Beaumont Independent School District v. LRG-Loss Recovery Group LLC and Randall Harris

In The

Court of Appeals

Ninth District of Texas at Beaumont

________________

NO. 09-23-00382-CV
________________

BEAUMONT INDEPENDENT SCHOOL DISTRICT, Appellant

V.

LRG-LOSS RECOVERY GROUP LLC AND RANDALL HARRIS,
Appellees

______________________________________________________________________

On Appeal from the 128th District Court
Orange County, Texas
Trial Cause No. A190049-C
______________________________________________________________________

MEMORANDUM OPINION

This is an interlocutory accelerated appeal concerning whether a contractual

agreement between Appellant Beaumont Independent School District (“BISD”) and

Appellees LRG-Loss Recovery Group LLC and Randall Harris (“Appellees”) was

“properly executed” on BISD’s behalf as required to waive BISD’s governmental

immunity under Chapter 271 of the Texas Local Government Code. See Tex. Loc.

Gov’t Code Ann. § 271.151(2)(A). Randall Harris (“Harris”), and his company,

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LRG-Loss Recovery Group LLC (“LRG”), filed a breach of contract claim against

BISD, alleging that BISD owes them money under a Public Adjuster Contract (“the

Contract”), which was signed by BISD’s superintendent, Dr. John Frossard

(“Frossard”). On appeal, BISD argues the trial court lacked subject matter

jurisdiction over Appellees’ breach of contract claim, because the Contract was not

“properly executed” by BISD as required to waive BISD’s governmental immunity

because the Board of Managers (the “Board”) never approved or ratified the Contract

or delegated Frossard authority to execute the Contract on its behalf.

We note that this Court previously affirmed the trial court’s denial of BISD’s

Original and Renewed Pleas to the Jurisdiction in which BISD raised different

arguments concerning governmental immunity in this case. See Beaumont Indep.

Sch. Dist. v. LRG-Loss Recovery Grp. LLC, No. 09-22-00144-CV, 2023 WL

3521936, at **1-5, 11 (Tex. App.—Beaumont May 18, 2023, pet. denied) (mem.

op.) (hereinafter “BISD I”). The current appeal concerns the trial court’s denial of

BISD’s latest Plea to the Jurisdiction (“Third Plea”) in which BISD raised its new

argument that the Contract was not “properly executed” as required to waive its

governmental immunity. BISD appeals the trial court’s denial of its Third

Plea. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (permitting an

interlocutory appeal of a trial court’s order denying a governmental entity’s plea to

the jurisdiction); Tex. Loc. Gov’t Code Ann. §§ 271.151-160 (“Chapter 271,

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Subchapter I,” setting forth the requirements for adjudication of claims arising under

written contracts with local governmental entities); Tex. R. App. P. 28.1(a)

(providing rules for accelerated appeals). For the reasons explained below, we

reverse the trial court’s Order Denying BISD’s Third Plea, render judgment granting

BISD’s Third Plea, and dismiss Appellees’ lawsuit for lack of subject-matter

jurisdiction.

PERTINENT BACKGROUND

In BISD I, we included the case’s full procedural history regarding the trial

court’s denial of BISD’s Original and Renewed Pleas, so we focus our background

on facts pertinent to BISD’s Third Plea. See BISD I, 2023 WL 3521936, at **1-5.

After BISD sustained damage from Hurricane Harvey in 2017, the Board held an

Emergency Meeting/Agenda of the Board of Managers of BISD on September 8,

2017, to consider a “Resolution Regarding Immediate Needs Associated with

Hurricane Harvey and Recovery[,]” and a “Resolution Granting Authority

Superintendent To Enter Into Contracts For Replacement Or Repair Of Equipment

Or School Facilities Including the Purchase Of Emergency Vehicles Damaged By

Hurricane Harvey . . . .”

