West Texas Municipal Power Agency v. Republic Power Partners, L.P. , 2014 Tex. App. LEXIS 1308 ( 2014 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-12-00374-CV
WEST TEXAS MUNICIPAL POWER AGENCY, APPELLANT
V.
REPUBLIC POWER PARTNERS, L.P., APPELLEE
On Appeal from the 237th District Court
Lubbock County, Texas
Trial Court No. 2012-501,169, Honorable Paul Davis, Presiding
February 5, 2014
OPINION
Before CAMPBELL and HANCOCK and PIRTLE, JJ.
This is an accelerated appeal wherein Appellant, West Texas Municipal Power
Agency (WTMPA), challenges the trial court‘s interlocutory order denying its plea to the
jurisdiction in a suit filed by Appellee, Republic Power Partners, L.P., for breach of
contract and breach of warranties. WTMPA contends the trial court erred in denying its
plea to the jurisdiction because it is an entity entitled to governmental immunity under
the facts of this case. Presenting two issues countering Republic Partner‘s position that
immunity does not apply or was statutorily waived, WTMPA contends (1) the
proprietary/governmental distinction employed in the Texas Tort Claims Act, and (2) the
waiver of immunity provisions of chapter 271 of the Texas Local Government Code do
not operate as to deny WTMPA the protections of governmental immunity. For the
reasons to follow, we affirm.
BACKGROUND
In 1983 the cities of Brownfield, Floydada, Lubbock and Tulia formed WTMPA for
the purpose of obtaining a reliable and adequate source of electric energy for its
citizens.1 WTMPA is a municipal power agency created pursuant to subchapter C of
chapter 163 of the Texas Utilities Code. See TEX. UTIL. CODE ANN. § 163.054(a) (West
2007). A municipal power agency created pursuant to this subchapter is a separate
municipal corporation, a political subdivision of this State, and a political entity and
corporate body distinct from the public entities creating it. See id. at § 163.054(c). A
municipal power agency is expressly authorized to enter into contracts necessary to the
full exercise of its powers, which includes the authority to enter into a contract, lease or
agreement for the generation, transmission, sale or exchange of electric energy. See
id. at § 163.060.
WTMPA currently obtains the electric energy it resells to its member cities from
Southwestern Public Service (SPS). Under the Power Purchase Agreement with SPS,
WTMPA is required to purchase all of its electric energy from SPS through May 2019.
In 2007, WTMPA was notified by SPS that the existing Power Purchase Agreement
1
Two members from each city sit on the board of WTMPA. A ―majority-in-interest‖ required for
voting on important issues is determined by the number of kilowatt hours purchased by each member city
each year. This formula gave Lubbock a 92.8% ―majority-in-interest‖ vote.
2
would not be renewed. At that time, WTMPA began contemplating how it was going to
supply electric energy to its member cities after expiration of the existing Power
Purchase Agreement. WTMPA ultimately negotiated and executed a Development
Agreement with Republic Power, a private business entity, for the purpose of forming a
partnership to develop, finance and operate future electric energy generation and
transmission facilities.2
Under the Development Agreement, Republic Power was responsible for
managing the development process which included the identification and evaluation of
new sources of electric energy.3 The agreement obligated Republic Power to secure
adequate private investment capital to complete the necessary feasibility studies and to
2
Municipal power agencies are expressly authorized to contract with private persons. See TEX.
UTIL. CODE ANN. § 163.060(b)(2)(C) (West 2007).
3
Section 2.4 of the Development Agreement expressly provides that Republic Power be
responsible for, and have authority to take, all actions it deems necessary to perform the agreement,
including:
(a) Retaining engineers, attorneys, accountants, financial advisors and other professionals . . . .
(b) Identifying potential Sites and negotiating for the acquisition of such Sites.
(c) Commissioning and preparing site surveys . . . .
(d) Selecting technology for the Project and negotiating for the acquisition or license of such
technology.
