County immune from claims for specific performance: no waiver by contract/conduct

 

Webb County v. Khaledi Properties, 04-12-00251-CV (Tex. App. – San Antonio, July 24, 2013).

This is a contractual immunity case where the County appealed the denial of a plea to the jurisdiction. Through a long history of events, Khaledi Properties sued for specific performance for the sale of real property.

Webb County solicited bids to sell a 294.24 acre property known as the Webb County Detention Center. Khaledi and Killam Ranch Properties Ltd. each submitted a sealed bid and the County awarded the sale to Khaledi.  Killam Ranch sued asserting competitive bid requirements were not met but the trial court dismissed on summary judgment. The Killam Ranch lawsuit is pending in the Texas Supreme Court. After growing tired of waiting due to the Killam Ranch lawsuit, Khaledi sued the County for specific performance of the sale.  The County filed a plea to the jurisdiction which the trial court denied. The County appealed.

The San Antonio Court of Appeals first held that the contract language section entitled “Default and Remedies” which allowed for specific performance, was not a waiver of sovereign immunity.  Only the legislature can waive immunity from suit, so there is no waiver by contract.

Khaledi next argued waiver by conduct. The court went through a history of the concept of waiver by conduct starting with the footnote in Federal Sign.  It explained that most courts have refused to recognize it and the court could point to only one court of appeals case which found a waiver by conduct. Assuming such a waiver is possible (although the 4th Court appears to doubt it), the court noted no extreme equitable circumstances exist in this case to justify it. As a result, there is no waiver by conduct in this case.

The trial court erred in denying the plea to the jurisdiction.  The case was reversed and rendered.

If you would like to read this opinion click here.