Harris County Flood Control District v. Great American Ins. Co. (pdf)
(Tex.App. - Houston [14th Dist.] Feb. 25, 2010)(Hedges) (plea to the jurisdiction governmental immunity, prompt
payment act, quantum meruit)
Appellant, Harris County Flood Control District, appeals from the denial of its plea to the
jurisdiction on the claims of appellee, Great American Insurance Company, for quantum
meruit and attorney’s fees. Because we conclude that appellant has not waived its
immunity relative to those claims, we reverse and dismiss in part, affirm in part, and
remand.
Having sustained appellant’s issues, we reverse the trial court’s denial of appellant’s
Plea to the Jurisdiction on appellee’s quantum meruit and attorney’s fees claims and
render judgment dismissing those causes of action. We remand this case to the trial
court for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED & REMANDED IN PART: Opinion by Chief Justice Hedges
Before Chief Justice Hedges, Justices Seymore and Senior Justice Margaret Mirabal
14-09-00571-CV Harris County Flood Control District v. Great American Insurance Company
Appeal from 157th District Court of Harris County
Trial Court Judge: Randy Wilson
Dissenting Opinion by Justice Mirabal in Harris County Flood Control Dist. v. Great American Ins. Co.
(pdf) (re immunity from liability and attorneys fees)
MAJORITY OPINION
Appellant, Harris County Flood Control District, appeals from the denial of its plea to the jurisdiction on the
claims of appellee, Great American Insurance Company, for quantum meruit and attorney’s fees. Because we
conclude that appellant has not waived its immunity relative to those claims, we reverse and dismiss in part,
affirm in part, and remand.
Factual and Procedural Background
In July 2002, appellant entered into a contract for the excavation of flood control improvements designed to
relieve flooding in the Deer Park area of Harris County with Handex Construction Services, Inc. (“Handex”). The
project required the excavation and removal of 1,253,500 cubic yards of material from the project site at a cost
of $4,632,808.67.
In June 2002, appellee issued the performance bond as surety for the Handex contract. The bond provided
that if Handex abandoned the project or otherwise failed to comply with the conditions of the contract, then
appellee had the right to complete the project in conformity with the terms and conditions of the original contract.
At a point in time after it began performing the contract, Handex filed bankruptcy in the United States District
Court for the Middle District of Florida and on March 16, 2006, it abandoned the contract. Appellee then
assumed the obligations under the contract in late March 2006. On April 24, 2006, appellant issued a new
purchase order for the project and designated appellee as the completing contractor for the project.
Appellant issued a certificate of substantial completion on May 8, 2007, which was approved by the Harris
County Commissioner’s Court on May 15, 2007. Conflict arose over the amount due appellee, and when the
dispute could not be resolved, appellee initiated this lawsuit. In addition to breach of contract, appellee asserted
an alternative quantum meruit claim and also sought attorney’s fees. Appellant filed a plea to the jurisdiction
and motion for partial summary judgment (“Plea to the Jurisdiction”), in which it asserted the trial court lacked
subject matter jurisdiction only as to appellee’s quantum meruit and attorney’s fees claims. When the trial court
denied appellant’s Plea to the Jurisdiction, this accelerated interlocutory appeal followed.
Discussion
In this appeal, appellant raises two issues challenging the trial court’s denial of its Plea to the Jurisdiction. The
first issue addresses appellee’s quantum meruit cause of action, the second, appellee’s attorney’s fees claim.
In both issues, appellant contends the trial court erred when it denied appellant’s Plea to the Jurisdiction,
arguing that the Texas legislature has not waived appellant’s immunity from suit.[1]
I. The Applicable Law and the Standard of Review
Government immunity has two components: immunity from liability and immunity from suit. Tooke v. City of
Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Immunity from suit bars suit against the entity altogether. Id.
Immunity from liability bars enforcement of a judgment against a political subdivision of the State. Id. A
governmental entity waives immunity from liability by entering into a contract and voluntarily binding itself to the
terms of the agreement. Id. Even if a governmental entity acknowledges liability on a claim, immunity from suit
bars a remedy until the Legislature consents to suit. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Political
Subdivisions Prop./Casualty Joint Self-Insurance Fund, 212 S.W.3d 320, 324 (Tex. 2006). To ensure legislative
control that immunity is not lightly disturbed, that waiver must be clear and unambiguous. Id. at 327 (quoting
Tex. Gov’t Code Ann. § 311.034 (Vernon 2005)).