The Board passed a Resolution that stated: there was a need for the acquisition

of goods and services to meet BISD’s needs to repair damages to its facility and that

its policies “CH (LOCAL) and CV (LOCAL) authorize the Superintendent or

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designee to approve the expenditure of up to $50,000 in the event of unanticipated

emergency requiring the commitment of unbudgeted financial resources for good

and services[.]” The Board resolved that it was currently in a state of emergency and

that the “Superintendent or designee may approve purchases to remediate, restore

and secure the facilities of the District and that the $50,000 limit to these purchases

. . . are waived under further action of the Board . . . [.]” The Board resolved that

after “purchases of the type above are made, a purchase order should be issued after

the fact as soon as practicable and the Board . . . will be notified of such purchases

. . . [.]” The Board also passed the Resolution granting the Superintendent authority

to enter into contracts for the replacement or repair of equipment or school facilities,

including purchasing emergency vehicles damaged by Hurricane Harvey.

On October 26, 2017, Frossard, as an Authorized Agent of BISD, signed the

Contract with Appellees, who were to “represent and assist [BISD] in the process of

investigating, filing, negotiating and adjustment of all applicable claims for loss or

damage . . . as a direct result of Hurricane Harvey[]” solely to BISD’s Central

Medical Magnate High School (“Central”). Appellee’s compensation under the

Contract, which states it is a service contract, was calculated on a contingency basis

and was to be paid “only if, when and to the extent [BISD] recovers funds from

Insurers[.]” The services provided under the Contract “are to assess damaged

properties, estimate costs of repairs and present claims on [BISD’s] behalf[,]” and

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exclude participating “directly or indirectly in the reconstruction, repair, or

restoration of damaged property[.]”

On June 19, 2018, BISD’s counsel sent Appellees a letter giving formal notice

of BISD’s Termination of the Contract and stating the termination “includes, but is

not limited to, LRG’s substandard performance in its adjusting responsibilities under

the contract . . . .” BISD’s Termination Letter stated it had retained LRG to identify

available coverage for damages at Central and incurred over $1,000,000 in expenses

and emergency repairs based on LRG’s advice that there was ample coverage to

expedite remediation and repairs. BISD stated that it was forced to close Central

after its insurers later advised that it had “very limited coverage” which was not

“remotely sufficient” to cover its incurred expenses and needed repairs. BISD

informed Appellees that its letter was not an “exhaustive explanation of all bases for

terminating the agreement, and it is not a limitation of the remedies BISD may

pursue against LRG[,]” which included claims for breach of contract, professional

negligence, and violations of the Deceptive Trade Practices Act and Insurance Code.

Appellees sent BISD a Formal Notice, Presentment and Demand seeking to

recover amounts allegedly owed under the Contract. Appellees filed suit against

BISD for breach of the Contract and alleged they suffered actual damages. BISD

filed an Answer and Affirmative Defenses, asserting a general denial, governmental

immunity, and material breach by Appellees. BISD filed its Original and Renewed

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Pleas raising separate grounds challenging the trial court’s subject matter

jurisdiction. The trial court denied BISD’s Original Plea, and its Renewed Plea was

overruled by operation of law. See id. at 5, 11.

In Appellees’ Fifth Amended Petition, the live pleading at the time BISD filed

its Third Plea, Appellees alleged breach of contract damages in excess of $400,000.

In its Third Plea, BISD argued there was no waiver of immunity for Appellees’

breach of contract claim because the Contract was not “properly executed” under

section 271.152 because (1) the Board’s Meeting Minutes and Agendas from 2017

to 2023 show the Board never approved the Contract in a duly noticed public

meeting, and (2) the Board did not delegate Frossard authority to enter the Contract

on BISD’s behalf. BISD attached evidence to its Third Plea, including, among other

items: the Contract; BISD’s Board Meeting Agenda and Minutes from 2017 to 2023;

and BISD’s Resolution.

Appellees filed a Sixth Amended Petition, alleging that BISD executed the

Contract with either the Board’s approval or the through the Board’s delegation or

ratification. Appellees alleged that their breach of contract claim “falls squarely

within section 271.152’s waiver of immunity, and BISD is not immune from suit for

breach of the contract.” Appellees also filed a Response in Opposition to BISD’s

Third Plea. In their Response, Appellees argued that while BISD claims the Contract

was not “‘properly executed[]’” because Frossard lacked authority to execute the

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Contract with Appellees, BISD filed a Petition in Intervention against LRG in

another case filed in Jefferson County District Court in which BISD was a party.

