Campbellton Road, Ltd. v. City of San Antonio (Opinion)
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The case involves a dispute between a developer, Campbellton Road, Ltd., and the City of San Antonio, specifically the San Antonio Water System (SAWS). The developer entered into a contract with SAWS in 2003, which included an option for the developer to participate in and fund the construction of off-site oversized infrastructure for a municipal water system. The developer planned to develop two residential subdivisions and needed sewer service for them. The contract stated that if the developer decided to participate in the off-site oversizing project, a contract would form, and the developer would earn credits that could be used to satisfy some or all of the collection component of assessed impact fees.
The Court of Appeals for the Fourth District of Texas concluded that the Local Government Contract Claims Act did not apply, and therefore did not waive immunity, because there was no agreement for providing services to the system. The court held that the system had no contractual right to receive any services and would not have “any legal recourse” if the developer “unilaterally decided not to proceed.”
The Supreme Court of Texas disagreed with the lower court's decision. The Supreme Court held that the Act waived the system’s immunity from suit because the developer adduced evidence that a contract formed when the developer decided to and did participate in the off-site oversizing project. The court found that the contract stated the essential terms of an agreement for the developer to participate in that project, and the agreement was for providing a service to the system that was neither indirect nor attenuated. The Supreme Court reversed the court of appeals’ judgment and remanded the case to the trial court for further proceedings.
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