Court Opinion

ID: 2807286
Source: CourtListenerOpinion
Date Created: 2015-06-11 11:20:11.612183+00
Date Added: 2024-06-11T11:30:03.816281
License: Public Domain

NUMBER 13-13-00340-CV

                             COURT OF APPEALS

                    THIRTEENTH DISTRICT OF TEXAS

                       CORPUS CHRISTI - EDINBURG

PARTNERS DEWATERING INTERNATIONAL, L.C.,                                 Appellant,

                                          v.

CITY OF RIO HONDO,                                                       Appellee.

                     On appeal from the 445th District Court
                          of Cameron County, Texas.

                          MEMORANDUM OPINION

     Before Chief Justice Valdez and Justices Rodriguez and Garza
             Memorandum Opinion by Justice Rodriguez
       This accelerated, interlocutory appeal involves the grant of a plea to the

jurisdiction.   See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (West, Westlaw

through 2013 3d C.S.). Appellant Partners Dewatering International, L.C. (PDI) filed a

breach of contract claim against appellee the City of Rio Hondo. In response, Rio Hondo
filed a plea to the jurisdiction asserting immunity.               See TEX. LOC. GOV’T CODE ANN.

§ 271.152 (West, Westlaw through 2013 3d C.S.). The trial court sustained the plea.

By a single issue, PDI contends that the trial court erred in granting Rio Hondo’s plea to

the jurisdiction. We reverse and remand.

                                            I.      Background

A.      The Agreement

        In 2008, PDI and Rio Hondo entered into an operating lease agreement (the

Agreement) for a liquid waste de-watering facility or a Type V-GG facility (the Facility).

See 30 TEX. ADMIN. CODE § 330.5(a)(3) (providing for a Type V Municipal Solid Waste

(MSW) Facility that is described as a “[s]eparate solid waste processing facility” including

“processing plants that transfer, incinerate, shred, grind, bale, salvage, separate,

dewater, reclaim, and/or provide other storage or processing of solid waste”) (emphasis

added). The Facility was to be located on the grounds of Rio Hondo’s Waste Water

Treatment Facility, also referred to as the Waste Water Treatment Plant (WWTP). 1 As

set out in the Agreement, PDI requested and Rio Hondo agreed to permit PDI “to

establish, operate and maintain the Facility “for the purpose of treating grease, grit, and

septage.”2 At its “sole cost, risk and expense,” PDI would “obtain a required registration,

install and operate” the Facility.

        1  Each party attached a copy of the “Operating Lease Agreement for Liquid Waste De-Watering
Facility” as relevant evidence supporting the pleadings before the trial court, including Rio Hondo’s plea to
the jurisdiction and PDI’s response to the plea. See City of Waco v. Kirwan, 298 S.W.3d 618, 622 (Tex.
2009).

        2 Section 330.9(g) of title 30 of the Texas Administrative Code provides, in relevant part, for the

following Type V registration:

                                                     2
        Pursuant to the Agreement, the WWTP would accept “water and wastewater

treatment sludges, organic non-hazardous industrial sludges, and chemical toilet

wastes,”3 and Rio Hondo would provide PDI, “when available, activated sewer sludge

generated by [Rio Hondo] for the purpose of mixing said sludge with the collected waste

in order to facilitate the separation of solids from liquids”—which, both parties

acknowledged, was the de-watering process. Processing and disposing of this activated

sludge was to “be at the sole cost, risk and expense of [PDI].” And PDI was “solely

responsible for disposing of any byproduct resulting from the [d]e-[w]atering process.”

        The Agreement addressed modifications and improvements,4 setting out, among

other things, that PDI was not to expend funds in excess “of $10,000.00 for material and

equipment for the mutually agreed improvements to [Rio Hondo’s] WWTP.”                                 The

Agreement described this expenditure for modifications as additional consideration—an

amount to be paid “[i]n addition to the consideration” Rio Hondo charged PDI for effluent

discharge that is discussed below. Yet the Agreement provided that “[a]ll modifications

[were] owned by [PDI],” and at PDI’s option, the modifications would be returned to PDI.

In addition, PDI was to return the property to its “original condition as much as possible”

        [A] registration is required for an MSW Type V processing facility that processes only
        grease trap waste, grit trap waste, or septage or a combination of these three liquid wastes
        . . . . For the purposes of this section, grit trap waste means grit trap waste from
        commercial car washes and excludes grit trap waste from other generators.

