IDEA Public Schools v. Wyatt Truscheit

NUMBER 13-22-00091-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI – EDINBURG

IDEA PUBLIC SCHOOLS, Appellant,

v.

WYATT TRUSCHEIT, Appellee.

On appeal from the 430th District Court
of Hidalgo County, Texas.

MEMORANDUM OPINION

Before Justices Benavides, Longoria, and Silva
Memorandum Opinion by Justice Silva

This case involves breach of contract claim brought by appellee Wyatt Truscheit

against appellant IDEA Public Schools (IDEA). IDEA appeals the trial court’s order

denying its amended plea to the jurisdiction. IDEA contends it was entitled to dismissal

because: (1) it is entitled to government immunity, which was not waived under the

evidence presented; and (2) “[t]o the extent the trial court found that there were genuine
issues of material fact concerning jurisdiction, same was error.” We reverse and render.

I. BACKGROUND

Truscheit brought suit against IDEA for breach of contract, seeking damages from

the breach as well as reasonable and necessary attorney’s fees. According to Truscheit’s

first amended petition, 1 he entered into a contract with IDEA on November 12, 2012, to

serve as IDEA’s chief financial officer (CFO). Truscheit’s contract was signed only by him

and IDEA’s chief executive officer (CEO), Thomas Torkelson. The contract, which was

attached to Truscheit’s amended petition, stated that “[t]he [CEO] of [IDEA] is authorized

to execute this [c]ontract on behalf of IDEA.” Truscheit’s amended petition maintained

that Torkelson “possess[ed] all authority vested in him by the charter, charter

amendments, by-laws, and applicable statutory and regulatory provisions” which included

the power to “select and terminate charter school employees or officers.” According to

Truscheit, although IDEA’s Board of Directors (Board) did not sign the contract, it did

“take[] action with respect to budgetary, tax, regulatory[,] and personnel matters,” which

Truscheit argued “had the legal effect of approving the [c]ontract and the expenditure of

state funds in connection with the [c]ontract.”

The contract provided for Truscheit to receive a salary plus performance bonuses,

actual and incidental costs related to the biweekly commute to and from California to the

Rio Grande Valley, and reasonable living expenses and transportation while in the Rio

Grande Valley. The contract included a provision that “[u]pon termination of the

Truscheit filed his original petition on August 3, 2020. IDEA filed its initial plea to the jurisdiction
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on September 4, 2020, prompting Truscheit to file his amended petition on October 28, 2021.

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employment or removal from the position of [CEO] of [Torkelson], this employment

contract will be terminated and all amounts remaining hereunder will be paid to the [CFO]

in a lump[ ]sum payment.” Further, the contract provided that Truscheit’s “compensation

salary and payment thereof over the term of [the] contract by IDEA shall be irrevocable

and unconditional.” The contract was originally set to expire on June 1, 2016, but was

extended by two subsequent contract amendments until December 31, 2022. Both

amendments were signed only by Torkelson and Truscheit. Both amendments state they

were executed “on behalf of IDEA” and “[a]pproved by the [CEO] of IDEA.”

According to Truscheit, Torkelson resigned from CEO in April 2020, thus

terminating Truscheit’s contract and entitling him “to a lump sum payment of the

remaining salary and bonuses which would have been paid to him through December 31,

2020.[ 2]” However, Truscheit “continued to work for IDEA as CFO with the expectation

that he would be paid the amounts due to him and with the intent to enter into a new

employment contract with IDEA.” Instead, IDEA terminated Truscheit’s employment

without explanation on July 16, 2020. 3 Truscheit alleged that IDEA has failed to pay him

the lump sum owed under the contract.

IDEA’s amended plea to the jurisdiction 4 asserted that it was entitled to

2 Truscheit’s brief asserts that he is due “a lump sum payment of the remaining salary and bonuses

which would have been paid to him through December 31, 2022.” Further, the contract amendment includes
a handwritten change from “December 31, 2020,” to “December 31, 2022,” that appears to be initialed by
both Torkelson and Truscheit.
3 IDEA contends that “Truscheit resigned as CFO of IDEA and hand-scribed that he ‘retired’ on his

resignation letter.”
4 IDEA amended its plea to the jurisdiction on November 12, 2021, following Truscheit’s amended
petition.

