Opinion
03-21-00651-CV
03-22-2023
City of Jarrell, Texas, Appellant v. BE Theon East Partnership No. 3, Ltd., Appellee
FROM THE 425TH JUDICIAL DISTRICT COURT OF WILLIAMSON COUNTY NO. 20-0125-C425, THE HONORABLE BETSY F. LAMBETH, JUDGE PRESIDING
Before Justices Baker, Triana, and Theofanis
MEMORANDUM OPINION
Rosa Lopez Theofanis, Justice
The City of Jarrell appeals from the trial court's order denying the City's plea to the jurisdiction. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8) (authorizing interlocutory appeal from order denying plea to jurisdiction by governmental unit). In four issues, the City challenges the trial court's jurisdiction over BE Theon East Partnership No. 3, Ltd.'s (BE Theon) claims against the City concerning a development agreement (the Development Agreement) between the parties. For the following reasons, we affirm the trial court's order in part and reverse and remand in part.
BACKGROUND
In 2008, the City and BE Theon entered into the Development Agreement concerning undeveloped property (the Property) that BE Theon owned near the intersection of Ronald Reagan Boulevard and Interstate 35 (I-35) in Williamson County. The Development Agreement identifies and contains a legal description of the Property. BE Theon agreed to voluntarily annex the Property to the City, and the City agreed to provide water and wastewater services to the Property (the Water and Wastewater Provision) and to waive its governmental immunity regarding the Development Agreement:
Section 3.01 Construction. The City shall provide sufficient water and wastewater capacity and sufficient approach mains to the northwest corner of the Land within three years after the completion of Ronald Reagan Boulevard at its intersection with IH-35. "Sufficient water and wastewater" shall mean sufficient, as reasonably anticipated by Owner and the City's engineer, for the uses planned for the Land at the time of the City's invitation(s) for bids for construction of such approach mains. To the extent that onsite water and wastewater lines are required to be oversized for service to properties other than the Land, the City shall pay for all costs reasonably attributed to such oversizing.
Section 8.08 Sovereign Immunity. In the event the doctrine of governmental immunity is ever held to apply to the City or its successors regarding the above Agreement, such governmental immunity is expressly waived.
Pursuant to the Water and Wastewater Provision, the City agreed to provide services within three years of the completion of Ronald Reagan Boulevard at its intersection with I-35.
The city council authorized the mayor to sign the Development Agreement, the mayor signed the Development Agreement, the city council approved the Property's annexation by ordinance, and the Development Agreement was publicly recorded in the real property records of Williamson County. In July 2018, the Property's plat map, which the city manager signed and approved, also was recorded in the real property records of Williamson County. It expressly states: "The city of Jarrell will provide water and wastewater to this site subject to the Development Agreement between the City of Jarrell, TX and [BE Theon], dated 11/4/2008."
In August 2019, BE Theon, through its counsel, provided a letter to the City with the "capacities it deemed sufficient for the planned uses of the Property" as calculated pursuant to "the City's Unified Development Code," but the City did not respond to the letter or provide water and wastewater services to the Property.
In its briefing to this Court, the City confirms that it "has not complied with [BE] Theon's demand" for water and wastewater services for the Property.
In January 2020, BE Theon sued the City seeking specific performance of the Development Agreement or, alternatively, damages. BE Theon also sought declaratory judgment under chapter 245 of the Texas Local Government Code to establish the City's obligations under the Development Agreement. See Tex. Loc. Gov't Code §§ 245.001-.006. BE Theon alleged that Ronald Reagan Boulevard at its intersection with I-35 had been completed for over three years and that the City had breached the Development Agreement by not complying with the Water and Wastewater Provision or, alternatively, that the City's promises in that provision were enforceable by promissory estoppel. BE Theon referenced a "ribbon cutting for the completion of the final, northern portion of Ronald Reagan Boulevard and the intersection at Interstate 35 [that] took place on March 5, 2014." BE Theon also referenced emails from the City manager in May 2019 that were BE Theon's "first indication that the City would not fulfill its obligations under the Development Agreement."
In February 2020, the City answered and filed a plea to the jurisdiction. Its arguments included that BE Theon's claims were barred by immunity, that providing water and wastewater services were discretionary governmental functions, that chapter 245's waiver of immunity did not apply to BE Theon's claims, that promissory estoppel did not apply, and that BE Theon's claims were not yet ripe. The City supported its plea with evidence that included copies of website pages from Williamson County and the Texas Department of Transportation concerning a construction project at the intersection of Ronald Reagan Boulevard and I-35 that was scheduled to begin in June 2019 and anticipated to be completed in the summer of 2020 or the middle of 2021.
