City of Houston and Daniel W. Kruger, in His Official Capacity as Director of Public Works and Engineering Department v. Little Nell Apartments, L.P. , 424 S.W.3d 640 ( 2014 )

Affirmed and Opinion filed January 23, 2014.
In the
Fourteenth Court of Appeals
NO. 14-12-01157-CV
CITY OF HOUSTON AND DANIEL W. KRUEGER, IN HIS OFFICIAL
CAPACITY AS DIRECTOR OF PUBLIC WORKS AND ENGINEERING
DEPARTMENT, Appellants
v.
LITTLE NELL APARTMENTS, L.P., ET AL., Appellees
On Appeal from the 129th District Court
Harris County, Texas
Trial Court Cause No. 2012-09885
OPINION
Appellants, the City of Houston (the ―City‖) and Daniel W. Krueger, in his
official capacity as Director of Public Works and Engineering Department, present
this accelerated appeal from the trial court‘s order partially denying their plea to
the jurisdiction based on governmental immunity in a declaratory judgment action
brought by appellees, Little Nell Apartments, LP (―Little Nell‖), HFI Regency
Park Apartments, LP (―Regency‖), and Windshire Apartments, LP (―Windshire‖)
(collectively, the ―Apartments‖). After an evidentiary hearing, the trial court
sustained in part and denied in part the City and Krueger‘s plea to the jurisdiction,
denying the plea only as to the Apartments‘ request for a declaratory judgment that
Krueger in his official capacity acted in an ultra vires manner by subjecting their
properties to drainage fees pursuant to chapter 47, article XIV, of the City‘s Code
of Ordinances. After concluding that we have appellate jurisdiction, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
In April 2011, the City enacted Ordinance No. 2011-254, hereinafter
referred to as the ―drainage fee ordinance.‖ See Houston, Tex., Code of
Ordinances, ch. 47, art. XIV (―Code of Ordinances‖). The drainage fee ordinance
created a municipal drainage utility, a public utility, ―[i]n the interest of public
health and safety and a more efficient and economic operation of drainage facilities
of the city.‖ Code of Ordinances, § 47-803. Under the drainage fee ordinance, the
City shall ―establish a schedule of drainage charges against all real property in the
city subject to such charges‖; provide drainage ―for all real property in the city on
payment of drainage charges unless the property is exempt from such payment‖;
and ―offer drainage service on nondiscriminatory, reasonable and equitable terms.‖
Id. § 47-801. The drainage charges are imposed ―[t]o recover the city‘s cost of
service to provide drainage to benefitted properties‖ and are to be used exclusively
for various expenses ―associated with the cost of service to provide drainage
services within the service area.‖ Id. §§ 47-821, 47-822(a). Drainage charges are
calculated based on the specified rate (either residential or non-residential, and if
residential, whether curb-and-gutter or open-ditch) per ―square foot of impervious
surface of a benefitted property.‖ Id. § 47-822(b), (c). The drainage fee ordinance
provides for various categories of exemptions from the imposition of a drainage
2
charge. Id. § 47-822(f). The director of the City‘s department of public works and
engineering ―shall be responsible for the administration of this article [XIV.
Municipal Drainage Utility System].‖ Id. § 47-805. The drainage fee ordinance
provides that the director ―shall establish and implement a system of verification
and correction of drainage charges for each property subject to the drainage
charges.‖ Id. § 47-824(a).
In May 2011, the Apartments received notice of proposed drainage charges
that Krueger had determined for each of the Apartments based on each property‘s
impervious square footage. The Apartments submitted requests for verification
and correction of their initial drainage charges, specifically indicating that each
property‘s drainage system was not part of the City‘s drainage system and
therefore should be exempt from the drainage charges. See id. § 47-824(b). After
these requests were denied, the Apartments requested an appeal. See id. § 47-
824(e). These appeals resulted in a downward adjustment of the amount of
Regency‘s impervious square footage, but did not change Little Nell‘s and
Windshire‘s noticed amounts.1
In February 2012, the Apartments sued both the City and Krueger in his
official capacity. The Apartments sought declarations with respect to whether they
were ―benefitted properties‖ under the ordinance, or alternatively, whether they
were exempt from drainage charges under section 47-822(f)(2) of the ordinance,
and sought recovery for drainage charges that they already paid. The City and
Krueger filed a plea to the jurisdiction based on governmental immunity. The
Apartments amended their petition to drop their claims for a refund of fees, and to
specifically seek a declaration that the drainage fee ordinance is invalid and assert
1
Krueger‘s determinations as to the area of impervious surface and amount of drainage
charges are not at issue in this appeal.
3
ultra vires claims against Krueger based upon his failure to follow the ordinance.
The City and Krueger filed an amended plea to the jurisdiction and a supplement to
their amended plea. The Apartments responded in opposition.
The trial court held an evidentiary hearing. Carol Haddock, a senior
assistant director in the City‘s public works and engineering department, and Carl
Smitha, the city engineer, testified on behalf of the City and Krueger. David
Brown, former chief drainage engineer for the City and former assistant director
over design and construction for the Harris County Flood Control District
(―HCFCD‖), currently in private engineering practice, is the engineer of record for
the development of the three properties at issue and testified on behalf of the
Apartments.
At the conclusion of the hearing on December 12, 2012, the trial court
provided its oral ruling denying in part and sustaining in part the City and
Krueger‘s plea. The City filed its notice of appeal that same day. On January 11,
2013, the trial court signed its written order denying the amended plea and
supplement as to the Apartments‘ request for a declaratory judgment that Krueger,
in his official capacity, acted in an ultra vires manner by subjecting their properties
to drainage fees pursuant to the drainage fee ordinance, and otherwise sustaining
the plea. The trial court indicated that its denial was ―due and restricted to the
particular jurisdictional facts associated with the [Apartments‘] specific locations
and drainage at issue in this suit.‖ The City filed an amended notice to appeal that
same day ―to provide the written order.‖ The City and Krueger filed a second
amended notice of appeal on March 27, 2013.
4
II. JURISDICTION
We first review the threshold issue of our jurisdiction. The Apartments
argue that this court lacks jurisdiction to hear Krueger‘s appeal because he was not
included as an appealing party on the City‘s notice of appeal filed on December 12,
2012, the day the trial court made its oral ruling, deemed filed as of January 11,
2013; he was not included as an appealing party on the City‘s amended notice of
appeal filed on January 11, 2013, ―to provide the [court‘s] written order‖; and he
was first included as an appealing party on a second amended notice of appeal filed
by both the City and Krueger on March 27, 2013.2 The Apartments contend that
Krueger‘s delay proves fatal to his appeal. We disagree.
Rule of Appellate Procedure 25.1 states that ―[a]n appeal is perfected when a
written notice of appeal is filed with the trial court clerk.‖ Tex R. App. P. 25.1(a).
The rule contemplates that there might be a defect or that information might be
omitted, and specifically authorizes a party to file an amendment ―to correct[] a
defect or omission in an earlier filed notice.‖ Id. 25.1(g). When a notice of appeal
fails to ―state that the party desires to appeal‖ and to ―state the name of each party
filing the notice,‖ it is defective. Kim v. Scarborough, No. 14-04-00262-CV, 2004
WL 1574598, at *1 (Tex. App.—Houston [14th Dist.] July 15, 2004, no pet.)
(mem. op.) (per curiam) (citing Tex. R. App. P. 25.1(d)(3),(5)).
The Texas Supreme Court ―has consistently held that a timely filed
document, even if defective, invokes the court of appeals‘ jurisdiction.‖ Sweed v.
Nye, 323 S.W.3d 873, 875 (Tex. 2010) (per curiam) (gathering cases). The Texas
Supreme Court also has explained that its ―consistent policy has been to apply
2
In their response brief, the Apartments requested that this court strike the City and
Krueger‘s second amended notice of appeal for cause per rule 25.1(g), and that this court
consider their brief to include a motion to dismiss for lack of appellate jurisdiction.
5
rules of procedure liberally to reach the merits of the appeal whenever possible.‖
Warwick Towers Council of Co-Owners ex rel. St. Paul Fire & Marine Ins. Co. v.
Park Warwick, L.P., 244 S.W.3d 838, 839 (Tex. 2008) (per curiam) (gathering
cases).
