SPECIAL NEWS OF INTEREST TO CONTRACT CITY ATTORNEYS:

The Internal Revenue Service has issued a formal ruling regarding the status of the City of Henderson’s city attorney. The ruling concludes that the city attorney, who maintains a private law practice and works for the city pursuant to a retainer and contract (as many do), should be classified as an employee rather than an independent contractor. As such, the IRS is telling the city that its contract city attorney is subject to federal income tax withholding. Those interested in filing comments on the city’s appeal should do so immediately. For more information, please click here.

2006 Fall Conference in Austin: The TCAA Fall conference will be held in conjunction with the TML Annual Conference on October 26, 2006, at the Austin Convention Center. Registration information is now available at www.texascityattorneys.org. Topics will include: (1) recent state and federal cases; (2) local regulation of sex offenders; (3) railroad quiet zones; (4) vacating city streets; (5) civil service update; and (6) ethics. Thanks to our Fall Conference Sponsors:

• Joe K. Longley, Attorney at Law
• Banowsky & Levine, P.C.

Please contact Scott Houston if you are interested in a sponsorship opportunity for the Fall conference.

Municipal Attorney Job Opening, City of New Braunfels, City Attorney: This is a full-time exempt position serving as legal counsel for the city council, city manager, and the various departments of the city providing advice, direction, and representation on all legal matters for the City of New Braunfels. The city attorney reports directly to city council and supervises the assistant city attorney who is responsible for all prosecutions in municipal court. This position also functions as a department head managing operations and budget for the legal department.

A four-year bachelors degree and juris doctor degree are required. Must be in good standing with the State Bar of Texas, and have a valid Texas driver’s license with an acceptable driving record. Residency within the city of limits of the City of New Braunfels will be required. Must be licensed to practice law in federal and state courts. Minimum of five years of municipal legal experience in the State of Texas required. Experience in land use, development, and finance law preferred. Must have excellent organizational and communication skills to interact and maintain effective working relationships with council, staff, vendors, contractors, and the general public. City council determines salary based on qualifications. Apply at the city secretary’s office in the municipal building, 424 S. Castell Avenue, New Braunfels, Texas 78130, or on the city’s Web site: www.nbtexas.org. The position is open until filled.

Please e-mail any articles or news of interest to city attorneys to Scott Houston at legalgovt@tml.org.

Note: Included cases are from the period beginning on the 10th of the previous month through the 10th of the current month.

Waiver of Governmental Immunity: Tooke v. City of Mexia, No. 03-0878, 2006 WL 1792223 (Tex. June 30, 2006). The plaintiffs successfully bid on a city contract whose term was stated to be for a three-year period starting November 1996. The contract also provided that it was "automatically renewable at the end of the first year and on the anniversary of each year thereafter, unless either party furnishes written notice to the other party at least sixty (60) days prior to said annual anniversary." In December 1997, the city advised that the budget for the services had been exhausted and the plaintiffs ceased the work. In March 1998, the city manager notified them that the city was "discontinuing" the contract for lack of funding. The plaintiffs sued for breach of contract, asserting that they had relied on a three-year term in purchasing equipment. The trial court rendered judgment for the plaintiffs, but the court of appeals reversed, holding that the contract covered a governmental function of the city from which it was immune from suit. That immunity was not waived by Section 51.075 of the Local Government Code, which provided simply that a home rule municipality "may plead and be impleaded in any court." On further appeal, the Supreme Court of Texas affirmed, overruling Missouri Pacific Railroad Co. v. Brownsville Navigation District, 453 S.W.2d 812 (Tex. 1970). A statute that waived the State's immunity must do so "beyond doubt," and Section 51.075 did not contain the necessary explicit waiver of the home rule municipality's immunity from suit. "Sue and be sued" and similar language (e.g., "prosecute and defend," "defend or be defended," "answer and be answered") did not, standing alone, operate to waive governmental immunity; instead, such statutes merely addressed a governmental entity's capacity to engage in the activities encompassed in those phrases.

