City of Dallas v. Texas EZPawn, L.P. D/B/A EZ Money, Loan Services

REVERSE and RENI)ER; Opinion Filed April 1, 2013.

In The

Qoitrt of Appeah3

li1ricI of xu at ki11a

No. 05-i 2-01269-CV

CITY OF DALLAS, Appellant

V.

rIEXAS EZPAWN, LP. DIBIA EZMONEY LOAN SERVICES,

Appellee

On Appeal from the 14th Judicial District Court

Dallas County, Texas

Trial Court Cause No. I)C-12-03373-A

MEMORANDUM OPINION

l3efore Chief Justice Wright and Justices Lang and Lang-Miers

Opinion by Justice Lang-Miers

This is an interlocutory appeal from the denial of the City of Dallas’s amended plea to the

jurisdiction. We reverse the trial court’s order and render judgment granting the City’s plea and

dismissing appellee’s lawsuit with prejudice. We issue this memorandum opinion pursuant to

Texas Rule of Appellate Procedure 47.4 because the law to he applied in the case is well settled.

Texas EZPAWN, L.P. operates a pawn shop in Dallas County. In 2003 it began to offer

short- and long-term loans under the trade name EZMONEY Loan Services. In 2012 the City

told EZPAWN that its loan services business constitutes an “Alternative Financial

Establishment” under Dallas City Code section 51A-4.207 and that it must comply with the

provisions of that section. As relevant here, section 51A-4.207 defines Alternative Financial

Establishment as “a car title loan business, check cashing business, or money transfer

business. . , An alternative financial establishment does not include an establishment that

provides tinanciul services that arc accessor to another main use.’’ Dallas, ‘rex., Code ch. 5 I A.

art. IV, § 51 A4207( 1) (1987).

EZPAWN disagreed with the City’s interpretation ol section 51 A4.207 and informally

attempted. but liiled. to persuade the City that EZMONEY is not an Alternative Financial

Establishment. EZPAWN then filed this lawsuit seeking a judicial declaration that its loan

services business is not an Alternative Financial Establishment, or, alternatively, that the

business is accessory to its “main pawn shop use.” The City filed a plea to the jurisdiction based

in part on governmental immunity. EZPAWN amended its petition and alleged that section

37.004 of the Uniform Declaratory Judgments Act waived the City’s immunity because the “suit

seeks the determination of the question of whether the ‘accessory use’ provisions of Dallas City

Code sections 51A4.207 and 51A-4.217 should he construed to encompass the olfermg ol short

term and long term loans to the customers of a pawn shop, incidental to the operation of the

pawnshop jsicj.” The City amended its plea to the jurisdiction to assert that the IJDJA did not

waive its governmental immunity for a suit against the City for the construction or interpretation

of an ordinance and that EZPAWN had not challenged the validity of the ordinance, In response,

EZPAWN alleged that the waiver of immunity applies to suits involving statutory interpretation

as well as invalidation. After a hearing, the trial court denied the City’s amended plea and this

interlocutory appeal followed.

Standard of Review

Governmental immunity from suit defeats a trial court’s subject matter jurisdiction and is

properly asserted in a plea to the jurisdiction. City cf Dallas v. Turley, 316 S.W.3d 762, 767

(Tex. App.—Dallas 2010, pet. denied). Whether a trial court has subject matter jurisdiction is a

question of law, which we review de novo. Id.

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When a plea to the jurisdiction challenges the pleadings, we must determine ii the pleader

has alleged facts that affirmatively demonstrate the court’s jurisdiction to hear the case. Id. The

plaintiff hears the burden to allege facts that aflirmatively demonstrate the trial court s

jurisdiction to hear the case. Id. We construe the allegations in the pleadings liberally in tavor

of

the plaintiff and look to the pleaders’ intent. Id. If the pleadings do not contain sufficient facts

to

affirmatively demonstrate jurisdiction, but might be cured by amendment, the issue is one of

pleading sufficiency and the court should allow the plaintil an opportunity to amend. Tex. Dep ‘t

of Parks & Wi1dlif’ e. Miranda. 133 S.W 3d 217, 226-27 (Tex. 2004). On the other

hand, if the

pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may

be

granted without allowing the plaintiff an opportunity to amend its pleading. Id. at 227.

Applicable Law

“[S jovereign immunity deprives a trial court of subject matter jurisdiction for lawsuits in

which the state or certain governmental units have been sued unless the state consents to

suit.”

hi. at 224. Municipalities are political subdivisions of the state and entitled to governmental

immunity unless it has been waived. Re’aia Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 374

(Tex. 2006). The waiver of governmental immunity must he in clear and unambiguous language.

TEx. Gov’T CODE ANN. 3 11.034 (West Supp. 2012).

Analysis

The issue in this appeal is whether section 37.004 of the UDJA waived the City’s

governmental immunity. The City argues there is no waiver for declaratory judgm

ent actions

seeking only to construe the meaning of a statute. It argues that because EZPAWN sought

oniy a

construction or interpretation of the city ordinance and did not seek to invalidate the section,

governmental immunity bars the lawsuit.

