ARANSAS COUNTY v. WESTERN STEEL COMPANY T2J LLC FPS LLC (2026)

OPINION

These accelerated interlocutory appeals arise from payment disputes regarding various construction entities, including appellees, for repair work to fix damage caused by Hurricane Harvey at the Aransas County Airport (the Airport case ¹ ) and an administration building owned by Rockport-Fulton Independent School District (the Administration Building case ² ). Appellant Aransas County, Texas (the County) argues by three issues in the Airport case and in one issue in the Administration Building case that the trial court improperly denied its pleas to the jurisdiction based on governmental immunity. Appellees Western Steel Company (Western Steel) and T2J Partners LLC d/b/a FPS Recovery LLC (T2J) each argue separate statutory waivers of the County's governmental immunity in the various cases.

As we find in a parallel matter today ³ , the County waived its immunity from suit by designating an agent to make contracts on its behalf when its commissioners' court voted to approve a contract that allowed the Regional Pool Alliance (RPA) to make repairs to its property. We affirm.⁴

I. Background

The County insured its properties with the aid of the RPA, a distinct intergovernmental unit created to help governmental entities perform a variety of services. See Tex. Gov't Code § 791.011. The RPA was created by the “Interlocal Agreement” which authorized it to perform a variety of functions, including—importantly here—providing “property or other loss coverage.” The RPA functioned by its member governmental units pooling resources together “to finance, spread, and mitigate their risk of liability or casualty.” The agreement stated that it did not “create a self insurance pool” but was instead “an agreement to cooperate in the performance of governmental functions.” The agreement further stated an intent that the RPA could neither sue nor be sued ⁵ and provided for the potential addition of further members.

The RPA created the “Property & Disaster Recovery Program” (the Program) to obtain disaster coverage for its members to pool and spread the risk of loss by obtaining better coverage than members could obtain individually. The Program authorized the RPA to secure insurance coverage from third party insurers that would list the RPA as the named insured and then allowed the members to make claims to the RPA for coverage. In 2017, the RPA did its annual duty by obtaining insurance from a variety of companies which would presumably provide coverage for damage resulting from Hurricane Harvey. A variety of disputes have arisen since, and several lawsuits have been filed.

In these cases, the parties dispute whether the RPA functioned as the County's insurer, and whether the County joined the RPA, which executed the construction contracts at issue, and, therefore, whether the County should be a party in this suit. However, it is undisputed that the County annually executed a contract with the RPA called the “Confirmation of Coverage” (Confirmation). The Confirmation applicable to the present matters had a coverage period of January 1, 2017, to March 1, 2018, and listed the County as a “Participating Member” and as a “Covered Entity.” It also listed covered perils, property covered, sublimits and deductibles, as well as total coverage values. The Confirmation contained property coverage declarations and descriptions of coverage terms, akin to an insurance policy. The Aransas County Judge accepted the Confirmation on behalf of the County. The County paid premiums to the RPA to obtain insurance coverage. A letter from the County Attorney described obtaining “insurance coverage through the [RPA]” and that the RPA “took on an additional role” of managing insurance claims and “contracting directly with contractors.”

Following Hurricane Harvey's damage to the area, the County made a claim based on the Confirmation issued by the RPA. Through this contract, the RPA was given the ability to choose between paying the County or performing the work directly, and pursuant to that authority the RPA opted to make the repairs itself. The RPA hired T2J as a general contractor to perform repairs throughout the County, including at the airport and administrative building, and signed a written agreement with T2J acknowledging that lack of insurance coverage or governmental funding would not excuse nonpayment. T2J hired Western Steel to perform work at two hangars at the airport. After performing work, T2J claimed to have not been paid by the RPA and Western Steel claimed to have not been paid by T2J.

Western Steel requested that the County provide a copy of a payment bond that it alleged the County had the responsibility to obtain for the airport project, but the County responded that it did not have any responsibility to obtain a bond. T2J did not obtain a bond for the project either. Western Steel sent requests for payment to all of the other parties, including a sworn statement of account pursuant to Texas Government Code § 2253, to no avail.