In July 2020, BE Theon filed a response to the City's plea and an amended petition. Exhibits attached to its amended petition included: (i) the Development Agreement; (ii) the city council's minutes authorizing the mayor to execute the Development Agreement; (iii) the City's ordinance annexing the Property; (iv) the 2018 plat map for the Property that was recorded in the Williamson County's real property records, which recites the City's agreement to provide water and wastewater to the Property in accordance with the Development Agreement; (v) BE Theon's Declaration of Covenants, Conditions, and Restrictions with a copy of the Development Agreement that was recorded in the Williamson County's real property records; (vi) an email from the city manager to BE Theon in May 2019; and (vii) BE Theon's counsel's August 2019 letter requesting that the City provide water and wastewater services in specified capacities based on the City's Unified Development Code.
In October 2020, BE Theon also filed: (i) a supplement to its first amended petition seeking mandamus relief against the City to compel the City to perform the ministerial act of providing a certificate pursuant to section 212.009(d) of the Texas Local Government Code, see Tex. Loc. Gov't Code § 212.009(d); and (ii) a traditional motion for partial summary judgment on its request for a writ of mandamus. In March 2021, the trial court granted BE Theon's motion for partial summary judgment and ordered that a writ of mandamus issue. The City attempted to appeal from this order to this Court, but we dismissed that appeal for want of jurisdiction. See City of Jarrell v. BE Theon E. P'ship No. 3, Ltd., No. 03-21-00292-CV, 2021 Tex.App. LEXIS 6641, at *2 (Tex. App.-Austin Aug. 12, 2021, no pet.) (mem. op.).
In its amended petition, BE Theon alleges that the trial court has jurisdiction over its claims under chapter 245 and section 212.172 of the Texas Local Government Code. See Tex. Loc. Gov't Code §§ 212.172(i) (waiving municipality's immunity from suit for adjudicating claim for breach of contract), 245.006(b) (waiving political subdivision's immunity from suit for action under chapter). BE Theon alleges that the Development Agreement is a valid, enforceable contract pursuant to section 212.172 that the City has breached. Consistent with its original petition, BE Theon seeks specific performance or, alternatively, damages in its amended petition based on its claims of breach of contract and promissory estoppel. It also seeks declaratory judgment pursuant to chapter 245 to establish the City's obligations under the Development Agreement and BE Theon's vested rights. See id. § 245.006(a) (authorizing enforcement of chapter through declaratory relief).
BE Theon also asserted that the trial court has jurisdiction over its claims pursuant to section 380.001 of the Texas Local Government Code, but that section does not impact our analysis of the trial court's jurisdiction over BE Theon's claims. See Tex. Loc. Gov't Code § 380.001(a)(2) (authorizing municipality to establish and provide for administration of program, including providing services of municipality, to stimulate business and commercial activity in municipality, which for purposes of subsection includes area in extraterritorial jurisdiction). The parties do not dispute that the City generally was authorized to enter into the Development Agreement.
In its response to the City's plea to the jurisdiction, BE Theon addresses the City's arguments and relies on the City's evidence about the construction project at the intersection of Ronald Reagan Boulevard and I-35 to support the trial court's jurisdiction over BE Theon's claims. Pages from the Williamson County website on February 20, 2020, provide details about the "Ronald Reagan Boulevard at IH35 Phase I Bridge Replacement," which "project will replace the existing two-lane bridge with dual bridges at the intersection." Similarly, pages from Texas Department of Transportation's website on February 22, 2020, provide details about "I-35 at Ronald Reagan Boulevard (Theon Road)," stating in the overview, "The existing Ronald Reagan Boulevard (Theon Road) bridge will be replaced with new eastbound and westbound bridges."
In a supplemental response to the City's plea filed in September 2021, BE Theon refers the trial court to the amendments to section 212.172 that were effective on September 1, 2021, and apply retroactively to the Development Agreement. See Tex. Loc. Gov't Code § 212.172(h). In November 2021, the trial court signed an order denying the City's plea to the jurisdiction. This interlocutory appeal followed. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8).
Section 212.172(h) states:
A contract between a municipality and a landowner entered into prior to the effective date of this section, or any amendment to this section, and that complies with this section is validated, enforceable, and may be adjudicated subject to the terms and conditions of this subchapter, as amended.Tex. Local Gov't Code § 212.172(h); see Act of June 15, 2021, 87th Leg., R.S., ch. 678, § 1, 2021 Tex. Gen. Laws 1407, 1407-08 (current version at Tex. Loc. Gov't Code § 212.172(h); see id. § 3 (effective September 1, 2021).
ANALYSIS
In its four issues, the City argues that the trial court erred by denying its plea to the jurisdiction because: (i) BE Theon's pleadings as to its chapter 245 claim affirmatively negate the limited waiver of immunity under that chapter; (ii) the amendments to section 212.172 cannot validate the Water and Wastewater Provision, which is void ab initio and unenforceable under the reserved powers doctrine, and "promissory estoppel is not applicable to enforce void acts"; (iii) separation of powers precludes the judiciary from enforcing the Water and Wastewater Provision; and (iv) alternatively, even if the provision is not void and the City's immunity is validly waived, BE Theon's claims are not ripe.
