4th Court of Appeals holds developer properly pled breach of contract claim for wastewater development agreement

NBL 300 Group Ltd v. Guadalupe-Blanco River Authority 04-17-00264-CV (Tex.App— San Antonio, August 16, 2017)

This is an immunity/breach of contract case where the San Antonio Court of Appeals reversed the granting of Guadalupe-Blanco River Authority’s (“GBRA”) plea to the jurisdiction.

NBL was developing certain properties known as Legend Pond. As part of the development NBL and GBRA entered into an agreement for the construction of a “wet well” and “lift station” (wastewater systems). NBL was to provide and oversee/arrange for the engineering, design, and construction of various improvements to the properties. GBRA was to apply certain connection fees and charges to reimburse NBL for its initial outlay. After completion of the development, NBL sued GBRA asserting breach and a failure to implement connection rate measures. GBRA filed a plea to the jurisdiction which the trial court granted. NBL appealed.

For a contract to be subject to Tex. Loc. Gov’t Code §271.152’s waiver of immunity, it (1) must be in writing, (2) state the essential terms of the agreement, (3) provide for goods or services, (4) to the local governmental entity, and (5) be executed on behalf of the local governmental entity. Under the contract NBL was required to propose a master plan, including design, permitting, acquisition, and construction of the facilities. NBL was responsible for engineering and permitting fees. In return, GBRA was required to approve all plans and specifications and to establish, to collect, and to forward fees to NBL as reimbursement for monies expended.  The court held constructing, developing, leasing, and bearing all risk of loss or damage to the facilities provides a “service.” NBL plead the contract was for services and all other essential terms. GBRA asserts NBL still does not plead damages via money’s due and owed.  However, the court held NBL alleges that GBRA: (1) refused to perform obligations under the contract; (2) failed and refused to pay amounts owed under the contract; (3) failed to comply with its obligations under the contract; and (4) that the breach was material because GBRA did not substantially perform a material obligation required under the contract. No other specifics were provided. As for damages, NBL seeks loss of the benefit of the bargain, loss of investment opportunity, loss of fees, and attorney’s fees. Again, no specifics.  However, the court held from a pleadings standpoint, such allegations were sufficient to qualify as a properly pled petition. The plea should not have been granted.

If you would like to read this opinion click here. The panel includes Justices Barnard, Alvarez, and Chapa. Justice Alvarez delivered the opinion of the court. Attorney listed for NBL 300 Group is Rafael Pizana III. Attorneys listed for the Guadalupe – Blanco River Authority are Lowell F. Denton and Scott Michael Tschirhart.