30 TEX. ADMIN. CODE § 330.9(g).

        3  The Solid Waste Disposal Act defines “sludge” as “solid, semisolid, or liquid waste generated
from a municipal, commercial, or industrial wastewater treatment plant, water supply treatment plant, or air
pollution control facility, excluding the treated effluent from a wastewater treatment plant.” TEX. HEALTH &
SAFETY CODE ANN. § 361.003(33) (West, Westlaw through 2013 3d C.S.).

        4   The parties use “modifications” and “improvements” interchangeably.
                                                     3
upon termination of the Agreement.        Finally, because the Agreement restricted the

Facility’s business traffic to a specific access road, PDI was also “required to construct

and maintain at its sole cost, risk and expense a road surface from the point of entry [off

of Reynolds Street] to the loading and unloading point of the Facility.”

       The monitoring of the Facility was to be in a manner approved by Rio Hondo to

verify that the Facility’s operations complied with State and Federal regulations. The

Agreement provided the following:

       All WWTP effluent sampling will be conducted by [PDI] and delivered to an
       approved laboratory with the cost of analysis to be borne by [Rio Hondo].
       All sampling requirements as set out in the Type V[-]GG . . . registration will
       be at the sole cost, risk and expense of [PDI].

       Regarding consideration, Rio Hondo agreed to allow PDI “to discharge treated

effluent from the [d]e-[w]atering process into [the WWTP] for treatment.” For the effluent

discharge, PDI agreed to pay Rio Hondo “$0.01 per gallon of waste as manifested being

received at the de-watering facility and $0.003125 as manifested and received at the

WWTP but in no event will [Rio Hondo] receive less than a minimum of $1,500.00 per

month.” The Agreement referred to this payment as the monthly amount PDI agreed to

pay Rio Hondo for the lease of its property for the Facility on the grounds of the WWTP.

The last sentence of this paragraph also set out that “[a]ll sludge generated by the WWTP

will be collected, hauled and disposed [of] at the sole cost[,] risk[,] and expense of [PDI].”

B.     PDI Sued Rio Hondo for Breach of Contract

       In February 2013, the governing body of Rio Hondo voted to terminate the

Agreement. PDI claimed that it had not materially defaulted and requested that the

parties arbitrate the matter.    When Rio Hondo did not respond to PDI’s arbitration

                                              4
demand, PDI sued Rio Hondo for breach of contract. In its petition, PDI alleged that

because the Agreement required PDI to provide Rio Hondo with goods and services, Rio

Hondo waived its immunity from suit.5           See TEX. LOC. GOV’T CODE ANN. § 271.152. PDI

sought damages on its breach of contract claim including “the balance due and owed by

[Rio Hondo] under the contract.” See id. § 271.153 (West, Westlaw through 2013 3d

C.S.). Rio Hondo filed a plea to the jurisdiction claiming it retained its immunity because

the Agreement “is a straight operating lease agreement for a liquid waste de-watering

facility” with “no special services provided or associated with this [c]ontract.” The trial

court granted Rio Hondo’s plea to the jurisdiction, and PDI filed this accelerated,

interlocutory appeal.

                                    II.     Standard of Review

        A plea to the jurisdiction is a dilatory plea; its purpose is "to defeat a cause of action

without regard to whether the claims asserted have merit." Bland Indep. Sch. Dist. v.

Blue, 34 S.W.3d 547, 554 (Tex. 2000). The plea challenges the trial court's jurisdiction

over the subject matter of a pleaded cause of action. Tex. Dep't of Parks & Wildlife v.

Miranda, 133 S.W.3d 217, 226 (Tex. 2004); Tex. Parks & Wildlife Dep't v. Morris, 129
S.W.3d 804, 807 (Tex. App.—Corpus Christi 2004, no pet.). Subject matter jurisdiction

is a question of law; therefore, an appellate court reviews de novo a trial court's ruling on

a plea to the jurisdiction. Miranda, 133 S.W.3d at 226; Morris, 129 S.W.3d at 807.

