Harris County Flood Control District v. Great American Insurance Co.
359 S.W.3d 736
Tex. App.2011Background
- Great American Insurance Company, as a performance bond surety, sues Harris County Flood Control District over the Handex Contract and a Purchase Order related to project work.
- The Handex Contract was amended and the Purchase Order conveyed remaining work to Great American; the project faced overpayments to Handex and substantial completion issues.
- Handex filed bankruptcy; even after, the District continued paying Handex and later directed funds that Great American claimed to be restricted to Handex and Great American jointly.
- Great American sought breach-of-contract damages, equitable subrogation, and waste-related claims, all tied to the Handex Contract, the Purchase Order, and the Performance Bond.
- The District invoked governmental-immunity defenses; the trial court denied, and this court previously held immunity was not waived for some claims, prompting remand.
- The appellate court held that the Legislature waived immunity under section 271.152 for (a) breach of the Purchase Order and (b) equitable-subrogation and waste claims tied to breach of the Handex Contract, but not for other waste claims or claims beyond those breaches.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §271.152 waive immunity for breach of the Purchase Order? | Great American argues waiver exists for breach of contract under §271.152. | District contends no waiver due to potential noncompliance with bidding laws and other prerequisites. | Waiver exists for breach of the Purchase Order. |
| Do §§271.151-.152 waive immunity for equitable-subrogation and waste claims? | Great American argues waiver applies to some equitable-subrogation and waste claims. | District argues immunity bars these claims unless specifically tied to a waived contract breach. | Equitable-subrogation and waste-to-breach- Handex Contract claims are waived; others barred by immunity. |
| Do §§262.023 and 271.024 apply to the Purchase Order under the 1937 Act? | Plaintiff contends these provisions apply to District contracting. | District contends it is not a governmental entity subject to these provisions. | Not applicable; the District is not required to follow those procedures for the Purchase Order. |
| May the District's second plea to the jurisdiction be granted in part and denied in part? | Great American argues partial denial of immunity remains for certain claims. | District contends the entire plea should be resolved on the merits of all claims. | Remains partially granted; immunity waived for breach of the Purchase Order and certain equitable-subrogation/waste claims; remand to dismiss those claims otherwise barred. |
Key Cases Cited
- County of Cameron v. Brown, 80 S.W.3d 549 (Tex. 2002) (jurisdictional analysis in trimming pleadings and waivers of immunity)
- Clear Lake City Water Auth. v. Friendswood Dev. Co., Ltd., 256 S.W.3d 735 (Tex.App.-Houston [14th Dist.] 2008) (waiver analysis under §271.152; contract/claim grounding)
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (doctrine of waiver not by conduct; immunity not impliedly waived)
- Victore Ins. Co. v. City of Bowie, 23 S.W.3d 499 (Tex. App.-Fort Worth 2000) (immunity analysis related to equitable-subrogation; no waiver by conduct)
- Gulf Liquids New River Project, LLC v. Gulsby Eng'g, Inc., 356 S.W.3d 54 (Tex.App.-Houston [1st Dist.] 2011) (equitable subrogation rights of surety; scope of waiver)