The record shows that in Cause Number B-203,080, PAL Environmental Safety

Corporation v. Beaumont Independent School District (“the Jefferson County

case”), BISD filed a Petition in Intervention against Harris for negligence, common-

law fraud, and breach of contract, and both Harris and BISD filed an Agreed Notice

of Non-Suit in that case because the parties no longer wished to pursue their causes

of action in Jefferson County. In its Petition in Intervention, BISD asserted that it

had a contract with Harris, who breached the contract, and that it was entitled to

actual damages.

In their Response, Appellees requested that the trial court take judicial notice

of the pleadings and documents filed in the Jefferson County case. Appellees argued

there was sufficient evidence to demonstrate genuine issues of fact on the questions

of whether (1) the Board delegated authority to Frossard to execute the Contract; (2)

BISD separately or independently approved the Contract; and (3) BISD ratified the

Contract through its post-contract conduct.

BISD filed a Reply to Appellees’ Response to its Third Plea and argued that

the Board did not delegate authority to Frossard to execute the Contract and no fact

issues exist as to whether the Board approved or ratified the Contract. BISD argued

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that Chapter 271 is the sole means by which a breach of contract claim may be

brought against a local governmental entity.

After conducting a hearing and taking the matter under advisement, the trial

court denied BISD’s Third Plea without stating its reason.

ANALYSIS

BISD argues the trial court erred in denying its Third Plea because Appellees

failed to show the Contract was “properly executed” on BISD’s behalf as required

to waive its governmental immunity under Chapter 271 of the Texas Local

Government Code. See Tex. Loc. Gov’t Code Ann. § 271.151(2)(A). According to

BISD, the Board neither approved the Contract nor authorized Frossard to execute

the Contract on its behalf. Appellees argue the trial court correctly denied BISD’s

Third Plea because the jurisdictional evidence shows, or raises fact issues, that (1)

the Contract did not require the Board’s approval because the Contract falls within

the scope of Frossard’s emergency powers under BISD’s policies; (2) the Board

approved or ratified the Contract by its conduct; or (3) BISD waived or abrogated

governmental immunity.

Standard of Review

A plaintiff has the burden to affirmatively demonstrate the trial court’s

jurisdiction, which includes the burden to establish a waiver of governmental

immunity. See Town of Shady Shores, 590 S.W.3d 544, 550 (Tex. 2019). The

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existence of subject-matter jurisdiction is a question of law that can be challenged

by a plea to the jurisdiction. Klumb v. Hous. Mun. Emps. Pension Sys., 458 S.W.3d

1, 8 (Tex. 2015); Tex. Dep’t of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 225-

26 (Tex. 2004); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).

We review a trial court’s ruling on a plea to the jurisdiction under a de novo standard

of review. See Miranda, 133 S.W.3d at 226, 228; Woodway Drive LLC v. Harris

Cnty. Appraisal Dist., 311 S.W.3d 649, 651 (Tex. App.—Houston [14th Dist.] 2010,

no pet.), superseded by statute on other grounds as stated in Town & Country, L.C.

v. Harris Cnty. Appraisal Dist., 461 S.W.3d 208, 212 (Tex. App.—Houston [1st

Dist.] 2015, no pet.). The trial court’s review of a plea to the jurisdiction “generally

mirrors the summary judgment standard.” Chambers-Liberty Cntys. Navigation

Dist. v. State, 575 S.W.3d 339, 345 (Tex. 2019) (citing Sampson v. Univ. of Tex.,

500 S.W.3d 380, 384 (Tex. 2016)).

When a plea to the jurisdiction challenges the existence of jurisdictional facts,

we consider relevant evidence submitted by the parties when necessary to resolve

the jurisdictional issues. See Miranda, 133 S.W.3d at 227. The movant must meet

the summary-judgment standard of proof by conclusively demonstrating that the trial

court lacks subject matter jurisdiction. See id. at 227-28. We credit as true all

evidence favoring the nonmovant and draw all reasonable inferences and resolve any

doubts in the nonmovant’s favor. Id. at 228. If the evidence creates a fact question

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regarding the jurisdictional issue, then the trial court cannot grant the plea to the

jurisdiction, and the fact issue will be resolved by the fact finder. Id. at 227-28.

