1 

### REVISED

United States Court of Appeals,

Fifth Circuit.

No. 94-60449.

Jose GRACIA, et al., Plaintiffs-Appellants, Cross-Appellees,

and

Healthsouth Rehabilitation Center, Intervenor-Appellant, CrossAppellee,

v.

BROWNSVILLE HOUSING, et al., Defendants-Appellees,

Cross-Appellants.

Feb. 14, 1997.

Appeal from the United States Dis trict Court for the Southern

District of Texas.

Before KING, JOLLY and DENNIS, Circuit Judges.

PER CURIAM:

This appeal arises from a terrible accident. In the summer of

1988, the Jose Gracia family wa s visiting Ezequiel Gracia, a

relative, w ho was a resident of the Victoria Gardens Housing

Project, a public housi ng project in Brownsville, Texas. During

the visit, four children were playing in Mr. Gracia's hammock,

which was strung between two trees near his apartment. One of the

trees, a decayed avocado tree over twenty feet high, collapsed and

fell on the children. One of Jose Gracia's children was killed and

another suffered paralysis and permanent brain damage. This case

presents the primary question, as it relates to jury instructions,

whether the Brownsville Housing Authority ("BHA") was covered under1 The Cit y of Brownsville settled prior to trial and was

dismissed from this action.

2 the Texas Tort Claims Act at the time of the accident. The answer

to this question determines t he standard of care the BHA owed to

the Gracia children.

I

Jose Gracia ("Gracia") initial ly filed this action in state

court seeking damages under Texas landlord/tenant principles. The

case was removed to federal court when Gracia added a claim under

42 U.S.C. § 1983. Gracia named the following defendants: the BHA;

the City of Brownsville 1 ; Raul Trevino ("Trevino"), individually

and as Executive Director of the BHA; and Genovevo Rubalcaba

("Rubalcaba"), individually and as Superintendent of Maintenance of

the BHA.

The BHA moved for summary judgment but the district court

denied the motion. The case then went to trial and was submitted

to the jury on special interrogatories. The jury found no

liability. The court then granted a directed verdict in favor of

the individua l defendants in their individual capacities and

entered judgment dismissing the complaint. Gracia's motion for a

new trial was denied.

On appeal, Gracia argues first, that, with respect to the

state law claims, the jury charge did not state the correct

standard of care; second that, with respect to the section 1983

claim, the jury instructions incorrectly conditioned consideration

of the claim upon a finding of state law negligence; and, finally,2 The first interrogatory read:

Do you find from a preponderance of the e vidence

that any of the named Defendants were negligent?

You are instructed that any of the individuals named

were negligent if:

A) The tree posed an unreasonable risk of harm; and

B) The Defendants knew of the danger; and

C) The Defendants failed to exercise ordinary care to

eliminate the danger.

3 that, with respect to the individual defendants, the directed

verdict was error. The BHA filed a cross-notice of appeal

asserting that the district judge erred in denying the BHA summary

judgment on Gracia's section 1983 claim. These appeals are now

before the court.

II

A

The initial point we address is whether the first

interrogatory submitted to the jury correctly stated the applicable

standard of care owed by the BHA to the Gracia chil dren. 2

Specifically, we ask: Did the defendants' duty of care to the

visiting Gracias arise only if the defendants had actual knowledge

of the danger posed by the tree or did th e duty of care arise if

the defendants had constructive knowledge of the danger, i.e., if

the defendants, b y the exercise of reasonable care, should have

known of the danger. The district court instructed the jury that

the defendants must have poss essed actual knowledge of the

dangerous tree in order to be held liable. Whether the district3 The Texas Tort Claims Act provides:

§ 101.022. Duty Owed: Premise and Special Defects

a) If a claim arises from a premise defect, the

governmental unit owes to the claimant only the

duty that a private person owes to a licensee on

private property, unless the claimant pays for the

use of the premises.

Tex. Civ. Prac. & Rem.Code Ann. § 101 .022 (West 1986). A

private person owes a licensee only the duty to refrain from

"injur[ing] a licensee by willful, wanton or grossly negligent

conduct, and [to] use ordinary care either to warn a licensee

of, or to make reasonably safe, a dangerous condition of which

the owner is aware and the licensee is not." S ee State Dep't

of Highways & Public Transp. v. Payne, 838 S.W.2d 235, 237

(Tex.1992) (emphasis added).

