470 S.W.3d 558
Tex. App.2015Background
- The case is a partial affirmance, reversal, and rendering filed April 2, 2015 in the Fourteenth Court of Appeals, No. 14-14-00294-CV, City of Galveston et al. v. CDM Smith, Inc.
- CDM Smith, Inc. sued the City and city officials in their official capacities over a HUD program contract related to Ike disaster relief funds.
- HUD allocated over $1.3 billion to Texas; about $160 million of that was for Galveston housing修agement under the program.
- The City and CDM disputed whether the contract was a goods/services contract and how payment was to be made; the City argued no clear essential terms for payment, while CDM argued the contract provided for payment and management/operational services.
- CDM asserted breach of contract, Texas Prompt Pay Act remedies, ultra vires actions, and a Public Information Act writ of mandamus, seeking documents.
- The trial court denied the City’s plea to the jurisdiction; on appeal the court held immunity waived for the breach claim but not for other claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether immunity is waived for CDM’s breach of contract claim under Local Government Code chapter 271. | CDM contends the contract for services falls within 271.152–271.151(2)(A). | City argues the contract lacks essential terms or constitutes a government function not covered by the waiver. | Waived; contract includes essential payment terms and services to the City. |
| Whether ultra vires claims against Patrick and Palumbo are barred because they seek retrospective monetary relief. | CDM seeks declaratory/mandamus relief for past contractual breaches by officials. | Immunity bars retrospective monetary relief; ultra vires may not support such relief. | Sustained; ultra vires claims lack jurisdiction as to retrospective monetary relief. |
| Whether CDM’s Texas Public Information Act claims are barred by immunity. | CDM seeks mandamus to compel disclosure under the Act against officials and City. | City argues no waiver as to officials or the Act itself. | Immunity not waived; PIA claims dismissed. |
| Whether the Texas Prompt Pay Act provides an independent waiver of immunity for interest on past due amounts. | CDM seeks interest on overdue payments under the Act. | Waiver may be available but is subsumed by 271.153; not essential to decision. | Not decided; Chapter 271 waiver controls breach claim; prompt-pay issue not resolved. |
Key Cases Cited
- Kirby Lake Development, Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829 (Tex. 2010) (written contracts state essential terms; payments and obligations clearly outlined)
- Church & Akin v. City of Lubbock, 442 S.W.3d 297 (Tex. 2014) (waiver of immunity depends on contract providing for goods/services to the entity; distinguish lease facts)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires suits permit future compliance relief but not past monetary relief)
- Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320 (Tex. 2006) (immunity from suit generally not waived without statutory authorization)
- ICI Construction v. Orangefield Indep. Sch. Dist., 339 S.W.3d 235 (Tex. App.—Beaumont 2011) (documents not showing essential contract payment terms fail waiver)
- City of San Antonio ex rel. San Antonio Water Sys. v. Lower Colo. River Auth., 369 S.W.3d 231 (Tex. App.—Austin 2011) (contractual services may waive immunity when benefits accrue to the entity)
- Town of Flower Mound v. Rembert Enters., Inc., 369 S.W.3d 465 (Tex. App.—Fort Worth 2012) (development/feasibility services can constitute waivers under 271)