(e) Designing or supervising the design of the Project . . . .
(f) Applying for such Governmental Approvals as may be required for the Project.
(g) Preparing such bid documents as may be required . . . .
(h) Negotiating contracts for the procurement of renewable and thermal energy to be utilized by
the Project.
(i) Negotiating the acquisition of (or options to acquire) easements and rights of way . . . .
(j) Negotiating contracts for Utilities.
(k) Negotiating contracts for the sale or other disposition of energy, capacity and End Products.
(l) Developing a plan of financing, preparing financing documents, preparing offering documents
and doing all related work necessary to achieve an Initial Closing.
(m) Developing a Market Standard package of insurance for the Project.
(n) Selecting Trustee candidates and negotiating one or more Trust Indentures under which the
Bonds will be issued.
(o) Selecting investment bankers, underwriter counsel and bond counsel to perform activities
related to the Project.
(p) Negotiating and preparing drafts of any Project Owner Contracts, including agreements
pertaining to the purchase or sale of any goods, services, fuel, electricity or other elements
incident to the operation of the Project.
3
implement the findings and recommendations of those studies. The Development
Agreement further required WTMPA to form a local government corporation to own and
operate any electric energy generation or transmission facility to be built and to issue
bonds to finance their construction.
The Development Agreement was executed August 1, 2008, and on September
25, 2008, WTMPA‘s Board of Directors unanimously approved High Plains Diversified
Energy Corporation as the local government corporation designated to own and operate
the electric energy generation and transmission facilities contemplated by the
agreement. Thereafter, one addendum dated July 23, 2009, and two amendments
dated October 9, 2009, and May 18, 2011, were added to the Development Agreement.
Initially, per the Development Agreement, the ―Project Owner‖ was WTMPA, but those
rights and obligations were assigned to High Plains.
Over the next three years, Republic Power raised millions in capital and
expended considerable sums completing feasibility studies and arranging for financing
of the project. The Development Agreement provided for issuance of first mortgage
revenue bonds by the local government corporation, ultimately High Plains, for the
purpose of obtaining the balance of the funds necessary to complete the project. In
furtherance of that financing obligation, a bond validation hearing was ultimately
scheduled in a Lubbock County district court to approve issuance of the revenue bonds.
Prior to that hearing, at a regularly scheduled meeting of the board of High
Plains, a dispute arose as to the allocation of any surplus revenue generated by the
project. Due to its greater usage of the electric energy to be generated, the City of
4
Lubbock believed it should receive a greater percentage of any surplus revenue. The
Board of Directors disagreed and ultimately, at the bond validation hearing, the City of
Lubbock objected to issuance of the revenue bonds by arguing High Plains was not a
valid local government corporation and WTMPA did not have the authority to create it.
The district court agreed with the City of Lubbock and dismissed the bond validation
proceeding with prejudice. As a result, no revenue bonds were ever issued.
After the bond validation suit failed, Republic Power filed the underlying suit
against the City of Lubbock and WTMPA alleging breach of the Development
Agreement. Initially, Republic Power alleged that WTMPA breached the agreement but
sought to hold the City of Lubbock liable under a joint enterprise theory. Both
defendants filed pleas to the jurisdiction asserting immunity from suit. Republic Power
then amended its petition to allege the City of Lubbock directly breached the
Development Agreement. In response, the City of Lubbock filed an amended plea to
the jurisdiction. Following a hearing, the trial court granted the City of Lubbock‘s
amended plea but denied WTMPA‘s plea. This appeal followed.4
STANDARD OF REVIEW—PLEA TO THE JURISDICTION
The party suing a governmental entity bears the burden of affirmatively
demonstrating the trial court has jurisdiction to hear the dispute. Tex. Dep’t. of Criminal
4
In a related appeal decided this same date, Republic Power challenged the trial court‘s order
granting the City of Lubbock‘s plea to the jurisdiction. See Republic Power Partners, L.P. v. The City of
Lubbock, No. 07-12-00438-CV, 2014 Tex. App. LEXIS ___, (Tex. App.—Amarillo Feb. 5, 2014, no pet.
h.). In that opinion, we held the trial court did not err when it granted the City of Lubbock‘s plea to the
jurisdiction because (1) the proprietary/governmental dichotomy did not apply to contract disputes, and
(2) the waiver of immunity provisions of section 271.152 of the Texas Local Government Code do not
apply so as to waive the City of Lubbock‘s immunity claims.
