Full Opinion

Affirm and Memorandum Opinion filed August 25, 2026 In The Fifteenth Court of Appeals NO. 15-25-00134-CV APPELLANT, TEXAS ASSOCIATION OF SCHOOL BOARDS RISK MANAGEMENT FUND // CROSS-APPELLANT, SOUTHWEST TEXAS JUNIOR COLLEGE V. APPELLEE, SOUTHWEST TEXAS JUNIOR COLLEGE // CROSS- APPELLEE, TEXAS ASSOCIATION OF SCHOOL BOARDS RISK MANAGEMENT FUND On Appeal from the 38th District Court Uvalde County, Texas Trial Court Cause No. 2023-11-35269-CV MEMORANDUM OPINION Appellant Texas Association of School Boards Risk Management Fund (the “Fund”) agreed to provide property insurance coverage to appellee Southwest Texas Junior College (the “College”). After a hail event damaged the College’s property, the College sued the Fund, alleging that the Fund breached its coverage agreement by failing to pay out a submitted claim for coverage. The College sought actual and consequential damages and also raised affirmative defenses that the College was not required to comply with certain provisions in the coverage agreement. In response, the Fund filed a partial plea to the jurisdiction arguing that the College’s affirmative defenses and request for consequential damages were barred by governmental immunity. The trial court granted the Fund’s plea in part as to the College’s request for consequential damages and denied it in part as to the College’s breach of contract claim and affirmative defenses, holding that said defenses benefit from the same waiver of immunity as the breach of contract claim. The Fund appealed the part of the order denying the plea and the College cross-appealed the part of the order granting the plea. The issues in this case are substantively identical to the issues disposed of in our recently issued opinion, Texas Association of School Boards Risk Management Fund v. Southwest Texas Junior College. No. 15-25-00115-CV, 2026 WL 1911630 (Tex. App.—15th Dist. July 2, 2026, pet. filed) (mem. op.). In Southwest, we concluded that the College’s affirmative defenses benefit from the same governmental immunity as the College’s breach of contract claim but that the College’s request for consequential damages was barred by immunity. Id. at *4, *7. We reach the same result here. Accordingly, we affirm. BACKGROUND The Fund is a self-insurance risk pool entity created by contract between local government entities designed to provide insurance coverage to these member entities, which now total over 1,000. The Fund administers this self-insurance coverage program. To be a Fund member and thus receive coverage, a local government must enter the Interlocal Participation Agreement (“Interlocal Agreement”) with the Fund’s other members. Entering the Interlocal Agreement 2 allows a Fund member to participate in one of the Fund’s programs, including the Fund’s property coverage program, which is at issue here. Participation in a Fund program requires that the Fund execute a Contribution and Coverage Summary (“CCS”) for each program the Fund member wishes to participate in. Incorporated within each CCS is a document—here, the Property Coverage Agreement—that sets out the scope of coverage and services from the Fund for the specific program in which the Fund member participates.1 The College became a Fund member when it entered the Interlocal Agreement in 2012. The associated Coverage Documents executed by the College provided coverage for wind and hail property damage. In April 2021, the College’s property was allegedly damaged by a hailstorm event. The College filed a claim with the Fund soon after for wind, water, and hail damage to buildings on the College’s property, which the Fund investigated. The Coverage Documents require the Fund member to elect one of two options within 180 days of a contractually defined loss: (1) the option “to repair or replace” the covered property and be reimbursed for costs actually and necessarily incurred (“replacement cost value” or “RCV”); or (2) the option “to receive payment for the Actual Cash Value (ACV) of th[e] Covered Property . . . .” The RCV option requires the “[r]epair or replacement [to] be completed within 365 days of the above election notice unless an extension is requested in writing by the Fund Member within this same period and granted in writing by the Fund.” The College sued the Fund and the Fund’s adjuster, alleging breach of contract against the Fund and bringing separate claims against the adjuster. The College alleges that the Fund breached the Coverage Documents by failing to pay the College 1 We refer to both the CCS and the Property Coverage Agreement collectively as the “Coverage Documents.” 