Opinion
No. 10-17-00180-CV
01-29-2020
PAPE PARTNERS, LTD., Glenn R. Pape and Kenneth W. Pape, Appellants v. DRR FAMILY PROPERTIES LP and Louise W. Champagne, Appellees
Doug Caroom, Gunnar P. Seaquist, Bickerstaff Heath Delgado Acosta LLP, Austin, for Appellants. Terry B. Gamble, Law Office of Terry B. Gamble PLLC, Austin, Clinton Twaddell III, Rhonda S. Jolley, Joseph Davis, Branscomb PC, San Antonio, for Appellees.
Doug Caroom, Gunnar P. Seaquist, Bickerstaff Heath Delgado Acosta LLP, Austin, for Appellants.
Terry B. Gamble, Law Office of Terry B. Gamble PLLC, Austin, Clinton Twaddell III, Rhonda S. Jolley, Joseph Davis, Branscomb PC, San Antonio, for Appellees.
Before Chief Justice Gray, Justice Davis, and Justice Neill
REX D. DAVIS, Justice
In one issue, Appellants Pape Partners, Ltd., Glenn R. Pape, and Kenneth W. Pape (collectively "the Papes") challenge the trial court's order granting Appellee DRR Family Properties, LP's ("DRR") motion to dismiss for lack of subject matter jurisdiction. We will affirm.
Appellee Louise W. Champagne was dismissed by agreement.
I. Background
Appellants' pleadings maintain that the Papes purchased a tract of land from Lola Robinson and Swirl Investments, Inc. in 2014. The purchase included irrigation water rights recognized by the State of Texas in Certificates of Adjudication ("COA") Nos. 12-4341 and 12-4344, as amended and consolidated in COA No. 12-4344A. The COA's were initially issued to Lola Robinson and her late husband in 1986 as part of a judgment in a lawsuit brought under the Texas Water Rights Adjudication Act. The amended COA authorized use of the permitted water for irrigating an additional 250 acres that was subsequently purchased by DRR.
Lola Robinson, Swirl Investments, Inc., Timothy Kingrey, Donna Kingrey, Theresa A. Spinks, Johnny W. Spinks, Roman Cisneros, and Sabrina Cisneros are also named as defendants in the Papes' lawsuit. The trial court severed the Papes' claims against DRR and Champagne after granting both parties' motions to dismiss for want of jurisdiction.
In 2015, the Papes attempted to record their purchase of the water rights with the Texas Commission on Environmental Quality ("TCEQ"). The TCEQ notified DRR and other potentially interested landowners that they might own an interest in the water rights. DRR filed a change of ownership form, and the TCEQ eventually concluded that DRR owned a portion of the water rights. The TCEQ changed its records to reflect DRR's ownership.
The Papes moved to reverse the TCEQ's decision, and the motion was overruled by operation of law. The Papes did not pursue an administrative appeal, but brought the present suit seeking a declaration that it owns all of the water rights in the tract purchased from Robinson and Swirl. The Papes further asserted claims against DRR for trespass to try title – adverse possession and to quiet title. DRR moved to dismiss the Papes' claims against it for lack of subject matter jurisdiction, asserting that the Papes had failed to exhaust their administrative remedies. The trial court granted DRR's motion.
II. Standard of Review
A motion to dismiss based on the absence of subject matter jurisdiction is the functional equivalent to a plea to the jurisdiction challenging the trial court's authority to determine the subject matter of a cause of action. Wallingford v. Trinity Universal Ins. Co. , 253 S.W.3d 720, 723 (Tex. App.—Amarillo 2007, pet. denied) ; Lacy v. Bassett , 132 S.W.3d 119, 122 (Tex. App.—Houston [14th Dist.] 2004, no pet.). The absence of subject matter jurisdiction may be raised by a plea to the jurisdiction, as well as by other procedural vehicles. Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). Whether a plaintiff has alleged facts that affirmatively demonstrate a trial court's subject matter jurisdiction is a question of law reviewed de novo. Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004).
III. Issue Presented
In its sole issue, the Papes assert that the TCEQ's ruling was in effect a determination of the legal ownership of the water rights and that the trial court erred in granting DRR's motion to dismiss because: (1) the question of property ownership is within the sole jurisdiction of the courts; (2) the legislature did not vest the TCEQ with exclusive jurisdiction over the Papes' claims; and (3) the ruling violates the separation of powers clause in the Texas Constitution.
