General Services Commission v. Little-Tex Insulation Co.

39 S.W.3d 591
CourtTexas Supreme Court
DecidedApril 5, 2001
Docket99-1015, 99-1071
StatusPublished
Cited by937 cases

This text of 39 S.W.3d 591 (General Services Commission v. Little-Tex Insulation Co.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Services Commission v. Little-Tex Insulation Co., 39 S.W.3d 591 (Tex. 2001).

Opinions

Justice BAKER

delivered the opinion of the Court,

in which Chief Justice PHILLIPS, Justice HECHT, Justice OWEN, Justice HANKINSON, and Justice O’NEILL joined, and in which Justice ABBOTT joined except as to Part 111(B).

We recently held that the State does not waive its immunity from suit for breach of contract simply by entering into a contract for goods and services. Federal Sign v. Texas So. Univ., 951 S.W.2d 401, 408 (Tex.1997). We specifically reserved judgment on whether other circumstances may exist in which “the State may waive its immunity by conduct other than simply executing a contract.” Federal Sign, 951 S.W.2d at 408 n. 1. The Third Court of Appeals has held that by accepting benefits under a contract the State waives its immunity from suit. DalMac Constr. Co. v. Texas A & M Univ., 35 S.W.3d 654 (Tex.App.— Austin 1999); Little-Tex Insulation Co. v. General Servs. Comm’n, 997 S.W.2d 358. However, after we issued Federal Sign, the Legislature established an administrative procedure for certain breach-of-contract claims against the State. See Tex. Gov’t Code § 2260.001-.108. We conclude that the Legislature intended this procedure to be the exclusive method available for resolving these cases. We therefore reverse the court of appeals’ decisions in both cases and dismiss the plaintiffs’ claims for want of jurisdiction.

I. BACKGROUND

A. Texas A & M University v. DalMac Construction Co.

Texas A & M University contracted with DalMac to build a $30 million recreational [594]*594sports building and natatorium. DalMac complained that the initial bid’s unclear specifications frequently conflicted, and because of necessary modifications, DalMac incurred expenses beyond the original contract. Urging an adjustment to the contract price, DalMac submitted a claim to TAMU for $2.4 million. TAMU paid only $255,171 of the claim. After exhausting its remedies under the contract, including a TAMU Board of Regents’ review, DalMac sued TAMU for more than $3 million. The trial court granted TAMU’s plea to the jurisdiction. The court of appeals reversed and remanded the case to the trial court to allow DalMac to discover information necessary to support its theory that TAMU waived its immunity from suit. 35 S.W.3d at 657.

B. Little-Tex Insulation Co. v. General Services Commission

The General Services Commission awarded Little-Tex a contract for asbestos abatement on two floors in a state office building. After the State paid Little-Tex’s first invoice, a dispute arose between the parties about Little-Tex’s performance. The Commission refused further payments until Little-Tex corrected certain safety violations. Never satisfied with those corrections, the Commission eventually terminated the contract. When the termination occurred, Little-Tex had completed thirty percent of one floor.

The abatement contract mandated an administrative review process before filing suit. Accordingly, Little-Tex submitted a claim to the Commission. The Commission’s executive director reviewed the claim but denied it in a formal opinion. Little-Tex then sued in district court. The trial court granted the State’s plea to the jurisdiction and dismissed the suit. The court of appeals reversed and remanded, holding that the State’s acceptance of a benefit from Little-Tex’s performance of the contract waived the State’s immunity from suit. 997 S.W.2d 358.

II. BREACH-OF-CONTRACT CLAIMS

A. Applicable Law

Sovereign immunity, unless waived, protects the State from lawsuits for damages. Federal Sign, 951 S.W.2d at 405. Sovereign immunity encompasses two principles: immunity from suit and immunity from liability. Texas Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999); Federal Sign, 951 S.W.2d at 405; Missouri Pac. R.R. v. Brownsville Navigation Dist., 453 S.W.2d 812, 813 (Tex.1970). Immunity from suit bars a suit against the State unless the Legislature expressly gives consent. Federal Sign, 951 S.W.2d at 405; Missouri Pac. R.R., 453 S.W.2d at 813. Immunity from liability protects the State from judgments even if the Legislature has expressly given consent to sue. Federal Sign, 951 S.W.2d at 405; Missouri Pac. R.R., 453 S.W.2d at 813. A party may establish consent by referencing a legislative statute or a resolution granting express legislative permission. Jones, 8 S.W.3d at 638. Legislative consent to sue the State must be expressed in “clear and unambiguous language.” University of Tex. Med. Branch v. York, 871 S.W.2d 175, 177 (Tex.1994).

When the State contracts, it is liable on contracts made for its benefit as if it were a private person. Federal Sign, 951 S.W.2d at 405; State v. Elliott, 212 S.W. 695, 697-98 (Tex.Civ.App.—Galveston 1919, writ ref'd). Consequently, when the State contracts with private citizens it waives immunity from liability. See Federal Sign, 951 S.W.2d at 408. But the State does not waive immunity from suit simply by contracting with a private person. Federal Sign, 951 S.W.2d at 408. Legislative consent to sue is still necessary.

B. Analysis

Little-Tex and DalMac argue that, while the act of contracting alone may not waive immunity from suit, the State’s conduct in [595]*595these cases has waived its immunity from suit. Because the State has waived its immunity, they argue, it is not necessary to obtain the Legislature’s consent to sue. Consequently, they contend, the dispute-resolution procedure that the Legislature recently adopted as a precursor to suits requiring legislative consent does not apply to waiver-by-conduct suits.

1. Waiver-by-Conduct Exception to Sovereign Immunity

Little-Tex and DalMac contend that once the State has accepted benefits under a contract, it is unfair to allow the State to shield itself from suit by evoking sovereign immunity. To support this argument, they rely on a footnote in Federal Sign, as well as language in its concurring opinion. 951 S.W.2d at 408 n. 1; 951 S.W.2d at 412-13 (Hecht, J., concurring).

In Federal Sign, we held that the State’s contracting for goods and services does not waive its immunity from suit. 951 S.W.2d at 408. We expressly left open the question of whether the State’s conduct may waive its immunity from suit. Federal Sign, 951 S.W.2d at 408 n. 1. Several courts of appeals have interpreted our opinion as suggesting that various other fact situations might warrant some judicially-imposed, equitable remedy. See, e.g., DalMac Constr. Co., 35 S.W.3d at 656; Little-Tex Insulation Co., 997 S.W.2d at 364-65; Aer-Aerotron, Inc. v. Texas Dep’t of Transp., 997 S.W.2d 687, 692 (Tex.App.—Austin 1999, pet. granted); Texas Natural Resource Conservation Comm’n v. IT-Davy, 998 S.W.2d 898, 901-02 (Tex.App.—Austin 1999, pet. filed); Texas So. Univ.

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Bluebook (online)
39 S.W.3d 591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-services-commission-v-little-tex-insulation-co-tex-2001.