COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

THE CITY OF EL PASO, TEXAS, §

No. 08-13-00187-CV

Appellant, §

Appeal from the

v. §

County Court at Law No. 3

HIGH RIDGE CONSTRUCTION, 

INC.,

Appellee.

§

§

§

of El Paso County, Texas

(TC# 2011DCV00361)

O P I N I O N

This is an accelerated appeal from an order denying a plea to the jurisdiction filed by the

City of El Paso. See TEX.CIV.PRAC.&REM.CODE ANN. §51.014(a)(8)(West Supp. 2013). We 

reverse in part and affirm in part.

FACTUAL SUMMARY

In 2009, Congress enacted the American Recovery and Reinvestment Act (ARRA) in 

response to the Great Recession. As a result of ARRA, the federal government provided 

increased funding for weatherization services. Those funds were administered by the Texas 

Department of Housing and Community Affairs (TDHCA) though local weatherization grants 

distributed to large cities, councils of government, and community action programs on a onetime basis. In order to receive these funds, the City entered into a contract with TDHCA to 

administer $4,007,592 of ARRA funds through the El Paso Weatherization Assistance Program 
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(EP-WAP). Under the EP-WAP, the City reimbursed TDHCA-approved contractors who 

provided weatherization services, including the installation of energy efficient appliances, in 

qualified low income residential properties.1

On March 23 2010, the City Council passed a resolution authorizing the City Manager to 

execute standard contracts between the City of El Paso and TDHCA-approved contractors to 

perform eligible weatherization energy conservation services on approved residential units 

pursuant to the EP-WAP. The following day, the City entered into a contract with High Ridge 

Construction, Inc. to deliver energy assessment and weatherization emergency conservation 

installment services related to the EP-WAP for eligible residential properties in El Paso. The 

contract expressly provided that the City would not pay High Ridge more than $600,000 for 

services performed under the contract.

The City hired employees to supervise and administer the EP-WAP. Ed Gonzalez served 

as the EP-WAP Project Coordinator and Robert Veliz served as the Lead Project Inspector. In

October 2010, the City became aware that Veliz had issued work orders to High Ridge which 

exceeded the contractual cap of $600,000 and had authorized High Ridge to perform 

weatherization services at the Muñoz Apartments without work orders. The City paid High 

Ridge a total of $1,429,725.72, but it refused to pay an additional $753,869.55 for materials and 

services High Ridge provided to various residential dwellings, including the Muñoz 

Apartments.2 High Ridge filed suit against the City asserting claims for breach of contract and 

an unconstitutional taking of private property. It asserted that the City’s immunity from suit was 

waived pursuant to Section 271.151 of the Texas Local Government Code. It also claimed that 

 

1

 The TDHCA required that priority be given to households with elderly persons, persons with disabilities, 

households with young children under the age of five and households with a high energy burden. 

2

 High Ridge asserts it is owed $662,609 for the materials and services provided to the Muñoz Apartments without 

work orders.
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the City is estopped from denying its contractual obligations because it had accepted the benefits 

of High Ridge’s performance under the contract. The City answered and filed a plea to the 

jurisdiction asserting governmental immunity.

After High Ridge amended its petition, the City filed another plea to the jurisdiction. 

High Ridge subsequently filed its second amended petition which continued to assert its breach 

of contract and unconstitutional takings claims and added a claim of equitable estoppel. In 

response, the City filed a plea to the second amended petition. In this plea, the City challenged 

High Ridge’s pleadings on their face and based on jurisdictional evidence attached to the plea. 

The trial court denied the plea to the jurisdiction.

STANDARD OF REVIEW

A plea to the jurisdiction is a dilatory plea by which a party challenges the court's 

authority to determine the subject matter of the action. Harris County v. Sykes, 136 S.W.3d 635, 

638 (Tex. 2004); Bland Independent School District v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). 

The burden is on the plaintiff to allege facts affirmatively demonstrating that the trial court has 

subject matter jurisdiction. Texas Department of Criminal Justice v. Miller, 51 S.W.3d 583, 587 

(Tex. 2001); City of El Paso v. Mazie’s, L.P., 408 S.W.3d 13, 18 (Tex.App.--El Paso 2012, pet. 

denied). Whether a party has alleged facts that affirmatively demonstrate a trial court’s subject 

matter jurisdiction is a question of law which is subject to de novo review. Texas Department of 

Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004); Mazie’s, 408 S.W.3d at 18. 

Likewise, whether undisputed evidence of jurisdictional facts establishes a trial court’s 

jurisdiction is also a question of law subject to de novo review. Miranda, 133 S.W.3d at 226. In 

some cases, disputed evidence of jurisdictional facts that also implicate the merits of the case 

may require resolution by the finder of fact. Id.
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In a plea to the jurisdiction, a defendant may challenge the plaintiff’s pleadings, the 

existence of jurisdictional facts, or both. Miranda, 133 S.W.3d at 226-27. Here, the City’s plea 

to the jurisdiction is directed both at the pleadings and the existence of jurisdictional facts. 

When examining the pleadings, we construe them liberally in favor of conferring jurisdiction.

