Trinity East v City of Dallas Docs

8/9/2019 Trinity East v City of Dallas Docs

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CAUSE NO. DC-14-01443

TRINITY EAST ENERGY, LLC, § IN THE DISTRICT COURT

§

Plaintiff , §

§v. § 192 ND JUDICIAL DISTRICT

§

CITY OF DALLAS, TEXAS, §

§

Defendant. § DALLAS COUNTY, TEXAS

CITY’S SUPPLEMENTAL PLEA TO THE JURISDICTION

TO THE HONORABLE COURT:

Defendant, the City of Dallas (“City”), files this supplemental plea to the

jurisdiction (the “Plea”) demonstrating that this Court lacks jurisdiction over the claims

and causes of action of Plaintiff, Trinity East Energy, LLC (“Trinity East”), as follows:

I. FACTS

On or about October 1, 2007, the City issued amendments to its requests for

proposal for oil and gas drilling and production within the City (the “RFP”). (Plaintiff’s

First Amended Petition “Amd. Pet.” at p. 4, ¶ 9). The RFP included locations of drilling

sites on city-owned properties. Pertinent provisions of the RFP are identified below:

• 22. CONTACT WITH CITY STAFF: DURING THE PROPOSAL

PROCESS, PROPOSER SHALL NOT CONTACT ANY CITY STAFF

EXCEPT THOSE DESIGNATED IN THE TEXT OF THE RFP OR IN

SUBSEQUENT DOCUMENTATION. AND QUESTIONS OR

CONCERNS SHOULD BE ADDRESSED IN WRITING TO THE CITY’SPURCHAING AGENT OR DESIGNEE …

• 24. MODIFICATIONS: THE RFP CAN ONLY BE MODIFIED OR

REVISED BY WRITTEN ADDENDUM PREPARED AND ISSUED BY

THE CITY’S BUSINESS DEVELOPMENT & PROCUREMENT

DALLAS

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FELI

DISTRI


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SERVICES DEPARTMENT. ORAL MODIFICATIONS ARE NOT

AUTHORIZED.

• ORDINANCE GOVERNING DRILLING: The Dallas City Council

approved the amendments to the ordinance governing gas drilling and

production facilities on September 12, 2007. The lease agreement will begoverned by the ordinance. A copy of the approved ordinance is attached

as Exhibit A-Revised .

• POTENTIAL SURFACE USE: The City of Dallas has identified and

included a list of possible drilling site locations. A map and chart of the

potential sites is attached as Exhibit G.

• INTERPRETATIONS, AMENDMENTS AND ADDENDA: Any

explanation, clarification, or interpretation desired by a Respondent

regarding any part of this Proposal must be requested in writing … Nothing stated or discussed orally during any conversation shall alter,

modify or change the requirements of the Proposal. Only interpretations,

explanations, or clarifications of this Proposal and answers to questions that

are incorporated into a written amendment or addendum to this Proposal

issued by the City of Dallas shall be considered by Respondents …

• By submitting a Proposal, the Respondent specifically waives any right to

recover or be paid attorney’s fees from the City of Dallas …

•

EXHIBIT G PROPERTY AVAILABLE FOR POTENTIALSURFACE USE The City of Dallas has identified potential drill site

locations. Such locations shall be limited to the designated portions of land

that are currently undeveloped and not planned to be developed.

(emphasis in original)

On or about October 10, 2007, the City provided a follow-up to the RFP, deleting

certain parcels from the list of potential drilling sites.

On or about November 9, 2007, Trinity East submitted its response to the RFP.

(Amd. Pet. at 4, ¶ 9). Trinity East’s response was for properties known as the Group 1

and Group 2A parcels. Trinity East also provided the City with a document entitled


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“COMMENTS AND PROPOSALS REGARDING THE FORM OF OIL AND GAS

LEASE”.

On or about February 27, 2008, the Dallas City Council authorized the city

manager to execute two 36-month oil and gas lease agreements with one 36-month

renewal option with Trinity East. (Amd. Pet. at 4, ¶ 10).

On or about August 15, 2008, the City and Trinity East executed two oil and gas

leases (the “Leases”). (Amd. Pet. at 5, ¶149). On that date the City also consented to

the assignment of the Leases.

On or about August 15, 2008, Trinity East and the Dallas city manager signed a

letter that stated although the City makes no guarantees, and the city staff was reasonably

confident that Trinity East would be granted the right to use the Radio Tower Tract as a

drill site location and that City staff would use its reasonable efforts to assist Trinity East

in placing an item before the Dallas City Council to permit such drilling. (Amd. Pet. at 6,

¶ 15).

On or about August 20, 2008, the City Council held a Chapter 26 public hearing

and authorized the non-park subsurface gas drilling and production use on certain park

land. (Amd. Pet. at 7, ¶1 9).

On or about December 20, 2010, in connection with the SUP Applications

(defined below), the City’s Assistant Director of the Real Estate Division sent a letter to

the City’s Current Planning Division stating that the City, as the owner of real property

known as the Gun Club Site, “authorizes, approves, adopts and consents to, the subject

SUP applications, and agrees to submit upon request, supplemental information in


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support of the Application.” A similar letter was sent in connection with the Radio

Tower Site. (Amd. Pet. at 8, ¶ 22).

On or about March 17, 2011, Trinity East filed two zoning applications for

specific use permits for surface gas drilling and production. The first was for the Gun

Club Site located at 1700 Royal Lane, Dallas, Texas, and it was given zoning case

number Z101-220. The second was for the Radio Tower site located at 1500 Royal Lane,

Dallas, Texas, and it was given zoning case number Z101-221. Trinity East also filed a

third zoning application for a specific use permit for gas drilling and production that was

located on the east side of Luna Road, Dallas, Texas, and it was given zoning case

number Z101-248. These three applications will be collectively referred to as “the SUP

Applications.”

On or about June 22, 2011, the Dallas City Council adopted a resolution

authorizing an amendment to the Leases, which added a provision stating that Trinity

East understood that it was required to obtain the required SUPs.

On or about July 1, 2011, the City Manager signed the amendment of oil and gas

leases that explicitly stated that the lessee understands that the proposed drill sites are on

parkland and that the Dallas City Council must approve drilling on parkland, that the drill

sites are in a floodplain and that gas drilling is not permitted in the floodplain without a

Code amendment or City Council authorization of a fill permit, and that Trinity East must

obtain a gas well permit before the land may be used for oil and gas drilling. Further, the

amended Leases also stated that the City’s police powers cannot be contracted away. The

Leases and their amendments shall be referred to as the “Leases”.


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On or about December 20, 2012, the Dallas city staff recommended approval of

the SUP Applications. (Amd. Pet. at 9, ¶ 24).

On or about March 21, 2013, the Dallas City Plan Commission (the “CPC”)

recommended denial of the SUP Applications. (Amd. Pet. at 9, ¶ 25).

On or about August 23, 2013, the Dallas City Council voted 9-6 in favor of the

SUP Applications. (Amd. Pet. at 10, ¶ 26). However, because the CPC recommended

denial of the SUP Applications, Dallas Development Code Section 51A-4.701(c)(1),

pursuant to Texas Local Government Code, Section 211.006(f) requires a three-fourths

vote of all of the City Council members to pass; therefore, the SUP Applications were

denied. ( Id .).