In its plea to the jurisdiction, the City also challenged the trial court's jurisdiction based on the "sinking fund" provisions in the Texas Constitution but does not assert this challenge on appeal. See Tex. Const. art. XI §§ 5, 7; City of San Antonio v. San Antonio Firefighters' Ass'n, Local 624, 533 S.W.3d 527, 534-35 (Tex. App.-San Antonio 2017, pet. denied) (discussing sinking fund provisions in Texas Constitution). As amended, section 212.172 states that a contract between a municipality and a landowner subject to its provisions is a "program authorized by the legislature under Section 52-a, Article III, Texas Constitution," meaning that the sinking fund provisions do not apply to the Development Agreement. See Tex. Loc. Gov't Code § 212.172(g)(2); Tex. Const. art. III, § 52-a (addressing programs and loans or grants of public money for economic development); see also Tex. Loc. Gov't Code § 380.001 (addressing municipalities' authority concerning economic development programs).
Standard of Review
Challenges to a trial court's subject-matter jurisdiction are properly asserted in a plea to the jurisdiction. Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). A plea to jurisdiction challenges a court's power over a claim, and its purpose "is 'to defeat a cause of action without regard to whether the claims asserted have merit.'" Town Park Ctr., LLC v. City of Sealy, 639 S.W.3d 170, 181 (Tex. App.-Houston [1st Dist.] 2021, no pet.) (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000)). We review a trial court's ruling on a plea to the jurisdiction de novo. Sampson v. University of Tex. at Austin, 500 S.W.3d 380, 384 (Tex. 2016) (citing Miranda, 133 S.W.3d at 226). We do not look to the merits of the cause of action but consider only the pleadings and the evidence relevant to the jurisdictional inquiry. See Miranda, 133 S.W.3d at 227; County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002).
If the plea to the jurisdiction challenges the pleadings, we liberally construe the pleadings to determine if the plaintiff "has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause." Miranda, 133 S.W.3d at 226. "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 plaintiffs should be afforded the opportunity to amend." Id. at 226-27. "If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend." Id. at 227.
If the plea to the jurisdiction challenges the existence of jurisdictional facts, "we consider relevant evidence submitted by the parties to determine if a fact issue exists." Suarez v. City of Tex. City, 465 S.W.3d 623, 632-33 (Tex. 2015) (citing Miranda, 133 S.W.3d at 227); see Bland Indep. Sch. Dist., 34 S.W.3d at 555. "We take as true all evidence favorable to the nonmovant, indulge every reasonable inference, and resolve any doubts in the nonmovant's favor." Suarez, 465 S.W.3d at 633 (citing Miranda, 133 S.W.3d at 227). "If the evidence creates a fact question regarding jurisdiction, the plea must be denied pending resolution of the fact issue by the fact finder." Id. (citing Miranda, 133 S.W.3d at 227-28). "If the evidence fails to raise a question of fact, however, the plea to the jurisdiction must be granted as a matter of law." Id. (citing Miranda, 133 S.W.3d at 228).
Claim for Declaratory Relief
In its first issue, the City argues that the trial court erred by failing to dismiss BE Theon's chapter 245 claim for declaratory relief because its pleadings affirmatively negate the waiver of immunity in that chapter. See Tex. Loc. Gov't Code § 245.006(b) ("A political subdivision's immunity from suit is waived in regard to an action under this chapter."). The City's challenge to this claim is based on BE Theon's pleadings and not evidence.
When chapter 245 applies, a regulatory agency is required to consider a permit application "solely on the basis of any orders, regulations, ordinances, rules, expiration dates, or other properly adopted requirements in effect at the time" that an original permit application, plat application, or development plan is filed. Tex. Loc. Gov't Code § 245.002(a); see id. § 245.002(b) (addressing when series of permits is required for project). Its requirements generally "'freeze' most of the regulatory authority's land-use regulations as they existed at the time the first permit application is filed through completion of the 'project.'" Harper Park Two, LP v. City of Austin, 359 S.W.3d 247, 250 (Tex. App.-Austin 2011, pet. denied); see City of San Antonio v. Rogers Shavano Ranch, Ltd., 383 S.W.3d 234, 245-46 (Tex. App.-San Antonio 2012, pet. denied) (defining "project" and explaining that "project with vested rights is not subject to intervening regulations or changes after the vesting date"). "The obvious intent of Chapter 245 is to prohibit land-use regulators from changing the rules governing development projects 'in the middle of the game,' thereby insulating already-underway development and related investment from the vicissitudes and uncertainties of regulatory decision making and all that may influence it." Harper Park Two, 359 S.W.3d at 250.