        A plea to the jurisdiction can make two types of challenges—to the pleadings or to

        5 Although PDI generally contends that it provided “goods and services” to Rio Hondo, its argument

on appeal discusses only PDI’s alleged provision of “services.” PDI does not develop any contention
regarding “goods” provided to Rio Hondo. Accordingly, we do not consider whether PDI provided “goods”
to Rio Hondo.
                                                    5
the existence of jurisdictional facts. See Miranda, 133 S.W.3d at 226–28. When a trial

court bases its decision concerning a plea to the jurisdiction on the plaintiff's pleadings,

we construe the pleadings liberally in favor of the plaintiff, accepting as true all factual

allegations in the pleadings and looking to the pleader’s intent, to determine if the plaintiff

met his burden to plead facts sufficient to confer jurisdiction on the court. Id. at 226;

Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003); Morris, 129
S.W.3d at 807. If the pleadings neither affirmatively demonstrate nor negate jurisdiction,

the plaintiff should be given an opportunity to amend the pleadings. City of Waco v.

Kirwan, 298 S.W.3d 618, 622 (Tex. 2009). When a plea to the jurisdiction challenges

the existence of jurisdictional facts, as here, we consider relevant evidence submitted by

the parties when necessary to resolve the jurisdictional issues that are raised. Id. (citing

Miranda, 133 S.W.3d at 227); see also City of Corpus Christi v. Scorpio Development,

LLC, No. 13-13-00445-CV, 2014 WL 1007880, at *2 (Tex. App.—Corpus Christi Mar. 13,

2014, no pet.) (mem. op.).       If that evidence creates a fact question regarding the

jurisdictional issue, then the district court cannot grant the plea to the jurisdiction, and the

fact issue will be resolved by the factfinder. Kirwan, 298 S.W.3d at 622; Miranda, 133
S.W.3d at 227–28. “However, if the relevant evidence is undisputed or fails to raise a

fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction

as a matter of law.” Miranda, 133 S.W.3d at 228.

       Here, the parties do not dispute the language or content of the Agreement, which

both attached to their pleadings. So we review whether the Agreement is a contract

providing services to Rio Hondo as a question of law. See MCI Telecomms. Corp. v.

                                               6
Tex. Utils. Elect. Co., 995 S.W.2d 647, 650 (Tex. 1999) (providing that construction of an

unambiguous contract is a question of law for the court); Water Exploration Co., Ltd., v.

Bexar Metro. Water Dist. 345 S.W.3d 492, 495 (Tex. App.—San Antonio 2011, no pet.).

                                       III.    Applicable Law

        Rio Hondo is a local governmental entity. See TEX. LOC. GOV’T CODE ANN. §

271.151(3)(A) (West, Westlaw through 2013 3d C.S.).

        Local governmental entities “enjoy governmental immunity from suit, unless
        immunity is expressly waived.” Kirby Lake Dev., Ltd. v. Clear Lake City
        Water Auth., 320 S.W.3d 829, 836 (Tex. 2010). Governmental immunity
        includes both immunity from liability, “which bars enforcement of a judgment
        against a governmental entity, and immunity from suit, which bars suit
        against the entity altogether.” Tooke v. City of Mexia, 197 S.W.3d 325, 332
        (Tex. 2006). A governmental entity that enters into a contract “necessarily
        waives immunity from liability, voluntarily binding itself like any other party
        to the terms of agreement, but it does not waive immunity from suit.” Id.
        Unlike immunity from liability, immunity from suit deprives the courts of
        jurisdiction and thus completely bars the plaintiff's claim. Wichita Falls
        State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003).

Lubbock County Water Control & Improvement Dist. v. Church & Akin, L.L.C., 442 S.W.3d
297, 300 (Tex. 2014).6

        Section 271.152 of the local government code “provides a limited waiver of

immunity for local governmental entities that enter into certain contracts.” Id. at 301

(citing Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 412 (Tex. 2011);

Kirby Lake, 320 S.W.3d at 838 (stating that the statute “waives immunity from suit for

certain contract claims”)). This waiver applies only to contracts that are in writing, are

properly executed, and state “the essential terms of the agreement for providing goods

        6The Texas Supreme Court decided Lubbock County Water Control & Improvement District v.
Church & Akin after the trial court made its ruling in this case. See generally 442 S.W.3d 297 (Tex. 2014).
                                                    7
or services to the local governmental entity.”           TEX. LOC. GOV’T CODE ANN.

§ 271.151(2)(A); Church & Akin, 442 S.W.3d at 301. And waiver applies “regardless of

the document's title and even if the provision of goods and services is not the primary

purpose of the contract.” Id. at 302.

