### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-09-00461- CV

F irst-C itizens Bank

& Trust Com pany, Ap pellant

v. Gr eate r Austin Area Te lecom m uni cations Net work

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 201 ST JUDICI AL DISTRICT NO. D-1 -GN-0 8-0 0204 1, H ONO RAB LE LO RA J. LI VINGSTO N, JUDGE P RESIDING

NO. 03-09-00462- CV

F irst-C itizens Bank

& Trust Com pany, Ap pellant

v. Austin In dependent S chool District , Appellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 250 TH JUDICI AL DISTRICT NO. D-1 -GN-0 8-0 0204 2, H ONO RAB LE LO RA J. LI VINGSTO N, JUDGE P RESIDING

O P I N I O N
Ap p ellant First-Citi zens Ba nk & Trust Company (the “Ba nk”), a putative assignee

o f a contra ctor’s acc ounts rec eivable, sued appellee s Gre ater Austin Are a Telec ommunicatio n s Networ k, an interloca l administrative ag ency , and Austin I ndepende nt School District (collec tivelythe “g overnme nt defe ndants”) for brea ch of contra ct. The g overnme nt defe ndants filed a plea to the

jurisdiction, asser

ting that sovere ign immunit y barr ed the Ba nk’s suit. The judge who conducte d an evidentiar y hear ing on the plea die d befor e ruling on the matter; a differ ent judge later g rante d the plea. The Ba

nk appea ls in two issues, asser ting that (1) the trial court has jurisdiction here beca use the local g overnme nt cod e wa i v es s o vere ign immunit y for an assig nee to sue for brea ch of an assig nor’s contra ct, and ( 2 ) th e succe ssor judge improperly ruled on the g overnme nt defe ndants’ plea without “hea

ring evidenc e.” We will reve rse the trial court’s order and re mand the cause for further proce eding s.

F ACTUAL AND P ROCEDURAL BACK GR OUND Complete Communi cation Service s, I nc. d/b/a CoCom Cabling Sy stems (“CoCom”) sold c ommunications c abling and installation service s to the g overnme nt defe ndants pursuant to a
contra ct (the “construc tion c ontrac t”). CoCom also e ntere d into a n “ac counts rec eivable purcha se and secur ity ag ree ment” (the “assig nment contra ct”) with the Ba nk, by which CoCom assig ned its

acc ounts rec eivable to the Ba nk in exchang e for cash. The g overnme nt defe ndants made pay ments 1

The g overnm ent defe ndants arg ue that the acc ounts rec eivable purcha se and secur ity 1 ag ree ment was not an assig nment, but was simply a “pur chase ” of CoCom’s ac counts rec eivable. We disag ree . The c ontrac t betwee n CoCom and the Ba nk is in the recor d. I ts te rms plainly indicate that CoCom “ag ree s to sell and assig n” to the Ba nk “oblig ation[s] owed to [C oCom] for g oods sold and delivere d or ser

vices re ndere d.” The contra ct also appoints t he Bank as CoCom’s attorney in fac t to “dema nd, take or bring , in the name of the Ba nk or Client, all steps, actions, suits or proce eding s deeme d by the Ba

nk in its sole and absolute discretion nece ssary or desirable to eff ect collection of or other rea liz ation upon the purcha sed acc ounts.” Such lang uag e esta blishes an assig nment here

. I n addition, the g overnme nt defe ndants themselves have, in their briefing , char acte rized the 2on the construc tion contrac t to the B ank as CoCom’s assig nee f or some time but later, f

or re asons that are not clear

from the r ecor d, stopped paying. The Ba nk, as the assig nee of CoCom’s acc ounts rec eivable, broug ht suit ag ainst the
g overnme nt defe ndants for brea ch of co n t ra ct

. The g overnme nt defe ndants filed a plea to the jurisdiction a sserting that (1) CoCom’s assig nment of its rig ht to pay ment was invalid be cause the construction contract contained a no-assig nment clause , and (2) even if the assig nment was valid,

sovere ign immunity

from suit had not bee n waived. Travis County District J udg e Scott Ozmun hear d the plea in an evidentiar y hear ing, but he died befor e ruling on it. T h e case was later assig ned to J udg e L ora L ivingston who, afte r

rec onsidering the evidenc e on the Ba nk’s motion, signe d an order g ranting the g overnme nt defe ndants’ plea to the jurisdiction and dismiss ing the cause for lack of subject-matter jurisdiction.

