LAW OFFICES OF WILLIE POWELLS III ASSOCIATES PLLC v. HARRIS COUNTY HOSPITAL DISTRICT (2026)

OPINION

A law firm appeals from an interlocutory order granting a hospital district's plea to the jurisdiction and dismissing the law firm's interpleader action and declaratory-judgment action against the hospital district. As to the interpleader action, we conclude that at the time of the trial court's order the interpleader action between the Law Firm and the hospital district was moot, and therefore we affirm the trial court's dismissal for lack of subject-matter jurisdiction as to the interpleader action. As to the trial court's implied dismissal of the law firm's requests for declaratory relief for lack of subject-matter jurisdiction, we conclude that these requests do not fall within the limited waiver of governmental immunity in the Texas Declaratory Judgments Act and that the law firm has not alleged a valid waiver of the hospital district's governmental immunity as to these requests. We affirm the trial court's order.

I. Factual and Procedural Background

Jalen Cimone Anderson (“Jalen”) was injured when the motorcycle he was riding collided with another vehicle. Jalen was treated at a facility operated by appellee/defendant Harris County Hospital District d/b/a Harris Health System (the “District”). The District filed a notice of hospital lien in the records of the county. Quania Washington Anderson (“Quania”), Jalen's mother and Jalen retained appellant/plaintiff Law Offices of Willie D. Powells III & Associates, PLLC (the “Law Firm”) to represent Jalen in his personal injury suit against the driver of the other vehicle. The insurer of the other driver agreed to settle Jalen's claim for policy limits of $500,000. After the settlement, a dispute arose among Jalen, Quania, the District, and the Law Firm as to how the settlement proceeds should be divided. Jalen discharged the Law Firm and obtained new lawyers. The District asserted a hospital lien in the amount of $330,057.02. The Law Firm asserted that it was entitled to legal fees and expenses totaling $186,666.67.

In February 2024, the Law Firm filed an interpleader action against Jalen, Quania, and the District. The Law Firm made an unconditional tender of the disputed funds into the registry of the court. The Law Firm alleged that it is a disinterested stakeholder and therefore it may recover its attorney's fees in the interpleader action out of the tendered and interpleaded funds.

The District answered and asserted a hospital lien of $330,057.02. The District asserted that it had a right to receive the settlement funds to the extent necessary to satisfy its lien.

In March 2024 the District and the Law Firm agreed that the District would receive $31,411.50 of the interpleaded funds to release its hospital lien, and the Law Firm paid this amount to the District out of the settlement funds. Despite the satisfaction of the hospital lien, the Law Firm continued to seek payment of its attorney's fees out of the interpleaded funds. In addition, the Law Firm filed a supplemental petition in which it added requests for ten declarations (the “Declarations”) under the Texas Declaratory Judgments Act (“DJ Act”) and sought to recover against the District reasonable and necessary attorney's fees as are equitable and just under the DJ Act.

Shortly after the Law Firm filed this suit, Jalen and Quania filed a separate lawsuit against the Law Firm. That lawsuit was later consolidated into this case. Thus, in the trial court Jalen and Quania (collectively the “Andersons”) asserted claims against the Law Firm for conversion and breach of fiduciary duty.

In October 2024 the District filed a plea to the jurisdiction and an alternative motion for summary judgment (the “Motion”). In the Motion the District asserted that its hospital lien had been fully satisfied and that it was no longer asserting any claim to the interpleaded funds. The District stated that it was not asserting any claim against any party in the case. In the Motion the District asserted that it enjoyed governmental immunity against the Law Firm's request for attorney's fees in the interpleader action because its governmental immunity has not been waived as to this action. In the alternative, on the merits of the interpleader action, the District sought summary judgment as to this request on the grounds that the Andersons allege that the Law Firm committed torts, and as an alleged tortfeasor with an interest in the interpleaded funds, the Law Firm is not an innocent, disinterested stakeholder, which is a status required for the Law Firm to recover its attorney's fees from the interpleaded funds. As to the declaratory-judgment action, the District asserted that (1) the District enjoys governmental immunity from suit as to the Law Firm's declaratory-judgment action because the action does not fall within the limited waiver of governmental immunity in the DJ Act covering declaratory relief as to challenges to the validity of a statute; (2) the Law Firm lacks standing to seek the Declarations; (3) the Law Firm's requests for the Declarations are moot; (4) the Law Firm's requests for the Declarations are redundant of the claims asserted by the Andersons against the Law Firm; and (5) the Law Firm is judicially estopped from arguing that the District's lien is invalid.

