Berkman v. City of Keene
Filing
16
Memorandum Opinion and Order granting 10 Motion for Summary Judgment. ; denying 14 Motion for Leave to File. (Ordered by Judge Jane J Boyle on 7/29/2011) (Judge Jane J Boyle)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
BRET “DOC” BERKMAN,
Plaintiff,
v.
CITY OF KEENE
Defendant.
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CIVIL ACTION NO. 3:10-CV-2378-B
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant City of Keene’s Motion for Summary Judgment (doc. 10), filed
April 4, 2011, and Plaintiff Bret “Doc” Berkman’s Motion for Leave to File Surreply (doc. 14), filed
May 18, 2011. Having considered the Motions, the Court is of the opinion that the Motion for
Summary Judgment should be and hereby is GRANTED, and the Motion for Leave to File Surreply
should be and hereby is DENIED.
I.
BACKGROUND
Throughout 1986, Laslo and Annie Varga owned and operated a home for children who were
wards of the state. (Def.’s Br. Mot. Summ. J. ¶ 1). On April 11, 1986, the Vargas entered into an
agreement (the “Agreement”) with the City of Keene (the “City”). (Id.). The Agreement provided
that the City would furnish free water and sewer services to the Vargas’ property for thirty-five years,
or twenty years if the property ceased being a home for children. (Id. at ¶ 2). The benefits of the
Agreement were transferable and assignable, and inured to the benefit of successors and assigns of
the property. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 4).
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On January 31, 2003, Bret “Doc” Berkman (“Berkman”) acquired a portion of the property.
(Def.’s Br. Mot. Summ. J. ¶ 5). At the time of the purchase, Berkman began paying for water and
sewer services because he was unaware of the Agreement. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 4).
Three years later, on May 9, 2006, Berkman learned of the Agreement and stopped paying for those
utilities. (Id.). The City refused to reimburse Berkman or provide free water and sewer services for
the remainder of the Agreement. (Id. at 5).
Berkman filed suit against the City in State Court on August 17, 2006, alleging the
Agreement is a contract breached by the City. (Def.’s Br. Mot. Summ. J. ¶ 7). Berkman filed his
First Amended Petition on May 22, 2007, and a Seconded Amended Petition on June 19, 2007.
(Def.’s Br. Mot. Summ. J. ¶¶ 8–9). The City filed its Motion for Summary Judgment on November
30, 2007, arguing that the Agreement was not assigned to Berkman by the Vargas. (Def.’s Br. Mot.
Summ. J. ¶ 11). The Trial Court granted summary judgment in favor of the City, and Berkman
appealed. (Id.). On July 15, 2009, the Texas Court of Appeals reversed and found in favor of
Berkman. (Id. at ¶ 12). On July 30, 2009, the City moved for rehearing, arguing that it has
governmental immunity from Berkman’s breach of contract claim. (Id. at ¶ 13). The Court of
Appeals reversed itself on this basis, and dismissed Berkman’s claims due to lack of jurisdiction. (See
App. to Def.’s Mot. Summ. J. 407–414 (doc. 10)). Subsequently, Berkman filed a petition for review
with the Texas Supreme Court on December 21, 2009. (Def.’s Br. Mot. Summ. J. ¶ 15). It was
denied on May 7, 2010. (Id. at ¶ 16). On June 25, 2010, Berkman filed a Motion for Rehearing of
his case with the Texas Supreme Court, and on October 1, 2010, it was denied. (Def.’s App. to Mot.
Summ. J. 403; 473–493).