Moreover, ―a court of appeals has jurisdiction over an appeal when the
appellant files an instrument that is ‗a bona fide attempt to invoke appellate court
jurisdiction.‘‖ City of San Antonio v. Rodriguez, 828 S.W.2d 417, 418 (Tex. 1992)
(per curiam) (citing Grand Prairie Indep. Sch. Dist. v. S. Parts Imports, Inc., 813
S.W.2d 499, 500 (Tex. 1991) (per curiam)). Thus, appellate courts should allow an
opportunity to amend a defective instrument before dismissal. Kim, 2004 WL
1574598, at *1 (describing issuance of court order allowing amendment of notice
of appeal). Examples where the Texas Supreme Court has concluded that a bona
fide attempt was made to invoke the appellate court‘s jurisdiction include: where
the notice of appeal was filed by the insurer instead of the insured,3 where a party
filed a notice of appeal in the alternative as part of a motion for new trial,4 where a
party filed one ―instrument‖ in an attempt to appeal two probate orders, 5 where a
party filed a notice of appeal with the wrong cause number,6 and where a party
filed a notice of appeal five and a half months after his claim was dismissed and
then amended that notice after the six-month mark to include information required
for a restricted appeal.7
The City and Krueger assert that their attorneys meant to appeal the partial
denial of the plea to the jurisdiction on behalf of both the City and Krueger. They
3
Warwick Towers, 244 S.W.3d at 839–40.
4
In re J.M., 396 S.W.3d 528, 531 (Tex. 2013) (per curiam).
5
Maxfield v. Terry, 888 S.W.2d 809, 811 (Tex. 1994) (per curiam).
6
Rodriguez, 828 S.W.2d at 418.
7
Sweed, 323 S.W.3d at 874–75.
6
acknowledge their attorneys made a mistake by only filing on the City‘s behalf, but
they amended the notice of appeal before filing their joint appellate brief. See Tex.
R. App. P. 25.1(g) (―An amended notice of appeal correcting a defect or omission
in an earlier filed notice may be filed in the appellate court at any time before the
appellant‘s brief is filed.‖). The Apartments acknowledge that the City‘s notice of
appeal from the denial of its and Krueger‘s plea to the jurisdiction was timely. See
Tex. Civ. Prac. & Rem. Code § 51.014(a)(8) (West 2011); Tex. R. App. P. 26.1(b)
& 28.1(b). The Apartments acknowledge that the City is a ―necessary party to the
case because the Court will be required to construe the City‘s ordinances in
determining whether Krueger had the authority to assess the Apartments with the
drainage fees.‖ See Tex. Lottery Comm’n v. First State Bank of DeQueen, 325
S.W.3d 628, 634 (Tex. 2010). The Apartments also acknowledge that the trial
court‘s order, which denied the plea to the jurisdiction as to the Apartments‘
request for a declaratory judgment that Krueger ―acted in an ultra vires manner by
subjecting the properties . . .with drainage fees,‖ was attached to the City‘s first
amended notice of appeal.
Nevertheless, the Apartments contend that there was no bona fide attempt by
Krueger to appeal. However, all the cases they cited are distinguishable either
because there was no timely notice of appeal filed whatsoever,8 the notice of
appeal was not timely as to the particular order sought to be appealed, 9 the party
who did file a timely notice of appeal lacked standing,10 or the court failed to
8
See Wilkins v. Methodist Health Care Sys., 160 S.W.3d 559, 564 (Tex. 2005); Wagner
& Brown, Ltd. v. Horwood, 58 S.W.3d 732, 737–38 (Tex. 2001); Harris Cty. v. Norris, 240
S.W.3d 255, 261 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).
9
See Rainbow Group, Ltd. v. Wagoner, 219 S.W.3d 485, 492 (Tex. App.—Austin 2007,
no pet.).
10
See Bahar v. Baumann, No. 03-09-00691-CV, 2011 WL 4424294, at *2 (Tex. App.—
Austin Sept. 23, 2011, pet. denied) (mem. op.).
7
address whether there was a bona fide attempt to invoke appellate jurisdiction.11
Moreover, the Apartments have not argued that they were misled or disadvantaged
in any way by the defective notice here. See Rodriguez, 828 S.W.2d at 418.
In light of the consistent holdings of the Texas Supreme Court, its policy to
apply the rules of procedure liberally in favor of appellate review, and the
circumstances of this case, we therefore conclude that we have jurisdiction to hear
Krueger‘s appeal.
III. ANALYSIS
The parties acknowledge that the sole issue on appeal is whether the trial
court erred in denying the City and Krueger‘s plea to the jurisdiction as to the ultra
vires claims alleged against Krueger by the Apartments. The City and Krueger
argue both the face of the Apartments‘ pleadings and the jurisdictional evidence
confirm that the alleged ultra vires claims are barred by governmental immunity.
We conclude that the trial court did not err.
A. Standard of review
If a governmental unit has immunity from a pending claim, a trial court
lacks subject matter jurisdiction as to that claim. Rusk State Hosp. v. Black, 392
S.W.3d 88, 95 (Tex. 2012). A challenge to a trial court‘s subject matter
jurisdiction may be asserted by a plea to the jurisdiction. Tex. Dep’t of Parks &
Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004). We review a trial
court‘s ruling on a plea to the jurisdiction de novo. Id. at 228. In a plea to the
jurisdiction, a party may challenge the pleadings, the existence of jurisdictional
facts, or both. Id. at 226–27.
11
See Crofton v. Amoco Chem. Co., No. 01-01-00526-CV, 2003 WL 21297588, at *3
(Tex. App.—Houston [1st Dist.] May 30, 2003, pet. denied) (mem. op.).
8
When a plea to the jurisdiction challenges the pleadings, we determine if the
plaintiff has alleged facts affirmatively demonstrating the court‘s jurisdiction. Id.
at 226 (citing Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446
(Tex. 1993)). ―We construe the pleadings liberally in favor of the plaintiffs and
look to the pleaders‘ intent.‖ Id. If the pleadings do not contain sufficient facts to
affirmatively demonstrate jurisdiction but do not reveal incurable defects, the issue
is one of pleading sufficiency and the plaintiffs should be afforded the opportunity
to amend. Id. at 226–27. If the pleadings affirmatively negate the existence of
jurisdiction, then a plea to the jurisdiction may be granted without allowing the
plaintiffs an opportunity to amend. Id. at 227.
Where the governmental unit challenges the existence of jurisdictional facts,
and the parties submit evidence relevant to the jurisdictional challenge, we
consider that evidence when necessary to resolve the jurisdictional issues raised.
Id. at 227; Olivares v. Brown & Gay Eng’g, Inc., 401 S.W.3d 363, 369 (Tex.
App.—Houston [14th Dist.] 2013, pet. filed). 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, when reviewing a plea in which the pleading
requirement has been met, we credit as true all evidence favoring the nonmovant
and draw all reasonable inferences and resolve any doubts in the nonmovant‘s
favor. Id. The movant must assert the absence of subject-matter jurisdiction and
present conclusive proof that the trial court lacks subject-matter jurisdiction. Id.
Proof is conclusive only if reasonable people could not differ in their conclusions.
City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). If the movant
discharges this burden, the nonmovant must present evidence sufficient to raise a
material issue of fact regarding jurisdiction, or the plea will be sustained.
9
Miranda, 133 S.W.3d at 228.
Thus, once and if the Apartments have met their pleading requirement, as
the movants, the City and Krueger have the burden to establish their entitlement to
governmental immunity. See id. If the evidence raises a fact issue as to
jurisdiction, their plea must be denied because the issue must be resolved by the
trier of fact. See id. at 227–28. If the relevant evidence is undisputed or fails to
present a jurisdictional fact issue, however, the court should rule on the plea as a
matter of law. Id.
B. Ultra vires claims
The Apartments have attempted to plead ultra vires claims against Krueger
in his official capacity, alleging that Krueger is acting outside of his authority
under the drainage fee ordinance by imposing drainage charges on the Apartments‘
properties. They contend that Krueger exceeded his authority because their
developed properties are not ―benefitted properties,‖ and because they are exempt
from drainage charges since they are ―served exclusively by a properly constructed
and maintained wholly sufficient and privately owned drainage system.‖ The City
and Krueger argue that the Apartments merely complain of Krueger‘s exercise of
authority and discretion, which he did not exceed, and therefore their claims are
barred by immunity.