The Ba nk appea ls in two issues. I t arg ues first that it was a lawful ass i gn ee o f CoCom’s rig ht to pay

ment under CoCom’s contra ct with the g overnme nt defe ndants, and, as such, local g overnme nt code section 271.152 waives sovere ign immunit y for the Ba nk’s suit to adjudicate

a brea ch of the co n s t ru ct i o n contract. I n its second issue, the Ba nk reque sts a rema

nd for

rec onsideration of the plea to the jurisdiction, asser ting that the trial court err ed when, afte r the death of Judge Ozmun, his successor on the ca se g rante d the plea w ithout “hear ing e vidence ” ane w.

contra ct at issue as an “assig nment contra ct,” go i n g s o far as to state: “The sole purpose of the [accounts rec eivable purcha se contra ct] is the assig nment of acc ounts rec eivable from CoCom to [t he B ank].” 3STANDARD OF REVIEW Sovereig n immunit y dep ri v es the trial court of subject-matter jurisdiction in case s wher e the State has been sued, absent a wa i v er of immunit y by the State. Texas Dep’ t of Parks & W ildlif e v. Miranda , 133 S.W .3d 217, 224 (Tex. 2004)

. Sovereig n immunit y encompa sses two 2

conce pts: immunit y from liability and immunit y from suit. Tooke v. City of Mex ia , 197 S.W .3d 325, 3 3 2 (Tex. 2006). By enter ing into a contra ct, a g overnme ntal entity waives its immuni t y fr o m liability but reta ins its immunit y from suit unl ess a waiver is eff ecte d by clea

r and unambig uous statutory lang uag e. Id. ; see also Tex. Gov’t Code Ann. § 311.034 (West Supp. 2009); but see Reata Constr. Corp. v. City of

Dallas , 197 S.W .3d 371, 375 (Tex. 2006) (noting that sovere ign immunit y is cre ature of common law whose boundarie s are set and may be altere d by courts). To aff irmatively demonstrate the trial court’ s jurisdiction, the plaintiff in a suit ag ainst the S tate or a gover nmental entity must alleg e a valid waiver of immunit y , which may be eith er a ref ere nce to a statute or to express leg islative permission. Texas De p’t of Transp. v. Jones , 8 S.W .3d 636, 637 (Tex. 1999). Whether a court has subject-matter jurisdiction is a question of law, which we revie w d e novo. Miranda , 133 S.W .3d at 224. When revie wing a g rant or denial of a plea to t h e jurisdiction, we consider the plaintif f’ s p l ea dings, construed in favor of the plaintiff, and any

ev i d ence rele vant to jurisdiction without considering the merits of the claim bey ond the ex t en t

A rela ted doctrine , g overnme ntal immunit y , simil arly protec ts other g overnme ntal 2 subdivisions and entities. Harris County v. Syke s , 136 S.W .3d 635, 638 (Tex. 2004); see also W ichita Falls State Hosp. v. Taylor , 106 S.W .3d 692, 694 n.3 (Tex. 2003) (noting that courts often use g overnme ntal immunit y and sovere ign immunit y intercha ng eably al though doctrines are conce ptually

differ ent). 4nece ssary to deter mi ne jurisdi ction. Id. at 226-27; County of Cameron v. Brown , 80 S.W .3d 549, 555 (Tex. 2002).

When a plea to the jurisdiction c halleng es the pleading s, we deter mine whether the
p la in ti f f has alleg ed sufficie nt jurisdictional fac ts to show the trial court’s subject-matter jurisdi c ti o n , using a liberal construction in favor of the plaintiff. Miranda , 133 S.W .3d at 226. I f the plaintiff’s pleading s “af

firmatively neg ate the exis tence of jurisdiction,” then a plea to the jurisdiction may be
gra n t ed without aff

ording the plaintiff an opportunity to amend his pleading s. Id. at 22 6 -2 7

. I f, h o weve r, the pleading s do not “demonstra te incura ble defe cts in jurisdiction,” but mere ly fa i l t o alleg e sufficie nt fac ts to aff irmatively demonstrate the trial court’s jurisdiction, then the issue is one of plea ding suf

ficienc y and the plaintiff should ha ve an oppor tunity to amend. Id. “[I ]f a plea to the jurisdiction challeng es the exis tence of jurisdictional fac ts, we consider re l ev ant evidenc e submitt ed by the parties when nece ssary to resolve the jurisdictional issues raised, as the trial c ourt is require d to do.” Id . at 227. Where the jurisdictional f acts do not implicate the merits of the suit and the fac ts are dispute d , t h e co u rt m ust make the nece ssary fac t finding s to r esolve the jurisdictional issue. Id. I f the jurisdictional fac ts do implicate the merits of the suit, the judge must apply a summary judgme nt-like standard to the evidenc e submitt ed. Id. I f

a fac t question exis t s o n the disputed jurisdictional issues, the court cannot g rant the plea to the jurisdiction; the fac t question must be resolved by the fac t finder. “Howe ver, if the rele vant evidenc e is undisputed or fails to raise a fact question on the j urisdictional issue, the t rial court rules on the plea to the jurisdiction as a matter of la

w.” Id. at 228.