Note: The case summary above is from the International Municipal Lawyers Association (IMLA) News, an excellent resource for national and international news and cases affecting cities. For more information, please visit www.imla.org.

Note - Remands under Tooke:
The court remanded the following cases, allowing them to be re-heard under the principles laid out in Tooke. They may raise new issues or further develop the governmental immunity doctrine:

• Satterfield & Pontikes Construction, Inc. v. Irving Independent School District, 123 S.W.3d 63 (Tex. App. – Dallas, September 26, 2003).
• The City of Houston, Texas v. Clear Channel Outdoor, Inc., 161 S.W.3d 3 (Tex. App. – Houston [14th Dist.], January 15, 2004).
• McMahon Contracting, L.P. v. City of Carrollton, 134 S.W.3d 925 (Tex. App. – Dallas, May 26, 2004).
• City of Houston v. Allco, Inc., Case No. 01-02-00812-CV (Tex. App. – Houston [1st Dist.], June 1, 2004).
• City of Tyler, Texas v. Timothy L. Beck and Susan G. Beck, Case No. 12 03 00170 CV (Tex. App. – Tyler, July 14, 2004).
• City of Houston v. Kenneth S. Jones, Case No. 01 03 00831 CV (Tex. App. – Houston [1st Dist.], August 19, 2004).
• PKG Contracting, Inc. v. City of Mesquite, 148 S.W.3d 209 (Tex. App. – Dallas, September 30, 2004).
• Columbus Independent School District v. Five Oaks Achievement Center, 162 S.W.3d 812 (Tex. App. – Houston [14th Dist.], March 21, 2005).
• Sisk Utilities, Inc. v. City of Greenville, Texas, 164 S.W.3d 931 (Tex. App. – Dallas, June 15, 2005).

Sovereign Immunity: Reata v. City of Dallas, No. 02-1031 (Tex. Sup. Ct. – June 30, 2006). Reata Construction was working on a city project as a subcontractor when Reata drilled in to a water main, flooding a building. The building owner, tenants, and general contractor sued Reata. Reata sued Dallas for negligently misidentifying the location of the water line. Dallas, before answering Reata’s claim, intervened in the first suit against Reata. Reata counterclaimed against Dallas in that suit. Dallas plead sovereign immunity against the counterclaims. The Supreme Court held that Dallas had submitted to adjudication in court by “assert[ing] affirmative claims [for] monetary relief against Reata.” Thus, the city waived immunity for all offsetting claims “germane to, connected to, and properly defensive to claims asserted by the city.”

Takings, Sovereign Immunity, Declaratory Judgment: City of Dallas v. VSC, LLC, No. 05-05-01227-CV (Tex. App.—Dallas, June 21, 2006). Dallas police seized 326 cars from VSC’s vehicle storage facility, with evidence that all but 13 were either stolen or had tampered serial numbers. VSC sued Dallas for a taking and sought declaratory relief. Dallas filed a plea to the jurisdiction, claiming that the cars were seized in a criminal action. The court held that where Dallas did not prove the jurisdictional fact that all the vehicles were subject to seizure, the court had jurisdiction to hear the case.

Takings: City of Keller v. Wilson, No. 2-00-183-CV (Tex. App.—Fort Worth, June 22, 2006, on remand from Tex. Sup. Ct.). The City of Keller lost procedural appeals in a suit for damages from its diversion of storm runoff water.

Official Immunity: City of Austin v. Choudhary et. al., No. 03-05-00549 (Tex. App.—Austin, June 16, 2006). Upholding denial of city’s motion for summary judgment. A defendant asserting official immunity must prove that he is a government employee acting in the performance of discretionary duties that are within the scope of his authority and that he does so in good faith. If an official is not performing a discretionary function, such as engaging in a high speed chase, the driving of a motor vehicle while on non-emergency business is a ministerial act. To establish that sovereign immunity was not waived, the city must show the city’s employee was responding to an emergency call acting in compliance with the applicable laws.

