Carl Owens, Jr., Connie Owens, Michael Terry, and Sandi Terry v. the City of Tyler, Texas

IN THE SUPREME COURT OF TEXAS
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No. 17-0888
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CARL OWENS, JR., CONNIE OWENS, MICHAEL TERRY,
AND SANDI TERRY, PETITIONERS
v.
THE CITY OF TYLER, TEXAS, RESPONDENT
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ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE TWELFTH DISTRICT OF TEXAS
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PER CURIAM
The City of Tyler built Lake Tyler in 1946 and leased lakefront lots to residents. The
Owens, Terry, and Chatelain families lease three contiguous lots on the lake pursuant to lease
agreements with the city. The Chatelains decided to build a new pier and boathouse extending
from their lot onto the water. They asked the city for a building permit. The Owens and Terry
families objected. After some attempts at compromise, the city approved the Chatelains’ request
for a permit.
The Owens and Terry families sued the city and the Chatelains, seeking to block the
construction. They alleged several causes of action, including breach of contract. The city filed a
plea to the jurisdiction asserting governmental immunity. The trial court denied the plea. The city
took an interlocutory appeal pursuant to TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8). Relying
primarily on Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (Wasson
I), the court of appeals concluded that the claims against the city were barred by governmental
immunity because they arose from the city’s governmental (rather than proprietary) acts. The
court of appeals reversed the denial of the city’s plea to the jurisdiction, rendered judgment
dismissing the claims against the city, and remanded the case for further proceedings. ___ S.W.3d
___, ___ (Tex. App.—Tyler 2017) (mem. op.). The plaintiffs petitioned for review.
After the court of appeals issued its decision, this Court decided Wasson Interests, Ltd. v.
City of Jacksonville, 559 S.W.3d 142 (Tex. 2018) (Wasson II). In Wasson II, we stated:
to determine whether governmental immunity applies to a breach-of-contract claim
against a municipality, the proper inquiry is whether the municipality was engaged
in a governmental or proprietary function when it entered the contract, not when it
allegedly breached that contract. Stated differently, the focus belongs on the nature
of the contract, not the nature of the breach. If a municipality contracts in its
proprietary capacity but later breaches that contract for governmental reasons,
immunity does not apply.
Wasson II at 149. By no fault of its own, the court of appeals did not conduct the inquiry described
above, under which the city’s immunity from a breach of contract claim depends on “the nature of
the contract, not the nature of the breach.” Id. To afford the court of appeals the opportunity to
re-conduct its review in accordance with our intervening decision in Wasson II, we remand this
case to the court of appeals without hearing oral argument. TEX. R. APP. P. 59.1; see, e.g., Bossier
Chrysler-Dodge II, Inc. v. Rauschenberg, 238 S.W.3d 376 (Tex. 2007) (per curiam).
The petition for review is granted, the judgment of the court of appeals is vacated, and the
case is remanded to the court of appeals for further consideration in light of Wasson II.
OPINION DELIVERED: December 21, 2018
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