The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
§
IBARRA CONSULTING §
ENGINEERS and RAQUEL §
IBARRA, §
§
Plaintiffs, § Civil Action No. 3:21-CV-1227-X
§
v. §
§
JACOBS ENGINEERING GROUP, §
§
Defendant. §
MEMORANDUM OPINION AND ORDER
Before the Court is defendant Jacobs Engineering Group’s (Jacobs) motion for
summary judgment. [Doc. No. 4.] Jacobs moves for summary judgment on all of the
plaintiffs’ claims against it. The Court GRANTS Jacobs’s motion in all respects and
DISMISSES WITH PREJUDICE the plaintiffs’ claims.
I. Factual Background
Defendant Jacobs is an international firm that provides professional services,
including consulting, technical, scientific, and project delivery for the government
and private sector. Jacobs has a longstanding professional relationship with the
Texas Department of Transportation (TxDOT). Plaintiff Ibarra Consulting
Engineers (Ibarra) is an engineering consulting firm; plaintiff Raquel Ibarra (Raquel)
is the sole owner and president of Ibarra.
Jacobs, Ibarra, and non-party Nathelyne A. Kennedy & Associates, L.P. (NAK)
were brought together through the TxDOT Alliance Program, which is a program
established by TxDOT to connect large, so-called “legacy firms,” like Jacobs, to
minority-owned companies, like Ibarra and NAK, for the purpose of facilitating
relationships between them.
A. Jacobs, Ibarra, and NAK form a joint venture.
In 2014, Jacobs approached Ibarra about forming a joint venture for the
purpose of seeking a contract with TxDOT. In May 2015, Jacobs, Ibarra, and NAK
executed a joint venture agreement. Under the joint venture agreement, a Board of
Control governed the joint venture. Each of the joint venture partners—Jacobs,
Ibarra, and NAK—received one seat on the Board of Control. Day-to-day
management of the services provided by the joint venture to TxDOT was to be
conducted by and under the direction of a project manager, which was to be appointed
by the sponsor of the joint venture, Jacobs.
Ibarra was required to perform and was fully responsible for the portion of the
services rendered to TxDOT that were assigned to Ibarra in a TxDOT-issued “work
authorization” approved by the Board of Control. The joint venture agreement states
that it was “intended that the proportion of the Services required under [the eventual
TxDOT Contract] that will be authorized and assigned to Ibarra will be
approximately equal to and not less than its Participation Percentage.”1 Ibarra’s
Participation Percentage was 10%; Jacobs’s was 80%; and NAK’s was 10%.
1 Doc. No. 6-13 at 8.
The joint venture agreement contemplated a partner’s “default” under the
contract. In addition to outside factors like bankruptcy or insolvency, default occurs
when a partner
materially breaches any of its obligations hereunder and fails to cure
such breach within fifteen (15) days after written notice thereof.
Material breaches include, but are not limited to, a Party’s failure to
provide competent and acceptable staff, failure to meet time
constraints, failure to perform in accordance with generally accepted
standards or in a manner satisfactory to [TxDOT], or failure to
provide adequate management and supervision.2
The agreement also contained a merger clause, providing that “this Agreement
represents the entire agreement between the Parties concerning the subject matter
hereof, and it supersedes all prior negotiations, representations, [or] oral or written
agreements which relate to the subject matter hereof.”
B. TxDOT executes a procurement engineering services contract with the
joint venture.
The purpose of the joint venture was to submit a proposal to TxDOT on a
procurement engineering project and, if selected by TxDOT, to negotiate and enter
into a Professional Services Agreement with TxDOT for the project. Procurement
engineering is a type of work for which TxDOT retains specialized consultants in
multi-year contracts to assist TxDOT with managing “alternate delivery”
procurements. Alternate delivery procurements include delivery platforms that
differ from the conventional “design-bid-build” delivery, including design-build,
2 Doc. No. 6-13 at 205.
design-build-finance, and design-build-finance-operate-maintain. Alternate delivery
procurements span from approximately 6 months to several years.
In August 2015, the joint venture and TxDOT entered into a procurement
engineering contract (the TxDOT Contract). The only parties to the TxDOT Contract
were TxDOT and the joint venture, but all three joint venture partners—Ibarra,
NAK, and Jacobs—executed the TxDOT Contract on behalf of the joint venture.
The TxDOT Contract became effective upon execution and was scheduled to
terminate on September 30, 2020, unless modified in writing, extended by TxDOT, or
terminated earlier in accordance with certain other provisions of the contract.
Without a work authorization issued by TxDOT, the joint venture could not do any
work under the TxDOT Contract. No work was guaranteed under the TxDOT
contract, but the maximum amount payable over the life of the contract was $20
million.
The TxDOT Contract was part of TxDOT’s commitment to participate in the
United States Department of Transportation’s Disadvantaged Business Enterprise
(DBE) Program. The Program “is a legislatively mandated federal Department of
Transportation program that applies to federal-aid highway dollars expended on
federally assisted contracts issued” by state transportation agencies to qualifying
small businesses.3 The goal of both agencies was to allow DBEs to “compete fairly for
contracts and subcontracts financed in whole or in part with [f]ederal funds.” It is
3 See Disadvantaged Business Enterprise (DBE) Program, U.S. DEPARTMENT OF
TRANSPORTATION, FEDERAL HIGHWAY ADMINISTRATION, available at
https://www.fhwa.dot.gov/civilrights/programs/dbe/.
undisputed that both Ibarra and NAK are DBEs as defined by federal law, and that
the joint venture is a “DBE Joint Venture” as defined in the TxDOT Contract.
Under the TxDOT Contract, the joint venture committed to “make a good faith
effort to meet the Disadvantaged Business Enterprise goal”4 for the contract, meaning
that it would undertake “efforts . . . which, by their scope, intensity, and
appropriateness to the objective, can reasonably be expected to fulfill the program
requirement.”5 The joint venture’s DBE “goal” under the TxDOT contract was
11.7%.6 In addition to the “goal,” the joint venture also made a DBE “commitment”
to TxDOT that it hoped to deliver 10% of the work under the contract to Ibarra;
another 10% to NAK; 6% to Seiler/Lankes Group, LLC, a Hispanic-owned sub-
provider; and 2.7% to HBMG, Inc., another Hispanic-owned sub-provider. Those
hopes resulted in a total DBE “commitment” of 28.7%.7
The joint venture contract stated that “in performing the Jacobs Scope of
Services and any additional services that may be assigned to it, Jacobs agrees to be
bound to the [joint venture] and to assume toward the [joint venture] all the
obligations, responsibilities, conditions, requirements, and duties that the [joint
venture], by the [TxDOT Contract] or applicable laws, assumed toward or is bound
toward [TxDOT].”8 The joint venture “agree[d] to comply with the requirements set
4 Doc. No. 6-13 at 81–82.
5 Id. at 81.
6 Id. at 82.
7 Id. at 85.
8 Id. at 7.
forth in Attachment H, Disadvantaged Business Enterprise . . . Subcontracting Plan
Requirements with an assigned goal or a zero goal, as determined by the State.”9
Attachment H, in turn, provided that the joint venture would offer DBEs “the
opportunity to compete fairly for contracts and subcontracts financed in whole or in
part with Federal funds. In this regard, the Provider shall make a good faith effort
to meet the [DBE] goal for this contract.”10 Furthermore, the joint venture agreed
that it “shall not discriminate on the basis of race, color, national origin, or sex in the
performance of this contract. The Provider shall carry out applicable requirements
of 49 CFR Part 26 in the award and administration of DOT assisted contracts.”11
C. Work begins slowly under the TxDOT Contract.
At TxDOT, the Director of Strategic Projects Division oversaw staff who
managed or were project managers on consulting contracts like the TxDOT Contract
between the joint venture and TxDOT. During the relevant time period, the Director
was Katherine Holtz. Holtz’s deputy was Kristi Flagg, who helped Holtz manage her
staff. The TxDOT staff member assigned to the TxDOT contract was Marcus
Coronado, who reported directly to Flagg.
