the City of Corinth, Texas v. Nurock Development, Inc., Nurock Corporation, NDG-Tower Ridge 1, LLC and Tower Ridge Corinth 1, Ltd.

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 2-07-422-CV

THE CITY OF CORINTH, TEXAS APPELLANT

V.

NUROCK DEVELOPMENT, INC., APPELLEES
NUROCK CORPORATION,
NDG-TOWER RIDGE 1, LLC AND
TOWER RIDGE CORINTH 1, LTD.

------------

FROM THE 362ND DISTRICT COURT OF DENTON COUNTY

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OPINION

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In this interlocutory appeal, appellant, the City of Corinth (the City),

challenges the trial court’s denial of its plea to the jurisdiction on sovereign

immunity grounds against claims asserted by appellees NuRock Development,

Inc., NuRock Corporation, NDG-Tower Ridge 1, LLC, and Tower Ridge Corinth
1, Ltd. (collectively, NuRock). We affirm in part and reverse and dismiss in part.

I. Background

This appeal arises from the City’s alleged breach of a settlement

agreement between the City and NuRock by which the parties settled NuRock’s

claims in an earlier federal lawsuit, NuRock Development, Inc. v. City of Corinth

(the Federal Action).1 In the Federal Action, NuRock sought damages and

injunctive relief from disputes stemming from NuRock’s efforts to develop and

construct an affordable housing project called Tower Ridge in Corinth (the

Apartments). NuRock claimed that the City violated both the Federal Fair

Housing Act 2 and the Texas Fair Housing Act 3 because the City’s actions

regarding the Apartments were intended to exclude families with children and

minorities. NuRock also asserted a takings claim under the Texas constitution,4

as well as a section 1983 claim.5

The April 2005 settlement agreement, as amended in July 2005 (the

Settlement Agreement), provided that NuRock would construct the Apartments

1
… No. 4:04cv277 (E.D. Tex. July 30, 2004).
2
… 42 U.S.C. §§ 3604, 3617 (2003).
3
… Tex. Prop. Code Ann. § 301.021 (Vernon 2007).
4
… Tex. Const. art. I,§ 17.
5
… 42 U.S.C. § 1983 (2003).

2
to certain specifications, that the City would acquire certain right-of-ways along

Tower Ridge Road, that NuRock would make specified improvements to Tower

Ridge Road, that NuRock would place $120,000.00 in escrow as collateral for

the improvements, and that the City would pay NuRock $120,000.00. The

parties agreed to dismiss the Federal Action and NuRock began construction of

the Apartments.

The City sued NuRock in state court in April 2006, alleging that NuRock

breached the Settlement Agreement by failing to place the funds in escrow.

NuRock filed counterclaims based on the City’s alleged breaches of the

Settlement Agreement, seeking damages, injunctive relief, and a declaratory

judgment. NuRock asserted that, despite the Settlement Agreement, the City

was interfering with and delaying construction of the Apartments, particularly

by refusing to perform inspections or issue building permits or certificates of

occupancy for the apartment buildings. At the City’s request, the trial court

realigned the parties so that NuRock was the plaintiff and the City was the

defendant.

In July 2006, the trial court entered a temporary injunction for NuRock,

which the City did not appeal. The injunction required the City to stop refusing

to issue temporary certificates of occupancy on the grounds that the Tower

Ridge Road improvements had not been completed.

3
 In June 2007, the City filed a plea to the jurisdiction alleging sovereign

immunity. The trial court denied the plea and this appeal followed.

II. Standard of Review

We review the trial court’s ruling on a plea to the jurisdiction based on

immunity from suit under a de novo standard of review. 6 In reviewing the

denial of a plea to the jurisdiction, we do not review the merits of the case. 7

When a plea to the jurisdiction challenges the pleadings, we determine if

the pleader has alleged facts that affirmatively demonstrate the court’s

jurisdiction to hear the cause. 8 We construe the pleadings liberally in favor of

the plaintiffs and look to the pleader’s intent.9 If the pleadings do not contain

sufficient facts to affirmatively demonstrate the trial court’s jurisdiction, but do

not affirmatively demonstrate incurable defects in jurisdiction, the issue is one

of pleading sufficiency and the plaintiffs should be afforded the opportunity to

6
… See Tex. Dep’t of Parks & W ildlife v. Miranda, 133 S.W.3d 217,
225–26 (Tex. 2004); City of Carrollton v. Singer, 232 S.W.3d 790, 794 (Tex.
App.—Fort Worth 2007, pet. denied).
7
… See State v. Fiesta Mart, Inc., 233 S.W.3d 50, 53–54 (Tex.
App.—Houston [14th Dist.] 2007, pet. denied) (citing Chocolate Bayou Water
Co. & Sand Supply v. Tex. Natural Res. Conservation Comm’n, 124 S.W.3d
844, 849 (Tex. App.—Austin 2003, pet. denied)).
8
… See Miranda, 133 S.W.3d at 226.
9
… Id.; Singer, 232 S.W.3d at 795.

