                                               OPINION
                                          No. 04-11-00821-CV

                                  CITY OF SAN ANTONIO,
                Acting By and Through City Public Service Board a/k/a CPS Energy,
                                           Appellant

                                                     v.

                   WHEELABRATOR AIR POLLUTION CONTROL, INC.,
                                   Appellee

                    From the 225th Judicial District Court, Bexar County, Texas
                                 Trial Court No. 2011-CI-13756
                              Honorable Larry Noll, Judge Presiding

Opinion by:      Phylis J. Speedlin, Justice

Sitting:         Phylis J. Speedlin, Justice
                 Steven C. Hilbig, Justice
                 Marialyn Barnard, Justice

Delivered and Filed: August 1, 2012

REVERSED AND RENDERED; REMANDED FOR FURTHER PROCEEDINGS

           The City of San Antonio, acting by and through CPS Energy 1 (hereinafter “CPS”),

appeals the trial court’s denial of its plea to the jurisdiction in this lawsuit by Wheelabrator Air

Pollution Control, Inc. in which it asserts a breach of contract claim and, alternatively, a quasi-

contractual quantum meruit claim to recover a 10% contract retainage withheld by CPS. This


1
 The City of San Antonio owns and operates the electric and gas utility known as CPS Energy, which is managed
by a five-member board of directors; the City’s mayor is a voting member of the board.
                                                                                                04-11-00821-CV


interlocutory appeal raises a question of first impression—whether the governmental/proprietary

distinction employed in the Texas Tort Claims Act applies in a contractual or quasi-contractual

setting to determine whether a municipality is immune from suit.                          We hold that the

governmental/proprietary distinction does not apply, and conclude CPS is immune from suit on

the quantum meruit claim. Accordingly, we reverse the trial court’s order denying CPS’s plea to

the jurisdiction, render judgment dismissing Wheelabrator’s quantum meruit claim for want of

jurisdiction, and remand the cause to the trial court for further proceedings. 2

                              FACTUAL AND PROCEDURAL BACKGROUND

        Contract for Project.              On or about August 5, 2004, Wheelabrator Air Pollution

Control, Inc. (“Wheelabrator”) and Casey Industrial, Inc. (“Casey”) entered into a written

contract with CPS for the design and construction of two baghouses at the J.T. Deely Station, a

coal-fired power station owned and operated by CPS. A baghouse traps fly ash, a coal by-

product, before it enters the air, providing a reduction in emissions from a power station. CPS

agreed to pay $41,818,460 to Wheelabrator and $43,541,737 to Casey for their roles in the

project. Wheelabrator was involved in the engineering design and procurement, while Casey

was involved in the actual construction of the baghouse units. The contract provided that CPS

would withhold from Wheelabrator 10% of the total contract price ($4,173,099) as retainage.

CPS fully paid Wheelabrator its contract price, except for the agreed upon 10% retainage. When

Wheelabrator sought payment of the retainage in 2007, contending it had fully and timely

performed, CPS informed Wheelabrator that it was going to withhold payment of the retainage

pending resolution of the claims asserted by Casey against CPS. Casey sought to recover an


2
  A related appeal also issued on this date, City of San Antonio, Acting By and Through City Public Service Board
a/k/a CPS Energy v. Casey Industrial, Inc. (Appeal Nos. 04-11-791-CV & 04-11-00814-CV), arises out of the same
underlying dispute and raises the same issue as to whether CPS is immune from suit on a quantum meruit claim,
along with an additional issue concerning the validity of the contract.

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additional $12,000,000 from CPS for costs of delay it alleged were caused by Wheelabrator.

Eventually, both Casey and Wheelabrator filed suit against CPS.

         Casey Lawsuit.                        In 2008, Casey filed suit against CPS asserting claims of

breach of contract, implied contract/quasi-contract, and quantum meruit.                                The litigation

proceeded for three years before Wheelabrator separately filed suit against CPS. Casey filed a

summary judgment motion, asserting that the three-party contract entered into by CPS,

Wheelabrator, and Casey is void due to violations of Texas’ procurement law requiring

competitive bidding, and that Casey should therefore be allowed to recover in quantum meruit

for additional work it performed. The City, acting on behalf of CPS, filed its own summary

judgment motion asserting the contract is valid and that Casey is barred from any equitable

recovery outside the contract. After a hearing, the trial court denied the City’s motion and

granted Casey’s summary judgment motion, finding that the contract is void and that Casey “is

entitled to prove liability, if any, and damages, if any, under the doctrine of quantum meruit.”

