Weir Bros., Inc. v. Longview Econ. Dev. Corp.

• Decision Date: 02 July 2012
• Docket Number: No. 05–10–01120–CV.,05–10–01120–CV.
• Citation: 373 S.W.3d 841
• Parties: WEIR BROS., INC., Appellant v. LONGVIEW ECONOMIC DEVELOPMENT CORPORATION, Bob Metzler, David Houston, Donny Stuckey, Dan Droege, Richard Andrews, William Miller, Gaylon Butler, and Steve Metcalf, Appellees.
• Court: Texas Court of Appeals

373 S.W.3d 841

WEIR BROS., INC., Appellant

v.LONGVIEW ECONOMIC DEVELOPMENT CORPORATION, Bob Metzler, David Houston, Donny Stuckey, Dan Droege, Richard Andrews, William Miller, Gaylon Butler, and Steve Metcalf, Appellees.

No. 05–10–01120–CV.

Court of Appeals of Texas, Dallas.

July 2, 2012.

Mark A. Herndon, Kevin P. Wright, Dallas, TX, for Appellant.

Jerry L. Ewing, Jason L. Wren, Walters, Balido & Crain, LLP, Dallas, TX, for Appellee.

Before Justices MOSELEY, LANG–MIERS, and MURPHY.

OPINION

Opinion By Justice LANG–MIERS.

This is an appeal from trial court orders granting a plea to the jurisdiction based on governmental immunity and dismissing claims without prejudice to refiling. Appellant Weir Bros., Inc. is a construction company that unsuccessfully bid for the award of a contract to construct a business park in Longview, Texas. Appellee Longview Economic Development Corporation is the corporation that awarded the contract. Appellees Bob Metzler, David Houston, Donny Stuckey, Dan Droege, Richard Andrews, William Miller, Gaylon Butler, and Steve Metcalf are its directors and made the decision to award the contract to another bidder. Longview and the Directors are also cross-appellants. We modify the trial court's orders granting the plea to the jurisdiction and affirm as modified.

Background

Weir sued Longview and the Directors alleging restraint of trade under the Texas Free Enterprise and Antitrust Act of 1983 (Texas Free Enterprise Act), ¹ fraud, and breach of contract arising from Longview's award of a contract to construct a business park to a contractor other than Weir. Weir alleged that Longview employed “an undisclosed local preference” as part of its selection criteria when Longview awarded the contract to another bidder. Longview and the Directors filed a plea to the jurisdiction claiming that the court did not have jurisdiction, asserting that Longview and the Directors are entitled to governmental immunity because Longview is a development corporation organized under the Development Corporation Act (the Act) and the Act grants immunity to a development corporation and its directors. SeeTex. Loc. Gov't Code Ann. §§ 501.001– 507.202 (West Supp.2011). The trial court granted the plea to the jurisdiction and dismissed Weir's causes of action against Longview and the Directors without prejudice to refiling.

Standard of Review

Governmental immunity from suit defeats a trial court's subject matter jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225 (Tex.2004); City of Dallas v. Turley, 316 S.W.3d 762, 767 (Tex.App.-Dallas 2010, pet. denied). A party properly asserts immunity by filing a plea to the jurisdiction. Miranda, 133 S.W.3d at 225–26;Turley, 316 S.W.3d at 767. Whether the court has subject matter jurisdiction is a question of law that we review de novo. State v. Holland, 221 S.W.3d 639, 642 (Tex.2007). We focus first on the plaintiff's petition to determine whether the plaintiff has pled facts that affirmatively demonstrate that the trial court has subject matter jurisdiction. Id. We construe the pleadings liberally in favor of the plaintiff and look to the plaintiff's intent. Id. at 643;Miranda, 133 S.W.3d at 226. The plaintiff bears the burden to allege facts that affirmatively demonstrate the trial court's jurisdiction to hear a case. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993); Turley, 316 S.W.3d at 767. When a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties to determine if a fact issue exists. Miranda, 133 S.W.3d at 227;Turley, 316 S.W.3d at 767. If the evidence creates a fact issue concerning jurisdiction, the trial court must deny the plea to the jurisdiction. Id. at 227–28. If the evidence is undisputed or fails to raise a fact issue concerning jurisdiction, the trial court rules on the plea to the jurisdiction as a matter of law. Id. at 228.

The Parties' Contentions

Weir argues that Longview and the Directors are not immune from liability under the Act because Longview's articles of incorporation do not expressly state that the corporation is governed by chapter 504 of the Texas Local Government Code and do not comply with the requirements of the Act. Weir also argues that other statutes either subject Longview and the Directors to liability or waive their immunity, that there is no immunity unless the alleged conduct involves governmental rather than proprietary functions, and that the appellees are not immune because the claimed wrongful acts were intentional.