However, if the relevant evidence is undisputed or fails to raise a fact question on

the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter

of law. Id. “A genuine issue of material fact exists if more than a scintilla of evidence

establishing the existence of the challenged element is produced.” Ford Motor Co.

v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).

“If the Legislature elects to waive immunity by statute, it must do so by clear

and unambiguous language.” Chambers-Liberty Cntys. Navigation Dist., 575

S.W.3d at 344 (citing Tex. Gov’t Code Ann. § 311.034; Tooke v. City of Mexia, 197

S.W.3d 325, 332-33 (Tex. 2006)). Matters of statutory construction are questions of

law that we review under a de novo standard of review. See In re Mem’l Hermann

Hosp. Sys., 464 S.W.3d 686, 700 (Tex. 2015); Tex. Mun. Power Agency v. Pub. Util.

Comm’n of Tex., 253 S.W.3d 184, 192 (Tex. 2007); Johnson v. City of Fort Worth,

774 S.W.2d 653, 656 (Tex. 1989). Statutory waivers of immunity are to be construed

narrowly. See Tex. Adjutant Gen.’s Off. v. Ngakoue, 408 S.W.3d 350, 353 (Tex.

2013) (citing Tex. Gov’t Code Ann. § 311.034). When construing a statute that

purportedly waives immunity, we generally engage in a heavy presumption in favor

of immunity and resolve ambiguities in favor of retaining immunity. See Harris

Cnty. Hosp. Dist. v. Tomball Reg’l Hosp., 283 S.W.3d 838, 844 (Tex. 2009) (citing

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Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex. 2003)); Gay v. City

of Wichita Falls, 457 S.W.3d 499, 504 (Tex. App.—El Paso 2014, no pet.) (“There

is a ‘heavy presumption’ in favor of immunity.”) (quoting City of Galveston v. State,

217 S.W.3d 466, 469 (Tex. 2007)).

Governmental Immunity

Governmental units, including school districts, are immune from suit unless

the State consents and waives immunity. See Alamo Heights Indep. Sch. Dist. v.

Clark, 544 S.W.3d 755, 770 (Tex. 2018) (citing Mission Consol. Indep. Sch. Dist. v.

Garcia, 372 S.W.3d 629, 636 (Tex. 2012); Miranda, 133 S.W.3d at 224). Under

Chapter 271, Subchapter I, the Legislature has expressly waived governmental

immunity for certain contracts with a governmental entity. Tex. Loc. Gov’t Code

Ann. § 271.152. A public school district is a governmental entity under the statute.

See Tex. Loc. Gov’t Code Ann. § 271.151(3)(B); see also El Paso Educ. Initiative,

Inc. v. Amex Props., LLC, 602 S.W.3d 521, 526 (Tex. 2020) (“Public school districts

are generally entitled to governmental immunity from liability and suit.”). Section

271.152, which provides the only waiver of immunity applicable to Appellees’

breach of contract claim states:

A local governmental entity that is authorized by statute or the
constitution to enter into a contract and that enters into a contract
subject to this subchapter waives sovereign immunity to suit for the
purpose of adjudicating a claim for breach of the contract, subject to the
terms and conditions of this subchapter.

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Tex. Loc. Gov’t Code Ann. § 271.152. A “[c]ontract subject to this subchapter” is

“a written contract stating the essential terms of the agreement for providing goods

or services to the local governmental entity that is properly executed on behalf of the

local governmental entity[.]” See Tex. Loc. Gov’t Code Ann. § 271.151(2)(A); see

also City of Hous. v. Williams, 353 S.W.3d 128, 135 (Tex. 2011); ICI Constr., Inc.

v. Orangefield Indep. Sch. Dist., 339 S.W.3d 235, 239-40 (Tex. App.—Beaumont

2011, no pet.). Section 271.151 does not define “properly executed,” but the Texas

Supreme Court has explained that “a contract is properly executed when it is

executed in accord with the statutes and regulations prescribing that authority.” El

Paso Educ. Initiative, 602 S.W.3d at 532; see also BISD I, 2023 WL 3521936, at

**6, 9.

“[J]ust as a government official cannot bind the government to a contract

based on apparent authority, an agent acting on behalf of a [governmental unit]

cannot bind it in a way that exceeds its statutory grant of authority to enter into

contracts.” El Paso Educ. Initiative, 602 S.W.3d at 533 (citing State ex rel. Dep’t of

Crim. Just. v. VitaPro Foods, Inc., 8 S.W.3d 316, 322 (Tex. 1999) (“Only persons

having actual authority to act on behalf of the State can bind the State in contract.”)).