A suit asserting that a government officer acted without legal authority or
seeking to compel him to comply with statutory or constitutional provisions is an
ultra vires suit and is not subject to pleas of governmental immunity. See City of
El Paso v. Heinrich, 284 S.W.3d 366, 371–72 (Tex. 2009). Such a suit, in effect,
does not seek to alter government policy; it seeks to reassert the control of and
enforce existing policy of the governmental entity. Id. at 372. Because these suits
are not considered to be suits against the governmental entity, they must be
10
brought against the allegedly responsible government actors in their official
capacities, as the Apartments have done here against Krueger. See id. at 373. To
fall within the ultra vires exception to governmental immunity, a plaintiff may not
complain about a government officer‘s exercise of discretion, but rather must
allege, and ultimately prove, that the officer acted without legal authority or failed
to perform a purely ministerial act. Id. at 372. The exception permits only
prospective declaratory or injunctive relief restraining ultra vires conduct, as
opposed to retroactive relief. Id. at 374–77 (explaining that although governmental
immunity does not bar such ultra vires claims, because suit is against the
governmental unit for all practical purposes, its remedies must be limited).
The parties agree that this court will need to construe the ordinance in our
review of the trial court‘s ruling in order to determine whether the facts as pleaded
demonstrate the ultra vires nature of Krueger‘s alleged actions. If we conclude that
the pleadings do not affirmatively negate jurisdiction, then we will determine
whether the evidence raises a fact issue as to jurisdiction.
C. The director’s authority and discretion under the drainage fee ordinance
The City and Krueger insist that the drainage fee ordinance necessarily
grants Krueger the authority and discretion to assess drainage charges on the
Apartments‘ properties after making the threshold determination as to whether the
property is within the ―service area‖ as defined in the ordinance, and after making
the determination as to whether the property falls within any of specified
exemptions from such charges. The Apartments acknowledge that the drainage fee
ordinance confers authority and some discretion upon Krueger to determine the
amount of the fee and the methodology employed in the calculation of the
impervious service on a property subject to the fee. However, they argue that the
issue presented in their ultra vires claims is whether a drainage charge can be
11
imposed on their properties at all. The Apartments contend nothing in the
ordinance gives Krueger the authority or discretion to charge fees that are not
otherwise authorized by the ordinance.
The same rules that govern statutory construction apply to the construction
of municipal ordinances. Seawall E. Townhomes Ass’n, Inc. v. City of Galveston,
879 S.W.2d 363, 364 (Tex. App.—Houston [14th Dist.] 1994, no writ) (citing
Mills v. Brown, 316 S.W.2d 720, 723 (Tex. 1958)). Our primary objective is to
give effect to the enacting body‘s intent. Id.; see TGS–NOPEC Geophysical Co. v.
Combs, 340 S.W.3d 432, 439 (Tex. 2011). The most reliable expression of such
intent is the literal text of the provision. See Alex Sheshunoff Mgmt. Servs., L.P. v.
Johnson, 209 S.W.3d 644, 651 (Tex. 2006). We presume that the language of an
ordinance was selected with care and that every word and phrase was used for a
purpose. See DeQueen, 325 S.W.3d at 635. Where possible, we avoid treating any
language as surplusage. Spradlin v. Jim Walter Homes, Inc., 34 S.W.3d 578, 580
(Tex. 2000). We construe an ordinance ―according to what it says, not according
to what we think it should have said.‖ City of San Antonio v. Hartman, 201
S.W.3d 667, 673 (Tex. 2006). If an ordinance assigns a particular meaning to a
term, courts are bound by the statutory usage. See TGS–NOPEC, 340 S.W.3d at
439.
The City and Krueger point to section 47-805 in support of Krueger‘s broad
authority, which, according to them, ―necessarily grants Krueger the authority and
discretion to assess drainage charges on their properties after determining whether
they are within the service area and not exempt.‖ Section 47-805 provides:
The director shall be responsible for the administration of this article
[XIV. Municipal Drainage Utility System] including, but not limited
to, enacting any procedures or policies necessary for the
administration of the drainage system and the drainage charges,
12
developing maintenance and improvement programs, and establishing
drainage criteria and standards for operation of the drainage system, in
accordance with and subject to the provisions of this article.
Calculation of impervious surface shall be adjusted by the director
based on utilization of approved stormwater management techniques
on the benefitted property. Any approved management techniques are
to be identified and described in detail by the director and the
information made readily available to the public.
Code of Ordinances, § 47-805. The drainage fee ordinance does not define
administration, but the pertinent ordinary meaning of the word means ―the act or
process of administering,‖ that is, ―managing or supervising the execution, use, or
conduct of,‖ here, the municipal drainage utility system. Merriam-Webster‘s
Collegiate Dictionary 16 (11th ed. 2003); see TGS-NOPEC, 340 S.W.3d at 439
(citing In re Hall, 286 S.W.3d 925, 928–29 (Tex. 2009)). The section then
includes some examples of what the director is responsible for administering, such
as ―enacting policies and procedures necessary for the administration of the
drainage system and the drainage charges, developing maintenance and
improvement programs, and establishing drainage criteria and standards for
operation of the drainage system.‖ Code of Ordinances, § 47-805. The director
also is expressly charged with adjusting the calculation of impervious surface
―based on utilization of approved stormwater management techniques on the
benefitted property,‖ and identifying, describing, and making information about
approved stormwater management techniques available to the public. Id.
This section thus confers authority on the director to reasonably fulfill his
duty of administering the municipal drainage utility system ―in accordance with
and subject to the provisions of this article.‖ See id. But essentially the
Apartments‘ position is that the director‘s actions in assessing their properties
drainage charges in fact fall wholly outside the scope and authority of such
13
administrative responsibility because their properties are not ―benefitted
properties‖ or are exempt from drainage charges under section 47-822(f)(2).
To determine whether the Apartments have pleaded permissible ultra vires
claims, we focus on whether those claims have been ―brought against a state
official for nondiscretionary acts unauthorized by law.‖ Tex. Dept. of Transp. v.
Sefzik, 355 S.W.3d 618, 620 (Tex. 2011) (per curiam). To determine the contours
of the director‘s authority and discretion, we examine the enacting body‘s words in
the context of the drainage fee ordinance as a whole and do not consider words or
parts of the ordinance merely in isolation. See DeQueen, 325 S.W.3d at 636.
Under the drainage fee ordinance, the City ―shall establish a schedule of
drainage charges against all real property in the city subject to such charges under
this article.‖ Code of Ordinances, § 47-801(1). The City ―shall provide drainage
for all real property in the city on payment of drainage charges unless the property
is exempt from such payment.‖ Id. § 47-801(2). And the City ―shall offer
drainage service on nondiscriminatory, reasonable and equitable terms.‖ Id. § 47-
801(3). With regard to which properties are subject to drainage charges, section
47-822(a) provides:
To recover the city‘s cost of service to provide drainage to benefitted
properties, annual drainage charges calculated as provided herein are
hereby imposed on all parcels of real property within the drainage
service area for which drainage service is made available under this
article, save and except for those properties exempted from the
payment of drainage charges as provided herein.
Id. § 47-822(a). Thus, the expressed purpose of the drainage charge is to recover
the cost of service associated with providing drainage to ―benefitted properties.‖
Id. The ordinance defines a ―benefitted property‖ as:
a lot or tract to which drainage service is made available under this
14
article and which discharges into a street, creek, river, slough, bayou,
culvert, conduit, inlet, or other channel that forms part of the city
drainage utility system.
Id. § 47-802. Thus, to fall within the category of benefitted property, drainage
service must be made available to the property at issue and that property must
discharge into a ―part of the city drainage utility system.‖ Id. The ordinance
provides that ―cost of service‖:
as applied to the drainage service for any benefitted property, means
but shall not be limited to, the prorated cost of the following:
(1) The acquisition of interests in real property relating to drainage
structures, equipment and facilities;
(2) The acquisition, construction, repair, and maintenance of drainage
structures, equipment, and facilities;
(3) The acquisition of drainage-related architectural, engineering,
legal, and related services, plans and specifications, studies, surveys,
estimates of cost and of revenue, and all other expenses necessary or
incident to planning, providing, or determining the feasibility and
practicality of drainage structures, equipment and facilities;
(4) Providing and operating all drainage-related machinery,
equipment, furniture, and facilities;
(5) Start-up costs of drainage facilities; and
(6) Administrative costs including bank fees.
Id. The ―cost of service‖ thus applies to ―the drainage service for any benefitted
property,‖ which includes costs for acquiring real property interests, constructing
and maintaining drainage equipment and facilities, and operating drainage-related
equipment and facilities. Id. The ordinance defines ―drainage‖ as:
streets, curbs, bridges, catch basins, channels, conduits, creeks,
culverts, detention ponds, ditches, draws, flumes, pipes, pumps,
sloughs, treatment works, and appurtenances to those items, whether
natural or artificial, or using force or gravity, that are used to draw off
surface water from land, carry the water away, collect, store, or treat
15
the water, or divert the water into natural or artificial watercourses;
drainage shall also mean the water so transported.