       While section 271 does not define the term “services,” the Texas Supreme Court

has held that, in the context of section 271.152, the term “is broad enough to encompass

a wide variety of activities.” Id. (quoting Kirby Lake, 320 S.W.3d at 839); see also City

of Alamo v. Osuna, No.13-13-00317-CV, 2014 WL 6602387, at *4 (Tex. App.—Corpus

Christi Nov. 20, 2014, no pet.) (memo. op.).      “The term ‘includes generally any act

performed for the benefit of another under some arrangement or agreement whereby

such act was to have been performed.’” Church & Akin, 442 S.W.3d at 303 (quoting

Kirby Lake, 320 S.W.3d at 839). In other words, “there must be some obligation to

perform.” Kirby Lake, 320 S.W.3d at 839. The services must be provided directly to the

governmental entity, see id. at 838, and “would not extend to ‘contracts in which the

benefit that the local governmental entity would receive is an indirect, attenuated one.’”

Church & Akin, 442 S.W.3d at 303 (citing Kirby Lake, 320 S.W.3d at 839 (quoting

Berkman v. City of Keene, 311 S.W.3d 523, 527 (Tex. App.—Waco 2009, no pet.) (op.

on reh’g))). “[T]he absence of any agreement by the governmental entity to pay for

goods or services may indicate that the claimant[, PDI in this case,] did not in fact agree

to provide goods or services to the governmental entity.” Church & Akin, 442 S.W.3d at

305; see also City of Alamo, 2014 WL 6602387, at *3. Yet in some instances a party

may agree to provide services in exchange for something other than payment. Church

                                            8
& Akin, 442 S.W.3d at 305; see also City of Alamo, 2014 WL 6602387, at *3.

                                          IV.      Discussion

        By a single issue, PDI challenges the trial court's granting of Rio Hondo’s plea to

the jurisdiction, arguing that section 271.152’s waiver of immunity from suit applies to the

Agreement because PDI provided services to Rio Hondo. Rio Hondo disagrees. The

principal dispute then in this appeal is whether the parties’ agreement includes an

“agreement for providing . . . services [to Rio Hondo].” See TEX. LOC. GOV’T CODE ANN.

§ 271.152(1)(A).

        PDI argues that Rio Hondo waived its immunity because the Agreement obligated

PDI to perform services related to: (1) satisfying Rio Hondo’s regulatory obligations

under the Texas Administrative Code; (2) making renovations to the WWTP; and (3)

obtaining a specialized Type V-GG registration from the Texas Commission on

Environmental Quality (TCEQ). 7            PDI claims that all of these alleged services were

“critical to the improved operation and benefit of Rio Hondo’s existing [WWTP].” We

address each argument in turn.

A.      “Services” Related to Satisfying Rio Hondo’s Regulatory Obligations

        Specifically, PDI asserts that it provided services involving the processing and

disposal of sludge, see 30 TEX. ADMIN. CODE § 312 (providing for sludge use, disposal,

and transportation), the sampling, monitoring, and reporting of effluent, see id. §§ 309.1–

.4 (setting out effluent limitations); id. § 319.1 (discussing effluent monitoring and

         7 Although PDI indicates that it applied for a Type V-GG permit, it appears from our review that PDI

sought to register the Facility with the Texas Commission on Environmental Quality. PDI filed its
application under section 330.9, which requires registration, not a permit. See 30 TEX. ADMIN. CODE ANN.
§ 330.9.
                                                     9
reporting requirements); and the controlling of odor, see id. § 309.13 (describing

unsuitable site characteristics, including the control of a nuisance of odor).

       1.     Rio Hondo’s Sludge

              a.     Activated Sludge

       Rio Hondo agreed to provide PDI with its “activated sewer sludge,” when available,

to facilitate PDI’s de-watering process. Because PDI was to bear the cost, risk, and

expense of processing and disposing of this activated sewer sludge, PDI claims that it

provided a service to Rio Hondo. But PDI’s processing and disposing of this sludge

directly benefited PDI’s de-watering process. At best, it only indirectly benefited Rio

Hondo. See Church & Akin, 442 S.W.3d at 305; Kirby Lake, 320 S.W.3d at 838–39.

Under this provision of the Agreement, we cannot conclude that PDI provided services to

Rio Hondo.

              b.     All Sludge Generated by the WWTP

       The Agreement also provided that PDI, at its sole cost, risk, and expense, would

collect, haul, and dispose of “[a]ll sludge generated by the WWTP.” By this provision,

PDI claims it provided a service to Rio Hondo.

