Court Opinion

ID: 3096168
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:35:45.184258+00
Date Added: 2024-06-11T12:13:46.196942
License: Public Domain

COURT OF APPEALS
EIGHTH DISTRICT OF
TEXAS
EL PASO, TEXAS
 
 

 
THE EL PASO EDUCATION INITIATIVE, INC., D/B/A
  BURNHAM WOOD CHARTER SCHOOL,
 
                            Appellant,
 
v.
 
AMEX PROPERTIES, LLC,
 
                           
  Appellee.

 
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                  No. 08-11-00378-CV
 
Appeal from the
 
County
  Court at Law Number Six
 
of El
  Paso County, Texas
 
(TC#2008-2370)
 

 
                                                                  O
P I N I O N
Appellant, the El Paso Education Initiative,
Inc. (EPEI) which does business as Burnham Wood Charter School (the charter
school) appeals the trial court’s denial of its plea to the jurisdiction in
which EPEI asserted that it is immune from the breach-of-contract suit filed by
Appellee, Amex Properties, LLC (Amex).  We
affirm the trial court’s order.
BACKGROUND
In 2008, EPEI sought to open an
open-enrollment charter school in east El Paso. 
EPEI then began negotiations with Amex to lease its property at 1441
North Zaragosa Road for the operation of Vista Del Futuro Charter School.
According to EPEI, the president of the
charter school, Iris Burnham, signed a proposed first lease offer and sent it
to Amex’s manager, Silvia Martinez Aguirre (Martinez), who did not agree with
its terms.  Negotiations then continued,
with Martinez revising the penalty for not meeting the occupancy date.
On or about April 24, 2008, Burnham received
from EPEI’s attorney Jerry Wallace, a lease document that incorporated changes
made to a prior version of the lease document. 
Burnham then signed and transmitted the document to Martinez.  Late in the day on Friday, April 25, 2008,
without consulting Amex’s attorney Victor Firth, Martinez took the Lease
Agreement to her bank to sign it before a notary public.
The twenty-four-page document, titled “Lease
Agreement,” bears the signature of Martinez as Manager of landlord Amex
Properties, LLC, the signature of Burnham as President of tenant the EPEI, and
the recital, “Executed as of 17 April 2008.” 
Contained within the Lease Agreement are two notarized certificates of
acknowledgement.  A certificate
acknowledging Burnham’s signature was signed by a notary public on April 24,
2008, and states that Burnham, as President of EPEI, had appeared and
acknowledged that she had executed the Lease Agreement “for the purposes and
considerations therein expressed” on behalf of EPEI.  The certificate acknowledging Martinez’s
signature was signed the following day, on April 25, 2008, by a notary public
who states therein that Martinez, as Manager of Amex, appeared and acknowledged
that Martinez had executed the Lease Agreement “for the purposes and
considerations therein expressed” on behalf of Amex.
Section 31.09 (Entire Agreement) of the
Lease Agreement signed by Burnham and Martinez specifies that “Submission of
this Lease for examination does not constitute an option for the Leased
Premises and becomes effective as a Lease only upon execution and delivery thereof
by Landlord to Tenant.”  On either
Friday, April 25, 2008 or the following Monday, April 28, 2008, Martinez verbally
informed the charter school’s general administrator, Rebeca Perez, and its realtor,
Juan Uribe, that she had executed the written Lease Agreement.
Unaware that Amex and the charter school had
executed a lease document, Firth had continued working on the lease document on
Sunday, April 27, 2008.  That same day,
Firth sent an email to EPEI’s attorney Wallace, in which Firth set forth Amex’s
“responses to your revisions to my initial lease draft,” expressed a hope that the
