Brown & Gay Eng'g, Inc. v. Olivares

• Decision Date: 24 April 2015
• Docket Number: No. 13–0605,13–0605
• Citation: 461 S.W.3d 117
• Parties: Brown & Gay Engineering, Inc., Petitioner, v. Zuleima Olivares, Individually and as the Representative of the Estate of Pedro Olivares, Jr., & Pedro Olivares, Respondents
• Court: Texas Supreme Court

461 S.W.3d 117

Brown & Gay Engineering, Inc., Petitioner

v.Zuleima Olivares, Individually and as the Representative of the Estate of Pedro Olivares, Jr., & Pedro Olivares, Respondents

No. 13–0605

Supreme Court of Texas.

Argued October 15, 2014

Opinion Delivered: April 24, 2015

Will W. Allensworth, William R. Allensworth, Allensworth & Porter L.L.P., Austin, for Amicus Curiae American Council of Engineering Companies of Texas.

Murray Fogler, Beck Redden LLP, Houston, for other interested party Mike Stone Enterprises, Inc.

Sean Higgins, Wilson Elser Moskowitz Edelman & Dicker LLP, Houston, for Petitioner Brown & Gay Engineering, Inc.

Peter M. Kelly, Kelly, Durham & Pittard, L.L.P., Ricardo Molina, Molina Law Firm, Houston, for Respondent Zuleima Olivares, Individually and as the Representative of the Estate of Pedro Olivares, Jr., & Pedro Olivares.

Opinion

Justice Lehrmann delivered the opinion of the Court, in which Justice Green, Justice Johnson, Justice Boyd, and Justice Devine joined.

The doctrine of sovereign immunity bars suit against the government absent legislative consent. In this case, a private engineering firm lawfully contracted with a governmental unit to design and construct a roadway, and a third party sued the firm for negligence in carrying out its responsibilities. The firm filed a plea to the jurisdiction seeking the same sovereign-immunity protection that the governmental unit would enjoy had it performed the work itself. The trial court granted the plea, but the court of appeals reversed, holding that the firm was not immune from suit. We hold that extending sovereign immunity to the engineering firm does not serve the purposes underlying the doctrine, and we therefore decline to do so. Accordingly, we affirm the court of appeals' judgment.

I. Background

During the early hours of January 1, 2007, an intoxicated driver entered an exit ramp of the Westpark Tollway in Fort Bend County. He proceeded east in the westbound lanes for approximately eight miles before colliding with a car driven by Pedro Olivares, Jr. Both drivers were killed.

The Fort Bend County portion of the Tollway fell under the purview of the Fort Bend County Toll Road Authority, a local government corporation created to design, build, and operate the Tollway. Rather than utilize government employees to carry out its responsibilities, the Authority entered into an Engineering Services Agreement with Brown & Gay Engineering, Inc. pursuant to Texas Transportation Code section 431.066(b), which authorizes local government corporations to retain “engineering services required to develop a transportation facility or system.” Under that agreement, the Authority delegated the responsibility of designing road signs and traffic layouts to Brown & Gay, subject to approval by the Authority's Board of Directors.¹ Brown & Gay was contractually responsible for furnishing the necessary equipment and personnel to perform its duties and was required to maintain insurance for the project, including workers' compensation, commercial general liability, business automobile liability, umbrella excess liability, and professional liability.

Olivares's mother, individually and as representative of his estate, and his father sued the Authority and Brown & Gay, among others,² alleging that the failure to design and install proper signs, warning flashers, and other traffic-control devices around the exit ramp where the intoxicated driver entered the Tollway proximately caused Olivares's death. The Authority filed a plea to the jurisdiction on governmental-immunity grounds. The trial court denied the plea, but on interlocutory appeal the court of appeals reversed, holding that the Authority was immune from claims based on its discretionary acts related to the placement and sufficiency of signs and other traffic-control and traffic-safety devices. Fort Bend Cnty. Toll Road Auth. v. Olivares, 316 S.W.3d 114, 121–26 (Tex.App.–Houston [14th Dist.] 2010, no pet.). The court of appeals remanded the case to the trial court to give the Olivareses an opportunity to amend their pleadings. Id. at 129. On remand, the Olivareses nonsuited the Authority, whose immunity is no longer at issue in this proceeding.

