Texas Judiciary Online - HTML Opinion

^{^[1]} See Tex. Const. art. XVI,=20 ' 59; Act of Apr. 18, 1963, 58th Leg., = R.S., ch.=20 101, 1963 Tex. Gen. Laws 164, 173;=20 Tex. Water Code Ann. chs. 49, 51 (Vernon 2000 & Supp.=20 2007).

^{^[2]} We refer to the water = distribution lines,=20 sanitary sewer lines, and drainage facilities collectively as the=20 AFacilities.@

^{^[3]} Original emphasis = omitted.

^{^[4]} Often, courts use the terms = Asovereign immunity@ and Agovernmental immunity@ interchangeably; nevertheless, they are = two=20 distinct concepts. Wichita Falls State Hosp. v. = Taylor, 106=20 S.W.3d 692, 694 n.3 (Tex. 2003). ASovereign immunity@ refers to a State=3Ds immunity from suit and = liability. =20 Id. Its protection extends not only to the State, but = also to=20 the varying divisions of state government, including agencies, = boards,=20 hospitals, and universities. AGovernmental immunity@ protects political subdivisions of the = State,=20 including counties, cities, and school districts. =20 Id.

^{^[5]} Section 49.184 of the Water Code = refers to=20 approval of bonds by the Attorney General and the registration of=20 bonds. See Tex. Water=20 Code Ann. ' 49.184 = (Vernon=20 Supp.=20 2007).

^{^[6]} Likewise, the portion of a 2003 = case from=20 this court indicating that the Legislature has waived the=20 Authority=3Ds immunity from suit is no longer good = law after=20 Tooke. See Clear Lake City Water Auth. v. Kirby = Lake=20 Development, Ltd., 123 S.W.3d 735, 750B51 (Tex. App.CHouston [14th Dist.] 2003, pet.=20 denied).

^{^[7]} See Valley Mun. Utility Dist. = No. 2 v.=20 Rancho Viejo, Inc., No. 13-07-545-CV, 2008 WL 384320, at=20 *2B4 (Tex. App.CCorpus Christi Feb. 14, 2008, no pet. = h.) (mem.=20 op.); Boyer, Inc. v. Trinity River Auth. of Tex., No. = 2-07-052-CV,=20 CS.W.3dC,C, 2008 WL 163560, at *3 (Tex. = App.CFort Worth Jan. 17, 2008, no pet. h.); = Bexar=20 Metro. Water Dist., 220 S.W.3d at 29B32.

^{^[8]} We use this example only as an=20 illustration. We recognize that the Legislature enacted = section=20 271.152 six years after it enacted the second sentence in section=20 49.066(a).

^{^[9]} Friendswood Development asserts = that the=20 Legislature included water districts in the definition of a = Alocal governmental entity@ in section 271.152 to reemphasize its = prior=20 intent to waive immunity from suit that the courts allegedly have=20 ignored. However, this argument is inconsistent with the = language of=20 section 271.152, in which the Legislature does not waive immunity = from=20 suit as to all claims against water districts (as some allege was = the=20 intent in the first sentence of section 49.066(a)) and the = Legislature=20 does not waive immunity from all suits on board-approved, written=20 contracts (as some allege was the intent in the second sentence of = section=20 49.066(a)).

^{^[10]} Friendswood Development asserts = that, in=20 section 49.066, the Legislature does impose objective limitations = on the=20 State=3Ds potential liability because it = requires=20 board-approved written contracts, prevents private parties from = contesting=20 the matters stated in section 49.066(d), and relieves the = Authority from=20 having to post bonds or deposit amounts beyond the amount of the = award in=20 eminent domain proceedings. However, the fourth aid looks to = objective limitations imposed on the governmental = entity=3Ds liability on the claims for which = immunity=20 allegedly has been waived. Precluding certain types of suits = does=20 not fit in this category. Waiving any bond requirement does = limit=20 the governmental entity=3Ds potential litigation expenses; = however,=20 governmental entities are often exempted from such ancillary = expenses,=20 regardless of whether immunity has been waived. In addition, = such a=20 waiver does not limit the governmental entity=3Ds exposure as to the claims for which = the=20 Legislature allegedly waived immunity. Furthermore, limiting = the=20 amount the governmental entity has to deposit when it is = condemning land=20 in an eminent-domain proceeding is not a limitation on the amount = of any=20 claims against the governmental entity.

