Court Opinion

ID: 7361042
Source: CourtListenerOpinion
Date Created: 2022-07-27 06:11:10.175523+00
Date Added: 2024-06-11T16:20:34.729290
License: Public Domain

AFFIRMED and Opinion Filed July 19, 2022

                                    S   In The
                             Court of Appeals
                      Fifth District of Texas at Dallas
                                No. 05-21-01012-CV

  TEXAS ASSOCIATION OF SCHOOL BOARDS RISK MANAGEMENT
                      FUND, Appellant
                            V.
     GREENVILLE INDEPENDENT SCHOOL DISTRICT, Appellee

                On Appeal from the 196th Judicial District Court
                             Hunt County, Texas
                        Trial Court Cause No. 89967

                         MEMORANDUM OPINION
             Before Justices Partida-Kipness, Pedersen, III, and Nowell
                        Opinion by Justice Partida-Kipness
      Appellant Texas Association of School Boards Risk Management Fund (the

Fund) appeals the denial of its partial plea to the jurisdiction. The trial court ruled

that immunity did not bar Greenville Independent School District’s (Greenville)

defensive theories, and its denial of the fund’s plea to the jurisdiction is the subject

of this appeal. Because the trial court ruled correctly, we affirm the judgment.

                                  BACKGROUND

      Greenville owns real property in Hunt County that was damaged in a 2019

hail storm. The properties were covered against wind, water, and hail damage under
an agreement with the Fund, which is a self-insurance fund for governmental entities

like Greenville. Greenville filed a claim for coverage, which the Fund denied. The

Fund asserted that Greenville had not fulfilled conditions precedent in the

agreement, such as its requirement to provide notice of loss within thirty days.

          Greenville sued the Fund for breach of contract and alleged the Fund’s

adjuster had done a one-sided investigation of the claim and wrongly denied

coverage. According to the petition, Greenville had performed all conditions

precedent under the agreement and given timely notice of its claim to the Fund.

Greenville further asserted that the agreement’s term requiring Greenville to provide

notice of its claim was “unreasonable and void” and that the Fund should be barred

from enforcing the agreement’s conditions precedent due to waiver, estoppel,

unconscionability, or an ambiguity that should be construed in Greenville’s favor.

          The Fund filed a partial plea to the jurisdiction in which it attacked

Greenville’s arguments concerning waiver, estoppel, and unconscionability. The

Fund contended that these arguments were actually extracontractual claims for

relief, for which there was no waiver of the Fund’s immunity as a governmental

entity.

          Greenville responded that its supposed extracontractual claims were not

independent claims at all but merely arguments in support of its contract claim.

Greenville maintained that the Fund’s plea should be denied because immunity for

the contract claim was waived under chapter 271 of the Texas Local Government

                                        –2–
Code (the Act). See TEX. LOC. GOV’T CODE § 271.152. As support, Greenville cited

cases from this Court and others, though the Fund argued that these cases had been

overruled.

      After review, the trial court denied the Fund’s plea to the jurisdiction. This

appeal followed.

                            STANDARD OF REVIEW

      Governmental immunity protects the State’s political subdivisions, including

self-insurance pools like the Fund, against suits and legal liability. Dohlen v. City of

San Antonio, 643 S.W.3d 387, 392 (Tex. 2022) (holding political subdivisions enjoy

governmental immunity); Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex.

Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 326 (Tex. 2006)

(concluding the self-insurance pool’s “‘nature, purposes and powers’ demonstrate

legislative intent that it exist as a distinct governmental entity entitled to assert

immunity in its own right for the performance of a governmental function”).

Governmental immunity thus bars suit against the Fund unless the Legislature has

waived immunity. See Chambers–Liberty Cntys. Navigation Dist. v. State, 575

S.W.3d 339, 344 (Tex. 2019).