4
amend.10 If the pleadings affirmatively negate the existence of jurisdiction, then

a plea to the jurisdiction may be granted without allowing the plaintiffs an

opportunity to amend.11 However, if a plea to the jurisdiction challenges the

existence of jurisdictional facts, we consider relevant evidence submitted by the

parties when necessary to resolve the jurisdictional issues raised, as the trial

court is required to do.12

III. Governmental Immunity

A. Settlement Agreement

In its first and second issues, the City asserts that it had immunity from

NuRock’s claims for breach of the Settlement Agreement, which settled the

Federal Fair Housing Act claim among others.13 Governmental immunity

protects governmental entities from lawsuits for damages absent legislative

consent.14 The doctrine of governmental immunity encompasses two distinct

concepts: (1) immunity from suit (barring a lawsuit unless the legislature

10
… Miranda, 133 S.W.3d at 226–27.
11
… Id at 227.
12
… Id.
13
… See 42 U.S.C. §§ 3604, 3617.
14
… See Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex. 1997);
Singer, 232 S.W.3d at 795.

5
expressly gives its consent to suit) and (2) immunity from liability (even if the

legislature has expressly given its consent to the suit). 15 “Immunity from

liability is an affirmative defense, while immunity from suit deprives a court of

subject matter jurisdiction.” 16

The City possesses immunity from suit and from liability.17 Although a

governmental entity like the City waives its immunity from liability when it

contracts with private citizens, it does not waive its immunity from suit solely

by entering into such a contract.18 Rather, express legislative consent in clear

and unambiguous language is required to show that immunity from a breach of

contract suit has been waived. 19

In Texas A & M University–Kingsville v. Lawson,20 a plurality of the

Supreme Court of Texas concluded that when a governmental entity settles a

15
… See Fed. Sign, 951 S.W.2d at 405; Singer, 232 S.W.3d at 795.
16
… Singer, 232 S.W.3d at 795 (quoting Miranda, 133 S.W.3d at 224).
17
… See Singer, 232 S.W.3d at 795; see also Fed. Sign, 951 S.W.2d at
405.
18
… See Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704, 705
(Tex. 2003); Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591,
594 (Tex. 2001).
19
… See Tex. Gov’t Code Ann. § 311.034 (Vernon Supp. 2008); Travis
County v. Pelzel & Assocs., Inc., 77 S.W.3d 246, 248 (Tex. 2002).
20
… 87 S.W.3d 518 (Tex. 2002).

6
claim for which immunity from suit has been waived, immunity from suit is also

waived for a breach of the settlement agreement.21 The plurality reasoned that

“when a governmental entity is exposed to suit because of a waiver of

immunity, it cannot nullify that waiver by settling the claim with an agreement

on which it cannot be sued.” 22

The City asserts that Lawson does not apply here because NuRock has

not pleaded in this action any state law claim in the underlying Federal Action

for which immunity was waived.23 The City reasons that the holding in Lawson

is limited to waivers of immunity by the Texas Legislature under state law, and

that because NuRock did not assert a claim in the Federal Action for which the

immunity is waived under state law, there is no basis for finding a waiver of

immunity from the settlement of the Federal Action.24

21
… Id. at 521–22.
22
… Id. at 521; see also Singer, 232 S.W.3d at 796, 799–800 (stating
that in Lawson, “the [Supreme Court of Texas] determined that a governmental
entity that has been exposed to a claim for which liability from suit has been
waived cannot regain that immunity by entering into a settlement of that
claim”(emphasis omitted)).
23
… The City also contends that because Lawson is a plurality opinion, it
is not binding and we should not follow it. Whether the City is correct or not,
this court has already elected to follow the Lawson plurality. See Singer, 232
S.W.3d at 800.
24
… The City asserts that the only state statute that could arguably have
waived its immunity in the Federal Action was the Texas Fair Housing Act, but

