Bret "Doc" Berkman v. City of Keene--Appeal from 249th District Court of Johnson County
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IN THE
TENTH COURT OF APPEALS
No. 10-08-00073-CV
BRET "DOC" BERKMAN,
Appellant
v.
CITY OF KEENE,
Appellee
From the 249th District Court
Johnson County, Texas
Trial Court No. C200600426
OPINION ON REHEARING
Bret “Doc” Berkman filed suit against the City of Keene alleging that the City
was obligated to furnish water and sewer services to his property at no charge under an
agreement between the City and Berkman‟s predecessors in title.
The trial court
granted the City‟s summary-judgment motion. On original submission, we reversed
the judgment and remanded this cause for further proceedings. The City contends in its
motion for rehearing that the case should be dismissed for want of jurisdiction because
of its immunity from suit. We agree.
According to the agreement which is the basis for the underlying suit, the City
agreed to furnish up to 1.2 million gallons of water per year to the property at no charge
and to furnish sewer services to the property at no charge. The City agreed to furnish
water and sewer services under these terms for 35 years if the property was “used on a
continuous basis from the date of this agreement forward as a home for children who
are wards of the State” or for 20 years if the property ceased to be used for this purpose.
The City contends on rehearing that its immunity from suit has not been waived
and thus the trial court lacked subject-matter jurisdiction.1 Berkman responds that the
City‟s immunity is waived by section 271.152 of the Local Government Code. See TEX.
LOC. GOV‟T CODE ANN. § 271.152 (Vernon 2005).
“Governmental immunity from suit defeats a trial court‟s jurisdiction.” See Ben
Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint SelfIns. Fund, 212 S.W.3d 320, 323 (Tex. 2006).
Such immunity protects political
subdivisions like the City from lawsuits except when that immunity has been waived
by the Legislature. Id. at 324. Section 271.152 waives immunity from suit for breach-ofcontract claims arising from “a contract subject to [chapter 271, subchapter I]” of the
Local Government Code. TEX. LOC. GOV‟T CODE ANN. § 271.152; see Ben Bolt, 212 S.W.3d
S.W.3d at 327.
A contract subject to this subchapter is statutorily defined as “a written contract
stating the essential terms of the agreement for providing goods or services to the local
Because immunity from suit deprives a trial court of subject-matter jurisdiction, it may be raised
for the first time in a motion for rehearing in the court of appeals. See Travis Cent. Appraisal Dist. v.
Norman, 274 S.W.3d 902, 912 (Tex. App.—Austin 2008, pet. granted).
1
Berkman v. City of Keene
Page 2
governmental entity that is properly executed on behalf of the local governmental
entity.” TEX. LOC. GOV‟T CODE ANN. § 271.151(2) (Vernon 2005). Citing Ben Bolt and
Dallas Area Rapid Transit v. Monroe Shop Partners, Ltd., No. 05-08-01526-CV, 2009 Tex.
App. LEXIS 5764 (Tex. App.—Dallas July 28, 2009, pet. filed), Berkman argues that the
“‟goods and services‟ provision of the statute ha[s] been loosely and broadly interpreted
to allow suits for breach of contracts against governmental entities.” However, we
believe he reads these decisions too “loosely and broadly.”
The Supreme Court in Ben Bolt held that an insurance contract between a school
district and a self-insurance fund qualified as a written contract for the provision of
goods and services under the statute. See Ben Bolt, 212 S.W.3d at 327. As noted, section
271.151(2) defines the requisite contract as one for the provision of “goods or services to
the local governmental entity.” TEX. LOC. GOV‟T CODE ANN. § 271.151(2) (emphasis
added). The Fund in Ben Bolt argued that the contract at issue provided for services to
the school district but not to the Fund, whose waiver of immunity was at issue. See Bolt,
212 S.W.3d at 327. The Supreme Court disagreed, apparently for two reasons. First, the
Court observed that Fund members (like the Ben Bolt school district) elected a
governing board and a subcommittee of that board resolved claim disputes. Id. “To
that extent, at least, the Fund‟s members provide services to the Fund.” Id.
Perhaps more importantly, the Court observed that “the statute‟s legislative
history indicates that, by enacting section 271.152, the Legislature intended to loosen the
immunity bar so „that all local governmental entities that have been given or are given
the statutory authority to enter into contracts shall not be immune from suits arising
Berkman v. City of Keene
Page 3
from those contracts.‟” Id. (quoting HOUSE COMM.
