Utility immune from attorney’s fees claim connected with alleged breach of 2004 contract

Wheelabrator Air Pollution Control, Inc. v. City of Public Service Board of San Antonio, 04-14-00451-CV (Tex. App. – San Antonio, November 26, 2014)

This is part of a continuing battle between CPS Energy of San Antonio and Whellabrator Air Pollution Control, Inc. In this portion, the trial court granted CPS’ plea to the jurisdiction as to a claim for attorney’s fees and Wheelabrator appealed interlocutory.

Wheelabrator entered into a design and construction contract with CPS Energy in 2004 and later asserted CPS breached the contract. In 2012 the Fourth Court of Appeals issued an opinion noting CPS retained immunity for claims and damages brought outside of Chapter 271 of the Texas Local Government Code since the proprietary/governmental dichotomy does not exist in a contract context. In this case, Wheelabrator brought claims specifically under Chapter 271 and asserted damages including those for attorney’s fees. CPS asserted the contract was entered into prior to 2005 (date immunity waiver added to Chapter 271) so it retained immunity for the attorney’s fees claim. The trial court granted the plea and Wheelabrator appealed.

The court noted the waiver of immunity in Chapter 271 is not retroactive. In 2005 the waiver did not contain a provision for the recovery of attorney’s fees, but that was amended in 2009. However, that amendment is also not retroactive and applies only to contracts executed after June 19, 2009. The court further recognized the Texas Supreme Court’s opinion in Zachry Constr. Corp. v. Port of Houston Auth. of Harris Co., 2014 WL 4472616 (Tex. 2014) which disapproved of the 4th Court’s opinion in  Roma Indep. Sch. Dist. v. Ewing Constr. Co., No. 04-12-00035-CV, 2012 WL 3025927, at *4-*5 (Tex. App.—San Antonio July 25, 2012, pet. denied) holding the damages categories applied to immunity from liability only. As a result, CPS retains immunity from suit for attorney’s fee claims under this contract and a plea to the jurisdiction was the proper vehicle to make such a challenge. Next the court addressed Wheelabrator’s claims that CPS waived immunity by seeking affirmative relief but held CPS only asserted that if found liable, any damages should be offset by amounts owed to another contractor on the same project. That is not the same as “joining the litigation process by asserting claims for affirmative monetary relief” but is merely a defensive stance so no waiver exists. Finally, Wheelabrator had ample time to formulate its pleadings and the pleadings affirmatively show no fact question exists to prevent the plea at this stage since it is clear the contract was entered into in 2004. The grant of the plea is affirmed.

If you would like to read this opinion click here.  Panel: Justice Angelini, Justice Barnard and Justice Chapa. Memorandum Opinion by Justice Angelini.  The attorneys listed for Wheelabrator are Alexander Burch, Charles Thomas Kruse and Matthew William Caligur.  The attorneys listed for CPS are Judith Reed Blakeway and Annalyn Garrett Smith.