3 “adequate compensation” for its damaged property due to the hail event, a loss the College argues is covered by the Coverage Documents. The parties do not dispute that the College seeks RCV damages. The College seeks relief in the form of actual and consequential damages, reasonable and necessary attorney’s fees, pre- and post- judgment interest, statutory interest, costs of court, and treble/exemplary damages. The College also asserted the affirmative defenses that the Coverage Documents contain provisions that are void, unconscionable, and waived by the Fund. The College later non-suited its claims against the Fund’s adjuster, leaving the Fund as the only defendant. The Fund filed a partial plea to the jurisdiction arguing that government immunity barred the College’s affirmative defenses, claims of fraud and bad faith,2 and requests for consequential, exemplary, and treble damages. The Fund argued that the College’s affirmative defenses are barred by immunity because they are equitable, extra-contractual claims for relief. The plea also contained an amended answer, which raised the Fund’s own affirmative defenses of governmental immunity, unsatisfied conditions precedent, denial of notice of loss, coverage exclusions, and other contract-related defenses. The trial court granted the Fund’s plea with respect to the College’s claims for consequential, exemplary, and treble damages—dismissing them with prejudice— but denied the plea “with respect to the College’s claims” in four areas involving (1) waiver and estoppel “of contractual provisions;” (2) reliance on statements made on the Fund’s webpage; (3) fraud or misrepresentation by the Fund as relating to “the parties’ written contract;” and (4) bad faith of the Fund as relating to “the parties’ written contract.” The trial court reasoned that the College’s “claims” are defensive 2 The College disputes that it ever pled these claims. 4 in nature and benefit from the same immunity waiver as the College’s breach of contract claim under Section 271.152 of the Texas Local Government Code. Both parties appealed. STANDARD OF REVIEW Governmental immunity from suit implicates a court’s subject matter jurisdiction and so is properly raised in a plea to the jurisdiction. Chambers-Liberty Cntys. Navigation Dist. v. State, 575 S.W.3d 339, 345 (Tex. 2019). We review a trial court’s ruling on a plea to the jurisdiction, including any questions of statutory construction, de novo. Id. A plea to the jurisdiction “may challenge the pleadings, the existence of jurisdictional facts, or both.” Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 770 (Tex. 2018). When a plea to the jurisdiction challenges the pleadings, we must determine whether the pleader has alleged facts that affirmatively demonstrate the trial court’s jurisdiction to hear the cause. Tex. Dep’t of Crim. Just. v. Rangel, 595 S.W.3d 198, 205 (Tex. 2020). When a plea to the jurisdiction challenges the existence of jurisdictional facts, we look beyond the pleadings and consider the relevant evidence submitted by the parties when necessary to resolve the jurisdictional issue raised. Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley, 598 S.W.3d 237, 241 (Tex. 2020). In evaluating an evidentiary plea to the jurisdiction, the standard of review “generally mirrors that of a summary judgment under Texas Rule of Civil Procedure 166a(c).” Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004). The plaintiff bears the burden to allege facts that affirmatively demonstrate the trial court’s subject matter jurisdiction. Rangel, 595 S.W.3d at 205. The evidence is reviewed in the light most favorable to the nonmovant to determine whether a genuine issue of material fact exists. Town of Shady Shores v. Swanson, 590 S.W.3d 544, 550 (Tex. 2019). “If the evidence creates a fact question regarding the jurisdictional issue,” the trial court 5 may not grant the plea, and the fact issue will be resolved at trial by the fact finder. Miranda, 133 S.W.3d at 227–28. “However, if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law.” Id. at 228. Here, the plea contests both the pleadings and the jurisdictional facts. ANALYSIS The Fund’s appeal challenges the trial court’s order denying the Fund’s governmental immunity defense in its plea to the jurisdiction. The Fund argues that governmental immunity bars the affirmative defenses the College raises as they relate to the College’s breach of contract claim against the Fund, along with the fraud and bad faith claims