See Texas Department of Transportation v. Ramirez, 74 S.W.3d 864, 867 (Tex. 2002). If the 

pleadings do not contain sufficient facts to affirmatively demonstrate the trial court’s jurisdiction 

but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading 

sufficiency and the plaintiffs should be afforded the opportunity to amend. Miranda, 133

S.W.3d at 226-27. On the other hand, if the pleadings affirmatively negate the existence of 

jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an 

opportunity to amend. Id. at 227.

When a plea to the jurisdiction challenges the existence of jurisdictional facts, the 

appellate court considers relevant evidence submitted by the parties when necessary to resolve 

the jurisdictional issues presented. Miranda, 133 S.W.3d at 227. The standard of review for a 

jurisdictional plea based on evidence “generally mirrors that of a summary judgment under 

Texas Rule of Civil Procedure 166a(c).” Miranda, 133 S.W.3d at 228. Under this standard, 

when reviewing a plea in which the pleading requirement has been met, we credit as true all 

evidence favoring the nonmovant and draw all reasonable inferences and resolve any doubts in 

the nonmovant's favor. Id. The movant must assert the absence of subject-matter jurisdiction 

and present conclusive proof that the trial court lacks subject-matter jurisdiction. Id. If the 

movant discharges this burden, the nonmovant must present evidence sufficient to raise a 

material issue of fact regarding jurisdiction, or the plea will be sustained. Id. If the evidence 

creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea 
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to the jurisdiction, and the fact question will be resolved by the fact finder. Id. at 227-28. The 

trial court rules on the plea to the jurisdiction as a matter of law if the relevant jurisdictional 

evidence is undisputed or it fails to raise a fact question on the jurisdictional issue. Id. at 228. 

GOODS OR SERVICES

Issues One and Two are related. In Issue One, the City asserts that it retains its 

governmental immunity from suit for breach of contract because High Ridge has failed to allege 

that the weatherization contract provided goods or services to the City. In its second issue, the 

City argues that it retains its governmental immunity from suit for breach of contract because the 

undisputed jurisdictional evidence negates that High Ridge provided goods or services to the 

City. We will consider Issue Two first because it will unnecessary to examine the sufficiency of 

the pleadings if the jurisdictional evidence negates jurisdiction.

Governmental Immunity

Sovereign immunity protects the State from lawsuits for money damages. Reata 

Construction Corporation v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006); Texas Natural 

Resource Conservation Commission v. IT–Davy, 74 S.W.3d 849, 853 (Tex. 2002). It also 

deprives a trial court of subject-matter jurisdiction. Miranda, 133 S.W.3d at 224. Political 

subdivisions of the state, including cities, are entitled to such immunity—referred to as 

governmental immunity—unless it has been waived. Reata, 197 S.W.3d at 374. 

Governmental immunity has two components: immunity from liability, which bars 

enforcement of a judgment against a governmental entity, and immunity from suit, which bars 

suit against the entity altogether. Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). By 

entering into a contract, a governmental entity necessarily waives immunity from liability, 

voluntarily binding itself like any other party to the terms of agreement, but it does not waive 
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immunity from suit. Tooke, 197 S.W.3d 332. The Supreme Court noted in Tooke that it has 

“consistently deferred to the Legislature to waive sovereign immunity from suit, because this 

allows the Legislature to protect its policymaking function.” Id. To ensure that this legislative 

control is not lightly disturbed, a waiver of immunity must be clear and unambiguous. Id. at 

332-33.

Governmental-Proprietary Dichotomy

The City’s arguments on appeal include an assertion that it is entitled to governmental 

immunity from suit for breach of contract because it was exercising a governmental function 

when it entered into the weatherization contract, namely, community development activities 

authorized under Chapters 373 and 374 of the Local Government Code. See TEX.CIV.PRAC.&

REM.CODE ANN. §101.025(a)(34)(West 2011)(designating as a governmental activity 

“community development or urban renewal activities undertaken by municipalities and 

authorized under Chapters 373 and 374, Local Government Code”). Citing City of San Antonio 

ex rel. City Public Service Board v. Wheelabrator Air Pollution Control, Inc., 381 S.W.3d 597, 

603-04 (Tex.App.--San Antonio 2012, pet. denied), High Ridge responds that the governmentalproprietary dichotomy does not apply to breach of contract claims, and even if it does, the City 

failed to prove that the weatherization contract qualifies as a community development program 

under Section 373.005 of the Local Government Code.

When performing governmental functions, political subdivisions derive governmental 

immunity from the state’s sovereign immunity. City of Houston v. Williams, 353 S.W.3d 128, 

134 (Tex. 2011); City of Galveston v. State, 217 S.W.3d 466, 469 (Tex. 2007). As a home rule 

city, El Paso derives its powers from the Texas Constitution, not the Legislature. See

TEX.CONST. art. XI, § 5; see City of Galveston, 217 S.W.3d at 469. It has “all the powers of the 
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state not inconsistent with the Constitution, the general laws, or the city’s charter.” See City of 

Galveston, 217 S.W.3d at 469, quoting Proctor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998).

Among those powers is immunity from suit for governmental functions. City of Galveston, 217 

S.W.3d at 469. Consequently, the question is not whether any statute grants a home-rule city

immunity from suit, but whether any statute limits its immunity from suit. Id. Such limits exist 

only when a statute speaks with “unmistakable clarity.” Id., quoting Proctor, 972 S.W.2d at 733.

