Court Opinion

ID: 4374785
Source: CourtListenerOpinion
Date Created: 2019-03-07 15:44:06.233751+00
Date Added: 2024-06-11T14:49:34.737290
License: Public Domain

NUMBER 13-18-00416-CV

                            COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                      CORPUS CHRISTI - EDINBURG

CITY OF PALMVIEW,                                                          Appellant,

                                           v.

AGUA SPECIAL UTILITY DISTRICT,                                             Appellee.

                   On appeal from the 389th District Court
                         of Hidalgo County, Texas.

                          MEMORANDUM OPINION

Before Chief Justice Contreras and Justices Benavides and Hinojosa
         Memorandum Opinion by Chief Justice Contreras

      This is an appeal of a temporary injunction issued in a dispute regarding the

provision of wastewater services in the city of Palmview (the City). The City, appellant

herein, filed suit seeking a declaration and a writ of mandamus compelling appellee, Agua

Special Utility District (Agua SUD), to permit the City to construct wastewater lines and
facilities. Agua SUD filed a counterclaim in which it sought a permanent injunction

prohibiting the City from constructing those utilities.

        The trial court granted Agua SUD’s request for a temporary order enjoining the

City from taking further action in that regard. The City contends in this appeal by three

issues that (1) the trial court abused its discretion by granting the temporary injunction,

(2) the trial court lacked jurisdiction because of governmental immunity, and (3) the trial

court lacked jurisdiction because exclusive jurisdiction over the dispute was vested in the

Public Utility Commission of Texas. We affirm.

                                           I. BACKGROUND

        The City, a home rule municipality located in Hidalgo County, agreed several

decades ago to transfer its Certificates of Convenience and Necessity (CCNs) for water

and wastewater to Agua SUD’s predecessor. See TEX. W ATER CODE ANN. §§ 13.241–

.258 (West, Westlaw through 2017 1st C.S.). In 2015, the City determined that a lift

station and wastewater collection lines were necessary to provide sufficient wastewater

services to prospective businesses in an area of the City near Interstate 2. Because Agua

SUD had the CCN for the geographic area in question, the City negotiated with Agua

SUD in order to obtain approval for the utility project.

        In January of 2018, Agua SUD determined that the project would not be necessary

because its own project, financed in part by the Texas Water Development Board, would

provide the necessary services to the area in question and could be completed in early

2019. Furthermore, Agua SUD determined that the lift station and force main1 the City

        1“Force mains are pipelines that convey wastewater under pressure from the discharge side of a
pump or pneumatic ejector to a discharge point. Pumps or compressors located in a lift station provide the
energy for wastewater conveyance in force mains.” Wastewater Tech. Fact Sheet: Sewers, Force Main,

                                                    2
sought to construct would be of no use to Agua SUD. Nevertheless, the City applied to

Agua SUD for permission to go ahead with the proposed project, asserting that “time is

of the essence” because the businesses looking to begin operations in the area would

not do so unless and until adequate wastewater collection services were available.

According to the City, Agua SUD has not approved or denied its application. Agua SUD

explained the City submitted an incomplete application and did not supplement it after

being informed of the needed missing items.

       The City filed suit in February 2018 seeking to compel Agua SUD to permit it to

complete the project.      Agua SUD filed an answer and a counterclaim requesting

temporary and permanent injunctive relief. After a hearing, the trial court granted Agua

SUD’s request for temporary injunction and set a trial date for August 6, 2018. The

temporary injunction order stated that, by initiating construction of wastewater lines and

facilities without a CCN and without approval by Agua SUD’s board of directions, the City

acted in violation of the Texas Water Code and “utterly without lawful authority.” The

order further stated:

       the evidence presented by Agua SUD at the hearing on the petition for
       temporary injunction established that unless the [City] is immediately
       restrained from taking any further action to construct any lines, facilities or
       other utility improvements within the geographical area encompassed in the
       [CCN] held by Agua SUD, Agua SUD will suffer irreparable harm resulting
       from the violation of the Texas Water Code and the Agua SUD rules and
       procedures by the lawless actions of the [City], resulting from the
       unnecessary expense of decommissioning and removal of facilities neither
       desired nor approved by Agua SUD, and resulting from the waste of
       taxpayer resources in the construction of the unauthorized improvements.

U.S.        ENVTL.       PROT.        AGENCY         (Sept.    2000)        available    at
https://www3.epa.gov/npdes/pubs/force_main_sewers.pdf.