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governmental immunity as an open-enrollment charter school. IDEA went on to argue

that the contract was not “properly executed” on behalf of IDEA and thus immunity was

not waived pursuant to Chapter 271 of the Texas Local Government Code. Specifically,

IDEA asserted that IDEA’s Board was required to approve Truscheit’s contract for it to be

properly executed but had not done so. IDEA attached three affidavits to its plea. The first

affidavit was from Joann Gama, IDEA’s superintendent since July 1, 2014. Gama averred

that, despite her routine interaction with the Board, Torkelson, and Truscheit, she was

unaware of Truscheit’s contract until May 2020. According to Gama, “[n]one of the other

chief-level executives[ 5] within IDEA had employment contracts up until August 2020.”

Thereafter, “the Board approved contracts for [other] chief-level executives at its July 17,

2020 meeting and authorized [her] to issue employment contracts.” Gama stated that the

Board did not, however, authorize Truscheit’s contract or its amendments, or delegate

the authority to Torkelson to do so.

The second affidavit was sworn to by Carlo Hershberger, IDEA’s senior vice

president of finance and interim CFO. Based on Hershberger’s review of IDEA’s financial

records, Truscheit was paid with public funds. 6

The third affidavit was sworn to by Jessica Hess, IDEA’s vice president of Board

relations and governance. Hess stated that her responsibilities include preparing and

maintaining “board business records including meeting agendas, meeting minutes[,] and

5 In a separate paragraph, Gama noted that the Board did authorize Torkelson’s contract, but

stated it has “[o]therwise . . . been IDEA’s policy and practice that employees are employed at-will.”
Torkelson’s contract and amendments were attached to Gama’s affidavit.

“‘Public funds’ means funds of the state or of a governmental subdivision of the state.” TEX. GOV’T
6

CODE ANN. § 552.003(5).

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board packets (containing a record of all documents presented to the [B]oard).” Hess

“reviewed the Board’s meeting agendas and meeting minutes since 2011” and found that

the “documents do not reflect that the Board was ever presented with or approved any

contract between IDEA and [Truscheit].”

IDEA subsequently filed the affidavit of Alfred Lopez in support of its plea. Lopez

has been a member of IDEA’s Board since 2015. Like Gama, Lopez swore that he was

unaware of Truscheit’s contract until May 2020. Lopez also averred that “[t]he Board has

never been presented the [c]ontract or taken a vote to authorize the [c]ontract during [his]

tenure . . . , nor has it ever appeared on a Board agenda for approval or been discussed

in executive session.” Additional affidavits were provided by Thomas Sage, IDEA’s

outside counsel, and Leanne Hernandez, IDEA’s newly hired CFO. Sage testified that he

drafted the amendments to Truscheit’s contract but not the original. After drafting the

amendments, Sage “expressly advised and directed [Torkelson] and [Truscheit] that the

Board needed to be presented with and take action to approve the [c]ontract and

[a]mendments in order for the contract to be enforceable.” However, “Truscheit

responded . . . that he did not believe it needed board approval because he said

[Torkelson] had the authority and he did not want to go to the Board.” Hernandez’s

affidavit was a business records affidavit. See TEX. R. EVID. 803(6). Hernandez stated she

was a custodian of records for IDEA and provided fifty-three pages of public records

consisting of IDEA’s budget proposals and budget items voted on and adopted by the

Board from fiscal years 2008–2009 through 2019–2020. Hernandez noted that none of

the budgets referenced or had line items for CFO employment or compensation.