5DISCUSSIO N I n its first issue, the Ba

nk arg ues that the trial court err ed in g ranting the g overnme nt defe ndants’ plea to the jurisdiction. I t asser ts that it aff

irmatively demonstrat ed t h e trial court’s j u ri s diction by pleading fac ts that cause its suit to fall within the waiver of sovere ign immun i t y contained in local g overnme nt code section 271.15 2

. T h e Ba nk pleade d that (1) CoCom had a
contra ct with the g overnme nt defe ndants to provide g oods and service s, (2) the Ba nk purcha sed an assig nment of CoCom’s acc ounts rec eivable, (3) among those acc ounts recei v ab le wer e unpaid
amounts owed to CoCom by the g overnme nt defe ndants u n d er the construction contra ct, and (4) section 271.152 of the local g overnme nt code waived sovere ign immunit y for the Ba nk’s suit to

rec over mone y

owed to CoCom on the construction contra ct. The g overnme nt defe ndants r e s p o n d th a t (1) the construction contra ct contained a noa s s ig nment clause , which invalidated CoCom’s purported assig nmen t; ( 2 ) e v e n if th e a s s ig n me n t w a s valid, section 271.152 does not waive their sovere ign immunit y to a suit broug ht by the Ba nk beca use the B ank wa s an assig nee, not a party to the construc tion contrac t; and (3) the B ank lac ks standing to bring claims here beca use it never enter ed into a contra ct with the g overnme nt defe ndants. The g overnme nt de fenda nts a ttached evidenc e to the ir plea. That evidenc e, howeve r, is not probative of the exis tence of any disputed jurisdictional fac ts. Moreover, t h e go v ernme nt defe ndants did not attach the construction contract, so we cannot d et er m i n e if their arg ument that the contra ct prohibits this assig nment—and the Ba nk’s counter -ar g ument that the UCC trumps the

6no-assig nment clause —has merit. I n the absence of rele vant evidence crea ting a fac t question as 3 to the exis tence of the Ba nk’s pleade d jurisdictional f acts, we decide the plea to the jurisdiction as

a matter of law. Miranda , 133 S.W .3d at 228. I n doing so, we take as true the Ba nk’s pleade d jurisdictional fac ts. See id. at 227-28

. Our inqui ry here is thus focuse d on the j urisdicti o nal facts in the Ba nk’s live pleading

. I f the Ba nk pleade d fac ts that, if true, demonstrate a waiver of sovere ign immunit y , then g rantingthe plea w as improper

.

As noted above, the Ba

nk relies on section 271.152 of the local g overnme nt code for that waiver . That sec tion states:

A local g overnme ntal entity that is a uthorized by statute or the constitution to enter into a contra ct and that enter s into a contra ct subject to thi s s ubchapte r waives sovere ign immunit y to suit for the purpose of adjudicating a claim for brea ch of the contra ct, subject to the ter ms and conditions of this subchapter.

Tex. L oc. Gov’ t Code Ann. § 271.152 (West 2006). A contr act subjec t to this subchapte r “mea ns

a written contra ct stating the essential terms of the ag ree ment for providing g oods or service s to the local g overnme ntal entity that is proper ly executed on behalf of the local g overnme ntal entity .” Id. § 271.151(2) ( West 2006).

The parties do not dispute that the g overnme nt defe ndants are local g overnme ntal entities authorized t o en t er into a contra ct; nor do they dispute that the contra ct betwee n the

I t is not nece ssary to have the construction contra ct in the rec ord for us to decide this initial 3 jurisdictional inquiry

. See Ben Bolt-Palito Blanco C o n sol. Indep. Sch. Dist. v. Texas Political Subdivisions Prop./Cas. Joint Self-Ins. Fund , 212 S.W .3d 320, 327-28 (Tex. 2006) (dec iding waiver under local g overnme nt code section 271.152 based on pleade d alleg ation of terms of contra ct when actua l contrac t was not in rec ord). 7g overnme nt defe ndants and CoCom was “subjec t to [subchapter I ].” L ibera lly construing th e B a nk’s pleading s, we take as true the Ba nk’s pleade d alleg ation that C o C o m ’s acc ounts rec eivable, including its rig ht to bring suit to enfor ce pay ment un d er t h e co n s truction contra ct, wer e validly assig ned to the Ba

nk. The rema ining questions, the ref ore, are whether the Ba

nk has standing here and, if so, whether section 271.152 of the local g overnme nt code waives sovere ign immunit y for a brea ch-of -contra ct suit broug ht by

an assig nee.