If the Act does not apply, the BHA stands in the shoes of

a private litigant. The standard of care for private persons

in the landlord/tenant context is stated in Parker v. Highland

Park, Inc., 565 S.W.2d 512, 515 (Tex.1978). In P arker, the

court held th at a landlord owed the following duty with

respect to areas of leased premises that lessees were entitled

to use even though they remained in the landlord's control:

A possessor of land who leases a part thereof and

retains in his own control any other part which the

lessee is entitled to use as appurtenant to the

part leased to him, is subject to liability to his

lessee and others lawfully upon the land with the

consent of the lessee or a sublessee for physical

harm caused by a dangerous condition upon that part

of the land retaine d in the lessor's control, i f

the lessor by the exercise of reasonable care could

have discovered the condition and the unreasonable

risk involved therein and could have made the

condition safe.

P arker, 565 S.W.2d at 515 (quoting Restatement (Second) of

Torts § 360) (emphasis added).

4 court erred in its actual knowled ge instruction depends upon

whether the Texas Tort Claims Act applied to the BHA at the time of

the accident. 3

The plaintiffs argue that the BHA, at the time of this4 Under the Texas Tort Claims Act, a city is protected by the

statute only with respect to the performance of governmental

functions, not the performance of proprietary functions. Tex. Civ.

Prac. & Rem.Code Ann. § 101.0215(a) (West 1996).

5 Under current Texas law, there is no question but that the

BHA is covered under the Texas Tort Claims Act. In August 1989, a

statute was enacted specifically providing that "[f]or all

purposes, including the application of the Texas Tort Claims Act

..., a housing authority is a unit of government and the functions

of a housing authority are essential governmental functions and not

proprietary functions." Tex. Local Gov't Code Ann. § 392.006 (West

Supp.1997). Gracia argues that this statute is inapplicable

because this cause of action accrued prior to its effective date.

The BHA counters that the statute is merely a codification of

preexisting law and that the BHA has always been a unit of

government for purposes of the Texas Tort Claims Act.

Alternatively, the BHA argues that the statu te applies to all

actions filed after its effective date and, therefore, applies to

this action. We find it unnecessary to address the applicability

of this statute to the present action.

5 accident, did not come within the scope of the Texas Tort Claims

Act because the BHA was not a unit of government under the terms of

the statute; instead, the BHA was only a subdivision of the city,

and it performed only a proprietary—not a governmental—function. 4

We do not agree. 5

We first tur n to examine the applicable law at the time the

accident occurred in the summer of 1988. Under the Texas Tort

Claims Act, then and now, an "institution, agency, or organ of

government the status and authority of which [is] derived from the

Constitution of Texas or from laws passed by the legislature under

the constitution" is considered a unit of government. Tex. Civ.

Prac. & Rem.Code Ann. § 101.001(2)(D) (West 1986). The statute

creating housing authorities reads, in relevant part,

(a) A housing authority is created in each municipality in the

state.6 This statute was enacted as Acts 1987, 70th Leg. Ch. 149, §

1 and took effect on September 1, 1987. Thus, the statute was in

effect at the time of the accident at issue.

6 (b) A municipal housing authority is a public body corporate

and politic.

(c) A municipal housing authority may not transact business or

exercise its p owers until the governing body of the

municipality declares by resolution that there is a need for

the authority.

Tex. Local Gov't Code Ann. § 392.011 (West 1988). 6 Thus, a housing

authority is created by the Tex as legislature as an entity

independent of the city and thereafter, the respective city, also

through a legislative grant of powe r, activates the housing

authority. Applying this statute to the definition of a

governmental unit in the Act, it seems quite clear that the BHA is

an agency that derives its status and authority from an act of the

Texas legislature. It is true, of course, that this status and

authority lies dormant until the city acts. This power of the city

that activates the housing authority, however, derives from a grant

from the legislature. Thus, in every sense, it can be said that

all status and authority enjoyed by the housing authority is

derived from the Texas legislature. Consequently, the BHA is

covered under the Act.

Indeed, this appeal presents a case that is closely analogous

to Huckabay v. Irving Hosp. Auth., 87 9 S.W.2d 64 (Tex.App.1993).

There, the court held that the hospital authority was a unit of

government for purposes of the Tort Claims Act, because the

authority fell within the definition of "governmental unit" under

the Act. Id. at 66. See also Edinburg Hospital Authority v.7

Trevino

, No. 95-0939, 1997 Westlaw 47912 (Tex. 1997). Specifically,

the court found that the City of Irving had created the Authority

pursuant to a statute authorizing such entities and that,

therefore, the Authority was an "inst itution, agency or organ of

government the status and authority of which [was] derived from the

constitution of Texas or from laws passed by the legislature under

the constitution." Id. The BHA occupies a position which, in its

essence, is the same as the Hospital Authority in Huckabay.