7
 The City’s argument is based on the concepts of federalism that are

embodied in the Eleventh Amendment to the United States Constitution.25 The

Supreme Court of the United States has stated that the Eleventh Amendment

presupposes two ideas: “first, that each State is a sovereign entity in our

federal system; and second, that ‘[i]t is inherent in the nature of sovereignty not

to be amenable to the suit of an individual without its consent.’” 26 Under the

Eleventh Amendment, the State of Texas and its agencies are immune from

claims based on federal law, whether brought in federal or state court, absent

either a clear indication by the United States Congress that it intends to

abrogate the immunity afforded to states under the Eleventh Amendment to the

federal Constitution,27 or a waiver of immunity by the Texas Legislature.28

that the Act does not actually waive immunity. See Tex. Prop. Code Ann. §§
301.001–.171 (Vernon 2007). Because of our disposition of the City’s first
and second issues, we need not and do not address this assertion. See Tex.
R. App. P. 47.1.
25
… U.S. Const. amend. XI.
26
… Alden v. Maine, 527 U.S. 706, 729, 119 S. Ct. 2240, 2254 (1999)
(quoting Hans v. Louisiana, 134 U.S. 1, 13, 10 S. Ct. 504, 506 (1890)).
27
… See, e.g., Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261, 279,
117 S. Ct. 2028, 2039 (1997) (explaining that state is not immune from claim
for damages under federal Title VII because Congress can abrogate Eleventh
Amendment immunity when exercising remedial powers under section five of
Fourteenth Amendment); Univ. of Tex. at El Paso v. Herrera, 281 S.W.3d 575,
579 (Tex. App.—El Paso Nov. 25, 2008, pet. filed) (“Federal courts have no
jurisdiction over federal or state law claims against a state or state agency

8
 Eleventh Amendment immunity, however, does not extend to

municipalities. “[T]he [United States Supreme] Court has consistently refused

to construe the [Eleventh] Amendment to afford protection to political

subdivisions such as counties and municipalities, even though such entities

exercise a ‘slice of state power.’” 29 Accordingly, notwithstanding the fact that

the State may enjoy immunity from Federal Fair Housing Act claims, the City

has no immunity from such claims.30

unless Eleventh Amendment immunity has been expressly waived by the state
or abrogated by Congress pursuant to proper constitutional authority.”) (citing
Hoff v. Nueces County, 153 S.W.3d 45, 48 (Tex. 2004)).
28
… See, e.g., Tex. A & M. Univ. Sys. v. Koseoglu, 233 S.W.3d 835,
838–39 (Tex. 2007) (holding that because state has not waived immunity from
money damages against federal claim based on § 1983, Lawson is not
implicated by claim that state official breached agreement settling § 1983
claim).
29
… Lake Country Estates, Inc. v. Tahoe Reg’l Planning Agency, 440 U.S.
391, 401, 99 S. Ct. 1171, 1177 (1979); see also Lincoln County v. Luning,
133 U.S. 529, 530, 10 S. Ct. 363, 363 (1890) (concluding that Eleventh
Amendment immunity extends only to States, not to counties or municipal
corporations).
30
… See Howlett v. Rose, 496 U.S. 356, 376–77, 110 S. Ct. 2430,
2443 (1990) (holding that state law sovereign immunity defense is not available
to school board in § 1983 action brought in state court that otherwise has
jurisdiction when such defense would not be available if action were brought
in federal court); see also Keith v. Volpe, 858 F.2d 467, 482 (9th Cir. 1988)
(citing U.S. v. City of Parma, 661 F.2d 562, 572 (6th Cir. 1981), cert. denied,
456 U.S. 926 (1982)); People Helpers, Inc. v. City of Richmond, 789 F. Supp.
725, 734 (E.D. Va. 1992) (“[M]unicipalities are ‘persons’ who can be sued
under the [federal] Fair Housing Act.”).

9
 Therefore, because the City has no immunity against NuRock’s Federal

Fair Housing Act claims, and, because the City is not immune from a claim for

breach of an agreement settling a claim for which it has no immunity, we hold

that the City is not immune from NuRock’s claim for breach of the Settlement

Agreement.31 We overrule the City’s first and second issues.

B. Inverse Condemnation

In its third issue, the City argues that the trial court did not have

jurisdiction over NuRock’s exaction-type inverse condemnation claim because

NuRock agreed to make the improvements to Tower Ridge Road which are the

basis of its takings claim. The City concedes that it does not have immunity

from a valid takings claim.32 But, when the government entity’s taking is

pursuant to colorable contract rights, it does not constitute a compensable

taking under article I, section 17 of the Texas constitution.33

It is undisputed that the Tower Ridge Road construction was part of the

consideration NuRock voluntarily promised to provide in the context of the

31
… See Koseoglu, 233 S.W.3d at 838–39 (suggesting that breach of
settlement claim based on agreement settling federal claim for which immunity
was waived would implicate Lawson).
32
… See Gen. Servs. Comm’n, 39 S.W.3d at 598.
33
… See State v. Holland, 221 S.W.3d 639, 644 (Tex. 2007); see Tex.
Const. art. I, §17.

