Texas Supreme Court holds contractor who rebuilt homes destroyed in hurricane for property owners was also providing “services” to Planning Commission, so Chapter 271 waiver of immunity applies.

BYRDSON SERVICES, LLC, D/B/A EXCELLO CONSTRUCTION, LLC v. SOUTH EAST TEXAS REGIONAL PLANNING COMMISSION, No. 15-0158 (Tex. December 23, 2016)

After South East Texas Regional Planning Commission (“Planning Commission” or “Commission”) received federal hurricane relief funding it contracted with Byrdson Services to rebuild certain areas within its jurisdiction. Under a contract between the State and the Planning Commission, the State provided $95 million to the Commission for various disaster-relief and housing-restoration services. Under this contract, the Planning Commission committed to provide homeowner-repair services to area households. The contract authorized the Planning Commission to subcontract the repair work, which it did to Byrdson.  A dispute arose between the Commission and Byrdson regarding the quality of Byrdson’s work and payment due under the contracts. Byrdson sued the Commission for payments allegedly due.  The Planning Commission filed a plea to the jurisdiction, which the trial court denied but the Court of Appeals reversed and granted. Byrdson appealed.

The Planning Commission asserts chapter 271 does not apply because its contracts do not state essential terms “for providing goods or services to the local governmental entity.” Citizens benefitted, not the Commission.  Byrdson counters the warranty and indemnity provisions provide the requisite services to the Planning Commission. These provisions require Byrdson to warrant its work to the homeowner and to hold the Planning Commission harmless.  The Court held it was not going to analyze the case in that fashion since contractual provisions intended to shield the Commission from liability would have the effect of waiving immunity. Instead, the Court noted the contract with the State obligated the Planning Commission to provide services to the property owners. By subcontracting the work, Byrdson was helping the Commission fulfil its obligation to the State. “For this reason the Byrdson agreements provided real and direct services to the Planning Commission that bring the agreements within chapter 271.” Finally, the Court held “[w]e have never suggested that the agreements covered by chapter 271 are limited to those where the governmental entity obtains a property interest, nor can such a limitation be gleaned from a plain reading of the statute.”

If you would like to read this opinion click here. Justice Willett delivered the opinion of the court. If you would like to see the Representatives for the Petitioner and Respondent click here for the Docket page.