                            NUMBER 13-16-00577-CV

                              COURT OF APPEALS

                      THIRTEENTH DISTRICT OF TEXAS

                        CORPUS CHRISTI - EDINBURG


JESSE DIAZ,                                                               Appellant,

                                          v.

CITY OF ELSA, TEXAS,                                                       Appellee.


                   On appeal from the 398th District Court
                         of Hidalgo County, Texas.


                       MEMORANDUM OPINION
           Before Justices Contreras, Benavides, and Longoria
               Memorandum Opinion by Justice Benavides

      This is an appeal from an order granting a plea to the jurisdiction in favor of

appellee, the City of Elsa, Texas (the City of Elsa, Elsa, or the City). By one issue,

appellant Jesse Diaz asserts that the trial court erred by granting the plea. We reverse

and remand.
                                   I.      BACKGROUND

       The following facts were gleaned from the record before us: Jesse Diaz became

Elsa Police Department’s warrants officer in April 2010. Later that year, the Elsa Police

Department’s Chief of Police position became vacant due to a credentialing issue with the

prior chief. Elsa’s city manager at the time, Mike Mesa, advised the mayor and other city

council members of the vacancy and recommended Diaz for the position. According to

Mesa, the mayor and council members told him to “go ahead” and appoint Diaz to the

position.

       Mesa testified that he notified Diaz of the forthcoming appointment, but Diaz

expressed concern of the temporary nature of the appointment. According to Mesa, Diaz’s

specific concern was that if he did not ultimately become the permanent chief of the

department, he did not want to lose his previous job as warrants officer. Mesa then took

Diaz’s concerns back to the mayor and two council members and explained that Diaz was

willing to take the chief position, so long as he could return to his previous position if he

did not ultimately become the permanent chief of police. Mesa stated that the mayor and

two city council members acquiesced and told him “that’s fine, go ahead.” Following this

conversation, Mesa sent the following correspondence (the Mesa Letter) on official City of

Elsa letterhead to Diaz:



       To:           Jesse Diaz, Warrants Officer
       From:         Mike Mesa, City Manager [initialed by Mesa]
       Date:         12/7/10
       Subj:         Appointment to Chief Position

              Officer Diaz, after reviewing your law enforcement credentials and
       evaluating your performance here at the City of Elsa, I am pleased to appoint
       you to the position of interim Chief of Police. This appointment is effective

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        immediately. Your pay will be increased to the current budgeted salary
        afforded to the chief of police position. I expect to open the chief of police
        position within the next 60 days and I welcome you to formally apply. If,
        however, you are not selected as the permanent chief, you will assume your
        former position of warrants officer and your pay will be re-adjusted to that
        level. Good luck.

               Xc:     [Illegible due to copy] Castillo, Mayor
                       Elsa City Council Members
                       Personnel file

Mesa testified that he had informally obtained approval from the city council by polling

them individually prior to sending the above-referenced correspondence to Diaz.

        Diaz then assumed the role of interim police chief for Elsa with a readjusted salary

to match his new position. However, a few months later, Diaz received the following

memorandum on official city letterhead from Juan Cedillo, Elsa’s new city manager at the

time:

        TO:            Jesse Diaz, Interim Chief of Police
        FROM:          JUAN CEDILLO, City Manager [initialed by Cedillo]
        RE:            Termination of Employment
        DATE:          MAY 26, 2011

        *************************************************************************************

        It is with deep regret that I write to inform you that I am removing you as
        Interim Chief of Police with the City of Elsa Police Department effective
        Friday, May 27, 2011.

        I understand you had [a] written agreement with the previous City Manager
        Mike Mesa. However, at this time, I do not have a position for you; therefore,
        I am terminating your employment.

        Please turn in all City issued property to the City Secretary. You will be paid
        all your accrued benefits, if any, with your final payroll check which will be
        available for you to pick up on June 3, 2011.

        If I can provide you with any reference for future employment, please do not
        hesitate to contact my office.

        Best wishes in your future endeavors.

