                             NUMBER 13-14-00070-CV

                            COURT OF APPEALS

                  THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI – EDINBURG

ENGELMAN IRRIGATION DISTRICT,                                                Appellant,

                                            v.

SHIELDS BROTHERS, INC.,                                                      Appellee.


                    On appeal from the 93rd District Court
                         of Hidalgo County, Texas.


                         MEMORANDUM OPINION
              Before Justices Rodriguez, Garza, and Longoria
                  Memorandum Opinion by Justice Garza
       In this case, we are asked to determine whether a 2006 change in the Texas

Supreme Court’s jurisprudence on governmental immunity renders a 1995 judgment void.

Appellant Engelman Irrigation District (“EID”) argues that it does and that the trial court

therefore erred by denying its motion for summary judgment in a suit filed against appellee

Shields Brothers, Inc. (“Shields”). We affirm.
                                             I. BACKGROUND

        The underlying facts of this case are undisputed. In 1992, Shields, a farming

business, brought suit against EID alleging breach of contract. EID asserted in defense

that the trial court lacked subject matter jurisdiction because of governmental immunity,

but the trial court rejected that argument. In 1995, after a jury trial, the trial court rendered

judgment that Shields recover from EID actual damages of $271,138.80 along with

interest and attorney’s fees. We affirmed the judgment. Engelman Irrigation Dist. v.

Shields Bros., Inc., 960 S.W.2d 343, 348 (Tex. App.—Corpus Christi 1997, pet. denied)

(op. on reh’g). The Texas Supreme Court denied EID’s petition for review on December

3, 1998, and it denied EID’s motion for rehearing on January 21, 1999. 989 S.W.2d 360,

360 (Tex. 1998).1

        More than fifteen years later, EID filed the instant suit seeking a declaration that

the 1995 judgment is void because the trial court’s assertion of jurisdiction was based on

prior case law which has since been overruled. In particular, EID asserted that the earlier



        1 As of the date of this opinion, EID has not satisfied the judgment. EID notes that in 1999, it “began

the process of requesting authorization to file for bankruptcy” from the Texas Commission on Environmental
Quality (“TCEQ”). Shields opposed authorization; authorization was ultimately denied; and EID lost an
appeal on the issue in 2008. See Engelman Irrigation Dist. v. Tex. Comm’n on Envtl. Quality, 251 S.W.3d
184, 191–202 (Tex. App.—Austin 2008, no pet.). In its opinion, the Austin Court of Appeals discussed the
following background regarding Shields’s efforts to enforce the judgment:
        Beginning in February 1999, [Shields] filed motions in the trial court to order [EID] to levy,
        assess, or collect taxes or assessments in order to pay the judgment. At that time, [EID]
        made its first “settlement and satisfaction of debt agreement” offer, proposing to pay
        [Shields] $50,000 upon full execution of settlement documentation, proceeds from the sale
        of all of its oil and gas mineral interests, and annual payments of $25,000 for seven years.
        [Shields] refused the offer. In response, [EID] declared itself unable to pay the [Shields]
        judgment and, in March of 1999, activated the bankruptcy-authorization process provided
        under the water code. . . . [Shields] opposed [EID]’s application and submitted evidence
        to [TCEQ] that [EID] did in fact have the ability to pay the judgment owed to [Shields]. As
        of May 31, 2002, the amount of the outstanding judgment with all of the accrued post-
        judgment interest was $789,893.52.
Id. at 188–89 (footnote and citations omitted).

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ruling was justified on Missouri Pacific Railroad Co. v. Brownsville Navigation District, in

which the Texas Supreme Court held that a statute providing that a navigation district

may “sue and be sued in all courts of this State” served as an effective waiver of

governmental immunity on behalf of the district. 452 S.W.2d 812, 813 (Tex. 1971); see

Engelman, 960 S.W.2d at 348 (concluding, based on Missouri Pacific, that immunity was

waived and the trial court had subject matter jurisdiction because section 58.098 of the

Texas Water Code provided that an irrigation district “may sue and be sued in the courts

of this state”). However, in 2006, the supreme court overruled Missouri Pacific in Tooke

v. City of Mexia, 197 S.W.3d 325, 342 (Tex. 2006) (“[T]he holding of Missouri Pacific that

‘sue and be sued’, by itself, in an organic statute always waives immunity from suit is

simply incorrect.”). Shields filed an answer, asserting in part that EID’s claim is barred by

res judicata, as well as a counterclaim asking that the trial court “order [EID]’s board of

directors to levy, assess, and collect taxes or assessments to pay” the 1995 judgment.

