Hospital District Not Immune from Breach of Contract Suit

The court affirmed a denial of the Dallas County Hospital District’s plea to the jurisdiction requesting dismissal of a breach of contract claim on the basis of governmental immunity, but reversed the decision with regards to a quantum meruit claim. The District entered into a written lease and purchase contract with Hospira for certain medical equipment and supplies. Several months after the end of the lease term, Hospira invoiced the District for the remaining amounts due under the lease. After unsuccessful attempts to recover the shortfall, Hospira sued the District asserting that immunity from suit had been waived by section 271.152 of the local government code. The District argued that its immunity from suit had not been waived under section 271.152 because it was not a local government entity as defined in section 271.151. The trial court denied the District’s plea to the jurisdiction, and the District filed an interlocutory appeal.

On appeal, the court noted that section 271.152 waives governmental immunity from suit for breach of contract claims against local governmental entities, defined as “a political subdivision of this state, other than a county or a unit of state government” and including a “special-purpose district.” The District contended that it is excluded from this definition because it is a “unit of state government” pursuant to the government code, but that code specifically excludes special purpose districts from the definition. Thus, the District could not assert immunity from the breach of contract claim. The court also held, however, that section 271.152 did not waive immunity from suit for Hopsira’s alternative claim based on quantum meruit. The statute expressly applied only to breach of contract.

Dallas County Hospital District v. Hospira Worldwide, Inc., No. 05-12-00902-CV