10
Settlement Agreement. Thus, the City accepted the improvements NuRock

made to the road under color of its contract with NuRock, and not pursuant to

its powers of eminent domain. The City is, therefore, not subject to liability

under article I, section 17 of the Texas constitution.34

NuRock contends, however, that because the City breached the

Settlement Agreement before the improvements were made, the agreement

was no longer enforceable, and, therefore, the City’s requirements that the

improvements be completed constitute an illegal taking. But, the City’s alleged

breach of the agreement is immaterial to whether the City had the requisite

intent to take the improvements when the agreement was executed.35 While

the City’s alleged breach may have excused NuRock from making the

improvements, 36 it does not alter the fact that the improvements were agreed

to well before the alleged breach occurred.37 We sustain the City’s third issue.

34
… See State v. Holland, 221 S.W.3d at 644.
35
… See id. at 643 (holding that focus is whether the state has the
“requisite intent” to take property for public use when the contract is formed).
36
… See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195,
196 (Tex. 2004) (“It is a fundamental principle of contract law that when one
party to a contract commits a material breach of that contract, the other party
is discharged or excused from further performance.”).
37
… NuRock contends that Town of Flower Mound v. Stafford Estates,
Ltd., 135 S.W.3d 620 (Tex. 2004), compels a different result because the
Texas Supreme Court permitted the developer in that case to maintain a takings

11
C. Declaratory and Injunctive Relief

In its fourth issue, the City asserts that the trial court should have

dismissed NuRock’s claims for declaratory and injunctive relief.

1. Declaratory Relief

The Uniform Declaratory Judgments Act 38 does not extend the jurisdiction

of Texas courts; it only provides a procedure by which a trial court may

“decid[e] cases already within [the] court’s jurisdiction.” 39 Thus, a declaratory

judgment claim can be maintained only where there is a justiciable controversy

between the parties as to their rights and status that the declaration would

actually resolve. 40

The Supreme Court of Texas has distinguished between suits against

governmental units in which a party seeks a declaration to clarify rights under

cause of action even though the developer “voluntarily” completed the roadway
improvements and transferred them to the town. Contrary to NuRock’s reading
of Stafford, however, the developer’s construction of the improvements in that
case was not voluntary, but, instead, was made under protest “at every
administrative level in the Town.” Id. at 624.
38
… See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001–.011 (Vernon
2008).
39
… Chenault v. Phillips, 914 S.W.2d 140, 141 (Tex. 1996) (quoting
State v. Morales, 869 S.W.2d 941, 947 (Tex. 1994)); see also Tex. Civ. Prac.
& Rem. Code Ann. §§ 37.001–.011.
40
… See Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440,
446 (Tex. 1993).

12
a statute or regulation, for which the Declaratory Judgments Act provides a

waiver of immunity, and suits in which the request for declaratory relief is no

more than a recasting of a claim for money damages, for which the Act does

not provide a waiver of immunity.41

NuRock asserts that it is seeking declaratory relief to construe a

legislative act by the City and attempts to categorize the Settlement Agreement

as the equivalent of a statute or municipal ordinance. We disagree. The

Settlement Agreement, however, is a contract, not a statute. Statutes or

ordinances enacted by legislative bodies are designed to address broad

questions of public policy and to promulgate laws that those subject to the

government’s power must follow in future conduct.42 The Settlement

41
… Compare Tex. Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex.
1994) (holding that court had jurisdiction where plaintiff sought declaratory
judgment challenging state agency’s construction of compulsory school
attendance law), with Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74
S.W.3d 849, 859–60 (Tex. 2002) (plurality op.) (holding that court lacked
jurisdiction where plaintiff sought declaration that state agency breached
contract, as such claim was “only . . . an attempt to have the trial court decide
its breach-of-contract claim [for which immunity was not waived]”); see also
de Miño v. Sheridan, 176 S.W.3d 359, 368 (Tex. App.—Houston [1st Dist.]
2004, no pet.) (concluding that request for declaratory relief “merely recast[]
[plaintiff’s] defamation claims” and, therefore, was “not within the proper scope
of an action for declaratory relief”).
42
… See Macias v. Rylander, 995 S.W.2d 829, 833 (Tex. App.—Austin
1999, no pet.) (“Generally, an administrative agency acts in a legislative
capacity when it addresses broad questions of public policy and promulgates
rules for future application ‘to all or some part of those subject to its power.’”).

13
Agreement clearly lacks these characteristics. Instead, it memorializes a

specific act to resolve a specific, isolated dispute between specific parties. It

establishes no rule or law that all members of the public must adhere to in

future conduct. 4 3 Thus, the Settlement Agreement involves the construction

of a contract, not the interpretation of a statute.

NuRock sought declaratory relief that it did not materially breach the

Settlement Agreement or otherwise fail to meet its obligations to the City. This

is not a permissible use of the Declaratory Judgments Act.44 Consequently, the

City’s immunity is not waived as to NuRock’s Declaratory Judgments Act

claim.45

2. Injunctive Relief

NuRock also sought permanent injunctive relief against the City.

