William Richard Holms v. West Travis County Public Utility Agency and Don Rauschuber ( 2019 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-17-00584-CV
William Richard Holms, Appellant
v.
West Travis County Public Utility Agency and Don Rauschuber, Appellees
FROM COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY
NO. C-1-CV-17-003601, HONORABLE TODD T. WONG, JUDGE PRESIDING
MEMORANDUM OPINION
William Richard Holms appeals the county court at law’s order granting the plea to
the jurisdiction filed by the West Travis County Public Utility Agency (WTCPUA) and dismissing
Holms’s claims against WTCPUA with prejudice. We hold that governmental immunity bars
Holms’s claims against the WTCPUA.
BACKGROUND1
Holms seeks monetary damages from WTCPUA, including a refund for over-
payments made due to excessive water bills. WTCPUA is the public utility agency that provides retail
water service to Holms’s residence. After receiving normal water bills for over a year, Holms’s
1
We take the factual allegations in Holms’s pleadings as true for the limited purpose of
this appeal, as the county court at law was required to do in ruling on the plea to the jurisdiction.
See, e.g., Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).
water bill increased to $401.63 in August 2015 and remained higher than normal for several months.
Holms called WTCPUA to inquire about these bills, but nevertheless paid them in full. After Holms
made several billing inquiries, Don Rauschuber, WTCPUA’s general manager, visited Holms’s
residence, examined the water meter, and had it replaced with a new one. According to Holms, his
water bills returned to normal thereafter, but Rauschuber indicated that no credit could be issued to
Holms for the alleged over-billing. Holms initially complained to the Public Utility Commission
of Texas (PUC), but the PUC determined that it lacked jurisdiction over the WTCPUA. The record
does not indicate whether Holms challenged the PUC’s determination nor whether he sought redress
through the board of the WTCPUA, and therefore those issues are not before this Court. Holms did,
however, sue WTCPUA and Rauschuber asserting three theories of liability: breach of contract, tort
(alleging “negligence and negligent representation,” misrepresentation, negligent misrepresentation,
actual fraud, constructive fraud, and civil conspiracy), and deceptive trade practices.2
WTCPUA filed a plea to the jurisdiction asserting governmental immunity. Holms
then filed an amended petition, urging the same claims as his original petition. The county court at
law held a hearing on the plea on August 15, 2017, and granted it two days later, dismissing Holms’s
claims against WTCPUA with prejudice. On August 25, 2017, Holms filed a motion to reconsider
and motion for new trial. On that same date, without leave of court, Holms filed a second amended
petition adding a request for declaratory judgment as well as claims under the Texas Constitution’s
2
Rauschuber, who was not served with process, has not appeared in this litigation and is not
part of this appeal. Our review is limited only to Holms’s claims against the WTCPUA.
2
guarantees of due process and equal protection.3 On September 5, 2017, Holms filed a third amended
petition, also without leave of court, adding a request for injunctive and equitable relief and
abandoning the deceptive-trade-practices allegation. On September 6, 2017, Holms perfected this
appeal, invoking Civil Practice and Remedies Code section 51.014(a)(8) (providing for interlocutory
review of an order from a county court at law that “grants or denies a plea to the jurisdiction by a
governmental unit as that term is defined in Section 101.001”).4 In two issues, Holms argues that
the county court at law erred in (1) granting WTCPUA’s plea to the jurisdiction, and (2) dismissing
his claims against WTCPUA with prejudice without allowing him an opportunity to amend to cure
any jurisdictional defect in his pleadings.
STANDARD OF REVIEW
“Sovereign immunity and governmental immunity are related common law doctrines
protecting the government from suit.” Harris County v. Annab, 547 S.W.3d 609, 612 (Tex. 2018)
(citing Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 57–58 (Tex. 2011)). “Sovereign
immunity protects the state and its various divisions, such as agencies and boards, from suit
and liability, whereas governmental immunity provides similar protection to the political
subdivisions of the state, such as counties, cities, and school districts.” Norman, 342 S.W.3d at
57–58. “Governmental immunity has two components: immunity from liability and immunity from
suit.” West Travis Cty. Pub. Util. Agency v. Travis Cty. Mun. Util. Dist. No. 12, 537 S.W.3d 549,
3
Holms’s second amended petition also added an allegation of violation of implied
contract, which is functionally the same as his existing breach-of-contract allegation for purposes
of our jurisdictional analysis.
4
“Governmental unit” includes “a political subdivision of this state.” Tex. Civ. Prac. &
Rem. Code § 101.001(3)(B).
