The City of Wesbster, Texas ("Webster") v. The City of Houston, Texas--Appeal from 334th District Court of Harris County

Affirmed in Part, Reversed and Remanded in Part and Memorandum Opinion filed April 19, 2005

Affirmed in Part, Reversed and Remanded in Part and Memorandum Opinion filed April 19, 2005.

In The

Fourteenth Court of Appeals

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NO. 14-04-00353-CV

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THE CITY OF WEBSTER, TEXAS, Appellant

V.

THE CITY OF HOUSTON, TEXAS, Appellee

On Appeal from the 334th District Court

Harris County, Texas

Trial Court Cause No. 03-06156

M E M O R A N D U M O P I N I O N

On January 10, 2001, appellee, the City of Houston, Texas, passed an ordinance annexing property in the overlapping extraterritorial jurisdictions of Houston and appellant, the City of Webster, Texas. On February 4, 2003, Webster sought a declaratory judgment, requesting that the court declare the parties rights and obligations with respect to the property in question. Webster later added a claim for breach of contract, asserting it was entitled to the property under an alleged 1972 contract between Houston and Webster apportioning the property. The trial court granted partial summary judgment on the declaratory judgment claim based on the statute of limitations, and the trial court later dismissed the breach of contract claim based on sovereign immunity.

In five issues, Webster asserts (1) the trial court erred in granting Houston s plea to the jurisdiction because Houston s immunity from suit has been waived and (2) the trial court erred in granting summary judgment on the declaratory judgment claim because the annexation was invalid as a matter of law and Houston is equitably estopped from asserting a limitations defense. Because we find that Houston s immunity from suit has been waived, we reverse the trial court s order granting Houston s plea to the jurisdiction and remand for further proceedings consistent with this opinion as to Webster s breach of contract claim. Because we further find that the declaratory judgment action was untimely, we affirm the trial court s order dismissing the declaratory judgment claim.

Immunity from Suit

In Texas, sovereign immunity protects the state against lawsuits for damages unless the state has consented to suit. Tex. Dep t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex. 2004). Cities, as political subdivisions of the state, are entitled to immunity unless it has been waived. San Antonio Indep. Sch. Dist. v. McKinney, 936 S.W.2d 279, 283 (Tex. 1996). Sovereign immunity encompasses two distinct principles: immunity from suit and immunity from liability. Miranda, 133 S.W.3d at 224. While immunity from liability is an affirmative defense, immunity from suit deprives a court of subject matter jurisdiction. Id. Because it affects the court s jurisdiction, immunity from suit, unlike immunity from liability, is properly raised in a plea to the jurisdiction. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003).

In its first issue, Webster argues that section 51.075 of the Local Government Code waives Houston s immunity from suit in breach of contract cases. Section 51.075, which apples to home-rule municipalities such as Houston, provides that [t]he municipality may plead and be impleaded in any court. Tex. Loc. Gov t Code Ann. 51.075 (Vernon 1999). In City of Houston v. Clear Channel Outdoor, Inc., No. 14-03-00022-CV, __ S.W.3d __, 2004 WL 63561, at *4 (Tex. App. Houston [14th Dist.] Jan. 15, 2004, pet. filed), this court analyzed section 51.075 and determined that it constituted a waiver of immunity from suit in a breach of contract action. Houston argues that Clear Channel was wrongly decided, but we are bound by principles of stare decisis to follow it. See Guest v. Cochran, 993 S.W.2d 397, 404 n.6 (Tex. App. Houston [14th Dist.] 1999, no pet.) ( We are, however, bound by prior opinions issued by this court. ). Thus, we hold that because Houston s immunity from suit has been waived, the trial court erred in granting its plea to the jurisdiction as to Webster s breach of contract claim. We sustain Webster s first issue.[1]

Limitations

Generally, a municipality s extraterritorial jurisdiction may not be reduced without its consent. See Tex. Loc. Gov t Code Ann. 42.023 (Vernon 1999). Webster contends that Houston s annexation of its extraterritorial jurisdiction is invalid because it did not first obtain Webster s consent. Relying on chapter 43 of the Local Government Code, Houston argues that Webster s challenge is untimely because it annexed the property on January 10, 2001, but Webster did not file its declaratory judgment claim until February 4, 2003, more than two years later. The trial court agreed and granted partial summary judgment based on limitations. In its fourth issue, Webster contends this was error. We disagree.

At the time Houston annexed the property in 2001, section 43.901 of the Local Government Code provided:

A municipal ordinance defining boundaries of or annexing area to a municipality is conclusively presumed to have been adopted with the consent of all appropriate persons if:

(1) two years have expired after the date of the adoption of the ordinance; and

(2) an action to annul or review the adoption of the ordinance has not been initiated in that two-year period.

Act of May 1, 1987, 70th Leg., R.S., ch. 149, 1, sec. 43.901,1987 Tex. Gen. Laws 707, 766 (amended 2001) (current version at Tex. Loc. Gov t Code Ann. 43.901 (Vernon Supp. 2004 2005)).[2] The Texas Supreme Court has ruled that section 43.901 bars a municipality s challenge to another municipality s annexation of its extraterritorial jurisdiction if not brought within two years. City of Murphy v. City of Parker, 932 S.W.2d 479, 480 (Tex. 1996). Webster asserts that the majority opinion in City of Murphy was wrongly decided. However, we are bound to follow supreme court precedent and do so in holding that Webster s declaratory judgment claim contesting Houston s annexation of its extraterritorial jurisdiction, which was brought more than two years later, is barred by limitations. Accordingly, we overrule Webster s fourth issue.

Equitable Estoppel

Webster asserts in its fifth issue that Houston is equitably estopped from asserting a limitations defense in this case. Webster provides no citations to the record or argument explaining its theory but merely asserts that [t]he evidence submitted by Webster in response to Houston s motion for summary judgment clearly meets each element of the standard for equitable estoppel. Thus, Webster has waived this argument because of inadequate briefing. See Tex. R. App. P. 38.1(h); Melendez v. Exxon Corp., 998 S.W.2d 266, 280 (Tex. App. Houston [14th Dist.] 1999, no pet.). We overrule Webster s fifth issue.

The trial court s order granting Houston s plea to the jurisdiction is reversed and remanded for proceedings consistent with this opinion. The trial court s order dismissing Webster s declaratory judgment claim is affirmed.

/s/ Leslie Brock Yates

Justice

Judgment rendered and Memorandum Opinion filed April 19, 2005.

Panel consists of Justices Yates, Anderson, and Hudson.

[1] Because we hold that section 51.075 waives Houston s immunity from suit, we need not address Webster s other argument in its first issue that Houston s City Charter waives its immunity from suit or Webster s second and third issues in which it contends that Houston waived immunity from suit by its conduct.

[2] In 2001, the statute was amended to exclude from this presumption of consent another municipality. Tex. Loc. Gov t Code Ann. 43.901 (Vernon Supp. 2004 2005). However, this change does not apply to a municipal annexing ordinance that was adopted before the effective date of the act. Act of May 15, 2001, 77th Leg., R.S., ch. 401, 2, 2001 Tex. Gen. Laws 733, 734. Because Houston passed its annexing ordinance on January 10, 2001 and because the act was not effective until September 1, 2001, see 2001 Tex. Gen. Laws at 734, the amended statute does not apply in this case.