                                 NO. 12-13-00262-CV

                          IN THE COURT OF APPEALS

               TWELFTH COURT OF APPEALS DISTRICT

                                    TYLER, TEXAS

WASSON INTERESTS, LTD.,                         §      APPEAL FROM THE SECOND
APPELLANT

V.                                              §      JUDICIAL DISTRICT COURT

CITY OF JACKSONVILLE, TEXAS,
APPELLEE                                        §      CHEROKEE COUNTY, TEXAS

                                 MEMORANDUM OPINION
       Wasson Interests, Ltd. (Wasson), appeals from a summary judgment granted in favor of
the City of Jacksonville, based on governmental immunity. In two issues, Wasson contends that
the trial court erred in granting both a traditional and a no evidence summary judgment in favor
of the City. We affirm.


                                         BACKGROUND
       Wasson is a successor in interest to a ninety-nine year lease covering property located on
Lake Jacksonville, which specifies the property is to be used for residential purposes only.
James and Stacy Wasson previously lived on the property, but after relocating to Tyler, they
conveyed their interest to Wasson. Wasson rented the property to others for terms of a week or
less. In response, the City sent an eviction notice, notifying Wasson that its short term rentals
constituted a commercial use of the property, which is a violation of the lease. The City and
Wasson entered into a reinstatement agreement that specified the property’s acceptable uses
under the lease.
       The City later sent a second eviction notice based on Wasson’s continued commercial use
of the property. The notice informed Wasson that its use of the property was a violation of the
reinstatement agreement.    Wasson filed suit, alleging that the City breached the lease by
improperly terminating the lease and evicting Wasson. Wasson also sought injunctive and
declaratory relief.   Following extensive discovery, the City filed a combined motion for a
traditional and a no evidence summary judgment. Among other things, the City claimed in the
motion that it retained governmental immunity, and consequently, the trial court lacked
jurisdiction over the suit. The trial court granted the motion for summary judgment without
stating a reason. This appeal followed, with Wasson attacking the summary judgment on both
traditional and no evidence grounds.


                                  GOVERNMENTAL IMMUNITY
        In its first issue, Wasson argues that the trial court erred when it granted the City’s
motion for traditional summary judgment.        Specifically, Wasson contends that the City’s
governmental immunity has been waived, thereby providing the trial court with subject matter
jurisdiction over this suit.
Standard of Review
        Subject matter jurisdiction is essential to a court’s power to decide a case. Bland Indep.
Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex. 2000).           The absence of subject matter
jurisdiction may be raised in a motion for summary judgment. Id. at 554. Governmental
immunity from suit defeats a trial court’s jurisdiction. Ben Bolt-Palito Blanco Consol. Indep.
Sch. Dist. v. Texas Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320,
323 (Tex. 2006).
        Normally, when both no evidence and traditional summary judgment motions are filed,
we address the no evidence motion first. Poag v. Flories, 317 S.W.3d 820, 825 (Tex. App.—
Fort Worth 2010, pet. denied). Here, we will review the propriety of granting the traditional
summary judgment first because it is dispositive. Id.
        We review a trial court’s summary judgment de novo. Traveler’s Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010); see also Ben Bolt, 212 S.W.3d at 323 (“Whether a trial court
has jurisdiction is a question of law subject to de novo review.”). Because the issue in this case
is whether the trial court lacked jurisdiction due to the City’s assertion of governmental
immunity, our review is de novo. See Ben Bolt, 212 S.W.3d at 323.




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Governmental Immunity
       In Texas, governmental immunity has two components: immunity from liability, which
bars enforcement of a judgment against a governmental entity, and immunity from suit, which
bars suit against the entity altogether. Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex.
2006). By entering into a contract, a governmental entity necessarily waives immunity from
liability, voluntarily binding itself like any other party to the terms of the agreement, but it does
not waive immunity from suit. Id. Immunity from suit bars a suit against the state or its political
subdivisions unless the legislature expressly gives its consent to the suit. City of Emory v. Lusk,
278 S.W.3d 77, 83 (Tex. App.—Tyler 2009, no pet.) (citing Fed. Sign v. Tex. S. Univ., 951
S.W.2d 401, 405 (Tex. 1997)). We defer to the legislature to waive immunity from contract
claims. Tooke, 197 S.W.3d at 332.
       The proprietary-governmental dichotomy has been used to determine a municipality’s
immunity from suit for tortious conduct. Id. at 343. But our supreme court has never held that
the same distinction determines whether immunity from suit is waived for breach of contract
claims. Id. With regard to contracts executed by local governments, our legislature has clearly
and unambiguously waived governmental immunity in certain types of contract suits. See City
of Dallas v. Albert, 354 S.W.3d 368, 377 (Tex. 2011); see also Lower Colo. River Auth. v. City
of Boerne, Tex., 422 S.W.3d 60, 65 (Tex. App.—San Antonio 2014, pet. filed) (citing City of
San Antonio ex rel. City Pub. Serv. Bd. v. Wheelabrator Air Pollution Control, Inc., 381
S.W.3d 597, 605 (Tex. App.—San Antonio 2012, pet. denied). Specifically, Section 271.152 of
the local government code provides that


       [a] local governmental entity that is authorized by statute or the constitution to enter into a contract
       and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the
       purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of
       this subchapter.