IV. Discussion
A. Jurisdiction. Generally, the power to determine controverted rights to property by means of binding judgment is vested in the courts. Barshop v. Medina Cty. Underground Water Conservation Dist. , 925 S.W.2d 618, 635 (Tex. 1996). Courts of general jurisdiction in Texas are presumed to have subject matter jurisdiction absent a showing that the Texas Constitution or some other law confers jurisdiction on another court, tribunal, or administrative body. Subaru of America, Inc. v. David McDavid Nissan, Inc. , 84 S.W.3d 212, 220 (Tex. 2002) ; see also TEX. CONST. art. V, § 8 ; TEX. GOV'T CODE ANN. §§ 24.007 -.008. Administrative bodies may exercise only those powers the law confers upon them in clear and express language. Subaru , 84 S.W.3d at 220. Courts will not imply the existence of additional authority for administrative bodies, nor may these bodies create for themselves any excess powers. Id. If an agency has exclusive jurisdiction, the Legislature grants the agency the sole authority to make an initial determination in a dispute. Id. at 221. A party must then exhaust all administrative remedies before seeking judicial review of an agency's action. Id. "Until then the trial court lacks subject matter jurisdiction and must dismiss the claims within the agency's exclusive jurisdiction." Id. ; see also In re Southwestern Bell Tel. Co. , 235 S.W.3d 619, 625 (Tex. 2007).
The Papes argue that the Water Code does not expressly grant exclusive jurisdiction to the TCEQ. In deciding whether an administrative body has exclusive jurisdiction, we look to its authorizing legislation for either an express grant of exclusive jurisdiction or for a "pervasive regulatory scheme" indicating an intent to confer exclusive jurisdiction. Emp's Ret. Sys. of Tex. v. Duenez , 288 S.W.3d 905, 908-09 (Tex. 2009).
The Texas Constitution provides:
The conservation and development of all of the natural resources of this State, ... including the control, storing, preservation and distribution of ... the water of its rivers and streams, for irrigation, power and all other useful purposes, ... are each and all hereby declared public rights and duties; and the Legislature shall pass all such laws as may be appropriate thereto.
TEX. CONST. art. 16, § 59. In keeping with this authority, the Legislature enacted the Water Code, granting the TCEQ the "primary authority to establish surface water quality standards, which it implements, in part, in its permitting actions." Tex. Comm'n on Envtl. Quality v. City of Waco , 413 S.W.3d 409, 411 (Tex. 2013). See TEX. WATER CODE ANN. § 26.023. Although the statute does not expressly grant exclusive jurisdiction over water rights to the TCEQ, the regulatory scheme behind surface water permits is pervasive and indicative of the Legislature's intent that jurisdiction over the adjudication of surface water permits is ceded to the TCEQ. See TEX. WATER CODE ANN. § 26.023 ; see also id. § 5.013(a)(1) ("The commission has general jurisdiction over ... water and water rights including the issuance of water rights permits, water rights adjudication, cancellation of water rights, and enforcement of water rights...."); § 11.021, et seq. (rights in state water); § 11.121, et seq. (permitting process); and § 11.301, et seq. (Water Rights Adjudication Act). The same enabling legislation has been determined to grant the TCEQ exclusive jurisdiction over other matters involving water rights. See Sierra Club & Pub. Citizen v. Tex. Comm'n on Envtl. Quality , No. 03-14-00130-CV, 2016 WL 1304928, at *3 (Tex. App.—Austin Mar. 31, 2016, no pet.) (wastewater discharge permits); City of College Station v. Wellborn Special Util. Dist. , No. 10-04-00306-CV, 2006 WL 2067887, at *1 (Tex. App.—Waco July 26, 2006, pet. denied) (water and sewer utility rates, operations, and services).
For a history of water rights legislation in Texas, see City of Marshall v. City of Uncertain , 206 S.W.3d 97 (Tex. 2006).
Once it is determined that an agency has exclusive jurisdiction over an issue, then the party injured by agency action must follow the review process set up in the statute. " ‘An appeal from an administrative agency is not a matter of right, it is set out by statute and must be strictly complied with in order to vest the district court with jurisdiction.’ " Jones v. State Bd. of Educator Certification , 315 S.W.3d 237, 243 (Tex. App.—Austin 2010, pet. denied) (quoting Tex. Alcoholic Beverage Comm'n v. Sfair , 786 S.W.2d 26, 27 (Tex. App.—San Antonio 1990) (per curiam (writ denied ))). See also Walter West, P.E., v. Tex. Comm'n on Envtl. Quality , 260 S.W.3d 256, 260 (Tex. App.—Austin 2008, pet. denied) (failure to comply with statutory prerequisites under Water Code deprived trial court of jurisdiction). It is undisputed that the Papes did not follow the administrative review process.