3
553 (Tex. App.—Austin 2017, pet. denied) (citing Tooke v. City of Mexia, 197 S.W.3d 325, 332
(Tex. 2006)). Governmental “immunity from liability . . . bars enforcement of a judgment against
a governmental entity,” while “immunity from suit . . . bars suit against the entity altogether.” Tooke,
197 S.W.3d at 332. Because “immunity from suit defeats a trial court’s subject matter jurisdiction,”
it “is properly asserted in a plea to the jurisdiction.” Texas Dep’t of Parks & Wildlife v. Miranda,
133 S.W.3d 217, 225–26 (Tex. 2004).
As subject-matter jurisdiction is a question of law, we review orders on jurisdictional
pleas de novo. Id. at 226. “When a plea to the jurisdiction challenges the pleadings,” as WTCPUA’s
plea does here, “we determine if the pleader has alleged facts that affirmatively demonstrate
the court’s jurisdiction to hear the cause.” Id. “We construe the pleadings liberally in favor of
the plaintiff[] and look to the pleader’s intent.” Id. “If the pleadings do not contain sufficient
facts to affirmatively demonstrate the trial court’s jurisdiction but [also] do not affirmatively
demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the
plaintiffs should be afforded the opportunity to amend.” Id. at 226–27 (citing County of Cameron
v. Brown, 80 S.W.3d 549, 555 (Tex. 2002)). “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.
ANALYSIS
I.
Holms asserts that the trial court had jurisdiction over his claims because (1)
WTCPUA is not a governmental entity entitled to immunity; (2) WTCPUA’s enabling statute is
4
silent as to immunity and thus immunity is waived; (3) various statutory waivers of immunity apply
to WTCPUA; (4) WTCPUA is being sued for “proprietary” functions to which immunity does not
apply; (5) WTCPUA is permitted to sue its customers and, therefore, customers should be permitted
to sue WTCPUA; and (6) dismissing his claims against WTCPUA violates Holms’s due-process
and equal-protection rights. Because none of these arguments support a waiver of WTCPUA’s
immunity on the facts alleged, we overrule Holms’s first issue. E.g., Miranda, 133 S.W.3d at 227.
A “[p]laintiff bears the burden to affirmatively demonstrate the trial court’s
jurisdiction by alleging a valid waiver of immunity, which may be either by reference to a statute or
to express legislative permission.” McCandless v. Pasadena Indep. Sch. Dist., No. 03-09-00249-CV,
2010 WL 1253581, at *3 (Tex. App.—Austin Apr. 2, 2010, no pet.) (mem. op.) (citing Texas Dep’t
of Transp. v. Jones, 8 S.W.3d 636, 637 (Tex. 1999)). Under the doctrine of sovereign immunity, “no
state can be sued in her own courts without her consent, and then only in the manner indicated by
that consent.” Hosner v. DeYoung, 1 Tex. 764, 769 (1847). Consequently, “it is the Legislature’s
sole province to waive or abrogate sovereign immunity.” Mission Consol. Indep. Sch. Dist. v.
Garcia, 253 S.W.3d 653, 660 (Tex. 2008) (quoting Texas Nat. Res. Conservation Comm’n v.
IT–Davy, 74 S.W.3d 849, 853 (Tex. 2002)). “Political subdivisions of the state . . . share in the
state’s inherent immunity” through the doctrine of governmental immunity. Wasson Interests, Ltd.
v. City of Jacksonville, 489 S.W.3d 427, 429–30 (Tex. 2016). As a political subdivision of the State,
“[a] governmental unit . . . may be sued if the Legislature has waived immunity in ‘clear and
unambiguous language.’” Harris County, 547 S.W.3d at 613 (quoting Tex. Gov’t Code § 311.034;
Oncor Elec. Delivery Co. v. Dallas Area Rapid Transit, 369 S.W.3d 845, 849 (Tex. 2012)). As a
public utility agency, WTCPUA is a political subdivision of the State of Texas. See Tex. Loc. Gov’t
5
Code § 572.052(c)(2) (providing that “[a] public utility agency is a political subdivision of this
state”). We have therefore recognized that WTCPUA is immune from suit absent a “clear and
unambiguous” legislative waiver of that immunity. West Travis Cty. Pub. Util. Agency, 537 S.W.3d
at 554. Accordingly, we reject Holms’s argument that WTCPUA is not a governmental entity entitled
to immunity.
Holms contends that governmental immunity does not apply to WTCPUA because
its enabling “statute” is “silent” as to immunity.5 But as set forth above, the legislature waives
immunity only through clear and unambiguous language. Harris County, 547 S.W.3d at 613. We
therefore reject Holms’s argument that the silence of WTCPUA’s enabling instrument waives its
immunity from suit.
