text:
    TRINITY UNIVERSAL INSURANCE COMPANY, Appellant, v. Rebecca L. DAY and Texas Workers Compensation Commission, Appellees.
    No. 08-03-00414-CV.
    Court of Appeals of Texas, El Paso.
    Aug. 26, 2004.
    Rehearing Overruled Sept. 15, 2004.

      Darryl J. Silvera, Silvera & Associates, Dallas, for Appellant.
    Kevin B. Miller, Law Office of Miller, Henderson & Bicklein, Odessa, for Rebecca L. Day.
    Kevin Heyburn, Asst. Atty. Gen., Austin, for Texas Workers’ Compensation Commission.
    Before Panel No. 1 LARSEN, McCLURE, and CHEW, JJ.
   OPINION

DAVID WELLINGTON CHEW, Justice.

The opinion dated July 22, 2004, is hereby withdrawn and the following is the opinion of this Court.

Appellant Trinity Universal Insurance Company (“Trinity”) appeals from a judgment in favor of Appellees Rebecca L. Day and Texas Workers’ Compensation Commission (“TWCC”). On appeal, Trinity raises two related issues: (1) whether Trinity timely filed its Request for Review with the Texas Workers’ Compensation Commission Appeals Panel, giving the trial court jurisdiction; and (2) whether the trial court improperly granted the plea to the jurisdiction filed by the TWCC. We reverse and remand.

On November 6, 1997, Rebecca Day was injured while working at the Center for Children and Families in Midland, Texas. She was hit on top of the head by a fifing cabinet drawer. She was certified at maximum medical improvement, was assigned an impairment rating, and applied for supplemental income benefits (“SIBS”) through the Texas Workers’ Compensation Commission. Trinity Universal Insurance Company was the insurance carrier for Ms. Day’s place of employment.

A benefit contested hearing was held on July 11, 2002 to determine whether Ms. Day was entitled to SIBS. A Contested Case Hearing Decision and Order was signed by the hearing officer and received by TWCC on July 19, 2002. It is undisputed that on July 24, 2002, the decision was issued from TWCC and mailed to the carrier’s attorney of record. It is also undisputed that on the same day, TWCC placed this decision in the box of the Austin representative for Trinity. The decision was stamped by the Austin representative as having been received July 24, 2002. The decision was actually received by the carrier’s attorney on July 26, 2002.

The carrier filed its appeal with the TWCC Appeals Panel on August 15, 2002. The TWCC Appeals Panel found that Trinity had not timely filed its Request for Review with the TWCC Appeals Panel. Trinity filed a petition for judicial review on October 28, 2002. TWCC intervened in this suit by fifing a plea to the jurisdiction on February 3, 2003. After a hearing was held on the TWCC’s plea to the jurisdiction on May 16, 2003, the trial court found that Trinity’s appeal to the TWCC was not timely, and therefore, it had no jurisdiction over the case. Trinity now timely files this appeal.

In Issue One, Trinity argues that it timely filed its Request for Review with the TWCC Appeals Panel, and therefore, the trial court had jurisdiction over the case. In Issue Two, Trinity contends that the trial court improperly granted TWCC’s plea to the jurisdiction because Trinity perfected its right to appellate review.

Whether the trial court properly denied the plea to the jurisdiction is a pure question of law that we examine under a de novo standard of review. Cornyn v. Akin, 50 S.W.3d 735, 736-37 (Tex.App.-El Paso 2001, no pet.). A plea to the jurisdiction is a dilatory plea by which a party contests the trial court’s authority to determine the subject matter of the cause of action. See, e.g., State v. Benavides, 772 S.W.2d 271, 273 (Tex.App.-Corpus Christi 1989, writ denied). Its purpose is “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 plaintiff has the burden to allege facts affirmatively showing that the trial court has subject-matter jurisdiction to hear the cause. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). On appellate review, we look to the allegations in the pleadings, accept them as true, and construe them in favor of the pleader. Tex. Ass’n of Bus., 852 S.W.2d at 446; City of Saginaw v. Carter, 996 S.W.2d 1, 3 (Tex.App.-Fort Worth 1999, pet. dism’d w.o.j.). We also consider evidence relevant to the jurisdictional issue that was before the trial court when it ruled on the plea. See Bland Indep. Sch. Dist., 34 S.W.3d at 555.

