Court Opinion

ID: 4064106
Source: CourtListenerOpinion
Date Created: 2016-09-29 21:16:45.607433+00
Date Added: 2024-06-11T14:31:44.208724
License: Public Domain

ACCEPTED
                                                                           04-15-00075-CV
                                                                FOURTH COURT OF APPEALS
                                                                     SAN ANTONIO, TEXAS
                                                                      3/16/2015 2:18:35 PM
                                                                             KEITH HOTTLE
                                                                                    CLERK
                      Cause No. 04-15-00075-CV

                                                   FILED IN
                IN THE COURT OF APPEALS     4th COURT OF APPEALS
            FOURTH JUDICIAL DISTRICT OF TEXASSAN ANTONIO, TEXAS
                 AT SAN ANTONIO, TEXAS      03/16/2015 2:18:35 PM
                                                      KEITH E. HOTTLE
                                                           Clerk

             SAN ANTONIO HOUSING AUTHORITY
                                   Appellant/Defendant,
                           v.

                SERENTO APARTMENTS, LLC,
                                 Appellee/Plaintiff.

                    ON APPEAL FROM
                 TH
              288 JUDICIAL DISTRICT COURT
                  BEXAR COUNTY, TEXAS
                  CAUSE NO. 2014-CI-16503

                        APPELLANT’S BRIEF

                               N. MARK RALLS
                               State Bar No. 16489200
                               Email: mralls@hfdlaw.com
                               APRIL Y. QUIÑONES
                               State Bar No. 24079167
                               Email: aquinones@hfdlaw.com
                               HOBLIT FERGUSON DARLING LLP
                               Bank of America Plaza
                               300 Convent Street, Suite 1450
                               San Antonio, Texas 78205
                               Telephone No. (210) 224-9991
                               Facsimile No. (210) 226-1544

                               ATTORNEYS FOR APPELLANT,
                               SAN ANTONIO HOUSING AUTHORITY

ORAL ARGUMENT REQUESTED
                                              TABLE OF CONTENTS

Names of the Parties and Their Counsel ............................................................................ iv

Request for Oral Argument ................................................................................................ iv

List of Authorities ................................................................................................................ v

Brief of Appellant ................................................................................................................ 1

I.        Statement of the Case ............................................................................................... 1

II.       Statement of Jurisdiction .......................................................................................... 2

III.      Issues Presented ........................................................................................................ 2

          1. The trial court erred in denying the San Antonio Housing Authority’s
             (“SAHA”) Plea to the Jurisdiction because Plaintiff did not plead any
             facts nor provide evidence that would demonstrate a waiver of SAHA’s
             governmental and sovereign immunity.

          2. The trial court erred in denying SAHA’s Plea to the Jurisdiction because
             the contract made the basis of Plaintiff’s lawsuit was a “Housing
             Assistance Program Contract Pursuant to Section 8 Moderate
             Rehabilitation Program, which provides rental assistance for low
             income families,” and it is not a contract “for providing goods or
             services to” the San Antonio Housing Authority, as defined by Texas
             Local Government Code, Section 271.151(2). Consequently, the limited
             waiver of governmental immunity from suit set forth in Texas Local
             Government Code, Section 271.152 does not apply to waive SAHA’s
             governmental and sovereign immunity from suit on the contract.

IV.       Statement of Facts .................................................................................................... 3

V.        Summary of the Argument ....................................................................................... 5

VI.       Standard of Review Is De Novo ............................................................................... 6

VII.      Arguments and Authorities ...................................................................................... 8

          A. Plaintiff Alleged No Facts that SAHA’s Entitlement to Immunity Is Waived .. 8

          B. Section 271.152’s Waiver of Immunity Does Not Apply to Contract ............... 9

                                                                 ii
               1. Government Acting as a Conduit of Federal Funds Does Not Constitute a
                  Waiver of Immunity and Low-Income Housing is Not Considered a
                  “Good” or “Service” .................................................................................... 10

               2. Contracts that Deal with Real Estate Do Not Waive Immunity.................. 11

               3. Statute Waiving Governmental Immunity Must be Strictly Construed ...... 11

VIII. Prayer ...................................................................................................................... 13

Certificate of Service ......................................................................................................... 14

                                                                 iii
               NAMES OF THE PARTIES AND THEIR COUNSEL

       Pursuant to and in compliance with Texas Rule of Appellate Procedure 38, the
parties to this appeal are the following:

DEFENDANT/APPELLANT:                    SAN ANTONIO HOUSING AUTHORITY

COUNSEL FOR DEFENDANT/                  HOBLIT FERGUSON DARLING LLP
APPELLANT:                              N. Mark Ralls
                                        April Y. Quiñones
                                        Bank of America Plaza
                                        300 Convent Street, Suite 1450
                                        San Antonio, Texas 78205
                                        Telephone No. (210) 224-9991
                                        Facsimile No. (210) 226-1544

PLAINTIFF/APPELLEE                      SERENTO APARTMENTS, LLC

COUNSEL FOR PLAINTIFF/                  LAW OFFICE OF JAMES A. RICKERSON
APPELLEE:                               James A. Rickerson
                                        111 E. Euclid
                                        San Antonio, Texas 78212
                                        Telephone No. (210) 363-2399
                                        Facsimile No. (210) 734-8097

                        REQUEST FOR ORAL ARGUMENT

       Pursuant to Texas Rule of Appellate Procedure 39, Appellant respectfully requests
oral argument in this case.

                                           iv
                                          LIST OF AUTHORITIES

Cases:

Bexar Metro. Water Dist. v. Educ. & Econ. Dev. Joint Venture, 220 S.W.3d 25
   (Tex. App.—San Antonio 2006, pet. dism’d) ................................................................. 11

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000) .............................................. 6

City of Galveston v. State, 217 S.W.3d 466 (Tex. 2007) .................................................. 8, 12

City of Houston v. Jackson, 192 S.W.3d 764 (Tex. 2006) ................................................... 12

City of Houston v. Northwood Mun. Utility Dist. No. 1, 73 S.W.3d 304 (Tex.
   App.—Houston [1st Dist.] 2002, pet. denied) ....................................................................8

City of San Antonio v. Reed S. Lehman Grain, Ltd., No. 04-04-00930-CV, 2007 Tex.
   App. LEXIS 632, 2007 WL 752197 (Tex. App.-San Antonio 2007, pet. denied)........... 11

C.L. Westbrook, Jr., v. Penley, 231 S.W.3d 389 (Tex. 2007) ............................................... 6

Cnty. of Cameron vs. Brown, 80 S.W.3d 549 (Tex. 2002). .....................................................7

E. Houston Estate Apts., L.L.C. v. City of Houston, 294 S.W.3d 723 (Tex. App.—
   Houston [1st Dist.] 2009, no pet.) .................................................................................... 10

Gen. Servs. Comm’n v. Little-Tex Insulation Co., Inc., 39 S.W.3d 591 (Tex. 2001) ............ 8

Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d 653 (Tex. 2008)........................ 12

Somerset Indep. Sch. Dist. v. Casias, No. 04-07-00829-CV, 2008 Tex. App. LEXIS
   2895, 2008 WL 1805533 (Tex. App.—San Antonio 2008, pet. denied)......................... 11

State v. Holland, 221 S.W.3d 639 (Tex. 2007)..................................................................... 6

Tex. Ass’n. of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex. 1993) ..................... 6, 7, 8

Tex. Dep’t of Criminal Justice v. Miller, 51 S.W.3d 583 (Tex. 2001) ........................ 6, 8, 9

Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) ..................... 6, 7

Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636 (Tex. 1999)................................................... 8

                                                             v
Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) .............. 8

Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) ...................................................... 8, 12

Wichita Falls State Hospital v. Taylor, 106 S.W.3d 692 (Tex. 2003) ................................ 12

Statutes and Rules:

TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8) ................................................................... 2

TEX. GOV’T CODE § 311.034............................................................................................... 8

TEX. LOC. GOV’T CODE § 271.151 ................................................................ ii, 3, 4, 5, 9, 10

TEX. LOC. GOV’T CODE § 271.152 ................................................ ii, 3, 4, 5, 6, 9, 10, 11, 12

TEX. LOC. GOV’T CODE § 271.153 ........................................................................................ 13

TEX. R. APP. P. 28.1 ............................................................................................................. 2

TEX. R. APP. P. 38 ............................................................................................................... iv

TEX. R. APP. P. 38.1 ............................................................................................................. 1

TEX. R. APP. P. 39 ............................................................................................................... iv

                                                                 vi
                                Cause No. 04-15-00075-CV

                       IN THE COURT OF APPEALS
                   FOURTH JUDICIAL DISTRICT OF TEXAS
                        AT SAN ANTONIO, TEXAS

                     SAN ANTONIO HOUSING AUTHORITY
                                           Appellant/Defendant,
                                   v.