See TEX. WATER CODE ANN. § 49.066 (West, Westlaw through 2013 3d C.S.) (successor

to former section 58.098; providing that an irrigation district “may sue and be sued in the

courts of this state in the name of the district by and through its board” and that “[a]ny

court in the state rendering judgment for debt against a district may order the board to

levy, assess, and collect taxes or assessments to pay the judgment”).

       EID filed a motion for summary judgment on its affirmative claim, which the trial

court denied. The trial court then rendered an order (1) severing EID’s affirmative claim

from Shields’s counterclaim, and (2) stating that “[EID] shall take nothing from [Shields]”

and that “[t]his Order finally disposes of [EID]’s action for declaratory judgment and is




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appealable.”2 This appeal followed.

                                              II. DISCUSSION

        EID raises three issues on appeal:                (1) the trial court lacked subject matter

jurisdiction over EID in the 1992 suit; (2) because it lacked subject matter jurisdiction, the

1995 judgment is void and may be collaterally attacked at any time; and (3) “separation

of powers require[s] courts to scrupulously refrain from exercising subject matter

jurisdiction over governmental entities when the legislative branch has not granted such

jurisdiction.” We will consider the issues together.

        We review summary judgments de novo. Neely v. Wilson, 418 S.W.3d 52, 59

(Tex. 2013); Nalle Plastics Family L.P. v. Porter, Rogers, Dahlman & Gordon, P.C., 406

S.W.3d 186, 199 (Tex. App.—Corpus Christi 2013, pet. denied).                            As the facts are

undisputed, EID bore the burden to show that it was entitled to judgment as a matter of

law.   See TEX. R. APP. P. 166a(c) (providing that a movant for traditional summary

judgment must show that no genuine issue of material fact exists and that the movant is

entitled to judgment as a matter of law).

        EID argued in its motion that the supreme court “was not changing the law by its

decision in Tooke, but correcting a misinterpretation that some courts had over the

meaning of ‘sue and be sued.’” EID argued that the supreme court’s “incorrect, and thus



           2 There was no trial, and Shields did not file any motion for summary judgment. Therefore, the trial

court’s final judgment on EID’s affirmative claim appears to have been premature. Nevertheless, we have
jurisdiction to consider the appeal because the order “clearly and unequivocally” disposes of all claims and
parties pending in EID’s declaratory judgment action. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205
(Tex. 2001) (noting that an appeal may ordinarily only be taken from a final judgment and that “when there
has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal
unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states
that it finally disposes of all claims and all parties”). We note that EID, whose affirmative claim remained
pending at the time of the final judgment, was the party that sought the severance order containing the
language indicating finality.

                                                      4
overruled, decision in Missouri Pacific helped to foster these misinterpretations and led

the Thirteenth Court of Appeals down the wrong path in its decision in Engelman.” EID

further contended that “[t]he Texas Supreme Court has previously acted to correct

decisions which were [decided] pursuant to the incorrect interpretation of the law in

Missouri Pacific,” citing Abilene Housing Authority v. Gene Duke Builders, Inc., 226

S.W.3d 415, 416–17 (Tex. 2007). There, the supreme court granted a petition for review

and reversed the Eastland Court of Appeals’ pre-Tooke ruling that the appellant housing

authority’s governmental immunity had been waived by “sue and be sued” language

contained in the local government code. Id. EID argued that it did not waive the issue of

subject matter jurisdiction because that issue can be raised at any time and may not be

waived by any party. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445

(Tex. 1993). EID further argued in a supplemental summary judgment motion that res

judicata does not apply because “[s]ubject-matter jurisdiction may not be conferred by

consent, waiver, or estoppel at any stage or a proceeding.” Gainous v. Gainous, 219

S.W.3d 97, 105 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (“One may thus raise

a collateral attack challenging a void order at any time, and res judicata is not a bar to the

attack.”).3

        We find that EID’s motions did not establish its entitlement to judgment as a matter

of law. EID is correct that subject-matter jurisdiction cannot be conferred by consent or

waiver; that a judgment rendered without subject-matter jurisdiction is considered void;



        3 EID’s initial summary judgment motion included an affidavit by the President of EID’s board of
directors attesting to the facts set forth in the motion, as well as an affidavit by EID’s counsel attesting as
to attorney’s fees. Shields filed a supplemental response to the summary judgment motion in which it
objected to parts of the affidavits; the record contains no ruling on the objections. Nevertheless, because
the facts are undisputed, we need not consider the affidavits in our analysis.

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and that a void judgment may be collaterally attacked. See Browning v. Prostok, 165

S.W.3d 336, 345 (Tex. 2005); Dubai Petroleum Co., Inc. v. Kazi, 12 S.W.3d 71, 76 (Tex.