parties could reach agreement “along these lines,” requested Wallace to refrain
from making other revisions without speaking with him, identified as the “major
issue” Amex’s proposed revision regarding a reduction of deposit as the sole
relief for a delayed completion date, noted his concern that it would be
difficult to meet the completion date “[i]f the parties cannot reach terms,”
and stated that his hope was that “we can get things in a position for the
parties to sign as early as possible this week.”  In his deposition, Firth later explained that
when he sent the email on Sunday, he had intended that it be a rejection of the
charter school’s most recent proposal and had not known at that time that the
parties had already “made their deal” or had signed the agreement.
The following day, April 28, 2008, Wallace
and Firth spoke by phone.  At the time,
neither Wallace nor Firth was aware of the fact that Burnham and Martinez had
signed or executed any documents.  In his
deposition, Wallace stated that he considered Firth’s email to be a
counteroffer.  Later that day or early on
Tuesday, April 29, 2008, Firth learned that Martinez had signed a lease
agreement on the preceding Friday, April 25, 2008.  As soon as Firth learned that Burnham and
Martinez had signed the Lease Agreement, he informed Wallace of that fact and
told Wallace that because their clients had “made their deal,” a contract had
been formed and the parties would need to address their remaining concerns in
an amendment to the executed Lease Agreement.[1]
On April 29, 2008, Wallace informed Firth by
email that the charter school was formally withdrawing its counteroffers and
rejected all offers and counteroffers submitted by Amex as the charter school
no longer desired to lease property from Amex. 
Firth sent an email reply asking Wallace to explain the impasse.  On May 1, 2008, Wallace sent another email to
Firth stating that the charter school had rejected Amex’s counteroffers, noting
Amex’s desire to meet Burnham’s terms regarding the lease, and setting forth
Burnham’s terms regarding occupancy, rental, deposit, space and other
requirements.  That same day, Firth
informed Wallace that he had confirmed that Martinez had signed the Lease Agreement
on April 25, 2008.  On May 5, Martinez
faxed to Wallace the Lease Agreement signed by Martinez and Burnham.
On June 16, 2008, Amex filed a
breach-of-contract suit for anticipatory breach of contract after receiving
notice from Burnham’s attorney, Jerry Wallace, that Burnham rejected the lease
and rejected any assertion that a valid lease existed.  The charter school filed a plea to the
jurisdiction contending that although it had submitted an offer to Amex in the
form of a final, signed lease contract, because Amex did not communicate its
acceptance of the offer after signing the lease document but, instead, allegedly
had rejected the offer and had attempted to negotiate more favorable terms, and
because the charter school had rejected all of Amex’s counteroffers, no
enforceable contract had been formed.  The
charter school asserted that, absent an enforceable contract, it is immune from
suit as a matter of law and its plea to the jurisdiction should be granted.
The trial court denied the charter school’s plea
to the jurisdiction, and EPEI filed this interlocutory appeal.
STANDARD
OF REVIEW
The existence of a trial court’s
subject-matter jurisdiction is a question of law reviewed de novo.  Texas Dep=t of Parks and Wildlife v. Miranda,
133 S.W.3d 217, 226, 228 (Tex. 2004); Tex.
Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002).  When a plea to the jurisdiction challenges
the existence of jurisdictional facts, we consider relevant evidence submitted
by the parties when necessary to resolve the jurisdictional issues raised, as
the trial court is required to do.  Miranda,
