Texas Southern University v. Pepper Lawson Horizon International Group, LLC ( 2020 )

Opinion issued December 1, 2020
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-19-00395-CV
———————————
TEXAS SOUTHERN UNIVERSITY, Appellant
V.
PEPPER LAWSON HORIZON INTERNATIONAL GROUP, LLC, Appellee
On Appeal from the 157th District Court
Harris County, Texas
Trial Court Case No. 2018-32362
OPINION
In this interlocutory appeal,1 appellant, Texas Southern University (“TSU”),
challenges the trial court’s order denying its first amended plea to the jurisdiction
1
See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8).
filed in the suit brought against it by appellee, Pepper Lawson Horizon International
Group, LLC (“PLH”), for breach of contract under Texas Civil Practice and
Remedies Code Chapter 1142 and for violation of the Texas Prompt Payment Act
(“PPA”).3 In three issues, TSU contends that that the trial court lacks subject-matter
jurisdiction over PLH’s claims.
We reverse and render.
Background
In its second amended petition, PLH alleged that in February 2014, TSU
awarded PLH a contract4 for the construction of a new student housing project (the
“Project”) for a fixed price of $41,500,000. PLH agreed to substantial completion
of its work by July 1, 2015, and final completion of its work by August 31, 2015,
“subject to justified time extensions and equitable adjustments to the contract price
for delays outside of PLH’s control.”
Shortly after beginning work on the Project, while drilling piers for the
foundation, PLH discovered that a previous building situated at the worksite had not
been fully demolished; instead, remnants of that building were buried beneath the
2
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 114.001–.013.
3
See TEX. GOV’T CODE ANN. §§ 2251.001–.055.
4
The parties’ contract is comprised of four parts: (1) the Owner-Contractor
Agreement, (2) the Uniform General Conditions (“UGC”), (3) TSU’s
Supplemental General Conditions (“SGC”), which modify the UGC, and
(4) the change orders executed during the Project.
2
worksite and obstructed progress on the Project. TSU agreed to a cost increase to
the parties’ contract for removal of the obstructions but denied PLH’s request for
additional time to perform the work. Exploratory work and removal of the larger
obstructions diverted manpower and resources, causing delays to the scheduled
work, and causing the Project to get out of sequence.
PLH further alleged that the delays pushed the Project into the Texas “wet
season.” May 2015 was a record month for rainfall in Texas, and the year 2015 had
the highest recorded rainfall of any year in Texas history. The heavy rains
“debilitated PLH’s ability to move forward and progress the Project as planned.”
Specifically, because the wet season commenced when the structure was still in its
early stages and the windows had not yet been installed, PLH had to pump water and
use other measures to try to dry out the Project site. The heavy rains reduced the
number of days that construction could progress. PLH requested a sixty-seven-day
extension for rain days under the parties’ contract. TSU agreed to a twenty-one-day
extension, rejecting forty-six of PLH’s requested days.
PLH also alleged that TSU failed to timely provide permanent power to the
Project site. According to PLH, TSU agreed to provide PLH with permanent power
“on or before December 12, 2014,” but TSU did not actually do so until August 6,
2015—192 days later. The delay “prevented PLH from beginning startup of
mechanical equipment, energizing electrical panels, starting installation of elevators
3
and hoists, providing controlled air, and commencing installation of planned
finishes,” and it caused PLH to incur additional work costs and unplanned,
temporary power expenses. It also required PLH to install more expensive
moisture-resistant drywall because of the inability to operate climate control in the
structure. PLH requested a 192-day extension under the parties’ contract based on
the “excusable delay” provision, but TSU denied the request. In addition, PLH
alleged that various other issues caused cost increases, including defective carton
forms and design plans.
