In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-24-00053-CV ___________________________
ALICE JONES MCDANIEL, INDEPENDENT EXECUTRIX OF THE ESTATE OF JAN LYNN JONES, DECEASED, Appellant
V.
CROWLEY INDEPENDENT SCHOOL DISTRICT; AND OMNI FINANCIAL GROUP, INC., D/B/A U.S. OMNI, Appellees
On Appeal from the 153rd District Court Tarrant County, Texas Trial Court No. 153-301726-18
Before Sudderth, C.J.; Bassel and Wallach, JJ. Opinion by Justice Wallach OPINION
Appellant Alice Jones McDaniel, Independent Executrix of the Estate of Jan
Lynn Jones, Deceased, 1 originally sued Appellee Crowley Independent School District
(CISD) seeking to recover the death benefits under a Section 457 deferred
compensation plan to which Decedent had subscribed while she was employed by
CISD. Omni Financial Group, Inc. (Omni) was subsequently joined as a defendant as
the third-party administrator of the CISD plan. In her live pleading, Executor sought
recovery for breach of contract, breach of fiduciary duty, constructive trust,
negligence, negligence per se, declaratory judgment, and exemplary damages.
When the lawsuit was originally filed, and for a significant period thereafter,
none of the parties produced a beneficiary designation executed by Decedent for the
death benefits. Thus, Executor claimed that the estate was the proper beneficiary by
default under the Texas Property Code. Eventually, the annuity contract issuer for the
plan, Lincoln National Life Insurance Company (Lincoln), produced a beneficiary
designation executed by Decedent that showed her niece and nephew as equal
beneficiaries. The death benefits were eventually paid to the niece and nephew
without objection by Executor.
Appellees filed pleas to the jurisdiction contending that (1) because the plan’s
death benefits were not assets of the estate subject to the Executor’s control,
We will use “Executor” to refer to McDaniel and use “Decedent” to refer to 1
Jones.
2 Executor had no standing to sue; (2) with the production of the beneficiary
designation by Lincoln designating niece and nephew as beneficiaries, Executor’s
claims became moot because the estate had no interest in the benefits; and
(3) Executor had no authority to enforce the annuity contract. After conducting two
hearings, and after death-benefit payments were made to the niece and nephew, the
trial court signed separate orders granting Appellees’ pleas to the jurisdiction and
dismissed the cases with prejudice. This appeal ensued. We will affirm the dismissals
of the Executor’s claims for want of subject matter jurisdiction.
I. Background
Since our focus will be primarily on Executor’s pleaded allegations, this
background is largely based on the allegations of the Third Amended Original
Petition, Executor’s live pleading, unless otherwise indicated.2 Executor alleged that
2 On October 5, 2023, Executor filed a First Amended Motion for Leave to File the Third Amended Petition, less than seven days before the then-current trial setting. Omni filed its opposition to the requested leave to amend on October 6, 2023. The court never ruled on the motion for leave. The case did not go to trial and Executor filed her Third Amended Original Petition on November 8, 2023. The hearings on the pleas to the jurisdiction were not held until January 6 and 25, 2024. The record does not reflect any scheduling order that might have had a deadline for filing the pleas to the jurisdiction, and a hearing on a plea to the jurisdiction is not a “trial” for purposes of Rule 63. Tex. R. Civ. P. 63. Therefore, the Third Amended Original Petition was the Executor’s live petition. See Grand Prairie Hosp. Auth. v. Tarrant Appraisal Dist., 707 S.W.2d 281, 283 (Tex. App.—Fort Worth 1986, writ ref’d n.r.e.), overruled on other grounds by Tarrant Appraisal Dist. v. Tarrant Reg’l Water Dist., 547 S.W.3d 917, 927 (Tex. App.—Fort Worth 2018, no pet.); see also Patel v. Trevino, No. 01-20-00445-CV, 2022 WL 3720135, at *1 n.4 (Tex. App.—Houston [1st Dist.] Aug. 30, 2022, no pet.) (mem. op.); City of McKinney v. Hank’s Rest. Grp., L.P., 412 S.W.3d 102, 110 (Tex. App.—Dallas 2013, no pet.).
3 CISD, a political subdivision of the State of Texas, offered a Section 457 qualified
deferred compensation plan (Plan) for its employees. Omni was the third-party
administrator of the Plan. Lincoln was the annuity contract issuer for the Plan.
Decedent was a teacher contracted by CISD from 1993 through 1997. She
became a participant in the Plan in 1993. On or about October 26, 1993, Decedent
executed a document entitled The Lincoln National Life Insurance Company
Deferred Annuity Application (Application), which specifically provided that the
funds being invested in the annuity contract were in a Section 457(b) governmental
plan. See 26 U.S.C.A. § 457 (governing “[d]eferred compensation plans of State and
local governments and tax-exempt organizations”). Under an eligible Section 457(b)
governmental plan, a participant may elect to defer a portion of her compensation for
federal income taxation purposes for a period extending to the date of the
participant’s termination or beyond. Id. The portion of an employee’s compensation
being deferred is invested by the employer into an annuity contract to set aside funds
for the payment of benefits payable to the participant pursuant to the provisions of
the plan.