                         SERENTO APARTMENTS, LLC,
                                          Appellee/Plaintiff.

                             ON APPEAL FROM
                           TH
                       288 JUDICIAL DISTRICT COURT
                           BEXAR COUNTY, TEXAS
                           CAUSE NO. 2014-CI-16503

                                  APPELLANT’S BRIEF

TO THE HONORABLE JUSTICES OF THE FOURTH COURT OF APPEALS:

      Appellant, SAN ANTONIO HOUSING AUTHORITY (“SAHA” or “Appellant”

or “Defendant” hereafter) files this Brief of Appellant pursuant to Texas Rule of

Appellate Procedure 38.1 and would respectfully show the following:

                                    I.
                           STATEMENT OF THE CASE

      This is an interlocutory appeal in a case involving a breach of contract claim.

Appellee sued SAHA alleging that SAHA breached provisions of a federal Housing

Assistance Program contract pursuant to the Section 8 Moderate Rehabilitation Program

                                           1
between Appellant and Appellee, Serento Apartments, LLC (“Serento” or “Appellee” or

“Plaintiff” hereafter) that relate to alleged notice requirements and renewal of said

contract. See C.R. at 1–5.1 SAHA appeals an order by the Honorable Stephani A. Walsh,

Judge of the 45th Judicial District Court of Bexar County, Texas, dated January 22, 2015,

denying San Antonio Housing Authority’s Plea to the Jurisdiction and alternative Motion

to Dismiss based on the defense of governmental and sovereign immunity of SAHA.

C.R. at 32.

                                            II.
                                 STATEMENT OF JURISDICTION

        This Honorable Court has jurisdiction over this interlocutory appeal pursuant to

Texas Civil Practice and Remedies Code Section 51.014(a)(8) and Texas Rule of

Appellate Procedure 28.1. SAHA filed its Plea to the Jurisdiction and Alternative Motion

to Dismiss on the basis it is protected by governmental and sovereign immunity from suit

for breach of contract, except to the extent immunity has been clearly and specifically

waived by the Texas Legislature. C.R. at 6–7. Since there has been no waiver of

immunity for Plaintiff’s suit or the allegations giving rise to Plaintiff’s suit against

SAHA, the trial Court lacks jurisdiction. Id.

                                                  III.
                                           ISSUE PRESENTED

         The trial court erred in denying the San Antonio Housing Authority’s (“SAHA”)

Plea to the Jurisdiction because Plaintiff did not plead any facts nor provide evidence that

1
 Citations to the District Clerk’s Record will be “C.R.,” and citations to the Court Reporter’s Record will be “R.R.”
Furthermore, all citations to the District Clerk’s Record refer to the record filed February 24, 2015.

                                                         2
would demonstrate a waiver of SAHA’s governmental and sovereign immunity.

         Further, the trial court erred in denying SAHA’s Plea to the Jurisdiction because

the contract made the basis of Plaintiff’s lawsuit was a “Housing Assistance Program

Contract Pursuant to Section 8 Moderate Rehabilitation Program, which provides rental

assistance for low income families,” and it is not a contract “for providing goods or

services to” the San Antonio Housing Authority, as defined by Texas Local Government

Code, Section 271.151(2). Consequently, the limited waiver of governmental immunity

from suit set forth in Texas Local Government Code, Section 271.152 does not apply to

waive SAHA’s governmental immunity from suit on the contract.

                                               IV.
                                        STATEMENT OF FACTS

         SAHA and Serento entered into a federal Housing Assistance Program (“HAP”)

contract pursuant to the Section 8 Moderate Rehabilitation Program (“Mod Rehab”),

which provided rental assistance for low-income families.2 C.R. at 2 and 24. The HAP

Program is overseen by the United States Department of Housing Development (“HUD”)

and administered locally by SAHA. Id.