For many years, intermediate appellate courts have applied the governmental-proprietary 

dichotomy to breach of contract claims asserted against municipalities. See City of Georgetown 

v. Lower Colorado River Authority, 413 S.W.3d 803, 810-11 & n.4 (Tex.App.--Austin 2013, pet. 

filed). The Eighth Court of Appeals is among those courts. See Williams v. City of Midland, 932 

S.W.2d 679, 683-84 (Tex.App.--El Paso 1996, no writ). The Texas Supreme Court called this 

approach into question in Tooke v. City of Mexia, when it observed that “we have never held that 

this same distinction determines whether immunity from suit is waived for breach of contract 

claims . . . .” 197 S.W.3d 325, 343 (Tex. 2006); see City of Georgetown, 413 S.W.3d at 810. 

The Supreme Court did not finally decide the issue in Tooke because the case involved a 

governmental function; consequently, even assuming the dichotomy applied, the municipality 

had governmental immunity. City of Georgetown, 413 S.W.3d at 810. After Tooke, some 

intermediate appellate courts have assumed without deciding that the dichotomy applies to 

contract claims. See e.g., East Houston Estate Apartments, L.L.C. v. City of Houston, 294 

S.W.3d 723, 731 (Tex.App.--Houston [1st Dist.] 2009, no pet.); City of Emory v. Lusk, 278 

S.W.3d 77, 83 (Tex.App.--Tyler 2009, no pet.); City of Houston v. Petroleum Traders 

Corporation, 261 S.W.3d 350, 355-56 (Tex.App.--Houston [14th Dist.] 2008, no pet.); City of 

Weslaco v. Borne, 210 S.W.3d 782, 791-92 (Tex.App.--Corpus Christi 2006, pet. denied).
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The San Antonio Court of Appeals reached a different conclusion in the context of a 

common law quantum meruit claim. Wheelabrator, 381 S.W.3d at 603-04. The court rejected 

Wheelabrator’s attempt to “import the proprietary/governmental distinction from the Texas Tort 

Claims Act into this quasi-contractual context.” Id. The court found it significant that when the 

Legislature enacted Chapter 271 in 2005 it “could have incorporated the 

proprietary/governmental distinction into the statutory waiver scheme for contract claims” but it 

did not do so. Id, at 603. Further, it interpreted Tooke as holding that sovereign immunity is the 

“default” rule for municipalities with respect to all types of claims. Tooke, 197 S.W.3d at 331-

32. Thus, the court of appeals held that the City Public Service Board was immune from suit on 

the quantum meruit claim. Wheelabrator, 381 S.W.3d at 605. The Austin Court of Appeals 

disagreed with Wheelabrator in City of Georgetown, 413 S.W.3d at 811-13, but the Amarillo 

Court of Appeals followed Wheelabrator in Republic Power Partners, L.P. v. City of Lubbock, 

424 S.W.3d 184 (Tex.App.--Amarillo 2014, no pet. h.).

Like the Austin Court of Appeals in City of Georgetown, we are reluctant to overrule our 

own precedent unless and until the Texas Supreme Court addresses whether the governmentalproprietary dichotomy applies to a breach of contract claim asserted against a municipality. See 

City of Georgetown, 413 S.W.3d at 811. At the same time, we recognize that we must begin our 

analysis with the presumption that the City is immune from suit for breach of contract. See City 

of Galveston, 217 S.W.3d at 469. High Ridge had the burden in the trial court to show that the 

City’s immunity from suit has been limited. Significantly, High Ridge never asserted in its 

pleadings that the City was not entitled to immunity because it was engaged in a proprietary 

function. To the contrary, High Ridge has taken the position that the governmental-proprietary 

dichotomy is completely inapplicable. Further, High Ridge did not allege any jurisdictional facts 
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that demonstrate its claims arose from proprietary functions. See Weir Brothers, Inc. v. 

Longview Economic Development Corporation, 373 S.W.3d 841, 846 (Tex.App.--Dallas 2012,

no pet.); City of Weslaco, 210 S.W.3d at 791 (“[T]he burden in this case was on appellees to 

overcome immunity to suit by alleging jurisdictional facts to demonstrate that their claims 

against appellants arose from proprietary functions.”). Consequently, we begin with the 

presumption that the City is immune from suit. See City of Galveston, 217 S.W.3d at 469.

3

 The 

only issue before us is whether that immunity is waived under Section 271.152 of the Local 

Government Code.

Waiver of Immunity -- Section 271.152

Section 271.152 waives qualifying local governmental entities’ immunity from suit for 

certain breach of contract claims. City of Houston v. Williams, 353 S.W.3d 128, 134 (Tex. 

2011). It 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.LOCAL GOV’T CODE ANN. §271.152 (West 2005).

The Supreme Court has held that the statute, when applicable, waives a governmental 

entity’s immunity from suit for breach of written contract by clear and unambiguous language. 

