Texas Association of Counties Property and Casualty Self-Insurance Fund v. Hidalgo County

NUMBER 13-05-528-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG TEXAS ASSOCIATION OF COUNTIES PROPERTY AND CASUALTY SELF- INSURANCE FUND, Appellant, v. HIDALGO COUNTY, Appellee. On appeal from the 332nd District Court of Hidalgo County, Texas. MEMORANDUM OPINION Before Justices Hinojosa, Yañez, and Castillo Memorandum Opinion by Justice Yañez Appellant, Texas Association of Counties Property and Casualty Self-Insurance Fund ("TACPC"), appeals from the trial court's order denying its plea to the jurisdiction. (1) We reverse the trial court's order and remand the cause for further proceedings. Background TACPC is a governmental entity comprised of various counties that have created a self-insurance fund to obtain property and casualty coverage pursuant to interlocal participation agreements authorized by statute. (2) Appellee, Hidalgo County ("the County"), sued TACPC for damages arising from an alleged breach of contract. TACPC filed a plea to the jurisdiction, alleging it is immune from suit. Following a hearing, the trial court denied the plea to the jurisdiction. This appeal ensued. Standard of Review Because jurisdiction is a question of law, we review the trial court's ruling on a plea to the jurisdiction de novo. (3) We apply the de novo standard to both the granting and denial of a plea to the jurisdiction. (4) In determining whether jurisdiction exists, rather than looking at the claim's merits, we look to the allegations in the pleadings, accept them as true, and construe them in favor of the pleader. (5) We consider the facts alleged in the petition and, to the extent relevant to the jurisdictional issue, any evidence submitted by the parties to the trial court. (6) It is the plaintiff's burden to allege facts affirmatively demonstrating the trial court's jurisdiction. (7) Applicable Law As the Texas Supreme Court recently clarified: In Texas, governmental immunity has two components: immunity from liability, which bars enforcement of a judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether. By entering into a contract, a governmental entity necessarily waives immunity from liability, voluntarily binding itself like any other party to the terms of agreement, but it does not waive immunity from suit. "We have consistently deferred to the Legislature to waive sovereign immunity from suit, because this allows the Legislature to protect its policymaking function." . . . In sum, "[i]n the contract-claims context, legislative control over sovereign immunity allows the Legislature to respond to changing conditions and revise existing agreements if doing so would benefit the public." To ensure that this legislative control is not lightly disturbed, a waiver of immunity must be clear and unambiguous. (8) Immunity from suit deprives a trial court of subject matter jurisdiction over a governmental unit, even where liability is undisputed. (9) The party bringing suit against a governmental entity has the burden of affirmatively showing that the trial court has jurisdiction to hear the case, which means that it must establish a clear and unambiguous waiver of immunity from suit by the legislature. (10) Analysis TACPC contends that the County failed to establish either by reference to a statute or express legislative permission, that the legislature consented to the suit. In its response to the plea to the jurisdiction, the County argued that TACPC waived its immunity to suit because its bylaws include the power to "sue and be sued." The County cited Missouri Pacific R.R. Co. v. Brownsville Navigation Dist., 453 S.W.2d 812 (Tex. 1970), in support of its argument. Similarly, at the August 9, 2005 hearing on the plea, the County also cited Missouri Pacific and argued that, "[t]he bottom line is, the bylaws has [sic] a clear and unequivocal waiver of immunity to sue when it says sue and be sued. The Texas Supreme Court refers to that language to be waiver of immunity to sue. So that's the plea to the jurisdiction." However, in Tooke, the Texas Supreme Court overruled Missouri Pacific. (11) The court held that because immunity is waived only by clear and unambiguous language, and because the meaning of phrases such as "sue and be sued" cannot be ascertained apart from the context in which they occur, such phrases do not, in and of themselves, waive immunity from suit. (12) The court noted that "sue and be sued" language is used in some statutes which expressly retain or confer immunity. (13) The County also argues that TACPC's immunity to suit is waived by chapter 271 of the local government code. (14) In 2005, the Texas Legislature passed sections 271.151 to 271.160 of the local government code, which waive local governmental entities' immunity from suit for breach of contract under certain circumstances and limit damages. Although the effective date of the new statute was September 1, 2005, it applies to claims arising under a contract executed before the effective date of the statute if sovereign immunity has not been waived with respect to the claim before the effective date. (15) The statute was not briefed or argued to the trial court because it was not in effect prior to the court's ruling on the plea to the jurisdiction. TACPC argues that subchapter 1 of chapter 271 does not apply to waive its immunity from suit. TACPC also argues that it was created by interlocal agreement pursuant to chapter 791 of the government code, which does not contain a clear and unambiguous legislative waiver of immunity to parties to interlocal agreements. (16) The parties did not have the opportunity to address either the supreme court's opinion in Tooke or chapter 271. The supreme court has determined that a remand is appropriate in such circumstances. (17) Accordingly, we reverse the trial court's denial of TACPC's plea to the jurisdiction and remand the cause for further proceedings. LINDA REYNA YAÑEZ, Justice Memorandum opinion delivered and filed this the 21st day of December, 2006. 1. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (Vernon Supp. 2006). 2. See Tex. Gov't Code Ann. § 791.011 (Vernon Supp. 2006). 3. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). 4. Godley Indep. Sch. Dist. v. Woods, 21 S.W.3d 656, 658 (Tex. App.-Waco 2000, pet. denied) (citing City of Houston v. Morua, 982 S.W.2d 126, 127 (Tex. App.-Houston [1st Dist.] 1998, no pet.)). 5. See County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). 6. Tex. Natural Res. Conservation Comm'n v. White, 46 S.W.3d 864, 868 (Tex. 2001). 7. Mission Cons. Indep. Sch. Dist. v. Flores, 39 S.W.3d 674, 676 (Tex. App.-Corpus Christi 2001, no pet.). 8. Tooke v. City of Mexia, 197 S.W.3d 325, 332-33 (Tex. 2006) (internal citations omitted). 9. Travis County v. Pelzel & Assoc., Inc., 77 S.W.3d 246, 248 (Tex. 2002). 10. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999); Tex. Political Subdivisions Propt./Cas. Joint Self-Ins. Fund v. Ben Bolt-Palito Blanco Cons. Ind. Sch. Dist., 163 S.W.3d 172, 176 (Tex. App.-San Antonio 2005, pet. filed) (citing Tex. Dep't. of Criminal Justice v. Miller, 51 S.W.3d 583, 587 (Tex. 2001)). 11. Tooke, 197 S.W.3d at 342. 12. Id. at 338-342. 13. Id. at 340-41. 14. Section 271.152 of the local government code 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. See Tex. Loc. Gov't Code Ann. § 271.152 (Vernon 2005). 15. See Act of May 23, 2005, 79th Leg., R.S., ch. 604, §§ 2-3, 2005 Tex. Gen. Laws 1548, 1549. 16. See Tex. Gov't Code Ann. § 791.011 (Vernon Supp. 2006); see also Tex. Political Subdivisions Propt./Cas. Joint Self-Ins. Fund, 163 S.W.3d at 176 (holding a local government entity self-insurance fund retained its immunity to suit because chapter 791 contains no clear indication of legislature's intent to permit suit). 17. See Satterfield & Pontikes Constr., Inc. v. Irving Indep. Sch. Dist., 197 S.W.3d 390, 391 (Tex. 2006).