                                                3
The order therefore commanded the City

       to desist and refrain from taking any further action to construct any lines,
       facilities or other utility improvements within the geographical area
       encompassed in the [CCN] held by Agua [SUD], from the entry of this order
       until further order of this Court.

This appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(4) (West,

Westlaw through 2017 1st C.S.) (authorizing immediate appeal from interlocutory order

granting temporary injunction).

                            II. SUBJECT MATTER JURISDICTION

       We address the City’s second and third issues first, by which it argues that the trial

court lacked subject matter jurisdiction to grant the temporary injunction.

A.     Standard of Review

       To render a binding judgment or order, a court must have subject matter

jurisdiction over the controversy. Spir Star AG v. Kimich, 310 S.W.3d 868, 871 (Tex.

2010). Whether a court has subject matter jurisdiction is a question of law that we review

de novo. Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.

2002). Because a challenge to the court’s subject matter jurisdiction cannot be waived,

a party may raise it for the first time on appeal. Oncor Elec. Delivery Co. v. Chaparral

Energy, LLC, 546 S.W.3d 133, 138 (Tex. 2018).

B.     Governmental Immunity

       By its second issue, the City argues that the trial court lacked subject matter

jurisdiction because Agua SUD failed to plead a waiver of the City’s governmental

immunity.

       1. Applicable Law

                                             4
       Governmental immunity defeats subject matter jurisdiction in suits against

subdivisions of the State, such as the City, unless that immunity has been clearly and

unambiguously waived by the legislature. Harris Cty. v. Sykes, 136 S.W.3d 635, 638

(Tex. 2004). However, a governmental entity’s immunity is subject to certain boundaries.

See Nazari v. State, 561 S.W.3d 495, 501 (Tex. 2018); Reata Const. Corp. v. City of

Dallas, 197 S.W.3d 371, 375 (Tex. 2006) (op. on reh’g). One such boundary is that a

governmental entity simply does not have immunity from suit for claims against it that are

germane to, connected with, and properly defensive to affirmative claims made by the

entity, to the extent that the claims against the entity offset the entity’s own claims. Nazari,
561 S.W.3d at 501; City of Dallas v. Albert, 354 S.W.3d 368, 372 (Tex. 2011); Reata, 197
S.W.3d at 376–77 (Tex. 2006); see, e.g., Anderson, Clayton & Co. v. State ex rel. Allred,

62 S.W.2d 107, 109 (Tex. 1933) (allowing claim for injunctive relief). “This is not because

the governmental entity ‘waives’ its immunity by filing a claim for affirmative relief.” Nazari,
561 S.W.3d at 501. “Instead, the scope of governmental immunity simply does not reach

the defensive counterclaims to the extent that any recovery on the counterclaims serves

as an ‘offset’ against the government’s recovery.” Id. at 502. Where a governmental

entity “voluntarily files a suit and submits its rights for judicial determination, it will be

bound thereby, and the defense will be entitled to plead and prove all matters properly

defensive.” Id. at 504; Anderson, 62 S.W.2d at 110; see Reata, 197 S.W.3d at 375 (“[W]e

believe it would be fundamentally unfair to allow a governmental entity to assert

affirmative claims against a party while claiming it had immunity as to the party’s claims

against it”).

       2. Analysis

                                               5
       Here, the City brought suit against Agua SUD seeking a declaration and a writ of

mandamus compelling Agua SUD to permit the City to construct wastewater lines and

facilities. Agua SUD’s counterclaim sought to prevent the City from constructing those

wastewater lines and facilities the City sought permission for from the trial court. Thus,

Agua SUD’s counterclaim for injunctive relief was properly defensive, connected with, and

germane to the affirmative claims made by the City. See Nazari, 561 S.W.3d at 501;

Anderson, 62 S.W.2d at 537. Accordingly, the trial court did not lack subject matter

jurisdiction over the controversy due to the doctrine of governmental immunity. See

Nazari, 561 S.W.3d at 501; Anderson, 62 S.W.2d at 537.

       We overrule the City’s second issue.

C.     Exclusive Jurisdiction

       By its third issue, the City argues that the trial court lacked subject matter

jurisdiction because the Public Utility Commission of Texas (PUC) has exclusive

jurisdiction over Agua SUD’s counterclaim.

