Martin K Eby Const v. Dallas Area Rapid ( 2004 )


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  •                                                          United States Court of Appeals
    Fifth Circuit
    F I L E D
    REVISED MAY 18, 2004
    April 29, 2004
    IN THE UNITED STATES COURT OF APPEALS
    Charles R. Fulbruge III
    FOR THE FIFTH CIRCUIT                      Clerk
    No. 03-10728
    MARTIN K EBY CONSTRUCTION COMPANY INC
    Plaintiff - Appellant
    v.
    DALLAS AREA RAPID TRANSIT
    Defendant - Appellee
    Appeal from the United States District Court
    for the Northern District of Texas
    Before KING, Chief Judge, and BENAVIDES and CLEMENT, Circuit
    Judges.
    KING, Chief Judge:
    Plaintiff-Appellant Martin K. Eby Construction Company, Inc.
    (Eby) appeals the district court’s judgment dismissing its action
    against Defendant-Appellee Dallas Area Rapid Transit (DART).
    Agreeing with the lower court that Eby must exhaust
    administrative remedies before pursuing this action, we affirm.
    I.   Background
    A.   Facts
    DART is a regional transportation authority created under
    1
    Chapter 452 of the Texas Transportation Code.     See Williams v.
    Dallas Area Rapid Transit, 
    242 F.3d 315
    , 317 (5th Cir. 2001); see
    also In re Dallas Area Rapid Transit, 
    967 S.W.2d 358
    , 359 (Tex.
    1998).   In April 2002, after a competitive-bidding process, DART
    awarded to Eby a contract to build a section of DART’s light-rail
    transit line near downtown Dallas.    Construction commenced in
    June 2002.   During the first six months of work on the project,
    Eby made little progress.   According to Eby, this delay was
    caused by numerous deficiencies and inaccuracies in the designs
    that were contained in DART’s bid solicitation.    In DART’s view,
    however, Eby bears significant responsibility for the
    construction delays.   Regardless of the cause of the delays, we
    must determine whether Eby can pursue its suit without first
    exhausting administrative remedies.
    DART’s Administrative Dispute-Resolution Process
    DART’s bid solicitation for the light-rail project--which is
    incorporated into the parties’ contract as an exhibit--contains a
    provision stating that the bidder, by responding to the
    solicitation, “agrees to exhaust its administrative remedies
    under . . . [1] [DART]’s Procurement Regulations or [2] the
    Disputes Clause of any resulting contract” before “seeking
    judicial relief of any type in connection with any matter related
    to this solicitation, the award of any contract, and any dispute
    under any resulting contract.”   DART’s procurement regulations
    contain procedures for resolving disagreements with its
    2
    contractors.   They were promulgated in accordance with express
    statutory authority; the Texas Legislature has empowered regional
    transportation authorities, such as DART, to “adopt and enforce
    procurement procedures, guidelines, and rules . . . covering:
    [inter alia] the resolution of . . . contract disputes.”     TEX.
    TRANSP. CODE ANN. § 452.106(a)(2)(C) (Vernon 1999).   Also, the
    contract between DART and Eby contains a disputes clause, which
    requires the contractor, Eby, to submit its grievances to DART’s
    administrative process before seeking judicial review.
    DART’s procurement regulations and the contract’s disputes
    clause both provide for a similar administrative dispute-
    resolution process, and the regulations contain greater detail.
    Both encompass a broad range of potential disagreements.     The
    disputes clause applies to “any dispute concerning a question of
    fact or law arising under or related to [the] contract.”
    Expounding on the coverage of DART’s administrative process,
    DART’s regulations state that the process covers “controversies
    between [DART] and a contractor which arise under, or by virtue
    of, a contract between them,” including, “without limitation,
    controversies based upon breach of contract, mistake,
    misrepresentation, or other cause for contract modification,
    reformation, or rescission.”   The regulations further explain
    that the “word ‘controversy’ is meant to be broad and all-
    encompassing,” applying to “the full spectrum of disagreements
    from pricing of routine contract changes to claims of breach of
    3
    contract.”
    The regulations and the disputes clause both mandate that
    controversies be submitted to the contracting officer--the person
    executing the contract on behalf of DART--for resolution.1    The
    decision of the contracting officer is final unless the
    contractor appeals within ninety days.   Administrative appeals
    are heard by DART’s authorized representatives, who are mostly
