### NUM BER 13-07- 640- CV 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS C O R P U S C H R IS T I - 

## EDI NBURG
TE XAS D EPA RT M ENTOF A pp ellan t, TR A NSP ORTA

TION
v . A LLA N A . CROCKETT A ND GULF COAST C ONT RA CT ORS , INC
. A pp ellees .

On ap pe al f rom th e 1 07t h Dist rict C ou rt of C amero n Co un ty , T exas 

## OP I N I ON B efo re J u st ic es Y añ ez , R o d rig u ez , a n d V el a

Op in io n b y

J u st ic e Ve la Appel lan t, the Tex as Dep artment of Tr anspo rt ati on (“ Tx DO T”) , appeals f ro m the deni al of its pl ea to the jur is dic ti on reg ar ding a c o u n te rclaim filed by appel lee s, Al lan A. Crockett an d Gulf

Coast Cont ractors, Inc. (collectiv ely “Crockett”). W e reverse and rend er,2

dis mis s C ro ck ett’ s c ountercl aim for l ack of j ur is dic ti on. I. B A CK GRO UND T x DOT f iled suit against Crocket t for conversion beca use T x DOT inadvertent ly paid $149,36 2.23 to ap pel lee , G ulf C oastC ontract ors, Inc ., ins tead of pay in g thatamount to Gul f Coas t Landsc ape Serv ic es, Inc., a di ff er ent a nd unrela ted c ompany
. Tx DO T int ended that tw o c h e ck s be remit ted t o Gul f Coas t Lan dsc ape Se rv ic es, Inc ., the c ompany that per formed l andsc api ng serv ic es in q uest ion f or T x DO T. Crock ett filed an a nsw er deny ing li a b il it y. Crocket t also f iled a cou nte rclaim stat ing that T x DOT consiste ntly und erpa id Crock ett for i ts mow ing se rv ic es and t hat t he par ti es h a d e n tered i nto a se ri es of forty
sev en c ontract s o v er

the las t s ix

y ears. Altho ugh the coun terclaim doe s not spe cif y the exact c laim Crocket t ma kes, it
a p pears to be a loo sel y ple aded cl aim for br each of c ontract

. Crock ett als o soug ht a “d ecl ar ati on from t he c our t t hat i t had been consist entl y under pai d for it s s er

v ic es” and
a sk e d t h e courtto “render a proper

co nst ru cti on of the amounts to be pai d under the cont racts bet w een the pa rties and require T x DOT to rend er a prope r accoun ting.” By a pl e a to the j ur is dic ti on, Tx DO T urg ed th at t he c ountercl aim shoul d be dism issed for lack of

jurisdiction, asse rting tha t it retain ed its sovereig n imm unity becau se Crock ett’ s count er cl aim w as not g er mane to, conne cte d w it h and proper ly defensi ve to Tx DO T’s conv ersi on s uit

. Tx DO T als o urg ed th at C ro ck ett had notex haust ed i ts admini strati v e r emedy

to pursue the a lle g ed unde rp ay ments throug h s ect ion 201. 112 of the Tex as Trans por

tati on Cod e. See T EX
. T R ANSP
. C OD E A NN . § 201.112 ( Ver non Su pp. 200 7).3 II. S TAND ARD OF R EVI EW Sov er eig n i mmunity , enc ompass ing both i mmunit y f rom sui t and i mmunity from liability , prote cts political sub divi sions of this state f rom l a wsu it s f or mo ney dam ages; sov e re ign i mmunity

from s uitdepr iv es a tr ial co urt of su bje ct matter j ur is dic ti on. Rea ta Con str

. Cor p. v. City of D all

as , 197 S.W .3d 371 , 374 (Tex. 2006 ). W e revi ew a trial court’s ruling on a plea to the jurisdiction base d on im mu nity f rom suit und er a d e novo stan dard of rev iew

. Tex. D ep’

t of Par ks & W ildli fe v. Mi ra nda ,133 S.W .3d 2 17, 2 26 ( Tex . 200 4) ; Tex. Natura l Res. Conservat ion Comm ’

n v. IT-Davy , 74 S.W .3d 8 49, 8 55 ( T e x. 2 0 02)

. A g ov er nmental ag ency , such as Tx DO T, is enti tl ed to so v er eig n i mmunity unl ess i mmunity has been w aiv ed. R eata , 197 S.W .3d a t 374

. As a g ener al ru le, co urts hav e deferred to the L eg is lat ur e to w aiv e s ov er eig n i mmunity

