X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:A.B. Bernard Jr. and BGI Enterprises Inc. sued Jefferson County under the real estate fraud statute. The county filed a plea to the jurisdiction based on governmental immunity from suit. The trial court denied the county’s plea, and the county filed this interlocutory appeal. HOLDING:Reversed and rendered. Bernard argues Kerrville HRH Inc. v. City of Kerrville, 803 S.W.2d 377 (Tex. App. San Antonio 1990, writ denied) represents the controlling law. In Kerrville HRH, the court held the use of the word “person” in Texas Business and Commerce Code 27.01 waived a city’s governmental immunity because 311.005 of the Government Code defines “person” to include governmental entities. The case was decided prior to the legislature’s enactment in 2001 of 311.034 of the Government Code. The sole question presented in this appeal is whether the legislature intended to waive governmental immunity to suit under 27.01 of the Texas Business and Commerce Code. In Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692 (Tex. 2003), the Texas Supreme Court explained the approach courts are to take when considering whether the legislature intended to waive governmental immunity in a statute. The court in Taylor considered whether a statute which 1. imposed liability on mental health facilities and 2. incorporated a definition of mental health facility which included state-operated facilities waived the state’s immunity. The statute did not expressly authorize suit against the state. The court nevertheless considered whether the statute waived immunity “by necessary implication.” The court concluded the incorporated definition was not the “functional equivalent” of an explicit legislative directive waiving immunity, and held immunity had not been waived by the statute. A statute that waives immunity must do so beyond doubt. Any ambiguities in a statute are to be resolved in favor of retaining immunity. When waiving immunity, as Taylor states, the Legislature “often enacts simultaneous measures to insulate public resources from the reach of judgment creditors.” Therefore, when deciding if a statute waives immunity, courts are to consider whether the statute provides an objective limitation on any potential liability. Section 27.01 does not contain language expressly waiving immunity from suit. Generally, the statute states a “person” who makes misrepresentations will be “liable” to the injured party. Section 311.034 of the Government Code says the inclusion of governmental entities in the definition of “person” does not indicate legislative intent to waive sovereign immunity “unless the context of the statute indicates no other reasonable construction.” Section 27.01 applies to private parties, so the statute is neither without meaning nor without purpose if governmental immunity is retained. The statute has a reasonable interpretation and application without waiver. Furthermore, section 27.01 does not set forth any objective limitations on potential liability, and the statute provides for recovery of exemplary damages. The Supreme Court noted as follows in Taylor: “No Texas statute expressly permits suit against the State for exemplary damages. Although not dispositive, the fact that Taylor’s construction of the Act would subject the State to exemplary damage awards reinforces our skepticism that the Legislature intended to waive sovereign immunity by mere implication.” The court concludes the Legislature did not intend to waive governmental immunity to suit for a claim under 27.01. Like the incorporated definition of “mental health facility” in Taylor, the incorporated definition of “person” in this statute is not the functional equivalent of an explicit legislative directive waiving immunity. Governmental immunity to suit bars Bernard’s claim under 27.01 of the Texas Business and Commerce Code. The trial court erred in denying the county’s plea to the jurisdiction. OPINION:Gaultney, J.; McKeithen, C.J., Burgess and Gaultney, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.