ON
CIVIL PRACTICES, BILL ANALYSIS,
Tex. H.B. 2039, 79th Leg., R.S. (2005)). The Court concluded that “entering into ‟a
written contract stating the essential terms of [an] agreement for providing goods or
[insurance] services to [a] local governmental entity‟ clearly does [constitute a waiver of
immunity under the statute].” Id. (emphasis added) (quoting TEX. LOC. GOV‟T CODE
ANN. § 271.151(2)). Thus, it appears that the Court has construed the statute broadly to
waive governmental immunity for any local governmental entity which is a party to a
written contract for the provision of goods or services to a local governmental entity
regardless of whether the entity being sued is the recipient or provider of such goods or
services.2 See Tex. Ass’n of Sch. Bds. Risk Mgmt. Fund v. Benavides Indep. Sch. Dist., 221
S.W.3d 732, 738-39 (Tex. App.—San Antonio 2007, no pet.).
The Dallas Court stated in DART, “Our Court has read the waiver provision of
section 271.152 broadly. Once the trial court determines whether a contract falls within
the provisions of section 271.152, then any class of breach falls within it.” DART, 2009
Tex. App. LEXIS 5764, at *5 (citing City of Mesquite v. PKG Contracting, Inc., 263 S.W.3d
444, 447 (Tex. App.—Dallas 2008, pet. filed)). In PKG Contracting, the Dallas Court
Although it is not entirely clear from the Court‟s opinion in Ben Bolt, we believe this is the correct
interpretation because the Court: (1) construed the pertinent statutory language as applying to any
written contract for the provision of goods or services to “a” local governmental entity rather than “the”
local governmental entity; (2) later repeated its observation that the Fund had entered a contract “for
providing [insurance] services to [a] local governmental entity”; and (3) did not make further mention of
its observation that, to a limited extent, Fund members provided services to the Fund. See Ben Bolt-Palito
Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320,
327-28 (Tex. 2006); Tex. Ass’n of Sch. Bds. Risk Mgmt. Fund v. Benavides Indep. Sch. Dist., 221 S.W.3d 732,
738-39 (Tex. App.—San Antonio 2007, no pet.); see also Ben Bolt, 212 S.W.3d at 330 (Willett, J., dissenting)
(criticizing this aspect of the majority opinion). But cf. Clear Lake City Water Auth. v. Friendswood Dev. Co.,
Ltd., 256 S.W.3d 735, 749-50 (Tex. App.—Houston [14th Dist.] 2008, pet. dism‟d) (concluding that Ben Bolt
decision focused on Fund members‟ provision of services to the Fund).
2
Berkman v. City of Keene
Page 4
construed the statute broadly only in considering whether a particular breach-ofcontract claim was included within the waiver of immunity where the parties did not
dispute that the contract itself fell within the provisions of section 271.152. See PKG
Contracting, 263 S.W.3d at 447 (rejecting city‟s claim that waiver of immunity applied
only to “claims of breach of the essential, written terms of an agreement, not for implied
duties”).
In DART however, the court arguably construed the statute broadly in
considering whether it applied to the contract at issue. The contract at issue was a
“CONTRACT OF SALE AND DEVELOPMENT” “which called for DART to sell, and
Monroe to purchase and develop, certain historically significant property near a DART
rail station.” DART, 2009 Tex. App. LEXIS 5764, at *1. Monroe sued DART for breach
of contract. Id. at *1-2. DART argued that its governmental immunity was not waived
by section 271.152 because the contract was merely a real estate sales contract and not a
contract for goods or services. See id. at *3. The Dallas Court disagreed, observing that
the contract required Monroe to provide “pre-closing and post-closing development
services . . . related to the construction on the property” which would be of some
benefit to DART. Id. at *3-4. Thus, the court held that the contract included “promises
by Monroe to provide services to DART.” Id. at *4-5.
The Fourteenth Court has likewise construed the statute in broad fashion. See
Clear Lake City Water Auth. v. Friendswood Dev. Co., Ltd., 256 S.W.3d 735, 748-50 (Tex.
App.—Houston [14th Dist.] 2008, pet. dism‟d). The contract at issue in Friendswood
Development was entitled “Sales Agreement and Lease of Facilities.”
Berkman v. City of Keene
Id. at 738.