Id. ―Drainage system‖ is defined as:
the drainage owned or controlled in whole or in part by the city and
dedicated to the service of benefitted property, including provisions
for additions to the system. Drainage system components, including
but not limited to streets, sidewalks, other dedicated improvements,
and supporting right-of-way shall not be considered residential or
nonresidential property as defined herein.
Id. Thus, to be part of the ―drainage system,‖ the drainage must be ―owned or
controlled in whole or in part by the city and dedicated to the service of benefitted
property.‖ Id. The ordinance defines ―public utility‖ as:
drainage service that is regularly provided by the city through
municipal property dedicated to providing such service to the users of
benefitted property within the service area, and that is based on an
established schedule of charges, the use of police power to implement
the service, and nondiscriminatory, reasonable, and equitable terms as
provided under this article.
Id. The ordinance defines the ―drainage service area‖ as ―the corporate limits of
the City of Houston, as those corporate limits are altered from time to time in
accordance with state law and the Charter and ordinances of the city.‖ Id.
The drainage charge is to be imposed on ―all parcels of real property within
the drainage service area for which drainage service is made available under this
article, save and except for those properties exempted from the payment of
drainage charges as provided herein.‖ Id. § 47-822(a). ―Drainage charge‖ is
defined as ―the charge imposed by the city herein, including penalties, to recover
the city‘s cost in furnishing drainage for any benefitted property and the cost of
funding future drainage system improvements.‖ Id. § 47-802. Section 47-822(f)
16
provides for various exemptions. Id. § 47-822(f). Properties falling within any of
these categories ―are exempt from imposition of a drainage charge.‖ Id. The
exemption at issue here is ―[p]roperties served exclusively by a properly
constructed and maintained wholly sufficient and privately owned drainage
system.‖ Id. § 47-822(f)(2); see also id. § 47-822(f)(1), (3)–(7) (other exemptions
are for agricultural use property, state agencies, institutions of higher education,
property owned by school districts as of a certain date, tax-exempt property owned
by religious organizations, and county-exempt property). The ordinance defines a
―wholly sufficient and privately owned drainage system‖ as ―land owned and
operated by a person or entity other than the city‘s drainage utility system, the
drainage of which does not discharge into a street, ditch, culvert, creek, river,
slough, or other channel that is a part of the city‘s drainage system.‖ Id. § 47-802.
The Apartments contend Krueger‘s charging drainage fees to properties that
are not ―benefitted properties‖ or that fall within the ―wholly sufficient and
privately owned drainage system‖ exemption would not be authorized by the
drainage fee ordinance. The City and Krueger insist that the Apartments merely
complain of Krueger‘s exercise of authority and discretion granted to him under
the ordinance to assess drainage charges on their properties after determining that
they are within the service area and not exempt. The City and Krueger argue that
the ordinance utilizes the term ―benefitted property‖ in a ―global sense‖ to refer to
all developed property in the service area, and thus all property presumptively is
―benefitted property‖ subject to drainage charges. The City and Krueger also
argue that ―as a matter of law, all property within the service area discharges into
the ‗drainage system‘ because that term is defined in an integrated holistic manner
to include all natural and artificial means or components for drawing off surface
runoff or storm water either directly or indirectly—including the water itself.‖ The
17
City and Krueger further contend the Apartments cannot complain that Krueger
―got it wrong‖ in an ultra vires suit.12 We conclude that the plain language of the
ordinance does not support the City and Krueger‘s position.
The drainage fee ordinance provides a specific definition for ―benefitted
property.‖ Id.13 This express definition does not state that ―benefitted property‖ is
all property within the City, or within the service area, but rather that it is property
to which drainage service is made available and which discharges into a part of the
city drainage utility system. See id. Nor does the plain language of the definition
of ―drainage system‖ support the City and Krueger‘s claim that all property in the
service area presumptively discharges into the requisite ―drainage system.‖ While
the components of the drainage system are not limited in type and include ―streets,
sidewalks, other dedicated improvements, and supporting right[s]-of-way,‖ there is
an express limitation in that such drainage must be ―owned or controlled in whole
or part by the city.‖ Id. The drainage within the drainage system also must be
―dedicated to the service of benefitted property.‖ Id. This usage is consistent with
12
We note that the City and Krueger‘s position as to this argument is inconsistent at best.
At the evidentiary hearing, counsel for the City and Krueger stated: ―If [Krueger] imposed a fee
on a piece of property that is not subject to the fee, then that would be an ultra vires act.‖ When
further asked by the trial court whether it had jurisdiction in a case where Krueger ―makes a
mistake‖ as to whether a property is subject to a fee, counsel for the City and Krueger agreed.
Moreover, the federal cases cited by the City and Krueger do not support their position. To the
extent we would even consider immunity as applied in federal law, the statutes at issue provided
authority for the official to perform the challenged action. Aminoil U.S.A., Inc. v. Cal. State
Water Res. Control Bd., 674 F.2d 1227, 1234 (9th Cir. 1982) (EPA administrator had authority
to issue ―a finding of violation‖ ―on the basis of any information available to him‖ under 33
U.S.C. § 1319(a)(1)); Gardner v. Harris, 391 F.2d 885, 888 (5th Cir. 1968) (―No limits on this
authority are cited to us, either by the Government or by the Court below, as long as it is
reasonably connected with the administration of the [Natchez] Trace.‖ (footnote omitted)).
13
This definition generally mirrors the definition of ―benefitted property‖ provided in
subchapter C of chapter 552 of the Texas Local Government Code (the ―Municipal Drainage
Utility Systems Act‖ or ―MDUSA‖). See Tex. Local Gov‘t Code § 552.044(1)(B). The
municipal drainage utility system under the drainage fee ordinance was created in accordance
with the MDUSA. Code of Ordinances, § 47-803.
18
the ordinance‘s definition of ―public utility,‖ which provides ―utility‖ drainage
service is such that is ―regularly provided by the city through municipal property
dedicated to providing such service to the users of benefitted property within the
service area.‖ Id. Further, the phrase ―for which drainage service is made
available‖ used within section 47-822(a) on drainage charges qualifies which
properties within the service area are to have charges imposed on them, and such
usage is consistent with the phrase ―to which drainage service is made available‖
included within the definition of ―benefitted property.‖ Id. §§ 47-802, 47-822(a).
Thus, we cannot agree with the City and Krueger that the facts relating to any
particular property—whether drainage service is made available to it and whether
it discharges into the city drainage utility system—are immaterial to its status as a
―benefitted property.‖
Not only does the ordinance assign a particular and binding definition to the
term ―benefitted property,‖ see TGS–NOPEC, 340 S.W.3d at 439, but also the
ordinance consistently qualifies that drainage charges are only to be imposed
where drainage is provided to ―benefitted properties.‖ For example, the expressed
purpose of the drainage charge is ―[t]o recover the city‘s cost of service to provide
drainage to benefitted properties‖ and, as such, the rates and calculations of
drainage charges are provided for each ―benefitted property.‖ Code of Ordinances,
§ 47-822(a), (b), (c). Drainage charges are imposed ―to recover the city‘s cost of
furnishing drainage for any benefitted property.‖ Id. § 47-802. The area of
impervious surface ―on each benefitted property‖ shall be determined based on
digital map data from the tax assessment rolls or other similar reliable data as
determined by the director. Id. § 47-822(d). The cost of service applies to ―any
benefitted property.‖ Id. § 47-802. Users, which are defined as ―person[s] or
entit[ies] who own[] or occup[y] a benefitted property,‖ id., can request
19
verification and correction of, and attempt to appeal, initial drainage charges
―imposed on a benefitted property,‖ id. § 47-824. Further, the defined term
―benefitted property‖ is utilized within seven other defined terms—including ―cost
of service,‖ ―drainage charge, ―drainage system,‖ ―public utility‖ and ―user‖—in
the ordinance. Id. § 47-802. We conclude that the enacting body would not have
particularly defined ―benefitted property‖ and consistently used it in the context of
qualifying the drainage charges to be imposed under the ordinance if what it
actually intended was that all real property in the City or ―service area‖
presumptively was to be assessed charges. To conclude otherwise would involve
impermissibly treating the term ―benefitted property‖ as surplusage. See Spradlin,
34 S.W.3d at 580.
We thus conclude that, under the plain language of the drainage fee
ordinance, a property must be a ―benefitted property‖ to be subjected to drainage
charges.14 Also, the parties apparently do not disagree that, under the plain
language of the ordinance, if a property falls within one of the specified categories
of exemption, including being exclusively served by a ―wholly sufficient and
privately owned drainage system,‖ it is not to be subjected to drainage charges.