         Pursuant to the Mod Rehab program contract, SAHA would refer low-income

families eligible for participation through the program to Appellee for occupancy of one

of Appellee’s apartment units. Id. Approved and selected tenants would then enter into a

separate Apartment Lease Contract with Appellee. Id. The contract between SAHA and

Serento was renewable each year for a one-year period. C.R. at 2 and 25. Pursuant to the

2
  While Plaintiff indicated that the contract at issue was attached as an exhibit to Plaintiff’s Original Petition and
subsequently filed an amended petition, no contract was ever filed by Plaintiff. See C.R. at 1–5 and 23–30.

                                                          3
contract, Serento was required to maintain its apartment units in accordance with certain

housing quality standards and SAHA could refuse to renew the contract with Serento if

SAHA or HUD determine that Serento engaged in material adverse financial or

managerial actions or omissions. Id. SAHA would conduct an annual inspection of

Plaintiff’s premises for the purpose of ensuring compliance with the contract. C.R. at 3

and 27.

      Plaintiff filed suit against SAHA alleging breach of the federal Housing

Assistance Program contract pursuant to the Section 8 Moderate Rehabilitation Program.

C.R. at 1–5. SAHA filed its Answer, Subject to its Plea to the Jurisdiction, generally

denying all of the Plaintiff’s allegations, and asserting specific denials and defenses.

C.R. at 6–10.

      The Texas Legislature has provided a very limited waiver of immunity from suit

involving an alleged breach of contract by a local governmental entity to include a

written contract stating the essential terms of the agreement for providing goods or

services to the local governmental entity. TEX. LOC. GOV’T CODE §§ 271.151(2)(A),

271.152. Because Plaintiff did not plead any facts to support a waiver of SAHA’s

immunity and because the contract made the subject of Plaintiff’s suit is not a contract

where the essential terms involved Serento providing goods or services directly to

SAHA, SAHA filed its Plea to the Jurisdiction on November 6, 2014. C.R. at 6–10.

Plaintiff never filed a response to Defendant’s Plea. See C.R. at 42–44. On January 22,

2015, Plaintiff filed its First Amended Original Petition. C.R. at 23–30. In its First

Amended Petition, Plaintiff did not plead any new facts nor provide any evidence to

                                           4
demonstrate that the contract at issue was one for goods and services provided by Serento

to SAHA. Compare C.R. at 1–5 with 23–30. Between Plaintiff’s Original Petition and

First Amended Petition, the factual allegations remained unchanged. Rather, Plaintiff

merely added a paragraph, stating that “[t]he Court ha[d] jurisdiction over this breach of

contract suit because the Texas Legislature waived Defendant’s immunity form [sic] suit

when it enacted Texas Local Government Code [§] 271.152,” along with amending a title

heading to read “Breach of Contract Pursuant to Local Government Code 271.152.” C.R.

at 23–24. The Honorable Stephani A. Walsh, Judge of the 45th Judicial District Court of

Bexar County, Texas, denied San Antonio Housing Authority’s Plea to the Jurisdiction

on January 22, 2015. C.R. 32. This interlocutory appeal followed.

                                      V.
                           SUMMARY OF THE ARGUMENT

       The trial court erred in denying SAHA’s Plea because Plaintiff’s pleadings are

devoid of any facts or evidence that SAHA waived its entitlement to governmental and

sovereign immunity.

       Furthermore, there is no waiver of sovereign and governmental immunity with

respect to Plaintiff’s claims.

       The trial court erred in denying SAHA’s Plea because there is no waiver of

sovereign and governmental immunity with respect to Plaintiff’s claims.

       Because the Contract at issue is not a contract wherein the essential terms are “for

providing goods or services to” SAHA, it is not a contract subject to Texas Local

Government Code Section 271.151(2). Consequently, the limited waiver of governmental

                                            5
immunity from suit set forth in Texas Local Government Code Section 271.152 does not

apply to waive SAHA’s governmental immunity from suit on the Contract.

       Because SAHA did not waive its governmental immunity with respect to

Plaintiff’s claims, the Court should reverse the order of the trial court and render

judgment for SAHA on its Plea.

                                       VI.
                                STANDARD OF REVIEW

       Sovereign immunity from suit defeats a trial court’s subject matter jurisdiction and

thus, is properly asserted in a plea to the jurisdiction. Tex. Dep’t of Parks & Wildlife v.

Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004). A plea to the jurisdiction is a dilatory

plea by which a party challenges a court’s authority to determine the subject matter of the

action. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). A party suing a

governmental entity bears the burden of affirmatively showing that the trial court has

jurisdiction to hear the cause. Tex. Dep’t of Criminal Justice v. Miller, 51 S.W.3d 583,

587 (Tex. 2001). A plea to the jurisdiction raises a question of law reviewed de novo on

appeal. C.L. Westbrook, Jr., v. Penley, 231 S.W.3d 389, 394 (Tex. 2007); State v. Holland,

221 S.W.3d 639, 642 (Tex. 2007); Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d

at 226–27.

       The determination of whether a trial court has subject-matter jurisdiction begins

with the pleadings. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d at 226–27.

The pleader has the initial burden of alleging facts that affirmatively demonstrate the trial

court’s jurisdiction to hear the cause. Id. (citing Tex. Ass’n. of Bus. v. Tex. Air Control Bd.,

                                               6
852 S.W.2d 440, 446 (Tex. 1993)). Whether the pleader has met this burden is also a

question of law, reviewed de novo. Id.

       A plea to the jurisdiction can challenge either the pleadings or the existence of

jurisdictional facts. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d at 226–27.

When a plea challenges the plaintiff’s pleadings, the determination hinges on whether the

pleader has alleged sufficient facts to demonstrate the court’s subject-matter jurisdiction

over the case. Id. The court construes the pleadings liberally in the plaintiff’s favor and

looks to the pleader’s intent. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d at

446.

       When the plea challenges the existence of jurisdictional facts, it is appropriate for

the court to consider evidence relevant to the jurisdictional issue(s) submitted by the

parties. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d at 227. When the

pleadings neither allege sufficient facts nor demonstrate incurable defects in jurisdiction,

the issue is one of pleading sufficiency and the plaintiff should be afforded an opportunity

to amend. Cnty. of Cameron vs. Brown, 80 S.W.3d 549, 555 (Tex. 2002). If the pleadings

affirmatively negate jurisdiction, then the plea to the jurisdiction may be granted without

leave to amend. Id.

       In this case, because appellee’s pleadings lacked any facts to support a waiver of

SAHA’s immunity, and instead, affirmatively negated the trial court’s subject-matter

jurisdiction to consider its claims, the trial court should have granted SAHA’s Plea to the

Jurisdiction or Alternative Motion to Dismiss.

                                             7
                                     VII.
                          ARGUMENTS AND AUTHORITIES

A.     Plaintiff Alleged No Facts that SAHA’s Entitlement to Immunity is Waived

       SAHA is a public housing authority organized pursuant to the laws and Constitution

of the State of Texas. As such, it is a local governmental entity and enjoys governmental

immunity from suit in the performance of its governmental functions unless that immunity

has been waived by the legislature in clear and unambiguous language. City of Galveston v.

State, 217 S.W.3d 466, 469 (Tex. 2007); Tooke v. City of Mexia, 197 S.W.3d 325, 343–44

(Tex. 2006); TEX. GOV’T CODE § 311.034. The Plaintiff always bears the burden to allege

facts which affirmatively demonstrate the court’s jurisdiction to hear the case. Tex. Ass’n

of Bus. v. Tex. Air Control Bd., 852 S.W.2d at 446. In a suit against a governmental

entity, because immunity from suit defeats a trial court’s subject-matter jurisdiction, the

burden is upon the plaintiff to affirmatively plead a clear and unambiguous Legislative

waiver of immunity from suit on each of its claims. Tex. Dep’t of Transp. v. Jones, 8
S.W.3d 636, 638 (Tex. 1999);Gen. Servs. Comm’n v. Little-Tex Insulation Co., Inc., 39
S.W.3d 591, 594 (Tex. 2001);Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74
S.W.3d 849, 854–5 (Tex. 2002). The failure of a plaintiff to meet this burden deprives the

trial court of subject-matter jurisdiction to consider the claim. See Tex. Dep’t of Criminal

Justice v. Miller, 51 S.W.3d at 586–87; City of Houston v. Northwood Mun. Utility Dist.

No. 1, 73 S.W.3d 304, 313 (Tex. App.—Houston [1st Dist.] 2002, pet. denied).