Berkman filed a new suit in State Court on October 29, 2010, claiming that by failing to
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honor the Agreement, the City engaged in an unconstitutional taking of Berkman’s property without
just compensation. (See App. to Pl.’s Br. Resp. Mot. Dismiss 4–8). This suit was the first time
Berkman introduced a theory of recovery based on the takings clause. (See generally Def.’s App. to
Mot. Summ. J.). The City removed the suit to this Court on November 19, 2010, and filed a Motion
to Dismiss (doc. 3) on November 22, 2010 arguing that Berkman’s claims were already litigated and
that the current lawsuit is barred by res judicata. (See generally Def.’s Mot. Dismiss). On March 2,
2011, the Court denied the Motion to Dismiss, and issued an Order (doc. 9) directing the City to
re-file its motion as a motion for summary judgment under Rule 56 of the Federal Rules of Civil
Procedure. The City filed its Motion for Summary Judgment on April 4, 2011, and Berkman
responded on April 22, 2011. The City filed its Reply (doc. 13) on May 6, 2011. On May 18, 2011
Berkman filed his Motion for Leave to File Surreply, and the City filed its Response to Plaintiff’s
Motion for Leave to File Surreply (doc. 15) on June 8, 2011. Having considered the Motions, the
Court now turns to the merits of its decision.
II.
LEGAL STANDARDS
A.
Summary Judgment
Summary judgment is appropriate where the pleadings and record evidence show no genuine
issue of material fact exists and that the movant is entitled to summary judgment as a matter of law.
Fed R. Civ. P. 56(c); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). Only disputes
about material facts preclude a grant of summary judgment, and “the substantive law will identify
which facts are material.” Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986).
The movant bears the burden of proving no genuine issue of material fact exists. Latimer v.
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Smithkline & French Lab., 919 F.2d 301, 303 (5th Cir. 1990). Where the non-movant bears the
burden of proof at trial, the movant need not support its motion with evidence negating the
nonmovant's case. Instead, the movant may satisfy its burden by pointing to the absence of evidence
to support an essential element of the non-movant's case. Id.; Little, 37 F.3d at 1075.
Once the movant has met its burden, the non-movant must show that summary judgment
is not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).
“This burden is not satisfied with ‘some metaphysical doubt as to material facts,’ ... by ‘conclusory
allegations,’... by ‘unsubstantiated assertions,’ or by only a ‘scintilla’ of evidence.” Id. (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). Instead, the
non-moving party must “come forward with ‘specific facts showing that there is a genuine issue for
trial.’” Matsushita, 475 U.S. at 587 (emphasis in original) (quoting Fed. R. Civ. P. 56(e)). The
non-moving party must show that the evidence is sufficient such that a reasonable jury could return
a verdict for the non-movant. Munoz v. Orr, 200 F.3d 291, 302 (5th Cir. 2000). The court will not
make credibility determinations, weigh the evidence, or draw inferences, but instead confine its
inquiry to facts material under the governing legal standard. Anderson, 477 U.S. at 255. In
determining whether a genuine issue exists for trial, the court will view all of the evidence in the
light most favorable to the non-movant.
B.
Res Judicata
“‘Under res judicata, a final judgment on the merits of an action precludes the parties or their
privies from relitigating issues that were or could have been raised in that action.’” Oreck Direct, LLC
v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)).
When a federal court considers whether res judicata applies to a judgment made by a Texas state
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court, Texas law concerning res judicata is governing. Wainscott v. Dall. Cnty., 408 F. App’x. 813,
815 (5th Cir. 2011).
Texas courts “follow the transactional approach, which bars a subsequent suit if it ‘arises out
of the same subject matter of a previous suit and which, through the exercise of diligence, could have
been litigated in a prior suit.’” Id.; See also Barr v. Resolution Trust Corp. ex rel. Sunbelt Fed. Sav., 837
S.W.2d 627, 631 (Tex. 1992). “Further, the rule of res judicata in Texas bars litigation of all issues
connected with a cause of action or defense which, with the use of diligence, might have been tried
in a former action as well as those which were actually tried.” Abbott Lab. v. Gravis, 470 S.W.2d 639,
642 (Tex. 1971)(citations ommitted).
Under Texas law, three elements must be satisfied in order for res judicata to be appropriate:
“(1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties
or those in privity with them; and (3) a second action based on the same claims as were raised or
could have been raised in the first action.” Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.
1996).
III.
ANALYSIS
A. Defendant’s Motion for Summary Judgment
In its Motion for Summary Judgment, the City argues that Berkman’s claims are barred by
res judicata and must be dismissed. Berkman admits the current suit involves the same parties and
is based on the same claims as the first-filed action, but denies his suit is barred by res judicata for
several reasons. (See Pl.’s Br. Resp. Def.’s Mot. Summ. J. 12). For the reasons discussed below, the
Court finds Berkman’s arguments unpersuasive.
