City of Midlothian, Texas v. ECOM Real Estate Management, Inc.

IN THE

TENTH COURT OF APPEALS

No. 10-09-00039-CV

City of Midlothian ,

Texas ,

Appellant

v.

ECOM Real Estate Management, Inc. ,

Appellee

From the 40th District

Court

Ellis County, Texas

Trial Court No. 68846

MEMORANDUM Opinion

The City of Midlothian, in the course of expanding its wastewater operations, approached ECOM Real

Estate Management, Inc. about obtaining an easement on ECOM’s property. The

parties entered an easement agreement for construction of a sewer system. The

City agreed to construct five stubout connections, which allow ECOM to access

the sewer system, and agreed that ECOM could provide its own water. After the City

installed the sewer system and stubouts, the city council passed an ordinance

requiring parties to purchase water from the City in order to use the sewer

systems. The City denied ECOM’s application for an exemption. ECOM sued the

City, alleging breach of contract, fraud, and fraudulent inducement and seeking

a declaratory judgment, attorney’s fees, and exemplary damages. [1]

The trial court denied the City’s partial plea to the jurisdiction. In five

issues, the City challenges the denial of its plea. We reverse and render.

STANDARD OF REVIEW

A p lea to the jurisdiction challenges the trial

court’s “power to determine the subject matter of the suit.” Vela v. Waco Indep. Sch. Dist. ,

69 S.W.3d 695, 698 (Tex. App.—Waco 2002, pet. withdrawn). We review a plea “ based on

sovereign immunity de novo

because the question of whether a court has subject matter jurisdiction is

a matter of law.” Hoff

v. Nueces County ,

153 S.W.3d 45, 48 (Tex. 2004); see Vela , 69 S.W.3d at 698 . Where “ the pleading

requirement has been met and evidence has been submitted to support

the plea that implicates the merits of the case, we take as true all

evidence favorable to the nonmovant.” Tex. Dep’t of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 228

(Tex. 2004) (citing Sci.

Spectrum, Inc. v. Martinez , 941 S.W.2d 910, 911 (Tex. 1997) ). “We indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor.” Id .

BREACH OF CONTRACT

In issue one, the City

argues that the trial court lacks subject matter jurisdiction over ECOM’s

breach of contract claim .

ECOM does not contend that the

Legislature has waived immunity from suit for the breach of contract action

alleged in this case. See Tex. Local Gov. Code Ann. §§ 271.151-.152 (Vernon 2005) ; see also City of San Antonio v. Reed S. Lehman

Grain, Ltd. , No. 04-04-00930-CV, 2007 Tex. App. LEXIS 7515 , at *6-7 n.2

(Tex. App.—San Antonio Mar. 14, 2007, pet. denied) (mem. op.) . Rather, ECOM argues that it may pursue its

breach of contract claim under Texas A&M University-Kingsville v. Lawson ,

87 S.W.3d 518 (Tex. 2002), (plurality op.) and City of Carrollton v.

Singer , 232 S.W.3d 790 (Tex. App.—Fort Worth 2007, pet. denied).

In Lawson , the trial court granted the University’s

plea to the jurisdiction as to all but Lawson’s whistleblower and

constitutional claims, which the parties settled. See Lawson , 87 S.W.3d at 518-19.

Lawson later sued the University for breach of the settlement agreement. Id .

at 519. The trial court denied the University’s plea to the jurisdiction. Id . Noting that the Legislature has waived immunity for whistleblower claims, the

Texas Supreme Court held:

[W]hen 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. The

government cannot recover waived immunity by settling without defeating the

purpose of the waiver in the first place. Such a rule would limit settlement

agreements with the government to those fully performed before dismissal of the

lawsuit because any executory provision could not thereafter be enforced.

Id . at 521. [2]

In Singer , the City notified the

Singers that it needed to

acquire a portion of their property to extend a road. See Singer , 232 S.W.3d at 792-93 . The Singers agreed to convey a right of way to the City in

exchange for the City’s agreement to perform certain promises. Id . The

Singers later sued the City for breach of the agreement. Id . at 794. The

trial court denied the City’s plea to the jurisdiction. Id . On appeal,

the Singers argued that the “City is not immune from suit in this instance

because the agreement between the parties was, in essence, a settlement of an

eminent domain claim, for which the City has no immunity by virtue of the Texas

Constitution.” Id . at 795.

