United Water Services, Inc. v. the City of Houston

Opinion issued April 29, 2004

In The

Court of Appeals

For The

First District of Texas

NO. 01-02-01057-CV

____________

UNITED WATER SERVICES, INC., Appellant

V.

THE CITY OF HOUSTON, Appellee

On Appeal from the 280th District Court

Harris County, Texas

Trial Court Cause No. 2001-60189

O P I N I O N

In this governmental immunity case, United Water Services, Inc. (“United

Water”) appeals the trial court’s order granting the City of Houston’s (“the City”)

plea to the jurisdiction. Of the two issues presented by United Water in this breach

of contract case, the dispositive issue that we address is whether article II, section 1

of the City’s charter expressly and unambiguously waives the City’s immunity from

suit.

We reverse and remand.

Background

The City contracted with United Water to operate and maintain a water

purification plant. After the contract’s term expired, the City claimed that United

Water had breached the contract and refused to pay United Water for the services that

United Water had provided under the contract. The City also submitted a claim to

Continental Insurance Company (“CNA”), the surety that issued a performance bond

on the contract, asserting that United Water’s breach of contract had caused the City

to incur damages.

United Water filed the underlying suit against the City, alleging breach of

contract and seeking in excess of $900,000 in damages. United Water also sought a

declaratory judgment that it did not breach the contract. The City filed a counterclaim

against United Water for breach of contract and also filed a separate suit against CNA

in federal court.

The City then filed a plea to the jurisdiction, asserting that it was immune from

suit. In response, United Water amended its petition, alleging that the Legislature

waived the City’s immunity by enacting Local Government Code section 51.075,

which states with regard to home-rule cities, “The municipality may plead and be

impleaded in any court.”

United Water further asserted that the language in the

City’s charter, which states that the City “may sue and be sued . . . implead and be

impleaded in all courts and places and in all matters whatever . . . .,”

also waived the

City’s immunity from suit. Additionally, United Water asserted that the City waived

immunity from suit by filing its counter-claim in the instant suit and by filing suit

against CNA in federal court. Alternatively, United Water argued that the City

waived suit by accepting the benefits of the contract.

The trial court granted the City’s plea to the jurisdiction and dismissed United

Water’s claims for want of subject matter jurisdiction.

United Water appeals the trial

court’s order.

Standard and Scope of Review

Subject-matter jurisdiction is essential for a court to have the authority to

resolve a case. Tex. Ass’n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 443 (Tex.

1993). The plaintiff has the burden to plead facts affirmatively showing that the trial

court has subject-matter jurisdiction. Id. at 446 . A party may challenge a court’s

subject-matter jurisdiction by filing a plea to the jurisdiction. See Tex. Dep’t of

Transp. v. Jones , 8 S.W.3d 636, 638-39 (Tex. 1999). As a question of law, we review

the trial court’s ruling on such a plea de novo. Mayhew v. Town of Sunnyvale , 964

S.W.2d 922, 928 (Tex. 1998). In conducting this de novo review, we do not look at

the merits of the plaintiff’s case but consider only the plaintiff’s pleadings and the

evidence pertinent to the jurisdictional inquiry. County of Cameron v. Brown , 80

S.W.3d 549, 555 (Tex. 2002). We construe the pleadings liberally in favor of

conferring jurisdiction. Tex. Dept. of Transp. v. Ramirez , 74 S.W.3d 864, 867 (Tex.

2002).

General Principles of Sovereign Immunity

Sovereign immunity protects the State, its agencies and officials, and political

subdivisions of the State from suit, unless immunity from suit has been waived. Gen.

Servs. Comm’n v. Little-Tex Insulation Co. , 39 S.W.3d 591, 594 (Tex. 2001). The

sovereign immunity of the State inures to the benefit of a municipality insofar as the

municipality engages in the exercise of governmental functions, except when that

immunity has been waived.

See Fort Worth Indep. Sch. Dist. v. City of Fort Worth ,

22 S.W.3d 831, 840 (Tex. 2000); City of Tyler v. Likes , 962 S.W.2d 489, 501 (Tex.

1997); see also City of Houston v. Rushing , 39 S.W.3d 685, 686 (Tex.

