BEN BOLT-PALITO BLANCO CONSOLIDATED INDEPENDENT SCHOOL DISTRICT, Petitioner, v. TEXAS POLITICAL SUBDIVISIONS PROPERTY/CASUALTY JOINT SELF-INSURANCE FUND, Respondent.
No. 05-0340.
Supreme Court of Texas.
Argued March 22, 2006. Decided Dec. 29, 2006.
Rehearing Denied Feb. 23, 2007.
The court‘s charge that was read to the jury instructed that Gullo Motors violated the DTPA if it (1) breached an express warranty, defined as any affirmation of fact that related to the 2002 Highlander Limited and became part of the basis of its bargain with Chapa, or (2) engaged in any false, misleading, or deceptive act or practice upon which Chapa relied to her detriment. A false, misleading, or deceptive act or practice includes representing that goods or services are of a particular standard, quality, grade, or of a particular style or model, or, failing to disclose information concerning goods which was known at the time of the transaction if such failure to disclose was intended to induce the consumer into a transaction the consumer would not have entered had the information been disclosed. As for the common-law fraud claim, the jury was instructed that Gullo Motors committed fraud if (a) it made a material misrepresentation, (b) the representation was made with knowledge of its falsity or made recklessly without any knowledge of the truth and as a positive assertion, (c) the representation was made with the intention that Chapa would act upon it, and (d) Chapa relied on the misrepresentation and thereby suffered injury. The evidence that Chapa presented to support her fraud claim also supported her DTPA claim, and vice versa. Because the legal services provided to advance the DTPA claim also advanced the fraud claim, the fees incurred cannot be segregated even under the Court‘s own analysis.
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For the reasons expressed, I respectfully dissent.
Merritt M. Clements, Judith R. Blakeway, Stephen T. Dennis, Strasburger & Price, San Antonio, TX, for respondent.
Rafael Edward Cruz, Office of the Attorney General, Austin TX, for Attorney General of Texas.
Rance L. Craft, Office of the Attorney General, Austin TX, for amicus curiae.
Justice O‘NEILL delivered the opinion of the Court, joined by Chief Justice JEFFERSON, Justice WAINWRIGHT, Justice BRISTER, Justice MEDINA, and Justice JOHNSON.
The issue in this insurance coverage dispute is whether a self-insurance fund composed of local political subdivisions enjoys governmental immunity against a fund member school district‘s coverage claim. In the suit underlying this appeal, fund member Ben Bolt-Palito Blanco Consolidated Independent School District (“Ben Bolt“) sued the Texas Political Subdivisions Property/Casualty Joint Self-Insurance Fund (the “Fund“) after the Fund denied a claim for benefits under its policy. The Fund asserted immunity in a plea to the jurisdiction, which the trial court denied. A divided court of appeals reversed, concluding that the Fund is immune from suit. 163 S.W.3d 172, 176-77. We agree that the Fund possesses governmental immunity. However, after the court of appeals rendered its judgment, the Legislature enacted a limited immunity waiver for breach of contract claims against governmental entities.1 We conclude that the statutory waiver applies to this insurance-coverage dispute. Accordingly, we reverse the judgment of the court of appeals.
I. Background
The Texas Interlocal Cooperation Act (the “Act“) allows political subdivisions to contract with one another to more efficiently share resources and responsibilities.
Ninety-two local governmental entities formed the Fund involved in this dispute by entering into an Interlocal Cooperation Agreement to pool funds to provide casualty insurance to participants. The Fund provides a self-insurance risk pool and claim administration for its members. Participants in the Fund include eight counties, six municipalities, forty-three independent school districts, and various special districts and other political subdivisions.
Ben Bolt, a small school district in Jim Wells County, purchased an insurance policy from the Fund for a coverage period between April 2002 and 2003. In Decem-
In its petition to this Court, Ben Bolt contends the Fund is not a governmental entity entitled to immunity. Alternatively, Ben Bolt claims that any immunity the Fund may possess derives from its member political subdivisions and cannot be asserted against its source. And even if the Fund may assert immunity against its members, Ben Bolt argues, that immunity has been waived in a number of ways: first, recently enacted section 271.152 of the Local Government Code is a clear expression of legislative intent to waive governmental immunity from suit on contract claims,
The Fund counters that it is a governmental entity existing under the Legislature‘s authority and thus enjoys immunity in its own right irrespective of its members. Moreover, the Fund argues that Chapter 271 is not a clear and unambiguous waiver of immunity because it is unclear whether that waiver applies to the Fund‘s insurance agreement with its members, some of which are excluded from the waiver. The Fund also contends there is no implied waiver or waiver by conduct, and that the UDJA does not prevent the Fund from asserting immunity here. We granted Ben Bolt‘s petition for review to determine the nature and extent of the Fund‘s alleged immunity from suit.