5
Justice v. Miller, 51 S.W.3d 583, 587 (Tex. 2001). A plea to the jurisdiction is a dilatory
plea, the purpose of which is to defeat a cause of action without regard to whether the
claims asserted have merit. Bland Independent School Dist. v. Blue, 34 S.W.3d 547,
554 (Tex. 2000). In the context of a claim of sovereign or governmental immunity, the
proponent of a plea to the jurisdiction contends the trial court lacks subject matter
jurisdiction over the claim because it is protected by immunity from suit which has not
been legislatively waived. Because immunity from suit defeats a trial court‘s subject
matter jurisdiction, Tex. Dep’t. of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999), a
plea to the jurisdiction is the proper way to assert a claim of sovereign or governmental
immunity from suit. Bland, 34 S.W.3d at 555.
Whether a court has subject matter jurisdiction is a question of law. Tex. Natural
Res. Conservation Comm‘n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). Therefore, if
the evidence creates a fact question regarding the existence of jurisdictional facts, the
trial court cannot grant the plea to the jurisdiction and the fact issue must be resolved by
the fact finder. Tex. Dep‘t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227-28 (Tex.
2004). A court deciding a plea to the jurisdiction is not required to look solely to the
pleadings but may consider evidence submitted by the parties, and it must do so, when
necessary to resolve the jurisdictional issues raised. Bland, 34 S.W.3d at 555. If the
relevant evidence is undisputed or fails to raise a fact question on the jurisdictional
issue, the trial court rules on the plea to the jurisdiction as a matter of law. Miranda, 133
S.W.3d at 228. Accordingly, we review a trial court‘s ruling on a plea to the jurisdiction
under a de novo standard of review. Tex. D.O.T. & Edinburg v. A.P.I. Pipe & Supply,
LLC, 397 S.W.3d 162, 166 (Tex. 2012); Miranda, 133 S.W.3d at 226. In doing so, we
6
exercise our own discretion and redetermine each legal issue, without giving deference
to the lower court‘s decision. See Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex.
1999) (op. on reh‘g).
SOVEREIGN/GOVERNMENTAL IMMUNITY
Sovereign immunity protects the State, as well as its agencies and officials from
lawsuits for damages and from liability. Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist.
v. Texas Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323-24
(Tex. 2006); Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006).
Similarly, the common law doctrine of governmental immunity protects political
subdivisions of the State, including counties, cities and school districts. Ben Bolt, 212
S.W.3d at 324. Under the doctrines of sovereign and governmental immunity, it has
long been recognized that there are two separate components to immunity: (1) immunity
from liability, which bars enforcement of a judgment against a governmental entity, and
(2) immunity from suit, which bars suit against the governmental entity altogether.
Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Accordingly, the State and
its political subdivisions are protected from both lawsuits and liability unless (1)
immunity does not apply to the claim or (2) immunity has been waived. IT-Davy, 74
S.W.3d at 853.
These components of immunity have come to be applied in a variety of
circumstances to promote the pragmatic purpose of immunity, which is to ―shield the
public from the costs and consequences of improvident actions of their governments.‖
Tooke, 197 S.W.3d at 332. Therefore, in the context of a suit arising from a breach of
7
contract, a governmental entity may necessarily waive immunity from liability by
entering into the contract, thereby binding itself to the terms of the agreement, but not
waive immunity from suit. Id. See Federal Sign v. Texas S. Univ., 951 S.W.2d 401,
405-06 (Tex. 1997).