After the TxDOT agreement was executed in August 2015, the Board of Control
began meeting regularly and the joint venture started submitting proposed work
authorizations to TxDOT. Things began slowly. As of March 2016, TxDOT had
rejected several proposed work authorizations, but things started looking up when,
9 Id. at 35.
10 Id. at 81.
11 Id.
by June 2016, TxDOT had approved five work authorizations. (Recall that the joint
venture could do no work on the TxDOT Contract without TxDOT issuing work
authorizations.) Even though TxDOT was beginning to approve the joint venture’s
work authorizations, TxDOT also asked the joint venture in June 2016 to reduce its
staff by nine people “because of a lack of work.”12
D. Ibarra and Raquel directly communicate with TxDOT.
Recall that, on the joint venture side, the project manager was in charge of day-
to-day management of the TxDOT Contract. The project manager served as the face
of the joint venture to TxDOT; this “one point of contact” method was TxDOT’s
preference. As Holtz, the Director of Strategic Projects Division at TxDOT, stated in
her deposition: “it helps with communication so that there’s not things going on
somewhere else that we don’t know what is going on. It’s just we know who has the
authority to speak for the contract.”13 Raquel acknowledges having received TxDOT’s
“one voice” directive on several occasions, both verbally, and in writing. Nevertheless,
Raquel also stated that all of these instructions “just sounds like a piece of advice.”14
In June 2016 and in August 2016, Raquel independently communicated with
TxDOT by arranging and holding meetings with two TxDOT employees without
informing the joint venture. On December 13, 2016, Raquel emailed the Board of
Control and copied Holtz. Because of the recent slowdown in work, Raquel was
worried that the revenue disparity between the joint venture partners would
12 Id. at 104.
13 Doc. No. 6-8 at 8.
14 Doc. No. 6-1 at 39.
substantially increase. Holtz called a meeting. During the meeting, Ibarra asked if
it could “sit in” on some meetings between TxDOT and the project manager.15 Holtz
responded by reminding Ibarra of TxDOT’s preference that the project manager “act
on behalf of their contract.”16 Holtz also explained that those meetings are “for
[project managers] and TxDOT leads to catch up on status of tasks” and that TxDOT
“will notify the [joint venture] of any new work, work plans and work
authorizations.”17
The next day, Raquel emailed Holtz with questions about labor classifications
of Ibarra. Holtz responded: “I am confused, is this a request from the joint venture?
I would really appreciate one voice for the Joint Venture submitting requests through
their program manager.”18
One of the project managers for the joint venture (there were several over the
relevant time period) recalls that Holtz had told her “more than once that TxDOT
wanted a single point of contact.”19 Holtz also visited the project manager’s office to
alert the project manager of a specific time when Ibarra contacted Holtz. TxDOT was
bringing to the project manager’s “attention” that these communications were
“inappropriate, that’s not how they wanted to operate, so that became a problem.”20
15 Doc. No. 6-13 at 141.
16 Id.
17 Id.
18 Id. at 142.
19 Doc. No. 6-11 at 7.
20 Doc. No. 6-10 at 6.
On January 5, 2017, the joint venture issued its first notice of default to Ibarra.
The Board of Control sent a letter to Ibarra giving notice that it viewed the ex parte
communications as violating the joint venture agreement, constituting a material
breach of the joint venture agreement, and undermining the working relationship
between the joint venture and TxDOT.21 Raquel sent a letter in response, stating that
the joint venture had “mostly misrepresent[ed] the events.”22 Raquel explained that
the December 2016 meeting came about “due to Jacobs’s refusal to present to
[TxDOT] the work classification categories” that Ibarra wanted to submit.23 Raquel
asked “if indeed it is Jacob’s position that every time a JV partner voices a concern or
does something one of the other partners disapproves it becomes a ‘material breach’?
One might ask how many material breaches has Jacobs committed?”24 Raquel said
that Jacobs was “bullying,” “intimidating,” and “harassing” her and her firm.25
In April 2017, Coronado, a TxDOT employee who reported to Holtz, provided
written evaluations of several work authorizations to the joint venture. Coronado
noted Ibarra’s continued communications with TxDOT and “request[ed] that Ibarra
coordinate with [the project manager] and not directly with TxDOT. [The joint
venture] would benefit from having a unified team presented to TxDOT.”26 Coronado
21 See Doc. No. 6-13 at 143.
22 Doc. No. 28-26 at 2.
23 Id.
24 Id.
25 Id. at 2–3.
26 Doc. No. 6-13 at 161.
did not “appreciate a [joint venture] member (Ibarra) contacting” TxDOT leadership
“without the TxDOT Program Manager being previously informed or consulted.”27
E. Ibarra submits deficient invoices.
Any partner (Jacobs, Ibarra, or NAK) that performed work on a work
authorization would send their individual invoices to the project manager who
reviewed, compiled, and sent them as a master invoice to TxDOT for payment.
Ultimately, it was TxDOT’s decision whether to approve or reject an invoice, or a
particular line item on an invoice, and Ibarra understood that.
Ibarra was new to the invoicing process. At the beginning of work on the
TxDOT Contract, a Jacobs employee who assisted the project manager with sending
invoices to TxDOT provided a daylong training session to Raquel Ibarra (president
and owner of the Ibarra firm) and Ibarra’s Chief Operations Officer, Whitt Drewyor.
In addition, the Jacobs employee provided feedback to Ibarra about Ibarra’s invoices,
recommending that Ibarra change certain line items before the joint venture
submitted the invoice to TxDOT.
Sometimes Ibarra accepted Jacobs’s suggestions; sometimes it didn’t. For
herself, Raquel stated at an August 2016 meeting of the Board of Control that the
“invoice process is a learning experience,”28 and later testified that “everybody has
27 Id. at 163.
28 Id. at 125.
their own style as to how they want their invoices.”29 “Everybody is different,” Raquel
explained.30
It appears that TxDOT did not share Raquel and Ibarra’s freestyle approach
to invoicing. At the same December 2016 meeting where TxDOT addressed the
importance of the project manager speaking “on behalf of the joint venture,” TxDOT
also addressed issues with Ibarra’s invoices. For example, TxDOT explained that
Ibarra’s “breakdown of hours” needed to improve: “If work is work related, then it
must be reported on timesheet and progress report so it doesn’t read simply ‘meeting
with [Name.]’ Must be clear about what subject was discussed or it will be assumed
[overhead]” and therefore “not covered under the Scope of Work.”31 Jacobs revised
and corrected several invoices that Ibarra submitted between September and
November 2016, and TxDOT was rejecting Ibarra’s invoices—meaning that people
weren’t getting paid.
In February 2017, the Board of Control issued its second notice of default to
Ibarra, based on the invoicing issues. The Board determined that the mistakes
constituted a material breach of the joint venture agreement and warned that it
would “implement remedies for default” if more problems occurred.32
29 Doc. No. 6-1 at 29.
30 Id.
31 Doc. No. 6-13 at 139.
32 Id. at 144–45.
F. Work picks up.
Recall that TxDOT had issued a few work authorizations to the joint venture
by June 2016. But not all was rosy, as TxDOT also asked the joint venture at that
time to reduce its staff by nine people because of a lack of work.
In August 2016, James Arbuckle, a Jacobs employee, became the joint
venture’s new project manager. Arbuckle told Ibarra that he would work to develop
a plan to get the proportion of work assigned to Ibarra under the TxDOT Contract up
to the goal level of 10 percent, but explained that the timeline was “by the time we
got through with the contract,” because “it was all dependent on getting task orders
from [TxDOT] and working towards trying to catch up.”33 Soon thereafter, TxDOT
approved Arbuckle’s plan to put Ibarra and NAK engineers on the “core team,” and
TxDOT issued a work authorization of which Ibarra and NAK had 40% of the budget.
Unfortunately, work again began drying up between late 2016 and early 2017.
The joint venture got a new project manager, Marcelle Jones. Then in April 2017,
because of the decrease in work, TxDOT directed the joint venture to submit a
“rightsizing plan” that would address the lack of work and resultant overstaffing.
