Opinion ID: 895256
Heading Depth: 1
Heading Rank: 3

Heading: Government Immunity

Text: Water Control and Improvement Districts are valid and existing governmental agencies and bodies politic. Willacy Cnty. Water Control & Improv. Dist. No. 1 v. Abendroth, 142 Tex. 320, 177 S.W.2d 936, 937 (Tex.1944) (quotations omitted). As such, they enjoy governmental immunity from suit, unless immunity is expressly waived. Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). The Developers argue that both Texas Water Code section 49.066 and Texas Local Government Code section 271.152 waive the Authority's immunity. The court of appeals in the Developers' two contract-based cases held that, while section 49.066 does not waive immunity, section 271.152 does. 2008 Tex.App. LEXIS 9127, at  n. 2 (citing Friendswood I, 256 S.W.3d at 747 n. 14) [6] ; 274 S.W.3d at 44. We agree for the following reasons.
Section 49.066(a) provides that [a] district may sue and be sued in the courts of this state in the name of the district by and through its board. A suit for contract damages may be brought against a district only on a written contract of the district approved by the district's board. TEX. WATER CODE § 49.066(a). As we explained in Tooke v. City of Mexia , the effect of a sue and be sued clause in an organic statute depends on the context in which it is used. The words can mean that immunity is waived, but they can also mean only that a governmental entity, like others, has the capacity to sue and be sued in its own name. Tooke v. City of Mexia, 197 S.W.3d 325, 337 (Tex.2006). Standing alone, then, sue and be sued does not plainly waive the Authority's immunity. The Developers argue that section 49.066 plainly waives a district's immunity because it specifies how a district may be served with a lawsuit for contract damages, and delineates the mechanisms for enforcing a judgment against it. See TEX. WATER CODE § 49.066(a)-(c). In Harris County Hospital District v. Tomball Regional Hospital, we held that a sue and be sued statute that specified who would represent the district in civil proceedings was not an indication of legislative intent to waive immunity: instead, the phrase merely anticipates the district's involvement in civil proceedings of some nature at some point, but it does not address immunity from suit. Harris Cnty. Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 843 (Tex.2009). As the court of appeals in Friendswood II reasoned, the Legislature states that a suit for contract damages may be brought against a district only on a written contract of the district approved by the district's board; however, it does not state that all parties to such contracts may sue the district for breach of these contracts or that immunity from suit as to all such claims is waived. 256 S.W.3d at 743. This interpretation conforms with our holding in Tooke, in which we scrutinized similar statutory language providing that the City may contract and be contracted with, implead and be impleaded in all courts and places and in all matters whatsoever.... Tooke, 197 S.W.3d at 344. We explained that the provision appears to address the capacity of the City to act as a corporate body, not its immunity from suit. All it clearly says is that the City can be sued and impleaded in court when suit is permitted, not that immunity is waived for all suits. Id. Hence, a statute that contemplates a government entity's involvement in litigation does not clearly and unambiguously waive the entity's immunity from suit. See Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex. 2003) ([A] statute that waives the State's immunity must do so beyond doubt....). The Developers also point to the provision in section 49.066(a) setting forth the only conditions under which a contract against a district will be enforceable. See TEX. WATER CODE § 49.066(a) (A suit for contract damages may be brought against a district only on a written contract of the district approved by the district's board.). But such language does not go as far as waiving immunity from suit, but merely establishes a condition precedent to suit. Travis County v. Pelzel & Assocs., 77 S.W.3d 246, 249 (Tex. 2002); see also Farmers State Bank of New Boston v. Bowie County, 127 Tex. 641, 95 S.W.2d 1304, 1306 (1936) (The language of said article indicates that the rejection by the commissioners' court of a claim against the county, or the failure of such court to act on the same, is merely a condition precedent to the filing of a suit to recover thereon.); Bexar Metro. Water Dist. v. Educ. and Econ. Dev. Joint Venture, 220 S.W.3d 25, 31 (Tex.App.-San Antonio 2006, pet. dism'd) (The language the legislature actually used in amending section 49.066(a) does not `authorize' a suit against a water district; nor does it expressly waive immunity. Rather, the amendment creates a condition precedent: if a suit for contract damages is otherwise authorized, it may be maintained only if the stated condition is met.). We therefore reject this argument as well. Since Tooke, we have consistently refused to find waivers of immunity implicit in statutory language: there can be no abrogation of governmental immunity without clear and unambiguous language indicating the Legislature's intent do so. See, e.g., Tomball, 283 S.W.3d at 842-43; Lamesa Indep. Sch. Dist. v. Booe, 235 S.W.3d 710, 711 (Tex.2007); City of Elsa v. M.A.L., 226 S.W.3d 390, 391 (Tex.2007). The present statute is no different. In fact, every court of appeals to interpret section 49.066 after Tooke has concluded that the statute does not waive immunity. See Clear Lake City Water Auth. v. MCR Corp., No. 01-08-00955-CV, 2010 WL 1053057, at , 2010 Tex.App. LEXIS 2194, at  (Tex.App.-Houston [1st Dist.] Mar. 11, 2010, pet. denied); Jonah Water Special Util. Dist., No. 03-06-00626-CV, 2009 WL 2837649, at , 2009 Tex.App. LEXIS 7072, at  (Tex.App.-Austin, Aug. 31, 2009, no pet.); Boyer, Inc. v. Trinity River Auth. of Tex., 279 S.W.3d 354, 358 (Tex. App.-Fort Worth 2008, pet. denied); Bexar Metro. Water Dist., 220 S.W.3d at 32; Valley Mun. Util. Dist. No. 2 v. Rancho Viejo, Inc., No. 13-07-545-CV, 2008 WL 384320, at -4, 2008 Tex.App. LEXIS 1109, at  (Tex.App.-Corpus Christi, Feb. 14, 2008, no pet.) (mem.op.). Because section 49.066 does not contain a clear and unambiguous waiver, the sue and be sued language in 49.066(a) does not on its own abrogate governmental immunity.