The Law Firm filed a response to the Motion asserting that (1) in the interpleader action the Law Firm does not seek a judgment against the District; instead the Law Firm seeks to recover its attorney's fees only from the interpleaded funds; (2) governmental immunity does not apply to the interpleader action in which the trial court has in rem jurisdiction to determine who owns the interpleaded funds; (3) the Law Firm is a disinterested stakeholder entitled to recover its attorney's fees from the interpleaded funds and seeks to recover its attorney's fees only from the interpleaded funds; (4) there is no requirement that the Law Firm be an innocent stakeholder to recover its attorney's fees from the interpleaded funds; (5) the waiver of immunity in the DJ Act covers declaratory relief as to challenges to the validity of a statute or requests for construction of a statute; (6) the Law Firm's declaratory-judgment action falls within this waiver of immunity; (7) the Law Firm's requests for the Declarations are not redundant of the claims asserted by the Andersons against the Law Firm; (8) the Law Firm has standing to seek the Declarations; (9) the Law Firm's requests for the Declarations are not moot; and (10) the Law Firm is not judicially estopped from arguing that the District's lien is invalid.

On October 30, 2024, the trial court signed an interlocutory order in which the court granted the Motion, without specifying the grounds for its ruling, and dismissed with prejudice all claims asserted by the Law Firm against the District. The Law Firm timely perfected this interlocutory appeal from the order under section 51.014(a)(8) of the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West, Westlaw through 2025 2nd C.S.) (authorizing an interlocutory appeal of an order that grants or denies a plea to the jurisdiction by a governmental unit).

II. Issues and Analysis

A. May the trial court's dismissal for lack of subject-matter jurisdiction as to the interpleader action be affirmed on the ground of mootness?

A case becomes moot if there ceases to be an actual controversy between the parties at any stage of the litigation. See Robinson v. Alief I.S.D., 298 S.W.3d 321, 324 (Tex. App.—Houston [14th Dist.] 2009, pet. denied). If a judgment can have no practical effect on an existing controversy, the case becomes moot, and any opinion issued on the merits on the appeal would constitute an impermissible advisory opinion. Hanson Aggregates, LLC v. Kowis, No. 14-20-00011-CV, 2020 WL 1921940, at *2 (Tex. App.—Houston [14th Dist.] Apr. 21, 2020, no pet.) (mem. op.). In the interpleader action the Law Firm alleged that it is a disinterested stakeholder entitled to recover its attorney's fees from the interpleaded funds. In its appellate brief the Law Firm notes that in March 2024 the District and the Law Firm agreed that the District would receive $31,411.50 of the interpleaded funds to release its lien. The Law Firm paid this amount to the District out of the settlement funds, and the District's hospital lien was satisfied. In the trial court the Law Firm sought to take attorney's fees from the remaining funds, and at the time of the trial court's ruling the District had no objection to the Law Firm doing so. When the trial court granted the District's plea to the jurisdiction, the District was not asserting any claim against any party in the case, and the District was not asserting any claim to the remaining interpleaded funds. We conclude that when the trial court granted the District's plea to the jurisdiction, there was no actual controversy between the Law Firm and the District as to the interpleader action, including as to whether the Law Firm may obtain attorney's fees from these funds. See Coastal Nejapa, Ltd. v. Crystal Power Co., Nos. 14-08-01136-CV, 14-08-01127-CV, 2009 WL 2476553, at *1–2 (Tex. App.—Houston [14th Dist.] Aug. 13, 2009, no pet.) (mem. op.). Though no party asserted that the interpleader action was moot, this court may affirm the trial court's order dismissing the interpleader action as to the Law Firm and the District based on mootness because the record shows that this action was moot when the trial court made this ruling. See Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850–51 (Tex. 2000); Tex. Dep't of Transp. v. Olivares, 316 S.W.3d 89, 95 (Tex. App.—Houston [14th Dist.] 2010, no pet.). Therefore, we affirm the part of the trial court's order in which it dismissed for lack of subject-matter jurisdiction the interpleader action between the Law Firm and the District.¹ See Noteware v. Turner, 576 S.W.3d 835, 843 (Tex. App.—Houston [1st Dist.] May 21, 2019, pet. denied) (mem. op.); Putnam v. Iverson, No. 14–13–00369–CV, 2014 WL 3955110, at *5 (Tex. App.—Houston [14th Dist.] Aug. 14, 2014, pet. denied) (mem. op.).

B. Did the trial court err in impliedly granting the plea to the jurisdiction as to the declaratory-judgment action based on the District's governmental immunity?

