West Travis County Public Utility Agency v. Travis County Municipal Utility District No. 12
537 S.W.3d 549
Tex. App.2017Background
- LCRA and MUD 12 executed a Raw Water Contract (2008) requiring MUD 12 to install and maintain a meter to measure raw water; LCRA approved design and location.
- Later LCRA (then-assignee Agency) and MUD 12 executed a Wholesale Water Services Agreement (Services Contract) for treatment/delivery of potable water; MUD 12 was to install a “Master Meter,” then dedicate and convey it to LCRA/Agency, after which the Agency would maintain it.
- The Services Contract’s effective date was conditioned on the Agency’s acceptance of the Master Meter and issuance of an acceptance letter.
- MUD 12 installed the Master Meter (incurring significant expense), the Agency accepted it, the parties performed, and a rate dispute arose; MUD 12 sued the Agency for breach alleging excessive rates.
- MUD 12 claimed the Texas Local Government Contract Claims Act (Act) waived the Agency’s sovereign immunity because MUD 12 provided services (installation/conveyance of the Master Meter) to the Agency.
- The trial court denied the Agency’s plea to the jurisdiction; the court of appeals reversed, holding the Act did not waive immunity for this contract and dismissing MUD 12’s claims for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Services Contract is a contract "subject to" the Act (i.e., a written contract stating essential terms of an agreement to provide goods or services to a local governmental entity) | MUD 12: its installation and conveyance of the Master Meter constituted provision of services to the Agency, so the Act waived immunity | Agency: the contract’s services flow from Agency to MUD 12 (water delivery); any benefit to Agency from the meter was indirect/attenuated and the contract contains no agreement by Agency to pay for meter services | Held: Services Contract is not subject to the Act — Agency had no contractual right to receive services from MUD 12 and the contract fails to state essential terms (price and time of performance) for any service to Agency, so immunity remains |
| Whether MUD 12’s pre‑effective-date installation/conveyance of the Master Meter created a contractual right enforceable under the Services Contract | MUD 12: installation/conveyance created an enforceable service obligation and triggers Act waiver | Agency: the Services Contract was expressly conditioned on Agency acceptance; if meter not accepted, no contract existed — installation before effectiveness does not give Agency a right under an in-force contract | Held: Installation before the condition precedent does not create an enforceable right under the Services Contract; the contract was not effective until acceptance |
| Whether the Act requires an express agreement by the governmental entity to pay and other essential terms before waiver applies | MUD 12: waiver can apply where services benefit the governmental entity even if not primary purpose | Agency: Act requires written contract stating essential terms (including price/time); absence shows no waiver | Held: Act requires essential terms in the written contract; here price/time are missing, so waiver fails |
| Whether ambiguity in waiver should be resolved for or against immunity | MUD 12: ambiguous but should be read to permit waiver given broad reading of “services” in prior cases | Agency: ambiguities must be resolved in favor of immunity; waivers must be clear and unambiguous | Held: Ambiguities resolved in favor of immunity; statutes waiving immunity strictly construed |
Key Cases Cited
- Tooke v. Mexia, 197 S.W.3d 325 (Tex. 2006) (governmental immunity has two components: immunity from liability and immunity from suit; waivers must be clear)
- Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (governmental immunity implicates subject-matter jurisdiction; plea to jurisdiction appropriate)
- Lubbock Cnty. Water Control & Improvement Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297 (Tex. 2014) (chapter 271 waiver applies only where written contract includes essential terms of goods/services provided to governmental entity)
- Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829 (Tex. 2010) ("services" construed broadly but not so broadly as to swallow statutory requirements)
- Zachry Constr. Corp. v. Port of Hous., 449 S.W.3d 98 (Tex. 2014) (scope of recoverable damages under Act and interpretation of "balance due and owed")
- Ben Bolt–Palito Blanco Consol. Indep. Sch. Dist. v. Texas Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320 (Tex. 2006) (members providing services to fund can create waiver)
- City of Hous. v. Williams, 353 S.W.3d 128 (Tex. 2011) (discussion of what constitutes essential terms under section 271.151)