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Dallas/Fort Worth International Airport Board v. Vizant Technologies, LLC

Court of Appeals of Texas, Fifth District, Dallas

December 15, 2017

DALLAS/FORT WORTH INTERNATIONAL AIRPORT BOARD, Appellant
v.
VIZANT TECHNOLOGIES, LLC, FORMERLY KNOWN AS P.E. SYSTEMS, LLC, Appellee

         On Appeal from the 191st Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-00368

          Before Justices Lang-Miers, Brown, and Boatright

          MEMORANDUM OPINION

          JASON BOATRIGHT, JUSTICE.

         The Dallas/Fort Worth International Airport Board appeals an interlocutory order denying its plea to the jurisdiction. We hold that the Board was engaged in a governmental function and therefore enjoyed governmental immunity for most of the claims against it. The Legislature, however, has waived the Board's immunity with respect to the breach of contract claim. We therefore affirm in part and reverse and render in part.

         BACKGROUND

         The Board was established in 1968 by contract between the cities of Dallas and Fort Worth. It consists of members from both cities and has the exclusive authority to "plan, acquire, establish, construct, improve, equip, maintain, operate, regulate, protect, and police" the Dallas/Fort Worth International Airport. Tex. Transp. Code Ann. § 22.074(c), (d) (West 2011). The Board is "a special purpose governmental entity separate from each of the cities." Dallas/Fort Worth Int'l Airport Bd. v. Ass'n of Taxicab Operators, USA, 427 S.W.3d 547, 548 (Tex. App.-Dallas 2014, pet. denied). It has the exclusive power to operate DFW Airport for the cities. Id. at 549-50.

         The contract establishing the Board authorizes it to contract for professional services and to fix the time, manner, and payment for these services. This contract establishes an executive director as the Board's chief officer, who is required to make recommendations to the Board in connection with the Board's exercise of its contract-based powers. In addition, a 2007 Board resolution authorizes its staff to execute contracts on behalf of the Board in an amount up to $50, 000 without the Board's express approval. Pursuant to this delegated authority, Board staff in 2012 retained a third-party consultant, appellee Vizant Technologies, LLC, to analyze the Board's credit-card processing costs.

         The parties finalized their engagement in a consulting agreement signed on August 29, 2012.[1] The duration of the agreement was thirty-six months from the date of the first invoice. Vizant's fee was to be based on the reduction in payment-processing costs that it achieved. The agreement also provided that Vizant's compensation would not exceed $50, 000 and that Vizant would stop work once its compensation reached this limit. The Board staff would then "make a good faith effort" to obtain Board authorization to increase the limit.

         Vizant delivered the consulting services contemplated by the agreement, and by its calculations it was due fees after the first year that greatly exceeded $50, 000. Pursuant to the "good faith effort" clause, Vizant in November 2013 sought to increase the $50, 000 limit under the contract. Board staff in June 2014 submitted a request to the Board for a revised limit of $330, 000, but the Board rejected the request. The Board paid Vizant's $50, 000 fee as specified in the agreement.

         Vizant sued the Board for breach of contract, fraudulent inducement, fraud-in-the-performance, promissory estoppel, and attorney's fees. The Board filed a plea to the jurisdiction that challenged Vizant's pleadings on the ground that Vizant's fraud and promissory estoppel claims were barred by governmental immunity.[2] Following a hearing, the district court denied the Board's plea to the jurisdiction. This interlocutory appeal followed.

         ANALYSIS

         Sovereign immunity deprives a trial court of subject matter jurisdiction for lawsuits in which certain governmental units have been sued. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex. 2004). We review a trial court's decision about whether it has jurisdiction de novo. Id. at 228. When a plea to the jurisdiction challenges the pleadings, we determine whether the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction, and we construe the pleadings liberally in favor of the plaintiff, looking to the pleaders' intent. Id. at 226. We indulge every reasonable inference and resolve all doubts in the plaintiff's favor. Id. at 228. We are not required to look solely at the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised. Bland Indep. School Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000). We first determine whether immunity applies and, if it does, we defer to the Legislature's decision to waive, or not to waive, such immunity. Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 435 (Tex. 2016).

         Applicability of Immunity

         Political subdivisions of the state are immune from suit when they perform governmental functions, but not when they perform proprietary functions. Id. at 430. The Board argues that Vizant's claims are related to the operation of an airport, which is a governmental function. Vizant, however, contends that the issue is not whether the Board engaged in functions that are classifiable as either governmental or proprietary, but whether the negotiation and performance of the agreement constituted governmental or proprietary functions. Mindful of our obligation to construe the pleadings in Vizant's favor, Miranda, 133 ...


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