    current or former members of the federal Armed Services Board of
    Contract Appeals.   DART also has promulgated a set of extensive
    procedural rules for adjudicating appeals; the rules envision a
    quasi-judicial proceeding that includes, among other things,
    discovery and a de novo hearing where the contractor can be
    represented by counsel.
    Regarding the finality of the administrative decision, the
    regulations and the disputes clause contain nearly identical
    language: “The decision . . . shall be final and conclusive as to
    questions of fact unless determined by a court of competent
    jurisdiction to have been fraudulent, capricious, arbitrary, so
    grossly erroneous as necessarily to imply bad faith, or not
    1
    Eby complains that the disputes clause does not require
    DART to submit its grievances to the administrative process. But
    both DART’s regulations and the disputes clause indicate that the
    dispute-resolution process is intended to resolve all conflicts
    between the parties. Further, DART’s regulations contain a
    provision explicitly stating that “[a]ll controversies involving
    claims asserted by [DART] against a contractor which cannot be
    resolved by mutual agreement shall be the subject of a decision
    by the Contracting Officer.”
    4
    supported by substantial evidence.”2   Further, the administrative
    resolution is not final on questions of law.   The regulations and
    the disputes clause permit a dissatisfied contractor to seek
    judicial review of the administrative decision within two years
    of the contractor’s receipt of the decision.
    Although Eby did not submit its grievances to the
    administrative process described above, it asserts that it
    complained to DART regarding the allegedly inadequate bid
    specifications.   According to Eby, DART neither accepted
    responsibility for the design defects nor compensated Eby for
    most of the cost overruns that it had incurred in performing the
    work.3   Substantial construction remains to be done, and Eby
    anticipates significant additional losses if it is forced to
    complete the project.   Frustrated with this state of affairs, Eby
    filed suit in federal court against DART in January 2003.
    B.   Proceedings in the District Court
    In its complaint, Eby pleaded two causes of action: breach
    2
    At various places in its brief, Eby claims that DART’s
    administrative process intends to resolve conclusively any
    questions of fact. But, as shown here, DART’s procurement
    regulations and the disputes clause of the parties’ contract both
    provide for substantial-evidence review of DART’s findings of
    fact. Regardless, we do not, in this appeal, express any opinion
    on the extent to which a subsequent court should defer to any
    findings of fact made during DART’s administrative process.
    3
    Eby’s complaint acknowledges that DART has paid Eby for
    individual change-order claims filed by Eby in accordance with
    the contract. But Eby maintains that this procedure is
    inadequate to compensate it for the losses it has suffered and
    will continue to suffer.
    5
    of contract and misrepresentation.   As remedies, Eby sought
    rescission of the agreement and compensation on a quantum meruit
    basis.   In response, DART moved to dismiss, contending first that
    Eby had failed to state a claim on which relief could be granted
    because it had not exhausted its administrative remedies.
    Second, DART asserted that Eby’s misrepresentation claim should
    be dismissed because it is a tort claim and governmental immunity
    bars tort claims against DART.
    The district court granted DART’s motion to dismiss both of
    Eby’s claims under Rule 12(b)(6).    First, the court held that Eby
    could not pursue its breach-of-contract claim without first
    exhausting the administrative procedure that has been established
    by DART in accordance with Texas statutory law and incorporated
    into the parties’ contract.4   Second, the court concluded that
    governmental immunity bars Eby’s tort claim of misrepresentation.
    Accordingly, in July 2003, the district court entered a judgment
    that Eby take nothing on its claims against DART.5   Eby appeals,
    challenging both of the district court’s rulings.
    4
    Rule 12(b)(6) forms a proper basis for dismissal for
    failure to exhaust administrative remedies. Taylor v. United
    States Treasury Dep’t, 
    127 F.3d 470
    , 476-78 & n.8 (5th Cir.
    1997).
    5
    When a district court dismisses a claim under
    Rule 12(b)(6) for failure to exhaust administrative remedies, the
    dismissal is without prejudice to the claimant’s right to return
    to court after it has exhausted its administrative remedies. See
    