At issue in this case is 28 TEX.ADMIN.CODE § 102.5(d)(2004) which states:

For purposes of determining the date of receipt for those written communications sent by the Commission which require the recipient to perform an action by a specific date after receipt, unless the great weight of evidence indicates otherwise, the Commission shall deem the received date to be five days after the date mailed; the first working day after the date the written communication was placed in a carrier’s Austin representative box located at the Commission’s main office in Austin as indicated by the Commission’s date stamp; or the date faxed or electronically transmitted.

Trinity argues that because the TWCC’s Decision and Order was placed in its Austin representative’s box on July 24, 2002, pursuant to 28 TEX.ADMIN.CODE § 102.5(d), Trinity should be deemed to have received the TWCC’s Decision and Order on July 25, 2002. Ms. Day and TWCC argue that Trinity had actual notice on July 24, 2002, and therefore, the deemed date provision is inapplicable. Having reviewed the entire record, we agree with Trinity’s assertions.

According to the 28 TEX.ADMIN.CODE § 102.5(d), unless the great weight of the evidence indicates otherwise, the deemed date of receipt should be the first working day after the date the written communication was placed in a carrier’s Austin representative box located at the Commission’s main office in Austin as indicated by the Commission’s date stamp. In this case, there is no dispute that the TWCC’s Decision and Order was placed in Trinity’s Austin representative’s box on July 24, 2002. Therefore, applying 28 TEX.ADMIN.CODE § 102.5(d), the date deemed received would be July 25, 2002. See 28 TEX.ADMIN.CODE § 102.5(d).

Ms. Day and TWCC would have this Court find that Trinity received actual notice of the TWCC’s decision on July 24, 2002, as evidenced by the received stamp and Austin representative’s signature on the order. The only case dealing with 28 TEX.ADMIN.CODE § 102.5(d) is Tex. Workers’ Comp. Comm’n v. Harris County, Texas, 132 S.W.3d 139 (Tex.App.-Houston [14th Dist.] 2004, no pet.h.). In that case, TWCC made the argument that the date of actual notice, and not the deemed date of receipt was the applicable date. See Tex. Workers’ Comp. Comm’n, 132 S.W.3d at 144. Even though the facts of Harris County differ from this case, we agree with that court’s construction of Rule 102.5(d). Id. at 144-45. A contrary construction would eviscerate the deemed receipt date and we hold that the deemed date of receipt in this case is applicable, and therefore, Trinity was deemed to have received the TWCC’s Decision and Order on July 25, 2002. Thus, under 28 TEX.ADMIN.CODE § 102.5(d), Trinity timely filed its appeal. We sustain Issues One and Two.

Accordingly, we reverse and remand this matter to the trial court for further proceedings consistent with this opinion.

      . The trial court found that the deadline for Trinity to filed its appeal to the TWCC Appeals Panel was on or before August 14, 2002.


source: Caselaw Access Project

author: Justice GARZA.

license: Public Domain

text:
    Jerry & Elva BRESHEARS, Appellants, v. STATE FARM LLOYDS, Appellee.
    No. 13-03-580-CV.
    Court of Appeals of Texas, Corpus Christi-Edinburg.
    Aug. 27, 2004.

      Bradford M. Condit, Corpus Christi, for appellants.
    Paul Dodson, Huseman & Pletcher, Corpus Christi, for appellee.
    Before Chief Justice VALDEZ and Justices RODRIGUEZ and GARZA.
   MEMORANDUM OPINION

Memorandum Opinion by

Justice GARZA.