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 In Truscheit’s response to IDEA’s amended plea to the jurisdiction, he argued that

the applicable administrative rule does not require express approval of a contract by a

charter school’s governing body. Truscheit further contended that the rule “did not list

hiring and firing of the CFO” like it did for CEO, so “[a]ny reasonable construction of the

[rule] must necessarily conclude that it does not apply to general personnel matters

including the hiring, firing, and paying of officers like the CFO.” Rather, Truscheit notes

that the rule “confers exclusive authority to select and terminate employees to the CEO

of a charter school.” Finally, Truscheit suggests that the “Board approved budgets and

budget amendments each year that included the allocation of funds for salaries of

educators, support staff, administrators[,] and officers” and that in doing so it “approved

the expenditure of state funds for the Truscheit [c]ontract. With such approval, the

[c]ontract was ‘properly executed’ and the statutory waiver of immunity to suit applies.”

Truscheit included an affidavit by Torkelson, wherein Torkelson stated that he “had

exclusive authority to hire and terminate officers such as the [CFO].” Torkelson further

averred that “it was not the practice of the Board to approve employment contracts such

as the Truscheit contract” and that “it would have been completely impractical[] for the

Board to have a duly noticed meeting to consider the expenditure of every dollar of state

funds.”

On January 20, 2022, the trial court heard arguments regarding the plea to the

jurisdiction from each party. The trial court took the parties’ arguments under advisement

and asked them to file additional documents and case law. On February 25, 2022, the

trial court denied IDEA’s plea without stating its reason. This interlocutory appeal

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followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8).

II. STANDARD OF REVIEW

“Local governmental entities ‘enjoy governmental immunity from suit, unless

immunity is expressly waived.’” Lubbock Cnty. Water Control & Imp. Dist. v. Church &

Akin, L.L.C., 442 S.W.3d 297, 300 (Tex. 2014) (quoting Kirby Lake Dev., Ltd. v. Clear

Lake City Water Auth., 320 S.W.3d 829, 836 (Tex. 2010)). “Governmental immunity

includes both immunity from liability, ‘which bars enforcement of a judgment against a

governmental entity, and immunity from suit, which bars suit against the entity

altogether.’” Id. (quoting Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006)). If a

local governmental entity enjoys governmental immunity, the trial court does not have

subject matter jurisdiction. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,

225–26 (Tex. 2004). Open-enrollment charter schools act as an arm of the State

government and are thus entitled to governmental immunity in the same respect as public

schools. TEX. EDUC. CODE ANN. § 12.1056; see El Paso Educ. Initiative, Inc. v. Amex

Props., LLC, 602 S.W.3d 521, 529–30 (Tex. 2020).

A plea to the jurisdiction is a dilatory plea used “to defeat a cause of action without

regard to whether the claims asserted have merit.” Bland Indep. Sch. Dist. v. Blue, 34

S.W.3d 547, 554 (Tex. 2000). The plea challenges the trial court’s subject matter

jurisdiction over a pleaded cause of action. Miranda, 133 S.W.3d at 226. “When a plea to

the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts

that affirmatively demonstrate the court’s jurisdiction to hear the cause.” Id. We will

liberally construe the pleadings and look to the pleader’s intent. Id. When the

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determinative facts are undisputed, we review the trial court’s ruling on a plea to the

jurisdiction de novo. Id. The plaintiff carries the initial burden to plead facts affirmatively

showing that the trial court has jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852

S.W.2d 440, 446 (Tex. 1993).

“However, if a plea to the jurisdiction challenges the existence of jurisdictional

facts, we consider relevant evidence submitted by the parties when necessary to resolve

the jurisdictional issues raised, as the trial court is required to do.” Miranda, 133 S.W.3d

at 227. If the evidence creates a fact question, the plea to the jurisdiction should not be

granted, and the fact issue should be resolved by the trier of fact. Id. at 228. If, on the

other hand, the relevant evidence is undisputed or fails to raise a fact question on the

jurisdictional issue, the trial court should rule on the plea to the jurisdiction as a matter of

law. Id. This standard generally mirrors that of summary judgment. Id.; see generally TEX.