The City also filed a plea to the jurisdiction asserting it is immune from suit for additional work

or quantum meruit; the trial court denied the plea. The City is appealing both rulings in the

Casey appeal—the summary judgment order finding the contract is void, and the denial of its

plea to the jurisdiction asserting immunity from the quantum meruit claim.

         Wheelabrator Lawsuit.                 Wheelabrator filed suit against CPS on August 23, 2011,

seeking to recover the $4,173,099 in retainage funds under a breach of contract claim and,

alternatively, a quantum meruit claim. 3 CPS filed a plea to the jurisdiction asserting immunity

from suit because there is no waiver of sovereign immunity for contractual claims outside the


3
  Wheelabrator was not, and is not currently, a participant in the Casey litigation. CPS has sought to consolidate the
Wheelabrator litigation with the Casey litigation at the trial level, but the trial court has not yet ruled on the issue of
consolidation.


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scope of Chapter 271 of the Local Government Code or for quantum meruit claims in equity.

Wheelabrator responded that CPS does not have any immunity from suit for functions taken in

its proprietary capacity, such as operation of a public utility, and even if it had immunity, it has

waived it through its conduct; therefore, Wheelabrator’s quantum meruit claim should survive.

Wheelabrator’s pleadings allege that CPS “is not immune from suit by virtue of the express

terms of the Agreement, and by virtue of Chapter 271 of the Texas Local Government Code.”

       At the end of a hearing on the plea to the jurisdiction, the trial court denied CPS’s plea.

The court’s written order finding CPS is “not immune from suit for claims for additional work or

quantum meruit,” and denying the plea to the jurisdiction, was signed on November 15, 2011.

CPS now appeals that finding. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8) (West

Supp. 2011).

                                     STANDARD OF REVIEW

       Subject matter jurisdiction is necessary for a court to have the authority to resolve a case.

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). Sovereign and

governmental immunity from suit deprive a trial court of subject matter jurisdiction. Reata

Const. Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex. 2006). To invoke a trial court’s

subject matter jurisdiction over a claim against a governmental entity, the plaintiff must allege a

valid waiver of immunity from suit and plead sufficient facts demonstrating the trial court’s

jurisdiction. Tex. Dept. of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004);

Tex. Ass’n of Bus., 852 S.W.2d at 446. A governmental entity properly raises immunity through

a plea to the jurisdiction. Reata, 197 S.W.3d at 374. In reviewing a trial court’s ruling on a plea

to the jurisdiction, we do not examine the merits of the cause of action, but consider only the

plaintiff’s pleadings and any evidence relevant to the jurisdictional inquiry. Miranda, 133



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S.W.3d at 227; County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). We construe the

pleadings liberally in favor of jurisdiction, and accept the pleadings’ factual allegations as true.

Miranda, 133 S.W.3d at 226. The existence of subject matter jurisdiction is a question of law

that we review de novo. Tex. Nat’l Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855

(Tex. 2002); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998).

                                      IMMUNITY FROM SUIT

       On appeal, CPS contends the trial court does not have jurisdiction over Wheelabrator’s

quantum meruit claim because (i) the legislature has not waived CPS’s immunity from suit for

quantum meruit claims, (ii) the proprietary-governmental dichotomy has not been extended

beyond the tort claim context, and (iii) CPS did not waive its immunity from suit by its conduct.

Presumption of Governmental Immunity

       Sovereign immunity protects the State, as well as its agencies and officials, from lawsuits

for damages and from liability.      Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex.

Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323-24 (Tex. 2006)

(sovereign is immune from both liability and suit). “The appurtenant common-law doctrine of

governmental immunity similarly protects political subdivisions of the State, including counties,

cities, and school districts.” Id. at 324; City of Houston v. Williams, 353 S.W.3d 128, 134 n.5

(Tex. 2011) (noting distinction between sovereign and governmental immunity).              Political

subdivisions of the State, such as the City of San Antonio, have governmental immunity from

suit unless the Legislature has expressly waived such immunity by statute. Williams, 353 S.W.3d

at 134; Ben Bolt, 212 S.W.3d at 324. A statute shall not be construed as waiving immunity

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

§ 311.034 (West Supp. 2011); Williams, 353 S.W.3d at 134. It has long been recognized that it



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is the Legislature’s sole province to waive immunity from suit. IT-Davy, 74 S.W.3d at 853-54.