Specifically, it asked that the City be ordered “[t]o cease and desist from

43
… See Beacon Nat’l Ins. Co. v. Montemayor, 86 S.W.3d 260, 268–69
(Tex. App.—Austin 2002, no pet.) (holding declaratory judgment action not
available to insurer because series of letters and draft consent decree are not
a “rule” for purposes of statute authorizing declaratory judgment action to
construe agency rules); Macias, 995 S.W.2d at 833 (“In determining whether
an administrative agency was acting in a legislative or judicial capacity, we ask
whether the administrative action implements broad public policy or concerns
only the parties immediately affected.”).
44
… See IT-Davy, 74 S.W.3d at 855–56; de Miño, 176 S.W.3d at 368.
45
… See IT-Davy, 74 S.W.3d at 855–56.

14
arbitrarily and capriciously applying the ordinances and variances therefrom of

the City of Corinth.” The City contends that the injunctive relief NuRock sought

regarding the City’s approval of certificates of occupancy for the Apartments

is not ripe and, therefore, the trial court had no jurisdiction to grant the relief.

NuRock contends that because the City failed to challenge NuRock’s request

for injunctive relief in its plea and supplemental plea to the jurisdiction, the City

cannot seek relief from that request in this appeal.46 We disagree.

Ripeness implicates subject matter jurisdiction.47 This court is obligated

to consider subject matter jurisdiction, even when it was not raised in the trial

court or asserted by either party on appeal.48

46
… See City of Dallas v. VSC, LLC, 242 S.W.3d 584, 598 (Tex.
App.—Dallas 2008, pet. filed) (holding that appellate court has interlocutory
jurisdiction only to consider issues that were raised in plea to jurisdiction).
47
… See, e.g., Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928
(Tex. 1998), cert. denied, 526 U.S. 1144 (1999).
48
… See Tex. Ass’n of Bus., 852 S.W.2d at 445–46; see also Waco
Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850–51 (Tex. 2000) (holding that
jurisdictional grounds not raised in plea to jurisdiction can be raised for first time
on interlocutory appeal); see also Dominguez v. City of Fort Worth, No. 02-06-
00196-CV, 2008 WL 623583, at *3 & n.16 (Tex. App.–Fort Worth Mar. 6,
2008, pet. denied) (mem. op.) (considering immunity argument raised for first
time in interlocutory appeal and noting that “[g]enerally, a challenge to subject
matter jurisdiction may be raised at any time”).

15
 A case is ripe when facts have developed sufficiently that an injury has

occurred or is likely to occur.49 A case is not ripe if the injury is contingent or

remote.50 The possibility of future arbitrary and capricious conduct concerning

the Apartments is too remote to support a claim for a permanent injunction.

Accordingly, we conclude that NuRock’s request for a permanent injunction is

not ripe and, therefore, that the trial court lacked jurisdiction over that request.

We sustain the City’s fourth issue.

D. Attorney’s Fees

In its fifth issue, the City asserts that NuRock is not entitled to attorney’s

fees under either its declaratory judgment or its breach of the Settlement

Agreement claims. We agree. Because we conclude that NuRock’s declaratory

judgment claim must be dismissed, there is no basis for NuRock to recover fees

pursuant to the Declaratory Judgments Act.51

49
… Patterson v. Planned Parenthood of Houston & Se. Tex., Inc., 971
S.W.2d 439, 442 (Tex. 1998).
50
… Id.
51
… See OAIC Commercial Assets, L.L.C. v. Stonegate Village, L.P., 234
S.W.3d 726, 746 (Tex. App.—Dallas 2007, pet. denied) (holding that where
party lacked standing to bring declaratory judgment action, party could not
recover attorney’s fees under Declaratory Judgments Act); Cytogenix, Inc. v.
Waldroff, 213 S.W.3d 479, 490 (Tex. App.—Houston [1st Dist.] 2006, pet.
denied) (holding that party may not recover attorney’s fees under Declaratory
Judgments Act where claim for declaratory relief mirrored breach of contract
claim).

16
 NuRock, however, asserts that it may recover attorney’s fees under

section 38.001(8) of the Texas Civil Practice and Remedies Code. 52 This

section provides that “[a] person may recover reasonable attorney’s fees from

an individual or corporation . . . if the claim is for . . . an oral or written

contract.” 53 NuRock asserts that the City is “an individual” for purposes of

section 38.001(8). We disagree.