On or about February 2016, PLH completed the Project and purportedly
satisfied its obligations to TSU under the parties’ contract. PLH invoiced TSU for
the remaining balance it believed it was owed under the contract, but according to
PLH, TSU wrongfully withheld payment.5
PLH brought a breach-of-contract claim against TSU,6 asserting that TSU
breached the parties’ contract by failing to pay PLH and by failing to accommodate
reasonable delays. According to PLH, TSU breached “[UGC] sections 9.6.2.2,
5
In certain filings in the trial court, TSU alleged that the parties’ contract required
substantial completion of the Project by September 13, 2015, but PLH did not
substantially complete the Project until March 4, 2016. Prior to PLH initiating its
suit, TSU exercised its contractual right to assess liquidated damages of $3,100,000
for PLH’s 155-day delay in achieving substantial completion.
6
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 114.001–.013.
4
9.6.3, and 9.9.4.2” of the parties’ contract “by failing to equitably adjust the contract
as required by the parties’ agreement.”
PLH also brought a claim against TSU for violation of the PPA, asserting that
TSU was statutorily obligated to pay PLH’s bills “within thirty (30) days of receipt
of an invoice for the goods or services provided to it” and TSU failed to pay PLH’s
final billings. This entitled PLH to statutory penalty interest “on its unpaid invoices
beginning on the first day the balance became overdue.”
For its claims, PLH sought to recover from TSU $3,320,605 for the balance
of the parties’ contract, retainage, and agreed change orders, $3,677,580 for
additional costs incurred, statutory penalty interest, attorney’s fees, and
post-judgment interest.
TSU answered, generally denying the allegations in PLH’s petition and
asserting various defenses. Pertinent here, it asserted that the trial court “lacks
jurisdiction because sovereign immunity ha[d] not been waived for [PLH’s] claims.”
In its first amended plea to the jurisdiction, TSU asserted that the trial court
lacks subject-matter jurisdiction over PLH’s suit against TSU because sovereign
immunity bars PLH’s claims and there had been no waiver of immunity.7 According
7
See City of Sugar Land v. Gaytan, No. 01-18-01083-CV, 2020 WL 2026374, at *2
(Tex. App.—Houston [1st Dist.] Apr. 28, 2020, no pet.) (mem. op.) (“Sovereign
immunity and its counterpart, governmental immunity, exist to protect the State and
its political subdivisions from lawsuits and liability for money
damages. . . . [S]overeign immunity extends to various divisions of state
5
to TSU, as to PLH’s breach-of-contract claim, Texas Civil Practice and Remedies
Code Chapter 114 provides a limited waiver of sovereign immunity when a state
agency has entered into a contract and a claim is brought against the state agency for
breach of an express provision of that contract.8 Thus, for PLH to plead a clear and
unambiguous waiver of immunity so that the trial court has subject-matter
jurisdiction over its breach-of-contract claim, PLH must show a breach of an express
provision of the parties’ contract. But PLH, in its second amended petition failed to
do so.
Specifically, in regard to PLH’s allegation that TSU breached a duty to inform
PLH of underground obstructions and delayed PLH’s access to the Project site, PLH
failed to invoke an express provision of the parties’ contract or acknowledge the
existing contractual provision declaring that “[TSU] ma[de] no representation as to
accuracy or completeness of the site information furnished to [PLH] by [TSU], and
[was] not responsible for any interpretation or conclusions reached by [PLH] with
respect to the information.” And as to PLH’s allegation that TSU breached the
parties’ contract by “improperly delay[ing] inspection[s],” “insist[ing] on higher
government, including agencies, boards, hospitals, and universities . . . .” (internal
quotations omitted) (internal citations omitted)); Tex. S. Univ. v. Araserve Campus
Dining Servs. of Tex., Inc., 981 S.W.2d 929, 930 (Tex. App.—Houston [1st Dist.]
1998, pet. denied) (TSU entitled to sovereign immunity).
8
See TEX. CIV. PRAC. & REM. CODE ANN. § 114.003 (“Waiver of Immunity to Suit
for Certain Claims”).
6
quality finishes,” and by its other contractor causing Project delays, PLH failed to
point to any express provision of the parties’ contract that TSU allegedly breached.