Williams, 353 S.W.3d at 134. Three elements must be established in order for Section 271.152’s 

waiver of immunity to apply: (1) the party against whom the waiver is asserted must be a “local 

 

3

 Even if the governmental-proprietary dichotomy applies in this case, the City established it was engaged in 

community development activities under Section 373.005(b)(2) of the Local Government Code. See TEX.LOCAL 

GOV’T CODE ANN. § 373.005(b)(2)(West 2005)(providing that a community development program may include 

acquisition, construction, reconstruction, or installation of public works, facilities, sites, or other improvements, 

including construction, reconstruction, or installation that implements design features or makes improvements that 

promote energy or water use efficiency); East Houston Estate Apartments L.L.C. v. City of Houston, 294 S.W.3d 

723, 733 (Tex.App.--Houston [1st Dist.] 2009, no pet.). The TDHCA contract requires the City to administer the 

EP-WAP pursuant to the Texas Weatherization Program regulations codified in Title 10 of the Texas Administrative 

Code. As noted by the City in its reply brief, Title 10 is named “Community Development.”
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governmental entity” as defined by Section 271.151(3); (2) the entity must be authorized by 

statute or the Constitution to enter into contracts; and (3) the entity must in fact have entered into 

a contract that is “subject to this subchapter” as defined by Section 271.151 and 271.152 of the 

Local Government Code. Williams, 353 S.W.3d at 134-35; see El Paso Education Initiative, Inc. 

v. Amex Properties, LLC, 385 S.W.3d 701, 706 (Tex.App.--El Paso 2012, pet. denied). Section 

271.151(2)(A) defines the phrase “contract subject to this subchapter” as “a written contract 

stating the essential terms of the agreement for providing goods or services to the local 

governmental entity that is properly executed on behalf of the local governmental entity.” 

TEX.LOCAL GOV’T CODE ANN. §271.151(2)(A) (West Supp. 2013).

The Supreme Court held in City of Houston v. Williams that Section 271.151(2)(A)

effectively states five elements a contract must meet in order for it to be a contract subject to 

Section 271.152’s waiver of immunity: (1) the contract must be in writing, (2) state the essential 

terms of the agreement, (3) provide for goods or services, (4) to the local governmental entity, 

and (5) be executed on behalf of the local governmental entity. Willliams, 353 S.W.3d at 135. 

Chapter 271 does not define the term “services” as it is used in Section 271.152 even though the 

Legislature has defined it in other contexts. Kirby Lake Development, Ltd. v. Clear Lake City 

Water Authority, 320 S.W.3d 829, 839 (Tex. 2010). Absent a definition, the term is broad 

enough to encompass a wide array of activities. Id., citing Van Zandt v. Fort Worth Press, 359 

S.W.2d 893, 895 (Tex. 1962)(stating that the term “services” has a rather broad and general 

meaning and it includes generally any act performed for the benefit of another under some 

arrangement or agreement whereby such act was to have been performed). The services 

provided need not be the primary purpose of the agreement, Kirby Lake, 320 S.W.3d at 839, but 

the benefit that the local governmental entity would receive must be direct and unattenuated. See 
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Berkman v. City of Keene, 311 S.W.3d 523, 527 (Tex.App.--Waco 2009, pet. denied)(“[T]he 

statute does not apply to contracts ‘in which the benefit that the [local governmental entity]

would receive is an indirect, attenuated one.’”).

The Jurisdictional Evidence

The City asserts, as it did in the trial court, that the undisputed jurisdictional evidence 

negates that High Ridge provided goods or services to the City as required by Section 

271.151(2)(A) because the evidence shows that the City merely acted as a conduit of federal

funds and did not receive any direct benefit from High Ridge under the weatherization contract. 

It relies primarily on East Houston Estate Apartments, LLC v. City of Houston, 294 S.W.3d 723 

(Tex.App.--Houston [1st Dist.] 2009, no pet.) in support of its argument.

In East Houston, the city entered into a loan agreement “to provide funding to a private 

entity, East Houston, for the purpose of rehabilitating an apartment complex to provide very lowincome and low-income housing . . . .” East Houston, 294 S.W.3d at 733. Under this 

agreement, the city agreed to disburse federal funds to East Houston subject to certain terms and 

conditions as part of an inter-creditor agreement for the financing of the federal government 

community development program. Id. at 735. The city argued that the loan agreement did not 

require East Houston to provide anything that could be construed as a service to the city, but East 

Houston claimed that it was effectively providing low-income housing as a service to the city. 

Id. at 733. The First Court of Appeals observed that the city would benefit in a general way from 

having the apartment units refurbished and from the availability of additional housing for lowincome families, but nothing in the contract obligated East Houston to provide any municipal 

service directly to the city. East Houston, 294 S.W.3d at 736. The central purpose of the 

agreement was to facilitate a loan of money from the city’s portion of federal funds and from 
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private funds to a private entity, East Houston, for the purpose of renovating East Houston’s 

empty apartment building. Id. Given that the city was a conduit of federal funds and a facilitator 

of the project but no services were directly provided to the city, the First Court of Appeals 

concluded that this is not the type of “service” contemplated by Section 271.152. Id.