App.—Houston [1st Dist.] 2001, pet. denied) (stating, “The City of Houston, as a

home-rule municipality, is generally immune from both suit and liability in its

governmental functions.”).

Governmental immunity encompasses two principles: (1) immunity from suit

(barring a lawsuit unless the Legislature expressly gives its consent to suit), and (2)

immunity from liability (protection from judgments even if the Legislature has

expressly given its consent to the suit). Travis County v. Pelzel & Assocs., Inc. , 77

S.W.3d 246, 248 (Tex. 2002). By entering into a contract, a governmental entity

waives immunity from liability for breaching that contract but does not waive

immunity from suit by entering into a contract. See Catalina Dev., Inc. v. County of

El Paso , 121 S.W.3d 704, 705 (Tex. 2003); Little-Tex Insulation , 39 S.W.3d at 594 ;

Dillard v. Austin Indep. Sch. Dist ., 806 S.W.2d 589, 592 (Tex. App.—Austin 1991,

writ denied).

A plaintiff has the burden to establish a waiver of immunity from suit. Jones ,

8 S.W.3d at 638 . Immunity from suit can be waived only by legislative consent or

constitutional amendment. Wichita Falls State Hosp. v. Taylor , 106 S.W.3d 692, 695

(Tex. 2003). The Texas Supreme Court has repeatedly reaffirmed that such waiver

must be expressed by clear and unambiguous language. Taylor , 106 S.W.3d at 696 ;

Pelzel , 77 S.W.3d at 248 ; Tex. Natural Res. Conservation Comm’n v. IT-Davy , 74

S.W.2d 849 , 854 (Tex. 2002); City of La Porte v. Barfield , 898 S.W.2d 288, 291

(Tex. 1995); Duhart v. State , 610 S.W.2d 740, 742 (Tex. 1980); see also Tex. Gov’t

Code Ann . § 311.034 (Vernon Supp. 2004) (providing, “In order to preserve the

legislature’s interest in managing state fiscal matters through the appropriations

process, a statute shall not be construed as a waiver of sovereign immunity unless the

waiver is effected by clear and unambiguous language.”).

Clear and Unambiguous Waiver Language

In its first issue, United Water contends that the City’s immunity from suit is

waived by the clear and unambiguous language of Local Government Code section

51.075, which states, “The municipality may plead and be impleaded in any court,”

and article II, section 1 of the City’s charter, which provides that the City “may sue

and be sued . . . in all courts and places and in all matters whatever . . . .”

In

conducting our de novo review of this issue, we must first determine whether the

language of either the City’s charter or Local Government Code section 51.075

clearly and unambiguously waives the City’s immunity to suit.

A. “Sue and be Sued” Provisions: Missouri Pacific Remains the Law

With regard to the “sue and be sued” language found in the City’s charter, such

determination has already been made by our supreme court in Missouri Pacific

Railroad Co. v. Brownsville Navigation District , 453 S.W.2d 812, 813 (Tex. 1970).

The Missouri Pacific court held that a statute which provides that a certain state entity

can “sue and be sued” meets the legislative permission requirement that waives

immunity from suit . Id. We are bound by such precedent.

The Missouri Pacific case arose when a brakeman for Missouri Pacific

Railroad died after being knocked from a train ladder by a crane that had been left too

close to the track. Id. at 812-13 . The brakeman’s beneficiaries sued Missouri Pacific,

which filed a cross-action for indemnity against the Brownsville Navigation District.

Id. The cross-action was based on a contract between Missouri Pacific and the

navigation district that prohibited the district from allowing certain objects to be

placed near the track. Id. The trial court granted the district’s plea to the jurisdiction

on the basis that the district was a subdivision of the State and that consent to suit had

not been given. Id. at 813 . The court of civil appeals affirmed. Id.

