Court Opinion

ID: 4530165
Source: CourtListenerOpinion
Date Created: 2020-04-30 09:13:57.100332+00
Date Added: 2024-06-11T08:44:41.614255
License: Public Domain

Fourth Court of Appeals
                                        San Antonio, Texas
                                  MEMORANDUM OPINION

                                          No. 04-19-00717-CV

                       ELIZABETH BENAVIDES ELITE AVIATION, INC.,
                                      Appellant

                                                   v.

                                         CITY OF LAREDO,
                                              Appellee

                      From the 341st Judicial District Court, Webb County, Texas
                                Trial Court No. 2017CVK002669-D3
                             Honorable Beckie Palomo, Judge Presiding

Opinion by:       Irene Rios, Justice

Sitting:          Rebeca C. Martinez, Justice
                  Patricia O. Alvarez, Justice
                  Irene Rios, Justice

Delivered and Filed: April 29, 2020

AFFIRMED

           Elizabeth Benavides Elite Aviation, Inc. (“Elite”) appeals the trial court’s order granting

the City of Laredo’s plea to the jurisdiction. Elite contends the trial court erred in granting the

City’s plea because the City was engaged in a proprietary function when it entered into a lease

agreement with Elite; therefore, the City is not immune from suit. We affirm the trial court’s order.

                                             BACKGROUND

           In 2006, Elite and the City entered into a lease agreement for a 2,500 square foot tract of

land at the Laredo International Airport. The lease provided the leased premises would be used
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“solely for the purpose of storage and dispensing of aviation fuels for fueling aircraft and no other

use of the leased premises is permitted.” Under the terms of the lease, Elite agreed to construct a

concrete fuel containment pad for the installation of aboveground fuel storage tanks.

       In 2019, Elite filed a cross-claim against the City in a pending lawsuit originally filed by

Laredo Jet Center. At the time of the hearing on the City’s plea to the jurisdiction, Elite had filed

a third amended cross-claim. The only cross-claim asserted against the City in the live pleading

was a breach of contract claim. In its pleading, Elite alleged the City was acting in its proprietary

capacity when it entered into the lease agreement with Elite.

       In its plea to the jurisdiction, the City asserted it was protected by governmental immunity

against Elite’s cross-claim and “did not waive immunity and consent to this suit and the allegations

made by Elite do not waive the governmental immunity afforded to [the] City.” In its response to

the City’s plea, Elite again asserted the City “was acting in its proprietary capacity at the time it

entered the lease contract with Elite.”

       At the hearing on the City’s plea to the jurisdiction, the City’s attorney acknowledged the

City’s plea was based on the pleadings and the facts alleged in the pleadings. Elite’s attorney

relied on Elite’s written response but noted Elite alleged the City was acting in its proprietary

capacity when it entered the lease, thereby waiving its immunity. The trial court took the matter

under advisement and subsequently signed an order granting the City’s plea and dismissing Elite’s

cross-claim against the City. Elite appeals.

                                      STANDARD OF REVIEW

       “When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has

alleged facts that affirmatively demonstrate the court’s jurisdiction to hear the cause.” City of El

Paso v. Heinrich, 284 S.W.3d 366, 378 (Tex. 2009) (internal quotation marks omitted). “Whether

a pleader has alleged facts that affirmatively demonstrate a trial court’s subject matter jurisdiction

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is a question of law reviewed de novo.” Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d
217, 226 (Tex. 2004) (emphasis in original).

                          GOVERNMENTAL/PROPRIETARY DICHOTOMY

       “The governmental/proprietary dichotomy recognizes that immunity protects a

governmental unit from suits based on its performance of a governmental function but not a

proprietary function.” Wasson Interests, Ltd. v. City of Jacksonville, 559 S.W.3d 142, 146 (Tex.

2018). “[The] dichotomy is based on the reality that sovereign immunity is inherent in the State’s

sovereignty, and municipalities share that protection when they act as a branch of the State but not

when they act in a proprietary, non-governmental capacity.” Id. (internal quotation marks

omitted). Accordingly, the performance of a proprietary function subjects a municipality “to the

same duties and liabilities as those incurred by private persons and corporations.” Id. (internal

quotation marks omitted).

       Under the Texas Constitution, the Legislature is authorized to “define for all purposes those

functions of a municipality that are to be considered governmental and those that are proprietary.”

TEX. CONST. art. XI, § 13. Exercising that authority, the Legislature enacted section 101.0215 of

the Texas Tort Claims Act (“Act”) which generally defines governmental functions as “those

functions that are enjoined on a municipality by law and are given it by the state as part of the

state’s sovereignty, to be exercised by the municipality in the interest of the general public.” TEX.

CIV. PRAC. & REM. CODE ANN. § 101.0215(a). The Act provides a non-exclusive list of thirty-six

governmental functions. Id.

       The Act generally defines proprietary functions as “those functions that a municipality

may, in its discretion, perform in the interest of the inhabitants of the municipality.” Id.

§ 101.0215(b). The Act also provides a non-exclusive list of three proprietary functions. Id. The

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proprietary functions of a municipality do not include those governmental functions expressly

enumerated in section 101.0215(a) of the Act. Id. § 101.0215(c).

