TCAA NEWS
(Volume 5, Issue 5—May 2010)
"Your Source for Information About the Texas City Attorneys Association"
News and Updates

Next TCAA News: The TCAA News will go on hiatus during the month of June and will return in July with a combined June/July edition.

TCAA Announces On-Demand Participatory CLE Seminars: TCAA Online Seminars allow city attorneys, assistant city attorneys, and attorneys who regularly practice municipal law to purchase and view a video of past seminars in a single-session format. The viewing of the session, along with the completion of an evaluation and participation in the LisTCAA listserv, allows attorneys to receive participatory CLE credit with the State Bar. The purchaser will receive a confirmation e-mail with a link to each online session that is purchased. The link will send the purchaser to a Web page that will have all materials and other necessary items linked through buttons beside the video screen. Important Note Regarding Access to Sessions: The purchase of a session or sessions will not allow immediate access. Once payment is confirmed, a confirmation e-mail with a link to the session or sessions will be e-mailed to the purchaser. That process may take up to two business days, but is often faster. To view available seminars, please go to www.texascityattorneys.org and click on “TCAA Online Seminars” on the front page.

Join us for the TCAA South Padre Conference to be held on June 9-11, 2010, at the Isla Grand Beach Resort! This year's theme is "Ex Mari Veritas" (From the Sea, Truth). Earn up to 10 hours of MCLE credit, including 2 ethics hours. Special Thanks to this Year's Sponsors:

Abernathy, Roeder, Boyd & Joplin, P.C.
Banowsky & Levine, P.C.
Bickerstaff Heath Delgado Acosta, LLP
Brown & Hofmeister, L.L.P.
Davidson & Troilo, P.C.
Denton, Navarro, Rocha and Bernal, P.C.
McKibben, Woolsey & Villareal, L.L.P.
LexisNexis
Lloyd, Gosselink, Rochelle & Townsend, P.C.
McKamie Krueger, LLP
Messer, Campbell & Brady, LLP
Municipal Code Corporation
Nichols, Jackson, Dillard, Hager & Smith, L.L.P.
Olson & Olson, L.L.P.
Potter Minton, P.C.
Ross, Banks, May, Cron & Cavin, P.C.
Russell & Rodriguez, LLP
Shotts, Pardue Trevino & Guevara, LLP
Strasburger & Price, L.L.P.
Taylor, Olson, Adkins, Sralla & Elam, L.L.P.
Texas Municipal League Intergovernmental Risk Pool

For hotel or other information, or to register, please go to www.texascityattorneys.org.

LisTCAA Listserv: Many Texas city attorneys participate in the International Municipal Lawyers Association Municode listserv. Now's your chance to glean and share information on a listserv that consists only of Texas attorneys! To join, please go to www.texascityattorneys.org and click on the "LisTCAA" link on the left side of the page.

Municipal Attorney Job Openings: For the most recent Texas Municipal League classifieds postings, please click here.

TML/TCAA Legal Defense Program
Amicus Brief, Attorney General Opinion, and State Agency Comments Filed

Harassment: Negrete v. City of Laredo, No. 10-1085 (Tex. 2010). TML, TCAA, the Texas Municipal League Intergovernmental Risk Pool, the Texas Association of Counties, and the Texas Council Risk Management Fund argued that the Supreme Court of Texas should establish the following principles in workplace harassment cases arising under the Texas Commission on Human Rights Act: (1) where an employee has endured her supervisor's mounting insults and unwelcome advances for a lengthy period without availing herself of the established procedure for complaining to higher management, such delay is unreasonable as a matter of law unless the evidence warrants a reasonable belief that such complaint would have been futile; and (2) whether the plaintiff has made a prima facie showing of harassment severe or pervasive enough to create an objectively hostile work environment is a question of law for the court to determine in the first instance, in light of the established body of federal and Texas case law. The petition for review was filed on May 7, 2010, and a decision on the petition is pending.

