City of Houston v. Kenneth S. Jones ( 2004 )

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Opinion issued August 19, 2004



In The

Court of Appeals

For The

First District of Texas

NO. 01-03-00831-CV

CITY OF HOUSTON, Appellant

V.

KENNETH S. JONES, Appellee

On Appeal from County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 736,724

MEMORANDUM OPINION ON REHEARING

          Appellee, Kenneth S. Jones, has filed a motion for rehearing. We deny rehearing, withdraw our opinion of July 1, 2004, issue this new opinion in its stead, and vacate our July 1, 2004 judgment.

          In an interlocutory order, the trial court denied appellant City of Houston’s (“the City”) plea to the jurisdiction. In his live pleading, appellee Kenneth R. Jones sues the City for breach of contract, asserting that the City breached a settlement agreement it had with him, which Jones alleges settled tort claims he had against the City. In its sole issue, the City contends that the trial court erred in denying its plea to the jurisdiction because it is entitled to immunity from suit.

          We affirm.

Procedural Background

          On June 23, 2000, Jones filed suit against his neighbor and the City. Jones asserted tort claims that arose out of demolition work completed by his neighbor under a permit issued by the City. Particularly, Jones alleged that his home was damaged as a result of his neighbor’s demolition work.

          In a later-filed, supplemental petition, Jones added a breach of contract claim against the City, alleging that the City and Jones had entered into a settlement agreement relating to Jones’s tort claims and that the City had breached that agreement, which in turn caused Jones to incur damages.

          In his second amended petition, which is his live pleading, Jones abandoned his tort claims and asserted only his breach of contract claim against the City. Specifically, Jones asserts the following allegations in support of his breach of contract claim:

          •        In October 2001, the City reached a settlement agreement with Jones in which the City agreed to enroll Jones in a home repair program administered by the City.

          •        Because the home repair program was full at that time, the City agreed to provide Jones with subsidized housing until Jones’s home was repaired. At the time of the filing of his second amended petition, Jones remained in subsidized housing.

          •        The City breached the settlement agreement when it informed Jones that he would not be enrolled in the home repair program.

          •        The City’s breach of the settlement agreement caused Jones to suffer damages. Particularly, Jones lost the benefits that he was promised under the settlement agreement. Additionally, since entering into the settlement agreement, Jones’s home has been vacant and has deteriorated. Jones also has incurred costs in storing his personal belongings as a result of entering into the agreement.

In his second amended petition, Jones also asserts, inter alia, that the City’s immunity from suit is waived by article II, section 1 of the City’s charter, which provides that the City “may sue and be sued . . . in all courts and places and in all matters whatever . . . .”

          After Jones filed his second amended petition, the City filed its “Second Plea to the Jurisdiction.” In its plea, the City argued that the charter’s “sue or be sued” language does not waive its immunity from suit but, rather, speaks to the City’s capacity to sue once immunity has been waived. After considering the City’s plea, the trial court signed an order denying the City’s “Second Plea to the Jurisdiction.” The trial court specifically stated in the order that the plea is “denied as to the issue of enforcement of the settlement agreements in this case.”

          The City appeals the order, contending in one issue that the trial court erred in denying its plea to the jurisdiction.

Standard of Review

          When deciding whether to grant a plea to the jurisdiction, the trial court looks only to the allegations in the plaintiff’s pleadings to determine if any of the claims raised support its jurisdiction. Harris County v. Estate of Ciccia, 125 S.W.3d 749, 752 (Tex. App.—Houston [1st Dist.] 2003, pet. denied); Baston v. City of Port Isabel, 49 S.W.3d 425, 427 (Tex. App.—Corpus Christi 2001, pet. denied). Subject matter jurisdiction is a question of law that this Court reviews de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). Our role is to examine the pleadings, taking the facts pleaded as true, and to determine whether those facts support the trial court’s jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993); Ciccia, 125 S.W.3d at 752. Here, Jones’s live petition, which we take as true, states only a claim for breach of contract.

General Principles of Sovereign Immunity

          Sovereign immunity protects the State, its agencies and officials, and political subdivisions of the State from suit, unless immunity from suit has been waived. Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 594 (Tex. 2001). The sovereign immunity of the State inures to the benefit of a municipality insofar as the municipality engages in the exercise of governmental functions, except when that immunity has been waived. See Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000); City of Tyler v. Likes, 962 S.W.2d 489, 501 (Tex. 1997).

