Aransas County v. Northstar Recovery Service, Inc.

• Court: Court of Appeals of Texas
• Decided: February 29, 2024
• Docket: 13-23-00324-CV
• Status: Published

Opinion

NUMBER 13-23-00324-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI – EDINBURG

ARANSAS COUNTY, Appellant,

v.

NORTHSTAR RECOVERY SERVICES, INC., Appellee.

On appeal from the 36th District Court of Aransas County, Texas.

MEMORANDUM OPINION

Before Justices Longoria, Silva, and Peña Memorandum Opinion by Justice Silva

Appellant Aransas County appeals the trial court’s denial of its plea to the

jurisdiction as to appellee NorthStar Recovery Services Inc.’s (NorthStar) claims against

it. By two issues, Aransas County argues the trial court erred by denying its plea because

(1) NorthStar did not plead facts sufficient to establish subject matter jurisdiction, and (2) NorthStar’s evidence does not demonstrate that the trial court possesses jurisdiction.

We affirm.

I. BACKGROUND

A. The Petition

This case arises out of events that followed Hurricane Harvey’s landfall and

resulting destruction along the Coastal Bend. According to NorthStar’s original petition, 1

it entered into a master services agreement with Regional Pool Alliance (RPA), ultimately

leading to a scope of work for services to be performed on government buildings impacted

by Hurricane Harvey for Aransas County Independent School District, Taft Independent

School District, Ingleside Independent School District, and Aransas County. The petition

alleged that RPA failed to pay NorthStar $21,237,022.62 on construction remediation

work performed.

NorthStar alleges that RPA acted as an agent on behalf of Aransas County,

establishing vicarious liability and subjecting Aransas County to liability for RPA’s failure

to pay. According to NorthStar, RPA received its authority to contract with NorthStar from

Aransas County and the obligations agreed to by RPA were within the scope of authority

granted to it by Aransas County. NorthStar sought actual damages, attorneys’ fees, court

costs, and pre and post judgment interest.

1 Following the trial court’s denial of Aransas County’s plea to the jurisdiction, the trial court signed

an order consolidating two cases filed by NorthStar: one against Aransas County and Aransas County Independent School District and one against HR&R, LLC, formerly known as HR&R Risk Management Group, LLC doing business as the Regional Pool Alliance Service Center (RPA). As such, there are two petitions in the record: one for each suit. Any reference to a petition in this case refers specifically to the petition filed against Aransas County and Aransas County Independent School District. Aransas County Independent School District is not a party to this appeal.

2 B. The Plea to the Jurisdiction

Aransas County filed a plea to the jurisdiction, arguing that NorthStar’s petition

failed to affirmatively demonstrate that the trial court had subject matter jurisdiction.

Specifically, Aransas County argued that various statutes waiving immunity for contract

claims against local governmental entities did not apply to counties. See, e.g., TEX. LOC.

GOV’T CODE ANN. § 271.151(3) (“‘Local governmental entity’ means a political subdivision

of this state, other than a county . . . .”) (emphasis added). In a supplemental filing,

Aransas County argued that its immunity was not waived because it was not a party to a

contract with NorthStar and reiterated its previous arguments.

C. The Response

NorthStar responded to Aransas County’s plea to the jurisdiction, arguing that it

did not file suit pursuant to the statutes cited by Aransas County but instead under

§ 262.007, which waives immunity for contract claims against a county when the county

is a party to the contract. See id. § 262.007(a) (“A county that is a party to a written

contract for engineering, architectural, or construction services or for goods related to

engineering, architectural, or construction services may sue or be sued, plead or be

impleaded, or defend or be defended on a claim arising under the contract.”). NorthStar

also argued that, through § 262.001, Aransas County was a party to the contract through

agency. See id. § 262.001(a)(1) (“The commissioners[’] court of a county may appoint an

agent to make a contract on behalf of the county for erecting or repairing a county

building.”); id. § 262.001(b) (“A contract or other act of an agent appointed under this

section that is properly executed on behalf of the county and is within the agent’s authority

3 binds the county to the contract for all purposes.”).

NorthStar included eight exhibits with its response, which included: (1) NorthStar’s

master services agreement with RPA; (2) NorthStar’s scope of work agreement for

Aransas County Properties with RPA; (3) Aransas County’s Commissioners’ Court July

16, 2016 workshop meeting minutes; (4) Aransas County’s Commissioners’ Court May

23, 2022 amended meeting agenda, (5) a September 21, 2022 letter from Aransas

County Attorney to its insurers, seeking cooperation for finalizing repairs relating to

damage caused by Hurricane Harvey; (6) a September 30, 2022 letter from attorneys

representing Aransas County’s insurers denying fault in any construction delays; (7) a

concurrent resolution from the Texas Legislature granting Aransas County permission to

file suit against RPA for its failure to pay contractors; and (8) a copy of Aransas County’s

petition against RPA and its director. NorthStar argued that this evidence supported its

claim that Aransas County authorized RPA to act as its agent.