II. GROUNDS FOR THE PLEA

The Court does not have subject-matter jurisdiction of Trinity East’s claims in this

lawsuit for the following reasons:

1 The City has governmental immunity from an invalid breach of contract claim

relating to the Leases as asserted in Count 1 of the Amended Petition because:

a.

the governmental/proprietary distinction is not applicable;

b. if the governmental/proprietary distinction applies, governmental functions

were involved;

c. there was no waiver under chapter 271 of the Local Government Code

because the Lease is not a contract for goods and services;

d. there was no waiver under chapter 271 of the Local Government Code

because Trinity East does not seek the balance due and owed under the

contract; and

e. Trinity East has failed to allege a valid breach of contract claim.


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2. The City has governmental immunity from Trinity East’s common law fraud and

fraud by nondisclosure claims as asserted in Count 3 of the Amended Petition

because:

a.

the governmental/proprietary distinction is not applicable;

b.

if the governmental/proprietary distinction applies, governmental functions

were involved and there was no waiver under the Tort Claims Act;

c. governmental immunity bars the common law fraud and fraud by

nondisclosure claims;

d. Trinity East has failed to allege valid common law fraud and fraud by

nondisclosure claims; and

e. fraud is an intentional tort for which the City has governmental immunity.

3. The City has governmental immunity from Trinity East’s statutory fraud claims as

asserted in Count 4 of the Amended Petition because:

a.

the governmental/proprietary distinction is not applicable and governmental

immunity bars the claim;

b.


were involved, there was no waiver under the Tort Claims Act and the

claim is barred by governmental immunity;

c. statutory fraud is inapplicable to governmental entities;

d. fraud is an intentional tort for which the City has governmental immunity;

and

e.

Trinity East has failed to allege a valid statutory fraud claim.

4. The City has governmental immunity from Trinity East’s promissory estoppel

claims as asserted in Count 5 of the Amended Petition because:

a.


immunity bars the claim and there was no waiver under the Tort Claims

Act;

b. if the governmental/proprietary distinction applies, governmental functions

were involved and the claim is barred by governmental immunity; and


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c. Trinity East has failed to allege valid promissory estoppel claims.

5. The City has governmental immunity from Trinity East’s negligent

misrepresentation claims as asserted in Count 6 of the Amended Petition because:

a.


functions were involved and there was no waiver under the Tort Claims

Act;

b. the City is immune from a negligent misrepresentation claim; and

c. Trinity East has failed to allege valid negligent misrepresentation claims.

6. The City has governmental immunity from Trinity East’s claim for attorney’s fees

because:

a.

the governmental/proprietary distinction is not applicable and the claim is

barred by governmental immunity;

b.


were involved and governmental immunity bars the claim;

c.

Trinity East is not entitled to attorney’s fees for tort or inverse

condemnation claims;

d.

there is no contract term or statute that authorizes the award of attorney fees

against the City. Chapter 38 of the Texas Business and Commerce Code

and chapter 27 of the Texas Business and Commerce Code are inapplicable

to municipalities; and

e.

Trinity East has failed to allege a valid claim for attorney’s fees.

III. JURISDICTIONAL REQUIREMENTS

A. The Court reviews a plea to the jurisdiction analyzing whether the plaintiff

pleaded jurisdictional facts and, if those facts are challenged with evidence,whether the plaintiff presented evidence sufficient to create a fact issue.

A plea to the jurisdiction contests a trial court’s subject-matter jurisdiction. Tex.

Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999). The purpose of the plea is not


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to force the preview of a case on the merits, but to establish a reason why the merits

should never be reached. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.

2000). In Texas Department of Parks & Wildlife v. Miranda, the supreme court

identified the proper analysis for deciding whether a plea to the jurisdiction should be

granted . See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226-27 (Tex.

2004).

When a plea to the jurisdiction challenges the pleadings, the court determines

whether the pleader has alleged facts that affirmatively demonstrate the court’s

jurisdiction to hear the cause. Id. at 226 (citing Tex. Ass’n of Bus. v. Tex. Air Control Bd.,

852 S.W.2d 440, 446 (Tex. 1993)). Courts construe the pleadings liberally in favor of the

plaintiff and look to the pleader’s intent. Id . If the pleadings do not contain sufficient

facts to affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively

demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and

the plaintiff should be afforded the opportunity to amend. Id. at 226-27 (citing Cnty. of

Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002)). If the pleadings affirmatively

negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without

allowing the plaintiff an opportunity to amend. Id. at 227.

When a plea to the jurisdiction challenges the existence of jurisdictional facts, the

trial court considers relevant evidence submitted by the parties to resolve the

jurisdictional issues raised. Id. When the jurisdictional challenge implicates the merits

of a plaintiff’s cause of action and the plea to the jurisdiction includes evidence, the trial

court reviews the evidence to determine whether a fact issue exists concerning the


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jurisdictional issue. Id . If the relevant evidence is undisputed or fails to raise a fact

question on the jurisdictional issue, the trial court should grant the plea to the jurisdiction

as a matter of law. Id. at 227-28.

If a plaintiff has been provided a reasonable opportunity to amend after a

governmental entity files its plea to the jurisdiction, and the plaintiff’s amended pleading

still does not allege facts that would constitute a waiver of immunity, then the trial court

should dismiss the plaintiff’s action with prejudice. Harris Cnty. v. Sykes, 136 S.W.3d

635, 639 (Tex. 2004).

Whether a court has subject-matter jurisdiction is a question of law. Miranda, 133

S.W.3d at 226; Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855

(Tex. 2002).

B. Governmental immunity protects the City from invalid claims.

In Texas, governmental and sovereign immunity deprives a trial court of subject-

matter jurisdiction for lawsuits against the State or other governmental units unless the

State consents to suit. See Miranda, 133 S.W.3d at 224; Dallas Cnty. v. Wadley, 168

S.W.3d 373, 376 (Tex. App.—Dallas 2005, pet. denied). To establish subject-matter

jurisdiction against a governmental unit, a plaintiff’s pleading must establish, either by

reference to a statute or express legislative permission, the legislature’s consent to its

lawsuit, or immunity from suit will deprive the trial court of subject-matter jurisdiction.

Jones, 8 S.W.3d at 638. Mere reference to a legislative waiver, however, does not

establish a governmental entity’s consent to be sued and is not enough to confer

jurisdiction on the trial court. See Tex. Dep’t of Criminal Justice v. Miller , 51 S.W.3d


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583, 587 (Tex. 2001) (holding that merely alleging the Tort Claims Act is not sufficient

to establish jurisdiction).

The plaintiff has the burden to allege facts affirmatively demonstrating that the

trial court has subject-matter jurisdiction. See Tex. Ass’n of Bus., 852 S.W.2d at 446. For

the waiver to be effective, a plaintiff must plead a constitutional or legislative waiver

with facts that make the waiver applicable. See Gen. Servs. Comm’n v. Little-Tex

Insulation Co., 39 S.W.3d 591, 599 (Tex. 2001) (holding that the plaintiff had failed to

allege facts to demonstrate a valid takings claim to invoke a waiver of immunity from

suit); Tex. Ass’n of Bus., 852 S.W.2d at 446 (holding that the pleader must allege facts

that affirmatively demonstrate the court’s jurisdiction to hear the cause). In order for

there to be a waiver of governmental immunity, the plaintiff must plead a valid claim.

See Kaufman Cnty. v. Combs, 393 S.W.3d 336, 345 (Tex. App.―Dallas 2012, pet.

denied).