It therefore seems indisputable that the BHA falls within the

express terms of the Texas Tort Claims Act. Because we conclude

that the BHA is entitled to the protection of the Texas Tort Claims

Act, we find that the jur y interrogatory correctly stated the

standard of care owed by the BHA to the visiting Gracias.

B

As we have noted, the case was submitted to the jury on

special interrogatories. The first interrogatory, discussed above,

asked the jury whether any of the defendants were negligent. The

jury instructions then conditioned consideration of Gracia's

section 1983 claim upon a finding of negligence. Specifically, the

jury was inst ructed not to consider or answer any additional

interroga tories unless the first interrogatory on negligence was

answered in the affirmative.

Gracia contends that the interrogatory conditioning the jury's

consideration of the section 1983 federal claim upon a finding of

negligence under state law was erroneous. We will assume, without

deciding, that the instruction wa s erroneous. We nevertheless7 Federal Rule of Civil Procedure 61 reads,

No error

... or defect

... in anything done or omitted by

the court ... is ground for granting a new trial or for

setting aside a verdict or for vacating, modifying, or

otherwise disturbing a judgment or order, unless refusal

to take such action appears to the court inconsistent

with substantial justice. The court at every stage of

the proceeding must disregard any error or defect in the

proceeding which does not affect the substantial rights

of the parties.

8 con clude that, because Gracia failed to establish a prima facie

case under section 1983, any error was harmless under Federal Rule

of Civil Procedure 61. 7

Gracia's section 1983 claim, in its essence, alleges that the

defendants deprived his children of a right under federal law to

have the housing project maintained in a safe condition. We reject

this basis as being insufficient to state a claim under section

1983. Indeed, we find that the Fair Housing Act and its

implementing regulations, relied upon by Gracia, do not confer on

the visiting Gracia children any enforceable rights.

We first look to the relevant portion of section 1983, which

provides:

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory or the

District of Columbia, subjects or causes to be subjected, any

citizen of the United States

... to the deprivation of any rights ... secured by the Constitution and laws shall be

liable to the party injured in an action at law....

In Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555

(1980), the Court recognized that section 1983 provided a cause of

action to redress violations of federal statutes and not solely

violations of the Constitution. No cause of action exists,9

however, "where t he statute in question does not "create

enforceable rights, privileges, or immunities within the meaning of

section 1983.' " S uter v. Artist M., 503 U.S. 347, 365, 112 S.Ct.

1360, 1371, 118 L.Ed.2d 1 (1992) (quoting Wright v. Roanoke Redev.

& Housing Auth., 479 U.S. 418, 423, 107 S.Ct. 766, 770, 93 L.Ed.2d

781 (1987)).

Gracia alleged a right, or rights, derived from federal

regulations enacted pursuant to the Fair Housing Act. Gracia's

argument is defective in several respects.

First, it is not clear that regulations can be considered

"laws" for purposes of creating a right actionable under section

1983. S ee, e.g., Wright v. Roanoke Redevelopment and Housing

Auth., 479 U.S. 418, 437-39, 107 S.Ct. 766, 778, 93 L.Ed.2d 781

(1987) (O'Connor, J., dissenting).

Second, even if regulations may create actionable rights,

there is no evidence that any of the cited regulations have been

violated by the BHA or its employees. Gracia specifically relies

up on 24 C.F.R. § 966.4. This regulation, however, only requires

that certain provisions be contained in leases entered into under

the Act. See 24 C.F.R. § 966.4 (stating "[a] lease shall be entered

into between the [public housing agency] and each tenant

... which

shall contain the provisions described hereinafter"). Although it

is true that the regulation requires that a provision be included

in the lease requiring the housing agency to maintain common areas

in a safe condition, ther e is no evidence that the BHA failed to

include the p rovision in the subject lease. S ee 24 C.F.R. §8 T h is regulation is titled "Tenant's right to use and

occupancy" and reads, in relevant part:

The lease shall provi de that the tenant shall have the

right to exclusive use and occupancy of the leased unit

by the members of the household authorized to reside in

the unit in accordance with the lease, including

reasonable accommodation of their guests.

24 C.F.R. 966.4(d)(1).

10 966.4(e)(4). In fact, the lease between Ezequiel Gracia and the

BHA contained a provision that stated,

[t]he authority agrees to keep the building facilities, common

areas and grounds not otherwise assigned to the Tenant for

maintenance and upkeep, in a clean and safe condition and to

make necessary repairs to the premises.