R. CIV. P. 166a(c).

Accordingly, when challenging the jurisdictional facts, the governmental unit

carries the initial burden. Miranda, 133 S.W.3d at 228. “[A]fter the [governmental unit]

asserts and supports with evidence that the trial court lacks subject matter jurisdiction,

we simply require the plaintiffs, when the facts underlying the merits and subject matter

jurisdiction are intertwined, to show that there is a disputed material fact regarding the

jurisdictional issue.” Id. “When reviewing a plea to the jurisdiction in which the pleading

requirement has been met and evidence has been submitted to support the plea that

implicates the merits of the case, we take as true all evidence favorable to the

nonmovant.” Id. “We indulge every reasonable inference and resolve any doubts in the

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nonmovant’s favor.” Id.

III. APPLICABLE LAW

A. Immunity from Breach of Contract Claim

It is up to the legislature to waive immunity for local governmental entities, and it

must do so by “clear and unambiguous language.” Church & Akin, L.L.C., 442 S.W.3d at

301 (citing TEX. GOV’T CODE § 311.034). The legislature has created one such waiver for

certain contract claims:

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, subject to the terms and
conditions of this subchapter.

TEX. LOC. GOV’T CODE ANN. § 271.152. “‘Contract subject to this subchapter’ means . . . a

written contract stating the essential terms of the agreement for providing goods or

services to the local governmental entity that is properly executed on behalf of the local

governmental entity.” Id. § 271.151(2)(A). To determine whether a contract with an open-

enrollment charter school is properly executed, we look to “the authority the legislature

granted the school in its charter, including the statutory and regulatory requirements

placed on open-enrollment charter schools entering (or seeking to enter) contractual

relationships.” El Paso Educ. Initiative, Inc., 602 S.W.3d at 532.

B. Charter School Authority

The Texas Administrative Code sets out the delegation of powers and duties for

the governing body of a charter school. See 19 TEX. ADMIN. CODE ANN. § 100.1101 (2022)

(Tex. Educ. Agency, Delegation of Powers and Duties). The code provides that

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 [e]xcept as provided by this section,[ 7] the governing body’s powers and
duties to operate the charter school shall not be delegated, transferred,
assigned, encumbered, pledged, subcontracted, or in any way alienated by
the governing body of the charter holder. Any attempt to do so shall be null
and void and of no force or effect and shall constitute abandonment of the
contract for charter.

Id. § 100.1101(b)(2). Further,

[a]n open-enrollment charter must specify the powers or duties of the
governing body of the charter holder that the governing body may delegate
to an officer, employee, contractor, management company, creditor, or any
other person. The exclusive method for making such a delegation shall be
to file a request for a delegation amendment with the [Texas Education
Agency (TEA)] division responsible for charter schools under § 100.1033 of
this title (relating to Charter Amendment), specifying the power or duty
delegated and the particular person or entity to which it is delegated.

Id. § 100.1101(c). “Unless the Commissioner has accepted a written delegation as a

charter amendment, a contract that ‘authorize[s] the expenditure or obligation of state

funds’ is one of the ‘powers and duties’ that the ‘governing body of the charter holder

itself’ must exercise.” El Paso Educ. Initiative, Inc., 602 S.W.3d at 532–33 (quoting 19

TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii)).

However, certain “powers and duties must be exercised by the superintendent or,

as applicable, the administrator serving as the educational leader and [CEO] of the

charter school.” Id. § 100.1033(b)(14)(D). Like governing body powers and duties, “[a]n

amendment that is not authorized by such a specific written exception is not effective for

any purpose.” Id. Among those powers and duties is the power and duty “to select and

terminate charter school employees or officers.” Id. § 100.1033(b)(14)(D)(iii).

