Opinion ID: 786344
Heading Depth: 1
Heading Rank: 4

Heading: Eby's Misrepresentation Claim

Text: 20 Viewing Eby's misrepresentation claim as one sounding in tort, the district court dismissed it as barred by governmental immunity. Although Eby concedes that DART enjoys immunity from tort claims, Eby asserts that the district court erred in dismissing its misrepresentation claim because (says Eby) it is a quasi-contractual cause of action — not a tort claim. This, Eby reasons, is because Texas law recognizes an equitable right to rescind a contract when one of the parties was induced to enter into the contract by a misrepresentation of fact, such as inadequate bid specifications. Eby therefore concludes that governmental immunity does not bar its quasi-contractual misrepresentation claim against DART. 21 DART rejects Eby's characterization of this claim as quasi-contractual, asserting that causes of action based on misrepresentation sound in tort under Texas law. Thus, DART concludes that the district court correctly dismissed Eby's misrepresentation claim as barred by governmental immunity. Alternatively, DART maintains that its administrative process covers this claim, regardless of whether it is labeled a contract claim or a tort claim. DART therefore contends that, even if it is not immune from this claim, Eby must still exhaust the claim before seeking judicial review. 22 We begin by pointing out that Eby's misrepresentation claim appears to be redundant to its first cause of action for breach of contract. In its complaint, Eby's primary allegation in support of its breach-of-contract claim is that the designs contained in DART's bid solicitation were materially inadequate and that DART therefore breached its duty to furnish reasonably accurate bid information. Then, under the heading misrepresentation, Eby averred that it had justifiably relied to its detriment on misrepresentations made by DART in its bid materials to the effect that those materials were sufficiently accurate to be relied on for development of a bid price. While the language employed differs somewhat, the gravamen of both of Eby's claims is that DART's bid specifications contained material misrepresentations. 23 When pressed at oral argument to identify the difference between its two claims, Eby responded by noting that it alleged, in its first count, that DART's breach involved refusal to cooperate with Eby in resolving the problems caused by the deficient bid materials. Thus, Eby asserted that its first claim encompasses performance issues, which are not duplicated by the misrepresentation claim. Even so, Eby has shown only that its first claim includes allegations not present in its second claim; it has not demonstrated that the averments in its second claim add to what is alleged in the first count. Moreover, Eby seeks the same contractual relief on both claims: rescission and recovery in quantum meruit. Eby's misrepresentation claim is, therefore, just a subset of its breach-of-contract claim. 24 With this in mind, it is clear that Eby's misrepresentation claim, as it is presented here, is a contractual one. See RESTATEMENT (SECOND) OF CONTRACTS § 164(1) (1981) (If a party's manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.). Thus, the district court erred in dismissing this claim as a tort claim barred by governmental immunity. Nevertheless, we affirm the district court's dismissal of Eby's misrepresentation claim. Since DART's administrative process is certainly broad enough to encompass this claim, see supra Part I(A), it also must be exhausted, for the reasons discussed above in Part III. We accordingly affirm the district court's dismissal of this claim, although not on the basis of governmental immunity. See, e.g., Chiu v. Plano Indep. Sch. Dist., 339 F.3d 273, 283 (5th Cir.2003) (This Court may affirm on grounds other than those relied upon by the district court.).