II. Discussion
A. Standard of Review
Governmental immunity from suit defeats a trial court‘s jurisdiction. Tex. Dep‘t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999). Whether a trial court has jurisdiction is a question of law subject to de novo review. See Tex. Natural Res. Conservation Comm‘n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). Because the issue in this case is whether the trial court lacked jurisdiction due to the Fund‘s assertion of immunity, our review is de novo.
B. Sovereign and Governmental Immunity
Sovereign immunity protects the State, its agencies, and its officials from lawsuits for damages.2 See Tooke v. City
The State‘s sovereign immunity extends to various divisions of state government, including agencies, boards, hospitals, and universities. Tooke, 197 S.W.3d at 331; Taylor, 106 S.W.3d at 694 n.3. The appurtenant common-law doctrine of governmental immunity similarly protects political subdivisions of the State, including counties, cities, and school districts. Taylor, 106 S.W.3d at 694 n.3; see also Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). A political subdivision enjoys governmental immunity from suit to the extent that immunity has not been abrogated by the Legislature. See IT-Davy, 74 S.W.3d at 853.
It is clear that the Fund in this case is composed of members which, like Ben Bolt, are themselves governmental units entitled to immunity. However, the Fund asserts discrete governmental-unit status in its own right separate and apart from its members. If it is true, as the Fund contends, that the Fund itself enjoys immunity from suit, then the extent to which the Fund might derive immunity from its members is immaterial. Accordingly, we begin by examining the nature of the Fund.
C. The Fund
Chapter 2259 of the Texas Government Code authorizes “governmental unit[s],” which include “local government[s],” to self insure.
Chapter 791 of the Government Code, known as the Interlocal Cooperation Act, allows local governments to contract with each other to collectively perform certain governmental functions.
We have said that where the governing statutory authority demonstrates legislative intent to grant an entity the “nature, purposes, and powers” of an “arm of the State government,” that entity is a government unit unto itself. See Harris County Flood Control Dist. v. Mann, 135 Tex. 239, 140 S.W.2d 1098, 1101 (1940) (holding statute creating flood-control District demonstrated legislative intent that the District be a state agency and a political entity distinct from the County, despite the identical boundaries of the District and County). A district with “[s]uch powers of government and with the authority to exercise such rights, privileges and functions” to achieve its purpose is considered a governmental unit. Id. (quoting
Similarly, Chapter 2259 and the Interlocal Cooperation Act imbue self-insurance pools with nature, purposes, and powers reflecting the Legislature‘s intent that the Fund exist as a discrete governmental unit. An interlocal contract may provide a governmental function that each contracting party is authorized to individually perform.
Many of our courts of appeals have considered self-insurance pools, though composed of political subdivisions, to be distinct governmental entities apart from their membership. See, e.g., Campbell v. Tex. Employers’ Ins. Ass‘n, 920 S.W.2d 323, 329-30 (Tex. App.—Houston [1st Dist.] 1995, no writ) (citing with approval a Texas court of appeals case that refers to a self-insurance risk pool as a governmental entity to hold that a private company that contracted to provide services to the Texas Association of School Boards’ self-insurance fund was not entitled to governmental immunity); TML Intergovernmental Employee Benefits Pool v. Prudential Ins. Co. of Am., 144 S.W.3d 600, 605-07 (Tex. App.—Austin 2004, pet. denied) (holding an insurance pool bringing a declaratory judgment waived immunity from suit, necessarily implying possession of immunity in order to waive it); Milner v. City of Leander, 64 S.W.3d 33, 38-40 (Tex. App.—Austin 2000, no pet.) (treating self-insurance fund as governmental entity and concluding that the Legislature did not waive its immunity); cf. Campbell, 920 S.W.2d at 329-30 (suggesting that school boards’ self-insurance fund was a governmental entity, but immunity did not extend to private company providing claims-adjustment services to the fund); Tex. Workers’ Comp. Comm‘n v. City of Bridge City, 900 S.W.2d 411, 414 (Tex. App.—Austin 1995, writ denied) (holding that because municipalities’ risk pool derived its existence and powers from legislative enactments, it was subject to legislative control and supremacy to the same extent as other political subdivisions); GAB Bus. Servs., Inc. v. Moore, 829 S.W.2d 345, 350-51 (Tex. App.—Texarkana 1992, no writ) (intimating that municipalities’ risk pool was a governmental entity, but holding that immunity did not extend to private company that contracted with pool to adjust claims); see also Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers’ Comp. Comm‘n, 74 S.W.3d 377, 384 (Tex. 2002) (noting that, in determining whether certain Labor Code provisions applied to the risk pool itself in addition to its 1600 member municipalities, the Commission did “not dispute that [the] Risk Pool itself qualifies as a political subdivision” within the meaning of those provisions).
