Opinion

02-10-408-CV

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-10-00408-CV

Town of Flower Mound, TEXAS, Harlan Jefferson, Town

Manager and Charles Springer, Assistant Town Manager/Chief Financial Officer

APPELLANTS

AND APPELLEES

V.

Rembert Enterprises, Inc.

APPELLEE

AND APPELLANT

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FROM THE 367th

District Court OF Denton COUNTY

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OPINION

ON REHEARING

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I.

Introduction

After

considering Appellants’ motion for rehearing, we deny the motion but withdraw

our prior opinion and judgment of December 8, 2011, and substitute the

following.

In

this interlocutory appeal, Appellants Town of Flower Mound, Texas; Harlan

Jefferson, Town Manager; and Charles Springer, Assistant Town Manager/Chief

Financial Officer (collectively, Appellants) challenge the trial court’s

partial denial of their plea to the jurisdiction in the lawsuit filed against

them by Appellee Rembert Enterprises, Inc. (Rembert). [1]

Appellants contend in five issues that governmental immunity protects it from Rembert’s

declaratory judgment, breach of contract, and attorney’s fee claims and that

Jefferson and Springer have derivative immunity. In its cross appeal, Rembert

argues that the trial court erred by partially granting Appellants’ plea to the

jurisdiction against Rembert’s inverse condemnation claim. We affirm in part

and reverse in part.

II.

Background

Rembert

is the developer of a residential subdivision in Flower Mound (the Property).

When Rembert applied to Flower Mound for approval of its development permits,

Flower Mound required Rembert to construct Auburn Drive on the property and

other land Rembert did not initially own as a condition of approval. Rembert

and Flower Mound thereafter entered into three separate development agreements,

and Rembert constructed Auburn Drive as set forth in those agreements. Flower

Mound paid Rembert fifty percent of the Auburn Drive construction cost, but

Rembert alleges in its third amended petition that the August 4, 2008

Development Agreement (the Agreement) required Flower Mound to reimburse

Rembert the full cost of constructing Auburn Drive through a combination of

impact fee credits and direct reimbursement. Rembert alleges that Flower

Mound’s failure to fully reimburse the Auburn Drive construction costs is a

breach of the Agreement or, alternatively, constitutes a compensable taking.

Rembert further seeks judicial declarations (1) that the Impact Fee Act, [2]

the Agreement, and Flower Mound’s ordinances required Flower Mound to

“reimburse Rembert for 100% of the cost to construct Auburn Drive” and (2) that

Flower Mound, Jefferson, and Springer “had a ministerial obligation to forward

the sums owed to [Rembert], and their refusal to do so was unauthorized and

illegal.”

Appellants

answered Rembert’s petition and filed a plea to the jurisdiction that they

amended on two occasions. The trial court conducted an evidentiary hearing on Appellants’

second amended plea to the jurisdiction and granted the plea in part. Appellants

appeal the trial court’s partial denial of their plea to the jurisdiction, and

Rembert appeals the trial court’s partial grant of Appellants’ plea.

III.

Standard of Review

Whether

the trial court had subject matter jurisdiction is a question of law that we

review de novo. Tex. Natural Res. Conservation Comm’n v. IT-Davy , 74

S.W.3d 849, 855 (Tex. 2002). A plea to the jurisdiction is a dilatory plea

that challenges the trial court’s subject matter jurisdiction. Bland Indep.

Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). It is used to defeat a

cause of action without regard to whether the claims asserted have merit. Id.

Although the claims may form the context in which a plea to the

jurisdiction is raised, the plea should be decided without delving into the

merits of the case. Id.

“[S]overeign

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.” [3] Tex. Dep’t of Parks

& Wildlife v. Miranda , 133 S.W.3d 217, 224 (Tex. 2004). In Texas,

sovereign immunity has two components: immunity from liability and immunity

from suit. Tooke , 197 S.W.3d at 332; Miranda , 133 S.W.3d at

224 . Immunity from liability “bars enforcement of a judgment against a

governmental entity” and is an affirmative defense. Tooke , 197 S.W.3d

at 332; Miranda , 133 S.W.3d at 224 . Immunity from suit, on the other

hand, “bars suit against the [governmental] entity altogether” because it

“deprives a court of subject matter jurisdiction.” Tooke , 197 S.W.3d at

332; Miranda , 133 S.W.3d at 224 . This appeal involves immunity from

suit.

When

a governmental entity such as Flower Mound enters into a contract, it waives

immunity from liability but does not waive immunity from suit unless the

legislature has clearly and unambiguously waived the governmental entity’s

immunity from suit. Tooke , 197 S.W.3d at 332–33. To invoke the trial

court’s subject matter jurisdiction over a claim arising out of a governmental

entity’s contractual obligations, the plaintiff must allege a valid waiver of

immunity from suit and plead sufficient facts demonstrating the trial court’s

jurisdiction. Miranda , 133 S.W.3d at 226 ; Tex. Ass’n of Bus.