Under such a plan, the employer is required to be both the owner and the
beneficiary of an annuity contract purchased by the employer so that the funds can be
redeemed by the employer to make distributions to the plan participant in accordance
with the plan. Consistent with those requirements, the Application reflects ClSD as
4 both the owner and the beneficiary of the proceeds payable under the annuity
contract.
Although Decedent, as participant, had no right to designate a beneficiary of
the annuity contract, she did have a right to designate a beneficiary of her interest in
the Plan, i.e., the death benefit. Decedent signed the Deferred Compensation Plan
Employee Participation Agreement (beneficiary designation) on October 25, 1993.
This document, which did not surface until well after the lawsuit was filed, designated
Decedent’s niece and nephew as beneficiaries of the death benefit.
Executor alleged that the Texas Government Code provides that amounts
deferred under a Section 457 plan are held in trust:
[a]n Employee’s deferred amounts and investment income under a [Section] 457 plan and the qualified investment products in which the amounts are invested are held in trust for the exclusive benefit of participants and their beneficiaries in accordance with Section 457 of the Internal Revenue Code of 1986[, as amended]. For purposes of this Section, custodial accounts and contracts described in Section 457 are treated as trusts.
Tex. Gov’t Code Ann. § 609.009.
Executor further alleged that the Code provides that a plan administrator must
have procedures regarding an employee’s designation of beneficiaries and the
distribution of the employee’s interest in a plan:
Distribution
A Plan Administrator shall develop and implement procedures for:
5 (1) the designation by a participating employee of a beneficiary to receive the employee’s deferred amounts and investment income after the employee’s death; and
(2) the distribution of a participating employee’s deferred amounts and investment income to the employee or the employee’s beneficiary, as appropriate, because of the employee’s death or termination of employment, financial hardship, or another reason permissible under federal law.
Id. § 609.111.
Executor also alleged that the Texas Property Code addresses unclaimed
benefits:
Unclaimed Benefits
If a trustee does not claim a death benefit on or before the first anniversary of the employee’s or participant’s death or if satisfactory evidence is provided to a trustee, custodian, other fiduciary, or other obligor of the employees’ trust, contract purchased by the employees’ trust, or the retirement account before the first anniversary of the employee’s or participant’s death that there is or will be no trustee to receive the death benefit, the death benefit shall be paid:
(1) according to the beneficiary designation under the plan, trust, contract, or arrangement providing the death benefit under the employees’ trust or retirement account; or
(2) if there is no designation in the employees’ trust or retirement account, to the personal representative of the deceased employee’s or participant’s estate.
Tex. Prop. Code Ann. § 121.054.
ln the spring of 1997, CISD elected not to renew Decedent’s employment
contract for the following year. Decedent severed employment with CISD in
approximately May or June of 1997. The funds contributed by Decedent as a
6 participant in the Plan (and the earnings thereon) remained in the Plan invested in the
Lincoln Annuity Contract, as evidenced by quarterly statements from Lincoln, which
were still being sent to Decedent at the time of her death on August 4, 2015, and
afterwards.
In October 2017, Executor believed that the death benefits were the property
of the estate as the default beneficiary under Texas Property Code Section 121.054(2).
Over the next several months, Executor allegedly made inquiries with CISD and
Lincoln about claiming the death benefits and obtaining the Plan documents,
including the beneficiary designation. Her efforts were mostly futile. At one point,
CISD’s Board of Trustees asserted that CISD was claiming the death benefit as a gift.
Eventually, CISD abandoned that position.
On July 3, 2018, Executor sent a letter to CISD demanding: (i) a copy of the
Plan; (ii) a copy of the summary Plan description; (iii) a copy of the beneficiary
designation form; and (iv) the current account balance of Decedent’s interest in the
Plan. CISD did not respond.
Executor then filed suit against CISD. The factual allegations of the Original
Petition regarding CISD were largely the same as the Third Amended Petition being
described herein and will not be summarized separately.3 Executor also served CISD
3 The legal theories asserted in the original petition were breach of fiduciary duty under Texas Government Code Section 609 and under the “Texas Trust Code,” breach of contract, imposition of a constructive trust on the annuity proceeds, and punitive damages. No request for declaratory relief was alleged.
7 with a request for production seeking various documents, including those just
mentioned. CISD answered with a general denial. CISD failed to produce the
documents in response to the request.
Executor filed her First Amended Original Petition on July 22, 2019. Again, the
factual allegations against CISD were largely the same as the Third Amended Petition
being described herein and will not be summarized separately. Executor’s legal
theories were the same as the First Amended except she added a request for
declaratory relief that the Estate is the beneficiary of Decedent’s interest in the Plan
and a request for attorney’s fees as are just and equitable.
Executor moved for partial traditional summary judgment against CISD. In its
response, CISD attached its original and amended answers to the request for
production, producing the Omni Group, Inc. Model 457(b) Deferred Compensation
Plan and the Lincoln Annuity Application, but denied that it was in possession of the
beneficiary designation. The summary judgment was denied on November 19, 2019.
After learning of Omni’s role as Plan administrator through the production of
the Plan by CISD, Executor filed her Second Amended Original Petition on
December 2, 2019, adding Omni as a defendant. The factual allegations giving rise to
the claims are essentially as described herein under the Third Amended Petition and
8 will not be summarized separately.4 She again sought declaratory relief and just and
equitable attorney’s fees through trial and on appeal.