On the other hand, a political subdivision may waive its immunity from liability by entering into

a contract with a private party. Id. at 854. Only immunity from suit operates as a jurisdictional

bar; immunity from liability constitutes an affirmative defense. Williams, 353 S.W.3d at 134;

Miranda, 133 S.W.3d at 224.

Limited Legislative Waiver of Immunity for Certain Contract Claims

       The Legislature has clearly and unambiguously waived a governmental entity’s immunity

from suit for certain contractual claims. Ben Bolt, 212 S.W.3d at 327. Chapter 271 of the Local

Government Code expressly waives qualifying local governmental entities’ immunity from suit

for certain breach of contract claims. TEX. LOC. GOV’T CODE ANN. §§ 271.151-.160 (West 2005

& Supp. 2011).      For section 271.152’s limited waiver to apply, three elements must be

established: (1) the party against whom waiver is asserted must be a “local governmental entity,”

(2) authorized to enter into contracts, and (3) the entity must have in fact entered into a “contract

subject to this subchapter.”    Williams, 353 S.W.3d at 134; TEX. LOC. GOV’T CODE ANN.

§ 271.152 (West 2005). A “contract subject to this subchapter” 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.” TEX.

LOC. GOV’T CODE ANN. § 271.151(2) (West 2005); Williams, 353 S.W.3d at 135. Thus, the

legislative waiver of immunity in the contract context is restricted to suits for breach of a written

contract for goods and services. TEX. LOC. GOV’T CODE ANN. § 271.152; Williams, 353 S.W.3d

at 135. Wheelabrator has indeed brought a breach of contract claim based on its written contract

with CPS as its primary claim, and CPS has not claimed immunity with respect to this claim.




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       CPS argues that because the Legislature chose to limit the statutory waiver of immunity

for contractual claims against governmental entities to suits for breach of express written

contracts, it consciously excluded quasi-contractual claims based on an implied contract or

quantum meruit from the waiver. We agree. In 2008, we addressed this issue in Somerset Indep.

Sch. Dist. v. Casias, and held that section 271.152’s waiver of immunity does not apply to an

implied contract claim or claim of quantum meruit. Somerset Indep. Sch. Dist. v. Casias, No.

04-07-00829-CV, 2008 WL 1805533, at *3 (Tex. App.—San Antonio Apr. 23, 2008, pet.

denied) (mem. op.). We concluded that, based on its plain language, section 271.152 applies

only to written contracts, and that quantum meruit claims, being based in equity, “are simply not

included in section 271.152’s limited waiver of governmental immunity.”          Id.; see Excess

Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, Inc., 246 S.W.3d 42,

49-50 (Tex. 2008) (equitable theory of recovery based on quantum meruit is a quasi-contractual

doctrine under which one who provides valuable services may establish that recipient has

implied-in-law obligation to pay for value of services when on reasonable notice that provider

expects to be paid). Several other courts of appeals have agreed. See, e.g., Harris Cnty. Flood

Control Dist. v. Great Am. Ins. Co., 309 S.W.3d 614, 617 (Tex. App.—Houston [14th Dist.]

2010, no pet.) (section 271.152 does not apply to quantum meruit claims, which are barred by

governmental immunity) (citing City of Houston v. Petroleum Traders Corp., 261 S.W.3d 350,

359-60 (Tex. App.—Houston [14th Dist.] 2008, no pet.)); Vantage Sys. Design, Inc. v.

Raymondville Indep. Sch. Dist., 290 S.W.3d 312, 316-17 (Tex. App.—Corpus Christi 2009, pet.

denied) (holding section 271.152’s waiver of immunity does not extend to quantum meruit

claims); City of Houston v. Swinerton Builders, Inc., 233 S.W.3d 4, 12-13 (Tex. App.—Houston

[1st Dist.] 2007, no pet.) (plain language of section 271.152 limits waiver of sovereign immunity



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to breach of contract, and “lists no other claims, either in law or in equity;” thus, legislature did

not intend to include quantum meruit claims within the waiver).

       Under the rules of statutory construction, we take the plain meaning of the statutory

language, which expressly limits the waiver to breach of contract claims based on written

contracts, and give effect to the Legislature’s omission of other types of contractual and quasi-

contractual claims. TEX. GOV’T CODE ANN. § 311.022 (West 2005); Hernandez v. Ebrom, 289

S.W.3d 316, 318 (Tex. 2009) (statutory interpretation begins with plain language of statute); City

of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008) (court construes legislative intent as

expressed by statute’s words); Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex.