7 The exceptions to the prohibition against delegation require an amendment to the school’s charter

be approved by the commissioner of the Texas Education Agency (TEA), which the parties agree has not
occurred here. See 19 TEX. ADMIN. CODE ANN. § 100.1101(b)(14) (2022) (Tex. Educ. Agency, Delegation
of Powers and Duties).
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 IV. ANALYSIS

The parties agree to many issues underlying this case. First, both agree that IDEA

is generally entitled to governmental immunity as an open-enrollment charter school that

expends public funds. See TEX. EDUC. CODE ANN. § 12.1056; El Paso Educ. Initiative, Inc.,

602 S.W.3d at 529–30. Both parties agree that for IDEA’s immunity to be waived, the

contract must have been “properly executed.” See TEX. LOC. GOV’T CODE ANN.

§§ 271.151(2), 271.152. Both parties agree that Torkelson had the authority to select and

terminate IDEA employees and officers. See 19 TEX. ADMIN. CODE ANN.

§ 100.1033(b)(14)(D)(iii). Neither party disputes that the Board did not expressly approve

the contract. Rather, Truscheit contends that immunity is waived because: (1) Torkelson

had the authority to execute the contract vis-a-vis Title 19 of the Texas Administrative

Code § 100.1033(b)(14)(D) and IDEA’s budget which included compensation for a CFO,

see id.; or (2) in the alternative, Title 19 of the Texas Administrative Code

§ 100.1033(b)(14)(C) does not require the board to expressly approve the spending of

public funds, and thus, IDEA’s approval of budgets and budget amendments amounted

to approval or adoption of the contract. See id. § 100.1033(b)(14)(C). Truscheit also

argues that various fact issues preclude the granting of a plea to the jurisdiction.

IDEA, conversely, argues that (1) Torkelson’s contract specifically prohibited him

from entering into contracts on behalf of IDEA and the authority was not otherwise

delegated to him, see id.; (2) IDEA’s budgets were only for one-fiscal-year periods, which

precludes Torkelson from binding IDEA to multi-year contracts without express approval;

and (3) the prohibition against delegating the authority to expend or obligate public funds

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in 19 Texas Administrative Code § 100.1033(b)(14)(C)(ii) requires express approval from

the Board. See id.; see also El Paso Educ. Initiative, 602 S.W.3d at 532–33. As it pertains

to Truscheit’s claim that factual disputes preclude granting the plea to the jurisdiction,

IDEA argued that “[t]hese [disputes] were all either legally irrelevant or factually resolved

by the undisputed evidence,” and that “merely asking rhetorical questions does not

constitute evidence and cannot, therefore, meet Truscheit’s burden to raise a material

issue of disputed fact.” We address each of the parties’ arguments in turn.

A. Torkelson’s Authority

The parties agree that Torkelson had the authority to select and terminate

employees and officers, including the CFO. See 19 TEX. ADMIN. CODE ANN.

§ 100.1033(b)(14)(D)(iii). The dispute arises, however, as to whether that authority

extended to binding IDEA to an employment contract expending public funds beyond

selecting the employee or officer. IDEA points to a clause in Torkelson’s contract that

permitted him to “negotiat[e] and execut[e] contracts where authorized by the Board,”

arguing that without express authorization, Torkelson had no authority to bind IDEA to a

multi-year employment contract. IDEA further argues that the Texas Supreme Court’s

opinion in El Paso Education Initiative is directly on point and controlling. See 602 S.W.3d

at 532–33.

Truscheit, on the other hand, argues that Torkelson’s authority to select and

terminate employees and officers necessarily includes the authority to bind IDEA to

employment contracts that expend public funds. See 19 TEX. ADMIN. CODE ANN.

§ 100.1033(b)(14)(D)(iii). Truscheit contends that factual differences in El Paso Education

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Initiative make it distinguishable and inapposite. See 602 S.W.3d at 524–26.

In El Paso Education Initiative, the Texas Supreme Court considered whether a

lease agreement executed by the school’s superintendent and president effected a waiver

of governmental immunity. See id. There, the board authorized the superintendent and

president, Burnham, “permission to ‘continue to negotiate a lease.’” Id. at 524–25.

