Court Opinion

ID: 5132753
Source: CourtListenerOpinion
Date Created: 2021-12-08 07:15:34.221855+00
Date Added: 2024-06-11T08:23:31.926418
License: Public Domain

Dismissed in Part, Affirmed in Part, and Opinion Filed December 2, 2021

                                   S  In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-20-00483-CV

  152 LAKEWEST COMMUNITY, LP AND SUPREME DEVELOPMENT
                 CORPORATION, Appellants
                           V.
    AMERISTAR APARTMENT SERVICES, L.P. D/B/A AMERISTAR
                 SCREEN & GLASS, Appellee

                On Appeal from the 192nd Judicial District Court
                             Dallas County, Texas
                     Trial Court Cause No. DC-17-15636

                        MEMORANDUM OPINION
                Before Justices Myers, Partida-Kipness, and Garcia
                        Opinion by Justice Partida-Kipness
      Appellants 152 Lakewest Community, LP (Lakewest) and Supreme

Development Corporation (Supreme) appeal the denial of their pleas to the

jurisdiction. In three issues, Lakewest and Supreme contend they are entitled to

governmental immunity from suit. Finding no error, we affirm the trial court’s order

denying Supreme’s jurisdictional pleas. We dismiss Lakewest’s appeal for lack of

jurisdiction.
                                BACKGROUND

      The underlying facts are well-known to the parties; therefore, we will not

provide a detailed statement of facts but instead provide only those facts necessary

for disposition of the appeal. See TEX. R. APP. P. 47.1. In 2017, appellee Ameristar

Apartment Services, L.P. d/b/a Ameristar Screen & Glass (Ameristar) performed

four repair orders for windows at Lakewest Townhomes (the Property) in Dallas.

Ameristar entered into the repair orders with the Property’s purported property

manager, Orion Real Estate Services, Inc. d/b/a Allied Orion Group (Orion).

Ameristar contends it fulfilled its contractual obligations and completed the repair

work but was not paid for the services and materials provided. Ameristar brought

the underlying lawsuit to recover the outstanding balance of $2,702.42 from the

Property’s purported owner, the Dallas Housing Authority (DHA). DHA answered

and filed a plea to the jurisdiction asserting governmental immunity. At the hearing

on DHA’s plea, counsel for DHA represented that Lakewest was the owner of the

improvements on the Property. Ameristar filed its Second Amended Petition and

added Lakewest and Supreme as parties. The trial court granted DHA’s plea shortly

thereafter.

      Lakewest and Supreme answered. Supreme filed a plea to the jurisdiction

asserting governmental immunity on February 23, 2019. The trial court denied that

plea on June 12, 2019. Lakewest filed a plea to the jurisdiction to assert

governmental immunity on February 3, 2020. Included within Lakewest’s plea was

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a second plea by Supreme. The trial court denied both pleas on March 31, 2020, and

April 20, 2020, respectively. Lakewest and Supreme then filed a joint plea to the

jurisdiction on April 20, 2020, which the trial court denied on May 18, 2020.

Lakewest and Supreme appealed the March 31, April 20, and May 18 orders denying

their pleas. In three issues, Lakewest and Supreme argue that the trial court should

not have denied their pleas to the jurisdiction.

                            STANDARD OF REVIEW

      Governmental immunity from suit defeats a trial court’s subject-matter

jurisdiction and is properly asserted in a plea to the jurisdiction. Tex. Dep’t of Parks

& Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004); see also Reata Constr.

Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). The existence of subject-

matter jurisdiction is a question of law, and we review the trial court’s ruling on a

plea to the jurisdiction de novo. State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007);

Miranda, 133 S.W.3d at 226, 228; City of Wylie v. Taylor, 362 S.W.3d 855, 859

(Tex. App.—Dallas 2012, no pet.).

                          APPELLATE JURISDICTION

      We may not address the merits of an appeal absent jurisdiction. State v. Ninety

Thousand Two Hundred Thirty-Five Dollars and No Cents in U.S. Currency

($90,235), 390 S.W.3d 289, 291–92 (Tex. 2013). Therefore, we begin our analysis

by considering our appellate jurisdiction. As a general rule, only final judgments and

orders are appealable. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001).