the College allegedly raises. The Fund does not contest that immunity is waived for the breach of contract claim itself. The College’s cross-appeal challenges the trial court’s order granting the Fund’s plea as to the College’s request for consequential damages. The College contends that immunity is waived as to the College’s request for consequential damages related to its breach of contract claim. We address these issues in turn. I. Governmental Immunity Does Not Bar the College’s Defenses. Under the Texas Local Government Code, “[a] local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract . . . .” Tex. Loc. Gov’t Code § 271.152. The parties do not dispute that the Fund is a local government entity. The Fund contends that the College cannot seek replacement cost value damages under the Coverage Documents because the Coverage Documents required 6 the College to fully repair its damaged property within the extended 365-day deadline. The College’s pleadings raise affirmative defenses that certain conditions precedent in the Coverage Documents cannot be enforced because they are unconscionable, void, and waived.3 Specifically, the College argues in its briefing before us that its defenses render the RCV repair deadline unenforceable because of the Fund’s conduct in underestimating and refusing to pay the College’s loss. The Fund in its appeal contends that the College’s affirmative defenses— waiver, unconscionability, and voidness—are being asserted offensively and are in fact claims seeking to rewrite the express terms of the Coverage Documents by voiding the College’s obligations therein and creating coverage where none existed before. The Fund also argues that governmental immunity bars affirmative defenses seeking relief based upon equitable theories. The Fund further argues that it has conclusively established that the College’s affirmative defenses do not apply. Finally, the Fund contends that the College’s pleadings raise claims of fraud and bad faith, which are barred by governmental immunity. The College responds that its affirmative defenses are part and parcel of its breach of contract claim and so the immunity waiver that applies to breach of contract claims against local governmental entities also applies to these defenses against enforcement of particular insurance policy provisions. The College also 3 The College argues that it also raised the affirmative defense of estoppel in its pleadings, citing language in its petition stating that the College was unable to perform under the contract by making repairs to its property because the Fund failed to pay the amount owed under the Coverage Documents. However, this language is used—alongside types of damages the College has sustained—to denote a consequence of the Fund’s actions and is not presented as a defense, estoppel or otherwise. Med. Imaging Sols. Grp., Inc. of Tex. v. Westlake Surgical, LP, 554 S.W.3d 152, 159 (Tex. App.—San Antonio 2018, no pet.) (“An affirmative defense must be stated in sufficient detail to give the plaintiff fair notice of what the defensive issue is and the relief that will be sought at trial.”); see Tex. R. Civ. P. 94. Consequently, the College did not raise estoppel as an affirmative defense in its live pleadings, and we do not consider it on appeal here. 7 responds that the Local Government Code contains a separate provision, Section 271.155, waiving immunity for affirmative defenses. The College additionally contends that its defenses are being asserted defensively, not offensively, and do not seek independent relief separate from its breach of contract claim. The College further argues that equitable estoppel can be asserted against the Fund because justice so requires and there is no interference with the exercise of governmental functions. Lastly, as to the Fund’s contention that the College’s claims of fraud and bad faith are barred by immunity, the College responds that it has never pled such claims. Following Southwest, we agree with the College that its affirmative defenses 4 are part and parcel of its breach of contract claim and so the immunity waiver encompasses them. 5 We also agree with the College that it has not pled claims of fraud or bad faith against the Fund. As to whether the College’s affirmative defenses—waiver, unconscionability, and voidness—are barred by governmental immunity, the circumstances here are nearly identical to Southwest. Southwest concerned whether the College could recover RCV damages under its insurance policy with the Fund for a wind and hailstorm event