Dallas Area Rapid Transit Authority v. GLF Construction Company ( 2020 )

AFFIRMED and Opinion Filed April 3, 2020
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-00930-CV
DALLAS AREA RAPID TRANSIT AUTHORITY, Appellant
V.
GLF CONSTRUCTION COMPANY, Appellee
On Appeal from the 160th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-19-00448
MEMORANDUM OPINION
Before Justices Myers, Whitehill, and Reichek
Opinion by Justice Whitehill
This is an accelerated interlocutory appeal from an order denying appellant
Dallas Area Rapid Transit Authority’s plea to the jurisdiction based on governmental
immunity from suit. DART argues that its immunity from suit is not waived because
GLF failed to exhaust its remedies under a contractual adjudication procedure. But
we affirm the order denying DART’s jurisdictional plea because GLF completed the
administrative process.
I. BACKGROUND
A. The Project and GLF’s Administrative Appeal
We draw these facts from GLF’s live pleading (its original petition) and the
evidence filed regarding DART’s jurisdictional plea.
In 1999, DART hired GLF to build part of a light rail extension. Paragraph
50 of the parties’ contract prescribed an administrative dispute resolution process for
contract disputes.
According to GLF, DART’s inadequate project administration drove GLF’s
costs up far beyond the contract price.
GLF submitted a paragraph 50 request for equitable adjustment. According
to GLF, in 2005 a DART contracting officer issued a decision “essentially denying
all of GLF’s claims and upholding all of DART’s counterclaims.”
GLF administratively appealed the contracting officer’s decision to an
administrative judge, leading to a 2007 liability evidentiary hearing. The judge
rendered a liability decision in September 2011. After further discovery there was
an evidentiary hearing on damages concluding in January 2013. The judge rendered
a damages decision in June 2017. According to GLF, the decision contained no final
accounting, and the parties don’t agree which party owes the other party money
under that decision.
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B. Procedural History of this Lawsuit
In January 2019, GLF sued DART in district court. GLF asserted claims for
contract breach and Texas Public Prompt Payment Act violations. GLF further
alleged that DART’s administrative dispute resolution procedure violated due
process, and it specifically requested a trial de novo by jury.
DART answered and filed a plea to the jurisdiction based on governmental
immunity from suit. Specifically, DART argued that (i) under Local Government
Code § 271.154, DART’s immunity from suit is waived only for claimants who
comply with the contract’s adjudication procedures and DART regulations and (ii)
GLF didn’t comply with those procedures.
GLF responded, and DART replied.
The trial court denied DART’s plea after a nonevidentiary hearing.
DART timely perfected this interlocutory appeal. See TEX. CIV. PRAC. &
REM. CODE § 51.014(a)(8).
II. STANDARD AND SCOPE OF REVIEW
We review de novo a jurisdictional plea ruling. Tex. Dep’t of Parks & Wildlife
v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004).
A jurisdictional plea may challenge the plaintiff’s pleadings, the facts, or both.
See id. at 226–27.
When a jurisdictional plea challenges the pleadings, we determine if the
pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to
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hear the cause. Id. at 226. We construe the pleadings liberally in the plaintiff’s favor
and look to its intent. Id. If the pleadings do not contain sufficient facts to
affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively
demonstrate incurable defects in jurisdiction, the issue is pleading sufficiency, and
the plaintiff should be allowed to amend. Id. at 226–27. If the pleadings
affirmatively negate jurisdiction, then a jurisdictional plea may be granted without
allowing the plaintiff an opportunity to amend. Id. at 227.
If a jurisdictional plea challenges the existence of jurisdictional facts, we
consider relevant evidence when necessary to resolve the jurisdictional issues raised.
Id. If the evidence creates a fact question regarding the jurisdictional issue, then the
trial court cannot grant the plea to the jurisdiction, and the fact issue will be resolved
by the factfinder. Id. at 227–28. But if the relevant evidence is undisputed or fails
to raise a fact question on the jurisdictional issue, the trial court rules on the
jurisdictional plea as a matter of law. Id. at 228. This standard generally mirrors a
summary judgment under Texas Rule of Civil Procedure 166a(c). Id.
III. ANALYSIS
DART’s sole issue amounts to a complaint that the trial court erred by denying
DART’s jurisdictional plea.1 DART presents no appellate arguments specifically
1
DART’s issue reads:
When the Texas Legislature has delegated authority to a regional transportation authority to adopt
and enforce administrative procedures for resolving disputes with its contractors, and a contractor,
such as GLF, has agreed to submit its contractual disputes with the regional transportation authority
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addressing GLF’s Prompt Payment Act claim, so we do not analyze that claim
separately from the contract breach claim.
A. Applicable Law and DART’s Arguments
“When performing governmental functions, political subdivisions derive
governmental immunity from the state’s sovereign immunity.” City of Houston v.
Williams, 353 S.W.3d 128, 134 (Tex. 2011) (footnote omitted). Governmental
immunity encompasses both immunity from liability, which bars enforcement of a
judgment against a governmental entity, and immunity from suit, which bars suit
against the entity altogether. Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex.
2006). “Governmental immunity from suit defeats a court’s subject matter
jurisdiction.” Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex.
2003).
