If the facts and law, pitifully and briefly summarized below, don't resonate with your practice, you need to leap to another post without looking back before terminal boredom reaches critical mass.
In January, 2001, our county, through its previous administration, entered into a CMA contract as the delivery method for renovation of the historic courthouse. Notwithstanding AG opinion HW-530, and its evil spawn, the county has taken the position that a Construction Manager Agent method of delivery was not available to counties until 9/1/2001, when it was specifically provided for in Chapter 271 LGC. Thus, they declared the contract void, and advised the CMA he could no longer be paid under a void contract.
The CMA countered that HW-530 established the "rule" that CMA contracts are personal service contracts, exempt under 2368a.5,the competitive bidding law until 9/1/87, when it was replaced by the LGC, and that the passage of the LGC had no effect on the what is or is not a personal service contract.
The county countered that even if the AG opinions pre and post the effective date of the LGC are "good", when the personal / professional contract exemptions from competitive bidding were codified in Sec. 262.023, an additional element was inserted over and above the conditions of Art. 2368a.5. Under that condition,the commissioners court must, by written order, provide for the exemption.
In our case they did not do so. After a thorough search of commissioners court proceedings, no resolution of exemption, or even a notice for RFP's was found. A school district CMA contract was used as a template, and was executed. CMA contracts have long been a statutorily authorized method for school districts.
Now the CMA has demanded arbitration. (I'm intentionally staying away from arguing the merits, vel non, of its claim for another dime from the county).
The county's position is, hey, the contract is void, no contract, no arbitration agreement. Unfortunately the Tex. S.C. says that attacks on the contract as a whole are specifically referable to the arbitrator, whereas attacks on the arbitration provision alone can be entertained by the courts.
This arbitration clause itself does not appear to be subject to any affirmative defenses other than the validity of the contract as a whole. Therefore the issue of jurisdiction of the arbitrator is to be fought out before the arbitrator. Seems to me this is backwards, and as our county judge puts it, "You mean the person who doesn't get paid if there's no arbitration is to decide whether they have jurisdiction to perform the arbitration?". Yep.
Thus, unless one or more of you have a lens that sheds a different light, we will probably be dragged, kicking and screaming, into the arbitration process.
Okay, here is the question, (other than the thinly veiled plea above to be proven Homerly incorrect on the threshold issue of arbitration attack), once an award is made, the happy victor can have it formalized by a judgment in district court. We do not believe the numbers will result in a net payable to this guy, but who knows what the arbitrator would do, especially to the side that is trying to keep them from getting the job. Isn't this the same as a suit against the county for money? Why would not that suit be barred by governmental immunity? (You should be made aware the contract documents in question ALSO predate the legislature's bad judgment in stripping us of immunity in these situations).
There you have it. Any thoughts?
file a dec action to determine whether or not they are entitle to arbitration........assert sovereign immunity during the suit
Thanks, and that's what the Co. Judge wants to do. I've looked at Chapt. 171 C.P.R.C., and the annotations go right back to the doctrine about the arbitrator being the "decider" on the jurisdiction issue. Cases involve cities and school districts, but can't recall a county being involved.
Do you know of any authority that governmental immunity will trump out in a Chapter 171 proceeding?
You still may be able to attack any resulting award that doesn't go your way. You appear to be correct in your view on the applicability of governmental immunity. With that in mind, under the common law, a trial court can vacate an arbitration award if it violates public policy or the law. Lee v. El Paso County, 965 S.W.2d 668, 672 (Tex. App.--El Paso 1998, pet. denied). In Lee, the court affirmed in part a summary judgment in favor of the county on the ground that the arbitration award improperly awarded extra compensation to an employee in violation of Tex. Const. art. III, sec. 53. If the arbitrator refuses to recognize and comply with the strictures of governmental immunity in issuing an award, that too would seem to be an award that violates the law making it subject to vacatur in district court.
Scott, as usual you have come up with what appears to be a silver bullet. I'll follow that track and see where it leads.
AND the thought occurs that it should be argued at the preliminary arbitration proceedings that the process is a waste of time, because it is simply an attempt to make an end run around governmental immunity, although at great risk of seeming cynical, I can't imagine that slowing the engine.
First, he was Yoda; now he's the Lone Ranger with a silver bullet! Who's Tonto?
I think I said he FOUND the silver bullet, (or at least I meant to). I think it was one the Lone Ranger dropped in the rush when he and Tonto left for California ... to get married.
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