In its opinion, the supreme court noted in Missouri Pacific that the navigation

district was governed by a provision of a 1925 act that provided as follows: “All

navigation districts established under this Act may, by and through the navigation and

canal commissioners, sue and be sued in all courts of this State in the name of such

navigation district.” Id . at 812-13 (emphasis added). At issue was whether the phrase

“sue and be sued” was a waiver of the district’s immunity from suit. Reversing the

court of appeals, the Missouri Pacific court concluded, “In our opinion [the

navigation district statute] is quite plain and gives general consent for District to be

sued in the courts of Texas in the same manner as other defendants.” Id . (emphasis

added). By its holding, the Missouri Pacific court rejected the district’s argument that

other statutes more clearly expressed the legislature’s consent to suit. Id .

Recognizing Missouri Pacific as binding precedent, other appellate courts have

found that similar “sue and be sued” provisions supply the requisite consent to sue

the subject governmental entity. See, e.g., Alamo Cmty. Coll. Dist. v. Browning

Const. Co. , No. 04-02-0808, 2004 WL 60975, at *4 (Tex. App.—San Antonio Jan.

14, 2004, pet. filed) (holding that “sue and be sued” language in Education Code

subsection 11.151(a) waives immunity to suit); Goerlitz v. City of Midland , 101

S.W.3d 573, 577 (Tex. App.—El Paso 2003, pet. filed) (concluding that city charter

provision that permitted city to “sue and be sued” waived immunity from suit);

Tarrant County Hosp. Dist. v. Henry , 52 S.W.3d 434, 449 (Tex. App.—Fort Worth

2001, no pet.) (holding Health Code subsection 281.056(a) “sue and be sued”

language waived immunity from suit); Bates v. Tex. State Technical Coll. , 983

S.W.2d 821, 827 (Tex. App.—Waco 1998, pet. denied) (holding that Education Code

section 135.55 which states that “board may sue, and be sued,” grants consent to sue

Texas State Technical College System); Engelman Irrigation Dist. v. Shields Bros.,

Inc ., 960 S.W.2d 343, 348 (Tex. App.—Corpus Christi 1997) (concluding that“sue

and be sued” language in Water Code section 58.098 “provided clear and

unambiguous consent for the Irrigation District to be sued”), pet. denied per curiam ,

989 S.W.2d 360 (Tex. 1998); Loyd v. ECO Res., Inc. , 956 S.W.2d 110, 122-23 (Tex.

App.—Houston [14th Dist.] 1997, no pet.) (holding Water Code provision stating that

water district could sue and be sued waived immunity from suit); Knowles v. City of

Granbury , 953 S.W.2d 19, 23 (Tex. App.—Fort Worth 1997, pet. denied) (“As a

home-rule municipality, Granbury may sue and be sued. Had it wanted to exempt

itself from liability, it could have . . . . Because the Local Government Code and

Granbury’s charter provide that the city may be sued, its immunity from suit is [ ]

waived.”); Dillard , 806 S.W.2d at 594 (recognizing Education Code section

providing that school district trustees may sue and be sued waived immunity from

suit).

We also recognize that several appellate courts have failed to follow Missouri

Pacific and have held that “sue and be sued” provisions do not waive the

governmental entity’s immunity from suit. See, e.g., City of Dallas v. Reata Constr.

Corp. , 83 S.W.3d 392, 398 (Tex. App.—Dallas 2002) , rev’d on other grounds , No.

02-1031, 47 Tex. Sup. Ct. J. 408 (Tex. April 2, 2004); Jackson v. City of Galveston,

837 S.W.2d 868, 871 (Tex. App.—Houston [14th Dist.] 1992, writ denied) ;

Townsend v. Mem. Med. Ctr. , 529 S.W.2d 264, 267 (Tex. Civ. App.—Corpus Christi

1975, writ ref’d n.r.e.) ; Childs v. Greenville Hosp. Auth. , 479 S.W.2d 399, 401 (Tex.

Civ. App.—Texarkana 1972, writ ref’d n.r.e.) .

The City relies on the Dallas Court of Appeals’ holding in Reata to support its

position that the “sue and be sued” language at issue does not waive its immunity to

suit; rather, the City argues that such language relates to the City’s capacity to sue or

be sued once immunity has been waived.