After Executor obtained new counsel, she asked Lincoln to produce the
previously requested Plan documents. Lincoln produced a copy of the beneficiary
designation, which designated the niece and nephew as beneficiaries, that also showed
that a copy of that document had been provided to CISD, which had never provided
it to Executor.
In the Original, First, and Second Amended Petitions, Executor was, in
essence, claiming to represent the estate as the contingent beneficiary of the death
benefits under the Plan because the conditions for payment to the primary beneficiary
had lapsed. In her Third Amended Original Petition, Executor explained that right as
being based on Texas Property Code Section 121.054 (see above). New to her factual
recitations in her Third Amended Petition was the fact that, based on the newly
produced beneficiary designation, the actual primary beneficiaries were the niece and
nephew. Despite that development, based on the above-referenced factual allegations,
4 The allegations against Omni, as third party administrator, were that Omni: (1) breached an agreement between CISD and Decedent for payment of the sums due for the Plan’s death benefit; (2) breached its fiduciary duty under Texas Government Code Section 609.009 for failing to properly ascertain the proper beneficiary under the Plan, failing to make distribution of the death benefit to the designated beneficiary, and failing to provide the requested Plan information in a timely fashion; and (3) breached its fiduciary duty under the Texas Trust Code by failing to remit funds due to Decedent and failing to carry out the provisions of the employee trust for Decedent’s benefit.
9 Executor sought recovery for breach of fiduciary duty, breach of contract, fraudulent
representations and concealment (CISD only), fraud (Omni), exemplary or punitive
damages for fraud, negligence, negligence per se, and gross negligence, and actual and
punitive damages. Executor sought imposition of a constructive trust on the death
benefits to prevent unjust enrichment to CISD and Omni. Executor also sought
declaratory judgment regarding the rightful entitlement to ownership of the death
benefits. All the rights of recovery were hinged on Executor’s alleged right to the Plan
documents, information, and death benefits, and damages flowing from CISD’s and
Omni’s failure or delay in providing such.
II. Issues on Appeal
Executor raises three issues on appeal. First, she argues she did not lack
standing. Second, she argues her claims did not become moot. Third, she alleges that
the trial court placed conditions on dismissal of the case for lack of subject matter
jurisdiction, thereby committing harmful error and depriving Executor of a trial on
the merits of her claims. We will affirm the trial court’s dismissal orders. Harris Cnty. v.
Annab, 547 S.W.3d 609, 616 (Tex. 2018) (stating that if the pleadings or record
conclusively negate the existence of jurisdiction or if, even with remand, the plaintiff
would be unable to show the existence of jurisdiction, the case should be dismissed
without a remand); Port of Corpus Christi, LP v. Port of Corpus Christi Auth. of Nueces Cnty.,
No. 13-19-00304-CV, 2021 WL 499067, at *7 (Tex. App.—Corpus Christi–Edinburg
Feb. 11, 2021, no pet.) (mem. op.).
10 III. Standards of Review and Legal Principles
a. Subject Matter Jurisdiction Standards of Review
A plea to the jurisdiction challenges the trial court’s subject matter jurisdiction
to hear a case. Bland ISD v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). When the plea
challenges the claimant’s pleadings, we determine whether the claimant has pleaded
facts that affirmatively demonstrate the trial court’s jurisdiction, construing the
pleadings liberally and in favor of the claimant. Tex. Ass’n of Bus. v. Tex. Air Control Bd.,
852 S.W.2d 440, 446 (Tex. 1993). We review a trial court’s ruling on a plea to the
jurisdiction de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,
226 (Tex. 2004). In our review, we construe the pleadings liberally in favor of the
pleader and look to the pleader’s intent to determine whether the facts alleged
affirmatively demonstrate the trial court’s jurisdiction to hear the cause. Id.
When the challenge to jurisdiction challenges the existence of jurisdictional
facts and the parties submit evidence relevant to the jurisdictional challenge, we
consider that evidence when necessary to resolve the jurisdictional issues raised.
Miranda, 133 S.W.3d at 228; City of Houston v. Aptim Env’t & Infrastructure, LLC,
693 S.W.3d 819, 823 (Tex. App.—Houston [14th Dist.] 2024, no pet.). When the
jurisdictional issues implicate the merits of the plaintiff’s claims, the standard of
review for the jurisdictional plea based on evidence “generally mirrors that of a
summary judgment under Texas Rule of Civil Procedure 166a(c).” Miranda,
133 S.W.3d at 228; City of Houston, 693 S.W.3d at 823. We take as true all evidence
11 favoring the nonmovant and draw all reasonable inferences and resolve any doubts in
the nonmovant’s favor. Miranda, 133 S.W.3d. at 228. If the evidence creates a fact
question regarding the jurisdictional issue, then the trial court cannot grant the plea to
the jurisdiction, and the fact issue must be resolved by the fact finder. Miranda,
133 S.W.3d at 227–28; City of Houston, 693 S.W.3d at 823. But if the relevant evidence
is undisputed or fails to raise a fact question on the jurisdictional issue, then the court
may rule on the plea to the jurisdiction as a matter of law. Miranda, 133 S.W.3d at 228;
City of Houston, 693 S.W.3d at 823. Finally, as we have previously noted, “[w]hen the
trial court grants a plea to the jurisdiction and does not state the basis of its ruling, we
may affirm on any basis preserved in the record.” Mann v. Denton Cnty., No. 02-16-
00030-CV, 2017 WL 526309, at *6 (Tex. App.—Fort Worth Feb. 9, 2017, pet. denied)
(mem. op.).