Thus, a contract is “properly executed” only “when it is executed in accord with the

statutes and regulations prescribing that authority.” Id. at 532 (noting that “proper”

means “[a]ppropriate, suitable, right, fit, or correct; according to the rules”). Under

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the education code, the board of trustees of an independent school district may “enter

into contracts as authorized under this code or other law and delegate contractual

authority to the superintendent as appropriate.” Tex. Educ. Code Ann. §

11.1511(c)(4);1 see Edcouch-Elsa Indep. Sch. Dist. v. Comprehensive Training

Center, LLC, No. 13-23-00108-CV, 2024 WL 3708934, at *3 (Tex. App.—Corpus

Christi Aug. 8, 2024, pet. filed) (mem. op.).

Did the Board Approve the Contract or Delegate Frossard Authority to Execute the
Contract on BISD’s Behalf?

The Board’s “final action, decision, or vote” may only be made in a duly

noticed open meeting. Tex. Gov’t Code Ann. § 551.102; see Davis v. Duncanville

Indep. Sch. Dist., 701 S.W.2d 15, 17 (Tex. App.—Dallas 1985, writ dism’d w.o.j.)

(stating a political subdivision of the state, including governing bodies of school

districts, “may act only as a body corporate at a properly called meeting[]”). The

Board is required to keep minutes or make a recording of each of its open meetings

and those minutes must indicate “each vote, order, decision, or other action taken.”

Tex. Gov’t Code Ann. § 551.021. If the Board approved the Contract, evidence of

that approval would be reflected in the minutes of the Board’s meetings. See Le Villa

1
We cite to the current version of the statute as the subsequent amendment
does not affect the outcome of this appeal.

13
Indep. Sch. Dist. v. Gomez Garza Design, Inc., 79 S.W.3d 217, 220-21 (Tex. App.—

Corpus Christi 2002, pet. denied).

In support of its Third Plea, BISD attached the Board’s Meeting Agendas and

Minutes from September 2017 to 2023, the Affidavit of Cheryl Hernandez

(“Hernandez”), and the Affidavit of Georgia Antoine (“Antoine”). In Hernandez’s

affidavit, she explained that as part of her duties as BISD’s Chief Financial Officer,

she regularly attends the Board’s meetings and places items to be approved on the

Board’s agendas. Hernandez stated from August 2017 to October 2023, the Contract

was not presented to the Board, and the Board did not vote to authorize any contract

with Harris and LRG. Hernandez also stated that the Board did not take any action

authorizing Frossard to enter into any contract with Harris and LRG. In Antoine’s

affidavit, she explained she was BISD’s Coordinator for Board Affairs and

Elections, and that she had reviewed the Board’s meeting agendas and minutes from

September 2017 to October 2023 and found no record that BISD was presented with

or approved any contract with Harris and LRG. Antoine also stated the Board did

not delegate Frossard authority to enter into any contract with Harris and LRG.

The parties did not include any record citations of evidence showing the Board

approved the Contract or specifically delegated Frossard authority to execute the

Contract during an open meeting, and we are not aware of any. Based on this record,

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we hold the Board never approved the Contract or specifically delegated Frossard

authority to execute the Contract on BISD’s behalf.

Did The Contract Not Require Board Approval?

Appellees argue the Contract did not require the Board’s approval because it

falls within the scope of Frossard’s emergency powers under BISD’s existing

policies, which authorized Frossard “to approve the expenditure of up to $50,000 in

the event of an unanticipated emergency requiring the commitment of unbudgeted

financial resources for goods and services[.]” See Tex. Educ. Code Ann. §

11.1511(c)(4). Appellees argue the Contract did not exceed the $50,000 cap because

Frossard did not spend any unbudgeted funds upfront due to the Contract being

contingent upon BISD obtaining insurance payments. Appellees assert that any

indeterminate payment under the Contract could have been less than $50,000 and

would not have been paid using school tax revenue.