But we acknowledge these are slightly different questions than whether the director
has the authority, and the discretion, to impose drainage charges on a property that
is not a ―benefitted property‖ under the ordinance or that is otherwise not subject to
drainage charges under the ―wholly sufficient and privately owned drainage
system‖ exemption, such that he would not be subject to ultra vires claims here.
Beyond the general responsibility to administer the municipal drainage
utility system, Code of Ordinances, § 47-805, the ordinance provides specific
14
We do not find persuasive the City and Krueger‘s cited cases related to other states‘
―similar statutes.‖ There, the central issue was whether the utility charge imposed amounted to
an impermissible tax or a valid special assessment. That particular issue is not before us.
20
authority with regard to the calculation and adjustment of impervious surface on
―benefitted properties‖ based on approved stormwater management techniques, id.;
the determination of the area of impervious surface ―on each benefitted property‖
based on digital map data from tax plats and assessment rolls or other similar,
reliable data, id. § 47-822(d); the review and adjustment of the amount of
impervious surface and drainage charges ―for benefitted property,‖ id. § 47-823;
the system of verification and correction for properties subject to drainage fees, id.
§ 47-824(a); for appeals, the designation of independent hearing examiners to
consider whether the drainage charge was correctly determined based on the
amount of impervious surface, id. § 47-824(e); and the determination of the party
responsible for drainage charges, id. § 47-843. However, none of these grants of
authority specifically indicates that the director has authority to determine which
properties are ―benefitted properties‖ or subject to drainage charges because they
do not meet an exemption.15 Rather, the common thread of all these specifically
authorized actions is that they apply and the director performs them only with
regard to ―benefitted properties,‖ or to properties ―subject to the drainage charges.‖
With regard to the specifically authorized actions, the drainage fee ordinance
indicates which are subject to the director‘s discretion.16 The director has
discretion to approve stormwater management techniques, id. § 47-805; to decide
15
Although the City and Krueger acknowledge this in their reply brief, they argue that
the authority to decide ―whether a property is benefitted‖ and ―whether properties have created a
sufficient private drainage system to qualify for an exception‖ is ―implied as a natural outgrowth
of the ordinance.‖ However, their cited case, Pruett v. Harris County Bail Bond Board, is
distinguishable because the statute at issue expressly conferred on the board as an administrative
agency the authority to ―regulate‖ the bail bonding business. 249 S.W.3d 447, 452–53 (Tex.
2008) (―When a statute expressly authorizes an agency to regulate an industry, it implies the
authority to promulgate rules and regulations necessary to accomplish that purpose.‖).
16
Within the context of official immunity, the Texas Supreme Court has explained: ―If an
action involves personal deliberation, decision and judgment, it is discretionary; actions which
require obedience to orders or the performance of a duty to which the actor has no choice, are
ministerial.‖ City of Lancaster v. Chambers, 883 S.W.2d 650, 654 (Tex. 1994).
21
what constitutes ―other similar reliable data‖ for purposes of determining area of
impervious surface, id. § 47-822(d); to ―where appropriate‖ adjust the calculation
of impervious square footage to determine drainage charges, id. § 47-823; with
regard to establishing and implementing the system for verification and correction
of drainage charges, id. § 47-824(a); with regard to establishing the independent
process for appealing verification and correction results, subject to City council‘s
approval, id. § 47-824(e); and, in circumstances of multiple users, when choosing
which party is responsible for drainage charges, id. § 47-843. However, the
ordinance does not contain any language indicating—even if the director has the
authority to make the determinations—that he personally decides which properties
are ―benefitted‖ or otherwise exempt from drainage charges, such as under section
47-822(f)(2). The ordinance does not expressly provide the director with
discretion to interpret the ordinance,17 or to grant or deny exemptions.18 Rather,
the ordinance expressly defines ―benefitted property‖ and provides a set list of
mandatory exemptions, including one for properties exclusively served by ―wholly
sufficient and privately owned drainage systems.‖ Id. §§ 47-802, 47-822(f); see
also id. § 47-801(2) (―The city shall provide drainage . . . on payment of drainage
charges unless the property is exempt from such payment as provided herein.‖); id.
§ 47-822(a) (―To recover the city‘s cost of service to provide drainage to benefitted
properties, annual drainage charges calculated as provided herein are hereby
17
The Apartments note that, unlike in Klumb v. Houston Municipal Employees Pension
System, the drainage fee ordinance does not provide the director with discretion to interpret or
supplement the ordinance. 405 S.W.3d 204, 218 (Tex. App.—Houston [1st Dist.] 2013, pet.
filed) (providing that pension board may ―interpret and construe‖ the statute at issue, and may
also ―correct any defect, supply any omission, and reconcile any inconsistency that appears in
this Act in a manner and to the extent that the pension board considers expedient to administer
this Act for the greatest benefit of all members‖).
18
Cf. Creedmoor-Maha Water Supply Corp. v. Texas Comm’n on Envtl. Quality, 307
S.W.3d 505, 517 (Tex. App.—Austin 2010, no pet.) (legislature delegated express and exclusive
authority to TCEQ to ―grant or deny‖ expedited release petitions based on all relevant
information submitted).
22
imposed . . . , save and except for those properties exempted from the payment of
drainage charges as provided herein.‖).
Nor do the cases relied on by the City and Krueger in their brief persuade
this court that the ordinance grants Krueger the discretion to perform the ultra vires
act of imposing a drainage charge on a property that is not a ―benefitted property‖
or the ultra vires act of imposing a drainage charge on a property that falls within
the ―wholly sufficient and privately owned drainage system‖ exemption, as alleged
here.19 City of Lancaster v. Chambers involved a police officer‘s discretionary
actions while engaging in a high-speed chase. 883 S.W.2d 650, 655 (Tex. 1994)
(―Beyond the initial decision to engage in the chase, a high speed pursuit involves
the officer‘s discretion on a number of levels[.]‖). In McLane Co. v. Strayhorn, the
court concluded that sovereign immunity barred suit against the comptroller who
refused a letter of credit as collateral for receiving cigarette tax stamps without
prepayment because the language of the statute at issue ―evidence[d] a clear grant
of discretion‖ to the comptroller to determine whether such pledged collateral was
―acceptable.‖ 148 S.W.3d 644, 650 (Tex. App.—Austin 2004, pet. denied).
19
The cases the City and Krueger cite in their reply brief also are distinguishable. See
Ahmed v. Texas Tech Univ. Health Sci. Ctr. Sch. of Med. at Amarillo, No. 07-11-00176-CV,
2013 WL 265076, at *7 (Tex. App.—Amarillo Jan. 23, 2013, no pet.) (mem. op.) (supervisor‘s
actions in providing unfavorable evaluation, opposing plaintiff‘s appeal of evaluation, cancelling
plaintiff‘s teaching assignments, failing to include plaintiff in faculty retreats, meetings and
dinners, failing to timely perform evaluations, and pressuring plaintiff to resign his position were
discretionary); Creedmoor-Maha Water Supply, 307 S.W.3d at 517; Merritt v. Cannon, No. 03-
10-00125-CV, 2010 WL 3377778, at *3 (Tex. App.—Austin Aug. 27, 2010, pet. denied) (mem.
op.) (statutory scheme at issue expressly charged the Texas Department of Transportation with
both administration and enforcement pertaining to regulation and permitting of outdoor signs on
rural roads); Appraisal Review Bd. of Harris Cty. Appraisal Dist. v. O’Connor & Assocs., 267
S.W.3d 413, 419 (Tex. App.—Houston [14th Dist.] 2008, no pet.) (concluding that plaintiffs
were required to and had failed to exhaust their administrative remedies under the Tax Code, nor
had plaintiffs pleaded review board acted wholly outside, just that it did not procedurally comply
with, Tax Code provisions).
