County of Galveston v. Triple B Services, LLP
498 S.W.3d 176
Tex. App.2016Background
- Galveston County contracted with Triple B to expand a three-mile road; the county was to relocate utilities but did so almost a year late. Triple B finished the project on time but claims increased costs caused by the county’s late utility moves (hand-forming manholes, extra crews, barricade work, cleanup, extended overhead, flagging/traffic control, etc.).
- Triple B sued for breach of contract seeking (1) increased costs it calls "disruption" damages, (2) interest under the Texas Prompt Payment Act (PPA), and (3) attorney’s fees. County filed a plea to the jurisdiction asserting sovereign immunity barred these claims.
- The trial court denied the plea to the jurisdiction; the county appealed. The appellate court reviewed whether Tex. Loc. Gov’t Code § 262.007 waives county immunity for: disruption damages, PPA interest, and attorney’s fees.
- Section 262.007(b) permits recovery of (1) amounts owed under the contract, including increased cost to perform work “as a direct result of owner-caused delays or acceleration,” (2) change-order/additional work, (3) reasonable and necessary attorney’s fees that are equitable and just, and (4) interest as allowed by law; it excludes consequential damages except as allowed in (b)(1).
- Triple B’s damages expert distinguished disruption from traditional delay damages (productivity loss vs. calendar/time-based losses) and testified Triple B’s claimed damages were disruption, not delay, damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §262.007 waives immunity for disruption (lost-productivity) damages caused by owner delay | Triple B: statute waives immunity for "increased cost" that are a direct result of owner-caused delays; disruption costs fit that text | County: waiver covers only traditional "delay" damages; disruption is consequential and barred | Held: Waiver covers disruption damages that are "direct result" of owner-caused delay; some claimed costs plausibly direct and within waiver, while consequential items (e.g., lost profits) are not waived |
| Whether §262.007 waives immunity for interest under the Prompt Payment Act | Triple B: statute allows recovery of "interest as allowed by law," which includes PPA interest | County: waiver requires explicit PPA reference (legislature’s later amendment for non-county entities shows counties were excluded) | Held: Waiver covers interest allowed by law, so PPA interest is within §262.007 and immunity is waived for Triple B’s PPA claim |
| Whether §262.007 creates a substantive right to attorney’s fees against a county | Triple B: pleaded §38.001 and §262.007(b)(3) as bases for fees | County: §262.007 merely waives immunity; it does not itself create a substantive right to fees | Held: §262.007 is only a waiver of immunity for attorney’s fees; it does not provide an independent substantive basis. Triple B failed to plead a statute or contract provision that substantively authorizes fees, so fee claim dismissed for lack of jurisdiction |
Key Cases Cited
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (sovereign immunity requires clear legislative waiver; distinguishes immunity from liability and immunity from suit)
- Zachry Const. Corp. v. Port of Houston Auth. of Harris Cty., 449 S.W.3d 98 (Tex. 2014) (interpretation of identical local-government waiver statute and limits on recoverable contract damages)
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (standard for considering evidence in jurisdictional fact disputes on plea to the jurisdiction)
- Green Intern., Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997) (construction-law reference to delay damages as a term of art)
- Sauer, Inc. v. Danzig, 224 F.3d 1340 (Fed. Cir. 2000) (distinguishing delay claims from disruption/equitable-adjustment claims)
- U.S. Indus., Inc. v. Blake Constr. Co., 671 F.2d 539 (D.C. Cir. 1982) (distinguishing delay damages from disruption damages)
- Jaster v. Comet II Constr., Inc., 438 S.W.3d 556 (Tex. 2014) (textualist rule: courts enforce statutes as written; apply ordinary meaning of words)