The Bank’s St

andin g We first addre ss the Ba

nk’s standing

. The g overnmen t d ef endants arg ue that the Ba nk does not have standing beca use it was not a party to the co n s truction contra ct. The Ba nk

asser ts that it is suing as CoCom’s assig nee under the construction contra ct and has standing by virtue of that a ssignment.

Standing is a component of subject-matter jurisdiction. A u s t i n Nursing Ctr., Inc.

v. Lovato , 171 S.W .3d 845, 849 (Tex. 2005). One way to establish standing in a brea ch-of -contra ct action is to show pri v i t y wi t h t he defe ndant. See Interstate Contracting Corp. v. City of Dallas , 135 S.W .3d 605, 618 (Tex. 2004) (citing Brown v. Todd , 53 S.W .3d 297, 305 (Tex. 2001)); Redmon

v. Griffit h , 202 S.W .3d 225, 239 (Tex. App.—Ty ler 2006, pe t. denied). F or purpose s of standing , “[p] rivity is established by proving that the defe ndant was a party to an enfor cea ble contra ct with either the plaintiff or a party who assig ned its cause of action to the plaintiff.” Redmon , 202 S.W .3d
at 239. An assig nee stands in the shoes of the assig nor and may asser t those rig hts that the assig nor could asser

t, including bring ing suit. Gulf Ins. Co. v. Burns Motors, Inc. , 22 S.W .3d 417, 420 (Tex. 2000); see also Jack

son v. Thweatt , 883 S.W .2d 171, 175 (Tex. 1994) (“[A]n assig nee rec eives the
8full rig hts of th e as s i gnor . . . .”). Thus, the Ba nk, as CoCom’s assig nee, has standing to asser t 4 CoCom’s claims and defe nses under the contra ct. This case is distinguishable from State v. Oakley , in which the Texas Supreme Court held that a cause of action under civil prac tice and reme dies code chapte r 103—the chapte r that waives sovere ign immunit y for suits ag ain s t t h e State for wrong ful imprisonment—was not assig nable. 227 S.W .3d 58, 61-62 (Tex. 2007). I n Oakley , the assig nee of a wrong fully imprisoned individual’s c laim a sserted that beca use chapte r 103 was silent as to a ssignments, the court should apply the common-law rule permitting the sale and assig nment of cause s of action. He urg ed the
court to hold that (1) an assig nee ha d standing to sue, and (2) sovere ign immunity was wa ived for

an ass igne e’s suit. Id. at 61. Addre ssing the standing arg ument as a threshold inquiry , the court noted that chapte r 103 expli citly prohibits survivability of a wrong ful-imprisonment cause of action. Id. Noting that assig nability and survivabilit y have long been li nked in Americ an and Texas law, the cour t c oncluded that the leg islature’s decision to e x tinguish the chapte r 103 cause of ac tion on the dea th of the wrong fully imprisoned person a lso prohibited assigning the claim. Id. at 62. The pre sent ca se diffe rs from Oakley in a cr ucial way

. Whil e the statute in Oakley waived sovere ign immunit y , it a lso create d the cause of action on which Oakley sued the State. I t
was, there fore , nece ssary for the court to look at t h e statute itself to deter mine whether the wrongfu l -d ea t h cause of action was assig nable. See id. (“A s Chapter 103 claims are entirely a

We note that public policy strong ly favor s assig nability of contra cts. See State Farm Fire 4 & Cas. Co. v. Gandy , 925 S.W .2d 696, 706-07 (Tex

. 1996) (discussing hi storical d evelopment of fre e assig nability of contra ct and tort cause s of action in Ang lo-Americ an law and limit ed exceptions to ge nera l rule of a ssigna

bility ). 9statutory

cre ation, we look to the words of the statute to determine w hether they are assig nable.” ). Her e, howeve r, the opposite holds true. Cf. id. The statute at i s s u e d o es not create the brea ch-of -contra ct cause of action ag ainst the State, it mere ly waives sovere ign immunit y for cer tain exis ting common-law brea ch-of -contra ct claims. Thus, we look to the statute not to deter mine if the claims are assig nable but only to see if sove reig n immunit y is waived.