b. Governmental Immunity and Subject Matter Jurisdiction
“Governmental immunity protects all governmental entities against suits for
their governmental actions, even when acting as employers.” Hillman v. Nueces Cnty.,
579 S.W.3d 354, 358 (Tex. 2019). School districts such as CISD are political
subdivisions of the state protected by governmental immunity. Wasson Ints., Ltd. v. City
of Jacksonville, 489 S.W.3d 427, 403 n.3 (Tex. 2016). Included in the types of claims that
are barred by governmental immunity are:
1) fraudulent inducement, Deceptive Trade Practice Act, and negligence claims, Amador v. City of Irving, No. 05-19-00278-CV, 2020 WL 1316921, at *8 (Tex. App.—Dallas Mar. 20, 2020, no pet.) (mem. op.);
12 2) fraud and breach of fiduciary duty claims, Tex. State Auditor’s Off. v. Mora- Nichols, No. 03-03-00113-CV, 2003 WL 22453830, at *3 (Tex. App.— Austin Oct. 30, 2003, no pet.) (mem. op.); and
3) promissory estoppel, quasi-contractual, oral representations, negligent misrepresentation, and negligent or intentional torts, Gay v. City of Wichita Falls, 457 S.W.3d 499, 507–09 (Tex. App.—El Paso 2014, no pet.).
When the defendant is the state or a political subdivision thereof, the plaintiff
must plead facts that affirmatively demonstrate that governmental immunity has been
waived and that the court has subject matter jurisdiction. Tex. Dep’t of Transp. v. Primary
Media Grp., Inc., No. 05-22-01273-CV, 2024 WL 3770330, at *6 (Tex. App.—Dallas
Aug. 13, 2024, pet. filed) (mem. op.); City of McKinney, 412 S.W.3d at 109. Sovereign
and governmental immunity sufficiently implicate subject matter jurisdiction such that
it cannot be waived by failure to assert it in the trial court and can be raised for the
first time on appeal, even if the appellate court raises it sua sponte. Manbeck v. Austin
ISD, 381 S.W.3d 528, 530 (Tex. 2012); see Clint ISD v. Marquez, 487 S.W.3d 538,
558 (Tex. 2016); San Jacinto River Auth. v. Dennis, No. 14-18-00174-CV,
2021 WL 4270030, at *1 (Tex. App.—Houston [14th Dist.] Sept. 21, 2021, no pet.)
It is the legislature’s purview to waive governmental immunity by statute. City of
Galveston v. State, 217 S.W.3d 466, 469 (Tex. 2007); Tex. Nat. Res. Conservation Comm’n v.
IT-Davy, 74 S.W.3d 849, 853–54 (Tex. 2002). If the legislature elects to waive
immunity by statute, it must do so by clear and unambiguous language. Tex. Gov’t
13 Code Ann. § 311.034; Hillman, 579 S.W.3d at 359–60; Tooke v. City of Mexia,
197 S.W.3d 325, 332 (Tex. 2006).
One source of statutory waiver of governmental immunity is Texas Local
Government Code Section 271.152, which 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 [Chapter 271,] subchapter [I].
Tex Loc. Gov’t Code Ann. § 271.152. School districts are “local government entities”
for purposes of that subchapter. Id. § 271.151(3)(B). For purposes of the subchapter, a
contract includes, “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.” Id. § 271.151(2)(A).
The waiver of governmental immunity under Section 271.152 is limited to the
recovery of items listed in Section 271.153. As pertinent to our case, the waiver
includes the balance due under the contract plus reasonable and necessary attorney’s
fees that are equitable and just and interest as allowed by law; it does not include other
consequential damages or exemplary damages. Id. § 271.153(a)(1), (3), (4), (b)(1), (2);
see Zachry Const. Corp. v. Port of Hous. Auth. of Harris Cnty., 449 S.W.3d 98, 110 (Tex.
2014); Amador, 2020 WL 1316921, at *6.
Section 271.157 further provides that the subchapter does not waive
governmental immunity for negligent or intentional torts. Tex. Loc. Gov’t Code Ann.
14 § 271.157; see Gay, 457 S.W.3d at 509. Further, Section 271.152 does not waive
governmental immunity for declaratory judgment actions against local government
entities to construe rights under a contract. Lower Colo. River Auth. v. City of Boerne,
422 S.W.3d 60, 67 (Tex. App.—San Antonio 2014, pet. dism’d) (affirming trial court’s
order granting city’s plea to jurisdiction on plaintiff’s declaratory judgment claim
where plaintiff had also asserted related breach of contract claim against city); see City
of League City v. Galveston Cnty. Mun. Util. Dist. No. 6, No. 01-23-00007-CV,
2023 WL 8814635, at *10 (Tex. App.—Houston [1st Dist.] Dec. 21, 2023, no pet.)
(mem. op.); Merrell v. City of Sealy, No. 01-21-00347-CV, 2022 WL 3970078, at
*10 (Tex. App.—Houston [1st Dist.] Sept. 1, 2022, no pet.) (mem. op.); Multi-County
Water Supply Corp. v. City of Hamilton, 321 S.W.3d 905, 909 (Tex. App.—Houston [14th
Dist.] 2010, pet denied).
