564 S.W.3d 228
Tex. App.2018Background
- EPEI (Burnham Wood Charter School) and Amex entered a written Lease Agreement in April 2008 to lease property and construct school facilities; the lease bears signatures of Iris Burnham (EPEI) and Silvia Martinez (Amex) and includes notarized acknowledgements.
- EPEI’s board had authorized Burnham to continue lease negotiations but there was no clear board vote approving the final lease; Burnham later told the board negotiations were unsuccessful and EPEI repudiated the lease.
- Amex sued for anticipatory breach, seeking actual damages, consequential damages (including costs from Amex’s construction contract with AbM), and attorney’s fees.
- EPEI filed multiple pleas to the jurisdiction asserting governmental immunity under Chapter 271 of the Texas Local Government Code, arguing the lease was not “properly executed” on behalf of EPEI and that Chapter 271 precluded consequential damages and attorney’s fees.
- The trial court denied EPEI’s plea as to breach, consequential damages, and attorney’s fees; on interlocutory appeal the court (a) held fact issues exist whether the lease was properly executed on EPEI’s behalf (jurisdictional question), (b) held Amex alleged recoverable damages under §271.153 so consequential-damages claims survive the plea, and (c) ruled attorney’s fees are barred because the lease was executed before the 2009 amendment to §271.153(b).
Issues
| Issue | Plaintiff's Argument (Amex) | Defendant's Argument (EPEI) | Held |
|---|---|---|---|
| Whether the lease was "properly executed on behalf of" EPEI under §271.151(2) (waiver of immunity) | The written, signed lease, notarizations, board minutes showing Burnham’s negotiation authority, and delivery of the lease create a fact question that the lease was properly executed on EPEI’s behalf | No delegation or board ratification in the charter/administrative code; absent a delegation amendment or board approval the lease was not properly executed and immunity remains | Denied plea; factual dispute exists whether the lease was properly executed on EPEI’s behalf — remand for fact finder (EPEI’s jurisdictional challenge rejected) |
| Whether consequential damages claimed by Amex are barred by Chapter 271 (§271.153) | Alleged damages (costs incurred under Amex–AbM contract) fall within the lease’s provisions (tenant-delay, reimbursement to landlord, contractor-payment clauses) and thus are recoverable under §271.153(a)(1) | Consequential damages beyond the contract balance are barred by §271.153(b) | Denied plea as to consequential damages; Amex pleaded and produced evidence of damages that may be "under the contract," creating a fact issue |
| Whether attorney’s fees are recoverable under Chapter 271 for this contract | (Conceded) Amex acknowledged pre-2009 law bars attorney’s fees for contracts dated before 2009 amendment | Attorney’s fees barred under pre-2009 §271.153(b) | Granted plea as to attorney’s fees; fees are precluded because the lease predates the 2009 statutory amendment |
Key Cases Cited
- Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (standard for reviewing pleas to the jurisdiction; treat pleadings in plaintiff’s favor and consider jurisdictional evidence)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (legislative waiver of immunity must be clear; contracting by governmental entities does not automatically waive immunity from suit)
- IT-Davy, Inc. v. Texas Nat. Res. Conservation Comm’n, 74 S.W.3d 849 (Tex. 2002) (sovereign immunity principles and limits on waiver)
- Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006) (distinguishing immunity from suit and immunity from liability)
- Killingsworth v. Housing Auth. of City of Dallas, 331 S.W.3d 806 (Tex. App.—Dallas 2011) (analyzing "properly executed" by reference to entity bylaws, board action, signature, and delivery; fact issue may preclude plea)
- Killingsworth v. Housing Auth. of City of Dallas, 447 S.W.3d 480 (Tex. App.—Dallas 2014) (contract language requiring board approval may defeat claim that a binding contract existed)
- City of Houston v. Clear Channel Outdoor, Inc., 233 S.W.3d 441 (Tex. App.—Houston [14th Dist.] 2007) ("properly executed on behalf of" focuses on authority to bind entity, not ultimate enforceability)
- Zachry Constr. Corp. v. Port of Houston Auth. of Harris Cty., 449 S.W.3d 98 (Tex. 2014) (Chapter 271 limits damages recoverable when immunity waived; waiver covers certain delay damages even if not expressly in contract)
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (limits on recovery under §271.153; certain third-party repair costs were not recoverable under the statute)
- Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829 (Tex. 2010) (purpose of §271.153 is to limit amount due once liability is established; whether liability exists remains for adjudication)
- El Paso Educ. Initiative, Inc. v. Amex Properties, LLC, 385 S.W.3d 701 (Tex. App.—El Paso 2012) (prior interlocutory opinion holding EPEI is a local governmental entity for Chapter 271 purposes and that the lease met several statutory elements)