Daryl Dwayne Smith, Stacy Schnell and Rose Mary Smith, Individually and for the Estate of Robert W. Smith v. City of Galveston ( 2007 )

Affirmed and Memorandum Opinion filed April 19, 2007

Affirmed and Memorandum Opinion filed April 19, 2007.

In The

Fourteenth Court of Appeals

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NO. 14-05-00926-CV

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DARYL DWAYNE SMITH, STACY SCHNELL, and ROSE MARY SMITH, Individually and for the Estate of ROBERT W. SMITH, Deceased, Appellants

V.

CITY OF GALVESTON, Appellee

On Appeal from the 127th District Court

Harris County, Texas

Trial Court Cause No. 03-62090A

M E M O R A N D U M     O P I N I O N

Appellants, Daryl Dwayne Smith, Stacy Schnell, and Rose Mary Smith, Individually and for the Estate of Robert W. Smith, Deceased, are the surviving spouse and children of Robert W. Smith.  Appellants appeal the trial court=s granting of the City of Galveston=s plea to the jurisdiction dismissing their wrongful death and survival actions.  We affirm.

In their petition, appellants allege that Robert W. Smith was repeatedly exposed to toxic and carcinogenic chemicals over a thirty-year career at the Port of Galveston grain facility.  They further claim this exposure caused Smith to develop leukemia, which resulted in his death. Appellants charge the City failed to take precautions to avoid, warn, or protect Smith from such exposure. 

The City filed a plea to the jurisdiction arguing it is entitled to governmental immunity and appellants= claims are barred by the Texas Tort Claims Act.  The trial court granted the plea to the jurisdiction and dismissed appellants= claims against the City. 

Subject matter jurisdiction is essential to the court=s power to decide a case.  Texas Ass=n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993).  Whether a court has subject matter jurisdiction is a question of law.  Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). 

A plea to the jurisdiction challenges the court=s subject matter jurisdiction.  Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).  When a plea to the jurisdiction challenges the pleadings, we determine if the pleader alleged facts that affirmatively demonstrate the court=s jurisdiction to hear the case.  Texas Dep=t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).  We construe the pleadings in favor of the plaintiffs and look to the pleaders= intent.  Id. If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court=s jurisdiction, but not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should have the opportunity to amend.  Id. at 226B27.  If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend. Id. at 227.

In their first and second issues, appellants assert the trial court erred in granting the City=s plea to the jurisdiction, holding that the operation of the Port of Galveston constituted a governmental function.  Article XII of the City=s Charter provides the Port of Galveston is to be set aside as a Aseparate utility@ from the City as follows:

Section 1. Designation as a Separate Utility.  The Wharf and Terminal properties belonging to the City of Galveston, as set forth and described in that certain ordinance adopted on the 17th day of October 1940, authorizing the issuance of City of Galveston Wharf and Terminal Facilities Revenue Bonds and execution of such properties, and the accumulated income and increment thereof, as heretofore or hereafter acquired by the City, are set apart and designated as a separate utility of the City, to be known as AGalveston Wharves@ and to be managed, maintained, operated and controlled as herein provided.

The Texas Supreme Court has recognized that while the City of Galveston owns the wharves and terminal facilities of Galveston harbor, they Ahave been set apart as a separate utility known as the Galveston Wharves.@  City of Galveston v. Hill, 519 S.W.2d 103, 103 (Tex. 1975).  Moreover, the City Ahas placed its wharf and terminal facilities under the management and control of the Board of Trustees of the Galveston Wharves.@  Lake Charles Harbor & Terminal Dist. v. Board of Trs. of the Galveston Wharves, 62 S.W.3d 237, 246 (Tex. App.CHouston [14th Dist.] 2001, pet. denied); see also Hill, 519 S.W.2d at 104 (A[T]he management and control of the Galveston Wharves has been invested in a board of trustees.@).  Thus, the Wharves is a separate governmental unit from the City.  See Lake Charles Harbor & Terminal Dist., 62 S.W.3d at 246 (AThe Wharves is thus a governmental unit, and as such is protected by the doctrine of sovereign immunity.@). 

Even if the City operates the Port, its operations are governmental functions.  The Texas Tort Claims Act provides a limited waiver of governmental immunity if certain conditions are met.  Sykes, 136 S.W.3d at 638; Turvey v. City of Houston, 602 S.W.2d 517, 519 (Tex. 1980).  AThe proprietary-governmental dichotomy has been used to determine a municipality=s immunity from suit for tortious conduct.@  Tooke v. City of Mexia, 197 S.W.3d 325, 343 (Tex. 2006). 

A municipality has no immunity for torts committed in the performance of its proprietary functions.  Id.  The proprietary functions of a municipality are those conducted A>in its private capacity, for the benefit only of those within its corporate limits, and not as an arm of the government.=@ Id. (quoting Dilley v. City of Houston, 148 Tex. 191, 222 S.W.2d 992, 993 (1949)).  Thus, when a municipality commits a tort while engaged in a proprietary function, it is liable to the same extent as a private entity or individual.  City of Corpus Christi v. Absolute Indus., 120 S.W.3d 1, 3 (Tex. App.CCorpus Christi 2001, pet. denied).  The Act provides a nonexclusive list of proprietary functions.  Tex. Civ. Prac. & Rem. Code Ann. ' 101.0215(b) (Vernon 2005). 