On April 8, 2024, Western Steel filed suit against T2J and the County for breach of contract and quantum merit (the Airport case). It asserted that the County's governmental immunity was waived because it failed to obtain a payment bond and is thus subject to the same liability that a surety would have. T2J filed crossclaims against the County, alleging breach of contract and violation of various statutes because the RPA was the County's agent and failed to pay T2J.

On October 23, 2024, in the Administration Building case, T2J filed a third-party petition also claiming that the RPA acted as the County's agent. T2J asserted that the County was responsible for the RPA's lack of payment due to this agency. Thus, T2J sued the County for breach of contract and for violating the Texas Prompt Payment Act. See Tex. Ins. Code §§ 542.051–.061.

The County responded with pleas to the jurisdiction in both cases arguing it should be dismissed because it was immune to suit. The County claimed immunity on the basis that the RPA was not its agent because it never became a member of the RPA or signed the Interlocal Agreement, and its commissioners' court never voted to appoint the RPA as its agent. See Tex. Loc. Gov't Code § 262.001(a). Western Steel responded to the plea in the Airport case by arguing the County's immunity was waived because the RPA acted as an insurance company for the County, and because the County was obliged to require the RPA and/or T2J to furnish a payment bond but failed to do so. See Tex. Gov't Code §§ 2253.021, .022, .027.

T2J likewise filed responses in both cases arguing that the County waived its governmental immunity because it appointed the RPA as its agent. See Tex. Loc. Gov't Code § 262.007(d). As evidence of the RPA's agency, T2J referred to several documents listing the County as a member of the RPA, such as work orders and minutes of the County commissioners' court. T2J also referred to the disposition of similar issues in two previous cases before this Court. See Aransas County v. NorthStar Recovery Servs., No. 13-23-00324-CV, 2024 WL 853324, at *4 (Tex. App.—Corpus Christi–Edinburg Feb. 29, 2024, no pet.) (mem. op.); Reg'l Pool All. v. NorthStar Recovery Servs., No. 13-21-00045-CV, 2022 WL 1412362, at *1 (Tex. App.—Corpus Christi–Edinburg May 5, 2022, no pet.) (mem. op.). The County responded in the Airport case that T2J was never its agent and that, because it did not enter into a public work contract with Western Steel, it was not required to obtain a payment bond. It also responded that the RPA was not an insurance company and instead provided “turnkey” services to the County as an independent contractor.

The County's March 31, 2023 petition in Cause No. 23-0069 ⁶ acknowledged that the County obtained insurance from the RPA, but stated the County was not a signatory to the Interlocal Agreement, it did not execute an acknowledgement of membership, and that its commissioners' court did not vote to join the RPA. The County conceded that it and the RPA have been proceeding as though it were a member. In support of their argument that the RPA was an independent contractor and not an agent, the County Attorney and the County Clerk stated in affidavits that the commissioners' court never voted to join the RPA and that the County had no right to direct the RPA's activities. Yet a T2J representative executed an affidavit testifying that T2J representatives were in constant contact with the County's officials throughout remediation, providing daily reports, and that T2J representatives were required to attend commissioners' court meetings; moreover, there were a multitude of emails between County officials and T2J representatives regarding the repair work at issue in this case.

After the parties filed several more responses, the trial court held a hearing on the County's plea in the Airport case on January 16, 2025. On March 11, 2025, the trial court denied the County's plea to the jurisdiction via email and signed a written order on April 1, 2025. The trial court held a hearing on the County's plea in the Administration Building case in May 2025 and denied the County's plea via written order on May 23, 2025. These accelerated interlocutory appeals followed. Tex. Civ. Prac. & Rem. Code § 51.014(a)(8).

II. Analysis

Appellees argue two separate waivers of governmental immunity based on different statutory provisions. T2J argues in both cases that the County's immunity is waived under Texas Local Government Code § 262.001 while Western Steel argues the County's immunity is waived pursuant to Texas Government Code § 2253. We examine each in turn.