Further, the contract specifically stated that “each signatory ‘represents and warrants’ that

she has the authority to execute the lease and that it is ‘binding upon the entity’ she

represents.” Id. at 525. However, “[d]espite these representations, [the lessor] understood

that the district’s board had to approve the lease to finalize it.” Id. Ultimately, the board

did not approve the lease and the lessor sued for anticipatory breach. Id. at 525–26. The

supreme court held that the district, as an open-enrollment charter school expending

public funds, acted as an arm of the State government, and was thus entitled to

governmental immunity. Id. at 530. The court then needed to determine whether the

district’s immunity was waived under the local government code. Id. at 531–33.

To determine whether the district’s immunity was waived, the court considered

whether the contract was “properly executed” on behalf of the district. Id. at 531–32. In

doing so, the court looked to whether the lessor “demonstrate[d] that the contract’s

execution comport[ed] with the authority the legislature granted the school in its charter,

including the statutory and regulatory requirements placed on open-enrollment charter

schools entering (or seeking to enter) contractual relationships.” Id. at 532. Ultimately, the

court concluded that without proper delegation as a charter amendment, executing “a

contract that ‘authorize[s] the expenditure or obligation of state funds’ is one of the

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‘powers and duties’ that the ‘governing body of the charter holder itself’ must exercise.”

Id. at 532–33. Because the evidence showed that the board was never presented the

contract for approval, the lease was not “‘properly executed on behalf of’ the district.” Id.

at 533.

Truscheit argues that El Paso Education Initiative is inapposite because it involves

a contract for real estate, not employment, and because the lease amount “did not arise

in the ordinary course of business for the school and was probably not a budgeted item.”

Truscheit asserts that:

the hiring of a CFO . . . would arise in the ordinary course of business
and . . . funds had been allocated in a yearly budget. Moreover, the TAC
rules are silent as to property leases whereas in the case at bar there is a
specific rule giving the CEO exclusive authority to select or terminate
employees.

However, a review of the applicable rule does not lend credence to Truscheit’s

argument. The rule specifically states that the governing body—in this case, the Board—

must approve expenditures of state funds. See 19 TEX. ADMIN. CODE ANN.

§ 100.1033(b)(14)(C)(ii). While the rule does give the CEO the authority to “select and

terminate charter school employees or officers,” it does not provide him the authority to

approve the expenditure of funds to do so. See id. § 100.1033(b)(14)(D)(iii).

“When we construe administrative rules and statutes, our primary objective is to

give effect to the intent of the issuing agency and legislature, ‘which, when possible, we

discern from the plain meaning of the words chosen.’” Heritage on San Gabriel

Homeowners Ass’n v. Tex. Comm’n on Env’t Quality, 393 S.W.3d 417, 424–25 (Tex.

App.—Austin 2012, pet. denied) (quoting State v. Shumake, 199 S.W.3d 279, 284 (Tex.

2006)). We see no reason the TEA would expressly limit the authorization to expend
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public funds to the Board in one subsection while implicitly authorizing the CEO to do so

in another. See id.; see also Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex.

2001) (explaining that when interpreting statutes “[w]e should not give one provision a

meaning out of harmony or inconsistent with other provisions, although it might be

susceptible to such a construction standing alone”). Rather, the CEO’s authority to select

and terminate employees and officers must be within the authorized expenditure of public

funds set by the Board. See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii).

Truscheit also argues that the rule’s reference to “‘final authority’ necessarily

recognizes and implies that there are other persons in the charter school that also have

authority to approve the expenditure of state funds.” See id. However, even assuming the

rule contemplated other levels of authority within the school, without the Board’s final

approval as the rule requires, there is no authority to expend funds. See id.; Heritage on

San Gabriel Homeowners Ass’n, 393 S.W.3d at 424–25. The plain meaning of the rule

requires the Board, not another person, to authorize the expenditure or obligation of state

funds. See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii); Heritage on San Gabriel

Homeowners Ass’n, 393 S.W.3d at 424–25. Moreover, without an amendment of the

school charter, requiring approval from the TEA commissioner, this duty cannot be

delegated. See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii).