^{^[11]} Friendswood Development asserts = that this=20 court should give significance to the fact that the Legislature = used=20 Asue and be sued@ language at a time when the Texas = Supreme Court=20 had held that this language waived immunity from suit. = However, the=20 Tooke court gave this fact no significance; therefore, we = give this=20 fact no significance. See Tooke, 197 S.W.3d at=20 333B42; Bexar Metro. Water Dist., 220 = S.W.3d at=20 30.

^{^[12]} This section = applies to=20 claims that arise before its effective date of September 1,=20 2005:

only if sovereign = immunity=20 has not been waived with respect to the claim before the effective = date of=20 this Act. A claim that arises under a contract executed before the = effective date of this Act and with respect to which sovereign = immunity=20 has been waived is governed by the law in effect on the date the = contract=20 was executed, and the former law is continued in effect for that=20 purpose.

Act of May 23, = 2005, 79th=20 Leg., R.S., ch. 604, ' 2, 2005 Tex. Gen. = Laws 1548,=20 1549.

^{^[13]} The Authority also asserts that, = because=20 Friendswood Development alleges the Authority breached the = Agreement only=20 in regard to the potential sale of the Facilities, the other parts = of the=20 Agreement are not relevant to the issue of whether section 271.152 = waives=20 the Authority=3Ds immunity in this case. However, = under the=20 unambiguous language of section 271.152, if the Agreement is = Aa written contract stating the essential = terms of=20 the agreement for providing goods or services to the local = governmental=20 entity that is properly executed on behalf of the local = governmental=20 entity,@ then the Authority Awaives sovereign immunity to suit for = the purpose=20 of adjudicating a claim for breach of the contract, subject to the = terms=20 and conditions of this subchapter.@ Tex. Loc. = Gov=3Dt Code = ' 271.152. Under this statutory = regime, once=20 the prerequisites for waiver of immunity are shown to be = satisfied, all=20 claims for breach of the contract in question are subject to the=20 Legislature=3Ds waiver of immunity. See = Tex. Loc. = Gov=3Dt Code = ' 271.151, et seq. In = addition, in=20 Ben Bolt, the Texas Supreme Court concluded that the = Legislature=20 had waived immunity under this statute even though the court = concluded=20 that the part of the contract on which the plaintiff based its = claim did=20 not involve the provisions of good or services to the local = governmental=20 entity. See Ben BoltBPalito Blanco Consol. Indep. Sch. Dist. = v. Texas=20 Political Subdivisions Property/Casualty Joint Self-Insurance=20 Fund, 212 S.W.3d 320, = 327 (Tex.=20 2006) (stating that, for there to be a waiver of immunity under = section=20 271.152, the suit must be for breach of Aa written contract stating the essential = terms of=20 the agreement for providing goods or services to the local = governmental=20 entity that is properly executed on behalf of the local = governmental=20 entity@).

^{^[14]} In response to = Friendswood=3Ds motion for rehearing on appeal, the = Authority=20 asserts, among other things, that immunity has not been waived = under=20 section 271.152 because no amount is Adue and owed@ by the Authority under the Agreement = within the=20 meaning of section 271.153(a)(1). See Tex. Loc. = Gov=3Dt Code = Ann. ' 271.153(a)(1). Presuming, without = deciding,=20 that Friendswood had to plead damages satisfying the requirements = of=20 section 271.153(a) to fall within the waiver of immunity in = section=20 271.152 and liberally construing Friendswood=3Ds petition (as to which the Authority = did not=20 specially except), Friendswood pleaded that its contract damages = fall=20 within the scope of section 271.153. However, in its plea to = the=20 jurisdiction and supplement thereto the Authority did not assert = that=20 governmental immunity applied based on Friendswood=3Ds failure to satisfy section = 271.153(a)(1). See=20 Austin Indep. Sch. Dist. v. Lowery, 212 S.W.3d 827, 834 (Tex.=20 App.CAustin 2006, pet. denied) (holding that, = in=20 interlocutory appeal of denial of plea to jurisdiction, appellate = review=20 is limited to the grounds asserted in the plea that the trial = court=20 denied); accord Brenham Housing Auth. v. Davies, 158 S.W.3d = 53, 61=20 (Tex. App.CHouston [14th Dist.] 2005, no = pet.). =20 Furthermore, the Authority did not challenge, either with argument = or=20 evidence in its plea, Friendswood=3Ds allegation that its claim satisfies = section=20 271.153. See Tex. Dept. of Parks & Wildlife v. = Miranda,=20 133 S.W.3d 217, 221 (Tex. 2004). In addition, the Authority = did not=20 argue section 271.153(a)(1) in its opening brief on appeal.=20