A. Standard of Review

Political subdivisions of the State such as the County are generally immune from suit unless immunity has been clearly and unambiguously waived by the legislature. Tex. Gov't Code § 311.034; City of Houston v. Hou. Mun. Emps. Pension Sys., 549 S.W.3d 566, 576 (Tex. 2018). Immunity from suit is properly asserted through a plea to the jurisdiction. See Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 770 (Tex. 2018) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000)). “A plea to the jurisdiction challenges the existence of subject matter jurisdiction; that is, the court's power to decide the case.” Herrera v. Mata, 702 S.W.3d 538, 541 (Tex. 2024) (citing Suarez v. City of Tex. City, 465 S.W.3d 623, 632 (Tex. 2015)). “The trial court's ruling on a plea to the jurisdiction is a question of law we review de novo.” Id. (citing Hou. Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 160 (Tex. 2016)). In de novo review, we give no deference to the trial court's decision. See In re Est. of Slaughter, 305 S.W.3d 804, 808 (Tex. App.—Texarkana 2010, no pet.) (citing Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)).

Challenges to jurisdiction can be based either on pleadings or the existence of jurisdictional facts. Jones v. Turner, 646 S.W.3d 319, 325 (Tex. 2022). When reviewing pleadings, we must “determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause.” Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). Pleadings are construed liberally in favor of the pleader and a plaintiff “should be afforded the opportunity to amend” if the challenged jurisdictional defect may be cured with further factual allegations. Tex. Tech. Univ. Sys. v. Martinez, 691 S.W.3d 415, 419 (Tex. 2024). A court cannot sustain a plea to the jurisdiction if the pleadings generate a fact question. Ryder Integrated Logistics, Inc. v. Fayette County, 453 S.W.3d 922, 927 (Tex. 2015) (per curiam); City of Corpus Christi v. Muller, No. 13-18-00443-CV, 2019 WL 2384162, at *1 (Tex. App.—Corpus Christi–Edinburg June 6, 2019, no pet.) (mem. op.).

If jurisdictional facts are challenged, our standard of review mirrors that of a summary judgment where we consider evidence necessary to resolve the jurisdictional issues. Clark, 544 S.W.3d at 770–71; Tex. R. Civ. P. 166a(c). It is foundational that the “party suing the governmental entity bears the burden of affirmatively showing waiver of immunity.” City of San Antonio v. Maspero, 640 S.W.3d 523, 528 (Tex. 2022). Thus, a plaintiff can only survive a plea to the jurisdiction “by showing that the statute ‘clearly and affirmatively waive[s] immunity’ and by also ‘negating any provisions that create exceptions to, and thus withdraw, that waiver.’ ” City of Austin v. Powell, 704 S.W.3d 437, 447 (Tex. 2024) (quoting Rattray v. City of Brownsville, 662 S.W.3d 860, 866 (Tex. 2023)). While a plaintiff need not anticipate every possible defense, if their pleadings indicate a particular defense, the government is not charged with producing additional evidence to invoke that defense. Id.

B. T2J

In both cases, T2J asserts the County's immunity was waived pursuant to Texas Local Government Code Chapter 262. This statute allows suit against “[a] county that is a party to a written contract for engineering, architectural, or construction services or for goods related to engineering, architectural, or construction services.” Tex. Loc. Gov't Code § 262.007(a). Despite the County not being a party to the contract sued upon, the County may be liable pursuant to § 262.001, which provides that a county's commissioners court can appoint an agent for the county for the purposes of making a contract for “repairing a county building.” See id. § 262.001(a)(1). So long as the contract is “properly executed on behalf of the county and is within the agent's authority,” it “binds the county to the contract for all purposes.” Id. § 262.001(b). T2J argues that the County appointed the RPA as its agent and that the RPA's contract with T2J bound the County and made the County susceptible to suit. Conversely, the County argues its commissioners' court never voted to appoint RPA as its agent and that without a direct vote, agency cannot be imputed to RPA.