23
Here, while clear authority is provided for the director to take various
discretionary actions with regard to ―benefitted property‖ and property not subject
to any exemption, the ordinance does not provide such a clear and unambiguous
grant of authority, much less discretion, for the director to make the underlying
determinations of whether a property constitutes ―benefitted property‖ or falls
within an exemption such as for properties served exclusively by ―wholly
sufficient and privately owned drainage systems.‖ Further, the ordinance‘s
consistent references to drainage charges as applying to ―benefitted properties,‖
and to property ―subject to such charges‖ and ―unless‖ and ―save and except‖
exempt indicates the intent of the enacting body was that only ―benefitted
properties‖ subject to drainage charges, meaning those not falling within an
exemption, even would have charges imposed on them. In other words, imposing
drainage charges on a property not properly subject to charges—that is not a
―benefitted property‖ or is a ―benefitted property‖ but otherwise exempt because it
is exclusively served by a ―wholly sufficient and privately owned drainage
system‖—would involve acting without legal authority under the ordinance.
Construing the ordinance as a whole, and under the presumption that the
enacting body chooses its wording with care, we conclude the director who
imposes drainage charges on properties that do not properly meet the definition of
―benefitted property‖ or that otherwise properly fall within the ―wholly owned and
privately owned drainage system‖ exemption has acted ultra vires—that is, he has
failed to comply with or has acted without legal authority under the ordinance. We
thus cannot agree with the City and Krueger that, if, as the Apartments have
pleaded, their properties do not fit within the definition of ―benefitted property‖
because the City does not own or control any part of the drainage system that is
made available or dedicated to their properties or their properties otherwise fall
24
within the ―wholly sufficient and privately owned drainage system‖ exemption,
Krueger has the authority and discretion to choose to impose drainage charges on
their properties. Therefore, construing the Apartments‘ pleadings liberally, we
conclude that they have met their affirmative pleading requirement. See Miranda,
133 S.W.3d at 226.
D. Whether the evidence conclusively shows a lack of jurisdiction
Next, we must determine whether the City and Krueger have presented
conclusive proof that the Apartments‘ properties are ―benefitted properties.‖ We
also must determine whether they have presented conclusive proof that the
Apartments‘ properties are otherwise not subject to the exemption for a ―wholly
sufficient and privately owned drainage system.‖ See id. at 228. Only if the
evidence fails to raise a fact issue as to the Apartments‘ status as ―benefitted
properties,‖ and also as not subject to the ―wholly sufficient and privately owned
drainage‖ fee exemption, then we should rule on and sustain the plea in its entirety
as a matter of law. See id.
In our review of the trial court‘s decision to partially deny the plea to the
jurisdiction, we take as true all evidence favorable to the Apartments and we keep
in mind it is the City and Krueger‘s burden to negate any genuine issue of material
fact as to jurisdiction, akin to review of a summary judgment. See id. We also
keep in mind that although we must review evidence that implicates the merits as
necessary to decide the jurisdictional question, the ultimate merits of the parties‘
controversy are not before us. See id. (―[B]y reserving for the fact finder the
resolution of disputed jurisdictional facts that implicate the merits of the claim or
defense, we preserve the parties‘ right to present the merits of their case at trial.‖);
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000) (―[T]he proper
function of a dilatory plea does not authorize an inquiry so far into the substance of
25
the claims presented that plaintiffs are required to put on their case simply to
establish jurisdiction.‖).
1. Evidence as to whether the Apartments are “benefitted properties”20
We first consider whether the City and Krueger have conclusively negated
any genuine fact issue as to whether the Apartments‘ properties are ―benefitted
properties.‖ The City and Krueger insist that because the Apartments‘ properties
have City addresses (Little Nell and Regency) or share a border with the City
(Windshire), they are within the service area under the ordinance and thus are
―benefitted properties‖ as a matter of law. However, as analyzed above, under the
drainage fee ordinance, mere location is not enough to meet the definition of a
―benefitted property.‖ Instead, a ―benefitted property‖ means ―a lot or tract to
which drainage service is made available under this article and which discharges
into a street, creek, river, slough, bayou, culvert, conduit, inlet, or other channel
that forms part of the city drainage utility system.‖ Code of Ordinances, § 47-802.
With regard to whether drainage service is made available to the
Apartments‘ properties and whether those properties discharge into ―part of the
city drainage utility system,‖ we consider the language of the ordinance.
―Drainage service‖ is not separately defined in the ordinance, but appears twice in
the definitions section. First, the term appears within the definition of ―cost of
service‖—―as applied to the drainage service for any benefitted property.‖ Id.
Second, within the definition of ―public utility,‖ meaning ―drainage service that is
regularly provided by the city through municipal property dedicated to providing
20
We note that the parties provided little in the way of argument regarding the specific
evidence put forth as to the jurisdictional facts. The City and Krueger primarily rely on their
interpretation of the ordinance and the ―MS4 permit.‖ And the Apartments dispute that the facts
implicate jurisdiction, as opposed to the merits, and then merely refer this court to their
―exhaustive briefing submitted to the trial court.‖
26
such service to the users of benefitted property within the service area.‖ Id. The
ordinance also does not define the term ―city utility drainage system,‖ but does
define ―drainage system‖ to mean:
the drainage owned or controlled in whole or in part by the city and
dedicated to the service of benefitted property, including provisions
for additions to the system. Drainage system components, including
but not limited to streets, sidewalks, other dedicated improvements,
and supporting right[s]-of-way shall not be considered residential or
nonresidential property as defined herein.
Id. ―Drainage system‖ also appears in the definition of ―drainage charge‖: ―the
charge imposed by the city herein . . . to recover the city‘s cost in furnishing
drainage for any benefitted property and the cost of funding future drainage system
improvements.‖ Id. Further, the ordinance expressly incorporates ―[e]xisting City
of Houston drainage facilities . . . into the drainage utility.‖ Id. § 47-804.
Based on the plain language read in the context of the ordinance as a whole,
it is clear that the drainage service made available to a property must be provided,
at least partially, by the City. Likewise, in order for a property to discharge into
the city drainage utility system, it is clear that the drainage at issue must be
furnished, that is, owned or controlled at least partially by the City. At the least,
the City and Krueger need to conclusively prove there is no genuine fact issue as to
the partial ownership or control by the City of the drainage service allegedly made
available to each of the Apartments‘ properties, and of the part of the city drainage
utility system into which each of the Apartments‘ properties allegedly discharges.
We conclude that they have not met their burden.
a. Little Nell
1) The City and Krueger‘s evidence
The City and Krueger point to testimony by Haddock and Smitha that
27
stormwater from Little Nell discharges into a flow pattern that includes Brays
Bayou,21 the Brays Bayou Detention Basin, and Mason Park, and ultimately flows
to the Houston Ship Channel. They presented deeds purporting to show the
transfers of the Brays Bayou detention facility property and the Mason Park
property to the City. Haddock and Smitha also testified that the detention facility
is owned by the City. Haddock further testified that the detention facility was built
by the City, and HCFCD ―agreed to the long-term maintenance.‖ Smitha stated
that HCFCD maintains the detention facility. The City and Krueger presented the
City‘s Storm Water Management Program (―SWMP‖)—the document
implementing the City‘s portion of the Municipal Separate Storm Sewer System
permit, known as the ―MS4 permit‖22—which states that the City constructed and
HCFCD maintains the Brays Bayou detention facility. They also presented the
Memorandum of Understanding between the City and HCFCD, which states that
the City owns and constructed the Brays Bayou Detention Basin, and HCFCD
―assumed responsibility for maintenance.‖
2) The Apartments‘ evidence
According to Brown, the drainage for Little Nell is collected in an
underground drainage system and then is discharged into an on-site detention
facility. This flow is then metered and discharged into a HCFCD flood control
21
The State of Texas, except where title has been transferred, owns the soil underlying
navigable streams. Tex. Parks & Wildlife Dep’t v. Sawyer Trust, 354 S.W.3d 384, 386–87 (Tex.
2011) (citing Tex. Parks & Wild. Code § 1.011(c); Tex. Water Code § 11.021). Although not
discussed in their respective briefs, in the trial court, the parties each relied on competing
legislative pronouncements that they contended bore on State transfer of ownership of the
various streams here, either to the City or to what is now the Port Authority. However, the
record indicates this is all the trial court was presented on the issue. Under these circumstances,
we conclude that the City and Krueger have not conclusively proven, as a matter of law, that the
steams at issue constitute drainage owned in whole or part by the City under the ordinance.
22
This is a permit to discharge stormwater within the MS4 system issued by the Texas
Commission on Environmental Quality (―TCEQ‖), and is discussed further in Section III.D.1.d.
28
unit, which is owned and operated by HCFCD. The Apartments presented, and
Brown discussed, correspondence between Brown and HCFCD concerning the
permitting and inspection of the discharge drainage pipe from the Little Nell
detention facility to the HCFCD‘s flood control unit. Brown testified that Little
Nell had to obtain a permit from HCFCD for the drainage ―[b]ecause they claim
that to be their wholly owned and operated facility.‖ After that, the drainage flows
to Brays Bayou, into the Houston Ship Channel, and then into the Gulf of Mexico.
