Charles J. Hughes v. Tom Green County ( 2016 )

ACCEPTED
03-16-00132-CV
11216005
THIRD COURT OF APPEALS
AUSTIN, TEXAS
6/17/2016 8:42:04 PM
JEFFREY D. KYLE
CLERK
NO. 03-16-00132-CV
FILED IN
3rd COURT OF APPEALS
IN THE AUSTIN, TEXAS
THIRD COURT OF APPEALS 6/17/2016 8:42:04 PM
JEFFREY D. KYLE
AT AUSTIN, TEXAS Clerk
CHARLES J. HUGHES,
Appellant
v.
TOM GREEN COUNTY,
Appellee
APPELLEE’S BRIEF
JAMES DAVID WALKER
P. O. Box 41
Milano, Texas 76556
SBOT 20706000
Phone: (512) 636-9520
Email: walker@2appeal.com
ATTORNEY FOR
APPELLEE TOM GREEN COUNTY
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellant’s Brief lists Appellee Tom Green County’s trial counsel.
Tom Green County is represented on appeal by:
James David Walker
P. O. Box 41
Milano, Texas 76556
SBOT 20706000
Phone: (512) 636-9520
Email: walker@2appeal.com
1
TABLE OF CONTENTS
INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Authority of Commissioners Court. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Governmental Immunity - General Principles.. . . . . . . . . . . . . . . . . . 23
Waiver of Governmental Immunity - Legislative Control. . . . . . . . . 25
Waiver of Governmental Immunity -
The Lawson Plurality Exception. . . . . . . . . . . . . . . . . . . . . . . . 32
Lawson Issues Summarized. . . . . . . . . . . . . . . . . . . . . . . 32
Court Not Required to Adopt Lawson. . . . . . . . . . . . . . . . . . . . 35
Reata Limitation on Immunity
Has No Application to Lawson Exception. . . . . . . . . . . . 38
Any Recovery
Should Be Limited To A Reata Offset.. . . . . . . . . . . . . . 48
Alternatively Lawson Should Not Be Applied
To A Contract Executed in 1994. . . . . . . . . . . . . . . . . . . 50
Record Does Not Support A Lawson Waiver. . . . . . . . . . . . . . 51
The record does not implicate the Reata immunity
exception. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
The record does not implicate the Lawson immunity
waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Waiver of Governmental Immunity - By Conduct. . . . . . . . . . . . . . . 59
PRAYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
2
INDEX OF AUTHORITIES
Cases
A. I. Divestitures, Inc. v. Texas Comm'n on Envtl. Quality, 2016 WL 3136850
(Tex.App.–Austin 2016, no. pet. h.). . . . . . . . . . . . . . . . . . . . . . . . . 39, 40, 43
Aledo ISD v. Choctaw Properties, L.L.C., 17 S.W.3d 260 (Tex.App.–Waco
2000, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). . . . . . . . . . . . . . . . . . . . 21
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000). . . . . . . . . . . . 20
Brown & Gay Eng'g, Inc. v. Olivares, 461 S.W.3d 117 (Tex. 2015). . . . . . 25
Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704 (Tex. 2003). . . 19,
23, 27
City of Carrollton v. Singer, 232 S.W.3d 790 (Tex. App.–Fort Worth 2007,
pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 47, 48
City of Dallas v. Albert, 354 S.W.3d 368 (Tex. 2011). . . . . . . . . . . . . . . . . 41
City of McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102
(Tex.App.–Dallas 2013, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 53, 63
City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501
(Tex.App.–Austin 2014, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 47, 63
Employees Ret. Sys. of Texas v. Putnam, LLC, 294 S.W.3d 309
(Tex.App.–Austin 2009, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 48-50
Federal Sign v. TSU., 951 S.W.2d 401 (Tex. 1997). . . . . . . . . . . . . . . . . . . 48
3
Firemen's Ins. Co. of Newark, N.J. v. Bd. of Regents of Univ. of Texas Sys.,
909 S.W.2d 540 (Tex.App.–Austin 1995, writ denied). . . . . . . . . . . . . . . . 21
Harris County v. Sykes, 136 S.W.3d 635 (Tex. 2004). . . . . . . . . . . . . . . . . 24
Hays County v. Hays County Water Planning Partnership, 106 S.W.3d 349
(Tex.App.–Austin 2003, pet. den.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Hydroscience Techs., Inc. v. Hydroscience, Inc., 401 S.W.3d 783
(Tex.App.–Dallas 2013, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Jonah Water Special Util. Dist. v. White, 2009 WL 2837649
(Tex.App.–Austin 2009, pet. struck).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Labrado v. Univ. of Texas at El Paso, 2012 WL 43385 (Tex.App.–Austin
2012, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 62, 63
Leach v. Texas Tech Univ., 335 S.W.3d 386 (Tex.App.–Amarillo 2011, pet.
denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006). . . 37, 48,
53, 54
Rusk State Hosp. v. Black, 392 S.W.3d 88 (Tex. 2012). . . . . . . . . . . . . . . . 20
Smith v. City of Blanco, 2009 WL 3230836 (Tex.App.–Austin 2009, no pet.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64, 65
Smith v. Lutz, 149 S.W.3d 752 (Tex.App.–Austin 2004, no pet.). . . . . . . . 54
Tarrant County v. Smith, 81 S.W.2d 537 (Tex.Civ.App.–Fort Worth 1935,
writ ref'd). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Texas A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518 (Tex. 2002). . . . 29,
32, 33, 36, 38, 44, 51
4
Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835 (Tex. 2007).. . . . 31, 43,
44
Texas Dept. of Health v. Neal, 2011 WL 1744966 (Tex.App.–Austin 2011,
pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 34, 35, 40, 43, 46
Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 28, 30, 36, 47, 66
Texas Southern University v. State Street Bank & Trust Co., 212 S.W.3d 893
(Tex.App.–Hou. [1st Dist.] 2007, pet. denied). . . . . . . . . . . . . . . . . . . . . . . 63
Thomas v. Long, 207 S.W.3d 334 (Tex. 2006). . . . . . . . . . . . . . . . . . . . . . . 21
Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006).. . . . . . . . . . . . . . 24, 34
Travis County v. Pelzel & Assocs., 77 S.W.3d 246 (Tex. 2002).. . . 26, 27, 31
Travis County v. Rogers, 2015 WL 4718726 (Tex.App.–Austin 2015, no pet.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 46
TXU Energy Retail Co. L.L.C. v. Fort Bend ISD., 472 S.W.3d 462
(Tex.App.–Dallas 2015, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Webb County v. Khaledi Props., 2013 WL 3871060 (Tex.App.–San Antonio
2013, no pet.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692 (Tex. 2003). . . . . . . 24
Statutes
Tex. Civ. Prac. & Rem. Code § 154.073.. . . . . . . . . . . . . . . . . . . . . . . . 60, 61
Tex. Civ. Prac. & Rem. Code §107.001-.005. . . . . . . . . . . . . . . . . . . . . . . . 30
5
Tex. Gov't Code § 311.034. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Tex. Loc. Gov't Code § 81.006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tex. Loc. Gov’t Code § 81.001.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6
STATEMENT OF FACTS
Appellant Hughes appeals the grant of a plea to the jurisdiction
[Appendix1]. Hughes sued Appellee Tom Green County alleging breach of a
1994 agreement, the Mutual Partial Assignments [Appendix2]. Hughes
complains that the County breached the Mutual Partial Assignments (MPA)
by failing to name the County’s library in honor of Hughes’ family. He seeks
damages in the amount of at least $3,000,000 plus attorney's fees.
[Appendix3]
The MPA was executed during the course of prior litigation (the SMU
litigation). Defendant's Exhibit 1 (CR3:4) contains a copy of every pleading
and any other document filed in the SMU litigation. (RR2:10)
Because this is an appeal from the grant of a plea to the jurisdiction, the
initial focus is on the facts pleaded by Hughes. His pleading is attached as
Appendix3. Hughes pleads:
*that the will of Hughes’ late uncle devised the residuary of the
uncle’s estate to the County.
*that in 1994 SMU filed suit seeking release of the will’s
restrictions on the use of a gift made to it by the uncle’s will.
7
*that the County intervened in the SMU litigation and sought a
declaration that the residue of such gift to SMU (the amount not
needed to satisfy the purpose of the gift) belonged to the County.
*that Hughes and others (the Hughes group) thereafter intervened
in the SMU litigation and sought a declaration that the residuary
gift to the County had lapsed and that, as a consequence, the
residue of the gift to SMU belonged to the uncle’s heirs.1
*that the SMU litigation court ordered the parties to mediation.
Prior to mediation, the MPA was executed.2 Hughes pleads that the
signatories to the MPA were authorized to sign by all required authorities.
(CR:808) SMU was not a party to the MPA.
By the MPA, the Hughes group assigned to the County "50% of the net
proceeds they actually receive from [the SMU litigation]." Likewise, the
1
Hughes was one of at least three heirs participating in the SMU litigation. In the current
litigation, Hughes is the lone plaintiff. Thus, for the sake of simplicity the argument will in some
respects ignore other heirs.
2
Hughes’ brief asserts that the MPA was signed at mediation. (Brief:3) Although the
timing does not seem to have any significance, the record does not support the brief’s assertion.
The MPA is not dated. However, Hughes pleads, “Prior to mediation, Tom Green County and the
Heirs-at-Law entered an agreement titled Mutual Partial Assignments . . . .” (CR:808) Hughes
acknowledges that the MPA was signed before the other agreements. (Brief:14-15)
8
County thereby assigned to the Hughes group "50% of the net proceeds it
actually receives from [the SMU litigation]." Similarly, the MPA provides
that “[t]hese mutual assignments are irrevocable and are intended to be a
mutual exchange of 50% of the respective interests of the parties hereto in
any recovery under said cause against SMU and any other adverse parties
who may be joined in the cause by mutual agreement of the parties hereto.”
The MPA expressly disavows any intent to extinguish claims. It
provides in relevant part: "[T]his document is in no way intended to eliminate
or reduce in any fashion the cause of action, claims, or rights held by the
heirs-at-law or the County." (emphasis added).
The MPA also includes the following: "In further consideration of this
matter, the County agrees to name the main county library, in honor of
Duwain E. Hughes, Jr., and/or Frances Crews Hughes, if the commissioners
consider the County's ultimate recovery in the cause to be substantial enough
for such recognition." Duwain and Frances Hughes are herein referenced as
“the Hughes family.”
Thereafter, during mediation, the parties executed a document
captioned Settlement Agreement. [Appendix4] The Settlement Agreement
9
provided: that SMU would pay $1,000,000 to the County and the other
parties to the suit (excepting one party); that SMU would obtain appropriate
relief as to the uncle’s will; and that all parties would dismiss their claims
with prejudice.
Thereafter, the parties executed a document captioned Compromise and
Settlement and Release of All Claims (the Compromise Agreement).
(CR:671) The Compromise Agreement [Appendix5] provides that the
Settlement Agreement is “further reduced to writing in this agreement.”
The County disputes Hughes’ assertion that the Compromise
Agreement “does not provide for any releases between the County and the
Hughes heirs.” (Brief:4) The Compromise Agreement summarizes the claims
asserted by SMU, the County, and the Hughes group and provides that by the
Settlement Agreement the parties agreed to a “complete and final
compromise and settlement of such suit and all of such disputes.” Similarly,
the trial court signed a Final Judgment [Appendix6] which recites that “all
matters in controversy between the parties which is the subject matter of this
suit have been fully and finally agreed to and settled.”
The Settlement Agreement, the Compromise Agreement, and the Final
10
Judgment make no mention of the MPA. Hughes pleads that the County and
the Hughes group evenly split (50-50) the $1,000,000 paid by SMU.
(CR:809)
Hughes pleads that he accepted the SMU settlement during mediation
because the County’s representatives had stated that “the County’s portion of
the SMU’s offer would be substantial enough to warrant naming the Central
Library as contemplated in the [MPA].”
Hughes further pleads that the County’s commissioners court met in
open session on July 9, 1994 and “considered the ultimate recovery in the
lawsuit to be substantial enough and ratified the [MPA].” (CR:809) He also
pleads that the commissioners court ratified “the separate agreement settling
claims against SMU and dismissing the lawsuit.” (CR:809)
Hughes pleads that the County’s commissioners court met on March 1,
2011 and passed a resolution which named the library the “Stephens Central
Library” and which expressly provided that the County’s recovery in the
SMU litigation is not substantial enough to name the library in honor of the
Hughes family. (CR:610)
Hughes sued the County, asserting three causes of action: (1) breach of
11
the MPA (by failing to name the library in honor of Hughes' family)
(CR:812); (2) an equitable claim captioned "money had and received,"
alleging that the County accepted the benefits of the MPA and unjustly
retains the SMU settlement funds (CR:813); and (3) a declaratory judgment
action asserting a violation of the Open Meetings Act and seeking to have the
March 11, 2011 resolution naming the library declared void and
unenforceable (CR:811).
The trial court granted the County’s plea to the jurisdiction and
dismissed for lack of subject matter jurisdiction the claims arising out of or
pertaining to the MPA. (CR:833)
12
SUMMARY OF THE ARGUMENT
Appellant Hughes sued the County seeking damages for breach of the
library naming provision set out in the Mutual Partial Assignments (MPA).
Hughes and the County executed the MPA during the course of prior
litigation, being the SMU litigation.
There is a dispute over performance of the library naming provision.
The MPA provides that the County will name the County’s library in honor
of the Hughes family - if the County’s commissioners determine that the
County’s recovery in prior litigation, the SMU litigation, is substantial
enough to name the library in honor of the Hughes family. The County
contends that even had the 1994 commissioners court determined that the
recovery was substantial enough to name the library for the Hughes family
(disputed), the 2011 commissioners court nevertheless had discretion to make
its own determination (a contrary determination) when it named the new
library in honor of the Stephens family.
In an effort to avoid the expense of trial, the County pleaded
governmental immunity. The trial court granted the plea to the jurisdiction
and dismissed for lack of subject matter jurisdiction the claims arising out of
13
or pertaining to the MPA.
Hughes argues that he pleaded two grounds for waiver of immunity
from suit: waiver of immunity for breach of a settlement agreement under
application of the Lawson case and waiver of immunity by conduct.
Hughes failed to demonstrate that immunity was waived under
application of the Lawson case. In Lawson, a Supreme Court plurality
opined: “[W]hen a governmental entity is exposed to suit because of a waiver
of immunity, it cannot nullify that waiver by settling the claim with an
agreement on which it cannot be sued.”
Thus, the Lawson rule provides that immunity is waived on a breach of
contract claim if three elements are satisfied:
1- a claim was asserted against the governmental entity;
2- the entity was thereby exposed to suit because of a waiver of immunity;
and,
3-the claim was settled by the agreement made the basis of suit.