1981) (in construing statute, court gives effect not only to terms used, but also to terms the

legislature chose not to use). In excluding equitable claims such as quantum meruit from the

waiver, the Legislature balanced competing interests and made a policy decision that binds this

court. Somerset, 2008 WL 1805533, at *3.

Proprietary/Governmental Distinction

       Wheelabrator responds to CPS’s argument that there is no waiver of immunity for

contractual or quasi-contractual claims outside the scope of Chapter 271 by asserting CPS has no

immunity in the first place with respect to its quantum meruit claim because it acted in a

proprietary capacity when it contracted with Wheelabrator and Casey for the baghouse project.

Wheelabrator seeks to import the proprietary/governmental distinction from the Texas Tort

Claims Act into this quasi-contractual context.       In Chapter 101 of the Civil Practice and

Remedies Code, known as the Texas Tort Claims Act (“TTCA”), the Legislature has clearly

waived governmental immunity from liability and suit for certain tort claims arising out of its

governmental functions, as specified in the Act. See TEX. CIV. PRAC. & REM. CODE ANN.



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§§ 101.021-.029 (West 2011). A municipality’s governmental functions are those conducted “in

the performance of purely governmental matters solely for the public benefit.” Tooke v. City of

Mexia, 197 S.W.3d 325, 343 (Tex. 2006) (quotation omitted). In the TTCA, the Legislature

specifically excluded from the waiver of immunity all claims arising from a municipality’s

proprietary functions, which it defined to include “the operation and maintenance of a public

utility.” TEX. CIV. PRAC. & REM. CODE ANN. § 101.0215(b) (West 2011); Tooke, 197 S.W.3d at

343 (a municipality’s proprietary functions are those conducted “in its private capacity, for the

benefit only of those within its corporate limits, and not as an arm of the government”).

       In arguing for application of the governmental/proprietary dichotomy to its quasi-

contractual claim, Wheelabrator first relies on cases that have characterized a city’s operation of

a public utility as a proprietary function. See San Antonio Indep. Sch. Dist. v. City of San

Antonio, 550 S.W.2d 262, 264 (Tex. 1976) (“A city which owns and operates its own public

utility does so in its proprietary capacity.”); see also Int’l Bank of Commerce of Laredo v. Union

Nat’l Bank of Laredo, 653 S.W.2d 539, 546 (Tex. App.—San Antonio 1983, writ ref’d n.r.e.)

(noting that a municipality’s proprietary functions have been defined to include providing gas

and electric service). Wheelabrator then argues that under common law when a municipality

engages in a proprietary function it is subject to the same duties and liabilities as private persons

and corporations, i.e., it is not immune from claims arising out of its proprietary acts. See Gates

v. City of Dallas, 704 S.W.2d 737, 739 (Tex. 1986) (noting that, “[c]ontracts made by municipal

corporations in their proprietary capacity have been held to be governed by the same rules as

contracts between individuals”). Thus, Wheelabrator asserts CPS has no immunity from a

common law quantum meruit claim arising out of its proprietary actions.




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       The flaw in Wheelabrator’s argument is that this common law principle pre-dates the

2005 enactment of Chapter 271 in which the Legislature established a statutory scheme imposing

a limited waiver of a municipality’s immunity for certain contract claims; it excluded quasi-

contract claims such as quantum meruit from the statutory waiver of immunity, as discussed

supra. As it had already done in the tort-claims context, the Legislature could have incorporated

the proprietary/governmental distinction into the statutory waiver scheme for contract claims;

however, it chose not to incorporate that distinction into a contract setting. See Tex. Mut. Ins.

Co. v. Ruttiger, No. 08-0751, 2012 WL 2361697, at *19 (Tex. June 22, 2012) (the court

“presumes the Legislature deliberately and purposefully selects words and phrases it enacts, as

well as deliberately and purposefully omits words and phrases it does not enact”). It is the

Legislature’s function to weigh competing interests and establish public policy. Id. at *17. “In

the contract-claims context, legislative control over sovereign immunity allows the Legislature to

respond to changing conditions and revise existing agreements if doing so would benefit the

public.” IT-Davy, 74 S.W.3d at 854. In excluding quasi-contractual claims from Chapter 271’s

waiver of immunity, the Legislature made a public policy decision. Tooke, 197 S.W.3d at 332-

33 (Chapter 271’s waiver of governmental immunity in the contract-claims context involves

complex policy choices best made by the Legislature).