       1. Applicable Law

       “We begin with the presumption that district courts are constitutionally authorized

to resolve legal disputes.” Oncor Elec., 546 S.W.3d at 138 (citing TEX. CONST. art. V, § 8;

In re Entergy Corp., 142 S.W.3d 316, 322 (Tex. 2004) (orig. proceeding)). “To overcome

that presumption, the Constitution or another law must grant exclusive jurisdiction to

another court or an administrative agency.” Id. (citing In re Sw. Bell Tel. Co., 235 S.W.3d
619, 624–25 (Tex. 2007) (orig. proceeding); Entergy, 142 S.W.3d at 322). Whether an

agency has exclusive jurisdiction presents a question of statutory interpretation we review

de novo. Id. (citing Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212,

                                              6
222 (Tex. 2002) (op. on reh’g)). If an agency has exclusive jurisdiction, a trial court lacks

subject matter jurisdiction and must dismiss any claim within the agency’s jurisdiction until

that party has exhausted all administrative remedies. Id.; Subaru, 84 S.W.3d at 221.

       “A state agency ‘has exclusive jurisdiction when the Legislature has granted that

agency the sole authority to make an initial determination in a dispute.’” Oncor Elec., 546
S.W.3d at 138 (quoting Entergy, 142 S.W.3d at 321); Cash Am. Int’l, Inc. v. Bennett, 35
S.W.3d 12, 15 (Tex. 2000). “Absent such an explicit grant, an agency may also have

exclusive jurisdiction ‘when a pervasive regulatory scheme indicates that the Legislature

intended for the regulatory process to be the exclusive means of remedying the problem

to which the regulation is addressed.” Oncor Elec., 546 S.W.3d at 138 (quoting In re Sw.

Bell Tel., 235 S.W.3d at 624–25); Subaru, 84 S.W.3d at 221. In deciding whether a

“pervasive regulatory scheme” exists, the statutory language is determinative. Oncor

Elec., 546 S.W.3d at 138 (citing Entergy, 142 S.W.3d at 322–23).

       In construing a statute, our purpose is to give effect to the Legislature’s intent as

expressed in the language of the statute. F.F.P. Operating Partners, L.P. v. Duenez, 237
S.W.3d 680, 683 (Tex. 2007); Bennet, 35 S.W.3d at 16. To do so, we consider the

statute’s language, history, and purposes and the consequences of alternate

constructions. Bennet, 35 S.W.3d at 16; see TEX. GOV’T CODE ANN. § 311.023 (West,

Westlaw through 2017 1st C.S.).           Furthermore, there is no presumption that

administrative agencies are authorized to resolve disputes. Subaru, 84 S.W.3d at 220.

Thus, administrative bodies may exercise only those powers that the law confers upon

them in clear and express statutory language and those reasonably necessary to fulfill a

function or perform a duty that the Legislature has expressly placed with the agency.

                                             7
Oncor Elec., 546 S.W.3d at 138; Thomas v. Long, 207 S.W.3d 334, 340 (Tex. 2006); see

Subaru, 84 S.W.3d at 220. “Courts will not divine by implication additional authority to

agencies, nor may agencies create for themselves any excess powers.” BCY Water

Supply Corp. v. Residential Invs., Inc., 170 S.W.3d 596, 600 (Tex. App.—Tyler 2005, pet.

denied); see Subaru, 84 S.W.3d at 220.

        2. Analysis

        The Texas Water Code requires a retail public utility2 to obtain a CCN from the

PUC before providing retail water or sewer utility service to an area and provides a way

for the certificate to be revoked or amended. TEX. W ATER CODE ANN. §§ 13.242(a), 13.254

(West, Westlaw through 2017 1st C.S.).

        The first question we must answer is whether the PUC has exclusive jurisdiction

over the claim for injunctive relief brought by Agua SUD against the City, a municipality,

which allegedly interfered with Agua SUD’s CCN in an area within the municipality’s city

limits. We conclude that it does not.

        The City argues that PUC has exclusive jurisdiction over Agua SUD’s counterclaim

and relies primarily on section 13.252 of the Texas Water Code:

        If a retail public utility in constructing or extending a line, plant, or system
        interferes or attempts to interfere with the operation of a line, plant, or
        system of any other retail public utility, or furnishes, makes available,
        renders or extends retail water or sewer utility service to any portion of the
        service area of another retail public utility that has been granted or is not
        required to possess a [CCN], the [PUC] may issue an order prohibiting the
        construction, extension, or provision of service or prescribing terms and

        2 A retail public utility under Chapter 13 of the Texas Water Code means: “any person, corporation,

public utility, water supply or sewer service corporation, municipality, political subdivision or agency
operating, maintaining, or controlling in this state facilities for providing potable water service or sewer
service, or both, for compensation.” TEX. W ATER CODE ANN. § 13.002(19) (West, Westlaw through 2017
1st C.S.) (emphasis added). It is undisputed that the City and Agua SUD are retail public utilities.

