Vantage Systems Design, Inc. v. Raymondville Independent School District

• Court: Court of Appeals of Texas
• Decided: March 12, 2009
• Docket: 13-08-00311-CV
• Status: Published

Opinion

NUMBER 13-08-00311-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

VANTAGE SYSTEMS DESIGN, INC., Appellant,

v.

RAYMONDVILLE INDEPENDENT SCHOOL DISTRICT, Appellee.

On appeal from the 197th District Court of Willacy County, Texas.

MEMORANDUM OPINION

Before Chief Justice Valdez and Justices Rodriguez and Benavides Memorandum Opinion by Chief Justice Valdez

On appeal, appellant, Vantage Systems Design, Inc. (“Vantage”) challenges the trial

court’s dismissal of its breach of contract and quantum meruit suit against appellee,

Raymondville Independent School District (“the District”), for lack of jurisdiction. In a single

issue, advanced by four subissues, Vantage Systems contends that the trial court erred

in dismissing its suit. We affirm. I. BACKGROUND

On June 5, 2002, the District, the Willacy County Courthouse, Reber Memorial

Public Library, the City of Raymondville, Raymondville Su Clinica, and Workforce Solutions

entered into an interlocal collaborative agreement1 whereby the entities agreed to apply for

a $203,000 grant from the Telecommunications Infrastructure Fund Board for the

installation of a wireless internet network in Willacy County. Under the terms of the

agreement, the District administered the grant and accepted bids from contractors.

Vantage submitted a $144,168.50 bid and made a visual presentation to the

District’s Board of Trustees at a board meeting. On March 31, 2003, Bernadette Cover,

the District’s superintendent, wrote to Patrick Kennedy, Vantage’s district sales manager,

that the District had accepted Vantage’s bid. Cover’s letter states in relevant part:

Please be advised that the RISD board unanimously approved the award of the Raymondville CN-3 grant project to Vantage Systems at a Special Meeting . . . .

...

Raymondville ISD, as grant administrator, is a tax exempt organization. Therefore, the district will require that all subcontractors and third party vendors submit their invoices directly to, and for payment by the Raymondville ISD. Invoices should not include any Sales Tax component.

Please prepare your time-line information and estimated payment schedule, identifying such subcontracts and vendors.

Thereafter, Vantage sent a signed contract to the District, but the District never executed

the contract. Vantage began the project and received at least one payment from the

District on April 17, 2003.

1 See T EX . G O V ’T C OD E A N N .§ 791.011 (Vernon Supp. 2008) (providing that local governm ents m ay contract with each other for the provision of governm ental services). 2 In July 2003, Cover e-mailed Vantage to express concerns over the quality of its

work and cost overruns. Vantage responded to Cover’s concerns and reassured her that

the project would be properly completed. The District subsequently hired another

contractor to complete the project.

On September 8, 2003, Vantage sued the District for breach of contract. The

District answered with a general denial, specifically denied executing a contract, and

asserted counterclaims for deceptive trade practice act violations, negligence, and

fraudulent inducement. In 2006, the District moved for a traditional summary judgment,

but the trial court denied its motion. The District filed a plea to the jurisdiction, which

asserted governmental immunity from suit, and a notice of nonsuit as to its counterclaims.

Vantage did not respond to the District’s jurisdictional plea. On April 30, 2008, the trial

court dismissed Vantage’s suit. This appeal followed.

II. STANDARD OF REVIEW

A plea to the jurisdiction challenges the trial court’s authority to determine the

subject matter of the action. Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.

1999). Whether a trial court has subject-matter jurisdiction and whether a pleader has

alleged facts that affirmatively demonstrate the trial court’s subject-matter jurisdiction are

questions of law that we review de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133

S.W.3d 217, 226 (Tex. 2004); Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74

S.W.3d 849, 855 (Tex. 2002). The plaintiff has the 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); Univ. of N. Tex. v. Harvey, 124 S.W.3d 216, 220 (Tex.

App.–Fort Worth 2003, pet. denied).

3 We construe the pleadings liberally in favor of the pleader, look to the pleader’s

intent, and accept as true the factual allegations in the pleadings. See Miranda, 133

S.W.3d at 226, 228; City of Fort Worth v. Crockett, 142 S.W.3d 550, 552 (Tex. App.–Fort

Worth 2004, pet. denied). If a plea to the jurisdiction challenges the existence of

jurisdictional facts, we consider relevant evidence submitted by the parties when necessary

to resolve the jurisdictional issues raised, as the trial court is required to do. See Bland

Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000) (confining the evidentiary review

to evidence that is relevant to the jurisdictional issue). We take as true all evidence

favorable to the non-movant and indulge every reasonable inference and resolve any

doubts in the non-movant’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 question will be resolved by

the factfinder. Id. at 227-28; Bland, 34 S.W.3d at 555. If the relevant evidence is

undisputed or fails to raise a fact question on the jurisdictional issue, however, the trial

court rules on the plea to the jurisdiction as a matter of law. Miranda, 133 S.W.3d at

227-28; Bland, 34 S.W.3d at 555.