Jerry and Elva Breshears appeal from a summary judgment granted in favor of State Farm Lloyds in a suit for breach of an insurance contract and violations of the insurance code. Both parties filed traditional motions for summary judgment, and State Farm also filed a no-evidence motion for summary judgment. The Breshears contend the trial court erred in granting State Farms’s summary judgment motion and denying their summary judgment motion. Because we conclude that there was no breach of contract or any violation of the insurance code, we affirm.

Facts

The Breshears are homeowners who have a Texas Homeowners “B” policy with State Farm. The Breshears’s home required extensive plumbing repairs, which were conducted by Gulf Coast Construction and Restoration (“GCC”). GCC billed the Breshears $23,735.92 for its work, and the Breshears filed a claim with State Farm for that amount. State Farm received notice of the Breshears’s claim and, pursuant to the terms of the policy, acknowledged their claim and began the investigation the following day. Two weeks later, State Farm sent the Breshears an estimate of $18,742.15 for the value of the work performed along with payment of $13,502.51 (the estimate less their deductible and some prior credits).

An oral contract between GCC and the Breshears provided that payment to GCC from the Breshears would only be in the amount paid by State Farm. In other words, the Breshears had no obligation to pay GCC any more than they received from State Farm and would only have to pay GCC additional amounts if they recovered more money from State Farm.

Regardless of this agreement, the Breshears filed suit against State Farm, alleging that it breached its insurance contract and violated provisions of the insurance code. The Breshears’s insurance policy provides for an appraisal if either party disagrees with the amount of payment. In accordance with the terms of this policy, the trial court abated the proceedings and the two parties began the appraisal process. The appraisers and umpire determined the amount of loss to be $21,484.00. Within thirty days of this decision, State Farm paid the Breshears an additional $5,698.36. According to the Breshears, this leaves $993.77 still unpaid from their original claim, based on GCC’s invoicing.

The Breshears then continued to pursue the suit. Both sides filed motions for summary judgment. The trial court granted State Farm’s motion without specifying whether it was granting the traditional or no-evidence motion for summary judgment and ordered that the Breshears take nothing on their claims. Because the trial court relied on evidence attached to the motions, we consider the traditional motion for summary judgment only. See Michael v. Dyke, 41 S.W.3d 746, 751-52 (Tex.App.-Corpus Christi 2001, no pet.).

Standard of Review

This court reviews the granting of summary judgment de novo. Tex. Commerce Bank-Rio Grande Valley, N.A. v. Correa, 28 S.W.3d 723, 726 (Tex.App.-Corpus Christi 2000, pet. denied).

In a traditional summary judgment, the issue on appeal is whether the movant met the burden of establishing that no genuine issue of material fact exists as to at least one element of the non-movant’s claim and that the movant is entitled to judgment as a matter of law. See Tex.R. Civ. P. 166a(c); Cate v. Dover Corp., 790 S.W.2d 559, 562 (Tex.1990). All doubts about the existence of a genuine issue of a material fact are resolved against the movant. Cate, 790 S.W.2d at 562; see also Acker v. Tex. Water Comm’n, 790 S.W.2d 299, 301-02 (Tex.1990). If the movant’s summary judgment motion and proof facially establishes its right to judgment as a matter of law, the burden shifts to the non-movant to raise a material fact issue sufficient to defeat summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979).

Where, as in this case, the trial court does not state the specific grounds upon which the summary judgment was granted, the reviewing court must consider whether any theories set forth in the motion will support a summary judgment. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993). A summary judgment must be affirmed if any of the theories advanced by the movant are meritorious. Harwell v. State Farm Mut. Auto. Ins. Co., 896 S.W.2d 170, 173 (Tex.1995).

In the event that both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review the summary judgment evidence presented by both sides and determine all questions presented and render the judgment the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).

State Farm Lloyds’s Motion for Summary Judgment

State Farm contends it did not breach its contractual obligations under the insurance policy; there are no grounds for setting aside the appraisal award; and it is not liable for prejudgment interest, penalty interest or attorney’s fees.

