Tooke v. City of Mexia, 03-0878.

Citation197 S.W.3d 325
Decision Date30 June 2006
Docket NumberNo. 03-0878.,03-0878.
PartiesJudy TOOKE and Everett Tooke d/b/a Tooke & Sons and d/b/a Nature's Way Organic Landscaping, Petitioners, v. CITY OF MEXIA, Respondent.
CourtSupreme Court of Texas

Brian L. Gibson, Gibson & Associates, P.L.L.C., Groesbeck, Robert Manning Clemons, for petitioner.

Charles Buenger, Kathleen French Dow, Buenger & Associates, Waco, Greg Abbott, Atty. Gen., Barry Ross McBee, Edward D. Burbach, Rafael Edward Cruz, Office of Atty. Gen., Austin, for respondent.

Bill Boyd, Boyd Veigel, P.C., McKinney, Kristofer S. Monson, Asst. Solicitor Gen., Craig T. Enoch, Winstead Sechrest & Minick, P.C., B. Craig Deats, Deats Durst Owen & Levy, P.L.L.C., Austin, Barbara E. Rosenberg, James B. Pinson, Asst. City Attys., Madeleine B. Johnson, City Atty., P. Michael Jung, Strasburger & Price, L.L.P., Dallas, Eric Weisberg, Weisberg Law Firm, Denison, for amicus curiae.

Justice HECHT delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice WAINWRIGHT, Justice BRISTER, Justice MEDINA, and Justice GREEN joined.

Scores of Texas statutes provide, variously, that individuals and entities, public and private, may "sue and (or) be sued", "(im)plead and (or) be impleaded", "be impleaded", "prosecute and defend", "defend or be defended", "answer and be answered", "complain and (or) defend", or some combination of these phrases, in court.1 The phrases are also used in municipal charters and ordinances and in corporate articles and bylaws. Read in context, they sometimes waive governmental immunity from suit, sometimes do not, and sometimes have nothing whatever to do with immunity, referring instead to the capacity to sue and be sued or the manner in which suit can be had (for example, by service on specified persons). Because immunity is waived only by clear and unambiguous language,2 and because the import of these phrases cannot be ascertained apart from the context in which they occur, we hold that they do not, in and of themselves, waive immunity from suit.

This case involves a suit against a city for breach of contract. The trial court rendered judgment on a verdict for the plaintiffs, but the court of appeals reversed,3 holding that the contract covered a governmental function of the city over which it was immune from suit, and that immunity was not waived by section 51.075 of the Local Government Code, which provides simply that a home-rule municipality4 "may plead and be impleaded in any court."5 We agree with the court of appeals.

While this case has been pending, the Legislature has enacted a limited waiver of the immunity municipalities and certain other governmental entities have from suit for breach of contract.6 Although the waiver is partially retroactive and would therefore reach the claim in this case,7 the consequential damages awarded the plaintiffs are not allowed by the statute. Accordingly, we conclude that recovery in this case is barred and therefore affirm the judgment of the court of appeals.

I

After competitive bids, the City of Mexia, a home-rule city, awarded a contract to J.E. Tooke & Sons, a sole proprietorship owned by Judy Tooke and her husband, Everett, to furnish the labor and equipment for collecting brush and leaves curbside within the city. The contract stated that its term was "for a three year period beginning November 1, 1996", but also provided that it was "automatically renewable at the end of the first year and on the anniversary of each year thereafter, unless either party furnishes written notice to the other party at least sixty (60) days prior to said annual anniversary." For about 14 months, the Tookes performed under the contract, and the City paid all their invoices, but in December 1997, after the contract's first anniversary, the City's director of public works advised the Tookes that the City's budget for their services had been exhausted. The Tookes did no more work, and the following March, the city manager notified them by letter that the City was "discontinuing" the contract for lack of funding.

The Tookes sued the City for breach of contract, asserting that they had relied on a three-year term in purchasing equipment. They claimed unspecified damages but requested jury findings only on lost profits and attorney fees, which the jury found to be $8,659 and $7,500, respectively. They did not claim that the City had failed to pay for the work they had done. The trial court rejected the City's contention that it was immune from suit and rendered judgment on the verdict plus prejudgment interest. The City appealed.