Immunity may, however, be waived and the Legislature has the exclusive
authority to do so by statute. To ensure that this legislative control is not lightly
disturbed, statutes waiving immunity are strictly construed as not waiving immunity
unless that waiver is effected by ―clear and unambiguous‖ language. See TEX. GOV‘T
CODE ANN. § 311.034 (West 2013). See also Oncor Elec. Delivery Co. LLC v. Dallas
Area Rapid Transit, 369 S.W.3d 845, 849 (Tex. 2012); Tooke, 197 S.W.3d at 332-33.
Any ambiguity should be resolved in favor of retaining immunity. Wichita Falls State
Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex. 2003).
In determining whether immunity has been waived, the Texas Supreme Court
has consistently deferred to the Legislature, because doing so allows the Legislature to
protect the complex policymaking function surrounding suits against governmental
entities. IT-Davy, 74 S.W.3d at 853-54. As more fully discussed below, the Texas
Legislature adopted section 271.152 of the Texas Local Government Code to deal with
the waiver of governmental immunity in the context of a breach of contract claim. See §
271.152.5 The Supreme Court has specifically held that ―legislative control over
sovereign immunity allows the Legislature to respond to changing conditions and revise
5
Unless otherwise indicated, this and all future references to sections refer to the Texas Local
Government Code.
8
existing agreements if doing so would benefit the public.‖ Tooke, 197 S.W.3d at 332
(quoting IT-Davy, 74 S.W.3d at 854). With these principles in mind, we turn to the
parties‘ arguments.
ANALYSIS
As previously stated, WTMPA contends it is entitled to the protections of
governmental immunity because (1) the proprietary/governmental distinction employed
in the Texas Tort Claims Act and (2) the waiver of immunity provisions of chapter 271 of
the Texas Local Government Code do not operate to deny immunity from suit. We start
with the undisputed premise that, as a political subdivision of the State, WTMPA is
otherwise entitled to governmental immunity.
Proprietary/governmental Dichotomy
Republic Power contends governmental immunity does not apply to the facts of
this case because ―the construction and operation of an electric utility‖ is a proprietary
function for which there is no immunity. In response to this argument, WTMPA
contends immunity does apply because (1) the initial performance of the Development
Agreement was not a proprietary function; and, even if it was, (2) the
proprietary/governmental dichotomy used to determine whether a governmental entity is
immune from suit under the Texas Tort Claims Act does not apply to contractual
disputes. Without further discussion of the merits of this issue, for the reasons stated in
Republic Power Partners, L.P. v. The City of Lubbock, No. 07-12-00438-CV, 2014 Tex.
App. LEXIS ___, (Tex. App.—Amarillo Feb. 5, 2014, no pet. h.), we find the
proprietary/governmental distinction employed in the Texas Tort Claims Act does not
9
apply to contract disputes and does not, therefore, operate to deny WTMPA the
protections of governmental immunity with respect to the claims being asserted by
Republic Power in this suit.6 Issue one is overruled.
Statutory Waiver of Immunity
Republic Power further contends governmental immunity was waived pursuant to
the provisions of chapter 271 of the Texas Local Government Code; whereas WTMPA
contends that it was not. On this point, we agree with the position taken by Republic
Power.
In the context of a breach-of-contract claim against a governmental entity, there
is but one route to the courthouse and that route is through section 271.152. General
Servs. Comm‘n v. Little-Tex Insulation Co., 39 S.W.3d 591, 597 (Tex. 2001). Section
271.152 provides: 7
[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 contract, subject to the term and
conditions of this subchapter.