Breach of Contract

The Breshears argue that because the appraisal award was greater than the initial payment made by State Farm, State Farm was in breach of the contract as a matter of law. However, they overstate the effect of appraisal decisions: an appraisal decision is intended “to estop one party from contesting the issue of the value of damages in a suit on the insurance contract,” Allison v. Fire Ins. Exch., 98 S.W.3d 227, 253 (Tex.App.-Austin 2002, pet. abated), not to facilitate this type of liability. See Wells v. Amer. States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex.App.-Dallas 1996, writ denied) (appraisal awards leave questions of liability to the court); Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 797-98 (Tex.App.-Amarillo 1995, writ denied) (same). The Breshears may not use the fact that the appraisal award was different than the amount originally paid as evidence of breach of contract, especially when the contract they claim is being breached provides for resolution of disputes through appraisal.

The Breshears argue that the Texas Supreme Court’s dicta in In re Allstate County Mut. Ins. Co., 85 S.W.3d 193, 195 (Tex.2002) (orig.proceeding), supports their breach of contract claim. The issue in Allstate was whether the trial court abused its discretion in refusing to uphold an appraisal clause in an automobile insurance policy. Id. The supreme court held that the trial court should have enforced the appraisal clause and explained, “[a]s to the plaintiffs’ breach of contract claim, the parties have agreed in the contract’s appraisal clause to the method by which to determine whether a breach has occurred. That is, if the appraisal determines that the vehicle’s full value is what the insurance company offered, there would be no breach of contract.” Id. at 196. The exact language of the appraisal clause that the court relied on to draw this conclusion is not cited in the opinion.

The Breshears appear to argue that this language indicates that if an- appraisal award is different from the amount initially offered by the insurance company, .a breach of contract has necessarily occurred. We disagree that this conclusion must follow from the supreme court’s statement, particularly in light of the language of the contract before us in this case. The State Farm insurance contract clearly specified an appraisal process was the remedy for any disagreement regarding the amount of loss, and that the decision reached by the appraisers and umpire “will set the amount of the loss” and “shall be binding on you and us.” Here, State Farm provided evidence establishing that it participated in the appraisal process and fully paid the amount set by the appraisers and umpire. There is no indication in the contract that a payment made prior to appraisal that differs from the appraisal award amounts to a breach of contract.

As State Farm complied with every requirement of the contract, it cannot be found to be in breach. Thus, the trial court did not err in granting summary judgment for State Farm on the breach of contract claim.

Appraisal Award

The Breshears also moved to set aside the appraisal award, which the trial court denied in granting State Farm’s motion for summary judgment. An appraisal award made pursuant to an insurance policy is binding and enforceable unless the insured proves that the award was unauthorized or the result of fraud, accident, or mistake. See Allison v. Fire Ins. Exch., 98 S.W.3d at 252; Providence Lloyds Ins. Co. v. Crystal City I.S.D., 877 S.W.2d 872, 875 (Tex.App.-San Antonio 1994, no writ) (citing Scottish Union & Nat’l Ins. Co. v. Clancy, 71 Tex. 5, 8 S.W. 630, 631 (1888)); see also In re Allstate, 85 S.W.3d at 195 (appraisal claims are enforceable). Every reasonable presumption will be indulged to sustain an appraisal decision. See Providence Lloyds, 877 S.W.2d at 875. In the present case, there is no evidence suggesting any fraud, accident, or mistake. State Farm’s summary judgment evidence shows that the appraisal award was made pursuant to the insurance policy, and payment was made reflecting the award determined by the appraisers appointed by each party and the independent umpire. Thus, because there is no evidence showing grounds to set aside the appraisal award, the trial court did not err in granting summary judgment on this issue.

Insurance Code Claims

State Farm also disputed in its motion for summary judgment the Breshears’s claim that it was liable under article 21.55 of the insurance code and section 304.102 of the finance code for pre-judgment interest, penalty interest, and attorney’s fees.