      Governmental immunity from suit implicates a trial court’s subject matter

jurisdiction and is properly asserted in a plea to the jurisdiction. Dohlen, 643 S.W.3d

at 392. A plea to the jurisdiction may challenge the pleadings, the existence of

jurisdictional facts, or both. Tex. Dep’t of Criminal Justice v. Rangel, 595 S.W.3d

                                          –3–
198, 205 (Tex. 2020). If the plea challenges the pleadings, as here, we determine if

the pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction

to hear the cause. Id. We liberally construe the pleadings, taking all factual assertions

as true and looking to the plaintiff’s intent. Id. If the allegations create a fact question

regarding jurisdiction, then a court cannot grant a plea to the jurisdiction, and the

factfinder must resolve the fact issue. Id. But if the plaintiff fails to raise a fact

question on the jurisdictional issue, a court rules on the plea to the jurisdiction as a

matter of law. Id.

                                       ANALYSIS

       In its sole issue on appeal, the Fund challenges the denial of its partial plea to

the jurisdiction. According to the Fund, Greenville raised three extracontractual

claims—waiver, estoppel, and unconscionability—for which there was no waiver of

immunity. The Fund seeks a judgment dismissing these claims for want of

jurisdiction.

       Greenville maintains that these three theories were not extracontractual claims

in their own right. Rather, according to Greenville, its only true cause of action was

for breach of contract. Greenville contends the Fund attacked that cause of action by

alleging that Greenville failed to satisfy certain conditions precedent within the

agreement, and Greenville responded with three arguments to defeat those

conditions, not three new and independent causes of action. Thus, Greenville reasons

these three theories are simply facets of the greater whole of its contract claim, for

                                           –4–
which there is an unambiguous waiver of immunity. See TEX. LOC. GOV’T CODE

§ 271.152. As support, Greenville cites a line of cases that originated with this

court’s opinion in City of Mesquite v. PKG Contracting, Inc., 263 S.W.3d 444, 447

(Tex. App.—Dallas 2008, pet. denied); accord Santa Rosa Indep. Sch. Dist. v.

Rigney Constr. & Dev., LLC, No. 13-12-00627-CV, 2013 WL 2949566, at *4 (Tex.

App.—Corpus Christi–Edinburg June 13, 2013, pet. denied) (mem. op.); Roma

Indep. Sch. Dist. v. Ewing Constr. Co., No. 04-12-00035-CV, 2012 WL 3025927, at

*3 (Tex. App.—San Antonio July 25, 2012, pet. denied) (mem. op. on reh’g).

      Like this case, City of Mesquite dealt with a provision in the Act that waives

immunity for contract claims against local government entities:

      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 § 271.152. We held that this waiver of immunity “applies to

any claims for breach of a contract falling within the terms of the statute.” City of

Mesquite, 263 S.W.3d at 447. “Once the trial court determines whether the contract

falls within the provisions of section 271.152, it need not parse further the pleadings

or the contract to determine whether the legislature has waived immunity for breach

of contract claims.” Id. Greenville cites this last quote with particular emphasis,

reasoning that it should prevent us from parsing the individual arguments that fall

under the broader heading of its contract claim.

                                         –5–
      The Fund acknowledges our holding in City of Mesquite but maintains this

holding was disapproved of in Zachry Construction Corp. v. Port of Houston

Authority of Harris County, 449 S.W.3d 98, 110 n.54 (Tex. 2014). Greenville

counters that Zachry disapproved of only one aspect of City of Mesquite that does

not apply here and left the relevant portions of the opinion intact. We agree with

Greenville.

      The issue in Zachry was a specific one: whether the Act waived immunity

from suit on a claim for consequential damages that were not recoverable under

section 271.153 of the Act. Id. at 110. After analyzing the statute’s text, the court

answered that question in the negative, stating, “We conclude that the Act does not

waive immunity from suit on a claim for damages not recoverable under Section

271.153.” Id. The court then included a footnote declaring, “We disapprove the

following cases to the extent they are to the contrary,” and listed nine cases,

including City of Mesquite. Zachry, 449 S.W.3d at 110 n.54 (emphasis added).