By entering a contract, a governmental entity waives immunity from liability
but not from suit. Tooke, 197 S.W.3d at 332. A waiver of immunity from suit
generally requires a clear and unambiguous act by the legislature. See TEX. GOV’T
CODE § 311.034; Tooke, 197 S.W.3d at 332–33.
to its administrative process, which culminates in a judicial review, does a later enacted statute that
provides a limited waiver of immunity for certain breach of contact claims against a local
governmental entity, include breach of contract claims on contracts containing adjudication
procedures stated in the contract or that are established by the local governmental entity and
expressly or by reference incorporated into the contract, except to the extent the procedures conflict
with the enacted statute?
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GLF does not dispute that DART is an entity that enjoys governmental
immunity from suit. See Dallas Area Rapid Transit v. Amalgamated Transit Union
Local No. 1338, 273 S.W.3d 659, 661 (Tex. 2008). Thus, GLF bore the burden to
allege a valid immunity waiver. Whitley, 104 S.W.3d at 542. Although GLF’s
petition doesn’t allege a waiver, GLF’s response to DART’s jurisdictional plea
invoked Texas Local Government Code § 271.152. That statute 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.
TEX. LOC. GOV’T CODE § 271.152. This statute clearly and unambiguously waives
a governmental entity’s immunity from suit for breach of a written contract.
Williams, 353 S.W.3d at 134.
DART doesn’t argue that the trial court erred because GLF didn’t plead
§ 271.152 in its petition or because § 271.152 isn’t satisfied in this case. Rather, it
makes these alternative arguments:
1. Section 271.152 doesn’t apply here because (i) the contract was
executed in 1999 (before the law’s effective date) and (ii) DART
waived its immunity to contract claims in this contract and its
procurement regulations. See Act of May 23, 2005, 79th Leg.,
R.S., ch. 604, § 2, 2005 Tex. Gen. Laws 1548, 1549 (§ 271.152
retroactive only if immunity was not waived before September
1, 2005). Because GLF didn’t exhaust its administrative
remedies under the contract and regulations, DART’s immunity
from suit isn’t waived.
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2. Alternatively, if § 271.152 applies to this case, § 271.154 makes
exhausting contractual adjudication procedures a condition of the
immunity waiver. Because GLF didn’t exhaust those
procedures, DART’s immunity from suit isn’t waived.
Thus, under either argument the ultimate question is whether DART established that
GLF failed to exhaust the dispute resolution procedures established in the contract
and DART regulations. Because we answer that question no, we need not decide
whether § 271.152 applies retroactively to this case.
B. Did DART establish that GLF failed to exhaust the contractual
adjudication procedure?
No, because this lawsuit satisfies the contract’s and regulations’ plain
language.
DART argues that GLF failed to exhaust the contractual adjudication
procedure without clearly asserting what part of the procedure GLF neglected. Its
briefing suggests that GLF failed to exhaust by failing to judicially appeal the
administrative judge’s decision within two years—even though the record shows
that GLF filed this lawsuit within the two-year period. We gather that DART views
GLF’s lawsuit as insufficient because GLF didn’t style its suit as an appeal, plead
the limited grounds allowed under the regulations for challenging fact findings, or
identify any legal errors in the administrative judge’s ruling.
We reject DART’s position because the regulations do not require such
formalities. The regulations (and the contract) provide, “No action challenging [the
administrative appellate] decision shall be brought more than two years from the
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date of the contractor’s receipt of such decision.” Because GLF sued DART within
two years after the judge made his ruling, the only question is whether under the
regulations’ plain language this is an action “challenging [the judge’s] decision.” To
“challenge” means to dispute something, especially as being unjust, invalid, or
outmoded. Challenge, WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY (1985)
(“to dispute esp. as being unjust, invalid, or outmoded”). Although GLF’s petition
doesn’t expressly attack the decision’s correctness, it requests a trial de novo and an
award of compensatory damages, which allegedly exceed $37 million. Moreover,
common sense suggests that GLF wouldn’t have sued if it didn’t dispute the
administrative judge’s decision.
We conclude that the petition challenges the administrative judge’s decision
within the plain meaning of the regulations and contract. Thus, DART’s contention
that GLF didn’t exhaust the contractual adjudication procedure is without merit.
Whether the regulations’ limitations on judicial review of fact findings apply in this
lawsuit—a matter the parties dispute—is not a jurisdictional question, and we
express no opinion about it.
In summary, because DART didn’t establish that GLF failed to exhaust the
contract’s adjudication procedures, we overrule DART sole issue.
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IV. CONCLUSION
We affirm the trial court’s order denying DART’s jurisdictional plea.
/Bill Whitehill/
BILL WHITEHILL
190930F.P05 JUSTICE
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
DALLAS AREA RAPID TRANSIT On Appeal from the 160th Judicial
AUTHORITY, Appellant District Court, Dallas County, Texas
Trial Court Cause No. DC-19-00448.
No. 05-19-00930-CV V. Opinion delivered by Justice
Whitehill. Justices Myers and
GLF CONSTRUCTION Reichek participating.
COMPANY, Appellee
In accordance with this Court’s opinion of this date, we AFFIRM the trial
court’s August 1, 2019 Order on Defendant’s Plea to the Jurisdiction.
It is ORDERED that appellee GLF Construction Company recover its costs
of this appeal from appellant Dallas Area Rapid Transit Authority.
Judgment entered April 3, 2020
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