In determining what documents may constitute a contract for waiver purposes
under Chapter 271, the Supreme Court has stated,
[w]e have also read two ordinances and related documents together as a single agreement, and noted that “a court may determine, as a matter of law, that multiple documents comprise a written contract.” Fort Worth ISD v. City of Fort Worth, 22 S.W.3d 831, 840–41 (Tex. 2000). It is “well- established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent.” Id. at 840. In addition, the multiple documents need not contain all of the terms; instead, only the essential terms are required. Osborne v. Moore, 112 Tex. 361, 247 S.W. 498, 499 (1923). Therefore, different ordinance sections can potentially be read together in a single contract. See City of Fort Worth, 22 S.W.3d at 840–41.
City of Houston v. Williams, 353 S.W.3d 128, 137 (Tex. 2011).
15 As further noted by the Court, the phrase “essential terms” is not defined in
the Local Government Code but has been generally characterized to include the time
of performance, the price to be paid, and the service to be rendered. Id. at 138–39.
And in the context of employment agreements, it typically includes compensation,
duties, or responsibilities. Id. at 139. A school district’s employee benefit plan that
provides its employees with medical benefits is a contract for purposes of Local
Government Code Section 271.152. S. Coast Spine & Rehab. PA v. Brownsville ISD,
No. 13-11-00270-CV, 2014 WL 1789546, at *3–4 (Tex. App.—Corpus Christi–
Edinburg, Apr. 30, 2014, no pet.) (mem. op.).
c. Standing and Subject Matter Jurisdiction
As recently noted by the Supreme Court,
[a] plaintiff must have standing to sue. Part of that analysis depends on whether a plaintiff has alleged an injury that her lawsuit can vindicate. A plaintiff’s general disagreement about the governing law or what the law should be does not suffice. Otherwise, anyone could approach a court for an opinion about hypothetical applications of the law. Instead, the relief that a plaintiff seeks from a court must in some way rectify or compensate the plaintiff for her alleged injury. In other words, to have standing, a plaintiff must allege a concrete personal injury that is both traceable to the defendant’s conduct and likely redressable by the requested relief.
State v. Zurawski, 690 S.W.3d 644, 657 (Tex. 2024) (emphasis added).
Since standing is a component of subject matter jurisdiction, we consider
Executor’s standing under the same standard by which we review subject matter
jurisdiction generally. Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 773 (Tex. 2020).
That standard requires the pleader to allege facts that affirmatively demonstrate the
16 court’s jurisdiction to hear the cause. Harris Cnty., 547 S.W.3d at 612; Tex. Ass’n of
Bus., 852 S.W.2d at 446. When reviewing a trial court order dismissing a cause for
want of jurisdiction, appellate courts “construe the pleadings in favor of the plaintiff
and look to the pleader’s intent.” Tex. Ass’n of Bus., 852 S.W.2d at 446 (citing Huston v.
FDIC, 663 S.W.2d 126, 129 (Tex. App.—Eastland 1983, writ ref’d n.r.e.)); see Harris
Cnty., 547 S.W.3d at 612–13. Factual allegations are accepted as true. Town of Flower
Mound v. Rembert Enter., Inc., 369 S.W.3d 465, 471 (Tex. App.—Fort Worth 2012, pet.
denied).
Lack of standing deprives the trial court of subject matter jurisdiction. Pike,
610 S.W.3d at 773. To show standing, a plaintiff must demonstrate that: (1) it suffered
a concrete and particularized injury-in-fact; (2) the injury is fairly traceable to the
defendant’s conduct; and (3) a favorable decision is likely to redress the injury. In re
Abbott, 601 S.W.3d 802, 808 (Tex. 2020) (citing Lujan v. Defenders of Wildlife, 504 U.S.
555, 560–61, 112 S. Ct. 2130 (1992)). However, “a plaintiff does not lack standing
simply because some other legal principle may prevent it from prevailing on the
merits; rather, a plaintiff lacks standing if its ‘claim of injury is too slight for a court to
afford redress.’” Data Foundry, Inc. v. City of Austin, 620 S.W.3d 692, 696 (Tex. 2021)
(quoting DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 305 (Tex. 2008)).
Standing may also be conferred by statute. Aubrey v. Aubrey, 523 S.W.3d 299,
311 (Tex. App.—Dallas 2017, no pet.). When standing has been statutorily conferred,
the statute itself serves as the proper framework for a standing analysis. Id. The party
17 seeking relief must allege and establish standing within the parameters of the language
used in the statute. Scott v. Bd. of Adjustment, 405 S.W.2d 55, 56 (Tex. 1966); Whittier
Heights Maint. Ass’n. v. Colleyville HomeOwners’ Rights Ass’n, No. 02-10-00351-CV,
2011 WL 2185699, at *3 (Tex. App—Fort Worth June 2, 2011, no pet.) (mem. op.);
Everett v. TK–Taito, L.L.C., 178 S.W.3d 844, 851 (Tex. App.—Fort Worth 2005, no
pet.). Mere reference to the elements of a statute and bare conclusions are not
enough; the plaintiff must actually allege a violation of a statute by pleading facts that
state a claim under the statute. Dohlen v. City of San Antonio, 643 S.W.3d 387, 392,
394 (Tex. 2022).
d. Mootness and Subject Matter Jurisdiction
“The mootness doctrine limits courts to deciding cases in which an actual
controversy exists.” Houston Chronicle Publ’g Co. v. Thomas, 196 S.W.3d 396, 399 (Tex.