       In addition, Gates pre-dates Tooke in which the Supreme Court made clear that sovereign

immunity is the “default” rule for municipalities with respect to all types of claims. Id. at 331-32

(sovereign immunity in the absence of a clear legislative waiver is the firmly established

principle); see also Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003)

(general rule is immunity). When it issued Tooke the Supreme Court was well aware of the

common law principle espoused in Gates, i.e., that “contracts made by municipal corporations in



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their proprietary capacity . . . [are] governed by the same rules as contracts between individuals.”

Gates, 704 S.W.2d at 739. With that knowledge, the Supreme Court used a compare signal

when citing Gates right after explicitly stating it has never held that the proprietary/governmental

distinction applies to determine whether immunity is waived for breach of contract claims,

thereby putting Gates into question. Tooke, 197 S.W.3d at 343 n.89. Moreover, Gates deals

with immunity from liability, not immunity from suit. Gates, 704 S.W.2d at 739 (proprietary

functions subject municipalities to the “same duties and liabilities” as private persons).

        By asking us to hold that CPS has no immunity from a common law quantum meruit

claim arising out of a proprietary function, Wheelabrator requests that we create an exception to

the default principle of sovereign immunity confirmed in Tooke. We decline to do so, as that is

the sole province of the Legislature. IT-Davy, 74 S.W.3d at 853-54. As of this date, neither the

Texas Legislature nor the Texas Supreme Court has stated that the proprietary/governmental

distinction used in the tort-claims context is to be used to determine a municipality’s immunity

from suit on a contractual or quasi-contractual claim such as quantum meruit.                       Indeed, in

considering application of the governmental/proprietary distinction to a breach of contract claim,

the Supreme Court expressly said in Tooke, “we have never held that this same distinction

[proprietary/governmental functions] determines whether immunity from suit is waived for

breach of contract claims, and we need not determine that issue here.” Tooke, 197 S.W.3d at

343. Since Tooke, the Supreme Court has not revisited the issue. 4




4
  Wheelabrator cites us to PKG Contracting, Inc. v. City of Mesquite, 197 S.W.3d 388, 388-89 (Tex. 2006) (per
curiam), in which the Court rejected PKG’s argument that the city’s immunity from suit for breach of contract was
waived because it acted in a proprietary capacity when it contracted for construction of a storm drainage system,
finding it was part of the city’s governmental functions. PKG was issued on the same day as Tooke, and the
immunity analysis in PKG was not conducted under Chapter 271; in fact, the Court noted the newly enacted statute,
and remanded for a determination of whether the statutory waiver of immunity applied to the breach of contract
claim at issue. Id. at 389.

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        Wheelabrator cites several courts of appeals cases decided after Tooke that it

characterizes as applying the governmental/proprietary distinction in determining whether

governmental immunity was waived for contract and quantum meruit claims, but they are not

persuasive.       In all the cases, the courts of appeals did not reach the issue of whether the

governmental/proprietary distinction applies to contractual or quasi-contractual claims because

they determined the municipality was engaged in a governmental function. See, e.g., City of San

Antonio v. Reed S. Lehman Grain, Ltd., No. 04-04-00930-CV, 2007 WL 752197, at *3 (Tex.

App.—San Antonio Mar. 14, 2007, pet. denied) (city was acting in a governmental capacity and

was immune from suit raising breach of contract and estoppel claims); East Houston Estate

Apartments, L.L.C. v. City of Houston, 294 S.W.3d 723, 731-32 (Tex. App.— Houston [1st Dist.]

2009, no pet.) (city acted in governmental capacity in entering into loan agreement and was thus

immune from breach of contract claim); City of Emory v. Lusk, 278 S.W.3d 77, 83 (Tex. App.—

Tyler 2009, no pet.) (city was immune from suit for breach of contract); City of Houston v.

Petroleum Traders Corp., 261 S.W.3d 350, 355-56 (Tex. App.—Houston [14th Dist.] 2008, no

pet.) (stating it need not decide whether the governmental/proprietary dichotomy applies in

contract actions, but “even assuming for argument’s sake that the dichotomy does apply” to the

contract claim, the city’s procurement of fuel was a governmental function); City of Weslaco v.