A plea to the jurisdiction based on government immunity challenges the trial court’s subject matter jurisdiction.
State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007). Whether a trial court has subject matter jurisdiction is a
question of law. Id. Therefore, we review a challenge to the trial court’s subject matter jurisdiction de novo. Id.
In performing this review, an appellate court does not look to the merits of the case, but considers only the
pleadings and evidence relevant to the jurisdictional inquiry. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.
3d 217, 226 (Tex. 2004).
II. Quantum Meruit
In its first issue, appellant argues the trial court erred in denying its Plea to the Jurisdiction because it is
immune from suit on appellee’s quantum meruit claim. In response, appellee asserts section 271.152 of the
Local Government Code waived appellant’s immunity from suit on its quantum meruit cause of action.
We have previously addressed this issue. In City of Houston v. Petroleum Traders Corp., we held that while
section 271.152 waived governmental immunity for breach of contract causes of action, it does not apply to
quantum meruit claims. City of Houston v. Petroleum Traders Corp., 261 S.W.3d 350, 359–60 (Tex. App.—
Houston [14th Dist.] 2008, rule 53.7(f) motion granted) (citing City of Houston v. Swinerton Builders, Inc., 233 S.
W.3d 4, 12–13 (Tex. App.—Houston [1st Dist.] 2007, no pet.)). Accordingly we sustain appellant’s first issue on
appeal.
III. Attorney’s Fees
In its second issue, appellant challenges the trial court’s denial of its Plea to the Jurisdiction on appellee’s
attorney’s fees claim. In response, appellee argues appellant’s immunity from suit has been waived by two
statutes: (1) sections 271.152[2] and 271.153(a)(3)[3] of the Local Government Code; and (2) section 2251.043
of the Texas Government Code (“Prompt Pay Act”).[4] We address each statute in turn.
A. Local Government Code
Appellee contends it is entitled to an award of its reasonable and necessary attorney’s fees because, in 2009,
the Legislature added section 271.153(a)(3) to the Local Government Code and repealed section 271.159.[5]
We conclude appellee’s reliance on the 2009 addition of section 271.153(a)(3) and repeal of section 271.159 is
misplaced.
Prior to the 2009 legislative session, section 271.153 of the Local Government Code did not mention attorney’s
fees. However, section 271.159 permitted the prevailing party to recover its reasonable and necessary attorney’
s fees if a written agreement authorized their recovery and specifically referenced section 271.159. During the
2009 legislative session, section 271.153(a) was amended to add that a plaintiff could recover reasonable and
necessary attorney’s fees that are equitable and just. Act of May 31, 2009, 81st Leg., R.S., ch. 1266, § 8, 2009
Tex. Gen. Laws 4006, 4007. In addition, section 271.159 was repealed. Act of May 31, 2009, 81st Leg., R.S.,
ch. 1266, § 16, 2009 Tex. Gen. Laws 4006, 4008. However, the amendment to section 271.153(a) took effect
on June 19, 2009 and only applies to contracts executed after that date. Tex. Loc. Gov’t Code Ann. § 271.153
(Vernon Supp. 2009). Because the contracts at issue here were executed long before June 19, 2009, the
amended section 271.153(a)(3) does not apply. Instead, the repealed section 271.159 still controls the issue of
attorney’s fees in this case. See id. (“A claim that arises under a contract executed before the effective date of
this Act is governed by the law as it existed immediately before the effective date of this Act, and that law is
continued in effect for that purpose.”). Because it is undisputed that the contracts at issue do not provide for
recovery of the prevailing party’s attorney’s fees, section 271.159 does not waive appellant’s immunity from suit
as to attorney’s fees.
