HOUSTON, TX (May 19, 2023) – Earlier today, the Texas Supreme Court ruled unanimously in favor of Andrews Myers client Pepper-Lawson Horizon International Group and against Texas Southern University. The Court’s opinion can be found here.
This ruling has a profound impact on all contractors doing business with the State of Texas. Specifically, state government entities will no longer be able to unreasonably stonewall contractor claimants. The often-used defense practice of challenging the Court’s jurisdiction to stall the case has now been properly clarified and limited. As of today, if contractors can properly state a claim under Chapter 114 (the applicable waiver of sovereign immunity statute), then the case can proceed. Further, contractors are no longer required to disprove all of the State’s defenses in order to proceed with their case.
Pepper-Lawson Horizon International Group sued Texas Southern University in 2018, asserting that the University had breached the parties’ contract on a student housing project by failing to pay and by denying its request for equitable time extensions. The University denied the allegations, arguing that “sovereign immunity has not been waived for [the Contractor’s] claims.” It also stated that Pepper-Lawson Horizon International Group had failed to point to a specific contractual provision that it had breached and that the Prompt Pay Act does not expressly waive sovereign immunity. The trial court denied the University’s jurisdictional defenses and set the matter for trial. On appeal, however, the Court of Appeals of Texas, First District, Houston, reversed. The appeals court rendered judgment dismissing the case for lack of subject matter jurisdiction. Andrews Myers appealed on behalf of longtime client Pepper-Lawson Horizon International Group, seeking review from the Texas Supreme Court, which was confirmed today.
Industry support came from the Associated Builders and Contractors of Texas, Associated General Contractors – Texas Building Branch, American Subcontractors Association, and the Houston Contractors Association, who provided friend-of-the-court amicus brief support.
The Andrews Myers legal team of Bob Plessala, Tim Ross and Ben Westcott will continue representation of Pepper-Lawson/Horizon International Group as the matter finally returns to trial court.
Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law. The firm focuses on the concentrated disciplines of construction, commercial real estate, corporate and business transactions, and business litigation, with additional emphasis on related issues including bankruptcy and insolvency, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit www.andrewsmyers.com.