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Date: 09-28-2022

Case Style:

Jubilee Academic Center, Inc. v. School Model Support, LLC d/b/a/ Athlos Academies

Case Number: 04-21-00237-CV

Judge: Lori I. Valenzuela


Fourth Court of Appeals San Antonio, Texas

On appeal from the 37th Judicial District Court of Bexar County

Plaintiff's Attorney:

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Defendant's Attorney: Matthew Kasey Ratliff


San Antonio, Texas – Governmental Law lawyer represented appellant with a governmental immunity in the underlying breach-of contract dispute.

Appellant, Jubilee Academic Center, Inc. (“Jubilee”), is a non-profit corporation that operates open-enrollment charter schools throughout Texas. Appellee, School Model Support d/b/a Athlos Academies (“Athlos”), is an education service provider. On July 8, 2013, the parties 04-21-00237-CV - 2 - signed a “School Services Agreement” (“services agreement”) under which Athlos agreed to provide services in connection with its physical education, athletics, and after-school programs at various campuses run by Jubilee. One of the provisions of the services agreement provided as follows: 2. SITE IDENTIFICATION. Upon [Jubilee’s] identification of a school that will utilize the Athlos Academy program (an “Athlos School”), an addendum shall be prepared identifying the location and term commencement and expiration date in the form attached hereto as Exhibit A and incorporated herein by this reference. The parties also signed one “School Identification Addendum,” which did not identify the school by name, but stated its location as 3223 S WW White, San Antonio, Texas 78222 (“AthlosSan Antonio HS”). No other addendums were executed. Jubilee subsequently opened three campuses under the Athlos name: Athlos Leadership Academy-Wells Branch (“Jubilee Wells Branch”), Athlos Leadership Academy-San Antonio (“Jubilee San Antonio”), and Athlos Leadership Academy-Brownsville (“Jubilee Brownsville”). Pursuant to the services agreement, Jubilee paid Athlos for its services related to these three schools from August 2014 to July 2017. In August of 2016, pursuant to the services agreement, Jubilee opened a fourth campus, Athlos Leadership Academy-Premier (“Jubilee Highland Hills”). However, because the gym at the Highland Hills campus was not completed until January 2017, Athlos did not bill Jubilee for its services at the campus for the first semester of school. Athlos began billing for its services at the Highland Hills campus on February 1, 2017. A dispute between the parties arose in August 2017. Jubilee stopped paying for services provided by Athlos, and Athlos stopped providing services to the schools. On December 4, 2018, Athlos sued Jubilee for, among other claims, breach of the services agreement. In its petition, Athlos contended the trial court had jurisdiction over Jubilee because its immunity was waived under Texas Local Government Code Chapter 271. Jubilee filed a plea to the jurisdiction asserting 04-21-00237-CV - 3 - it was an open-enrollment charter school that enjoyed the same sovereign immunity from suit as a school district and there was no waiver of its immunity. The trial court denied the plea and Jubilee appealed. The appeal was dismissed for want of prosecution. See Jubilee Acad. Ctr., Inc. v. Sch. Model Support, LLC, 04-19-00707-CV, 2020 WL 1277755, at *1 (Tex. App.—San Antonio Mar. 18, 2020, no pet.) (per curiam) (mem. op.). Jubilee later filed a hybrid traditional and no-evidence motion for summary judgment, Athlos responded, and Jubilee filed a reply. The trial court denied the hybrid motion without stating its grounds. Jubilee filed this appeal. STANDARD OF REVIEW Athlos, as the plaintiff, had the burden to affirmatively demonstrate the trial court’s jurisdiction. Town of Shady Shores v. Swanson, 590 S.W.3d 544, 550 (Tex. 2019). “That burden encompasses the burden of establishing a waiver of sovereign immunity in suits against the government.” Id. “When a defendant[, such as Jubilee,] challenges jurisdiction, a court ‘is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised.”’ Id. (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000)). “A jurisdictional challenge, including one premised on sovereign immunity, ‘may be raised by a plea to the jurisdiction, as well as by other procedural vehicles, such as a motion for summary judgment.’” State v. Lueck, 290 S.W.3d 876, 884 (Tex. 2009) (citation omitted). In this case, Jubilee filed a motion for summary judgment asserting the trial court lacked jurisdiction over the lawsuit filed by Athlos. When, as here, the motion for summary judgment challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised, as the trial court is required to do. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex. 2004). When consideration of a trial court’s subject matter 04-21-00237-CV - 4 - jurisdiction requires the examination of evidence, the trial court exercises its discretion in deciding whether the jurisdictional determination should be made at a preliminary hearing or await a fuller development of the case. Id. In a case in which the jurisdictional challenge implicates the merits of the plaintiff’s cause of action and the jurisdictional challenge includes evidence, the trial court reviews the relevant evidence to determine if a fact issue exists. Id. “If the evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, and the fact issue will be resolved by the fact finder.” Id. at 227-28. However, if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the jurisdictional challenge as a matter of law. Id. at 228. This standard generally mirrors that of a summary judgment. Id. By requiring the governmental entity to meet the summary judgment standard of proof in cases like this one, the plaintiff is protected from having to “put on their case simply to establish jurisdiction.” Id. (quoting Bland, 34 S.W.3d at 554). Instead, after the governmental entity asserts and supports with evidence that the trial court lacks subject matter jurisdiction, the plaintiff, when the facts underlying the merits and subject matter jurisdiction are intertwined, must show there is a disputed material fact regarding the jurisdictional issue. Id. Because Jubilee, as the movant, filed a hybrid summary judgment motion on both noevidence and traditional grounds, we first review the trial court’s judgment under the no-evidence standard of review. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013); see also Town of Shady Shores, 590 S.W.3d at 551 (allowing jurisdictional challenges via no-evidence motions). Athlos, the non-movant, has the burden to present evidence establishing a material issue of fact concerning the element under attack. Merriman, 407 S.W.3d at 248. If Athlos failed to produce legally sufficient evidence to meet its burden, there is no need to analyze whether Jubilee satisfied its burden under the traditional motion. Id.; see also Vause v. Liberty Ins. Corp., 456 04-21-00237-CV - 5 - S.W.3d 222, 226 (Tex. App.—San Antonio 2014, no pet.). We review the evidence presented by the motion and response in the light most favorable to the nonmovant, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Merriman, 407 S.W.3d at 248. When reviewing a traditional summary judgment motion, we take as true all evidence favorable to the nonmovant, and we indulge in every reasonable inference and resolve any doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). To prevail on a traditional summary judgment motion, Jubilee had to establish that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). In this case, both parties rely on the same evidence—the services agreement and addendum—to support their arguments regarding whether they entered into a contract subject to the statutory waiver of immunity under Government Code section 271.152. IMMUNITY FROM LIABILITY AND SUIT “[G]overnmental immunity has two components: immunity from liability, which bars enforcement of a judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether.” Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). “By entering into a contract, a governmental entity necessarily waives immunity from liability, voluntarily binding itself like any other party to the terms of agreement, but it does not waive immunity from suit.” Id. Immunity from suit prohibits suits against a governmental entity unless the Legislature expressly consents to the suit. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003); see also Rusk State Hosp. v. Black, 392 S.W.3d 88, 93 (Tex. 2012) (“immunity from suit completely bars actions against those entities unless the Legislature expressly consents to suit”). 04-21-00237-CV - 6 - Thus, a governmental entity’s immunity from suits arising from breach of contract is waived only by the Legislature’s consent, either by statute or by its express consent on a dispute-by-dispute basis. In re City of Galveston, 622 S.W.3d 851, 855 (Tex. 2021). A statute shall not be construed as waiving immunity unless the waiver is effected by “clear and unambiguous” language. TEX. GOV’T CODE § 311.034; see also Tooke, 197 S.W.3d at 333 (“waiver of immunity must be clear and unambiguous.”). In this case, immunity from suit is statutorily waived under Government Code section 271.152, which states: A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter. TEX. LOC. GOV’T CODE § 271.152. This “statute’s plain language allows for