IV. THERE IS NO WAIVER OF GOVERNMENTAL IMMUNITY FOR

TRINITY EAST’S BREACH OF CONTRACT CLAIMS

Trinity East alleges that sovereign/governmental immunity for its contractual

claim was waived pursuant to sub-chapter I of chapter 271 of the Texas Local

Government Code (hereafter “chapter 271”). It also asserts that its contractual claims

involve proprietary functions and, therefore, no waiver of governmental immunity is

necessary. (Am. Pet. at 12 [¶¶ 30, 31]). Neither contention has merit.


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A.

There is no applicable waiver of immunity pursuant to chapter 271.

Plaintiff claims to have a written contract that is enforceable under the limited

waiver in chapter 271 of Texas Local Government Code. See Tex. Loc. Gov’t Code, §§

271.151 -.160. The general rule is that a governmental entity is immune from an action

for breach of contract. E.g., Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 408 (Tex. 1997).

In 2005, however, the legislature enacted chapter 271, which provides a limited waiver of

immunity from suit on a contract that is subject to the waiver. Tex. Loc. Gov’t Code §

271.152; Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivs.

Prop./Cas. Joint Self-Ins. Fund , 212 S.W.3d 320, 327 (Tex. 2006).

The waiver found in chapter 271 is limited to written contracts, properly executed

by the local government, that state the essential terms of the agreement, and that provide

goods or services to the local government. Tex. Loc. Gov’t Code §§ 271.151, .152).

1.

There is no contract for the provision of “goods and services” to the City

and, therefore, there is no waiver of immunity.

Trinity East alleges it entered into an oil and gas lease and a real property interest

was conveyed to it. This is not a contract for providing “goods and services” to the City.

In Lubbock County Water Control and Improvement District v. Church & Akin,

LLC., 442 S.W.3d 297 (Tex. July 3, 2014), the Supreme Court confronted the issue of

whether the lease of a marina from the water district was a contract for goods and

services. The Court held that under sub-chapter 271, the terms of the written agreement

“are themselves the substance that determines whether immunity is waived,” adding that


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if the written contract did not include the essential terms of agreement to provide goods

or services to a governmental entity, there was no waiver of sovereign immunity. Id ., at

304. The Court then reviewed the terms of the agreement at issue and concluded it did

not qualify as a contract providing goods and services to the governmental entity and,

therefore, there was no waiver of sovereign immunity. Id . at 303-305. The Court

rejected the plaintiff’s argument that it provided services. The Court noted that sub-

chapter 271’s limitation on damages to sums due and owed along with the requirement of

providing goods and services, meant the waiver typically applies only when the

governmental entity agrees to make payment for the goods and services. Id. at 304. The

Court held that the fact that the water district did not agree to pay under the contract

supported the Court’s conclusion that the claimant did not agree to provide services. Id .

Trinity East entered into the Leases and agreed to make payments to the City. The

City had no contractual obligation to ever make any payment to Trinity East. Trinity East

did not provide any goods or services to the City and the waiver of immunity in chapter

271 is inapplicable.

Trinity East alleges that oil and gas are goods and the delivery of the royalty

payment to the City was a service. Any receipt of oil, gas, or money by the City from

Trinity East’s would be considered payment for the Leases and not for the purpose of

providing of goods or services to the City. Further, the Supreme Court expressly rejected

this argument in Church & Akin. The plaintiff claimed it provided services by operating

the marina. The Supreme Court concluded that, even though the parties may have

contemplated that the plaintiff would operate a marina, the language of the contract did


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2.

Trinity East does not seek sums “due and owed” under the Leases, and

therefore, there is no waiver of immunity.

Any recovery under chapter 271 is to limited “the balance due and owed by the

local governmental entity under the contract including any amount owed as compensation

for increased cost to perform the work as a direct result of owner-caused delays or

acceleration.” Tex. Loc. Gov’t Code § 271.153(a)(1). Here, Trinity East does not seek

any sums due and owed under the Leases. Under the express terms of the Leases, the

City never made any payments to Trinity East; instead, only Trinity East was to make

payments. Since Trinity East does not seek the balance due and owed under the Leases,

it does not assert a valid claim within the waiver of chapter 271. This is yet another

reason that the Court lacks jurisdiction over the breach of contract claim.1

B. The governmental/proprietary distinction is not applicable to any of

Trinity East’s claims.

In a vain effort to escape the City’s governmental immunity, Trinity East claims

that the City’s actions involve proprietary rather than governmental functions. As

discussed in more detail herein, the City’s actions involved governmental functions,

therefore, the governmental/proprietary distinction applies to none of the claims Trinity

East asserts and to none of the applicable actions taken by the City that form the basis of

Trinity East’s claims.

1 In addition, Trinity East seeks lost profits which are excluded under sub-chapter 271. Tex. Loc. Gov’t

Code § 271.153(b)(1); Tooke v. City of Mexia, 197 S.W.3d 325, 346 (Tex. 2006).


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1.

The dichotomy does not apply to contract claims.

In Tooke, the Supreme Court noted that it had never determined whether the

governmental/proprietary dichotomy is applicable to waivers of sovereign immunity for

breach of contract claims. Tooke, 197 S.W.3d at 343-344. Its application to breach of

contract claims has been repeatedly and expressly rejected. Lower Colorado River Auth.

v. City of Boerne, 422 S.W.3d 60, 65 (Tex. App.—San Antonio 2014, pet. dism’d by

agr.); Republic Power Partners, P.P. v. City of Lubbock , 424 S.W.3d 184, 193 (Tex.

App.—Amarillo 2014, no pet. h.); W. Tex. Mun. Power Agency v. Republic Power

Partners, LP, No. 07-12-00374-CV, 2014 WL 486287, at *4 (Tex. App.—Amarillo

2014, no pet. h.); Wasson Interests, 2014 WL 3368413, at *3; Gay v. City of Wichita

Falls, No. 08-13-00028-CV, 2014 WL 3939141, at *5 (Tex. App.—El Paso Aug. 13,

2014, no pet.); City of San Antonio ex rel. City Public Serv. Bd. v. Wheelabrator Air

Pollution Control, Inc., 381 S.W.3d 597, 605 (Tex. App.—San Antonio 2012, pet.

denied). 2

Application of the dichotomy to breach of contract claims has been rejected

because the dichotomy arose in the contexts of torts, the policy reasons for the dichotomy

are outdated and have no application to contractual claims, there have been significant

changes in governmental immunity law since the dichotomy first developed and those

changes all weigh against application of the dichotomy to contract claims, the Legislature

2 Only the Austin Court of Appeals reached a contrary conclusion. E.g. City of Austin v. MET Center NYCTEX

Phase II, Ltd ., 2014 WL 538697 (Tex. App.—Austin 2014, pet. dism’d agr.). The Austin Court ignored Tooke and

looked to pre-Tooke cases.


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has already determined the scope of the waiver for contract claims by its adoption of

chapter 271, and recognizing a dichotomy despite chapter 271 would create needless

uncertainty the Legislature sought to eliminate with chapter 271. The

governmental/proprietary function distinction has no application to breach of contract

claims.

The only waiver for breach of contract claims is found in chapter 271 and no

waiver is granted for Trinity East’s claim.

2. The dichotomy does not apply to home rule municipalities.

Dallas is a home rule city. The common law governmental/proprietary distinction

is not applicable to home rule cities. In City of Galveston v. State, the Texas Supreme

Court observed that the high standard for a waiver of sovereign immunity was especially

true for home-rule cities. City of Galveston v. State, 217 S.W.3d 466, 469 (Tex. 2007).