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“The legislature, however, has specified circumstances in which a litigant may

appeal immediately from an otherwise unappealable order because a final judgment

has not been rendered.” Rosenberg Dev. Corp. v. Imperial Performing Arts, Inc.,

526 S.W.3d 693, 698 (Tex. App.—Houston [14th Dist.] 2017), aff’d, 571 S.W.3d

738, 741 (Tex. 2019). Lakewest and Supreme maintain that they are governmental

units under section 101.001 of the Texas Tort Claims Act and, as such, may appeal

from the trial court’s orders denying their pleas to the jurisdiction. See TEX. CIV.

PRAC. & REM. CODE § 101.001(3) (providing four definitions of “governmental

unit”); TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8) (appeal permitted from an

interlocutory order that “grants or denies a plea to the jurisdiction by a governmental

unit as that term is defined in [Texas Civil Practice and Remedies Code] Section

101.001.”). We, therefore, have jurisdiction over this appeal with respect to

Lakewest and Supreme only if they are “governmental units.” See TEX. CIV. PRAC.

& REM. CODE § 51.014(a)(8).

      Lakewest and Supreme contend they are “governmental units” as defined by

section 101.001(3)(D), which defines “governmental unit” as “any other institution,

agency, or organ of government the status and authority of which are derived from

the Constitution of Texas or from laws passed by the legislature under the

constitution.” TEX. CIV. PRAC. & REM. CODE § 101.001(3)(D). The phrase

“institution, agency, or organ of government” has a broad meaning and encompasses

an “entity that operates as part of a larger governmental system.” Univ. of the

                                         –4–
Incarnate Word v. Redus, 518 S.W.3d 905, 910–11 (Tex. 2017) (concluding a

private university was a “governmental unit” under Subsection (D) for purposes of

law enforcement). To satisfy the second prong of Subsection (D), “the entity

asserting immunity from suit must have a legislative or constitutional source from

which it derived its status and authority.” Lenoir v. U.T. Physicians, 491 S.W.3d 68,

77 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (op. on reh’g) (citing LTTS

Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d 73, 76, 81 (Tex. 2011)).

      Supreme is a public facility corporation (PFC) that is owned and operated by

DHA, which is a governmental unit. See TEX. LOC. GOV’T CODE § 392.006

(designating housing authorities units of government for all purposes); see also

Orion Real Estate v. Sarro, 559 S.W.3d 599, 607 (Tex. App.—San Antonio 2018,

no pet.) (first citing section 392.006 and then citing Marshall v. Hous. Auth. of City

of San Antonio, 183 S.W.3d 689, 690 n.1 (Tex. App.—San Antonio 2003), vacated

on other grounds, 198 S.W.3d 782 (Tex. 2006)). The Texas Local Government Code

allows a housing authority to create a nonprofit public facility corporation to (1)

issue bonds; (2) finance public facilities on the housing authority’s behalf; or (3)

“acquire, construct, rehabilitate, renovate, repair, equip, furnish, or place in service

public facilities,” which includes housing projects. TEX. LOC. GOV’T CODE §§

303.021, 392.066.

      Under these statutes, Supreme is an “institution, agency, or organ” of

government whose “status and authority” are derived from laws passed by the

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legislature. See Orion Real Estate, 559 S.W.3d at 603 (concluding PFC owned and

operated by San Antonio Housing Authority was governmental unit under the Act)

(citing City of Leon Valley Econ. Dev. Corp. v. Little, 422 S.W.3d 37, 40–41 (Tex.

App.—San Antonio 2013, no pet.) (concluding an economic development

corporation is a “governmental unit” under Subsection (D) because its “powers,

privileges, and functions are specified and circumscribed by statute”)). Because

Supreme is a “governmental unit” under Subsection (D), we have jurisdiction over

this interlocutory appeal as it relates to Supreme. See TEX. CIV. PRAC. & REM. CODE

§ 51.014(a)(8).