enforcement of contracts against local governmental entities by waiving their immunity from suit.” Ben BoltPalito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 327 (Tex. 2006); see also City of Houston v. Williams, 353 S.W.3d 128, 134 (Tex. 2011) (section 271.152 “waives qualifying local governmental entities’ immunity from suit for certain breach of contract claims”). DISCUSSION Jubilee moved for summary judgment on several grounds all premised on its argument that section 271.152 did not apply; therefore, it had immunity from liability and suit. In its no-evidence motion, it argued there was no evidence of an enforceable contract subject to section 271.152 between itself and Athlos. Specifically, Jubilee argued there is no evidence of an enforceable contract for each of the four schools because, as to each individual school, Athlos has no evidence that (1) a contract is in writing, (2) any contract contained the essential term of the time period for 04-21-00237-CV - 7 - the contract, (3) the time period for the contract is enforceable, (4) Athlos provided services for charter education under the contract, and (5) Jubilee properly executed a contract for each school. In its traditional summary judgment motion, Jubilee asserted it was entitled to immunity as a matter of law for three reasons. First, Jubilee contended that because the parties did not sign any addendum, there is no written contract that (1) places an obligation on Jubilee to accept any services from Athlos for any of Jubilee’s schools or to pay for any such services and (2) identifies any schools subject to the services agreement or has a start date and duration for any services to be provided to any schools. Second, Jubilee asserts that, even if there was a signed, written contract, the evidence shows Athlos breached the contract first. Finally, Jubilee asserts a provision in the services agreement shows the parties agreed Jubilee retained its immunity. On appeal, Jubilee does not specifically challenge the trial court’s denial of its no-evidence motion based on its allegation that no written contract exists. Jubilee also does not challenge the denial of its traditional summary judgment motion on the ground that Athlos breached the contract first. Instead, on appeal, Jubilee challenges the existence of a written contract subject to section 271.152 and whether a provision of that contract allows it to retain its immunity. Therefore, we consider whether Jubilee established its entitlement to summary judgment as a matter of law on these grounds. A. Is There a Contract “Subject to” Section 271.152? Section 271.152’s waiver of immunity applies if three elements are established: (1) the party against whom the waiver is asserted must be a “local governmental entity” as defined by section 271.151(3), (2) the entity must be authorized by statute or the Constitution to enter into contracts, and (3) the entity must in fact have entered into a contract that is “subject to this subchapter,” as defined by section 271.151(2). Williams, 353 S.W.3d at 134-35. The parties do not dispute that the first and second elements are satisfied. The dispute centers on the third 04-21-00237-CV - 8 - element. 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 § 271.151(2)(A). Jubilee does not dispute that it operated four Athlos-branded schools and that Athlos provided at least some services to three of those schools. Jubilee also does not dispute that it signed the services agreement. However, Jubilee asserts the services agreement required the parties to sign an addendum for each school to which Athlos would provide services and each addendum would establish the essential terms of the parties’ agreement: the identity of the school to be bound by the agreement, the start date, and the duration of the obligations. Jubilee argues that (1) the services agreement by itself did not obligate Jubilee to take any action and did not bind any Jubilee school; (2) to bind a Jubilee school to the services agreement, the parties had to agree to it in an addendum; (3) the addendum had to identify the school to be bound; (4) the addendum had to establish the start date and duration for the designated school; (5) the addendum had to be signed; and (6) the addendum was not effective as a supplement to the services agreement until it was signed by both parties. There is no dispute that only one addendum was signed, but Jubilee argues that addendum did not identify by name or address any Jubilee school or properly state the start date. Jubilee concludes that because there was no signed addendum for each of the four schools, there was no written contract binding any of Jubilee’s schools; therefore, there exists no written contract “subject to” section 271.152. We first consider Jubilee’s argument that executing an addendum for each school was a condition precedent to enforcement of the services agreement. “A condition precedent is an event that must happen or be performed before a right can accrue to enforce an obligation.” Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992). To determine whether a condition precedent 04-21-00237-CV - 9 - exists, we must ascertain the parties’ intention, which can be done only by looking at the entire contract. Criswell v. European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990). To make performance specifically conditional, “a term such as ‘if’, ‘provided that’, ‘on condition that’, or some similar phrase of conditional language must normally be included.” Criswell, 792 S.W.2d at 948. “While there is no requirement that such phrases be utilized, their absence is probative of the parties’ intention that a promise be made, rather than a condition imposed.” Id. When no conditional language is used and another reasonable interpretation of the contract is possible, we construe the terms as a covenant. See Solar Applications Eng’g, Inc. v. T.A. Operating Corp., 327 S.W.3d 104, 109 (Tex. 2010). “A covenant, as distinguished from a condition precedent, is an agreement to act or refrain from acting in a certain way.” Id. at 108. “Breach of a covenant may give rise to a cause of action for damages, but does not affect the enforceability of the remaining provisions of the contract unless the breach is a material or total breach.” Id. “Conversely, if an express condition is not satisfied, then the party whose performance is conditioned is excused from any obligation to perform.” Id. The services agreement contained the following provision: 2. SITE IDENTIFICATION. Upon [Jubilee’s] identification of a school that will utilize the Athlos Academy program (an “Athlos School”), an addendum shall be prepared identifying the location and term commencement and expiration date in the form attached hereto as Exhibit A and incorporated herein by this reference. Although the services agreement provided that “an addendum shall be prepared,” no conditional language is used and no other language in the services agreement conditioned enforceability of the agreement on the execution of an addendum. We conclude a reasonable interpretation of the services agreement is possible. Therefore, we construe the site identification clause as a covenant, i.e., an agreement to act in a certain way. Accordingly, we hold the execution 04-21-00237-CV - 10 - of an addendum for each school is not a condition precedent to the enforcement of the services agreement. We next look to the services agreement to determine whether it states the essential terms of: the duration of the agreement, whether it obligates Jubilee to accept any services from Athlos or to pay for any such services, and whether the agreement required the identity of specific schools and the start date and duration of any services to be provided to each school. “Any written, authorized contract that states the essential terms of an agreement for providing services to the governmental entity triggers the waiver of immunity under chapter 271.” Lubbock Cty. Water Control & Improvement Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297, 302 (Tex. 2014). Section 271.151(2) does not define “essential terms.” Williams, 353 S.W.3d at 138. However, the Supreme Court has characterized essential terms for purposes of chapter 271 to include, among other things, the names of the parties, the price to be paid, the service to be rendered, the property at issue, and the time of performance. See id. at 138-39; Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829, 838 (Tex. 2010). The essential terms must outline the basic obligations of the parties. Kirby Lake Dev., 320 S.W.3d at 838. Courts consider each contract separately on a case-by-case basis to determine its essential terms. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The services agreement identifies the parties as Jubilee and Athlos and states, in pertinent part, as follows: WHEREAS, [Jubilee] desires to obtain [Athlos’s] services in connection with [Athlos’s] physical education, athletics and after-school programs to be offered at some of [Jubilee’s] schools pursuant to the terms and conditions contained herein; . . . WHEREAS, [Athlos] is able and willing to provide the Services (as defined below) and shall provide such services in accordance with the Charter (as defined below) and Applicable Law (as defined below). 