    Taylor, 127 F.3d at 478
    ; Crawford v. Tex. Army Nat’l Guard, 
    794 F.2d 1034
    , 1035, 1037 (5th Cir. 1986).
    6
    II.   Standard of Review
    The grant of a Rule 12(b)(6) motion to dismiss is reviewed
    de novo.   Gregson v. Zurich Am. Ins. Co., 
    322 F.3d 883
    , 885 (5th
    Cir. 2003).    Further, this court accepts “all well-pleaded facts
    as true, viewing them in the light most favorable to the
    plaintiff.”    Jones v. Greninger, 
    188 F.3d 322
    , 324 (5th Cir.
    1999).   “Thus, the court should not dismiss [a] claim unless the
    plaintiff would not be entitled to relief under any set of facts
    or any possible theory that [it] could prove consistent with the
    allegations in the complaint.”     
    Id. III. Eby’s
    Breach-of-Contract Claim
    Eby maintains that the district court erred by requiring it
    to exhaust DART’s administrative dispute-resolution process
    before seeking relief for breach of contract in a court of law.
    It challenges both the district court’s reliance on the parties’
    contract and the court’s reliance on the dispute-resolution
    procedures promulgated by DART at the direction of the Texas
    Legislature.   Defending the district court’s judgment, DART
    primarily contends that the doctrine of exhaustion of
    administrative remedies requires Eby to submit its grievances to
    DART’s administrative process before pursuing judicial review.
    Alternatively, DART relies on both its bid solicitation and the
    parties’ contract in maintaining that Eby agreed to exhaust
    administrative remedies before seeking judicial review.
    7
    As DART asserts, Texas courts generally do require a party
    to exhaust its administrative remedies before seeking judicial
    review of the decision of a governmental entity.   See Tex. Dep’t
    of Transp. v. Jones Bros. Dirt & Paving Contractors, Inc., 
    92 S.W.3d 477
    , 484-85 (Tex. 2002); Tex. Educ. Agency v. Cypress-
    Fairbanks I.S.D., 
    830 S.W.2d 88
    , 89-90 & n.1 (Tex. 1992); Tex.
    State Bd. of Exam’rs in Optometry v. Carp, 
    343 S.W.2d 242
    , 246-47
    (Tex. 1961); Firefighters’ & Police Officers’ Civil Serv. Comm’n
    v. Herrera, 
    981 S.W.2d 728
    , 732 (Tex. App.--Houston [1st Dist.]
    1998, pet. denied); Caspary v. Corpus Christi Downtown Mgmt.
    Dist., 
    942 S.W.2d 223
    , 226 (Tex. App.--Corpus Christi 1997, writ
    denied); Bandera Downs, Inc. v. Alvarez, 
    824 S.W.2d 319
    , 321
    (Tex. App.--San Antonio 1992, no writ); see also Glasscock
    Underground Water Conservation Dist. v. Pruit, 
    915 S.W.2d 577
    ,
    580 (Tex. App.--El Paso 1996, no writ) (“In most instances, a
    party must exhaust available administrative remedies before
    resorting to the courts.” (citing Webb County Appraisal Dist. v.
    New Laredo Hotel, Inc., 
    792 S.W.2d 952
    , 954 (Tex. 1990))).     But,
    as Eby notes, none of these cases is precisely on point; they all
    deal with administrative procedures codified in a statute.6
    DART’s dispute-resolution process, by contrast, is found only in
    its own procurement regulations and in the parties’ contract.
    6
    Cf. 
    Taylor, 127 F.3d at 476-77
    (applying the
    “jurisprudential exhaustion doctrine” and dismissing plaintiff’s
    suit against the IRS for failure to exhaust the IRS’s non-
    statutory administrative procedure for Privacy Act requests).
    8
    Thus, this case presents a question of first impression in Texas-
    -i.e., whether a contractor can sue a regional transportation
    authority for breach of contract without first submitting its
    claim to the authority’s administrative process.    As we explain
    below, we conclude that the Texas Supreme Court, if faced with
    this situation, would hold that Eby must first exhaust the
    administrative remedies provided in DART’s regulations before
    pursuing a breach-of-contract action in a court of law.      See,
    e.g., Mayo v. Hartford Life Ins. Co., 
    354 F.3d 400
    , 406 (5th Cir.
    2004) (stating the general rule that, when faced with an
    unsettled question of substantive state law in a diversity case,
    a federal court must make an “Erie-guess” as to how the state’s
    highest court would answer the question).
    Eby asserts that, because DART lacks governmental immunity
    from Eby’s breach-of-contract claim, Eby has the right to sue
    without first exhausting administrative remedies.    Eby argues
    that, under Texas law, DART waived its governmental immunity from
    Eby’s breach-of-contract action by contracting with Eby.     Eby is
    half right.   In Texas, governmental immunity embraces two
    principles: “immunity from suit and immunity from liability.”
    Travis County v. Pelzel & Assocs., Inc., 
    77 S.W.3d 246
    , 248 (Tex.
    2002).   Thus, although Eby is correct that DART waived immunity
    from liability by contracting with Eby, DART retains immunity
    from suit on the contract, unless that immunity has been
    expressly waived.   
    Id. (“When a
    governmental entity contracts
    9
    with a private party . . . it is liable on its contracts as if it