It is true that a “county may contract only on express authorization by vote of the governing body reflected in the minutes.” S. Disposal, Inc. v. City of Blossom, 165 S.W.3d 887, 893 (Tex. App.—Texarkana 2005, no pet.). “[T]he county's commissioners court is ‘the general business and contracting agency of the county, and it alone has authority to make contracts binding on the county, unless otherwise specifically provided by statute.’ ” Puente v. County of Uvalde, No. 04-96-00673-CV, 1998 WL 337779, at *1 (Tex. App.—San Antonio June 24, 1998, no pet.) (not designated for publication) (quoting Anderson v. Wood, 152 S.W.2d 1084, 1085 (Tex. 1941)). It is a plaintiff's burden “to both plead and prove that the minutes show the ․ authorizing or ratifying [o]f the contract.” S. Disposal, Inc., 165 S.W.3d at 894.

T2J concedes in both matters that no meeting minutes for the County's commissioners court show a direct vote authorizing the RPA as its agent to make a contract to repair county buildings following Hurricane Harvey's devastation. See Tex. Loc. Gov't Code § 262.001(a)(1). Instead, T2J argues that the County, through the 2017 Confirmation and by its “apparent conduct,” acted as a member of the RPA, that certain documents showed the County was an RPA member; and that the County allowed the RPA to form contracts on its behalf. The County responds that governmental entities cannot be bound by apparent agency and that only actual authority to act would bind the County.

While the commissioners' court did not explicitly appoint the RPA as an agent for the specific purpose of making a contract to repair buildings, we find that its vote to approve the Confirmation functions as the appointment of the RPA as the County's agent due to the contract language. See Tex. Loc. Gov't Code § 262.001(a)(1). Parties to a contract are presumed to know and accept all of the contract's terms. Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 423–24 (Tex. 2015). Therefore, the County is bound with knowledge and agreement to all the terms of the Confirmation when the commissioners' court voted to accept coverage under this contract. See id.

Importantly, the Confirmation authorized the RPA to respond to an insurance claim by opting to either pay the value of the damaged property or “[r]epair, rebuild, or replace the property” itself. Thus, when the County executed the Confirmation, it explicitly and unambiguously authorized the RPA to “[r]epair, rebuild, or replace the property” by itself if it so chose. Because the RPA was not a contractor itself, this necessarily implied an authorization for the RPA to hire contractors as needed to effectuate the repairs, including by entering a contract with T2J. We do not see how this is functionally different from the exact procedure the statute requires for appointment of an agent. See Tex. Loc. Gov't Code § 262.001(a)(1). The Texas Legislature did not require a general appointment of an agent to bind government entities as the County contends, but, instead, gave entities like the County the ability to appoint an agent for the specific purpose of making contracts for repairs. See id. Thus, the RPA was acting pursuant to its contractual authority and appointment when it hired T2J to repair the County's buildings. See Tex. Loc. Gov't Code § 262.001(b).

The County contends in both of its briefs that the “RPA contracted with T2J on its own account,” but such assertion flies in the face of the record. The County does not dispute that it contracted with the RPA for insurance coverage and authorized it by paying premiums and making claims on the policy for repairs. Nor does the County dispute that the properties the RPA hired T2J to repair were the County's properties. The only reason the RPA hired T2J to make repairs to the County's properties was because it was contractually obligated to do so and was providing a service to the County as explicitly authorized by the County. See id. § 262.001(a)(1).

The County also argues that governmental entities cannot be bound by apparent agents and that the RPA was not its agent under general agency principles. This is irrelevant to our analysis because we find that the RPA was acting with actual agency pursuant to the County's commissioners' court's annual votes to renew its contract with the RPA for insurance. See id. The County's argument regarding Section 262.001 hinges on its interpretation that there is no proper agency absent an explicit vote by the commissioners' court to appoint T2J or the RPA as an agent for the sole purpose of making a contract to make repairs. But the statutory language only provides that a commissioners' court “may appoint an agent” and does not require the specific wording or action that the County argues. See id. (emphasis added). Because of this, whether the County voted to become an official member of the RPA is irrelevant because Section 262.001(a)(1)'s agency requirement does not hinge on whether the commissioners' court voted to become member of an intergovernmental pool. The only relevant fact is that the commissioners' court voted to give the RPA authority to repair the County's buildings, regardless of whether it became an official member of the RPA. See id.