      Lakewest argues it is also a governmental unit because it was created by

Supreme to carry out DHA’s functions of acquiring title to the Lakeview

Townhomes and obtain low-cost loans to create that public facility. Citing sections

303.041 and 303.002(a) of the local government code, Lakewest contends that it is

a PFC or its equivalent and, as such, a governmental unit like Supreme because

Lakewest carries out some duties of a PFC. We disagree. The record shows Lakewest

is a Texas limited partnership and Supreme is Lakewest’s general partner. As a

limited partnership, Lakewest is not a corporation and, therefore, cannot be

considered a public facility corporation. See SJ Med. Ctr., L.L.C. v. Estahbanati, 418

S.W.3d 867, 869 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (dismissing

appeal of order denying plea to the jurisdiction for lack of jurisdiction because, as

an LLC, the party was not a “nonprofit corporation, partnership, or sole

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proprietorship” as required to be a governmental unit under applicable statute).

Indeed, Chapter 303 of the local government code under which Lakewest seeks

immunity applies to corporations. TEX. LOC. GOV’T CODE § 303.002(b) (“The

legislature intends that a corporation created under this chapter be a public

corporation, constituted authority, and instrumentality authorized to issue bonds on

behalf of its sponsor . . . .”); see e.g., id. at §§ 303.022, 303.024, 303.025 (creation

and operation of PFCs). Further, DHA’s general counsel. Gregory T. Mays, testified

via affidavit below that “DHA formed Lakewest to act as the operator and manager

of the Lakeview Townhomes.” Absent statutory authority not present here, an entity

hired to manage such a facility is not a governmental unit for purposes of our

jurisdiction. See Orion Real Estate, 559 S.W.3d at 603 (private company hired as an

independent contractor to manage apartments developed by housing authority was

not a governmental unit). On this record, we conclude Lakewest is not a

“governmental unit” under Subsection (D), and we therefore do not have jurisdiction

over this interlocutory appeal as it relates to Lakewest. See id. (dismissing

interlocutory appeal after rejecting argument that appellant was a governmental

unit); see also Baylor Scott & White v. Peyton, 549 S.W.3d 242, 256 (Tex. App.—

Fort Worth 2018, no pet.) (same); AECOM USA, Inc. v. Mata, No. 04-15-00773-

CV, 2016 WL 5112222, at *4 (Tex. App.—San Antonio Sept. 21, 2016, pet. denied)

(mem. op.) (concluding a private contractor hired by a state agency was not a

“governmental unit” under Section 101.001(3) and dismissing the appeal for lack of

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jurisdiction). Accordingly, we must dismiss this appeal for lack of jurisdiction as to

Lakewest.

                             IMMUNITY ANALYSIS

      We now turn to the merits of Supreme’s appeal. Although we have determined

we have jurisdiction over this interlocutory appeal because Supreme falls within the

“broad definition” of “governmental unit,” that does not mean that Supreme enjoys

immunity from suit. See Orion Real Estate, 559 S.W.3d at 603–04. Whether this

Court has appellate jurisdiction over an interlocutory appeal is a separate question

decided under within a separate analytical framework from the question of whether

the party is entitled to immunity. Incarnate Word, 518 S.W.3d at 911 (quoting

Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 432 (Tex. 2016)).

I.    Governmental immunity as a PFC

      In its first issue, Supreme argues it is entitled to governmental immunity

because Supreme is a PFC. This is a matter of first impression in our Court.

However, we find our sister court’s analysis of this issue in Orion Real Estate

instructive and apply it here. See Orion Real Estate, 559 S.W.3d at 604–07.

