152 Lakewest Community, LP and Supreme Development Corporation v. Ameristar Apartment Services, L.P. D/B/A Ameristar Screen & Glass ( 2021 )

Dismissed in Part, Affirmed in Part, and Opinion Filed December 2, 2021
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-20-00483-CV
152 LAKEWEST COMMUNITY, LP AND SUPREME DEVELOPMENT
CORPORATION, Appellants
V.
AMERISTAR APARTMENT SERVICES, L.P. D/B/A AMERISTAR
SCREEN & GLASS, Appellee
On Appeal from the 192nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-17-15636
MEMORANDUM OPINION
Before Justices Myers, Partida-Kipness, and Garcia
Opinion by Justice Partida-Kipness
Appellants 152 Lakewest Community, LP (Lakewest) and Supreme
Development Corporation (Supreme) appeal the denial of their pleas to the
jurisdiction. In three issues, Lakewest and Supreme contend they are entitled to
governmental immunity from suit. Finding no error, we affirm the trial court’s order
denying Supreme’s jurisdictional pleas. We dismiss Lakewest’s appeal for lack of
jurisdiction.
BACKGROUND
The underlying facts are well-known to the parties; therefore, we will not
provide a detailed statement of facts but instead provide only those facts necessary
for disposition of the appeal. See TEX. R. APP. P. 47.1. In 2017, appellee Ameristar
Apartment Services, L.P. d/b/a Ameristar Screen & Glass (Ameristar) performed
four repair orders for windows at Lakewest Townhomes (the Property) in Dallas.
Ameristar entered into the repair orders with the Property’s purported property
manager, Orion Real Estate Services, Inc. d/b/a Allied Orion Group (Orion).
Ameristar contends it fulfilled its contractual obligations and completed the repair
work but was not paid for the services and materials provided. Ameristar brought
the underlying lawsuit to recover the outstanding balance of $2,702.42 from the
Property’s purported owner, the Dallas Housing Authority (DHA). DHA answered
and filed a plea to the jurisdiction asserting governmental immunity. At the hearing
on DHA’s plea, counsel for DHA represented that Lakewest was the owner of the
improvements on the Property. Ameristar filed its Second Amended Petition and
added Lakewest and Supreme as parties. The trial court granted DHA’s plea shortly
thereafter.
Lakewest and Supreme answered. Supreme filed a plea to the jurisdiction
asserting governmental immunity on February 23, 2019. The trial court denied that
plea on June 12, 2019. Lakewest filed a plea to the jurisdiction to assert
governmental immunity on February 3, 2020. Included within Lakewest’s plea was
–2–
a second plea by Supreme. The trial court denied both pleas on March 31, 2020, and
April 20, 2020, respectively. Lakewest and Supreme then filed a joint plea to the
jurisdiction on April 20, 2020, which the trial court denied on May 18, 2020.
Lakewest and Supreme appealed the March 31, April 20, and May 18 orders denying
their pleas. In three issues, Lakewest and Supreme argue that the trial court should
not have denied their pleas to the jurisdiction.
STANDARD OF REVIEW
Governmental immunity from suit defeats a trial court’s subject-matter
jurisdiction and is properly asserted in a plea to the jurisdiction. Tex. Dep’t of Parks
& Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004); see also Reata Constr.
Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). The existence of subject-
matter jurisdiction is a question of law, and we review the trial court’s ruling on a
plea to the jurisdiction de novo. State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007);
Miranda, 133 S.W.3d at 226, 228; City of Wylie v. Taylor, 362 S.W.3d 855, 859
(Tex. App.—Dallas 2012, no pet.).
APPELLATE JURISDICTION
We may not address the merits of an appeal absent jurisdiction. State v. Ninety
Thousand Two Hundred Thirty-Five Dollars and No Cents in U.S. Currency
($90,235), 390 S.W.3d 289, 291–92 (Tex. 2013). Therefore, we begin our analysis
by considering our appellate jurisdiction. As a general rule, only final judgments and
orders are appealable. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001).