“Individual” is not defined in section 38.001 or in the Code Construction

Act. Webster’s Third New International Dictionary defines “individual” to mean

“a single human being as contrasted with a social group or institution.” 54

”Person,” on the other hand, is defined broadly in the Code Construction Act

to include governmental entities.55

In light of the definition the legislature has given the word “person” in the

Code Construction Act, the fact that the legislature chose to use the word

“individual” in section 38.001, instead of the word “person,” indicates a clear

52
… See Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (Vernon 2008).
53
… Id.(emphasis supplied).
54
… Webster’s Third New International Dictionary 1152 (2002).
55
… See Tex. Gov’t Code Ann. § 311.005(2) (Vernon 2005) (“‘Person’
includes corporation, organization, government or governmental subdivision or
agency, business trust, estate, trust, partnership, association, and any other
legal entity.”).

17
legislative intent to exclude government entities from those against whom

attorney’s fees may be recovered under the statute. Moreover, the legislature

expressly exempted municipalities from being a “corporation” under section

38.001.56 It would be incongruous to conclude that the legislature,

nonetheless, meant to implicitly include municipalities under the term

“individual.” Accordingly, we hold that section 38.001(8) does not authorize

recovery of attorney’s fees by NuRock against the City. The City’s fifth issue

is sustained.

Conclusion

The City is not immune from NuRock’s claims for breach of the

Settlement Agreement. The trial court, therefore, properly denied the City’s

plea to the jurisdiction as to this claim. The trial court erred, however, by

denying the City’s plea as to NuRock’s takings claim, requests for declaratory

and injunctive relief, and for attorney’s fees. Accordingly, we affirm that part

of the trial court’s order denying the City’s plea to the jurisdiction as to

NuRock’s breach of Settlement Agreement. We reverse that part of the order

56
… See Tex. Loc. Gov’t Code Ann. § 5.904(a) (Vernon 2008) (“A
municipality may not be considered a corporation under a state statute
governing corporations unless the statute extends its application to a
municipality by express use of the term ‘municipal corporation,’ ‘municipality,’
‘city,’ ‘town,’ or ‘village.’”).

18
denying the City’s plea as to NuRock’s takings claim, requests for declaratory

and injunctive relief, and for attorney’s fees, and dismiss those claims.

JOHN CAYCE
CHIEF JUSTICE

PANEL: CAYCE, C.J.; LIVINGSTON, J.; and DIXON W. HOLMAN (Senior
Justice, Retired, Sitting by Assignment).

LIVINGSTON, J. filed a concurring opinion.

DELIVERED: July 30, 2009

19
 COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 2-07-422-CV

THE CITY OF CORINTH, TEXAS APPELLANT

V.

NUROCK DEVELOPMENT, INC.,
NUROCK CORPORATION,
NDG-TOWER RIDGE 1, LLC AND
TOWER RIDGE CORINTH 1, LTD. APPELLEES

------------

FROM THE 362ND DISTRICT COURT OF DENTON COUNTY

------------

CONCURRING OPINION

------------

I concur in the result reached by the majority, but I write separately to

clarify and express disagreement with some of the statements contained in the

majority opinion and to emphasize that the majority’s holding does not affect

the precedent established by a previous opinion from our court, City of

Carrollton v. Singer. 232 S.W.3d 790, 800 (Tex. App.—Fort Worth 2007, pet.

denied) (following Tex. A&M Univ.-Kingsville v. Lawson, 87 S.W.3d 518,
522–23 (Tex. 2002) (holding that when a governmental entity is exposed to

suit because of a waiver of immunity, it cannot settle that suit and

subsequently deny waiver of immunity for enforcement thereof)).

Chapter 271 of the local government code

The majority opinion acknowledges that governmental entities like Corinth

waive immunity from liability when they enter into contracts with private

citizens. Majority op. at 6. And discussing a city’s immunity from suit, the

majority observes that governmental entities do not automatically waive

immunity from suit simply by entering into contracts. Id.; see Catalina Dev.,

Inc. v. County of El Paso, 121 S.W.3d 704, 705 (Tex. 2003).

However, under chapter 271 of the local government code, when a party

provides goods or services to a local government, the local government waives

immunity from suit as well for the purpose of adjudicating a claim for breach of

the contract if the contract is properly authorized and executed. See Tex. Loc.

Gov’t Code Ann. §§ 271.151–.152 (Vernon 2005);1 Singer, 232 S.W.3d at

1
… The waiver of immunity for a claim under chapter 271 applies
retroactively to contracts executed before the effective date of the statute,
September 1, 2005, if sovereign immunity had not been waived with respect
to the claim before that date. See Tex. Loc. Gov’t Code Ann.
§§ 271.152–.154 historical note (Vernon 2005) [Act of May 23, 2005, 79th
Leg., R.S., ch. 604, § 2, 2005 Tex. Gen. Laws 1548, 1549]; Tooke v. City of
Mexia, 197 S.W.3d 325, 344–45 (Tex. 2006); Boyer, Inc. v. Trinity River
Auth. of Tex., 279 S.W.3d 354, 358 (Tex. App.—Fort Worth 2008, pet. filed).

