Alamo Community College v. Browning Const.

• Citation: 131 S.W.3d 146
• Decision Date: 14 January 2004
• Docket Number: No. 04-02-00808-CV.,04-02-00808-CV.
• Parties: ALAMO COMMUNITY COLLEGE DISTRICT, Appellant, v. BROWNING CONSTRUCTION COMPANY, Appellee.
• Court: Court of Appeals of Texas

131 S.W.3d 146

ALAMO COMMUNITY COLLEGE DISTRICT, Appellant, v. BROWNING CONSTRUCTION COMPANY, Appellee.

No. 04-02-00808-CV.

Court of Appeals of Texas, San Antonio.

January 14, 2004.

Rehearing Overruled February 9, 2004.

Reba Bennett Kennedy, Law Offices of Reba Bennett Kennedy, Wade B. Shelton, Shelton & Valadez, P.C., and William T. Armstrong, III, Langley & Banack, Inc., San Antonio, for Appellant.

P. Michael Jung, Kenneth S. Beat, Strasburger & Price, L.L.P., Dallas, Stanley W. Curry, Jr., Nicole Betters, Richard C. McSwain, Curry & Associates, P.C., San Antonio, for Appellee.

Sitting: CATHERINE STONE, Justice, PAUL W. GREEN, Justice, KAREN ANGELINI, Justice.

OPINION

Opinion by KAREN ANGELINI, Justice.

This case arises from a breach-of-contract suit between Browning Construction Company ("Browning") and Alamo College Community District ("ACCD"). At trial, the jury awarded Browning, the plaintiff, over $3,000,000 on its breach-of-contract claim. The trial court entered judgment in accordance with the verdict. ACCD, the defendant at trial, appeals the judgment of the trial court in fourteen issues. Browning, appellee and cross-appellant, brings one issue on appeal. We affirm the judgment of the trial court.

BACKGROUND

ACCD and Browning entered into a contract whereby Browning agreed to serve as the general contractor for the construction of a new campus for ACCD. After disagreements over delay, Browning sued ACCD for breach of contract and won damages of over $3,000,000. The key issue in the suit was whether Browning could collect damages for delay when the contract had a no-damages-for-delay clause. The jury answered yes, because 1) ACCD had waived its right to rely on that clause; 2) ACCD is estopped from relying on that clause; 3) ACCD and Browning had agreed to modify the clause; 4) the delays encountered by Browning were caused by the active interference of ACCD; 5) ACCD committed unreasonable delay such that Browning would have been justified in abandoning the contract; and 6) ACCD committed fraud, misrepresentation, or other bad faith. Browning also sued ACCD for violations of the Prompt Pay Act and quantum meruit. The jury did not find for Browning on these causes of action.

ACCD, appellant and cross-appellee, presents the following issues for review:

1) Does sovereign immunity protect ACCD from suit? Does sovereign immunity protect ACCD from tort liability?

2) Did ACCD have a duty to Browning for design errors?

3) Was it proper for the trial court to instruct the jury that the architects were agents of ACCD?

4) Was it error for the trial court to permit the jury to assess damages for Browning's liability to its subcontractors?

5) Does Jury Question 5 submit an offensive theory of estoppel, and if so, was it error for the trial court to submit it?

6) Was it error for the trial court to omit from Jury Question 1 an instruction on the specific contractual provisions at issue? Does Jury Question 1(b) violate Casteel?

7) Did the trial court submit an improper measure of damages?

8) Was there legally and factually sufficient evidence of causation to support a finding of damages for delay?

9) Was there legally and factually sufficient evidence of consideration to support the jury's finding that ACCD and Browning agreed to modify the contract?

10) Was there legally and factually sufficient evidence of design error?

11) Did the trial court abuse its discretion in denying ACCD's motion for new trial?

12) Was there legally and factually sufficient evidence to support the jury's finding that ACCD waived its right to rely on the no-damages-for-delay clause as a defense to Browning's claims?

13) Was there legally and factually sufficient evidence to support the jury's finding that ACCD breached the contract?

14) Was there legally and factually sufficient evidence to support the jury's finding of overhead cost damages?

Browning, appellee and cross-appellant, presents the following issue for review: Did the trial court err in failing to render judgment notwithstanding the verdict for Browning on its Prompt Pay Act claim?

SOVEREIGN IMMUNITY

A. Immunity from Suit

In its first issue, ACCD argues that sovereign immunity protects it from suit.

Sovereign immunity defeats a trial court's subject-matter jurisdiction over a lawsuit. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638-39 (Tex.1999) (per curiam). The State may assert sovereign immunity from suit in a plea to the jurisdiction. Id. at 638. Because the question of subject-matter jurisdiction is a question of law, we review de novo a trial court's order denying a jurisdictional plea based on sovereign immunity. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998).

