West Texas Municipal Power Agency v. Republic Power Partners, L.P.

428 S.W.3d 299, 2014 WL 486287, 2014 Tex. App. LEXIS 1308
CourtCourt of Appeals of Texas
DecidedFebruary 5, 2014
Docket07-12-00374-CV
StatusPublished
Cited by11 cases

This text of 428 S.W.3d 299 (West Texas Municipal Power Agency v. Republic Power Partners, L.P.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
West Texas Municipal Power Agency v. Republic Power Partners, L.P., 428 S.W.3d 299, 2014 WL 486287, 2014 Tex. App. LEXIS 1308 (Tex. Ct. App. 2014).

Opinions

OPINION

PATRICK A. PIRTLE, Justice.

This is an accelerated appeal wherein Appellant, West Texas Municipal Power Agency (WTMPA), challenges the trial court’s interlocutory order denying its plea to the jurisdiction in a suit filed by Appel-lee, Republic Power Partners, L.P., for breach of contract and breach of warranties. WTMPA contends the trial court erred in denying its plea to the jurisdiction because it is an entity entitled to governmental immunity under the facts of this case. Presenting two issues countering Republic Partner’s position that immunity does not apply or was statutorily waived, WTMPA contends (1) the proprietary/governmental distinction employed in the Texas Tort Claims Act, and (2) the waiver of immunity provisions of chapter 271 of the Texas Local Government Code do not operate as to deny WTMPA the protections of governmental immunity. For the reasons to follow, we affirm.

BACKGROUND

In 1983 the cities of Brownfield, Floyda-da, Lubbock and Tulia formed WTMPA for the purpose of obtaining a reliable and adequate source of electric energy for its citizens.1 WTMPA is a municipal power agency created pursuant to subchapter C of chapter 163 of the Texas Utilities Code. See Tex. Util.Code Ann. § 163.054(a) (West 2007). A municipal power agency created pursuant to this subchapter is a separate municipal corporation, a political subdivision of this State, and a political entity and corporate body distinct from the public entities creating it. See id. at § 163.054(c). A municipal power agency is expressly authorized to enter into contracts necessary to the full exercise of its powers, which includes the authority to enter into a contract, lease or agreement for the generation, transmission, sale or exchange of electric energy. See id. at § 163.060.

WTMPA currently obtains the electric energy it resells to its member cities from Southwestern Public Service (SPS). Under the Power Purchase Agreement with SPS, WTMPA is required to purchase all of its electric energy from SPS through May 2019. In 2007, WTMPA was notified by SPS that the existing Power Purchase Agreement would not be renewed. At that time, WTMPA began contemplating how it was going to supply electric energy to its member cities after expiration of the existing Power Purchase Agreement. WTMPA ultimately negotiated and executed a Development Agreement with Republic Power, a private business entity, for the purpose of forming a partnership to develop, finance and operate future electric energy generation and transmission facilities.2

Under the Development Agreement, Republic Power was responsible for manag[303]*303ing the development process which included the identification and evaluation of new sources of electric energy.3 The agreement obligated Republic Power to secure adequate private investment capital to complete the necessary feasibility studies and to implement the findings and recommendations of those studies. The Development Agreement further required WTMPA to form a local government corporation to own and operate any electric energy generation or transmission facility to be built and to issue bonds to finance their construction.

The Development Agreement was executed August 1, 2008, and on September 25, 2008, WTMPA’s Board of Directors unanimously approved High Plains Diversified Energy Corporation as the local government corporation designated to own and operate the electric energy generation and transmission facilities contemplated by the agreement. Thereafter, one addendum dated July 23, 2009, and two amendments dated October 9, 2009, and May 18, 2011, were added to the Development Agreement. Initially, per the Development Agreement, the “Project Owner” was WTMPA, but those rights and obligations were assigned to High Plains.

Over the next three years, Republic Power raised millions in capital and expended considerable sums completing feasibility studies and arranging for financing of the project. The Development Agreement provided for issuance of first mortgage revenue bonds by the local government corporation, ultimately High Plains, for the purpose of obtaining the balance of the funds necessary to complete the project. In furtherance of that financing obligation, a bond validation hearing was ultimately scheduled in a Lubbock County district court to approve issuance of the revenue bonds.

Prior to that hearing, at a regularly scheduled meeting of the board of High [304]*304Plains, a dispute arose as to the allocation of any surplus revenue generated by the project. Due to its greater usage of the electric energy to be generated, the City of Lubbock believed it should receive a greater percentage of any surplus revenue. The Board of Directors disagreed and ultimately, at the bond validation hearing, the City of Lubbock objected to issuance of the revenue bonds by arguing High Plains was not a valid local government corporation and WTMPA did not have the authority to create it. The district court agreed with the City of Lubbock and dismissed the bond validation proceeding with prejudice. As a result, no revenue bonds were ever issued.

After the bond validation suit failed, Republic Power filed the underlying suit against the City of Lubbock and WTMPA alleging breach of the Development Agreement. Initially, Republic Power alleged that WTMPA breached the agreement but sought to hold the City of Lubbock liable under a joint enterprise theory. Both defendants filed pleas to the jurisdiction asserting immunity from suit. Republic Power then amended its petition to allege the City of Lubbock directly breached the Development Agreement. In response, the City of Lubbock filed an amended plea to the jurisdiction. Following a hearing, the trial court granted the City of Lubbock’s amended plea but denied WTMPA’s plea. This appeal followed.4

Standard of Review — Plea to the Jurisdiction

The party suing a governmental entity bears the burden of affirmatively demonstrating the trial court has jurisdiction to hear the dispute. Tex. Dept. of Criminal Justice v. Miller, 51 S.W.3d 583, 587 (Tex.2001). A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat a cause of action without regard to whether the claims asserted have merit. Bland Independent School Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000). In the context of a claim of sovereign or governmental immunity, the proponent of a plea to the jurisdiction contends the trial court lacks subject matter jurisdiction over the claim because it is protected by immunity from suit which has not been legislatively waived. Because immunity from suit defeats a trial court’s subject matter jurisdiction, Tex. Dept. of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999), a plea to the jurisdiction is the proper way to assert a claim of sovereign or governmental immunity from suit. Bland, 34 S.W.3d at 555.

Whether a court has subject matter jurisdiction is a question of law. Tex. Natural Res.

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Bluebook (online)
428 S.W.3d 299, 2014 WL 486287, 2014 Tex. App. LEXIS 1308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/west-texas-municipal-power-agency-v-republic-power-partners-lp-texapp-2014.