Ibarra and NAK declined to approve the first proposed plan, but it ended up not
mattering because TxDOT rejected Jones’s first plan. On May 8, 2017, TxDOT
accepted Jones’s second plan; it decreased the size of the on-site staff to only nine
people. Jones told TxDOT that the right-sizing could adversely affect the DBE
commitments.
33 Doc. No. 6-9 at 6.
G. Raquel sends a letter to TxDOT raising various complaints.
On May 16, 2017, without the joint venture’s knowledge, Ibarra sent a letter
to Martin Rodin, the TxDOT Professional Engineering Procurement Services Division
Director. Raquel later testified that she had first spoken with TxDOT’s Chief
Engineer and then with Rodin, and that Rodin asked Raquel to “put it in writing.”
The letter was the result. After receiving the letter, Rodin summarized it in an email
to TxDOT’s Chief Engineer. Rodin described Raquel’s complaints “in a nutshell” as:
(1) “Jacobs [project manager] is allowed to not be a [Professional Engineer];” (2)
“TxDOT is talking only to Jacobs [Project Manager] and not the [joint venture]
leadership;” (3) “Ibarra is not allowed to staff positions up to their 10% [joint venture]
commitment;” (4) Ibarra invoices were rejected for “inconsistent reasons as a means
of punishment;” (5) “Ibarra staff not allowed to Invoice at the correct rates;” and (6)
“Ibarra staff being fully removed from [core] Team on May 19, 2017.”34
Rodin and his staff examined the dollar commitments in all “work
authorizations that had been issued, and . . . verified” that the joint venture was
meeting its goals for Ibarra and NAK under the TxDOT contract.35 At that time,
TxDOT had executed eleven work authorizations and the approximate percentage of
the dollar commitments going to each joint venture partner was 68% to Jacobs, 7% to
Ibarra, and 7% to NAK. The rest had gone to DBE sub-consultants. Thus, in total,
about 31% of all committed dollars had gone to the contract’s DBEs—Ibarra, NAK,
34 Doc. No. 6-13 at 227–28.
35 Doc. No. 6-7 at 4.
and the two DBE sub-consultants. The TxDOT Contract DBE goal was 11.7% and
the “commitment” was 28.7%, so the joint venture was, overall, overperforming.
In addition to reviewing the work authorizations, TxDOT referred Raquel’s
letter to Martha Arnold, the TxDOT DBE Program Manager and a senior TxDOT
employee. Arnold’s job was to make sure there was no noncompliance with the DBE
program regulations. Arnold concluded that Raquel’s letter did not raise any DBE
program concerns, and that there was indeed no direct mention of DBE matters in
the letter.
Although Raquel referred to Ibarra as a “minority joint venture partner” in the
letter, this did not, in TxDOT’s eyes, constitute a complaint about racial
discrimination against minorities. Rather, TxDOT interpreted “minority” as
referring to Ibarra’s status as a minority joint venture partner relative to Jacobs. In
other words, TxDOT concluded that Raquel’s letter had little to do with TxDOT or
the DBE program. The letter was about internal joint venture disputes and TxDOT
told Raquel as much: “The management issues identified in your letter are, for the
most part, a reflection of issues within the . . . Joint Venture Team and should be
resolved internally within the Joint Venture upon acceptance of the new . . . Project
Manager.”36
On June 9, 2017, the joint venture program manager informed the Board of
Control about Raquel’s letter and her prior meetings with TxDOT staff leading up to
the letter.
36 Doc. No. 28-20 at 2.
H. The joint venture terminates Ibarra.
On August 4, 2017, the Board of Control, on behalf of the joint venture, sent a
final notice of default to Ibarra. The joint venture reminded Ibarra of its prior notice
of default for Ibarra’s unauthorized communications and explained that Ibarra’s
continued communications with TxDOT—especially her meetings with TxDOT
leading to the May 2017 letter and the letter itself—constituted material breaches of
the joint venture agreement. The joint venture declared Ibarra in default and
“[Ibarra’s] participation in this Joint Venture is hereby terminated, effective
immediately.”37
II. Procedural Background
This case has had several iterations. The first began in August 2017, when
Ibarra filed its petition in state court, alleging various state-law claims and claims
for racial discrimination and retaliation under 42 U.S.C. § 1981. Jacobs removed to
this Court. The case was assigned to the Honorable Sam Cummings.38 The parties
conducted discovery, then Jacobs moved for summary judgment on all claims against
it.
In his order, Judge Cummings found that Ibarra had failed to demonstrate a
genuine dispute of material fact precluding summary judgment on the racial-
discrimination claim.39 Judge Cummings found that the claim was simply a
37 Doc. No. 6-13 at 182–83.
38 Ibarra Consulting Eng’rs, Inc. & Raquel Ibarra v. Jacobs Eng’g Grp., Inc., Civil Action No.
3:19-cv-1437, Doc. No. 38 (N.D. Tex.).
39 Id. at 2.
“repackaging” of Ibarra’s breach of contract claim and that the evidence showed no
genuine dispute of material fact that “Ibarra signed off on each work order submitted
to TXDOT for which racial discrimination is now alleged.”40 So he dismissed Ibarra’s
§ 1981 racial-discrimination claim with prejudice.
Judge Cummings also found for Jacobs on Ibarra’s retaliation claim. “[T]here
is no evidence to support that Ibarra ever made a claim for racial
discrimination. . . . Thus, without a valid report of discrimination, there can be no
retaliation.”41 “Finally,” Judge Cummings said, “the record is clear that Raquel
Ibarra’s constant contacting of TXDOT officials was causing problems for the joint
venture and is a legitimate, non-discriminatory reason for any action taken in
response thereto.”42 So Judge Cummings dismissed with prejudice that claim as well.
After disposing of both claims that presented federal questions, Judge
Cummings declined to exercise his supplemental jurisdiction over the remaining
state-law claims. He remanded the case.43
Once the case was back in state court, the plaintiffs filed an amended petition.
They deleted the § 1981 claim, maintained their other state-law claims, maintained
the breach of contract claim, and expanded the breach of contract allegations by
asserting for the first time that Jacobs had “failed to make good faith efforts to ensure
that Ibarra” received adequate work assignments and failed to make good faith
40 Id.
41 Id.
42 Id.
43 Id. at 3.
efforts not to racially discriminate as “required” by 49 C.F.R. § 26.44 Section 26 guides
the implementation of the federal DBE Program.45
In response to the plaintiffs’ new allegation that Jacobs had violated a federal
regulation, Jacobs again removed the case and asserted federal-question
jurisdiction.46 The plaintiffs moved to remand; the undersigned denied the motion.47
Jacobs filed the instant motion for summary judgment.
III. Legal Standard
Courts must grant summary judgment if the movant shows that “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.”48 A material fact is one “that might affect the outcome of the suit
under the governing law.”49 And a “dispute is genuine ‘if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.’”50 Courts “resolve
factual controversies in favor of the nonmoving party, but only where there is an
actual controversy, that is, when both parties have submitted evidence of
contradictory facts.”51
44 See Doc. No. 16 at 14–15.
45 49 C.F.R. § 26 (2014).
46 Doc. No. 1.
47 Doc. No. 25.
48 FED. R. CIV. P. 56(a).
49 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
50 Westfall v. Luna, 903 F.3d 534, 546 (5th Cir. 2018) (quoting Anderson, 477 U.S. at 248).
51 Lexon Ins. Co. v. Fed. Deposit Ins. Corp., 7 F.4th 315, 321 (5th Cir. 2021).
The party moving for summary judgment bears the initial burden of
identifying the evidence “which it believes demonstrate[s] the absence of a genuine
[dispute] of material fact,” but need not necessarily support its motion with
“materials negating the opponent’s claim.”52 The nonmoving party must “go beyond
the pleadings and establish ‘specific facts showing that there is a genuine [dispute]
for trial.’”53 “Summary judgment is not foreclosed by some metaphysical doubt as to
the material facts, by conclusory allegations, by unsubstantiated assertions, or by
only a scintilla of evidence.”54
IV. Analysis
In the operative pleading, Ibarra asserts three claims and Raquel asserts one.