04-21-00237-CV - 11 - NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained and of the fees to be paid to [Athlos] as hereinafter set forth, and for other good and valuable consideration the sufficiency of which is hereby acknowledged, [Jubilee] and [Athlos] (together, the “Parties” and each a “party”), do hereby agree on behalf of themselves and their respective legal successors and assigns, as follows: 1. ENGAGEMENT. [Jubilee] hereby engages [Athlos] on the terms and conditions hereinafter set forth to provide the Services (as defined below) and [Athlos] hereby agrees to provide the Services to [Jubilee] pursuant to the terms hereof. 2. SITE IDENTIFICATION. Upon [Jubilee’s] identification of a school that will utilize the Athlos Academy program (an “Athlos School”), an addendum shall be prepared identifying the location and term commencement and expiration date in the form attached hereto as Exhibit A and incorporated herein by this reference. 3. INITIAL TERM. The term of each Athlos School shall be for a period of eight (8) years commencing on the first day such Athlos School is operating in its new facility and continuing until the last day of the school year in the eighth (8th) year (the “Initial Term”). . . . The services agreement states, “[t]he relationship between the Parties was developed and entered into through arms-length negotiations and is based solely on the terms of this Agreement.” [Emphasis added.] The agreement provides that Each party acknowledges that (i) the party was advised or represented by counsel in connection with the negotiation, preparation, revision and execution of this Agreement; (ii) before executing this Agreement, the party discussed the Agreement with the party’s counsel and became fully informed of the terms, contents, conditions and effect of this Agreement; (iii) the party is legally competent, as well as fully qualified and authorized to execute this Agreement; (iv) in executing this Agreement, the party is not relying on any warranty, statement, promise or representation of any kind that has been made to the party by any other party, or by legal counsel for any other party or anyone acting for another party in any capacity, except as expressly stated in this Agreement; (v) each party expressly disclaims reliance upon any facts, promises, warranties, undertakings, or representations, whether express or implied, by any other party, or its agents or legal counsel as consideration for this Agreement, except for the explicit provisions of this Agreement; (vi) the party has relied solely on the party’s own judgment and/or the advice of the party’s counsel in executing this Agreement; (vii) the party understands the terms, contents, conditions, and effect of this Agreement, and voluntarily accepts the Agreement in its entirety; and (viii) each party has executed this Agreement of its own free will as a free and voluntary act, without any duress, coercion or undue influence exerted by or on behalf of any person or entity. 04-21-00237-CV - 12 - The services agreement set forth the services Athlos was to provide and states, “[t]he Services provided by [Athlos] under this Agreement shall be provided in conformity with this Agreement, Applicable Law, the Charter, and Athlos School policies and procedures.” [Emphasis added.] The agreement also states the circumstances under which either party may terminate the services agreement. Jubilee could terminate the services agreement “for cause,” which included “(i) failure by [Athlos] to provide the Services in a manner adequate and sufficient, in [Jubilee’s] sole and absolute judgment, for [Jubilee] to operate the Athlos School in compliance with and pursuant to the Charter, Applicable Law, and/or school policies and procedures as adopted by the Board . . . or (ii) any act, failure or omission that [Jubilee] determines, in [Jubilee’s] sole and absolute discretion, endangers or materially lessens the safety of students.” Athlos could terminate the services agreement in the event Jubilee “(i) defaults in the performance of any material obligation hereunder, and (ii) fails to cure such default within thirty (30) days of the date of written notice from [Athlos] to it (or if such cure is not curable within thirty (30) days, then if [Jubilee] fails to commence such cure within a reasonable time thereafter), advising that a default has occurred, and describing the default.” “Material obligation,” for the purpose of this provision, is defined to mean “that (i) [Jubilee] has failed to pay amounts due under this Agreement beyond the applicable period of notice and cure; or (ii) [Jubilee] has not otherwise complied with its obligations under this Agreement in all material aspects related thereto.” [Emphasis added.] The services agreement could also be terminated by either party if Jubilee lost its charter or by mutual