    were a private party.     But a governmental entity does not waive
    immunity from suit simply by contracting with a private party.
    Express consent is required to show that immunity from suit has
    been waived.” (citations omitted)).
    Eby maintains that DART’s immunity from suit has been waived
    by the Texas Legislature.    In Eby’s view, the Legislature waived
    DART’s governmental immunity from suit by declaring in DART’s
    enabling legislation that it “may sue and be sued.”      TEX. TRANSP.
    CODE ANN. § 452.054(b).   Texas courts are divided, however, on
    whether such language is sufficiently clear and unambiguous to
    constitute a waiver of immunity.       See, e.g., Satterfield &
    Pontikes Constr., Inc. v. Irving Indep. Sch. Dist., 
    123 S.W.3d 63
    , 65-68 (Tex. App.--Dallas 2003, no pet.) (disagreeing with
    several other Texas Courts of Appeals and holding that “sue and
    be sued” language does not waive a governmental entity’s
    immunity).   In any event, Eby’s argument is beside the point.
    Even if DART lacks governmental immunity, as Eby argues, Eby
    would not be relieved of its obligation to exhaust administrative
    remedies.
    Eby cites no authority for the proposition that a plaintiff
    is only required to exhaust administrative remedies against a
    defendant who enjoys governmental immunity.7      Cf. State v. Fid. &
    7
    Eby contends that General Services Commission v.
    Little-Tex Insulation Co., 
    39 S.W.3d 591
    (Tex. 2001), does stand
    10
    Deposit Co. of Md., 
    127 S.W.3d 339
    , 345-47 (Tex. App.--Austin
    2004, no pet.) (holding that the State waived its sovereign
    immunity from the defendant’s counterclaims by filing suit, and
    then separately analyzing whether the defendant’s counterclaims
    must nonetheless be dismissed for failure to exhaust statutorily
    prescribed administrative remedies).   On the contrary, since
    DART’s administrative process culminates in the opportunity for
    judicial review, it makes little sense to say that the process is
    for such a proposition. But Little-Tex is inapposite. Recall
    that, although the State of Texas waives immunity from liability
    by entering into an agreement, it generally retains immunity from
    suit on its contracts. In Little-Tex, the Texas Supreme Court
    considered whether the State waives its immunity from suit by
    accepting benefits under a contract. 
    Id. at 595.
    The Court took
    note of the Texas Legislature’s recent enactment of a detailed
    statute governing the resolution of certain contract claims
    against the State. See TEX. GOV’T CODE ANN. §§ 2260.001-.108
    (Vernon 2000). (This statute does not apply to claims against
    political subdivisions like DART. See 
    id. § 2260.001(1),
    (4);
    Stephens v. Dallas Area Rapid Transit, 
    50 S.W.3d 621
    , 632-34
    (Tex. App.--Dallas 2001, pet. denied) (holding that DART is both
    a governmental entity and “a legally constituted political
    subdivision of the state”).) This newly enacted legislation
    established an administrative process to which plaintiffs must
    submit their claims before seeking the Legislature’s consent to
    sue the State under Chapter 107 of the Texas Civil Practice and
    Remedies Code. TEX. GOV’T CODE ANN. § 2260.005. The Court
    rejected the plaintiffs’ waiver-by-conduct argument “in light of
    the Legislature’s enactment of” this administrative process for
    disposing of contract claims against the State. 
    Little-Tex, 39 S.W.3d at 597
    . True, the Little-Tex opinion indicates that a
    plaintiff does not have to submit to the administrative
    procedures in Chapter 2260 of the Texas Government Code if she
    has already obtained the Legislature’s consent to sue, since the
    process serves as a prerequisite to requesting such consent. 
    Id. But, while
    the obligations of this particular administrative
    scheme are tied to the existence of governmental immunity,
    Little-Tex does not state, or even imply, that exhaustion of
    administrative remedies is generally not required when a
    defendant lacks governmental immunity from suit.
    11
    enforceable only if DART is immune from suit in a court of law.
    Further, while Eby focuses heavily on the apparent waiver of
    governmental immunity in DART’s enabling legislation, it ignores
    the fact that the very same legislation also explicitly delegated
    to DART the power to “adopt and enforce” dispute-resolution
    procedures, TEX. TRANSP. CODE ANN. § 452.106(a)(2)(C) (emphasis
    added), strongly suggesting that participation in those
    procedures is not merely voluntary.   Put another way, the
    Legislature’s waiver of DART’s governmental immunity does not
    equate to permission for contractors to sue DART without first
    submitting their claims to the statutorily authorized
    administrative process.   Although the Legislature may have
    intended to waive DART’s governmental immunity, it also seems to
    have intended to require contractors to submit their claims to
    DART’s administrative process before bringing suit.    To conclude
    otherwise would fail to give effect to the language of Section