Ibarra asserts a (1) breach of contract claim and alleges that Jacobs breached the
contract in eight different ways. Ibarra also asserts claims for (2) money had and
received and/or unjust enrichment and (3) fraudulent inducement. Raquel asserts a
tortious interference with contract claim.
A. Supplemental Jurisdiction
Ibarra and Raquel urge the Court to exercise its jurisdiction over only Ibarra’s
breach of contract claim based on Jacobs’s alleged violation of 49 C.F.R. § 26, which
is the claim that the Court previously found to provide federal jurisdiction over this
case. Ibarra and Raquel want the Court to remand the rest of the state-law-based
52 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also FED. R. CIV. P. 56(c)(1).
53 McWhirter v. AAA Life Ins. Co., 622 F. App’x 364, 365 (5th Cir. 2015) (alteration in original)
(quoting Celotex, 477 U.S. at 324).
54 Lexon Ins. Co., 7 F.4th at 322 (cleaned up).
claims for the state court to decide. Jacobs urges the court to exercise its
supplemental jurisdiction to rule on all claims.
The Court agrees with Jacobs. At least three of the four factors outlined in 28
U.S.C. § 1367(c) governing when a district court may decline to exercise supplemental
jurisdiction counsel against declining to do so here. That statute allows a district
court to decline to exercise its supplemental jurisdiction if “(1) the claim raises a novel
or complex issue of State law, (2) the claim substantially predominates over the claim
or claims over which the district court has original jurisdiction, (3) the district court
has dismissed all claims over which it has original jurisdiction, or (4) in exceptional
circumstances, there are other compelling reasons for declining jurisdiction.” The
plaintiffs’ state-law claims raise neither novel nor complex issues of state law, they
do not predominate over the breach of contract claim based on Jacobs’s alleged
violations of 49 C.F.R. § 26, and there are no exceptional circumstances.
Finally, the “common law factors of judicial economy, convenience, fairness,
and comity” also weigh in favor of exercising supplemental jurisdiction here.55 This
case is over four years old and in its fourth iteration between state court and federal
court. The Court will exercise its supplemental jurisdiction over all of Ibarra’s and
Raquel’s state-law claims.
B. Breach of Contract Claim
Ibarra’s first claim against Jacobs is for breach of the joint venture contract.
Ibarra alleges that Jacobs breached the contract in eight different ways. A claim for
55 Wilson v. Tregre, 787 F.3d 322, 326 (5th Cir. 2015) (cleaned up).
breach of contract “requires proof of the following elements: (1) a valid contract,
(2) performance or tendered performance by the plaintiff, (3) breach of the contract
by the defendant, and (4) damages sustained by the plaintiff as a result of the
breach.”56
i. Allocation of Work
Ibarra’s first claim of breach is that Jacobs “fail[ed] to comply with the
contractual provisions for the allocation of work both in amount and timeliness.”57
Ibarra argues that the joint venture contract required Jacobs to allocate to Ibarra not
less than 10% of every invoice throughout the life of the contract and that Jacobs
failed to do that because Ibarra was in fact not given at least 10% of every invoice
(and indeed was not assigned any work at all on some of the TxDOT work
authorizations).
Jacobs argues that Ibarra’s claim fails for several reasons. First, Jacobs
explains that the text of the joint venture agreement did not call on Jacobs to ensure
that Ibarra received not less than 10% of every invoice. Instead, Jacobs quotes the
contract itself, which says that the parties “intended that the proportion of the
Services required under [the eventual TxDOT Contract] that will be authorized and
assigned to Ibarra will be approximately equal to and not less than its Participation
Percentage [10%].”58 According to Jacobs, Ibarra was entitled to approximately and
56 Petras v. Criswell, 248 S.W.3d 471, 477 (Tex. App.—Dallas 2008, no pet.). Neither side of
this dispute contends that any law other than Texas law applies to the state law claims.
57 Doc 1-1 at 20.
58 Doc. No. 5 at 11 (emphasis added).
not less than ten percent of the “services required” over the lifetime of the TxDOT
Contract. “10% [was] a ‘life of the contract’ goal rather than a per-[work
authorization], per-invoice mandate.”59
Second, Jacobs argues that the evidence bears out the truth that the contract
did not require each joint venture partner to receive its participation percentage on
every single invoice. Jacobs notes that Ibarra approved of and signed off on all eleven
work authorizations that TxDOT sent during Ibarra’s time in the joint venture.
While Ibarra got work on five of them, it received no work on six of them.60 And yet
Ibarra approved them all. Moreover, on the work authorizations that assigned Ibarra
at least some work, not all of them gave Ibarra at least 10% of the work.61 Ibarra
approved those too.
Thus, Jacobs contends that Ibarra “waived” any right to contest that it was due
at least 10% on every single work authorization. “Waiver is an affirmative defense
available against a party who . . . engages in intentional conduct inconsistent with
claiming that right.”62 Waiver by conduct “may be established by showing a party’s
prolonged silence or inaction in asserting a known right.”63 “Courts will not find an
implied waiver through a party’s actions unless the intent to waive the party’s right
59 Doc. No. 5 at 35.
60 Doc. No. 5 at 28, 36.
61 Doc. No. 5 at 28. For example, Ibarra received 5.18% ($20,628.74 ÷ $398,348.48) on work
authorization #7.
62 Martin v. Birenbaum, 193 S.W.3d 677, 681 (Tex. App.—Dallas 2006, pet. denied).
63 Id.
is clearly demonstrated by the surrounding facts and circumstances.”64 “Ordinarily,
waiver is a factual issue, but it may be established as a matter of law when the facts
and circumstances are admitted or clearly established.”65
Here, the facts and circumstances are clearly established and undisputed that
Ibarra approved the allegedly problematic invoices over a sustained period of time.
Although Raquel’s communications with TxDOT expressed concern about Ibarra’s
overall share of the work, she never said or even implied that Ibarra was supposed to
get at least 10% on every single invoice. Thus, the Court is inclined to find that
Ibarra’s approving all eleven work authorizations was conduct “inconsistent with
claiming” a right to at least 10% on every invoice and thus, waiver.66
In response to this evidence, Ibarra argues that it approved the work
authorizations under “duress,” posits that Jacobs would have “threat[ened]” Ibarra if
Raquel had requested changes to the work authorizations, and asserts that Jacobs
lied to Ibarra by leading Ibarra to believe that TxDOT required fast approval. But
Ibarra submits no evidence of any such “threats,” nor any evidence that Ibarra ever
attempted to initiate discussions about the allocation of work on any particular work
authorization or invoice, or that Ibarra refused to approve an invoice or work
authorization unless and until it was granted 10% of the work. This is an
64 Id.
65 Id. (cleaned up).
66 Id.
unsubstantiated assertion the Court must reject.67 Jacobs has shown an absence of
any genuine dispute as to any material fact on waiver.
Third, even if Ibarra did not waive its alleged right to have at least 10% of
every invoice, Jacobs argues that the parties did not understand any joint venture
partner to have a right to its participation percentage on every single invoice. Jacobs
cites the deposition testimony of Rodin, a Director at TxDOT. He testified that it is
normal for fewer than all joint venture partners to be on any given work
authorization: “Every work authorization is different, and it uses different team
members. There’s gonna be work authorizations that only Jacobs may be needed on.
There’s gonna be work authorizations that—that Ibarra and NAK may only be needed
on. . . . It’s just the nature of the work.”68
Jacobs submits the deposition testimony of Ian Alderson, one of the joint
venture’s project managers. Alderson testified:
[T]he work authorizations are sometimes tied to specific tasks, and
sometimes they’re more of an ongoing nature. And so at any point in
time on a five-year contract, the allocation of work between the partners
would be contingent on the work that has been directed in the executed
work authorizations. So in my experience working as a Program
Manager [. . .] is that you try as hard as you can to make a good-faith
effort to give everybody their committed share by the end of the contract.