2000) (“[A] judgment will never be considered final if the court lacked subject-matter

jurisdiction.”). Accordingly, if in fact the 1995 trial court lacked subject-matter jurisdiction,

the doctrine of res judicata would not block EID’s efforts to have the judgment declared

void. See Gainous, 219 S.W.3d at 105; see also PNS Stores, Inc. v. Rivera, 379 S.W.3d

267, 272 (Tex. 2012) (“A void judgment can be collaterally attacked at any time.”). But

that argument is contingent on a finding that the court rendering the 1995 judgment lacked

subject-matter jurisdiction. On the other hand, if the court had subject-matter jurisdiction

over the dispute, the judgment would not be void and would not be subject to collateral

attack.

          EID has established that, under Tooke, a trial court would not have subject-matter

jurisdiction over a claim against an irrigation district such as the claim asserted by Shields.

See Tooke, 197 S.W.3d at 342. But EID has not cited any authority establishing that

judicial opinions such as Tooke may be applied retroactively in order to void judgments

that have already been finalized and for which direct appellate review has been

exhausted.4 In fact, neither party directs us, nor did they direct the trial court in their

summary judgment pleadings, to any case law regarding retroactive applicability of

judicial opinions.




          4
         Abilene Housing Authority is obviously distinguishable because the judgment in that case had not
yet become final, and the Texas Supreme Court had not yet passed judgment on it, at the time Tooke was
handed down. See 226 S.W.3d 415, 416–17 (Tex. 2007).

                                                   6
       We observe that the Texas Supreme Court has held that “[a]s a rule, court

decisions apply retroactively.” Baker Hughes, Inc. v. Keco R. & D., Inc., 12 S.W.3d 1, 4

(1999). “Exceptions are determined mostly by three factors”:

       (1) whether the decision establishes a new principle of law by either
       overruling clear past precedent on which litigants may have relied or by
       deciding an issue of first impression whose resolution was not clearly
       foreshadowed; (2) whether prospective or retroactive application of the
       particular rule will further or retard its operation through an examination of
       the history, purpose, and effect of the rule; and (3) whether retroactive
       application of the rule could produce substantial inequitable results.

Id. at 4–5 (citing State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696, 719 (Tex. 1996)).

Here, the new “rule”—that is, the Tooke holding—clearly establishes a new principle of

law and overrules clear past precedent upon which the litigants relied. See id.

       In any event, even if we were to conclude that Tooke should apply retroactively,

that does not mean that it can or should apply to cases that have already been decided

on direct review and have already been upheld at all levels of appeal. In Harper v. Virginia

Department of Taxation, the United States Supreme Court held:

       When this Court applies a rule of federal law to the parties before it, that
       rule is the controlling interpretation of federal law and must be given full
       retroactive effect in all cases still open on direct review and as to all events,
       regardless of whether such events predate or postdate our announcement
       of the rule.

509 U.S. 86, 97 (1993) (emphasis added). That is, even under Harper’s expansive ruling

mandating retroactive applicability of judicial opinions, such opinions will be “given full

retroactive effect” only in cases that are “still open on direct review.” See id. The instant

case has not been “open on direct review” since the twentieth century.

       We note that the general “policy of the law” is to “give finality to the judgments of

the courts.”   Browning, 165 S.W.3d at 345.          This remains the policy even when



                                              7
subsequent events cast severe doubt on the propriety of the judgment. As the Browning

Court noted:

       The mischief of retrying every case in which the judgment or decree
       rendered on false testimony, given by perjured witnesses, or on contracts
       or documents whose genuineness or validity was in issue, and which are
       afterwards ascertained to be forged or fraudulent, would be greater, by
       reason of the endless nature of the strife, than any compensation arising
       from doing justice in individual cases.

Id. (quoting United States v. Throckmorton, 98 U.S. 61, 68–69 (1878)). Allowing EID to

reopen the issue of subject-matter jurisdiction fifteen years after it exhausted its appellate

remedies would strike a mortal blow to this policy, and it would strongly encourage other

judgment debtors to delay satisfaction of judgments indefinitely in the hopeful anticipation

that the law may someday evolve in their favor.

       Here, at the time the trial court considered EID’s plea to the jurisdiction in 1995,

Missouri Pacific was good law. At the time we affirmed subject-matter jurisdiction in 1998,

Missouri Pacific was good law. And at the time the Texas Supreme Court denied EID’s

petition for review in 1999, thereby rendering the 1995 judgment final, Missouri Pacific

was good law. The trial court therefore had subject-matter jurisdiction over Shields’s suit

at the time the suit was filed, decided, and appealed. Accordingly, the 1995 judgment is

not void and may not be attacked collaterally, notwithstanding the holding in Tooke.

                                      III. CONCLUSION

       We overrule EID’s issues and affirm the trial court’s judgment.


                                                  DORI CONTRERAS GARZA,
                                                  Justice


Delivered and filed the
15th day of January, 2015.


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