133 S.W.3d at 227; see Bland Ind. School
Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).
When the jurisdictional challenge implicates
the merits of the plaintiff=s
cause of action and the plea to the jurisdiction includes evidence, the trial
court reviews the relevant evidence to determine if a fact issue exists.  Miranda, 133 S.W.3d at 227.  If a fact question regarding the
jurisdictional issue is created by the evidence, the trial court cannot grant
the plea to the jurisdiction and the fact issue will be resolved by the fact
finder.  Id. at 227-28.  When 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.  Id. at 228.
This standard generally mirrors that of a
summary judgment under Rule 166a(c) of the Rules of Civil Procedure.  Tex.
R. Civ. P. 166a(c); Miranda,
133 S.W.3d at 228; El Paso Community
College Dist. v. Chase, 355 S.W.3d 164, 166-67 (Tex.App.–El Paso 2011, pet.
denied).  Consequently, when the facts
underlying the merits are intertwined with the trial court’s subject-matter
jurisdiction, a plaintiff is required to show that there is a disputed material
fact regarding the trial court’s jurisdiction once a government defendant has
asserted and has supported with evidence its assertion that the trial court is
without subject-matter jurisdiction.  Miranda, 133 S.W.3d at 228; Chase, 355 S.W.3d at 167.  “When reviewing a plea to the jurisdiction in
which the pleading requirement has been met and evidence has been submitted to
support the plea that implicates the merits of the case, we take as true all
evidence favorable to the nonmovant” and “we indulge every reasonable inference
and resolve any doubts in the nonmovant’s favor.”  Miranda,
133 S.W.3d at 228; see also City of Waco v. Kirwan, 298 S.W.3d 618,
622 (Tex. 2009).
DISCUSSION
Section 271.152 of the Local Government Code
provides that a local governmental entity that is authorized by statute or the
constitution to enter into a contract and does enter into a contract subject to
Subchapter I (Adjudication of Claims Arising Under Written Contracts with Local
Governmental Entities) waives its immunity to suit for the purpose of
adjudicating a breach-of-contract claim subject to the provisions of Chapter
271, Subchapter I.  Tex. Loc. Gov’t Code Ann. § 271.152
(West 2005).  The term “local
governmental entity” includes a public school district.[2]  Tex.
Loc. Gov’t Code Ann. § 271.151(3)(B) (West 2005).  In 2011, the Texas Supreme Court concluded
that an open-enrollment charter school is also a “local governmental entity”
for Texas Tort Claims Act purposes.  LTTS Charter School v. C2 Const. Inc.,
342 S.W.3d 73, 82 (Tex. 2011).  Our
sister court thereafter concluded that an open-enrollment charter school is a
local governmental entity for purposes of Section 271.152.  LTTS
Charter School v. C2 Construction, Inc., 358 S.W.3d 725, 742 (Tex.App.—Dallas
2011, pet. filed).  We also conclude that
EPEI is a local governmental entity for such purposes.  A contract subject to Subchapter I means “a
written contract stating the essential terms of the agreement for providing
goods or services to the local governmental entity that is properly executed on
behalf of the local governmental entity. 
Tex. Loc. Gov’t Code Ann.
§ 271.151(2) (West 2005).
The Texas Supreme Court has determined that a
party wishing to establish a local governmental entity’s waiver of immunity to
suit for breach of written contract under Section 271.152, must establish three
elements:
(1)
the party against whom the waiver is asserted must be a “local governmental
entity” as defined by Section 271.151(3), (2) the entity must be authorized by statute
or the Constitution to enter into contracts, and (3) the entity must in fact
have entered into a contract that is “subject to this subchapter,” as defined
by section 271.151(2).
 