      In Orion Real Estate, the plaintiff’s son was bit by a dog while playing outside

of an apartment complex. Id. at 601. The complex was owned by the San Antonio

Housing Authority (SAHA) and Woodhill Public Facility Corp., and managed by

Orion. Id. Woodhill, like Supreme, was a PFC owned and operated by a housing

authority and, like Lakewest, owned the apartment buildings. Id. at 603, 607. The

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appellate court concluded that Woodhill was not entitled to governmental immunity

because “PFCs, like EDCs, ‘are, in essence, nonprofit corporations that undertake

discrete projects for the benefit of their [sponsors].’” Id. at 606–07 (quoting

Rosenberg Dev. Corp., 526 S.W.3d at 704).

      In reaching this conclusion, the court first analyzed the nature of PFCs. Id. at

605. The court explained that the Public Facility Corporation Act was enacted to

“authorize the creation and use of public facility corporations with the broadest

possible powers to finance or to provide for the acquisition, construction,

rehabilitation, renovation, repair, equipping, furnishing, and placement in service of

public facilities in an orderly, planned manner and at the lowest possible borrowing

costs.” Id.(quoting TEX. LOC. GOV’T CODE § 303.002). The Act allows a political

subdivision known as a “sponsor”, including a housing authority, to create a PFC to

issue bonds to purchase the authority’s obligations, finance public facilities on the

authority’s behalf, and acquire, construct, rehabilitate, renovate, repair, equip,

furnish, or place in service public facilities. TEX. LOC. GOV’T CODE §§ 303.003(11),

303.021. In addition, a housing authority is permitted to create a PFC to “enter into

a lease or exchange with, or make a mortgage or loan to the [PFC] to . . . acquire,

construct, rehabilitate, renovate, repair, equip, furnish, or provide assistance to

a . . . housing project.” Id. § 392.066(a)(1). Although the Act permits a PFC to take

various actions, such as issuing bonds if authorized by its sponsor and “acquire title

to a public facility” in order to take statutorily-authorized actions, the PFCs sponsor

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“may not delegate to a corporation the power of taxation or eminent domain, a police

power, or an equivalent sovereign power of this state or the sponsor.” Id. § 303.041.

Moreover, a PFC’s sponsor “in its sole discretion, may alter the [PFC’s] structure,

organization, programs, or activities, . . . .” Id. § 303.045.

      The Orion Real Estate court then compared economic development

corporations (EDCs) with PFCs because EDCs are not entitled to governmental

immunity from suit. Orion Real Estate, 559 S.W.3d at 607. The court concluded that

“EDCs and PFCs share many similar features,” including their corporate set-up as

nonprofit corporations that are not permitted to exert the governmental powers

delegated to the political subdivision that created the PFC. Id. at 606. The court

concluded that, like EDCs, PFCs “are not distinct governmental entities entitled to

governmental immunity” and affirmed the denial of Woodhill’s plea to the

jurisdiction on its general immunity argument. Id. at 607.

      The same analysis applies here. Supreme, like Woodhill, is a PFC that was

created by a housing authority to perform certain tasks and fulfill purposes pursuant

to the Act. Although the DHA exerts a high degree of control over Supreme’s

existence, activities, and whether to issue bonds, we agree with the San Antonio

court of appeals’s conclusion that PFCs, like EDCs, “are, in essence, nonprofit

corporations that undertake discrete projects for the benefit of their [sponsors]” and

are not distinct governmental entities entitled to governmental immunity. Id. at 606–

07. We overrule Supreme’s first issue.

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II.   Derivative immunity

      In its second issue, Supreme argues it is entitled to derivative immunity

because Supreme acted as DHA’s agent and acted without discretion regarding the

maintenance of the property. An agent of a governmental entity may be entitled to

derivative immunity if the agent shows that the “complained-of conduct . . . was

effectively attributed to the government” in that it acted “as the government without

discretion.” Orion Real Estate, 559 S.W.3d at 607 (emphasis in original); see also

Brown & Gay Eng’g, Inc. v. Olivares, 461 S.W.3d 117, 125–26 (Tex. 2015) (noting

that in cases in which a government contractor was entitled to immunity, “the

complained-of conduct for which the contractor was immune was effectively

attributed to the government. That is, the alleged cause of the injury was not the

independent action of the contractor, but the action taken by the government through

the contractor) (emphasis in original).