BE Theon's pleadings seek "declaratory relief under Texas Local Government Code section 245.006 to establish the City's obligations under the Development Agreement and BE Theon's vested rights." See Tex. Loc. Gov't Code § 245.006(a) (authorizing enforcement of chapter through declaratory relief); Village of Tiki Island v. Premier Tierra Holdings, Inc., 464 S.W.3d 435, 440 (Tex. App.-Houston [14th Dist.] 2015, no pet.) (explaining that permit applicant's accrued statutory rights under chapter 245 "are commonly referred to as 'vested rights'"). As BE Theon explains it in its briefing to this Court, its claim is that the City "has attempted to change the rules mid-game in violation of Chapter 245" because it "has a statutory obligation to follow the rules and regulations in effect when it entered into the [Development] Agreement, which include the provision of water and wastewater services to the Property."
The Development Agreement expressly addresses BE Theon's vested development rights, including the following provision:
Each application for a City Permit (as hereinafter defined), including a site plan, that may be filed with the City for the development, construction or operation on the [Property] shall only be required to comply with, and shall be reviewed, processed and approved, only in accordance with City ordinances rules and regulations in effect on the date the preliminary plat for the Land was submitted [subject to specified exceptions]. For purposes of this Agreement, "City Permit" means a City license, certificate, approval, registration, consent, permit, or other form of authorization required by a City ordinance, regulation, or rule in order to develop construct and operate the Land.
The City does not dispute that immunity is waived when chapter 245 applies, see Tex. Loc. Gov't Code § 245.006(b), or that the Development Agreement constitutes a "permit" under chapter 245, see id. §§ 212.172(a)(2) (defining "contract" to mean "contract for a development agreement authorized by this subchapter"), (g)(1) (stating that contract constitutes permit under chapter 245), 245.001(1) (defining "permit"). The City argues that BE Theon's pleadings do not allege a "justiciable" claim under chapter 245, that chapter 245 "has no application to [BE] Theon's claims because [BE] Theon is not complaining that the City is trying to apply subsequently enacted land-use regulations to its development," and that chapter 245 "is not a contract enforcement mechanism."
In an analogous case, a landowner sued the City of Sealy, asserting claims of breach of contract and seeking declaratory relief under chapter 245 regarding a development agreement between the parties. Town Park Ctr., 639 S.W.3d at 177-79, 187. The landowner alleged that the development agreement "granted it a right to purchase storage capacity in B&PW Park, but after the parties executed the [agreement], City officials refused to allow Town Park Center to purchase storage capacity." Id. at 190. Our sister court determined that the trial court had jurisdiction over the landowner's breach of contract claim against the city, id. at 189, but that it did not have jurisdiction over the chapter 245 claim because the landowner had not stated a "valid claim" under that chapter and, therefore, that the city's immunity for the claim had not been waived. Id. at 191 (citing City of Floresville v. Starnes Inv. Grp., LLC, 502 S.W.3d 859, 869-70 (Tex. App.-San Antonio 2016, no pet.) (concluding that trial court erred by denying city's plea to jurisdiction on Chapter 245 claim in part because plaintiff did not point to any change in city's regulations that occurred after plaintiff filed zoning application)). In its analysis, our sister court explained:
Town Park Center has not identified any City order, regulation, ordinance, rule, or other requirement in effect when its rights in the project vested that mandates the sale of capacity from either B&PW Park or JAC Park. . . . Instead, any alleged right that Town Park Center has to purchase capacity in B&PW Park arises solely from the [agreement].
Although Town Park Center has asserted a claim that the City breached the [agreement] by refusing to sell it capacity from B&PW Park, it has not alleged that the City had changed its orders, regulations, ordinances, rules, expiration dates, or other requirements after the vesting date of the project and impermissibly attempted to apply these changed requirements to the project.Id. (footnote omitted). Similarly, BE Theon alleges that the City breached the Development Agreement by not complying with the Water and Wastewater Provision, but it has not alleged that the City has changed its regulations, ordinances, rules, or other requirements after the vesting date of the project and impermissibly attempted to apply those changed requirements to BE Theon's development of the Property. See id.
In another analogous case, the Amarillo Court of Appeals concluded that the trial court did not have jurisdiction over a landowner's chapter 245 claim against the City of Buda that was based on the parties' agreement concerning development on the landowner's property. See City of Buda v. N.M. Edificios LLC, No. 07-20-00284-CV, 2021 Tex.App. LEXIS 2895, at *3-11 (Tex. App.-Amarillo Apr. 16, 2021, pet. denied) (mem. op.). Under the parties' agreement, the city had agreed to construct drainage facilities, and the landowner's chapter 245 claim alleged that the rule that the city had tried to change was its "contractual duty to construct all drainage facilities" because that duty fell within the scope of section 245.002(a) and (b) as an "other properly adopted requirement[] in effect at the time" the parties entered into the agreement. Id. at *7 (citing Tex. Loc. Gov't Code § 245.002(a), (b)).