City of Houston v.
Williams, 353 S.W.3d 128, 134-35 (Tex. 2011).  Consequently, because an open-enrollment
charter school is a local governmental entity for purposes of Section 271.152, the
first waiver element also encompasses open-enrollment charter schools.  See
LTTS Charter School, Inc., 342 S.W.3d
at 742.
In its sole issue, EPEI complains that the
trial court erred in denying its plea to the jurisdiction because no
enforceable lease contract was formed between the parties and, as a result, the
charter school’s governmental-entity immunity from suit remains intact.  EPEI contends that Amex has not established that
EPEI in fact entered into a contract as defined by Section 271.152, the third City of Houston element.  Tex.
Loc. Gov’t Code Ann. §§ 271.151(2), 271.152 (West 2005); City of Houston, 353 S.W.3d at 134-35.
Amex concedes that, in the absence of a
contract, EPEI, as an open-enrollment charter school, enjoys immunity from suit
as a governmental entity.  However, Amex
asserts that a valid contract between the parties was formed which waived the
charter school’s immunity, thus justifying the trial court’s denial of the
charter school’s plea to the jurisdiction. 
Amex alternatively contends that, at a minimum, the parties’ production
of conflicting evidence regarding delivery and formation of the contract is
sufficient to preclude the granting of the charter school’s plea to the
jurisdiction.  Miranda, 133 S.W.3d at 227-28.
The five elements for establishing a
contract subject to waiver under Section 271.152 are: “(1) the contract must be
in writing, (2) state the essential terms of the agreement, (3) provide for
goods or services, (4) to the local governmental entity, and (5) be executed on
behalf of the local governmental entity.” 
Tex. Loc. Gov’t Code Ann.
§ 271.151(2) (West 2005); City of Houston,
353 S.W.3d at 135.  Because the Lease
Agreement executed by Burnham and Martinez is in writing, and because Burnham
executed the Lease Agreement by signing it in her authorized capacity on behalf
of the local governmental entity, EPEI, the first and fifth elements have been met.  Because the Lease Agreement provides that Amex
is leasing pad sites and will construct buildings thereon for the charter
school’s use, the third and fourth elements requiring that the contract provide
goods and services to EPEI as a local governmental entity are met.
We next determine whether the second element,
that the contract states the essential terms of the agreement, has been
established.  City of Houston, 353 S.W.3d at 135. 
EPEI contends that it is impossible to determine what the essential
elements of the agreement would be due to the initials, interlineations, and
question marks denoted on prior drafts of the document.  EPEI also argues that acceptance, and thus
the existence of a contract, could only occur when Amex executed and delivered
this lease to EPEI.  We disagree with
EPEI’s analysis.
The material terms of a contract are
determined on an agreement-by-agreement basis. 
See T.O. Stanley Boot Co., Inc. v.
Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992); see also Southern v. Goetting, 353 S.W.3d 295, 300 (Tex.App.–El
Paso 2011, no pet.).  The Lease Agreement
executed by Burnham and Martinez contains no initials, interlineations,
quotation marks, or other markings that would indicate rejection of any of its
provisions or indicate that a term has been left to future negotiations.  Our review of the written, executed Lease
Agreement shows that its terms are reasonably specific and certain, and no
party directs us to any provisions therein that are not reasonably specific and
certain.[3]
The Lease Agreement was first signed by
Burnham on behalf of EPEI, was tendered to Martinez who accepted the Lease
Agreement terms and signed the document. 
Moreover, EPEI’s argument that Amex’s alleged failure to comply with the
delivery provision in Section 31.09 of the Lease Agreement constituted Amex’s
failure to accept the terms of EPEI’s offer is without merit.  Section 31.09 of the Lease Agreement did not
require execution and delivery for the purpose of constituting an acceptance of
an offer.  Rather, that provision of the
Lease Agreement specifies that the Lease Agreement is to become effective,
rather than formed, upon the execution and delivery of the Lease Agreement by
Amex to EPEI.
The second element for establishing a
contract subject to waiver has been met. 
Tex. Loc. Gov’t Code Ann.
§ 271.151(2) (West 2005); City of Houston,
353 S.W.3d at 135.  Consequently, because
EPEI entered into a contract that is subject to Subchapter I as defined by
section 271.151(2), the Legislature has waived EPEI’s immunity to suit for the
purpose of adjudicating a breach-of-contract claim.  Tex.
Loc. Gov’t Code Ann. §§ 271.151(2), 271.152 (West 2005); City of Houston, 353 S.W.3d at 134-35; Miranda,
133 S.W.3d at 227-28; LTTS Charter School,
358 S.W.3d at 742.  Issue One is
overruled.
CONCLUSION
The trial court’s order denying the plea to
the jurisdiction is affirmed.
 