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       Cedillo testified he himself was terminated as Elsa’s city manager a month after

writing that memorandum to Diaz. Cedillo further testified that Diaz had a written contract

with the City of Elsa regarding his employment as the police chief. During his deposition,

Cedillo acknowledged that he understood the terms stated in the Mesa Letter, including

that Diaz would return to his previous position as warrants officer if he was terminated as

interim police chief. Cedillo also testified that all the city council members were “well

aware” of the City’s agreement with Diaz as articulated in the Mesa Letter. Additionally,

Cedillo testified that it was within his authority as city manager—and likewise within Mesa’s

prior authority in December 2010—to make such agreements with Diaz.

       Diaz subsequently sued the City of Elsa alleging, among other things, that he and

the City of Elsa had entered into an employment agreement vis a vis the Mesa Letter, and

that the City of Elsa breached such agreement, resulting in damages. Elsa filed a plea to

the jurisdiction alleging that the City was immune from suit and no valid waiver of immunity

exists. The trial court granted the City’s plea, and this appeal followed.

                             II.    PLEA TO THE JURISDICTION

       By his sole issue, Diaz asserts that the trial court erred by granting the City’s plea

to the jurisdiction.

A.     Standard of Review

       Whether a court has subject matter jurisdiction is a question of law subject to de

novo review. Tex. Nat. Res. Conserv Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.

2002). Whether a plaintiff has alleged facts that affirmatively demonstrate a trial court’s

subject matter jurisdiction is a question of law that we review de novo. Tex. Dep’t of Parks

& Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). Whether undisputed evidence of

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jurisdictional facts establishes a trial court’s jurisdiction is also a question of law. Id.

However, disputed evidence of jurisdictional facts that also implicate the merits of the case

may require resolution by the finder of fact. Id.

       We construe the pleadings liberally in favor of the plaintiffs and look to the pleaders’

intent. Id. If the pleadings do not contain sufficient facts to affirmatively demonstrate the

trial court’s jurisdiction but do not affirmatively demonstrate incurable defects in

jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded

the opportunity to amend.       Id. at 226–27.      If the pleadings affirmatively negate the

existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the

plaintiffs an opportunity to amend. Id. at 227.

       If 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 raised, as the trial court is required to do. Id. When the consideration

of a trial court’s subject matter jurisdiction requires the examination of evidence, the trial

court exercises its discretion in deciding whether the jurisdictional determination should be

made at a preliminary hearing or await fuller development of the case, mindful that this

determination must be made as soon as practicable.               Id.   In a case in which the

jurisdictional challenge implicates the merits of the plaintiff’s cause of action and the plea

to the jurisdiction includes evidence, the trial court reviews the relevant evidence to

determine if a fact issue exists. Id. If the evidence creates a fact question 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. This procedure generally mirrors

that of a summary judgment. See id. However, when the state asserts and supports with



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evidence that the trial court lacks subject matter jurisdiction, a plaintiff, when the facts

underlying the merits and subject matter jurisdiction are intertwined, must show that there

is a disputed material fact regarding the jurisdictional issue.

       When reviewing a plea to the jurisdiction in which the pleadings requirement has

been met and evidence has been submitted to support the plea that implicates the merits

of the case, we take as true all evidence favorable to the nonmovant and indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor. Id. at 228.

B.     Discussion

       1. Waiver of Immunity Under Local Government Code Section 271.152

       When     performing    governmental      functions,   political   subdivisions   derive

governmental immunity from the state’s sovereign immunity. City of Houston v. Williams,

353 S.W.3d 128, 134 (Tex. 2011). Under the common-law doctrine of sovereign immunity,

the sovereign cannot be sued without its consent. Id.

       Like sovereign immunity, governmental immunity can be waived by statute. Id. The

Legislature has made clear that a statute shall not be construed as a waiver of immunity

unless it is effected by “clear and unambiguous language.” TEX. GOV’T CODE ANN. §

311.034 (West, Westlaw through 2017 1st C.S.).