Further, as to PLH’s allegation that TSU breached the parties’ contract by
“fail[ing] to apply weather days to contract time,” PLH, in its second amended
petition, failed to plead a cognizable Chapter 114 claim because it did not show that
it had “met the conditions precedent to requesting [a] time extension as required” by
the parties’ contract. And without a cognizable Chapter 114 claim, sovereign
immunity cannot be waived. Finally, in regard to PLH’s allegation that TSU
breached the parties’ contract by refusing to “equitably adjust the contract time and
price for PLH’s excusable delays and weather delays,” PLH failed to “point to any
contractual provision that expressly allow[ed] recovery for owner-caused delays.”
As to PLH’s claim for violation of the PPA, TSU asserted that the PPA does
not waive sovereign immunity for such a claim.
After PLH responded to TSU’s first amended plea to the jurisdiction, the trial
court, in an interlocutory order, denied TSU’s first amended plea to the jurisdiction.
Standard of Review
“A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for
lack of subject matter jurisdiction.” Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex.
2004); Villarreal v. Harris Cty., 226 S.W.3d 537, 541 (Tex. App.—Houston [1st
Dist.] 2006, no pet.). We review de novo a trial court’s ruling on a jurisdictional
7
plea. See Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivs.
Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323 (Tex. 2006); City of Houston
v. Vallejo, 371 S.W.3d 499, 501 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).
A defendant may use a plea to the jurisdiction to challenge whether the plaintiff has
met its burden of alleging jurisdictional facts or to challenge the existence of
jurisdictional facts. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,
226–27 (Tex. 2004).
When a plea to the jurisdiction challenges the pleadings, we determine
whether the pleader has alleged facts that affirmatively demonstrate the trial court’s
jurisdiction. Id. at 226. We construe the pleadings liberally in favor of the pleader,
accept all factual allegations as true, and look to the pleader’s intent. Heckman v.
Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012). If the pleadings are insufficient,
the court should afford an opportunity to replead if the defects are potentially curable
but may dismiss if the pleadings affirmatively negate the existence of jurisdiction.
City of Houston v. Guthrie, 332 S.W.3d 578, 586–87 (Tex. App.—Houston [1st
Dist.] 2009, pet. denied).
Review of a plea challenging the existence of jurisdictional facts mirrors that
of a matter-of-law summary-judgment motion. Mission Consol. Indep. Sch. Dist. v.
Garcia, 372 S.W.3d 629, 635 (Tex. 2012); Miranda, 133 S.W.3d at 228 (“[T]his
standard generally mirrors that of a summary judgment under Texas Rule of Civil
8
Procedure 166a(c). . . . By requiring the [S]tate to meet the summary judgment
standard of proof . . . , we protect the plaintiff[] from having to put on [its] case
simply to establish jurisdiction.”) (internal quotations omitted) (internal citations
omitted)); see also TEX. R. CIV. P. 166a(c). “[A] court deciding a plea to the
jurisdiction . . . may consider evidence and must do so when necessary to resolve the
jurisdictional issues raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555
(Tex. 2000). And a court may consider evidence as necessary to resolve a dispute
over the jurisdictional facts even if the evidence “implicates both the subject matter
jurisdiction of the court and the merits of the case.” Miranda, 133 S.W.3d at 226.
We take as true all evidence favorable to the non-movant and we indulge
every reasonable inference and resolve any doubts in the non-movant’s favor. Id. at
228. If the defendant meets its burden to establish that the trial court lacks
jurisdiction, the plaintiff is then required to show that there is a material fact question
regarding the jurisdictional issue. Id. at 227–28. If the evidence raises a fact issue
about jurisdiction, the plea cannot be granted, and a fact finder must resolve the
issue. Id. On the other hand, if the evidence is undisputed or fails to raise a fact
issue, the plea must be determined as a matter of law. Id. at 228; Garcia, 372 S.W.3d
at 635.
9
Plea to the Jurisdiction
In its first and second issues, TSU argues that the trial court erred in denying
its first amended plea to the jurisdiction because neither the PPA nor Texas Civil
Practice and Remedies Code Chapter 114 waives sovereign immunity in this case.