                                                     8
       conditions for locating the line, plant, or system affected or for the provision
       of the service.

Id. § 13.252.

       As noted earlier, our ultimate goal in construing a statute is to give effect to the

Legislature’s intent as expressed in the language of the statute. Duenez, 237 S.W.3d at

683; Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 892 (Tex. 2000); Tara

Partners, Ltd. v. City of S. Houston, 282 S.W.3d 564, 572 (Tex. App.—Houston [14th

Dist.] 2009, pet. denied). In doing so, we must always consider the statute as a whole

rather than its isolated provisions. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493

(Tex. 2001) (“[W]e should not give one provision a meaning out of harmony or inconsistent

with other provisions, although it might be susceptible to such a construction standing

alone.”).

       Section 13.001 provides the legislative policy and purpose of Chapter 13 of the

water code:

       (a) [Chapter 13 of the Texas Water Code] is adopted to protect the interest
           inherent in the rates and services of retail public utilities.

       (b) The legislature finds that:

                (1) retail public utilities are by definition monopolies in the areas they
                    serve;

                (2) the normal forces of competition that operate to regulate prices in
                    a free enterprise society do not operate for the reason stated in
                    Subdivision (1); and

                (3) retail public utility rates, operations, and services are regulated
                    by public agencies, with the objective that this regulation will
                    operate as a substitute for competition.

       (c) The purpose of [Chapter 13] is to establish a comprehensive regulatory
           system that is adequate to the task of regulating retail public utilities to
           assure rates, operations, and services that are just and reasonable to
           the consumers and to the retail public utilities.

                                                9
TEX. W ATER CODE ANN. § 13.001 (West, Westlaw through 2017 1st C.S.). The language

in subsection 13.001(c) speaks with unmistakable clarity to the comprehensive intent of

the regulation of retail public utilities under chapter 13. City of Carrollton v. Tex. Comm’n

on Envtl. Quality, 170 S.W.3d 204, 210 (Tex. App.—Austin 2005, no pet.); see Entergy,
142 S.W.3d at 322–23. However, all regulatory schemes have limitations. Oncor Elec.,
546 S.W.3d at 139; see, e.g., Clint Indep. Sch. Dist. v. Marquez, 487 S.W.3d 538, 546

(Tex. 2016) (noting that the exhaustion-of-remedies requirement “applies only to

complaints that the Legislature has authorized the Commissioner to resolve”).

        Section 13.042 is titled “Jurisdiction of Municipality; Original and Appellate

Jurisdiction of Utility Commission.” TEX. WATER CODE ANN. § 13.042 (West, Westlaw

through 2017 1st C.S.). It provides that the PUC “shall have exclusive original jurisdiction

over water and sewer utility rates, operations, and services [3] not within the incorporated

limits of a municipality exercising exclusive original jurisdiction over those rates,

operations, and services as provided in this chapter.”4 Id. § 13.042(e) (emphasis added).

        3 Under Chapter 13 of the Texas Water Code, “services” means “any act performed, anything

furnished or supplied, and any facilities or lines committed or used by a retail public utility in the performance
of its duties under this chapter to its patrons, employees, other retail public utilities, as well as the
interchange of facilities between two or more retail public utilities.” Id. § 13.002(21). We assume for
purposes of this opinion that the construction of a lift station, force main, and wastewater collection lines,
as alleged here, are “services.”

          4 “This limitation is consistent with the legislative history of public utility regulation in Texas, which

represents an attempt to retain local regulation of public utilities while empowering the [PUC] to regulate
regional service or service outside municipal limits.” Tara Partners, Ltd. v. City of S. Houston, 282 S.W.3d
564, 573 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (citing Pub. Util. Comm’n v. City of Austin,
728 S.W.2d 907, 913 (Tex. App.—Austin 1987, writ ref’d n.r.e.)); see City of Sherman v. Pub. Util. Comm’n,
643 S.W.2d 681, 683 (Tex. 1983) (describing municipalities’ opposition to state regulation of municipally
owned utilities and explaining statutory compromise of retaining municipal regulation within a municipality’s
territorial boundaries and exempting municipalities from most of the statute’s regulatory provisions). The
City of Sherman and City of Austin courts were construing the Public Utilities Regulatory Act of 1975. Tara
Partners, 282 S.W.3d at 573 n.9; see City of Sherman, 643 S.W.2d at 683; City of Austin, 728 S.W.2d at
912–13. The water code provisions at issue in the present case retain much of the language of that act.
Tara Partners, 282 S.W.3d at 573 n.9.