    452.106(a)(2)(C).   See, e.g., Perkins v. State, 
    367 S.W.2d 140
    ,
    146 (Tex. 1963) (“[I]t is settled that every word in a statute is
    presumed to have been used for a purpose; and a cardinal rule of
    statutory construction is that each sentence, clause and word is
    to be given effect if reasonable and possible.”).
    In addition, Eby--both by submitting a bid and by entering
    into the contract--agreed to submit its claims to DART’s
    12
    administrative process.8   Nevertheless, Eby contends that DART
    cannot enforce Eby’s agreement to submit its disputes with DART
    to DART’s administrative process because Eby has alleged material
    breach.   Eby correctly states the general rule that, when a party
    materially breaches a contract, the nonbreaching party can cease
    performance and sue.   But the cases cited by Eby all involve
    appeals from a verdict against the breaching party.   See Graco
    Robotics, Inc. v. Oaklawn Bank, 
    914 S.W.2d 633
    , 637 (Tex. App.--
    Texarkana 1995, no writ); Tribble & Stephens Co. v. Consol.
    8
    We note that this court has enforced a contractually
    established disputes procedure in a federal government contract.
    See Patton Wrecking & Demolition Co. v. TVA, 
    465 F.2d 1073
    (5th
    Cir. 1972). (Several years after we decided Patton Wrecking,
    Congress enacted the Contract Disputes Act of 1978, as amended,
    41 U.S.C. §§ 601-613, which requires federal government
    contractors to submit their claims to an administrative dispute-
    resolution process that is somewhat similar to DART’s, see 
    id. §§ 605-609.)
    Eby argues that we should not look to Patton
    Wrecking for guidance, since the Wunderlich Act, 41 U.S.C.
    §§ 321-322, governed judicial review of the administrative
    determination in that case, 
    see 465 F.2d at 1078
    . Eby portrays
    the Wunderlich Act as a restrictive piece of legislation that
    curtails the rights of contractors, and Eby asserts that Texas
    law affords it greater rights than federal-government contractors
    subject to the Act. But Eby fails to recognize that Congress
    passed the Wunderlich Act to protect contractors and to overrule
    a Supreme Court decision that essentially had eliminated, absent
    fraud, judicial review of administrative determinations rendered
    under disputes clauses in federal-government contracts. See
    Revision Notes and Legislative Reports, 41 U.S.C.A. § 321 (West
    1987); United States v. Wunderlich, 
    342 U.S. 98
    , 100-01 (1951).
    The Wunderlich Act requires judicial review--under standards
    substantially similar to those provided in DART’s regulations and
    disputes clause--of administrative adjudications of disputes
    arising under federal-government contracts. See 41 U.S.C.
    §§ 321-322. We therefore view Patton Wrecking as a relevant
    guidepost that counsels in favor of enforcing Eby’s promise to
    exhaust administrative remedies.
    13
    Servs., Inc., 
    744 S.W.2d 945
    , 947 (Tex. App.--San Antonio 1987,
    writ denied); Shintech Inc. v. Group Constructors, Inc., 
    688 S.W.2d 144
    , 147 (Tex. App.--Houston [14th Dist.] 1985, no writ);
    see also Brown & Root U.S.A., Inc. v. J.I. Ramirez Constructors,
    Inc., No. 04-95-00200-CV, 
    1997 WL 61488
    , at *3 (Tex. App.--San
    Antonio Feb. 12, 1997, no writ) (not designated for publication)
    (“Once a breach by Brown & Root was established, the contractual
    conditions to seeking further relief were dispensed with or
    relinquished by Brown & Root . . . .” (emphasis added)).   None
    addresses a motion to dismiss for failure to exhaust
    administrative remedies.   Eby provides no authority for the
    proposition that, merely by alleging material breach, it can
    avoid its obligation to exhaust administrative remedies before
    pursuing its breach-of-contract claim in court.
    As we have said in the context of determining whether a
    plaintiff has stated an actionable claim for relief, “[w]hile the
    district court must accept as true all factual allegations in the
    complaint, it need not resolve unclear questions of law in favor
    of the plaintiff.”   Kansa Reins. Co. v. Cong. Mortgage Corp. of
    Tex., 
    20 F.3d 1362
    , 1366 (5th Cir. 1994) (citation omitted).
    Similarly, we believe (contrary to Eby’s assertion) that the
    district court, in adjudicating DART’s Rule 12(b)(6) motion to
    dismiss for failure to exhaust administrative remedies, was not
    required to treat the contract between DART and Eby as having
    been materially breached and therefore rescinded.   Accordingly,
    14
    we conclude that Eby’s allegation of material breach does not
    prevent enforcement of its promise to exhaust DART’s
    administrative dispute-resolution process before filing suit.9
    In sum, the Texas Legislature has delegated to DART the
    authority to adopt and to enforce administrative procedures for
    resolving disputes with its contractors, and Eby has agreed to
    submit its contractual disputes with DART to DART’s
    administrative process.    Having failed to exhaust its
