The Corpus Christi-Edinburg Court of Appeals has affirmed three TC orders denying a county’s and ISD’s plea to the jurisdiction in a payment dispute with general contractors over repairs to damage caused by Hurricane Harvey.
Aransas County v. NorthStar Recovery Services, Inc. (No. 13-25-00159-CV; March 12, 2026) arose from a payment dispute between the county and several construction companies, including NorthStar, for their work to repair damage caused by Hurricane Harvey. The county was part of the Regional Pool Alliance (RPA), an entity created under § 791.011, Government Code, to pool resources for the purpose of financing, spreading, and mitigating risk. The agreement specified that RPA was not a reinsurance agreement and that it could not sue or be sued. The RPA established a “Property & Disaster Recovery Program” to procure disaster coverage for members of the pool from third party insurers. RPA was the named insured on these policies and members made claims to RPA for coverage. When Hurricane Harvey hit in 2017, it gave rise to a raft of claims and disputes, resulting in numerous lawsuits.
The parties disagreed about “whether the RPA functioned as the county’s insurer and whether the County joined the RPA, which executed the contract at issue, and, therefore, whether the County should be a party to the suit.” Each year, including 2017, the county executed a contract with the RPA called the “Confirmation of Coverage.” That agreement identified the county as a “participating member” and “covered entity.” It further detailed coverage and limits, contained declarations and descriptions of coverage terms, “akin to an insurance policy.” The county judge accepted the confirmation on the county’s behalf, the county paid premiums for coverage to the RPA, and the county attorney described obtaining “insurance coverage through the [RPA],” which “‘took on an additional role’ of managing insurance claims and ‘contracting directly with contractors.’”
The county made a claim to the RPA for Harvey-related damage, in accordance with the confirmation. RPA opted to make the repairs directly, rather than paying the county to do it. RPA hired NorthStar as the general contractor. The parties signed a master services contract that “included acknowledgment that lack of insurance coverage would not excuse nonpayment.” After it completed the work, NorthStar alleged that RPA didn’t pay for it. It sued the county (and later added RPA) for breach of contract, alleging that RPA acted as its agent and was responsible for nonpayment. The county filed a plea to the jurisdiction asserting governmental immunity. Plaintiff responded that the county waived immunity because it appointed RPA as its agent. The trial court denied the county’s plea. The county sought interlocutory relief.
In an opinion by Justice Fonseca, the court of appeals affirmed. Plaintiff argued that the county waived immunity under Chapter 262, Local Government Code, because the RPA was its agent when RPA contracted with Plaintiff. That statute waives immunity for a “county that is a party to a written contract for engineering, architectural, or construction services or for goods related to engineering, architectural, or construction services.” § 262.007(a). Even if the county isn’t a party to the contract, it can be sued if the county commissioners court appoints an agent for purposes of contracting for the repair of a building. § 262.001(a)(1). Plaintiff contended that the county did that when it confirmed coverage by the RPA. The county responded that since the commissioners court never voted to appoint RPA or anyone else as its agent, agency couldn’t be imputed to the RPA.
As the court observed, the county had a point that it could “contract only on express authorization by vote of the governing body reflected in the minutes” (citations omitted). Plaintiff argued that though no meeting minutes existed to this effect, “the County by its conduct acted as a member of the RPA, that its conduct treated the RPA as its agent, that documents showed the County was an RPA member, and that it allowed the RPA to form contracts on its behalf.” That court didn’t need to look to the county’s conduct because it found that “its vote to approve the Confirmation function[ed] as the appointment of the RPA as the County’s agent due to the contract language.” When the commissioners court voted to renew coverage with the RPA and “authorized the RPA to respond to an insurance claim by opting to either pay the value of the damage property or ‘[r]epair, rebuild, or replace the property itself.” RPA opted to hire the contractor instead of the county doing it directly. “We do not see,” the court concluded, “how this is functionally different from the exact procedure the statute requires for appointment of an agent.” In fact, the Legislature “gave entities like the County the ability to appoint an agent for the general purpose of making contracts for repairs,” just like the county did here.
The court rejected the county’s argument that governmental entities couldn’t “be bound by apparent agents and that the RPA was not its agent under general agency principles.” The RPA, it determined, acted as the county’s actual, not apparent, agency. Once the county commissioners voted to authorize the RPA to repair the county’s buildings, the deed was done. Still trying, the county argued that the confirmation “merely made the RPA its independent contractor rather than its agent ….” But whether RPA was a general contractor only matters “when determining if a defendant is vicariously liable for acts of its employees” (citation omitted). Even if the confirmation didn’t establish RPA’s agency, however, it wouldn’t have made any difference since RPA clearly acted as the county’s agent and that the county considered it as such. It did not escape the court’s notice that the confirmation didn’t preclude the county’s involvement in the repair process, which it heavily was. Plaintiff “affirmatively demonstrated agency and negated any exception to the waiver of immunity.”
Justice Fonseca made it clear that the court “[was] not holding that by mere virtue of a commissioners’ court vote to approve an insurance policy or other agreement to cover damages, that a county makes the insurer or contracting party an agent for all purposes.” Instead, this holding was based on specific statutory authority conferred upon the county to make arrangements such as the RPA for purposes of making repairs on behalf of the county. The court decided two other nearly identical cases together with this one: Rockport-Fulton Independent School District v. NorthStar Recovery Services, Inc. (No. 13-25-00168) and Aransas County, Texas v. T2J Partners, LLC d/b/a FPS Recovery, LLC (No. 13-25-00323-CV).
What we see in these cases does not show the county or the ISD in a very favorable light. Stiffing contractors after collecting insurance proceeds covering damage those contractors fixed seems pretty shabby to us. We applaud the court of appeals for seeing through that.
