578 S.W.3d 668
Tex. App.2019Background
- Carowest owns land in New Braunfels; it and the City entered a 2009 Letter Agreement allowing Carowest to modify a drainage channel (South Tributary Project) and providing indemnity obligations and allocation of fill. The City hired contractor Yantis for the South and North Tributary Projects.
- Disputes arose when Yantis submitted delay claims against the City for work tied to Carowest’s Modification; the City passed those claims to Carowest per the Letter Agreement’s indemnity clause.
- Yantis executed releases (an October 2009 change order and a May 31, 2010 partial waiver) but later pressed delay claims; Carowest sued Yantis and the City in 2010 asserting, among other things, several UDJA declaratory claims about the validity of Yantis’s delay claims and related contract issues.
- The trial court granted declaratory relief on the South Tributary claims (finding Yantis’s releases barred the delay claim and that the City had no indemnity right against Carowest) but left attorney’s fees and other claims pending; Carowest then moved to sever those declarations into a separate cause in 2017.
- After this severance, the City (and Yantis) filed pleas to the jurisdiction asserting governmental immunity; the district court denied the pleas and the City and Yantis appealed. The appellate court reviews whether the district court lacked subject-matter jurisdiction over Carowest’s standalone declaratory claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has jurisdiction over Carowest’s UDJA declaratory claim that the City has no right to indemnification under the Letter Agreement | Carowest: chapter 271’s waiver and the City’s earlier monetary counterclaims in the parent case supply jurisdiction; prior Carowest I supports jurisdiction | City: sovereign/governmental immunity bars a standalone declaratory action; no waiver where no breach-of-contract claim or active affirmative monetary claim exists in the severed suit | Held: No jurisdiction. Chapter 271 does not waive immunity for a bare declaratory claim and the City’s prior counterclaims in the parent case do not carry jurisdiction into the severed action |
| Whether TOMA or Local Gov’t Code §252 waives immunity for declaratory relief here (by analogy to Carowest I) | Carowest: earlier Carowest I holding allowed UDJA claims under TOMA and §252; declaratory form should not defeat jurisdiction | City: Zachry and subsequent Texas Supreme Court decisions narrow waivers to the express remedies in the statutes; TOMA and §252 waive only injunctive/mandamus relief, not declaratory relief | Held: Declaratory relief not waived by TOMA or §252 for these severed claims; Carowest II’s analysis controls to limit waivers to statutory remedies |
| Whether Local Gov’t Code §271.152 waives immunity to permit adjudication of declaratory rights under a contract absent a pleaded breach | Carowest: §271.152’s waiver of suit for adjudicating contract claims supports jurisdiction over declaratory rights tied to indemnity | City: §271.152 waives immunity only for breach-of-contract actions; absent a breach claim, there is no waiver for declaratory-only relief | Held: §271.152 does not waive immunity for a declaratory-judgment claim where no breach action is pleaded |
| Whether Yantis, a private contractor, may pursue an interlocutory appeal under Tex. Civ. Prac. & Rem. Code §51.014(a)(8) as a "governmental unit" | Yantis: it functioned as an "organ of government" here (acting on the City’s behalf), so it qualifies as a governmental unit and may appeal denial of its plea to the jurisdiction | Carowest/City: Yantis is a private contractor and does not derive status/authority from constitution/statute; it is not an "organ of government" under §101.001 | Held: Yantis failed to show it is a governmental unit; it cannot bring an interlocutory appeal and its appeal is dismissed |
Key Cases Cited
- City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501 (Tex. App.—Austin 2014) (Carowest I) (earlier appellate holding that UDJA claims were within jurisdictional waivers then viewed as available)
- City of New Braunfels v. Carowest Land, Ltd., 549 S.W.3d 163 (Tex. App.—Austin 2017) (Carowest II) (revisited Carowest I in light of intervening Texas Supreme Court precedent and limited waivers to statutory remedies)
- Zachry Constr. Corp. v. Port of Hous. Auth. of Harris Cty., 449 S.W.3d 98 (Tex. 2014) (limits scope of express waiver of immunity to remedies expressly provided by statute)
- Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69 (Tex. 2015) (addresses redundant remedies doctrine relevant to limits on UDJA relief)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (limitations on liability and waiver principles for governmental entities)
- Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006) (limited jurisdiction may arise when a governmental entity asserts affirmative monetary claims)
- Texas Dep’t of Transp. v. Sefzik, 355 S.W.3d 618 (Tex. 2011) (UDJA actions barred against political subdivisions absent legislative waiver)
- University of the Incarnate Word v. Redus, 518 S.W.3d 905 (Tex. 2017) (clarifies when a private entity may be an "organ of government" for interlocutory-appeal purposes)
- Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (plea-to-jurisdiction review standards and evidentiary approach)
- Lower Colorado River Authority v. City of Boerne, 422 S.W.3d 60 (Tex. App.—San Antonio 2014) (concludes §271.152 does not waive immunity for declaratory-judgment claims absent a breach action)