C. Borunda Holdings, Inc. v. Lake Proctor Irrigation Authority of Comanche County, Texas ( 2016 )

Opinion filed December 22, 2016
In The
Eleventh Court of Appeals
__________
No. 11-15-00057-CV
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C. BORUNDA HOLDINGS, INC., Appellant
V.
LAKE PROCTOR IRRIGATION AUTHORITY OF COMANCHE
COUNTY, TEXAS, Appellee
On Appeal from the 220th District Court
Comanche County, Texas
Trial Court Cause No. CV00614
MEMORANDUM OPINION
Lake Proctor Irrigation Authority sued C. Borunda Holdings, Inc. for
nonpayment under various water supply agreements. Borunda filed a counterclaim
and alleged that LPIA had breached those agreements. Borunda has filed this appeal
from the trial court’s order by which it granted LPIA’s motion for summary
judgment. Borunda asks us to hold that the trial court erred when it granted LPIA’s
plea to the jurisdiction and held that it did not have subject-matter jurisdiction over
Borunda’s counterclaim for breach of contract. We affirm.
LPIA initiated this action when it sued Borunda to recover $111,481.41 that
LPIA claimed Borunda owed it for water furnished to Borunda in 2012 and 2013
under fourteen separate water supply agreements that LPIA and Borunda had
entered. Borunda answered and also filed a counterclaim for breach of contract.
Later, Borunda amended its counterclaim and alleged that LPIA breached a 2011
water supply agreement in addition to the 2012 and 2013 agreements. LPIA
allegedly failed to make reasonable efforts to provide Borunda water on a
comparable basis to other customers.
Shortly after LPIA filed the lawsuit, it filed a lis pendens that covered
Borunda’s real property to which LPIA supplied water under the agreements. On
March 7, 2014, in order to complete a sale of that real property, Borunda paid LPIA
$118,045.52, and on March 12, 2014, Scott Allen, the attorney for LPIA, released
the lis pendens. The record before us reveals that LPIA never obtained a judgment
against Borunda and that, on November 13, 2014, LPIA filed a notice of nonsuit and
withdrew its claims for affirmative relief.
LPIA filed a plea to the jurisdiction and a motion for summary judgment.
When it ruled on the plea to the jurisdiction, the trial court found that it had “subject
matter jurisdiction of [Borunda’s] breach of contract counterclaim only to the extent
the claim is connected to and defensive to” LPIA’s claims established in the 2012
and 2013 agreements. The trial court also found that its subject-matter jurisdiction
existed only to the extent that Borunda attempted to recover monetary damages as
an offset to breach-of-contract damages sought by LPIA and that it did not have
jurisdiction over any causes of action that existed prior to 2012 (LPIA did not seek
any recovery for 2011). As far as LPIA’s motion for summary judgment was
concerned, the trial court granted the motion and found that, at the time of the
summary judgment, LPIA had nonsuited all of its affirmative claims against
Borunda and that Borunda was not, therefore, entitled to recover on its counterclaim.
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The trial court erred in neither instance.
Sovereign immunity is a common law doctrine that protects the State from
lawsuits for money damages. Tooke v. City of Mexia, 197 S.W.3d 325, 331 (Tex.
2006); Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex.
2002). Governmental immunity, although often referred to as sovereign immunity,
is a term applied to the immunity enjoyed by political subdivisions of the State, such
as counties, cities, school districts, and other subdivisions. See Wichita Falls State
Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003).
The general principles applicable to sovereign immunity and governmental
immunity have been fully articulated by the writers of an abundance of opinions on
the subject. Except for those principles that are specifically at issue in this case, we
see no reason to repeat those principles here but will simply refer to, and abide by,
those set forth in opinions such as Reata Constr. Corp. v. City of Dallas, 197 S.W.3d
371, 374–75 (Tex. 2006).
Governmental immunity can be waived. Generally, a waiver of governmental
immunity or consent to sue lies in legislative action. City of Dallas v. Albert, 354
S.W.3d 368, 374 (Tex. 2011). The judiciary, however, determines the boundaries
or contours of that waiver. Id. For instance, claims that would, in whole or in part,
offset a recovery by LPIA and “that were germane to, connected with, and properly
defensive to” claims made by LPIA are not barred by governmental immunity. Id.
But claims in excess of the amount that would offset LPIA’s claim, even if they are
germane to, connected with, and properly defensive to LPIA’s claim, are barred by
governmental immunity. Id. Likewise, governmental immunity bars claims that are
not germane to, connected with, or properly defensive to LPIA’s claim. Id.
When LPIA sought affirmative relief in damages in its lawsuit against
Borunda, it waived its governmental immunity from suit as to “claims that would
offset, in whole or in part, any recovery by [LPIA] and that were germane to,
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connected with, and properly defensive to [LPIA’s] claims.” See id. Because LPIA
never had immunity as to those claims, it did not resurrect immunity when it took a
nonsuit of its affirmative claims. See id. at 374–75. When LPIA filed its lawsuit
and sought affirmative relief by way of damages, the trial court acquired jurisdiction
over LPIA’s claim as well as certain offsetting, defensive claims that Borunda
asserted against it. This is so because the judiciary has abrogated immunity for
entities that file affirmative litigation claims to the extent that opposing claims are
offsetting and are germane to, connected with, and properly defensive to the entities’
claim. Id. at 375. That is why, and the extent to which, the trial court acquired
subject matter jurisdiction in this case, not because LPIA brought about a change in
its immunity when it filed its affirmative claims against Borunda. See Reata, 197
S.W.3d at 377. By the same token, as we have said, LPIA did not resurrect immunity
when it nonsuited its claim. See Albert, 354 S.W.3d at 374–75.
Without immunity, LPIA participates as would any regular litigant. See id. at
375–76. As an ordinary litigant, under the facts of this case, LPIA was entitled to
nonsuit its claims for affirmative relief. See TEX. R. CIV. P. 162; Albert, 354 S.W.3d
at 375. After LPIA nonsuited it claims, there was nothing against which Borunda
could offset its counterclaim. See id. at 376. In Sharyland, the court wrote: “With
[the City of Alton’s] counterclaim gone, there were no longer any claims to offset,
and Sharyland could not recover a judgment for damages against Alton.” Sharyland
Water Supply Corp. v. City of Alton, 354 S.W.3d 407, 414 (Tex. 2011). Here, with
LPIA’s claims to affirmative relief gone, there was nothing against which Borunda
could apply an offset, and Borunda could not recover a judgment from LPIA. The
trial court’s findings and orders on LPIA’s plea to the jurisdiction and motion for
summary judgment are appropriate applications of the law under this record. We
have liberally construed Borunda’s sole issue on appeal, and we overrule it.
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We affirm the judgment of the trial court.
JIM R. WRIGHT
CHIEF JUSTICE
December 22, 2016
Panel consists of: Wright, C.J.,
Bailey, J., and Countiss.1
Willson, J., not participating.
1
Richard N. Countiss, Retired Justice, Court of Appeals, 7th District of Texas at Amarillo, sitting
by assignment.
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