The Legislature enacted section 271.152 to loosen the immunity bar so that all local governmental entities that have been given or are given the statutory authority to enter into contracts shall not be immune from suits arising from those contracts. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Property/Casualty Joint Self-Ins. Fund, 212 S.W.3d 320, 327 (Tex.2006) (quotations omitted). [7] The statute waives immunity from suit for certain contract claims: 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.... TEX. LOC. GOV'T CODE § 271.152. The statute defines 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. Id. § 271.151(2). The Agreements here are written contracts stating their essential terms. The names of the parties, property at issue, and basic obligations are clearly outlined. See Liberto v. D.F. Stauffer Biscuit Co., 441 F.3d 318, 324 (5th Cir.2006) (noting that Texas courts generally construe essential terms of a contract to include the time of performance, the price to be paid, the work to be done, the service to be rendered, or the property to be transferred); Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 846 (Tex.2000) (noting that a contract is legally binding if its terms are sufficiently definite to enable a court to understand the parties' obligations). The relevant inquiry is whether the Agreements entail the provision of goods or services to the Authority. Chapter 271 provides no definition for services, despite the Legislature's definition of the term in other contexts. [8] It appears, generally, that the term is broad enough to encompass a wide array of activities. See Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895 (Tex.1962) (In ordinary usage the term `services' has a rather broad and general meaning. It includes generally any act performed for the benefit of another under some arrangement or agreement whereby such act was to have been performed. (quoting Creameries of Am. v. Indus. Comm'n, 98 Utah 571, 102 P.2d 300, 304 (1940))); but see 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.) (quotations omitted). The Friendswood I court relied on our analysis in Ben Bolt to conclude that the agreement to hire third parties to construct the Facilities and to build the streets, roads, and bridges is ... sufficient to constitute the provision of services to the Authority. Friendswood I, 256 S.W.3d at 751; see Ben Bolt, 212 S.W.3d at 327. In Ben Bolt, we liberally construed a government-pooled insurance policy (the Fund) as encompassing services rendered by its members, based on the fact that the Fund's members elect a governing board, and a board subcommittee resolves claims disputes. To that extent, at least, the Fund's members provide services to the Fund. Id. The services provided thus need not be the primary purpose of the agreement. See Friendswood I, 256 S.W.3d at 746 n. 13 ([I]n Ben Bolt, the Texas Supreme Court concluded that the Legislature had waived immunity under this statute even though the court concluded that the part of the contract on which the plaintiff based its claim did not involve the provisions of good [sic] or services to the local governmental entity.). We agree with the court of appeals that the Agreements entail services provided directly to the Authority. The Developers contracted to construct, develop, lease, and bear all risk of loss or damage to the facilities, obligations far more concrete than those at issue in Ben Bolt. Ben Bolt, 212 S.W.3d at 327. We therefore hold that the Agreements contemplate the provision of services under the statute. The Authority also argues that the Agreements fall outside chapter 271 because there is no balance due and owed. See TEX. LOC. GOV'T CODE § 271.153(a)(1) (limiting [t]he total amount of money awarded in an adjudication brought against a local governmental entity for breach of a contract to the balance due and owed by the local governmental entity under the contract.). According to the Authority, because the voters have not approved bonds to buy the facilities, the Developers cannot prove that the amount they seek is due and owed. At least within the context of these Agreements, we disagree. The purpose of section 271.153 is to limit the amount due by a governmental agency on a contract once liability has been established, not to foreclose the determination of whether liability exists. Furthermore, the Agreements do stipulate the amount of reimbursement owed upon approval of bond funds. The existence of a balance due and owed is thus incorporated within the contracta balance that would come due when voters approve payment in a bond election. For the above reasons, we agree that section 271.152 waives the Authority's immunity from suit.