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795 n.4. The majority failed to note this statutory exception in its broad

statement regarding lack of immunity from suit in breach of contract claims.

While NuRock did not explicitly rely on chapter 271 as a basis for its argument

about Corinth’s waived immunity, several courts, including our supreme court,

are remanding cases where chapter 271 likely applies.

For example, the Dallas Court of Appeals remanded two different cities’

firefighters’ cases against Grand Prairie and Dallas, respectively, to allow the

trial court an opportunity to determine whether sections 271.151–.160 might

apply. See Bell v. City of Grand Prairie, 221 S.W.3d 317, 323 n.4 (Tex.

App.—Dallas 2007, no pet.) (op. on reh’g); City of Dallas v. Albert, 214 S.W.3d

631, 636–37 (Tex. App.—Dallas 2006, pet. filed) (op. on reh’g); see also City

of Houston v. Clear Channel Outdoor, Inc., 197 S.W.3d 386, 386–87 (Tex.

2006) (holding that remand is proper to give the proponent of waiver of

immunity an opportunity to argue that chapter 271 applies because it applies

retroactively); McMahon Contracting, L.P. v. City of Carrollton, 197 S.W.3d

387 (Tex. 2006) (same).

I recognize that the cited cases were in the appellate process when the

revisions to chapter 271 took place, as opposed to this case, which was not

even filed until after its effective date. However, we should not ignore the

posture of this case when filed: Corinth was the original plaintiff for the very

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breach of contract action—breach of the Settlement Agreement—it now seeks

to avoid. Corinth first filed suit in April 2006. At the time NuRock filed its

answer, Corinth had not challenged jurisdiction. And by the time Corinth first

asserted its plea to the jurisdiction, in June 2007, all pleadings were on file and

discovery was complete.

Furthermore, the issue regarding the applicability of chapter 271 was

before the trial court regardless. Corinth raised its applicability in its plea to the

jurisdiction, in its seconded amended answer, and in its alternative motion for

summary judgment. In fact, Corinth alternatively asserted that section

271.153(b) could apply, which could serve to protect Corinth from some of the

damages it claimed would be excluded by the chapter itself. See Tex. Local

Gov’t Code Ann. § 271.153(b) (Vernon 2005) (excluding consequential and

exemplary damages from recovery under chapter 271). On this record, we can

not tell whether the trial court applied this statute when it denied Corinth’s plea

to the jurisdiction.

The majority opinion only concedes lack of immunity on one theory: that

the underlying suit was based upon breaches of the Federal Fair Housing Act

wherein a state’s immunity from suit is maintained but a city’s immunity from

suit is not. Majority op. at 9. In affirming the trial court’s judgment denying

Corinth’s plea to the jurisdiction, I would also instruct the trial court to

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determine the applicability of this statute on waiver of immunity from suit. See

Tex. Loc. Gov’t Code Ann §§ 271.151–.160.

The effect of the dismissal of Corinth’s affirmative claims

NuRock also cited Reata Construction Corporation v. City of Dallas

(“Reata II”) to argue that Corinth waived its immunity against NuRock’s claim

for a breach of the settlement agreement by asserting its own monetary claim

for a breach of that agreement. 197 S.W.3d 371, 376–77 (Tex. 2006).

Corinth responded by stating that it has withdrawn all of its claims for

affirmative relief and that the reasoning of Reata II, which allows private parties

to assert otherwise immunity-barred claims as offsets against a governmental

entity’s recovery, cannot therefore apply. Id. at 377. Although the majority did

not discuss the effect of Reata II, I disagree with the notion that a

governmental entity may totally regain immunity that it has lost through filing

affirmative claims by simply dismissing or nonsuiting those claims much later

in the litigation; such a process would allow the entity to participate in litigation

without any risk of loss and flies in the face of the supreme court’s procedural

rules and related case law. See Tex. R. Civ. P. 162 (stating a dismissal shall

not prejudice the right of an adverse party regarding a pending claim for relief

or the right of the trial court to tax costs); Reynolds v. Murphy, 266 S.W.3d

141, 145 (Tex. App.—Fort Worth 2008, pet. denied); see also Joachim v.

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Travelers Ins. Co., 279 S.W.3d 812, 815 (Tex. App.—Amarillo 2008, pet.

filed). But see City of Dallas v. Albert, 214 S.W.3d 631, 636 (Tex.

App.—Dallas 2006, pet. filed and briefing proceeding in the Supreme Court of

Texas) (op. on reh’g) (holding that “the City’s now withdrawn counterclaims

cannot form the basis of the trial court’s jurisdiction”); cf. City of Dallas v.