       Unlike the provision directing PDI to process and dispose of activated sludge used

to facilitate its de-watering process, this provision set out that PDI was to collect, haul,

and dispose of all sludge that WWTP generated. So by this language, the Agreement

identified an act to be performed by PDI for the direct benefit of Rio Hondo. See Church

& Akin, 442 S.W.3d at 303; Kirby Lake, 320 S.W.3d at 839. PDI obligated itself to

perform this service that directly benefited Rio Hondo. See Church & Akin, 442 S.W.3d
10
at 305; see also Kirby Lake, 320 S.W.3d at 839. This was not an indirect or attenuated

benefit to Rio Hondo. See Church & Akin, 442 S.W.3d at 303; Kirby Lake, 320 S.W.3d

at 839. We conclude that by this activity, PDI provided a service to Rio Hondo.

      The Agreement, however, provided for no payment by Rio Hondo to PDI for the

service. See Church & Akin, 442 S.W.3d at 305; see also City of Alamo, 2014 WL
6602387, at *3. Instead, the Agreement set out that PDI was to absorb the cost, risk,

and expense of collecting, hauling, and disposing of all sludge generated by the WWTP.

So we must determine if this is an instance where a party may have agreed to provide a

service in exchange for something other than payment. See Church & Akin, 442 S.W.3d

at 305; see also City of Alamo, 2014 WL 6602387, at *3.

      Rio Hondo and PDI placed this language at the end of the Agreement’s lease

payment provision. This suggests that the parties considered the value of this service to

Rio Hondo in arriving at PDI’s monthly lease payment. The value of PDI’s actions may

have been part of the payment calculation, rather than Rio Hondo paying PDI directly.

Although the actual meaning of this provision seems less than clear, we cannot conclude,

in this case, that because the Agreement did not reflect a payment from Rio Hondo to

PDI for this service, PDI did not in fact agree to provide this service to Rio Hondo. Cf.

Church & Akin, 442 S.W.3d at 305; City of Alamo, 2014 WL 6602387, at *3.

      This provision sets out an essential term of the Agreement for a service to be

rendered to Rio Hondo. See Church & Akin, 442 S.W.3d at 301; Kirby Lake, 320 S.W.3d

at 839. Even though the service provided did not address the Agreement’s primary

purpose, we conclude that the Agreement’s requirement regarding the collecting, hauling,

                                           11
and disposing of all sludge generated by the WWTP constituted a service under the

statute. So Rio Hondo waived immunity to suit. See Kirby Lake, 320 S.W.3d at 839;

see also TEX. LOC. GOV’T CODE ANN. § 271.151(2).

       2.     Effluent

       PDI also contends that its obligation to conduct all of WWTP’s effluent sampling

and to deliver the samples to an approved laboratory for analysis constituted a service to

Rio Hondo. However, Rio Hondo was to pay for any costs related to the analysis of the

effluent samples for the WWTP. And PDI was responsible for “the sole cost, risk and

expense” related to all sampling requirements for PDI’s Type V-GG registration. While

Rio Hondo may have benefited from PDI conducting the effluent sampling and delivering

those samples to the laboratory, we can only conclude that those benefits were indirect

in light of PDI, itself, directly benefiting from monitoring its Facility and satisfying its own

requirements under the Type V-GG registration. And there is nothing in the Agreement

that would support a conclusion that Rio Hondo agreed to pay PDI to collect and deliver

the effluent samples, which indicates, in this instance, that PDI did not agree to provide

this service to Rio Hondo.       See Church & Akin, 442 S.W.3d at 305.             Finally, this

language is found in a paragraph titled, “Monitoring of the Facility.”          As part of its

obligation under the Agreement, PDI monitored its Facility to verify that its operations

complied with all State and Federal regulations and the requirements or limits of Rio

Hondo’s EPA and TECQ permits.                Accordingly, we cannot conclude that the

Agreement’s provisions regarding effluent sampling evidenced a service to Rio Hondo.