App.—Houston [1st Dist.] 2006, no pet.) (quoting FDIC v. Nueces Cnty., 886 S.W.2d
766, 767 (Tex. 1994)). The doctrine applies to cases in which a justiciable controversy
exists between the parties at the time the case arose, but the live controversy ceases
because of subsequent events. Matthews v. Kountze ISD, 484 S.W.3d 416, 418–19 (Tex.
2016); Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012). “To constitute a
justiciable controversy, there must exist a real and substantial controversy involving
genuine conflict of tangible interests and not merely a theoretical dispute.” Bonham
State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995) (quoting Bexar-Medina-Atascosa
Cntys. Water Control & Improvement Dist. No. 1 v. Medina Lake Protection Ass’n,
18 640 S.W.2d 778, 779–80 (Tex. App.—San Antonio 1982, writ ref’d n.r.e.)); Kessling v.
Friendswood ISD, 302 S.W.3d 373, 380 (Tex. App.—Houston [14th Dist.] 2009, pet.
denied). “If a controversy ceases to exist—‘the issues presented are no longer “live”
or the parties lack a legally cognizable interest in the outcome’—the case becomes
moot.” Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001) (quoting Murphy v. Hunt,
455 U.S. 478, 481, 102 S. Ct. 1181 (1982)); City of El Paso v. Waterblasting Tech., Inc.,
491 S.W.3d 890, 904–05 (Tex. App.—El Paso 2016, no pet.) (holding that full
performance of contract in question mooted suit to enjoin performance of that
contract and payment). If a case becomes moot, the court loses jurisdiction over the
claims. City of El Paso, 491 S.W.3d at 904. However, mootness, like standing, is
generally analyzed on a claim-by-claim basis, with the claims subject to being grouped
and analyzed by the injury alleged. Cyphers v. Cunningham, No. 02-23-00148-CV,
2024 WL 3819315, at *3 (Tex. App.—Fort Worth Aug. 15, 2024, no pet.) (mem. op.);
Blanton v. Red Desert Enters., LLC, No. 02-23-00191-CV, 2024 WL 1925140, at *4 (Tex.
App.—Fort Worth May 2, 2024, pet. denied) (mem. op.).
Even if a request for declaratory judgment is rendered moot on the substantive
dispute, though, a request for attorneys’ fees under the Declaratory Judgment Act may
remain a live controversy, and the trial court retains jurisdiction. Allstate Ins. Co. v.
Hallman, 159 S.W.3d 640, 642 (Tex. 2005); Camarena v. Tex. Emp. Comm’n, 754 S.W.2d
149, 151 (Tex. 1988); Cyphers, 2024 WL 3819315, at *4; Ward v. Lamar Univ.,
19 484 S.W.3d 440, 451 (Tex. App.—Houston [14th Dist.] 2016, no pet.). As noted by
the Supreme Court,
[w]hether an attorney’s-fees claim breathes life into an otherwise moot appeal depends first on whether the claimant seeks the fees under a statute that authorizes fees only for a prevailing party or, alternatively, under a statute that permits fees based on equitable principles regardless of who prevails. If the statute allows a non-prevailing party to recover fees under equitable principles, the claim for fees always breathes life into a case that has otherwise become moot, because the trial court must always consider the relative merits of the parties’ positions (among other factors) when exercising its discretion to award fees to either party.
State ex rel Best v. Harper, 562 S.W.3d 1, 7 (Tex. 2018) (citing Allstate, 159 S.W.3d at
643).
A claim for recovery of attorney’s fees under Local Government Code Section
271.153(a)(3) requires the requesting party to be a prevailing party. Tex. Local Gov’t
Code Ann. § 271.153(a)(3). Even though it uses “equitable and just” language when
referencing attorney’s fees, it is not an independent ground for recovery of attorney’s
fees. Cnty. of Galveston v. Triple B Serv., LLP, 498 S.W.3d 176, 189 (Tex. App.—
Houston [1st Dist.] 2016, pet. denied) (construing Tex. Loc. Gov’t Code Ann.
§ 262.007, a similar limitation on waiver of local governmental entity contractual
immunity, as failing to constitute a substantive basis for attorney’s fees award and
clarifying that statute only allows attorney’s fees if another statute or contract allows
them). While Section 271.152 waives sovereign (governmental) immunity to suit for
qualifying local governmental entities for the purpose of adjudication of claims for
breach of contract, Section 271.153(a)(3) expressly limits the amount of money that
20 can be awarded in an adjudication against a local governmental entity in such a breach
of contract action. Tex. Loc. Gov’t Code Ann. §§ 271.152, .153(a)(3). The latter
section limits recovery of attorney’s fees to those that are not only reasonable and
necessary but also equitable and just. Id. § 271.153(a)(3). Further, Texas Civil Practice
and Remedies Code Section 38.001 cannot serve as an independent right to recover
attorney’s fees for breach of contract against local governmental entities. Cnty. of
Galveston, 498 S.W.3d at 189; City of Corinth v. NuRock Dev. Inc., 293 S.W.3d 360,
370 (Tex. App.—Fort Worth 2009, no pet.); see Wasson Ints., Ltd. v. City of Jacksonville,
No. 12-13-00262-CV, 2019 WL 7373851, at *10 (Tex. App.—Tyler Dec. 31, 2019,
pet. denied) (mem. op. on reh’g).