TEX. LOC. GOV’T CODE ANN. § 271.152 (West 2005). A “contract subject to this subchapter” is
defined as “a written contract stating the essential terms of the agreement for providing goods or
services to the local governmental entity that is properly executed on behalf of the local
governmental entity.” Id. § 271.151(2) (West Supp. 2013).
       The legislature has authorized cities to enter into contracts, including leases of real
property. Id. §§ 51.014, 51.015 (West 2008); see also Jamestown Partners v. City of Fort


                                                          3
Worth, L.P., 83 S.W.3d 376, 380 (Tex. App.—Fort Worth 2002, pet. denied) (“A municipality
may enter into and be bound by a contract the same as a private entity.”). But a governmental
entity does not waive immunity from suit simply by contracting with a private party. Travis
Cnty. v. Pelzel & Assocs., Inc., 77 S.W.3d 246, 248 (Tex. 2002). Express consent is required to
show that immunity from suit has been waived in a breach of contract case. Id. A statute that
waives the governmental entity’s immunity must do so beyond doubt. Kirby Lake Dev., Ltd. v.
Clear Lake City Water, 320 S.W.3d 829, 837 (Tex. 2010).
Proprietary-Governmental Dichotomy
          The plaintiff bears the burden to prove facts that affirmatively demonstrate that
governmental immunity has been waived and that the court has subject matter jurisdiction. City
of Dallas v. Turley, 316 S.W.3d 762, 767 (Tex. App.—Dallas 2010, pet. denied). Wasson
contends that the City’s actions in this matter were proprietary in nature and therefore immunity
was waived. In City of Georgetown v. Lower Colorado River Authority, the case cited by
Wasson in support of this contention, the Austin court of appeals decided that the proprietary-
governmental dichotomy applied to the contract claims against the City of Georgetown. See City
of Georgetown v. Lower Colo. River Auth., 413 S.W.3d 803, 811 (Tex. App.—Austin 2013, pet.
dism’d). The court based its holding on pre-Tooke authority that the proprietary-governmental
dichotomy applied to contract claims against governmental entities under the common law. See
id. at 810-11. In reaching this result, the Austin court expressly disagreed with the San Antonio
court of appeals’ decision in Wheelabrator. Compare id. at 814 with Wheelabrator, 381 S.W.3d
at 605.
          In Wheelabrator, the San Antonio court determined that Tooke created a default
principle of governmental immunity in contract cases. See Wheelabrator, 381 S.W.3d at 604.
The court reasoned that the legislature could have easily included the proprietary-governmental
into the statutory waiver scheme for contract claims but chose not to do so. Id. at 605. Both the
San Antonio and Austin courts agreed that the Texas Supreme Court has declined to address the
application of the proprietary-governmental dichotomy in a contractual setting. Id.; City of
Georgetown, 413 S.W.3d at 810.
Discussion
          We agree with the San Antonio court’s reasoning that Tooke has created the default
position that we should follow until either the Texas Legislature or our supreme court



                                               4
specifically addresses the application of the proprietary-governmental dichotomy in contract
cases. We therefore decline to extend any pre-Tooke reasoning to contract cases involving a
municipality such as the City of Jacksonville. See Wheelabrator, 381 S.W.3d at 605
         Also, since the legislature has waived immunity in suits against the City for contracts
providing goods and services to the City, and since this real property lease does not involve the
provision of goods and services to the City, the default position under Tooke applies here.
Therefore, governmental immunity has not been waived under these facts. See TEX. LOC. GOV’T
CODE ANN. §§ 271.151(2), 271.152; Wheelabrator, 381 S.W.3d at 605.
         The trial court could have granted the City’s motion for traditional summary judgment on
the ground that the City had governmental immunity from suit.            As a result, we overrule
Wasson’s first issue.         Because that is dispositive to this appeal, we need not address the
challenge to the no-evidence summary judgment motion in Wasson’s second issue. TEX. R. APP.
P. 47.1.


                                                    DISPOSITION
         Having overruled Wasson’s first issue, which is dispositive, we affirm the judgment of
the trial court.

                                                                  JAMES T. WORTHEN
                                                                     Chief Justice

Opinion delivered July 9, 2014.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.




                                                    (PUBLISH)




                                                           5
                                   COURT OF APPEALS

      TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

                                            JUDGMENT

                                               JULY 9, 2014


                                          NO. 12-13-00262-CV


                                 WASSON INTERESTS, LTD.,
                                         Appellant
                                            V.
                              CITY OF JACKSONVILLE, TEXAS,
                                         Appellee


                                  Appeal from the 2nd District Court
                      of Cherokee County, Texas (Tr.Ct.No. 2011-05-0389)

                       THIS CAUSE came to be heard on the oral arguments, appellate record
and briefs filed herein, and the same being considered, it is the opinion of this court that there
was no error in the judgment.
                       It is therefore ORDERED, ADJUDGED and DECREED that the judgment
of the court below be in all things affirmed, and that all costs of this appeal are hereby adjudged
against the appellant, WASSON INTERESTS, LTD., for which execution may issue, and that
this decision be certified to the court below for observance.

                    James T. Worthen, Chief Justice.
                    Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