“[P]ersons or entities contracting with governmental units are charged by law

with notice of the limits of the authority of the governmental unit and are bound at

their peril to ascertain if the contemplated contract is properly authorized.’” Base-

Seal, Inc. v. Jefferson Cnty., 901 S.W.2d 783, 788 (Tex. App.—Beaumont 1995, writ

denied). Appellees were charged by law with notice that under BISD’s existing

policies, Frossard’s delegated contractual authority included approving an

“expenditure of up to $50,000 in the event of an unanticipated emergency requiring

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the commitment of unbudgeted financial resources for goods and services[.]” For

Frossard to have “properly executed” the Contract on BISD’s behalf, the Contract

must fall within his delegated contractual authority. See Tex. Educ. Code Ann. §

11.1511(c)(4); El Paso Educ. Initiative, 602 S.W.3d at 531-33; Edcouch-Elsa Indep.

Sch. Dist., 2024 WL 3708934, at *3.

We disagree that BISD’s policy specifically delegating to Frossard the

authority to expend up to $50,000 for repair and remediation services can be

interpreted as delegating to Frossard the authority to enter into a contingent fee

contract, as Appellees allege, that has caused them damages in excess of $400,000–

an amount well in excess of $50,000. Importantly, subject to established legislative

limits, BISD must be the ultimate interpreter of its policies, not Appellees. See

Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 565 (Tex. 2000); Robstown

Indep. Sch. Dist. v. Alejandro, No. 13-23-00406-CV, 2025 WL 555767, at *6 n.7

(Tex. App.—Corpus Christi Feb. 20, 2025, no pet.) (mem. op.); see also Tex. Educ.

Code Ann. § 11.151(b) (providing board has the exclusive power and duty to govern

and oversee the district’s management).

Appellees alternatively argue that the Contract did not need Board approval

because the Resolution authorized Frossard to approve “purchases to remediate,

restore, and secure” BISD’s facilities and waived the $50,000 limit to those

purchases established by BISD’s policies. According to Appellees, because the

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Resolution stated that “it was ‘necessary . . . to address damage and begin

remediation immediately;’” the Resolution can be “holistically read” to have also

delegated to Frossard the power to approve a purchase for “damage assessment” to

BISD’s facilities regardless of whether the service would directly “remediate,

restore, and secure” BISD’s facilities.

The Resolution specifically delegated to Frossard the authority to “approve

purchases to remediate, restore, and secure the facilities of the District[,]” and

provided that after “purchases of the type referenced above are made, a purchase

order should be issued after the fact as soon as practicable and the Board . . . will be

notified of such purchases . . . [.]” The Resolution also delegated to Frossard the

authority to enter into contracts for the replacement or repair of equipment or school

facilities, including purchasing emergency vehicles damaged by Hurricane Harvey.

The unapproved LRG Contract called for Appellees to “represent and assist [BISD]

in the process of investigating, filing, negotiating and adjustment of all applicable

claims for loss or damage” that occurred at Central. The Contract specifically

provides that Appellees “may not participate directly or indirectly in the

reconstruction, repair, or restoration of the damaged property that is the subject of a

claim adjusted by [Appellees.]” We note that this Court previously found that the

Contract was for “adjusting insurance claims, and not for the replacement and repair

of school equipment or facilities.” See BISD I, 2023 WL 3521936, at *8.

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The plain language of the Resolution does not support Appellees’ assertion

that Frossard had delegated authority to approve purchases regardless of whether

they were “to remediate, restore, and secure” BISD’s facilities. We hold that the

Contract was for adjusting claims, and not for purchases to “remediate, restore, and

secure the facilities of the District[.]” See id. Accordingly, the Resolution did not

delegate to Frossard the authority to execute the Contract for adjusting claims. Since

the Contract does not fall within Frossard’s delegated authority, we conclude it was

not “properly executed” on BISD’s behalf. See El Paso Educ. Initiative, 602 S.W.3d

at 533-34.