Development Agreements/Referendum: In re Hollis, No. 10-0183 (Tex. 2010). The issue in this case is whether or not an amendment to a development agreement is subject to a referendum election. In this case, the City of Buda adopted an amendment to an existing development agreement that would allow for light industrial use on a piece of property in the city's extraterritorial jurisdiction. A group of citizens submitted a petition to submit the approved amendment to a referendum election pursuant to the city charter. The city determined that a referendum election was not permitted by state law and city charter in this instance, and declined to order the election. Two citizens sought a writ of mandamus to order the election and were denied at the appellate level. This decision was appealed to the Supreme Court of Texas. TML and TCAA argued that the referendum election was not allowed because the action taken was not legislative in nature and was precluded by the city charter. The brief was filed on May 18, 2010.

Eminent Domain: City of Austin v. Harry M. Whittington, et al., No. 03-07-00729-CV (Tex. 2010). The issues in this case are whether there is a bad faith defense to condemnation, and if so, whether an e—mail by a city employee would be adequate to prove bad faith on the part of the city. TCAA and TML argued in their brief that there is no basis for a bad faith defense to condemnation in the Texas Constitution, state statutes, or applicable case law, and that such an exception is not in line with current case law that gives great weight to the legislative decisions of the city council with regard to condemnation. The brief also argued that, even if a bad faith exception is considered, an e-mail by a city employee should not be considered in the determination of bad faith because all decisions regarding condemnation belong to the city council and may not be delegated. The petition for review was filed on May 10, 2010, and a decision on the petition is pending.

Attorney General REQUESTS of Interest to Cities

RQ-0878-GA: Authority of a chief appraiser to grant a tax exemption under section 11.182(b), Tax Code, when the record owner of the property is either a for-profit limited partnership or a limited liability company. To view this request, go to: http://www.oag.state.tx.us/opinions/opinions/50abbott/rq/2010/pdf/RQ0878GA.pdf

Recent Texas Cases of Interest to Cities
Note: Included cases are from the period beginning on the 10th of the previous month through the 10th of the current month.

Takings: Alewine v. City of Houston, No. 14-08-00473-CV (Tex. App.—Houston [14th Dist.], April 8, 2010). On November 1, 2003, runway 8L-26R was added at Bush Intercontinental Airport in Houston. The operation of the new runway caused a substantial increase in airplane flights over the southwest portion of the Woodcreek Subdivision. On October 31, 2005, a group of 83 homeowners in the subdivision sued the city for inverse condemnation. The trial court granted the city's motion for summary judgment for unspecified reasons, and the homeowners appealed.

On appeal, the homeowners alleged that the trial court erred in granting summary judgment for the city because the homeowners stated a valid takings claim, namely that the increased overflights interfered with the use and enjoyment of their property. The city argued that a higher legal standard applied—one which required the homeowners to show that their property was no longer usable for residential purposes.

In determining the appropriate standard to apply to determine a taking by overflight, the appellate court relied on the test established by the Supreme Court of Texas in City of Austin v. Travis County Landfill Co., 73 S.W.3d. 234 (Tex. 2002). In that decision, the Court applied a “usability” standard: “[T]o establish a taking by aircraft overflights, a landowner must show that the flights directly, immediately, and substantially interfere with the land's use and enjoyment. To meet this standard, the landowner must show that the overflight effects directly and immediately impact the land so that the property is no longer usable for its intended purpose.” City of Austin, 73 S.W.3d at 240.

Applying that standard to the case at hand, the court of appeals determined that the homeowners did not state a viable takings claim. Homeowners alleged that the overflights caused a substantial interference in the ability to hold conversations, watch television, and sleep, as well as an overall diminution in the quality of the neighborhood itself. But the homeowners did not contend that they could no longer live in their homes due to the increased air traffic. Although the court was sympathetic to the homeowners' frustration, the increased overflights did not cause a constitutional taking of their property under Texas law because there was no showing that their homes were unusable for residential purposes.

Texas Tort Claims Act: City of Dallas v. Carbajal, No. 09-0427 (Tex. May 7, 2010). In 2007, Olivia Carbajal filed a lawsuit against the City of Dallas for damages she sustained when she drove her vehicle into a gap in the city street that had not been properly barricaded. Carbajal did not provide the city with formal notice of an injury pursuant to Section 101.101(a) of the Civil Practice and Remedies Code. Instead, she claimed that the police report prepared by a city police officer provided the city with subjective awareness of its fault, thereby establishing actual notice under Section 101.101(c) of the Civil Practice and Remedies Code. The city contended that the report did not provide actual notice and filed a plea to the jurisdiction, which was denied by the trial court. The court of appeals affirmed.