We must next consider whether the Board’s budget, which allowed for the hiring

and compensation of a CFO, created authority for Torkelson to bind IDEA to the contract

as Truscheit argues. Among the exhibits provided by IDEA are its annual budgets as

adopted by the board from fiscal years 2008–2009 through 2019–2020. The budgets

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included a line item for “School Leadership,” which the parties agree includes the CFO’s

salary and benefits. However, the budgets adopted by IDEA necessarily only include

expenditures for the fiscal year contemplated. Truscheit’s contract, and each amendment

thereto, was for multi-year terms. Thus, IDEA’s approval of the budget for any given fiscal

year could not have created authority for Torkelson to obligate IDEA to expend public

funds for future fiscal years. See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii); El

Paso Educ. Initiative, Inc., 602 S.W.3d at 532–33.

Truscheit contends that “[t]he argument that a contract has not been approved by

the Board merely because it creates a multi-year obligation is not tenable in the least bit.”

In support of this argument, Truscheit notes that “there is no question that the Board

routinely approves multi-year contracts and obligations in its yearly budget,” such as

Torkelson’s multi-year CEO contract or rent and mortgage payments. However, those

contracts are not before us. Further, as Truscheit specifically notes, those contracts were

approved by the Board—Truscheit’s was not. Thus, the notion that IDEA’s annual budget

including items from approved multi-year contracts must necessarily provide Torkelson

the authority to obligate the expenditure of state funds for multiple years without Board

approval is unsustainable.

Additionally, Torkelson’s contract expressly limited his ability to enter into contracts

on behalf of IDEA “where authorized by the Board.” Thus, neither the rule nor Torkelson’s

contract permitted him to obligate IDEA to expend state funds. See id. As such, the

contract was not “properly executed on behalf of” IDEA as contemplated by Torkelson’s

authority. See TEX. LOC. GOV’T CODE ANN. § 271.151(2)(A).

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B. Approval by Adoption

Truscheit next argues that the Board implicitly approved the contract by continuing

to pass the annual budget providing for “School Leadership.” Truscheit notes that the rule

prohibiting the Board from delegating the approval or obligation of the expenditure of state

funds “does not specify how or when the [B]oard must approve the expenditure of state

funds.” See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii). We agree with Truscheit

that it is impractical for “each and every expenditure of state funds [to] be listed as an

agenda item, duly noticed and approved by the [Board].” We further agree that the Board

may approve the expenditure or obligation of state funds through its approved budget.

However, this argument fails for the same reason as the argument that Torkelson was

granted authority to enter into the contract by the Board’s approval of a budget: the

Board’s approval of the expenditure for state funds did not exceed the fiscal year for which

the budget was passed. 8 See id.

Extending Truscheit’s argument, the CEO would be able to enter into any multi-

year contract to expend state funds without providing notice to or receiving approval from

the Board, merely because the Board included the expenditure of state funds for a specific

year. For example, if the Board’s budget allowed for the purchase of a school bus in fiscal

year 2010–2011, the CEO could bind IDEA to a contract to purchase a school bus each

8 To the extent Truscheit intends to argue that the Board ratified the contract through subsequent

budget approvals, the evidence presented by IDEA is that the Board was never notified of or presented
with the contract, and Truscheit presented no evidence otherwise. Thus, the Board could not have ratified
the contract. See Barrand, Inc. v. Whataburger, Inc., 214 S.W.3d 122, 146 (Tex. App.—Corpus Christi–
Edinburg 2006, pet. denied) (“[I]f a party by its conduct recognizes a contract as valid, having knowledge
of all relevant facts, it ratifies the contract.” (emphasis added)); see also McAllen Hosps., L.P. v. Lopez, 576
S.W.3d 389, 392 (Tex. 2019) (“Both express and implied contracts require the element of mutual
agreement . . . .”).

