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Click here for the full text of this decision FACTS:In 1981, the city of League City created municipal utility districts (MUDs) one through six, which are located within the boundaries of the city. The city executed contracts (utility agreements) with each MUD. The utility agreements related to the acquisition and construction of water, sewer and drainage systems. Each utility agreement also noted that both the city and the MUD would levy and collect ad valorem taxes on the taxable property in each MUD and the city would allocate 40 percent of the taxes it collected from the residents to the respective MUD. Seven years later, the city amended its utility agreements with MUD numbers two and three and stated that the allocation percentage payable by the city to each MUD was to be determined in accordance with a “complex formula.” The next year, the city also amended its original utility agreement with MUD number six to reflect the same change. A few years later, taxpayers who resided in the MUDs sued the city; MUDs two, three and six; and their respective directors to recover damages equal to the taxes that they had paid on their property. The taxpayers asserted claims against the city for money “had and received” and breach of contract. Specifically, they alleged that under the utility agreements, the city collected ad valorem taxes from them in excess of the amount that it was legally permitted to collect pursuant to Texas Water Code �54.016(f). The taxpayers argue that �54.016(f) provides that the contracts must contain an allocation agreement to assure that the total ad valorem taxes collected by the city and the MUDs from the taxable property within the municipal utility district does not exceed an amount greater than the city’s ad valorem taxes on such property. The taxpayers also argue that the tax limitations contained in �54.016(f) became part of and govern the utility agreements. In response, the city filed its first amended answer and plea to the jurisdiction. In its plea, the city alleged that the trial court lacked jurisdiction over the taxpayers’ case because the taxpayers failed to plead sufficient facts to overcome the city’s immunity from suit. The trial court granted the city’s plea to the jurisdiction and dismissed the taxpayers’ case for want of jurisdiction. HOLDING:Affirmed. Governmental immunity, the court stated, protects political subdivisions of the state from suit, unless immunity from suit has been waived. Governmental immunity from suit, the court stated, defeats a trial court’s subject-matter jurisdiction and is properly asserted in a plea to the jurisdiction. Generally, the court stated, a party suing a governmental entity must establish consent to sue, which may be alleged either by reference to a statute or to express legislative permission. Where a claim for declaratory or injunctive relief is brought seeking the refund of illegally collected tax payments, the court stated that sovereign immunity will not apply if the taxpayer alleges that the payments were made as a result of fraud, mutual mistake of fact or duress, whether express or implied. No legislative consent to sue is needed under these circumstances, the court stated. In this case, the court stated, the taxpayers did not plead sufficient facts to establish that the city’s governmental immunity did not bar their claims for money had and received and breach of contract. Accordingly, the court held that sovereign immunity barred the taxpayers’ claims for money had and received and breach of contract. The taxpayers also asserted that Texas Local Government Code �51.075 expressly waived the city’s immunity to this suit. Section 51.075 provides that a home rule municipality such as the city “may plead and be impleaded in any court.” But the court noted that in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006), the Texas Supreme Court ruled that �51.075 did not constitute a clear and unambiguous waiver of immunity from suit. Accordingly, the court held that the trial court did not err in granting the city’s plea to the jurisdiction on the basis of governmental immunity. OPINION:Hanks, J.; Radack, C.J., and Jennings and Hanks, J.J.

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