       Section 271.152 of the local government code waives immunity to suit for qualifying

local governmental entities for purposes of adjudicating a claim for breach of contract

entered into by the local governmental entity. TEX. LOC. GOV’T CODE ANN. § 271.152 (West,

Westlaw through 2017 1st C.S.); see City of Houston, 353 S.W.3d at 134. For the waiver

of immunity under section 271.152 to apply, three elements must be established: (1) the

party against whom the waiver is asserted must be a local governmental entity as defined



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by the local government code, (2) the entity must be authorized by statute or the

Constitution to enter into contracts, and (3) the entity must in fact have entered into a

contract that is defined by local government code section 271.151(2). See TEX. LOC. GOV’T

CODE ANN. §§ 271.151(2); 271.152; City of Houston, 353 at 135. Relevant to the issue of

waiver of immunity, a contract is defined as “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 id. at 135 (citing TEX.

LOC. GOV’T CODE ANN. § 271.151(2) (West, Westlaw through 2017 1st C.S.) (defining a

“contract” for purposes of waiving immunity under this subchapter)).

       The parties in this case solely focus on whether Diaz can establish the third element

for waiver to apply under section 271.152. The third element “effectively states five

elements a contract must meet for it to be a contract subject to section 271.152’s waiver

of immunity: (1) the contract 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.” City of Houston, 353

S.W.3d at 135.

       Diaz argues on appeal that he has satisfied his burden to establish the third

element that he and the City of Elsa entered into a contract as defined by section

271.151(2). On the other hand, the City of Elsa argues that Diaz fails to establish that

they entered into a contract under section 271.151(2). To decide this issue, we turn to

the purported contract, referred to in this opinion as the Mesa Letter.




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        2. The Mesa Letter as a Unilateral Contract

        Prior to delving into a section 271.151(2) analysis, we must preliminarily discuss

the law of unilateral contracts. Unilateral contracts are created when a promisor promises

a benefit if a promisee performs, and the contract becomes enforceable when the

promisee performs. See Vanegas v. Am. Energy Servs., 302 S.W.3d 299, 302 (Tex.

2009). Therefore, a unilateral employment contract is created when an employer promises

an employee certain benefits in exchange for the employee’s performance, and the

employee performs. City of Houston, 353 S.W.3d at 136.

        We now turn to the Mesa Letter and whether it meets the five elements of a contract

to make section 271.152’s waiver apply.

        First, the Mesa Letter comprises a contract and that contract is in writing. A

promise, the acceptance of which forms a contract, is a manifestation of intention to act or

refrain from acting in a specified way, so made as to justify a promisee in understanding

that a commitment has been made. Id. at 138 (citing Montgomery Cty. Hosp. Dist. v.

Brown, 965 S.W.2d 501, 502 (Tex. 1998)). The Mesa Letter unambiguously and clearly

expresses a manifestation of intent by Mesa, as the city manager and acting on its behalf,1

to appoint Diaz as its interim chief of police in exchange for a salary increase to what was

budgeted for the chief of police position and until such position became filled. The letter

further shows that the City intended for Diaz’s appointment to be temporary; that he was

invited to formally apply to become the permanent chief; and that if he was not ultimately

selected as the permanent chief, he would be allowed to assume his former position as



        1 Diaz alleged in his petition that by authority granted under an Elsa city ordinance, the City of Elsa
delegated to the city manager the authority to appoint and remove the City’s chief of police. Diaz further
alleged that Mesa exercised his authority under this ordinance and acted on behalf of the City in doing so.

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warrants officer and his pay would be readjusted to that previous level. These sets of

promises by the City of Elsa constituted offers that were communicated to Diaz, who

accepted by performing. See City of Houston, 353 S.W.3d at 136. Specifically, because

the City’s offers required acceptance by performance, the Mesa Letter was a unilateral

contract that became binding when Diaz performed the duties of police chief, which the

record undisputedly shows that he did. See id. Thus, the City’s promises of higher pay

and restoration of Diaz’s previous position and pay grade if he was no longer the chief of

police became binding. Furthermore, the unilateral contract is in writing.