consent. The services agreement also states the amount of fees Athlos would receive “[i]n consideration for the services” based on a percentage of the “local and state revenues of [Jubilee].” The services fees were not tied to the revenue of a specific school; instead, Jubilee paid the fees from funds it received from local and state agencies. “The Parties . . . acknowledge[d] and agree[d] 04-21-00237-CV - 13 - that as of the date of this Agreement, the Services Fee payable to [Athlos were] reasonable, necessary and fair market value compensation for services rendered.” [Emphasis added.] Finally, in relevant part, the agreement states: This Agreement contains the entire agreement between the Parties, but only as concerns the specific matters addressed herein. Furthermore, this Agreement supersedes any and all prior or contemporaneous agreements and any and all prior or contemporaneous negotiations, understandings, warranties, discussions or representations, whether oral or written, and this Agreement is subject to modification, waiver, or addition only by means of a writing signed by the party to be charged. [Emphasis added.] To be enforceable, a contract’s essential terms must be sufficiently definite to confirm that both parties intended to be contractually bound. T.O. Stanley Boot, 847 S.W.2d at 221. “In that connection, the terms must also be sufficiently definite to enable a court to understand the parties’ obligations and give an appropriate remedy if they are breached.” Houston Cmty. Coll. Sys. v. HV BTW, LP, 589 S.W.3d 204, 212-13 (Tex. App.—Houston [14th Dist.] 2019, no pet.). “We rely on guiding principles of contract interpretation to determine whether the services described in the contract are sufficiently definite.” Id. at 213. We conclude the services agreement identifies the names of the parties, the price to be paid, the services to be rendered, the properties at issue, and the time of performance. Additionally, we conclude the essential terms are sufficiently definite to confirm that both parties intended to be contractually bound. Accordingly, the services agreement is a contract “subject to” section 271.152’s waiver of immunity. We next address whether a provision contained in the services agreement allowed Jubilee to retain its immunity. B. Did the Parties Contractually Agree Jubilee’s Immunity Was Not Waived? There is no dispute that if section 271.152 applies, then Jubilee’s immunity from suit is waived. However, Jubilee argues the following provision of the services agreement prohibited the waiver of its immunity: 04-21-00237-CV - 14 - 22. GOVERNMENTAL IMMUNITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, [Athlos] ACKNOWLEDGES, STIPULATES AND AGREES THAT NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WAIVER OF ANY STATUTORY OR GOVERNMENTAL IMMUNITY AVAILABLE TO [Jubilee] UNDER APPLICABLE LAW. Jubilee contends this provision (hereinafter, “paragraph 22”) is a contractual non-waiver of immunity that formed part of the consideration for the services agreement and Athlos’s agreeing to the non-waiver was an allocation of risk intrinsic to the right to contract. Athlos counters that paragraph 22 is inapplicable because Jubilee’s immunity is statutorily waived under section 271.152 and cannot be contractually “reinstated.” Parties may not contractually waive immunity from a breach of contract suit; only the Legislature may do so. Webb Cty. v. Khaledi Props., Ltd., 04-12-00251-CV, 2013 WL 3871060, at *2 (Tex. App.—San Antonio July 24, 2013, no pet.) (mem. op.) (emphasis added); see also Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 858 (Tex. 2002) (rejecting waiverof-immunity-by-contract argument and noting waiver of immunity from suit in contract claims are made only by the Legislature). The issue here is whether parties may contractually agree that a governmental entity retains its immunity from suit despite the Legislature’s clear waiver of such immunity in section 271.152. We conclude they may not. “[N]othing in section 271.152 specifically precludes reinstatement or avoidance of the limited waiver of immunity.” City of Willow Park, Tex. v. E.S. & C.M., Inc., 424 S.W.3d 702, 708 (Tex. App.—Fort Worth 2014, pet. denied). However, courts consistently defer to the Legislature in matters concerning the waiver of immunity from suit. See Tooke, 197 S.W.3d at 332 (such deference “allows the Legislature to protect its policymaking function.”). Section 271.152’s “legislative history indicates that, by enacting section 271.152, the Legislature intended to loosen the immunity bar so ‘that all local governmental entities that have been given or are given the 04-21-00237-CV - 15 - statutory authority to enter into contracts shall not be immune from suits arising from those contracts.’” Ben Bolt-Palito, 212 S.W.3d at 327 (citation omitted) (emphasis in original). In City of Willow Park, the Fort Worth Court of Appeals examined the same issue with which we are presented here. In that case, the parties’ contract contained the following provision: “12.11 Sovereign Immunity—The parties agree that the City has not waived its sovereign immunity by entering into and performing its obligations under this Agreement.” 