Law School Case Brief
Dallas/Fort Worth Int'l Airport Bd. v. Vizant Techs., LLC - 2019 Tex. LEXIS 467
The legislature has unambiguously declared that the maintenance, operation, and regulation of an airport and the exercise of any other power granted for that purpose, whether exercised severally or jointly by local governments, are public and governmental functions, exercised for a public purpose, and matters of public necessity. Tex. Transp. Code Ann. § 22.002(a). Tex. Civ. Prac. & Rem. Code Ann. § 101.0215(a)(10) lists airports as a governmental function under the Texas Tort Claims Act.
The Dallas Fort Worth International Airport Board operates the DFW International Airport. In 2012, the Board's staff retained Vizant Technologies to analyze the airport's payment-processing costs (including costs for processing credit-card payments) and to provide recommendations on how the airport could reduce those costs. Exercising delegated authority, the Board's staff negotiated and executed a written Consulting Agreement providing for a three-year term. The contract required the Board to pay Vizant a consulting fee. The contract further stated that Vizant's "compensation under this Agreement shall not exceed $50,000," and Vizant must "stop work once its compensation reaches" that amount. Its services ultimately saved the airport about $820,000, and its fee under the agreed formula exceeded $300,000. Vizant submitted an invoice for $50,000 and requested that the Board approve an amendment authorizing the higher amount. The Board's staff paid the $50,000 and ultimately asked to Board to approve an increase to $330,000, but the Board denied that request. Vizant sued the Board for breach of contract, fraud, fraudulent inducement, and promissory estoppel, alleging in part that the Board failed to make the promised good-faith effort to authorize the increased compensation. Vizant alleged that it agreed to the $50,000 cap only because the Board's staff assured Vizant that the Board always approves such increases. The Board filed a plea to the jurisdiction asserting that governmental immunity bars Vizant's claims. The trial court denied the plea, holding that governmental immunity does not apply because the Board's management of the airport's payment-processing costs is a proprietary (rather than governmental) function. On appeal, the court of appeals reversed in part and affirmed in part. It reversed and rendered judgment dismissing Vizant's fraud and estoppel claims, concluding that governmental immunity applied because the Board was engaged in a governmental function and no statute waived the Board's immunity from those claims. But it affirmed the trial court's denial of the Board's plea as to Vizant's breach-of-contract claim, holding that although governmental immunity applies, chapter 271 of the Texas Local Government Code waived the Board's immunity from that claim. The Board filed a petition for review challenging the court of appeals' holding on the contract claim.
Was the Board liable for breach of contract?
The Supreme Court of Texas held that because the Board entered into the contract with the consulting firm for the purpose of analyzing and reducing the airport's expenses, it was acting in its governmental capacity and governmental immunity applied under Tex. Civ. Prac. & Rem. Code Ann. § 101.0215(a). Chapter 271 of the Texas Local Government Code did not waive the Board's immunity because the Board's promise to make a good-faith effort to authorize a higher compensation to the firm did not state the essential terms of a legally enforceable agreement.
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