A messy legal battle between the City of Houston and Hope For Families, Inc. continues as an appeals court affirms in part and reverses in part a trial court’s ruling that denied the city’s motion to dismiss the case because of immunity.
The Court of Appeals for the First District of Texas made the ruling in HFF’s Uniform Declaratory Judgment Act (DJA) lawsuit against the city and Keith W. Wade on Jan. 9.
Ultimately, the city and Wade said HFF failed to show that despite their status as a governmental entity, they weren’t protected from HFF’s request for declaratory relief that a deed the city organized is invalid.
Justice Gordon Goodman of the Court of Appeals for the First District of Texas
Justices Gordon Goodman, Evelyn Keyes and Peter Kelly pointed out that there’s no waiver of immunity in HFF’s petition after the city transferred HFF’s deed to the city to help settle a debt. Justice Goodman wrote, “[The DJA does not] permit the corporation to bring suit against the transferee to contest the validity of the transfer…only the attorney general has standing to bring a proceeding under section 22.255 to undo the deed between HFF and the city.”
The only valid action HFF can take is to sue the board member who actually signed the deed in question. In this instance, HFF’s claim doesn’t waive governmental immunity.
Still, when it comes to the fraud claims against Wade, while the judges ruled that he can’t be sued in his individual capacity because he has no interest in the property in question, he is also not entitled to immunity for his conduct in his official capacity.
Since HFF sued Wade in his individual capacity, claiming that he was inappropriate in filing the deed, and wants the deed to be revoked under this claim, HFF could have a solid case. “Construing the petition’s allegations liberally in favor of jurisdiction, they never affirmatively demonstrate nor negate the court’s jurisdiction over Wade in his official capacity,” wrote Justice Gordon. “HFF thus should receive the opportunity to replead its [fraud] claim against Wade.”
The legal issues began after the city financed HFF’s purchase of property for a community development project. But after a previous tax issue became connected to the property, Wade consulted for the deed to be transferred to the city so that the previous issue would be forgiven. HFF sued in hopes of having the deed transferred back, claiming that Wade acted fraudulently when negotiating the transfer.