Owens v. City of Tyler

CARL OWENS, JR., CONNIE OWENS, MICHAEL TERRY, AND SANDI TERRY, APPELLANTS v. THE CITY OF TYLER, TEXAS, APPELLEE

No. 12-21-00009-CV

Court of Appeals of Texas, Twelfth District, Tyler

October 6, 2021

Appeal from the County Court at Law No. 3 of Smith County, Texas (Tr. Ct. No. 72337-B)

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

MEMORANDUM OPINION

BRIAN HOYLE, JUSTICE

Carl Owens, Jr., Connie Owens, Michael Terry, and Sandi Terry (collectively "the Lessees") appeal the trial court's order granting summary judgment against them and in favor of the City of Tyler, Texas. They present ten issues on appeal. We modify and affirm as modified.

Background

In 1946, the City constructed Lake Tyler. The City owns the land underneath the lake and the land surrounding the lake. The City subdivided portions of the land surrounding the lake for the construction of lake homes, buildings, and boat stalls. In 1953, the City leased the three contiguous lots that are the subject of this suit-Lots 18, 19, and 20 of the Peninsula Subdivision- to Dr. Howard Bryant. After a series of transfers and lease amendments, the Owenses, Kourt and Jamie Chatelain, and the Terrys became the current lessees of Lots 18, 19, and 20, respectively. The leaseholds do not extend into the lakebed.

However the City generally allows the lessees to construct piers and boathouses. The Tyler Code of Ordinances, which is incorporated into the leases, requires that the lessee submit the proposed construction plan according to specific guidelines, pay a fee, and consent to an on- site physical inspection. If satisfied with the construction plan, the Water Production and Water Quality Manager for the Tyler Water Utilities Division (Manager) will issue a building permit.

The Chatelains' lot is a pie-shaped lot in a cove with limited lake frontage. The Chatelains had an old pier and boathouse in place when they acquired the lease for Lot 19 but they removed them. On September 24, 2015, the Chatelains requested that the City approve their proposed plans for a new pier and boathouse and issue a construction permit.

On October 12, the Terrys, the lessees of Lot 20 whose leasehold shared the cove with the Chatelains, submitted a request for the City to authorize construction of a four-foot wide pier that would extend 160 feet into the cove. This pier would have essentially prevented the Chatelains' access to the lake. On October 23, the City denied the Terrys' request.

On October 22, the City sent a letter to the Owenses informing them of the Chatelains' request to approve a new pier and boathouse. The letter stated that the proposed boathouse would encroach on the Owenses' frontage, but "[u]nfortunately, due to the layout of the shoreline and of the other boathouses in this area, there is no other location for the [Chatelains'] proposed boathouse that will still provide access to the lake to the [Chatelains'] neighbor to the east on [the Terrys'] Lot 20." Carl Owens called the Manager and asked for a meeting. At the meeting, Owens expressed his discontent with the Chatelains' proposed pier and boathouse location. Owens believed that the new boathouse would adversely affect his view of the lake and the value of his property.

Consequently in an attempt to maximize the interested parties' access to the lake, the Manager reoriented the location of the Chatelains' boathouse on their proposed construction plan and asked that the Chatelains resubmit their request. Thereafter, the Owenses' attorney sent a letter to the Chatelains demanding that they refrain from constructing the boathouse, alleging that the boathouse would encroach upon the Owenses' lot line extending from their property into the lake, and that the City never allowed a neighboring property owner to construct a boathouse across this extended property line. The Chatelains resubmitted their request in accordance with the Manager's suggestions. On February 10, 2017, the City issued a construction permit to the Chatelains.

Subsequently the Owenses filed suit against the City and the Chatelains, and the Terrys intervened. They each adopted the others' pleadings. They brought several claims, seeking to enjoin the Chatelains' construction of their boathouse, along with actual and exemplary damages, a declaratory judgment, injunctive relief, and attorney's fees. The trial court granted an ex parte temporary restraining order against the City and the Chatelains, temporarily halting the Chatelains' construction of their pier and boathouse.