          Governmental immunity encompasses two principles: (1) immunity from suit (barring a lawsuit unless the Legislature expressly gives its consent to suit), and (2) immunity from liability (protection from judgments even if the Legislature has expressly given its consent to the suit). Travis County v. Pelzel & Assocs., 77 S.W.3d 246, 248 (Tex. 2002). By entering into a contract, a governmental entity waives immunity from liability for breaching that contract but does not waive immunity from suit. See Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704, 705 (Tex. 2003); Little-Tex Insulation, 39 S.W.3d at 594; Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589, 592 (Tex. App.—Austin 1991, writ denied).

          A plaintiff has the burden to establish a waiver of immunity from suit. Jones, 8 S.W.3d at 638. Immunity from suit can be waived only by legislative consent or constitutional amendment. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 695 (Tex. 2003). The Texas Supreme Court has repeatedly reaffirmed that such waiver must be expressed by clear and unambiguous language. Id. at 696; Pelzel, 77 S.W.3d at 248; Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 854 (Tex. 2002); City of La Porte v. Barfield, 898 S.W.2d 288, 291 (Tex. 1995); Duhart v. State, 610 S.W.2d 740, 742 (Tex. 1980).

Charter’s “Sue and be Sued” Language is Clear and Unambiguous Waiver

          As he did in the trial court, Jones contends on appeal that the City’s immunity from suit is waived by the clear and unambiguous language of article II, section 1 of the City’s charter, which provides that the City “may sue and be sued . . . in all courts and places and in all matters whatever . . . .” City of Houston Charter, art. II, § 1 (Act of 1905). We agree. We recently addressed this same issue in United Water Services, Inc. v. City of Houston, holding that the “sue and be sued” language in the City’s charter waived its immunity from suit. No. 01-02-01057-CV, slip. op. at p. 21 (Tex. App.—Houston [1st Dist.] Apr. 29, 2004, pet. filed). That holding likewise applies to this case.

          In its brief, the City contends that it has immunity from Jones’s breach of contract claim because that claim is “derived from” Jones’s tort claims for which the City argues it had immunity from suit. The City relies on Texas A & M University–Kingsville v. Lawson, 87 S.W.3d 518 (Tex. 2002) to support this contention. However, such reliance is misplaced. The controlling facts in Lawson are inapposite to the those presented here.

          In a plurality opinion, the supreme court held in Lawson that, having waived immunity from suit in the whistleblower act, the State was not allowed to claim immunity from a suit brought to enforce a settlement agreement reached to dispose of a whistleblower claim brought under that act. Id. at 522-23. The court reasoned that to allow the State to claim immunity from suit in the breach of contract action “would impair the effectiveness of the legislative waiver of immunity expressed in the Whistleblower Act by pressuring the government and some claimants to remain in litigation rather than settle.” Id. at 523.

          The conundrum in Lawson arose because no waiver of immunity from suit existed for the plaintiff’s breach of contract claim. See id. at 521. Here, we are not faced with such a dilemma. To the contrary, the language of article II, section 1 of the City’s charter clearly and unambiguously waives the City’s immunity from suit for such claims. In this case, unlike in Lawson, it is unnecessary to look at underlying policy reasons to determine whether immunity from suit has been waived with regard to Jones’s breach of contract claim. Other than Lawson, the City cites no legal authority to support its theory that it has immunity from Jones’s breach of contract claim—a claim for which immunity from suit has been expressly waived—because that claim is “derived from” Jones’s abandoned tort claims for which the City argues it had immunity from suit.

          Moreover, the City has not alleged that Jones is merely recasting his tort claims as a breach of contract claim. It is well-established that an action for breach of a settlement agreement is separate from the underlying claims that the agreement settles. See Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658-59 (Tex. 1996). This separateness is demonstrated by the allegations in this case. Here, the factual bases supporting Jones’s breach of contract claim are distinct from those supporting his earlier tort claims against the City. Jones primarily based his tort claims against the City on the City’s issuance of a demolition permit to Jones’s neighbor. In contrast, Jones’s breach of contract allegations are based on the City’s later conduct of agreeing to enroll Jones in its home repair program and then reneging on that promise.

          The damages that Jones seeks in his breach of contract action are also distinct from those he claimed with regard to his tort claims. Jones’s breach of contract damages are alleged to have been caused by Jones’s reliance on the City’s agreement to enroll him in the home repair program and the City’s subsequent breach of that agreement—conduct separate and distinct from the conduct underlying Jones’s tort claims.

          We hold that the trial court correctly denied the City’s plea to the jurisdiction as to Jones’s breach of contract claim. We overrule the City’s sole issue.

Conclusion

          We affirm the order of the trial court.

                                                             Laura Carter Higley

                                                             Justice

Panel consists of Justices Nuchia, Alcala, and Higley