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Sect ion 37.004 states. A person . whose rights. status, or other legal tehit ions are

affected by a ...municipal ordinance . . may have determined any question of construction or

validity arising under the ...ordinance . . . and obtain a declaration ot rights, status, or other

legal relations ihereunder.’ TEX. Civ. PRAC. & REM. CODE ANN. 37.004 (West 2008),

§

The Supreme Court ol lexas has stated that the UI)JA “does not enlarge the trial

court’s

jurisdiction and “is ‘mere! a procedural device for deciding, cases already within a courts

jurisdiction.” Tex, Dep’t of lransp, v. Sefik, 355 S.W.3d 618. 621—22 (Tex. 2011) (quotin

g Tex,

Parks & Wildlife Dep’t v. Sawyer Trust, 354 S.W.3d 384. 388 (Tex, 2011)), The

court has

recognized that the legislature expressly waived immunity for lawsuits challenging

the validity

of a municipal ordinance because section 37.006(b) of the IJDJA expressly requires

joinder of a

municipality in actions challenging the validity of a municipal ordinance. See Id. at 622

& n.3;

see also City of LI Paso v. Heinrich, 284 S.W.3d 366, 373 n.6 (Tex. 2009)). But the

court has

concluded that the legislature through the UDJA has not clearly and unambiguous

ly waived

governmental immunity for actions in which “the plaintiff seeks a declaration of his

or her rights

under a statute or other law.” See Sefik, 355 S.W.3d at 621; Heinrich, 284 S.W.3d at

373 n.6.

EZPAWN’s petition does not challenge the validity of the ordinance: it

seeks a

construction of the ordinance. But EZPAWN does not direct us to any provision

in the UDJA

that expressly waives the City’s immunity for that claim. It argues that three opinio

ns from the

supreme court have held that governmental immunity is waived for declaratory judgm

ent actions

seeking to construe a statute. We address each in turn.

The first case that EZPAWN contends supports its argument is Texas Educat

ion Agency

i’. Leeper, 893 S.W.2d 432 (Tex. 1994). EZPAWN quotes language from that case stating

, “[tjhe

DJA expressly provides that persons may challenge ordinances or statute

s, and that

governmental entities must be joined or notified” and “[tjhe Act thus contem

plates that

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ç’oreriitnental entities mar IN’ indeed, must be omed in suits io construe their legislative

pronouncemnents,” Id. at 446 (emphasis added). But this discussion was in the contex

t of lawsuits

in which governmental entities must be made a party. See Id. And the only provision

in which a

municipality must be made a party is in an action challenging the validity of a statute. See TEX.

Civ. PRAc. & RiM. CODE ANN. § 37.00I.001 I. Additionally, in Leeier. the parties

did

challenge the validity of a statute See Leeper. 893 S.W.2d at 337 (class action suit filed

to halt

State’s enforcement of compulsory attendance law based on “nothing other than the

fact that a

child was being schooled at home”).

The second case upon which EZPAWN relies is Texas Natural Resources C’onse

rvation

Commission v. IT-Davy, 74 S. W .3d 849 (Tex. 2002). EZPAWN argues that IT-Do

yr concluded

that “the term challenges’ was not limited to challenges to the validity of an ordinance

or statute.

but included challenges to a governmental entity’s construction of the ordinance or statute

.” But

in interpreting Leeper, the IT-I)avv court stated that ‘the DJA expressly allows person

s to

challenge ordinances or statutes. Moreover, the DJA requires challengers to join govern

mental

entities in suits to construe legislative pronouncements Id. at 859—60. Because the UDJA

requires governmental entities to be joined only in suits challenging the validity of

an ordinance

or statute, the ITDay case was referring to those types of challenges. See id. Additi

onally, IT

I)avv involved a contract dispute, not a challenge to the validity of the statute

. See id. at 856—57.

Finally, EZPAWN relies on Texas Lottery commission v. First State Bank of DcQueen,

325 S.W.3d 628 (Tex. 2010). The issue in that case was whether provisions of

the Texas

Uniform Commercial Code conflicted with provisions of the Texas Lottery Act

and,

consequently, rendered the provisions of the Texas Lottery Act ineffective. Id. at 639.

Although

the court used language like statutory interpretation” and “statutory construction,”

it was

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undisputed that the lawsuit challenged the validity of the provisions of the Texas Lottery Act

and

did not simply seek an interpretallon of the statute. See’ itt. at 634-35, 610.

Construing EZPAWN’ s a! legations liberally in its favor, we conclude that they do not

allege facts that, if true, affirmatively demonstrate the trial court’s subject matter jurisdiction.

Indeed, because EZPAWN sought only the interpretation of an ordmance and a declaration that

the ordinance does not apply to its loan services business, we conclude that the allegations

affirmatively negate the trial court’s subject matter jurisdiction. See Turley, 316 S.W,3d at 770—

71.

Conclusion

We sustain the City’s issues, reverse the trial court’s order, and render judgment

dismissing the petition with prejudice.

12 1269F.P05

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(!!nitrt of Appiu16

fift1! Jitrirt of exa Lit aU&u

JUDGMENT

CITY OF DALLAS. Appellant On Appeal from the 14th Judicial District

Court, Dallas County, Texas

No, 05-12-01 269-CV V. Trial Court Cause No. DC-I 2-03373-A.

Opinion delivered by Justice Lang-Miers.

TEXAS EZPAWN, LP. Dill/A EZMONEY Chief Justice Wright and Justice Lang

LOAN SERVICES. Appellee participating.

In accordance with this Court’s opinion of this date, the judgment of the trial court is

REV! RSI I) md IudgmLnt is RI NDEREI) th it

City of Dallas’s plea to the jurisdiction is GRANTED and appellee Texas

EZPAWN, L.P. d/b/a EZMONEY Loan Services’s lawsuit is dismissed with

prejudice,

It is ORDERED that appellant City of Dallas recover its costs of this appeal from

appellee Texas EZPAWN. LP. dibia EZMONEY Loan Services.

Judgment entered this l day of April, 2013.

F /1(/

EL,VABTH LANG-?RS