III. GOVERNMENTAL IMMUNITY

Governmental immunity has two components: immunity from liability and immunity

from suit. Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Immunity from suit

bars suit against the entity altogether. Id. When a governmental entity enters into a

contract, that entity waives immunity from liability and voluntarily binds itself, just as any

other party would, to the terms of the contract, but that entity does not thereby waive

4 immunity from suit. Id. For there to be a waiver of immunity from suit in the contract-claim

context, the legislature must have waived immunity from suit as to the claim in question by

clear and unambiguous language. See TEX . GOV’T CODE ANN . § 311.034 (Vernon Supp.

2008) (providing that a statute shall not be construed as a waiver of sovereign immunity

unless the waiver is effected by clear and unambiguous language); Tooke, 197 S.W.3d at

332-33 (requiring clear and unambiguous language to waive governmental immunity).

Under Texas Local Government Code section 271.152, a local governmental entity

authorized by statute or constitution to enter into contract, and which enters into a contract

subject to the subchapter, waives sovereign immunity to suit for purpose of adjudicating

a claim for breach of the contract. TEX . LOC. GOV’T CODE ANN . § 271.152 (Vernon 2005).

A contract subject to the subchapter is “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) (Vernon 2005).

IV. DISCUSSION

A. Breach of Contract

In its first subissue, Vantage argues that the trial court has jurisdiction over its claim

because section 271.152 of the local government code waives governmental immunity for

breach-of-contract claims and “at least some evidence exists” of a contract. In its first

amended original petition, Vantage pleaded in relevant part,:

On March 27, 2003, Defendant, RISD, awarded to Plaintiff [Vantage] a contract to complete the CN-3 Grant project for RISD. That contract called for Plaintiff to complete the work necessary to create a community wireless network for RISD and other entities. Plaintiff would show that Defendant RISD breached without excuse its contract on or about August 29, 2003.

5 In its plea to the jurisdiction, the District denied executing a contract with Vantage.

The record in this case lacks a written, executed contract between the parties. See

id. Vantage concedes this point, yet it contends that a contract, even in a governmental

immunity context, may consist of multiple documents. See Courage Co. v. Chemshare

Corp., 93 S.W.3d 323, 333 (Tex. App.–Houston [14th Dist.] 2002, no pet.) (citing Fort

Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000)) (“A court

may determine, as a matter of law, that multiple documents comprise a written contract,

and in appropriate instances, may construe all the documents as if they were part of a

single, unified instrument.”). Vantage posits that there is some evidence of a contract

under the “multiple document standard” because it made a formal proposal to the District’s

Board of Trustees and Cover acknowledged the District’s acceptance of the proposal.

Vantage essentially asks us to apply the common law of contracts to a governmental

immunity question just as the Texas Supreme Court did in 2000 in Fort Worth Indep. Sch.

Dist., 22 S.W.3d at 840.

Since that case, the Texas Legislature has enacted section 271.152 of the local

government code, which governs the underlying dispute,2 and we defer to the legislature

to waive governmental immunity. See TEX . GOV’T CODE ANN . § 311.034; IT-Davy, 74

S.W.3d at 853. Section 271.151 clearly states that for a contract to waive governmental

immunity it must be written and properly executed. See TEX . LOC . GOV’T CODE ANN . §

2 Although the effective date of this statute was Septem ber 1, 2005, the statute also applies to claim s arising under a contract executed before the effective date if sovereign im m unity has not been waived with respect to the claim before the effective date. Act of May 23, 2005, 79th Leg., R.S., ch. 604, §§ 2-3, 2005 Tex. Gen. Laws 1548, 1549. Because the contract was allegedly form ed in March 2003, we analyze Vantage’s claim under section 271.152 of the local governm ent code.

6 271.151. Even though Vantage pleaded the existence of a contract, it has not marshaled

one, which in this situation is a key jurisdictional fact.

Vantage’s first subissue is overruled.

B. Quantum Meruit

By its second subissue, Vantage contends that section 271.152 of the local

government code extends a waiver of governmental immunity to its quantum meruit claim.

The Houston First Court of Appeals has held that the waiver of governmental immunity in

section 271.152 does not extend to quantum meruit claims. See City of Houston v.