Hughes argues that the County was “exposed to suit” (County lacked
immunity) in the SMU litigation because it voluntarily intervened in the
SMU litigation. Hughes would thereby invoke the Reata case’s voluntary
14
litigation exception to immunity.
However, in A. I. Divestitures this Court recognized that the judicially
promulgated Reata immunity exception has no application to Lawson
immunity waiver. The Lawson waiver rule applies only to agreements which
settle claims as to which immunity has been statutorily waived.
In any event, the record does not support an application of Reata -
because the County sought no damages in the SMU litigation. Likewise,
Reata has no application because vis-a-vis Hughes the County’s claims were
merely defensive. Hughes intervened after the County intervened.
Additionally, the Lawson immunity waiver can have no application
because the MPA did not settle any claim - much less a claim asserted by
Hughes against the County. In the SMU litigation Hughes asserted no claim
against the County.
Additionally, even if Reata's judicially implemented limitation on the
contours of immunity were engrafted onto the Lawson waiver rule, and even
if Lawson otherwise had application, then logic and equity weigh in favor of
likewise engrafting and applying Reata's limited scope of jurisdiction. If the
County's voluntary intervention in the SMU litigation, or its conduct,
15
triggered a waiver of immunity (disputed), then the trial court did not
thereby acquire jurisdiction over Hughes' claim for monetary relief against
the County in excess of an amount sufficient to offset the County's recovery
(if any). Alternatively, the 2002 Lawson plurality’s immunity waiver should
not be applied to a contract signed in 1994.
Hughes failed to demonstrate that the County waived immunity by its
conduct. Hughes relies on alleged representations which as a matter of law
cannot be considered.
Even if such allegations could be considered, this court has repeatedly
declined to apply a waiver by conduct exception to immunity. Even if the
waiver by conduct theory were viable, the facts pleaded by Hughes do not
support an equitable waiver of immunity.
The County is not alleged to have made any representations to Hughes
concerning immunity. Hughes may have presumed that the County was
obligated to name the new library in honor of his family. However, a
misunderstanding of the law does not justify an equitable waiver of
immunity.
Here, the County asserts immunity in an effort to avoid the expense of
16
trial. The pleaded facts do not demonstrate that the County made promises
which it intended to break.
Here, there is a good-faith dispute over performance of the library
naming provision: whether the 1994 commissioners court found that the
SMU litigation recovery was substantial enough to name the library in honor
of Hughes' family (disputed); and, even if it had, whether in the course of
naming the new library the 2011 commissioners court is somehow precluded
from making its own determination (a contrary determination).
There is no showing that Hughes exercised his statutory remedy:
seeking legislative authority to sue the County. For that additional reason,
there is no basis for an equitable waiver of the County’s governmental
immunity.
17
ARGUMENT
Background
There is a dispute over performance of the library naming provision set
out in the Mutual Partial Assignments (MPA). The County denies that the
1994 commissioners court determined that the SMU litigation recovery was
substantial enough to name the library in honor of Hughes’ family. (CR:616)
Even if the 1994 commissioners court had made such a determination, the
2011 commissioners court was not thereby precluded from making its own
determination (a contrary determination) when naming the new library.
In this regard, the issue is not whether the SMU litigation recovery was
substantial enough to name the library in honor the Hughes’ family. The
issue is whether the County’s commissioners court considers the recovery
substantial enough to name the library for the Hughes family. The contract
which Hughes claims to have been breached, the MPA [Appendix2],
provides that “the County agrees to name the main county library, in honor of
Duwain E. Hughes, Jr., and/or Frances Crews Hughes, if the commissioners
consider the County's ultimate recovery in the cause to be substantial enough
for such recognition." (emphasis added).
18
The County contends that the 2011 commissioners court had authority
to determine the issue of whether the recovery was substantial enough to
name the library in honor of Hughes' family. See Catalina Dev., Inc. v.
County of El Paso, 121 S.W.3d 704, 706 (Tex. 2003) (commissioners court
not bound by policy decisions of their predecessors); TXU Energy Retail Co.
L.L.C. v. Fort Bend ISD., 472 S.W.3d 462, 466 (Tex.App.–Dallas 2015, no
pet.) (rejecting implied contract theory); Texas Dept. of Health v. Neal, 2011
WL 1744966, at *5 (Tex.App.–Austin 2011, pet. denied) (rejecting doctrine
of equitable estoppel).
Hughes alleges that the 2011 commissioners court made its
determination in violation of the Open Meetings Act. However, even if the
2011 determination were set aside, the commissioners court can make a new
determination.
In an effort to avoid the expense of trial, the County pleaded immunity
from liability and immunity from suit (CR:612) and filed a plea to the
jurisdiction (CR:651-677). The trial court granted the plea to the jurisdiction
and dismissed for lack of subject matter jurisdiction the claims arising out of
or pertaining to the MPA. (CR:833)
19
Standard of Review
Issues of immunity from suit, ripeness, and standing are issues of
subject-matter jurisdiction that may be raised for the first time on
interlocutory appeal. Rusk State Hosp. v. Black, 392 S.W.3d 88, 94 (Tex.
2012). A court deciding a plea to the jurisdiction is not required to look
solely to the pleadings but may consider evidence and must do so when
necessary to resolve the jurisdictional issues raised. Bland Indep. Sch. Dist. v.
Blue, 34 S.W.3d 547, 555 (Tex. 2000).
Whether a pleader has alleged facts that affirmatively demonstrate a
trial court's subject matter jurisdiction, or whether undisputed evidence of
jurisdictional facts establishes a trial court's jurisdiction, is a question of law
reviewed de novo. City of Carrollton v. Singer, 232 S.W.3d 790, 794 (Tex.
App.–Fort Worth 2007, pet. denied). If the pleadings affirmatively negate the
existence of jurisdiction, the plea may be granted without giving the claimant
an opportunity to amend. City of McKinney v. Hank's Rest. Group, L.P., 412
S.W.3d 102, 110 (Tex.App.–Dallas 2013, no pet.).
In a jurisdictional challenge, the court is bound neither by the legal
conclusions nor by any illogical factual conclusions that Plaintiffs draw from
20
the facts pleaded. Firemen's Ins. Co. of Newark, N.J. v. Bd. of Regents of
Univ. of Texas Sys., 909 S.W.2d 540, 542 (Tex.App.–Austin 1995, writ
denied); see Aledo ISD v. Choctaw Properties, L.L.C., 17 S.W.3d 260, 262
(Tex.App.–Waco 2000, no pet.) (in review of ruling on a plea to the
jurisdiction, we are not bound by legal conclusions nor by any illogical
factual conclusions drawn from the facts pled).
A trial court is not required to deny an otherwise meritorious plea to the
jurisdiction or a motion for summary judgment based on a jurisdictional
challenge concerning some claims because the trial court has jurisdiction
over other claims. Thomas v. Long, 207 S.W.3d 334, 339 (Tex. 2006).
Authority of Commissioners Court
The commissioners court is the general business and contracting
agency of the county, and it alone has authority to make contracts binding on
the county, unless otherwise specifically provided by statute. Anderson v.
Wood, 152 S.W.2d 1084, 1085 (Tex. 1941). “The members of the
commissioners court are the county judge and the county commissioners.”
Texas Local Government Code § 81.001(a). Three members generally
constitute a quorum for conducting county business. Tex. Loc. Gov't Code
21
Ann. § 81.006(a).
The commissioners court is a court of record and speaks through its
official minutes. Hays County v. Hays County Water Planning Partnership,
106 S.W.3d 349, 360-361 (Tex.App.–Austin 2003, pet. den.). The
commissioners' court does not act by the statement of one member thereof.
Id. No member of the commissioners court acting alone may bind the court or
the county. Id.. “[T]he individual commissioners have no authority to bind
the county by their separate action.” Canales v. Laughlin, 214 S.W.2d 451,
455 (Tex. 1948).
The commissioners court can act only as a body and when in an official
meeting. Hays County, 106 S.W.3d at 360-361. They meet as a court and
transact the county business in open session. Id. This requirement is not a
mere formality.
[T]he commissioners' court does not act by the statement of one
member thereof at the local drug store and another at the county
victuals emporium, etc. They meet as a court and transact the
county business in open session. Such requirement is not formal.
It is substantial, both that the members may have the benefit of
the knowledge and opinions of the other members, as well as that
the public may know when and where its affairs are being
transacted.
22
Tarrant County v. Smith, 81 S.W.2d 537, 538 (Tex.Civ.App.–Fort Worth
1935, writ ref'd).
Governmental Immunity - General Principles
The doctrine of sovereign immunity serves to prevent governmental
entities from being bound by the policy decisions of their predecessors.
Catalina Development, Inc. v. County of El Paso, 121 S.W.3d 704, 706 (Tex.
2003); see Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849,
854 (Tex. 2002) (sovereign immunity ensures that current policymakers are
neither bound by, nor held accountable for, policies underlying their
predecessors' long-term contracts). Although sovereign immunity furthers
important public policy goals, the courts need not justify its application.
In this Court's second Term, we acknowledged the
common-law rule that “no state can be sued in her own courts
without her consent, and then only in the manner indicated by
that consent.” We gave no basis for this principle of sovereign
immunity, perhaps because a rule then more than six centuries
old which the United States Supreme Court would describe as
“an established principle of jurisprudence in all civilized nations”
required no justification, or perhaps because the reasons given for
the rule had evolved over the centuries, from “the king can do no
wrong”, to preserving the dignity of the state, to protecting state
resources. The rule remains firmly established, and as it has come
to be applied to the various governmental entities in this State, an
important purpose is pragmatic: to shield the public from the
23
costs and consequences of improvident actions of their
governments.
Tooke v. City of Mexia, 197 S.W.3d 325, 331-32 (Tex. 2006) (footnotes
omitted).
Technically, Texas counties enjoy the benefit of governmental
immunity - not sovereign immunity.
Courts often use the terms sovereign immunity and
governmental immunity interchangeably. However, they involve
two distinct concepts. Sovereign immunity refers to the State's
immunity from suit and liability. In addition to protecting the
State from liability, it also protects the various divisions of state
government, including agencies, boards, hospitals, and
universities. Governmental immunity, on the other hand, protects
political subdivisions of the State, including counties, cities, and
school districts.
Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 (Tex. 2003)
(authority omitted).
For purposes of this case, there is no meaningful distinction between
governmental immunity and sovereign immunity. Cases construing sovereign
immunity are equally relevant to governmental immunity. “Governmental
immunity operates like sovereign immunity to afford similar protection to
subdivisions of the State, including counties . . . .” Harris County v. Sykes,
24
136 S.W.3d 635, 638 (Tex. 2004).
Like sovereign immunity, governmental immunity encompasses both
immunity from suit and immunity from liability. Immunity from suit can be
challenged by a plea to the jurisdiction.
Referred to as governmental immunity when applied to the
state's political subdivisions, Travis Cent. Appraisal Dist. v.
Norman, 342 S.W.3d 54, 57-58 (Tex. 2011), sovereign immunity
encompasses both immunity from suit and immunity from
liability, Reata Constr. Corp., 197 S.W.3d at 374. Immunity from
liability is an affirmative defense that bars enforcement of a
judgment against a governmental entity, while immunity from
suit bars suit against the entity altogether and may be raised in a
plea to the jurisdiction. State v. Lueck, 290 S.W.3d 876, 880
(Tex. 2009); Wichita Falls State Hosp. v. Taylor, 106 S.W.3d
692, 696 (Tex. 2003).
Brown & Gay Eng'g, Inc. v. Olivares, 461 S.W.3d 117, 121 (Tex. 2015).
Waiver of Governmental Immunity - Legislative Control
The courts consistently hold that only the Legislature can waive a
county’s immunity from suit for breach of contract. The waiver must be
evidenced by statute or resolution and must be expressed by clear and
unambiguous language.
Express consent is required to show that immunity from suit has
been waived. Thus in this case [involving a contract claim],
Pelzel must establish consent to sue Travis County. Absent
25
consent, the trial court lacks jurisdiction.
A party may establish consent by statute or legislative
resolution. The consent must be expressed by "clear and
unambiguous language.”
***
Travis County v. Pelzel & Assocs., 77 S.W.3d 246, 248 (Tex. 2002)
(authority omitted); see Webb County v. Khaledi Props., 2013 WL 3871060
(Tex.App.–San Antonio 2013, no pet.) (waiver of a county's immunity from
suit for a claimed breach of contract requires a clear and unambiguous
expression of the Legislature, either by statute or resolution).
The requirement that a statutory waiver of immunity be clear and
unambiguous has been preserved by the legislature. Consider the following:
In order to preserve the legislature's interest in managing
state fiscal matters through the appropriations process, a statute
shall not be construed as a waiver of sovereign immunity unless
the waiver is effected by clear and unambiguous language. In a
statute, the use of “person,” as defined by Section 311.005 to
include governmental entities, does not indicate legislative intent
to waive sovereign immunity unless the context of the statute
indicates no other reasonable construction. Statutory
prerequisites to a suit, including the provision of notice, are
jurisdictional requirements in all suits against a governmental
entity.
Tex. Gov't Code § 311.034.
26
When a county contracts with a private party, it waives its immunity
from liability but not its immunity from suit.
When a governmental entity contracts with a private party,
as Travis County has done here, it is liable on its contracts as if it
were a private party. But a governmental entity does not waive
immunity from suit simply by contracting with a private party.
***
Pelzel, 77 S.W.3d at 248 (authority omitted); see Catalina Dev., Inc. v.
County of El Paso, 121 S.W.3d 704, 706 (Tex. 2003) (contract formation, by
itself, is not sufficient to waive a governmental unit's immunity from suit).
Texas courts have consistently deferred to the Legislature to waive
immunity from suit.
We have consistently deferred to the Legislature to waive
sovereign immunity from suit, because this allows the Legislature
to protect its policymaking function. Indeed, in the Code
Construction Act, the Legislature expressed its desire to maintain
control over sovereign immunity [i]n order to preserve [its]
interest in managing state fiscal matters through the
appropriations process....; See Tex. Gov't Code § 311.034.
Subjecting the government to liability may hamper governmental
functions by shifting tax resources away from their intended
purposes toward defending lawsuits and paying judgments.
Accordingly, the Legislature is better suited than the courts to
weigh the conflicting public policies associated with waiving
immunity and exposing the government to increased liability, the
burden of which the general public must ultimately bear.
27
Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.
2002) (authority omitted).
The Supreme Court has found contract claims to be especially
appropriate for such legislative deference.
In the contract-claims context, legislative control over
sovereign immunity allows the Legislature to respond to
changing conditions and revise existing agreements if doing so
would benefit the public. Moreover, legislative control ensures
that current policymakers are neither bound by, nor held
accountable for, policies underlying their predecessors' long-term
contracts.
Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.
2002) (authority omitted).
Reasons for deferring to the Legislature in deciding whether to waive
sovereign immunity for contract claims have been summarized as follows:
the handling of contract claims against the government involves
policy choices more complex than simply waiver of immunity,
including whether to rely on administrative processes and what
remedies to allow;
the government should not be kept from responding to changing
conditions for the public welfare by prior policy decisions
reflected in long-term or ill-considered obligations;
the claims process is tied to the appropriations process, and the
priorities that guide the latter should also inform the former; and,
28
the Legislature is able to deal not only with these policy concerns
but also with individual situations in deciding whether to waive
immunity by resolution, cases by case, or by statute.
Texas A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518, 522 (Tex. 2002)
(plurality) (footnotes omitted).
Because waiver of immunity is a matter committed to the legislature,
the courts have been reluctant to apply a waiver-by-conduct theory: being
waiver based on the notion that a governmental entity can unilaterally waive
its governmental immunity through its own actions. This court has repeatedly
declined to apply such a theory, as is demonstrated by the following:
Carowest's notion that the City can unilaterally waive its
governmental immunity through its own actions traces back to
the Texas Supreme Court's now-infamous footnote in Federal
Sign v. Texas Southern University intimating that "[T]here may
be . . . circumstances where the State may waive its immunity by
conduct other than simply executing a contract so that it is not
always immune from suit when it contracts." But in the years
since it decided Federal Sign, the [Texas Supreme Court] has
clarified—and repeatedly emphasized—that it defers to the
Legislature, not the actions of individual governmental units, to
determine whether, when, and how sovereign or governmental
immunity should be waived. In so doing, moreover, it has
squarely rejected the notion that a governmental entity with
authority to enter contracts, or an agent acting on its behalf, can
contractually waive immunity from suit, as Carowest insists
occurred here. It has similarly declined repeated requests to
recognize a "waiver by conduct," and has never gone further than
29
its suggestion in Federal Sign that such a waiver might
conceivably occur under some set of facts it has not yet seen.
Similarly, in the absence of further guidance from the supreme
court, this Court (at least in recent years) has consistently rejected
requests that we recognize "waivers by conduct" under a variety
of factual scenarios.
City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501, 521
(Tex.App.–Austin 2014, no pet.) (emphasis added).
Legislative control over the waiver of immunity from suit does not
mean that the State can freely breach contracts with private parties, or that the
State can use sovereign immunity as a shield to avoid paying for benefits the
State accepts under a contract. Texas Nat. Res. Conservation Com'n v.
IT-Davy, 74 S.W.3d 849, 854 (Tex. 2002). There is a statutory remedy. If a
party who contracts with the State feels aggrieved, the party can seek redress
by asking the Legislature to waive immunity from suit. Id., citing Tex. Civ.
Prac. & Rem. Code §107.001-.005.
Although the commissioners court has authority to enter into contracts
on behalf of a county, it does not have authority to waive the county’s
immunity from suit. IT-Davy, 74 S.W.3d at 858 (even though the TNRCC's
executive director had the authority to enter into the contract with IT-Davy
30
on the TNRCC's behalf, he did not have authority to, and thus did not, waive
the TNRCC's immunity from suit); Labrado v. Univ. of Texas at El Paso,
2012 WL 43385, at *3 (Tex.App.–Austin 2012, no pet.) (only the
Legislature, not contracting parties, may waive a governmental unit's
immunity).
A county does not waive its immunity by accepting the benefits of a
contract. See Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.
2007) (the State does not waive its immunity from a breach-of-contract
action by accepting the benefits of a contract).
Likewise, a county does not waive immunity by seeking to comply
with the terms of a contract - even if the scope of performance required by
the contract is disputed. Pelzel, 77 S.W.3d at 252 (when a governmental unit
adjusts a contract price according to the contract's express terms, it does not,
by its conduct, waive immunity from suit, even if the propriety of that
adjustment is disputed).
31
Waiver of Governmental Immunity -
The Lawson Plurality Exception
Lawson Issues Summarized
Hughes observes that he pleaded two grounds for waiver of immunity
from suit: waiver of immunity for breach of a settlement agreement under
application of the Lawson case and waiver of immunity by conduct. (Brief:7)
He argues: “The issue facing this Court is whether the County waived
immunity from suit for its breach of the Agreement – either by breaching a
settlement agreement under Lawson or by its conduct in breaching the
Agreement.” (Brief: 8) By “Agreement,” Hughes refers to the Mutual Partial
Assignments (MPA) which contains the library naming provision. (Brief:3)
This section will address the first issue (Lawson): waiver of immunity
for breach of a settlement agreement. Following that, the County will address
waiver by conduct.
Hughes relies on an immunity waiver theory applied by a plurality of
the Supreme Court in Texas A&M University-Kingsville v. Lawson, 87
S.W.3d 518 (Tex. 2002). In Lawson, the state university entered into an
agreement which settled Mr. Lawson’s Whistleblower claim - being a claim
32
as to which immunity had been statutorily waived. Mr. Lawson brought suit
for breach of the agreement.
Four judges (a plurality) concluded that the breach of contract claim
was not barred by immunity, ruling that the university had waived immunity
by entering into the settlement agreement. The Lawson plurality opined:
“[W]hen a governmental entity is exposed to suit because of a waiver of
immunity, it cannot nullify that waiver by settling the claim with an
agreement on which it cannot be sued.” Lawson, 87 S.W.3d at 521.
Hughes contends that the Mutual Partial Assignments (the source of the
library naming provision) settled a claim as to which immunity from suit had
been waived. In this regard, he argues that the County lost its immunity from
suit by voluntarily intervening in the SMU litigation (the Reata exception to
immunity). Hughes further contends that, under application of Lawson,
immunity from suit is as a consequence waived on his suit for breach of the
Mutual Partial Assignments (failure to name the library in honor of the
Hughes family).
The Lawson plurality’s theory of immunity waiver (Lawson waiver) is
not binding authority and should not be adopted. Even if adopted, the Court
33
can determine the scope of the Lawson waiver.
Even if the Mutual Partial Assignments (MPA) settled a claim on
which immunity did not apply (disputed), the nature of the claim settled by
the MPA is not the sort of claim which falls within the scope of Lawson
waiver (Lawson waiver applying to claims as to which immunity has been
statutorily waived).
Even if otherwise applicable, the scope of Lawson waiver should be
limited to allow suit for an offset (against any monetary recovery obtained by
the County) because that is the scope of the immunity exception applicable to
Hughes’ voluntary intervention theory (being the Reata exception to
immunity). Alternatively Lawson should not be applied to a contract
executed in 1994.
Immunity is the default position (it is presumed). It is the application of
an exception to immunity which must be justified. Neal, 2011 WL 1744966,
at *4 (the legislature has not waived immunity from suit over settlement
agreements generally). The application of immunity to settlement agreements
need not be justified. Cf. Tooke v. City of Mexia, 197 S.W.3d 325, 331-32
(Tex. 2006) (observing that sovereign immunity has long been recognized
34
and, as such, needs no justification - although it serves important purposes).
Court Not Required to Adopt Lawson
The Lawson plurality’s theory of immunity waiver is not binding
authority and should not be adopted. This Court is free to adopt or reject
Lawson waiver and, if adopted, is free to determine the scope of the waiver.
Because Lawson was decided by a plurality, and because the Lawson
exception has never been expressly adopted by a Supreme Court majority, the
Lawson exception to immunity has no precedential value. See Neal, 2011 WL
1744966, at *3 (Lawson is a plurality decision lacking precedential value).
This Court has applied Lawson. However, it is not clear whether the
Court applied Lawson because the Lawson rationale went unchallenged or
whether the court deemed itself bound to apply the rationale. See e.g. Travis
County v. Rogers, 2015 WL 4718726, at *5 n.1 (Tex.App.–Austin 2015, no
pet.). (Pemberton, J., concurring) (observing that the issue was not raised, but
Court of Appeals might be bound to apply Lawson).
The fact that the Supreme Court has remanded cases for courts to
consider the Lawson exception does not necessarily signal the Supreme
Court’s approval of the exception. It may simply signal a desire that the
35
courts of appeal have the first opportunity to determine whether, and the
extent to which, the exception should be applied.
The Lawson exception to immunity judicially intrudes into an area
which is delegated to the Legislature - waiver of sovereign immunity. See
Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.
2002) (we have consistently deferred to the Legislature to waive sovereign
immunity from suit).
This is nothing more than an ordinary contract dispute. Unless
waived, the State retains its immunity from suit on a contract,
whether the contract is for goods and services or a settlement
agreement. We have repeatedly held that sovereign immunity in
ordinary contract claims is an area best left to legislative
judgment. See York, 871 S.W.2d at 177 (“[T]he waiver of
governmental immunity is a matter addressed to the
Legislature.”). Deference to the Legislature to determine
sovereign immunity in ordinary breach-of-contract cases
claiming waiver by conduct is founded on sound policy. See Fed.
Sign, 951 S.W.2d at 413 (Hecht, J., concurring) (“There are
compelling reasons for this Court to continue to defer to the
Legislature.”). Yet today the plurality overrides those compelling
reasons and concludes that although the Legislature has not
chosen to waive sovereign immunity for this breach-of-contract
claim, the University simply “may not” claim immunity in this
case.
Lawson, 87 S.W.3d at 525-26 (Rodriguez, J., dissent).
In this regard, the question is not whether the Lawson exception
36
advances equitable or otherwise beneficial policy. The question is whether
the policy choices should be made by the courts or by the Legislature. Cf.
Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371, 375 (Tex. 2006) (there
is tension between the concept of a governmental entity waiving its immunity
from suit by some action independent from the Legislature's waiving
immunity and the principle that only the Legislature can waive sovereign
immunity).
The Lawson exception to immunity also ignores established law that a
suit for breach of a settlement agreement is independent of the settled claim.
The plurality concedes that the Legislature has not waived
immunity for Lawson's breach-of-contract claim. Nevertheless,
the plurality sidesteps recent precedent concerning sovereign
immunity in breach-of-contract suits, wholly ignores established
law that a suit for breach of a settlement agreement is
independent of the settled claim, and erroneously concludes that
the University may not assert immunity.
***
[T]he issue here is whether the State may assert sovereign
immunity in an ordinary breach-of-contract case, and the answer
to that question is decidedly “yes.” Lawson asserted a
breach-of-contract claim against the University, and the State has
sovereign immunity on that claim. When Lawson settled, he
traded in his wrongful termination claims for a settlement
contract, and, in addition to accepting $62,000, he accepted the
37
risk that the State could assert immunity if it breached the
contract, just as all people who contract with the State accept that
risk. Although such a risk might discourage some parties from
contracting with the State, that risk has not daunted the Court
before. See Pelzel, 77 S.W.3d at 252; IT-Davy, 74 S.W.3d at
856; Fed. Sign, 951 S.W.2d at 408. Moreover, those who settle
for cash and receive payment before dismissing their suit take no
risk that the State will assert immunity. Thus, contrary to the
plurality's fears, only a handful of settlements in which the
private party insists on executory provisions rather than only a
cash settlement would be discouraged.
Lawson, 87 S.W.3d at 524-25 (Rodriguez, J., dissent).
Reata Limitation on Immunity
Has No Application to Lawson Exception
Even if the Lawson rationale is adopted, this Court can determine the
scope of the Lawson waiver. In order to apply Lawson waiver to Hughes’
claim, the Court would need to expand the waiver beyond the narrow scope
to which it was applied by the Lawson plurality.
The Lawson plurality opined: “[W]hen a governmental entity is
exposed to suit because of a waiver of immunity, it cannot nullify that waiver
by settling the claim with an agreement on which it cannot be sued.” Lawson,
87 S.W.3d at 521 (plurality).
Thus, the Lawson rule provides that immunity is waived on a breach of
38
contract claim if three elements are satisfied:
1- a claim was asserted against the governmental entity;
2- the entity was thereby exposed to suit because of a waiver of immunity;
and,
3-the claim was settled by the agreement made the basis of suit.
Even assuming that Hughes met the other two elements (disputed),
Hughes has not demonstrated that in the SMU litigation the County was
exposed to suit because of a waiver of immunity. Here, in an effort to
establish that immunity was waived on a claim allegedly settled by the MPA,
Hughes relies on Reata’s judicially created voluntary litigation exception to
immunity.
However, this Court has declined to extend the Lawson waiver in the
manner advocated by Hughes. See A.I. Divestitures, Inc. v. Texas Comm'n on
Envtl. Quality, 2016 WL 3136850, at *8 (Tex.App.–Austin 2016, no. pet. h.)
(rejecting argument that the Reata exception to immunity will support an
application of Lawson waiver). A judicially created exception to immunity
will not support an application of Lawson.
The Lawson exception has no application - because even if the Mutual
39
Partial Assignments (MPA) settled a claim, it did not settle a claim for which
the legislature had waived immunity. See A.I. Divestitures, 2016 WL
3136850, at *8 (Lawson waiver is not implicated when there has been no
legislative waiver of the State's immunity). In Neal, this Court likewise
distinguished Lawson, holding as follows: “[T]he present case differs from
Lawson in a crucial respect: Lawson had a statutorily recognized claim (i.e .,
a claim for which the State had waived immunity) pending in the trial court
when he settled with the State.” 2011 WL 1744966, at *4.
The voluntary litigation theory (the Reata rule) relied on by Hughes
does not give rise to a statutory waiver of immunity. Instead, the voluntary
litigation theory gives rise to a limited judicial exception to immunity and, as
such, will not support application of a Lawson waiver.
Hughes argues that the County “voluntarily intervened in the SMU
litigation and had no grounds for asserting sovereign immunity as to Hughes’
claim in the SMU Litigation.” (Brief:8,10,14). He provides neither argument
nor authority. (CR:806).
However, voluntary litigation gives rise to a very limited exception to
immunity. See Employees Ret. Sys. of Texas v. Putnam, LLC, 294 S.W.3d
40
309, 325 (Tex.App.–Austin 2009, no pet.). In Putnam, this Court observed:
In Reata, the court held that when a governmental entity files a
lawsuit or otherwise seeks affirmative relief, it waives immunity
for connected, germane, and properly defensive counterclaims,
but only to the extent those counterclaims offset the claims of the
government entity. 197 S.W.3d at 377 (“Absent the Legislature's
waiver of the City's immunity from suit, ... the trial court did not
acquire jurisdiction over a claim for damages against the City in
excess of damages sufficient to offset the City's recovery, if
any.”).
Putnam, 294 S.W.3d at 324-25.