6
We are aware of the Austin Court of Appeals‘s decision in City of Georgetown v. Lower
Colorado River Authority, 413 S.W.3d 803 (Tex. App.—Austin 2013, pet. filed Dec. 30, 2013). Because
that opinion was issued before the Supreme Court denied petition in City of San Antonio ex. rel. City
Public Service Board v. Wheelabrator Air Pollution Control, Inc., 381 S.W.3d 597 (Tex. App.—San
Antonio 2012, pet. denied), and for the reasons stated in Republic Power Partners, L.P. v. City of
Lubbock, No. 07-12-00438-CV, 2014 Tex. App. LEXIS __, (Tex. App.—Amarillo Feb. 5, 2014, no pet. h.),
we respectfully reject the reasoning expressed in that opinion.
7
The subchapter referenced in § 271.152 is subchapter I of Chapter 271, entitled ―ADJUDICATION
OF CLAIMS ARISING UNDER W RITTEN CONTRACTS W ITH LOCAL GOVERNMENTAL ENTITIES.‖ TEX. LOCAL GOV‘T
CODE ANN. §§ 271.151 – 271.160 (West 2005).
10
Section 271.152 provides a clear and unambiguous waiver of governmental
immunity from suit in the context of a breach of contract claim. City of Dallas v. Albert,
354 S.W.3d 368, 377 (Tex. 2011); Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth.,
320 S.W.3d 829, 838 (Tex. 2010). By enacting section 271.152 in 2005, the Legislature
made a conscious decision ―to loosen the immunity bar so that all local governmental
entities that have been given the statutory authority to enter into contracts shall not be
immune from suits arising from those contracts.‖ Ben Bolt, 212 S.W.3d at 327. This
legislative policy encourages private entities to enter into contracts with local
governmental entities without fear of being denied access to the courts in the event of a
contractual dispute.
The analysis of whether waiver of immunity applies must necessarily focus on
the contractual language and relationship of the parties. See Ben Bolt, 212 S.W.3d at
327 (finding the relationship between a claimant and governmental entity to be different
from ―the ordinary consumer/seller relationship‖). For the waiver of immunity provisions
to apply, three requirements must be established: (1) the party against whom the waiver
is asserted must be a local governmental entity; (2) the entity must be authorized by
statute or the Constitution to enter into contracts; and (3) the entity must in fact have
entered into a contract that is ―subject to this subchapter.‖ City of Houston v. Williams,
353 S.W.3d 128, 134 (Tex. 2011).
The first two requirements for waiver of immunity are not in dispute in this case.
As stated above, WTMPA is a municipal power agency created pursuant to subchapter
C of chapter 163 of the Texas Utilities Code. See TEX. UTIL. CODE ANN. § 163.054(a)
(West 2007). As such, WTMPA is a political subdivision of this State, id. at §
11
163.054(c), and a local governmental entity, TEX. LOCAL GOV‘T CODE ANN. § 271.151(3)
(West 2005), authorized by statute to enter into contracts. See TEX. UTIL. CODE ANN. §
163.060 (West 2007). It is the third requirement, to-wit: whether a contract ―subject to
this subchapter‖ exists, that is at the heart of WTMPA‘s contention that waiver does not
apply to the facts of this case and therefore, the trial court erred in denying its plea to
the jurisdiction.
Contract Subject to Subchapter I
A ―contract subject to [subchapter I]‖ is defined as ―a written contract stating the
essential terms of the agreement for providing goods or services to the local
governmental entity . . . .‖ See § 271.151(2). See also Albert, 354 S.W.3d at 377.
Accordingly, five elements must be met to determine if the contract is ―subject to this
subchapter.‖ It must be (1) in writing, (2) state the essential terms, (3) provide for goods
or services, (4) to the local governmental entity, and (5) be executed on behalf of the
local governmental entity. See Williams, 353 S.W.3d at 135. It is WTMPA‘s specific
contention that the contract in dispute does not provide for ―goods or services‖ to a local
governmental entity.
WTMPA‘s argument is two-fold. WTMPA first contends the Development
Agreement does not provide goods or services to a local government entity because all
rights, duties and obligations arising from the agreement were to be assigned to High
Plains. Secondly, WTMPA contends that no goods or services were actually provided
to it during the ―development period‖ of the contract.