Saucedo-Falls, 172 S.W.3d 703, 708 (Tex. App.—Dallas 2005), rev’d, 218

S.W.3d 79 (Tex. 2007).

For these reasons, I agree with the majority’s disposition of Corinth’s first

and second issues by overruling them, but I disagree with the limited basis upon

which that disposition was reached.

The continuing validity of our Singer opinion

As the majority notes, a governmental entity may waive immunity from

suit by entering and breaching an agreement that settles a claim for which the

entity did not have immunity. Lawson, 87 S.W.3d at 518, 522–23; see

majority op. at 7. For instance, when a governmental entity enters into a

contract under the threat of and in lieu of condemnation proceedings, for which

the entity does not have immunity, the entity does not have immunity for a

breach of that contract. Singer, 232 S.W.3d at 798–800. I agree with the

majority’s expression in its resolution of Corinth’s third issue that a

governmental entity’s act under colorable contract rights alone cannot be a

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taking and that immunity applies in such a situation, but I note that the inverse

circumstance—where the entity enters a contract with a threat of a colorable

taking—does not maintain immunity for a breach of a contract that resolves the

threat. See majority op. at 11; State v. Holland, 221 S.W.3d 639, 644 (Tex.

2007); Singer, 232 S.W.3d at 800.

The ripeness of NuRock’s claim for injunctive relief

Finally, I cannot agree with the majority that NuRock’s claim for injunctive

relief is not ripe for adjudication. See majority op. at 14–16. The majority

holds that the “possibility of future arbitrary and capricious conduct concerning

the Apartments is too remote to support a claim for a permanent injunction.”

Id. at 16. But the prevention of imminent, nonspeculative future conduct is

indeed a valid purpose of an injunction, and ripeness only requires a showing

that an injury is likely to occur. See Patterson v. Planned Parenthood of

Houston & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998); Democracy Coal.

v. City of Austin, 141 S.W.3d 282, 296 (Tex. App.—Austin 2004, no pet.).

Preceding NuRock’s request in its pleading that Corinth and its

representatives be enjoined from arbitrarily and capriciously applying Corinth’s

ordinances and variances, NuRock alleged that its construction and leasing of

its apartments had already been delayed because, in summary, (1) Corinth

arbitrarily canceled and refused to perform inspections, (2) Corinth refused to

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issue permits and certificates of occupancy for reasons not contemplated by

and in contravention to the parties’ agreement settling their federal case, and

(3) Corinth refused to meet with NuRock’s representatives about issues related

to NuRock’s construction. And contrary to a statement in Corinth’s reply brief,

NuRock did plead “immediate and irreparable injury” based on Corinth’s

allegedly wrongful continued interference in NuRock’s development project.

I believe that NuRock’s pleading, when construed liberally as required by

our standard of review, provided the trial court with a sufficient basis to

determine that an injury was likely to occur by similar future conduct by

Corinth, and I would hold that whether the allegations comprise the type of

harm that would entitle NuRock to injunctive relief concerns the merits of

NuRock’s claim, not the ripeness of the claim. See Hays County v. Hays

County Water Planning P’ship, 69 S.W.3d 253, 260 (Tex. App.—Austin 2002,

no pet.); cf. Tex. Bay Cherry Hill, L.P. v. City of Fort Worth, 257 S.W.3d 379,

394 (Tex. App.—Fort Worth 2008, no pet.) (concluding that a claim for an

injunction against an eminent domain action was not ripe because the City of

Fort Worth expressly stated that it would not exercise its eminent domain

authority); Coble v. City of Mansfield, 134 S.W.3d 449, 458 (Tex. App.—Fort

Worth 2004, no pet.) (holding that a regulatory taking claim was not ripe

because the City of Mansfield had not acted to apply its ordinance at issue to

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specific property). However, because I believe that the majority’s decision to

dismiss appellees’ injunctive relief claim against Corinth is supported by an

independent ground argued by Corinth in its brief (related to the proper

governmental defendant for injunctive relief when the injunction does not

involve constitutional violations), I concur with the majority’s disposition

overruling that claim. See City of Elsa v. M.A.L., 226 S.W.3d 390, 391–92

(Tex. 2007); City of Alton v. Sharyland Water Supply Corp., 277 S.W.3d 132,

156 (Tex. App.—Corpus Christi 2009, pet. filed) (op. on reh’g); Meroney v. City

of Colleyville, 200 S.W.3d 707, 711 (Tex. App.—Fort Worth 2006, pet.

granted, judgm’t vacated w.r.m.).

For the reasons stated, I concur only with the majority’s judgment and its

disposition of this appeal.

TERRIE LIVINGSTON
JUSTICE

DELIVERED: July 30, 2009

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