      Orion Real Estate is again instructive on the question of derivative immunity.

There, the court determined that Woodhill was not entitled to derivative immunity

as SAHA’s agent because Woodhill presented no evidence “that it acted without

discretion and at the direction of SAHA regarding the dog’s presence on the property

or any security systems or procedures in place to protect against dog attacks.” Orion

Real Estate, 559 S.W.3d at 607 (citing TEX. LOC. GOV’T CODE §§ 303.021, 392.066);

see also Lenoir, 491 S.W.3d at 86 (concluding a medical clinic established by a state

                                          –11–
university was not entitled to derivative governmental immunity where the

complained-of actions were discretionary).

      When determining whether to extend immunity under an assertion of

derivative liability, a court must look to “whether the entity that is seeking to benefit

from another’s immunity had discretion as it relates to the activities underlying the

plaintiff's claims.” Lenoir, 491 S.W.3d at 88. Here, Ameristar contends it has been

injured by Lakewest and Supreme’s failure to pay four invoices for window repairs

completed at the Property. There is no evidence that the DHA had a right to control

contracting with and payment of contractors such as Ameristar for work completed

on a property established or managed by a PFC such as Supreme. On the contrary,

the record includes evidence showing that DHA granted Supreme discretion

regarding the repair and maintenance of the Property, hiring contractors, and paying

contractors, which encompass the complained-of conduct in this case. For example,

Gregory Mays, DHA’s general counsel, conceded in his deposition that DHA is not

involved in hiring contractors. Further, Supreme’s bylaws and Articles of

Incorporation provide that Supreme, through its President, had the authority to sign

and execute contracts, and that Supreme had express authority to pay contractors and

execute contracts and pay for services rendered by private persons. This evidence

supports the trial court’s implied finding that Supreme acted with discretion in hiring

Ameristar to complete the window repairs, rather than acting at DHA’s direction.

On this record, Supreme acted with discretion in relation to the injuries alleged by

                                         –12–
Ameristar and is, therefore, not entitled to derivative immunity. We overrule

Supreme’s second issue.

III.   Waiver of immunity

       In its third and final issue, Supreme argues that Ameristar did not establish a

waiver of their immunity. We have concluded that Supreme is not entitled to

immunity. As such, we need not reach Supreme’s third issue, which is premised on

a finding that Supreme is entitled to immunity from suit.

                                  CONCLUSION

       For these reasons, we dismiss Lakewest’s appeal for lack of jurisdiction,

overrule Supreme’s appellate issues, and affirm the trial court’s orders denying

Supreme’s pleas to the jurisdiction.

                                            /Robbie Partida-Kipness/
                                            ROBBIE PARTIDA-KIPNESS
                                            JUSTICE
200483F.P05

                                        –13–
                                  S
                           Court of Appeals
                    Fifth District of Texas at Dallas
                                 JUDGMENT

152 LAKEWEST COMMUNITY,                      On Appeal from the 192nd Judicial
LP AND SUPREME                               District Court, Dallas County, Texas
DEVELOPMENT CORPORATION,                     Trial Court Cause No. DC-17-15636.
Appellant                                    Opinion delivered by Justice Partida-
                                             Kipness. Justices Myers and Garcia
No. 05-20-00483-CV          V.               participating.

AMERISTAR APARTMENT
SERVICES, L.P. D/B/A
AMERISTAR SCREEN & GLASS,
Appellee

        In accordance with this Court’s opinion of this date, we DISMISS appellant
152 Lakewest Community, LP’s appeal for lack of jurisdiction, and AFFIRM the
trial court’s orders denying appellant Supreme Development Corporation’s pleas to
the jurisdiction.

      It is ORDERED that appellee AMERISTAR APARTMENT SERVICES,
L.P. D/B/A AMERISTAR SCREEN & GLASS recover its costs of this appeal
from appellants 152 LAKEWEST COMMUNITY, LP AND SUPREME
DEVELOPMENT CORPORATION.

Judgment entered this 2nd day of December 2021.

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