The court noted that such cities derive power from the Constitution and have all powers

of the State not inconsistent with the Constitution, the general laws, or the city’s charter.

Id. The court concluded that the question is not whether any statute grants home-rule

cities immunity from suit but rather whether there is any statute that limits the cities

immunity from suit and that such limits exist only when a statute speaks with

unmistakable clarity. Id.

For the State, there is no common law governmental/proprietary distinction.

Instead, all functions are considered governmental. Hencerling v. Tex. A & M Univ., 986

S.W. 2d 373, 374-5 (Tex. App.—Houston [1st Dist.] 1999, pet. denied). Home rule cities

have all the power of the State. Protor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998). In


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the absence of legislation stating otherwise, the exercise of the State power is a

governmental function. See Perry v. Greanias, 95 S.W.3d 683, 692-4 (Tex. App.—

Houston [1st Dist.] 2002, pet. denied) (home rule city audit part of self-government

power and a governmental function). For a home rule city, the only question is whether

there is a statute limiting the sovereign immunity. City of Galveston, 217 S.W.3d at 469.

For breach of contract claims, the only waiver is found in chapter 271 and it does not

contain a governmental/proprietary distinction. The distinction has no application to

home-rule cities.

3.

In the alternative, the common law governmental/proprietary

dichotomy should not be expanded to contract claims.

The common law distinction between functions should not be expanded to

contract claims. The Texas Supreme Court observed that:

In a world with increasingly complex webs of government units, the

Legislature is better suited to make the distinctions, exceptions, and

limitations that different situations require. The extent to which any particular city, county, port, municipal utility district, school district, or

university should pay damages involves policy issues the Legislature is

better able to balance.

City of Galveston, 217 S.W.3d at 469.

There is a lack of a factual or policy reason to expand the common law distinction.

See Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 537-548 (1985)

(analyzing, and then rejecting, a judicial distinction between governmental and

proprietary functions “as unsound in principle and unworkable in practice.”). The

adherence to common law classifications formulated over a century ago without regard to

the modern role of local governments and the State is without reason.


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In Texas, the case by case distinction of the function have “yielded inconsistent

and incoherent results.” Williams v. City of Midland , 932 S.W.2d 679, 682 (Tex. App.—

El Paso 1996, no pet.). The United States Supreme Court described the distinction as a

… quagmire that has long plagued the law of municipal corporations. A

comparative study of the cases in the forty-eight States will disclose an

irreconcilable conflict. More than that, the decisions in each of the States

are disharmonious and disclose the inevitable chaos when courts try to

apply a rule of law that is inherently unsound.

Indian Towing Co. v. United States, 350 U.S. 61, 65 (1955).

Other courts have criticized the governmental/proprietary distinction as being

illusory, elusive, arbitrary, misguided, chaotic, illogical, and unworkable. E.g.

Morningstar Water Users Ass'n, Inc. v. Farmington Mun. School Dist. No. 5, 901 P.2d

725, 731, 735 (N.M. 1995) (holding the governmental/proprietary distinction had “little

to supporting the reasoning” and concluding it had “no decisive legal value”); Northwest

Nat. Gas Co. v. City of Portland, 711 P.2d 119, 123, 126 (Ore. 1985) (stating the

distinction is “unworkable, untenable and unhelpful”); City and Cnty of Denver v.

Mountain States Tel. and Tel. Co., 754 P.2d 1172 (Colo. 1988) (stating the distinction is

“unreliable”, “analytically unsound”, and has “no continuing validity”); Pac. Tel. & Tel.

Co. v. Redevelopment Agency of City of Redlands, 75 Cal.App.3d 957, 968, 142 Cal.

Rptr. 584, 591 (1977) (stating the distinctions “are of dubious value in any context”).

As the United States Supreme Court noted in Indian Towing:

… all Government activity is inescapably ‘uniquely governmental’ in that it

is performed by the Government. … ‘Government is not partly public or

partly private, depending upon the governmental pedigree of the type of a

particular activity or the manner in which the Government conducts it.’

Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 383-384, 68 S.Ct.

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1, 3, 92 L.Ed. 10. …it is hard to think of any governmental activity …

which is ‘uniquely governmental,’ in the sense that its kind has not at one

time or another been, or could not conceivably be, privately performed.

Id ., 350 U.S. at 67-68. In Garcia, the Court continued its criticism in refusing to apply

the distinction in the context of federal regulation stating, “Any such rule leads to

inconsistent results at the same time that it disserves principles of democratic self-

governance, and it breeds inconsistency precisely because it is divorced from those

principles.” Id., 469 U.S. at 547. There is no reason to expand a common law

classification system that the Texas Supreme Court has noted “has not been clear”.

Tooke, 197 S.W. 3d at 343.

4.

In the alternative, Trinity East contractually admitted that

governmental functions are involved.

In the Leases, Trinity East acknowledged and agreed that, “the City may not

legally contract away its constitutional or statutory police powers, including without

limitation the power to establish and subsequently amend city codes, development

guidelines, and other rules and regulations,” “that a decision on an application for a

Specific Use Permit is a police power that cannot be contracted away,” and “the city

council must authorize the oil and gas drilling use on park land [and] [t]his authorization

is a police power that cannot be contracted away.” Thus, Trinity East through the

contract admitted that any decision about the SUP or other permits or authorizations were

the exercise of the City’s police powers.

Activities performed as part of a municipality’s police powers clearly fall within

the governmental functions of a city. City of Dallas v. Moreau, 718 S.W. 3d 776, 779

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(Tex. App.—Corpus Christi 1986, writ ref’d n.r.e.). A municipality’s zoning authority is

derived from the police powers of the State and a city functions in its governmental

capacity when it performs functions mandated by the State. Truong v. City of Houston,

99 S.W.3d 204, 210 (Tex. App.—Houston [1st Dist.] 2003, no pet.). Zoning and land-

use ordinances are valid exercises of a city’s police powers and are the governmental

functions. Id . at 211. Trinity East contractually admitted that the City’s decision

regarding Trinity East’s applications for SUPs was a police power and a governmental

function.

Even without Trinity East’s admission, the City’s actions regarding the zoning and

the consideration of the requests for SUPs involved governmental functions. See Trail

Enter., Inc. v. City of Houston, 957 S.W.2d 625, 633-34 (Tex. App.―Houston [14th Dist.

1997, pet. denied) cert. denied 525 U.S. 1070 (1999) (Adoption of an ordinance limiting

oil and gas drilling involved governmental function).

The following functions are governmental are applicable to the activities of the

City in this matter: sanitary and storm sewers, parks and zoos, dams and reservoirs,

building codes and inspections, and zoning, planning and plat approval. Tex. Civ. Prac.

& Rem. Code §§ 101.0215(a) (9), (13), (19), (28) and (29).

Therefore, the only possible waiver for a breach of contract claim is in sub-chapter

271 and Trinity East’s claims do not fall within the limited waiver. Jurisdiction does not

exist for its breach of contract claim.


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C.

Trinity East failed to allege a valid breach of contract claim.

Trinity East alleges that the City breached the Leases “by interfering with Trinity’s

exclusive right to drill and operate oil and gas wells, by unreasonably withholding its

consent to Trinity’s request for access to the property for the purpose of drilling for oil

and gas, and by denying each of Trinity’s SUP applications for surface locations for

operations.” Trinity East has failed to allege a valid breach of contract claim.