v. Tex. Air Control Bd. , 852 S.W.2d 440, 446 (Tex. 1993). We construe the

pleadings liberally in favor of the plaintiff, look to the pleader’s intent,

and accept the pleadings’ factual allegations as true. Miranda , 133

S.W.3d at 226 . If, as in this case, a plea to the jurisdiction challenges the

existence of jurisdictional facts, we consider relevant evidence submitted by

the parties that is necessary to resolve the jurisdictional issues. Id. at 227 ; see also Bland , 34 S.W.3d at 555 (stating that “[t]he court

should, of course, confine itself to the evidence relevant to the

jurisdictional issue”). We take as true all evidence favorable to the

nonmovant, and we indulge every reasonable inference and resolve any doubts in

the nonmovant’s favor. Wise Reg’l Health Sys. v. Brittain , 268 S.W.3d

799, 805 (Tex. App.—Fort Worth 2008, no pet.) (citing Miranda , 133

S.W.3d at 228 ). If the evidence creates a fact question regarding

jurisdiction, the trial court must deny the plea to the jurisdiction and leave

its resolution to the factfinder. Miranda , 133 S.W.3d at 227–28. But

if the evidence is undisputed or fails to raise a fact question on the

jurisdictional issue, the trial court rules on the plea to the jurisdiction as

a matter of law. Id. at 228 .

IV.

Breach of Contract

Appellants

contend in their third issue that the trial court does not have subject matter

jurisdiction over Rembert’s breach of contract claim because the Agreement does

not involve the provision of goods and services as required for a waiver of

immunity under local government code chapter 271.

Section

271.152 of the local government code states:

A local governmental

entity that is authorized by statute or the constitution to enter into a

contract and that enters into a contract subject to this subchapter waives

sovereign immunity to suit for the purpose of adjudicating a claim for breach

of the contract, subject to the terms and conditions of this subchapter.

Tex.

Loc. Gov’t. Code Ann. § 271.152 ( West 2005).

A “[c]ontract subject to this subchapter” is defined, in relevant part, as “a

written contract stating the essential terms of the agreement for providing

goods or services to the local governmental entity.” Id. §

271.151(2) (West 2005).

Appellants

argue that, even though Rembert used goods and services to construct Auburn

Drive, the Agreement is not a contract for “goods or services” because it is

ultimately a contract for the conveyance of improved real property. [4]

But the Agreement involved more than the conveyance of improved real property,

and this distinction is illustrated by two supreme court opinions concerning

the provision of goods or services to a municipality by contract. See Kirby

Lake Dev., Ltd. v. Clear Lake City Water Auth. , 320 S.W.3d 829 (Tex. 2010); Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdiv.

Prop./Cas. Joint Self-Ins. Fund , 212 S.W.3d 320 (Tex. 2006).

In Ben

Bolt , ninety-two governmental entities formed an insurance fund to provide

casualty insurance to fund participants. See 212 S.W.3d at 322 . Fund

members elected a governing board, and a board subcommittee resolved self-insurance

claim disputes. See id. at 327 . The Fund argued that its immunity from

suit was not waived by local government code section 271.152 because no goods

or services were provided to the Fund under the insurance contract with a

member entity. See id. Disagreeing, the supreme court held that the

Fund’s immunity from suit was waived because the members provided services to

the Fund in that the members elected the governing board whose subcommittee

resolved claim disputes. See id. Thus, in Ben Bolt , even though

the service provided to the Fund was not the primary purpose of the contract,

the members’ provision of claim dispute services was sufficient to fall within

the waiver of immunity under local government code section 271.152. See id.

at 327–28.

In Kirby Lake , several developers entered into agreements with the Clear Lake

Water Authority. 320 S.W.3d at 832 . The development agreements required the

developers to build water and sewer facilities and lease the facilities to the

Water Authority free of charge. Id. The court of appeals held that the

developers’ “agreement to hire third parties to construct the Facilities and to

build the streets, roads, and bridges” was “sufficient to constitute the

provision of services to the [Water] Authority.” Clear

Lake City Water Auth. v. Friendswood Dev. Co., Ltd. ,

256 S.W.3d 735, 751 (Tex. App.—Houston [14th Dist.] 2008, pet. dism’d) (op. on

reh’g) .

Affirming and holding that the Water Authority’s immunity from suit was waived

by section 271.152, the supreme court stated:

We

agree with the court of appeals that the Agreements entail services provided

directly to the [Water] Authority. The Developers contracted to construct,

develop, lease, and bear all risk of loss or damage to the facilities,

obligations far more concrete than those at issue in Ben Bolt . We

therefore hold that the Agreements contemplate the provision of services under

the statute.