On appeal, the Supreme Court of Texas held that the police report was, at most, an initial response to the accident and did not give the city actual notice of Carbajal's injury. In reaching its conclusion, the Court relied heavily on its opinion in Texas Department of Criminal Justice v. Simons, 140 S.W.3d 338 (Tex. 2004). In that case, the Court held that merely investigating an accident is insufficient to provide actual notice. Simons, 140 S.W.3d at 347. The police report at issue did not provide the city with subjective awareness of fault because it did not expressly state or imply that the city was at fault, and as a result the road conditions could have been caused by a private contractor or another governmental entity other than the city. The Court characterized the report as “no more than a routine safety investigation,” which cannot provide actual notice to a governmental body. Consequently, the Court reversed the court of appeals' judgment and dismissed the case for lack of subject matter jurisdiction.

Elections: Hotze v. City of Houston,No. 01-08-00016-CV (Tex. App.—Houston [1st Dist.] April 15, 2010) (mem. op.). In this memorandum opinion, the court of appeals examined whether the trial court's dismissal of an election challenge against the City of Houston and Mayor Bill White by the plaintiff Mr. Hotze was proper.

Two proposed amendments to the Houston City Charter appeared on the ballot in 2004. Proposition 1, placed on the ballot on the city's own motion, required that the city council obtain voter approval before increasing property tax revenues above the lesser of 4.5 percent or the cumulative combined rates of inflation and population growth, and required voter approval for any water and sewer rate increase above the cumulative combined rates of inflation and population growth. All other revenues could be assessed and collected without limitation.

Proposition 2, a citizen-initiated referendum supported by Mr. Hotze and others, would have required voter approval before the city could raise revenues from all sources by more than the combined rates of inflation and population. Proposition 1 also contained language stating that if it received more votes than another proposition for a charter amendment relating to increases in city revenue at the same election, it would prevail and the other proposition would not become effective.

At the election, both propositions passed. However, Proposition 1 received more votes than Proposition 2 in the election, and the city determined that Proposition 2 would not be enforced. Mr. Hotze and others filed suit against the city, mayor, and city council seeking a declaration of Proposition 2's effectiveness. The Fourteenth Court of Appeals held that Mr. Hotze and the other plaintiffs did not have standing for their challenge to the city's interpretation based on their work, contributions, and votes in support of Proposition 2, but ultimately remanded the case to the trial court to allow the plaintiffs an opportunity to replead an acceptable case for standing. White v. Robinson, 260 S.W.3d 463, 466 (Tex.App. – Houston [14th] 2008, pet. granted).

In the intervening years, the city placed two new propositions on the 2006 ballot due to concerns that uncertainty during the resolution of the Proposition 1 and 2 litigation could complicate city finances. Known as Propositions G and H, both items dealt with revenue limitations and the city charter, and both were placed on the November 2006 ballot. Proposition G excluded certain revenues from any revenue limits that might be included in the charter. Mr. Hotze filed a declaratory judgment action before the election seeking a declaration that Proposition G was “illegal and invalid as a matter of law,” but sought no immediate relief. Both propositions passed. Thirty-three days after the city canvassed and declared the results of the election, Mr. Hotze amended his existing petition to include an election contest, seeking a declaration that both Propositions G and H were illegal and invalid as a matter of law.

His contest was styled “Plaintiff's/Contestant's First Amended Original Petition Seeking Declaratory Judgment and Asserting an Election Contest.” The city then filed a plea to the jurisdiction, arguing that the court did not have subject matter jurisdiction over the action under the Texas Election Code, which requires that any election contest must be brought within 30 days after the return date of the election. TEX. ELEC. CODE §§ 221.002; 233.006. The trial court granted the city's plea to the jurisdiction as to all of Mr. Hotze's claims.

Mr. Hotze appealed, asserting that he was no longer pursuing any election contest claims, only declaratory judgment, and thus his claims were not time barred. The court noted, however, that the majority of Mr. Hotze's claims were based in the language of the propositions, thereby challenging the election process itself. Thus, those issues were properly filed as an election challenge, which was not filed in the appropriate time period, and the trial court lacked subject matter jurisdiction to hear any claims challenging the facial legality of Propositions G and H on the ballot. TEX. ELEC. CODE §§ 221.002; 233.006.