B. Prompt Pay Act
Appellee’s reliance on section 2251.043 of the Prompt Pay Act is similarly misplaced. The Dallas Court of
Appeals recently addressed this issue and determined that the Prompt Pay Act does not waive immunity from
suit for attorney’s fees. McMahon Contracting, L.P. v. City of Carrolton, 277 S.W.3d 458, 465 (Tex. App.—
Dallas 2009, pet. denied). As part of its analysis, the Dallas Court of Appeals distinguished State v. Mid-South
Pavers, Inc., 246 S.W.3d 711 (Tex. App.—Austin 2007, no pet.), the case appellee cites in support of its
contention appellant’s immunity from suit has been waived, because it involved a suit against the Texas
Department of Transportation “pursuant to a written contract and under authority of specific provisions of the
transportation code providing for resolution of a ‘claim arising under a contract.’” McMahon Contracting, 277 S.
W.3d at 466. We agree with the Dallas Court of Appeals’ analysis and hold that section 2251.043 does not
provide a clear and unambiguous waiver of appellant’s immunity from suit for appellee’s attorney’s fee claim.
We sustain appellant’s second issue.
Conclusion
Having sustained appellant’s issues, we reverse the trial court’s denial of appellant’s Plea to the Jurisdiction
on appellee’s quantum meruit and attorney’s fees claims and render judgment dismissing those causes of
action. We remand this case to the trial court for further proceedings consistent with this opinion.
/s/ Adele Hedges
Chief Justice
Panel consists of Chief Justice Hedges and Justices Seymore and Senior Justice Mirabal.[6](Mirabal, J.
dissenting.)
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[1] In its response brief, appellee argues this court does not have jurisdiction to hear this interlocutory appeal
because appellant did not assert governmental immunity as a bar to the entire case. Appellee cites two cases in
support of this argument: Speer v. Stover, 685 S.W.2d 22, 23 (Tex. 1985) and City of Cleburne v. Trussell, 10 S.
W.3d 407, 410 (Tex. App.—Waco 2000, no pet.). These cases stand for the proposition that “the granting of a
plea to the jurisdiction on the basis that some of the damages pled are not recoverable would be erroneous.”
City of Cleburne, 10 S.W.3d at 410 (emphasis in original). However, this line of cases has been overruled by
the Texas Supreme Court in Thomas v. Long, 207 S.W.3d 334, 339 (Tex. 2006). In Thomas, the Texas
Supreme Court held “[a] trial court is not required to deny an otherwise meritorious plea to the jurisdiction or
motion for summary judgment based on a jurisdictional challenge concerning some claims because the trial
court has jurisdiction over other claims.” Id. To be entitled to an interlocutory appeal, all section 51.014(a)(8) of
the Civil Practice & Remedies Code requires is the denial of a jurisdictional challenge. Id. at 340. We conclude
that we have jurisdiction to hear this appeal.
[2] Local Government Code, section 271.152 provides:
A local governmental entity that is authorized by statute or the constitution to enter into a contract and that
enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of
adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter.
Tex. Loc. Gov’t Code Ann. § 271.152 (Vernon 2005).
[3] Local Government Code section 271.153(a)(3), as cited by appellee, provides: “The total amount of money
awarded in an adjudication brought against a local governmental entity for breach of a contract subject to this
subchapter is limited to the following: (3) reasonable and necessary attorney’s fees that are equitable and just.”
Tex. Loc. Gov’t Code Ann. § 271.153(a)(3) (Vernon Supp. 2009).
[4] Section 2251.043 of the Government Code provides: “In a formal administrative or judicial action to collect an
invoice payment or interest due under this chapter, the opposing party, which may be the governmental entity or
the vendor, shall pay the reasonable attorney fees of the prevailing party.” Tex. Gov’t Code Ann. § 2251.043
(Vernon 2008).
[5] Local Government Code section 271.159 provides:
Attorney’s fees incurred by a local governmental entity or any other party in the adjudication of a claim by or
against a local governmental entity shall not be awarded to any party in the adjudication unless the local
governmental entity has entered into a written agreement that expressly authorizes the prevailing party in the
adjudication to recover its reasonable and necessary attorney’s fees by specific reference to this section.
Tex. Loc. Gov’t Code Ann. § 271.159 (Vernon 2005 ).
[6] Senior Justice Margaret Garner Mirabal sitting by assignment.