–3–
“The legislature, however, has specified circumstances in which a litigant may
appeal immediately from an otherwise unappealable order because a final judgment
has not been rendered.” Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc.,
526 S.W.3d 693, 698 (Tex. App.—Houston [14th Dist.] 2017), aff’d, 571 S.W.3d
738, 741 (Tex. 2019). Lakewest and Supreme maintain that they are governmental
units under section 101.001 of the Texas Tort Claims Act and, as such, may appeal
from the trial court’s orders denying their pleas to the jurisdiction. See TEX. CIV.
PRAC. & REM. CODE § 101.001(3) (providing four definitions of “governmental
unit”); TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8) (appeal permitted from an
interlocutory order that “grants or denies a plea to the jurisdiction by a governmental
unit as that term is defined in [Texas Civil Practice and Remedies Code] Section
101.001.”). We, therefore, have jurisdiction over this appeal with respect to
Lakewest and Supreme only if they are “governmental units.” See TEX. CIV. PRAC.
& REM. CODE § 51.014(a)(8).
Lakewest and Supreme contend they are “governmental units” as defined by
section 101.001(3)(D), which defines “governmental unit” as “any other institution,
agency, or organ of government the status and authority of which are derived from
the Constitution of Texas or from laws passed by the legislature under the
constitution.” TEX. CIV. PRAC. & REM. CODE § 101.001(3)(D). The phrase
“institution, agency, or organ of government” has a broad meaning and encompasses
an “entity that operates as part of a larger governmental system.” Univ. of the
–4–
Incarnate Word v. Redus, 518 S.W.3d 905, 910–11 (Tex. 2017) (concluding a
private university was a “governmental unit” under Subsection (D) for purposes of
law enforcement). To satisfy the second prong of Subsection (D), “the entity
asserting immunity from suit must have a legislative or constitutional source from
which it derived its status and authority.” Lenoir v. U.T. Physicians, 491 S.W.3d 68,
77 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (op. on reh’g) (citing LTTS
Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d 73, 76, 81 (Tex. 2011)).
Supreme is a public facility corporation (PFC) that is owned and operated by
DHA, which is a governmental unit. See TEX. LOC. GOV’T CODE § 392.006
(designating housing authorities units of government for all purposes); see also
Orion Real Estate v. Sarro, 559 S.W.3d 599, 607 (Tex. App.—San Antonio 2018,
no pet.) (first citing section 392.006 and then citing Marshall v. Hous. Auth. of City
of San Antonio, 183 S.W.3d 689, 690 n.1 (Tex. App.—San Antonio 2003), vacated
on other grounds, 198 S.W.3d 782 (Tex. 2006)). The Texas Local Government Code
allows a housing authority to create a nonprofit public facility corporation to (1)
issue bonds; (2) finance public facilities on the housing authority’s behalf; or (3)
“acquire, construct, rehabilitate, renovate, repair, equip, furnish, or place in service
public facilities,” which includes housing projects. TEX. LOC. GOV’T CODE §§
303.021, 392.066.
Under these statutes, Supreme is an “institution, agency, or organ” of
government whose “status and authority” are derived from laws passed by the
–5–
legislature. See Orion Real Estate, 559 S.W.3d at 603 (concluding PFC owned and
operated by San Antonio Housing Authority was governmental unit under the Act)
(citing City of Leon Valley Econ. Dev. Corp. v. Little, 422 S.W.3d 37, 40–41 (Tex.
App.—San Antonio 2013, no pet.) (concluding an economic development
corporation is a “governmental unit” under Subsection (D) because its “powers,
privileges, and functions are specified and circumscribed by statute”)). Because
Supreme is a “governmental unit” under Subsection (D), we have jurisdiction over
this interlocutory appeal as it relates to Supreme. See TEX. CIV. PRAC. & REM. CODE
§ 51.014(a)(8).
