Baylor County Special Utility District v. City of Seymour, Texas

Opinion filed March 20, 2025

In The

Eleventh Court of Appeals
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No. 11-24-00071-CV
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BAYLOR COUNTY SPECIAL UTILITY DISTRICT,
Appellant/Cross-Appellee
V.
CITY OF SEYMOUR, TEXAS,
Appellee/Cross-Appellant

On Appeal from the 50th District Court
Knox County, Texas
Trial Court Cause No. 10378

OPINION ON MOTION FOR REHEARING
On January 30, 2025, this court issued an opinion in this cause in which we
held, among other things, that the parties’ contract is a “requirements contract” and
that the trial court properly dismissed a declaratory-judgment claim asserted by
Appellee and Cross-Appellant, City of Seymour, Texas (Seymour). Baylor Cnty.
Special Util. Dist. v. City of Seymour, No. 11-24-00071-CV, 2025 WL 336966, at
*7, *9 (Tex. App.—Eastland Jan. 30, 2025, no pet. h.). Appellant and Cross-
Appellee, Baylor County Special Utility District (Baylor), has filed a motion for
rehearing in which it asks us to “modify [our] opinion in two respects to clarify that
Baylor is not forfeiting its standalone defenses against Seymour’s causes of action.”
Although we recognize Baylor’s concerns, we deny its motion for rehearing.
First, Baylor states that we should reconsider and “remove” the following
statement: “Importantly, Baylor presented no evidence that Seymour could not fulfill
its water supply requirements or that its acquisition of water from other sources was
due to Seymour’s inability to provide same.” Id. at *7. Baylor contends that the
statement is “misleading because it could imply that Baylor has no such evidence”
and “unnecessary because the essence of Baylor’s interlocutory appeal was that the
contract could be construed without any parol evidence.” Baylor states that its
“removal would eliminate any confusion on remand regarding Baylor’s presentation
of evidence in support of its necessity defense.” Seymour responds that “the opinion
does not constitute a bar to the presentation of evidence by Baylor upon remand.”
We agree with Seymour. The suit continues following our disposition of this
interlocutory appeal and Baylor has all relevant, available defenses at its disposal as
the case proceeds in the trial court. Nothing in this statement forecloses Baylor’s
ability to present evidence in support of its defenses as the proceedings continue.
Moreover, while courts should not delve into the merits of the case in ruling
on a plea to the jurisdiction, “a court deciding [the plea] is not required to look solely
at the pleadings but may consider evidence and must do so when necessary to resolve
the jurisdictional issues raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555
(Tex. 2000). Here, Baylor argued that Seymour’s claims were “barred, in whole or
in part, by lack of jurisdiction and by governmental immunity.” As we discussed in
our opinion:
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Baylor argued that because the contract is not a “requirements
contract,” Baylor could not have breached it by purchasing treated
water from a third party. Moreover, Baylor contended that any statute
that would permit Seymour to recover attorney’s fees was inapplicable.
Baylor further asserted that Section 271.153 of the Texas Local
Government Code, permitting recovery of attorney’s fees in breach-of-
contract cases with a local governmental unit, was limited to recovery
for contracts executed after June 19, 2009, which the execution of this
contract predated.
In a supplement to its plea to the jurisdiction, Baylor argued that
because the contract in question is not a requirements contract, the trial
court should dismiss Seymour’s request for declaratory and injunctive
relief. In a second supplement, Baylor established that the Corporation
had converted to a special utility district, and it attached relevant
documents from the Texas Commission on Environmental Quality
pertaining to Baylor’s conversion and an assignment of intangible
business property, which included the contract with Seymour.

Baylor, 2025 WL 336966, at *2. The trial court was permitted to consider evidence
in deciding Baylor’s plea. Blue, 34 S.W.3d at 554–55; see City of Webster v.
Hunnicutt, 650 S.W.3d 792, 797 (Tex. App.—Houston [14th Dist.] 2022, pet.
denied) (Appellate courts do not consider the merits of the underlying claims and
examine only the “pleadings and the evidence pertinent to the jurisdictional
inquiry.”); Hunt v. City of Diboll, 574 S.W.3d 406, 418 (Tex. App.—Tyler 2017,
pet. denied) (same).
Second, Baylor states that we should reconsider and “remove” the following
statement: “Moreover, because our decision today concludes that the contract is a
requirements contract, Seymour’s claim for declaratory judgment is moot.” Baylor,
2025 WL 336966, at *9. Baylor contends that this statement “suggests that Seymour
has already prevailed on the substance of its ‘requirements contract’ allegations,
when Baylor still has meritorious defenses against such allegations” and that the
statement is “unnecessary because [the] previous sentence was correct and sufficient