The Fort Worth Court agreed with the

Singers. According to the Court, “An agreement to convey property to a

governmental authority for a public purpose has the same effect as a formal

condemnation proceeding.” Id . at 798.

[E]ven though the City had not yet

instituted condemnation proceedings against the Singers in court, it intentionally

acquired the Singers’ land for the public purpose of extending a road, for

which a municipality is statutorily authorized to institute condemnation

proceedings…and it had performed a condition precedent to instituting eminent

domain proceedings in court--negotiating with the Singers for adequate

compensation.

Id . at 799. “[I]f the Singers had not

reached a settlement agreement with the City, the City would have had to

institute eminent domain proceedings against them to acquire the land.” Id . The City “exposed itself to liability and suit by its threat of eminent

domain proceedings.” Id . at 800 (emphasis added).

[T]he City could not create immunity

from suit for the Singers’ claim for adequate compensation by contracting to

purchase their property at an agreed upon valuation in fulfillment of the

condition precedent to filing an eminent domain proceeding in court as set

forth in the property code.

Id . (internal citations omitted). The Fort Worth Court held

that the City was not immune from suit because the agreement was a “settlement

of an eminent domain proceeding in which the Singers would have a claim against

the City for adequate compensation for the City’s acquisition of their

property, and for which the City would not be immune.” Id .

Here, the City admits that it

cannot prevail under Singer . However, relying on Chief Justice Cayce’s

dissent, the City argues that Singer was wrongly decided.

In his dissent, Chief Justice Cayce noted

that the majority’s holding conflicted with the rule that a governmental entity

“does not, merely by entering into a contract, waive immunity from suit .” Id . at 801 (Cayce, C.J., dissenting). He

emphasized that, unlike Lawson , the “City was not exposed to suit

because of a waiver of immunity when it entered into its agreement with the

Singers.” Id . At the time of the agreement, the Singers had “no

cognizable claim under Texas law that could be brought against the City based

on their negotiations with the City, and they had not filed or threatened to

file a suit alleging a claim against the City for which the City’s immunity is

waived.” Id .

He voiced several concerns with the

majority’s conclusion that the “City exposed itself to suit by ‘its threat

of eminent domain proceedings,’ and that the parties’ agreement settled an

eminent domain claim in which ‘the Singers would have a claim against

the City for adequate compensation.’” Id . at 802. First, the “alleged

‘threat’ of eminent domain proceedings did not expose the City to a suit for

adequate compensation because the Singers could not have sued the City based on

such a threat.” Id . The Singers would not have an “actionable claim

against the City for adequate compensation” unless the City “actually commenced

eminent domain proceedings to take the property--which the City did not do.” Id . Second, the agreement “evidences an intent that the Singers convey their

property to the City in consideration for the City’s promise[s],” not an intent

to “ settle an alleged eminent domain or adequate compensation claim.” Id . Third, the Singers had “no adequate compensation claim to settle when they

entered into the agreement because they had already reached an agreement with

the City on the amount of compensation:”

Before initiating an eminent domain

proceeding, a municipality must first attempt to purchase the property by

agreement. When the municipality purchases the property by agreement, there is

no condemnation or “taking” of the property by the power of eminent domain. In

such a case, the person from whom the property was purchased has no justiciable

claim for adequate compensation under the condemnation statutes or the takings clause .

Id .

Finally, Chief Justice Cayce warned that

“characterizing the agreement as settling an eminent domain claim” ignores the

“distinction between a municipality’s power to purchase property by contract

and to take property by eminent domain.” Id . at 803.

The evidence conclusively shows that the

City was acting within a color of right under contract when it negotiated the

agreement with the Singers to purchase their property and not under its

eminent domain powers. The Singers were not forced to negotiate with the City.

They could have refused to negotiate, insisted that the City take the

property, if at all, by eminent domain, and asserted a claim for adequate

compensation. Having agreed to convey their property to the City voluntarily,

however, the Singers should not be allowed to now assert that the City has

taken or attempted to take their property against their will by eminent domain.

Id .

To support the holding in Singer ,

ECOM cites San Antonio

v. Grandjean , 91 Tex. 430 , 41 S.W. 477 (1897), State v. Brewer , 141 Tex. 1 , 169 S.W.2d

468 (1943), Howard

v. County of Nolan , 319

S.W.2d 947 (Tex. Civ. App.—Eastland 1959, no writ), and Weingarten

Realty Investors v. Albertson’s, Inc. , 66 F. Supp. 2d 825 (S.D. Tex 1999).