Under its first issue, the Law Firm asserts that the trial court erred in granting the District's plea to the jurisdiction based on the District's argument that the trial court lacks subject-matter jurisdiction over the declaratory-judgment action against the District due to governmental immunity from suit. The District is a hospital district established under the authority of article IX, section 4 of the Texas Constitution, and Chapter 281 of the Texas Health and Safety Code. See Tex. Const. art. IX, § 4; Tex. Health & Safety Code Ann. § 281.002 (West, Westlaw through 2025 2nd C.S.). The District is a political subdivision of the State and generally enjoys governmental immunity. See Harris Cnty. Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 842 (Tex. 2009). The District asserted in its plea to the jurisdiction that it enjoys governmental immunity from suit as to the Law Firm's declaratory-judgment action because the action does not fall within the limited waiver of governmental immunity in the DJ Act covering declaratory relief as to challenges to the validity of a statute.

We review the trial court's granting of the District's plea to the jurisdiction de novo. City of Conroe v. San Jacinto River Auth., 602 S.W.3d 444, 457 (Tex. 2020). When, as in today's case, a party has filed a plea to the jurisdiction challenging the pleadings, we must construe the pleadings liberally in favor of the pleader and look to the pleader's intent. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). A party suing a governmental entity bears the burden of affirmatively demonstrating the trial court's jurisdiction by alleging a valid waiver of immunity. Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003). To determine if the party has met that burden, we consider the facts alleged by the party and, to the extent it is relevant to the jurisdictional issue, any evidence submitted by the parties. Id.

Governmental immunity encompasses immunity from suit and immunity from liability. See Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). Immunity from suit bars a suit absent a waiver of governmental immunity. Id. Governmental immunity from suit deprives a trial court of subject-matter jurisdiction. Id.

This case does not involve an ultra vires claim, and the Law Firm does not assert that the non-statutory waiver of immunity from the Reata case applies. See City of El Paso v. Heinrich, 284 S.W.3d 366, 371–73 (Tex. 2009); Reata Construction Corp., 197 S.W.3d at 373. In this context, for there to be a waiver of the District's governmental immunity as to the declaratory-judgment action, the Texas Legislature must have waived the District's governmental immunity by clear and unambiguous language in a statute or legislative resolution. See Tex. Civ. Prac. & Rem. Code Ann. § 107.001, et seq. (West, Westlaw through 2025 2d C.S.); Tex. Gov't Code Ann. § 311.034 (West, Westlaw through 2025 2d C.S.); Brice v. Texas Dep't of Fam. & Protective Servs., No. 14-20-00506-CV, 2022 WL 1310876, at *2 (Tex. App.—Houston [14th Dist.] May 3, 2022, no pet.) (mem. op.). The only statute that the Law Firm contends constitutes a clear and unambiguous waiver of the District's governmental immunity is section 37.006(b) of the Civil Practice and Remedies Code (“Section 37.006(b)”), which is part of the DJ Act. See Tex. Civ. Prac. & Rem. Code Ann. § 37.006(b) (West, Westlaw through 2025 2d C.S.).

1. What is the scope of the waiver of immunity in Section 37.006(b)?

The parties dispute the scope of the waiver of governmental immunity in Section 37.006(b). The Law Firm argues that this waiver applies to challenges to the validity of an ordinance or statute, as well as to requests for declarations that construe a statute. The District contends that this waiver only applies to challenges to the validity of an ordinance or statute. Section 37.006(b), the only part of the DJ Act that contains an express waiver of sovereign immunity,² provides as follows:

In any proceeding that involves the validity of a municipal ordinance or franchise, the municipality must be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard.

Id. (emphasis added). Arguably, the only clear and unambiguous waiver of sovereign immunity in this statute is a waiver of the sovereign immunity of municipalities in any declaratory-judgment action involving the validity of a municipal ordinance or franchise. See id. Nonetheless, in the Leeper case, the Supreme Court of Texas concluded that Section 37.006(b) waived sovereign immunity as to governmental entities that were not municipalities in a case involving declaratory relief regarding the construction of a statute. See Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 444–46 (Tex. 1994). The Leeper court stated that the DJ Act “expressly provides that persons may challenge ordinances or statutes, and that governmental entities must be joined or notified.” Id. at 446. According to the Leeper court, the DJ Act contemplates that governmental entities must be joined as parties in suits to construe their legislative pronouncements, and that entities so joined are bound by a court's declaration construing their ordinances or statutes. See id. The Leeper opinion supports a conclusion that, in the DJ Act, the Legislature waived governmental entities' sovereign immunity from both claims seeking a declaration construing a statute and from claims seeking a declaration challenging the validity of a statute. See id. The Law Firm relies on the Leeper case for this proposition.