Borne, 210 S.W.3d 782, 790-93 (Tex. App.—Corpus Christi 2006, pet. denied) (city’s operation

of mobile home park was governmental function, and thus city was immune from suit for breach

of contract). 5




5
  Wheelabrator also relies on Temple v. City of Houston, in which the court held the city had no sovereign immunity
from a breach of contract suit because it was performing a proprietary function when it provided life insurance
benefits to its employees. Temple v. City of Houston, 189 S.W.3d 816, 819-21 (Tex. App.—Houston [1st Dist.]
2006, no pet.). Temple was decided in January 2006, before Tooke was issued.

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       In sum, the Texas Supreme Court has so far declined to address whether application of

the governmental/proprietary distinction to a contractual or quasi-contractual setting is

appropriate for purposes of determining a municipality’s immunity from suit.        Tooke, 197

S.W.3d at 343. The appellate courts that have considered the issue since Tooke have not

squarely reached the issue, concluding that governmental functions were involved. In Chapter

271, the Legislature has balanced competing public and private interests and enacted a

comprehensive scheme for handling contract claims against municipalities. Sharyland Water

Supply Corp. v. City of Alton, 354 S.W.3d 407, 414 (Tex. 2011). The statutory scheme for

waiving a municipality’s immunity from suit in the contract context omits quasi-contractual

claims such as quantum meruit. Somerset, 2008 WL 1805533, at *3. The Legislature easily

could have included the proprietary/governmental dichotomy it used in the tort-claims context in

the contract-claims scheme, but chose not to do so. As it is solely the Legislature’s role to

“clearly and unambiguously” waive governmental immunity from suit, and it has not done so for

quantum meruit claims, we hold CPS is immune from suit on Wheelabrator’s quantum meruit

claim. See IT-Davy, 74 S.W.3d at 853-54.

Waiver of Immunity by Conduct

       Finally, Wheelabrator makes an equitable argument, contending CPS waived its

immunity from the quantum meruit claim by accepting benefits under the contract while

wrongfully withholding the retainage; in addition, it asserts CPS was complicit in violating the

competitive bidding laws based on the trial court’s finding in the Casey litigation that the

contract is void. CPS asserts that the circumstances of this case do not warrant a finding of

waiver of immunity by conduct, and further asserts the concept of waiver by conduct has not

been applied by the courts. We agree.



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       In arguing for application of a waiver-by-conduct, Wheelabrator relies on the Supreme

Court’s footnote in a 1997 case, Federal Sign v. Texas Southern University, that suggested there

could be circumstances where the State waives its sovereign immunity by its conduct, other than

by entering into a contract. Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 408 n.1 (Tex. 1997).

Despite the footnote, in the years since Federal Sign the Supreme Court has declined to apply a

waiver-by-conduct theory. See, e.g., Sharyland, 354 S.W.3d at 414 (it is sole province of

legislature to recognize waiver-by-conduct exception to immunity in breach of contract suit); IT-

Davy, 74 S.W.3d at 856-57 (rejecting a waiver-by-conduct argument and stating it is legislature’s

province to waive immunity); Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.

2007) (governmental unit does not waive immunity from breach of contract action by accepting

benefits under a contract); Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704, 705-06

(Tex. 2003) (nothing in circumstances showed waiver of immunity by conduct). We have also

repeatedly declined to apply waiver-by-conduct. See Somerset, 2008 WL 1805533, at *4 (also

noting that although supreme court has discussed the “possibility” of waiver by conduct absent a

legislative waiver of immunity, “it has recognized a ‘tension’ in this waiver concept”); Dimmit

Cnty. Mem’l Hosp. v. CPM Med., LLC, No. 04-11-00710-CV, 2012 WL 1431366, at *5 (Tex.

App.—San Antonio Apr. 25, 2012, no pet.) (mem. op.). Based on this precedent, CPS’s conduct

in accepting the benefit of the contract while withholding the retainage did not waive its

governmental immunity.

                                         CONCLUSION

       Because the Legislature’s limited waiver of governmental immunity from suit in Chapter

271 does not include quantum meruit claims, and the proprietary/governmental distinction from

the TTCA does not apply in this contractual or quasi-contractual context, CPS is immune from



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suit on Wheelabrator’s quantum meruit claim. In addition, the circumstances do not support a

waiver of immunity by conduct. Therefore, the trial court erred in denying CPS’s plea to the

jurisdiction as to the quantum meruit claim. Accordingly, we reverse the trial court’s order

denying CPS’s plea to the jurisdiction and render judgment that Wheelabrator’s quantum meruit

claim is dismissed for want of jurisdiction. We remand the cause to the trial court for further

proceedings consistent with this opinion.


                                                Phylis J. Speedlin, Justice




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