Wheelabrator Air Pollution Control, Inc. v. City of Public Service Board of San Antonio, a Municipal Board of the City of San Antonio

Citation: Not availableDocket: 04-14-00451-CV

Court: Court of Appeals of Texas; November 25, 2014; Texas; State Appellate Court

Original Court Document: View Document

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Wheelabrator Air Pollution Control, Inc. appealed a decision from the Fourth Court of Appeals affirming the trial court's order granting the City Public Service Board of San Antonio's plea to the jurisdiction regarding Wheelabrator's claim for attorney’s fees in a breach of contract lawsuit. Wheelabrator and Casey Industrial, Inc. had entered into a contract with the City Public Service Board (CPS) in 2004, later alleging breaches by CPS in separate but consolidated suits. Wheelabrator sought damages and attorney's fees, asserting that CPS was not immune from suit under the Texas local government code. CPS contended it had governmental immunity from Wheelabrator’s attorney’s fees claim, leading to the plea to the jurisdiction. Wheelabrator argued against CPS's plea, claiming it was procedurally improper, that immunity was waived, and that CPS was performing a proprietary function. The trial court, however, granted CPS’s plea and dismissed the attorney’s fees claim, a decision that was upheld on appeal. The court emphasized that governmental immunity limits subject matter jurisdiction unless the state consents to suit, distinguishing between immunity from suit and immunity from liability, with the former depriving courts of jurisdiction.

Governmental immunity can be waived through explicit legislative action or by governmental entities through specific legal actions, such as initiating litigation for affirmative relief. To establish a trial court's subject matter jurisdiction over a governmental entity, a plaintiff must demonstrate a valid waiver of immunity and provide sufficient factual allegations to support jurisdiction. Determining subject matter jurisdiction is a legal question, reviewed de novo, and if jurisdiction is negated by the pleadings, a plea to the jurisdiction can be granted without allowing amendments.

In the case of Wheelabrator, there is a dispute over the appropriate procedural method used by CPS to challenge Wheelabrator's attorney’s fees claim, with CPS arguing that its plea to the jurisdiction is suitable and that the relevant version of Chapter 271 of the Texas Local Government Code prohibits recovery of attorney’s fees in this breach of contract case. Originally enacted in 2005, Section 271.152 of Chapter 271 waives immunity for local governmental entities to suit in breach of contract claims under certain written contracts. The chapter allowed recovery of attorney’s fees only if explicitly stated in the contract and referenced Section 271.159, which is not retroactive.

Section 271.153, addressing damages in breach of contract actions against governmental entities, did not initially include attorney's fees. An amendment in 2009 allowed recovery of reasonable attorney’s fees, applicable only to contracts executed after June 19, 2009. Wheelabrator's arguments primarily relate to Section 271.153, but CPS's plea indicates that CPS claims immunity from Wheelabrator’s claims unless they fall under Section 271.152, including limitations stated in Section 271.153. Wheelabrator's contract, executed in 2004, does not qualify for attorney’s fees recovery.

Wheelabrator contends that the court's decision in Roma Indep. Sch. Dist. v. Ewing Constr. Co. is decisive for reversing the trial court’s dismissal of its attorney’s fees claim. However, the court disagrees. In Roma, a construction company sued a school district for breach of contract, and the district claimed immunity from suit. The trial court's denial of this claim was affirmed on appeal, which determined that section 271.153 of the Texas Local Government Code pertains to immunity from liability, not immunity from suit. The Texas Supreme Court subsequently disapproved of Roma in Zachry Constr. Corp. v. Port of Houston Auth., clarifying that chapter 271 limits recovery and does not waive immunity from suit for non-recoverable damages under section 271.153.

Wheelabrator also argues against the use of a plea to the jurisdiction to contest its attorney’s fees claim. The court maintains that immunity from suit impacts subject matter jurisdiction, which justifies the use of such a plea. Thus, it affirms that a plea to the jurisdiction is appropriate for challenging an attorney’s fees claim when the trial court lacks jurisdiction. This conclusion is supported by several Texas appellate court decisions affirming that governmental entities’ immunity from suit regarding attorney’s fees claims can be properly challenged through a plea to the jurisdiction.

CPS's immunity from suit regarding Wheelabrator's attorney's fees claim was appropriately raised in a plea to the jurisdiction. Wheelabrator acknowledges the Texas Supreme Court's decision in Zachry, which disapproves of Roma, but contends that it does not alter the relevant precedent. Wheelabrator argues that a request for attorney's fees affects a governmental entity's immunity from liability, which must be pled by the entity and is not suitably raised in a plea to the jurisdiction. They reference Wichita Falls State Hosp. v. Taylor and Kinnear v. Texas Comm’n on Human Rights to support their position; however, these cases involve different statutes and do not bolster Wheelabrator's argument. 

In Taylor, the court established that the legislature did not waive a state hospital's immunity via the patient’s bill of rights. In Kinnear, the court held that an appellate court erred by raising immunity from liability sua sponte in a case under the Texas Fair Housing Act. Notably, since the parties’ contract was executed in 2004, the relevant provisions of chapter 271 concerning attorney’s fees, effective only after September 1, 2005, and amended in 2009 without retroactive application, do not apply, confirming that CPS's immunity from suit regarding attorney's fees remains intact.

Wheelabrator further claims that CPS waived its immunity by asserting its own claim for affirmative relief, referencing Reata Constr. Corp. v. City of Dallas, where the Texas Supreme Court indicated that a governmental entity partially waives its immunity by joining the litigation process with affirmative claims. However, CPS's pleadings, which seek an offset rather than monetary recovery, do not constitute a claim for affirmative relief as defined in Reata. Thus, CPS's request is deemed defensive, and it did not waive immunity from suit.

CPS did not waive its immunity from suit regarding Wheelabrator’s attorney’s fees claim by asserting its own claim for affirmative relief. The case references previous rulings, noting that a governmental entity’s counterclaim is not an affirmative claim if it constitutes part of its defense, as established in Housing Auth. of the City of Dallas v. Killingsworth and My-Tech, Inc. v. Univ. of N. Tex. Health Sci. Ctr. The Texas Tort Claim Act (TTCA) waives governmental immunity for certain tort claims but excludes claims arising from proprietary functions, such as operating a public utility. In a prior appeal, it was determined that this proprietary function waiver does not apply to Chapter 271 contract claims. Wheelabrator’s argument that CPS should have been denied its plea to the jurisdiction due to a lack of discovery time was rejected, as both parties have had ample time during the lengthy proceedings. The case cited, Rusk State Hosp. v. Black, is distinguished because CPS did not raise its plea on appeal but rather at the trial court, allowing Wheelabrator a fair opportunity to respond. Ultimately, the pleadings showed no factual issues regarding the trial court's jurisdiction over the attorney's fees claim, leading to the affirmation of the trial court’s order granting CPS’s plea to the jurisdiction.