      The Zachry court did not consider the wholesale correctness of City of

Mesquite, the validity of our holdings concerning review of whether the Act’s waiver

of immunity applies, or any issue involved in this case. City of Mesquite was

overruled only insofar as it ran counter to Zachry’s holding on damages. See

Romulus Grp., Inc. v. City of Dallas, No. 05-16-00088-CV, 2017 WL 1684631, at

*6 n.1 (Tex. App.—Dallas May 2, 2017, pet. denied) (mem. op.) (concluding that

Zachry disapproved City of Mesquite only to the extent that it “conflicted with the

                                        –6–
holding on damages” but that other aspects of the opinion remained intact); see also

City of Corpus Christi v. Graham Constr. Servs., Inc., No. 13-19-00367-CV, 2020

WL 3478661, at *4 n.2 (Tex. App.—Corpus Christi–Edinburg June 25, 2020, pet.

denied) (mem. op.) (similar as to Roma).

      It is for that reason that courts have continued to cite City of Mesquite and its

progeny as good law and have applied them to situations that parallel the

circumstances of this case. See Graham Constr. Servs., 2020 WL 3478661, at *4

(citing Roma, 2012 WL 3025927, at *2); Lower Valley Water Dist. v. Danny Sander

Constr., Inc., 587 S.W.3d 823, 827 (Tex. App.—El Paso 2019, no pet.) (citing City

of Mesquite, 263 S.W.3d at 447); Clear Creek Indep. Sch. Dist. v. Cotton

Commercial USA, Inc., 529 S.W.3d 569, 585 (Tex. App.—Houston [14th Dist.]

2017, pet. denied) (same). In Graham Construction, for instance, the plaintiff sued

a city for breach of contract, and the city responded that the plaintiff had failed to

give a required notice of claim that was a condition precedent to recovery under their

agreement. 2020 WL 3478661, at *3. To circumvent the condition precedent, the

plaintiff raised multiple defensive theories, including waiver, just as Greenville has

done in this case. Id. The city responded that the plaintiff should not be permitted to

raise these defensive theories, but the appellate court disagreed, citing a case that

adopted our holding in City of Mesquite. Id. at *4 (citing Roma,

2012 WL 3025927, at *2). Thus, in the view of our sister courts, City of Mesquite

applies in situations such as this one.

                                          –7–
      The Graham Construction court offered another rationale that is relevant here:

the Act “specifically states that [it] does not waive defenses available to a party to a

contract.” Id. (citing TEX. LOC. GOV’T CODE § 271.155). “Thus, [the plaintiff] is

allowed to raise defenses to the contract, including the contractual notice

requirements.” Id.

      Taken together, the above principles resolve this case. Under section 271.152

of the Act, Greenville triggered a waiver of immunity when it pleaded a contract

claim against a local government entity within the meaning of the Act. See TEX. LOC.

GOV’T CODE § 271.152. Under City of Mesquite, Greenville’s defensive theories

benefit from the same waiver of immunity. See 263 S.W.3d at 447. Under section

271.155 of the Act, Greenville’s ability to raise these theories is specifically

preserved. See TEX. LOC. GOV’T CODE § 271.155.

      Greenville has therefore affirmatively demonstrated the trial court’s

jurisdiction to hear its sole claim for breach of contract, including the subsidiary

theories that support the contract claim. See Rangel, 595 S.W.3d at 205. We overrule

the Fund’s sole issue.

                                   CONCLUSION

      The Fund contested the denial of its plea to the jurisdiction concerning

Greenville’s defensive theories.

                                          –8–
     Because the trial court did not err in denying the plea, we affirm the judgment.

                                          /Robbie Partida-Kipness/
                                          ROBBIE PARTIDA-KIPNESS
                                          JUSTICE

211012F.P05

                                       –9–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

TEXAS ASSOCIATION OF                           On Appeal from the 196th Judicial
SCHOOL BOARDS RISK                             District Court, Hunt County, Texas
MANAGEMENT FUND, Appellant                     Trial Court Cause No. 89967.
                                               Opinion delivered by Justice Partida-
No. 05-21-01012-CV           V.                Kipness. Justices Pedersen, III and
                                               Nowell participating.
GREENVILLE INDEPENDENT
SCHOOL DISTRICT, Appellee

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.

     It is ORDERED that appellee GREENVILLE INDEPENDENT SCHOOL
DISTRICT recover its costs of this appeal from appellant TEXAS ASSOCIATION
OF SCHOOL BOARDS RISK MANAGEMENT FUND.

Judgment entered this 19th day of July 2022.

                                        –10–