the City of Corpus Christi v. H & H Sand and Gravel, Inc.

                                    NUMBER 13-05-306-CV

                                 COURT OF APPEALS

                     THIRTEENTH DISTRICT OF TEXAS

                         CORPUS CHRISTI B EDINBURG

THE CITY OF CORPUS CHRISTI,                                                    Appellant,

                                                             v.

H&H SAND AND GRAVEL, INC.,                                                      Appellee.

                    On appeal from the 148th District Court

                                        of Nueces County, Texas.

                                M E M O R A N D U M   O P I N I O N

     Before Chief Justice Valdez and Justices Castillo and Garza

      Opinion by Chief Justice Valdez  

This is an interlocutory appeal by appellant, the City of Corpus Christi, from the trial court=s denial of appellant=s plea to the jurisdiction asserted against appellee, H&H Sand and Gravel, Inc. We reverse and remand.

Background

In January 1999, the City of Corpus Christi invited bids from contractors for AMaterials for Sector Liner Construction.@  A few months later, the City accepted a bid from Suntide Materials & Trucking to supply 35,000 tons of sand for the project.  The sand was delivered to the City, which paid Suntide in full by December 1999. 

However, in July 2002, H&H Sand filed a petition in district court, alleging that Suntide had subcontracted its sand contract to H&H Sand.  According to the petition, Suntide fell behind in its payments to H&H Sand and eventually agreed to have the City make its payment to the two companies jointly.  This assignment was memorialized in a letter agreement between Suntide and H&H Sand dated October 28, 1999, which read in its entirety:

Suntide Materials & Trucking will agree to have joint checks made payable to Suntide and H&H Sand at P.O. Box 329, Odem TX, until the old balance of $47,213.73 is paid on our account for the sand haul on the City of Corpus Christi job at the Landfill.

H&H Sand alleges that this agreement was delivered to the City=s head of purchasing on the same day it was signed.   According to H&H Sand, this served to put the City on notice that its contract with Suntide had been modified.  The City, however, continued to pay only Suntide for the sand. 

H&H Sand sued the City, Suntide, and other parties, seeking monetary damages for breach of contract, fraud, and other causes of action.  The City filed a plea to the jurisdiction in response, asserting that H&H Sand had failed to prove the City waived its sovereign immunity to be sued.  The trial court denied the City=s plea, which the City appeals to this Court. 

Plea to the Jurisdiction

A party may submit a plea to the jurisdiction in order to assert that it enjoys  sovereign immunity from suit and therefore is not properly within the subject matter jurisdiction of the trial court.  Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999) (per curiam). The limits of the trial court's subject matter jurisdiction is a question of law and subject to de novo review by the appellate court.  Tex. Natural Res. Conservation Comm'n v. IT‑Davy, 74 S.W.3d 849, 855 (Tex. 2000). 

In a suit against a governmental unit, the plaintiff must affirmatively demonstrate the court's jurisdiction by alleging a valid waiver of immunity.  Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003).  To determine if the plaintiff has met that burden, "we consider the facts alleged by the plaintiff and, to the extent it is relevant to the jurisdictional issue, the evidence submitted by the parties."  Tex. Natural Res. Conservation Comm'n v. White, 46 S.W.3d 864, 868 (Tex. 2001).  The court of appeals may look beyond the pleadings in this de novo review and evaluate the jurisdictional evidence submitted by both parties.  Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).  The court must also take the pleadings as true when evaluating them for purposes of jurisdiction and must construe them liberally in favor of jurisdiction.  Texana Cmty. MHMR Ctr. v. Silvas, 62 S.W.3d 317, 320 (Tex. App.BCorpus Christi 2001, no pet.). 

The plaintiff ultimately bears the burden of alleging sufficient facts to demonstrate that the trial court does indeed have jurisdiction to hear a case.  Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).  When a plaintiff fails to plead facts that establish jurisdiction, but the petition does not effectively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded an opportunity to amend.  County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002);  City of Alton v. Sharyland Water Supply Corp., 145 S.W.3d 673, 680 (Tex. App.BCorpus Christi 2004, no pet.).  If, however, the pleadings affirmatively negate the existence of jurisdiction, a plea to the jurisdiction may be granted without allowing the plaintiff an opportunity to amend.  See Brown, 80 S.W.3d at 555.

