Court Opinion

ID: 2765758
Source: CourtListenerOpinion
Date Created: 2014-12-31 10:14:36.598549+00
Date Added: 2024-06-11T12:08:30.257865
License: Public Domain

Fourth Court of Appeals
                                        San Antonio, Texas
                                   MEMORANDUM OPINION
                                            No. 04-14-00429-CV

                                     CITY OF SAN ANTONIO
              acting through City Public Service Board of San Antonio a/k/a CPS Energy,
                                               Appellant

                                                        v.

                                      CASEY INDUSTRIAL, INC.,
                                              Appellee

                     From the 408th Judicial District Court, Bexar County, Texas
                                  Trial Court No. 2008-CI-06252
                            Honorable Michael E. Mery, Judge Presiding

Opinion by:       Patricia O. Alvarez, Justice

Sitting:          Catherine Stone, Chief Justice
                  Sandee Bryan Marion, Justice
                  Patricia O. Alvarez, Justice

Delivered and Filed: December 31, 2014

AFFIRMED

           Appellant CPS Energy 1 was sued by Appellee Casey Industrial, Inc. for various causes of

action including breach of contract. In its defense, CPS Energy argued its governmental immunity

is not waived for Casey’s claims, and it moved to dismiss Casey’s suit. The trial court denied CPS

Energy’s plea to the jurisdiction, and it sought this interlocutory appeal. Because Casey met its

burden to show CPS Energy’s immunity is waived by the Local Government Code, and CPS

1
 Appellant identifies itself as the City of San Antonio acting through the City Public Service Board of San Antonio
(CPS Energy).
                                                                                      04-14-00429-CV

Energy failed to meet its burden to conclusively disprove any essential element of subject matter

jurisdiction, we affirm the trial court’s order.

                                            BACKGROUND

        In August 2004, CPS Energy contracted with Casey and Wheelabrator Air Pollution

Control, Inc., to add pollution control systems to one of CPS Energy’s coal-fired power stations.

City of San Antonio ex rel. City Pub. Serv. Bd. of San Antonio v. Casey Indus., Inc., 381 S.W.3d
589, 591 (Tex. App.—San Antonio 2012, pet. denied). After some disputes between the parties,

Casey sued CPS Energy for, inter alia, breach of contract and quantum meruit. Id. Casey moved

for partial summary judgment on the ground that the three-party contract was void and its quantum

meruit claim should be tried. Id.

        The trial court granted Casey’s motion, id., but this court reversed the judgment, id. at 596–

97. We concluded the contract was not void, dismissed Casey’s quantum meruit claim for want

of jurisdiction, and remanded the cause to the trial court. Id.

        After remand, CPS Energy moved to dismiss Casey’s breach of contract claim. CPS

Energy asserted Casey’s claims are outside the contract, its immunity from suit is not waived for

an “extra-contractual” claim, and Casey’s claims must be dismissed. The trial court denied CPS

Energy’s plea to the jurisdiction, and CPS Energy appeals.

                                    GOVERNMENTAL IMMUNITY

        The common-law doctrine of governmental immunity shields political subdivisions of the

State from suits for money damages. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex.

Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 324 (Tex. 2006); Reata

Const. Corp. v. City of Dall., 197 S.W.3d 371, 374 (Tex. 2006). However, the legislature has

waived a local governmental entity’s immunity from suit in certain breach of contract claims.

Zachry Const. Corp. v. Port of Hous. Auth. of Harris Cnty., No. 12-0772, 2014 WL 4472616, at
                                                   -2-
                                                                                        04-14-00429-CV

*4 (Tex. Aug. 29, 2014) (citing TEX. LOC. GOV’T CODE ANN. §§ 271.152, .153 (West 2005)). For

a breach of contract claim to withstand a plea to the jurisdiction, “the claimant must plead facts

with some evidentiary support that constitute a claim for which immunity is waived.” Zachry

Const., 2014 WL 4472616, at *7.

                                    PLEA TO THE JURISDICTION

        If a plaintiff sues a governmental entity, the plaintiff bears the burden to plead facts that

show the trial court’s subject matter jurisdiction over the governmental entity defendant. Tex.

Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226–28 (Tex. 2004); accord Tex. Dep’t of

Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam). In response, the governmental

entity may assert its immunity from suit in a plea to the jurisdiction. Miranda, 133 S.W.3d at 225–

26 (“Sovereign immunity from suit defeats a trial court’s subject matter jurisdiction and thus is

properly asserted in a plea to the jurisdiction.”); accord Lubbock Cnty. Water Control & Imp. Dist.

v. Church & Akin, L.L.C., 442 S.W.3d 297, 305 (Tex. 2014); Jones, 8 S.W.3d at 638. In its plea,

the defendant bears the burden “to establish that it is a governmental entity entitled to

governmental immunity.” Church & Akin, 442 S.W.3d at 305; accord Miranda, 133 S.W.3d at

228 (requiring “the state to meet the summary judgment standard of proof”). If the governmental

entity meets its burden, the burden shifts back to the plaintiff “to establish, or at least raise a fact

issue on, a waiver of immunity.” Church & Akin, 442 S.W.3d at 305; accord Miranda, 133 S.W.3d

at 228. If the trial court denies the plea, the governmental entity may appeal. TEX. CIV. PRAC. &

REM. CODE ANN. § 51.014(a)(8) (West Supp. 2014); Ben Bolt-Palito Blanco, 212 S.W.3d at 324;

Miranda, 133 S.W.3d at 225–26.

                                       STANDARD OF REVIEW

        In appellate review of a trial court’s decision on a plea to the jurisdiction, the question of

“whether [the trial] court has subject matter jurisdiction is a question of law” which we review de
                                                  -3-
                                                                                       04-14-00429-CV

novo. Miranda, 133 S.W.3d 226 (citing Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74
S.W.3d 849, 855 (Tex. 2002)).

       The parties’ burdens for a plea to the jurisdiction “generally mirror[] that of a [traditional]

summary judgment.” Miranda, 133 S.W.3d at 228 (referencing TEX. R. CIV. P. 166a(c)). After

the plaintiff “allege[s] facts that affirmatively demonstrate a trial court’s subject matter

jurisdiction,” id. at 226, the governmental entity must “assert[] and support[] with evidence [the

proposition] that the trial court lacks subject matter jurisdiction” Id. at 228. If the governmental

entity fails to conclusively disprove any essential element required to show waiver, it is not entitled

to have its plea granted. See id. (applying summary judgment burdens to a plea to the jurisdiction);

Elliott-Williams Co., Inc. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999) (“The defendant as movant must

disprove at least one of the essential elements of the plaintiff’s causes of action to prevail on

summary judgment.”); cf. Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 642 (Tex.

2012) (granting a plea to the jurisdiction on a claim because the governmental entity negated an

essential element of plaintiff’s claim and plaintiff failed to raise a fact question on the negated

element).

       The court must “take as true all evidence favorable to the nonmovant [and] indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor.” Miranda, 133 S.W.3d at

228.

                                             ANALYSIS

       In its sole issue on appeal, CPS Energy asserts it is immune from Casey’s suit on two bases:

first, because Casey’s claims “fall outside the contract and outside Section 271.152[’s]” waiver of

immunity; and second, because Casey’s damages “are not recoverable under section 271.153.”

Before we address CPS Energy’s arguments, we briefly review the statutory requirements

pertaining to Casey’s claims and CPS Energy’s governmental immunity defense.
                                                 -4-
                                                                                      04-14-00429-CV

A.     CPS Energy has Governmental Immunity

       In this matter, the City of San Antonio is acting through CPS Energy, and the City is a local

governmental entity. See TEX. LOC. GOV’T CODE ANN. § 271.151(3)(A) (West 2005); Tooke v.

City of Mexia, 197 S.W.3d 325, 345 (Tex. 2006) (“A local government entity is defined to include

a municipality.”). As a local governmental entity, the City has immunity from suit unless its

immunity is waived. See TEX. LOC. GOV’T CODE ANN. § 271.152; Tooke, 197 S.W.3d at 332.

B.     Applicable Immunity Waiver Law for Casey’s Suit

       Casey’s breach of contract claims arise under the contract CPS Energy and Casey entered

into in August 2004. CPS Energy’s immunity was not waived by statute for such a claim before

September 1, 2005.      See Zachry Const., 2014 WL 4472616, at *14 (Boyd, J., dissenting)

(reviewing the history of local governmental entity immunity against contract actions). Therefore,

sections 271.152 and 271.153 apply in this case. See Act of May 20, 2005, 79th Leg., R.S., ch.

604, § 2, sec. 271.152, .153, 2005 Tex. Gen. Laws 1548, 1549 (West) (codified at TEX. LOC. GOV’T

CODE ANN. §§ 271.152–.153) (applying sections 271.152 and 271.153 “to a claim that arises under

a contract executed before the effective date of this Act only if sovereign immunity has not been

waived with respect to the claim before the effective date of this Act”).

C.     Section 271.152, “Waiver of Immunity to Suit for Certain Claims”

       1.      CPS Energy’s Argument

       As its first basis to show its immunity was not waived, CPS Energy asserts that Casey’s

own pleadings affirmatively negate jurisdiction. CPS Energy insists that Casey’s pleadings admit,

as a matter of law, the additional work Casey did for which it seeks damages was “outside the

contract.” CPS Energy argues that the essential terms for the extra work Casey performed were

not defined because it did not issue a change order authorizing the work; thus, there was no contract

governing the work, and its immunity from suit is not waived by section 271.152.
                                                -5-
                                                                                    04-14-00429-CV

       2.      Section 271.152’s Plain Language

       Section 271.152 states the conditions on which a local governmental entity’s immunity

from suit is waived.