. Id . at375. In Tex as, the cour ts hav e made exception s to imm unity from suit w hen the waiv er com port s wi t h t h e un derlyi ng policy
conc er ns ass oci ated w it h s ov er eig n i mmunity

. Id. at 37 5- 76. III

. W AI VE R OF I MMUN I TY A. Subs tanti v e Law 1. W aiver und er Rea ta T x DOT urges that it did no t w aive i ts imm unity w ith respe ct to Crockett ’s count er cl aim becau se the c ounter cl aim does not meetthe re q uirements for w aiv er set fort h in Rea ta. In Rea ta , t he Tex as Supr eme C our t i ter ated that w hen a g ov er nmental enti ty fi l es a l aw suit f or da ma g es a g ai ns t a pr i v at e pa rty , i t i s n oti mmu ne from s ui t for c l ai ms ag ain st itthatar e “ g er mane to, co nnect ed w it h, an d proper ly defensi v e to” cl aims thatthe enti ty as ser ts, ex ceptfor t he amount s th a t e x ceed the a mounts nec ess ar y to offsetthe4

g ov er nmental enti ty ’s cl aim. Id . at376- 77. In Rea ta , t he c our t ex pla ine d tha t w hen: the g ov er nmental enti ty i nter jec ts it sel f into or

ch ooses to eng ag e i n l it ig ati on to assert af

f irmative claims fo r mo net ary dam ages, the entity w ill presu ma bly hav e made a d eci si on to ex pend resources to pay l it ig ati on c ost s. If the oppos ing par

ty ’s cl aims ca n o p e ra te on ly as an o ffsetto re duce the go ve rn m e n t ’s re c o ve ry, n o t a x re s o u rc e s wi l l b e c a ll e d u p o n t o p a y a jud g ment, and t he fis cal pl anni ng of the g ov er nmental enti ty s houl d notbe dis ru pted. Ther efore, a det er minat ion that a g ov er nmental enti ty ’s i mmunity f rom s u it d o e s n ot extend to a situa tion where the entity has f iled suit is c o n s is t e n twit h t h e p o li c y is s u e s in vo lve d wit h im m u n it y. In t h is si t u a t io n , we bel iev e that it w oul d be fundamentall y unfair to al low a g ov er nmental enti ty to asse rtaf

firmat iv e clai ms aga ins t a par ty w hil e clai ming it had immunity as to t he par

ty ’s cl aims ag ain st it

. Id . at375- 76. In ad dit i o n , h o w e v e r , a n d v e r y i mp o rt a n t t o o u r a n a l y si s h er e, t he R eata court restricted th e w aiver to on ly those claims tha t have a nexus w ith the g overnme nta l entity’s cl aim. Id

. a t3 7 7

. T h e d e c is io n t o f il e su it fo r d a m a ge s “e n c o m p a s s e d a d e c is io n t o le a ve it s sphere of i mmunity from sui t for cl aims ag ain st itw hic h ar e g er mane to, co nnect ed w it h and prope rly

def ensive to claims th e cityasserts.” Id

. A g ov er nmental enti ty r etai ns immuni ty f ro m s uitas to thos e c lai ms for monetar y damag es that ar e notg er mane to,
conne cte d w it h and pr oper ly defensi v e to the e nti ty ’s cl aim. City of Ir vi ng v . Infor mC onst r. , Inc ., 201 S. W .3d 6 93, 6 94 ( Tex . 200 6) ; City of A ngleton v. US Fi lter Oper ati ng Ser vs ., Inc ., 201 S. W .3d 6 77, 6 78 ( Tex . 200 6)

. By li miti ng the w aiv er to cl aims thatar e r ela ted t o the
sov er eig n’s cl aim, pol ic y dec is ion s reg ar din g g ov er nment s pendi ng r emain int act

. The ter m “ g er mane” has been defined as “c los ely akin, ” “ bei ng at once re lev ant a nd app ropriate ,” “cl osely or significan tly related ,” “relevant , ” an d “pertine nt.” See Sweeney Com m . Hosp. v. Mendez , 226 S. W .3d 5 84, 5 92 ( Tex . Ap p.–H oust on [1 st Di st. ] 200 7, no p e t. ) (ci ti n g M ERR I AM -W EBST ER ’ S C O LLEGI AT E D I C T I O N A R Y 525 (11th e d. 20 03)).5

