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Contracts No. 02-0299, 5/8/2003. Click here for the full text of this decision FACTS: A county solicited bids for purchasing a parcel of land, accepted the highest bid, deposited the tendered earnest money, and sent the purported buyer a warranty deed and affidavit to be used to close the transaction. The county delayed authorization to sign the deed, however, and a newly elected commissioners court refused to approve the sale. HOLDING: Affirmed. The court decides whether the county, by its conduct, waived its immunity from suit. Relying on Federal Sign v. Texas S. Univ. , 951 S.W.2d 401 (Tex. 1997), Gregory Collins claims that the facts presented here support a finding that El Paso County, by its conduct, waived immunity from suit. Specifically, Collins asserts that the county waived immunity by advertising for bids to sell the land, accepting Collins’ bid, accepting and depositing Collins’s earnest money and sending Collins an earnest money contract to sign. The county responds that these activities constitute nothing more than acts of contract formation, which this court has already stated do not, by themselves, waive immunity from suit. The court agrees with El Paso County. The actions that El Paso County took are the kind that are necessary and expected during contract formation. Soliciting for bids in the local paper allowed the county to determine who might be interested in purchasing the land and was a required act under Texas law. Texas Local Government Code �272.001(a). Accepting Collins’ bid and earnest money, and sending Collins a contract, were steps in forming a contract between the parties. Collins describes nothing in El Paso County’s conduct that falls outside the realm of contract formation. Contract formation, by itself, is not sufficient to waive a governmental unit’s immunity from suit. Collins argues that this case is factually distinguishable from Federal Signbecause Collins fully performed under the contract. Collins claims that his actions, including forwarding the earnest money to the county and depositing money with the title company, fulfilled his obligations to the county and constituted full performance. But Collins ignores an important distinction between Federal Signand this case. In Federal Sign, the state was the buyer of commercial goods, while here the county is the seller of government land. Collins does not seek to recover for goods already conveyed. Instead, Collins wishes to force a sale of land that belongs to the people of El Paso County. Although in Federal Signthe court suggested that some circumstances might warrant recognizing a waiver by conduct, the equitable basis for such a waiver simply does not exist under this set of facts. The facts presented here illustrate a fundamental reason why immunity exists – to prevent governmental entities from being bound by the policy decisions of their predecessors. In this case, the county, upon an electoral change in the commissioners court, determined that selling the property to Collins was a poor decision. Rather than lock El Paso County residents into a contract not in their best interest, the court acted within its discretion to protect the perceived interests of the public by rejecting the contract. In doing so, the county did not profit unfairly at Collins’ expense. The court notes that the bidding statute under which the sale of the county’s land was conducted further supports this conclusion. Texas Local Government Code �272.001(d) provides that a governmental entity acting under the statute is not required “to accept any bid or offer or to complete a saleor exchange.” Here, although the county had taken a number of steps toward closing the sale, it ultimately declined to complete the transaction. Section 272.001(d) makes clear that the county was under no statutory obligation either to accept any potential bids or to complete a transaction if it did decide to accept a bid. OPINION: O’Neill, J.; O’Neill, J., Phillips, C.J., Hecht, Owen, Jefferson, Schneider, Smith and Wainwright, JJ. DISSENT: Enoch, J. “I continue my disagreement with this Court’s unique position among the vast majority of states that when a governmental unit contracts with a private party, the governmental unit does not waive immunity from suit. Today, the Court holds that El Paso County did not waive its immunity from suit in the underlying breach of contract action brought by Gregory Collins and Catalina Development Inc. (collectively, “Collins”). In addition, the Court misleads the public by refusing to disavow its acknowledgment that a governmental unit can waive its immunity by conduct. This case demonstrates that the Court will never conclude that such a waiver actually occurred. I therefore dissent once again.”

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