Purchase Gas Adjustment (PGA) Clauses: CenterPoint Energy Entex v. Railroad Commission and City of Tyler, No. 03-04-00731-CV (Tex. App.—Austin, July 7, 2006). Second Rehearing. The Railroad Commission has authority to conduct retroactive prudence reviews of charges flowed through a PGA clause and to order refunds. Such review is not a “ratemaking proceeding,” and as such the city was not entitled to reimbursement for its costs.

Substandard Buildings: Wu et al. v. City of San Antonio, No. 04 -05-00847-CV (Tex. App.—San Antonio, July 28, 2006). The court upheld, under the “abuse of discretion” standard, the trial court’s denial of a temporary injunction against the demolition of dangerous building.

Sovereign Immunity: Toliver v. City of San Antonio, No. 04-05-00683-CV (Tex. App—San Antonio, July 28, 2006). Disagreement over actual date of letter containing putative typographical error in year created a question of fact, making trial court’s grant of the city’s plea to the jurisdiction improper.

Whistleblower: Scott v. City of Houston, No. 13-05-461-CV (Tex. App.—Corpus Christi, June 29, 2006). Summary judgment for the city upheld under affirmative defense provided in Texas Whistleblower act.

Sovereign Immunity: City of Laredo v. Duarte, No. 04-06-00226-CV (Tex. App.—San Antonio, July 12, 2006). The city reviewed and made adjustments to Duarte’s plan to comply with a privately-held easement. A city inspector issued a stop work order for the structure when it was found to still be encroaching. Duarte brought negligence and takings claims. The court overruled the denial of plea to the jurisdiction, holding that inspection is a governmental function, and that enforcement of easements is not a taking.

Sovereign Immunity: City of El Paso v. Gomez-Parra and Gomez-Parra, No. 08-05-00057-CV (Tex. App.—San Antonio, July 13, 2006). The city sold a forfeited vehicle at auction to Gomez-Parra, who was later arrested for possession of 27 pounds of marijuana that had been left inside the car. The court overruled denial of the city’s plea to the jurisdiction, holding the auction of cars to be a governmental function as an extension of police and fire protection.

Inverse Condemnation: City of Anson v. Harper et. al., No. 11-05-00398-CV (Tex. App.—Eastland, July 13, 2006). Owners of mineral rights sued the city for a taking when the city planned to build a landfill on the surface estate. The court held that the pending application before TCEQ prevented ripeness on a claim regarding the landfill, but where construction of a service road had already begun, that the claim was ripe. The court held that jurisdiction for a takings claim on the road construction was proper because the city’s fulfillment of the governmental function met the public purpose test, the mineral estate was dominant to the surface estate by its deed, and the state faced no greater liability than a private person would have for damage to the property. The court also held that there was no waiver of sovereign immunity to allow suit for injunctive relief.

Note: Included cases are from the period beginning on the 10th of the previous month through the 10th of the current month.

Opinion No. GA - 443: Concludes that a tax lien for taxes owed on a manufactured home attaches to the specific manufactured home, and a taxing unit may perfect a tax lien on the home by filing a notice of the lien with the Manufactured Housing Division of the Texas Department of Housing and Community Affairs (MHD) not later than six months after the end of the year for which the tax is owed, even though the notice may reflect the name of the prior owner rather than the current owner as shown by the MHD's records.

Open Meetings Act: Whether a governmental body may selectively admit members of the public into an executive session under the Open Meetings Act, RQ-0496-GA, Texas attorney general’s office. TML and TCAA argued that: (1) notice of an executive session is adequate if it is sufficient to apprise the general public of the subject matter of the meeting; (2) no specific deliberation is required when deciding who may attend an executive session; and (3) improperly allowing a third party into an executive session does not constitute a crime.

Recreational Use: The State of Texas and the Texas Parks and Wildlife Department v. Shumake, No. 04-0460 in the Texas Supreme Court. TML argued as amicus curiae in support of the state’s motion for rehearing that the Court’s original opinion incorrectly modified the trespasser-based standard of care under the Recreational Use Statute. Specifically, TML argued that Section 75.002 of the Texas Civil Practices and Remedies Code does not abrogate the property condition exemption to liability. The state filed a motion for rehearing on July 20, 2006, and a decision is pending.

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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