       3.     Odors and Contaminants

                                              12
       PDI further contends that it provided a service to Rio Hondo by agreeing to “control

and contain any odor and contaminants, if any, within the WWT[P].” PDI argues that this

alleged service directly benefited Rio Hondo because it satisfied one of Rio Hondo’s

regulatory obligations as a “permitee of a Waste Water Treatment Facility.” However,

the Agreement provides, in its entirety, the following:

              [PDI] further agrees that the Facility will be constructed so as to
       contain any spillage and [PDI] shall assume all liability for any spillage that
       may occur. [PDI] will control and contain any odor and contaminants, if
       any, within the WWT Plant, and such odors or contaminants shall not be at
       a level to cause any harm, danger or destruction to any person or property.
       Nor will any odor be at a level that would offend any reasonable person with
       a normal sense of smell.

       When read in context, the odor and contaminants discussed in this paragraph do

not refer directly to Rio Hondo’s regulatory obligations as permitee of the WWTP.

Instead, this portion of the paragraph titled “Establishment, Operation[,] and Maintenance

of the Facility,” refers to PDI’s agreement to contain spillage at its Facility and to control

and contain any odor and contaminants within the WWTP that involve its Facility; the

Agreement simply addressed restrictions on PDI’s operation of the Facility. At best, this

referenced odor and contamination control would only indirectly benefit Rio Hondo. We

cannot conclude that the Agreement’s provisions regarding odors constituted a service to

Rio Hondo.

B.     “Services” Related to Modifications/Improvements

       PDI contends that by agreeing to make certain renovations to the WWTP, it

provided a service to Rio Hondo. PDI claims that the Agreement

       provides a significant benefit to Rio Hondo as it calls for PDI to make
       improvements to Rio Hondo’s [WWTP]. While Rio Hondo argues that such

                                             13
       improvements are of no benefit to Rio Hondo because they are removable,
       this argument overlooks that the returning of [the] premises to an original
       condition . . . is in and of itself, an additional service to Rio Hondo that is
       provided for under the Agreement.

PDI identifies the following, which it claims are services: (1) expending funds not to

exceed $10,000 for mutually agreed improvements to the WWTP; (2) constructing and

maintaining a road on Rio Hondo-owned property; and (3) installing and operating a

liquid waste de-watering facility on the grounds of the WWTP. In response, Rio Hondo

argues that all construction, modifications, and improvements, including the road, were

not for the benefit of Rio Hondo, but for PDI’s own operation of its business. We agree

with Rio Hondo.

       First, the Facility was to be installed and operated at PDI’s “sole cost, risk and

expense.”    The de-watering equipment was owned by PDI and was to be promptly

removed “[s]hould [PDI] cease to operate the de-watering system for its intended

purpose.” The Agreement similarly provided that PDI owned all modifications and that,

at PDI’s option, they would be returned to PDI upon the termination of the Agreement.

Second, the modifications or improvements to the Facility directly benefited PDI because

the expenditure of funds to improve the WWTP, the construction and maintenance of the

road, and the installation and operation of the de-watering facility facilitated the operation

of PDI’s business. PDI paid for and owned all equipment and modifications. Upon

termination of the Agreement, “[t]he property [was] to be returned to the original condition

as much as possible by [PDI]” through the removal and return of equipment and

modifications to PDI, which again provided a benefit to PDI, not Rio Hondo. And absent

from the contract was any agreement by Rio Hondo to pay PDI for any modifications or

                                             14
for the return of the property to its original condition, which we conclude, in this instance,

indicates that PDI did not agree to provide this as a service to Rio Hondo. See Church

& Akin, 442 S.W.3d at 305.

       PDI also agreed to construct and maintain a road for the Facility’s business traffic,

from “the point of entry [onto WWTP’s property] to the loading and unloading point of the

Facility.” This road was to “include an area for the parking of [PDI’s] equipment and

trucks.” We conclude that PDI’s act of building this road did not provide a service directly

to Rio Hondo. See Kirby Lake, 320 S.W.3d at 839. The road provided a direct benefit

to PDI, allowing ingress and egress to the Facility for its business traffic. It also provided

a parking area for PDI’s equipment and trucks.          While the road would likely have

remained on the property upon termination of the Agreement, we conclude that Rio

Hondo would only have received an indirect, attenuated benefit from its construction and

its use. See Church & Akin, 442 S.W.3d at 303 (citing Kirby Lake, 320 S.W.3d at 839).

       PDI relies on Hoppenstein Properties, Inc. v. McLennan County Appraisal District,

for the proposition that a “lease” has been held to waive immunity from suit under section

271.152 if it involves the provision of goods or services to a governmental entity. See

341 S.W.3d 16, 20 (Tex. App.—Waco 2010, pet. denied) (op. on reh’g). We agree with

the basic premise, but do not agree that Hoppenstein supports PDI’s argument regarding

the lease agreement in this case.