Longview and the Directors argue that they are immune from liability under the Act, that the alleged acts were governmental functions, and that Longview's articles of incorporation comply with the Act. They also argue that Weir did not plead and establish a clear and unambiguous waiver of the immunity granted by the Act. Additionally, Longview and the Directors argue, by cross-appeal, that the trial court erred by dismissing Weir's claims without prejudice instead of with prejudice.

Immunity of Corporation and Directors

Immunity under the Act

Weir recognizes that Longview and the Directors claim immunity under the Act, but argues that “[d]ue to [Longview's] failure to expressly state that it is governed by Chapter 504 in its articles of incorporation, [Longview] is not a properly organized Type A Corporation and should not be afforded the governmental immunity outlined in the [Act].” We disagree.

Longview filed articles of incorporation in 1992. And in 1992 the statute in effect stated: “The articles of incorporation of a corporation under this section must state that the corporation is governed by this section.” ² The articles state that Longview “is an industrial development corporation under the Development Corporation Act of 1979, and shall be governed by Section 4A of said Act and specifically Article 5190.6, Section 4A, Revised Civil Statutes of the State of Texas, as now existing or as may be amended.” Weir does not argue that Longview's articles of incorporation did not comply with the statute in effect at the time the articles were filed.

As was true of its predecessor statute, the current statute,³section 504.004 of the local government code, also states: “The certificate of formation of a Type A corporation must state that the corporation is governed by this chapter.” Tex. Loc. Gov't Code Ann.. § 504.004.⁴ We conclude that the language in Longview's articles of incorporation specifying that Longview “shall be governed by Section 4A ... as now existing or as may be amended” satisfies the requirement of section 504.004. See Cities of Austin, Dallas, Ft. Worth and Hereford v. Sw. Bell Tel. Co., 92 S.W.3d 434, 443–44 (Tex.2002) (stating where codification did not change statute and legislature stated that codification made no substantive statutory changes, “the codification is the same as its predecessor”).

Governmental Functions

Weir also argues that the alleged acts were not governmental functions and appellants are not entitled to immunity. Weir claims that, to determine whether the claimed acts qualify as governmental functions, we should look to the definition of governmental function in the Penal Code and the list of governmental functions identified in the Texas Tort Claims Act. SeeTex. Penal Code Ann. § 38.01(6) (West 2011); Tex. Civ. Prac. & Rem.Code Ann. § 101.0215(a) (West 2011). Conversely, Longview and the Directors argue that they are immune from liability because their acts in connection with the award of the construction contract were governmental functions.

The governing Act specifically addresses this issue. As a result, we look to the Act, and not other statutes, to determine whether the acts challenged were governmental functions. See Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex.2001) (“We must construe statutes as written and, if possible, ascertain legislative intent from the statute's language.”). The Act grants power to Longview, as a Type A development corporation, to “contract with another private corporation to: (1) carry out an industrial development program or objective; or (2) assist with the development or operation of an economic developmentprogram or objective consistent with the purposes and duties provided by this subtitle.” Tex. Loc. Gov't Code Ann.. § 504.102. Additionally, the Act states:

(a) The following are not liable for damages arising from the performance of a governmental function of a Type A corporation or the authorizing municipality: (1) the corporation; (2) a director of the corporation ...

(b) For purposes of Chapter 101, Civil Practice and Remedies Code (Texas Tort Claims Act), a Type A corporation is a governmental unit and the corporation's actions are governmental functions. Tex. Loc. Gov't Code Ann.. § 504.107.

This language is unambiguous. And because the statutory language is unambiguous, “this court must seek the intent of the legislature as found in the plain and common meaning of the words and terms used.” Sorokolit v. Rhodes, 889 S.W.2d 239, 241 (Tex.1994). When we apply the plain and common meaning, we may not enlarge the meaning of any word beyond its ordinary meaning by implication. Id.

As the statute clearly states, “a Type A corporation is a governmental unit and the corporation's actions are governmental functions.” Tex. Loc. Gov't Code Ann.. § 504.107(b); see City of Weslaco v. Borne, 210 S.W.3d 782, 789 n. 1 (Tex.App.-Corpus Christi 2006, pet. denied) (construing previous article 5190.6 and stating “[t]he Act expressly extends governmental immunity to economic development corporations”); Rayl v. Borger Econ. Dev. Corp., 963 S.W.2d 109, 114 (Tex.App.-Amarillo 1998, no pet) (construing previous article 5190.6 and concluding actions “expressly authorized by the enabling legislation ... were ‘governmental functions' ” and statute “expressly extends governmental immunity” to a development corporation)....