Technically, the Reata rule is not a rule of waiver - it is a judicially
implemented limitation on the contours of immunity (the extent to which
immunity will be applied). This distinction is illustrated by the following:
Although litigation actions of governmental entities
underlay our decisions in Reata and similar cases, we did not
hold that those actions effected waivers of immunity; rather, they
were factors we considered in defining the contours of immunity.
In other words, we have not, in Reata or other decisions, altered
the principles that (1) the boundaries of sovereign immunity are
determined by the judiciary, and (2) waivers of sovereign
immunity or consent to sue governmental entities must generally
be found in actions of the Legislature.
City of Dallas v. Albert, 354 S.W.3d 368, 374 (Tex. 2011) (authority
omitted).
Because the Reata rule gives rise to a judicially implemented limitation
41
on the contours of immunity, its application to Lawson waiver is
inappropriate because, as noted, Lawson waiver is justified (if at all) by its
application to statutorily recognized claims (claims as to which the legislature
has waived immunity).
This Court recently held that the Reata voluntary litigation rule has no
application to Lawson waiver, holding as follows:
Relying on Reata Construction Corporation v. City of Dallas,
A.I. asserts that by filing suit against A.I., the Commission
waived immunity concerning any and all of A.I.'s potential
defenses and potential offsets. See Reata Constr. Corp. v. City of
Dallas, 197 S.W.3d 371, 374 (Tex.2006). Relying further on
Texas A & M University–Kingsville v. Lawson, A.I. maintains
that because the Commission agreed to settle the enforcement
action, for which according to A.I. it had waived its immunity, it
could not claim immunity from a suit alleging that it breached
that settlement agreement. See Texas A & M Univ.-Kingsville v.
Lawson, 87 S.W.3d 518, 520–23 (Tex.2002) (holding exception
to sovereign immunity exists when suit alleges breach of
agreement settling claim for which Legislature has waived State's
immunity).
***
In this case there is no legislative waiver of the Commission's
immunity such that applying immunity to A.I.'s suit for breach of
an agreement settling the enforcement action would thwart the
Legislature's policy judgments in waiving immunity in the first
place. See Lawson, 87 S.W.3d at 521 (“[W]hen a governmental
entity is exposed to suit because of a waiver of immunity, it
42
cannot nullify that waiver by settling the claim with an agreement
on which it cannot be sued ... without defeating the purpose of
the waiver in the first place.”). The Lawson exception to
sovereign immunity is simply not implicated when there has been
no legislative waiver of the State's immunity. A.I.'s breach of
contract claim was barred by sovereign immunity, and the district
court properly granted the Commission's plea to the jurisdiction
as to that claim.
A. I. Divestitures, 2016 WL 3136850, at *8.
The Supreme Court has recognized that the Lawson rule creates a
“narrow exception.” See Texas A & M Univ. Sys. v. Koseoglu, 233 S.W.3d
835, 838 (Tex. 2007) (pleadings against Texas A & M did not fit the narrow
exception suggested by the plurality in Lawson). The Lawson exception
permits immunity to be disregarded only if the agreement settled a claim as to
which immunity is statutorily waived.
The rationale underlying Lawson provides that the legislature has
waived immunity on the claim so enforcement of an agreement settling the
claim preserves and perpetuates the statutory waiver. This court has
recognized that the Lawson plurality “found a waiver of immunity in the
situation at bar only because it concluded that the Legislature intended one.”
Neal, 2011 WL 1744966, *13 (emphasis added).
43
The key distinction - the Lawson plurality determined that immunity
was waived by the legislature and not by the courts. See Lawson, 87 S.W.3d
at 522 (once the Legislature has decided to waive immunity for a class of
claims, the inclusion of settlements within the waiver is consistent with that
decision); Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.
2007) (in Lawson, a plurality of this Court held a plaintiff's claim for breach
of an agreement settling his underlying Whistleblower Act claim was
encompassed within the Legislature's decision to waive immunity for
Whistleblower Act claims).
Both the Lawson plurality and dissent recognized the need to give
deference to the legislature’s role in waiving sovereign immunity. The
Lawson four-judge dissent opined that the plurality exception failed to give
due deference to the Legislature, as follows:
We have repeatedly held that sovereign immunity in ordinary
contract claims is an area best left to legislative judgment. See
York, 871 S.W.2d at 177 ("The waiver of governmental
immunity is a matter addressed to the Legislature."). Deference to
the Legislature to determine sovereign immunity in ordinary
breach-of-contract cases claiming waiver by conduct is founded
on sound policy. See Fed. Sign, 951 S.W.2d at 413 (Hecht, J.,
concurring) ("There are compelling reasons for this Court to
continue to defer to the Legislature."). Yet today the plurality
44
overrides those compelling reasons and concludes that although
the Legislature has not chosen to waive sovereign immunity for
this breach-of-contract claim, the University simply "may not"
claim immunity in this case.
Id. at 525 (Rodriguez, J., dissent).
The Lawson plurality recognized that the Legislature was due
deference but concluded that such deference was not abridged - because the
Lawson exception gives effect to a statutorily recognized claim, as follows:
Allowing suit against the government for breach of an
agreement settling a claim for which immunity has been waived
does not interfere with the Legislature's policy choices. On the
contrary, having determined to allow suits on such claims and
prescribed the available remedies, the Legislature must surely
have considered -- indeed, hoped -- that claims would often be
settled. If anything, for the government to be immune from the
enforcement of such settlements would impair the purposes of the
waiver by limiting its effectiveness in cases not tried to a final
judgment.
***
Once the Legislature has decided to waive immunity for a class
of claims, the inclusion of settlements within the waiver is
consistent with that decision.
***
In resolving this issue, we have concluded that the dissent's rigid
view of immunity from suit for breach of contract would impair
the effectiveness of the legislative waiver of immunity expressed
45
in the Whistleblower Act by pressuring the government and some
claimants to remain in litigation rather than settle.
Lawson, id. at 522-23 (plurality, emphasis added).
Enforcing settlements of claims which have not been statutorily
authorized denies due legislative deference and is inconsistent with the
policies recognized by both the Lawson plurality and the Lawson dissent. As
noted, this court has recognized that the Lawson plurality “found a waiver of
immunity in the situation at bar only because it concluded that the
Legislature intended one.” Neal, 2011 WL 1744966, *13 (emphasis added).
The following underscores the fact that Lawson’s application is limited
to claims on which immunity has been statutorily waived.
Where the Legislature has chosen to waive immunity as to a
cause of action against government, government settles the
claim, and then government allegedly breaches the settlement
agreement and tries to invoke immunity as a bar to any claims for
breach, Lawson holds that the immunity that would ordinarily bar
the claims for breach (aside from some sort of independent
legislative waiver) does not apply.
Rogers, 2015 WL 4718726, at *5 (Pemberton, J., concurring) (emphasis
added).
The Legislature is better suited than the courts to weigh the conflicting
46
public policies associated with waiving immunity and exposing the
government to increased liability, the burden of which the general public
must ultimately bear. IT-Davy, 74 S.W.3d at 854; City of New Braunfels v.
Carowest Land, Ltd., 432 S.W.3d 501, 521 (Tex.App.–Austin 2014, no pet.)
(the Texas Supreme Court has repeatedly emphasized that it defers to the
Legislature to determine whether, when, and how sovereign or governmental
immunity should be waived).
Hughes relies on City of Carrollton v. Singer, 232 S.W.3d 790
(Tex.App.–Fort Worth 2007, pet. den.). However, Singer is consistent with
Lawson's application to statutorily authorized claims.
In Singer, the court applied Lawson to an agreement settling an
eminent domain proceeding - in which proceeding the Singers asserted a
claim against the City alleging inadequate compensation for the City's
acquisition of their property, and for which the City would not be immune.
Singer, 232 S.W.3d at 800 (Tex. App.–Fort Worth 2007, pet. denied). The
Singer court observed that condemnation is a process created entirely by
statute. Id. at 797. The court held that the landowners settled a claim for
which the governmental entity's immunity is statutorily waived and that
47
enforcement of that settlement necessarily is included within that initial
waiver. Id. at 799-800.
Thus Singer is consistent with Lawson's limited application, being
application to the settlement of statutorily authorized claims. Because the
MPA did not settle a statutorily authorized claim, Lawson waiver should not
be applied.
Any Recovery
Should Be Limited To A Reata Offset
Reata applies retrospectively. See Putnam, 294 S.W.3d at 325-26
(given that the Texas Supreme Court has seen fit to apply its decision in
Reata retrospectively, including to those cases pending on appeal at the time
Reata was issued, we see no reason not to do so in the present case as well).
The principles underlying Reata date back to at least 1943. See Reata, 197
S.W.3d at 377 (observing that Reata court merely applies principles
promulgated as early as 1943 in the Humble Oil case); cf. Federal Sign v.
TSU., 951 S.W.2d 401, 408 (Tex. 1997) (the three times this Court
considered sovereign immunity in the breach of contract context, we held that
the State is immune from suit arising from breach of contract suits).
48
If Reata’s judicially implemented limitation on the contours of
immunity is engrafted onto the Lawson waiver rule, then logic weighs in
favor of likewise engrafting and applying Reata’s limited scope of
jurisdiction: the trial court would not thereby acquire jurisdiction over a
claim for monetary relief against the governmental entity in excess of
damages sufficient to offset the governmental entity’s recovery, if any.
This Court has recognized the limited scope of jurisdiction imparted by
Reata:
In Reata, the court held that when a governmental entity files a
lawsuit or otherwise seeks affirmative relief, it waives immunity
for connected, germane, and properly defensive counterclaims,
but only to the extent those counterclaims offset the claims of the
government entity. 197 S.W.3d at 377 (“Absent the Legislature's
waiver of the City's immunity from suit, ... the trial court did not
acquire jurisdiction over a claim for damages against the City in
excess of damages sufficient to offset the City's recovery, if
any.”).
Putnam 294 S.W.3d at 324-25.
A contrary rule (applying an unlimited waiver of immunity) would
raise a disincentive for governmental entities to settle claims. If in the
absence of settlement governmental entities are (under operation of Reata)
exposed to a limited waiver of immunity (damages limited to an offset), but
49
by settling are exposed (under operation of Lawson) to an unlimited waiver
(and unlimited damages), then governmental entities are not likely to settle
claims. Fewer settlements means more litigation.
Hughes seeks damages in the amount of at least $3,000,000 plus
attorney’s fees. [Appendix3] If the County’s voluntary intervention in the
SMU litigation, or its conduct, triggered a waiver of immunity (disputed),
then the trial court did not thereby acquire jurisdiction over Hughes’ claim
for monetary relief against the County in excess of an amount sufficient to
offset the County’s recovery (if any).
Alternatively Lawson Should Not Be Applied
To A Contract Executed in 1994
If it should be determined that Reata's judicially implemented
limitation on the contours of immunity (jurisdiction limited to an offset) is
inapplicable, then it would be contrary to public policy to apply the Lawson
waiver rule to the MPA. See Putnam, 294 S.W.3d at 325 (although Texas
Supreme Court decisions usually apply retrospectively, exceptions may be
recognized when considerations of fairness and policy dictate prospective
effect only).
50
The contract herein made the subject of suit, the MPA, was executed in
1994. The Lawson rule was not announced until 2002 and even then it was
supported only by a plurality. The rule is yet to be applied by a majority of
the Supreme Court.
The Lawson plurality supported its immunity waiver by entertaining a
presumption that a governmental entity calculates risk when entering into a
settlement agreement. The plurality observed that the governmental entity
trades unknowns for knowns, “being obligations that are more accurately
assessable.” Lawson, 87 S.W.3d at 522 ) (plurality). However, here, it cannot
be said that the risk (a Lawson immunity waiver) was known to the County in
1994.
Record Does Not Support A Lawson Waiver
As was demonstrated, the Lawson rule provides that immunity is
waived on a breach of contract claim if three elements are satisfied:
1- a claim was asserted against the governmental entity;
2- the entity was thereby exposed to suit because of a waiver of immunity;
and,
3-the claim was settled by the agreement made the basis of suit.
51
Hughes argues that the County lost its immunity on SMU litigation
claims by voluntarily intervening in the SMU litigation (being the Reata
immunity exception). Hughes reasons that the Mutual Partial Assignments
(the source of the library naming provision) as a consequence settled a claim
as to which the County had no immunity (the Lawson immunity waiver).
However, even if this co-mingling of theories (Reata and Lawson) had
merit, the pleaded facts do not fit the theories. The County’s intervention in
the SMU litigation did not implicate the Reata immunity exception. Even if it
had, Lawson waiver would not be implicated because: (1) Hughes asserted no
claim against the County (as contrasted with a claim against SMU); and, (2)
the Mutual Partial Assignments (MPA) did not settle a claim.
The record does not implicate the Reata immunity exception. The
County’s intervention in the SMU litigation did not implicate the Reata
immunity exception (being the second Lawson element - “exposed to suit
because of waiver”).
The Reata exception has application only if the governmental entity
asserts a claim for damages. The Reata court held: "Once it asserts
affirmative claims for monetary recovery, the City must participate in the
52
litigation process as an ordinary litigant, save for the limitation that the City
continues to have immunity from affirmative damage claims against it for
monetary relief exceeding amounts necessary to offset the City's claims."
Reata, 197 S.W.3d at 377.
In contrast, a governmental entity's affirmative claim for declaratory
relief does not have any effect on the entity's immunity. City of McKinney v.
Hank's Rest. Group, L.P., 412 S.W.3d 102, 116 (Tex.App.–Dallas 2013, no
pet.).
Here, Hughes pleads that the County sought declaratory relief (“sought
a declaration”). (CR:807) Hughes thereby negated the claimed waiver of
immunity. The County’s intervention did not waive the County’s immunity
as to claims asserted against the County by Hughes (if any).
Additionally, the County’s intervention in the SMU litigation did not
implicate the Reata immunity exception because, as between the County and
Hughes, the County's SMU litigation claim was defensive. The Reata goal is
to provide the party sued an opportunity to assert defensive claims. See
Reata, 197 S.W.3d at 374 (where a state voluntarily files a suit and submits
its rights for judicial determination, the defense will be entitled to plead and
53
prove all matters properly defensive). The Reata court held that “it would be
fundamentally unfair to allow a governmental entity to assert affirmative
claims against a party while claiming it had immunity as to the party's claims
against it.” Reata, 197 S.W.3d at 375-76 (emphasis added).
Here however, as between the County and Hughes, in the SMU
litigation it was the County which stood in the defendant’s shoes. In this
regard, the County did not initiate litigation with Hughes. The County sued
SMU (by intervening in the pending suit).