                                                        10
“The governing body of a municipality by ordinance may elect to have the [PUC] exercise

exclusive original jurisdiction over the utility rates, operation, and services of utilities,

within the incorporated limits of the municipality.” Id. § 13.042(a) (emphasis added); see

also 16 TEX. ADMIN. CODE ANN. § 24.375(a) (West, Westlaw through 2017 1st C.S.) (Pub.

Util. Comm’n of Tex., Jurisdiction of Municipality:                  Surrender of Jurisdiction).5

Furthermore, the PUC “shall have exclusive appellate jurisdiction to review orders or

ordinances of those municipalities as provided in this chapter.” TEX. W ATER CODE ANN.

§ 13.042(d). The water code emphasizes that section 13.042

       does not give the [PUC] power or jurisdiction to regulate or supervise the
       rates or service of a utility owned and operated by a municipality, directly or
       through a municipally owned corporation, within its corporate limits or to
       affect or limit the power, jurisdiction, or duties of a municipality that regulates
       land and supervises water and sewer utilities within its corporate limits,
       except as provided by this code.

Id. § 13.042(f) (emphasis added). Thus, based on the express language of section

13.042, the PUC’s jurisdiction is exclusive under certain circumstances. BCY Water, 170
S.W.3d at 600; see TEX. W ATER CODE ANN. § 13.042. We reiterate that there is no

presumption that administrative agencies are authorized to resolve disputes and that such

agencies may exercise only those powers the law, in clear and express statutory

language, confers upon them. Subaru, 84 S.W.3d at 220; BCY Water, 170 S.W.3d at

601.

       Based on the express language of the statute, we conclude that the circumstances

set forth in chapter 13 under which the PUC has exclusive jurisdiction are not present in

         5 Chapter 24 of Title 16 of the Texas Administrative Code provides the PUC’s substantive rules

applicable to water and sewer service providers. See 16 TEX. ADMIN. CODE ANN. § 24.375(a) (West,
Westlaw through 2017 1st C.S.) (Pub. Util. Comm’n of Tex., Jurisdiction of Municipality: Surrender of
Jurisdiction).

                                                  11
the situation before us. The enjoined actions are within the City’s incorporated limits, and

the City has not argued or presented any evidence that it has issued an ordinance electing

for the PUC to have exclusive original jurisdiction.          See TEX. W ATER CODE ANN.

§ 13.042(a). Accordingly, we conclude the PUC did not have exclusive jurisdiction to

issue the injunction in dispute. See BCY Water, 170 S.W.3d at 601.

       The City also cites an unpublished memorandum opinion from our sister court in

Waco in support of its argument that the PUC has exclusive jurisdiction. See City of

College Station v. Wellborn Special Util. Dist., No. 10-04-00306-CV, 2006 WL 2067887

(Tex. App.—Waco July 26, 2006, pet. denied) (mem. op.). Similar to the case before us,

the city of College Station sued the special utility district that held the CCN and sought

permission to provide water services in an area covered by that CCN. Id. at *1. The city

of College Station brought claims for “breach of contract, promissory estoppel, specific

performance, and requests for a declaratory judgment, an injunction, and attorney’s

fees . . . .” Id. at *2. The Waco court noted that all of College Station’s claims were

“predicated on a determination that [the special utility district] allow the City [of College

Station] to provide water utility service to the newly annexed area within [the special utility

district’s] service area.” Id. Citing section 13.042(e), which provides that the PUC has

exclusive jurisdiction over water and sewer rates, operations, and services not within the

incorporated limits of a municipality, see TEX. W ATER CODE ANN. § 13.042(e) (emphasis

added), the Waco court concluded that, under Chapter 13 of the water code, the PUC

had exclusive jurisdiction to make a determination on the service underlying the city of

College Station’s claims. See College Station, 2006 WL 206788, at *2 (citing TEX. W ATER

CODE ANN. §§ 13.042(e), 13.242(a), 13.255).

                                              12
        Here, unlike the city in College Station, the City seeks to provide sewage service

to an area that has not been newly annexed and that is within its municipal limits.6

Accordingly, we find College Station distinguishable and inapplicable, and we reject the

City’s argument that the PUC has exclusive jurisdiction over the injunctive claim brought

by Agua SUD.

        We overrule the City’s third issue.

                                           III. TEMPORARY INJUNCTION

        By its first issue, the City argues that the trial court abused its discretion when it

granted Agua SUD’s request for a temporary injunction.