The city argued that because the election contest claims were barred, the suit should be dismissed for lack of controversy, but the court disagreed. The court held that Mr. Hotze's amended petition also sought a declaratory judgment regarding the city's implementation and interpretation of the election results for Proposition H. Because none of those claims concern the validity of the process of the election or the election itself, they did not have to be brought under the Election Code and were not time—barred. However, the court held that courts have historically required a plaintiff challenging an election to allege “an injury distinct from that sustained by the public at large,” which must be “an actual, not merely a hypothetical or generalized grievance.” Brown v. Todd, 53 S.W.3d 297, 302 (Tex. 2001). Mr. Hotze claimed that his support of Proposition 2 and opposition of Propositions G and H through work, donations, campaigns, and voting were enough to establish standing. The court disagreed, citing White v. Robinson (260 S.W.3d at 463) and holding that while that involvement would have given Mr. Hotze standing to challenge the election process, it did not rise to the level of an injury caused by the implementation or interpretation of Proposition H distinct from the injury (if any) suffered by other voters, taxpayers, or citizens. Thus, he did not have standing to challenge the city's implementation and interpretation of the results through a declaratory judgment.

In its conclusion, however, the court stated that a plaintiff who fails to plead sufficient facts affirmatively demonstrating the trial court's jurisdiction but whose pleadings do not affirmatively demonstrate incurable defects in jurisdiction should be afforded the opportunity to amend, particularly when an appellate court has determined that a plea to the jurisdiction should have been sustained. The court held that Mr. Hotze failed to establish standing, but that his filing did not affirmatively negate standing. Because Mr. Hotze might allege other facts demonstrating standing, the court declared that he must be allowed a reasonable opportunity to amend his pleadings before the trial court's final disposition on the plea to the jurisdiction. White, 260 S.W.3d at 476. The court reversed the trial court's final judgment and remanded the case for further proceedings consistent with the opinion.

Governmental Immunity: City of Victoria v. Wayne, No. 13-09-00695-CV (Tex. App.—Corpus Christi-Edinburg April 15, 2010) (mem. op.). A plaintiff should be allowed to replead his declaratory judgment cause of action if there are facts available that could grant the trial court jurisdiction.

Procedure: City of Houston v. Student Aid Foundation Enterprises, No. 14-09-00236-CV (Tex. App.—Houston [14th Dist.] May 4, 2010) (mem. op.). A takings claim is not ripe unless evidence is presented that shows the party intended to do something that would be prohibited or hindered by the applicable city ordinance.

Procedure: City of Corpus Christi v. Friends of the Coliseum, No. 13-10-00229-CV (Tex. App.— Corpus Christi-Edinburg May 6, 2010). An order for a temporary injunction is void if it does not specify how a party will be irreparably harmed by not having an injunction under Texas Rule of Civil Procedure 683.

Utilities: Gatesco, Inc. Ltd., et al., v. City of Rosenburg, et al., No. 14-08-01109-CV (Tex. App.—Houston [14th Dist.] April 13, 2010). Section 13.042 of the Texas Water Code does not grant the TCEQ exclusive or primary jurisdiction over challenges to water rates charged by a city. The court also held that Gatesco's request for retrospective recovery of water rate “overcharges” are barred by governmental immunity unless Gatesco can replead that the charges were the result of fraud, mutual mistake of fact, or duress.

Takings: AN Collision Center of Addison v. City of Addison, No. 05-09-00272-CV (Tex. App.— Dallas April 12, 2010). A takings claim is not valid unless the property owner can show an intentional action by the city, which is not shown through flood waters destroying property allegedly due to the design of the city airport.

You can view attorney general opinions at www.oag.state.tx.us. On the same site, you can also sign up to receive e-mail updates of opinion requests and newly released opinions.

As a supplement to TCAA News, please check the TML Legislative Update Newsletter and TML's Connect News Service .
Please contact Scott Houston, TCAA General Counsel, with your news, questions, and/or comments by e-mail at legalgovt@tml.org or by phone at 512-231-7400.
TCAA members may use the information herein for any purpose. No other person may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas City Attorneys Association.
Texas City Attorneys Association
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