       Moreover, mere reference to a statute which contains a limited waiver of immunity

from suit is not sufficient to confer jurisdiction upon the trial court. Tex. Dep’t of Criminal

                                              8
Justice v. Miller, 51 S.W.3d at 586–87. The facts alleged by a plaintiff as the basis of its

claim, must fit within the limited waiver of immunity provided by the statute, or the

allegation of waiver is insufficient. Id.

       In both its original and first amended petition, Plaintiff clearly did not provide

sufficient facts, yet alone any facts, to support a waiver of SAHA’s immunity;

specifically, that the contract in question was one where the essential terms involved

Serento providing goods or services directly to SAHA. See C.R. at 1–5 and 23–30. In an

insufficient attempt to invoke jurisdiction, Plaintiff filed a First Amended Petition that

merely added a paragraph, stating that “[t]he Court ha[d] jurisdiction over this breach of

contract suit because the Texas Legislature waived Defendant’s immunity form [sic] suit

when it enacted Texas Local Government Code [§] 271.152” along with amending a title

heading to read “Breach of Contract Pursuant to Local Government Code 271.152.”

Compare C.R. at 1–5 with 23–30. For the foregoing reasons, the trial Court erred in

denying SAHA’s Plea to the Jurisdiction.

B.     Section 271.152’s Waiver of Immunity Does Not Apply to Contract

       Section 271.152 provides that “[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. Section 271.151(2) defines a “[c]ontract subject to this

subchapter” as “a written contract stating the essential terms of the agreement for

                                              9
providing goods or services to the local governmental entity that is properly executed on

behalf of the local governmental entity.” Id. § 271.151(2) (emphasis added).

      1.     Government Acting as a Conduit of Federal Funds Does Not Constitute
             a Waiver of Immunity and Low-Income Housing is Not considered a
             “Good” or “Service”

      The central purpose of the Contract at issue was to facilitate federal funds to a

private entity, Serento, on behalf of low-income families. SAHA, in its governmental

function and capacity, was merely a conduit of federal funds and no goods or services were

provided directly by Serento to SAHA. See E. Houston Estate Apts., L.L.C. v. City of

Houston, 294 S.W.3d 723, 736–37 (Tex. App.—Houston [1st Dist.] 2009, no pet.)

(rejecting apartment owner’s argument that the City’s immunity was waived as the owner

was providing a service to the City—low income housing).

      Furthermore, the “services” being provided under a contract must be directly

provided to and directly benefit the governmental entity. See id. at 736 (concluding that

while the City would benefit in a general way from apartment owner providing availability

of more housing for low income families, such a benefit is an indirect and attenuated one

and Section 271.152’s waiver did not apply).

      Here, the essential terms and central purpose of the contract was for Serento to

provide apartment units that met housing quality standards to low income families. C.R. at

2 and 24–25. In no way did SAHA receive any type of service or benefit directly under the

contract. Rather, the benefit of the federal funds received, pursuant to the contract, ran

directly from the federal government to Serento, not SAHA. See C.R. at 2 and 24–25.

Because SAHA, pursuant to the contract, is merely acting as a conduit of federal funds and

                                           10
because providing low-income housing is not considered a “good” or “service” under the

statute, SAHA’s entitlement to immunity is not waived.

       2.     Contracts that Deal with Real Estate Do Not Waive Immunity

       The Section 8 contract in question is a contract that deals with the lease of real

estate, i.e., Serento’s apartment units, to low income families, wherein SAHA would pay a

portion of the family’s monthly rent, via the federal Housing Assistance Program, directly

to Serento. C.R. 2 and 24–25. This Court has already concluded that contracts that deal

with the lease of real estate are not included within Section 271.152’s waiver of immunity.

See Bexar Metro. Water Dist. v. Educ. & Econ. Dev. Joint Venture, 220 S.W.3d 25, 31–32

(Tex. App.—San Antonio 2006, pet. dism’d); see also Somerset Indep. Sch. Dist. v. Casias,

No. 04-07-00829-CV, 2008 Tex. App. LEXIS 2895, 2008 WL 1805533, at *3 (Tex. App.—

San Antonio 2008, pet. denied) (holding that section 271.152 did not waive immunity with

respect to the contract because the earnest money contract itself was for the sale of land;

the services at issue were a condition to closing); City of San Antonio v. Reed S. Lehman

Grain, Ltd., No. 04-04-00930-CV, 2007 Tex. App. LEXIS 632, 2007 WL 752197, at *2 n.2

(Tex. App.-San Antonio 2007, pet. denied) (noting section 271.152 not applicable to claim

for breach of easement dedication contract because it conveyed an interest in real

property and was not an agreement for providing goods and services). Because the

contract in issue deals with the lease of real estate, there is no waiver of SAHA’s immunity.