The Papes identify four opinions that they assert establish that water rights ownership disputes are excepted from the TCEQ's jurisdiction under § 5.013(a)(1). However, the two oldest cases were decided before the current text of § 5.013(a) went into effect in 1985. See Clark v. Briscoe Irr. Co. , 200 S.W.2d 674 (Tex. Civ. App.—Austin 1947, no writ) ; City of Corpus Christi v. Nueces Cty. Water Control and Imp. Dist. No. 3 , 540 S.W.2d 357 (Tex. App.—Corpus Christi 1976, writ ref'd n.r.e.). The other cases do not address the TCEQ's jurisdiction. Wilson v. New Braunfels Util.'s , 536 S.W.3d 5 (Tex. App.—Austin 2016, pet. dism'd) involves governmental immunity, not whether the appropriate administrative procedures were followed, while Graham v. Kuzmich , 876 S.W.2d 446 (Tex. App.—Corpus Christi 1994, no pet.) involves a determination of whether water rights passed with a deed—the jurisdiction of the TCEQ is not addressed.
Because the Legislature has vested the TCEQ with the exclusive jurisdiction to determine water rights, the Papes were required to exhaust their administrative remedies before resorting to the courts.
B. Separation of Powers. Separation of powers is expressly guaranteed by the Texas Constitution, which provides:
The powers of the Government of the State of Texas shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit: Those which are Legislative to one; those which are Executive to another, and those which are Judicial to another; and no person, or collection of persons, being of one of these departments, shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted.
TEX. CONST. art. II, § 1.
The separation of powers doctrine is violated "when one branch of government assumes or is delegated a power ‘more properly attached’ to another branch." Salinas v. State , 523 S.W.3d 103, 106-07 (Tex. Crim. App. 2017) (quoting Ex parte Lo , 424 S.W.3d 10, 28 (Tex. Crim. App. 2013) (opinion on rehearing)). However, the Texas Constitution, as noted above, permits a transfer of powers from one branch to another when expressly permitted by another provision of the Constitution. In the present case, the Texas Constitution specifically authorizes the authority given to the TCEQ. See TEX. CONST. art. 16, § 59. The Papes rely on Bd. of Water Engr's v. McKnight , 111 Tex. 82, 86, 229 S.W. 301, 301 (1921), which struck down previous statutory provisions authorizing the Board of Water Engineers to determine "the relative rights of the various claimants" to use State waters. However, art. 16, § 59 had not been adopted when the statutes involved in McKnight were considered. Corzelius v. Harrell , 143 Tex. 509, 512, 186 S.W.2d 961, 963 (1945). Additionally, the Water Rights Adjudication Act passed in 1967, authorizing the administrative processes used by the TCEQ, is constitutional and not a violation of separation of powers. In re Adjudication of the Water Rights of Upper Guadalupe Segment of Guadalupe River Basin , 642 S.W.2d 438, 442 (Tex. 1982).
The legislative scheme giving jurisdiction to the TCEQ to determine water rights does not violate the separation of powers clause in the Texas Constitution.
V. Conclusion
After a de novo review, we conclude that the trial court did not err in granting DRR's motion to dismiss. We overrule the Papes' sole issue and affirm the judgment of the trial court.
(Chief Justice Gray dissenting with opinion)
DISSENTING OPINION
TOM GRAY, Chief Justice
THE COON HUNT
The most embarrassing thing for a coon dog is to bark up the wrong tree. Sometimes a coon will go up one tree, walk across the tree tops to another tree and come back to the ground and escape the dogs and hunters. Some coon dogs, however, learn this escape tactic and either follow movement of the coon in the treetop (which is difficult to do since most coon hunts are at night) or periodically make wide sweeping circles around the tree to make sure the coon has not walked the tree tops and come back to the ground from another tree. The really good coon dogs never continue to bark up the wrong tree.