12
Assignment Argument
WTMPA contends the Development Agreement is not an agreement to provide
goods or services to it because ―all rights and obligations‖ under the agreement were
assigned to High Plains. This argument fails for at least two reasons.
First, waiver of immunity is triggered by the mere act of entering into a contract
for goods or services. See § 271.152. While an assignment may bear on questions of
ultimate liability, once waived, the assignment of any of the rights, privileges, duties or
obligations arising under the agreement does not revive that which had already been
waived.
Secondly, WTMPA contends immunity was not waived because it is not liable
under the contract by reason of the assignment. This argument simply begs the
question. Issues concerning the merits of the claim are distinct from issues concerning
the subject matter jurisdiction of the trial court. See Miranda, 133 S.W.3d at 226.
Accordingly, the assignment of the Development Agreement to High Plains is irrelevant
to the issue of waiver.
Goods or Services Argument
WTMPA next contends the Development Agreement is not a contract for goods
or services because ―no goods or services of any kind were to be provided to WTMPA
under the express terms of the [agreement].‖ To analyze this argument we must focus
on the nature and purpose of the agreement.
13
WTMPA exists for the purpose of providing a reliable and adequate source of
electric energy to its member cities and to generate revenues for those cities. Currently,
WTMPA purchases electric energy from SPS and resells that power to its member
cities. Because that source of electric energy is scheduled to terminate in 2019,
WTMPA entered into the Development Agreement with Republic Power for the purpose
of ensuring that facilities capable of generating and transmitting its electric energy
needs would be constructed and operational before that date.8 Because developing
and constructing electric energy generation and transmission facilities can take years,
the Development Agreement contemplated a development period during which the
parties would ―evaluat[e] new sources for power generation and transmission, rais[e]
capital and acquir[e] feasibility studies for the design, development, engineering,
financing, legal, regulatory, construction and operations of any project.‖
The Development Agreement specifically contemplates that Republic Power
would identify and evaluate potential sources of electric energy generation and
transmission and that it would be responsible for managing the development process.
Specifically, Republic Power agreed to obtain necessary feasibility studies for the
design, development, engineering, regulation, construction, and operation of any
electric energy generating facility. Additionally, the agreement charged Republic Power
with the responsibility of securing adequate private investment capital to complete the
feasibility studies and implement the findings and recommendations of those studies. In
8
The opening paragraphs of the Development Agreement specifically provide that it is made and
entered into by and between West Texas Municipal Power Agency and Republic Power Partners, L.P. for
the purpose of providing ―a number of diverse, ongoing opportunities to maximize the economic benefits
for public and private entities within the Project Area [to be] derived from renewable as well as traditional
energy resources.‖
14
an effort to comply with those responsibilities, Republic Power pursued completion of
both feasibility studies and financing options by engaging the services of consultants,
engineers, financial advisors, attorneys and accountants. For almost three years,
Republic Power worked with WTMPA in the performance of the Development
Agreement for the ultimate purpose of providing WTMPA and its member cities with a
reliable source of electric energy.
While chapter 271 of the Texas Local Government Code does not specifically
define ―goods or services‖ that term is a sufficiently broad enough term to encompass a
wide array of activities.9 Kirby Lake Dev., Ltd., 320 S.W.3d at 839. It includes generally
any act performed for the benefit of another under some arrangement or agreement
whereby such act was to have been performed. Id. (quoting Creameries of Am. v.
Indus. Comm’n, 98 Utah 571, 102 P.2d 300, 304 (Utah 1940)). But see Berkman v. City
of Keene, 311 S.W.3d 523, 527 (Tex. App.—Waco 2009, pet. denied) (holding the
statute does not apply to contracts in which the benefit that the local government entity
would receive is an indirect, attenuated one).
9
―Goods‖ have been defined in other statutes as follows: (1) ―tangible personal property,‖ TEX.