Did the Board Approve or Ratify the Contract

Appellees argue the Board approved or ratified the Contract by its conduct.

Appellees contend that the Board knew about the Contract prior to its execution and

that the Board’s conduct supporting ratification includes:

• Harris provided BISD’s Director of Maintenance, Cisco Abshire (“Abshire”),
a sample contract to review.

• Abshire informed Harris that he answered the Board’s questions about the
Contract, and Abshire continued to share information with the Board after
Frossard executed the Contract.

• BISD’s counsel negotiated parts of the Contract.

• The Board terminated the Contract for non-performance and not for being
invalid.

• BISD sued Harris for breaching the Contract.

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As we have already explained, the Board can only make a “final action,

decision, or vote” in a duly noticed open meeting. See Tex. Gov’t Code Ann. §

551.102; Davis, 701 S.W.2d at 17. Since there is no evidence showing the Board

ratified the Contract during an open meeting, we hold the Board never ratified the

Contract. See Tex. Gov’t Code Ann. § 551.021; Le Villa Indep. Sch. Dist., 79 S.W.3d

at 220-21.

Did BISD Waive Governmental Immunity by its Conduct?

Based on the same actions they used to support their ratification argument,

Appellees also argue that BISD waived governmental immunity by its conduct. The

Texas Supreme Court has rejected “the invitation to recognize a waiver-by-conduct

exception in a breach-of contract suit against a governmental entity[,]” explaining

that creating such an exception would force the State to expend resources to litigate

the issue before enjoying sovereign immunity’s protections. Sharyland Water

Supply Corp. v. City of Alton, 354 S.W.3d 407, 414 (Tex. 2011) (citations omitted).

In Jefferson County v. Stines, this Court recognized the Supreme Court’s rejection

of a waiver-by-conduct exception, and noted that “‘at least one intermediate

appellate court ha[d] concluded that a governmental entity may waive its immunity

from suit by its conduct in “extraordinary factual circumstances.’” 523 S.W.3d 691,

724-25 (Tex. App.—Beaumont 2017, rev’d in part and vacated in part on other

grounds, 550 S.W.3d 178 (2018) (citing Tex. S. Univ. v. State St. Bank & Tr. Co.,

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212 S.W.3d 893, 908 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (finding

wavier by conduct where university received approximately $13 million in

equipment and services and then claimed contract was invalid and refused to pay).

Additionally, in City of Conroe v. TPProperty, LLC, this Court again refused to

recognize waiver by conduct and held that the facts in that case did not rise to the

level of the extraordinary facts presented in State Street Bank. 480 S.W.3d 545, 565

(Tex. App.—Beaumont 2015, no pet.); see also TGP Pub. Schs., Inc. v. Powell Law

Grp., LLP, No. 03-22-00200-CV, 2024 WL 1333991, at *7 (Tex. App.—Austin

Mar. 29, 2024, no pet.) (mem. op.) (refusing to recognize waiver by conduct). Based

on our review of the record, the facts of this case do not merit waiver by conduct.

Did BISD Abrogate Governmental Immunity through Litigation?

Appellees argue BISD waived or abrogated governmental immunity by suing

Harris for breaching the Contract and seeking damages under the Contract.

According to Appellees, BISD acknowledged the Contract’s validity in its Petition

in Intervention filed against Harris in the Jefferson County case. At Appellees’

request, we take judicial notice of the pleadings and documents filed in the Jefferson

County case. See Tex. R. Evid. 201(b)(2).

In the Jefferson County case, PAL Environmental Safety Corporation, a

remediation company, sued BISD, which then filed a Petition in Intervention suing

Harris for breach of contract and seeking actual damages under the Contract that

20
Harris had with BISD. BISD and Harris jointly non-suited all their claims without

prejudice because they no longer wished to pursue their causes of action in Jefferson

County. The record shows that during an open meeting, BISD authorized its legal

counsel to proceed with the Petition in Intervention against Harris.

While the judiciary has generally deferred to the Legislature to waive

immunity because it is better suited to address conflicting policy issues, the Texas

Supreme Court has recognized a variation on the waiver-by-conduct exception for

cases in which the governmental entity voluntarily engages in certain litigation.

