Opinion
No. 05-04-00316-CV
Opinion Filed October 5, 2004.
On Appeal from the 298th District Court Dallas County, Texas, Trial Court Cause No. 01-09840-M.
Affirm.
Before Justices FITZGERALD, LANG, and LANG-MIERS
OPINION
City of Dallas brings this interlocutory appeal of the trial court's denial of the City's plea to the jurisdiction. The City asserts that it is immune from the lawsuit brought by John Bargman as trustee of the Ann T. Bovis Property Trust (the Trust) and that the Trust lacks standing to bring the claim against the City. We conclude the Trust has standing and that the City waived its immunity from suit by filing counterclaims against the Trust. Accordingly, we conclude the trial court did not err by denying the City's plea to the jurisdiction, and we affirm the trial court's order.
BACKGROUND
In 1959, Ann Bovis granted the City an easement for street purposes on a portion of a parcel of her real estate. In 1969, Bovis signed a 99-year lease with The Lincoln Company (Lincoln) giving Lincoln use of some or all of the parcel. Whether the lease included, and was intended to include, the property subject to the City's easement is a disputed issue in the litigation. The lease contained a purchase option. Bovis died in 1993, and in 1998, her interest in the property subject to the lease was transferred to the Ann T. Bovis Property Trust (the Trust). In 1999, Lincoln exercised the purchase option and purchased the property subject to the lease. That same day, Bovis's estate purported to transfer to the Trust the property subject to the City's easement. In 2001, the Trust sued Lincoln and the City asserting that the City had abandoned the street easement and that the City and Lincoln were trespassing on the Trust's property by installing sewers, water lines, and other utilities. The City filed counterclaims against the Trust, including a suit to quiet title and a claim of breach of the warranty in the deed granting the City the easement. Part of the City's prayer for relief included "judgment awarding the City its actual damages arising from Plaintiff's casting a cloud on the City's title to and use and enjoyment of the Easement and/or breaching its warranty to defend the City's title to the easement. . . ."
The City filed a plea to the jurisdiction asserting two grounds. First, the City asserted that the Trust lacked standing to bring the suit because the land subject to the easement was included in the lease, and the Trust had sold that property to Lincoln in 1999. Second, the City asserted that governmental immunity barred the Trust's claims. The parties moved for summary judgment on the issue of whether the Trust's lease and deed to Lincoln conveyed the property subject to the easement. In June 2002, the trial court granted Lincoln's motion for partial summary judgment, which had asserted that the lease and deed conveyed the property subject to the City's easement. The Trust then amended its pleading to include a claim to reform the deed to Lincoln to exclude the property subject to the easement, alleging that any inclusion of the property subject to the easement was the result of mutual mistake. The trial court granted the City's plea to the jurisdiction on the Trust's cause of action for trespass, but the court denied the plea on the Trust's cause of action for abandonment of the easement. The City then filed this interlocutory appeal. Tex. Civ. Prac. Rem. Code Ann. § 51.014(a)(8) (Vernon Supp. 2004-05).
The Trust did not appeal the sustaining of the plea to the jurisdiction on the trespass cause of action against the City. Accordingly, the propriety of that decision is not before us.
STANDING
In its first issue, the City asserts the trial court erred in denying its plea to the jurisdiction because the Trust lacked standing to bring its suit for abandonment of the easement as the Trust no longer owned the property subject to the easement. However, because the Trust has alleged an equitable interest in the property, we conclude it has standing to assert its claim against the City.
To establish standing, a plaintiff must show "a distinct injury to the plaintiff and `a real controversy between the parties, which . . . will be actually determined by the judicial declaration sought.'" Brown v. Todd, 53 S.W.3d 297, 305 (Tex. 2001) (quoting Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 517-18 (Tex. 1995)). Standing is a prerequisite of subject-matter jurisdiction, and its absence may be raised in a plea to the jurisdiction. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex. 2000).
The City argues the Trust's lack of standing as follows: (1) the trial court determined that the deed from the Trust to Lincoln by its terms conveyed the property subject to the City's easement; (2) when the City allegedly abandoned the easement, title to the property subject to the easement resided in Lincoln and not the Trust; and (3) thus, because the Trust did not own the property when the City allegedly abandoned the easement, there can be no controversy between the Trust and the City. In response, the Trust argues that it amended its petition to seek a reformation of the deed to exclude the property subject to the easement because of mutual mistake by the Trust and Lincoln in drafting the deed.
The Trust's suit against Lincoln for reformation of the deed to exclude the property subject to the easement is an assertion of an equitable interest in that property. See Gibralter Sav. Ass'n v. Martin, 784 S.W.2d 555, 558 (Tex.App.-Amarillo 1990, writ denied); N.E. Indep. Sch. Dist. v. Aldridge, 528 S.W.2d 341, 343 (Tex.Civ.App.-Amarillo 1975, writ ref'd n.r.e.); Hamilton v. Green, 166 S.W. 97, 98 (Tex.Civ.App.-Dallas 1914, no writ). That assertion of an equitable interest is sufficient to give it standing to allege its claim that the City abandoned the easement. The City, however, relying on this Court's decision in Hamilton v. Green, asserts that the Trust cannot bring the suit for abandonment of the easement until the Trust resolves the title issue against Lincoln. Thus, the City argues, the Trust's abandonment claim is unripe and should be dismissed.