    administrative remedies, Eby nonetheless seeks to proceed with
    this suit.   We conclude that, if the Texas Supreme Court were to
    confront this situation, it would hold that Eby must exhaust the
    administrative remedies provided in DART’s dispute-resolution
    procedures before seeking relief on the parties’ contract in a
    court of law.
    IV.   Eby’s Misrepresentation Claim
    Viewing Eby’s misrepresentation claim as one sounding in
    tort, the district court dismissed it as barred by governmental
    immunity.    Although Eby concedes that DART enjoys immunity from
    tort claims, Eby asserts that the district court erred in
    dismissing its misrepresentation claim because (says Eby) it is a
    9
    Eby also complains that DART’s administrative
    procedures and the disputes clause of the parties’ contract
    impermissibly limit the remedies that it can seek for breach of
    contract. We do not decide here the remedies that will be
    available to Eby in a subsequent proceeding in federal or state
    court after it properly has exhausted DART’s administrative
    process.
    15
    quasi-contractual cause of action--not a tort claim.    This, Eby
    reasons, is because Texas law recognizes an equitable right to
    rescind a contract when one of the parties was induced to enter
    into the contract by a misrepresentation of fact, such as
    inadequate bid specifications.    Eby therefore concludes that
    governmental immunity does not bar its quasi-contractual
    misrepresentation claim against DART.
    DART rejects Eby’s characterization of this claim as quasi-
    contractual, asserting that causes of action based on
    misrepresentation sound in tort under Texas law.    Thus, DART
    concludes that the district court correctly dismissed Eby’s
    misrepresentation claim as barred by governmental immunity.
    Alternatively, DART maintains that its administrative process
    covers this claim, regardless of whether it is labeled a contract
    claim or a tort claim.   DART therefore contends that, even if it
    is not immune from this claim, Eby must still exhaust the claim
    before seeking judicial review.
    We begin by pointing out that Eby’s misrepresentation claim
    appears to be redundant to its first cause of action for breach
    of contract.   In its complaint, Eby’s primary allegation in
    support of its breach-of-contract claim is that the designs
    contained in DART’s bid solicitation were materially inadequate
    and that DART therefore breached its duty to furnish reasonably
    accurate bid information.   Then, under the heading
    “misrepresentation,” Eby averred that it had justifiably relied
    16
    to its detriment on misrepresentations made by DART in its bid
    materials to the effect that those materials were sufficiently
    accurate to be relied on for development of a bid price.           While
    the language employed differs somewhat, the gravamen of both of
    Eby’s claims is that DART’s bid specifications contained material
    misrepresentations.
    When pressed at oral argument to identify the difference
    between its two claims, Eby responded by noting that it alleged,
    in its first count, that DART’s breach involved refusal to
    cooperate with Eby in resolving the problems caused by the
    deficient bid materials.          Thus, Eby asserted that its first claim
    encompasses performance issues, which are not duplicated by the
    misrepresentation claim.          Even so, Eby has shown only that its
    first claim includes allegations not present in its second claim;
    it has not demonstrated that the averments in its second claim
    add to what is alleged in the first count.          Moreover, Eby seeks
    the same contractual relief on both claims: rescission and
    recovery in quantum meruit.          Eby’s misrepresentation claim is,
    therefore, just a subset of its breach-of-contract claim.
    With this in mind, it is clear that Eby’s misrepresentation
    claim, as it is presented here, is a contractual one.           See
    RESTATEMENT (SECOND)   OF   CONTRACTS § 164(1) (1981) (“If a party’s
    manifestation of assent is induced by either a fraudulent or a
    material misrepresentation by the other party upon which the
    recipient is justified in relying, the contract is voidable by
    17
    the recipient.”).   Thus, the district court erred in dismissing
    this claim as a tort claim barred by governmental immunity.
    Nevertheless, we affirm the district court’s dismissal of Eby’s
    misrepresentation claim.    Since DART’s administrative process is
    certainly broad enough to encompass this claim, 
    see supra
    Part
    I(A), it also must be exhausted, for the reasons discussed above
    in Part III.   We accordingly affirm the district court’s
    dismissal of this claim, although not on the basis of
    governmental immunity.     See, e.g., Chiu v. Plano Indep. Sch.
    Dist., 
    339 F.3d 273
    , 283 (5th Cir. 2003) (“This Court may affirm
    on grounds other than those relied upon by the district court.”).
    V.   Conclusion
    Accordingly, we affirm the judgment of the district court
    dismissing Eby’s suit.
    18
    