Reata v. Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 375-76 (Tex. 2006)

(citation omitted) (holding that when City filed its affirmative claims for relief as an

intervenor, the trial court acquired subject matter jurisdiction over claims made

against the City which were connected to, germane to, and properly defensive to the

matters on which the City based its claims for damages). The Reata Court explained

that it recognizes that sovereign immunity is a common-law doctrine and that it is

the judiciary’s responsibility to define the boundaries of that common-law doctrine

to determine whether a governmental entity’s immunity from suit extends to a

situation where the entity has filed suit asserting affirmative claims for monetary

damages. Id. at 374-75. The Reata Court stated that “if the governmental entity

interjects itself into or chooses to engage in litigation to assert affirmative claims for

monetary damages, the entity will presumably have made a decision to expend

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resources to pay litigation costs.” Id. at 375. The Reata Court held that in such an

instance, “it would be fundamentally unfair to allow a governmental entity to assert

affirmative claims against a party while claiming it had immunity as to the party’s

claims against it.” Id. at 375-76.

A governmental entity’s claim seeking affirmative relief waives immunity

from suit for any claim “‘germane to, connected with, and properly defensive to the

[governmental entity’s] claims, to the extent [the private entity]’s claims offset those

asserted by the [governmental entity].’” (citation omitted). See La Joya Indep. Sch.

Dist. v. Bio-Tech Sols., Inc., No. 13-07-00484-CV, 2009 WL 1089459, at **3-5

(Tex. App.—Corpus Christi Apr. 23, 2009, pet. denied) (mem. op.) (holding school

district’s counterclaim seeking affirmative relief constitutes a waiver of immunity);

see also Harris Cnty. Fresh Water Supply Dist. No. 61 v. Magellan Pipeline Co.,

L.P., 649 S.W.3d 630, 642-45 (Tex. App.—Houston [1st Dist.] 2022, pet. denied)

(holding District’s participation in litigation by procuring its filing abrogated its right

to claim immunity despite District not filing or intervening in the lawsuit). We hold

that the cases applying the waiver-by-conduct exception in instances where the

governmental entity voluntarily engaged in litigation are distinguishable from this

case, because the governmental entities’ actions seeking affirmative relief occurred

within those cases. See Reata, 197 S.W.3d at 375-76; La Joya Indep. Sch. Dist., 2009

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WL 1089459, at **3-5; Harris Cnty. Fresh Water Supply Dist. No. 61, 649 S.W.3d

at 642-45.

In this case, BISD did not seek affirmative relief under the Contract, and BISD

only sought affirmative relief in the Jefferson County case, which did not include all

the parties in this case. Additionally, the record shows BISD abandoned its Petition

in Intervention in the Jefferson County case when it and Harris jointly non-suited all

their claims without prejudice because they no longer wished to pursue their causes

of action in Jefferson County. Accordingly, we hold that BISD did not seek

affirmative relief in this case by intervening in the Jefferson County case and that its

actions in the Jefferson County case did not waive or abrogate its right to claim

governmental immunity in this case.

CONCLUSION

We have determined that Appellees failed to show the Contract was “properly

executed” on BISD’s behalf, as required, in order to waive its governmental

immunity under Chapter 271. See Tex. Loc. Gov’t Code Ann. § 271.151(2)(A). We

have also determined that BISD did not approve or ratify the Contract, delegate to

Frossard the authority to execute the Contract on its behalf or waive or abrogate its

right to claim governmental immunity. For those reasons, BISD established the trial

court lacked jurisdiction as a matter of law. See Alamo Heights Indep. Sch. Dist.,

544 S.W.3d at 771; Miranda, 133 S.W.3d at 228. Therefore, we conclude the trial

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court erred by denying BISD’s Third Plea and sustain BISD’s issues. Accordingly,

we reverse the trial court’s Order Denying BISD’s Third Plea, render judgment

granting its Plea, and dismiss Appellees’ lawsuit for lack of subject-matter

jurisdiction.

REVERSED AND RENDERED.

JAY WRIGHT
Justice

Submitted on May 8, 2025
Opinion Delivered June 19, 2025

Before Johnson, Wright and Chambers, JJ.

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