Tex. Mun. League Intergovernmental Risk Pool v. City of Abilene

551 S.W.3d 337
Court of Appeals of Texas·Decided May 10, 2018·No. No. 11-17-00253-CV·Published·Cited by 17 cases

Opinion

JOHN M. BAILEY, JUSTICE

*340This interlocutory appeal involves a claim of governmental immunity in an insurance dispute. The Texas Municipal League Intergovernmental Risk Pool challenges the trial court's denial of its plea to the jurisdiction. In its sole issue, the Risk Pool, a governmental entity protected by governmental immunity, asserts that the trial court erred by denying its plea to the jurisdiction because its insured, the City of Abilene, failed to plead a valid waiver of immunity under Section 271.152 of the Texas Local Government Code. See TEX. LOC. GOV'T CODE ANN. § 271.152 (West 2016). We affirm.

Background Facts

The underlying lawsuit arises from an insurance claim for hail damage. The Risk Pool is a self-insurance pool of local governments. See TEX. GOV'T CODE ANN § 2259.031(a) (West 2016). As such, the Risk Pool is a governmental entity that enjoys governmental immunity the same as other political subdivisions. See Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund , 212 S.W.3d 320, 324-26 (Tex. 2006). The City is a member of the Risk Pool.

The City purchased real and personal property insurance to cover over 400 structures located in Abilene. On June 12, 2014, a wind and hailstorm moved through Abilene causing extensive property damage. The following day, the City reported the damage to the Risk Pool, and the Risk Pool promptly sent an adjuster to evaluate the claim.

On August 20, 2014, the City executed the original Proof of Loss in accordance with the time limits set forth in the Property Coverage Document.2 Based on the loss and damage known at the time, the City's initial claim amounted to $1,799,101.51, which the Risk Pool calculated using its own valuation of the property at the time of the loss less the deductible. The Risk Pool promptly paid that amount.

The parties continued to assess the damage over the course of two years, and the Risk Pool's adjuster submitted supplemental reports regarding damage that was not included in the original estimate. The parties do not dispute that the Risk Pool made supplemental payments to the City in April 2015, February 2016, and March 2016. Furthermore, it is undisputed that as of June 2016 the Risk Pool had paid the City a total of $6,948,132.78 for damages caused by the 2014 storm.

On June 13, 2016, the City submitted an additional Proof of Loss for a significantly higher amount than it had previously reported. In the subsequent Proof of Loss, the City claimed that its damages less the deductible and prior payments amounted to $19,960,422.44. The City subsequently requested a 180-day extension to invoke the appraisal provision in the Property Coverage Document. The Risk Pool granted the City an extension on August 15, 2016.

On August 26, 2016, the City demanded an appraisal of the damage pursuant to the procedures set out in the Property Coverage *341Document.3 The Risk Pool declined to participate in an appraisal because discussions were still ongoing between the parties. Accordingly, the Risk Pool asserted that an appraisal was not warranted because there was a lack of a disagreement regarding the "amount of the loss."

Following multiple failed attempts to resolve the dispute without court intervention, the City filed the underlying lawsuit asserting a claim for breach of contract against the Risk Pool. The City alleged that the Risk Pool failed to properly investigate and evaluate the damage caused by the storm.

The City subsequently filed an amended petition that expanded upon its original allegations. In the amended petition, the City sought damages exclusively under Section 271.153 of the Texas Local Government Code for its cause of action for breach of contract. Additionally, the City sought to compel the Risk Pool to participate in the appraisal process in accordance with the Property Coverage Document to determine the amount of the City's damages.

Subsequently, the City filed a verified motion to compel appraisal and abate the case pending completion of the appraisal. The Risk Pool objected to the City's motion on the basis that the Risk Pool's governmental immunity deprived the trial court of subject-matter jurisdiction to order an appraisal. The Risk Pool also argued that, even if the trial court had jurisdiction, the City failed to comply with the contractual conditions precedent to invoke the appraisal right.

The Risk Pool also filed an amended partial plea to the jurisdiction in response to the City's amended petition. In the amended partial plea, the Risk Pool asserted that Section 271.152 of the Texas Local Government Code did not waive immunity for a claim for specific performance. The Risk Pool also challenged the sufficiency of the City's jurisdictional pleadings. The Risk Pool also reasserted its previous arguments regarding the City's other claims for damages.

On July 28, 2017, the trial court held a hearing on both the Risk Pool's amended partial plea to the jurisdiction and the City's motion to compel appraisal and abate the case. Following the hearing, the trial court entered a written order that denied the Risk Pool's amended partial plea to the jurisdiction and granted the City's motion to compel appraisal and abate the case. This appeal followed.

Analysis

In a single issue, the Risk Pool challenges the trial court's denial of its amended partial plea to the jurisdiction regarding the request to compel appraisal.

*3424 The Risk Pool contends that the City's pleadings did not adequately assert a waiver of the Risk Pool's governmental immunity under the Texas Local Government Contract Claims Act (the Act) and that the City failed to adequately plead jurisdictional facts. See LOC. GOV'T §§ 271.151-.160. The Risk Pool bases these contentions on the argument that the City's attempt to invoke the appraisal process constitutes an impermissible attempt to obtain specific performance under the contract, a remedy for which the Risk Pool's governmental immunity would not be waived. See LOC. GOV'T §§ 271.151(2)(B), 271.153(c).5 We disagree.

"Sovereign immunity and its counterpart, governmental immunity, exist to protect the State and its political subdivisions from lawsuits and liability for money damages." Mission Consol. Indep. Sch. Dist. v. Garcia , 253 S.W.3d 653, 655 (Tex. 2008). The State retains sovereign immunity from suit to the extent that immunity has not been abrogated by the legislature. See Tex. Nat. Res. Conservation Comm'n v. IT-Davy ,

Tex. Mun. League Intergovernmental Risk Pool v. City of Abilene, 551 S.W.3d 337 (Tex. Ct. App. 2018).

551 S.W.3d 337 (Tex. Mun. League Intergovernmental Risk Pool v. City of Abilene) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

City of Ames, Texas v. City of Liberty, Texas
Court of Appeals of Texas, 2023
Jason Garms v. Comanche County
Court of Appeals of Texas, 2020