### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-11-00662- CV

The City of Au stin d/ b/a Aus tin En ergy; and L arry We is, Ge neral Manager , Austin E nergy, Appellants

v. MET Center NYCTEX, P hase II, Ltd., Ap pellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 98TH JUDICI AL DISTRICT NO. D-1 -GN-1 0-0 0426 9, H ONO RAB LE GISELA D. TRI ANA, JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

I n this interlocutory appea l, the City of Austin d/b/a Austin Energ y , and L arr y Weis,
Gene ral Manag er, Austin Energ y (jointly the City ) challeng e the trial court’s denial of their plea to the jurisdiction based on g overnme ntal im m u n i t y . M E T Center NYCTEX, Phase I I , L td. (MET Center) sued the City

for br eac h of contra ct and decla ratory relief reg arding the par ties’ rig hts and

o b l i g ations under the parties’ contra ct and cer tain city ordinanc es. Be cause we conclude t h at t h e City has no immunit y from t h i s s u it, we aff irm the trial court’s denial of the City ’s plea to the jurisdiction.

BACK GR OUND

MET Center, a commerc ial develope r initiating a projec t ta rg eting high technolog y elec tric ut ility service u s ers, and the C ity of Austi n d/b/a Austin Energ y (the Ci ty ) entered into anag ree ment wher eby MET Center constructe d a specia liz ed conduit sy ste m k nown as an

“under g round duct bank sy stem” to car ry high levels of elec tric service require d b y te c h n o log y -base d

users on Austin Energ y ’s elec tric distribution lines. MET Center constructe d the duct bank to the 1 City ’s specific ations, and the City inspected and “ac cepte d” it. Disputes subsequently arose over the

use of the duct bank, and MET Center sued the City alleg ing brea ch of contra ct, seeking decla ratory relief , and asser

ting ultra vires claims ag ainst the manag er of Austin Ene rg y . The City filed a plea

to the jurisdiction asser

ting that (1) it is immune from Met Center’ s brea ch of contra ct claim beca use section 271.152 of the L ocal Government Code, which provides a limited waive r of immunity for

cer tain contra cts the City enter s into, does not apply to the contra ct in this case , and (2) Met Center’ s claims for decla

ratory relief are mere ly an attempt to circ umvent the City ’s immunit y to the brea ch of contra ct claims. See Tex. L oc. Gov’t Code § 271.152; Tex. Civ. Prac. & Rem. Code § 37.004. The trial c ourt denied the City ’s plea to the jur isdiction, and this appeal followe d.

DISCUSSIO N On appe al the City

arg ues that it is imm une fr om MET Center’ s brea ch of contra ct claim beca

use section 271.152 of the L ocal Gover nment Code does not apply so as to p ro v i de a limit ed waiver of immunit y , that MET Center’ s claims for decla ratory relief are an at t em pt to circ umvent the City ’s immunit y , and that MET Center failed to asser t a proper ultra vires claim

T h e fa cts and proce dural backg round of this case are well known to the parties, and we 1 there fore will not rec i t e t hem in g rea t detail in this opinion. See Tex. R. App. P. 47.1 (appe llate court opinions should be as “brie f as prac ticable” ), 47.4 (memora ndum opinion s s h o u l d be “no longe r than ne cessa

ry to advise the pa

rties of the c ourt’s dec ision and the basic r easons f or it”). 2ag ainst Austin Energ y ’s manag er. Howeve r, beca use we conclude that the City has no g overnme ntal immunit y from MET Center ’s claims, we do not rea ch the City ’s issues. Austin Ene rg y is the name under which the City provides elec tric utilit y service s to its c ustomers. I t is well settled that with r espec t to tort claims, the opera tion a nd maintenanc e of a municipal utilit y is a proprieta ry funct i o n , for which the municipality enjoy s no g overnme ntal immunit y . See Tex. Civ. Prac. & Rem. Code § 101.0215(b)( 1) (listing opera tion and maintenanc e

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of municipal utilit y as proprieta ry function); Tooke v. City of Mex ia , 197 S. W

. 3 d 325, 343 (Tex.
200 6 ) (municipality not immune from suits for torts committed in perf ormanc e of proprieta

ry functions); San Antonio Indep. Sch. Dist. v. City of San Antonio , 550 S.W .2d 262, 264 (Tex. 1976) (oper ation of public utilit y is proprieta ry function under common law). Rece ntly , this Court held that (1) under the common law, the proprieta ry -g overnme ntal dichotomy also applies to contra ct claims and (2) L ocal Gove rnment Code sec tion 271.152 did not abrog ate the c ommon law’s trea tment of that dichotomy

. See City of George town v. Lower Colo. River Auth. , 413 S.W .3d 803, 810–11, 814 (Tex. App.—Austin 2013, p et

. filed); see also City of Seguin v. Lower Colo. River Auth. , No. 03-13-00165- CV, 2 0 1 4 Tex. App. L EXI S 401, at *3–4 (Tex. App.—Austin J an. 15, 2014,

no pet. h.) (mem. op.) (explaining holding of C i t y of George town and following its rea soning in rela ted ca se).

A proprieta

ry function is one a municipality perf orms in its discretion for the benef it of its 2 inhabitants, as opposed to a g overnme ntal function, which is enjoined on a municipality by the state to be exercised in the interest of the g ener al public. See Tex. Civ. Prac. & Rem. Code § 101.0215(a) , (b); City of George town v. Lower Colo. River Auth. , 413 S.W .3d 803, 808–09 (Tex. App.—Austin 2013, pet. filed) ( discussing history and ra tionale of propr ietary -g overnme ntal dichotomy ).

3I n City of George town , the L ower Colorado R iver Authority (L CRA) sued t he city

for decla ratory relief conce rning the parties’ rig hts and obliga t i o n s u n d er a contra ct for the city ’s purcha se of elec tricity from the L CRA for resa le to the city ’s reta il customers throug h its municipal utilit y . See 413 S.W .3d at 805–06. This Court conclude d that the city was acting in its proprieta ry
capa city when i t enter ed int o its contra ct wit h the L CRA and therefor e had no immunit y from the suit. Id. at 814 (citing Tex. Civ. Prac. & Rem. Code § 101.0215(b)( 1) and Tooke , 197 S.W .3d at 344 (applying section 101.0215’s classification of m unicipal func t ion in contra ct case))

. Simi larly , in this case , we conclude that the City was acting in its proprieta ry capa city when it ag ree d with MET Center to “collabor ate about an underg round duct bank sy stem available for Austin Energ y ’s elec tric distribution lines.” S

ee Tex. Civ. Prac. & Rem. Code § 101.0215(b)( 1); City of George town , 413 S.W .3d at 805–06. Consequently , the City has no g overnme ntal immunit y from MET Center’ s claims, and the trial court did not err i n d en y i n g t h e C i t y ’s plea to the jurisdiction. See City of George town , 413 S.W .3d at 814; City of Seguin , 2014 Tex. App. L EXI S 401, at *4.

CONCLUSION We affir m the trial court’ s denial of the City of Austin’s plea to the jur isdiction. 3

MET Center ha s filed a motion for temporar y order pursuant to Texas Rule of Appellate 3 Procedur e 29.3, and the City has filed a motion to strike MET Center’ s motion for temporar y order s and an ag re ed motion for leave to file its amende d motion to strike MET’s Center’ s motion for temporar y order s, all of which are pending befor e this Court. These motions are dismiss ed as moot. 4_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Melissa Goodwin, Jus tice
Be fore J ustices Pury ear , Henson, a nd Goodwin J ustice He nson not participating Affir med Filed: F ebrua

ry 6, 2014

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