Travis County v. Pelzel & Associates, Inc.
77 S.W.3d 246 | Texas Supreme Court | 2002
What This Case Means for Subcontractors
Pelzel & Associates sued Travis County for withholding $5,500 in liquidated damages from a construction contract. The Texas Supreme Court ruled that counties have sovereign immunity from payment disputes and that simply following the presentment requirement in state law does not waive that immunity. This means subcontractors cannot sue counties for contract payment disputes even if they follow all required procedures.
Key Takeaways
- •Government entities (counties, cities, states) have sovereign immunity and cannot be sued for contract disputes unless they explicitly waive immunity in writing
- •Following required presentment procedures before filing suit does not automatically give you the right to sue a government entity
- •Liquidated damages clauses in government contracts may not be enforceable against the government the same way they are against private parties
- •Get written confirmation of completion dates and deadlines with government clients—disputes about substantial completion dates are costly and hard to win
Section 89.004(a) does not clearly and unambiguously waive immunity from suit.
Frequently Asked Question
Can I sue a county or city if they withhold payment from my construction contract?
Not without an explicit written waiver of sovereign immunity from the government entity. Simply following required procedures like presenting your claim to the commissioners court does not give you the right to sue. Government entities have broad immunity from lawsuits. Always get legal review before contracting with government clients and negotiate immunity waivers upfront.
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