Opinion
No. 04-12-00142-CV
06-19-2013
CITY OF LEON VALLEY ECONOMIC DEVELOPMENT CORPORATION, Appellant v. Larry LITTLE, Appellee
OPINION
From the 37th Judicial District Court, Bexar County, Texas
Trial Court No. 2011-CI-17823
Honorable Peter A. Sakai, Judge Presiding
Opinion by: Patricia O. Alvarez, Justice Sitting: Karen Angelini, Justice
Sandee Bryan Marion, Justice
Patricia O. Alvarez, Justice
DISMISSED FOR WANT OF JURISDICTION
This is an interlocutory appeal of the trial court's denial of City of Leon Valley Economic Development Corporation's (LVEDC) plea to the jurisdiction and motion to dismiss in a suit by Larry Little against LVEDC for breach of contract. LVEDC appeals the trial court's order. We dismiss this appeal for want of jurisdiction.
BACKGROUND
LVEDC is a Type B economic development corporation created under the Development Corporation Act of 1979 (the Act) and organized to promote economic growth within the city limits of Leon Valley, Texas. Little is a commercial real estate developer. This case arises out of communications between Little and LVEDC relating to the acquisition of certain real properties in conjunction with the Leon Valley Town Center Project. LVEDC approached Little about the possibility of Little purchasing real property for the proposed project. The parties executed two unimproved real property sales contracts whereby LVEDC would then purchase the properties from Little, but these sales were subject to LVEDC obtaining third-party financing at a specified rate. LVEDC did not obtain financing or purchase the property. Little claims LVEDC was approved for a loan to purchase the property and breached the sales contracts by refusing to obtain the loan. LVEDC asserts it did not complete the purchase because it did not receive third-party financing at the rate required by the Commercial Contract Financing Addendums by the closing date.
LVEDC refers to the communications as mere negotiations, whereas Little contends that the parties negotiated and agreed to the terms of a development agreement.
Little sued LVEDC for breach of contract. LVEDC filed a plea to the jurisdiction, claiming immunity from suit and liability under the Act. See TEX. LOC. GOV'T CODE ANN. § 505.106 (West Supp. 2012). LVEDC also asserted a counterclaim for declaratory relief and attorney's fees and costs. The trial court denied the plea to the jurisdiction and LVEDC filed this interlocutory appeal. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (West Supp. 2012) (authorizing interlocutory appeal from a trial court's denial of a plea to the jurisdiction by certain governmental units).
JURISDICTION
Before we can address the parties' issues, we must determine whether we have jurisdiction over LVEDC's interlocutory appeal. See Dall. Cnty. Appraisal Dist. v. Funds Recovery, Inc., 887 S.W.2d 465, 468 (Tex. App.—Dallas 1994, writ denied) ("We must inquire into our own jurisdiction, even if it is necessary to do so sua sponte.").
A. Right to Interlocutory Appeal
Texas Civil Practice and Remedies Code section 51.014(a) provides "'a narrow exception to the general rule that only final judgments are appealable.'" Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 841 (Tex. 2007) (quoting Bally Total Fitness Corp. v. Jackson, 53 S.W.3d 352, 355 (Tex. 2001)). Section 51.014(a)(8) permits appeal from an interlocutory order of a district court that "grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in Section 101.001." See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (emphasis added); Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 637 n.1 (Tex. 1999). Texas Civil Practice and Remedies Code section 101.001 defines governmental unit as:
(A) this state and all the several agencies of government that collectively constitute the government of this state, including other agencies bearing different designations, and all departments, bureaus, boards, commissions, offices, agencies, councils, and courts;TEX. CIV. PRAC. & REM. CODE ANN. § 101.001(3) (West 2005) (emphasis added); accord Koseoglu, 233 S.W.3d at 841.
(B) a political subdivision of this state, including any city, county, school district, junior college district, levee improvement district, drainage district, irrigation district, water improvement district, water control and improvement district, water control and preservation district, freshwater supply district, navigation district, conservation and reclamation district, soil conservation district, communication district, public health district, and river authority;
(C) an emergency service organization; and
(D) 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.