The Apartments also presented a deed purporting to show the transfer of the Brays
Bayou detention facility property from Frank Meyer to HCFCD; Smitha agreed
that the survey attached to the deed ―looks like it borders or is part of Brays
Bayou.‖ In addition, Haddock testified that HCFCD calls the Brays Bayou
Detention Basin the ―Meyer Tract‖ and also described the detention facility
property as ―[p]art of the Mason conveyance.‖ Further, the City‘s SWMP states
that HCFCD constructed the ―freshwater tidal marsh and wetland‖ within Mason
Park.
Taking as true all evidence favorable to the Apartments and drawing all
reasonable inferences and resolving any doubts in their favor—we conclude that
the City and Krueger have not conclusively shown there is no genuine fact issue
regarding whether the Little Nell property is a ―benefitted property‖ under the
ordinance and thus presumptively subject to drainage charges. See Miranda, 133
S.W.3d at 228. In other words, the evidence presents a fact issue as to the partial
ownership or control by the City of the drainage service allegedly made available
to Little Nell, and whether Little Nell discharges into any part of the city drainage
utility system.
b. Windshire
1) The City and Krueger‘s evidence
29
According to Haddock, the drainage from Windshire flows into ―a private
detention facility built [sic] which the plaintiff at the site and then drains back into
the [South] Shaver Road roadside open ditch system and ultimately into . . . Brays
Bayou and ultimately into Sims [B]ayou,‖ and then through the Houston Ship
Channel to Galveston Bay. She stated that the Windshire drainage also flows
through Milby Park, owned by the City, and that the City performs maintenance on
the South Shaver Road ditches. Haddock testified that, based on her review of two
purported Milby Park deeds, the City owns land to the ―center line‖ of Sims
Bayou. According to Smitha, Windshire‘s stormwater first drains into a private
pumped detention pond, then drains into a ditch on South Shaver Road, a City-
owned and –maintained street, and then to Milby Park.
2) The Apartments‘ evidence
Brown testified that stormwater from Windshire discharges into a roadside
ditch along the east side of South Shaver Road, then flows to State Highway 3, into
―an open ditch drainage channel along the railroad tracks . . . eventually making its
way to Berry Bayou, on towards Sims Bayou, then to the Houston Ship Channel,
and then to the Gulf of Mexico.‖ Brown testified that South Shaver Road was and
is owned, operated, and maintained by Harris County—the road ―shows up on the
County Road Log.‖ According to Brown, none of the ―spots‖ of Windshire‘s
drainage flow is owned by the City. The Apartments also presented a deed
purporting to show that the City granted an easement to HCFCD of the Milby Park
land.
Taking as true all evidence favorable to the Apartments and drawing all
reasonable inferences and resolving any doubts in their favor—we conclude that
the City and Krueger have not conclusively shown there is no genuine fact issue
regarding whether the Windshire property is a ―benefitted property‖ under the
30
ordinance and thus presumptively subject to drainage charges. See id. In other
words, the evidence presents a fact issue as to the partial ownership or control by
the City of the drainage service allegedly made available to Windshire, and
whether Windshire discharges into any part of the city drainage utility system.
c. Regency
1) The City and Krueger‘s evidence
Both Haddock and Smitha testified that the stormwater drainage from
Regency eventually flows to Sims Bayou. Also, according to Haddock, the
stormwater collected by Regency‘s internal drainage system flows onto Southdown
Trace Trail, the City-owned street in front of the property, and into a City-owned
culvert under the street. Haddock testified that the drainage then passes through a
Harris County Municipal Utility District (―MUD‖) facility and other
improvements, constructed by MUD but with the City‘s approval, and then
eventually into Clear Lake, which she acknowledged is not owned by the City.
2) The Apartments‘ evidence
Brown testified that there is no City-owned or –operated drainage for
Regency. The stormwater from Regency is collected in an underground drainage
system, ―then conveyed across the entry drive into a private storm sewer, which
then goes about, my recollection is 650, 700 feet of private offsite storm sewer that
we had to build to convey the water and get it to the Harris County MUD Number
4-10 Regional Detention Facility.‖ Brown stated that Regency had to obtain
MUD‘s approval for the drainage; the Apartments presented Brown‘s letter to
MUD ―request[ing] a commitment for drainage.‖ According to Brown, although
the City has to ―approve the creation of these MUD districts,‖ the MUD districts
have ―a separate board that controls and operates the districts.‖ Brown also
31
indicated at the time of development MUD represented to him that the box culvert
under the street was part of a private drainage system. Brown further testified that
the flow is then metered through the MUD facility into a HCFCD facility, and goes
south to Clear Creek, then through Clear Lake and into Galveston Bay.
Taking as true all evidence favorable to the Apartments and drawing all
reasonable inferences and resolving any doubts in their favor—we conclude that
the City and Krueger have not conclusively shown there is no genuine fact issue
regarding whether the Regency property is a ―benefitted property‖ under the
ordinance and thus presumptively subject to drainage charges. See id. In other
words, the evidence presents a fact issue as to the partial ownership or control by
the City of the drainage service allegedly made available to Regency, and whether
Regency discharges into any part of the city drainage utility system.
d. MS4 permit
Alternatively, even if the Apartments‘ stormwater discharges into property
or facilities otherwise entirely owned or operated by other entities, and not the
City, the City and Krueger insist that this still does not raise a fact issue as to
whether the Apartments are ―benefitted properties‖ because the ordinance
―considers the MS4 as part of the City‘s service area and all property discharging
into the MS4 as ‗benefitted property.‘‖ They provide, and we have located, no
language from the drainage fee ordinance that supports this claim. Indeed, the
ordinance only speaks to the dedication of existing City drainage assets to the
municipal drainage utility system. Code of Ordinances, § 47-804. The City and
Krueger further argue that since all the drainage at issue falls within the purview of
the MS4 permit,23 because the City is a co-permittee, the City is therefore
23
The initial permit was issued by the Environmental Protection Agency; permitting later
was delegated to the TCEQ.
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responsible for all drainage within the permitted area as a ―single system.‖
1) The City and Krueger‘s evidence24
Haddock and Smitha provided testimony regarding the MS4 permit. Under
the Clean Water Act, the federal government began requiring municipalities to
obtain permits in order to ―control discharges from storm water‖ into U.S. waters.
The MS4 permit allows four co-permittees—the City, HCFCD, Harris County, and
the Texas Department of Transportation Houston District (―TxDOT‖)—to ―use
[the] MS4 system.‖ Haddock testified that the co-permittees are ―jointly
responsible‖ for ―what leaves the MS4‖ into U.S. and Texas waters. That is, the
co-permittees engage in joint and individual programs in an effort to ―eliminate the
potential for pollutants and non storm water to get into and be discharged from the
MS4.‖ According to Haddock, all property in the City is covered by the MS4
permit. Haddock also testified ―the bayous, the pipes, the open ditches‖ are part of
the joint MS4 ―drainage system that services, facilitates drainage within the City.‖
Smitha stated that it was ―common knowledge‖ that the City, HCFCD, Harris
24
Although not discussed in their appellate briefing, in the trial court, the City and
Krueger also presented stormwater quality permits issued by the City to the Apartments‘
properties in support of their claim that the City is thus responsible for all portions of the MS4
drainage. Under the relevant portion of the MS4 permit, co-permittees are charged with
continuing to implement ―a comprehensive master planning process (or equivalent) to develop,
implement, and enforce controls to minimize the discharge of pollutants from areas of new
development and significant redevelopment after construction is completed.‖ According to
Haddock, these permits help the City meet ―the responsibility of making sure [pollutants] do not
get into our MS4‖ and concern ―the potential for pollutants in the storm water and non storm
water leaving the property.‖ According to Smitha, these permits ―allow the plaintiff‘s properties
to discharge storm water into the MS4‖ and have to be issued by the City for certain
development property within the City. Brown indicated that these permits do not ―establish any
control over the drainage systems by the City of Houston on the plaintiffs‘ properties.‖ Brown
testified that the only control at issue in these permits is of the Apartments as property owners—
which have to control the quality of their stormwater discharge ―as it leaves the property,‖
―before‖ it enters the MS4 system. Thus, the City and Krueger have not met their burden to
show that the City‘s issuing and approving stormwater discharge permits for certain development
property within the City equates to conclusive evidence of the City‘s having partial ownership or
control over the facilities into which that property‘s stormwater discharge flows.