Sovereign Immunity

In H&H Sand=s first amended original petition, it asserted that the City was liable for breach of contract, breach of constructive trust, negligence, negligence per se, and quantum meruit.  In a supplement to its petition, H&H Sand argued that the following waived the City=s sovereign immunity for purposes of its suit: Acommon law doctrine,@ sections 101.025 and 101.0215 of the civil practice and remedies code, and sections 51.013 and 51.075 of the local government code.  See Tex. Civ. Prac. & Rem. Code Ann. '' 101.025, 101.0215 (Vernon 2005); Tex. Loc. Gov=t Code Ann. '' 51.013, 51.075 (Vernon 1999).

Contrary to H&H Sand=s assertions, Acommon law doctrine@ will not serve to waive the City=s sovereign immunity.  Common law, in fact, is the original source of the City=s immunity:  AIn Texas, the bar of sovereign immunity is a creature of the common law and not of any legislative enactment.  It protects the government both from liability and from suit.@  Tex. A&M University‑Kingsville v. Lawson, 87 S.W.3d 518, 520 (Tex. 2002).  A city may waive immunity from liability for breach of contract by entering into a contract with a private citizen or entity, but it does not waive immunity from suit merely by entering into a contract.  Id. at 520-21 (emphasis added).  Instead, there must be a specific legislative exception to the common law rule in order to waive a city=s immunity from suit for certain causes of action.  Id. at 521.^[1]   Thus, common law is actually the source of the City=s sovereign immunity in this case, rather than waiver of this immunity.

H&H Sand also cites two sections of the civil practice and remedies code as granting waiver. Section 101.025 of the civil practice and remedies code, which is part of the Texas Tort Claims Act, does not have a specific exception that waives liability for tort claims; instead, it simply states that Asovereign immunity to suit is waived and abolished to the extent of liability created by this chapter.@ See Tex. Civ. Prac. & Rem. Code Ann. ' 101.025(a). The other section from this chapter cited by H&H Sand, section 101.0215, recites the following:

A municipality is liable under this chapter for damages arising from its governmental functions, which are those functions that are enjoined on a municipality by law and are given it by the state as part of the state's sovereignty, to be exercised by the municipality in the interest of the general public . . .

Id. ' 101.0215(a).

A list of exemplar governmental functions follows and includes such items as Astreet construction and design,@ Azoning, planning, and plat approval,@ and Aengineering functions.@  See id.  It does not include the actions that the City is accused of improperly performing in H&H Sand=s petition, i.e., contract management and contractor payment.  Thus, neither of the cited provisions of the civil practice and remedies code serves to effectively waive the City=s immunity from the claims H&H Sand raises in tort.

Turning to the two local government code statutes cited by H&H Sand, we note first that section 51.013 of the local government code does not apply to the City, as it is contained in a subchapter entitled, AProvisions Applicable to Type A General Law Municipality,@ and the City is not this kind of municipality.  See Tex. Loc. Gov=t Code Ann. '' 51.011 - .018 (Vernon 1999).  However, section 51.075, which applies to home rule municipalities such as the City, does apply.  This section states that a home rule municipality Amay plead and be impleaded in any court.@ Tex. Loc. Gov=t Code Ann. ' 51.075 (Vernon 1999). 