Sovereign immunity and its counterpart, governmental immunity, exist to
protect the State and its political subdivisions from lawsuits and liability for money
damages. Garcia, 372 S.W.3d at 655; Tex. Nat. Res. Conservation Comm’n v. IT–
Davy, 74 S.W.3d 849, 853 (Tex. 2002); see also Ben Bolt-Palito Blanco Consol.
Indep. Sch. Dist., 212 S.W.3d at 323–24 (“Sovereign immunity protects the State,
its agencies, and its officials from lawsuits for damages.”). Although the terms
“sovereign immunity” and “governmental immunity” are often used
interchangeably, sovereign immunity “extends to various divisions of state
government, including agencies, boards, hospitals, and universities,” while
governmental immunity “protects political subdivisions of the State, including
counties, cities, and school districts.” See Ben Bolt-Palito Blanco Consol. Indep.
Sch. Dist., 212 S.W.3d at 323–24; see also Odutayo v. City of Houston, No.
01-12-00132-CV, 2013 WL 1718334, at *2 n.8 (Tex. App.—Houston [1st Dist.]
Apr. 18, 2013, no pet.) (mem. op.); Tex. S. Univ. v. Araserve Campus Dining Servs.
of Tex., Inc., 981 S.W.2d 929, 930 (Tex. App.—Houston [1st Dist.] 1998, pet.
denied) (TSU entitled to sovereign immunity). We interpret statutory waivers of
10
sovereign immunity narrowly, as the Texas Legislature’s intent to waive immunity
must be clear and unambiguous. See LMV-AL Ventures, LLC v. Tex. Dep’t of Aging
& Disability Servs., 520 S.W.3d 113, 120 (Tex. App.—Austin 2017, pet. denied);
see also TEX. GOV’T CODE ANN. § 311.034. Without an express waiver of sovereign
immunity or governmental immunity, courts do not have subject-matter jurisdiction
over suits against the State or its political subdivisions. State v. Shumake, 199
S.W.3d 279, 283 (Tex. 2006); Miranda, 133 S.W.3d at 224–25.
A. PPA
In its first issue, TSU argues that the trial court erred in denying its first
amended plea to the jurisdiction as to PLH’s claim for violation of the PPA9 because
the PPA does not waive sovereign immunity in this case.
The PPA applies solely to contracts between a vendor and a governmental
entity or a vendor “who supplies goods or a service to a governmental entity or
another person directed by the entity” and its subcontractor. See TEX. GOV’T CODE
ANN. §§ 2251.001(9), (10), 2251.023. It provides a remedy for a governmental
entity’s failure to make payment due by the thirtieth day after completion of
performance under a contract, but “it does not create an independent obligation to
pay monies not otherwise owed under the contract.” Cty. of Galveston v. Triple B
9
PLH alleged in its second amended petition that it was entitled to statutory penalty
interest and attorney’s fees under the PPA.
11
Servs., LLP, 498 S.W.3d 176, 187 (Tex. App.—Houston [1st Dist.] 2016, pet.
denied) (internal quotations omitted)); see TEX. GOV’T CODE ANN. § 2251.021(a).
In Triple B, this Court recognized that other Texas appellate courts have held
that the PPA lacks its own waiver of immunity from suit. 10 See Triple B Servs., 498
S.W.3d at 188. And in Triple B, this Court held that immunity was waived, not
because of the PPA itself, but only because of a change to the Local Government
Code authorizing the suit to include “‘interest as calculated under the [PPA].’” See
id. (quoting TEX. LOC. GOV’T CODE ANN. § 271.153).
PLH does not identify a separate statutory source outside of the PPA that
allows a waiver of sovereign immunity for its claim against TSU for violation of the
PPA. Thus, we hold that the PPA does not waive TSU’s sovereign immunity related
to PLH’s claim for violation of the PPA and the trial court erred in denying TSU’s
first amended plea to the jurisdiction on PLH’s claim under the PPA.
We sustain TSU’s first issue.