ECOM argues these cases clarify that a “conveyance in lieu of condemnation is

the equivalent of a condemnation.”

In Grandjean , the city council declared that the Grandjeans’

property should be condemned and the City condemned the property, naming only

Ulysses Grandjean in the

petition . See Grandjean ,

41 S.W. at 477, 480 . Marie Grandjean accepted one half of the proceeds, but later

sued to recover the property. Id . at 477-78. The Texas Supreme Court held

that Marie could not recover the property. Id . at 480. The Court

noted that eminent domain is “essentially a right to take, and does not involve

the necessity of any grant or conveyance on part of the owner, or of any

judicial decree.” Id . at 478.

[S]ince the State has the inherent and

paramount right to the property, when needed for public purposes, the

determination by the proper authority that the necessity for the taking exists,

the taking, and the adjustment with the owner of the question of compensation,

however affected, completes the appropriation and devotes the property to the

public use. The conditional paramount title of the government becomes absolute

when the compensation is assessed or agreed upon and paid, or when its payment

is waived. The doctrine of eminent domain implies that it is to be exercised

against the will of the owner. It is his want of consent that renders its

exercise necessary, and hence it is not consistent with the theory of the

doctrine, that any conveyance from the owner or decree of court is essential to

pass the title. The dissent of the owner to the taking is unavailing. His

right under our Constitution, except as against the State itself, is to demand

that before the property be taken, his compensation shall be paid. When

he accepts as compensation a sum of money, whatever the amount and in whatever

manner arrived at, his property, to the extent of the taking, is expropriated

and appropriated to the use of the public. The question of compensation out of

the way, he must yield to the inevitable. The State’s right is to take or

accept without a conveyance, and hence, when the compensation is adjusted, no

conveyance is necessary.

Id . at 479; Dorsett v. State , 422 S.W.2d 828, 831 (Tex. Civ. App.—Waco

1967, writ ref’d n.r.e.).

In Brewer , the Brewers conveyed land to the State for

construction of a highway and later sued for damage to their remaining property.

See Brewer , 169 S.W.2d

at 469, 471 . The Texas Supreme Court explained that:

The conveyance of land for a public

purpose will ordinarily vest in the grantee the same rights as though the land

had been acquired by condemnation. The conveyance will be held to be a release

of all damages which would be presumed to be included in the award of damages

if the property had been condemned.

Id . at 471 (quoting 2 John Lewis, A Treatise on the Law of Eminent

Domain in the United States § 474 (3d ed. 1909)). The Brewers could not

recover for damage to their property. See id . at 472-73.

In Howard , the Howards conveyed

land to the State

and Nolan County for “highway purposes” and later sued to set aside the deed. Howard , 319 S.W.2d at 948 .

The power to acquire property for public

use is inherent in the State without regard to consent of the owner, when

adequate consideration is paid. However, when an owner consents to the taking

and use of his property, such consent is a defense to an action to recover its

possession. It is also held that whenever the owner accepts a sum of

money as compensation for land for such a use, his property, to the extent of

the taking, is expropriated to the use of the public.

Id . at 950 (internal citations omitted). The

Howards could not set aside the deed, but were “limited to an action for

damages for additional servitude on their land.” Id .

In Weingarten , Albertson’s leased a space from

Weingarten . See

Weingarten , 66 F. Supp. 2d at 834 . The lease contained a provision

regarding eminent domain. Id . at 835. TxDOT later sent correspondence entitled “Proposed

Condemnation Proceedings.” Id .

Weingarten conveyed the property to TxDOT. Id . The deed provided that the consideration

“represents a settlement and compromise by all parties as to the value of the

property…in order to avoid formal eminent domain proceedings...” Id . at 843. Albertson’s terminated

the lease and later sued for breach of contract to recover a portion of the

proceeds. See id . at 836-37. The Court noted that the “institution of formal condemnation

proceedings was not required because Weingarten agreed to convey the property

to TxDOT.” Id . at 843.

An agreement to convey property to a

governmental authority has the same effect as a formal condemnation proceeding.

“The conveyance of land for a public purpose will ordinarily vest in the

grantee the same rights as though the land had been acquired by condemnation

proceedings.” Indeed, “whenever the owner accepts a sum of money as

compensation for land for such a use, his property, to the extent of the

taking, is expropriated to the use of the public.”