Swinerton Builders, Inc., 233 S.W.3d 4, 12 (Tex. App–Houston [1st Dist.] 2007, no pet.);

see also McMahon Contr., L.P. v. City of Carrollton, No. 05-07-01626-CV, 2009 Tex. App.

LEXIS 311, at *9 (Tex. App–Dallas Jan. 19, 2009, no pet. h.) (noting that the parties

agreed that section 271.152 does not waive immunity from suit for quantum meruit claims);

see also H & H Sand & Gravel, Inc. v. City of Corpus Christi, No. 13-06-00677-CV, 2007

Tex. App. LEXIS 8878, at *7 (Tex. App.–Corpus Christi Nov. 8, 2007, pet. denied) (memo.

op.) (holding that claims in equity, including waiver by acceptance of material and benefit

and detrimental reliance are not encompassed by section 271.152's limited waiver).

Vantage concedes that the Swinerton case contradicts its position, but, without a

developed argument or rationale, it invites us to hold otherwise. We decline to do so.

Vantage’s second subissue is overruled.

C. Waiver

By its third subissue, Vantage argues that the District waived immunity by filing

counterclaims and, after engaging in the litigation process for several years, is now

7 precluded from regaining immunity. With regard to the District’s first argument, the

supreme court has held that where a

governmental entity has joined into the litigation process by asserting its own affirmative claims for monetary relief, we see no ill befalling the governmental entity or hampering of its governmental functions by allowing adverse parties to assert, as an offset, claims germane to, connected with, and properly defensive to those asserted by the governmental entity.

Reata Constr. Co. v. City of Dallas, 197 S.W.3d 371, 376-77 (Tex. 2006). The Dallas

Court of Appeals has held that a governmental entity may regain immunity by withdrawing

claims for affirmative relief. See City of Dallas v. Albert, 214 S.W.3d 631, 636 (Tex.

App.–Dallas 2006, pet. filed) (op. on reh’g) (holding that to the extent the City may have

waived immunity from suit by filing counterclaims, the City reinstated its immunity from suit

by dismissing its counterclaims).3 In this case, the District filed a notice of nonsuit as to its

counterclaims. Assuming the District’s counterclaims where “germane to, connected with,

and properly defensive to” Vantage’s claims, the District regained its immunity by

withdrawing its counterclaims. See id.

Vantage also argues that the District is precluded from regaining immunity because

it invoked the trial court’s jurisdiction by asserting counterclaims, pursuing discovery for

years, and then unilaterally attempting to vitiate jurisdiction through nonsuit. Vantage

contends that Perry Homes v. Cull supports its waiver argument. 258 S.W.3d 580 (Tex.

2008).

We conclude that Vantage’s reliance on Perry Homes is misplaced. The principle

issue in that case was whether the home-owning-plaintiffs in a construction defect case

3 See also City of Dallas v. Martin, 214 S.W .3d 638, 643 (Tex. App.–Dallas 2006, pet. filed) (op. on reh'g) (sam e holding).

8 against a contractor waived their right to arbitration by opposing arbitration, engaging in

discovery, and then insisting on arbitration on the eve of trial. See id. at 584-85. The

principle issue in this case is not a contractual right but a fundamental jurisdictional

concept—governmental immunity. And, it is well established that subject-matter

jurisdiction is authorized by constitution or statute, and it is not something the parties can

confer by consent or waiver or abrogate by agreement. Fernandez v. Frost Nat'l Bank, 267

S.W.3d 75, 81 (Tex. App.–Corpus Christ 2008, pet. filed) (citing Walls Reg'l Hosp. v.

Altaras, 903 S.W.2d 36, 40-41 (Tex. App.–Waco 1997, no writ)).

Vantage’s third subissue is overruled.

D. Effect of Nonsuit

In what we construe as Vantage’s fourth subissue, it argues that the District’s

counterclaim is still effective because no order dismissing it has been entered, and even

if a dismissal order were signed, the withdrawn counterclaim serves as some evidence of

a written contract. But, as we have already held, the local government code’s waiver of

governmental immunity requires a written contract, not some evidence of a written contract.

With regard to the nonsuit, we conclude, under the instant circumstances, that it took effect

when it was filed. See Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon, 195

S.W.3d 98, 100 (Tex. 2006) (“While the date on which the trial court signs an order

dismissing the suit is the ‘starting point for determining when a trial court's plenary power

expires,’ a nonsuit is effective when it is filed.”) (quoting In re Bennett, 960 S.W.2d 35, 38

(Tex. 1997)).

Vantage’s fourth subissue is overruled.

9 V. CONCLUSION

The trial court’s dismissal order is affirmed.

____________________ ROGELIO VALDEZ Chief Justice

Memorandum Opinion delivered and filed this the 12th day of March, 2009.