High Ridge maintains that East Houston is distinguishable because the City received a 

direct benefit from the warranty and indemnity provisions contained in the weatherization 

contract. The weatherization contract provides that the City engaged the services of High Ridge 

“to deliver, on behalf of the City, energy assessment and weatherization emergency conservation 

installment services related to the City’s Weatherization Program for eligible residential 

properties in the City of El Paso.” [Emphasis added]. It is undisputed that the weatherization 

services were provided exclusively to private residential properties. We recognize that the entire 

community of El Paso generally benefitted from the increased energy efficiency in the residential 

units which received services as a result of the EP-WAP, but this is an indirect result of the 

contract. No courts have construed Section 271.152 as permitting a waiver of a local 

governmental entity’s immunity from suit when it generally and indirectly benefits from the 

contract. To the contrary, courts construing the statute have required that the benefit be direct 

and not attenuated. We agree with the City that the weatherization services provided by High 

Ridge to private residential properties did not provide a direct benefit to the City, and therefore, 

they are not the type of service contemplated by Section 271.152. See East Houston, 294 

S.W.3d at 736 (“It is clear that, while the City would benefit in a general way from having East 

Houston's apartment units refurbished and from the availability of more housing for low-income 

families, nothing in the contract obligated East Houston to provide any municipal service directly 

to the City.”). That does not end our inquiry, however, because the weatherization contract also 
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required High Ridge to provide a one year warranty to the client and to the City for all

weatherization work completed. Further, High Ridge is required by the weatherization contract 

to indemnify and defend the City from any causes of action and claims arising out of High 

Ridge’s activities under the contract. The warranty and indemnity provisions certainly operate as 

a direct benefit to the City. We conclude that the weatherization contract contemplates the 

provision of services directly to the City. See Kirby Lake, 320 S.W.3d at 839 (agreement 

between residential developers and city water control and improvement district authority entailed 

the provision of goods or services under Section 271.152 where developers agreed to construct, 

develop, lease, and bear all risk of loss or damage to water and sewer facilities). Issue Two is 

overruled.

High Ridge’s Pleadings

We turn now to the sufficiency of High Ridge’s pleadings. The only question presented 

by Issue One is whether High Ridge alleged that the weatherization the contract provided for 

goods or services to be provided to the City. High Ridge alleged generally in its second 

amended petition that the City did in fact enter into a contract subject to Chapter 271” and the 

pleadings specifically reference Section 271.152, but it did not allege that the contract 

contemplated that goods or services would be provided to the City.

Citing El Paso Education Initiative, Inc. v. Amex Properties, LLC, 385 S.W.3d 701, 706 

(Tex.App.--El Paso 2012, pet. denied), High Ridge asserts that it is only required to generally 

allege that the City entered into a contract subject to Chapter 271 and it is not required to allege 

any of the five elements set forth in Section 271.152. Our decision in El Paso Education 

Initiative does not support High Ridge’s argument regarding the sufficiency of its pleadings 

because the issue in the cited case was whether the jurisdictional evidence showed a waiver of 
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immunity. El Paso Education Initiative, 385 S.W.3d at 705-06. We conclude that High Ridge’s 

pleadings fail to state a waiver of immunity under Section 271.152 because they do not allege 

that the weatherization contract provided for goods or services to be provided to the City. Issue 

One is sustained.

CONTRACTUAL AMENDMENT

Issues Three and Four pertain to the City’s argument that High Ridge’s breach of contract 

claim is based on purported amendments of the weatherization contract. In Issue Three, the City 

contends that its immunity is not waived because High Ridge failed to allege that the purported 

amendments to the weatherization contract were in writing and properly executed on behalf of 

the City. Under Section 271.151(2)(A), the contract must be in writing and it must have been 

property executed on behalf of the local governmental entity. See TEX.LOCAL GOV’T CODE ANN.

§ 271.151(2)(A).

High Ridge alleged in its second amended petition that it entered into the weatherization 

contract with the City and agreed to perform the work requested by the City. It specifically 

alleged in paragraphs 9 and 10 of the second amended petition that:

9. Pursuant to the agreement, Plaintiff began work on the Project. Payments 

were issued by the City in the following manner. The City would request that 

Plaintiff begin work on certain identified residential properties. Plaintiff would 

begin, and often complete, the majority of the work/services that were requested 

by the City. After much of the work/services were completed, the City would 

issue a work order to Plaintiff that identified minor additional items of work to be 

completed by Plaintiff on the residential properties. As Plaintiff completed these 

additional items of work, the City would issue payment to Plaintiff for the

goods/work/services that were provided by Plaintiff.

10. The contract provides that its term is from April 26, 2010, until August 31, 

2011. The contract also provides that the City would pay Plaintiff the total sum of 

$600,000 for services performed by Plaintiff on the Project. However, it became

clear that the City intended and expected Plaintiff to perform additional

work/services on the Project, and pursuant to the contract. Accordingly, the total

payments paid to Plaintiff by the City in connection with the Project, and pursuant
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to the contract, equal $1,275,856.72. Accordingly, the parties’ course of dealing 

and course of conduct on the Project acknowledged that the City would pay 

Plaintiff amounts in addition to the $600,000 price originally stated in the contract 

for the Project. Alternatively, the City has waived any alleged limitation in the 

contract concerning amounts that can be paid to Plaintiff under the contract.

Under these pleadings, High Ridge admits that it was issued work orders and received payment 

for the $600,000 in weatherization services it provided under the weatherization contract. 