Lakewest argues it is also a governmental unit because it was created by
Supreme to carry out DHA’s functions of acquiring title to the Lakeview
Townhomes and obtain low-cost loans to create that public facility. Citing sections
303.041 and 303.002(a) of the local government code, Lakewest contends that it is
a PFC or its equivalent and, as such, a governmental unit like Supreme because
Lakewest carries out some duties of a PFC. We disagree. The record shows Lakewest
is a Texas limited partnership and Supreme is Lakewest’s general partner. As a
limited partnership, Lakewest is not a corporation and, therefore, cannot be
considered a public facility corporation. See SJ Med. Ctr., L.L.C. v. Estahbanati, 418
S.W.3d 867, 869 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (dismissing
appeal of order denying plea to the jurisdiction for lack of jurisdiction because, as
an LLC, the party was not a “nonprofit corporation, partnership, or sole
–6–
proprietorship” as required to be a governmental unit under applicable statute).
Indeed, Chapter 303 of the local government code under which Lakewest seeks
immunity applies to corporations. TEX. LOC. GOV’T CODE § 303.002(b) (“The
legislature intends that a corporation created under this chapter be a public
corporation, constituted authority, and instrumentality authorized to issue bonds on
behalf of its sponsor . . . .”); see e.g., id. at §§ 303.022, 303.024, 303.025 (creation
and operation of PFCs). Further, DHA’s general counsel. Gregory T. Mays, testified
via affidavit below that “DHA formed Lakewest to act as the operator and manager
of the Lakeview Townhomes.” Absent statutory authority not present here, an entity
hired to manage such a facility is not a governmental unit for purposes of our
jurisdiction. See Orion Real Estate, 559 S.W.3d at 603 (private company hired as an
independent contractor to manage apartments developed by housing authority was
not a governmental unit). On this record, we conclude Lakewest is not a
“governmental unit” under Subsection (D), and we therefore do not have jurisdiction
over this interlocutory appeal as it relates to Lakewest. See id. (dismissing
interlocutory appeal after rejecting argument that appellant was a governmental
unit); see also Baylor Scott & White v. Peyton, 549 S.W.3d 242, 256 (Tex. App.—
Fort Worth 2018, no pet.) (same); AECOM USA, Inc. v. Mata, No. 04-15-00773-
CV, 2016 WL 5112222, at *4 (Tex. App.—San Antonio Sept. 21, 2016, pet. denied)
(mem. op.) (concluding a private contractor hired by a state agency was not a
“governmental unit” under Section 101.001(3) and dismissing the appeal for lack of
–7–
jurisdiction). Accordingly, we must dismiss this appeal for lack of jurisdiction as to
Lakewest.
IMMUNITY ANALYSIS
We now turn to the merits of Supreme’s appeal. Although we have determined
we have jurisdiction over this interlocutory appeal because Supreme falls within the
“broad definition” of “governmental unit,” that does not mean that Supreme enjoys
immunity from suit. See Orion Real Estate, 559 S.W.3d at 603–04. Whether this
Court has appellate jurisdiction over an interlocutory appeal is a separate question
decided under within a separate analytical framework from the question of whether
the party is entitled to immunity. Incarnate Word, 518 S.W.3d at 911 (quoting
Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 432 (Tex. 2016)).
I. Governmental immunity as a PFC
In its first issue, Supreme argues it is entitled to governmental immunity
because Supreme is a PFC. This is a matter of first impression in our Court.
However, we find our sister court’s analysis of this issue in Orion Real Estate
instructive and apply it here. See Orion Real Estate, 559 S.W.3d at 604–07.