It’s not always able to do that in a perfectly linear manner.69
Jacobs submits the deposition testimony of Nathelyne Kennedy, whose firm
(NAK) was the other DBE joint venture partner that, like Ibarra, had a 10%
67 Lexon Ins. Co., 7 F.4th at 322.
68 Doc. No. 5 at 28.
69 Id. at 35.
participation percentage. Kennedy testified that she never thought that NAK would
get “10 percent of [each] invoice;” rather, she viewed it as “a five-year contract and so
it’s my understanding that we would get 10 percent throughout, by the end of the five
years.”70 Kennedy explained: “we are prime on a lot of projects. That’s just the way—
they don’t always work. They don’t always work 10 percent each time there is an
invoice. . . . [T]he percentages are the goal. . . . [S]ometimes it comes up to be above
it, and sometimes it comes below it.”71
Raquel Ibarra is the only individual involved with the joint venture who
testified that she thought that the contract required that Ibarra get at least 10% of
every invoice. Her only basis was the contract’s “Service Authorization” provision.
That provision requires that “changes in the allocation of Services among the Parties”
had to be, among other things, “documented.”72 Ibarra says in its response to Jacobs’s
motion for summary judgment: “If, like JACOBS would have it, JACOBS could
allocate work in any amounts it wanted throughout the contract, then this provision
would be meaningless since there would be no point at which ‘a change’ could be
recognized or defined in the allocations of services to the partners.”73 In other words,
Ibarra interprets the “Service Authorization” provision as requiring an elaborate
approval process every time that Ibarra was assigned anything less than 10% of any
invoice. So the “Service Authorization” provision supports Ibarra’s argument only if
70 Id. at 36.
71 Id.
72 Id.at 35.
73 Doc. No. 27 at 24.
you also buy Ibarra’s interpretation that it was entitled to at least 10% of every
invoice.
But the Court doesn’t buy it. As the contract’s text and the evidence reveal,
these provisions refer to the “services provided” over the life of the contract. The
parties agreed to “intend[]” that Ibarra receive “approximately equal to and not less
than” its participation percentage (10%) of services provided over the life of the
contract.74 The relevant provisions do not speak of individual invoices or work
authorizations; they speak in a more general sense, of “services provided” under the
eventual TxDOT contract. The parties could have agreed to more specific or different
terms, but they didn’t. And, as explained above, the parties also acted as though they
were entitled to their respective participation percentages over the life of the
contract.75
Does that mean, as Ibarra contends, that the “Service Authorization” provision
is rendered meaningless? No. It means that, if the parties wanted to “change[] the
allocation of services” to which Ibarra was entitled—approximately equal to and not
74 Id. at 11 (emphasis added).
75 Under principles of textualism, the Court believes the contract is sufficiently clear that there
is no need to resort to parole evidence like the conduct of the parties. But given that Ibarra believes
that beyond-the-contract evidence (like Raquel’s testimony) helps its claim, the Court is compelled to
demonstrate it does the opposite.
less than 10%—that change would have to comply with the provision’s
requirements.76
Finally, in Ibarra’s petition, it alleges that “JACOBS failed to make good faith
efforts [under 49 C.F.R. § 26] to ensure that IBARRA and NAK were provided specific
and independent work assignments and ensure that IBARRA and NAK received ‘no
less than 10%’ participation each.”77 This allegation is one on which the Court based
its decision to deny the motion to remand, finding that Ibarra’s petition presented a
federal question.
Jacobs argues that there is no genuine dispute of material fact as to this claim.
Jacobs explains that the “goal” for DBE participation was 11.7% of the TxDOT
Contract amount and that, near the time of Ibarra’s termination, DBE participation
under the contract at that point was approximately 31%. Thirty-one percent also
exceeded the DBE “commitment,” which was 28.7%. When the report showing these
percentages was made, as explained above, Ibarra had received about 7% of the total
contract. In response to Jacobs’s motion, Ibarra argues that Jacobs did not make
“good faith” efforts under 49 C.F.R. § 26 to meet the DBE goal, the DBE commitments,
or the joint venture contract’s work allocation to Ibarra of “approximately equal to
and not less than 10%.”
Just as Jacobs successfully established an absence of a genuine dispute of
material fact as to whether it breached its “inten[tion]” to give Ibarra “approximately
76 Id. at 35.
77 Doc. No. 1-1 at 21.
equal to and not less than”78 10% over the life of the contract, Jacobs has also
successfully shown as a matter of law that it did not fail to make good-faith efforts
not to breach as to the allocation of work. And, just as Ibarra waived its right to
pursue the argument that every invoice should have given it 10%, Ibarra waived its
right to pursue this argument. Approving all eleven invoices without requesting any
changes is conduct inconsistent with believing that Jacobs was failing to make a good-
faith effort to meet the contract’s goals—whether rooted in the joint venture contract
directly or, by reference or incorporation, § 26. In addition, as discussed above, Jacobs
has established that the contract meant 10% over the lifetime of the contract. When
Ibarra materially breached the contract (discussed below), it cut short its window to
obtain 10% over the life of the contract.
No reasonable jury would conclude—contrary to the contract’s text and the
parties’ conduct—that Ibarra was due approximately equal to and at least 10% of
every invoice and/or work authorization, or that Jacobs failed to make good-faith
efforts with respect to the work allocation. Thus, Jacobs is entitled to summary
judgment on the allocation-of-work theory for Ibarra’s breach of contract claim.
ii. Failure to Mentor
Ibarra’s next theory undergirding its breach of contract claim is that the joint
venture contract required Jacobs to “mentor” Ibarra and that Jacobs failed to do so.79
Ibarra admits that the contract “does not specifically innumerate [sic] a duty” for
78 Doc. No. 6-13 at 8.
79 Doc. No. 1-1 at 20.
Jacobs to mentor Ibarra. Instead, Ibarra relies on two provisions that, Ibarra says,
imply a duty to mentor. One is the “Jacobs Scope of Services Component,” which
states that:
In performing the Jacobs Scope of Services [. . .] Jacobs agrees to be
bound to [the joint venture] and to assume toward the joint venture all
the obligations, liabilities, responsibilities, conditions, requirements,
and duties that the [joint venture . . .] assumes toward or is bound to
[TxDOT].80
The obligations that the joint venture owed to TxDOT were defined by the
TxDOT Contract, which in turn allegedly incorporated at least some of the terms of
49 C.F.R. § 26. And § 26.1 states that one “objective” of the federal DBE program is
“[t]o assist the development of firms that can compete successfully in the marketplace
outside the DBE program.” Ibarra says that § 26.1 imposed a duty to mentor, but
Ibarra does not explain how. Lacking any textual evidence, it is not at all clear to the
Court that § 26 imposes any duty to mentor, much less that any such duty is imposed
on Jacobs as opposed to, for example, TxDOT, as the state agency that receives the
DBE program funding.
The second contractual provision that Ibarra argues imposed on Jacobs a duty
to mentor is the “Defaulting Party” provision. That provision states, in pertinent
part, that a “[m]aterial breach[] include[s] . . . a Party’s . . . failure to perform in
accordance with generally accepted standards or in a manner satisfactory to
[TxDOT], or failure to provide adequate management and supervision.”81 Ibarra
80 Doc. No. 31 at 13.
81 Doc. No. 31 at 14.
asserts that Jacobs breached this provision but provides no evidence that Jacobs
“fail[ed] to perform . . . in a manner satisfactory to [TxDOT]” or otherwise defaulted
by not mentoring Ibarra.
Ibarra cites the testimony of Holtz, who testified that her “understanding” was
that “part of the process” of being “DBE partners . . . would involve Jacobs mentoring
Kennedy and Ibarra.” Ibarra does not explain or even argue that Holtz’s
“understanding” was based in the contract between Ibarra and Jacobs (the joint
venture contract). Standing alone, Holtz’s testimony on this point is insufficient to
defeat a motion for summary judgment when the contract contained a merger clause.
