CITY OF LEON VALLEY ECONOMIC DEVELOPMENT CORPORATION, Appellant v. Larry LITTLE, Appellee.
No. 04-12-00142-CV.
Court of Appeals of Texas, San Antonio.
Dec. 31, 2013.
III. CONCLUSION
Having overruled appellant‘s sole issue on appeal, we affirm the judgment of the trial court.
Matthew F. Wymer, Beirne, Maynard & Parsons, Lorien Whyte, Brin & Brin, PC, San Antonio, TX, for Appellee.
Sitting: KAREN ANGELINI, Justice, SANDEE BRYAN MARION, Justice, PATRICIA O. ALVAREZ, Justice.
OPINION
Opinion by: PATRICIA O. ALVAREZ, Justice.
Appellant City of Leon Valley Economic Development Corporation (LVEDC) was sued by Appellee Larry Little for breach of contract. LVEDC asserted immunity from suit and filed a plea to the jurisdiction and a motion to dismiss. The trial court denied the plea, and LVEDC filed this interlocutory appeal. On June 19, 2013, this court issued an opinion dismissing this appeal for want of jurisdiction. LVEDC filed a motion for en banc reconsideration, and Little filed a response to the motion. By separate order of this date, the en banc court denied the motion for en banc reconsideration. Acting sua sponte, we withdraw our opinion and order of June 19, 2013, and substitute this opinion and judgment. We affirm the trial court‘s order.
BACKGROUND
LVEDC is a Type B economic development corporation (EDC) created under the Development Corporation Act of 1979 (the Act). See Act of May 15, 2007, 80th Leg., R.S., ch. 885, § 3.01, 2007 Tex. Gen. Laws 2082 (codifying the Development Corporation Act of 1979 as Title 12 of the
This case arises out of communications1 between Little and LVEDC relating to the acquisition of certain real properties in conjunction with the Leon Valley Town Center Project. LVEDC approached Little about the possibility of Little purchasing real property for the proposed project, and LVEDC later purchasing the property from Little. The parties executed two sales contracts for unimproved real property for LVEDC to purchase the properties from Little. Both sales were subject to LVEDC obtaining third-party financing at a specified rate. However, LVEDC did not obtain financing or purchase the property. Little contends LVEDC was approved for a loan to purchase the property and breached the sales contracts by refusing to obtain the loan. LVEDC asserts it did not complete the purchase because it did not receive third-party financing at the rate required by the Commercial Contract Financing Addendums by the closing date.
Little sued LVEDC for breach of contract. LVEDC filed a plea to the jurisdiction, claiming immunity from suit and liability under the Act. See
APPELLATE JURISDICTION
LVEDC asserts it is a governmental unit and is entitled to an interlocutory appeal of the trial court‘s denial of its plea to the jurisdiction. See
A. Characteristics of an EDC
An EDC is a corporation organized “for the promotion and development of new and expanded business enterprises to provide and encourage employment.”
B. EDC Eligibility for Interlocutory Appeal
- the state and its agencies,
- political subdivisions of the state,
- emergency service organizations, and
- “any other institution, agency, or organ of government the status and authority of which are derived from laws passed by the legislature under the constitution.”
An EDC‘s powers, privileges, and functions are specified and circumscribed by statute. E.g.,
C. Appellate Jurisdiction Here
In this appeal, LVEDC is a governmental unit for purposes of interlocutory appeal. See
GOVERNMENTAL IMMUNITY
In its plea to the jurisdiction, LVEDC argued that the trial court lacked subject matter jurisdiction because the Development Corporation Act makes it a governmental unit performing governmental functions and thus it is entitled to governmental immunity. Governmental immunity is a common-law doctrine that extends immunity from suit and liability to political subdivisions performing governmental functions. City of Galveston v. State, 217 S.W.3d 466, 469 (Tex.2007); Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 324 (Tex. 2006).
A. Immunity From Suit
“[Governmental] immunity from suit bars an action against [a governmental unit] unless the state expressly consents to the suit.” Tex. Dep‘t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999) (per curiam); accord Ben-Bolt, 212 S.W.3d at 324; Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex.2006). If a governmental unit defendant is immune from suit, the trial court has no subject matter jurisdiction to hear the case against it, and the defendant may properly challenge the suit in a plea to the jurisdiction. See Tex. Dep‘t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex.2004); see also Koseoglu, 233 S.W.3d at 843.
B. Immunity from Liability
“Immunity from liability protects the state from judgment even if the Legislature has expressly consented to the suit.” Jones, 8 S.W.3d at 638; accord Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex.2003). Immunity from liability acts like an affirmative defense: it must be pled and it does not deprive the trial court of subject matter jurisdiction. Jones, 8 S.W.3d at 638; see Miranda, 133 S.W.3d at 224.
STANDARD OF REVIEW
“Whether a court has subject matter jurisdiction is a question of law.” Miranda, 133 S.W.3d at 226; accord Tex. Natural Res. Conservation Comm‘n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). “Appellate courts reviewing a challenge to a trial court‘s subject matter jurisdiction review the trial court‘s ruling de novo.” Miranda, 133 S.W.3d at 228; accord IT-Davy, 74 S.W.3d at 855.
COMMON-LAW GOVERNMENTAL IMMUNITY
In response to Little‘s suit, LVEDC asserted in its plea to the jurisdiction that it has immunity from suit because it is an EDC. We first determine whether
A. EDC is not Inherently a Governmental Unit
Governmental immunity is a common-law doctrine that protects political subdivisions of the state performing governmental functions from suit and liability. City of Galveston, 217 S.W.3d at 469, 471-73; Ben-Bolt, 212 S.W.3d at 324. Political subdivisions of the state include entities such as counties, cities, and school districts, see Ben-Bolt, 212 S.W.3d at 324; Harris Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex.2004), but do not include EDCs. The Act expressly excludes an EDC from the set of political subdivisions of the state: “A[n economic development] corporation is not a political subdivision ... for purposes of the laws of this state.”