FIN. CODE ANN. §§ 345.002(a) and 371.003 (West 2006); (2) ―real or tangible personal property,‖ TEX. TAX
CODE ANN. § 171.1012 (West Supp. 2013); (3) ―minerals or the like (including oil and gas) or a structure or
its materials to be removed from realty,‖ TEX. BUS. & COM. CODE ANN. § 2.107 (West 2009); (4) ―property,
tangible or intangible, real, personal, or mixed, and any article, commodity, or other thing of value,
including insurance,‖ id. at § 15.03(2); (5) ―tangible chattels or real property purchased or leased for use,‖
id. at § 17.45(1); (6) ―supplies, materials, or equipment,‖ TEX. GOV‘T CODE ANN. § 2155.001(1) (West
2008). Likewise, ―services‖ has been defined in other statutes as follows: (1) ―work, labor, or service
purchased or leased for use, including services furnished in connection with the sale or repair of goods,‖
TEX. BUS. & COM. CODE ANN. § 17.45(2) (West 2011); and (2) ―any act performed, anything supplied, and
any facilities used or supplied by a public utility in the performance of the utility‘s duties . . . . ‖ TEX. UTIL.
CODE ANN. § 11.003(19) (West 2007); (3) ―services primarily intended to guide governmental policy to
ensure the orderly and coordinated development of the state or of municipal, county, metropolitan, or
regional land areas,‖ TEX. LOCAL GOV‘T CODE ANN. § 252.001(5) (West 2005); (4) ―services within the
scope of the practice . . . of . . . professional engineering,‖ TEX. GOV‘T CODE ANN. § 2254.002(a)(vii) (West
2008); (5) ―skilled or unskilled labor or professional services, as defined by Section 2254.002,
Government Code,‖ TEX. LOCAL GOV‘T CODE ANN. § 176.001(6) (West 2008).
15
The Development Agreement clearly contemplated the performance of acts
leading to the development and implementation of a plan ultimately resulting in the
construction and operation of a power generating facility, which would then provide
electricity to WTMPA and its member cities. It matters not that the dispute arose during
the development stage of this agreement when the objective of the agreement was to
plan for the ultimate acquisition of a good or service. Parsing a long-term high
technology procurement contract,10 such as the research and development of an
electric energy production and delivery system, into ―phases‖ where the ultimate goal is
to provide something as complex as a public utility does not serve the legislative
purposes of section 271.152.
Furthermore, the goods or services provided to the governmental entity need not
be the primary purpose of the contract, Kirby Lake Dev., Ltd., 320 S.W.3d at 839, or
even form the basis of the dispute. Ben Bolt, 212 S.W.3d at 327. In Ben Bolt, the
Supreme Court liberally construed a government-pooled insurance policy (the Fund) as
encompassing ―services‖ rendered by its members based on the fact the Fund‘s
members elected a governing board and a board subcommittee resolved claims
disputes. Id. at 327. This function, the Court determined was a provision of services
from the Fund‘s members to the Fund. Id. In this case, WTMPA sought and received
planning and development services—services essential to ultimate acquisition of
electric energy and services which were clearly intended to benefit WTMPA and its
member cities. Therefore, we find the Development Agreement provides for the
10
―‗High technology procurement‘ means the procurement of equipment, goods or services of a
highly technical nature, including: . . . (C) electronic distributed control systems, including building energy
management systems . . . .‖ TEX. LOCAL GOV‘T CODE ANN. § 252.001(4) (West 2005).
16
delivery of goods or services to a local governmental entity and we conclude section
271.152 waives immunity from suit for the purpose of adjudicating Republic Power‘s
breach of contract claims. Issue two is overruled. Accordingly, we hold the trial court
did not err in denying WTMPA‘s plea to the jurisdiction as to those claims.
CONCLUSION
We affirm the trial court‘s order denying WTMPA‘s plea to the jurisdiction on
Republic Power‘s claims for breach of contract.
Patrick A. Pirtle
Justice
17