Reata , 83 S.W.3d at 398 (holding “sue and

be sued” language “simply speak[s] to the City’s capacity to sue when immunity has

been waived.”).

We note that Reata fails to distinguish, or even to mention, Missouri Pacific ’s

holding that “sue and be sued” language plainly waives immunity . Instead, Reata

cited Jackson as the authority supporting its holding. Id. (citing Jackson , 837 S.W.2d

at 871 ). Significantly, the Fourteenth Court of Appeals recently declined to follow

its earlier holding in Jackson in determining whether the “plead and be impleaded”

language found in Local Government Code section 51.075 waives the City of

Houston’s immunity from suit. City of Houston v. Clear Channel Outdoor, Inc. , No.

14-03-00022, 2004 WL 63561 at *4 (Tex. App.—Houston [14th Dist.] Jan. 15, 2004,

no pet. h.). Instead, the Clear Channel court chose to following the supreme court’s

holding in Missouri Pacific , which it noted “remains good law,” and “the majority of

intermediate appellate courts” that have held “sue and be sued” language provides

legislative consent for suit. Id .

In analyzing Reata , we also note that the Jackson court’s holding that a “sue

and be sued” provision did not “impliedly” waive a city’s immunity was based,

without analysis, on Townsend and Childs. Jackson , 837 S.W.2d at 871 (citing

Townsend , 529 S.W.2d at 267 and Childs , 479 S.W.2d at 401 ). The Townsend court

relied solely on Childs , which in turn relied exclusively on pre- Missouri Pacific cases

to support its holding that a “sue and be sued” provision did not waive a hospital

district’s immunity from suit. Townsend , 529 S.W.2d at 267 ; Childs , 479 S.W.2d at

401 . For these reasons, we decline to follow Reata .

The Dallas Court of Appeals revisited the issue of whether “sue and be sued”

language waives immunity from suit in Satterfield & Pontikes Constr., Inc. v. Irving

Indep. Sch. District , 123 S.W.3d 63 (Tex. App.—Dallas 2003, pet. filed.). Relying

on Reata , the Satterfield court held that the “sue and be sued” language found in

section 11.151 of the Education Code “merely ‘speak[s] to the City’s . . . capacity to

be sued when immunity has been waived.’” Id . at 66 (quoting Reata , 83 S.W.3d at

398 ). The Satterfield court also noted, “At least one commentator has suggested that

because ‘sue and be sued’ language originated in the corporate law context, these

provisions can easily be read as a designation to give a particular entity a legal

existence in the courts.” Id. (citing George C. Kraehe, “There’s Something About

Cities”: Understanding Proprietary Functions of Texas Municipalities and

Governmental Immunity , 32 Tex. Tech. L. Rev. 1, 35-36 (2000)); see also A. Craig

Carter, Is Sue and Be Sued Language a Clear and Unambiguous Waiver of

Immunity? , 35 St. Mary’s L. J. 275, 289-300 (2004) (asserting that “sue and be sued”

language refers to an entity’s capacity to be sued).

Unlike Reata , the Satterfield court directly addressed the holding in Missouri

Pacific , stating that “the supreme court has since departed from the logic of Missouri

Pacific in the three decades following that decision.” Satterfield , 123 S.W.3d at 67.

The Satterfield court posited that the supreme court’s holdings in Pelzel and Taylor

abrogated its holding in Missouri Pacific . See id. (citing Pelzel , 77 S.W.3d 246, 249

(Tex. 2002) and Taylor , 106 S.W.3d at 700 )). In this regard, the Satterfield court

reasoned as follows:

Both Pelzel and Taylor listed several examples of clear and

unambiguous expressions of the Legislature’s intent to waive immunity

from suit. Notably, neither of these supreme court cases presented a

“sue and be sued” statute as an example of a clear and unambiguous

waiver of immunity of suit.

Satterfield , 123 S.W.3d at 67 (internal citations omitted).