       Second, the Mesa Letter states the essential terms of the agreement between Diaz

and the City of Elsa. The Texas Supreme Court has described “essential terms” of a

contract as “the time of performance, the price to be paid, and the service to be rendered.”

Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829, 838 (Tex. 2010).

In the context of employment agreements, typical essential terms include “compensation,

duties, or responsibilities.” City of Houston, 353 S.W.3d at 139. The Mesa Letter states

the time for performance by indicating that Diaz’s appointment was “effective immediately”

and that Mesa expected to open the chief of police position “within the next 60 days” by

inviting him to apply. Furthermore, the Mesa Letter states that Diaz’s pay would be

increased to the level budgeted for the police chief, and that if he did not become the

permanent police chief, his position and salary as warrants officer would be restored.

Lastly, the Mesa Letter states that Diaz’s duties and responsibilities would be to serve in

the position of interim chief of police.

       Third, the Mesa Letter provides for goods or services. “Services” under section

271.151(2) has been construed broadly “to encompass a wide array of activities” and



                                                9
includes “any act performed for the benefit of another under some arrangement or

agreement whereby such act was to have been performed.” Kirby Lake, 320 S.W.3d at

839. Mesa testified that prior to Diaz’s appointment, the City received notice from the

Texas Commission on Law Enforcement that its previous chief of police (Diaz’s

predecessor) did not hold the credentials required by the State of Texas. According to

Mesa, the City’s non-compliance with state credentialing standards would have resulted

in daily civil penalties until the City became compliant.       In his letter to Diaz, Mesa

specifically highlighted Diaz’s law enforcement credentials and performance as a police

officer as a reason for his appointment to serve as chief of police. Thus, the City benefitted

from Diaz’s appointment because it became compliant with state standards and allowed it

to avoid any civil penalties.

       Fourth, the services were provided to a local governmental entity. It is undisputed

that Diaz’s services as interim police chief were rendered to the City of Elsa, a local

governmental entity. See TEX. LOC. GOV’T CODE ANN. § 271.151(3)(A).

       Fifth and finally, the Mesa Letter was executed by the City. In its briefing to this

Court, the City of Elsa argues that the Mesa Letter was not executed by the City “at a

lawfully convened meeting pursuant to the Texas Open Meetings Act” and because it was

not approved at an official meeting by the Elsa City Council, the contract was not properly

executed.    We disagree.       Section 271.152(2) does not define the term “executed.”

However, the Texas Supreme Court has explained that “executed” has “several

definitions” and it means to “finish” or “make complete.” Mid-Cont. Cas. Co. v. Global

Enercom Mgmt., Inc., 323 S.W.3d 151, 157 (Tex. 2010) (per curiam). First, we note that

the Mesa Letter was signed by Mesa in his official capacity as the city manager of Elsa.



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Next, the record shows that Juan Cedillo—Mesa’s successor as Elsa’s city manager who

terminated Diaz—acknowledged that Diaz had a written contract with the City and that the

Elsa City Council also understood that to be the case as well. Cedillo also acknowledged

that Mesa acted within his authority as city manager to enter into the contract with Diaz.

Furthermore, Cedillo testified that Elsa’s city attorney and the city council acknowledged

to him that Diaz had an employment contract with the city. Based on this evidence, we

conclude that the Mesa Letter was executed by the City.

       To summarize, the Mesa Letter meets each of the five elements required by section

271.151(2) of the local government code. Therefore, it is a unilateral employment contract

between the City of Elsa and Diaz which falls within the scope of section 271.152’s waiver

of immunity. We sustain Diaz’s sole issue.

                                     III.   CONCLUSION

       We reverse the trial court’s granting of the City of Elsa’s plea to the jurisdiction and

remand this case to the trial court for further proceedings consistent with this opinion.




                                                                 GINA M. BENAVIDES,
                                                                 Justice


Delivered and filed the
8th day of March, 2018.




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