If the County is deemed to have asserted a claim against Hughes
(disputed), the claim is defensive in nature and as such would not trigger the
Reata exception to immunity. Cf. Smith v. Lutz, 149 S.W.3d 752, 758
(Tex.App.–Austin 2004, no pet.) (since IT-Davy, this Court has only
recognized a waiver of immunity in contract cases when the State has first
sued the contracting party).
Hughes pleads that he intervened after the County had intervened.
(CR:808-809) Hughes thereby negated application of a waiver based on
voluntary litigation. As between the County and Hughes it was Hughes who
stood in the plaintiff’s shoes and, consequently, Hughes cannot invoke the
54
benefit of a voluntary litigation doctrine which is designed to afford fairness
to a defendant.
The record does not implicate the Lawson immunity waiver. Even if
Hughes had satisfied the second Lawson element (exposed to suit because of
waiver), under the facts pleaded the Lawson immunity exception would not
be implicated because Hughes failed to satisfy the first and third elements.
Element One: In the SMU litigation Hughes asserted no claim against the
County (as contrasted with a claim against SMU) and thus had no claim
against the County that could be deemed settled by the Mutual Partial
Assignments (MPA). Element Three: the MPA did not settle a claim - it was
the post-MPA agreement and judgment which settled claims.
The trial court found that the MPA is a “mutual settlement agreement.”
(CR:833) The meaning and intent of this finding is not clear. The trial court
erred as a matter of law if it thereby determined that the MPA settled a claim
asserted by Hughes against the County - the record conclusively negates such
a conclusion. The fact that the trial court granted the plea to the jurisdiction
implies that the court did not assign such a construction to the MPA.
In the SMU litigation Hughes asserted no claim against the County (as
55
contrasted with a claim against SMU) and thus had no claim against the
County that could be deemed settled by the MPA. In such litigation, Hughes
and the County each sought to establish ownership of assets which were
being enjoyed by SMU. Neither Hughes nor the County therein asserted a
claim against the other.
In this regard, Hughes pleads that the County sought “a declaration that
the residue of the gift to SMU belonged to the County Library.” (CR:807)
Hughes pleads that Hughes sought “a declaration that because of the lapse in
the gift of the residue to Tom Green County, the residue of the gift to SMU
belonged to [the uncle’s] heirs at law [the Hughes group].” (CR:808 -
emphasis added) Although the relief sought by Hughes and the County
conflicted in the sense that relief for one precluded relief for the other, the
claims were asserted against SMU.
Additionally, the MPA did not settle a claim. It was the post-MPA
agreements and judgment which settled claims. The MPA merely altered the
ownership structure of the claims asserted by Hughes and the County against
SMU.
By the MPA, the Hughes group assigned to the County "50% of the net
56
proceeds they actually receive from [the SMU litigation]." (CR:662-663)
Likewise, by the MPA the County assigned to the Hughes group "50% of the
net proceeds it actually receives from [the SMU litigation]."(CR:662-663)
Similarly, the MPA provides that “[t]hese mutual assignments are irrevocable
and are intended to be a mutual exchange of 50% of the respective interests
of the parties hereto in any recovery under said cause against SMU and any
other adverse parties who may be joined in the cause by mutual agreement of
the parties hereto.” (CR:664)
In this manner, the MPA merely transfers an interest in net proceeds.
The MPA expressly disavows any intent to extinguish claims, providing in
relevant part as follows: "[T]his document is in no way intended to eliminate
or reduce in any fashion the cause of action, claims, or rights held by the
heirs-at-law or the County." [Appendix2] (emphasis added).
Hughes reasons that any claim asserted by Hughes against the County
in the SMU litigation would still be viable if the MPA did not settle that
claim. However, as noted, Hughes did not assert a claim against the County.
In any event, the post-MPA agreements and judgment (not the MPA)
settled claims. The County disputes Hughes’ assertion that one of these post-
57
MPA agreements, the Compromise Agreement [Appendix 5], “does not
provide for any releases between the County and the Hughes heirs.” (Brief:4)
The SMU litigation claims were settled by the Settlement Agreement,
the Compromise Agreement, and the Final Judgment. The Compromise
Agreement [Appendix 5] summarizes the claims asserted by SMU, the
County, and the Hughes group and provides that by the Settlement
Agreement [Appendix 4] (another post-MPA agreement) the parties agreed to
a “complete and final compromise and settlement of such suit and all of such
disputes.” Similarly, the trial court signed a Final Judgment [Appendix 6]
which recites that “all matters in controversy between the parties which is the
subject matter of this suit have been fully and finally agreed to and settled.”
58
Waiver of Governmental Immunity - By Conduct
Hughes observes that he pleaded two grounds for waiver of immunity
from suit: (1) waiver of immunity for breach of a settlement agreement under
application of the Lawson case and (2) waiver of immunity by conduct.
(Brief:7) He argues: “The issue facing this Court is whether the County
waived immunity from suit for its breach of the Agreement – either by
breaching a settlement agreement under Lawson or by its conduct in
breaching the Agreement.” (Brief: 8) By “Agreement,” he refers to the
Mutual Partial Assignments (MPA) which contains the library naming
provision. (Brief:3)
This section will address the second issue: waiver of immunity by
conduct. This ground for waiver of immunity has special relevance to
Hughes’ equitable claim captioned "money had and received," alleging that
the County accepted the benefits of the MPA and unjustly retained SMU’s
settlement payment. (CR:813)
Hughes’ pleadings do not support a waiver of immunity by conduct.
Hughes pleads: “Tom Green County has waived sovereign immunity from
suit as a result of its conduct in entering into and then breaching the Mutual
59
Partial Assignments between Hughes and the County.” (CR:806)
Hughes pleads the following facts in support of waiver by conduct
exception to immunity:
18. At the time that the $1,000,000 settlement offer was made,
and although he was already delegated authority, Timothy
Weatherby contacted the other County Commissioners, and they
all agreed that the County's $500,000 share was "significant" (as
it constituted the largest single cash donation the County had ever
received), should be accepted, and warranted naming the Central
Tom Green County Library in honor of Duwain E. Hughes, Jr. or
Frances Hughes Crews, as set forth in the Agreement. Id.
19. Because the Tom Green County representatives at the
mediation stated that the County's portion of SMU's offer would
be substantial enough to warrant naming the Central Library as
contemplated in the Assignment Agreement, the Heirs-at-Law
agreed to go along with Tom Green County and accepted SMU's
offer. Id. Under the terms of the Assignment Agreement, the
Heirs-at-Law and Tom Green County split those proceeds 50/50.
Id.
(CR:808)
These statements alleged to have been made at mediation should not be
considered for any purpose. Use of the statements is barred by the mediation
privilege, being Tex. Civ. Prac. & Rem. Code § 154.073. This statute
provides that, subject to exceptions not shown applicable by the record,
a communication relating to the subject matter of any civil or
60
criminal dispute made by a participant in an alternative dispute
resolution procedure, whether before or after the institution of
formal judicial proceedings, is confidential, is not subject to
disclosure, and may not be used as evidence against the
participant in any judicial or administrative proceeding.
Tex. Civ. Prac. & Rem. Code Ann. § 154.073 (West).
Because the statute indicates such privileged information cannot be
disclosed or considered, it therefore follows it is a substantive defect that
cannot be waived by failing to obtain a ruling from the trial court.
Hydroscience Techs., Inc. v. Hydroscience, Inc., 401 S.W.3d 783, 793
(Tex.App.–Dallas 2013, pet. denied). Moreover, the County pleaded the
statute in bar of such representations. (CR:614)
The Hydroscience court observed that “[p]arties must not be allowed to
use evidence from mediation to dispute terms of a settlement agreement,
particularly years later.” 401 S.W.3d at 796. Here, the MPA [Appendix2]
(executed in 1994) expressly provides that the commissioners court will have
discretion to determine whether the recovery is substantial enough to name
the library in honor of the Hughes family. Hughes would use statements
allegedly made in mediation to establish that the County’s commissioners
court had no such discretion, notwithstanding the fact that Hughes pleads that
61
the 1994 commissioners court subsequently (after the statements were made)
ratified the MPA. (CR:809)
Additionally, statements made by commissioners outside the context of
an official meeting should not be considered. The County is not bound by
any such representations. See Tarrant County v. Smith, 81 S.W.2d 537, 538
(Tex. Civ. App.–Fort Worth 1935, writ ref'd) (the commissioners' court does
not act by the statement of one member thereof at the local drug store and
another at the county victuals emporium - they meet as a court and transact
the county business in open session); cf. Labrado, 2012 WL 43385, at *3
(only the Legislature, not contracting parties, may waive a governmental
unit's immunity).
In any event, this court has repeatedly declined to apply a waiver by
conduct exception to immunity, as is demonstrated by the following:
Carowest's notion that the City can unilaterally waive its
governmental immunity through its own actions traces back to
the Texas Supreme Court's now-infamous footnote in Federal
Sign v. Texas Southern University intimating that "[T]here may
be . . . circumstances where the State may waive its immunity by
conduct other than simply executing a contract so that it is not
always immune from suit when it contracts." But in the years
since it decided Federal Sign, the [Texas Supreme Court] has
clarified—and repeatedly emphasized—that it defers to the
62
Legislature, not the actions of individual governmental units, to
determine whether, when, and how sovereign or governmental
immunity should be waived. In so doing, moreover, it has
squarely rejected the notion that a governmental entity with
authority to enter contracts, or an agent acting on its behalf, can
contractually waive immunity from suit, as Carowest insists
occurred here. It has similarly declined repeated requests to
recognize a "waiver by conduct," and has never gone further than
its suggestion in Federal Sign that such a waiver might
conceivably occur under some set of facts it has not yet seen.
Similarly, in the absence of further guidance from the supreme
court, this Court (at least in recent years) has consistently rejected
requests that we recognize "waivers by conduct" under a variety
of factual scenarios.
City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501, 521
(Tex.App.–Austin 2014, no pet.).
Hughes cites Texas Southern University v. State Street Bank & Trust
Co., 212 S.W.3d 893 (Tex.App.-Hou. [1st Dist.] 2007, pet. denied).
However, this Court has expressly rejected application of State Street. See
Labrado, 2012 WL 43385, at *3 (court does not have discretion to recognize
State Street’s waiver by conduct exception to sovereign immunity in the
absence of Supreme Court authority).
Other courts have likewise criticized State Street. See e.g. City of
McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102, 114
63
(Tex.App.–Dallas 2013, no pet.) (the amorphous nature of State Street’s
waiver-by-conduct doctrine weighs against its adoption); Leach v. Texas
Tech Univ., 335 S.W.3d 386, 401 (Tex.App.–Amarillo 2011, pet. denied)
(State Street contradicts the Supreme Court's statements about the only
avenue for redress being through the Texas Legislature).
Some courts have distinguished State Street on the ground that the
State Street case involved an egregious set of facts. It appears that no court
has applied State Street to find a waiver of immunity.
Before this Court expressly rejected any application of State Street, this
Court distinguished State Street in Smith v. City of Blanco, 2009 WL
3230836 (Tex.App.–Austin 2009, no pet.). The Court observed that in State
Street TSU’s attorney had given false assurances of the validity and
enforceability of the contract to lure CMS into the contract, then TSU
reneged on its agreement, and tried to hide behind the cloak of immunity.
2009 WL 3230836, at *4. In Blanco, this Court failed to find such egregious
conduct - stressing that the city had made no representations to plaintiff
concerning immunity. Id. The court held that the plaintiff’s potential
misunderstanding of the law was not enough to justify an equitable waiver of
64
immunity against the City. Id.
As in Blanco, the County is not alleged to have made any
representations to Hughes concerning immunity. Even if Hughes presumed
that the County was obligated to name the library in honor of his family, a
misunderstanding of the law does not justify an equitable waiver of
immunity.
In Jonah Water Special Util. Dist. v. White, 2009 WL 2837649
(Tex.App.–Austin 2009, pet. struck), this Court failed to find the
“extraordinary factual circumstances” presented in State Street where the
record did not indicate that the defendant had procured a contract with
promises it intended to break and the lawsuit appeared to have grown out of
what was initially a good-faith disagreement over performance under the
contract. 2009 WL 2837649, at *3.
Here, the County asserts immunity in an effort to avoid the expense of
trial. The pleaded facts do not demonstrate that the County made promises
which it intended to break.
Here, there is a good-faith dispute over performance of the library
naming provision: whether the 1994 commissioners court found that the
65
SMU litigation recovery was substantial enough to name the library in honor
of Hughes’ family (disputed); and, even if it had, whether in the course of
naming the new library the 2011 commissioners court is somehow precluded
from making its own determination (a contrary determination). This issue
was previously discussed.
Finally Hughes, having waived his statutory remedy, has shown no
right to equitable relief. Hughes could have sought legislative consent to sue.
See IT-Davy, 74 S.W.3d at 854 (if a party who contracts with the State feels
aggrieved, it can seek redress by asking the Legislature to waive immunity
from suit). Hughes does not plead that he even sought, much less obtained,
legislative consent. Hughes has not pleaded a basis for waiver of immunity
by conduct.
66
PRAYER
Appellee Tom Green County prays:
1. That the judgment be in all matters affirmed.
2. That Appellee have such other relief as to which it has shown itself
entitled.
Respectfully submitted,
JAMES DAVID WALKER
P. O. Box 41
Milano, Texas 76556
SBOT 20706000
Phone: (512) 636-9520
Email: walker@2appeal.com
COUNSEL FOR
TOM GREEN COUNTY
67
CERTIFICATE OF WORD COUNT
I certify that this document contains 12,672 words.
CERTIFICATE OF SERVICE
On June 17, 2016, this document was electronically served on Counsel
for Appellant: David H. Smith (dhsmith@dgclaw.com).
James David Walker
68
NO. 03-16-00132-CV
HUGHES V. TOM GREEN COUNTY
APPENDIX TO APPELLEE’S BRIEF
Appendix1. Order Granting Tom Green County’s Plea to the
Jurisdiction (CR:833)
Appendix2. Mutual Partial Assignments (CR:692-700)
Appendix3. Plaintiff’s Third Amended Petition to Enforce Settlement
Agreement and Declaratory Judgment Action (exhibits
omitted) (CR:805-815)
Appendix4. Settlement Agreement (CR:751)
Appendix5. Compromise and Settlement and Release of All Claims
(RR3:241-247)
Appendix6. Final Judgment (SMU Litigation) (RR3:159-163)
Appendix1
Order Granting
Tom Green County's Plea to the Jurisdiction
(CR:833)
CAUSE NO. Al30194C
CHARLES J. HUGHES, § IN THE DISTRICT COURT OF
Plaintiff, §
§
V. § TOM GREEN COUNTY, TEXAS
§
TOM GREEN COUNTY, §
Defendant. § 51st JUDICIAL DISTRICT
ORDER GRANTING TOM GREEN COUNTY'S
PLEA TO THE JURISDICTION
On February 16, 2016, the Court heard and considered Tom Green County's Plea to the
Jurisdiction. After hearing evidence and argument of counsel, the Court finds that Tom Green
County's Plea to the Jurisdiction should be granted.