It does not matter if the RPA was the County's agent in general but only whether the RPA had authority as an agent to make contracts for the purpose of making repairs on behalf of the County. Thus, this is not a question of general agency principles, but specific statutory agency. See id.; see also Puente, 1998 WL 337779, at *1. The Confirmation gave authority to the RPA to do exactly what the statute requires when appointing an agent.⁷ Therefore, the County's argument that the RPA could not have been voted to be the County's agent because the RPA didn't have general agency authorization fails. See Tex. Loc. Gov't Code § 262.001(a)(1); Nat'l Prop. Holdings, 453 S.W.3d at 423–24.

The County's argument that the Confirmation merely made the RPA its independent contractor rather than its agent fails for a similar reason. “An independent contractor is one who, in pursuit of an independent business, undertakes specific work for another using his or her own means and methods without submitting to the control of the other person as to the details of the work.” Doe v. YUM! Brands, Inc., 638 S.W.3d 214, 233 (Tex. App.—Houston [1st Dist.] 2021, no pet.) (quoting Farlow v. Harris Methodist Fort Worth Hosp., 284 S.W.3d 903, 911 (Tex. App.—Fort Worth 2009, pet. denied)). While the RPA did not submit to the control of the County regarding the hiring of a contractor for repairs, the independent contractor doctrine is only applicable when determining if a defendant is vicariously liable for acts of its employees. See, e.g., Renaissance Med. Found. v. Lugo, 719 S.W.3d 505, 510–11 (Tex. 2025).

But we are not examining an action for vicarious liability; rather we are determining if there was a specific statutory agency created that binds the County to the contract. See Tex. Loc. Gov't Code §§ 262.001(a)(1), 267.007(a). The nature of the relationship between the County and the RPA and the interplay with the statute is a different analysis than any employer-employee relationship. Thus, while there is reference to the RPA providing turnkey services, this does not change the fact that the County met the requirements of the statute when the commissioners' court specifically approved giving the RPA the right to form a contract to make repairs to the County's buildings and to potentially repair them itself. See id. § 262.001(a)(1).

Further, even if we found the Confirmation alone insufficient to establish agency, the record still establishes that the RPA behaved as the County's agent and not as an independent contractor. “The principal's extent of control over the details of accomplishing the assigned task primarily distinguishes the status of agent from that of independent contractor.” First Nat'l Acceptance Co. v. Bishop, 187 S.W.3d 710, 714 (Tex. App.—Corpus Christi–Edinburg 2006, no pet.) (citing Lyons v. Lindsey Morden Claims Mgmt., Inc., 985 S.W.2d 86, 90 (Tex. App—El Paso 1998, no pet.)); Cmty. Health Sys. Prof'l Servs. Corp. v. Hansen, 525 S.W.3d 671, 691 (Tex. 2017) (citing Grissom v. Watson, 704 S.W.2d 325, 326 (Tex. 1986)). The RPA did not display the total independence and freedom of control that the County claims. While the Confirmation gave the RPA the choice in deciding whether to pay the County directly or make the repairs itself, this is still a limited scope of choice.

The Confirmation did not restrain or preclude the County from being involved in the repair process; in fact, the record indicates the opposite. The County required its public facilities director to accompany contractors for inspections of the property and to allow access to parts of the facilities. The County's employees also made specific requests to T2J and the RPA regarding installation of certain elements. The County also directed work by requesting prioritization of certain buildings in the order of repairs and the movement of dirt on its properties. T2J provided daily reports, attended meetings with the County Judge and commissioners, and exchanged a multitude of emails with County officials concerning the repairs to the County's property. Based on the record before us, we conclude that the RPA did not have the freedom of control an independent contractor would enjoy. We find that T2J has affirmatively demonstrated agency and negated any exception to the waiver of immunity. See City of Austin, 704 S.W.3d at 447.

To be clear, we are not holding that by mere virtue of a commissioners' court voting to approve an insurance policy or other agreement to cover damages, that a county makes the insurer or contracting party an agent for all purposes. Rather, it is only because the Confirmation specifically delegates authority to the RPA to opt to make repairs itself that it creates agency because this functioned as approval for the RPA to take action to make repairs on behalf of the County. See Tex. Loc. Gov't Code § 262.001(a)(1). Other insurance policies may or may not act as appointment of an agent depending on the policy terms.