Add itiona lly , the t erm “conn ecte d” m ean s “un ited, jo ined o r linked ” an d “joined togethe r in sequen ce; l inked cohe rently” and “havi ng parts or elem ent s logi cally linked togeth er.” Id. (ci ti n g M ERR I AM -W EBST ER ’ S C OLLEGI AT E D I C T I O N A R Y 525 (11th e d. 20 03); RA N D O M H OU SE W EBST ER ’ S U NA B RI DGE D D I C T I O N A R Y 800 ( 2d ed. 2001) ). Me ndez sugg ests th at th e term “p ro per ly defensi v e” w as not i ntended to “rest ri ct jur is dic ti on for the t y pe of c la im rai sed, but, ra ther

to re str ic t j ur is dic ti on ov er the amount o f a cl aim for damag es ag ain st the g ov er nmental enti ty to the a mount t hat t he g ov er nment ac tual ly r ecov ers." Id. at 59 3- 94. Si nce Rea ta , several of our sister courts have ana ly z ed w hat it me ans for a claim to be g er mane to, co nnect e d wit h and proper ly defensi v e. In State v . Lan gle y , t he Lang ley s a ss erted a co unter cl aim that the S tate had c ontract ed w it h t h e m f o r re loc ati on ex pense s i n r espon se to an emi nent domain act ion filed by the g ov er nmental enti ty

. 232 S.W .3d 3 63, 367 (Tex . App.–Ty ler 2007, no pet.) . The Ty ler co urt of appeal s i ter ated that the Lang ley s’ re loc ati on, mis re pr esent ati on, and br each of c ontract cl aims w er e not g er mane to, co nnect ed w it h, an d proper ly def ensi v e to the eminentdomai n c lai ms made by the Stat e. Id . According to the Tyler court, th e c o u n t erclaim issue s w ere tot ally separate from the eminen t domai n c lai ms. Id

. On th e oth er han d, in M uenster Hosp. D is t. v. Car

ter , t he F o rt W orth c our

t of appeal s h eld thatthe doct ors’ r etal iat or y di sc harg e c lai ms wer e g er mane to, co nnect ed
w i t h a n d p r o p e r l y d e fe n s i v e t o t h e h o s p i t a l ’ s b r e a c h o f c o n t r a c t c l a i m. 2 1 6 S

. W

. 3d 500, 501 ( Tex . Ap p.–F ort W orth 2 0 0 7 , n o p e t.)

. The Car ter panel opi ned t hat i f the hos pit al dis tr i c t e n g a g e d i n r e t a l i a t o r y d i s c h a rg e , t h a t fa c t w a s g e r ma n e t o , c o n n e c t e d w i t h and pr oper ly defensi v e to the p hy si ci an’ s all eg ed f ail ur e to maint ain f ull ti me medi cal pr act ic es6

at t he hos pit al. Id

. a t 505

. Lik ew is e, i n Me ndez , the court he ld tha t a physician’s count er cl aims f o r to rtio us int er ferenc e, de famation a nd retal iat ion w er e g er mane to,
conne cte d w it h and pr oper ly defensi v e to the hospi tal ’s cl aim of breach of an empl oy ment cont ract. 226 S.W .3d at 586 . Th e cou rt said tha t altho ugh the elem ent s of the claim differed, the c or e facts w er e the same—dete rmi nin g w hether the hospi tal and the p hy si ci an met th eir

obl ig ati ons under

the cont ra ct wa s n e ce ssar y to both the h ospi tal and the phy si ci an’ s c lai ms. Id . at593. 2. Elem ent s of

the Claim and Count erclaim Here, C ro ck ett’ s c ounter cl aim is for a ll eg edl y bei ng underpai d on forty se v en cont racts. Th e elem ent s of a breach o f

c o n t ra c t action are: (1) the existence of a v alid cont ra ct; ( 2) per

formance or t e n d er ed per formance by

the pla int iff; (3) br each by the defendant; and ( 4) damag es sus tai ned by the pla int iff as a re sul t of the br each. South we ll
v. University of Incarnat e W ord , 974 S.W .2d 3 51, 3 54- 55 ( Tex . Ap p.–San Ant oni o 1998, pet . den ied). T he claim of conversion w as base d on Crocket t’s reten tion of tw o che cks in Janua ry 2002, one for $26,025.59 and one f or $123,336.64, check s i nadv ertentl y pai d to Crock ett for w or k d one bya different company

. The ele ments of conv ersi on ar e: (1 ) the pla int iff ow ned, had leg al poss ess ion of , or w as enti tl ed to posses si on of the proper

ty ; ( 2) the d efendan t a ss u m e d and ex er ci sed domini on and cont ro l ov er the proper

ty i n an unla wf ul and una uth oriz ed m ann er, to th e exclusion of and inconsiste nt w ith the plaintif f 's ri gh t s ; a n d (3 ) th e d e fe n d a n t re f u s e d t h e p la in t if f ' s d e m a n d fo r th e re t u rn o f t h e p ro p e rt y. Huf fm eyer v. M ann , 49 S.W .3d 5 54, 5 58 ( Tex . Ap p.–C or pus Chr is ti 2001, no p et.)