10
The cases include City of Midland v. M.T.D. Environmental, L.L.P., 429 S.W.3d
800, 806 (Tex. App.—Eastland 2014, no pet.), City of San Antonio v. KGME, Inc.,
340 S.W.3d 870, 877–78 (Tex. App.—San Antonio 2011, no pet.), Harris County
Flood Control District v. Great American Insurance Co., 309 S.W.3d 614, 618
(Tex. App.—Houston [14th Dist.] 2010, pet. denied), and McMahon Contracting,
L.P. v. City of Carrollton, 277 S.W.3d 458, 465 (Tex. App.—Dallas 2009, pet.
denied).
12
B. Chapter 114
In its second issue, TSU argues that the trial court erred in denying its first
amended plea to the jurisdiction as to PLH’s claim for breach of contract because
Texas Civil Practice and Remedies Code Chapter 114 does not waive sovereign
immunity in this case.
“By entering into a contract, a governmental entity necessarily waives
immunity from liability, . . . but it does not waive immunity from suit.” Tooke v.
City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). A waiver of immunity from suit
must be clear and unambiguous. See TEX. GOV’T CODE ANN. § 311.034; Tooke, 197
S.W.3d at 332–33.
Chapter 114 waives immunity from suits claiming “breach of an express
provision” of a contract for engineering, architectural, or construction services and
materials for an amount greater than $250,000. See TEX. CIV. PRAC. & REM. CODE
ANN. §§ 114.002–.003. Pertinent to this appeal, Chapter 114 states:
(a) The total amount of money awarded in an adjudication brought
against a state agency for breach of an express provision of a contract
subject to this chapter is limited to the following:
(1) the balance due and owed by the state agency under the
contract as it may have been amended, including any amount
owed as compensation for the increased cost to perform the work
as a direct result of owner-caused delays or acceleration if the
contract expressly provides for that compensation[.]
13
Id. § 114.004(a)(1). Thus, to show a clear and unambiguous waiver of sovereign
immunity under the parties’ contract, PLH had the burden of alleging facts giving
rise to a claim for breach of an express provision of the parties’ contract.
In its second amended petition, PLH alleged that TSU breached “[UGC]
sections 9.6.2.2, 9.6.3, and 9.9.4.2” by failing to equitably adjust the contract time
for excusable delays, and other delays within TSU’s reasonable control, including
delaying PLH’s access to the Project site, failing to timely provide power to the
Project site, providing deficient design documents, and interfering with PLH’s work
on the Project. The contract sections relied on by PLH address “change orders,”
which the parties’ contract defines as “written modification[s] of the [Project
agreement] between [TSU] and [PLH], signed by [TSU], [PLH], and [the
Architect/Engineer].” These sections entitled PLH to an equitable time adjustment
“extend[ing] the number of days lost because of excusable delay or Weather Days.”
A “Weather Day” is defined as “a day on which [PLH]’s current schedule indicate[d]
[w]ork [was] to be done, and on which inclement weather and related [Project] site
conditions prevent[ed] [PLH] from performing seven (7) continuous hours of [w]ork
between the hours of 7:00 a.m. and 6:00 p.m.” To obtain an extension based on a
weather delay, PLH was required to:
[I]mmediately notify [the project manager] for confirmation of the
conditions. [And] [a]t the end of each calendar month, submit to [the
project manager] and [the architect/engineer] a list of Weather Days
occurring in that month along with documentation of the impact on
14
critical activities. Based on confirmation by [the project manager], any
time extension granted w[ould] be issued by Change Order.
Under the parties’ contract, non-weather-related excusable delays included:
• Errors, omissions and imperfections in design, which the
architect/engineer corrects by means of changes in the drawings and
specifications;
• Unanticipated physical conditions at the Project site, which the
architect/engineer corrects by modifying the design or tasks identified
in the contract documents;
• Changes in the work ordered by the project manager that affect tasks
identified as “critical” to completion of the entire job;
• Suspension of work for unexpected natural events (sometimes called
“acts of God”), civil unrest, strikes, or other events which are not within
the contractor’s reasonable control; and
• Suspension of work for convenience of the project manager, which
prevented PLH from completing the job within the contract time.