Prejudgment interest is owed following a judgment in a wrongful death, personal injury or property damage case. See Tex. Fin.Code Ann. § 304.102 (Vernon Supp.2004). Insurers owe prejudgment interest on top of the policy benefits only if they withheld those benefits in breach of the insurance contract. Henson v. Southern Farm Bureau Ins. Co., 17 S.W.3d 652, 654 (Tex.2000). As there was no breach of contract by State Farm, and consequently no judgment against it on which to base interest calculations, prejudgment interest cannot be awarded against State Farm. See. Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549, 554 (Tex.1985).

The Breshears also requested penalty fees and attorney’s fees pursuant to article 21.55 of the insurance code. This article requires an insurer to notify a claimant in writing of the acceptance or rejection of the claim not later than the fifteenth business day after “the insurer receives all items, statements, and forms required by the insurer, in order to secure final proof of loss.” Tex. Ins.Code Ann. art. 21.55 § 3(a) (Vernon Supp.2004). Article 21.55 also provides that “if an insurer delays payment of a claim following its receipt of all items, statements, and forms reasonably requested and required ... for more than 60 days, the insurer shall pay damages and other items as provided for in Section 6 of this article.” Id. art. 21.55 § 3(f). Section six provides for eighteen percent annual interest on the amount of the delayed payment, together with reasonable attorney’s fees. Id. art. 21.55 § 6. The purpose underlying article 21.55 damages is to ensure prompt payment of insurance claims. Id. art. 21.55 § 8; J.C. Penney Life Ins. Co. v. Heinrich, 32 S.W.3d 280, 290 (Tex.App.-San Antonio 2000, pet. denied). If an insurer chooses to delay payment or not pay a claim, it runs the risk of incurring this eighteen percent statutory fee and reasonable attorneys fees. Oram v. State Farm Lloyds, 977 S.W.2d 163, 167 (Tex.App.-Austin 1998, no pet.).

It is stipulated by both parties in the record that State Farm received notice of the claim on April 13, 2000 and the next day acknowledged receipt of the claim, began an investigation, and requested items necessary for the investigation. After receiving additional documents from the Breshears’s contractor, State Farm paid the claim within the amount of time specified by the code. We conclude that it therefore did not delay payment or fail to pay the claim.

The Breshears argue that because of the appraisal process, they were not actually paid until after State Farm paid them the difference between the first payment and the appraisal award, which occurred long after the sixty-day statutory limit. The Breshears also argue that by invoking the appraisal process, State Farm did not notify them as to whether it intended to pay their claim within the time required by the code. We disagree. The Breshears were paid by State Farm within the sixty-day limit, and they were notified that State Farm would pay the claim when State Farm sent them an estimate of the cost of their repairs accompanied by a check. The fact that the appraisal process was later invoked does not alter the fact that State Farm complied with the insurance code, and provided a reasonable payment within a reasonable time. See Tex. Ins. Code Ann. art. 21.55 §§ 3, 6, 8. Accordingly, we conclude the trial court did not err in granting summary judgment on this issue.

Breshears’s Motion for Summary Judgment

In their motion for partial summary judgment, the Breashears contend that State Farm breached its contract by failing to notify them under the terms of article 21.55 of the insurance code as to whether their claim would be paid, and then pay that which was demanded within the mandated time periods. See id. art. 21.55. However, we have already reached the opposite conclusion and held that State Farm did not breach its contract.

The Breshears further contend in their motion for summary judgment that State Farm has extra-contractual liability for falsely representing that it only owes the “average costs” instead of “reasonable costs,” thereby-engaging in acts of deception prohibited by the insurance code. See id. art. 21.21 § 4 (Vernon Supp.2004). The record indicates that State Farm sent the Breshears an estimate and payment based on “the average prices charged by local repair firms.” The record includes a lengthy report explaining in detail how this estimate was developed and comparing costs charged by ten local firms for each repair undertaken and part replaced at the Breshears’ home. The Breshears have provided no evidence or citation to authority which would show that “average” costs of repairs are not reasonable, or that the average cost State Farm calculated in their case was itself unreasonable. See Tex.R. Civ. P. 166a. The Breshears were paid in a timely manner sufficient to satisfy the requirements of the code, and later received additional funds under the appraisal award. State Farm acted in good faith and conducted a reasonable investigation in response to their claim. See Tex. Ins.Code Ann. art. 21.21, § 4. Therefore, denial of the Breshears’ motion for summary judgment was proper as they have failed to establish an article 21.21 violation against State Farm.