We disagree with the Satterfield court’s reasoning that the supreme court’s lack

of citation to “sue and be sued” statutes as an example of a clear and unambiguous

waiver of immunity of suit in Pelzel and Taylor serves to implicitly overrule Missouri

Pacific.

To the contrary, the supreme court in Pelzel discussed Missouri Pacific ,

noting that the statute at issue, Local Government Code section 89.004, was

distinguishable from the one in Missouri Pacific because it did not contain “sue and

be sued” language. Pelzel , 77 S.W.3d at 249-50 . In this regard, the supreme court

in Pelzel observed that the predecessor statute to section 89.004 had contained “sue

and be sued language,” which was deleted in 1879. Id. Implicitly referring to

Missouri Pacific , the court stated, “Thus well over a hundred years ago, the

Legislature deleted the only language arguably waiving sovereign immunity,

suggesting that it intended to preserve counties’ immunity from suit.” Id. at 250 .

The Pelzel court then engaged in the following detailed discussion of Missouri

Pacific :

In Missouri Pacific , we held that a statute applicable to navigation

districts “is quite plain and gives general consent for District to be sued

in the courts of Texas.” The statute stated that navigation districts “may,

by and through the navigation and canal commissioners, sue and be sued

in all courts of this State in the name of such navigation district, and all

courts of this State shall take judicial notice of the establishment of all

districts.” In response to the district’s argument that other statutes had

more clearly expressed consent to suit, we noted that ‘suits against

counties have been held to be authorized by statutes that simply require

the filing of a claim before institution of suit.’ But Missouri Pacific

involved a different statute than the one in this case and that statute,

unlike the current version of the statute here, contained “sue and be

sued” language.

Id. at 251 (citations omitted). Thus, rather than overruling its prior holding in

Missouri Pacific , the supreme court in Pezel distinguished the “sue and be sued”

language found by the Missouri Pacific court to “quite plain[ly]” waive immunity

from suit from the ambiguous expression of legislative waiver of immunity found in

Local Government Code section 89.004. Id. at 250 .

We acknowledge that the Satterfield court correctly recognized that Taylor

does not reference Missouri Pacific. Although we do not interpret that omission to

be indicative that Missouri Pacific is no longer binding authority, we do recognize

that Taylor cannot be ignored. At issue in Taylor was whether the Legislature waived

a state hospital’s consent to suit by enacting the patient’s bill of rights statute, which

provides that a person who is harmed by a mental health facility’s violation of the

patient’s bill of rights may sue for injunctive relief, damages, or both. See Taylor ,

106 S.W.3d at 698-99 . The Taylor court stated that “we have little difficulty

recognizing the Legislature’s intent to waive immunity from suit when a statute

provides that a state entity may be sued or that “sovereign immunity to suit is

waived.’” Id . at 696-97 (emphasis added). The court then noted that the patient’s bill

of rights statute did not contain such explicit language. Id. at 697 .

In the absence of explicit waiver language, the Taylor court outlined the

following factors for a court to consider in determining whether a statute waives

immunity: (1) the statute in question must waive immunity “beyond doubt”; (2)

ambiguities are generally resolved in favor of immunity; (3) if the Legislature

requires the joinder of a governmental entity in a suit for which immunity would

otherwise attach, the Legislature has waived immunity; and (4) if the Legislature

simultaneously enacts legislation limiting the governmental unit’s potential liability,

a waiver of immunity may be found. Id. at 697-98 .

As mentioned throughout this opinion, the supreme court held in Missouri

Pacific that “sue and be sued” language “quite plain[ly]” waives immunity from suit

and “gives general consent” for the governmental entity to be sued. Mo. Pac. , 453

S.W.2d at 813-14 . Therefore, we need not, and should not, apply the Taylor factors

to the City charter provision at issue in this case because, as determined by the

supreme court in Missouri Pacific , the provision contains explicit waiver language.