Because the County directly authorized the RPA to make repairs to County property pursuant to the Confirmation's terms, the RPA acted with actual agency when it made a contract with T2J to effectuate those repairs. See S. Disposal, Inc., 165 S.W.3d at 894. Accordingly, the County is bound to this “contract for all purposes.” See Tex. Loc. Gov't Code § 262.001(b). As it was bound to the contract, the County's governmental immunity to T2J's breach of contract claim is waived. See id. § 267.007(a).⁸ We therefore overrule the County's first issue in the Airport case and sole issue in the Administration Building case.

C. Western Steel

The County's second and third issues in the Airport case both concern the plea to the jurisdiction as to Western Steel. Western Steel's first asserted waiver was pursuant to Texas Government Code § 2253. If a governmental entity “makes a public work contract with a prime contractor” the entity must require the contractor to execute a payment bond. Tex. Gov't Code § 2253.021(a), (c). Should the entity fail to obtain a payment bond from the prime contractor, then “the entity is subject to the same liability that a surety would have if the surety had issued a payment bond and if the entity had obtained the bond.” Id. § 2253.027(a)(1).

The County argues that this waiver is inapplicable because the County did not make a public work contract with the prime contractor, T2J. However, as discussed above, we find that the County appointed the RPA as its agent for the limited purpose of making contracts to make repairs to county buildings. See Tex. Loc. Gov't Code § 262.001(a)(1). Here, the RPA acted pursuant to its authority under the Confirmation when it hired T2J to make repairs to the County's buildings. Accordingly, when the RPA executed the contract with T2J on behalf of the County to make repairs to the County's buildings, this bound the County “to the contract for all purposes.” See id. § 262.001(b).

Therefore, the County is treated as having made a contract with a prime contractor and was subsequently required to ensure that a payment bond was executed. Tex. Gov't Code § 2253.021(a), (c). That the RPA may share in that requirement as another governmental entity that contracted with T2J does not absolve the County of its responsibilities.⁹ The County may thus be liable under Texas Government Code § 2253.027.

We overrule the County's second issue in the Airport case. Because we have found at least one valid ground for waiving the County's immunity to suit as to Western Steel, we need not resolve the County's third issue. See Tex. R. App. P. 47.1.

III. Conclusion

We affirm the trial court's rulings in both matters.

FOOTNOTES

1.   Appellate cause number 13-25-00148-CV.

2.   Appellate cause number 13-25-00323-CV.

3.   Appellate cause number 13-25-00159-CV.

4.   While we did not consolidate these matters due to differing factual issues, we resolve these appeals in one opinion due to identical legal issues.

5.   The Legislature, however, granted the County permission to sue RPA “with respect to any cause of action arising from [RPA's] conduct in connection with [the County]'s losses from Hurricane Harvey” through a concurrent resolution. Tex. S. Con. Res. 44, 88th Leg., R.S., 2023 Tex. Gen. Laws 4623; see Tex. Civ. Prac. & Rem. Code ch. 107.

6.   This cause is the County's suit against the RPA's director related to the overall dispute. The petition is attached as evidence in the record, but this matter is not on appeal.

7.   One may be an independent contractor in some circumstances and an agent in connection with other circumstances. See Fred Loya Ins., v. Cohen, 446 S.W.3d 913, 919 (Tex. App.—El Paso 2014, pet. denied).

8.   The County also discussed immunity to Prompt Payment Act claims and the fact that such claims can only proceed if there is a separate waiver of immunity. See McMahon Cont., L.P. v. City of Carrollton, 277 S.W.3d 458, 466 (Tex. App.—Dallas 2009, pet. denied) (observing that “[n]o provision in the [Prompt Payment] Act discusses or addresses ‘governmental’ or ‘sovereign’ immunity, nor does the Act include language indicating such immunity is waived”). In light of our conclusion above, there is a separate waiver of immunity and T2J's Prompt Payment Act claims can proceed. See id.

9.   This issue is not before the Court, however, and we need not resolve whether the RPA would also be required to obtain a payment bond. See Tex. R. App. P. 47.1.

Opinion by Justice Fonseca