The Breshears also claim in their motion for summary judgment that there is no evidence in the record of an itemized decision from the umpire setting forth the amount of the loss agreed to by the umpire and the two appraisers. The record includes a notarized certification of appraisal as well as deposition testimony by the umpire discussing how he developed his estimate. As previously stated, an appraisal award is binding and enforceable unless the insured proves that the award was unauthorized or the result of fraud, accident, or mistake. See Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex.App.-Fort Worth 1992, writ denied). In the present case the record does not raise any issues of fact as to whether there was any fraud, accident, or mistake with the appraisal process or award. Instead, the dispute centers around whether the umpire’s decision was sufficiently itemized so as to be in compliance with the insurance policy.. Given the evidence in the record, we find that it was, and the trial court did not err in denying the Breshears’ partial motion for summary judgment on this ground.

Conclusion

We affirm the judgment of the trial court.

      . The insurance contract contains this appraisal provision:
      If you and we fail to agree on the actual cash value, amount of loss or cost of repair or replacement, either can make a written demand for appraisal. Each will then select a competent, independent appraiser.... [T]he two appraisers will then choose an umpire.... If the appraisers fail to agree/ they will submit their differences to the umpire. An itemized decision agreed to by any two of these three and filed with us will set the amount of the loss. Such award shall be binding on you and us.

      . The trial court's order granted summary judgment "after examining the pleadings and the summary judgment evidence.”


author: DAVID WELLINGTON CHEW, Justice.

text:
    Cameron O. BAILEY, Appellant, v. The STATE of Texas, Appellee.
    No. 08-02-00422-CR.
    Court of Appeals of Texas, El Paso.
    Aug. 31, 2004.
    Rehearing Overruled Oct. 20, 2004.

      Stephen Paul Wohr, Denton, for Appellant.
    William T. Hill, Dist. Atty. of Dallas County, Dallas, for State.
    Before Panel No. 3 BARAJAS, C.J., LARSEN, and CHEW, JJ.
   OPINION

DAVID WELLINGTON CHEW, Justice.

Cameron Bailey appeals from his convictions under the Texas Securities Act on three separate indictments for: (1) selling unregistered securities; (2) selling securities without being a registered securities salesperson; and (3) engaging in fraud in the sale of securities. A jury found Bailey guilty of all three securities fraud charges. The court sentenced Appellant to 5 years’ in jail and a $1,000 fine on two of the charges, and 8 years’ in jail and a $5,000 fine on the other. The court also ordered Appellant to pay restitution of more than half a million dollars to seven different investors. We reverse and remand for a new trial.

In late 1998, Appellant began working as a sales person for Cornerstone Financial and sold purported “Certificates of Deposit” (also referred to as “CDs”) on behalf of Cambridge International Bank of Grenada. A number of his clients testified they bought the Cambridge CDs after seeing newspaper advertisements offering federally-insured CDs with a 12 percent fixed-rate of return. In February 1999, the Texas Securities Board began investigating Appellant for alleged illegal sales of viatical contracts. An investigator for the State, Joseph Oman, sent Appellant a letter warning him that viaticáis are securities, and he was not registered to sell securities in Texas. The State also knew Appellant was also offering the certificates of deposit, but it never sent him a letter or written document telling him that those instruments were considered to be securities.

Appellant complied with the demand by the State Board and stopped selling the viaticáis. In September of 1999, the agency executed a search warrant on Appellant’s office, where agents seized files and a computer. By June or July of 2000, Cornerstone Financial shut down. In March 2001, eighteen months after seizing Appellant’s files, the agency issued a “cease and desist” letter concerning the certificates of deposit of the Cambridge Bank. In February of 2002, the State charged Appellant with knowingly and intentionally offering for sale unregistered securities in the form of certificates of deposit. Appellant was never charged in relation to sales of the viaticáis.