While we acknowledge that the area of waiver of governmental immunity is an

evolving one, we cannot agree with the Satterfield court that Missouri Pacific has

been overruled. See Satterfield , 123 S.W.3d at 70 (Lang, J., dissenting) (criticizing

majority opinion for improperly concluding that Missouri Pacific has been effectively

overruled). As an intermediate court of appeals, we must follow our supreme court’s

expressions of the law and leave changes in the application of common-law rules to

that higher authority. See Lubbock County v. Trammel’s Lubbock Bail Bonds , 80

S.W.3d 580, 585 (Tex. 2002) (“It is not the function of a court of appeals to abrogate

or modify established precedent. That function lies solely with [the Supreme]

Court.”); Lofton v. Tex. Brine Corp ., 777 S.W.2d 384, 386 (Tex. 1989) (“This court

need not defend its opinions from criticism from courts of appeals; rather they must

follow this court’s pronouncements.”). Because Missouri Pacific remains the law of

this state, we are bound to follow its holding that “sue and be sued” language waives

immunity from suit. See Clear Channel Outdoor , No. 14-03-00022, 2004 WL 63561

at *1-*2 (recognizing that Missouri Pacific remains good law and applying its

holding); Webb v. City of Dallas , 314 F.3d 787, 795-96 (5th Cir. 2002) (refusing to

certify to Texas Supreme Court question of whether “sue and be sued” language

waived City of Dallas’s immunity from suit because controlling authority from

supreme court, i.e, Missouri Pacific , already addressed issue).

B. Ambiguity of Waiver Language Found in City Charter Article II, Section 1

The City also contends that the “sue and be sued” language found in its charter

is distinguishable from the “sue and be sued” language found in Missouri Pacific and

from other “sue and be sued” provisions that have been held to waive immunity from

suit. The City argues that, when read within the context of the entirety of article II,

section 1, the charter’s “sue and be sued” language no longer provides a clear and

unambiguous waiver of immunity from suit. Specifically, the City relies on language

appearing at the end of article II, section 1, which provides that the City “ shall enjoy

all rights, immunities, powers, privileges, and franchises now possessed and enjoyed

by said City and herein granted and conferred.”

City of Houston Charter , art.

II, § 1 (Act of 1905). The City asserts that such language serves to abrogate the

waiver effect of the “sue and be sued” language found at the beginning of article II,

section 1. The City contends that, because the charter appears to waive immunity

from suit while simultaneously retaining all immunities “now possessed,” an

ambiguity exists whether immunity from suit is expressly waived. To determine the

validity of the City’s contention, the relevant inquiry becomes whether the City

“possessed” immunity from suit when article II, section 1 was enacted in 1905.

Stated differently, if the City did not possess immunity from suit in 1905 when the

current charter provision was enacted, then the “sue and be sued” language found in

the charter operates as a clear and express waiver of the City’s immunity from suit

under the holding of Missouri Pacific . To make this determination, a historical

analysis of the charter is useful.

As noted by one scholar, “[f]rom 1836 to 1912 the major cities in Texas were

created by a special act of the Texas congress or legislature.” 22 David B. Brooks ,

Texas Practice: Municipal Law and Practice § 1.16 (2d ed. 1999). Incorporated

in 1836, Houston was no exception. See Act approved June 5, 1837, 1st Cong., R.S.,

§ 10, 1836- 1837 Repub. Tex. Laws 238 , 239, reprinted in 1 H.P.N. Gammel, The

Laws of Texas 1822-1897, at 1298, 1299 (Austin, Gammel Book Co. 1898). During

this same period, the state Legislature frequently amended and replaced the special

charters granted to Texas cities. 22 David B. Brooks, Texas Practice: Municipal

Law and Practice § 1.16.

In 1839, the Third Congress of the Republic of Texas granted the City a

charter, which provided that the City was “capable of suing and being sued, and

defending in all courts and in all actions and matters whatsoever.” Act approved Jan.

28, 1839, 3rd Cong., R.S., § 1, 1839 Repub. Tex. Laws 94 , 94, reprinted in 2 H.P.N.

Gammel, The Laws of Texas 1822-1897, at 94, 94 (Austin, Gammel Book Co.

1898). The Texas Legislature retained similar “sue and be sued” provisions in the

charters it granted the City in 1866, 1870, 1874, 1893, 1903, and 1905.