Further, High Ridge admits it has been paid $1,275,856.72 in connection with the contract. The 

pleadings reflect that High Ridge is suing the City for payment on additional weatherization 

services performed under the weatherization contract.

The City does not assert that the written weatherization contract itself was not properly 

executed. It instead takes issue with High Ridge’s failure to allege that the parties entered into a 

properly executed contract amendment to “increase the contractual cap from $600,000 to nearly 

$2,000,000.00.” High Ridge specifically alleges that it performed additional work or services on 

the weatherization project under the contract through additional work orders issued by Robert 

Veliz and Ed Gonzalez. The City characterizes the pleadings as alleging that these additional 

work orders were de facto contract amendments that increased High Ridge’s contract. The City 

argues that these allegations are legally insufficient to state a breach of contract claim under 

Section 271.152 because High Ridge does not allege that it received a written contract 

amendment that was properly executed by the City. Thus, the City maintains that its immunity 

for this particular breach of contract claim has not been waived.

Section 271.153 permits a plaintiff who has brought a breach of contract action against a 

local governmental entity to be awarded (1) the balance due and owed by the local governmental 

entity under the contract as it may have been amended, including any amount owed as 

compensation for the increased cost to perform the work as a direct result of owner-caused 
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delays or acceleration; and (2) the amount owed for change orders or additional work the 

contractor is directed to perform by a local governmental entity in connection with the contract. 

See TEX.LOCAL GOV’T CODE ANN. § 271.153(a)(West Supp. 2013)(Emphasis added). We 

understand High Ridge to allege that the City has failed to pay it for additional work it was 

directed to perform by the City. The pertinent statutes do not require that this additional work be 

supported by a written contract amendment and the City has not cited any controlling case 

authority. Furthermore, we do not read High Ridge’s pleadings as necessarily alleging that the 

additional work orders were de facto contract amendments.

High Ridge has alleged that the City is a “local government entity” under the statute and 

we have determined that the jurisdictional evidence shows that the City properly executed a 

written contract with High Ridge for providing goods or services to the City. It is undisputed 

that the weatherization contract states the “essential terms of the agreement” between the City 

and High Ridge. Further, High Ridge is seeking to adjudicate its claim for breach of the 

contract. Therefore, the contract at issue is a “contract subject to this subchapter” under Section 

271.151(2), and the City, by entering into the contract has waived its governmental immunity to 

suit. See TEX.LOCAL GOV’T CODE ANN. § 271.152; City of Mesquite v. PKG Contracting, Inc., 

263 S.W.3d 444, 447 (Tex.App.--Dallas 2008, pet. denied)(rejecting the city’s argument that 

governmental immunity is waived only for claims of breach of the essential, written terms of an 

agreement, not for implied duties; once the trial court determines that the contract falls within the 

provisions of Section 271.152, it need not parse further the pleadings or the contract to determine 

whether the legislature has waived immunity for breach of contract claims). The City’s 

argument that High Ridge cannot maintain its breach of contract claim for damages in excess of 

the $600,000 contractual cap unless there is a properly executed written amendment is in reality 
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an argument that the contract claim will fail on the merits. Such a claim does not deprive the 

trial court of jurisdiction to hear the claim. See Roma Independent School District v. Ewing 

Construction Company, No. 04-12-00035-CV, 2012 WL 3025927, at *3 (Tex.App.--San Antonio 

July 25, 2012, pet. denied)(memo op.)(an argument that the breach of contract claim will fail 

does not deprive the trial court of jurisdiction to hear the contract claim); see also City of North 

Richland Hills v. Home Town Urban Partners, Ltd., 340 S.W.3d 900, 905 (Tex.App.--Fort 

Worth 2011, no pet.)(court of appeals rejected city’s argument that the trial court lacked subject 

matter jurisdiction over a breach of contract claim because the plaintiff’s alleged damages did 

not fall within those available under Chapter 271; Chapter 271 is not a basis for a governmental 

entity to claim that the trial court lacks jurisdiction). Issue Three is overruled.

Jurisdictional Evidence

In Issue Four, the City contends that it retains its immunity from suit for the breach of 

contract claim because the undisputed jurisdictional evidence negates High Ridge’s allegations 

that it performed services under the EP-WAP pursuant to a properly executed contract. As noted 

in our discussion of Issue Three, High Ridge alleged that it performed additional work under the 

weatherization contract pursuant to work orders issued by Robert Veliz and Ed Gonzalez. The 

City is correct that the contract provides that it could be amended at any time by mutual 

agreement of the parties, and it could only be amended by written instrument duly executed on 

behalf of the City and High Ridge. The City offered evidence that the City Manager is the only 

person who could enter into contracts with contractors under the EP-WAP. Further, there is 

evidence that Mr. Veliz did not have authority to issue work orders. Thus, the City reasons that 

the jurisdictional evidence “negates High Ridge’s jurisdictional allegation that its weatherization 
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contract was amended through a written instrument that was properly executed on behalf of the 

City.”

High Ridge did not allege that the weatherization contract had been amended. Its second 

amended petition instead alleges that it performed additional work under the contract pursuant to 

work orders issued by Mr. Veliz and Mr. Gonzalez. The City’s argument that High Ridge cannot 

maintain its breach of contract claim unless there is a written contract amendment is in reality an 

argument that the contract claim will fail on the merits. Such a claim does not deprive the trial 

court of jurisdiction to hear the claim. See Roma Independent School District, 2012 WL 

3025927, at *3; see also City of North Richland Hills, 340 S.W.3d at 905. Accordingly, we 

overrule Issue Four.