that damaged one of the College’s properties in April 2020. Southwest, 2026 WL 1911630, at *1–2. Southwest involved the same parties, the same Interlocal Agreement, and—for the purposes of this appeal—substantively the 4 As noted in Southwest, even though the College raised its defenses in its petition and not a responsive pleading, they are still affirmative defenses. Southwest, 2026 WL 1911630, at *4 n.3. Here, the College’s allegations in its petition that certain contractual conditions precedent are waived, void, or unconscionable respond, at a minimum, to the Fund’s affirmative defenses of unsatisfied conditions precedent and governmental immunity. The College bears the burden to present evidence demonstrating how its affirmative defenses defeat the Fund’s affirmative defenses. Id. 5 As this disposition resolves this issue, we do not reach whether Texas Local Government Code Section 271.155 contains an immunity waiver provision for affirmative defenses, whether the College’s defenses are being asserted offensively or defensively, or whether justice requires the application of equitable estoppel. 8 same Coverage Documents. Id. At issue there was whether the College’s asserted affirmative defenses—waiver and voidness—were barred by governmental immunity. We held that they were not. Id. at *5. We reasoned that the College raised these defenses “to avoid conditions precedent in the Coverage Documents—such as the requirement that the College repair its property within 365 days to be entitled to RCV damages—in order [to] prevail on its breach of contract claim and acquire these damages.” Id. In doing so, “the College [was] seeking an excuse from complying with certain contractual provisions—not relief or damages.” Id. Because the defenses did “not stand on their own but [were] rather means to the end of prevailing on the College’s breach of contract claim,” we held these defenses were “part of the College’s breach of contract claim, thus subjecting them to the immunity waiver under Section 271.152 of the Texas Local Government Code.” Id. Similarly here, the College’s affirmative defenses of waiver, voidness, and unconscionability are raised “to avoid conditions precedent in the Coverage Documents”—such as the RCV damages 365-day repair deadline—with the purpose of “prevail[ing] on its breach of contract claim” against the Fund and acquiring RCV damages. Id. As these defenses are only instrumental to the College’s breach of contract claim and do not “stand on their own,” we hold here too that these defenses are part and parcel of the College’s breach of contract claim and are thus subject to Section 271.152’s immunity waiver. Id. Regarding whether the College’s purported fraud and bad faith claims are barred by immunity, the Fund in its briefing cites to several statements in the College’s pleadings that it argues evidences such claims were raised: • “[E]ach of these promises and representations proved to be false— in reality TASB used the same tactics, biased inspectors, misreading of policy language, and pretextual investigations as bad faith insurance carriers . . .” 9 • “Based on TASB’s representations listed above, Plaintiff entered into an agreement with TASB to pay premiums in exchange for comprehensive property damage coverage . . .” • “Defendants . . . made multiple misrepresentations to Plaintiff about coverage to the Campus.” • “Defendants’ bad faith failure to adjust the claim and provide necessary money to repair the Campus has caused further damage and injury to the Plaintiff’s real property . . .” (alteration in original). Looking at the pleadings holistically, these statements are mere factual allegations and do not rise to the level of claims. As stated by the Texas Rules of Civil Procedure, pleadings must “consist of a statement in plain and concise language of the plaintiff’s cause of action or the defendant’s grounds of defense,” Tex. R. Civ. P. 45(b), and contain a “short statement of the cause of action sufficient to give fair notice of the claim involved,” Tex. R. Civ. P. 47(a). “Our procedural rules merely require that the pleadings provide fair notice of the claim and the relief sought such that the opposing party can prepare a defense.” In re Lipsky, 460 S.W.3d 579, 590 (Tex. 2015). Notice pleading consists of “general allegations that merely recite the elements of a cause of action,” id. at 590–91, although “omission of an element is not fatal if the cause of action ‘may be reasonably inferred from what is specifically stated.’” Id. at 590 (quoting Boyles v. Kerr, 855 S.W.2d 593, 601 (Tex. 1993)). Here, the petition fails to recite any of the elements for bad faith and does not provide a “short statement” of either bad faith or fraud sufficient to provide “fair notice” of these claims. 