The City filed a plea to the jurisdiction, asserting that it had governmental immunity and it should be dismissed from the suit for lack of subject matter jurisdiction. The trial court thereafter held a hearing on the Lessees' application for temporary injunction and the City's plea to the jurisdiction. The trial court denied the temporary injunction and the City's plea to the jurisdiction.^[1]The City took an interlocutory appeal pursuant to Section 51.014(a)(8) of the Texas Civil Practice and Remedies Code. Relying on Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (Wasson I), we concluded that the claims against the City were barred by governmental immunity because they arose from the City's governmental, rather than proprietary, acts. Consequently, we 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.^[2]

The Lessees' petitioned for review in the Texas Supreme Court. During the interim, the Supreme Court decided Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142 (Tex. 2018) (Wasson II), which held that the City's immunity from a breach of contract claim depends on "the nature of the contract, not the nature of the breach." Wasson II, 559 S.W.3d at 149. As a result, the Supreme Court remanded the case for consideration under Wasson II.^[3] On remand, we determined that the City's issuance of lakefront leases to private parties is a proprietary function, and, therefore, governmental immunity did not protect the City from the Lessees' suit for breach of the lease agreements.^[4] We affirmed the denial of the City's plea to the jurisdiction and remanded the case for further proceedings.

On remand, the City filed a motion for traditional summary judgment and asked the trial court to order that the Lessees take nothing on their tort, breach of contract, and declaratory judgment claims. The City also filed a motion for a no evidence summary judgment asserting that the Lessees had no evidence to support their breach of contract and declaratory judgment causes of action. The Lessees responded to the motions and amended their pleadings to drop the tort claims in conformity with prior representations they would not be pursuing tort claims against the City. However, before the summary judgment hearing, the Lessees amended their pleadings again to add the tort claims of statutory fraud and violations of the Deceptive Trade Practices Act (DTPA). The Terrys also filed a motion for continuance.

Following a hearing, the trial court ruled on the parties' objections to the summary judgment evidence and granted the City's motions for summary judgment. In addition to granting the summary judgments, the order contained the following paragraph:

The summary judgment ruling considers and includes the Deceptive Trade Practices and statutory fraud claims newly asserted by Plaintiffs and Intervenors against the City of Tyler, in August 2020. Additionally, the Court finds and orders that those same claims are estopped based on the prior proceedings in this case and because the City of Tyler has governmental immunity regarding such actions. This Order confirms the bench rulings previously made by Judge Rogers granting the City's Plea to the Jurisdiction regarding Plaintiffs' and Intervenors' tort claims verses (sic) the City of Tyler.

The trial court then severed the case against the City from the case against the Chatelains and granted a final judgment against the Lessees. This appeal followed.

Motion for Summary Judgment

In their first, second, third, and fourth issues, the Lessees urge the trial court erred in granting summary judgment on their breach of contract claims.

Standard of Review

Because the grant of a summary judgment is a question of law, we review the trial court's summary judgment decision de novo. See Ft. Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 837 (Tex. 2018).

In this case, the City moved for a no evidence summary judgment. See Tex. R. Civ. P. 166a(i). The motion must state the elements as to which there is no evidence, but the movant need not produce any proof in support of its no evidence claim. DeGrate v. Exec. Imprints, Inc., 261 S.W.3d 403, 407 (Tex. App.-Tyler 2008, no pet.). A no evidence summary judgment motion is properly granted if the nonmovant fails to bring forth more than a scintilla of evidence to raise a genuine fact issue as to an essential element of the nonmovant's claim on which the nonmovant would have the burden of proof at trial. Id.; see Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).

The City also moved for traditional summary judgment. To be entitled to a traditional summary judgment, a defendant must conclusively negate at least one essential element of each of the plaintiff's causes of action or conclusively establish each element of an affirmative defense. Priddy v. Rawson, 282 S.W.3d 588, 592 (Tex. App.-Houston [14th Dist.] 2009, pet. denied). When reviewing a summary judgment we "must examine the entire record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion." City of...