Brown & Gay then filed its own plea to the jurisdiction, arguing that it was an employee of the Authority being sued in its official capacity and was therefore entitled to governmental immunity. See Tex. Adjutant General's Office v. Ngakoue, 408 S.W.3d 350, 356 (Tex.2013) (explaining that a suit against a government official acting in an official capacity is “merely another way of pleading an action against the entity of which the official is an agent” (internal quotation marks and citation omitted)). The trial court granted the plea, but the court of appeals reversed, holding that Brown & Gay was not entitled to governmental immunity because it was an independent contractor, not an “employee” of the Authority as that term is defined in the Texas Tort Claims Act.³ 401 S.W.3d 363, 378–79 (Tex.App.–Houston [14th Dist.] 2013).

In this Court, Brown & Gay argues that its status as an independent contractor rather than a government employee does not foreclose its entitlement to the same immunity afforded to the Authority. It argues that the court of appeals' reliance on the Tort Claims Act was misplaced because the Act “uses ‘employee’ to delineate the circumstances where the government will be liable under a waiver of immunity,” not “to limit the scope of ... unwaived governmental immunity.” Brown & Gay further argues that the purposes of sovereign immunity are served by extending it to private entities performing authorized governmental functions for which the government itself would be immune.

II. Analysis

A. Origin and Purpose of Sovereign Immunity

Once again we are presented with questions about the parameters of sovereign immunity, the well-established doctrine “that ‘no state can be sued in her own courts without her consent, and then only in the manner indicated by that consent.’ ” Tooke v. City of Mexia, 197 S.W.3d 325, 331 (Tex.2006) (quoting Hosner v. DeYoung, 1 Tex. 764, 769 (1847) ). While sovereign immunity developed as a common-law doctrine, we “have consistently deferred to the Legislature to waive such immunity.” Reata Constr. Corp. v. City of Dall., 197 S.W.3d 371, 375 (Tex.2006) (emphasis omitted). Referred to as governmental immunity when applied to the state's political subdivisions,⁴ Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 57–58 (Tex.2011), sovereign immunity encompasses both immunity from suit and immunity from liability, Reata Constr. Corp., 197 S.W.3d at 374. Immunity from liability is an affirmative defense that bars enforcement of a judgment against a governmental entity, while immunity from suit bars suit against the entity altogether and may be raised in a plea to the jurisdiction. State v. Lueck, 290 S.W.3d 876, 880 (Tex.2009) ; Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex.2003).

Although the doctrine's origins lie in the antiquated “feudal fiction that ‘the King can do no wrong,’ ” modern-day justifications revolve around protecting the public treasury. Taylor, 106 S.W.3d at 695. At its core, the doctrine “protects the State [and its political subdivisions] from lawsuits for money damages” and other forms of relief, and leaves to the Legislature the determination of when to allow tax resources to be shifted “away from their intended purposes toward defending lawsuits and paying judgments.” Tex. Natural Res. Conservation Comm'n v. IT–Davy, 74 S.W.3d 849, 853–54 (Tex.2002) (plurality op.); see also Tex. Dep't of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex.2011) (per curiam) (noting that sovereign immunity “shield[s] the state from lawsuits seeking other forms of relief,” not just suits seeking money judgments). And while inherently connected to the protection of the public fisc, sovereign immunity preserves separation-of-powers principles by preventing the judiciary from interfering with the Legislature's prerogative to allocate tax dollars. See Rusk State Hosp. v. Black, 392 S.W.3d 88, 97 (Tex.2012) (noting that immunity respects “the relationship between the legislative and judicial branches of government”); see also Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 414 (Tex.1997) (Hecht, J., concurring) (outlining modern political and financial justifications for sovereign immunity).

Sovereign immunity thus protects the public as a whole by preventing potential disruptions of key government services that could occur when government funds are unexpectedly and substantially diverted by litigation. It also recognizes that the Legislature has the responsibility to determine how these public funds will be spent. But with this benefit comes a significant cost: in “shield[ing] the public from the costs and consequences of improvident actions of their governments,” Tooke, 197 S.W.3d at 332, sovereign immunity places the burden of shouldering those “costs and consequences” on injured individuals. See Bacon v. Tex. Historical Comm'n, 411 S.W.3d 161, 172 (Tex.App.–Austin 2013, no pet.) (noting that “sovereign immunity generally shields our state government's improvident acts—however improvident, harsh, unjust, or infuriatingly boneheaded these acts may seem” (internal quotation marks and citation omitted)). And it does so by foreclosing—absent a legislative waiver—the litigation and judicial remedies that would be available to the injured person had the complained-of acts been committed by private persons. Id.

In this case, we do not consider whether a governmental unit is immune from suit or whether the government's immunity has been waived. Instead, a private company that performed allegedly negligent acts in carrying out a contract with a governmental unit seeks to invoke the same immunity that the government itself enjoys. With the considerations outlined above in mind, we examine the parties' arguments.

B. Effect of Statutes...