               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. LOC. GOV’T CODE ANN. § 271.152 (West 2005).

       3.      Requirements to Invoke Section 271.152’s Waiver

       We review the evidence pertaining to each of the statutory requirements necessary to

invoke section 271.152’s waiver of immunity.

       •       The City of San Antonio is a local governmental entity. See TEX. LOC. GOV’T CODE
               ANN. § 271.152 (“local governmental entity” (emphasis added)).
       •       Acting through CPS Energy, it was authorized by statute to enter into a contract
               with Casey for the J.T. Deely power station modifications. See id. (“authorized
               by statute . . . to enter into a contract” (emphasis added)); City of San Antonio ex
               rel. City Pub. Serv. Bd. of San Antonio v. Casey Indus., Inc., 381 S.W.3d 589, 596
               (Tex. App.—San Antonio 2012, pet. denied) (citing TEX. LOC. GOV’T CODE ANN.
               § 271.119 (“Design-Build Contracts for Facilities”)).
       •       It did so in August 2004. See TEX. LOC. GOV’T CODE ANN. § 271.152 (“enters into
               a contract” (emphasis added)); Casey Indus., 381 S.W.3d at 596–97.
       •       In its pleadings, Casey (1) alleged that CPS Energy breached the August 2004
               contract and (2) provided evidence of the executed contract and affidavits
               supporting its allegations of breach. Casey also provided evidence that contract
               provisions under paragraph 14.1.2 include procedures for CPS Energy or Casey to
               modify the scope of work, change the performance schedule, and seek an increase
               or decrease in the D/B contractor’s compensation. It argued and pled evidence
               showing that it complied with the procedures to raise, discuss, and resolve a claim.
               See TEX. LOC. GOV’T CODE ANN. § 271.152 (“claim for breach of contract”
               (emphasis added)).

Specifically, Casey argued contract section 14.1.2 authorized Casey to seek additional

compensation. Article 14 addresses “Default and Termination”; section 14.1 is titled “Default by

[Casey] or Wheelabrator”; the concluding sentence of section 14.1.2 reads as follows:

                                               -6-
                                                                                     04-14-00429-CV

       Provided [Casey] is not in Default itself, a Default by Wheelabrator under Section
       14.1.1, which results in an impairment or frustration of [Casey’s] Work through no
       fault of [Casey], shall be considered a “Force Majeure” event and will entitle
       [Casey] to request an extension of time and/or additional compensation by Notice
       to [CPS Energy] as required in Section 9:1.3.

Casey pointed the trial court to CPS Energy’s January 3, 2006 letter declaring Wheelabrator was

in default under the contract. Casey pled evidence, including an affidavit from one of its officers,

to show it complied with the contract’s requirements to request additional compensation.

       Having reviewed the evidence in the light most favorable to Casey, we conclude Casey

met its burden to show CPS Energy’s immunity was waived. See Zachry Const., 2014 WL
4472616, at *7; Miranda, 133 S.W.3d at 228.

       4.      CPS Energy’s Evidence to Rebut Waiver of Immunity

       Because Casey met its initial burden, the burden shifted to CPS Energy to conclusively

disprove a waiver of its immunity from suit. See Miranda, 133 S.W.3d at 226–28; Elliott-Williams

Co., Inc. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999) (“The defendant as movant must disprove at least

one of the essential elements of the plaintiff’s causes of action to prevail on summary judgment.”).

To overcome Casey’s evidence that CPS Energy’s immunity was waived, CPS Energy argued and

pled evidence that Casey did not comply with what it asserts are the applicable contract procedures,

e.g., 9.1 Change Orders. It contended that the only contractual procedure to modify Casey’s scope

of work was the change order provision, Casey never requested a change order, it never issued

one, and any additional work Casey did was not covered by a contract. Thus, CPS Energy argues,

without a valid contract for the additional work, section 271.152 does not apply and its immunity

was not waived.

       Viewing the parties’ evidence in the light most favorable to Casey, Miranda, 133 S.W.3d

at 228, we conclude CPS Energy failed to meet its burden to disprove as a matter of law any

essential element of section 271.152, see Elliott-Williams Co., 9 S.W.3d at 803; cf. Mission Consol.

                                                -7-
                                                                                                   04-14-00429-CV

Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 642 (Tex. 2012) (granting a plea to the jurisdiction

on a claim because the governmental entity negated an essential element of plaintiff’s claim and

plaintiff failed to raise a fact question on the negated element).