Local Gov ernm ent Code Section 271.152 Waives Im m uni ty for Assignees

Concludin g that the Ba

nk has standing here , we must now decide whether section 271.152 of the local g ov er n m en t co d e waives the g overnme nt defe ndants’ immunit y from a suit broug ht by an assig nee. This require s interpre ting sever al statutes. Our objective in interpre ting any
statute is to deter

mine leg islati v e intent. Mid-Century Ins. Co. v. Ademaj , 243 S.W .3d 618, 621 (Tex. 2007). We look to the statute’s plain meaning and construe it as a whole to g ive eff ect to ever y part, see id. , unless such a construction would lead to absurd or nonsensical re s u l t s , FKM P’ship

v. Board of

Rege nts of Univ. of

Houston Sys ., 255 S.W .3d 619, 633 (Tex. 2008); see also Fitzgerald

v. Advanc ed Spine Fixation Sys., Inc. , 996 S.W .2d 864, 866 (Tex. 1999) (“[I ]t is a fair a ssumption that the L eg islature tries to say what it means, and there fore the words it chooses should be the surest
g uide to leg islative intent.”). We may consider the object of the statute, leg islative history , and the
conseque nces of a proposed construction. Tex. Gov’t Code Ann. § 311.023(1), (3), (5) (West 2005). I n deciding whether a statute waives sovere ign immunit y , we bear in mind that a leg islative waiver must be “ef

fec ted by clea r and una mbiguous lang uag e.” Id. § 311.034. As quoted above, section 271.152 of the local g overnme nt code waives sovere ign immunit y “for the purpose of adjudicating a claim for brea ch of the contra ct, subject to the terms and
10conditions of [subch ap t er I ] ” if the local g overnme nt entity “ente rs into a contra ct subject to

[subchapter I ].” By its own terms, section 271.152’s waiver is not limit ed only to suits broug ht by signa tory parties—that is, to contra ctors who direc tly co n t ra ct wi th the local g overnme nt entity

. I nstead, section 271.152 waives immunit y for a class of suits —suits for the purpose of adjudicating

a claim for brea ch of a contra ct subject to subchapte r I —without restric ting which parties can bring the suit. The logic al implicatio n o f s u ch s tatutory lang uag e is that when, as here , a plaintiff h as standing to sue a local g overnme nt entity for brea ch of a “contr act subject to [subch ap t er I ] , ” section 271.152 wa ives sovere ign immunity “for the purpose of

adjudicating [t hat] claim.” As section 271.152 waives immunit y “subjec t to [subchapter I ],” w e must examine the entire subchapte r to deter mine if the leg islature intended waiver to apply t o assig nees. See Ademaj , 243 S.W .3d at 621. Subchapter I encompa sses sections 271.151 throug h 271.160, which (1) define the te rms used in the subcha pter; (2) provide for

waiver ; (3) lim it the amount and ty pes of dam ag es that may be awa rded in a suit; (4) make enfor cea ble any specia l contra cted- for adjudication proce dures like alterna tive-dispute resolution or pre- su i t n o t ice; (5) clar ify that this subchapte r does not waive the g overnme ntal entities’ defe nses, immunit y to suit in fede ral court, or immunit y to liability in tort; (6) note tha t this subchapter is not the basis of the grant of i mmunity
to suit to a local g overnme ntal entity ; and (7) prohibit the rec overy of attorney ’s fee s absent a
contra ctual provision allowin g preva iling parties to rec over. See Tex. L oc. Gov’t Code Ann. §§ 271.151-.160 (West 2006 & West Supp. 2009). None of the subchapte r’s provisions limit who

can bring a suit on the contra ct. Nor d o t h ey sug g est that the leg islature intended to exclude assig nees f

rom the re ach of

section 271.152.