We conclude that the Fund‘s “nature, purposes and powers” demonstrate legislative intent that it exist as a distinct governmental entity entitled to assert immunity in its own right for the performance of a governmental function. With regard to that function, the Fund enjoys the same governmental immunity as other political subdivisions. Having concluded that the Fund enjoys immunity in its own right, we need not decide whether the Fund‘s immunity is also derivative of its members.
D. Waiver of Immunity
With the Fund‘s governmental immunity shield, Ben Bolt‘s claims are barred absent a waiver of that immunity. It is the province of the Legislature to consent to a suit against a governmental entity. IT-Davy, 74 S.W.3d at 853. “We have consistently deferred to the Legislature to waive sovereign immunity from suit, because this allows the Legislature to protect its policymaking function.” Id. at 854. Because immunity from suit protects the public coffers, “the claims process is tied to the appropriations process, and the priorities that guide the latter should also inform the former.” Tooke, 197 S.W.3d at 332. The exposure of governmental entities to liability may shift tax resources away from their intended purposes and toward defending lawsuits and paying judgments, thereby hampering government functions. IT-Davy, 74 S.W.3d at 854. For this rea-
Ben Bolt argues that Section 271.152 of the Local Government Code provides a clear and unambiguous waiver of the Fund‘s immunity from suit for breach of its insurance agreement with Ben Bolt. That section provides:
A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter.
First, the Fund points out that Section 271.151(2) defines a “[c]ontract subject to this subchapter [subchapter I of chapter 271]” as “a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity.”
It is true that Ben Bolt is a consumer of insurance that the Fund offers. But the relationship between the Fund and its members differs from the ordinary consumer/seller relationship. As the Fund has acknowledged, its members elect a governing board, and a board subcommittee resolves claims disputes. To that extent, at least, the Fund‘s members provide services to the Fund. Moreover, the statute‘s legislative history indicates that, by enacting section 271.152, the Legislature intended to loosen the immunity bar so “that all local governmental entities that have been given or are given the statutory authority to enter into contracts shall not be immune from suits arising from those contracts.” HOUSE COMM. ON CIVIL PRACTICES, BILL ANALYSIS,
The Fund next contends Section 271.152 does not clearly and unambiguously waive its immunity from suit because some of the Fund‘s members, such as counties, do not meet Section 271.151(3)‘s definition of a “local governmental entity.” But as we
Because the Fund is a “local governmental entity” as defined by
Ben Bolt asserts a number of alternative grounds upon which it claims the Fund‘s immunity from suit was waived, but does not claim that success on these other points would afford it greater relief. Because we hold that Section 271.152 of the Local Government Code waives the Fund‘s immunity from suit, we do not consider them.
III. Conclusion
Because Section 271.152 of the Local Government Code waives the Fund‘s immunity from Ben Bolt‘s claim arising out of the insurance agreement between the parties, we reverse the court of appeals’ judgment and remand to the trial court for further proceedings.
Justice WILLETT delivered a dissenting opinion, joined by Justice HECHT.
Justice GREEN did not participate in the decision.
Justice WILLETT, joined by Justice HECHT, dissenting in part.
I agree with most of the Court‘s opinion, but respectfully dissent from Part II(D) because I do not believe that section 271.152 of the Local Government Code clearly and unambiguously waives the Fund‘s governmental immunity.
