected within the City’s [extra-
territorial jurisdiction] in and around the District’s boundaries,” the City’s
annexation removes the property from the City’s extra-territorial jurisdiction,
“prevents” it from coming under the agreement, and “depriv[es] the District of this
potential sales tax revenue.” However, the evidence shows that the parties’
agreement, the SPA, applies to the specific territory delineated on the map, which
does not include the property. Thus, the City’s evidence conclusively establishes
that its annexation of the property did not result in an injury to the District in the
form of lost sales tax revenues under the SPA.
Finally, the District asserts that it is required to obtain approval from the
City to construct projects within the City’s extra-territorial jurisdiction and because
the City’s annexation “affects the location” of its extra-territorial jurisdiction, it
affects the area in which such approvals are required. A special burden does not
exist, however, if, as here, a claimant merely alleges the ordinary consequences of
annexation that burden the public in general. See Sunchase Capital Grp., Inc. v.
City of Crandall, 69 S.W.3d 594, 597 (Tex. App.—Tyler 2001, no pet.).
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We conclude that the City’s evidence conclusively establishes that the
District has not suffered a particular burden or injury from the City’s annexation of
the strip and property. Accordingly, we hold that the District lacks standing to
challenge the annexation and the trial court erred in denying the City’s plea to the
jurisdiction.
We sustain the City’s sole issue.
Conclusion
We vacate the trial court’s order denying the City’s plea to the jurisdiction
and dismiss the case. See TEX. R. APP. P. 43.2; Lucas, 101 S.W.3d at 122.
Terry Jennings
Justice
Panel consists of Justices Jennings, Bland, and Brown.
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