D. The Ruling

After a hearing, the trial court denied Aransas County’s plea to the jurisdiction. This

interlocutory appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8).

II. STANDARD OF REVIEW AND APPLICABLE LAW

“Local governmental entities ‘enjoy governmental immunity from suit, unless

immunity is expressly waived.’” Lubbock Cnty. Water Control & Imp. Dist. v. Church &

Akin, L.L.C., 442 S.W.3d 297, 300 (Tex. 2014) (quoting Kirby Lake Dev., Ltd. v. Clear

Lake City Water Auth., 320 S.W.3d 829, 836 (Tex. 2010)). “Governmental immunity

includes both immunity from liability, ‘which bars enforcement of a judgment against a

4 governmental entity, and immunity from suit, which bars suit against the entity

altogether.’” Id. If a local governmental entity enjoys governmental immunity, the trial court

does not have subject matter 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 used “to defeat a cause of action without

regard to whether the claims asserted have merit.” Bland Indep. Sch. Dist. v. Blue, 34

S.W.3d 547, 554 (Tex. 2000). The plea challenges the trial court’s subject matter

jurisdiction over a pleaded cause of action. Miranda, 133 S.W.3d at 226. “When a plea to

the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts

that affirmatively demonstrate the court’s jurisdiction to hear the cause.” Id. We will

liberally construe the pleadings and look to the pleader’s intent. Id. The plaintiff carries

the initial burden to plead facts affirmatively showing that the trial court has jurisdiction.

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).

“In responding to a jurisdictional plea, ‘the plaintiff must affirmatively demonstrate

the court’s jurisdiction by establishing a valid waiver of immunity.’” Fraley v. Tex. A&M

Univ. Sys., 664 S.W.3d 91, 97 (Tex. 2023) (quoting Gulf Coast Ctr. v. Curry, 658 S.W.3d

281, 284 (Tex. 2022)). “To avoid dismissal, a plaintiff must establish that jurisdiction exists

as a matter of law or raise a fact issue that overcomes the jurisdictional challenge that is

intertwined with the merits.” Id. When the governmental entity challenges the trial court’s

subject matter jurisdiction based on a failure to demonstrate a waiver of governmental

immunity in the pleadings, we review the matter de novo. Id. “When either party adduces

evidence in connection with a jurisdictional plea, the trial court should consider that

5 evidence in addition to challenges to the pleadings in confirming its jurisdiction.” Id.

In order to waive immunity, a plaintiff may not merely reference a statute’s

elements, but must actually allege a violation of the statute by pleading facts that state a

claim thereunder. Dohlen v. City of San Antonio, 643 S.W.3d 387, 392 (Tex. 2022). “If the

pleading does not contain sufficient facts to demonstrate the court’s jurisdiction but also

does not affirmatively demonstrate incurable defects, the plaintiffs are given an

opportunity to amend.” Id. at 393. On the other hand, if the pleadings affirmatively negate

jurisdiction, the plea should be granted without the opportunity to amend. Id.

It is up to the legislature to waive immunity for local governmental entities, and it

must do so by “clear and unambiguous language.” Church & Akin, 442 S.W.3d at 301

(citing TEX. GOV’T CODE ANN § 311.034). The legislature has created one such waiver for

certain contract claims against a county:

A county that is a party to a written contract for engineering, architectural, or construction services or for goods related to engineering, architectural, or construction services may sue or be sued, plead or be impleaded, or defend or be defended on a claim arising under the contract. A suit on the contract brought by a county shall be brought in the name of the county. A suit on the contract brought against a county shall identify the county by name and must be brought in a state court in that county.

TEX. LOC. GOV’T CODE ANN. § 262.007(a). Moreover, the local government code provides

the commissioners’ court of a county with authority to appoint an agent to enter into

contracts to erect or repair country buildings on the county’s behalf. Id. § 262.001(a). “A

contract or other act of an agent appointed under this section that is properly executed

on behalf of the county and is within the agent’s authority binds the county to the contract

for all purposes.” Id. § 262.001(b).

6 III. ANALYSIS

A. NorthStar’s Pleadings

By its first issue, Aransas County argues that NorthStar failed to plead facts that

would support a waiver of immunity. Specifically, Aransas County, for the first time on

appeal, complains that

NorthStar’s pleading identifies no facts to support the conclusion that RPA was the County’s agent. . . . NorthStar does not identify the instrument that created the alleged agent-principal relationship. Nor does it identify the scope of the agency or the date when the agency was created. NorthStar’s allegations begin and end with the bare and conclusory allegation that “RPA and ARANSAS COUNTY had a principal-agent relationship.”