A.      Standard of Review & Applicable Law

        We review a trial court’s decision to grant a temporary injunction for an abuse of

discretion. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). A trial court

abuses its discretion if it rules in an arbitrary manner or without reference to guiding rules

and principles. Id. at 211; see Sargeant v. Al Saleh, 512 S.W.3d 399, 409 (Tex. App.—

Corpus Christi 2016, orig. proceeding). A trial court also abuses its discretion when it

grants a temporary injunction if it misapplies the law to the established facts. Sargeant,
512 S.W.3d at 409.

          6 Based on the authority cited for its conclusion that the PUC had original and exclusive jurisdiction,

the Waco court treated the annexed lands by the city of College Station as not being within the incorporated
limits of College Station for the purpose of chapter 13. See City of College Station v. Wellborn Special Util.
Dist., No. 10-04-00306-CV, 2006 WL 2067887, *2 (Tex. App.—Waco July 26, 2006, pet. denied) (mem.
op.) (citing TEX. W ATER CODE ANN. §§ 13.042(e), 13.242(a), 13.255 (West, Westlaw through 2017 1st
C.S.)). In its analysis, the Waco court noted “when an area that is already being provided retail water or
sewer utility by a retail public utility is annexed by a municipality, the municipality may not provide water or
sewer service to the annexed area without a” CCN. Id. at *1 (citing TEX. W ATER CODE ANN. § 13.247(a)
(West, Westlaw through 2017 1st C.S.). The Waco court also cited the sections of the water code that
provide the procedure a municipality must follow to provide water or sewer utility services to an area
annexed when that area was already serviced by another entity holding a CCN. Id. at *1–2; see TEX. W ATER
CODE ANN. §§ 13.254, 13.255 (West, Westlaw through 2017 1st C.S.). We pass no opinion on whether
lands annexed by a municipality are considered to be within the municipality’s incorporated limits for the
purpose of chapter 13 of the Texas Water Code.

                                                      13
       “A temporary injunction is an extraordinary remedy and does not issue as a matter

of right.” Id. (citing Butnaru, 84 S.W.3d at 204). The purpose of a temporary injunction

is to preserve the status quo of the subject matter of the litigation until a trial on the merits.

Clint Indep. Sch. Dist. v. Marquez, 487 S.W.3d 538, 555 (Tex. 2016); Butnaru, 84 S.W.3d

at 204. The status quo is “the last, actual, peaceable, non-contested status which

preceded the pending controversy.” In re Newton, 146 S.W.3d 648, 651 (Tex. 2004) (orig.

proceeding).

       To obtain a temporary injunction, the applicant must plead and prove three specific

elements: (1) a cause of action against the defendant; (2) a probable right to the relief

sought; and (3) a probable, imminent, and irreparable injury in the interim. Butnaru, 84
S.W.3d at 204; Sargeant, 512 S.W.3d at 408–09; see Sun Oil Co. v. Whitaker, 424
S.W.2d 216, 218 (Tex. 1968) (noting that “[t]o be entitled to the writ when the only relief

sought on final trial is injunctive, the applicant must show a probable right on final hearing

to a permanent injunction.”). The applicant bears the burden of production to offer some

evidence on each of these elements. Sargeant, 512 S.W.3d at 409. The applicant is not

required to establish that it will ultimately prevail at trial, only that it is entitled to

preservation of the status quo pending trial on the merits. Id. We review the evidence

submitted to the trial court in the light most favorable to its ruling, drawing all legitimate

inferences from the evidence, and deferring to the trial court’s resolution of conflicting

evidence. Butnaru, 84 S.W.3d at 204; Sargeant, 512 S.W.3d at 410.

B.     Analysis

       1. Cause of Action or Permanent Injunctive Relief

                                               14
       The City first argues that the trial court abused its discretion when it granted Agua

SUD’s request for a temporary injunction because Agua SUD failed to plead a cause of

action. As a prerequisite for injunctive relief, the applicant must plead for some form of

permanent relief—either a cause of action (e.g., a suit for damages) or, if injunctive relief

is the only relief sought, a permanent injunction. See Butnaru, 84 S.W.3d at 204; Walling

v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993); Sun Oil, 424 S.W.2d at 218.

       Here, Agua SUD pleaded for a temporary restraining order, a temporary injunction,

and a permanent injunction. Because Agua SUD pleaded for a permanent injunction, the

prerequisite that the applicant plead for some form of permanent relief or cause of action

is satisfied. See Butnaru, 84 S.W.3d at 204; Walling, 863 S.W.2d at 57; Sun Oil, 424
S.W.2d at 218. Accordingly, we reject the City’s argument that the trial court abused its

discretion because Agua SUD failed to plead a cause of action.