UNCONSTITUTIONAL TAKINGS CLAIM

In its fifth issue, the City asserts that it retains its immunity from suit for High Ridge’s 

claim that the City unconstitutionally took its property because High Ridge failed to allege that 

the City intended to exercise its eminent domain powers to take High Ridge’s private property. 

High Ridge responds that its second amended petition contains the necessary allegations required 

to state a claim for an unconstitutional taking.

Article I, Section 17 of the Texas Constitution provides that: “No person’s property shall 

be taken, damaged, or destroyed for or applied to public use without adequate compensation 

being made, unless by the consent of such person . . . .” TEX.CONST. art. I, § 17. This provision, 

like the Fifth Amendment to the United States Constitution, applies not only to traditional 

takings claims, but also to inverse condemnation claims, in which a property owner alleges that 

the government has usurped the use and value of his or her property, even if it has not 

completely appropriated title. Kirby Lake Development, Ltd. v. Clear Lake City Water Authority, 
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320 S.W.3d 829, 844 (Tex. 2010).

A takings claim consists of three elements: (1) an intentional act by the government 

under its lawful authority, (2) resulting in a taking, damaging, or destruction of the plaintiff’s 

property, (3) for public use. General Services Com’n v. Little-Tex Insulation Company, Inc., 39 

S.W.3d 591, 598 (Tex. 2001); Mazie’s, 408 S.W.3d at 19; City of El Paso v. Ramirez, 349 

S.W.3d 181, 186 (Tex.App.--El Paso 2011, no pet.). The City does not have immunity from a 

valid takings claim. Mazie’s, 408 S.W.3d at 18, citing Little-Tex Insulation Company, 39 S.W.3d 

at 598. If, however, the plaintiff fails to allege a valid takings claim, the City retains its 

immunity from suit. Mazie’s, 408 S.W.3d at 19, citing Little–Tex Insulation, 39 S.W.3d at 598.

The Supreme Court stated in Kirby Lake that when a private party contracts with the 

government, generally “the State does not have the requisite intent under constitutional-takings 

jurisprudence when it withholds property or money from an entity in a contract dispute.” Kirby 

Lake, 320 S.W.3d at 844, quoting Little-Tex Insulation Company, 39 S.W.3d at 598-99. In that 

situation, “the State is acting within a color of right under the contract and not under its eminent 

domain powers.” Id., quoting Little-Tex Insulation Company, 39 S.W.3d at 599. 

High Ridge alleged in its second amended pleading that the City has intentionally taken 

and obtained the benefit of the materials and work which High Ridge provided to the properties 

described in the pleadings, the property has been taken for a public use, and the City has refused 

to provide it with just compensation for the property. High Ridge expressly incorporated the 

portion of its pleadings related to its claim for breach of contract. The pleadings demonstrate 

that High Ridge voluntarily provided the property and services pursuant to the contract under the 

EP-WAP and the City has withheld payment under a contractual dispute. Thus, the pleadings 

affirmatively show that the City did not have the requisite intent to take High Ridge’s property
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under its eminent domain powers. See Kirby Lake, 320 S.W.3d at 844; Little-Tex Insulation 

Company, 39 S.W.3d at 599 (state university’s withholding of additional payments to building 

contractor, which submitted claim for expenses allegedly not contemplated by original contract, 

did not give rise to an action by contractor for compensation under takings clause of the Texas

Constitution; since university was acting under colorable contractual rights, it did not have 

requisite intent to take contractor’s labor and materials under any eminent domain powers); State 

v. Steck Co., 236 S.W.2d 866, 869 (Tex.Civ.App.--Austin 1951, writ ref’d)(where plaintiff 

entered into a contract with the state for the printing of cigarette tax stamps, and plaintiff 

voluntarily manufactured the stamps and delivered them to the state, but the state refused to pay 

the plaintiff for the stamps because the state had not followed competitive bid procedures when it 

award the contract to the plaintiff; held that the plaintiff could not maintain a takings claim 

against the state for its refusal to pay the plaintiff for the stamps due to because the state was not 

exercising its power of eminent domain). Consequently, the City retains its immunity from suit 

for this claim. Issue Five is sustained. 

ESTOPPEL

Issues Six and Seven address High Ridge’s assertion of estoppel. In Issue Six, the City

maintains that its immunity from suit for High Ridge’s equitable estoppel claim has not been 

waived because High Ridge’s pleadings do not support application of the limited “justice 

requires” exception. The City argues in Issue Seven that the undisputed jurisdictional evidence 

negates application of the “justice requires” exception to the City’s immunity from the equitable 

estoppel claim.

It has long been the rule in Texas that a city cannot be estopped from exercising its 

governmental functions. City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770, 773 
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(Tex. 2006), citing City of Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex. 1970)(city not 

estopped from enforcing zoning restrictions) and Rolison v. Puckett, 145 Tex. 366, 198 S.W.2d 

74, 77 (1946)(city not estopped from collecting taxes); City of San Angelo v. Deutsch, 126 Tex. 