Document Info

Docket Number: 03-10728

Filed Date: 5/19/2004

Precedential Status: Precedential

Modified Date: 12/21/2014

Authorities (27)

Chiu v. Plano Independent School District , 339 F.3d 273 ( 2003 )

Richard M. Crawford v. Texas Army National Guard, Bruce A. ... , 794 F.2d 1034 ( 1986 )

Mayo v. Hartford Life Insurance , 354 F.3d 400 ( 2004 )

Gregson v. Zurich American Insurance , 322 F.3d 883 ( 2003 )

Kansa Reinsurance Co., Ltd. v. Congressional Mortg. Corp. ... , 20 F.3d 1362 ( 1994 )

James Stephen Jones v. M.L. Greninger, M.L. Greninger ... , 188 F.3d 322 ( 1999 )

Patton Wrecking and Demolition Co., Inc., and Patton Bros., ... , 465 F.2d 1073 ( 1972 )

Byron L. Taylor v. United States Treasury Department, ... , 127 F.3d 470 ( 1997 )

Webb County Appraisal District v. New Laredo Hotel, Inc. , 792 S.W.2d 952 ( 1990 )

Texas Department of Transportation v. Jones Bros. Dirt & ... , 92 S.W.3d 477 ( 2002 )

General Services Commission v. Little-Tex Insulation Co. , 39 S.W.3d 591 ( 2001 )

Perkins v. State , 367 S.W.2d 140 ( 1963 )

In Re Dallas Area Rapid Transit , 967 S.W.2d 358 ( 1998 )

United States v. Wunderlich , 72 S. Ct. 154 ( 1951 )

Shintech Inc. v. Group Constructors, Inc. , 688 S.W.2d 144 ( 1985 )

Stephens v. Dallas Area Rapid Transit , 50 S.W.3d 621 ( 2001 )

Graco Robotics, Inc. v. Oaklawn Bank , 914 S.W.2d 633 ( 1996 )

Texas Education Agency v. Cypress-Fairbanks I.S.D. , 830 S.W.2d 88 ( 1992 )

TEXAS STATE BOARD OF EXAMINERS IN OPTOMETRY v. Carp , 343 S.W.2d 242 ( 1961 )

Travis County v. Pelzel & Associates, Inc. , 77 S.W.3d 246 ( 2002 )

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