IV. Analysis
a. CISD
CISD did not raise governmental immunity in the trial court or in this court.
However, governmental immunity is jurisdictional and may appropriately be raised by
this court sua sponte. CISD was alleged to be a school district and a political
subdivision of the State of Texas. Hence, it was incumbent on Executor to
affirmatively plead facts that established a waiver of governmental immunity.
Construing the pleadings liberally in Executor’s favor, we hold that Executor’s
original petition pleaded facts that would constitute waiver of governmental immunity
as to the breach of contract claim but not as to her other claims.
21 As a school district, CISD qualifies as a local governmental entity authorized to
enter into contracts for the provision of goods and services, thereby waiving
immunity as to claims for breach of contract. Tex. Loc. Gov’t Code Ann. § 271.152. It
is undisputed that Decedent entered into an employment service contract with CISD.
In connection with her employment with CISD, it is undisputed she entered into a
properly authorized agreement for an employment benefit with CISD in the form of a
Section 457 deferred compensation plan. The Plan agreement was lengthy, detailing
the rights and obligations of the parties to the Plan, including the rights to the benefits
of the Plan. Construing these documents together, we hold that Executor alleged facts
in her original petition that pleaded the essential terms of a written contract and
breach thereof such that CISD waived governmental immunity as to Executor’s
claims for breach of contract under the Local Government Code. See Campbellton Rd.,
Ltd. v. San Antonio Water Sys. ex rel. City of San Antonio, 688 S.W.3d 105, 115–16 (Tex.
2024); Clear Creek ISD v. Cotton Com. USA, Inc., 529 S.W.3d 569, 585 (Tex. App.—
Houston [14th Dist.] 2017, pet. denied). Despite Executor’s failure to allege a specific
statutory basis for waiver of immunity, her factual allegations for breach of contract
were sufficient. Hous. Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154,
169 (Tex. 2016); King v. Tex. Dep’t of Hum. Servs. ex rel. Bost, 28 S.W.3d 27, 32 (Tex.
App—Austin 2000, no pet.). Because the factual allegations regarding breach of
contract were essentially the same in Executor’s subsequent petitions, they also raised
22 facts constituting a waiver of governmental immunity under the Local Government
Code for breach of contract.
However, waiver of immunity for one claim is not a waiver as to all claims, and
the trial court must dismiss those claims over which it has no subject matter
jurisdiction. Heckman, 369 S.W.3d, at 150; Amador, 2020 WL 1316921, at *8.
Excluding the claim for breach of contract, Executor’s other claims in her original and
subsequent petitions did not allege facts constituting a waiver of governmental
immunity. When considering the facts pleaded, all of Executor’s other claims involved
intentional or negligent torts, which do not qualify for immunity waiver under the
Local Government Code, and Executor did not affirmatively plead any other waiver
of immunity. See Amador, 2020 WL 1316921, at *8; Gay, 457 S.W.3d at 509; Tex. State
Auditor’s Off., 2003 WL 22453830, at *3. Therefore, the trial court’s dismissal of those
claims was proper. Likewise, based on the authorities cited above, Executor’s claim
for declaratory relief for construction of her contract rights was barred by
governmental immunity. See Lower Colo. River Auth., 422 S.W.3d at 67; City of League
City, 2023 WL 8814635, at *10; Merrell, 2022 WL 3970078, at *10; Multi-Cnty. Water
Supply Corp., 321 S.W.3d at 909.
Thus, the only claim against CISD over which the trial court had subject matter
jurisdiction was the breach of contract claim. But the trial court justifiably dismissed
this claim on mootness grounds. Executor originally pleaded facts that created
standing because she alleged she had suffered a concrete and particularized injury-in-
23 fact that was fairly traceable to the defendant’s conduct and that a favorable decision
would have been likely to redress her injury. This was rendered moot when the death
benefit beneficiary designation that identified the niece and nephew as beneficiaries
was produced and when the death-benefit funds were paid to them without objection.
At that point there was no longer a controversy between Executor and CISD.
Therefore, dismissal was the appropriate remedy. See City of El Paso, 491 S.W.3d at
904–05. We therefore overrule Executor’s issues and affirm the trial court’s dismissal
of CISD. See Thames Shipyard & Repair Co. v. Galveston Cent. Appraisal Dist., No. 14-11-
00691-CV, 2011 WL 5042836, at *5 (Tex. App.—Houston [14th Dist.] Oct. 25, 2011,
no pet.) (per curiam) (mem. op.).
b. Omni
Omni did not raise governmental immunity at trial or on appeal. However,
governmental immunity may extend to private entities that contract with
governmental entities. Brown & Gay Eng’g, Inc. v. Olivares, 461 S.W.3d 117, 124 (Tex.