It is, therefore, ORDERED that Charles Hughes' claims and causes of action arising out
of or pertaining to the Mutual Partial Assignments are dismissed for lack of subject matter
·11-..~ (~--"---!- hLA-c:l ~ '\l{..._.z fYI.~fl,vl PC<-<-`` f /ts ~)o-r-~
jurisdiction. ; Y'-.
tl ,~ ~Y:le-r J-r; h~ ,'1-._ ~" ·tVvvt. -h---1 ~w{_`` b.""'.':r"~'-A-<.....t-;
Signed this 1b_ day of February 2016. · ·- ~ "'"'"'
q
f
A
~
JAY GIBSON
SENIOR DISTRICT JUDGE
SITIING BY ASSIGNMENT
833
Appendix2
Mutual Partial Assignments
(CR:692-700)
Filed for Record
2/9/2016 3:42:51 PM
Sheri Woodfin, District Clerk
Tom Green County, Texas
Wli!IQAS, Clui.rles Hughes, CUcl crew Ca:a:tu, uci Joan Crews
Hoyt, (herein~ft:er referred to as the "hei2:s-•t:-law•) ·have filed an
intervention in Cause No, CV91•0426-A, styled •rn Be: !!'.he will at
Puwa.in ~. Hughes, Jr., /Jec:eased, n against Southern Methodist
Univer~itr (hereinafter referred to as "SMU"), believing and
clatmi~g that, ~ng other things, the Last Will and mestament of
D~Jlmin J!l, Jluqhes, Jr. cioes not specify how hia estate will l:le
haZidl.etl or to whom it will pass aftu all bequests have been
satisfied clue to en~nt fulfillments anci lapsec1 bequests, such
~ that the heirs-at-law, as defined by Texas legal statutes, should
i.nheri t from Duwain 2. Hughefl, Jr. ; anci
wal!lRBAS, Tom Green County (hereiuefter referreci to as "the
County") haa filed an intervention in Cause No. CV91-0426•A, styled
"In Re: !l'he w.ill o£ Duva.:tn B, Hughes 1 Jr, , Depe~tsecl, " against SMU,
))elievinq and. clailllinq that, among other things, the :trast Will ud
Test.eu111mt of Duwain 1!1. Bughell, Jr. specifie11 that the ·estat:e use'l:s
in eXt::ess of the l;leq11est to SMU sb~ld pass to t.he County 1 pUrsuant
to the residuary a~a~se contained in the willJ apd
WJ:Ul:IU!lAS 1 the heirs-at-law and the Co\Ulty would inevitably
suffer s~ve~e costs and legal ``see by i.ncie~endently pu~eqing
the!r causes of aotiop regarding the construction of the will of
Duwa~n E. H11qhea, Jr. (hereinafter referred to as "the Will") due
to the unl~ted funds available to SMD, even thoqgh it is clear
' EXHIBIT
~' 51
I her 1!;44111# l:l:mL :L=cs:puxal:ae ~e'eet:e:e 'e name.- (" .f/('
-4-
HUGHES_RRFP000004
695
••:axe~tive t;l.gh~a 11 a~a1~ mean the excl.usiva :r:igbt to exeaate
oil, qaa and mine.~:al. lease a without jainde: · of the County as to the
cambine4 ~erals of the be~s-at-law ana the County and does not
inalud.e bonQsea OJ:" other %'eveDtaes fr011 the respective mineral·
inte``at~ of the p~ie"•
mbepe mutual assig,qments are irrevocable and are intended to
be Ito mutual exahange of so• of the .respective :Lnterests of tbe
parties hereto in any recovery uncler sa.icl cause against SMtJ and any
othe+ adve~se pe:t~es who may be joined in the a~use ~y mutual
a~eament of the parties'be~to.
3. Prgaegution o£ L!tiqaticp agd §ettlement•
``am the date of tbesa mutual assignments, the undersigned
partiea, in aonjuctiou with their at.to:clley,;s, 'l'bompaan, Coe,
cousins I Iz-ans 1 :t.·.:r..t. and Ball & :tcane, r...L.f. shall be jaintly
:esponaible fo:r: the contLnuation and praseaution of t;.he litigation
involving SMD and any other culpable parties wbo ~y be added as
parliee .tn sucA actio~&. Any clQ..ims originally awned, prior to this
assi~en~, b.Y `` Gree~ County ~y be brought i~ its name or in
the uam~ of the heirs·~t-1aw1 and any alatms ·originally owned by
the hei:rs-at.•law, pz:iar to this ass.i.gnment, ataY be brought in their
names o~ in the name af m~ G~een County. !be f&~ies and their
atta``eyp shall joiatly make the determination regarding in whose
name(s) t~e su,i.t aba.ll be cant:Lnued. Jlotbing in tbifJ a~eement is
i~te~4e4 ~o preve~t the parties fr~ filing sui~, or con~inuing
litigati.pn,, both in the lla.ti\S of 1:be assig~ao~ an4 iP the name cf the
assignee. :tt iP flu:tber uncie~stood and ag+eed that all signatories
-s-
HUGHES_RRFPOOOOOS
696
hereto will fully and faithfully coo~ate in tbe deve~apment and
pros~u'tign of the litiga.tion, wlliah will include, but noi: lle
lild.teQ. t.o, appea.J:a.nae by deposition or a.t tx-i!Ell o:f. any neaessary
witnesaes, est:~lishtng the alaims that are the subject of these
m\lt\1"1 pu:t.lal assignments, and further, avai~ility for t:ial if
.i.t ia deemed neceJ:~sax;y by counsel iD :eurtherance of tbe proseaution
au4 to collect ~he partially-ass1gne4 p~oceeds gf the litigat~on;
bowevca:r:, all litig•tion &¥-peuaes shall be bame by the heirs-at-law
and the County, as eetablisbed by their ~espective attorneys' fee
ag:eemants.
. It i&~ fUX'ther expres,.ly unclea:stood and a~ed that all control
over prosecution aa4/or settl``t of ~he litigation between tbe
hei~s-~t-law a~ the County on the one hand `` against SMD or
~ other C\llfable· parties O!l the other han4 s)lall be jointly
aont~o~lea cy t~e signatories· hereto.
4. Re~reaentatipna GQd Indeqro!tv:
'»be un4e;'s!gDed. beirs-at-l·aw .J:epresent ·to the county tbat they
join1=-ly :epz:esant q4 wo~ld. own a two..tbi%'ds intet"est in the estate
of all o~ the in~estate heirs-at-law of Duwain B· B~qhes, Jr., if
he had ~d without a will at any t~e durtnq 1985 throuqh tbe
present time, tqtd t!hat they jointly :-epresent a,nd. woul.cl own a.· two-
thit'~ inte.ttest. in the estate of all the intesta.te hei:r:a-at-law of
nuwain I. :auqhes, Jr. I if he bad died without a will. ail his actual
date of death, excluding in the l-tter c``e oniy the one-eighth
intet:e~at helci in tnst for the life of Carlotta Hartlnan, remainder
to the u~4ersiqned he~rs-at•law.
-6-
HUGHES _RRFP000006
697
l~b of th~ undersigned heirs-at-law ~ep~esents·to t~e county
tba;t. t.be intestate 1nte3:'8sts desc:z:ibed above and. t~eir claims
~ato ~amain intact as to the assets ana minerals in issue in
· said aa1.Jee ~d that tbez:e have been na p:iar assigmnentt:~,
eonvey~ncee, or transfe:• of any kind that would affect •ny a£
t:heir 1ntereste the:eein, there have been no liens, deed$ of trp.st,
sec~ity ~nt~rests, o~ otbe~ encumbr~aes granted or imposed upon
any of th~ir interests tbe:ein, there have baen no bankruptcy a~
otber d~btor p~Qceedings that wo~ld adversely affect their
interest$ therein, IUlQ the~e ue no other defeats, adverse cla.iws,
or other •~tters that would aaversel7 af~ect their interests, as
iutesta`` be~s, iu the aesets end minerala in issue in sai4 cause
·other t~n the la.w regarding the disposition of an.y excess of tlle
gift to S)1.U.
'!be aounty repx-esents to the unde:r:signed beizs-at..-law that the
c:~ou~t,-'s inteJ:est .i.n and alainls to the assets ud mtneral~ in issue
in said cause, as ~eneficiar,r of tbe ~estdue, remain intaat and
that tbe:e have been no pria~ assig~nts, conveyances, or
t.-ansfe:rts of any kind. that would. affect the county's interest
therein, there bave been no liens, deed.s of t%Ust, security
inte~esta, o3:' other enP'UlftPrances qJ:"anted or imposec:l upon its
inte~est the+ein, tne~e have been ~o han~ptcy or other debtor
proaeeQ!Qes that wo~ld a4ve~aely affect it~ inte%'eet tbe:ein, aRd
the~e ~e no other defects, adverse claim~, or otber ~tters that
would aqver$ely ~ffect its interest, as beneficiary of the
resi4ue, in the assets and ~nerals in issue in said cause, other
HUGHES_RRFP000007
698
tb~u the effect ai the county's sale of th~ house desc:ibed in tbe
residllaiy clause ant! tbe 1-.w regazc;U.ng tl)e dtsposition of uy
excesa of the gift to SMD.
In the event a party ha.s assigned let:ls than that party
rep:eseQts herein that that party hap to a.s:rrign, the assignee party
or parties shall be antitle4 to recover the def1cienay f~am the
asaignj.Dg party and. shall have any ather z:emedies p~c:avicleci by law.
S• Miscel1apeous.
Whe signatories hereto apecifiaally waive any conflicts of
inte:r:est, whet.he~ actqal az: potential, wbich exi11t, or may exist,
by the Ratuat ~ap~pentation of all partie~ he:eto, following the
execution of tbia dccmnent and the effeatuatian of the lqU.tual
partial. assignments reflecbecl herein, py the law fixm of Thompson,
~ Coe, Coua~ne & I~ans, ~.~.p. and Pall & Lane, ~.~.P.
'!he aignata~tes !u:rther waive any conf1ictca of interest in the
rep~esent-~ion by ~aappou, Coe, Cousins & Iron$, ~.L.P. of the
heirs-at~ law agai2u1t 'the County, arlcl the repJ:esentation by Ball &
Lane, :t..;..P. of 1:.he Coun"t:y against tlle heirs-at-law as to any
clisputes, llreacbes, O:t' lld.srepresentations that Wll' arise under this
a.qreeme~t,.
'»billS agreement is entere4 into in the St.ate of Wexas and shall
be const``e4 ~4 !~terpreted in aeaardanae wtt~ the laws of the
Sta1:e of !t'exas.
tt i• un~erstood that the conei4eration stated herein is of a
oant+actual nature and not a mere recital.
-a-
HUGHES_RRFPOOOOOS
699
All partiera to this agreement agree to and w.il·l execute any
document~! ~eaesr:s4:cy to comply wi.th iiPY requir~ts iaposed by
~exas 'r~perty Code 1 12.014(b)•
Al:S. parties agree that this clocument may Ae exeautecl in
muli:.iple originals, with suah doc:\ll'nents being constned as a single
doaumant.
Duly ~ tho~imed aep~asentative of
~d fxom mom G~eeA oaaa~y
HUGHES_RRFP000009
700
Appendix3
Plaintiff’s Third Amended Petition
to Enforce Settlement Agreement
and Declaratory Judgment Action
(exhibits omitted)
(CR:805-815)
Filed for Record
2/9/2016 3:50:04 PM
Sheri Woodfin, District Clerk
Tom Green County, Texas
CAUSE NO. A130194C
CHARLES J. HUGHES, § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
v. § TOM GREEN COUNTY, TEXAS
§
TOM GREEN COUNTY, §
§
Defendant. § 51st JUDICIAL DISTRICT
Plaintiff’s Third Amended Petition to Enforce
Settlement Agreement and Declaratory Judgment Action
To the Honorable Judge of the Court:
Plaintiff Charles J. Hughes files this Third Amended Petition to Enforce a Settlement
Agreement he entered with Tom Green County to resolve claims the underlying lawsuit.
I. Related Case
1. This action is being filed to enforce a settlement agreement entered in Cause No.
CV91-0426-A; In re the Will of Duwain E. Hughes, Jr., in the 51st Judicial District Court of Tom
Green County.
II. Discovery
2. Discovery in this action should be governed by the Level III scheduling order entered
in this matter.
III. Parties
3. Plaintiff Charles J. Hughes is a resident of Tom Green County.
4. Defendant Tom Green County is a county located in Texas. Tom Green County has
answered and appeared in this suit.
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 1
805
IV. Venue and Jurisdiction
5. Venue is mandatory in Tom Green County. Tex. Civ. Prac. & Rem. Code § 15.015.
6. This Court has subject matter jurisdiction over Tom Green County because this action
arises from a settlement agreement entered between parties to an action initiated, in part, by Tom
Green County, and Tom Green County thereby waived sovereign immunity. Kinnear v. Tex.
Comm’n on Human Rights ex rel. Hale, 14 S.W. 299, 300 (Tex. 2000)(holding the state waives
immunity from suit when it files suit); Tex. A&M Univ.–Kingsville v. Lawson, 87 S.W.3d 518, 521
(Tex. 2002)(holding where the state has waived sovereign immunity, and then enters an agreement
settling the claims subject to that waiver, the state cannot assert sovereign immunity as a basis to
avoid enforcement of the settlement). Further, Tom Green County has waived sovereign immunity
from suit as a result of its conduct in entering into and then breaching the Mutual Partial
Assignments between Hughes and the County.
7. In addition, Hughes files a declaratory judgement action seeks to invalidate and set
aside a March 1, 2011 motion and resolution of the Tom Green County Commissioners' Court made
in violation of the Texas Open Meeting Act. Texas courts have repeatedly held that the State has
waived sovereign immunity for alleged violations of the Texas Open Meetings Act. See, e.g., Riley
v. Comm'rs Ct., 413 S.W.3d 774, 776 - 77 (Tex. App. - Austin 2013, no pet.). Moreover, this action
seeks recovery of amounts in excess of the minimum jurisdictional limits of this Court.
7. In addition to declaratory relief, Hughes seeks monetary relief of over $1,000,000.00.
V. Facts
8. Duwain E. Hughes, Jr. was the uncle of Charles J. Hughes. Duwain Hughes lived
in San Angelo and taught English for many years. Following Duwain Hughes’s death, The Will
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 2
806
of Duwain E. Hughes, Jr. (the “Will”) was probated in the County Court of Tom Green County,
Texas, on April 6, 1965.