I agree with the Court that the Fund is a discrete governmental unit performing a governmental function, and therefore possesses immunity from suit unless the Legislature has waived it. I also agree that the Fund is a “local governmental entity” under sections 271.151(3) and 271.152. However, I part company on whether the Legislature in 2005 clearly waived the Fund‘s immunity for two principal reasons: (1) deciding whether a contract is “subject to this subchapter” requires this Court to actually see and read the contract, which exists nowhere in the record; and (2) even accepting Ben Bolt‘s description of the contract, it falls outside the restrictive language of the statute‘s immunity waiver (or at minimum does not “clearly and unambiguously” fall within it).
It is axiomatic that “a waiver of immunity must be clear and unambiguous,” Tooke v. City of Mexia, 197 S.W.3d 325, 333 (Tex. 2006), see also
Rightly or wrongly, the Legislature chose the preposition “to“—not the opposite term “from“—and this is a grammatical distinction with a difference. As any fax cover sheet (or elementary school valentine card) makes clear, the words have diametrically opposite definitions and convey diametrically opposite meanings; generally, the preposition “to” means “in a direction toward” while “from” means “in a direction away.” The core commodity covered by the agreement, casualty insurance, flows from the Fund, not to the Fund as the statute requires.
Certainly, reasonable people can argue that construing the statute as not providing a waiver of immunity impairs the purpose underlying the overall scheme, but we interpret statutory text as we find it. The clearest manifestation of what lawmakers intended is what lawmakers enacted, and it is not this Court‘s role to embroider or spruce up statutory language, particularly when such embellishment requires us to read a term as really meaning the polar opposite. This is not an overly technical interpretation but one that recognizes the special deference owed legislative policy choices in the context of contract claims against the government, even if critics find those choices odd, unfair, or imprudent. Moreover, it is an interpretation that acknowledges the settled principle that immunity waivers must be unequivocal.
The Court relies principally on two arguments to scale the “to/from” hurdle. First, it avers that “the relationship between the Fund and its members differs from an ordinary consumer/seller relationship” and that because members like Ben Bolt “elect a governing board, and a board subcommittee resolves claims disputes,” the members do in fact provide services to the Fund. 212 S.W.3d 320, 327. The Court insists that this suffices to waive the Fund‘s immunity, but in reaching to satisfy the definitional requirement of section 271.151(2), the Court disregards the actual waiver provision of section 271.152. This section waives immunity from suit “for the purpose of adjudicating a claim for breach of the contract,”
In any event, even if the described board- and claims-related activities were detailed in the insurance contract itself, these seem to be little more than oversight-related activities to help set up and maintain the Fund, and the Legislature has expressly preserved immunity for such functions: “[t]he establishment and maintenance of a self-insurance program by a governmental unit is not a waiver of immu-
Second, the Court cites a House bill analysis to bolster its view that “to” should also be read to mean “from,” and concludes, “There is no indication that the Legislature intended to exclude self-insurance fund agreements from enforcement.” 212 S.W.3d at 327. There is such indication: the literal text that our elected representatives and senators enacted. As we recently cautioned in Sheshunoff, if the statutory text is plain, “we must take the Legislature at its word and not rummage around in legislative minutiae.” Alex Sheshunoff Mgmt. Servs. v. Johnson, 209 S.W.3d 644, 652 n.4 (Tex. 2006). In any event, the bill analysis quoted by the Court offers such indication, too, in qualifying language found in the very same sentence; this language, omitted by the Court, is shown here in italics: “all local governmental entities that have been given or are given the statutory authority to enter into contracts shall not be immune from suits arising from those contracts, subject to the limitations set forth in C.S.H.B. 2039.”1 HOUSE COMM. ON CIVIL PRACTICES, BILL ANALYSIS,
At minimum, the Legislature‘s selection of “to” instead of the directionally opposite “from” renders the purported waiver less than conclusive and a flimsy basis for holding that the Legislature has waived immunity beyond all doubt. More fundamentally, it is difficult to conclude with unalloyed certainty that a contract is “subject to this subchapter” and thus an undeniable waiver of immunity when the contract itself appears nowhere in the record.
In sum, the statute‘s immunity language does not evince the Legislature‘s unequivocal intent to cover this specific contract. Accordingly, since we must resolve uncertainties over legislative consent in favor of immunity, I would hold that the Legislature has not abrogated the Fund‘s immunity from suit.
I find none of Ben Bolt‘s other arguments for disregarding the Fund‘s immunity persuasive and would affirm the judgment of the court of appeals.