       In Hoppenstein, the McLennan County Appraisal District (MCAD) leased office

space in a building owned by Hoppenstein.           See id. at 19 n.2.     The Waco Court

concluded that under the lease, “Hoppenstein contracted to renovate the [leased]

                                             15
premises for MCAD. Thus, the lease [with a construction contract addendum] entails the

provision of services to MCAD within the meaning of the statute.” Id. (citing Kirby Lake,
320 S.W.3d at 832, 839) (concluding immunity was waived when a Water Authority

entered into a contract that stipulated “that the Developers would build water and sewer

facilities according to the Authority’s specifications [with 70% reimbursement upon voter

approval of bond funds], and that the Developers would lease the facilities to the Authority

free of charge until the Authority purchased them”). In other words, the Hoppenstein

Court found that an agreement for renovation of office space for the government

constituted services to the government entity, which waived immunity.              See id.

Hoppenstein does not apply to the facts of this case where PDI agreed to make

modifications to the WWTP for its own Facility; modifications that we have concluded

were not for the government but for PDI’s benefit.          Therefore, PDI’s reliance on

Hoppenstein is misplaced.

       In sum, based on the above, we cannot conclude that the Agreement’s provisions

addressing modifications, construction, or renovations stated a service provided directly

to Rio Hondo under the Agreement.

C.     “Services” Related to Obtaining a Type V-GG Registration from the TCEQ

       Finally, PDI claims that it provided a service to Rio Hondo because it was obligated

under the Agreement to obtain a specialized registration from the TCEQ called a “Type

V-GG.” See 30 TEX. ADMIN. CODE §§ 330.9(g), 330.57(a–b) (providing the procedure for

a permit application or for a registration application, which follows the same process but

is not subject to a hearing request or to any administrative completeness determinations).

                                            16
PDI argues “[t]his specialized [registration] would provide a significant benefit to Rio

Hondo’s Waste Water Treatment Facility as it would elevate what type of product could

be appropriately handled there,” suggesting that Rio Hondo’s revenues would increase.

      Although Rio Hondo might have received some benefit from the issuance of the

registration for a Type V Liquid Waste Processing Facility (Type V-GG), it is PDI that

directly benefited from its issuance. PDI needed the registration before it could open the

Facility. By the Agreement, PDI, not Rio Hondo, bore the responsibility of applying for

the Type V-GG registration. See id. § 330.57(b). PDI also bore the costs related to the

filing of the MSW registration application. And the Agreement did not suggest that Rio

Hondo was to pay PDI for registering the Facility.       Finally, there is nothing in the

Agreement or the record to support PDI’s contention that obtaining a Type V-GG

registration would have provided a direct benefit to Rio Hondo by increasing its revenue.

See Church & Akin, 442 S.W.3d at 306–07 (concluding that nothing in the lease or the

record substantiated the implication that an increase in marina traffic through Church &

Akin’s sale of catering tickets would benefit the Water District). So we cannot conclude

that the Agreement’s provision requiring PDI to obtain the Type V-GG registration from

the TCEQ stated a service to Rio Hondo.

D.    Summary

      We conclude that the following does not constitute the provision of services directly

to Rio Hondo under the Agreement:        (1) processing and disposing of Rio Hondo’s

activated sludge to facilitate PDI’s de-watering process; (2) conducting effluent sampling

and delivering the samples to an approved laboratory for analysis; (3) controlling and

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containing any odor and contaminants; (4) making renovations or modifications to the

Facility; and (5) obtaining a Type V-GG registration. We do conclude that PDI agreed to

provide a service to Rio Hondo by collecting, hauling and disposing “[a]ll sludge generated

by the WWTP.” The trial court erred in granting Rio Hondo’s plea to the jurisdiction

because the Agreement contemplates the provision of this service to Rio Hondo under

the statute. See Kirby Lake, 320 S.W.3d at 839. We sustain PDI’s issue only on this

basis and overrule it on all other services claimed.

                                    IV.    Conclusion

       We reverse the order of the trial court granting Rio Hondo’s plea to the jurisdiction

and remand this cause to the trial court for further proceedings consistent with this

opinion.

                                                               NELDA V. RODRIGUEZ
                                                               Justice

Delivered and filed the
11th day of June, 2015.

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