Spring 2015

Immunity from Breach of Contract Claims

In 1992, Shields Brothers, Inc., a farming business, sued the Engelman Irrigation District (EID), a governmental entity, alleging breach of contract.  EID asserted in defense that the trial court lacked subject matter jurisdiction because of governmental immunity, but the trial court rejected that argument relying on Missouri Pacific Railroad Co. v. Brownsville Navigation District.  In 1995, after a jury trial, the trial court rendered judgment against EID.

In 2006, the Texas Supreme Court decided Tooke v. City of Mexia, holding that statutes stating that public entities may “sue and [or] be sued” do not, merely by using such phrase, clearly waive a governmental entity's immunity from suit, overruling Missouri Pacific.

EID then filed suit seeking a declaration that the 1995 judgment is void because the trial court’s assertion of jurisdiction was based on the now-overruled holding in Missouri Pacific.  The trial court denied EID’s summary judgment and the Thirteenth Court of Appeals affirmed, holding that judicial opinions such as Tooke may not be applied retroactively in order to void judgments that have already been finalized and for which direct appellate review has been exhausted.

EID now seeks review from the Texas Supreme Court.  LAF has agreed to join the Texas Municipal League and the Texas City Attorneys Association to encourage the court to grant EID’s petition for review and hold the immunity from suit bars the claims by Shields Brothers in this case.  Engelman Irrigation Dist. v. Shields Bros. Inc., No. 15-0188 (pet. filed).  LAF’s Attorney: Ray Viada, Viada & Strayer, The Woodlands.