Kirby

Lake ,

320 S.W.3d at 839 (internal citation omitted).

In

this case, the Agreement required Rembert to “construct Auburn Drive

. . . together with all related appurtenances in addition to all

other facilities necessary to serve the Property,” to “acquire in fee simple

all rights-of-way necessary for the Right-Turn Lane,” to “design and construct the

Right-Turn Lane in accordance with [Flower Mound]’s engineering standards,” and

to “work with TxDOT and [Flower Mound] to determine the proper location and

alignment of the Right-Turn Lane.” Clearly, the Agreement required Rembert to

provide services to Flower Mound in the manner, at least, of constructing

Auburn Drive; designing and constructing the Right-Turn Lane; and working with

TxDOT concerning the location, alignment, design, and construction of the

Right-Turn Lane. See id. at 839–40; Ben Bolt , 212 S.W.3d at 327–28;

City of N. Richland Hills v. Home Town Urban Partners, Ltd. , 340 S.W.3d

900 , 908–09 (Tex. App.—Fort Worth 2011, no pet.) (holding agreement to hire

third party contractors, among other things, constituted provision of services

to city); Wight Realty Interests, Ltd. v. City of Friendswood , 333

S.W.3d 792, 797 (Tex. App.—Houston [1st Dist.] 2010, no pet.); Friendswood

Dev. Co. , 256 S.W.3d at 751 ; see also City of San Antonio v. Lower Colo.

River Auth. , No. 03-10-00085-CV, 2011 WL 3307509, at *3 (Tex. App.—Austin

July 29, 2011, no pet.) (holding contract was for goods or services because it

required the water authority “to identify, pursue, and fund feasibility studies

that subsequently became LCRA’s exclusive property”).

Appellants

attempt to distinguish Ben Bolt , Kirby Lake , and other similar

cases by arguing that the contracts at issue in those cases differ from the contract

at issue here because the contract here is “nothing more than a restatement of

independent obligations that Rembert must undertake under the Town’s

development regulations as part of the land-development process.” However, Appellants’

argument requires a close examination of the merits of Rembert’s lawsuit beyond

a review of Rembert’s pleadings and the jurisdictional evidence, an inquiry the

supreme court has cautioned against. See Bland , 34 S.W.3d at 554 .

Furthermore, Appellants’ contention ignores one of the fundamental fact issues

underlying its dispute with Rembert, that is, whether the construction of

Auburn Drive was actually required by Flower Mound’s ordinances. Appellants argue

on appeal and presented evidence to the trial court that Flower Mound’s

ordinances required the construction of Auburn Drive, but Rembert argues on

appeal and pointed to other evidence in the trial court that the property

already had existing access to the north and south at the time Rembert

purchased it. [5] Thus, one possibility is

that the factfinder will determine that Flower Mound’s ordinances did not

require the construction of Auburn Drive. [6] Should that occur, then

the Agreement is not at all a memorialization of Flower Mound’s ordinances.

Therefore, Appellants’ contention that the Agreement merely memorialized

Rembert’s development obligations under Flower Mound’s ordinances cannot be

resolved in this pretrial plea to the jurisdiction proceeding. See

generally Miranda , 133 S.W.3d at 227 (stating trial court cannot grant plea

to jurisdiction if there is a fact question concerning the jurisdictional

issue).

We

hold, based on Rembert’s third amended petition and the parties’ plea to the

jurisdiction evidence, that local government code section 271.152 waives Flower

Mound’s immunity from suit with regard to the Agreement because the Agreement

is a contract for the provision of services to Flower Mound within the meaning

of that statute. See Tex. Loc. Gov’t Code Ann. §§ 271.151(2), .152; Kirby

Lake , 320 S.W.3d at 839–40; Ben Bolt , 212 S.W.3d 327–28; Home

Town , 340 S.W.3d at 908–09; Friendswood Dev. Co. , 256 S.W.3d at

751 . We overrule Appellants’ third issue.

V.

Declaratory Judgment and Individual Defendants

Appellants

contend in their first and fifth issues that the trial court did not have

subject-matter jurisdiction over Rembert’s requested declarations because they

are nothing more than a restatement of Rembert’s breach of contract claim and

because Jefferson and Springer have derivative immunity. Appellants argue in

part of their fourth issue that Rembert may not recover attorney’s fees for

declaratory judgment claims over which the trial court did not have

subject-matter jurisdiction. Because Appellants’ first, fourth, and fifth

issues are related, we address them together.

A.

Applicable Law

The

Declaratory Judgments Act contains a waiver of immunity from suit. See Tex. Civ. Prac. & Rem. Code Ann. § 37.006 (b) (West 2008); City of El Paso v.

Heinrich , 284 S.W.3d 366 , 373 n.6 (Tex. 2009). But this waiver is a

limited one, and determining whether a particular request for declaratory

relief falls within this waiver of immunity is often complicated.

Immunity

from suit is waived if a party joins a governmental entity and seeks a

declaration that an ordinance or statute is invalid, based on either

constitutional or nonconstitutional grounds. See Heinrich , 284 S.W.3d

at 373 n.6; City of Elsa v. M.A.L. , 226 S.W.3d 390 , 391–92 (Tex. 2007); Lakey v. Taylor , 278 S.W.3d 6, 15 (Tex. App.—Austin 2008, no pet.); see

also City of Beaumont v. Bouillion , 896 S.W.2d 143 , 148–49 (Tex. 1995). Likewise, immunity from suit is waived if a party joins a governmental entity

and seeks a declaration construing an ordinance or statute. See Tex.

Lottery Comm’n v. First State Bank of DeQueen , 325 S.W.3d 628 , 633–34 (Tex.

2010) (noting that governmental entities are to be joined in suits to construe

their legislative pronouncements and that immunity from suit is waived in such

suits) (citing Heinrich , 284 S.W.3d at 373 n.6); Tex. Educ. Agency v.