To counter the City's assertion of immunity, the Tookes argued that immunity had been waived three ways. First, they argued that section 51.075 waives immunity by providing that home-rule municipalities "may plead and be impleaded in any court."8 The court of appeals, noting the disagreement among its sister courts on the subject,9 looked to the four "aids to help guide . . . analysis in determining whether the Legislature has clearly and unambiguously waived sovereign immunity" set out in our opinion in Wichita Falls State Hospital v. Taylor:

First, a statute that waives the State's immunity must do so beyond doubt, even though we do not insist that the statute be a model of "perfect clarity.". . . For example, we have found waiver when the provision in question would be meaningless unless immunity were waived. . . .

Second, when construing a statute that purportedly waives sovereign immunity, we generally resolve ambiguities by retaining immunity. . . .

Third, if the Legislature requires that the State be joined in a lawsuit for which immunity would otherwise attach, the Legislature has intentionally waived the State's sovereign immunity. . . .

Finally, we are cognizant that, when waiving immunity by explicit language, the Legislature often enacts simultaneous measures to insulate public resources from the reach of judgment creditors. . . . Therefore, when deciding whether the Legislature intended to waive sovereign immunity and permit monetary damages against the State, one factor to consider is whether the statute also provides an objective limitation on the State's potential liability. . . .10

Applying these factors to the City's claim of governmental immunity,11 the court of appeals concluded that section 51.075 is "ambiguous at best".12 The court reasoned that because the phrase "plead and be impleaded" often appears in statutes in conjunction with "sue and be sued," and because "sue and be sued" waives immunity from suit, according to this Court's holding in Missouri Pacific Railroad Co. v. Brownsville Navigation District,13 "plead and be impleaded" must be presumed to have a different meaning if every word of such statutes is to be given effect.14 The latter phrase, the court said, "can be reasonably construed as authorization for municipalities to file pleadings and be named in adverse pleadings in lawsuits in which immunity from suit has already been waived."15 Further, the court observed, section 51.075 "does not require the joinder of a home-rule municipality in a suit for which immunity would otherwise attach",16 and no limitation on home-rule municipalities' potential liability accompanied the enactment of section 51.075.17 Thus, the court held that section 51.075 does not waive immunity from suit.18

The court easily rejected the Tookes' other arguments of waiver. The court found no authority for their contention that the City had waived immunity by partially performing under their contract and accepting its benefits.19 And contrary to the Tookes' argument that the City was acting in its proprietary capacity, section 101.0215(a)(6) of the Texas Civil Practice and Remedies Code states that "`solid waste removal, collection, and disposal' is a governmental function."20 Accordingly, the court reversed the trial court's judgment and rendered judgment for the City.21

We granted the Tookes' petition for review.22

II

In this Court's second Term, we acknowledged the common-law rule that "no state can be sued in her own courts without her consent, and then only in the manner indicated by that consent."23 We gave no basis for this principle of sovereign immunity, perhaps because a rule then more than six centuries old which the United States Supreme Court would describe as "an established principle of jurisprudence in all civilized nations"24 required no justification, or perhaps because the reasons given for the rule had evolved over the centuries, from "the king can do no wrong",25 to preserving the dignity of the state,26 to protecting state resources.27 The rule remains firmly established, and as it has come to be applied to the various governmental entities in this State, an important purpose is pragmatic: to shield the public from the costs and consequences of improvident actions of their governments.

In Texas, governmental immunity has two components:28 immunity from liability, which bars enforcement of a judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether.29 By entering into a contract, a governmental entity necessarily waives immunity from liability, voluntarily binding itself like any other party to the terms of agreement, but it does not waive immunity from suit.30 "We have consistently deferred to the Legislature to waive sovereign immunity from suit, because this allows the Legislature to protect its policymaking function."31 More specifically, we defer to the Legislature to waive immunity from contract claims because:

"the handling of contract claims against the government involves policy choices more complex than simply waiver of immunity," including whether to rely on administrative processes and what remedies to allow;

• the government should not be kept from responding to changing conditions for the public welfare by prior policy decisions reflected...

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