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of the following three fiscal years without Board notice or approval. That application is

incongruent with the rule. See id. It does not matter that the expenditure of state funds is

for compensation of an officer, which Torkelson had the authority to select, because the

rule prohibits the Board from delegating the authority to expend or obligate state funds—

there is no exception for the purpose of the expenditure or obligation. See id. Such

construction of the rule is consistent with the Texas Supreme Court’s holding that “a

contract that ‘authorize[s] the expenditure or obligation of state funds’ is one of the

‘powers and duties’” that the “‘governing body of the charter holder itself’ must exercise.”

See El Paso Educ. Initiative, Inc., 602 S.W.3d at 532–33 (alteration in original).

C. Disputed Material Facts

Finally, IDEA argues that the trial court could not have denied its plea to the

jurisdiction on the basis that there are genuine issues of material facts. See Miranda, 133

S.W.3d at 228; see also TEX. R. CIV. P. 166a(c). The evidence provided by IDEA

conclusively shows that the authority to authorize the expenditure and obligation of state

funds had not been delegated to Torkelson. See 19 TEX. ADMIN. CODE ANN.

§ 100.1033(b)(14)(C)(ii). The evidence further shows that the Board did not approve the

contract through its annual budgets or during any duly noticed meeting. See id. As we

have concluded, the Board could not have implicitly approved the contract, and Torkelson

could not bind IDEA to a multi-year contract where no authority was given. See id.

Truscheit did not present any evidence that disputed or contradicted the evidence

presented by IDEA.

Truscheit insists that there are genuine issues of material fact. However, in his

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response, Truscheit does not cite to the record where the disputes can be found and, in

our review, we do not find any disputes. See TEX. R. APP. P. 38.1(i) (requiring a brief to

include “appropriate citations to authorities and to the record”); id. R. 38.2(a)(1) (requiring

an appellee’s brief to conform to the requirements of Rule 38.1). The facts Truscheit

contends are in dispute are either (1) issues of law (such as “Did Torkelson have authority

to sign the [c]ontract?”); (2) not in dispute (such as “Did the Board approve a budget that

authorized the hiring of a CFO?”); or (3) not material to the disposition (such as “What

Board procedures were in place at the time the [c]ontract was signed for the approval of

employment contracts?”). See Miranda, 133 S.W.3d at 228; see also TEX. R. APP. P.

166a(c); Janaki v. C.H. Wilkinson Physician Network, 624 S.W.3d 623, 628 (Tex. App.—

Corpus Christi–Edinburg 2021, no pet.) (“A fact is ‘material’ only if it affects the outcome

of the suit under the governing law.” (quoting W. Trinity Props., Ltd. v. Manhattan Mortg.

Corp., 92 S.W.3d 866, 869 (Tex. App.—Texarkana 2002, no pet.))). Accordingly, we

conclude there are no issues of material fact. See Miranda, 133 S.W.3d at 228; see also

TEX. R. CIV. P. 166a(c).

D. Summary

We conclude that Torkelson did not have the authority to obligate the expenditure

of state funds on behalf of IDEA. See 19 TEX. ADMIN. CODE ANN. § 100.1033(b)(14)(C)(ii).

IDEA’s passing of an annual budget that allowed for the salary of a CFO did not authorize

the expenditure of state funds beyond that fiscal year. See id. And no issue of material

fact exists that would preclude the trial court from granting IDEA’s plea to the jurisdiction.

See Miranda, 133 S.W.3d at 228; see also TEX. R. CIV. P. 166a(c). We further conclude

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the contract was not “properly executed on behalf of” IDEA. See TEX. LOC. GOV’T CODE

ANN. § 271.151(2)(A); El Paso Educ. Initiative, Inc., 602 S.W.3d at 532–33. Because the

contract was not properly executed on behalf of IDEA, its immunity was not waived. See

TEX. LOC. GOV’T CODE ANN. § 271.152; El Paso Educ. Initiative, Inc., 602 S.W.3d at 534.

The trial court erred by denying IDEA’s plea to the jurisdiction. We sustain IDEA’s first

and second issues.

V. CONCLUSION

We reverse the trial court’s judgment and render judgment dismissing the suit.

CLARISSA SILVA
Justice

Delivered and filed on the
1st day of September, 2022.

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