A claim for breach of contract requires proof of the following elements: (1) the

existence of a valid contract; (2) performance or tendered performance by the plaintiff;

(3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as

a result of that breach. Holloway v. Dekkers, 380 S.W.3d 315, 324 (Tex. App.―Dallas

2012, no pet.) (citing Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d

876, 882 (Tex. App.―Dallas 2007, no pet.)).

With respect to the second and third elements, Trinity East has failed to allege that

it performed or tendered performance under the Leases or that the City breached the

Leases. Instead, Trinity East seeks to engraft additional terms into the Leases. There was

no contractual term that the City must approve SUPs to all potential drilling locations

selected by Trinity East. To the contrary, the Leases recognizes that the decision whether

or not to grant an SUP was an exercise of police power that could not be contracted away.

The City did not withhold its consent to explore for oil and gas because the Leases

specifically state that Trinity East was required to comply with all laws regarding the

exploration for oil and gas within the City. The Leases provided:

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21(c) Lessee shall conduct all operations hereunder … in

accordance with all federal, state and local laws, ordinances and regulations

as they may be amended from time to time. As a governmental entity, the

City may not legally contract away its constitutional or statutory police

powers, including without limitation the power to establish and

subsequently amend city codes, development guidelines, and other rulesand regulations; and nothing in this Lease is to be interpreted as waiving

the City’s power to establish and amend them, even if the same subject

matters are addressed in this Lease …

21(q) If Lessee seeks a variance or waiver of any city, county, other

governmental entity ordinance, rule, order, or other regulation relating to

drilling, completing, operating, or producing an oil or gas well drilled on

the Land or in the area of the Land, then the Lessor shall not unreasonably

oppose Lessee’s request for such variance or waiver.

Lessee understands that a Specific Use Permit is required before the Land

can be used for oil and gas drilling and that a decision on an application for

a Specific Use Permit is a police power that cannot be contracted away.

Lessee further understands that a gas well permit pursuant to Dallas

Development Code Article III is required to conduct gas drilling and

production.

Lessee understands that the proposed drill sites are on park land and that

before the Land may be used for oil and gas drilling, and as required by the

Texas Parks and Wildlife Code, Sections 26.001 through 26.004, the citycouncil must authorize the oil and gas drilling use on park land. This

authorization is a police power that cannot be contracted away.

Lessee understands that the proposed drill sites are within the flood plain

and that oil and gas drilling is not a permitted use within the flood plain.

Lessee further understands that before the Land may be used for oil and gas

drilling, a decision by the city council must be made to amend the Dallas

Development Code to allow the use within the flood plain, or Lessee must

obtain a fill permit pursuant to Dallas Development Code Section 51A-

5.105.’

These provisions in the Leases recognize that if an SUP or other regulatory

approval was needed, such approval was an exercise of police power and could not be

contracted away. Trinity East knew and contractually accepted the risk that the City


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Council or some other governmental entity might not grant whatever regulatory approval

or permit was necessary. Trinity East entered the Leases knowing of that possibility and

accepted the risk that the necessary regulatory approval might not be granted. As the

pleadings admit, City staff did present and did support Trinity East’s requests. The City

Council, exercising the police power entrusted to it, decided not to grant the SUPs. There

are no allegations that in exercising that power, City Council unreasonably opposed the

SUPs.

Trinity East knew that it was required to obtain regulatory approval before it

could begin drilling within the City. Nothing in the Leases required the City Council to

approve the SUPs. Therefore, the City could not have breached the Leases by virtue of

not approving the SUPs. Trinity East can point to no action of the City to show that it

breached the Leases. Since Trinity East has failed to allege a valid breach of contract

claim, that claim should be dismissed with prejudice for lack of jurisdiction.

V. THERE IS NO WAIVER OF GOVERNMENTAL IMMUNITY FOR

TRINITY EAST’S PROMISSORY ESTOPPEL CLAIM

A. The governmental/proprietary function dichotomy is inapplicable,

governmental functions were involved, and there is no legislative

waiver of promissory estoppel claims.

Trinity East asserts a promissory estoppel claim and the only basis alleged to

evade governmental immunity is to claim that proprietary functions were involved. The

governmental/proprietary dichotomy does not apply to quasi-contractual claims and such

claims are barred by governmental immunity. See Gay, 2014 WL 3939141, at *5. Also

as discussed above, the governmental/proprietary dichotomy does not apply to home rule


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cities, and the common law dichotomy should not be expanded beyond tort claims.

Further, as described above, governmental functions were involved.

In addition to Gay, many other courts have held there is no waiver of

governmental or sovereign immunity for promissory estoppel claims. Somerset Indep.

Sch. Dist. v. Casias, No. 04–07–00829–CV, 2008 WL 1805533, at *3 (Tex. App.―San

Antonio Apr. 23, 2008, pet. denied) (mem. op.); City of Deer Park v. Ibarra, No. 01–10–

00490–CV, 2011 WL 3820798, at *6-7 (Tex. App.―Houston [1st Dist.] Aug. 25, 2011,

no pet.); Nussbaum v. Univ. of Tex. Med. Branch at Galveston, No. 01–99–00871–CV,

2000 WL 1864048, at **3–4, 8–9 (Tex. App.―Houston [1st Dist.] Dec. 21, 2001, pet.

denied) (not designated for publication). See also H & H Sand & Gravel, Inc. v. City of

Corpus Christi, No. 13-06-00677-CV, 2007 WL 3293628, at *3 (Tex. App.―Corpus

Christi Nov. 8, 2007, no pet.); City of Houston v. Swinerton Builders, Inc., 233 S.W.3d 4,

13 (Tex. App.―Houston [1st Dist.] 2007, no pet.). Governmental immunity bars Trinity

East’s promissory estoppel claims.

B.

Trinity East failed to allege a valid promissory estoppel claim.

Trinity East has also failed to allege a valid promissory estoppel claim. Under

Texas law, promissory estoppel is not applicable when a valid contract exists. See

Doctors Hosp. 1997, L.P. v. Sambuca Hosp., L.P., 154 S.W.3d 634, 636-637 (Tex.

App.―Houston [14th Dist.] 2004, pet. filed) and authorities listed therein; Jhaver v.

Zapata Off-Shore Co., 903 F.2d 381, 388 (5th Cir. 1990). Trinity East alleges a breach of

a valid contract and thereby precludes a valid promissory estoppel claim.

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Additionally, the elements of promissory estoppel are: 1) a promise; 2)

foreseeability of reliance thereon by the promisor; and 3) substantial reliance by the

promise to his detriment. English v. Fischer , 660 S.W. 2d 521, 524 (Tex. 1983). The

reliance must be reasonable. See Wheeler v. White, 398 S.W.2d 93, 96-97 (Tex. 1965).

Trinity East’s pleading acknowledge that each element is missing.

First, as discussed above, the Leases did not contain promises that SUPs would be

granted and instead recognized the uncertainty of whether regulatory approval would be

granted. Trinity East has not alleged any promise by the City Council other than what is

in the Leases and the amendments to the Leases. Only the Dallas City Council can bind

the City. The alleged promises by City employees are not binding on the City.

Additionally, the RFP documents specifically state that Trinity East was not to rely upon

any oral representations by anyone in connection with the Leases. Therefore, there is no

allegation or evidence of a City promise. Trinity East’s promissory estoppel claim fails.