Id . at 843 (internal citations omitted).

The Court rejected Weingarten’s argument that no taking occurred. See id .

at 843-45.

These cases recognize that both a

voluntary conveyance of property by a landowner to a governmental entity and a

taking by eminent domain have the same result. See Grandjean , 41 S.W. at 479; see also Brewer , 169 S.W.2d at 471 ; Howard , 319 S.W.2d at 950 ; Weingarten , 66 F. Supp. 2d at

843 . As

Chief Justice Cayce notes, there exists a distinction between a governmental

entity’s right to purchase property versus its right to take property. See

Osborne v. Keith , 142 Tex. 262 , 177 S.W.2d 198 , 201 (1944); see also Weingarten , 66 F. Supp. 2d at

842 (“ Generally, in Texas,

‘the government compensates the owner before appropriating property, either by

paying a mutually agreed price or by paying the value as determined in a

statutory condemnation proceeding.’”); Tex. Prop. Code

Ann. § 21.012 (Vernon Supp. 2008); Tex. Local Gov. Code Ann. § 273.001 (Vernon 2005) . Under either method, the entity has

the same rights to the property. See Grandjean ,

41 S.W. at 479; see also

Brewer , 169 S.W.2d

at 471 ; Weingarten , 66 F. Supp. 2d at 843 . Despite having the same result ,

the difference between the two methods of acquisition is that eminent domain is

“exercised against the will of the owner,” while a purchase involves the

owner’s voluntary consent. Grandjean , 41 S.W. at 479. If the owner consents to a

purchase, the process of eminent domain is unnecessary. See id . We agree with Chief Justice Cayce’s conclusion that Singer

ignores this important distinction.

Additionally, Singer ignores the

fact that Lawson involved a pending lawsuit. The San Antonio Court recently declined to

apply Lawson absent pending litigation:

Unlike Lawson , Gracia did

not have a statutorily recognized claim pending in the trial court when he

entered into an agreement with the District. The settlement agreement in this

case was executed just as Gracia was instituting the administrative process

that the State created for challenging the termination of teaching contracts. In

short, Gracia settled a claim that, at that point in time, had no adjudicative

value in our court system.

Donna Indep. Sch. Dist. v. Gracia , 286 S.W.3d 392, 395 (Tex. App.—Corpus

Christi 2008, no pet.) . [3]

In Porretto v. Patterson , 251 S.W.3d 701 (Tex. App.—Houston [1st Dist.] 2007, no pet.), the First Court cited Lawson as follows:

[A] governmental entity that agrees to settle

a lawsuit from which it is not immune cannot claim immunity from

suit for breach of the settlement agreement relating to that claim. The

policy supporting this holding is that the government should not regain

immunity it previously has waived by settling a case .

Porretto , 251 S.W.3d at 712 (“Because the GLO is not immune from

the Porrettos’ takings claim, under Lawson , the

Porrettos’ breach of contract claim can proceed, but only to the extent it

arises out of the takings claim.”) (emphasis added) (internal citations

omitted). We agree with this interpretation of Lawson .

In doing so, we note that this case does

not involve a situation where the City was exposed to suit. See Singer , 232 S.W.3d

at 802-03 (Cayce, C.J., dissenting). When the parties entered the easement

agreement, no eminent domain proceeding was pending because no petition had

been filed in the proper court. See Tex. Prop. Code Ann. § 21.012(a) . ECOM, however, argues that the City threatened

to file eminent domain proceedings and would have commenced proceedings had an

agreement not been reached; thus, the agreement was made under a threat of

eminent domain. [4]

This argument is inconsistent with our interpretation of Lawson . See

Porretto , 251 S.W.3d at 712 . ECOM could not assert a claim for

adequate compensation until the City filed a petition to take the property by

eminent domain. See Singer , 232 S.W.3d at 802 (Cayce, C.J., dissenting). Thus,

ECOM had no claim to settle at the time the agreement was reached. Id .