Holms identifies several statutes which he claims waive WTCPUA’s immunity
from suit: sections 101.021 and 101.0215(a) of the Tort Claims Act (TCA), the Local Government
Contract Claims Act, and the Uniform Declaratory Judgment Act (UDJA). WTCPUA’s immunity
is not waived under any of these statutes.
TCA section 101.021 specifies particular circumstances under which a “governmental
unit” may be held liable for “property damage, personal injury, and death.” Tex. Civ. Prac. & Rem.
Code § 101.021. Because Holms has not alleged that he suffered property damage, personal injury,
or death, section 101.021 does not confer jurisdiction over his tort claims. Id.; see also, e.g., City
5
WTCPUA was not established through legislation, but under a 2011 concurrent ordinance
adopted by the City of Bee Cave, Hays County, and West Travis County Municipal Utility District
No. 5 pursuant to Texas Local Government Code Chapter 572. See Tex. Loc. Gov’t Code §§ 572.051
et seq. (entitled “Public Utility Agencies for Provision of Water or Sewer Service”); .052(a) (providing
that “[p]ublic entities may create a public utility agency by concurrent ordinances”). Holms has not
argued that there is any waiver of immunity in Texas Local Government Code Chapter 572.
6
of Killeen v. Cheney, No. 03-18-00139-CV, 2018 WL 5832088, at *3 (Tex. App.—Austin Nov. 8,
2018, no pet.) (mem. op.) (noting that TCA “provides a limited waiver of governmental immunity
for certain torts” and that “section 101.021 of the Act, entitled ‘Governmental Liability,’ allows a
plaintiff to bring suit against a governmental unit for three categories of claims when certain
statutory criteria are met: (1) claims for injury arising from use of motor vehicles; (2) claims for
injury caused by a condition or use of tangible personal property; and (3) premises-defect claims”).
TCA section 101.0215(a) provides that “[a] municipality is liable under this chapter
for damages arising from its governmental functions,” which it defines as “those functions that are
enjoined on a municipality by law and are given it 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 § 101.0215(a) (emphasis added). Holms emphasizes that the TCA classifies certain functions
as governmental, including “water and sewer service.” Id. § 101.0215(a)(32). But as noted above,
“the words ‘under this chapter’ limit the liability of the municipality for the listed functions under
section 101.0215 to the conditions required under section 101.021.” Bellnoa v. City of Austin,
894 S.W.2d 821, 826 (Tex. App.—Austin 1995, no writ). In other words, “section 101.0215 is not
an independent waiver of immunity.” Id. And because Holms does not allege “property damage,
personal injury, [or] death,” WTCPUA is not liable “under this chapter,” regardless of whether it
was engaged in providing “water and sewer service.” See id.; see also Tex. Civ. Prac. & Rem.
Code § 101.021.
Similarly, Holms’s reliance on the Local Government Contract Claims Act is
misplaced. See Tex. Loc. Gov’t Code §§ 271.151–.160. As relevant here, under that statute:
7
[a] local governmental entity that is authorized by statute or the constitution to enter
into a contract and that enters into a contract subject to this subchapter waives
sovereign immunity to suit for the purpose of adjudicating a claim for breach of the
contract, subject to the terms and conditions of this subchapter.
Id. § 271.152. The statute defines a “contract subject to this subchapter” as “a written contract
stating the essential terms of the agreement for providing goods or services to the local governmental
entity that is properly executed on behalf of the local governmental entity.” Id. § 271.151(2)
(emphasis added). Under the terms of the contract at issue here, Holms was not bound to provide
goods or services to WTCPUA. Consequently, there is no “contract subject to this subchapter” at
issue in this case. See Lubbock Cty. Water Control & Improvement Dist. v. Church & Akin, L.L.C.,
442 S.W.3d 297, 308–09 (Tex. 2014) (holding that a lessee that paid the governor lessor rent did
not provide services to the governmental entity for purposes of the Local Government Contract
Claims Act).
The UDJA also does not confer jurisdiction over Holms’s claims. See Tex. Civ.
Prac. & Rem. Code § 37.001 et seq. “While the DJA waives sovereign immunity for certain claims,
it is not a general waiver of sovereign immunity.” Texas Parks & Wildlife Dep’t v. Sawyer Tr.,
354 S.W.3d 384, 388 (Tex. 2011). Other than waiving immunity for certain types of “claims
challenging the validity of ordinances or statutes . . . the DJA does not alter a trial court’s
jurisdiction.” Id.; see, e.g., City of El Paso v. Heinrich, 284 S.W.3d 366, 370 (Tex. 2009). “Rather,
the DJA is merely a procedural device for deciding cases already within a court’s jurisdiction.” Id.