Leeper , 893 S.W.2d 432 , 445–46 (Tex. 1994) (stating that governmental

entities are not immune from suits seeking a construction of their legislative

pronouncements). However, governmental immunity generally bars suits for

retrospective monetary relief, and private parties cannot circumvent a

governmental entity’s immunity from suit by characterizing a suit for money

damages as a declaratory judgment claim. See Heinrich , 284 S.W.3d at

368–69, 371; see also City of Houston v. Williams , 216 S.W.3d 827 ,

828–29 (Tex. 2007) (“The only injury the retired firefighters allege has

already occurred, leaving them with only one plausible remedy—an award of money

damages. As they assert no right to payments from the City in the future, they

lack standing to seek a statutory interpretation on behalf of those currently

employed.”). Therefore, if a litigant joins a governmental entity and seeks an

otherwise proper declaratory judgment construing or invalidating a statute, the

claim is nonetheless barred by governmental immunity if the declaration sought

would have the effect of establishing a right to relief against the

governmental entity for which governmental immunity has not been waived. See

Heinrich , 284 S.W.3d at 372 ; Williams , 216 S.W.3d at 828–29; State

v. BP Am. Prod. Co. , 290 S.W.3d 345, 360 (Tex. App.—Austin 2009, pet. denied).

Furthermore, a party may not seek a declaratory judgment “only in an attempt to

have the trial court decide its breach-of-contract claim.” IT-Davy , 74

S.W.3d at 860 (holding that the limited waiver under the Declaratory Judgment

Act recognized in Leeper “does not allow private parties to sue the

State for money damages”); see also City of Corinth v. NuRock Dev., Inc. ,

293 S.W.3d 360 , 368–69 (Tex. App.—Fort Worth 2009, no pet.) (holding that

immunity is not waived for a requested declaration that the plaintiff “did not

materially breach the [contract] or otherwise fail to meet its obligations to

the City”).

“Private

parties may seek declaratory relief against state officials who allegedly act

without legal or statutory authority[,]” but “such suits are not suits against

the State” because “suits to compel state officers to act within their official

capacity do not attempt to subject the State to liability.” IT-Davy , 74

S.W.3d at 855 (citations omitted). “In contrast, declaratory-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” and “cannot be maintained without legislative permission.” Id.

at 855–56.

B.

Discussion

In

its third amended petition, Rembert requested a judicial declaration that the

Impact Fee Act, the Agreement, and Flower Mound’s ordinances required Flower

Mound to “reimburse Rembert for 100% of the cost to construct Auburn Drive” and

that Flower Mound, “Jefferson[,] and Springer had a ministerial obligation to

forward the sums owed to [Rembert], and their refusal to do so was unauthorized

and illegal.” However, Rembert similarly alleged in its third amended petition

that Flower Mound breached the Agreement and that Rembert is therefore entitled

to recover the amount Flower Mound owed it under the Agreement. Rembert’s

requested declarations merely recast Rembert’s claim for breach of the

Agreement. See IT-Davy , 74 S.W.3d at 860 ; NuRock , 293 S.W.3d at

368–69.

Rembert

attempts to distinguish its declaratory judgment claim from its breach of

contract claim by arguing that a judicial interpretation of the Impact Fee Act

and Flower Mound ordinances is required to determine whether Flower Mound is

required to reimburse Rembert fifty or one hundred percent of the cost of

constructing Auburn Drive. “But in every suit against a governmental entity

for money damages, a court must first determine the parties’ contract or

statutory rights; if the sole purpose of such a declaration is to obtain a

money judgment, immunity is not waived.” Williams , 216 S.W.3d at 829

(citing IT-Davy , 74 S.W.3d at 860 ). Thus, although the Declaratory

Judgments Act typically waives immunity when the construction of a statute or

ordinance is involved, see First State Bank of DeQueen , 325 S.W.3d at 633–34,

the trial court in this case must construe the Impact Fee Act, Flower Mound’s

ordinances, and the Agreement to determine whether Flower Mound breached the

Agreement. Thus, Rembert’s declaratory judgment claim is merely a recast of

its breach of contract claim, and immunity has not been waived. See

Williams , 216 S.W.3d at 829 ; IT-Davy , 74 S.W.3d at 860 ; NuRock ,

293 S.W.3d at 368–69.

Rembert

also contends that Flower Mound’s immunity has been waived because governmental

entities must be joined in suits to construe their legislative pronouncements.

But as previously discussed, the construction of the ordinances will occur as

part of and is arguably dispositive of Rembert’s breach of contract claim

against Flower Mound, and Flower Mound is already a party to the case for that

purpose. Furthermore, Rembert’s reliance on City of Crowley v. Ray is

misplaced because that case involved a claim for liability against a third-party

engineer rather than the city; the city was a party only because the construction

of city documents was at issue and pertained to the engineer’s potential

liability. See No. 02-09-00290-CV, 2010 WL 1006278 , at *1, *5 (Tex.

