Background
The City of Edinburg hired Texas Cordia Construction, LLC (Cordia) to perform two roadway improvement projects. For each project, the city manager executed a written contract, the city attorney approved the form, and the city council approved Cordia’s winning bid at scheduled public meetings. In May 2022, Cordia invoked the force majeure clauses in both contracts, citing materials cost increases caused by the war in Ukraine. Edinburg responded by terminating both contracts for convenience under provisions that entitled Cordia to payment for completed work, expenses incurred, and a reasonable overhead and profit allowance — but expressly excluded lost anticipated profits and post-termination overhead.
Edinburg paid Cordia’s final pay applications but refused to pay accrued interest and other amounts Cordia claimed were owed under the termination-for-convenience clauses. Cordia sued for breach of contract and a Prompt Payment Act violation, invoking the waiver of governmental immunity in Texas Local Government Code Chapter 271. Edinburg filed a plea to the jurisdiction arguing Cordia had not pleaded sufficient facts to show the contracts were “properly executed on behalf of the local governmental entity” as required by § 271.151(2)(A). The trial court ordered jurisdictional discovery, after which Cordia supplemented the record with sworn responses from Edinburg confirming that it was a municipality, that it entered written construction contracts with Cordia, and that its city manager executed those contracts with authority. The trial court ultimately denied Edinburg’s plea and the city appealed the accelerated interlocutory order.
The Court’s Holding
The Thirteenth Court of Appeals affirmed on all three grounds raised by Edinburg. On the first issue — whether the trial court erred by considering Cordia’s evidence when Edinburg’s plea challenged only the pleadings — the court called Edinburg’s argument “frivolous” and found it unsupported by any cited authority. Nothing in Texas precedent bars a plaintiff from presenting evidence when a governmental entity challenges only the sufficiency of the pleadings, and the Texas Supreme Court held in Fraley v. Texas A&M University System, 664 S.W.3d 91 (Tex. 2023), that trial courts are required to assess “evidence either party adduces in connection with a jurisdictional plea.” The practical consequence of Edinburg’s approach — that clear evidence of contract execution must be ignored simply because the city did not frame its challenge as a factual one — would force needless formalism over the core question of whether immunity has been waived.
On the merits of the waiver, the court held that Cordia’s pleadings were facially sufficient — they alleged contracts entered “pursuant to Texas Local Government Code Chapter 271” — and the jurisdictional discovery furnished undisputed proof that Edinburg’s city manager executed the contracts with authority. Cordia’s damages allegations also survived. Edinburg argued that Cordia’s claims for amounts owed under the termination-for-convenience clauses were in reality consequential damages for the Ukraine cost disruption, which are excluded from the statutory waiver. The court rejected this characterization: Cordia was seeking balances “due and owed” under the contract’s express termination provisions, which fall squarely within § 271.153(a)(1). Disputes over specific line-items — a used pick-up truck, personnel wages, construction equipment — are merits questions, not jurisdictional ones. Finally, Edinburg’s claim that the Prompt Payment Act was not covered by the immunity waiver was dismissed on its own authority: § 262.007 waives immunity for interest “as allowed by law,” and Prompt Payment Act interest is interest allowed by law.
Key Takeaways
- A governmental entity cannot prevent a contractor from presenting jurisdictional evidence by framing its plea to the jurisdiction as a pleadings-only challenge; under Fraley, courts must consider all evidence either party submits in connection with a jurisdictional plea, regardless of how the challenge is styled.
- Payments owed under a termination-for-convenience clause are “amounts due and owed under the contract” within the meaning of Texas Local Government Code § 271.153(a)(1), and a governmental entity’s disagreement with specific damage line-items is a merits dispute, not a jurisdictional bar.
- The immunity waiver in § 271.152 extends to Prompt Payment Act interest claims because § 262.007 waives immunity for “interest as allowed by law” and PPA interest qualifies.
Why It Matters
Public construction contractors in Texas regularly face governmental immunity arguments at the outset of payment disputes. City of Edinburg closes a procedural loophole that municipalities might otherwise exploit: by framing a plea to the jurisdiction as a pleadings-only challenge, a city could argue that the contractor’s sworn proof of proper contract execution is simply off-limits. The court’s flat rejection of that tactic — citing Fraley and calling the argument frivolous — clarifies that contractors can (and should) present supporting evidence in response to any plea, regardless of how it is styled.
The court’s treatment of the termination-for-convenience damages issue is also notable. Texas municipalities sometimes terminate construction contracts for convenience and then contest the scope of owed payments on immunity grounds. This opinion makes clear that when a contractor is seeking amounts expressly prescribed by the contract’s termination clause, those claims fall within the statutory waiver as balances “due and owed” — and arguments about particular line-items belong at trial, not in a plea to the jurisdiction.