It appears that the failure to comply with this term of the lease

may give rise to a breach of contract action in favor of Ezequiel

Gracia. This provision, however, does not give rise to a section

1983 action in favor of persons who are not even parties to the

lease.

This point brings us to a third problem with Gracia's claim

under the regulatio ns: His children are not within the scope of

the regulations that allegedly create the federal right upon which

he relies. The Gracia children were not residents of the housing

project and so the obligations of the BHA do not run to them.

Gra c ia attempts to rely upon 24 C.F.R. § 966.4(d) 8 to support his

claim, but that provision only requires that, with respect to use

and occupancy r ights, the lease recognize the t enant's right to

make "reasonable accommodations" for his guests and does not confer

any enforceable rights upon the Gracia children.

In sum, we conclude that Gracia failed to state a prima facie9 Our hol dings as to the first two issues on appeal moot

Gracia's third point of error—that the trial judge erred in

granting directed verdicts in favor of the individual defendants in

their individual capacities. Gracia failed to state a claim under

section 1983, thus, there could be no individual liability as to

that claim. The state law claims were premises liability claims,

a nd because neither Trevino nor Rubalcaba were possessors of the

property they owed no individual duty to the Gracia children.

11 case under section 1983 because he failed to demonstrate that any

act or failure to act by the BHA deprived his children of any

r ights to which they were entitled under federal law. Thus, any

error that occurred as a result of the trial court's structuring of

the jury interrogatories on the section 1983 claim was harmless.

III

In conclusion, we hold that the jury was properly instructed

with respe ct to Gracia's state law negligence claim because the

Texas Tort Claims Act encompasses the BHA and, thus, the applicable

standard of care was set out in the jury interro gatory.

Additionally, we conclude that any error in connection with the

instructions regarding Gracia's section 1983 claim was harmless

because Graci a failed to state a viable claim under the section. 9

The judgment of the district court is therefore

AFFIRMED.

DENNIS, Circuit Judge, concurring:

While I concur in the result reached by the majority, I am

troubled by the disposition of the § 1983 claim against the

authority in Section II(B) of the majority opinion. In Wright v.

City of Roanoke Redevelopment and Housing Authority, 479 U.S. 418,

107 S.Ct. 766, 93 L.Ed.2d 781 (1987), the Supreme Court held that12

ten ants living in low-income housing projects owned by a public

housing authority, who alleged that the housing a uthority

overbilled the m for their utilities and thereby violated a rent

ceiling imposed by the Brooke Amendment to the Housing Act of 1937

(42 U.S.C. § 1437(a)) and the implementing regulations of the

federal Department of Housing and Urban Development (HUD), have a

private cause of action under 42 U.S.C. § 1983. The Court stated:

"In our view, the benefits Congress intended to confer on tenants

are sufficiently specific and definite to qualify as enforceable

rights under Pennhurst and § 1983, rights that are not, as

respondent suggests, beyond the competence of the judiciary to

enforce." Id. at 432, 107 S.Ct. at 774-75 (footnote omitted).

I understand that we are dealing here with a different section

of the Housing Act of 1937 and a different implementing regulation,

but the Wright majority held, however, that nothing in the Housing

Act or the Brooke Amendment evidences that Congress in tended to

preclude the tenants' § 1983 claims against the authority, and that

the provision in the HUD regulations for a "reasonable" allowance

for utilities was sufficiently specific and definite to qualify as

enforceable rights under Pennhurst and § 1983. I am uncomfortable

in relying partially on the Wright dissent, as the majority opinion

does, in a case under the same Act and in not closely following or

applying by analogy the W right majority's analysis to the Act ' s

provisions and the HUD regulation at issue in our case. I realize

that the Supreme Court now follows a different approach and does

not easily recognize implied private causes of action under federal13

statutes, but I do not believe we should apply the new approach to

a provision of the Housing Act and a regulation thereunder in view

of Wright.

Instead, we should hold simply that the Gracias failed to

establish a prima facie case under § 1983 because under Canton v.

Harris, 489 U.S. 378, 109 S.Ct. 1197, 103 L.Ed.2d 412 (1989), and

Monell v. New York City Dept. of Social Services, 436 U.S. 658, 98

S.Ct. 2018, 56 L.Ed.2d 611 (1978), no reasonable juror could have

found that the housing authority's policy makers were "deliberately

indifferent" to the safety needs of the tenants with respect to the

condition of trees on the premises. In light of the above

observations, the judgments in favor of Trevino and Rubalcaba

should be affirmed on the basis of the Texas Tort Claims Act §

101.106, lack of personal participation, and their qualified

immunity.