The Court will not deny summary judgment when the contract forecloses the failure-
to-mentor argument. So the Court grants summary judgment to Jacobs.
iii. Invoicing Issues
Ibarra’s third, fourth, and fifth theories for its breach of contract claim all
relate to invoicing issues, so the Court will handle them together. Ibarra alleges that
Jacobs breached the joint venture contract by failing “to process Ibarra’s invoices
accurately and timely,” by “altering Ibarra’s invoices without Ibarra’s approval and
against requests from TxDOT,” and by “delaying, failing, or refusing to pay Ibarra
amounts due.”82
However, in its response to Jacobs’s motion for summary judgment, Ibarra did
not mention the invoicing issues or make any argument that the Court should not
grant summary judgment. Ibarra argued that the Court shouldn’t grant Jacobs’s
82 Doc. No. 1-1 at 20.
summary judgment on its other bases for the breach of contract claim, but not as to
these three. Thus, Ibarra forfeited its claims and the Court could grant summary
judgment as unopposed.83
Regardless, however, Jacobs deserves summary judgment because it has met
its “burden of establishing the absence of a genuine [dispute] of material fact.”84
Ibarra submitted no evidence that Jacobs “altered” its invoices other than to ensure
that they conformed to the billing requirements established in the TxDOT Contract
(to which Ibarra agreed). To the extent that some of Ibarra’s invoices were delayed,
it appears that the delay was not Jacobs’s fault. Rather, the evidence is that the
delays were caused by Ibarra’s own freestyling invoicing method, which did not
always comply with TxDOT’s requirements. As explained above, Holtz, Ibarra, and
Jacobs discussed Ibarra’s recurring invoicing errors at the December 2016 meeting,
and the invoicing issues served as the bases for one of the joint venture’s default
letters to Ibarra.
So the Court rejects the invoicing-issues basis for two reasons. First, Ibarra
did not oppose Jacobs’s motion on these grounds. Second, no reasonable jury would
conclude that Jacobs breached the contract with respect to Ibarra’s invoices. Thus,
83 See United States v. Shoup, No. 3:14-CV-4440-N-BK, 2017 WL 4535285, at *3 (N.D. Tex.
Sept. 8, 2017) (Toliver, M.J.) (granting summary judgment for plaintiff on claim on which plaintiff
bore burden of proof, where nonmovant “fail[ed] to respond to Plaintiff’s arguments, challenge
Plaintiff’s evidence, or present controverting evidence of his own”), report and recommendation
adopted, No. 3:14-CV-4440-N-BK, 2017 WL 4516453 (N.D. Tex. Oct. 10, 2017) (Godbey, J.).
84 Hetzel v. Bethlehem Steel Corp., 50 F.3d 360, 362 n.3 (5th Cir. 1995).
Jacobs is entitled to summary judgment on the invoicing-issues basis for Ibarra’s
breach of contract claim.
iv. Racial Discrimination and Retaliation
Ibarra’s sixth and seventh bases for breach of contract are that Jacobs “fail[ed]
or refus[ed] to provide good faith efforts not to discriminate against Ibarra and
NAK.”85 Ibarra argues that 49 C.F.R. § 26 prohibited Jacobs from “intimidat[ing],
threaten[ing], coerc[ing], or discriminat[ing] against” Ibarra “for the purpose of
interfering with any right or privilege secured by [§ 26] or because the individual or
firm has made a complaint, testified, assisted, or participated in any manner in any
investigation, proceeding, or hearing under [§ 26].”86 Ibarra alleges that Jacobs
breached the duties imposed by 49 C.F.R. § 26 and incorporated into the joint venture
contract by discriminating and retaliating against Ibarra on the basis of Raquel’s
race.87
In its motion for summary judgment, Jacobs asserts the affirmative defense
that claim preclusion and/or issue preclusion block Ibarra’s racial discrimination and
retaliation bases for the breach of contract claim.
Jacobs argues that Ibarra’s discrimination and retaliation bases are barred by
claim preclusion under Judge Cummings’s prior order. Claim preclusion has four
elements: “(1) the parties are identical or in privity; (2) the judgment in the prior
action was rendered by a court of competent jurisdiction; (3) the prior action was
85 Doc. No. 1-1 at 20.
86 Id. (partially quoting 49 C.F.R. § 26).
87 Doc. No. 1-1 at 18.
concluded by a final judgment on the merits; and (4) the same claim or cause of action
was involved in both actions.”88 Here, the parties are the same, Judge Cummings
had jurisdiction over the prior case, and he made a final judgment on the merits.
That leaves us with only the fourth element, whether this case involves the same
claim or cause of action.
“In order to determine whether both suits involve the same cause of action,”
the Fifth Circuit “uses the transactional test.”89 Under this test, a prior judgment’s
“preclusive effect extends to all rights of the plaintiff with respect to all or any part
of the transaction, or series of connected transactions, out of which the original action
arose.”90 “The critical issue is whether the two actions are based on the same nucleus
of operative facts.”91
In the prior federal case, Ibarra asserted that Jacobs had violated 42 U.S.C.
§ 1981 by racially discriminating and retaliating against it. Judge Cummings
rejected that claim when ruling on Jacobs’s motion for summary judgment:
Plaintiffs have failed to create a genuine issue of material fact as to any
racial animus that played a role in interfering with [Ibarra’s] ability to
contract. The allegations are simply a repackaging of the alleged breach
of contract claims asserting that a minimum of 10% invoicing was not
allotted to [Ibarra]. . . . The evidence, as noted by Defendant, indicates
that Ibarra signed off on each work order submitted to TXDOT for which
racial discrimination is now alleged. For the reasons argued by
88 Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005).
89 Id.
90 Id.
91 Id. (cleaned up).
Defendant, Plaintiffs have failed to create a genuine issue of material
fact as to racial discrimination or pretext.92
So, Judge Cummings held that Ibarra had no evidence of racial discrimination and
no evidence of retaliation.
Ibarra’s breach of contract claim based on racial discrimination and retaliation
is precluded by Judge Cummings’s prior judgment on the § 1981 claim because the
two claims are indeed based on the same nucleus of operative facts—the parties’
conduct during Ibarra’s tenure on the joint venture. Judge Cummings has already
decided that Ibarra has no evidence of racial discrimination or retaliation, and to side
with Ibarra here, the Court would have to decide that “the prior judgment was in
error.”93 And the Court has no basis to do that, so Ibarra’s argument is barred.94
Ibarra’s response is unavailing. Ibarra argues that Judge Cummings’s
language that the § 1981 claim was “simply a repackaging of the alleged breach of
contract claim” is “dicta” and should not be followed.95 First, the “repackaging”
phrase isn’t what Ibarra should be worried about. Judge Cummings’s holding that
Ibarra had no evidence of racial discrimination or retaliation should be Ibarra’s
concern for res judicata purposes. Second, Ibarra cites no legal authority explaining
why anything in Judge Cummings’s prior order was “dicta.” Ibarra also argues that
the wider scope of § 26’s prohibition on racial discrimination and retaliation means
that Judge Cummings’s holding on its § 1981 claim do not preclude the § 26 claim
92 Ibarra Consulting Eng’rs, Inc., Civil Action No. 3:19-cv-1437, Doc. No. 38 at 2 (N.D. Tex.).
93 Singh, 428 F.3d at 571.
94 Id.
95 Doc. No. 27 at 31 n.40.
here. Again, Ibarra’s problem is its dearth of evidence—not which federal statute
provides more protection.