         Because “Section 271.152 uses Section 271.153 to further define to what extent immunity

has been waived,” we next consider whether Casey’s claimed damages are of the type recoverable

under section 271.153. See id.

D. Section 271.153, “Limitations on Adjudication Awards”

         As its second basis to show it is immune from suit, CPS Energy argues Casey’s damages

are not recoverable under section 271.153. Section 271.153 2 reads in its entirety as follows:

         (a) The total amount of money awarded in an adjudication brought against a local
         governmental entity for breach of a contract subject to this subchapter is limited to
         the following:
                 (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 delays or acceleration;
                 (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; and
                 (3) interest as allowed by law.
         (b) Damages awarded in an adjudication brought against a local governmental
         entity arising under a contract subject to this subchapter may not include:
                 (1) consequential damages, except as expressly allowed under Subsection
                 (a)(1);
                 (2) exemplary damages; or
                 (3) damages for unabsorbed home office overhead.

2
 Section 271.153 was amended in 2009, 2011, and 2013, but the changes apply “only to a claim that arises under a
contract executed on or after the effective date of [the respective] Act.” See, e.g., Act of May 21, 2009, 81st Leg.,
R.S., ch. 1266, § 17, 2009 Tex. Gen. Laws 4006, 4008 (West) (amending, inter alia, TEX. LOC. GOV’T CODE ANN.
§ 271.153). Each revising act applied the former law to contracts executed before its effective date. See, e.g., id.

                                                        -8-
                                                                                       04-14-00429-CV

Act of May 20, 2005, 79th Leg., R.S., ch. 604, § 1, sec. 271.153, 2005 Tex. Gen. Laws 1548, 1549

(amended 2009, 2011, 2013) (current version at TEX. LOC. GOV’T CODE ANN. § 271.153 (West

Supp. 2014)).

       CPS Energy argues that even if its governmental immunity were waived by section

271.152, its immunity from suit was not waived because Casey’s claimed damages are not those

allowed by section 271.153. Citing section 271.153, CPS Energy argues there was no balance due

or owed because Casey had been paid in full, CPS Energy did not sign any change orders, and the

evidence conclusively proves it was not responsible for any delays.

       In response, Casey pled evidence showing Wheelabrator, acting as CPS Energy’s

contractor, caused project delays, Casey cites the contract provisions that allow it to seek additional

compensation, e.g., 14.1.2, and it provides evidence that it complied with those provisions. Casey

pled evidence to show there is a balance due and owed to it by CPS Energy for the retainage—

which CPS Energy admits it has not paid. See TEX. LOC. GOV’T CODE ANN. § 271.153(a)(1)

(allowing damages for “balance due and owed” from “owner-caused delays”). Casey also argues

CPS Energy owes it damages for the additional work CPS Energy required it to perform on the

power station. See id. § 271.153(a)(2) (allowing damages for “additional work the contractor is

directed to perform”). Casey contends the additional work it did was work defined in the contract

but not within Casey’s original scope of work. Casey also asserts the contract terms required it to

do the work or pay liquidated damages in the amount of approximately $150,000 per day.

       Viewing the parties’ evidence in the light most favorable to Casey, Miranda, 133 S.W.3d

at 228, we conclude it shows Casey is suing CPS Energy on a breach of contract claim arising

from a contract with CPS Energy for damages it claims CPS Energy owes it for additional work

CPS Energy required it to do. See TEX. LOC. GOV’T CODE ANN. § 271.153(a). Thus, we conclude

Casey met its burden to show its claimed damages are recoverable under section 271.153. See id.;
                                                 -9-
                                                                                     04-14-00429-CV

Zachry Const., 2014 WL 4472616, at *7 (requiring the claimant to “plead facts with some

evidentiary support that constitute a claim for which immunity is waived”); Miranda, 133 S.W.3d

at 228.

          On the other hand, we conclude CPS Energy failed to meet its burden to prove as a matter

of law that Casey’s damages are not recoverable under section 271.153. See Mission Consol.

Indep. Sch. Dist., 372 S.W.3d at 642 (requiring, for its plea to the jurisdiction to be granted, the

governmental entity defendant to conclusively negate at least one essential element of the

claimant’s claim).

                                            CONCLUSION

          Having reviewed all the evidence in the light most favorable to Casey, Miranda, 133
S.W.3d at 228, we conclude Casey met its burden to “plead facts with some evidentiary support

that constitute a claim for which immunity is waived.” See Zachry Const., 2014 WL 4472616, at

*7. To the contrary, CPS Energy failed to meet its burden to conclusively negate any essential

element of subject matter jurisdiction. See Miranda, 133 S.W.3d at 228; Elliott-Williams Co., 9
S.W.3d at 803.

          Therefore, we overrule CPS Energy’s issue and affirm the trial court’s order.

                                                    Patricia O. Alvarez, Justice

                                                 - 10 -