^{^[15]} Friendswood Development cites = several cases=20 involving construction contracts for real property. See = City of=20 Mesquite v. PKG Contracting, Inc., 148 S.W.3d 209 (Tex.=20 App.CDallas 2004) (involving construction of = a storm=20 drainage system), rev=3Dd,=20 197 S.W.3d 388, 388B89 (Tex. 2006) (reversing and remanding = to the=20 trial court so that plaintiff could have opportunity to argue in = the trial=20 court that the Legislature waived city=3Ds immunity from suit in the recently = enacted=20 section 271.152); City of Carrollton v. McMahon = Contracting,=20 L.P., 134 S.W.3d 925 (Tex. App.CDallas 2004) (involving street repairs), = rev=3Dd, 197=20 S.W.3d 387 (Tex. 2006) (reversing and remanding to the trial court = so that=20 plaintiff could have opportunity to argue in the trial court that = the=20 Legislature waived city=3Ds immunity from suit in the recently = enacted=20 section 271.152); Satterfield & Pontikes Constr., Inc. v. = Irving=20 Indep. Sch. Dist., 123 S.W.3d 63 (Tex. App.CDallas 2003) (involving construction of = new school=20 building), rev=3Dd,=20 197 S.W.3d 390, 391 (Tex. 2006) (reversing and remanding to = the trial=20 court so that plaintiff could have opportunity to argue in the = trial court=20 that the Legislature waived city=3Ds immunity from suit in the recently = enacted=20 section 271.152). These cases are not on point because, in = all of=20 these cases, the courts of appeals did not address section = 271.152, and=20 the Texas Supreme Court only remanded to the trial court so that = the=20 plaintiff could have the opportunity to make an argument = under the=20 recently enacted section 271.152.

^{^[16]} We have found no case from the = Fourteenth=20 Court of Appeals construing this statutory language. = Friendswood=20 Development cites City of Houston v. Clear Channel Outdoor, = Inc.;=20 however, that case is not on point. See 233 S.W.3d = 441, 447=20 (Tex. App.CHouston [14th Dist.] 2007, no = pet.). The=20 only issue decided in that case was that the trial court did not = err in=20 denying the City of Houston=3Ds plea, in which the City asserted that = there was=20 no waiver of immunity because the contract was not Aproperly executed on behalf of the [City = of=20 Houston]@ under Local Government Code section = 271.151(2). See=20 id. at 442B43, 445B47. The City of Houston = court did not=20 address the meaning or application of the language requiring that = there be=20 Aa written contract stating the essential = terms of=20 the agreement for providing goods or services to the local = governmental=20 entity.@ See Tex. Loc. = Gov=3Dt Code = ' 271.151(2); City of Houston, 233 = S.W.3d at=20 445B47.

^{^[17]} The Ben Bolt court stated = that the=20 fund acknowledged that its members elected its governing board, = without=20 addressing whether any references to these election services were=20 contained in the insurance policy. Indeed, the dissenting = justices=20 stated that the record in Ben Bolt did not contain the = insurance=20 policy. See id. at 327, 328B29 (Willett, J., dissenting). =

^{^[18]} The Bill Analysis for Section = 271.152=20 states that the bill in question clarifies and re-expresses the=20 Legislature=3Ds intent Athat all local governmental entities = that are=20 given the statutory authority to enter into contracts shall not be = immune=20 from suits arising from those contracts, subject to the = limitations set=20 forth in [the bill].@ House=20 Comm. on Civil Practices, Bill Analysis, Tex. H.B. 2039, = 79th Leg.=20 R.S. (2005) (emphasis added). Although the Ben Bolt = court=20 quoted this sentence from the Bill Analysis without including the = final=20 clause (emphasized above), the court clearly stated that this = statutory=20 waiver of immunity only applied to written contracts Astating the essential terms of the = agreement for=20 providing goods or services to the local governmental = entity.@ See Ben Bolt, 212 S.W.3d at = 327. =20 Therefore, the quotation of the Bill Analysis does not appear to = provide=20 an additional reason as to why the Ben Bolt court concluded = the=20 contract fell within the scope of the statute.