“Once a movant who does not have the burden of proof at trial makes a properly
supported motion, the burden shifts to the nonmovant to show that a summary
judgment should not be granted.”96 Jacobs has made a properly supported motion,
but Ibarra has failed to carry its burden of “identify[ing] specific evidence in the
record and . . . articulat[ing] the precise manner in which that evidence supports his
or her claim.”97 The Court concludes that Ibarra’s racial discrimination and
retaliation bases for its breach of contract claim are precluded by Judge Cummings’s
prior order. Because the Court holds thus, it need not decide whether the bases are
also barred by issue preclusion.
v. Termination without Justification
Ibarra’s eighth and final breach of contract argument is that Jacobs
“terminat[ed] Ibarra without justification and in violation of the terms of” the joint
venture contract.98 As previewed above, the contract states that “[m]aterial
breaches include, but are not limited to . . . failure to perform in accordance with
generally accepted standards or in a manner satisfactory to [TxDOT].”99 The contract
also states that a party is in default if the party “materially breaches any of its
obligations hereunder and fails to cure such breach within fifteen (15) days after
96 Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
97 Id.
98 Doc. No. 1-1 at 20.
99 Doc. No. 6-13 at 205.
written notice thereof.”100 Finally, the contract empowered the Board of Control to
“determine and act upon the various matters, expressly or impliedly contained in
other sections of this Agreement which require decision by the Board of Control.”101
Jacobs contends that Ibarra’s unauthorized communications with TxDOT and
its recurrent invoicing issues were material breaches that authorized Jacobs and
NAK to expel Ibarra from the joint venture. Judge Cummings noted in his prior order
that “the record is clear that Raquel Ibarra’s constant contacting of TXDOT officials
was causing problems for the joint venture and is a legitimate, non-discriminatory
reason for any action taken in response thereto.”102
The Court agrees with Judge Cummings. As explained above, TxDOT
complained on multiple occasions about Raquel and Ibarra’s speaking to TxDOT and
not going through the program manager. Ibarra clearly behaved “in a manner [not]
satisfactory to [TxDOT]” and thus materially breached the contract.103 Ibarra’s
communications also violated the plain text of the contract, which states that “the
Project Manager shall have primary responsibility for . . . contact and correspondence
with [TxDOT] . . . and contact and correspondence with any third party on matters
arising under [the TxDOT Contract] or this Agreement.”104
100 Id.
101 Id. at 4.
102 Ibarra Consulting Eng’rs, Inc., Civil Action No. 3:19-cv-1437, Doc. No. 38 at 2.
103 Doc. No. 6-13 at 205.
104 Id. at 6.
Ibarra also invoiced “in a manner [not] satisfactory to [TxDOT].”105 As
explained above, Ibarra had recurring problems with its invoicing. TxDOT and
Jacobs had to redline and edit several of Ibarra’s invoices because they did not comply
with TxDOT standards. After the errors persisted, the Board of Control issued a
notice of default. The default letter reminded Ibarra of Jacobs’s and TxDOT’s efforts
to train Ibarra and bring it into compliance with TxDOT policies. The default letter
explained that Ibarra had submitted invoices for “administrative work at senior or
[project manager] labor classifications, . . . charges for non-allowable expenses, and
excessive hours for invoice review.”106 And yet Ibarra “insisted on their submission,
disregarding TxDOT invoicing requirements and expectations.”107 Those “invoices
were submitted and, as forewarned, rejected by [TxDOT].”108 “Ibarra’s repeated
refusal or inability to comply with TxDOT requirements has jeopardized prompt
payment to the [joint venture] partners and subconsultants [and has] caused friction
with and excessive work for TxDOT staff . . . .”109 “[Y]our actions constitute a material
breach . . . .”110
Importantly, it wasn’t only Jacobs that decided to expel Ibarra from the joint
venture. NAK—the other DBE joint venture partner—joined Jacobs and agreed that
the joint venture should terminate Ibarra. Kennedy testified that she “knew that
105 Id. at 205.
106 Id. at 144.
107 Id.
108 Id.
109 Id. at 145.
110 Id.
TxDOT didn’t like what was going on” with Ibarra’s communications.111 Kennedy
“agreed that Ibarra should be held in default.”112 Specifically, Kennedy testified that
Ibarra defaulted because “TxDOT didn’t like it. . . . No one was supposed to be going
to TxDOT without—you know . . . without the project manager and the joint venture
team.”113
While determining if a breach is material can often be a fact-bound question,
it is not here. The parties defined material breaches to be performance that did not
satisfy TxDOT. No reasonable jury would conclude that Ibarra had not materially
breached the contract and thus that the joint venture was not justified in terminating
Ibarra. Thus, Jacobs is entitled to summary judgment on the unjust-termination
theory for Ibarra’s breach of contract claim.
C. Money Had and Received Claim
Ibarra’s second cause of action is for money had and received.114 Money had
and received is an equitable doctrine designed to prevent unjust enrichment.115 A
claim for money had and received is intended to permit a party to recover on a debt
that is not based on an express contract, but rather on a contract implied by law.116
111 Doc. No. 6-3 at 6.
112 Id.
113 Id.
114 Doc. No. 1-1 at 20.
115 Edwards v. Mid-Continent Office Distribs., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008,
pet. denied).
116 Friberg-Cooper Water Sup. v. Elledge, 197 S.W.3d 826, 831 (Tex. App.—Fort Worth 2006),
rev’d on oth. gr., 240 S.W.3d 869 (2007).
“There can be no recovery under a contract implied by law, however, where a valid
express contract governing the subject matter exists.”117
Ibarra alleges that Jacobs has “compensation . . . that belongs in equity to
Ibarra . . . through the [joint venture] and the [TxDOT Contract] . . . that Ibarra
performed but Jacobs had yet to provide Ibarra before its termination of Ibarra.”118
Of course, as Ibarra acknowledges, the reason that Jacobs (or TxDOT) ever
compensated Ibarra under the TxDOT Contract is because the joint venture
contract—directly at issue here—required it to. As explained above, the joint venture
contract stated that the parties intended for Ibarra to receive approximately equal to
and not less than 10% of the contract amount over the lifetime of the contract. The
joint venture contract’s “subject matter” plainly governs Ibarra’s entitlement to
compensation under the TxDOT Contract. Therefore, Ibarra has “no recovery for
unjust enrichment” and the Court grants summary judgment to Jacobs on this
claim.119
D. Fraudulent Inducement Claim
Ibarra’s third and final cause of action is for fraudulent inducement. Ibarra
alleges that Jacobs “made numerous . . . material representations to induce Ibarra to
enter into the [joint venture] contract for the purpose of pursuing, obtaining, and
117 Oldham v. ORIX Fin. Servs., Inc., No. 3:05-cv-2361-M, 2007 WL 530202, at *4 (N.D. Tex.
Feb. 21, 2007) (Lynn, J.) (cleaned up) (granting summary judgment, and determining that because a
contract existed, despite not having been breached, it would be a “perverse result” to permit equitable
recovery).
118 Doc. No. 1-1 at 22.
119 Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000).
performing on the [TxDOT Contract].”120 Ibarra alleges that Jacobs promised that
“Ibarra would receive no less than 10% of the [TxDOT Contract] participation” and
that “Jacobs would mentor Ibarra.”121 And Ibarra alleges that, when Jacobs made
these promises, it “knew” that they were “false or made recklessly . . . . with the intent
to induce Ibarra to agree to join the [joint venture].”122 Finally, Ibarra alleges that
the false promises harmed it because it “did not receive” the promised terms “and
Jacobs had no intent of providing the[] promised terms.”123
To prove a claim for fraudulent inducement, the plaintiff must prove “(1) a
material misrepresentation, (2) made with knowledge of its falsity or asserted
without knowledge of its truth, (3) made with the intention that it should be acted on
by the other party, (4) which the other party relied on and (5) which caused injury.”124
Where a fraud claim is based on “a promise to perform in the future, in addition to
the above elements, it is necessary to prove facts that the promise was made with a
present intent not to perform.”125
“[A] party’s intent is determined at the time the party made the
representation,” but intent may also “be inferred from the party’s subsequent acts
120 Doc. No. 1-1 at 22.
121 Id. In its petition, Ibarra asserted two other alleged misrepresentations, but Ibarra is now
pursuing only the mentoring and 10%-allocation theories.
122 Id. at 22–23.
123 Id. at 23.
124 Mercedes-Benz USA, LLC v. Carduco, Inc., 583 S.W.3d 553, 557 (Tex. 2019), reh’g denied
(Oct. 18, 2019) (cleaned up).