Matters of subject matter jurisdiction, including those that would normally be

included in a governmental unit’s plea to the jurisdiction, may be considered for the first

time on appeal. See Rusk State Hosp. v. Black, 392 S.W.3d 88, 95–96 (Tex. 2012).

However, if the plaintiff has not had a fair opportunity to address complaints or amend its

petition, we “must construe the pleadings in favor of the party asserting jurisdiction, and,

if necessary, review the record for evidence supporting jurisdiction.” Id.

In its original petition, NorthStar alleged that it entered into a contract with RPA,

who acted as Aransas County’s agent, to restore Aransas County facilities following

damage from Hurricane Harvey. NorthStar attached to its petition a copy of the master

services agreement and the scope of work agreement. See TEX. LOC. GOV’T CODE ANN.

§ 262.001. NorthStar alleged that it performed restoration services on Aransas County’s

properties pursuant to the contract and that RPA breached the contract by failing to pay,

making Aransas County liable as the principal. See id. §§ 262.001, 262.007(a).

Additionally, NorthStar’s request for damages is limited to those allowed by law. See id.

7 § 262.007(b) (limiting damages to the amount due and owed under the contract,

reasonable and necessary attorney’s fees, and interest as allowed by law). Rather than

merely reference a statute’s elements, NorthStar pleaded facts that would support a

waiver of immunity. See Dohlen, 643 S.W.3d at 392–93. We disagree with Aransas

County that NorthStar was required to identify an instrument appointing RPA as Aransas

County’s agent or identify the scope of the agency. See id. at 392–93. Accordingly,

Aransas County’s first issue is overruled.

B. NorthStar’s Evidence

By its second issue, Aransas County argues that the evidence attached fails to

raise a genuine issue of material fact—that is, whether RPA acted as Aransas County’s

agent. Aransas County elaborates on its argument by noting that NorthStar did not

produce any evidence demonstrating that the commissioners’ court appointed RPA as its

agent through an official act. We note, however, that Aransas County is making this

argument for the first time on appeal; Aransas County did not challenge the alleged

agency relationship through an evidentiary plea to the jurisdiction or a no-evidence motion

for summary judgment. See Town of Shady Shores v. Swanson, 590 S.W.3d 544, 550

(Tex. 2019) (permitting a challenge to the trial court’s jurisdiction through a no-evidence

motion for summary judgment); Miranda, 133 S.W.3d at 227–28 (permitting a plea to the

jurisdiction to challenge jurisdiction facts with supporting evidence).

Because Aransas County raises this issue for the first time on appeal, NorthStar

has not had a fair opportunity to fully develop the record. See Rusk State Hosp., 392

S.W.3d at 96. Accordingly, we first review the evidence in conjunction with the pleadings

8 to determine whether jurisdiction has been affirmatively negated. See id. “[I]f the

pleadings and record neither demonstrate jurisdiction nor conclusively negate it,” Aransas

County must show that NorthStar “would be unable to show the existence of jurisdiction

if the cause were remanded to the trial court and such opportunity afforded.” Id.

Having reviewed the evidence provided by NorthStar, we cannot say it affirmatively

negates jurisdiction. See id. Although the evidence may not necessarily be sufficient to

show that the Aransas County Commissioners’ Court formally voted to appoint RPA as

its agent, as Aransas County argues is necessary, it does not conclusively disprove that

such an action occurred or that the commissioners’ court did not otherwise appoint RPA

as its agent. 2 See id. Aransas County claims that the commissioners’ court “has never

voted to join RPA,” and invites this Court to review past minutes of the commissioners’

court and take judicial notice of the result. However, we decline to comb through years of

meeting minutes in order to search for an action that creates a fact question regarding

whether the commissioners’ court appointed RPA as its agent.

Because NorthStar’s pleadings and evidence do not affirmatively negate the trial

court’s jurisdiction and Aransas County has failed to demonstrate that NorthStar would

be unable to show the existence of jurisdiction on remand, we overrule Aransas County’s

second issue.

2 This opinion should not be construed as setting out what must be done in order to appoint an

agent pursuant to § 262.001(a) of the local government code. See TEX. LOC. GOV’T CODE ANN. § 262.001(a). Such a question is not presently before this Court and addressing the issue would constitute an advisory opinion. See Cadena Comercial USA Corp. v. Tex. Alcoholic Beverage Comm’n, 518 S.W.3d 318, 338 (Tex. 2017).

9 IV. CONCLUSION

We affirm the trial court’s judgment.

CLARISSA SILVA Justice

Delivered and filed on the 29th day of February, 2024.