       2. Probable Right to Relief

       The applicant must also show it has a probable right to the relief it seeks on final

hearing. Butnaru, 84 S.W.3d at 204; Walling, 863 S.W.2d at 58; Sun Oil Co., 424 S.W.2d

at 218. That is, the applicant must prove it is likely to succeed on the merits of its lawsuit.

DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 686 (Tex. 1990); Sw. Bell Tel. Co. v. Pub.

Util. Comm’n, 571 S.W.2d 503, 506 (Tex. 1978). It is not necessary for the applicant to

prove it will ultimately prevail. Walling, 863 S.W.2d at 58; Sun Oil, 424 S.W.2d at 218.

       Here, it is undisputed that Agua SUD holds the CCN that covers the geographical

area in which the City began the construction of wastewater utility improvements. As

noted earlier, a retail public utility, like the City, “may not may furnish, make available,

render, or extend . . . sewer utility service to any area to which . . . sewer utility service is

                                               15
being lawfully furnished by another retail public utility without first having obtained a [CCN]

that includes the area . . . .” TEX. W ATER CODE ANN. § 13.242(a). The unrefuted evidence

at the hearing before the trial court established that the City had began construction of

improvements to provide wastewater utility services to an area covered by Agua SUD’s

CCN. The City did not present any evidence of a legal right to such construction. Thus,

Agua SUD proved it is likely to succeed on the merits of its counterclaim.

       3. Probable Injury

       Finally, the City argues that Agua SUD did not establish there was a probable,

imminent, and irreparable injury to Agua SUD. The probable injury element requires a

showing that the harm is imminent, the injury would be irreparable, and the applicant has

no other adequate legal remedy. Harbor Perfusion, Inc. v. Floyd, 45 S.W.3d 713, 716

(Tex. App.—Corpus Christi 2001, no pet.).

                a. Imminent Harm

       At the hearing before the trial court, Agua SUD presented testimony from its

general manager, Jorge Saenz.         According to Saenz, the engineer for Agua SUD

determined that some of the wastewater lines and facilities the City planned to build would

be useless to Agua SUD. In particular, Saenz explained the lift station and force main

the City sought to construct would be of no use to Agua SUD. Saenz explained the City

began the construction of this project before they had even submitted an application to

Agua SUD, and the City brought a lawsuit to force Agua SUD to approve its ongoing

construction.

       As to the imminent harm requirement, an injunction will not be issued unless it is

shown that the respondent will otherwise engage in the activity enjoined.             State v.

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Morales, 869 S.W.2d 94, 946 (Tex. 1994); Frey v. DeCordova Bend Estates Owners

Ass’n, 647 S.W.2d 246, 248 (Tex. 1983). Fear or apprehension of the possibility of injury

is not sufficient; the applicant must prove the respondent has attempted or intends to

harm the applicant. Jones v. Jefferson Cty., 15 S.W.3d 206, 213 (Tex. App.—Texarkana

2000, pet. denied). Here, there was evidence before the trial court that established that

the City had already began construction and that it intended to continue with the

construction that would harm Agua SUD. The lift station and force main the City wants

to construct will serve no purpose to Agua, and the injury would continue to take place

without the temporary injunction. Thus, there was evidence before the trial court that the

harm was imminent. See State v. Morales, 869 S.W.2d 941, 946 (Tex. 1994); Frey v.

DeCordova Bend Estates Owners Ass’n, 647 S.W.2d 246, 248 (Tex. 1983); Jones, 15
S.W.3d at 213.

             b. Irreparable Injury

      An injury is irreparable if the injured party cannot be adequately compensated in

damages or if the damages cannot be measured by a certain pecuniary standard.

Butnaru, 84 S.W.3d at 204; Sargeant, 512 S.W.3d at 409; see Canteen Corp. v. Rep. of

Tex. Props., Inc., 773 S.W.2d 398, 401 (Tex. App.—Dallas 1989, no writ).

      Saenz provided the following relevant testimony:

      [Agua SUD’s counsel]:       What would be the harm to Agua SUD and its
                                  constituents if the force main and the lift station
                                  are installed and placed underground?

      [Saenz]:                    This is a lift station and a force main that we feel
                                  will never be used. It will be in the ground and
                                  it will become property of Agua, which we will
                                  never use and it would be a detriment to the
                                  system. Number Two, we feel it sets a bad
                                  precedent for the district, which would—if this
                                  were to be allowed, that means any developer
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                        or any city would be allowed to put in a system
                        that we would be forced to accept even though
                        it’s not in compliance or it’s not conforming to
                        our overall plan. So we feel that we would not
                        be allowed to have any say so, which we have
                        that right to do so.