6 The cited allegations are made in the petition’s factual background section and are not raised as claims under the causes of action section. The causes of action section raises a breach of contract claim against the Fund as 6 The College’s petition does not use the term “fraud” once. 10 well as since-nonsuited claims alleging that the insurance adjuster had violated the Texas Insurance Code, breached its duty of good faith and fair dealing, violated the Texas Deceptive Trade Practices Act, and made unlawful misrepresentations. Nowhere does the petition raise bad faith and fraud as separate causes of action, and the College denies doing so. These circumstances are similar to those present in Boyles, where the Texas Supreme Court held that the plaintiff failed to meet the notice pleading requirements because her petition “contained specific causes of action on which she was seeking to recover, and there was nothing contained in the petition that gave fair notice to [defendant] that [plaintiff] would also seek to recover under [this] separate cause of action for ‘grossly negligent’ infliction of emotional distress by outrageous conduct.” Boyles, 855 S.W.2d at 601. The Court noted that the petition asserted the defendant’s conduct “was ‘willful,’ ‘malicious,’ and ‘grossly negligent,’ but these allegations were made only in support of the punitive damages claim, not as a separate cause of action.” Id. The College likewise alleges the Fund and the insurance adjuster acted in “bad faith” and made “representations proved to be false,” but these allegations were made in support of the College’s claims as listed in the section of the pleadings dedicated to articulating the College’s causes of action—they do not rise to the level of providing fair notice for separate causes of action. Lipsky, 460 S.W.3d at 590–91; Tex. R. Civ. P. 45, 47. We overrule the Fund’s issue raised on appeal. II. Governmental Immunity Bars the College’s Request for Consequential Damages. In its cross-appeal, the College argues that an exception to the immunity bar for “owner-caused delays” applies, allowing the College to bring consequential damages. The Fund responds that this exception does not apply. Following 11 Southwest, we agree with the Fund. Section 271.153 states that “[d]amages awarded in an adjudication brought against a local governmental entity arising under a contract” may not include “consequential damages . . . .” Tex. Loc. Gov’t Code § 271.153(b)(1). However, an exception to this bar is “any amount owed as compensation for the increased cost to perform the work as a direct result of owner-caused delays or acceleration . . . .” Id. § 271.153(a)(1). The College argues that the Fund’s failure to timely pay the property coverage benefits owed under the Coverage Documents resulted in increased costs of construction for the College. The College contends that these costs are “owner-caused delays” because the Fund “owns” the risk management program administering property coverage and the “delay” of the Fund’s refusal to pay coverage benefits “caused” the College’s increased construction costs. The College made the same arguments in Southwest and so we reach the same conclusion here. As we stated there, “own” means “[t]o rightfully have or possess as property; to have legal title to.” Southwest, 2026 WL 1911630, at *7 (alteration in original) (quoting Own, BLACK’S LAW DICTIONARY (12th ed. 2024)). “The Fund does not ‘own’ the risk management program under Section 271.153 because it does not ‘possess as property’ or have ‘legal title’ to the program. Rather, the program is a creature of contract that the Fund administers.” Id. Specifically, it is undisputed— there as well as here—“that the program was born of the contractual relationship between the Fund members through an interlocal agreement, and that the Fund was created as a self-insurance pool to administer the program to its member entities pursuant to the Texas Interlocal Cooperation Act.” Id. Accordingly, the Fund “does not ‘own’ the program but administers it.” Id. We overrule the College’s issue raised on cross-appeal. 12 CONCLUSION We affirm the trial court’s order granting in part and denying in part the Fund’s plea to the jurisdiction. /s/ April Farris April Farris Justice Panel consists of Chief Justice Brister and Justices Field and Farris. 13