App.—Fort Worth Mar. 18, 2010, no pet.); see also Tex. Civ. Prac. &

Rem. Code Ann. § 37.006 (a) (requiring joinder of “all persons who have or claim

any interest that would be affected by the declaration”). We hold that the

trial court erred by denying Appellants’ plea to the jurisdiction as to

Rembert’s request for a judicial declaration that the Impact Fee Act, Flower

Mound’s ordinances, and the Agreement required Flower Mound to “reimburse

Rembert 100% of the cost to construct Auburn Drive.” We sustain Appellants’

first issue.

Appellants

further contend that because the trial court lacked subject-matter jurisdiction

over Rembert’s claim for declaratory relief against it, the trial court also

lacked subject-matter jurisdiction over the claims against Jefferson and

Springer. Rembert, citing Heinrich , 284 S.W.3d at 378–79, responds that

Jefferson and Springer do not have immunity because the claim against them is

based on their alleged illegal conduct. Specifically, Rembert argues that

Jefferson and Springer had a ministerial duty to sign the check to Rembert for

the additional amounts owed and that “[t]his situation is similar to the one in

Heinrich where the individually named defendants did not enjoy immunity

where they refused to pay the individual plaintiff in accordance with the terms

of the statute.” But the claim in Heinrich differs from the claim against

Jefferson and Springer in two significant ways. First, Heinrich alleged

entitlement to future pension benefits and did not seek only a retrospective

remedy. See id. at 377 (holding claim for prospective benefits must be

against individual officials in their official capacity). Here, Rembert seeks

only retrospective relief in the form of reimbursement of the cost of

constructing Auburn Drive. Second, Heinrich’s allegation involved a statutory

rather than a contractual duty. See id. at 369 . “[D]eclaratory-judgment

suits against state officials ‘allegedly act[ing] without legal or statutory

authority’” are permissible, but “‘declaratory-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’” and are not permissible as ultra vires suits against individuals

in their official capacity. See id. at 371–72 (quoting IT-Davy ,

74 S.W.3d at 855–56). Here, Rembert’s request for a declaration that Jefferson

and Springer had a ministerial duty to issue payment under the Impact Fee Act,

the applicable ordinances, and the Agreement is an impermissible recasting of

Rembert’s breach of contract claim and another manner of seeking retrospective

relief against Flower Mound, and that claim must be brought against Flower

Mound rather than the individual officers. See id. at 371–72; IT-Davy ,

74 S.W.3d at 855–56. We sustain Appellants’ fifth issue.

Because

we have held that the trial court did not have subject-matter jurisdiction over

Rembert’s declaratory judgment claims, we also sustain the portion of Appellants’

fourth issue relating to Rembert’s claim for attorney’s fees based on its

request for declaratory judgment. See Home Town , 340 S.W.3d at 913

(holding party could not recover attorney’s fees for prosecuting claims for

which the city’s immunity had not been waived).

VI.

Impact Fee Act Claim

Appellants

argue in their second issue and the remainder of their fourth issue that the

trial court did not have subject-matter jurisdiction over Rembert’s Impact Fee

Act claim or Rembert’s corresponding request for attorney’s fees. However,

Rembert unequivocally pleaded in the trial court and asserted in its appellate

brief that it does not allege a claim under the Impact Fee Act, and we do not

read Rembert’s third amended petition to assert a claim under the Impact Fee

Act. [7]

Instead, as we understand Rembert’s pleading, the Impact Fee Act is relevant

because Appellants contend that the Impact Fee Act and Flower Mound’s

ordinances limit Rembert’s reimbursement to fifty percent. As discussed above,

that dispute will be resolved as part of Rembert’s breach of contract claim.

Thus, we overrule Appellants’ second issue and the remainder of their fourth

issue. See Tex. R. App. P. 47.1 (requiring appellate court to address

“every issue raised and necessary to final disposition of the appeal”).

VII.

Inverse Condemnation

Rembert

contends in its sole cross-issue that the trial court erred by granting Appellants’

plea to the jurisdiction as to Rembert’s inverse condemnation claim.

A.

Applicable Law

A

prohibition against taking private property for public use without just

compensation is set forth in article I, section 17 of the Texas constitution, which

provides that “[n]o person’s property shall be taken, damaged, or destroyed for

or applied to public use without adequate compensation being made, unless by

the consent of such person.” Tex. Const. art. I, § 17; see Mayhew v. Town

of Sunnyvale , 964 S.W.2d 922, 933 (Tex. 1998). Takings are classified as

either physical or regulatory. Mayhew , 964 S.W.2d at 933 ; Sefzik v.

City of McKinney , 198 S.W.3d 884, 891 (Tex. App.—Dallas 2006, no pet.). A

physical taking is an unwarranted physical appropriation or invasion of the

property. Mayhew , 964 S.W.2d at 933 . A compensable regulatory taking

can occur when a governmental entity imposes restrictions that either deny a

property owner all economically viable use of his property or unreasonably interfere

with the owner’s right to use and enjoy the property. Id. at 935 . A

distinct category of regulatory taking occurs when the government conditions

the approval of a permit or some other type of governmental approval on an

exaction from the approval-seeking landowner. See Lingle v. Chevron U.S.A.,

Inc. , 544 U.S. 528, 548 , 125 S. Ct. 2074, 2087 (2005) (referring to

“land-use exaction” taking theory); Dolan v. City of Tigard , 512 U.S.