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County, and TxDOT each owns and operates certain parts of the drainage system
within the City, but indicated that under the MS4 ―it‘s still one system.‖
2) The joint MS4 permit and individual SWMPs
The MS4 permit defines co-permittee as ―one of several entities authorized
under a single individual permit that is only responsible for permit conditions
relating to the discharge for which it is the operator.‖ The MS4 permit provides
that each co-permittee is ―individually responsible‖ for ―[c]ompliance with permit
conditions relating to discharges from portions of the JTF [Joint Task Force] MS4
for which they are the operator‖ and ―Storm Water Management Program (SWMP)
implementation on portions of the JTF MS4 for which they are the operator.‖ Co-
permittees are ―jointly responsible‖ for ―permit compliance on portions of the JTF
MS4 where operational or SWMP implementation authority over portions of the
JTF MS4 is shared.‖ Each co-permittee is to develop, implement, and revise its
own SWMP, and is to ―provide adequate finances, staff, equipment, and support
capabilities to implement their activities under the SWMPs.‖ In addition, ―[t]he
SWMPs shall identify the areas of copermittees‘ jurisdiction for each program,
element, control and activity.‖
The City‘s SWMP under the MS4 permit states that ―the City has
constructed or assumed responsibility for nine detention basins,‖ ―maintains a
storm sewer system,‖ and maintains its streets, bridges, ditches, and rights-of-way.
The City‘s SWMP also states: ―HCFCD is responsible for most major flood
control facilities within Harris County, including within the City.‖ HCFCD‘s
SWMP states that it owns and operates 2500 miles of drainage channels and
regional detention basins. Harris County‘s SWMP states that its four precincts and
the Harris County Toll Road Authority are responsible for ―[t]he operation and
maintenance of County-owned storm sewers, roadside ditches, and roadway
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drainage structures.‖ Harris County‘s SWMP also states that HCFCD ―has
primary responsibility for flood control projects in Harris County.‖ TxDOT‘s
SWMP states that it ―owns, operates and maintains the drainage system that
conveys runoff from the TxDOT right-of-way,‖ which ―drainage system is
typically composed of storm sewers, open ditches, outfalls, detention ponds and
pump stations.‖
3) The Apartments‘ evidence
According to Brown, under the MS4 permit:
There is [sic] some open channels within the city that are owned,
operated and maintained by the City, but there‘s [sic] not very many
of those. 99.9 percent of all the channels that flow through the city,
open ditch channels are operated and maintained by the Harris County
Flood Control District. The ownership or the underlying fee
ownership or easement ownership varies from location to location.
Brown also stated that ―the City and the Flood Control District get together from
time to time and just dust off the list of these channels to make sure everybody
clearly understands the separation of authority as to who‘s going to declare what as
being owned and operated and maintained.‖ Brown thus opined that the drainage
system is not ―one integrated system.‖
Taking as true all evidence favorable to the Apartments and drawing all
reasonable inferences and resolving any doubts in their favor—we conclude that
the City and Krueger have not conclusively shown the City‘s partial ownership or
control of all drainage facilities subject to the joint MS4 permit, and thus that the
Apartments‘ properties are ―benefitted properties‖ as a matter of law. See
Miranda, 133 S.W.3d at 228. Therefore, because the City and Krueger have failed
to meet their burden to negate any genuine issue as to this jurisdictional fact, we
conclude that the trial court did not err in partially denying their plea to the
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jurisdiction with regard to the Apartments‘ claims that Krueger acted ultra vires by
determining that their properties were ―benefitted properties‖ subject to drainage
charges. See id. at 227–28.
2. Evidence as to whether the Apartments’ properties fall within the
“wholly sufficient and privately owned drainage system” exemption
Alternatively, the Apartments allege that even if their properties are
―benefitted properties‖ under the drainage fee ordinance, Krueger is committing
ultra vires acts by imposing drainage charges on them because they fall within the
exemption provided under section 47-822(f)(2) of the ordinance. See Code of
Ordinances, § 47-822(f)(2). The Apartments allege that all of the drainage systems
used by their properties are not a part of the city drainage system—the drainage
systems they use are owned and operated by the Apartments, Harris County, and
HCFCD. Thus, we next consider whether the City and Krueger have conclusively
negated any genuine fact issue as to whether the Apartments‘ properties fall within
the ―wholly sufficient and privately owned drainage system‖ exemption.
The ordinance provides an exemption from imposition of drainage charges
for ―[p]roperties served exclusively by a properly constructed and maintained
wholly sufficient and privately owned drainage system.‖ Id. The ordinance
defines ―wholly sufficient and privately owned drainage system‖ to mean:
land owned and operated by a person or entity other than the City‘s
drainage utility system, the drainage of which does not discharge into
a street, ditch, culvert, creek, river, slough, or other channel that is a
part of the city‘s drainage system.
Id. § 47-802. We already have determined that to be part of the city drainage
utility system or city drainage system, the drainage at issue must be furnished, that
is, owned or controlled at least partially by the City. Thus, under the plain
36
language of the ordinance, a property is exempt from drainage charges under
section 47-822(f)(2) when it is ―served exclusively by a properly constructed and
maintained wholly sufficient and privately owned drainage system‖; that is, the
property must be served exclusively by properly constructed and maintained land
that is not at least partially owned or controlled by the City, the drainage of which
does not discharge into drainage at least partially owned or controlled by the City.
Id. §§ 47-801, 47-822(f)(2).
The City and Krueger argue that they proved the Apartments‘ properties do
not fall within this exemption ―because they actually discharge into the [City‘s]
drainage system.‖ They essentially rely on the ―same evidence‖ that they rely on
for purposes of the ―benefitted property‖ jurisdictional fact issue. The City and
Krueger also point to testimony by Haddock explaining a property only would
qualify for this exemption if it were ―bermed,‖ i.e., surrounded by land that would
not allow any water to leave the site, or if its detention system retained all water
until it evaporated. According to Haddock and Smitha, any detention system or
basin owned or operated by the Apartments does not qualify as a ―wholly sufficient
and privately owned drainage system‖ because although it may collect the
stormwater on site, ultimately, it allows drainage to flow, even if at a metered rate,
into the city drainage system. They point to Brown‘s acknowledgement that the
water eventually does leave the private detention systems or basins on the
Apartments‘ property. And, again, the City and Krueger contend even if the
evidence shows that certain of the Apartments‘ properties discharge only onto land
or into components entirely owned or controlled by another entity such as HCFCD,
―[t]hese properties still utilize Houston‘s drainage system because it is one
complete integrated holis[]tic system‖ under the MS4 permit.
37
However, just because stormwater is metered out and flows beyond any
private detention system or basin on the Apartments‘ properties does not
conclusively prove that the properties are not exclusively served by land owned
and operated by a person or entity (such as HCFCD, Harris County, or TxDOT)
other than the city‘s drainage utility system and that such drainage discharges into
some portion of the city‘s drainage system. We already have determined that the
City and Krueger have not conclusively shown there is no genuine fact issue
regarding whether Little Nell, Windshire, and Regency‘s respective stormwater
flows discharge into any part of the city drainage utility system and regarding the
City‘s partial ownership or control of all drainage facilities subject to the joint MS4
permit. Likewise, whatever the course of the Apartments‘ respective stormwater
flows, the evidence does not conclusively prove that there is no fact issue as to
whether the land at issue is owned and operated by a person or entity other than the
city drainage utility system.
Thus, taking as true all evidence favorable to the Apartments and drawing all
reasonable inferences and resolving any doubts in their favor—we conclude that
the City and Krueger have not conclusively shown there is no genuine fact issue
regarding whether the Apartments‘ properties fall within the section 47-822(f)(2)
exemption. See Miranda, 133 S.W.3d at 228. Because the City and Krueger have
failed to meet their burden to negate any genuine issue as to this jurisdictional fact,
we conclude that the trial court did not err in partially denying their plea to the
jurisdiction with regard to the Apartments‘ claims that Krueger acted ultra vires by
determining that their properties did not fall within the section 47-822(f)(2)
exemption. See id. at 227–28.
Therefore, we overrule the City and Krueger‘s sole issue.
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IV. CONCLUSION
Accordingly, we affirm the trial court‘s order partially denying the City and
Krueger‘s plea to the jurisdiction.
/s/ Marc W. Brown
Justice
Panel consists of Justices Christopher, Donovan, and Brown.
39