A municipality has immunity for governmental functions, except to the extent immunity is waived by acts, omission, and conditions as specified in the Act.  City of El Paso v. Gomez-Parra, 198 S.W.3d 364, 367 (Tex. App.CEl Paso 2006, no pet.).  Governmental functions are those that are enjoined on a municipality by law and are given by the State as part of the state=s sovereignty, to be exercised by the municipality in the interest of the general public.  Tex. Civ. Prac. & Rem. Code Ann. ' 101.0215(a) (Vernon 2005).  Section 101.0215(a) provides a nonexclusive list of governmental functions for which a municipality may be held liable under the Act.  Id.; City of Kemah v. Vela, 149 S.W.3d 199, 203 n.1 (Tex. App.CHouston [14th Dist.] 2004, pet. denied). 

Relying on section 101.0215(b)(1), which provides the Aoperation and maintenance of a public utility@^[1] is a proprietary function, appellants assert the operation of the Port of Galveston is a proprietary function.  Thus, according to appellants, the Port of Galveston, which has been set aside as a Aseparate utility@ under the City=s charter, is a Apublic utility@ under the acts enumerated as proprietary functions in section 101.0125(b).  However, the Texas Transportation Code expressly enumerates actions related to owning and operating a port are governmental functions:

(a) A municipality that owns and operates a port may construct, acquire, lease, improve, enlarge, extend, repair, maintain, replace, develop, or operate a port improvement or facility.

(b) A port improvement or facility may be constructed on land acquired by purchase, lease, or otherwise, and the land, interest in the land, or port improvement or facility may be conveyed by lease, sublease, or sale by installment or otherwise on the terms the municipality determines to be advantageous.

(c) Each power provided by this section is a public and governmental function, is exercised for a public purpose, and is a matter of public necessity.

Tex. Transp. Code Ann. ' 54.003 (Vernon Supp. 2006) (emphasis added).  The Transportation Code is applicable to municipalities that are located on the Gulf of Mexico, or channel, canal, bay, or inlet connected to the Gulf, and has a population of more than 5,000.  Tex. Transp. Code Ann. ' 54.001 (Vernon Supp. 2006).  Appellants do not dispute that the Transportation Code applies to the City of Galveston.  Moreover, the Texas Supreme Court has already defined certain actions with regard to the Port of Galveston as governmental functions.  See Hill, 519 S.W.2d at 105 (stating A[t]he management of income and revenue from the Galveston Wharves, the setting of rates and the determination of policies@ are governmental functions which cannot be delegated or bartered away).  The City=s charter=s designation of the Wharves and Port as a Aseparate utility@ does not make it a Apublic utility.@ 

Appellants further assert the Texas Supreme Court has held the operation of the Port of Galveston is proprietary function.  See Guillory v. Port of Houston Auth., 845 S.W.2d 812, 815B16 (Tex. 1993). In Guillory, Guillory, a longshoreman, was unloading cargo, when the truck he was driving flipped backwards off of a ramp and into a ship=s hold.  Id. at 812.  The issue in Guillory was whether the liability of the Port of Houston Authority, which was leasing trucks for profit, could be limited to $100,000 for its alleged negligence under the Texas Tort Claims Act.  Id. at 813 (citing Tex. Civ. Prac. & Rem. Code Ann. ' 101.023).  Guillory argued that the Port Authority=s leasing of trucks for profit was a proprietary function and that it should be liable to the same extent as a private entity conducting the same activity.  Id. at 814.  The court held the Houston Port Authority, as a navigation district created by the Legislature under article XVI, section 59 of the Texas Constitution, is Aentirely governmental in function@ and the Legislature has not waived immunity for it.  Id. (emphasis added). 

Appellants, however, rely on the following text from Guillory in support of their argument:

It cannot be denied that applying immunity based upon the creation of the governmental unit instead of its function results in certain anomalies and inconsistencies.  As Guillory points out, the Port of Galveston, owned and operated by the City of Galveston, is not as fully shielded by immunity as is the Port of Houston, a water navigation district, even though the two entities perform similar functions. 

Id. at 815B16 (emphasis added). 

Appellants= reliance on Guillory is misplaced. The court in Guillory did not state that the operation of a port by a municipality is a proprietary function when it stated Athe Port of Galveston, owned and operated by the City of Galveston, is not as fully shielded by immunity as is the Port of Houston, a water navigation district.@  Guillory, 845 S.W.2d at 815.  To the extent Guillory could be read that the operation of port by a municipality is a proprietary function, such language is dicta.  Appellants= first and second issues are overruled. 

In their third issue, appellants argue that even if the operation of the Port of Galveston were a governmental function, the trial court erred in holding the City possessed complete immunity because it would still possess limited liability under the Texas Tort Claims Act.  For a municipality to be liable for a governmental function, liability must arise out of one of the specific areas of waiver listed under section 101.021.^[2] Vela, 149 S.W.3d at 203 n.1.  Section 101.021 waives immunity for performing a governmental function in Athree general areas: >use of publicly owned automobiles, premises defects, and injuries arising out of conditions or use of property.=@  Texas Dept. of Transp. v. Able, 35 S.W.3d 608, 611 (Tex. 2000) (quoting Lowe v. Texas Tech Univ., 540 S.W.2d 297, 298 (Tex.1976)).  Appellants= first amended petition does not allege use of a vehicle, premises defect, or injury arising out of the condition or use of tangible personal property.  Appellant=s third issue is overruled.

Accordingly, the judgment of the trial court is affirmed. 

/s/      J. Harvey Hudson

Justice

Judgment rendered and Memorandum Opinion filed April 19, 2007.

Panel consists of Justices Anderson, Hudson, and Guzman.

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^[1]  Tex. Civ. Prac. & Rem. Code Ann. ' 101.0215(b)(1) (emphasis added).

^[2]  Tex. Civ. Prac. & Rem. Code Ann. ' 101.021. (Vernon 2005).