374 , 377–80, 114 S. Ct. 2309 , 2312–14 (1994) (permit to expand store and parking

lot conditioned on dedication of portions of property for greenway and bicycle

and pedestrian pathway); Nollan v. Cal. Coastal Comm’n , 483 U.S. 825 ,

827–28, 107 S. Ct. 3141 , 3143–44 (1987) (permit to build larger residence on

beachfront property conditioned on dedication of easement allowing public to

traverse strip of property). Specifically, an exaction occurs if a

governmental entity requires an action by a landowner as a condition to

obtaining governmental approval of a requested land development. Town of

Flower Mound v. Stafford Estates, L.P. , 71 S.W.3d 18, 30 (Tex. App.—Fort

Worth 2002), aff’d , 135 S.W.3d 620, 630 (Tex. 2004) (citing Dolan ,

512 U.S. at 377 , 114 S. Ct. at 2312–13, and Nollan , 483 U.S. at 827 , 107

S. Ct. at 3143 ).

As

stated by the supreme court in Stafford ,

conditioning

government approval of a development of property on some exaction is a

compensable taking unless the condition (1) bears an essential nexus to the

substantial advancement of some legitimate government interest and (2) is

roughly proportional to the projected impact of the proposed development.

Town

of Flower Mound v. Stafford Estates, L.P. , 135 S.W.3d 620, 634

(Tex. 2004).

B.

Discussion

In

its third amended petition, Rembert alleged that “the number of vehicular trips

from the houses in the Subdivision represent 5% or less of the capacity of the

roadways Rembert was required to construct by [Flower Mound],” that “Rembert

was coerced into signing (and did not consent to) the boilerplate waiver and

release language to the extent [Flower Mound] was considering paying Rembert

less than 100% of the Auburn Drive costs,” and that “Rembert’s understanding at

the time the Agreement was signed was that Rembert would be reimbursed or

credited 100% of the roadway construction costs based on the express terms of

the Agreement and Chapter 42-78 of the [Flower Mound] Code.” Rembert also

alleged as follows:

In

the alternative, the construction cost required of Rembert for roadways related

to the Subdivision does not meet the proportionality requirement for an

exaction under Article I, Section 17 of the Texas Constitution. Rembert is

entitled to recover from [Flower Mound] the total street construction costs

incurred by Rembert related to the Subdivision (or at a minimum, 95% of the

cost). [Flower Mound] does not enjoy immunity from constitutional violations

for illegal exactions.

Under

facts very similar to this case, the supreme court held in Stafford that

Flower Mound was required to compensate Stafford for the cost of rebuilding a

road abutting but not within Stafford’s development. See id. at

645 . Flower Mound, as a condition of its approval of the plats for the second

and third phases of Stafford’s development, required Stafford to rebuild the

asphalt road next to the development. Id. at 623 . Stafford objected,

rebuilt the road as Flower Mound required, and sued Flower Mound for

compensation. Id. at 624 . After a lengthy discussion of the United

States Supreme Court’s opinions in Nollan and Dolan and after

rejecting Flower Mound’s attempts to distinguish those cases, the Stafford

Court agreed that Flower Mound advanced legitimate government interests—such as

the safety and durability of the road—by requiring Stafford to rebuild the

road. Id. at 643–44. However, the court also held that Flower Mound

failed to show that the required rebuild of the road bore “any relationship to

the impact of the Stafford Estates development on the road itself or on the

Town’s roadway system as a whole.” [8] Id. at 645. The Court

concluded,

On

this record, conditioning development on rebuilding Simmons Road with concrete

and making other changes was simply a way for the Town to extract from Stafford

a benefit to which the Town was not entitled. The exaction the Town imposed

was a taking for which Stafford is entitled to be compensated.

Id.

Relying on Stafford , Rembert argues that the trial court erred by

granting Appellants’ plea to the jurisdiction as to its inverse condemnation

claim.

Appellants

argue that Stafford is distinguishable because it “involved an off-site

road improvement obligation, not an internal subdivision road.” But Appellants

omit that Flower Mound required Rembert to not only build Auburn Road to

connect F.M. 1171 and Peters Colony Road but also to acquire the land necessary

to do so in the manner that Flower Mound required instead of permitting Rembert

to build two points of egress on the land it already owned and that abutted

those two roads. In other words, Flower Mound’s requirement that Rembert

acquire additional land and construct Auburn Drive is not “the garden-variety

on-site requirement” that Appellants contend it to be.

In

a further attempt to distinguish Stafford , Appellants argue that the

evidence that the development’s use of Auburn Drive will not exceed five

percent of its capacity is not evidence of how much traffic from the

development will use Auburn Drive now or in the future. Appellants posit that

the development could hypothetically account for seventy-five percent of the

traffic on Auburn Drive but still account for less than five percent of Auburn Drive’s

capacity. But Appellants ignore other evidence in the record that, combined

with the five percent capacity evidence, presents an issue for the factfinder.