       As the Texas Supreme Court has explained, the governmental functions of a municipality

generally “consist of a municipality’s activities in the performance of purely governmental matters

solely for the public benefit.” Wasson Interests, Ltd., 559 S.W.3d at 147 (internal quotation marks

omitted). Conversely, proprietary functions “are those performed by a city, in its discretion,

primarily for the benefit of those within the corporate limits of the municipality, and not as an arm

of the government.” Id. (internal quotation marks omitted). Proprietary functions are not

performed as a branch of the state but are performed by the municipality acting on its own behalf.
Id. at 149. As a result, proprietary functions are “usually activities that can be, and often are,

provided by private persons.” Id. at 147 (internal quotation marks omitted).

       When the Act does not expressly enumerate a municipality’s activity as governmental or

proprietary, the Texas Supreme Court has “fleshed out” the general definitions and instructed the

courts to consider the following four factors in determining whether a City’s act was governmental

or proprietary: (1) was the City’s act “mandatory or discretionary,” (2) was the City’s act “intended

to benefit the general public or the City’s residents,” (3) was the City “acting on the State’s behalf

or its own behalf” in undertaking the activity; and (4) was the City’s act “sufficiently related to a

governmental function to render the act governmental even if it would otherwise have been

proprietary.” Hays St. Bridge Restoration Group v. City of San Antonio, 570 S.W.3d 697, 705

(Tex. 2019) (quoting Wasson Interests, Ltd., 559 S.W.3d at 150).

                                             ANALYSIS

       In this case, the issue presented is whether the City was acting in its proprietary capacity

in entering into the lease agreement with Elite, thereby waiving its immunity. As the Texas

Supreme Court has explained:

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             We hold that, to determine whether governmental immunity applies to a breach-
         of-contract claim against a municipality, the proper inquiry is whether the
         municipality was engaged in a governmental or proprietary function when it entered
         the contract, not when it allegedly breached that contract. Stated differently, the
         focus belongs on the nature of the contract, not the nature of the breach.

Wasson Interests, Ltd., 559 S.W.3d at 149. 1

         Although Elite’s brief focuses on the four factors the Texas Supreme Court has “fleshed

out” to be considered when the Act does not expressly enumerate a municipality’s activity as

governmental or proprietary, Hays St. Bridge Restoration Group, 570 S.W.3d at 705, we need not

resort to those factors in our analysis because both the Act and the Texas Transportation Code

expressly enumerate airports as a governmental function. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 101.0215(a)(10); TEX. TRANSP. CODE ANN. § 22.002(a)(2). As the Texas Supreme Court has

explained, legislative enumerations of particular functions as governmental “aid our inquiry” in

cases involving contract claims as well as tort claims. Dallas/Fort Worth Int’l Airport Bd. v. Vizant

Techs., LLC, 576 S.W.3d 362, 367 (Tex. 2019). Although the Act simply lists “airports” as a

governmental function, TEX. CIV. PRAC. & REM. CODE ANN. § 101.0215(a)(10), the Code

identifies “the planning, acquisition, establishment, construction, improvement, equipping,

maintenance, operation, regulation, protection, and policing of an airport” as “public and

governmental functions, exercised for a public purpose, and matters of public necessity.” TEX.

TRANSP. CODE ANN. § 22.002(a)(2).

         In Vizant Techs., LLC, the Texas Supreme Court applied the above-cited provisions of the

Act and the Code in analyzing whether a local governmental entity was engaged in a governmental

1
 Because we focus on the nature of the contract, we disregard the arguments made in the City’s plea and at the hearing
regarding Elite’s alleged abandonment of the lease. Those arguments focused on actions Elite took after the execution
of the lease in allowing Laredo Jet Center and/or John Holler to use the leased premises and operate the fuel farm
sometime after the lease was signed and after Elite built the concrete fuel containment pad and installed two
aboveground fuel storage tanks.

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function in entering into a contract “to analyze [an] airport’s payment-processing costs (including

costs for processing credit-card payments) and to provide recommendations on how the airport

could reduce those costs.” 576 S.W.3d 364. Quoting the above-cited provisions from the Code

and the Act, the court held the entity was engaged in a governmental function in entering into the

contract because the contract was entered into “for the purpose of analyzing and reducing the

airport’s expenses.” Id. at 367.

        Here, Elite attached both its lease with the City and the City’s ordinance approving the

lease to its third amended cross-claim. Having reviewed the terms of the lease and the facts alleged

by Elite regarding the nature of its operation, we hold the City was engaged in a governmental

function in entering into the lease. We note the recitals in the City’s ordinance state the lease was

being recommended for city council approval “in furtherance of the development of the Laredo

International Airport and as support to the maintenance and operation of the Laredo International

Airport.” We further note, the recitals in the lease agreement also state the City “has determined

that it is advantageous to itself, its citizenry, and the operation of its airport to lease the demise[d]

premises located on the airport to” Elite. Therefore, based on the allegations in Elite’s pleading

regarding its use of the leased premises at the airport, we hold the trial court properly granted the

City’s plea because the City was engaged in a governmental function in entering into the lease

with Elite.

                                               CONCLUSION

        The trial court’s order is affirmed.

                                                    Irene Rios, Justice

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