We have concluded in a previous case involving a plea to the jurisdiction that another statute, which applied to general law municipalities, did serve to waive sovereign immunity.  See City of Alton, 145 S.W.3d at 681.  However, the statute in question in that case stated that the municipality Amay sue and be sued, implead and be impleaded, and answer and be answered in any matter in any court or other place.@  See id. (citing Tex. Loc. Gov=t Code Ann. ' 51.03 (Vernon 1999)).  The relevant statute here does not include the clauses Asue and be sued@ or Aanswer and be answered,@ and therefore is not sufficiently unambiguous as to indicate the Legislature=s intent to waive all liability from suit for these types of municipalities.  See Tex. Gov=t Code Ann. ' 311.034 (Vernon 2005) (AIn order to preserve the legislature's interest in managing state fiscal matters through the appropriations process, a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language.@); see also City of Roman Forest v. Stockman, 141 S.W.3d 805, 813 (Tex. App.BBeaumont 2004, no pet.) (concluding that language of section 51.075 was not an unambiguous waiver of immunity); City of Carrollton v. McMahon Contr., L.P., 134 S.W.3d 925, 927 (Tex. App.BDallas 2004, pet. filed) (AThe Supreme Court has never held that the language >plead and implead= is a clear and unambiguous waiver of immunity from suit . . . .@).

Furthermore, we note that the Texas Supreme Court recently considered a contract suit against a home-rule municipality that involved the same Aplead and be impleaded@ statute.  See Reata Constr. Corp. v. City of Dallas, No. 02‑1031, 2004 Tex. LEXIS 303, at *6-7 (Tex. April 2, 2004) (per curiam).  In that case, the supreme court disregarded the Aplead and be impleaded@ statute, as well as similar language in the city charter, and held that the city in question had waived its immunity from liability because the city had taken the affirmative action of filing suit against a party.  See id. at *3 n.1, *7-8.  Here, the City of Corpus Christi has taken no affirmative action and has filed no pleadings as a plaintiff or intervenor against H&H Sand, and therefore, the City has not acted in any way inconsistent with a sovereign enjoying immunity from suit.

We conclude that the pleadings at this point do not assert a cause of action for which the City could be considered to have waived its immunity, and the trial court erred in denying the City=s plea to the jurisdiction.  We accordingly sustain the City=s first issue on appeal.

Leave to Amend

As noted above, if a petition does not invoke a court=s jurisdiction by showing waiver of sovereign immunity, the issue is one of pleading sufficiency and the plaintiff should be afforded an opportunity to amend unless the defects in jurisdiction are incurable. See Brown, 80 S.W.3d at 555 (Tex. 2002); see also Harris County v. Sykes, 136 S.W.3d 635, 639 (Tex. 2004). Dismissal for failure to state a claim is appropriate only when the plaintiff has been given an opportunity to amend after a plea to the jurisdiction has been sustained.  See Brown, 80 S.W.3d at 559. 

We have concluded that neither common law nor the statutes listed in the pleadings provide H&H Sand with a jurisdictional basis for asserting its claims against the City as a sovereign entity.  Thus, we reverse the judgment of the trial court and sustain the City=s plea to the jurisdiction.  However, as H&H Sand has not yet had an opportunity to amend its plea now that we have reversed the trial court=s ruling and sustained the City=s plea to the jurisdiction, it would be inappropriate dismiss the case at this juncture, given that these defects may yet be curable.  See id.; City of Alton, 145 S.W.3d at 680. 

Conclusion

We reverse the trial court=s denial of the City=s plea to the jurisdiction, and we remand so that H&H Sand can be provided the opportunity to amend its pleadings.

Rogelio Valdez,

Chief Justice

Memorandum Opinion delivered and filed

this 1^st day of December, 2005.

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^[1] The City also argues in its plea to the jurisdiction that H&H Sand provided no proof that there was ever a contract between Suntide and H&H Sand, and therefore, H&H Sand failed to allege facts sufficient to prove that it has standing to bring a breach of contract claim.  We have reviewed the record and see that the only contract included in the record is the contract between the City and Suntide.  However, given that this is a plea to the jurisdiction, we must take H&H Sand=s allegations that there was a contract between itself and Suntide as true for this stage of the proceedings.  See Texana Cmty. MHMR Ctr. v. Silvas, 62 S.W.3d 317, 320 (Tex. App.BCorpus Christi 2001, no pet.).