11The leg islative history of subcha

pter I also sug g ests that the l eg islature int ended to

enac t a rela tively broad waiver

. The supreme court noted in Ben B o l t t hat “by enac ting section 271.152, the L eg islature intended to loose n the immunit y bar so ‘that all local g overnme nt entities that have been g iven or are g iven the statutory authority to enter into contra cts shall not be immune from suits arising from those contra cts.’” Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Texas Political Subdivisions Prop./Cas. Joint Self-Ins. Fund , 212 S.W .3d 320, 327 (Tex. 2006) (quoting House Comm. on Civil Practice s, Bill Analy sis, Te x . H.B

. 2039, 79th L eg ., R.S. (2005))

. The bill analy sis a lso sug g ests that part of the impetus f or House Bill 2039 was to a ddress the fundame ntal unfairne ss inhere nt in allowing g overnme ntal entities to use sovere ign immunit y as a shield to avoid their contra ctual obliga tions. House Comm. on Civil Practice s, Bill Analy sis, Tex. H.B

. 2039, 79th L eg ., R.S. (2005).

Supporters of the bill asser ted that, b e c a

u s e o f th e threa t of sovere ign immunit y , many highly qualified contra ctors considere d bidding on lo ca l go v er nment contra cts too risky , leading
many contra cto rs , espec ially small businesses, not to bid at all. Id

. Supporters t houg ht there was

a risk that those who did bid would submit artificia lly i n fl at ed bids or potentially perf orm sub s t an d ard work as a form of “insuranc e” ag ainst the possibili ty of the g overnme ntal entity ’s

non-re dressa

ble brea ch. Id. Subchapter I was intended to addre ss those complaints and encour ag e

a broade r, more qualified, and more diverse rang e of bidders for local-g overnme nt contra cts and to lower the price of those contr acts by reduc ing the risk of non-r edre ssable bre ach. Id. I t would be inconsistent with the statute’s purpose, there fore , to construe subchapte r I

as deny ing waiver to assig n ee s o f l o cal- g overnme nt contra cts. Such a construction would risk

12raising the cost of financ ing, as financ iers like the Ba nk might be reluc tant to purcha se a contra ctor’s

acc ounts rec eivable if th ey t houg ht sovere ign immunit y would expose them to the same risk of

non-re dressa

ble brea ch that the statute soug ht to eliminate. That could result in the same problems of inflated bids, re duced numbe rs and ty pes of bidders, and highe r costs to local g overnme nts that the leg islature soug ht to remedy

.

For the rea sons discussed above, we conclude that, in enac ting section 271.152, the leg islatu re wa i v ed s overe ign immunit y for suits broug ht by assig nees of those who enter into
contra cts that are subject t o s u b ch ap t er I

. Contrary to the gover nment defe ndants’ assertions, our conclusion here does not expand the unambig uous leg islative waiver of sovere ign immunit y in section 271.152. To the contra ry , first and fore most, the plain lang uag e of subchapte r I compels our decision here

. See Fitzgerald , 996 S.W .2d at 866 (“[I ]t is a fair assumption that the L eg islature tries
to say what it means, an d there fore the words it chooses should be the surest g uide to leg islative in t en t .”). Fur

ther, allowing the Ba

nk, as CoCom’s assig nee, to bring claims to enfor ce CoCom’s
contra ct with the g overnme nt defe ndants does not subje ct t h em t o additional liability

. The
g overnme nt defe ndants’ maxi mum liability is still cappe d by subsection I ’s provisions limit ing

rec overy to “the balanc e due and owed” on the contra ct plus any valid chang e order s and interest as allowed by law. See Tex. L oc. Gov’t Code Ann. § 271.153 (West Supp. 2009). As the Ba nk stands in CoCom’s shoes, its claim ag ainst the g overnme nt defe ndants i s only as g ood as CoCom’s; the claim will succe ed o r fa il as it would if CoCom itself wer e suing the g overnme nt defe ndants. Recog nizi ng waiver here also fac ilitates financ ing by contra cting parties, further ing th e s t at u t e’s

13object i v e o f lowering costs to contra ctors and encour ag ing more diverse bidders to bid for

g overnme nt contrac ts.

Be cause we hold that local g overnme nt code s ec tion 271.152 waives sovere ign immunit y here , we h o l d t h at the Ba nk’s live pleading aff

irmatively demonstrated the trial court’s jurisdiction. The court t h er efore err ed in g ranting the g overnme nt defe ndants’ plea to the jurisdiction. W e sustain the B ank’s f irst issue. Having done so, we need not r eac h their sec ond.

CONCLUSION Having held that t h e Bank’s pleade d jurisdictional fac ts aff irmatively demonstrate the trial court’s s u b

j ec t -m att er jurisdiction, we reve rse the order of the trial court and rema nd the

cause to that court for

further proce eding s.

__________________________________________

J . Woodfin J ones, Chief Just ice Be fore Chief J ustice Jones, J ustices Pemberton a nd Waldrop Reverse d and Remande d Filed: Aug ust 6, 2010

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