However, even if the Court were to assume that alleged promises were made by

City employees to support Trinity East’s promissory estoppel claim, such promises were

fulfilled by the City officials. City officials stated that they would use their best efforts to

see that specific use permits were issued such that Trinity East would be permitted to drill

within the City. Trinity East’s pleadings admit that City staff recommended approval of

the SUPs, however, the Dallas City Council did not approve the SUPs. Therefore,

assuming that promises were made, City staff did not violate their promise.

Finally, Trinity East’s reliance was not reasonable. It was not reasonable for

Trinity East to rely on a promise by City employees that the SUPs would be approved


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when it was not within the power of such employees to approve the SUPs. Also, the

Leases and the amendments specifically state that no such promises can be contractually

made. Since Trinity East’s reliance was not reasonable, it has failed the third element for

bringing a successful promissory estoppel claim. Since Trinity East has failed to allege a

valid promissory estoppel claim, that claim should be dismissed with prejudice.

VI. THERE IS NO WAIVER OF GOVERNMENTAL IMMUNITY FOR

TRINITY EAST’S COMMON LAW FRAUD AND NEGLIGENCE

CLAIMS

A. Trinity East does not claim a waiver under the Torts Claims Act.

Trinity East asserts fraud and negligence claims. It does not contend that any of

its claims fit within the waiver of the Tort Claims Act. See Tex. Civ. Prac. & Rem. Code,

§ 101.001, et seq. If it attempted to do so, no waiver would be recognized. Its claims do

not involve property damage, personal injury, or death and do not involve motorized

equipment, tangible personal property, or a premise defect. See id ., § 101.021. To avoid

the lack of a waiver under the Tort Claims Act, Trinity East asserts that all of the claims

are proprietary. It relies on cases that pre-date and ignore the adoption of the article XI,

section 13 of the Texas Constitution and the Texas Tort Claims Act. The Act applies and

it provides no waiver for Trinity East’s tort claims.

B. Trinity East’s fraud and negligence claims are barred by the TexasTort Claims Act.

1.

The City’s actions involved governmental functions.

The Texas Constitution authorizes the Legislature to “define for all purposes

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


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are proprietary, including reclassifying a function's classification assigned under prior

statute or common law.” Tex. Const. art. XI, § 13; see also City of Tyler v. Likes, 962

S.W.2d 489, 503 (Tex.1997). The Legislature has described 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 Legislature has

statutorily recognized a non-exclusive list of 36 governmental functions. Id . The

Legislature specified that the “proprietary functions of a municipality do not include

those governmental activities listed under subsection (a).” Id. § 101 .0215(c). The courts

have no discretion to determine that a municipality's action is proprietary if it has been

designated as a governmental function by the Tort Claims Act. See City of Texas City v.

Suarez, No. 01–12–00848–CV, 2013 WL 867428, at *7 (Tex. App.—Houston [1st Dist.]

March 7, 2013, pet. filed) (mem.op); accord City of Plano v. Homoky, 294 S.W.3d 809,

814 (Tex. App.—Dallas 2009, no pet.); Tex. River Barges v. City of San Antonio, 21

S.W.3d 347, 357 (Tex. App.—San Antonio 2000, pet. denied).

The listing of governmental functions in § 101.215 is a “non-exclusive list of

activities,” and “broad legislative concepts.” Ethio Exp. Shuttle Serv., Inc. v. Houston,

164 S.W.3d 751, 755 (Tex. App.—Houston [14th Dist.] 2005, no pet.); City of Dallas v.

Reata Constr. Co., 83 S.W.3d 392, 395-396 (Tex. App.—Dallas 2002) rev’d on other

grounds, 197 S.W.3d 371 (2006). If an activity is “encompassed within” or “touched on”

a category or “falls under the classification,” then it is part of the governmental function.

Texas River Barges, 21 S.W.3d at 357; City of El Paso v. Gomez-Parrs, 198 S.W.3d 364,


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369 (Tex. App.—El Paso 2006, no pet.); City of Weslaco v. Borne, 210 S.W.3d 782, 792

(Tex. App.—Corpus Christi 2006, pet. denied). If an activity can be considered a mixed

function, the entire function is considered governmental if any component of a function is

governmental. City of Texarkana v. City of New Boston, 141 S.W.3d 778, 784 n.3 (Tex.

App.—Texarkana 2004, pet. denied).

Trinity East alleges that the City entered into oil and gas leases, which conveyed

real property interests of City park properties. It also alleges that the City denied its

zoning request for a SUP. These two allegations are critical to all of Trinity East’s

claims.

Section 101.215 lists the following as governmental function: sanitary and storm

sewers, parks and zoos, dams and reservoirs, building codes and inspections, and zoning,

planning and plat approval. Tex. Civ. Prac. & Rem. Code §§ 101.0215(a) (9), (13), (19),

(28) and (29).

In addition, the grant or denial of permits is a governmental function. See Cities

of Friendswood, League City, Dickson v. Adair, No. 01–03–00205–CV, 2003 WL

22457996, at *2 (Tex. App.—Houston [1st Dist.] Oct. 30, 2003, pet. denied) (and

authorities cited therein). Trinity East’s pleadings admit and acknowledge that the City’s

alleged actions or inactions were encompassed, touched upon, and were part of

governmental functions. All of Trinity East’s fraud and negligence claims involved

governmental functions and are barred by the Tort Claims Act.


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2. Fraud is an intentional tort for which the City has governmental

immunity.

Trinity East has alleged common law fraud, fraud by non-disclosure, and

statutory fraud. The Tort Claims Act and sub-chapter 271 specifically state there is no

waiver of immunity for intentional torts. Tex. Loc. Gov't Code § 271.157; Tex. Civ.

Prac. & Rem. Code § 101.057(2). Governmental immunity bars all of the fraud claims.

City of Freeport v. Briarwood Holdings, L.L.C., No. 01–11–01108–CV, 2013 WL

1136576, at *6 (Tex. App.—Houston [1st Dist.] March 19, 2013, no pet.); LTTS Charter

School, Inc. v. Palasota, 362 S.W.3d 202, 209 (Tex. App.—Dallas, 2012, no pet.).

3. Governmental immunity bars Trinity East’s negligent

misrepresentation claim.

Trinity East has also alleged a negligent misrepresentation claim. Trinity East’s

claims for negligent misrepresentation do not contain any allegations involving tangible

personal property, use of motor-driven equipment, or a premises defect. Thus, like the

fraud claim, immunity is not waived with respect to this claim. Ethio Exp. Shuttle

Service, 164 S.W.3d at 757-58; Kojo Wih Nkansah v. University of Texas at Arlington,

No. 02–10–00322–CV, 2011 WL 4916355, at *3 (Tex. App.—Fort Worth Oct. 13, 2011,

pet. denied). Trinity East has alleged no waiver under the Tort Claims Act and none

exists.

Furthermore, like its promissory estoppel claim, Trinity East has failed to allege a

valid claim since it has failed to allege what representation of the City was negligently


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made. Without such assertion, it has failed to allege a valid negligent misrepresentation

claim.

Therefore, Trinity East has failed to allege a valid negligence claim and its

negligent misrepresentation claim must be dismissed with prejudice.

4. Trinity East’s tort claims are also barred because the City’s actions

involved the exercise of its discretion.

The Tort Claims Act also provides that there is no waiver of governmental

immunity for a government’s “decision not to perform an act … if the law leaves the

performance or nonperformance of the act to the discretion of the governmental unit.”

Tex. Civ. Prac. & Rem. Code § 101.056. Whether to grant or deny an application for a

SUP is a discretionary decision. There is no waiver of governmental immunity for the

City’s decision not to grant a SUP.