In determining that the trial court did not have jurisdiction over the landowner's chapter 245 claim, the court explained:
Yet, even if we were to assume that such a contractual obligation was a "properly adopted requirement," it nonetheless had to preexist execution of the Agreement, given our foregoing interpretation of the statute. It did not, though, for it arose from the Agreement, not from rules, regulations, and like "in effect at the time." Thus, Buda's contractual duty to build drainage facilities was and is not a regulation against which subsequent permits must be considered per § 245.002(b).Id. The court interpreted the phrase "in effect at the time" in section 245.002 to require the rule, regulation, or like to "have already been enacted." Id. at *6-7. Because a contractual obligation necessarily does not arise until the parties enter into a contract, the obligation cannot be "in effect at the time." See id. The court determined that the parties' agreement was a permit under chapter 245 but not that "the contents of the Agreement necessarily became regulations, rules, ordinances, 'or other properly adopted requirements in effect at the time' the permit was sought or issued." Id. at *10. As our sister court explained, "[t]his is not to say that Buda has not changed the rules in the middle of the game" but that "the rules were not changed in a manner prohibited under Chapter 245 of the Local Government Code." Id. at *11. Similar to the city's contractual duty to construct drainage facilities in that case, the City's obligations under the Water and Wastewater Provision were not "in effect" or had not already been enacted "at the time" the parties entered the Development Agreement but arose from it.
Following our sister courts' reasoning in Town Park Center and N.M. Edificios, we sustain the City's first issue and conclude that the trial court erred by denying the City's plea to the jurisdiction as to BE Theon's chapter 245 claim for declaratory relief. See Miranda, 133 S.W.3d at 226-27 . We, however, cannot conclude that BE Theon's pleadings affirmatively negate jurisdiction because the parties agree that the Development Agreement is a permit under chapter 245 and remand the claim to allow BE Theon an opportunity to replead. See id.
Because we are remanding the chapter 245 claim with an opportunity to replead, we also remand for the trial court's consideration the City's request for attorney's fees as to this claim. See Tex. Loc. Gov't Code § 245.006(c) (authorizing trial court to award attorney's fees to prevailing party in action under chapter).
Breach of Contract and Promissory Estoppel Claims
The City's second issue challenges the trial court's jurisdiction over BE Theon's breach of contract and promissory estoppel claims. BE Theon's pleadings alleged that the trial court has jurisdiction over its breach of contract claim under section 212.172 of the Texas Local Government Code and included as exhibits to its pleadings copies of the Development Agreement identifying and containing a legal description of the Property, minutes from the city council authorizing the mayor to sign the Development Agreement, and the recording of the plat map and the Development Agreement in the real property records. See Tex. Loc. Gov't Code § 212.172(c) (stating requirements for agreement to fall within section 212.172's purview). A development agreement, which is defined as a "contract," that falls within the purview of section 212.172 "is binding on the municipality and the landowner," see id. § 212.172(f), and "[a] municipality that enters into a contract [subject to this section] waives immunity from suit for the purpose of adjudicating a claim for breach of the contract," id. § 212.172 (i). Consistent with the waiver of immunity in section 212.172, the Development Agreement includes the City's express agreement that its governmental immunity is waived: "In the event the doctrine of governmental immunity is ever held to apply to the City or its successors regarding the above Agreement, such governmental immunity is expressly waived."
Subsection 212.172(c) requires a contract to be in writing, contain an adequate legal description of the land, be approved by the governing body of the municipality and the landowner, and be recorded in the applicable real property records. See Tex. Loc. Gov't Code § 212.172(c).
Viewing the pleadings under the applicable standard, we conclude that BE Theon's pleadings and attached exhibits support that the Development Agreement was a contract within the purview of section 212.172 and, thus, were sufficient to invoke the trial court's jurisdiction over BE Theon's breach of contract claim. See Miranda, 133 S.W.3d at 226; City of Shavano Park v. Ard Mor, Inc., No. 04-14-00781-CV, 2015 Tex.App. LEXIS 11029, at *12 (Tex. App.-San Antonio Oct. 28, 2015, no pet.) (mem. op.) (explaining that city has statutory authority to enter into development agreement with owner of land located in city's extraterritorial jurisdiction under section 212.172 of Texas Local Government Code).
Because the City's immunity has been waived as to BE Theon's breach of contract claim pursuant to section 212.172, we need not determine if the City was acting in its governmental or proprietary capacity when it entered into the Development Agreement. See Wasson Interests, Ltd. v. City of Jacksonville (Wasson II), 559 S.W.3d 142, 146-54 (Tex. 2018) (discussing distinction between municipality's governmental and proprietary functions in context of determining municipalities' immunity from breach of contract claims); CHW-Lattas Creek, L.P. v. City of Alice, 565 S.W.3d 779, 785 (Tex. App.-San Antonio 2018, pet. denied) (explaining that "municipality is immune for acts done as a branch of the state referred to as governmental functions"; that it "is not immune in performing a proprietary function"; and that in context of breach of contract claim, determination of whether municipality is performing governmental or proprietary function considers nature of contract, not nature of breach).