For example, there is evidence that Auburn Drive was a fee-impact eligible road

and that Flower Mound “anticipated that the construction of Auburn Drive would

likely be necessary within the upcoming 10-year window as a roadway

improvement.” While this certainly did not guarantee that Flower Mound would

in fact build Auburn Drive, this evidence, combined with the evidence that the

development would use only five percent or less of Auburn Drive’s capacity,

presents a fact question on the proportionality prong of Rembert’s takings

claim. [9] See id. In other

words, the factfinder must determine whether Flower Mound took advantage of

Rembert’s request to develop the property and exacted a benefit to which it was

not entitled by requiring that Rembert construct Auburn Drive.

Appellants

also argue that the trial court properly dismissed Rembert’s takings claim

because Rembert consented to the alleged taking. A landowner may consent to

property being taken or damaged without payment of any compensation. Tex.

Const. art. I, § 17; Hale v. Lavaca Cnty. Flood Control Dist. , 344

S.W.2d 245, 248 (Tex. Civ. App.—Houston 1961, no writ). Consent is an act of

the will; it need not be written but may be spoken, acted, or implied. Hightower

v. City of Tyler , 134 S.W.2d 404, 407 (Tex. Civ. App.—El Paso 1939, writ ref’d).

To

support their consent argument, Appellants quote language in the Agreement that

purports to waive any takings claims, points to e-mails it contends show that

Rembert understood all along that his total reimbursement would not exceed

fifty percent of the cost of constructing Auburn Drive, and argues that Rembert

never objected to the condition that it construct Auburn Drive. The e-mails,

however, all post date the first development agreement, and nothing in the

e-mails confirms Rembert’s supposed understanding or consent to Appellants’

contention that total reimbursement could not exceed fifty percent of the

construction cost. To the contrary, each e-mail to or from Rembert can be

construed to speak separately about impact fee credits—which are capped at

fifty percent of total cost—and reimbursement—which may or may not be capped at

fifty percent of total cost. [10] Moreover, Rembert

contends that it did not consent to any taking and that it never understood or

read the Agreement to waive or otherwise preclude its ability to recover up to

100% of the construction cost. And Rembert presented evidence to support these

contentions. Specifically, Reginald Rembert’s affidavit in opposition to the

plea to the jurisdiction states that “Rembert’s intent and understanding at the

time the Agreement was signed was that [Flower Mound] would pay Rembert the

difference between the Auburn Drive construction cost minus the total amount of

roadway impact fees in the Subdivision.” The affidavit also explains Rembert’s

interpretation of Flower Mound’s reimbursement obligation under the Agreement

and states that “[b]ecause Rembert was to be reimbursed for 100% of its costs

to construct Auburn Drive pursuant to the express terms of the Agreement, there

were no constitutional or inverse condemnation claims for Rembert to waive at

that time.” And based on this evidence, there is a question of fact as to

whether Rembert consented to the alleged taking. See generally Miranda ,

133 S.W.3d at 227 (stating trial court cannot grant plea to jurisdiction if

there is a fact question concerning the jurisdictional issue). Compare

Stafford , 135 S.W.3d at 624 (stating developer objected “at every

administrative level”), with Rischon Dev. Corp. v. City of Keller , 242

S.W.3d 161 , 168–69 (Tex. App.—Fort Worth 2007, pet. denied) (affirming judgment

that developer consented to conditions imposed by not objecting before signing

development agreement). [11]

Finally,

Appellants contend that Flower Mound did not have the requisite intent required

to support a takings claim because a breach of contract cannot result in a

taking. We disagree for two reasons. First, Rembert clearly pleaded its

inverse condemnation claim in the alternative to its breach of contract claim. See

Tex. R. Civ. P. 48 (permitting parties to plead alternative, inconsistent

claims for relief). Should the trial court determine that the Agreement and

Flower Mound’s ordinances required Flower Mound to reimburse Rembert only fifty

percent of the Auburn Drive construction cost, Rembert’s inverse condemnation

claim would not rely on the Agreement as a basis of liability. See

generally Sefzik , 198 S.W.3d at 896 (affirming denial of summary judgment

on takings claim based on condition city placed on development approval because

claim not based on contract). In other words, Rembert’s takings claim, because

it is pleaded in the alternative to its breach of contract claim, is not

dependent upon Flower Mound’s alleged breach of contract.

Second,

the cases upon which Appellants rely are distinguishable. For example, the

claimants in Kirby Lake contractually agreed that the Water Authority

could use the facilities for free until the Water Authority purchased the

facilities and thus could not claim that the Water Authority’s use of the

facilities constituted a taking. See 320 S.W.3d at 844 . In Gen.

Servs. Commiss’n v. Little-Tex Insulation Co., 39 S.W.3d 591 , 593–94,

598–99 (Tex. 2001), the claimant constructed a recreational facility for Texas

A&M University and contended that by not paying additional amounts under

the contract, the school had taken the claimant’s “labor and materials to build

an athletic facility for use as part of its public university.” Finally, in NuRock ,

NuRock settled a federal lawsuit against the City of Corinth and agreed as part

of the settlement to make improvements to a specified road. See 293

S.W.3d at 367 . The claimants in each case attempted inverse condemnation

claims based only on contractual obligations.