5.

Trinity East’s claims for punitive damages are barred.

Trinity East seeks punitive damages in association with its various fraud theories.

Because the Court lacks jurisdiction for these claims it also lacks jurisdiction over the

related punitive damages claims. Additionally, the Tort Claims Act and chapter 271

specifically state that there is no waiver of sovereign immunity for punitive damages.

Tex. Loc. Gov't Code § 271.153(b)(2); Tex. Civ. Prac. & Rem. Code § 101.024.

C. Trinity East’s fraud and negligent misrepresentation claims are

duplicative of its breach of contract claim for which the City has

immunity.

To establish a cause of action for negligent misrepresentation, a plaintiff must

demonstrate, among other things, that the defendant supplied “false information” for the


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guidance of others in their business. Gay, 2014 WL 3939141, at *6 (citing Airborne

Freight Corp. v. C.R. Lee Enter., Inc., 847 S.W.2d 289, 295 (Tex. App.―El Paso 1992,

writ denied). The false information necessary for negligent misrepresentation is a

misstatement of existing fact as opposed to false information about a promise of future

conduct. Id . When a negligent misrepresentation claim is based upon allegedly false

information about a future promise rather than an existing fact, the claim sounds in

contract, not tort. Id. Here, Trinity East complains about the alleged failure to perform

future conduct that it contends were part of the Leases. Trinity East’s pleadings establish

that its negligent misrepresentative claim is duplicative of its contract based claim and,

therefore its claim sounds in contract, not tort. Gay, 2014 WL 3939141, at *6. Since

there is no waiver of immunity for any breach of contract claim, this purported negligent

misrepresentation claim is also barred.

Likewise, a common law fraud claim is duplicative of a breach of contract claim if

the defendant's alleged conduct would give rise to liability only because it breaches the

parties' agreement. Id . (citing and quoting Farah, 927 S.W.2d at 674, Southwestern Bell

Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991)). Looking at the substance of

the cause of action rather than the manner in which it was pleaded, Trinity East’s

common law fraud claim centers on the City's alleged promise that the City would

approve the SUPs and the subsequent failure to approve the SUPs. Like negligent

misrepresentation, the fraud claim is duplicative of the breach of contract claim and

sounds in contract. The claim falls under the purview of Sections 271.152 of the Local

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Government Code and the City has immunity from that claim. Id . The purported fraud

claim is likewise barred.

VII. GOVERNMENTAL IMMUNITY HAS NOT BEEN WAIVED FOR A

STATUTORY FRAUD CLAIM

Trinity East asserts a statutory fraud claim pursuant to section 27.001 of the Texas

Business and Commerce Code. The only alleged basis to avoid governmental immunity

is a claim that a proprietary function is involved. As described above, governmental

functions were involved and Trinity East’s contention fails. Also, as discussed above, the

governmental/proprietary dichotomy does not apply to home rule cities, and the common

law dichotomy should not be expanded.

In addition, statutory fraud is necessarily a statutory cause of action. Its attempted

use against governmental entities requires a waiver of sovereign immunity and there is no

such waiver in the statute. Dallas Cnty v. Rischon Dev. Corp. 42 S.W.3d 90, 94-95 (Tex.

App. —Dallas 2007, pet. denied); Jefferson Cnty v. Bernard , 148 S.W.3d 698, 700-702

(Tex. App.—Beaumont 2004, no pet.). Similarly, the statute is not applicable against

governmental entities and, as a matter of law, Trinity East cannot allege a valid statutory

fraud cause of action against a governmental entity such as the City. Id .

C.

TRINITY EAST HAS FAILED TO ALLEGE VALID TORT CLAIMS

1.

Trinity East has failed to allege valid common law tort claims.

The common elements to fraud, fraud by nondisclosure, and negligent

misrepresentation are a representation of an existing material fact or a failure to disclose

an existing material fact and the plaintiff’s reasonable reliance on the representation or


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omission. Better Bus. Bureau of Metro. Houston, Inc. v. John Moore Services, Inc., 441

S.W. 3d 345, 358 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (stating elements of

fraud); Horizon Shipbuilding, Inc. v. Blyn II Holding, LLC , 324 S.W.3d 840, 850 (Tex.

App.—Houston [14th Dist.] 2010, no pet.) (stating elements of fraud by omission); Bank

of Tex., N.A. v. Glenny, 405 S.W.3d 310, 313 (Tex. App.—Dallas 2013, no pet.) (stating

elements of negligent misrepresentation). See also McCamish, Martin, Brown & Loeffler

v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex. 1999). Trinity East’s pleadings

negate both of those elements.

First, Trinity East makes no allegation regarding a material existing fact. Instead,

its claims are all premised on an alleged future promise of conduct. As a matter of law,

this is insufficient for these tort claims. Trinity East claims that the City made the

following material representations to induce Trinity East into entering into the Lease

Agreements:

• “City Staff’s assurances to Trinity that the City would make that happen on the

Radio Tower Tract and would attempt to get approval on the Gun Club Tract.”

• “City Manager Mary Suhm’s letter to Trinity officials stating that she was

‘reasonably confident’ the company would obtain the right to use the Radio Tower

Tract for drilling operations.”

• “[N]umerous City representations and promises that the City would provide any

and all necessary approvals to allow Trinity to perform under the Lease

Agreements.”

All of the representations that Trinity East alleges City employees made were about

future actions. Alleged representations about future actions cannot form the basis for

these tort claims. Petrus v. Criswell, 248 S.W.3d 471, 476 (Tex. App.—Dallas 2008, no

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pet.) (granting summary judgment against negligent misrepresentation claim that was

based on future promises and conduct rather existing facts).

Second, Trinity East has failed to allege valid tort claim because Trinity East has

not identified any false representation that the Dallas City Council made to it. Its claims

are all based on representations of City employees. Trinity East was charged with notice

that under the City’s Charter and state law that City representatives could not make

binding promises on behalf of the City. Cleontes v. City of Laredo, 777 S.W.2d 187,

189-190 (Tex. App.―San Antonio 1989, writ denied); City of Greenville v. Emerson,

740 S.W.2d 10, 13 (Tex. Civ. App.―Dallas 1987, no writ); Barrett v. City of Dallas, 490

S.W.2d 605, 608 (Tex. Civ. App.―Dallas 1973, no writ). Only the Dallas City Council

can bind the City. Id . Furthermore, the request for proposal documents made it clear that

Trinity East was not to rely upon representations other than those made in writing during

the RFP process. Therefore, there was no false representation made by the City.

Moreover, since only the City Council can grant or deny a SUP or other necessary

permits, reliance on an employee’s representation was unreasonable. The tort claims fail.

Third, no false representation was made by City employees. Instead, the only

representation that Trinity East claims was made was as to the whether or not the City

staff would use its best efforts to see that the SUPs were approved. Trinity East’s

pleadings admit that the City staff recommended approval but the Dallas City Council did

not approve the SUPs. Therefore, even though such future promise cannot be considered

false information, City staff did not provide false information or representation since they

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did exactly as they said they would, to use its best efforts to see that the SUPs were

approved.

Fourth, Trinity East could not reasonably rely on any claimed representation. The

Leases and the amendments specifically stated that Trinity East was required to obtain all

regulatory approvals before it would be permitted to drill within the City. The

agreements also specifically stated such approvals were part of the City’s police powers

that could not be contracted away. By these very terms of the contract, the parties

acknowledged that there were no promises or representations that the approvals would be

granted. The terms acknowledge the uncertainty and risk which Trinity East accepted.