ACCD argues that sovereign immunity protects it from suit. We have specifically held, however, that junior college community districts like ACCD are not immune from suit:

ACCD is a junior college community district organized pursuant to chapter 130 of the Texas Education Code. Under chapter 130, ACCD's board of trustees' "powers and duties" "in the ... management and control of the junior college" are governed by "the general law governing the ... management and control of independent school districts insofar as the general law is applicable." Part of the "general law" governing the management and control of independent school districts is the Texas Legislature's consent to suits against "[t]he trustees of an independent school district... in the name of the district...."

... By subjecting junior college districts like ACCD to the same general law applicable to independent school districts, it appears to us, clearly and unambiguously, the Texas Legislature granted its consent to sue junior college community districts and we so hold.

Alamo Cmty. Coll. Dist. v. Obayashi Corp., 980 S.W.2d 745, 747-48 (Tex.App.-San Antonio 1998, pet. denied) (citations omitted), abrogated on other grounds by Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 595-98 (Tex.2001).

In Obayashi, we followed the supreme court's holding in Missouri Pacific Railroad Co. v. Brownsville Navigation District, 453 S.W.2d 812 (Tex.1970). See Obayashi, 980 S.W.2d at 748 (citing Mo. Pac., 453 S.W.2d at 813). In Missouri Pacific, the question was whether a 1925 statute clearly and unambiguously waived Brownsville Navigation District's immunity from suit. Mo. Pac., 453 S.W.2d at 813. The statute provided: "All navigation districts established under this Act may, by and through the navigation and canal commissioners, sue and be sued in all courts of this State in the name of such navigation district...." Id. (emphasis added). The court held: "In our opinion [the statute] is quite plain and gives general consent for District to be sued in the courts of Texas in the same manner as other defendants." Id.

Similarly, the statute we relied on in Obayashi provides: "The trustees of an independent school district constitute a body corporate and in the name of the district may acquire and hold real and personal property, sue and be sued, and receive bequests and donations or other moneys or funds coming legally into their hands." Tex. Educ.Code Ann. § 11.151(a) (Vernon 1996) (emphasis added). Thus, both Obayashi and Missouri Pacific find a waiver of sovereign immunity where the Legislature provides that the governmental entity may "sue and be sued." Mo. Pac., 453 S.W.2d at 813; Obayashi, 980 S.W.2d at 748.

ACCD argues that two recent Texas Supreme Court cases, Texas Natural Resource Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex.2002) and Travis County v. Pelzel & Associates, Inc., 77 S.W.3d 246 (Tex.2002), suggest that community college districts like ACCD are immune from suit. We disagree.

In IT-Davy, a general contractor (IT-Davy) contracted with the Texas Water Commission (predecessor of the Texas Natural Resource Conservation Commission) to clean up a hazardous waste site in Houston. IT-Davy, 74 S.W.3d at 851. IT-Davy cleaned the site, and the TNRCC paid IT-Davy the full contract price. Id. IT-Davy claimed, however, that it was owed additional monies under the contract because materially different site conditions increased its clean-up costs. Id. The TNRCC refused to pay these additional costs, and IT-Davy brought suit against the TNRCC for breach of contract, negligent misrepresentation, quantum meruit, and promissory estoppel. Id. at 851-52. In response, the TNRCC filed a plea to the jurisdiction, alleging that sovereign immunity barred IT-Davy's claims. Id. at 852. The trial court denied the plea. Id. The TNRCC then filed an interlocutory appeal. Id. The court of appeals affirmed the trial court's order, holding that IT-Davy's allegations were "sufficient to show that the [TNRCC] has engaged in conduct, beyond the mere execution of a contract, that waives its immunity from suit." IT-Davy, 74 S.W.3d at 851 (citation omitted) (brackets in original).

At the supreme court, IT-Davy argued that the TNRCC waived its immunity from suit by fully accepting benefits under the contract. Id. at 856. In support of its argument, IT-Davy cited a footnote from Federal Sign v. Texas Southern University, 951 S.W.2d 401 (Tex.1997), providing that there may be circumstances "where the State may waive its immunity by conduct other than simply executing a contract...." See IT-Davy, 74 S.W.3d at 856 (quoting Federal Sign, 951 S.W.2d at 408 n. 1). Thus, the issue for the supreme court in IT-Davy was whether Texas law allows governmental entities to waive their immunity by conduct. See id. (noting that several courts of appeals have relied on the footnote in Federal Sign to create a judicially-imposed, equitable waiver of immunity from suit). The court held:

We again affirm that it is the Legislature's sole province to waive or abrogate sovereign immunity.... Because we have consistently held that only the Legislature can waive sovereign immunity from suit, allowing other governmental entities to waive...