Page 5
“Friendswood Development was to arrange for the construction of water distribution
lines, sanitary sewer lines, and drainage facilities to provide service to houses
Friendswood Development proposed to build on its land; and the Authority agreed to
purchase or lease the completed „Facilities.‟” Id. at 739. The court recognized that
Friendswood Development‟s obligation to arrange for the construction of these items
appeared to be “directed towards and to benefit the Subdivision and its residents,
rather than the Authority,” but nevertheless concluded that under “the Ben Bolt court‟s
liberal construction of the applicable statute,” the agreement was one for the provision
of services to the Authority. Id. at 750-51.
We would not go so far as the Fourteenth Court did in Friendswood Development.
Rather, we are more persuaded by the interpretation advanced by the First Court in
East Houston Estate Apartments, L.L.C. v. City of Houston, No. 01-08-00966-CV, 2009 Tex.
App. LEXIS 4899 (Tex. App.—Houston [1st Dist.] June 25, 2009, no pet.). In that case,
the court began its discussion of section 271.152 by referring to both statutory and
common law requirements that a waiver of immunity must be clear and unambiguous.
Id. at *23-24 (citing TEX. GOV‟T CODE ANN. § 311.034 (Vernon Supp. 2009); Tooke v. City of
Mexia, 197 S.W.3d 325, 332-33 (Tex. 2006)). The court held that the statute does not
apply to contracts “in which the benefit that the [local governmental entity] would
receive is an indirect, attenuated one.” Id. at *30.
If every contract that confers some attenuated benefit on a governmental
entity constitutes a contract for a “service,” the limitation of contracts
covered by section 271.152 to “contract for goods or services provided to
the entity” loses all meaning. Nothing in the statute nor in its legislative
history supports such an interpretation. Had the legislature intended to
Berkman v. City of Keene
Page 6
waive immunity from liability for every contract participated in by the
State, it could have done so. We must interpret the limitation as having
some meaning.
Id. at *30-31.
Here, Berkman contends that the parties‟ agreement includes the provision of at
least two services to the City: (1) use of the property as a children‟s home; and (2) the
filing of an annexation petition for the property.3 However, these are at best “indirect”
or “attenuated” benefits to the City. See id. at *30.
The City has no independent obligation to provide for the welfare of children
who are wards of the State. Thus, the commitment to use the property as a children‟s
home is at most the provision of a service to the State rather than the City. Cf. id. at *32
(benefit of funds under agreement “ran directly from the federal government and Chase
Bank to [the apartments], not to the City”). To the extent that the needs of parentless
children in the City are met, this would be an indirect benefit to the City.
Nor does the filing of an annexation petition constitute the provision of a service
to the City. At most, the filing of the annexation petition provided an indirect benefit to
the City in this instance by ultimately expanding the City‟s tax base.
For these reasons, the agreement at issue is not “a contract subject to [chapter
271, subchapter I]” of the Local Government Code. See TEX. LOC. GOV‟T CODE ANN. §
271.152; E. Houston Estate Apartments, 2009 Tex. App. LEXIS 4899, at *29-33. Therefore,
These are two of the three requirements which served as consideration for the conveyance by
Berkman‟s predecessors in title of three small tracts of land to the City. The other requirement was the
City‟s agreement to furnish water and sewer services at no charge for a specified period of time.
3
Berkman v. City of Keene
Page 7
the City‟s immunity from suit was not waived. See E. Houston Estate Apartments, 2009
Tex. App. LEXIS 4899, at *33.
The City‟s motion for rehearing is granted. The opinion and judgment of this
Court dated July 15, 2009 are withdrawn, and the opinion and judgment we issue today
are substituted therefor. We reverse the trial court‟s judgment and render a judgment
of dismissal for want of jurisdiction.
FELIPE REYNA
Justice
Before Chief Justice Gray,
Justice Reyna, and
Justice Davis
(Chief Justice Gray concurring with note)*
Reversed and rendered
Opinion delivered and filed November 4, 2009
[CV06]
*
(Without joining the opinion or issuing a separate opinion, Chief Justice Gray
concurs in the dismissal for want of jurisdiction noting, “I simply cannot join much of
the sweeping language and purported analysis of broad or narrow interpretation of the
waiver of immunity. This contract is not for the provision of goods or services to the
City of Keene.”)
Berkman v. City of Keene
Page 8
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