. Crockett do es no t claim th at it did not cash the checks in q uest ion, n or doe s it claim oth er available def ense s to a con v ersion clai m , s uch a s q ualif ied good -faith ref usal or a7

super ior ti tl e or righ t to t he funds. See Stein v. Mau ricio , 5 8 0 S

. W

. 2 d 8 2 , 8 3 (T e x. App.–S an Ant oni o 1979, no w ri t) ; Endur o Oi l Co. v. Pari

sh & El li son , 834 S.W .2d 5 47, 5 49 (Te x . App .–Hou ston [14t h Dist.] 199 2, w rit den ied). Rathe r, the claims arise f rom d istinct condu ct at di ff er ent t imes and under v er y diff er ent ci rc umstan ces
. The tw o clai ms are not
re lat ed. Addi ti onal ly , t he c ountercl aim w as not g er mane or co nnect ed becau se itembr aced ent irely dif feren t elem ent s f rom the conv ersion claim and sought recov ery for claims tot ally
un r el at ed t o th e al l eg ed c on v er te d c he c k s
. Th e c ou nt er c l ai m d oe s no t ar i s e fr om th e s am e tr ansac ti on or oc cur re nce that is the subj ectmatte r of TxD OT’s cl aim. See T EX
. R. C IV
. P. 97( a)

. The onl y

co mmon thr ead i s t hat b oth c lai ms inv olv e lan dsc ape ser v ic es. The facts
conc er nin g the all eg ed c onv ersi on of tw o c heck s i n 2002 ar e notr ela ted t o the pur por ted under pay ment of l andsc ape s er vice s o v er

a s ix -y ear

per iod as as ser

ted i n the
c ou nt er c l ai m. As pr ev iou sl y

di sc uss ed, Rea ta and it s p ro g eny hav e fou n d counter cl aims to be g er mane, c onnected w it h and proper ly defensi v e for cl ear

and obv iou s reason s. F or ins tanc e, i n Rea ta, the c it y of D all as ass erted a cross cl aim for neg li g ence ag ain st Rea ta. 197 S. W .3d a t 373. R eata’ s c lai m w as li kew is e for neg li g ence; i t merely mir ro re d the ci ty of Dal las ’s cl aim. Id

. Simil ar ly , i n Me n de z and Car ter , retaliato ry

discharge claims w ere cl ear ly g er mane to the e mploy ment c ontract s b e tw een t he phy si ci ans and t he g ov er nmental enti ti es becau se all i ss ues re v olv ed around t h e s ame co ntr act ual
re lat ion ship . Alt houg h none of the pos t- Rea ta cases are f actu ally similar, the sce nario pr esent ed i n Lan gley is mor e ak in to t his ca se. Ther e, t he c our t f o und t he r elo cat ion ,8

mis re present ati on and br each of cont ra ct cl aims w er e not ger mane to, c onnec ted w it h, an d pr oper ly def ensi v e to the eminen t domai n ac ti on by the g ov er nmental enti ty

. Langley , 232 S.W .3d at 367. The count er cl aim her e does not meet the ele ments re q uired by R eata ; it i s n otg er ma ne t o, c on ne c te d w i th an d pr op er l y d efe ns i v e to Tx D OT ’ s c on v ers i on c l ai m. Tx DO T’s firs t i ss ue i s s ust ain ed.

IV. F A I L URE TO E XH A US T A D M I N I ST R AT I VE R EM EDI ES W e al so ag re e w it h Tx DO T th a t Cro ckett w as re q uired to , butnev er att empted t o uti lize the admin is tr ati v e procedu re s i n pl ace for i ts compl ain ts re g ar din g under pay ment fo r wo rkd o n e
. W h e n t h e L e gi s la t u re ve s t s e x c l u s ive ju ri s d ic t io n in a n a d m in is t ra t ive agency, trial courts have no jurisdiction over cl aim s g overned by the relevant stat ute until t h e a d mi n i s t r a t i v e p r o c e s s i s ex haust ed. State v . F ide lity and D eposit C o. of Md. , 223 S.W .3d 3 09, 3 11 ( Tex . 200 7)