More importantly, the easement agreement itself contains no language suggesting

an intent to settle an eminent domain claim. See Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 662 (Tex. 2005) (“ In construing a written contract, the

primary concern of the court is to ascertain the true intentions of the parties

as expressed in the instrument.”);

see also Weingarten , 66

F. Supp. 2d at 843 (Deed contained language evidencing an intent to settle and avoid eminent domain proceedings) .

ECOM suggests that to hold that the

easement agreement did not settle an eminent domain claim renders the

negotiation process a “mere charade to create immunity.” To say that the easement

agreement settled an eminent domain claim, when it contains no language to this

effect [5]

and no eminent domain proceeding was pending, further blurs the distinction

between an entity’s power to purchase and its power to take. See Singer , 232 S.W.3d at 803 (Cayce, C.J., dissenting); see also Travis County v. Pelzel & Assocs. , 77 S.W.3d 246, 248 (Tex. 2002) (“[A] governmental entity does not waive

immunity from suit simply by contracting with a private party.”).

Accordingly, we conclude that the City

was “acting within a color of right under contract when it negotiated the

agreement with [ECOM] to purchase [] property and not under its eminent

domain powers.” Singer , 232 S.W.3d at 803 (Cayce, C.J., dissenting). Because

the trial court erred by denying the City’s plea to the jurisdiction as to

ECOM’s breach of contract claim, we sustain issue one.

DECLARATORY JUDGMENT

The City argues, in issue two, that the

trial court has no subject matter jurisdiction over ECOM’s declaratory judgment

claim because it is an

improper attempt to enforce performance of the easement agreement and is so

intertwined with ECOM’s breach of contract claim as to be an attempt to recast

its breach of contract claim as a declaratory judgment claim.

A person interested under a deed, will,

written contract, or other writings constituting a contract or whose rights,

status, or other legal relations are affected by a statute, municipal

ordinance, contract, or franchise may have determined any question of

construction or validity arising under the instrument, statute, ordinance,

contract, or franchise and obtain a declaration of rights, status, or other

legal relations thereunder. Tex. Civ. Prac. & Rem. Code Ann. § 37.004(a) (Vernon 2008). “[D] eclaratory-judgment suits against state

officials seeking to establish a contract’s validity, to enforce performance

under a contract, or to impose contractual liabilities are suits against the

State” for which immunity is not waived. Tex.

Natural Res. Conservation Comm’n v. IT-Davy , 74 S.W.3d 849, 855-56 (Tex. 2002) . “[P]rivate parties cannot circumvent

the State’s sovereign immunity from suit by characterizing a suit for money

damages, such as a contract dispute, as a declaratory-judgment claim.” Id . at 856.

ECOM’s breach of contract claim is

phrased, in pertinent part, as follows:

Through the Ordinance, Midlothian

breached the settlement agreement/contract. Midlothian’s refusal to allow ECOM

and the future residents of the Master Tract access to Midlothian’s sewer

system without the purchase of water from Midlothian is a breach of the

settlement/agreement contract, which has proximately caused damages to ECOM…

ECOM’s declaratory judgment claim states,

in pertinent part:

As the dispute arises from the

interpretation of a written instrument, ECOM requests the Court enter a

declaratory judgment as to the meaning of the easement. Specifically, ECOM

asks the Court to adjudicate the intent of the parties as reflected in the

easement was to allow future residents of the Master Tract access to

Midlothian’s sewer system without necessity of purchasing water from Midlothian.

ECOM requested a similar finding if the

trial court determined that the agreement was ambiguous and, alternatively,

requested rescission in the event there was no meeting of the minds between the

parties.

ECOM maintains that it simply seeks a declaration

as to “whether the easement agreement in conjunction with the ordinance

requires that ECOM purchase water from the City if it likewise wants to connect

to the sewer system.” We disagree.

In Texas Parks & Wildlife

Department v. Callaway , 971 S.W.2d 145 (Tex. App.—Austin 1998, no pet.), Callaway owned property on which the Texas Parks and Wildlife Department had an easement for a waterway. See Callaway , 971 S.W.2d at 147. Callaway sued the Department,

alleging that the Department’s opening of the waterway to the public resulted

in a taking without compensation. Id . at 148. Callaway sought a

declaration that the “Department has authority to keep the [waterway]

closed to the public” and “must use this authority in complying with the

easement’s conditions and restrict public boating in the [waterway].” Id . at 151. The trial court denied the Department’s plea to the jurisdiction. See

id . at 147. The Austin Court held:

Although Callaway’s request for

declaratory judgment is not premised expressly on breach of contract, it is

analogous to such a claim. In essence, Callaway seeks a declaration of his

rights under the easement and an order enforcing those rights. There is no

basis for the injunctive relief or the contractual damages that Callaway seeks

unless he can establish that the easement constituted a contract, binding on

the Department, which he can enforce. Whether the Department’s decision that

it was legally required to open the Pass was correct or incorrect, a suit to

test it by seeking enforcement of contract rights is necessarily a suit against

the state that cannot be maintained without legislative permission.