Absent PLH’s agreement, TSU could “issue a Unilateral Change Order that w[ould]
have the full force and effect of a contract modification,” but would “not prejudice
[PLH]’s right to make claims or to appeal disputed matters under terms of the
[parties’] [c]ontract.”
UGC sections 9.6.2 and 9.9.4.2 address weather and other excusable delays.
Section 9.6.2 provides:
When a delay defined herein as excusable prevents [PLH] from
completing the [w]ork within the Contract Time, [PLH] is entitled to
an extension of time. [TSU] will make an equitable adjustment and
extend the number of days lost because of excusable delay or Weather
15
Days, as measured by [PLH]’s progress schedule. All extensions of
time will be granted in calendar days. In no event, however, will an
extension of time be granted for delays that merely extend the duration
of non-critical activities, or which only consume float without delaying
the project’s Substantial Completion date(s).
UGC section 9.7 addresses damages for delay. It provides that “[PLH] ha[d] no
claim for monetary damages for delay or hindrances to the work from any cause,
including without limitation any act or omission of the [TSU].” And UGC section
9.9 declares that it applies to “[t]ime extensions requested in association with
changes to the Work Directed or requested by [TSU],” and not “[t]ime extensions
requested for inclement weather,” which “are covered by [section] 9.6.2.1 . . . .”
Under section 9.9.4.2, PLH is entitled to the amount of time requested if TSU fails
to respond to the request for extension of time “within forty-five (45) days from the
date the Time Extension Request is received.” No parallel automatic-approval
mechanism exists for weather-related extension requests under section 9.6.2.1. For
weather-related delays, if the parties “cannot agree on the time extension, [TSU]
may issue a [unilateral change order] for [a] fair and reasonable time extension.”
These provisions set forth the procedures for obtaining time extensions, but
PLH does not allege in its second amended petition that TSU failed to comply with
such procedures; rather, it disputes the results. And PLH’s challenges do not
concern any unilateral change orders, for which TSU could “make claims” or
16
“appeal disputed matters.”11 The change orders were executed by both parties and
so, under the express terms of the parties’ contract, constitute agreed-to contract
modifications. Thus, PLH’s allegations that TSU refused to extend time according
to the amount PLH initially requested and that TSU refused to agree to a specific
price increase in response to a change order request do not support a claim for breach
of an express contract provision.
Likewise, PLH does not identify in its second amended petition any provision
of the parties’ contract that gave PLH the right to access the Project site by a specific
date, that required TSU to provide power to the Project site by a specific date, that
holds TSU responsible for inaccuracies in the design documents, or that required
TSU to refrain from performing other activities at the Project site during
construction. TSU, on the other hand, identified in its first amended plea to the
jurisdiction the provisions of the parties’ contract that disavowed any such rights or
11
In its appellate briefing, PLH appears to argue that it was automatically entitled to
a 192-day extension for TSU’s delay in providing power because TSU waived its
objection to the extension request by failing to “timely respond.” Its citation to the
appellate record, though, does not support its argument. PLH cites only to the
allegation in its second amended petition that, “[b]ased on the agreed contract
schedule and sequencing, PLH was entitled to 192 days from the date permanent
power was provided to achieve substantial completion. PLH requested an
appropriate time and extension and TSU wrongfully rejected the request.” Further,
this argument does not appear in PLH’s response to TSU’s first amended plea to the
jurisdiction. PLH’s breach-of-contract claim concerns only TSU’s refusal to grant
the extension and not an alleged failure to follow the process required by the parties’
contract.