The City argues that section 212.172 cannot validate the Water and Wastewater Provision in the Development Agreement because the provision "is void ab initio and unenforceable under the reserved powers doctrine." See Love Terminal Partners, LP v. City of Dall., 256 S.W.3d 893, 897 (Tex. App.-Dallas 2008, no pet.) ("If an action is void or void ab initio, the transaction is a nullity."). "Under the reserved powers doctrine, certain legislative and governmental powers 'are conferred on government entities for public purposes, and can neither be delegated nor bartered away. Government entities cannot cede away such powers through contracts with others so as to disable them from the performance of their public duties." City of San Antonio v. San Antonio Firefighters' Ass'n, Local 624, 533 S.W.3d 527, 543 (Tex. App.- San Antonio 2017, pet. denied) (quoting Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.2d 829, 843 (Tex. 2010) (internal quotation marks and citations omitted)). "A city contract that does so is not binding and is terminable at will." Id. (citing Kirby Lake Dev., 320 S.W.2d at 842; Clear Lake City Water Auth. v. Clear Lake Utils. Co., 549 S.W.2d 385, 391 (Tex. 1977)).
Relying on this doctrine, the City contends that the Water and Wastewater Provision is void because it "allows [BE] Theon and the City's engineer, not the elected City Council, to determine what constitutes 'sufficient' water/wastewater capacity for [BE] Theon's development." Among its arguments, the City argues that the Water and Wastewater Provision "constitutes a blank check to a private developer written in 2008, which purports to obligate future city councils to appropriate unspecified sums"; contends that the provision improperly has a "perpetual duration," see Tex. Loc. Gov't Code § 212.172(d) (capping duration of contract subject to section to forty-five years); that BE Theon has not alleged that "the City has put out an invitation for bids for the construction of approach mains for water and wastewater to serve the tract in question" or that it "actually has sufficient water and wastewater capacity" to provide the amounts BE Theon requests; and that there are no allegations about costs.
The City's arguments, however, which address the meaning and scope of the Water and Wastewater Provision and its enforceability against the City, concern the merits of BE Theon's breach of contract claim, not the trial court's jurisdiction over the claim. See Ard Mor, 2015 Tex. App, LEXIS 11029, at *10 (explaining that review of trial court's jurisdiction over claim is of trial court's "power to reach the merits" of claim without delving into merits or deciding "whether the plaintiff should win or lose"); see, e.g., City of the Colony v. North Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App-Fort Worth 2008, pet. dism'd) (applying traditional principles of contract construction to contract between city and water district to determine enforceability in appeal from final judgment); Save Our Springs All. v. City of Austin, 149 S.W.3d 674, 680 (Tex. App.-Austin 2004, no pet.) (explaining that plea to jurisdiction challenges trial court's authority to determine subject matter of specific cause of action). Because the Development Agreement is a contract that is subject to section 212.172, we conclude that the trial court did not err in denying the City's plea to the jurisdiction as to BE Theon's breach of contract claim. See Tex. Loc. Gov't Code § 212.172(i).
We reach the same conclusion as to BE Theon's alternative claim of promissory estoppel. Generally, a promissory estoppel claim requires a plaintiff to prove: "(1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to his detriment." English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). A governmental entity may be prevented from asserting immunity from a promissory estoppel claim when a plaintiff shows that justice requires the application of promissory estoppel, that its application does not interfere with the entity's exercise of its governmental functions, and that the entity accepted and retained benefits arising from the contract. See Bexar Metro. Water Dist. v. Education & Econ. Dev. Joint Venture, 220 S.W.3d 25, 32 (Tex. App.-San Antonio 2006, pet. dism'd); Maguire Oil Co. v. City of Houston, 69 S.W.3d 350, 366 (Tex. App.-Texarkana 2002, pet. denied). Here, BE Theon's pleadings alleged that the City promised to provide water and wastewater services, that BE Theon reasonably and substantially relied on that promise to its detriment, that it was foreseeable for it do so because the City signed the Development Agreement, and that injustice could be avoided only by enforcing the City's promise. BE Theon also alleged that it had an alternative option to annex the Property to the City of Georgetown but based on the City's promises in the Development Agreement, it voluntarily annexed the Property to the City, and that the City accepted benefits from the Development Agreement but refused to comply with the Water and Wastewater Provision. These allegations are sufficient to invoke the trial court's jurisdiction over BE Theon's promissory estoppel claim. See Miranda, 133 S.W.3d at 226.