Here,

there is evidence, some of it conflicting, that the construction of Auburn

Drive may or may not have been required by Flower Mound’s ordinances, that

Flower Mound conditioned approval of Rembert’s development on Rembert’s

construction of Auburn Drive, that only then did the parties enter into a development

agreement, and that Rembert never consented to building Auburn Drive without

receiving full reimbursement. Should Appellants prevail on their contention

that the Agreement and Flower Mound’s ordinances limit Rembert’s reimbursement

to fifty percent, Rembert should be permitted to proceed on its alternative

claim that Flower Mound’s ordinances and resulting development condition

constituted a compensable taking. See generally Stafford , 135 S.W.3d at

645 . Of course, if Rembert is found after a trial on the merits to have

consented to receiving only fifty percent reimbursement (or if another defense

to Rembert’s alternative claim for a compensable taking bars Rembert’s recovery),

Rembert could not prevail on its takings claim. Thus, our holding should not

be construed (as Appellants contend in their motion for rehearing) to mean that

a party may consent via contract to a defined reimbursement and also seek the

remainder of the cost through a takings claim.

On

this record, given the conflicting evidence and the alternative nature of

Rembert’s inverse condemnation claim, we hold that the trial court erred by

granting Appellants’ plea to the jurisdiction as to Rembert’s alternatively

pleaded inverse condemnation claim. See Tex. R. Civ. P. 48; see also

Stafford , 135 S.W.3d at 645 ; Miranda , 133 S.W.3d at 227 . We sustain

Rembert’s sole cross-issue.

VIII.

Conclusion

Having

overruled Appellants’ second and third issues and part of their fourth issue,

we affirm in part the trial court’s denial of Appellants’ plea to the

jurisdiction. Having sustained Rembert’s sole cross-issue, we reverse the part

of the trial court’s order that granted Appellants’ plea to the jurisdiction as

to Rembert’s inverse condemnation claim. Finally, having sustained Appellants’

first and fifth issues and part of their fourth issue, we reverse in part the

trial court’s order denying Appellants’ plea to the jurisdiction and dismiss

for lack of subject-matter jurisdiction Rembert’s request for judicial

declarations and request for attorney’s fees based on that claim. We remand

the case to the trial court for further proceedings consistent with this

opinion.

ANNE GARDNER

JUSTICE

PANEL:

GARDNER,

WALKER, and MCCOY, JJ.

DELIVERED: March 1, 2012

[1] See Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (a)(8) (West Supp. 2011) (permitting

interlocutory appeal from an order granting or denying a plea to the

jurisdiction filed by a governmental unit).

[2] See Tex. Loc. Gov’t

Code Ann. §§ 395.001–.021 (West 2008), .022 (West Supp. 2011); .024–.079 (West

2008), .081 (West Supp. 2011).

[3] Courts often use the terms

interchangeably, but governmental, rather than sovereign, immunity is at issue

in this case. See Tooke v. City of Mexia , 197 S.W.3d 325 , 329

n.11 (Tex. 2006) (distinguishing the State’s sovereign immunity from the

governmental immunity enjoyed by political subdivisions of the State such as

counties, cities, and school districts).

[4] See , e.g. , Brown

Water Marine Serv., Inc. v. Aransas Cnty. Navigation Dist. No. 1 , No.

13-07-00055-CV, 2008 WL 1822727 , at *2 n.1 (Tex. App.—Corpus Christi Apr. 24,

2008, pet. denied) (mem. op.) (holding lease of property not goods or services);

Somerset Indep. Sch. Dist. v. Casias , No. 04-07-00829-CV, 2008 WL

1805533 , at *3 (Tex. App.—San Antonio Apr. 23, 2008, pet. denied) (mem. op.)

(holding contract was one for the conveyance of land even though the seller was

required to perform environmental cleanup as a condition of closing).

[5] Appellants argue that

“Rembert fails to distinguish between the existing road conditions suitable for

the existing Country Meadow Estates Mobile Home Park located on the Property

and the road access needed for the proposed 52-lot Casa de Rembert residential

subdivision.” But this is a question of fact for the factfinder.

[6] We do not imply that the

factfinder will or should make this determination and note only that it is one

possibility.

[7] Rembert pleaded in its

third amended petition that it “is not seeking an impact fee refund under §

395.025, Tex. Loc. Govt. Code” and wrote in its appellate brief that “Rembert

is not making a ‘claim’ under Chapter 395.”

[8] Stafford had offered

evidence that its development would increase traffic on the road by only about

eighteen percent. Id. at 644.

[9] The parties do not dispute

that the construction of Auburn Drive served legitimate government interests,

the first prong of the takings analysis. See id. at 634.

[10] Some of the e-mails do

support Appellants’ contention that all reimbursement to Rembert could not

exceed fifty percent of the construction cost, but Rembert was not a sender or

recipient of those e-mails.

[11] Also, we note that

neither Stafford nor Rischon was decided after a pretrial plea to

the jurisdiction and that Appellants resisted responding to discovery in this

case before the trial court ruled on its plea to the jurisdiction. See

Stafford , 135 S.W.3d at 624 ; Rischon , 242 S.W.3d at 166 .