Furthermore, Trinity East’s pleadings admit the tentative and qualified nature of the

representations. (e.g. “reasonably confident” of approval).

Fifth, the tort claims are barred by the economic loss rule. Basically, the rule

provides that a party should only be able to recover in contract and not in tort when the

injury is limited purely to economic losses suffered to the subject matter of a contract.

James J. Flanagan Shipping Corp. v. Del Monte Fresh Produce N.A., Inc., 403 S.W.3d

360, 365 (Tex. App.―Houston [1st Dist.] 2013, no pet.). Application of the rule depends

on the source of the defendant's duty to act (whether it arose solely out of the contract or

from some common-law duty) and the nature of the remedy sought by the plaintiff .

Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 45

(Tex.1998). To maintain a separate tort action, the plaintiff must show that he has

“suffered an injury that is distinct, separate, and independent from the economic losses

recoverable under a breach of contract claim.” Sterling Chems., Inc. v. Texaco Inc., 259


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approval and highlighted that uncertainty. Finally, as previously stated, any reliance was

not reasonable or justified based upon the contract terms and the tentative and qualified

nature of the representations. A valid claim under this theory is not alleged.

VIII. THERE IS NO WAIVER OF GOVERNMENTAL IMMUNITY AND

NO VALID CLAIM FOR TRINITY EAST’S ATTORNEY FEES

CLAIM.

Trinity East asserts entitlement to attorney fees. It claims proprietary functions are

involved, a waiver pursuant to chapter 271, and entitlement based on Chapter 38 of the

Texas Business and Commerce Code. None of the arguments are applicable and Trinity

East is not entitled to attorney fees.

To be entitled to fees, Trinity East must first establish jurisdiction for any of its

claims. As discussed above, the Court lacks jurisdiction of such claims and, therefore,

lacks jurisdiction over attorney fees claims.

Also, Trinity East does not have a valid claim for fees. Attorney fees may only be

awarded if authorized by statute or allowed by the contract between the parties. Holland

v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 95 (Tex. 1999). There is no statutory

authorization for attorney fees for the contract, tort or takings claims. The leases did not

authorize the award of attorney fees. And there is no statute that authorizes the award of

attorney fees against the City for an alleged breach of contract.

Trinity East relies on chapter 271. However, as discussed above, it is not

applicable to this contract claim. Even if it were applicable, it only waives governmental

immunity as to claims for attorney fees; it does not authorize such awards.


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Respectfully submitted,

WARREN M. S. ERNST

Dallas City Attorney

/s/Christopher J. Caso

Christopher J. Caso

Texas Bar No. 03969230

[email protected]

Senior Assistant City Attorney

City Attorney’s Office

1500 Marilla Street, Room 7D North

Dallas, Texas 75201

Telephone: 214-670-3519Telecopier: 214-670-0622

CERTIFICATE OF SERVICE

This is to certify that on this the 29th day of April, 2015, a true and correct copy of

the above and foregoing was served in accordance with the Rules 21 and 21a of the Texas

Rules of Civil Procedure, upon all counsel of record.

/s/Christopher J. Caso

Christopher J. Caso


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Defendant’s Motion for Protective Order Page 1

CAUSE NO. DC-14-01443

TRINITY EAST ENERGY, LLC, § IN THE DISTRICT COURT§

Plaintiff , §

§v. § 192 ND

JUDICIAL DISTRICT

§

CITY OF DALLAS, §

§ Defendant. § DALLAS COUNTY, TEXAS

DEFENDANT’S MOTION FOR PROTECTIVE ORDER

Defendant the City of Dallas (the “City”), hereby files Defendant’s Motion for Protective

Order to seek protection from Plaintiff’s (“Trinity East” or “Plaintiffs”) attempt to take the oral

depositions of Shayne D. Moses, Mark Duebner, David Cossum and corporate representatives

and in support of which, shows the Court:

I.

Introduction

1. Plaintiffs have sued the City for breach of contract, inverse condemnation, fraud,

promissory estoppel and negligent misrepresentation. The City filed its answer, containing a plea

to the jurisdiction and has recently filed a supplemental plea to the jurisdiction, alleging that the

Court lacks jurisdiction over Trinity East’s breach of contract, fraud, promissory estoppel,

negligence and attorney’s fees claims.

2. Trinity East noticed the oral depositions of Shayne D. Moses, Mark Duebner, David

Cossum and corporate representatives of the City on 20 topics on or about May 6, 2015. (See

Notices of Deposition, true and correct copies of which are attached hereto as Exhibit A, and

incorporated herein, by reference.) The City moved to quash the Notices on or about May 8,

2015. (See City’s Motion to Quash, which is attached hereto as Exhibit A and incorporated

herein by reference.)

DALLAS

5/11/2015 4

FELI

DISTRI


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3. The City seeks a protective order preventing the taking of any depositions until the Court

determines whether it has subject-matter jurisdiction over Plaintiff’s claim.

4. If discovery proceeds pending the Court’s ruling on the plea to the jurisdiction, the City

will have the expense of complying with discovery requests and otherwise participating in

pretrial proceedings based on a mere assumption that the Court has jurisdiction. A protective

order is appropriate to protect the City from the burdens of litigation pending disposition of the

immunity issue. See City of Galveston v. Gray, 93 S.W.3d 587, 592 (Tex. App.—Houston [14th

Dist.] 2002, pet. denied) (holding the trial court abused its discretion in refusing to rule on the

city’s and the county’s respective pleas to the jurisdiction based on sovereign immunity and in

granting the plaintiff’s motion for a continuance of the plea hearing to allow discovery on

liability). The court in Gray held that “a governmental unit’s entitlement to be free from suit is

effectively lost if the trial court erroneously assumes jurisdiction and subjects the governmental

unit to pre-trial discovery and the costs incident to litigation; therefore the trial court abuses its

discretion and there is no adequate remedy at law.” Id . at 591.

II.

Protective order from depositions

a. Shayne Moses, attorney of record for the City

5. The City requests that the Court issue a protective order prohibiting the deposition of

Shayne Moses because the discovery sought is privileged as attorney work product and attorney-

client communication and because Trinity East is seeking to disqualify Moses from representing

the City.

6. It is unclear what testimony Trinity East is seeking from. Presumably, Trinity East seeks

to depose Moses on privileged matters. Trinity East has alleged that Moses represented the City

in negotiating the leases that are the subject of this litigation but Moses did not negotiate the

leases, he represented the City as an attorney.


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7. Because Trinity East has noticed an attorney of record, its request implicates the City’s

attorney-client communication. Moses represents the City in this litigation because he has

entered an appearance in this case.

8. An attorney’s actions taken in furtherance of his representation, including communication

with third parties and evidence strategy and method, fall squarely within core work product. See

In re Bexar Cnty. Criminal Dist. Attorney’s Office, 224 S.W.3d 182, 186 (Tex. 2007) (orig.

proceeding) (Finding that “the work product privilege is broader than the attorney-client

privilege because it includes all communications made in preparation for trial, including an

attorney's interviews with parties and non-party witnesses.”) (emphasis added).

9. In addition to the work product privilege and the objections in the City’s Motion to

Quash, the discovery Trinity seeks is protected from disclosure under the attorney-client

privilege. See Tex. R. Evid. 503. The discovery sought is privileged attorney-client

communication because it was made for the purpose of facilitating the rendition of professional

Documents

Trinity East v City of Dallas Docs