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In its Motion, the City maintains that a dismissal based on governmental immunity is a
dismissal with prejudice, and thus is sufficient to invoke res judicata. (Def.’s Br. Mot. Summ. J. 7).
In response, Berkman argues judgments based on a lack of subject matter jurisdiction are not final
orders, and cannot be used as a basis for res judicata. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 7).
A dismissal based on governmental immunity is treated as a dismissal based on a lack of
jurisdiction. Tex. Dept. of Transp. v. Jones, 8 S.W.3d 636, 638–639 (Tex. 1999). However, immunity
from liability does not affect a court’s jurisdiction to hear a case. Id. at 638. The Supreme Court of
Texas has plainly stated that dismissals due to governmental immunity are dismissals with prejudice.
Harris Cnty. v. Faye Sykes, 136 S.W.3d 635, 639 (Tex. 2004) (“Such a dismissal is with prejudice
because a plaintiff should not be permitted to relitigate jurisdiction once that issue has been finally
determined.”). The Fifth Circuit came to the same conclusion when it held that under Texas law
“summary judgment on grounds of sovereign immunity is a judgment on the merits for purposes of
res judicata.” Flores v. Edinburg Consol. Indep. Sch. Dist., 741 F.2d 773, 775 n.3 (5th Cir. 1984).
Berkman relies on Helen Li v. University of Texas Health Science Center at Houston, 984
S.W.2d 647, 654 (Tex. App. – Houston [14th Dist.] 1998, pet. denied) and Herbert M. Schenker v.
City of San Antonio, 369 S.W.2d 626, 630 (Tex. Civ. App. – San Antonio 1963, writ ref’d n.r.e.) to
argue that dismissal based on governmental immunity is a dismissal without prejudice. (Pl.’s Br.
Resp. Def.’s Mot. Summ. J. 7). However, both cases predate the Harris County decision. See 136
S.W.3d at 639 (holding that a suit is dismissed with prejudice when the defendant is immune from
the claim). The Court finds that the Texas State Court of Appeals’ dismissal based on governmental
immunity is a dismissal with prejudice, and acts as a final judgment. Accordingly, Berkman’s claims
are barred by res judicata, and summary judgment in favor of the City is appropriate.
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The City also contends that in order to pursue a takings clause theory, Berkman should have
amended his initial pleadings to include that claim. (Def.’s Br. Mot. Summ. J. 6–9). In response,
Berkman argues that when a case is dismissed due to a jurisdictional problem, the plaintiff is afforded
the right to re-file his claim in a proper court and add additional legal theories to his cause of action.
(Pl.’s Br. Resp. Def.’s Mot. Summ. J. 6–7, 12). Berkman claims he is curing a defect in his pleadings
by transforming his breach of contract claim into a takings claim in order to avoid dismissal based
on governmental immunity. However, Berkman offers no explanation as to why he failed to amend
his pleadings in the initial lawsuit to include this new theory.
In Texas, res judicata “bars litigation of all issues connected with a cause of action or defense
which, with the use of diligence, might have been tried in a former action as well as those which were
actually tried.” Abbott Lab., 470 S.W.2d at 642. Thus, the question is not whether Berkman was
required to amend his pleading to include his takings claim, but rather whether, acting diligently,
he would have done so.
Berkman asserts that the issue of governmental immunity was first raised during the City’s
Motion for Rehearing on July 30, 2009. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 5). However,
governmental immunity is first mentioned on July 26, 2007, in the City’s First Amended Answer to
Berkman’s first lawsuit. (Def.’s App. to Mot. Summ. J. 47). Even if Berkman is correct about when
the immunity issue was first raised, he petitioned the Texas Supreme Court for review of his case well
after July 30, 2009, and did not raise his takings claim issue at that time. (Id.). Berkman
subsequently petitioned the same court for rehearing and argued against the City’s immunity claim
on separate grounds, again without mentioning his takings claim. (Def.’s App. to Mot. Summ. J.