                                             11
       3.     Statute Waiving Governmental Immunity Must be Strictly Construed

       Governmental immunity is a jurisdictional bar to suits against local governmental

entities, absent a Legislative waiver of that immunity. City of Galveston v. State, 217
S.W.3d at 569-71; Tooke v. City of Mexia, 197 S.W.3d at 334. Any such waiver must be

“clearly and unambiguously stated.” Tooke v. City of Mexia, 197 S.W.3d at 336–43.

Statutes waiving governmental immunity are strictly construed. City of Houston v. Jackson,

192 S.W.3d 764, 770 (Tex. 2006); Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d
653, 655 (Tex. 2008) (“We interpret statutory waivers of immunity narrowly, as the

Legislature’s intent to waive immunity must be clear and unambiguous.”) Texas courts

generally resolve ambiguities by retaining immunity. Wichita Falls State Hospital v.

Taylor, 106 S.W.3d 692, 697 (Tex. 2003).

       Serento has represented that the “service” it provided to SAHA was managing and

maintaining its own apartment complex units. See R.R. P. 7/L. 24 – P. 8/L. 3 and P. 17/L.

25 – P. 18/L. 14. However, the Serento apartment complex was neither owned nor operated

by SAHA. Accordingly, to the extent Serento’s employees or contractors managed,

maintained, and/or repaired its own apartment units, Serento was doing so in furtherance of

its own interests, not as a “service” to SAHA.

       Serento’s position impliedly invites this Court to construe the limited waiver in

Texas Local Government Code Section 271.152 liberally, rather than strictly, as required

by numerous decisions of the Texas Supreme Court. City of Houston v. Jackson, 192
S.W.3d at 770; Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d at 655. A review

of Subchapter I of Chapter 271 of the Texas Local Government Code shows that the statute

                                            12
was intended to be for the benefit of contractors who sell goods or services to local

governmental entities. For example, the kinds of damages available under Texas Local

Government Code Section 271.153 are limited to “the balance due and owed by the local

government entity under the contract” and “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.” TEX. LOC. GOV’T CODE § 271.153(a)(1)–(2). The

Legislature never intended the limited waiver of the statute to reach a contract where a

claimant can merely point to some incidental act that it claims to have performed, and

which could, under a strained construction, be interpreted to be a “good” or “service” to the

local governmental entity. Because Plaintiff has alleged no facts in its pleadings nor

provided evidence to support a waiver of SAHA’s immunity, the trial Court erred in

denying SAHA’s Plea to the Jurisdiction and Motion to Dismiss.

                                           VIII.
                                         PRAYER

       Appellant, SAN ANTONIO HOUSING AUTHORITY, respectfully prays this

Court reverse the trial court’s Order of January 22, 2015, denying SAHA’s Plea to the

Jurisdiction and dismiss Plaintiff’s suit against SAHA for want of subject matter

jurisdiction. Appellant prays for such other and further relief, at law or in equity, to which

it may be justly entitled.

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                                         Respectfully submitted,

                                         _______________________________
                                         N. MARK RALLS
                                         State Bar No. 16489200
                                         Email: mralls@hfdlaw.com
                                         APRIL Y. QUIÑONES
                                         State Bar No. 24069756
                                         Email: aquinones@hfdlaw.com
                                         HOBLIT FERGUSON DARLING LLP
                                         Bank of America Plaza
                                         300 Convent Street, Suite 1450
                                         San Antonio, Texas 78205
                                         Telephone No. (210) 224-9991
                                         Facsimile No. (210) 226-1544

                                         ATTORNEYS FOR APPELLANT,
                                         SAN ANTONIO HOUSING AUTHORITY

                            CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing has been served upon
counsel of record via Certified Mail, Return Receipt Requested #7014 1200 0001 2447
4340, on this 16th day of March, 2015.

      James A. Rickerson
      Law Office of James A. Rickerson
      111 E. Euclid
      San Antonio, Texas 78212
      Counsel for Plaintiff/Appellee

                                  By:    ______________________________
                                         N. MARK RALLS

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