From 1994 through 2010, the Supreme Court of Texas cited this part of Leeper in support of each of these propositions. See Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 633–35 (Tex. 2010); Heinrich, 284 S.W.3d at 373 n.6. In 2011, the high court again cited Leeper and stated that the DJ Act contains an express waiver of a governmental unit's sovereign immunity as to a claim seeking a declaratory judgment challenging the validity of a statute. See Texas Dept. of Transp. v. Sefzik, 355 S.W.3d 618, 622 & n.3 (Tex. 2011). But, in the same case, the Sefzik court correctly noted that the Heinrich court concluded that sovereign immunity barred declaratory-judgment claims against the governmental entities, as opposed to the governmental actors. See Sefzik, 355 S.W.3d at 621; Heinrich, 284 S.W.3d at 380. The Sefzik court indicated that, if the DJ Act included a waiver of governmental entities' sovereign immunity from claims seeking a declaratory judgment regarding the construction of a statute, then sovereign immunity would not have barred Heinrich's claims against the governmental entities. See Sefzik, 355 S.W.3d at 621. Because the Heinrich court concluded that sovereign immunity barred Heinrich's declaratory-judgment claims against the governmental entities, the Sefzik court concluded that the Heinrich court necessarily determined that the DJ Act does not waive the sovereign immunity of governmental entities from claims seeking a declaration regarding the construction of a statute and the plaintiff's rights under the statute. See id. The Sefzik court noted that, under an ultra vires claim, a plaintiff might be able to effectively get similar declaratory relief against a governmental official; nonetheless, the Sefzik court concluded that the DJ Act does not waive the sovereign immunity of governmental entities from claims seeking a declaratory judgment regarding the construction of a statute and the plaintiff's rights under the statute, thus effectively abrogating the Leeper court's contrary holding. See id.; City of San Antonio v. Rogers Shavano Ranch, Ltd., No. 04-13-00623-CV, 2014 WL 631484, at *2–5 (Tex. App.—San Antonio Feb. 19, 2014, pet. denied) (mem. op.); City of McKinney v. Hank's Restaurant Group, L.P., 412 S.W.3d 102, 111– 12 (Tex. App.—Dallas 2013, no pet.). Under Sefzik, Section 37.006(b) contains an express and unambiguous waiver of sovereign immunity only as to a claim seeking a declaratory judgment challenging the validity of a statute. See Sefzik, 355 S.W.3d at 622 & n.3.

Both in the trial court and on appeal, the Law Firm has asserted that Section 37.006(b) waives the District's governmental immunity as to the Law Firm's requests for declaratory relief regarding the construction of a statute. Under the Sefzik precedent, there is no waiver of governmental immunity as to these requests. See Town of Shady Shores v. Swanson, 590 S.W.3d 544, 552–53 (Tex. 2019); Sefzik, 355 S.W.3d at 621; Heinrich, 284 S.W.3d at 369–80.

The Law Firm claims that the Supreme Court of Texas recently changed the scope of the waiver of immunity in Section 37.006(b) in its opinion in State v. Zurawski. See 690 S.W.3d 644, 660–61 (Tex. 2024). We disagree. The Zurawski court reaffirmed that Section 37.006(b) “provides ‘only a limited waiver for challenges to the validity of an ordinance or statute.’ ” Id. at 660 (quoting Swanson, 590 S.W.3d at 552). According to the high court sovereign immunity bars claims for other types of declaratory relief absent a legislative waiver of immunity with respect to the underlying action. See id. at 660–61. The Zurawski court stated that to fall within the waiver of sovereign immunity in Section 37.006(b), a party must allege that the challenged law is invalid because it is unconstitutional, preempted by superior governing law, or barred for some similar reason. See id. at 661. The Zurawski court stated that the DJ Act does not waive immunity as to a declaratory-judgment action seeking guidance about the application of a statute to particular facts. Id. The high court noted that courts often must interpret the law or the challenged statute to determine whether the challenged statute is invalid and the plaintiff is entitled to a declaration to that effect. See id.