473–493). Texas Rule of Appellate Procedure 49.5 states “[a]fter a motion for rehearing is decided,
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a further motion for rehearing may be filed within 15 days of the court’s action if the court: (a)
modifies its judgment; (b) vacates its judgment and renders a new judgment; or (c) issues a different
opinion.” TEX. R. APP. PROC. 49.5. In either of Berkman’s petitions, he had the ability to argue his
takings claim, but instead chose to focus on other legal theories.
Despite being fully aware of the City’s immunity argument, and having several opportunities
to amend his pleadings, Berkman failed to act diligently and raise the takings issue. Thus, the claim
is barred by res judicata, and the Court finds summary judgment in favor of the City is appropriate.
Finally, the City argues it is entitled to summary judgment because Berkman has no legal
grounds to file a new suit based on his takings claim. (Def.’s Br. Mot. Summ. J. 9–10). Berkman
insists that Sections 16.064 and 16.068 of the Texas Civil Practices and Remedies Code stand for
the proposition that when a case is dismissed for want of jurisdiction, a plaintiff may re-file his case
in the proper court with additional legal theories. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 8–9).
However, Berkman misinterprets both the scope and intention of those provisions.
Section 16.064 tolls the statute of limitations for filing a second suit where a plaintiff’s first
suit is dismissed due to a lack of jurisdiction. TEX. CIV. PRAC. & REM. CODE § 16.064. It is intended
to “suspend[ ] the limitations period when a party mistakenly, and in good faith, files suit in one
court, when jurisdiction was only proper in another . . . .”. City of DeSoto v. White, 288 S.W.3d 389,
401 (Tex. 2009). Berkman’s suit was dismissed on governmental immunity. It was not mistakenly
brought in a court where it did not belong; in fact, Berkman filed his first and second suits in the
same venue. (Pl.’s Br. Resp. Def.’s Mot. Summ. J. 5–6). The only material changes between the
suits are the legal theories upon which they are based. Because the Court finds Berkman’s claim
would have been dismissed regardless of where it was filed, jurisdiction was not proper in any venue,
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and Section 16.064 is inapplicable. See Mohamad v. Dallas Co. Cmty. Coll., No. 3:10-CV-1189-L,
2010 WL 4883436, at *1 n. 1 (“[T]here is no court, state or federal, that has jurisdiction to hear
these claims because they are barred by governmental immunity.”)
Section 16.068 is a “relation back” statute that allows new claims related to an initial claim
to be added to a plaintiff’s pleading. TEX. CIV. PRAC. & REM. CODE § 16.068. However, Berkman
cites no authority and offers no explanation as to why the statute should be read to allow him to file
an entirely new suit. (See Pl.’s Br. Resp. Def.’s Mot. Summ. J. 8–9). A plain reading of the statute
does not support allowing plaintiffs to endlessly search for new grounds upon which to sue after their
claims have already been litigated. Thus, the Court finds Section 16.068 is inapplicable to the
instant case.
Because neither of the statutes Berkman references allow him to file a second suit after his
first was dismissed on grounds of governmental immunity, Berkman is barred from relitigating his
claims and summary judgment in favor of the City is appropriate.
B. Plaintiff’s Motion for Leave to File Surreply
Berkman also contends that the City presents new legal issues in its Reply that warrant a
Surreply. Specifically, Berkman seeks leave to respond to the City’s argument that Berkman waived
his takings claim by failing to amend the pleadings to incorporate it. (Pl.’s Mot. Leave File Surreply
5). The Court finds that the City was not presenting a new legal issue, but rather responding to
Berkman’s assertions that he was free to file a new suit in lieu of amending his initial pleadings to
incorporate his takings claim. Because Berkman’s Motion for Leave to File Surreply involves issues
already addressed above, the Court DENIES the Motion.
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IV.
CONCLUSION
For the foregoing reasons, the Court finds that the City’s Motion for Summary Judgment
should be and hereby is GRANTED. Berkman’s Motion for Leave to File Surreply is DENIED.
Costs are to be borne by the party incurring same.
SO ORDERED.
SIGNED July 29, 2011
_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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