Water Exploration Co. v. Bexar Metropolitan Water District
2011 Tex. App. LEXIS 744
| Tex. App. | 2011Background
- WECO leased groundwater rights and entered a Water Supply Agreement with BexarMet on Sept. 11, 2005, effectively sub-letting WECO's groundwater leases to BexarMet.
- The dispute centers on whether Texas Local Government Code §271.152 waives sovereign immunity for the Water Supply Agreement.
- BexarMet, a water district, maintains/operates facilities; WECO retains Wells and related property interests, with WECO's Wells owned by WECO but leased to BexarMet.
- The Agreement contains multiple testing, cure, and minimum-production provisions that WECO argues create services-for-suit obligations; BexarMet contends those provisions are contingent/curative and do not create a services contract.
- The trial court granted BexarMet’s plea to the jurisdiction; WECO appealed contending §271.152 applies; the court analyzes whether the Agreement is a contract for providing services to the District under §271.152.
- The court ultimately holds that the Agreement does not constitute a contract providing services under §271.152 and confirms the immunity from suit was not waived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §271.152 waive immunity for the Water Supply Agreement? | WECO contends the Agreement provides services to BexarMet. | BexarMet asserts the Agreement is a lease of real property, not a services contract. | No waiver; not a contract stating essential terms for providing services. |
| Do option-to-cure provisions convert the agreement into a services contract? | WECO argues cure/termination clauses create services. | BexarMet argues such provisions are contingent/curative, not services. | Not enough to trigger waiver under §271.152. |
| Do lease-of-groundwater rights/wells make the contract one for providing services? | WECO asserts the arrangement involves services via maintenance/permits. | BexarMet maintains this is a real estate lease with ancillary obligations. | Agreement not a contract for providing services; immunity not waived. |
Key Cases Cited
- Kirby Lake Development, Ltd. v. Clear Lake City Water Authority, 320 S.W.3d 829 (Tex. 2010) (releases immunity when contract contemplates services to a local entity)
- Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006) (immunity from suit and contract considerations in public works)
- Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320 (Tex. 2006) (liberal construction of services under public contract fund)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (two components of governmental immunity; waiver only by Legislature)
- IT-Davy (Tex. Natural Resource Conservation Comm'n v. IT-Davy), 74 S.W.3d 849 (Tex. 2002) (only Legislature can waive immunity from contract claims; contract language cannot suffice)