(quoting Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993)). Because
“a litigant’s couching its requested relief in terms of declaratory relief does not alter the underlying
8
nature of the suit . . . sovereign immunity will bar an otherwise proper DJA claim that has the effect
of establishing a right to relief against the State for which the Legislature has not waived sovereign
immunity.” Id. (citations omitted). As Holms has not established such a waiver, the UDJA cannot
cure the jurisdictional defect.
Holms next argues that governmental immunity is inapplicable because his claims arise
from WTCPUA’s exercise of a proprietary rather than governmental function. “The governmental/
proprietary dichotomy recognizes that immunity protects a governmental unit from suits based on
its performance of a governmental function but not a proprietary function.” Wasson Interests, Ltd.
v. City of Jacksonville, 559 S.W.3d 142, 146 (Tex. 2018). However, the provision of water service
is expressly classified as a governmental function, and not a proprietary one. See Tex. Civ. Prac. &
Rem. Code § 101.0215(a)(32) (including “water and sewer service” in list of “governmental functions”
that “are enjoined on a municipality by law and are given it by the state as part of the state ’s
sovereignty”); see also Tex. Const. art. XI, § 13(a) (providing that the legislature has the authority
to “define for all purposes those functions of a municipality that are to be considered governmental
and those that are proprietary, including reclassifying a function’s classification assigned under
prior statute or common law”).
Holms further argues that WTCPUA has waived its immunity from suit by suing its
own customers. But such waiver occurs “where the governmental entity has joined into the litigation
process by asserting its own affirmative claims for monetary relief.” Reata Constr. Corp. v. City of
Dallas, 197 S.W.3d 371, 376–77 (Tex. 2006). Because WTCPUA has not asserted affirmative
claims for monetary relief, it has not thereby waived its immunity.
9
Finally, Holms asserts that dismissal of his suit on the basis of governmental
immunity violates his rights to due process and equal protection under the United States and Texas
Constitutions. See U.S. Const. amend. XIV; Texas Const. art. I, §§ 3, 19. Texas and federal courts
have rejected similar arguments, holding that governmental immunity violates neither due process
nor equal protection. See, e.g., PYCA Indus. v. Harrison Cty. Waste Water Mgmt. Dist., 81 F.3d 1412,
1420 n.9 (5th Cir. 1996); Grimes v. Pearl River Valley Water Supply Dist., 930 F.2d 441, 444 (5th
Cir. 1991); Trevathan v. State, 740 S.W.2d 500, 502–03 (Tex. App.—Houston [1st Dist.] 1987, writ
denied); Stout v. Grand Prairie Indep. Sch. Dist., 733 S.W.2d 290, 296–97 (Tex. App.—Dallas
1987, writ ref’d n.r.e.); Tarrant Cty. Hosp. Dist. v. Ray, 712 S.W.2d 271, 273 (Tex. App.—Fort
Worth 1986, writ ref’d n.r.e.); Duson v. Midland Cty. Indep. Sch. Dist., 627 S.W.2d 428, 429 (Tex.
App.—El Paso 1981, no writ). We find no reason to depart from these precedents here.
II.
In his second issue, Holms argues that the county court at law erred in dismissing his
claims against WTCPUA with prejudice without allowing him to amend his live pleading to cure
any jurisdictional defect therein.
Generally, a plaintiff is entitled to amend his pleadings before his claims are dismissed
with prejudice. Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex. 2007). An exception
to this rule exists where the pleadings are incurably defective with respect to jurisdiction. Id. (noting
that the plaintiff deserved “the opportunity to amend his pleadings if the defects can be cured”)
(emphasis added); see Rusk State Hosp. v. Black, 392 S.W.3d 88, 96 (Tex. 2012) (reiterating that
dismissal is proper where the pleadings or record conclusively negate the existence of jurisdiction).
10
In Koseoglu, the Texas Supreme Court noted that the plaintiff “has made no suggestion as to how
to cure the jurisdictional defect” in the pleading before the lower court when it dismissed the case.
233 S.W.3d at 840. We reach the same conclusion here. None of the bases Holms has offered to
support a waiver of WTCPUA’s immunity confers jurisdiction on the facts alleged.
CONCLUSION
We affirm the county court at law’s order dismissing Holms’s claims against
WTCPUA with prejudice.
__________________________________________
Gisela D. Triana, Justice
Before Chief Justice Rose, Justices Goodwin and Triana
Affirmed
Filed: March 13, 2019
11