The City argues that promissory estoppel is not applicable because the Water and Wastewater Provision is void. See City of Denton v. Municipal Admin. Servs., Inc., 59 S.W.3d 764, 770 (Tex. App.-Fort Worth 2001, no pet.) ("Estoppel and ratification doctrines will not make void contracts enforceable."). This argument, however, delves into the merits of this claim. See Ard Mor, 2015 Tex.App. LEXIS 11029, at *10. For example, the City cites City of Denton as support for its argument that BE Theon "cannot legitimately" rely to its detriment on the Water and Wastewater Provision because it is charged with notice that "the promise it extracted from the City was void and unenforceable." The court in that case, however, necessarily concluded that it had the power to reach the merits of the claim prior to determining that the challenged contract was void ab initio. See City of Denton, 59 S.W.3d at 772-73 (rendering judgment and remanding to trial court).
The City also argues that the City's provision of water and wastewater services is a governmental function that is not subject to estoppel. See S.W. v. Arlington Indep. Sch. Dist., 435 S.W.3d 414, 420 (Tex. App.-Fort Worth 2014, no pet.) ("Governmental units exercising governmental functions, as opposed to propriety functions, are generally not subject to estoppel." (citing Leeco Gas & Oil Co. v. Nueces County, 736 S.W.2d 629, 630 (Tex. 1987))); see Tex. Civ. Prac. & Rem. Code § 101.0215(a)(32) (stating that "water and sewer service" is governmental function for purposes of Tort Claims Act). Governmental immunity protects subdivisions of the state such as cities when they perform governmental functions unless the legislature has waived immunity, but governmental immunity does not extend to political subdivisions of the state "for acts committed in the performance of propriety functions." See City of Westworth Village v. City of White Settlement, 558 S.W.3d 232, 240 (Tex. App.-Fort Worth 2018, pet. denied) (citing Wasson Interests, Ltd. v. City of Jacksonville (Wasson I), 489 S.W.3d 427, 429-30 (Tex. 2016)); id. at 244-50 (discussing proprietary-governmental dichotomy in context of determining governmental entity's immunity from claim).
Viewing BE Theon's pleadings and the jurisdictional evidence under our applicable standard of review, we conclude that they raise fact issues as to whether the City should be estopped from asserting immunity. See Maguire Oil Co., 69 S.W.3d at 366; see also Roberts v. Haltom City, 543 S.W.2d 75, 80-81 (Tex. 1976) (holding that summary judgment proof raised a fact issue as to whether city should be estopped). The City does not seek to set aside the 2008 Development Agreement in its entirety, necessarily accepting and seeking to retain benefits from the Development Agreement. See Bexar Metro. Water Dist., 220 S.W.3d at 32. BE Theon also has asserted a viable breach of contract claim for which immunity is waived, seeking promissory estoppel in the alternative. Cf. CHW-Lattas Creek, L.P. v. City of Alice, 565 S.W.3d 779, 791 (Tex. App.-San Antonio 2018, pet. denied) (in context of promissory estoppel claim against city, distinguishing its facts from cases in which complaining party had "viable claim for which immunity was waived"). Thus, we conclude that the trial court did not err in denying the City's plea to the jurisdiction as to BE Theon's promissory estoppel claim.
Because we have concluded that the trial court did not err in denying the City's plea to the jurisdiction as to BE Theon's breach of contract and promissory estoppel claims, we overrule the City's second issue.
Separation of Powers
In its third issue, the City relies on the separation of powers doctrine to argue that "[t]he judiciary cannot enforce the [Water and Wastewater Provision] through specific performance because a court cannot order a co-equal branch to appropriate funds for the performance of a discretionary governmental act and void contracts cannot be breached." "Under this doctrine, governmental authority vested in one department of government cannot be exercised by another department unless expressly permitted by the constitution." Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993); see id. (stating that one constitutional limit on courts' jurisdiction is separation of powers doctrine).
The substance of the City's argument is an as-applied challenge to the constitutionality of section 212.172(j) that allows courts to order specific performance against a municipality. See Tenet Hosps. Ltd. v. Rivera, 445 S.W.3d 698, 702 (Tex. 2014) (describing as-applied challenge to constitutionality of statute). However, the City did not raise this constitutional challenge to section 212.172 with the trial court and, therefore, may not raise it in this interlocutory appeal. See Dreyer v. Greene, 871 S.W.2d 697, 698 (Tex. 1993) ("As a rule, a claim, including a constitutional claim, must have been asserted in the trial court in order to be raised on appeal."); Nivens v. City of League City, 245 S.W.3d 470, 475 n.6 (Tex. App.- Houston [1st Dist.] 2007, pet. denied) (concluding appellants waived constitutional arguments challenging trial court's granting of city's plea to jurisdiction by not raising arguments in trial court). Further, even if the City had raised this argument with the trial court, we would conclude that its' as-applied challenge to the constitutionality of section 212.172 does not impact the trial court's jurisdiction over BE Theon's claims. In this interlocutory appeal, the question is whether the trial court had authority to determine the subject matter of BE Theon's claims, not whether they ultimately will prevail. See Ard Mor, 2015 Tex. App, LEXIS 11029, at *10; Save Our Springs All., 149 S.W.3d at 680. We overrule the City's third issue.