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to affirm the dismissal of Seymour’s declaratory judgment claim.” Seymour
responds that, because this court has determined that the contract is a requirements
contract as a matter of law, “the fact finder has no need to make such a
determination” and states that “there is no further need for declaratory relief on that
issue.”
The declaratory relief at issue was described in Seymour’s “Fifth Cause of
Action.” In its original petition, Seymour alleged and requested the following:
[Seymour] contends Defendant [North Central Texas Municipal
Water Authority] NCTMWA cannot legally sell treated water to
defendant Baylor and defendant Baylor, as per Section 3 of the 1994
agreement, may not legally acquire treated water from any source other
than [Seymour]. The sale of treated water by a source other than
[Seymour] violates the 1994 contract. [Seymour] is seeking a judgment
declaring the sale, or provision of, treated water from NCTMWA to
Baylor to be prohibited.
“The purpose of the [UDJA] . . . is to declare existing rights, status, or other legal
relations. The statute cannot be invoked as an affirmative ground of recovery
to revise or alter such rights or legal relations.” Republic Ins. Co. v. Davis, 856
S.W.2d 158, 164 (Tex. 1993) (internal citations and quotation marks omitted). The
basis of Seymour’s claim for declaratory relief was the requirements contract. That
was the right or status at issue. Because we determined that the contract is a
requirements contract—and that Seymour could not seek a determination of their
rights and responsibilities against Baylor, a governmental entity—the trial court
properly dismissed Seymour’s claim for declaratory relief with prejudice for want
of jurisdiction.
Moreover, Seymour nonsuited the other defendant, NCTMWA, that it sought
to obtain a declaratory judgment against, stating that its “nonsuit [was] effective
immediately upon filing.” At the beginning of the hearing on the plea to the
jurisdiction, the trial court stated that it was its “understanding that the second
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defendant has been nonsuited,” which was confirmed by both parties. In its claim
for declaratory relief, Seymour contended that “Defendant NCTMWA cannot legally
sell treated water to defendant Baylor,” and sought “a judgment declaring the sale,
or provision of, treated water from NCTMWA to Baylor to be prohibited.” (Emphasis
added). “Rule 39, like the [UDJA], mandates joinder of persons whose interests
would be affected by the judgment.” Brooks v. Northglen Ass’n, 141 S.W.3d 158,
162 (Tex. 2004); see TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(a) (West 2020)
(When a party seeks declaratory relief, “all persons who have or claim any
interest that would be affected by the declaration must be made parties.”); TEX. R.
CIV. P. 39. In this regard, a trial court is without jurisdiction to issue a judgment to
declare the rights and status of a party not before the court—here, NCTMWA. See
Brooks, 141 S.W.3d at 162, 164 (The trial court was without jurisdiction to issue a
judgment with respect to parties not joined in the action, and any judgment affecting
or opinion interpreting the non-parties land, or their rights thereto, would be
advisory).
Thus, as we held in our original opinion, the trial court’s dismissal of
Seymour’s request for declaratory relief, which included Baylor and a non-party,
was proper. Baylor, 2025 WL 336966, at *9; see also Worford v. Stamper, 801
S.W.2d 108, 109 (Tex. 1990) (When, as here, no findings of fact or conclusions of
law were requested or filed, “[t]he judgment must be affirmed if it can be upheld on
any legal theory that finds support in the evidence.”); Woods v. Cmtys. in Sch. Se.
Tex., No. 09-14-00021-CV, 2015 WL 2414260, *6 (Tex. App.—Beaumont May 21,
2015, no pet.) (mem. op.) (“We will affirm the trial court’s dismissal order on any
legal theory supported by the record.”). That claim for declaratory relief remains
dismissed. As we have said, Seymour, in its response, confirms that “there is no
further need for declaratory relief on that issue.” Nothing in our opinion suggests
that Seymour “has already prevailed” on its substantive claims, nor does it foreclose
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Baylor’s relevant, available defenses to such claims that Baylor may raise as the
proceedings continue.
We deny Baylor’s motion for rehearing.

W. BRUCE WILLIAMS
JUSTICE

March 20, 2025
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.

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