2015) (quoting K.D.F. v. Rex, 878 S.W.2d 589, 597 (Tex. 1994), which held (that a
private company that “‘operate[d] solely upon the direction of [the system]’ and
‘exercise[d] no discretion in its activities’ was indistinguishable from the system, such
that ‘a lawsuit against one [wa]s a lawsuit against the other’”). If governmental
immunity applies to a claim against a private contractor, the trial court lacks subject
matter jurisdiction over the matter. Bellamy v. Allegiance Benefit Plan Mgmt, Inc.,
696 S.W.3d 751, 763–64, 768 (Tex. App.—Eastland 2024, no pet.). Therefore, like
24 governmental immunity for governmental entities, governmental immunity for
contractors may be raised for the first time on appeal, even sua sponte.
In this case, Executor affirmatively pleaded that Omni was the third-party
administrator for the Plan. The Plan demonstrated that CISD, not Omni, had the
ultimate decision-making control for Plan benefit decisions. As noted by the court in
Bellamy, “Texas courts have uniformly held that a private company acting in the role as
a third-party administrator to an insurance program that is funded by the State or
another governmental entity is, like the governmental entity for which it contracts,
immune from liability and suit.” 696 S.W.3d at 763. 5 Therefore, we hold that CISD’s
governmental immunity extends to Omni.
5 Bellamy acknowledged that, in the context of its case, Allegiance’s relationship with the City entitled Allegiance to rely on governmental immunity. Bellamy, 696 S.W.3d at 763–64 (first citing Foster v. Tchr. Ret. Sys., 273 S.W.3d 883, 885– 90 (Tex. App.—Austin 2008, no pet.) (extending immunity to third-party administrator Aetna Health Management, LLC); and then citing Stegall v. TML Multistate Intergovernmental Emp. Benefits Pool, Inc., No. 05-18-00239-CV, 2019 WL 4855226, at *5 (Tex. App.—Dallas Oct. 2, 2019, no pet.) (mem. op.) (extending immunity to the administrator for the TML Multistate Intergovernmental Employee Benefits Pool, Inc.’s intergovernmental self-insurance risk pool); United Healthcare Choice Plus Plan for City of Austin Emps. v. Lesniak, No. 03-15-00309-CV, 2015 WL 7951630, at *2–3 (Tex. App.—Austin Dec. 1, 2015, pet. denied) (mem. op.) (extending immunity to administrator of the City’s self-funded health plan); and Humana Ins. Co. v. Mueller, No. 04-14-00752-CV, 2015 WL 1938657, at *2, *5 (Tex. App.—San Antonio Apr. 29, 2015, pet. denied) (mem. op.) (extending immunity to insurer that served as the “Plan Manager” of the City of San Antonio Housing Authority’s self-funded health care plan); and finally citing McAllen Anesthesia Consultants, P.A. v. United Healthcare Servs., Inc., No. 7:14-CV-913, 2015 WL 9257154, at *8 (S.D. Tex. Dec. 14, 2015) (extending immunity to the third-party administrator of the Employees Retirement System of Texas’s (ERS) health insurance plan because final decisions on benefit payments rested with ERS)). Bellamy noted that “in [such]
25 Does CISD’s waiver of immunity under the Local Government Code for
breach of contract actions apply to Omni, too? Waiver of governmental immunity
exists only if the legislature has clearly and unambiguously waived the immunity by
statute. Rattray v. City of Brownsville, 662 S.W.3d 860, 865 (Tex. 2023); Bellamy,
696 S.W.3d at 760. No such waiver has been granted by the legislature for claims
against third-party administrators like Omni in this case. Under this scenario, the trial
court had no subject matter jurisdiction over the breach of contract claim and the
remainder of the claims against Omni would be barred by governmental immunity for
the same reasons they were barred against CISD.
The ultimate result is the same if Omni’s immunity for breach of contract was
waived under Local Government Code Section 271.152. As with the breach of
contract claim against CISD, once the benefit designation form was produced and the
niece and nephew were paid their rightful benefits, there ceased to be a controversy
between Executor and Omni, and the claim became moot. Therefore, dismissal was
appropriate.
circumstances . . . , courts have held that the governmental unit’s immunity protections extend to and may be asserted by the third-party administrator that is retained to supervise the unit’s self-funded insurance plan” because “a third-party administrator’s entitlement to immunity is ‘derived’ from the governmental unit’s assertion of immunity.” Bellamy, 696 S.W.3d at 764.
26 c. Remand
Should Executor’s claims be remanded to give Executor a chance to amend her
pleadings? No. Executor has sued entities that have governmental immunity from suit
based on the pleaded facts. In those claims where immunity is waived by the pleaded
facts, they were rendered moot by the uncontroverted identification of the rightful
beneficiaries and payment of benefits to them. The lack of subject matter jurisdiction
in this case does not arise from a lack of factual allegations but from the nature of the
allegations and the undisputed facts. Therefore, remand is not appropriate. See Clint,
487 S.W.3d at 559; Johnson v. Williams, No. 02-19-00089-CV, 2019 WL 6334689, at
*5 (Tex. App.—Fort Worth Nov. 27, 2019, pet. denied) (mem. op.); Dunson v. Jacobson,
No. 02-18-00059-CV, 2019 WL 4122606, at *7 (Tex. App.—Fort Worth Aug. 29,
2019, no pet.) (mem. op.).
V. Conclusion
We overrule Executor’s issues and affirm the judgment of the trial court.
/s/ Mike Wallach Mike Wallach Justice Delivered: March 20, 2025