424 S.W.3d at 708. The governmental entity argued paragraph 12.11 is “clearly aimed at contractually reinstating . . . immunity which might otherwise be waived by operation of [section 271.152].” Id. It also argued the parties were free to contract around section 271.152’s limited waiver of immunity. Appellee replied that the parties could not, by contract, circumvent the waiver of immunity the Legislature intended. Id. The court of appeals held that “[i]f parties to a contract cannot, between themselves, voluntarily choose to waive an entity’s sovereign or governmental immunity because the [L]egislature has sole province over such matters, . . . parties may [not] collectively and voluntarily abrogate the [L]egislature’s intention to waive such immunity.” Id. at 709 (emphasis added). “In other words, because matters of immunity hinge upon legislative policy balancing of competing public and private interests, . . . we conclude that these parties could not tilt that balance in either direction through their contract.” Id. (citation omitted). Turning next to the policies underlying section 271.152, the court held these policies“— including avoiding the elimination of redress to contractors when a governmental entity refuses to pay—would be thwarted by enforcing” a contractual reinstatement of the waiver provided in section 271.152. Id. The court concluded the Legislature “intended to avoid a mutual elimination of section 271.152’s policy because chapter 271, by its own language, indicates that some contractual terms that conflict with the chapter’s waiver of immunity cannot be enforced.” Id. 04-21-00237-CV - 16 - “Specifically, although section 271.154 allows parties to incorporate ‘[a]djudication procedures’ (such as notice or alternative dispute resolution provisions) into contracts subject to chapter 271, the section prohibits such procedures from ‘conflict[ing] with the terms’ of section 271.152.” Id. at 709-10 (citing TEX. LOC. GOV’T CODE § 271.154). 1 The court could not “imagine that the [L]egislature would have precluded some contractual terms from conflicting with chapter 271’s limited waiver of immunity while intending to allow for the possibility that a contractual term could override the waiver altogether.” Id. at 710. Finally, the court considered the governmental entity’s argument that parties are free to contract as they wish. The court recognized “there is a strong public policy in enforcing voluntary and knowing contracts.” Id. “But the freedom of contract is ‘not unbounded’; parties do not have the right to enter contracts that violate another strong public policy as expressed through the [L]egislature’s statutes.” Id. “The appropriate test when considering whether a contract violates public policy is whether the tendency of the agreement is injurious to the public.” Id. The court concluded “[e]nforcing paragraph 12.11 or identical provisions in the future would be injurious to the public because it would allow local governments to breach contractual terms without the possibility of redress, contravening section 271.152’s policy.” Id. On appeal, Jubilee urges this court to reject the analysis in City of Willow Park for several reasons. First, Jubilee contends chapter 271 waives immunity only for written “contract[s] subject to this subchapter,” and determining whether a contract is subject to chapter 271 requires reviewing the contract and applying its terms. Therefore, Jubilee contends there is nothing inconsistent with 1 “Adjudication procedures, including requirements for serving notices or engaging in alternative dispute resolution proceedings before bringing a suit or an arbitration proceeding, that are stated in the contract subject to this subchapter or that are established by the local governmental entity and expressly incorporated into the contract or incorporated by reference are enforceable except to the extent those procedures conflict with the terms of this subchapter.” TEX. LOC. GOV’T CODE § 271.154. 