In Orion Real Estate, the plaintiff’s son was bit by a dog while playing outside
of an apartment complex. Id. at 601. The complex was owned by the San Antonio
Housing Authority (SAHA) and Woodhill Public Facility Corp., and managed by
Orion. Id. Woodhill, like Supreme, was a PFC owned and operated by a housing
authority and, like Lakewest, owned the apartment buildings. Id. at 603, 607. The
–8–
appellate court concluded that Woodhill was not entitled to governmental immunity
because “PFCs, like EDCs, ‘are, in essence, nonprofit corporations that undertake
discrete projects for the benefit of their [sponsors].’” Id. at 606–07 (quoting
Rosenberg Dev. Corp., 526 S.W.3d at 704).
In reaching this conclusion, the court first analyzed the nature of PFCs. Id. at
605. The court explained that the Public Facility Corporation Act was enacted to
“authorize the creation and use of public facility corporations with the broadest
possible powers to finance or to provide for the acquisition, construction,
rehabilitation, renovation, repair, equipping, furnishing, and placement in service of
public facilities in an orderly, planned manner and at the lowest possible borrowing
costs.” Id.(quoting TEX. LOC. GOV’T CODE § 303.002). The Act allows a political
subdivision known as a “sponsor”, including a housing authority, to create a PFC to
issue bonds to purchase the authority’s obligations, finance public facilities on the
authority’s behalf, and acquire, construct, rehabilitate, renovate, repair, equip,
furnish, or place in service public facilities. TEX. LOC. GOV’T CODE §§ 303.003(11),
303.021. In addition, a housing authority is permitted to create a PFC to “enter into
a lease or exchange with, or make a mortgage or loan to the [PFC] to . . . acquire,
construct, rehabilitate, renovate, repair, equip, furnish, or provide assistance to
a . . . housing project.” Id. § 392.066(a)(1). Although the Act permits a PFC to take
various actions, such as issuing bonds if authorized by its sponsor and “acquire title
to a public facility” in order to take statutorily-authorized actions, the PFCs sponsor
–9–
“may not delegate to a corporation the power of taxation or eminent domain, a police
power, or an equivalent sovereign power of this state or the sponsor.” Id. § 303.041.
Moreover, a PFC’s sponsor “in its sole discretion, may alter the [PFC’s] structure,
organization, programs, or activities, . . . .” Id. § 303.045.
The Orion Real Estate court then compared economic development
corporations (EDCs) with PFCs because EDCs are not entitled to governmental
immunity from suit. Orion Real Estate, 559 S.W.3d at 607. The court concluded that
“EDCs and PFCs share many similar features,” including their corporate set-up as
nonprofit corporations that are not permitted to exert the governmental powers
delegated to the political subdivision that created the PFC. Id. at 606. The court
concluded that, like EDCs, PFCs “are not distinct governmental entities entitled to
governmental immunity” and affirmed the denial of Woodhill’s plea to the
jurisdiction on its general immunity argument. Id. at 607.
The same analysis applies here. Supreme, like Woodhill, is a PFC that was
created by a housing authority to perform certain tasks and fulfill purposes pursuant
to the Act. Although the DHA exerts a high degree of control over Supreme’s
existence, activities, and whether to issue bonds, we agree with the San Antonio
court of appeals’s conclusion that PFCs, like EDCs, “are, in essence, nonprofit
corporations that undertake discrete projects for the benefit of their [sponsors]” and
are not distinct governmental entities entitled to governmental immunity. Id. at 606–
07. We overrule Supreme’s first issue.
–10–
II. Derivative immunity
In its second issue, Supreme argues it is entitled to derivative immunity
because Supreme acted as DHA’s agent and acted without discretion regarding the
maintenance of the property. An agent of a governmental entity may be entitled to
derivative immunity if the agent shows that the “complained-of conduct . . . was
effectively attributed to the government” in that it acted “as the government without
discretion.” Orion Real Estate, 559 S.W.3d at 607 (emphasis in original); see also
Brown & Gay Eng’g, Inc. v. Olivares, 461 S.W.3d 117, 125–26 (Tex. 2015) (noting
that in cases in which a government contractor was entitled to immunity, “the
complained-of conduct for which the contractor was immune was effectively
attributed to the government. That is, the alleged cause of the injury was not the
independent action of the contractor, but the action taken by the government through
the contractor) (emphasis in original).