17
duties. The parties’ contract allocates the risk for the discovery of unknown
conditions at the Project site. The SGC explains that “[TSU] ma[de] no
representation as to accuracy or completeness of the site information furnished to
[PLH] by [TSU] and [was] not responsible for any interpretations or conclusions
reached by [PLH] with respect to the information.” And the UGC declares that
“[PLH] ha[d] no claim for monetary damages for delay or hindrances to the work
from any cause, including without limitation any act or omission of [TSU].” As for
any concealed Project site conditions, the UGC explains:
[TSU] is responsible for visiting the [Project] [s]ite and being familiar
with local conditions . . . . If, in the performance of the Contract,
subsurface, latent, or concealed conditions at the [Project] [s]ite are
found to be materially different from the information included in the
Contract . . . , or if unknown conditions of an unusual nature are
disclosed differing materially from the conditions usually inherent in
[w]ork of the character shown and specified, ODR and A/E shall be
notified in writing of such conditions before they are disturbed. Upon
such notice, or upon its own observation of such conditions, A/E, with
the approval of ODR, will promptly make such changes in the
Drawings and Specifications as they deem necessary to conform to the
different conditions, and any increase or decrease in the cost of the
[w]ork, or in the time within which the [w]ork is to be completed,
resulting from such changes will be adjusted by Change Order, subject
to the prior approval of ODR.
These provisions preclude, as a matter of law, a conclusion that the parties’ contract
unambiguously waives TSU’s immunity from suit for PLH’s breach-of-contract
claim based on alleged design deficiencies or TSU’s interference. See TEX. GOV’T
CODE ANN. § 311.034.
18
As to PLH’s allegation that TSU breached the parties’ contract by failing “to
make payment of [PLH]’s contract and change order balance totaling $3,320.605,”
PLH relies on Article 6 of the Owner-Contractor agreement, which requires PLH to
promptly pay all bills for labor and materials; provides procedures for PLH to apply
for payment; allows TSU, as a state agency, to offset, deduct, or withhold payments
based on various circumstances; and allows TSU to audit PLH’s billings. This
provision does not contain any express payment obligation that TSU allegedly
breached.
Instead, the parties’ contract disclaims any such obligation by TSU. The
contract provides that “[TSU] ha[d] no duty to pay [PLH] except on receipt . . . of
1) a complete Application for Payment certified by [the architect/engineer];
2) [PLH]’s updated Work Progress Schedule; and 3) confirmation that [PLH]’s
record documentation at the [Project] [s]ite is kept current.” Other contract
provisions allowed TSU to reduce the price owed or withhold payments under
certain conditions, and the parties’ contract also required PLH to pay liquidated
damages if the Project was not substantially completed by the due date, which
occurred in this case. Because the provisions of the parties’ contract that PLH relies
on do not expressly require TSU to make the payment sought by PLH, PLH does not
19
state a claim for breach of an express contract provision for which TSU has waived
immunity from suit.12
Because no express contract provision required TSU to perform as PLH
alleged in its second amended petition, PLH has failed to show, as a matter of law,
that Texas Civil Practice and Remedies Code Chapter 114 waives TSU’s immunity
from suit for PLH’s breach-of-contract claim against it. See Miranda, 133 S.W.3d
at 228. Thus, we hold the trial court erred in denying TSU’s first amended plea to
the jurisdiction on PLH’s breach-of-contract claim.
We sustain TSU’s second issue.
Because of our disposition of TSU’s first and second issues, we need not reach
TSU’s third issue. See TEX. R. APP. P. 47.1.
12
In its appellate briefing, PLH further argues that TSU waived immunity from suit
for its claim for relief under the PPA because TSU agreed in the parties’ contract to
timely pay its bills “in accordance with” the PPA. But the parties’ contract also
declares that “[n]othing herein shall waive or be construed as a waiver of the State’s
sovereign immunity.” The parties’ contract arguably may constitute a waiver of
immunity from liability, but not a waiver of immunity from suit. See Tooke v. City
of Mexia, 197 S.W.3d 325, 332 (Tex. 2006).
20
Conclusion
We reverse the trial court’s order denying TSU’s first amended plea to the
jurisdiction and render judgment dismissing the suit of PLH for lack of
subject-matter jurisdiction.
Julie Countiss
Justice
Panel consists of Justices Kelly, Landau, and Countiss.
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