Tex. Mun. League Intergovernmental Risk Pool v. City of Hidalgo

CourtCourt of Appeals of Texas
Docket Number13-22-00250-CV
Decision Date25 August 2022



No. 13-22-00250-CV

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

August 25, 2022

On appeal from the 464th District Court of Hidalgo County, Texas.

Before Chief Justice Contreras and Justices Longoria and Tijerina



Appellant Texas Municipal League Intergovernmental Risk Pool (Risk Pool) contends by one issue that the trial court erred by denying its plea to the jurisdiction. In summary, the Risk Pool asserts that it possesses governmental immunity from a breach of contract claim filed by the City of Hidalgo (City) because the City failed to comply with


the adjudicative procedures contained in the parties' contract. See Tex. Loc. Gov't Code Ann. §§ 271.151, 271.154. We affirm.

I. Background

On August 30, 2021, the City filed suit against the Risk Pool after it denied coverage for property damages sustained by one of the City's elevated water towers during Hurricane Hanna. The City filed its lawsuit in the 464th District Court of Hidalgo County. The City alleged that the Risk Pool's immunity from suit was waived by the Texas Local Government Code and that venue was proper in Hidalgo County because the insured property, the water tower, was located there. See Tex. Loc. Gov't Code Ann.§§ 271.151-.160 (governing the adjudication of claims arising under written contracts with local governmental entities); Tex. Civ. Prac. & Rem. Code Ann. § 15.032 (stating in relevant part that "suit against fire, marine, or inland insurance companies may . . . be commenced in any county in which the insured property was situated").

According to the City's petition, the Risk Pool is an administrative agency created under the government code that allows local governmental entities to jointly self-insure, and the Risk Pool administers the self-insurance program created by the member governmental entities. The City is a member of the Risk Pool and pays an annual contribution to the Risk Pool in exchange for self-insurance coverage. The City's coverage is governed by its Interlocal Agreement (Agreement), which incorporates by reference the "TML Liability Self-Insurance Plan and/or the TML Property Self-Insurance Plan, Declarations of Coverage, and Endorsements and addenda." The City alleged that the Agreement, along with the property coverage document in effect at the time, the


declarations of coverage, and endorsements, constituted an enforceable contract under the terms of the Texas Insurance Code. The City's petition stated that Hurricane Hanna compromised the structural stability of the water tower, creating a risk for health and safety, and the City filed an insurance claim for the property damages sustained to the water tower, but that the Risk Pool denied coverage. The City thus filed suit for breach of the Agreement and invoked its contractual right to appraisal. The City sought damages comprising the "benefit of its bargain," prejudgment and post-judgment interest, and attorney's fees.

On October 14, 2021, the Risk Pool filed a combined pleading comprising a plea to the jurisdiction, motion to dismiss, and original answer. The Risk Pool asserted that it was immune from suit and argued that the local government contract claims act, see Tex. Loc. Gov't Code Ann.§§ 271.151-.160 (Act), did not waive its immunity because the City failed to comply with a contractual "adjudication procedure" requiring it to pursue litigation only in Travis County, Texas. The applicable property coverage document contains the following provision:

No suit or action on this Agreement for the recovery of any claim shall be sustainable in any court of law or equity unless the Member shall have fully complied with all the requirements of this Agreement and commenced not more than two years after the cause of action accrues. Venue of any dispute or suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of Travis County, Texas

According to the Risk Pool, this provision is a forum selection clause which constitutes an "adjudication procedure" under the Act. The Risk Pool thus requested dismissal of the City's suit on grounds that it retained governmental immunity due to the City's failure to


follow the adjudicative procedures detailed in the Agreement. See id. § 271.154.

On April 11, 2022, the City filed a verified response to the Risk Pool's plea to the jurisdiction and motion to dismiss. The Risk Pool filed a reply. On April 12, 2022, the trial court held a non-evidentiary hearing on the Risk Pool's plea to the jurisdiction and motion to dismiss. On May 10, 2022, the trial court denied the Risk Pool's plea to the jurisdiction and motion to dismiss. This appeal ensued. The Risk Pool asserts that the trial court erred by denying its plea to the jurisdiction which invoked its "retained governmental immunity and established that the City failed to comply with the adjudication procedure in the parties' contract requiring that any suit be brought in Travis County, Texas." As will be discussed further, the City filed a responsive brief asserting that the trial court made no such error.