Id . at 152.

In Lehman Grain , Reed dedicated a sewer line easement to

the City of San Antonio in exchange for the City’s agreement that Reed could

connect to the sewer line as long as “Reed ‘ma[de] a proper application’ and ‘enter[ed]

into an agreement with the City for such sewer service.’” Lehman Grain , 2007 Tex. App. LEXIS 7515 , at

*1-2. Reed later sued the

City when it denied sewer service. See id . at *2. Reed sought a

declaration that “the City is obligated to comply with the terms of the

Dedication Agreement by granting Lehman the privilege of connecting to the

sewer line.” Id . at

*10. The trial court

denied the City’s plea to the jurisdiction. See id . at *3-4. The San Antonio Court held that Reed’s

declaratory judgment claim sought

to “enforce performance under the easement dedication contract.” Id . at *10.

In State v. Allodial Limited Partnership ,

280 S.W.3d 922 (Tex. App.—Dallas 2009, no pet.), Allodial’s successor sold a twelve acre

tract to the State, but retained a two acre tract, which it later sold to Allodial.

See Allodial , 280 S.W.3d at 924-25 . Allodial later sued TxDOT. Id . at 925. Allodial sought a declaration that the “deed covenants required TxDOT

to take no steps to deprive the 2.843 acre tract of on-grade access to the

service road and that TxDOT's actions constituted a taking under article I, section 17 of the

Texas Constitution. ” Id . at 927. The

trial court denied TxDOT's plea to the jurisdiction. See id . at 925. Citing

Calloway , the Dallas Court held that Allodial’s claim for breach of deed

covenants was “analogous to breach of contract claims.” Id . at 928.

In light of these authorities, ECOM’s

declaratory judgment claim is analogous to a breach of contract claim. ECOM

not only seeks a declaration of its rights under the easement agreement, but

further attempts, in essence, to enforce performance of the agreement. See Callaway , 971 S.W.2d at 152 ; see also Allodial ,

280 S.W.3d at 928 ; Lehman Grain , 2007 Tex. App. LEXIS 7515 , at *10.

Accordingly, the trial

court erred by denying the City’s plea to the jurisdiction as to ECOM’s

declaratory judgment claim. [6]

We sustain issue two.

FRAUD/FRAUDULENT INDUCEMENT

In issue three, the City

contends that the trial court lacks subject matter jurisdiction over ECOM’s

fraud and fraudulent inducement claims.

In the tort context, “[d]etermining

a municipality’s amenability to suit is a two-step inquiry:” (1) whether the

function is governmental or proprietary; and (2) if governmental, whether immunity has been

waived by statute. City

of Houston v. Petroleum Traders Corp. ,

261 S.W.3d 350, 355 (Tex. App.—Houston [14th Dist.] 2008, no

pet.) (quoting Ethio Express Shuttle Serv., Inc.

v. City of Houston, 164 S.W.3d 751 , 754 n.4 (Tex. App.—Houston [14th Dist.] 2005, no pet.) ).

ECOM argues that if the City was not

exercising its eminent domain powers at the time of the easement agreement,

then it was acting in a proprietary capacity for which it has no immunity.

However, the Legislature has identified sanitary and storm sewers and water and

sewer service as governmental functions. See Tex. Civ. Prac.

& Rem. Code Ann. §

101.0215(a) (9), (32) (Vernon

2005). By entering a contract for the “purpose of installing, repairing,

maintaining, removing, and operating a sanitary sewer line,” the City performed

a governmental function. See id .; see also Lehman Grain , 2007 Tex. App. LEXIS 7515 , at *8 (“ City was acting in a governmental

capacity when it contracted with Reed to acquire the easement for the

installation of the sewer line.”).

Moreover, ECOM has not alleged (1)

property damage, personal injury, or death proximately caused by the operation

or use of a motor-driven vehicle or motor-driven equipment; (2) personal injury

or death so caused by a condition or use of tangible personal or real property;

or (3) a claim arising from a premises defect. Tex. Civ. Prac. & Rem. Code

Ann. § 101.021 (Vernon

2005); Tex. Civ. Prac. & Rem. Code

Ann. § 101.022 (Vernon Supp. 2008). Additionally, the Tort Claims

Act does not apply to

claims “arising out of assault, battery, false imprisonment, or any other

intentional tort .” Tex. Civ. Prac. & Rem. Code Ann. § 101.057(2) (Vernon 2005); see

Sanders v. City of Grapevine , 218 S.W.3d 772, 779 (Tex. App.—Fort

Worth 2007, pet. denied) (T rial

court lacked jurisdiction over fraud claim because “ fraud is an intentional tort.”) .