9. Under the terms of the Will, Duwain E. Hughes, Jr. left his then new home, collection
of rare books, and his music collection to the Tom Green County Library board, to establish an
adjunct library in his name. Duwain E. Hughes, Jr. also left the residue of his estate to the Tom
Green County Library Board to pay down the mortgage on the home and for the upkeep and
maintenance of his home. At that time, this residual gift included a significant mineral estate that
was worth several million dollars.
10. Inexplicably, instead of honoring Duwain E. Hughes, Jr.’s wishes and maintaining
his home as a library, the County chose to sell the home at a steep discount. This allowed the
residuary gift of Duwain E. Hughes, Jr.’s estate to arguably lapse to Southern Methodist University
(“SMU”), which also received gift of specific mineral interests under the Will.
11. On April 9, 1991, Southern Methodist University filed a lawsuit styled In re: The Will
of Duwain E. Hughes, Jr. in the 51st Judicial District Court of Tom Green County under Cause No.
CV91-0426-A (the “Underlying Suit”). In the Underlying Suit, SMU requested that the court
release a restriction on the use of a gift made to it under the Will for the endowment of a Chair of
English for SMU, so that the excess value of that gift could otherwise be used to support and
maintain the English Department for SMU. At that time, the value of the mineral estate that SMU
had received exceeded the maximum amount necessary to endow a Chair for the Department of
English by approximately $4,000,000.
12. On May 3, 1991, Tom Green County intervened in the Underlying Suit on behalf of
the Tom Green County Library, and sought a declaration that the residue of the gift to SMU
belonged to the County Library.
807
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 3
13. On March 30, 1993, Charles J. Hughes intervened and sought a declaration that
because of the lapse in the gift of the residue to Tom Green County, the residue of the gift to SMU
belonged to Duwain E. Hughes, Jr.’s heirs-at-law – Charles J. Hughes, Carol Crews Carter, and Joan
Crews Hoyt (the “Heirs-at-Law”).
14. The Court ordered the parties to mediation of the SMU Lawsuit on May 26, 1994.
Prior to mediation, Tom Green County and the Heirs-at-Law entered an agreement titled Mutual
Partial Assignments (hereafter the “Agreement”), attached hereto as Exhibit A, by which the parties
irrevocably assigned and divided the proceeds of any recovery in the lawsuit 50% to the Heirs-at-
Law, and 50% to Tom Green County. The signatories to the Agreement were authorized to sign
by all required authorities.
15. Specifically, under the terms of the Agreement Tom Green County promised to name
its Central Tom Green County Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews,
“if the commissioners consider the County’s ultimate recovery to be substantial enough for such
recognition.” Exhibit A, p. 4.
16. The Tom Green County Commissioner’s Court authorized Timothy Weatherby, one
of the Commissioners at the time, to serve as the County’s representative for the mediation. Exhibit
B, Affidavit of Timothy Weatherby. Mr. Weatherby was fully aware that a settlement and
substantial recovery from SMU would trigger the naming obligation under the Assignment
Agreement. Id. Counsel for the County, Phil Lane, and the County Attorney, Tom Goff, also
participated in the mediation. Pursuant to the Agreement, Hughes and the Heirs at Law aligned with
the County at mediation and joined forces against SMU. After the initial separate offers to the
County and to the Heirs at Law, the County representatives and the Heirs at Law moved into the
same room and began negotiating for joint offers from SMU.
808
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 4
17. SMU offered to pay the Heirs-at-Law and Tom Green County $1,000,000 in
settlement for their claims. Id.
18. At the time that the $1,000,000 settlement offer was made, and although he was
already delegated authority, Timothy Weatherby contacted the other County Commissioners, and
they all agreed that the County’s $500,000 share was “significant” (as it constituted the largest single
cash donation the County had ever received), should be accepted, and warranted naming the Central
Tom Green County Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews, as set forth
in the Agreement. Id.
19. Because the Tom Green County representatives at the mediation stated that the
County’s portion of SMU’s offer would be substantial enough to warrant naming the Central Library
as contemplated in the Assignment Agreement, the Heirs-at-Law agreed to go along with Tom
Green County and accepted SMU’s offer. Id. Under the terms of the Assignment Agreement, the
Heirs-at-Law and Tom Green County split those proceeds 50/50. Id.
20. On July 6, 1994, Tom Green County Commissioner’s Court met in open session.
During this session, the Commissioners considered the ultimate recovery in the lawsuit to be
substantial enough and ratified the Agreement with Hughes and the Heirs at Law.
21. After ratifying the Agreement and the separate agreement settling claims against
SMU and dismissing the lawsuit, Tom Green County deposited the settlement proceeds it received
into a segregated bank account called the Hughes Library Fund. Exhibit B.
22. Tom Green County used a part of the Hughes Library Fund to hire an architect to
evaluate potential new locations for the central library, and also utilized a portion of the funds to hire
a grant consulting firm to assist the Library Board with grant applications. Id.
23. The planning and preparation for the new library location was interrupted, however,
when financial difficulties caused by bad investments and criminal cover ups by a previous County
809
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 5
Treasurer made it necessary to utilize a portion of the Hughes Library Fund to assist Tom Green
County in meeting its financial shortfalls. Id.
24. The Tom Green County Commissioners discussed the use of the Hughes Library
Fund to assist with the County’s financial burdens with Charles Hughes, who agreed to allow the
fund to be used in such a manner, so long as the County fulfilled its obligation to name the new
Central Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews, whenever it was built.
Id. The County agreed to this stipulation. Id.
25. Charles Hughes met and spoke with County Judge Mike Brown and Timothy
Weatherby on a number of occasions to discuss the County’s plans regarding the naming of the
Central Library, and was repeatedly informed that the issue would be addressed when the location
for the new central library was chosen, and it was an appropriate occasion for giving it a name.
26. The Tom Green County Central Library remained unnamed until March 1, 2011,
when the Tom Green County Commissioners met to vote on naming portions of the new Tom Green
County Central Library, which had just been constructed by remodeling the former Hemphill-Wells
Building. Exhibit C, Excerpt of Minutes of County Commissioners Meeting. Notwithstanding the
County’s agreement with Mr. Charles Hughes, and the donations made by his uncle Duwain E.
Hughes, Jr. —which had the County retained would have had a value of more than $12,000,000—
the County Commissioners read a pre-written "motion" and “voted” unanimously to name the library
the “Stephens Central Library,” in recognition of a recent $3,000,000 donation from Pollyanna and
Steve Stephens. Id.
27. In addition to a blank for the Commissioners to fill in with “Stephens Central Library,”
the pre-written motion provided that "Tom Green County's ultimate recovery in [the Underlying
Lawsuit] is not substantial enough to name Tom Green County's main library in honor of Duwain
E. Hughes Jr. [or] in honor of Frances Hughes Crews . . . ." See Exhibit C (emphasis added).
810
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 6
28. On information and belief, the County Commissioners came to a final decision on this
matter and pre-drafted the accompanying motion in a private meeting prior to the public hearing - a
meeting at which neither Plaintiff nor any other members of the public were present. The pointed
reference to the language of the Assignment Agreement clearly indicates the County Commissioners
were aware of the County’s prior obligation to the Hughes family, and entered the March 1, 2011
hearing with a settled intent to disregard that obligation, regardless of the Commissioners Court’s
decision on July 6, 1994. Thus, the naming decision was a foregone conclusion, and the County's
purported deliberations and "vote" at the hearing were simply a sham. The pre-written motion only
announced the County’s pre-determined decision, and was orchestrated to present an appearance of
due process and facial compliance with the Open Meetings Act.
VI. Causes of Action
29. The foregoing facts are fully incorporated herein by reference for all purposes.
A. Declaratory Judgment
30. Section 551.102 of the Texas Open Meetings Act (the "Act") provides that "[a] final
action, decision, or vote on a matter deliberated in a closed meeting under this chapter may only be
made in an open meeting that is held in compliance with the notice provisions of this chapter."
31. The March 1, 2011 motion was pre-determined and pre-written by the Commissioners
prior to the public hearing. Upon information and belief, the official "vote" taken in open session was
merely an announcement of the actual decision, which was made by the Commissioners in private,
outside of the open meeting. Neither Plaintiff nor any other member of the public received any notice
of, or were given any opportunity to participate in, these private deliberations.
32. Such actions constitute a direct violation of the Texas Open Meetings Act and the
March 1, 2011 resolution should therefore be declared invalid and set aside. See TEX. GOV'T CODE
ANN. § 551.141 ("An action taken by a governmental body in violation of this chapter is voidable");
811
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 7
See Lower Colorado River Auth. v. City of San Marcos, 523 S.W.2d 641, 646 (Tex. 1975)
(recognizing the courts' inherent authority to invalidate and set aside government decisions made in
violation of the Act).
33. Violations of the Texas Open Meetings Act may be addressed through a number of
remedies available under the Act and separate statutory authorities. One such remedy is found in
Section 551.142 of the Act, which allows any "interested person" to "bring an action by mandamus
or injunction to stop, prevent, or reverse a violation or threatened violation of this chapter by
members of a governmental body." In lieu of a writ of mandamus or injunction, an "interested
person" authorized under Section 551.142 may also seek a declaratory judgment to invalidate the
unlawful act under Chapter 37 of the Texas Civil Practice and Remedies Code. See Bd. of Trs. v. Cox
Enters., Inc., 679 S.W.2d 86, 88 (Tex. App. - Texarkana 1984) (recognizing declaratory judgment
action as an additional option to challenge violations of the Act); see also TEX. CIV. PRAC. & REM.
CODE ANN. § 37.003 (authorizing a court to declare the "rights, duties, and other legal relations" of
citizens and public officials).
B. Breach of Settlement Agreement
34. The Agreement constituted a valid and enforceable settlement agreement between
Tom Green County and the Heirs-at-Law, including Charles Hughes.
35. Tom Green County waived sovereign immunity with respect to those claims by
intervening in the Underlying Lawsuit filed by SMU.
36. Tom Green County accepted the proceeds from the settlement reached with SMU and
the Heirs-at-Law, including Charles Hughes, thus Charles Hughes and the other Heirs-at-Law fully
performed their obligations under the settlement agreement. Further, on July 6, 1994, Tom Green
County ratified the Agreements.
812
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 8
37. Tom Green County, however, has materially breached the Agreement by failing and
refusing to name the Tom Green County Central Library in honor of Duwain E. Hughes, Jr. or
Frances Hughes Crews. At the time of the County’s breach on March 1, 2011, the value of the
naming obligation was $3,000,000.00. As a result of the County’s breach, Hughes suffered damages
in the amount of the lost value of the naming obligation – $3,000,000.00.
38. Further, and in the alternative, because Tom Green County has materially breached
the agreement, it is liable for the $500,000 in settlement proceeds it received, plus pre-judgment and
post judgment interest.
C. Action for Money Had and Received
39. Tom Green County accepted the benefits of the Assignment Agreement, and the
subsequent settlement reached with SMU and the Heirs-at-Law. By accepting those benefits, Tom
Green County enjoyed the savings of significantly limiting the scope and risk associated with the
Underlying Lawsuit as it approached mediation, and then benefitted from its use of the $500,000 in
settlement proceeds for many years.
40. Tom Green County received this benefit on the basis of false promises that it would
name the Tom Green County Central Library in honor of Duwain E. Hughes, Jr. or Frances Hughes
Crews.
41. Tom Green County has failed and refused to do equity, by returning the $500,000 it
has unjustly received, in exchange for its promise to name the Central Library.
42. Tom Green County has instead named the Central Library the “Stephens Central
Library,” and continues to retain, or has otherwise appropriated the $500,000 it received and that in
equity, justice, or in law belongs to Hughes.
43. Therefore, Tom Green County is obligated to return the $500,000 to the Charles
Hughes as is equitable and just.
813
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 9
VII. Conditions Precedent
44. All conditions precedent to the relief sought by Charles Hughes have been fulfilled
or have occurred.
VIII. Attorney’s Fees
45. Charles Hughes seeks reasonable and necessary attorneys' fees for Tom Green
County’s breach of contract pursuant to Texas Civil Practice & Remedies Code Section 38.001(8)
and seeks such attorneys’ fees as are equitable and just pursuant to Texas Civil Practice and
Remedies Code Section 37.009.
IX. Damages
46. As a result of Tom Green County’s breach of the Agreement, Hughes suffered the loss
of the value of the naming obligation, which at the time of the County’s breach was valued at
$3,000,000.00.
47. Alternatively, as a result of Tom Green County’s breach of the Agreement, Hughes
suffered the loss of his share of $500,000 by his reliance on the County’s Agreement.
48. Further, and in the alternative, Tom Green County was unjustly enriched in the amount
of $500,000.00 in funds that it received and that amount should be returned to Hughes.
IX. Prayer
Wherefore, Plaintiff Charles J. Hughes respectfully requests that upon trial of this matter the
Court enter judgment for Hughes against Tom Green County, invalidate and set aside the March 1,
2011 Resolution made in violation of the Texas Opening Meetings Act, order the County to pay
Charles J. Hughes the amount of damages sought herein, plus pre-judgment interest, costs, attorney
fees, post judgment interest, and grant Charles J. Hughes such other and further relief, at law or in
equity, to which he is justly entitled.
814
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 10
Respectfully submitted,
DAVIS, GERALD & CREMER
A Professional Corporation
400 W. Illinois, Ste. 1400
Midland, Texas 79701
432-687-0011
Fax: 432-687-1735
By: /s/ Daniel J. Harper
David H. Smith
Texas Bar No. 00794652
dhsmith@dgclaw.com
Daniel J. Harper
Texas Bar No. 24074363
djharper@dgclaw.com
ATTORNEYS FOR PLAINTIFF
CERTIFICATE OF SERVICE
I certify that on this 9th day of February, 2016, a true and correct copy of the foregoing was
delivered as follows:
VIA E-SERVICE
Wm. Keith Davis
Hay, Wittenburg, Davis, Caldwell &
Bale, L.L.P.