B. LVEDC is not a Governmental Unit
1. Civil Practice and Remedies Code Section 101.001(3)
As discussed above, LVEDC is a Type B economic development corporation created under the Act. Section 501.055(b) of the Act states that "[a] corporation is not a political subdivision . . . for purposes of the laws of this state." TEX. LOC. GOV'T CODE ANN. § 501.055(b). Thus, LVEDC does not qualify as a governmental unit under Texas Civil Practice and Remedies Code section 101.001(3)(B). See TEX. CIV. PRAC. & REM. CODE ANN. § 101.001(3)(B). Moreover, LVEDC does not meet any of the other definitions of governmental units in section 101.001(3). See id. § 101.001(3)(A), (C), (D).
2. Local Government Code Section 505.106
Although LVEDC does not meet the definitions in Texas Civil Practice and Remedies Code section 101.001(3), it may be considered a governmental unit for certain purposes under section 505.106(b) of the Act.
Section 505.106 of the Act provides,
(a) The following are not liable for damages arising from the performance of a governmental function of a Type B corporation or the authorizing municipality:TEX. LOC. GOV'T CODE ANN. § 505.106 (emphasis added). Subsection (b) refers to Chapter 101 of the Texas Civil Practice and Remedies Code, which is commonly referred to as the Texas Tort Claims Act. See TEX. CIV. PRAC. & REM. CODE ANN. § 101.002 (West 2005). Applying the unambiguous plain language of the statute, see City of San Antonio v. Caruso, 350 S.W.3d 247, 250 (Tex. App.—San Antonio 2011, pet. denied), we hold that section 505.106(b) only applies to tort claims, see TEX. CIV. PRAC. & REM. CODE ANN. § 101.002; TEX. LOC. GOV'T CODE ANN. § 505.106(b). But see Weir Bros., Inc. v. Longview Econ. Dev. Corp., 373 S.W.3d 841, 843, 846 (Tex. App.—Dallas 2012, no pet.) (concluding in a suit for fraud and breach of contract, that the Type A economic development corporation was a governmental unit). Because Little's suit against LVEDC is solely for breach of contract, section 505.106(b) does not apply and thus does not confer governmental unit status on LVEDC for purposes of this suit. See TEX. LOC. GOV'T CODE ANN. § 505.106(b).
(1) the corporation;(b) For purposes of Chapter 101, Civil Practice and Remedies Code, a Type B corporation is a governmental unit and the corporation's actions are governmental functions.
(2) a director of the corporation;
(3) the municipality;
(4) a member of the governing body of the municipality; or
(5) an employee of the corporation or municipality.
Our analysis does not end here. As discussed herein, the Act expressly provides that Type B economic development corporations are not political subdivisions, and we have determined that LVEDC does not meet any of the other definitions of governmental units in section 101.001(3). Furthermore, although section 505.106(b) confers governmental unit status on economic development corporations for tort claims, because Little's sole claim against LVEDC is for breach of contract, section 505.106(b) does not apply and thus does not confer governmental unit status on LVEDC. We must determine whether the language "governmental function" in section 505.106(a) somehow invokes section 505.106(b)'s governmental unit designation. If it does not, LVEDC is not a governmental unit for purposes of this suit.