In this case, the Papes realized that the issue they were chasing was not in the TCEQ-administrative tree. Rather, the issue that needed to be decided was up another tree; the district-court-ownership-determination tree. They were initially barking up the wrong tree, but they made a big sweeping circle and found the tree to which the coon had moved. I think the Papes are now barking up the right tree. My colleagues, however, have concluded that the Papes must stay with the first tree even though it appears the first tree is useless to them because there is no coon in that tree. Thus, I will endeavor to briefly explain why they should not be required to continue to bark up the wrong tree.
THE IMPORTANCE
Any person who owns a right to surface water, and attorneys who regularly litigate title issues, particularly those that may also involve ownership of water rights, whether as part of a conveyance of property or as a severed property right, draw near and listen. If this Court's holding is correct, any effort to determine the ownership of surface water rights must be pursued solely through the administrative process before the TCEQ. Because I do not believe that is the proper holding in this appeal, I respectfully dissent.
WATER RIGHTS
I will not recount the lengthy and colorful history recognizing that the right of access to and use of water is a valuable right. I will pick up with the story in 1967 when Texas passed the Texas Water Rights Adjudication Act (TWRAA). See TEX. WATER CODE ANN. §§ 11.301 et seq. In this Act, the legislature used a phrase "water rights adjudication." The phrase became a short-hand reference to the delegation to regulate the conservation of the natural resource of surface water by determining the amount of use, place of use, purpose of use, point of diversion, rate of diversion, and in the appropriate situation, included the acreage to be irrigated.
This meaning of the phrase was thus well established by the time the legislature used it roughly 18 years later when it delegated to the TCEQ in the Texas Water Code "general jurisdiction over water and water rights including the issuance of water rights permits, water rights adjudication , cancellation of water rights, and enforcement of water rights." TEX. WATER CODE ANN. § 5.013(a) (emphasis added). The legislature did not grant the TCEQ jurisdiction to adjudicate title, in effect ownership, of water rights which is the traditional role of the courts. And there are serious constitutional arguments against such a grant if attempted.
Moreover, it appears such an effort to strip the courts of such a role would be unworkable within the current TCEQ framework.
EXCLUSIVE JURISDICTION OF TCEQ?
If the TCEQ "exclusive jurisdiction" argument of appellee is accepted, every ownership dispute of water rights must be submitted to TCEQ for a determination. This would mean that every will contest, every contract, every deed, and every other dispute (including claims of adverse possession) over a water right would have to be decided by the TCEQ even though other and directly related ownership interest in property would have to be decided by a court in the judicial branch. Such a system of separating ownership determinations could lead to directly conflicting results.
The TCEQ regulatory system is not structured to determine ownership. It is a system that is designed to track recorded ownership, not to determine ownership. The system looks at the title documents, it may apply some of its internal rules, and determine who, according to the chain of title established by those title documents, owns the water right. That is as far as the TCEQ's "jurisdiction" goes.
If there is a dispute about whether a water right was transferred or not, the TCEQ, which is in the administrative branch of government, is not the place to adjudicate that issue. Rather, a court in the judicial branch is where ownership of these water rights is properly determined. Nowhere is the fallacy of the appellee's argument more apparent than a determination of ownership based on adverse possession. In such a dispute, there is normally no title document upon which the TCEQ can establish a chain of title until a court renders a judgment adjudicating ownership of the property right, thus determining title. And how unworkable would the system be if the title by adverse possession of real property had to be done in a court while adverse possession of a water right appurtenant to that same real property had to be adjudicated by the TCEQ because it had "exclusive jurisdiction" as argued by the appellee.
CONCLUSION
In deference to the decision made by a majority of this Court, and in the interest of time, a more detailed discussion of the cases and arguments of the parties will yield to this more general discussion of the issue. But that is a serious and difficult issue that could adversely impact any person that needs to adjudicate ownership of a water right so that they can present a proper and valid chain of title for that water right to the TCEQ.
Both parties have provided extensive briefing and case analysis which is readily available on the Court's case management system, aka TAMES. While it would serve no useful purpose here to rehash their arguments, it appears both have assumed the extreme positions that are beyond the scope of the relatively narrow issue before the Court and that the answer to that issue is somewhere in the middle of their more extreme positions.
I find no fault with what the Papes have done. When the Papes realized they were barking up the wrong tree at the TCEQ, they shifted to the correct tree - a court in the judicial branch. Accordingly, I respectfully dissent to the Court's affirmance of the trial court's dismissal of their suit to litigate ownership of the water rights at issue in this proceeding. I would reverse the trial court and remand this proceeding to the trial court for further proceedings to litigate the merits of their dispute over the ownership of those water rights.