Ripeness
In its fourth issue, the City argues alternatively that even if the Water and Wastewater Provision is not void ad initio and the City's immunity is validly waived, BE Theon has not pled a ripe claim. Relying on evidence, the City challenges BE Theon's pleaded fact that more than three years had passed since Ronald Reagan Boulevard at its intersection with I-35 was completed. In this context, "the City, as the movant, had the burden to present evidence establishing the trial court lacked jurisdiction as a matter of law." See Ard Mor, 2015 Tex.App. LEXIS 11029, at *15 (citing Miranda, 133 S.W.3d at 228).
"Ripeness 'is a threshold issue that implicates subject matter jurisdiction . . . [and] emphasizes the need for a concrete injury for a justiciable claim to be presented.'" Robinson v. Parker, 353 S.W.3d 753, 755 (Tex. 2011) (quoting Patterson v. Planned Parenthood of Hous. & Se. Tex., 971 S.W.2d 439, 442 (Tex. 1998)). "In evaluating ripeness, we consider 'whether, at the time a lawsuit is filed, the facts are sufficiently developed so that an injury has occurred or is likely to occur, rather than being contingent or remote.'" Id. (quoting Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851-52 (Tex. 2000) (emphasis in original)); see also Southwestern Elec. Power Co. v. Lynch, 595 S.W.3d 678, 684-86 (Tex. 2020) (affirming denial of plea to jurisdiction challenging declaratory judgment claim and concluding that landowner's claims regarding utility company's interpretation of easement were ripe because they "were inextricably tethered to a present disagreement between the parties over the easements' scope").
The City argues that a claim for breach of the Water and Wastewater Provision cannot accrue until more than three years after "the intersection of [Ronald] Reagan [Boulevard] and IH-35 is 'complete'" and that its evidence established that the earliest that the intersection would be complete was in 2020. The Development Agreement, however, does not state that the intersection must be complete but refers to the completion of Ronald Reagan Boulevard at the intersection's location. It states that the City "shall provide sufficient water and wastewater capacity and sufficient approach mains to the northwest corner of the Land within three years after the completion of Ronald Reagan Boulevard at its intersection with IH-35." BE Theon's pleadings alleged that Ronald Reagan Boulevard was completed at its intersection with I-35 in 2014, referring to "the ribbon cutting for the completion of the final, northern portion of Ronald Reagan Boulevard and the intersection of I-35."
Relying on the website pages from Williamson County and the Texas Department of Transportation, the City contends that this evidence conclusively established that construction work at the intersection was "ongoing" when BE Theon filed suit in January 2020 and not anticipated to be complete until the summer of 2020 or the middle of 2021. But those website pages at a minimum create a fact issue of the boulevard's completion date because they support the reasonable inference that Ronald Reagan Boulevard at the intersection had already been completed prior to the anticipated bridge replacement. See Miranda, 133 S.W.3d at 227-28 ("If the evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction[.]"); Ard Mor, 2015 Tex.App. LEXIS 11029, at *15.
The website pages from Williamson County on February 20, 2020, provide details about the "Ronald Reagan Boulevard at IH35 Phase I Bridge Replacement," which "project will replace the existing two-lane bridge with dual bridges at the intersection." According to this information, a two-lane bridge already existed at the intersection at that time. Similarly, the website pages from the Texas Department of Transportation on February 22, 2020, providing information about "I-35 at Ronald Reagan Boulevard (Theon Road)," supports that the "Ronald Reagan Boulevard (Theon Road) bridge" already existed because it was to be "replaced with new eastbound and westbound bridges." The website pages also reference the schedule for "Plans, Specifications, and Estimates" as starting in January 2016, supporting a reasonable inference that the boulevard was already complete at that time. Because the evidence creates a fact question regarding whether three years have passed since the Ronald Reagan Boulevard was considered complete for purposes of the Water and Wastewater Provision, we conclude that the trial court did not err in denying the City's plea to the jurisdiction to the extent that the plea was based on ripeness. See Miranda, 133 S.W.3d at 227-28; Ard Mor, 2015 Tex.App. LEXIS 11029, at *15. We overrule the City's fourth issue.
In a footnote in its briefing to this Court, the City argues that BE Theon's amended petition does not allege that the City has put out an invitation for bids for construction as contemplated in the Water and Wastewater Provision or that funds to build have been budgeted or appropriated and that the lack of these allegations implicates "a failure of ripeness." The City, however, concedes that it is refusing to comply with the provision. In this context, we cannot conclude that the City conclusively established that BE Theon's claims were not ripe. See Southwestern Elec. Power Co. v. Lynch, 595 S.W.3d 678, 684-86 (Tex. 2020).
CONCLUSION
For these reasons, we reverse and remand the portion of the trial court's order denying the City's plea to the jurisdiction as to BE Theon's claim that it brought under chapter 245 of the Texas Local Government Code. We affirm the remainder of the trial court's order.
Affirmed in Part; Reversed and Remanded in Part