125 Gillum v. Republic Health Corp., 778 S.W.2d 558, 571 (Tex. App.—Dallas 1989, no pet.).
after the representation is made.”126 Because “intent to defraud is not susceptible to
direct proof, it invariably must be proven by circumstantial evidence.”127
Consequently, it “is a fact question uniquely within the realm of the trier of fact
because it so depends upon the credibility of the witnesses and the weight to be given
to their testimony.”128
While “the mere failure to perform a contract is not evidence of fraud,”129
failure to perform “is a circumstance to be considered with other facts to establish
intent.”130 “Slight circumstantial evidence . . . is sufficient to support a finding of
fraudulent intent” “when considered with the breach of promise to perform.”131 “[A]
party’s denial that he ever made a promise is [also] a factor showing no intent to
perform when he made the promise.”132
Jacobs first argues that the contract’s merger clause prohibits Ibarra’s claim
for fraudulent inducement. While “a statement disclaiming reliance is sufficient to
waive fraud-based claims”133 including fraudulent inducement, “pure merger
clauses”134 are generally not sufficient. Rather, the merger clause must “express[]
126 Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex. 1986).
127 Id. at 435.
128 Id.
129 Formosa Plastics Corp., 960 S.W.2d at 48.
130 Spoljaric, 708 S.W.2d at 435.
131 Id.
132 Id.
133 Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d 170, 178 (5th Cir. 2016).
134 Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 334 (Tex. 2011).
clear and unequivocal intent to disclaim reliance” to “ha[ve] the effect of precluding
claims for fraudulent inducement.”135
Here, the joint venture contract stated: “This Agreement represents the entire
agreement between the Parties . . . and it supersedes all prior negotiations,
representations, oral or written agreements which relate to the subject matter
hereof.”136 There is no express disclaimer of reliance, so this term does not preclude
Ibarra’s fraudulent inducement claim.
Next, Jacobs argues that Ibarra’s fraudulent inducement claim fails because
Ibarra has failed to provide evidence of any misrepresentation—especially evidence
of a promise that Jacobs had no intent to perform at the time the promise was made.
As evidence of the required present-intent-to-not-perform, Ibarra has Raquel’s
deposition testimony. Raquel testified that Jacobs’s employee Greg Janes made the
mentoring and no-less-than-10% promises to Raquel. Raquel testified: “It is my belief
that several of the things that were told to us when [Janes] was trying to convince us
to be a joint venture partner never came to fruition. It is our belief that their intent
was for it not to come to fruition.”137
This conclusory assertion is insufficient to defeat Jacobs’s motion for summary
judgment on the fraudulent inducement claim. Raquel testified simply that she
“believe[ed]” that Jacobs had no intent to mentor Ibarra or provide at least 10% of the
135 Id.
136 Doc. No. 6-13 at 20.
137 Doc. No. 5 at 47.
contract amount to Ibarra. That is rank speculation, not “slight circumstantial
evidence.”138
In response to Jacobs’s motion for summary judgment, Ibarra also argues that
the fraudulent inducement claim should proceed because, Ibarra says, Jacobs denies
ever making promises to mentor Ibarra and give Ibarra 10% of the TxDOT contract
amount. As Ibarra notes, such evidence would counsel in favor of finding fraudulent
inducement.139 But Jacobs affirmatively states that it did intend to give Ibarra
approximately equal to and not less than 10% of its “participation” in the TxDOT
contract.140 Although Jacobs does deny ever making a promise to mentor Ibarra (as
discussed extensively above), Ibarra still has failed to introduce even slight
circumstantial evidence that, when Jacobs allegedly promised to mentor Ibarra,
Jacobs had no intent to do so.
Thus, Ibarra has failed to establish a dispute as to any material fact on its
fraudulent inducement claim and Jacobs is entitled to judgment as a matter of law.
E. Tortious Interference with Contract
Raquel’s only claim against Jacobs is for tortious interference with contract.
Specifically, Raquel alleges that she “had a valid contractual relationship with Ibarra
as its president and owner,” that Jacobs “engaged in racially discriminatory or
138 Spoljaric, 708 S.W.2d at 435. Cf. Ramachandran v. Jain, No. 3:18-CV-00811-X, 2022 WL
102612, at *5 (N.D. Tex. Jan. 11, 2022) (Starr, J.) (denying defendant summary judgment on
fraudulent inducement claim where plaintiff testified that defendant’s actions evinced a present lack
of intent to fulfill promises by, for example, threatening economic harm if the plaintiff did not accept
less favorable terms).
139 Spoljaric, 708 S.W.2d at 435.
140 Doc. No. 1-1 at 22. See Doc. No. 5 at 47.
retaliatory harassment and disparate treatment of” Ibarra and Raquel, and that
Jacobs’s behavior “damaged” Raquel’s “desire to work cooperatively” with the joint
venture partners.141 Raquel also alleges that Jacobs damaged her emotional health
and wellbeing and economically harmed her.142
To prevail, Raquel must show: (1) the existence of a valid contract between
herself and Ibarra; (2) willful and intentional interference with that contract;
(3) injury proximately caused by that interference; and (4) actual damage or loss.143
First, Jacobs argues that Raquel has failed to show that she had a contract
with Ibarra. While Raquel admits that she has no written contract with Ibarra, she
argues in response to Jacobs’s motion that she nevertheless has a “terminable at-will
employment contract” with Ibarra and that such an “employment relationship” can
serve as the basis for a tortious interference claim.144
But Raquel’s petition states only that she has a contract with Ibarra as its
“president and owner”—not as its “employee.”145 So that’s the first problem, because
“district courts do not abuse their discretion when they disregard claims or theories
of liability not present in the complaint and raised first in a motion opposing
summary judgment.”146 In addition, Raquel has provided the Court with no legal
authority allowing an inference that her serving as an owner makes her an employee.
141 Doc. No. 1-1 at 23.
142 Id. at 24.
143 Cmty. Health Sys. Prof’l Servs. v. Hansen, 525 S.W.3d 671, 689 (Tex. 2017).
144 Doc. No. 27 at 47; see also Doc. No. 6-1 at 48 at 363:23–25, 364:1–11.
145 Doc. No. 1-1 at 23.
146 De Franceschi v. BAC Home Loans Servicing, L.P., 477 F. App’x 200, 204 (5th Cir. 2012).
And Raquel has provided no evidence showing that she is in fact a “terminable, at-
will” employee, which is what the cases cited by Raquel call for.147 Raquel points the
Court to two pages of an exhibit that lists “Raquel Ibarra” under the heading
“Employee Name” but does not otherwise explain or elaborate in any detail how or
why Raquel is a terminable, at-will employee of Ibarra.148
Second, even if the Court were to find that Raquel has shown a valid contract
with Ibarra, her claim fails for at least one other reason. Raquel presented the Court
with absolutely no evidence that she suffered “actual harm” from Jacobs’s allegedly
tortious interference. In response to Jacobs’s motion, Raquel states that “[i]t is
reasonable to infer that Jacobs’s decision to terminate Ibarra from the [joint venture]
had the intended consequence of harming both Ibarra the company and Ibarra
[Raquel] the person through both the immediate removal of the prospect of any
additional work for the remaining scheduled three years on the TxDOT Contract as
well as the reputational and personal harms to both IBARRA and Ibarra [Raquel].”
She also states that she “suffered from a loss of income due to Jacobs’s intended
tortious actions.”
In support of these “reasonable infer[ences],” Raquel cites to no evidence,
deposition testimony, affidavits, or anything else. The party “opposing summary
judgment is required to identify specific evidence in the record and to articulate the
precise manner in which that evidence supports his or her claim.”149 The Court will
147 See, e.g., Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex. 1989).
148 Doc. No. 6-13 at 110–11.
149 Ragas, 136 F.3d at 458.
not “sift through all the record in search of evidence.”!5° Thus, the Court grants
Jacobs summary judgment on Raquel’s tortious inference with contract claim.
V. Conclusion
The Court GRANTS Jacobs’s motion for summary judgment in all respects.
The Court DISMISSES WITH PREJUDICE Ibarra and Raquel’s claims.
IT ISSO ORDERED this 30th day of March, 2022.
BRANTLEY STARR
UNITED STATES DISTRICT JUDGE
150 Td. (cleaned up).
45