In summary, the trial court erred by

denying the City’s plea to the jurisdiction as to ECOM’s fraud and fraudulent

inducement claims. We sustain issue three.

EXEMPLARY DAMAGES AND ATTORNEY’S FEES

In its fourth and fifth

issues, the City argues that the trial court lacks subject matter jurisdiction

over ECOM’s claims for exemplary damages and attorney’s fees.

Because the trial court has no subject

matter jurisdiction to consider ECOM’s breach of contract, declaratory

judgment, fraud, or fraudulent inducement claims, ECOM cannot recover attorney’s

fees or exemplary damages associated with these claims. See Holland v. Wal-Mart Stores, Inc. , 1 S.W.3d 91, 95 (Tex. 1999)

(“[A] prevailing party cannot recover attorney’s fees from an opposing party unless permitted

by statute or

a contract

between the parties.”); see also Twin City Fire Ins. Co. v. Davis , 904 S.W.2d 663, 665 (Tex. 1995) (“[R]ecovery of punitive damages

requires a finding of an independent tort with accompanying actual damages.”). We sustain issues four and five.

We reverse the trial court’s

judgment and render judgment dismissing

ECOM’s breach of contract, declaratory judgment, fraud, and fraudulent

inducement claims .

FELIPE REYNA

Justice

Before Chief

Justice Gray,

Justice

Reyna, and

Justice

Davis

(Chief

Justice Gray dissenting)

Reversed and

rendered

Opinion

delivered and filed January 27, 2010

[CV06]

[1] ECOM also alleged a

takings claim under article I, sections 17 and 19 of the Texas Constitution. See

Tex. Const. art. I, §§ 17, 19.

These claims were not part of the City’s partial plea to the jurisdiction and

are not before us.

[2] We note that Lawson

is a plurality opinion. A plurality opinion

has little precedential

value, if any. See Univ. of Tex. Med. Branch v. York , 871 S.W.2d 175, 176 (Tex. 1994).

[3] ECOM distinguishes Gracia

on grounds that Gracia had an administrative remedy. See

Donna Indep. Sch. Dist.

v. Gracia , 286 S.W.3d

392, 395 (Tex. App.—Corpus Christi 2008, no pet.) (“The Texas Supreme Court…has forestalled the

waiver-by-conduct exception to sovereign immunity in situations where an

administrative remedy is available.”). Despite this factual distinction, the

San Antonio Court’s reasoning that Lawson is inapplicable absent a

pending lawsuit is still relevant to our analysis.

[4] Although the record lacks

evidence suggesting that the City actually did threaten to commence eminent

domain proceedings, ECOM’s first amended original petition states:

“representatives of Midlothian indicated to ECOM the city’s need for a sewer

line across a portion of the Master Tract and that it would acquire the land by

eminent domain if an agreement between Midlothian and ECOM could not be

reached.” We must take ECOM’s pleadings as true. See Tex. Dep’t of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 228 (Tex. 2004).

[5] ECOM maintains that its

pleadings establish that the easement agreement is actually a settlement of an

eminent domain claim. While we must take ECOM’s pleadings as true, “we are not

bound by legal conclusions

nor by any illogical factual conclusions drawn from the facts pled.” Aledo Indep. Sch. Dist. v. Choctaw

Props. , 17 S.W.3d

260, 262 (Tex. App.—Waco 2000, no pet.), overruled on other grounds by

Thomas v. Long , 207 S.W.3d 334 (Tex. 2006).

[6] ECOM cites cases in which

a governmental entity was not immune from declaratory judgment actions on

takings claims. See Koch

v. Tex. Gen. Land Office ,

273 S.W.3d 451, 457-60 (Tex. App.—Austin 2008, pet. filed); see also State

v. BP Am. Prod. Co. , 290 S.W.3d 345, 365-66 (Tex. App.—Austin 2009,

pet. filed). The City’s

partial plea to the jurisdiction does not challenge ECOM’s takings claim; thus,

the issue is not before us.