                        ....

[Agua SUD’s counsel]:   Once the lift station and these force mains are
                        put underground, buried underground, does the
                        district have—do they have the responsibility to
                        maintain this equipment?

[Saenz]:                Yes, yes, sir.

[Agua SUD’s counsel]:   And will that be an additional expense and
                        burden to the district?

[Saenz]:                Yes, because we’re the only ones that have the
                        right to operate, maintain the water and sewer
                        system within the CCN.

                        ....

[Agua SUD’s counsel]:   And so in addition to the harm that would be
                        caused to the citizens of Palmview, what about
                        the cost of maintaining all these lines and
                        maintaining this—are there costs associated—
                        once they’re put there, there are costs that Agua
                        SUD will have to incur to maintain responsibility
                        for this lift station?

[Saenz]:                Yes. We have maintenance costs, electrical
                        costs to have it on, if we were to accept it, and
                        then the cost of decommissioning it as well. Our
                        understanding is this line is going over a canal
                        that—an irrigation district canal, which obviously
                        is one that we have not approved either.

                        ....

[Agua SUD’s counsel]:   Mr. Saenz, do you believe Agua will suffer
                        irreparable harm if construction is not halted by
                        the City of Palmview on this project?

[Saenz]:                Yes, I do.

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      [Agua SUD’s counsel]:       And are you asking the           Court to    halt
                                  construction on this project?

      [Saenz]:                    Yes, we are.

      Saenz’s testimony established that Agua SUD would suffer damages from the time

and money it would take to maintain the lift station and force main built by the City,

because Agua SUD would be responsible for them as the holder of the CCN. These are

damages that could continue for an indefinite time. Furthermore, Agua SUD’s CCN would

lose its value and purpose—i.e., cities and developers would be able to force Agua SUD

to accept a system without Agua SUD’s opinion on the matter. See TEX. W ATER CODE

ANN. §§ 13.242(a); 13.247(a) (West, Westlaw through 2017 1st C.S.). This is irreparable

and not quantifiable and cannot be remedied by damages. See, e.g., Intercont. Terminals

Co. v. Vopa N. Am., Inc., 354 S.W.3d 887, 895 (Tex. App.—Houston [1st Dist.] 2011, no

pet.) (concluding that injury was irreparable because plaintiff’s damages were not

presently ascertainable or easily calculated); Wright v. Sport Sup. Grp., 137 S.W.3d 289,

294 (Tex. App.—Beaumont 2004, no pet.) (same). Thus, there was evidence before the

trial court that the harm cannot be measured and would be irreparable. Butnaru, 84
S.W.3d at 204; Sargeant, 512 S.W.3d at 409; see Canteen Corp., 773 S.W.2d at 401.

             c. Inadequate Remedy at Law

      The requirements of an irreparable injury and an inadequate remedy at law are

intertwined under Texas case law. Wright v. Sport Supply Grp., Inc., 137 S.W.3d 289,

294 (Tex. App.—Beaumont 2004, no pet.). “An adequate remedy at law is one that is as

complete, practical, and efficient to the prompt administration of justice as is equitable

relief.” Intercont. Terminals, 354 S.W.3d at 895. Thus, if damages do not provide as

complete, practical, and efficient a remedy as may be had by injunctive relief, the trial

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court does not err in granting temporary injunction so long as the other elements of

injunctive relief are satisfied. Id. Here, evidence was presented that supported the trial

court’s conclusion that the actions enjoined would cause irreparable injury to Agua SUD

and that at least some of the harm offered by Agua SUD cannot be remedied with the

recovery of money. There are also aspects of the damages Agua SUD would incur that

cannot be easily ascertained. Therefore, we conclude that there is evidence in the record

to support the trial court’s conclusion that Agua SUD lacks an adequate remedy at law.

See id.

       4. Summary

       Under an abuse of discretion standard, a court of appeals cannot overrule a trial

court’s decision unless the trial court acted unreasonably or in an arbitrary manner,

without reference to guiding rules or principles. Butnaru, 84 S.W.3d at 211. Viewing the

evidence in the light most favorable to the trial court’s ruling, we conclude that the trial

court did not abuse its discretion when it granted Agua SUD’s temporary injunction. See

Butnaru, 84 S.W.3d at 204; Sargeant, 512 S.W.3d at 410.

       We overrule the City’s first issue.

                                            IV. CONCLUSION

       We affirm the trial court’s order.

                                                               DORI CONTRERAS
                                                               Chief Justice

Delivered and filed the
7th day of March, 2019.

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