. The Tex a s T ranspor tati on C ode aut hor iz es Tx DO T to “estab lish proced ures for the inf orma l resolution of a claim arising out of a contra ct describe d by . . . Chapt er 223 .” T EX
. T RA NS
. C OD E A NN
. § 201 .11 2 (Verno n Sup p. 20 07). Sect ion 22 3.0 01 o f

t he T exas Tran sporta tion Cod e stat es tha t TxDOT is to sub mit compet it iv e bi ds for c ontract s fort he i mprov ement of a h ig hw ay thati s p art of the sta te h ig h wa y sys t e m o r fo r m a t e ri a ls u s e d i n t h e c o n s t ru c t io n o f o r m a in t e n a n c e o f

a h ig h wa y. Id

. § 223. 001 ( Ver non 199 9 ). Improv ement i ncl udes “c onst ru cti on, recons tr uct ion , maint enanc e, an d the maki ng of neces sar y pl an or sur

v ey before beg inn ing co nst ru cti on,
r ec on s tr uc ti on or ma i nt en an ce.” Id . § 221 .00 1(2) (Vernon Supp . 200 7). Here, it isF or i ns t ance, sect i on 2 23. 042 oft he T r anspor t at i on Code def i nes a m ai nt enance pr oj ect as “ any 1 rou t i ne or pre ven t i ve m ai nten an c e ac t i vi t y . ” T EX
. T RAN SP
. C OD E A NN
. § 223. 042( h) (Ver non Supp. 2007)

. T he te rm i n c l u d e s s u c h a c ti v i ti e s a s m o w i n g , l i tte r p i c k -u p a n d h e rb i c i d e s p ra y i n g
. Id

. 9 undi sp u t e d t h a tt h e w o r kp e r fo r me d c a me w i t h i n t h e c a t e g o r y o f m a i n t e n a n c e
. The 1 le gi s la t u re h a s e xp re s s ly d e t e rm in e d t h a tt h e t ra n s p o rt a t io n co d e p ro vid e s t h e e xc lu s ive
re medy for c ontractcl aims ag ain st T xDOT

. Tex. Dept . of Transp

. v. Jones Br os. D ir t & Pavi ng Contra ctors , 92 S.W .3d 4 77, 4 84 (T ex. 2002 ). Because the T ransp ortat ion Cod e’s admini strati v e r emedie s c ov er mai ntenanc e c ontract s, the t ri al cour t had no subj ectmatte r jur is dic ti on ov er

C ro ck ett’ s c ountercl aims

. Tx DO T’s sec ond i ss ue i s s ust ain ed.

V. R E QUE S T F OR D E C LA R A T O R Y R ELI EF Tx D O T a l s o arg u e s th a tC r o c k e t t ’ s r e q u e s ti s no ta p r o p e r o n e fo r d e c l a r a t o r

y r e l i e f. W e agree. P riv ate p arties m ay not circumvent sovereig n imm unity by characte riz ing a suit for moneydamages as one for decl ar ator y rel ief. Ci t

y o f Ho u s to n v

. W il lia ms , 216 S.W .3d 827, 828- 29 ( Tex . 200 7)

. The onl y r emedy soug ht byCro ck ett is f or m oney damages . In fa ct , it s o wn pr a yer fo r re lie f as ke d th e tri a l co u rtto “ r e n d e r a ju d gm e n t fo r an y sho rt a ge to G CC ” and render

a “p ro per

constr uct ion of

the amounts to be pai d under the cont ra cts bet w een the pa rties a nd require T x DOT to rend er a prope r accoun ting to GCC.” T x DOT ’s thi rd i ss ue i s s ust ain ed. VI. C ONCL US I ON T he t ri a l court ha d no subject mat ter jurisdiction over Crocket t’s coun terclaim beca use it w as not germ ane t o, conn ecte d w ith and p rope rly def ensive to T x DOT ’s claim for c onv ersi on. Tx DO T’s immuni ty has not been w aiv ed. Addi ti onal ly , t he tr ial co urt had no j ur is dic ti on bec ause the Tr anspo rt ati on Code set forth spec ific adminis tr ati v e r emedie s10

to ad dr ess r esol uti on of con tr act s s uch as the mai ntenanc e c ontract s a t i ss ue here, an d Crock ett did not ex hausti ts a d m in ist ra ti v e r emedie s b efore fil ing su it

. W e r ev erse and
re nder j udg ment di smi ss ing Cro ck ett’ s c ountercl aims for l ack of subj ectmatte r jur is dic ti on.

RO SE V ELA J u s t i c e Opi nio n del iv er ed and filed thi s 5 th da y

of June, 2008.