Hamilton is the City's sole authority for its argument that the Trust cannot bring its suit to reform the deed and for abandonment of the easement in the same proceeding. Hamilton, however, makes clear that the suit to reform the deed and a cause of action based on the reformed deed may be brought in the same proceeding when the suit to reform the deed is not barred:
We do not mean to say that a suit to cancel or correct deed and one in trespass to try title may not be determined in one proceeding. We think it can. Before the land may be recovered in such proceeding, however, the correction or reformation of the deed is an essential preliminary step, and if, in the progress of the suit, the four-year bar is pleaded, and the facts raise the issue which is resolved by the jury for the one in possession, the fact that such dual relief is sought is immaterial; since a favorable finding upon the questions of limitation destroys the right to sue in or proceed with the suit in trespass to try title.
Hamilton, 166 S.W. at 98. The record before us does not show that Lincoln has asserted and proved limitations or that any other defense bars the Trust's suit for reformation of the deed. In this situation, as Hamilton makes clear, the Trust's suits for reformation of the deed and abandonment of the easement may be brought in a single proceeding. See also Walters v. Pete, 546 S.W.2d 871, 875 (Tex.Civ.App.-Texarkana 1977, writ ref'd n.r.e.) ("It is, however, within the power of the court to reform an instrument relied upon in trespass to try title when the deed contains a mutual mistake of fact, provided the parties are before the court and limitation has not barred the action." (citation omitted)).
We conclude the trial court did not err in denying the City's plea to the jurisdiction on the ground that the Trust lacked standing. We resolve the City's first issue against it.
SOVEREIGN IMMUNITY
In its second issue, the City asserts the Trust's suit for abandonment of the easement was barred by sovereign immunity because the legislature had not consented to the Trust's suit. Sovereign immunity protects the State of Texas, as well as municipalities, from lawsuits for damages arising out of the exercise of governmental powers for a public purpose. See Fed. Sign v. Tex. S. Univ. 951 S.W.2d 401, 405 (Tex. 1997), superseded by statute on other grounds as stated in Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 593 (Tex. 2001); City of San Benito v. Ebarb, 88 S.W.3d 711, 720 (Tex.App.-Corpus Christi 2002, pet. denied). The supreme court has held that legislative action is not the only manner in which a governmental entity may waive immunity from suit: "by filing a suit for damages, a governmental entity waives immunity from suit for any claim that is incident to, connected with, arises out of, or is germane to the suit or controversy brought by the State." Reata Constr. Co. v. City of Dallas, No. 02-1031, 2004 WL 726906, at *3 (Tex. Apr. 2, 2004). In this case, the City's counterclaim for actual damages from the Trust's "casting a cloud on the City's title to and use and enjoyment of the Easement" is clearly "incident to, connected with, arises out of, or is germane" to the Trust's claim that the City had abandoned the easement.
The City urges us not to apply Reata to this case for several reasons. First, the City argues Reata is inapplicable because, in Reata, the City had intervened into an existing lawsuit while in this case it filed a counterclaim. This Court has held that a governmental entity's counterclaim seeking damages constitutes "an intentional relinquishment of any claim to governmental immunity." City of Irving v. Inform Constr., Inc., No. 05-03-01460-CV, 2004 WL 1852795, at *3 (Tex.App.-Dallas Aug. 9, 2004, no pet. h.). The City also asserts that Reata should not apply to compulsory counterclaims. However, this Court has held that Reata applies to all claims for damages brought by a governmental entity, including compulsory counterclaims. See id. The City also asserts this Court is not bound by Reata because the supreme court's opinion is still subject to revision or withdrawal as a motion for rehearing in that case is pending. In In re K.M.S., 68 S.W.3d 61 (Tex.App.-Dallas 2001), pet. denied, 91 S.W.3d 331 (Tex. 2002) (per curiam), this Court declined to follow a portion of a supreme court opinion issued fourteen days earlier because we concluded that portion of the opinion was dicta, was not supported by the authority cited, and was not good public policy. Id. at 70. The supreme court denied the petition for review of our opinion, but in doing so, it stated, "in reaching their conclusions, courts of appeals are not free to disregard pronouncements from this Court, as did the court of appeals here." In re K.M.S., 91 S.W.3d 331 (Tex. 2002) (per curiam); see also In re Doe, 92 S.W.3d 511, 512 (Tex. 2002) (per curiam) ("lower courts are to follow pronouncements from this Court."). Thus, although the supreme court's opinion is subject to withdrawal or revision, we may not disregard it.
The City also relies on the pre- Reata opinion in State v. Lain, 162 Tex. 549, 349 S.W.2d 579 (1961). In that case, the supreme court stated in dicta, "When in this state the sovereign is made a party defendant to a suit for land, without legislative consent, its plea to the jurisdiction of the court based on sovereign immunity should be sustained in limine." Id. at 552, 349 S.W.2d at 582. The City, however, does not explain, and we do not perceive, why Reata, which concerned tortious conduct, should not be applicable to suits concerning title to land
We conclude the trial court did not err in determining that sovereign immunity did not bar the Trust's suit for abandonment of the easement. We resolve the City's second issue against it.
We affirm the trial court's order denying the City's plea to the jurisdiction on the Trust's suit for abandonment of the easement.