Orion Real Estate is again instructive on the question of derivative immunity.
There, the court determined that Woodhill was not entitled to derivative immunity
as SAHA’s agent because Woodhill presented no evidence “that it acted without
discretion and at the direction of SAHA regarding the dog’s presence on the property
or any security systems or procedures in place to protect against dog attacks.” Orion
Real Estate, 559 S.W.3d at 607 (citing TEX. LOC. GOV’T CODE §§ 303.021, 392.066);
see also Lenoir, 491 S.W.3d at 86 (concluding a medical clinic established by a state
–11–
university was not entitled to derivative governmental immunity where the
complained-of actions were discretionary).
When determining whether to extend immunity under an assertion of
derivative liability, a court must look to “whether the entity that is seeking to benefit
from another’s immunity had discretion as it relates to the activities underlying the
plaintiff's claims.” Lenoir, 491 S.W.3d at 88. Here, Ameristar contends it has been
injured by Lakewest and Supreme’s failure to pay four invoices for window repairs
completed at the Property. There is no evidence that the DHA had a right to control
contracting with and payment of contractors such as Ameristar for work completed
on a property established or managed by a PFC such as Supreme. On the contrary,
the record includes evidence showing that DHA granted Supreme discretion
regarding the repair and maintenance of the Property, hiring contractors, and paying
contractors, which encompass the complained-of conduct in this case. For example,
Gregory Mays, DHA’s general counsel, conceded in his deposition that DHA is not
involved in hiring contractors. Further, Supreme’s bylaws and Articles of
Incorporation provide that Supreme, through its President, had the authority to sign
and execute contracts, and that Supreme had express authority to pay contractors and
execute contracts and pay for services rendered by private persons. This evidence
supports the trial court’s implied finding that Supreme acted with discretion in hiring
Ameristar to complete the window repairs, rather than acting at DHA’s direction.
On this record, Supreme acted with discretion in relation to the injuries alleged by
–12–
Ameristar and is, therefore, not entitled to derivative immunity. We overrule
Supreme’s second issue.
III. Waiver of immunity
In its third and final issue, Supreme argues that Ameristar did not establish a
waiver of their immunity. We have concluded that Supreme is not entitled to
immunity. As such, we need not reach Supreme’s third issue, which is premised on
a finding that Supreme is entitled to immunity from suit.
CONCLUSION
For these reasons, we dismiss Lakewest’s appeal for lack of jurisdiction,
overrule Supreme’s appellate issues, and affirm the trial court’s orders denying
Supreme’s pleas to the jurisdiction.
/Robbie Partida-Kipness/
ROBBIE PARTIDA-KIPNESS
JUSTICE
200483F.P05
–13–
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
152 LAKEWEST COMMUNITY, On Appeal from the 192nd Judicial
LP AND SUPREME District Court, Dallas County, Texas
DEVELOPMENT CORPORATION, Trial Court Cause No. DC-17-15636.
Appellant Opinion delivered by Justice Partida-
Kipness. Justices Myers and Garcia
No. 05-20-00483-CV V. participating.
AMERISTAR APARTMENT
SERVICES, L.P. D/B/A
AMERISTAR SCREEN & GLASS,
Appellee
In accordance with this Court’s opinion of this date, we DISMISS appellant
152 Lakewest Community, LP’s appeal for lack of jurisdiction, and AFFIRM the
trial court’s orders denying appellant Supreme Development Corporation’s pleas to
the jurisdiction.
It is ORDERED that appellee AMERISTAR APARTMENT SERVICES,
L.P. D/B/A AMERISTAR SCREEN & GLASS recover its costs of this appeal
from appellants 152 LAKEWEST COMMUNITY, LP AND SUPREME
DEVELOPMENT CORPORATION.
Judgment entered this 2nd day of December 2021.
–14–