532, 91 S.W.2d 308-09 (1936)(city not estopped from asserting a tax lien). The Supreme Court 

explained in Super Wash that the bases for the rule are that the interest of the individual must at 

times yield to the public interest, and the responsibility for public policy must rest on decisions 

officially authorized by the government’s representatives, rather than on mistakes committed by 

its agents. Super Wash, 198 S.W.3d at 773. A municipality may be estopped, however, in those 

cases where justice requires its application and there is no interference with the exercise of its 

governmental functions. Id., citing City of Hutchins, 450 S.W.2d at 836. This exception has 

been found to apply where the municipal officials affirmatively misled the party seeking to estop 

the municipality and the misleading statements resulted in the permanent loss of claims against 

the municipality. See Roberts v. Haltom City, 543 S.W.2d 75, 80 (Tex. 1976)(holding that a city 

could be estopped from enforcing a law against a party that required a party bring suit against the 

city to file a notice of claim within thirty days of injury where there is evidence that city officials 

may have affirmatively misled the party seeking to estop the city and that the misleading 

statements resulted in the permanent loss of the party’s claims against the city). Evidence

showing city officials acted deliberately to induce a party to act in a way that benefitted the city 

but prejudiced the party weighs in favor of applying the exception. Super Wash, 198 S.W.3d at 

775, citing e.g., City of Austin v. Garza, 124 S.W.3d 867, 875 (Tex.App.--Austin 2003, no 

pet.)(where city received a direct donation of land in exchange for land subject to an erroneous 

plat note, the city could be estopped from later denying the validity of the plat note).
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High Ridge responds that it is not required to plead or offer evidence pertaining to the 

justice requires exception, and further, the City’s argument cannot be raised or considered in a 

plea to the jurisdiction. High Ridge sued the City for breach of contract based on the City’s 

refusal to pay High Ridge for work performed under work orders issued by Robert Veliz and Ed 

Gonzalez. The City has taken the position that the work was extra-contractual because it is in 

excess of the contractual cap of $600,000 and neither Veliz nor Gonzalez had the authority to 

issue work orders beyond the contractual cap or to amend the contract. High Ridge alleges in its 

second amended petition that the City should be estopped from denying the authority of Robert 

Veliz and Ed Gonzalez in providing work orders to High Ridge pursuant to the weatherization 

contract. Thus, High Ridge is not seeking to estop the City from exercising a governmental 

function. Compare Super Wash, 198 S.W.3d 770 (where car wash owner brought action against 

city to challenge the validity and enforceability of a zoning ordinance which placed conditions 

on the use of the owner’s property, and alternatively, argued that city should be estopped from 

enforcing the ordinance, the car wash owner was required to establish that justice required 

estoppel and estoppel would not interfere with the city’s exercise of a governmental function). 

High Ridge is instead seeking to foreclose a defensive issue raised by the City in response to 

High Ridge’s breach of contract claim. The City does not cite and we have not found any cases 

holding that a plaintiff must establish the justice requires exception in these circumstances. 

Issues Six and Seven are overruled.

OPPORTUNITY TO REPLEAD

In Issue Eight, the City asserts that High Ridge should not be afforded an opportunity to 

amend its pleadings because it is impossible for High Ridge to cure the pleading deficiencies 

identified in the City’s plea to the jurisdiction and raised on appeal. The Supreme Court held in 
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Miranda that if the pleadings do not contain sufficient facts to affirmatively demonstrate the trial 

court’s jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the 

issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to 

amend. Miranda, 133 S.W.3d at 226-27; see City of El Paso v. Collins, --- S.W.3d ----, 2013 

WL 6665090, at *6 (Tex.App.--El Paso 2013, no pet.). We sustained Issue One, but have 

concluded that the pleadings do not affirmatively establish that there are incurable defects in 

jurisdiction. Thus, High Ridge must be given an opportunity to amend its pleadings with respect 

to the breach of contract claim. We sustained Issue Five and concluded that the pleadings and 

jurisdictional evidence affirmatively demonstrate that the City retains its immunity from suit for 

the unconstitutional takings claim. In these circumstances, dismissal of the unconstitutional 

takings claim is appropriate. Issue Eight is therefore sustained in part and overruled in part.

Having sustained Issue One, but having overruled Issue Eight in part, we reverse the trial 

court’s order denying the plea to the jurisdiction as it applies to High Ridge’s breach of contract 

claim and remand the cause to the trial court to allow High Ridge an opportunity to amend their 

pleadings to cure the jurisdictional defects identified in the opinion. Having sustained Issue 

Five, but having sustained Issue Eight in part, we reverse the trial court’s order denying the plea 

to the jurisdiction as it applies to High Ridge’s unconstitutional takings claim and render 

judgment dismissing that claim. Having overruled the remaining issues, we affirm the trial 

court’s order denying the plea to the jurisdiction as it applies to High Ridge’s estoppel claim.

July 31, 2014

YVONNE T. RODRIGUEZ, Justice

Before Rodriguez, J., Barajas, C.J., and Chew, C.J. (Senior Judges)

Chew, C.J. (Senior Judge), sitting by assignment (concurring opinion), joined by Barajas, C.J. 

(Senior Judge), sitting by assignment