P.O. Box 271
San Angelo, Texas 76902
/s/ Daniel J. Harper
Daniel J. Harper
815
Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 11
Appendix4
Settlement Agreement
(CR:751)
(·--. ,--...
t
·SE'ITLEMENT AGREEMENT
. This is a memorandum of understanding between the undersigned parties in settlement
of a pending dispu'te, which has been voluntarily resolved through a mediation process conducted
at Judiciai Arbitration & Mediation Services, Inc. (J • A· M • S) on the date hereinbelow
indicated. In accordance with their understanding, the parties agree:
. Jvv $~ M
It is al_so agreed: (1) that the attorneys for said parties have prepared and approved this
agreement, and that the parties have relied entirely on the legal advice of their respective counsel
in effecting this settlement; (2) that the parties enter into this agreement of their own voluntary
will and accord; and (3) that this agreement will be considered to have·been made pursuant to
Rule 11, Texas Rules of Civil Procedure. The parties further agree to execute and deliver such
additional agreements and documents as shall be nec:essary to carry out the purposes of this
agreement, and that this agreement may be enforced as any other contrac~
Signed this L6 74 day of /ttatJ J191{at 6``-``
./.4 I -
'&-t r~4n rbCtbt~ 4£4tL~<
Parties and/ or Representa~ . Counsel
v
' DEPOSmON
! ,.3rr
It-t z..-1 ~c._) 751
Appendix5
Compromise and Settlement and Release of All Claims
(RR3:241-247)
;-
. .·
-: DEFENDANT'S
i EXHIBIT
s
!
l
,I
Too-·
NO. CV91-0426-A
m
~
1ll
!i
DEPOSITION
EXHIB~
;s I
~ '2-1 i-1 Lt (.yvi
IN RE: THE WILL OF § IN THE DISTRICT COURT OF
§
DUWAJN E. HUGHES, JR., §
DECEASED § TOM GREEN COUNTY, TEXAS
§
SOUTHERN METHODIST UNIVERSITY, §
BENEFICIARY § 51ST JUDICIAL DISTRICT
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS
WHEREAS, SOUTHERN METHODIST UNIVERSITY, acting through its Board
of Trustees, herein referred to as SMU, filed an Application to Release Restriction with
reference to the will of Duwain E. Hughes, Jr., in the above entitled and numbered cause,
and has supplemented such application with its Supplemental Petition for Declaratory
Judgment, which pleadings and all amendments and supplements and the will of Duwain E.
Hughes, Jr. are here referred to for all purposes;
WHEREAS, TOM GREEN COUNTY, on behalf of TOM GREEN COUNTY
LIBRARY, filed a Plea In Intervention in said cause, which plea in intervention was
amended by TOM GREEN COUNTY with its First Amended Plea in Intervention and
Original Counterclaim for Declaratory Judgment, and a Supplemental Plea in Intervention
and Counterclaim for Declaratory Judgment, which pleadings asserted rights in the Estate
ofDuwain E. Hughes, Jr., and such pleadings and all amendments and supplements are here
referred to for all purposes;
WHEREAS, CHARLES J. HUGHES filed his Plea In Intervention and Petition for
Declaratory Judgment in said cause, which asserted rights in the Estate of Duwa41 E.
Hughes, Jr., and made KATHARINE HUGHES TRIGG, CAROL CREWS CARTER,
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS P<>n<> 1
AND JOAN CREWS HOYT, additional interested parties in the suit, such pleadings and
all amendments and supplements are here referred to for all purposes;
WHEREAS, pursuant to order of the Court SMU filed a Petition to Join Party which
made FIRST NATIONAL BANK OF WEST TEXAS, TRUSTEE OF THE CARLOTTA
HUGHES TRUST as an additional party to the suit;
WHEREAS, all parties who have or might have an interest in the Estate of Duwain
E. Hughes, Jr. to the extent of the oil, gas and minerals and disputes descnbed herein, are
parties to the suit and have filed pleadings, which pleadings are here referred to for all
purposes;
WHEREAS, there are various disputes concerning the will of Duwain E. Hughes, Jr.,
and the Estate of Duwain E. Hughes, Jr., which disputes are reflected in the various
pleadings which have been filed herein, and which disputes include, without limitation,
interpretation of the will of Duwain E. Hughes, Jr., denomination and classification of the
nature of the gift made to SMU in paragraph No. III. of such will, whether or not such will
created a fee simple title to the properties descnbed in SMU without limitation or
restriction, whether or not the will created a charitable trust to SMU for the purpose of
funding one chair in the English department at SMU, whether or not the purpose of such
a trust, if any, has been fulfilled and whether the funds in excess of such fulfillment should
belong to Torn Green County under paragraph No. V. of the will or to the intestate heirs
of Duwain E. Hughes, Jr., whether or not there are restrictions in the will on the use of the
funds by Tom Green County, whether or not the doctrine of cy pres is applicable, and if so,
how it should be applied, whether or not restrictions, if any, on the use of the funds, by
SMU or Tom Green County should be relieved pursuant to the Texas Uniform Management -
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 2
Funds Act, Tex. Prop. Code § 163.001 et seq., or under the doctrine of cy pres, all of which
disputes are further detailed in the pleadings filed herein;
WHEREAS, it is agreed that resolution of the said disputes is problematical and
difficult to predict with any degree of certitude, that said suit, unless compromised and
settled by the parties, will require extensive time and expense in the courts, and the parties
therefore have agreed to a complete and final compromise and settlement of such suit and
all of such disputes in accordance with the agreement made at the mediation hearing
conducted on May 26, 1994, which compromise and settlement is further reduce(\ to writing
in this agreement which is as follows:
Green County, Charles J. Hughes, Carol Crews Oirter, and Joan Crews Hoyt, which
payment will be made on execution of the settlement documents by all parties and on entry
of a final judgment in this suit by the presiding judge.
2. Judgment will be entered in the suit which will declare and confirm:
a. that SOUTHERN METHODIST UNIVERSITY has a vested fee title in
the oil, gas and other mineraJs owned by Duwain E. Hughes, Jr., at his death,
situated in Reagan and Irion Counties, Texas, save and except any interest
therein which had been inherited by Duwain E. Hughes, Jr., from his brother
Jackson Hughes, and all claims made by the parties to this proceeding other
than SOUTHERN METHODIST UNIVERSITY to said oil, gas and other
minerals are held for naught and denied;
b. that SOUTHERN METHODIST UNIVERSITY is entitled to all funds
and income which it has received from the Estate of Duwain E. Hughes, Jr.,
COMPROMISE AND SE'ITLEMENT AND RELEASE OF ALL CLAIMS Page 3
(---
and all claims made to such funds and income by the parties to this
proceeding other than SOUTHERN METHODIST UNIVERSITY are held
for naught and denied;
c. that the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,
concerning the use of the estate devised to SOUTHERN :M ETHODIST
UNIVERSITY under such will is obsolete, inappropriate or impracticable, and
is released to the extent that SOUTHERN METHODIST UNIVERSITY
shall be entitled to use the property and income therefrom derived from the
estate of Duwain E. Hughes, Jr., for the purpose of establishing, supporting
and maintaining a chair in its English Department, called the "Duwain E.
Hughes, Jr. Distinguished Chair in English", and for any other purpose
connected with supporting and maintaining the· English Department at
SOUTHERN METHODIST UNIVERSITY;
d. that the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,
concerning the use of the estate devised to TOM GREEN. COUNTY
LIBRARY under such will is obsolete, inappropriate or impracticable and is
is released to the extent that TOM GREEN COUNTY, ON BEHALF OF
TOM GREEN COUNTY LIBRARY, shall use any funds derived from the
settlement of the claims made by TOM GREEN COUNTY in this suit for any
purpose connected with operating, supporting, maintaining and housing the
Tom Green County Library;
e. that all claims made by the parties to this proceeding against SOUTHERN
METHODIST UNIVERSITY have been fully and finally settled and released,
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 4
,' and all relief prayed for by any party not specifically granted is specifically
denied;
f that all court costs and attorney's fees shall be borne by and paid by the
party incurring the same; and
g. that the judgment entered is restricted solely to the declaration of rights
to the oil, gas and minerals which were part of the e~tate of Duwain E.
Hughes, Jr. and that other oil, gas and mineral interests of any kind owned by
the parties hereto or their predecessors in title are not in any manner
determined or affected by the judgment.
3. In consideration of the agreements made herein and the money to be paid as set
forth herein, TOM GREEN COUNTY, on behalf of TOM GREEN COUNTY LIBRARY,
CHARLES J. HUGHES, CAROL CREWS CARTER, JOAN CREWS HOYT, FIRST
NATIONAL BANK OF WEST TEXAS, TRUSTEE OF THE CARLOTTA HUGHES
HARTMAN TRUST (which has made no claim against SMU), and KATHARINE
HUGHES TRIGG (who has made no claim against SMU), DO HEREBY FOREVER
RELEASE, REMISE AND DISCHARGE SOUTHERN METHODIST UNIVERSITY
from all claims of any kind or nature pertaining to or arising from the will and Estate of
Duwain E. Hughes, Jr., and from all causes of action which have been asserted in this suit,
or which might have been asserted in this suit.
4. All parties agree to pay the attorney's fees and court costs incurred by such party,
which agreement shall be reflected in the judgment of the Court to be entered herein.
5. It is further understood and agreed that this agreement is a compromise and
settlement of a disputed matter, it is not an admission of liability or facts by any party
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 5
·' hereto, and neither this compromise and settlement agreement nor any part thereof shall
ever be construed or used as an admission on the part of any party hereto.
6. This compromise and settlement agreement and release contains the entire
agreement between the parties, and the terms hereof are contractual and not a mere recital.
EXECUTED in multiple counter parts on this the ___ day of _ _ _ _ _ __
1994.
~RSITY
SMITH,
rn
CARLOTTA HUGHES HARTMAN
FIRST NATIONAL BANK OF WEST SIMS, KIDD, HUBBERT & WILSON
TEXASONBEHALFOFTHE
CARLOTTA HUGHES HARTMAN TRUST
By:
_;;-
4;/ &u:__.-----
. L/ First
HALLdZ,~
By: fi~ dcz_J-Jf
Phil Lane, Attorney for Tom Green
County
COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Pal!e ti
(
(
/
I HUGHES & LUCE, L.L.P.
By:~v{;5terii{~
-eS}uml1ey for
Kath,€rine Hugnes Trigg
0-'
~Rfw~c'AA~·L`` 1HOMPSON, COE, COUSINS, & IRONS,
L.L.P.
COMPROMISE AND SE'ITLEMENT AND RELEASE OF ALL CJ.ATMS »---"'
Appendix6
Final Judgment
(SMU Litigation)
(RR3:159-163)
,. t •• Ill
·NO. CV91-0426-A
IN RE: THE WILL OF
DUWAIN E. HUGHES, JR.,
DECEASED
SOUTHERN METHODIST
UNIVERSITY, BENEFICIARY 51ST JUDICIAL DISTRICT· ..
On this ~ 7 day of __S_tii-"-·p_ti.-'-e_~-t_;;G:...:..:::...:..fl..::__ _, 1994, carne on to be heard the abo':e
entitled and numbered cause, and it was announced to the Court that all matters in...
controversy between the parties which is the subject matter of this suit have been fully and
finally agreed to and settled as is further evidenced by the signatures of all parties and their
attorneys agreeing to this judgment, and the Court, having considered the pleadings, the
agreement of the parties and the evidence offered, finds and concludes as follows:
that the Court has jurisdiction over all the parties hereto and that all
necessary parties for entry of this judgment are properly before the Court;
that the Attorney General of the State of Texas has filed a proper Waiver of
the right of the Sta!e of Texas to intervene and be a party to this proceeding;
that the Court has jurisdiction over the subject matter of this suit, and the
jurisdiction and authority to enter this judgment, pursuant to its general
jurisdictional authority, <:md punmant to the Uniform Management of
Instiiutional Funds Act, Texas Property Code § 163.001 et seq., and the
Uniform Declaratory Judgments Act, Texas Civil Practice & Remedies Code,
~· J7 .001 cl_sc~; and the Court finds and is of the opinion that this judgment
should he entered.
- Pngcl
IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED a... ·-·-·A·····:
A SOUTHERN METHODIST UNIVERSITY has a vested fee title in the
oil, gas and other minerals owned by Duwain E. Hughes, Jr., at. his death~
'•''
situated in Reagan and Irion Counties, Texas, save and except any interest
therein which had been inherited by Duwain E. Hughes, Jr. from his brother
Jackson Hughes, and all claims made by the partie$ to this proceeding other
than SOUTHERN METHODIST UNIVERSITY to said oil, gas and other
minerals are held for naught and denied;
B. SOUTHERN METHODIST UNIVERSITY is entitled to all funds and
income \-Vhich it has received from the Estate of Duwain E. Hughes, Jr., and
all claims made to such funds and income by the parties to this proceeding
other than SOUTHERN METHODIST UNIVERSITY are held for naught
and denied;
C. the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,
concerning the use of the estate devised to SOUTHERN METHODIST
UNIVERSITY under such will is obsolete, inappropriate or impracticable, and
it is hereby decreed that such restriction is released to the extent that
SOUTHERN METHODIST UNIVERSITY shall be entitled to use the
property and income therefrom dc::ivcd from the estate of Duwain E. Hughe~,
Jr., for the purpose of establishing, supporting and maintaining a chair in its
Engli~;ll Department, called the "Duwain E. Hughes, Jr. Distinguished Chair
in Engiish'', and for any other purpose connected with supporting and
maintaining the English Department at SOUTHERN METHODIST
UNIVERSITY;
• Pagel
D.
concerning the use of the estate devised to TOM GREEN
LIBRARY under such will is obsolete, inappropriate or impracticable
·,•,',··'
'
is hereby decreed that such restriction is released to the extent'
GREEN COUNTY, ON BEHALF OF TOM GREEN COUNTYLIBRARY,,,,
shall use any funds derived from the settlement of the claims made by TOM
GREEN COUNTY in this suit for any purpose connected with operating,
supporting, maintaining and housing the Tom Green County Library;
E. all claims made by the parties to this proceeding against SOUTHERN
METHODIST UNIVERSITY have been fully and finally settled and released,
and all relief prayed for by any party not specifically granted herein is
spccificaliy denied; and
F. all court costs and attorney's fees shall be borne by and paid by the party
incurring the same, and it appearing to the Court that all costs of tt"lis suit
have been paid, no further order is entered with respect thereto.
IT IS SPECIFICALLY ORDERED AI~D DECREED that the judgment entered in
this case is restricted solely to the declaration of rights to the oil, gas and minerals which
were part of the estate of Duwain E. Hughes, Jr. Other oil, gas and mineral interests of any
kind owned by the parties hereto or their predecessors in title are not in anv manner
determined or affected by this judgment.
'1994.
CURT STEIB, JUDGE PRESIDING
• Page3
~ ., ....
APPROVED AND AGREED TO:
FIRST NATIONAL BANK OF WEST SIMS, KIDD, HUBBERT & WILSON
TEXAS ON BEHALF OF THE
CARLO'n'A HUGHES HARTMAN TRUST
``=``````~-=``-
]ohn C. (Sims, Attorney for First
/ /National Bank of West Texas
. /
i/
\../
HALL~ ~E~LP.
By: ;/1/:zd ,-~. .
Phil Lane, Attorney for Tom Green
County
HUGHES & LUCE, L.L.P.
• Page4
• PageS