II. Appellate Jurisdiction

As a threshold matter, the City contends that we lack jurisdiction to review the Risk Pool's arguments on appeal. The City acknowledges that this Court would normally have jurisdiction to consider an appeal of the trial court's interlocutory denial of the Risk Pool's plea to the jurisdiction pursuant to Texas Civil Practice and Remedies Code § 51.014(a)(8), which authorizes an appeal from an interlocutory order that grants or denies a plea to the jurisdiction by a governmental unit, such as the Risk Pool. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8). However, the City alleges that this appeal is "based exclusively upon an unenforceable venue provision in the contract between the parties" and contends that venue rulings are not subject to interlocutory appeal. The City thus argues that the Risk Pool's arguments for reversing the trial court's order denying


the Risk Pool's plea to the jurisdiction should not be considered in this appeal.

A. Applicable Law

"As a general rule, subject only to 'a few mostly statutory exceptions,' parties may only appeal a final judgment." Elec. Reliability Council of Tex., Inc. v. Panda Power Generation Infrastructure Fund, LLC, 619 S.W.3d 628, 632 (Tex. 2021). The traditional rule that appeals may proceed only from final judgments "ensures issues are decided on a full record, prevents unnecessary delays in the underlying trial, and allows appellate courts to consider all issues in a single round of review." Sabre Travel Int'l, Ltd. v. Deutsche Lufthansa AG, 567 S.W.3d 725, 736 (Tex. 2019). Thus, historically, interlocutory appeals were strictly construed as a narrow exception to the general rule that interlocutory orders were not subject to appeal. See CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011); see also In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 461 (Tex. 2008) (orig. proceeding) ("Appellate courts cannot afford to grant interlocutory review of every claim that a trial court has made a pre-trial mistake."). Nevertheless, the enactment of the statutory provision at issue, § 51.014, "was driven by the public policy of ensuring the efficient resolution of civil suits in certain Texas courts and making the judicial system more accessible, more efficient, and less costly to all taxpayers." Sabre Travel Int'l, Ltd., 567 S.W.3d at 736 (citing Senate Comm. on State Affairs, Engrossed Bill Analysis, Tex. H.B. 274, 82d Leg., R.S. (2011)). In keeping with this public policy, and "as the statute has expanded," the supreme court has instructed us that our "real goal" in determining the propriety of an interlocutory appeal is simply a "fair" reading of the statutory language that enables the appeal. Dall. Symphony Ass'n, Inc. v. Reyes, 571 S.W.3d 753, 759 (Tex. 2019).


B. Analysis

Here, the Risk Pool filed a plea to the jurisdiction in which it alleged it was immune from suit based on governmental immunity. The parties presented arguments pertaining to the Risk Pool's governmental immunity, or the lack thereof, and the trial court denied the Risk Pool's plea in an order which expressly states that the trial court "retains jurisdiction" over all claims raised in the City's petition. The Risk Pool did not raise the issue of venue in its plea to the jurisdiction and motion to dismiss and did not file a separate motion to transfer venue. The trial court made no ruling on venue. We conclude that the Risk Pool's appeal of the denial of its plea to the jurisdiction falls squarely and fairly within the statute allowing an interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8); Dall. Symphony Ass'n, Inc., 571 S.W.3d at 758. Accordingly, we proceed to address the merits of this appeal.

III. Standard of Review

"Governmental units are immune from suit unless immunity is waived by state law." City of San Antonio v. Maspero, 640 S.W.3d 523, 528 (Tex. 2022). "Because governmental immunity is jurisdictional, it is properly raised through a plea to the jurisdiction, which we review de novo." Id.; see State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007); Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004). The party bringing suit against a governmental unit bears the burden of affirmatively showing a waiver of immunity. Univ. of Tex. M.D. Anderson Cancer Ctr. v. McKenzie, 578 S.W.3d 506, 512 (Tex. 2019). "To determine whether the party has met this burden, we


may consider the facts alleged by the plaintiff and the evidence submitted by the parties." Id. (citing Tex. Nat. Res. & Conservation Comm'n v. White, 46 S.W.3d 864, 868 (Tex. 2001)). When a plea...

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