                                                                        GUADALUPE
RIVERA, Justice
October 31, 2012
 
Before McClure, C.J., Rivera, J., and Antcliff, J.

[1]
Firth and Wallace disagree about the specific date on which Firth then verbally
informed Wallace that their clients had signed a lease despite ongoing
negotiations, but the evidence is consistent with a date following soon after
the weekend of April 26-27, 2008.

[2]
The Legislature has also conferred upon open-enrollment charter schools the
status of a governmental entity for purposes of Government Code Chapter 2252,
Subchapter D (Real Property Held in Trust) and of Local Government Code Chapter
271, Subchapter B (Competitive Bidding on Certain Public Works Contracts).  See Tex. Educ. Code Ann. § 12.1053(b) (West
2006); Tex. Loc. Gov’t Code Ann.
§ 271.152 (West 2005).  The Legislature
has similarly conferred upon open-enrollment charter schools the status of a
political subdivision for purposes of Government Code Chapter 2254, Subchapter
A (Professional Services) and the status of a local government for purposes of
Government Code Sections 2256.009 through 2256.016 (Authorized Investments for
Governmental Entities).  See Tex.
Educ. Code Ann. § 12.1053(b)(West 2006). 
Having found that an open-enrollment charter school qualifies as an
“institution, agency, or organ of government” which derives its status and
authority from legislative enactment, the Texas Supreme Court has determined
that an open-enrollment charter school is a “governmental unit” as defined in
Section 101.001(3)(D) of the Tort Claims Act and is permitted to take an
interlocutory appeal from a trial court’s denial of its plea to the
jurisdiction pursuant to Section 51.014(a)(8) of the Civil Practice and
Remedies Code.  See Tex. Civ. Prac. &
Rem. Code Ann. §§ 51.014(a)(8), 101.001(3)(D) (West Supp. 2012); see also LTTS Charter School, Inc. v. C2
Construction, Inc., 342 S.W.3d 73, 74-75, 78 (Tex. 2011).  

[3]
The Lease Agreement provisions specifically identify or address, among other
provisions: (1) the leased premises; (2) square footage; (3) the buildings to
be constructed thereon; (4) the initial ten-year term of the agreement; (5)
rental rates per year; (6) tenant’s tax obligations; (7) tenant’s deposit and
the potential forfeiture of all or a portion thereof under specified
circumstances; (8) responsibility for securing permits and compliance with
municipal building codes; (9) net lease; (10) various definitions; (11)
construction obligations of landlord and tenant, preparation of construction
plans and specifications, plan changes and payment of related costs resulting
therefrom; (12) use of the premises for the purpose of conducting a public
charter school; (13) the orderly and legal operation of the premises, including
storage and removal trash and garbage, pest extermination; (14) arrangement of
orderly transportation for students and restricting students from loitering or
assembling in specified areas; (15) tenant’s covenants regarding laws, waste,
and nuisance; (16) provisions regarding signage, awnings, and roof; (17)
maintenance by landlord and tenant and landlord’s right to cure; (18)
provisions regarding alterations, additions, and improvements to the lease
premises; (19) rights and obligations in relation to the filing of mechanic’s
or materialman’s liens; (20) utility responsibilities; (21) common use areas;
(22) assignment; (23) indemnity and release; (24) insurance; (25) destruction;
(26) condemnation; (27) default, remedies, bankruptcy, and insolvency; (28)
access to leased premises; (29) subordination; (30) attornment; (31) mortgagee
protection; (32) quiet enjoyment; (33) surrender of premises; (34) holding
over; (35) attorney’s fees; (36) no existence or creation of partnership; (37)
force majeure; (38) notices; (39) memorandum of lease for filing; (40) partial
invalidity; (41) broker’s commission; (42) successors and assigns; (43) entire
agreement; (44) recourse by tenant; (45) security interest; (46) measurement
approximations; (47) right of first refusal; and (48) authority of signatories.