2. Do any of the requested Declarations fall within the scope of Section 37.006(b)'s waiver of governmental immunity?

In its “Second Amended Supplemental Petition” the Law Firm asks the trial court to make ten Declarations. Nine of the Declarations address (1) the validity of the Law Firm's agreement with the Andersons, (2) various factual matters regarding the Law Firm and the Andersons, (3) whether the Andersons discharged the Law Firm without good cause, (4) whether the Andersons and the District remain in the interpleader action as necessary parties, or (5) whether the Law Firm complied with all the requirements of Rule 1.14 (a-c) of the Texas Disciplinary Rules of Professional Conduct. None of these requested declarations challenge the validity of an ordinance or statute. The Law Firm argues that this remaining requested declaration constitutes a challenge to the validity of a statute:

(e) That [the District] asserted an impermissible and invalid lien against the settlement funds of the [Andersons], in an amount of $330,057.02 ․ under Chapter 55, Tex. Prop. C., which would have exceeded the remaining settlement proceeds, and then refused to negotiate the lien down. [The Law Firm] seeks a determination that specifically § 55.002(a), Tex. Prop. C. is invalid or construed inapplicable, as applied to [its] claim for this amount against Jalen Anderson. [The Law Firm] seeks no tort liability against ․ any Defendant.

A challenge to the validity of the District's hospital lien is not a challenge to the validity of any statute. Texas Property Code section 55.002(a) provides that “[a] hospital has a lien on a cause of action or claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person” and that “[f]or the lien to attach, the individual must be admitted to a hospital not later than 72 hours after the accident.” Tex. Prop. Code Ann. § 55.002(a) (West, Westlaw through 2025 2d C.S.). This requested declaration is stated in the disjunctive, and one alternative—that section 55.002(a) is construed not to apply—does not constitute a challenge to the validity of any statute.

On appeal the Law Firm states that it “has never challenged the statutory validity of [section 55.002(a) of the Texas Property Code], only the validity of the application of Chapter 55 [of the Texas Property Code] for the entire medical bill being reflected in a lien, at the urging of the Andersons.” The Law Firm also asserts that under Texas Property Code section 55.004(b)(2) the District's hospital lien should have been for $156,750.00 rather than $330,057.02. Powells claims that it is challenging the validity of a statute because Property Code section 55.004(b) “is the superior governing law to § 55.002-§ 55.003 and bars a reliance upon general provisions [in sections 55.002 and 55.003], as an exception to same.” But these assertions by the Law Firm address the construction and application of Property Code section 55.004(b), they do not assert that any part of Property Code chapter 55 is invalid. In context we conclude that this requested declaration addresses the construction and applicability of Property Code section 55.002(a), not its validity. Because none of the Declarations provide that any statute or ordinance is invalid, we conclude that the declaratory-judgment action does not fall within the waiver of governmental immunity in Section 37.006(b). See Tex. Civ. Prac. & Rem. Code Ann. § 37.006(b); Sefzik, 355 S.W.3d 618, 622 & n.3; Fallon v. Univ. of Tex. MD Anderson Cancer Ctr., 586 S.W.3d 37, 56 (Tex. App.—Houston [1st Dist.] 2019, no pet.). The Law Firm does not assert that the Texas Legislature has waived the District's governmental immunity in any other statute or in any legislative resolution. See Brice, 2022 WL 1310876, at *2. Because the Law Firm did not carry its burden of affirmatively demonstrating the trial court's jurisdiction by alleging a valid waiver of the District's governmental immunity, the trial court did not err in granting the District's plea to the jurisdiction as to the declaratory-judgment action against the District, including the request for attorney's fees under the DJ Act. See Whitley, 104 S.W.3d at 542. Therefore, we overrule the Law Firm's first issue and affirm the part of the trial court's order in which it dismisses for lack of subject-matter jurisdiction the declaratory-judgment action as to the District.³

III. Conclusion

When the trial court granted the District's plea to the jurisdiction, there was no actual controversy between the Law Firm and the District as to the interpleader action, including as to whether the Law Firm may obtain attorney's fees from the interpleaded funds. The record shows that the action was moot when the trial court made this ruling. Therefore we affirm the trial court's order dismissing the interpleader action as to the Law Firm and the District. The trial court did not err in granting the District's plea to the jurisdiction as to the declaratory-judgment action against the District, including the request for attorney's fees under the DJ Act. Accordingly, we affirm the trial court's judgment.

FOOTNOTES

1.   We need not and do not address whether the trial court properly dismissed this action based on the District's assertion of governmental immunity.

2.   For ease of reference, all further references to “sovereign immunity” will include both sovereign immunity and governmental immunity. See Reata Const. Corp., 197 S.W.3d at 374 n.1.

3.   We need not address the second, third, fourth, or fifth issues regarding the Law Firm's standing to seek declaratory relief, whether the declaratory judgment action is moot, whether the District may rely on estoppel or judicial estoppel, and whether the attorney general must be made a party to this case.

Randy Wilson, Justice