In 1912, the “home-rule amendment” of the Texas Constitution was passed,

which authorized cities with more than five thousand inhabitants to adopt a home-rule

charter. See Tex. Const . art. XI, § 5. The home-rule amendment “altered the

longstanding practice of having special charters individually granted and amended

by the legislature” for the State’s larger cities. 22 David B. Brooks, Texas

Practice: Municipal Law and Practice § 1.17.

The City’s charter reflects that many of its provisions, including article II,

section 1, originated in the 1905 charter granted by the Legislature. See City of

Houston Charter , art. II, § 1. These provisions were later adopted by the City

pursuant to its home-rule status. Tex. Const . art. XI, § 5. Thus, the language that

we find in article II, section 1 of the charter today is identical to the language

contained in article II, section 1 of the charter granted to the City by the Legislature

in 1905. Compare City of Houston Charter , art. II, § 1 with Act of March 18,

1905, 29th Leg., R.S., ch. 17, art. II, § 1, 1905 Tex. Spec. Laws 131, 131.

Because it was the last charter granted by the Legislature to the City prior to

1905, the 1903 charter is of particular relevance to our analysis in determining

whether the City “possessed” immunity from suit when the Legislature granted the

1905 charter. Importantly, article II, section 1 of the 1903 charter expressly waived

the City’s immunity from suit and read as follows:

The City of Houston, made a body politic and corporate by this Act,

shall have perpetual succession, may use a common seal, sue and be

sued , and for any purpose which it deems necessary or expedient for the

public interest, perform and render all public services and acquire

property within or without the city limits by purchase, gift, device or by

condemnation proceedings, and hold, manage and control the same, such

condemnation proceedings to be governed and controlled by the law

now in force in reference to the condemnation of the right of way of

railroad companies and the assessment of damages therefor.

Act of April 21, 1903, 28th Leg., R.S., ch. XX, art. II, § 1, 1903 Tex. Spec. Laws 97,

98 . (emphasis added).

That the City “ shall enjoy all rights, immunities, powers, privileges, and

franchises now possessed” was added by the Legislature to article II, section 1 for

first the time in 1905. Because the Legislature had expressly waived the City’s

immunity from suit in 1903, the City did not “possess” such immunity when the

charter, including article II, section 1, was amended in 1905. Accordingly, we hold

that the “sue and be sued” language found in article II, section 1 of the charter is a

clear and unambiguous waiver of the City’s immunity from suit.

C. The City’s Authority to Waive Immunity from Suit

Lastly, we address the City’s contention that the charter cannot serve to waive

its immunity from suit because only the Legislature, not the City, can waive immunity

from suit. As discussed in the preceding section, it was the Legislature who

originally waived the City’s immunity from suit when it enacted article II, section 1

as part of the 1905 special act granting the City a new charter. Act of March 18,

1905, 29th Leg., R.S., ch. 17, art. II, § 1, 1905 Tex. Spec. Laws 131, 131. After

obtaining home-rule status, the City adopted that provision. See City of Houston

Charter , art. II, § 1. Since its adoption, article II, section 1 has not been amended

or repealed by the City. See id. Thus, because it was, indeed, the Legislature who

originally waived the City’s immunity from suit, we need not address the issue of

whether the City, itself, can waive immunity from suit.

Because we have held that the “sue and be sued” language found in its charter

waives the City’s immunity from suit, we need not address whether Local

Government Code section 51.075, which provides that home-rule municipalities may

“plead and be impleaded,” also waives the City’s immunity from suit.

See Tex. R.

App. P . 47.1 (stating court of appeals must hand down an opinion that addresses every

issue raised and necessary to final disposition of appeal).

We sustain United Water’s first issue to the extent that it contends that the

City’s charter waives the City’s immunity from suit.

Conclusion

We reverse the order of the trial court dismissing United Water’s claims against

the City and remand the cause to the trial court.

Laura Carter Higley

Justice

Panel consists of Chief Justice Radack and Justices Jennings and Higley.