472 S.W.3d 462
Tex. App.2015Background
- Fort Bend ISD competitively solicited bids in May 2010 for electricity covering June 1, 2011–May 31, 2013 and included a solicitation term referencing “blend and extend availability.”
- TXU won a one-year contract (June 1, 2011–May 31, 2012) with a transaction confirmation containing a "blend and extend" provision allowing the parties to negotiate a blended price and extended term in good faith.
- In September 2011 the parties executed a new transaction confirmation under the blend-and-extend provision that reset pricing and extended the primary contract term to May 31, 2014 (with options to extend further), exceeding the original competitive procurement period that ended May 31, 2013.
- In fall 2012 the District concluded the 2011 agreement violated the competitive-bidding requirements of Tex. Educ. Code § 44.031 and notified TXU it would not purchase electricity after June 2013; the District later awarded the subsequent contract to a different provider.
- TXU sued for breach of contract and promissory estoppel; the District filed a plea to the jurisdiction and summary-judgment motion arguing the 2011 agreement was void for noncompliance with competitive-bidding law and thus no waiver of governmental immunity under the Local Government Contract Claims Act (Tex. Loc. Gov’t Code § 271.152) applied.
- The trial court granted the District’s plea and summary judgment (dismissing TXU’s claims based on the 2011 agreement); TXU appealed interlocutorily.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2011 agreement (entered under the blend-and-extend clause) complied with the Education Code competitive-bid requirements so as to waive governmental immunity under the LGCCA | TXU: the blend-and-extend term was disclosed in the original competitive solicitation, so extensions under that provision are effectively competitively procured and authorized | District: the 2011 agreement extended the contract beyond the procurement period in the original bid and thus violated §44.031 and is void, so §271.152 waiver does not apply | Court: Held for District — the 2011 agreement extended beyond the original competitive procurement period and was not authorized by statute; therefore no waiver under §271.152 |
| Whether TXU can establish a waiver of governmental immunity by the District’s conduct (accepting benefits, representations, warranties) or via an implied contract | TXU: District’s conduct and acceptance of benefits created an implied waiver or contract such that immunity is waived | District: waiver-by-conduct is not a recognized exception; waiver must be by statute | Court: Held for District — rejects waiver-by-conduct; courts will not judicially create a conduct-based waiver in contract suits against governmental entities |
Key Cases Cited
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (standards for reviewing jurisdictional facts on plea to the jurisdiction)
- Hoff v. Nueces Cty., 153 S.W.3d 45 (Tex. 2004) (de novo review of governmental-immunity plea)
- Zachry Constr. Corp. v. Port of Houston Auth. of Harris Cty., 449 S.W.3d 98 (Tex. 2014) (scope of waiver under the Local Government Contract Claims Act)
- Sharyland Water Supply Corp. v. City of Alton, 354 S.W.3d 407 (Tex. 2011) (rejecting waiver-by-conduct for breach-of-contract suits against government)
- Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) (only the Legislature may waive sovereign/governmental immunity)