Some Texas appellate courts have determined that economic development corporations are governmental units under section 505.106. See e.g., City of Weslaco v. Borne, 210 S.W.3d 782, 788 n.1 (Tex. App.—Corpus Christi 2006, pet. denied) (tort and contract claims); accord Rayl v. Borger Econ. Dev. Corp., 963 S.W.2d 109, 111, 114 (Tex. App.—Amarillo 1998, no pet.) (involving, inter alia, contract claims, but no claims under the Texas Tort Claims Act); see also Weir Bros., Inc., 373 S.W.3d at 843, 846 (quoting Borne and Rayl in a case involving tort and contract claims); Purdin v. Copperas Cove Econ. Dev. Corp., 143 S.W.3d 290, 293, 295 (Tex. App.—Waco 2004, pet. dism'd) (involving claims under the Texas Commission on Human Rights Act and citing Rayl). However, it is unclear from our reading of these cases which subsection of section 505.106 (or its predecessor statute) these courts were referring to as conferring governmental unit status—and thus governmental immunity—on an economic development corporation. See Borne, 210 S.W.3d at 788 n.1 (citing TEX. REV. CIV. STAT. ANN. art. 5190.6, § 4B(M) (recodified in TEX. LOC. GOV'T CODE ANN. § 505.106)); Weir Bros., Inc., 373 S.W.3d at 846 (quoting Borne and Rayl as stating that the Act expressly extends governmental immunity to economic development corporations in the context of section 504.107(b) (pertaining to Type A corporations), which contains language identical to section 505.106); Purdin, 143 S.W.3d at 295 (citing TEX. REV. CIV. STAT. ANN. art. 5190.6, § 4A(J) (recodified in TEX. LOC. GOV'T CODE ANN. § 504.106)); Rayl, 963 S.W.2d at 114 (citing TEX. REV. CIV. STAT. ANN. art. 5190.6) (emphasizing the language now appearing in section 505.106(b)).
Texas Revised Civil Statute and Remedies Code article 5190.6, section 505.106's predecessor, contained the same language as section 505.106, but it did not separate the text that is now divided into subsections (a) and (b). See TEX. REV. CIV. STAT. ANN. art. 5190.6, § 4B(M) (recodified in TEX. LOC. GOV'T CODE ANN. § 505.106); Rayl, 963 S.W.2d, at 114. Section 505.106(a) provides that certain individuals and entities "are not liable for damages arising from the performance of a governmental function of a Type B corporation or the authorizing municipality." See TEX. LOC. GOV'T CODE ANN. § 505.106(a). By its plain language, section 505.106(a) does not confer governmental unit status. Moreover, we must assume the legislature acted with purpose when it chose to separate this text and designate an economic development corporation as a governmental unit for purposes of the Texas Tort Claims Act and not for purposes of other claims. See Caruso, 350 S.W.3d at 250 ("'[W]e construe the statute's words according to their plain and common meaning, unless a contrary intention is apparent from the context, or unless such a construction leads to absurd results.'"). The legislature could have designated an economic development corporation as a governmental unit for all purposes, but it did not. See id.; see also TEX. LOC. GOV'T CODE ANN. § 505.106. To the contrary: it expressly stated the general rule that an economic development corporation "is not a political subdivision . . . for purposes of the laws of this state." See TEX. LOC. GOV'T CODE ANN. § 501.055(b). Thus, we hold that section 505.106 does not confer governmental unit status on an economic development corporation for non-tort claims. See id. § 505.106. Therefore, to the extent that other courts have held that an economic development corporation is a governmental unit performing governmental functions for non-tort claims, we disagree. E.g., Borne, 210 S.W.3d at 788 n.1; Weir Bros., Inc., 373 S.W.3d at 846; Rayl, 963 S.W.2d at 114; Purdin, 143 S.W.3d at 295. See generally TEX. LOC. GOV'T CODE ANN. §§ 501.055, 505.106.
CONCLUSION
As a Type B economic development corporation, LVEDC is not a political subdivision. LVEDC does not meet any of the other definitions of governmental unit in section 101.001(3). Furthermore, because Little's suit against LVEDC is for breach of contract and does not include tort claims, section 505.106 does not confer governmental unit status on LVEDC. Because LVEDC is not a governmental unit for purposes of this suit, it does not meet Texas Civil Practice and Remedies Code section 51.014(a)(8)'s statutory exception permitting an appeal of the trial court's interlocutory order denying its plea to the jurisdiction. Accordingly, we dismiss this appeal for want of jurisdiction.
Patricia O. Alvarez, Justice