B. EDC is a Nonprofit Corporation
The Act infuses an EDC with, but limits its reach to, “the powers, privileges, and functions of a nonprofit corporation ... formed under the Texas Nonprofit Corporation Law.”
C. EDC not Inherently Entitled to Governmental Immunity
Construing the plain language of the Act, we hold that an EDC is not inherently entitled to governmental immunity and is thus not immune from suit or liability except as otherwise provided by statute.2 Therefore, LVEDC is not inherently protected by the common-law doctrine of governmental immunity. See City of Galveston, 217 S.W.3d at 469; Ben-Bolt, 212 S.W.3d at 324. We next turn to whether LVEDC has statutory immunity under the Act.
STATUTORY IMMUNITY
LVEDC asserts the trial court erred by denying its plea to the jurisdiction and motion to dismiss because it is immune from suit under section 505.106 as recognized by Weir Bros., Purdin, and Rayl. See
“In construing statutes, we ascertain and give effect to the Legislature‘s intent as expressed by the language of the statute.” City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex.2008); accord Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex.2009). We presume the legislature acted with purpose when it included each word and excluded omitted words. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex.2011); Laidlaw Waste Sys. (Dall.), Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex.1995). “If the statutory text is unambiguous, [we] must adopt the interpretation supported by the statute‘s plain language unless that interpretation would lead to absurd results.” See Tex. Dep‘t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 177 (Tex.2004); accord City of Rockwall, 246 S.W.3d at 625-26.
B. Section 505.106
LVEDC insists that it is immune from suit, including Little‘s breach of contract suit, based on the statutory protections in section 505.106 of the Act:
(a) The following are not liable for damages arising from the performance of a governmental function of a Type B corporation or the authorizing municipality:
- the corporation;
- a director of the corporation;
- the municipality;
- a member of the governing body of the municipality; or
- an employee of the corporation or municipality.
(b) For purposes of Chapter 101, Civil Practice and Remedies Code, a Type B corporation is a governmental unit and the corporation‘s actions are governmental functions.
1. Subsection (b)
Under the general provisions of the Act, an EDC is a nonprofit corporation, see
2. Subsection (a)
3. Section 505.106 in Context
Reading section 505.106 as a whole and in the context of the Act, we hold as follows: (1) an EDC, like a private nonprofit corporation, is not inherently entitled to governmental immunity, see
This construction applies the statute‘s unambiguous plain language, gives purpose to each word, and does not produce absurd results. See TGS-NOPEC Geophysical Co., 340 S.W.3d at 439; Laidlaw Waste Sys., 904 S.W.2d at 659.
LVEDC‘S PLEA TO THE JURISDICTION
LVEDC argues the trial court erred by denying its plea to the jurisdiction because the Act grants it governmental immunity as recognized by Weir Bros., Purdin, and Rayl. We have already construed the statute; we now address the cited cases.
A. Earlier Cases Distinguishable
Several of our sister courts have determined that section 505.106 “expressly extends governmental immunity to economic development corporations.” E.g., Borne v. City of Corpus Christi, 210 S.W.3d 788, 788 n. 1 (Tex. App. 2006); accord Weir Bros., 373 S.W.3d at 846; Purdin, 143 S.W.3d at 295; Rayl, 963 S.W.2d at 114. However, each of these cases involved tort claims. Cf. Weir Bros., 373 S.W.3d at 843 (e.g., fraud, breach of contract); Borne, 210 S.W.3d at 786 (e.g., fraud, breach of contract); Purdin, 143 S.W.3d at 293 (e.g., TCHRA claims);3 Rayl, 963 S.W.2d at 111 (e.g., tortious interference, breach of contract). As we have previously discussed, section 505.106‘s subsections (a) and (b) raise different shields based on the nature of the claims. See
Our case presents only a breach of contract claim — which does not trigger the governmental immunity protections raised by subsection (b) for tort claims. See
B. Plea to the Jurisdiction Inapt
Contrary to LVEDC‘s arguments, section 505.106(b) does not raise a governmental immunity shield against Little‘s breach of contract claim; subsection (b)‘s shield is limited to tort claims. See
In its plea, LVEDC argued it has governmental immunity from suit under section 505.106; it does not. Little did not bring a tort claim, so LVEDC cannot assert subsection (b)‘s governmental immunity shield against such a claim. At best, LVEDC has immunity from liability under subsection (a), and such immunity does not deprive the trial court of subject matter jurisdiction. See Miranda, 133 S.W.3d at 224; Taylor, 106 S.W.3d at 696; Jones, 8 S.W.3d at 638. Thus, the trial court did not err in denying LVEDC‘s plea to the jurisdiction.
CONCLUSION
LVEDC, as a Type B economic development corporation, is a governmental unit for purposes of appealing an interlocutory order, and is entitled to appeal the trial court‘s denial of its plea to the jurisdiction. However, it is not a political subdivision of the state, and is not inherently entitled to governmental immunity under the common law.
Section 505.106(b) of the Development Corporation Act statutorily invokes common-law governmental immunity for an EDC against tort claims, but such immunity does not apply to Little‘s breach of contract claim. Any immunity from liability under section 505.106(a) does not affect the trial court‘s subject matter jurisdiction. Therefore, the trial court properly denied LVEDC‘s plea to the jurisdiction. We affirm the trial court‘s order.