^{^[19]} See also Tex. Loc. = Gov=3Dt Code = '' 271.151(2), 271.152; Tooke, 197 = S.W.3d at=20 342, 346 (stating that section 271.152 is a limited waiver of = immunity=20 from suit for breach of contract under certain circumstances and = that it=20 is a more measured approach that waives immunity as to certain = contract=20 claims).

^{^[20]} Relying on the Bexar = Metropolitan=20 case from the Fourth Court of Appeals, the Authority asserts = that=20 section 271.152 does not waive immunity for real-estate sales = contracts=20 and that the Agreement is a real-estate sales contract. = See Bexar=20 Metro. Water Dist., 220 S.W.3d at 32 (stating the waiver of = immunity=20 from suit in section 271.152 does not waive a water = district=3Ds immunity for breaching a real-estate = sales=20 contract). If the Agreement dealt only with the potential = sale of=20 the Facilities by Friendswood Development to the Authority, we = would agree=20 with this argument. However, we also must take into account = the=20 other parts of the Agreement. Likewise, the Rancho = Viejo=20 court based its holding on the utility district=3Ds failure to properly execute the = contact, which=20 was an easement agreement that was materially different from the = Agreement=20 at issue in this case. See Rancho Viejo, Inc., 2008 WL = 384320, at=20 *4.

^{^[21]} The Authority also asserts that = the=20 Agreement cannot be a construction contract because the parties do = not=20 describe the construction project with specificity and the = Agreement was=20 not publicly bid, as required by the Texas Water Code. = See=20 Tex. Water Code = Ann.=20 '' 49.271B49.273 (Vernon 2000). Presuming, = without=20 deciding, that these statutes apply and prevent the Agreement from = being a=20 construction contract, that would not prevent the Agreement from = being=20 Aa written contract stating the essential = terms of=20 the agreement for providing goods or services to the local = governmental=20 entity that is properly executed on behalf of the local = governmental=20 entity.@ See Tex. Loc. = Gov=3Dt Code = '' 271.151, 271.152. =

^{^[22]} The Authority argues that, under = the=20 Agreement, Friendswood Development is not obligated to construct = anything=20 for the Authority; rather, the construction referred to in the = Agreement=20 is to be performed by third-party contractors. Although the=20 Agreement requires Friendswood Development to hire third-party=20 contractors, the relevant statute does not require that the = provision of=20 goods or services to the local governmental unit be performed by = employees=20 rather than independent contractors. See Tex. Loc. = Gov=3Dt Code = '' 271.151, 271.152. Such a narrow = construction of=20 the statute would be inconsistent with its plain meaning and the = Texas=20 Supreme Court=3Ds broad construction of the = statute. =20 See Tex. Loc.=20 Gov=3Dt Code = '' 271.151, 271.152; Ben Bolt, 212 = S.W.3d at=20 326B27.

^{^[23]} The trial court struck the = affidavit of=20 William Schweinle, the Authority=3Ds general counsel. On appeal, the = Authority=20 asserts the trial court abused its discretion in doing so. = However,=20 presuming without deciding that the trial court erred in striking = this=20 affidavit, this error would not affect our conclusion that the = trial court=20 properly denied the Authority=3Ds plea to the jurisdiction. =20 Schweinle=3Ds affidavit is replete with parol = evidence and=20 conclusory statements. Even if Friendswood Development had = not=20 objected to the affidavit and even if the trial court had not = stricken the=20 affidavit, these statements would be incompetent and amount to no=20 evidence. See Coastal Transport Co. v. Crown Cent. = Petroleum=20 Corp., 136 S.W.3d 227, 232 (Tex. 2004); City of Mission v.=20 Popplewell, 294 S.W.2d 712, 717 (Tex. 1956). Even considering = all of=20 the testimony in this affidavit, we still would reach the same = conclusion=20 based on section 271.152 and the Ben Bolt decision. = Because=20 consideration of this affidavit would not materially affect our = analysis=20 and disposition in this case, we need not and do not address the = issue of=20 whether the trial court erred in striking the Schweinle=20 = affidavit.