04-21-00237-CV - 17 - chapter 271 and determining whether the terms of a contract fall outside its application. Second, Jubilee takes issue with the City of Willow Park’s conclusion that enforcing the contractual provision would be injurious to the public and against public policy. Jubilee contends agreeing to the non-waiver of immunity is simply a form of risk allocation intrinsic to the right to contract. We agree with Jubilee’s first contention and have concluded the terms of the services agreement fall within Chapter 271’s application. Therefore, we next address the merits of its second contention. “‘As a general principle, ‘parties have the right to contract as they see fit as long as their agreement does not violate the law or public policy.’” In re City of Galveston, 622 S.W.3d 851, 858 (Tex. 2021) (orig. proceeding) (citation omitted). Therefore, “[w]e consider the force and effect of a nonwaiver provision [such as paragraph 22] in light of Texas’s public policy that “strongly favors freedom of contract.” Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 481 (Tex. 2017) (citation omitted). “[Th]e Legislature is better suited than the courts to weigh conflicting public policies associated with waiving immunity and subjecting the government to increased liability, the burden of which the public must bear.” Ben Bolt-Palito, 212 S.W.3d at 327. “[U]ntil chapter 271, governmental immunity shielded a local government from enforcement of its contract obligations.” San Antonio River Auth. v. Austin Bridge & Rd., L.P., 601 S.W.3d 616, 622 (Tex. 2020). Although “a local government could sue a contractor, a contractor had no corresponding ability to sue a local government for breach of its contract obligations without ‘legislative consent’—by statute or resolution.” Id. “But times change.” Id. “First, the [L]egislature codified its pro-arbitration public policy stance and recognized an array of arbitration procedures.” Id. “It later applied these procedures to some government disputes, encouraging local governments to ‘develop and use alternative dispute resolution procedures’ consistent with statutorily-recognized 04-21-00237-CV - 18 - practices. Id. “Second, the [L]egislature began to authorize, and sometimes require, arbitration in government-related contexts.” Id. “And finally, the [L]egislature enacted Local Government Code Chapter 271, which, for the first time, made local governments accountable for their obligations in goods-and-services contracts by granting a limited waiver of immunity for claims brought within the chapter’s parameters.” Id. at 622-23. There is no dispute here that Jubilee is a governmental entity authorized to enter into contracts. See El Paso Educ. Initiative, Inc. v. Amex Props., LLC, 602 S.W.3d 521, 532 (Tex. 2020) (“Open-enrollment charter schools operate pursuant to statute. Accordingly, they may enter into a contract only in the manner the [L]egislature has authorized.”); see also LTTS Charter Sch., Inc. v. C2 Constr., Inc., 358 S.W.3d 725, 742 (Tex. App.—Dallas 2011, pet. denied) (concluding “an open-enrollment charter school is a ‘local governmental entity’ for purposes of section 271.152”). We conclude Jubilee’s freedom to contract in its capacity as a governmental entity is qualified by its concomitant limited waiver of immunity for claims brought within Chapter 271’s parameters. See Andrada v. City of San Antonio, 555 S.W.2d 488, 491 (Tex. Civ. App.—San Antonio 1977, writ dism’d) (“But even at a time when courts were alert to strike down regulations of economic freedom, ameliorative legislation was upheld by acknowledging that freedom of contract is a qualified, not an absolute, right.”). In other words, public policy favors holding a governmental entity accountable for its obligations in goods-and-services contracts “by granting a limited waiver of immunity for claims brought within the chapter’s parameters.” San Antonio River Auth., 601 S.W.3d at 622-23; see Solar Applications Eng’g, 327 S.W.3d at 112 (holding that construing lien-release provisions, common to construction contracts, as conditions precedent to suit on the contract without express conditional language contravenes lien statutes’ goal of allowing contractor or owner to avoid litigation by foreclosing on their lien or withholding the retainage). 04-21-00237-CV - 19 - We therefore hold paragraph 22 cannot be enforced as a reinstatement of Jubilee’s immunity “[b]ased on principles generally underlying the waiver of sovereign or governmental immunity, on the purpose behind the enactment of section 271.152, and on legislative intent expressed within another section2 in chapter 271 . . ..” City of Willow Park, 424 S.W.3d at 709.

Outcome: For the reasons stated above, we conclude Jubilee did not establish its entitlement to summary judgment as a matter of law. Therefore, we overrule Jubilee’s issues on appeal and affirm the trial court’s judgment.

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