Appellant’s single issue on appeal is that “the trial Court erred in finding as a matter of law that a certificate of deposit is a security within the meaning of the [Texas] Securities Act.” Appellant argues that certificates of deposit are not securities as a matter of law. The State argues the opposite; that they are securities as a matter of law. We conclude that whether a nominal certificate of deposit is or is not a security under the Texas Security Act depends on the facts and the determination of that issue must be left to a jury under instructions defining “securities” under the Texas Security Act and Certificate of deposits under the Texas Business and Commerce Code. See Gamez v. State, 737 S.W.2d 315, 322 (Tex.Crim.App.1987). Accordingly, we re-frame Appellant’s complaint to be that the trial court erred in charging the jury that the certificates of deposit in this case were securities. See Tex.R.App.P. §§ 38.1, 38.9.

Standard of Review

Appellate review of error in a jury charge involves a two-step process. Abdnor v. State, 871 S.W.2d 726, 731-32 (Tex.Crim.App.1994). We first determine whether error occurred. If so, we must then evaluate whether sufficient harm resulted from the error to require reversal. Id. at 731-32. Preserved error in the charge requires reversal if the error caused some harm to the accused from the error. Tex.Code Crim.Proc.Ann. art. 36.19 (Vernon 1981); see also Abdnor, 871 S.W.2d at 731-32; Almanza v. State, 686 S.W.2d 157, 171 (Tex.Crim.App.1984)(Opin. on reh’g).

The essential issue in this case is whether the certificates of deposit that Appellant sold were securities under Texas securities law. The State presented two key expert witnesses to establish that they were. First, William Kerr, a federal banking examiner with the Officer of the Comptroller of Currency, testified that the Cambridge International Bank was an offshore bank that was not approved to do banking in the United States and that there was no deposit insurance or other security to protect that bank’s deposits. This testimony laid the predicate for the testimony of David Grauer, director of the Enforcement Division of the Texas Securities Board. Mr. Grauer gave his opinion that the instruments sold by Appellant were securities because they were “investment contracts” and “evidence of indebtedness.” He also testified more boldly, on cross-examination, that in his opinion all certificates of deposit were securities except that FDIC insured deposits were “exempt securities.”

The trial court obviously believed that the issue was his to decide as a question of law because most of Mr. Grauer’s testimony, and certainly all that was essential to the issue, was presented outside the presence of the jury. At the conclusion of the State’s case, the trial court denied the defendant’s Motion for Directed Verdict ruling that the certificates of deposits were securities. Then, after both sides closed, the trial court instructed the jury that “the certificates of deposit issued by Cambridge International Bank & Trust. Ltd., are securities.”

We begin with the common, ordinary everyday meaning of a nominal certificate of deposit as a financial instrument. The Texas Business and Commerce Code provides us this definition:

‘Certificate of deposit’ means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

TexJBus. & Com.Code Ann. 3.104(j).

In banking, a certificate of deposit and savings accounts are classified as a time deposits, as opposed to checking accounts which are classified as demand deposits, with a bank or thrift institution. A certificate of deposit is purchased from a bank for a fixed sum of money for a fixed period of time and, in exchange, when the certificate of deposit matures, the issuing bank pays the original money plus the accrued interest. The United States and most advanced industrial countries include the total amount of bank deposits in short-term savings accounts and certificates of deposit in the money stock or money supply of the country. Securities are not included in the money supply. Campbell R. McConnell & Stanley L. Brue, Macroeconomics, p. 256 (13th ed.1990).

The Texas State Securities Act defines securities as:

The term ‘security’ or ‘securities’ shall include any limited partner interest in a limited partnership, share, stock, treasury stock, stock certificate under a voting trust agreement, collateral trust certificate, equipment trust certificate, preorganization certificate or receipt, subscription or reorganization certificate, note, bond, debenture, mortgage certificate or other evidence of indebtedness, any form of commercial paper, certificate in or under a profit sharing or participation agreement, certificate or any instrument representing any interest in or under an oil, gas or mining lease, fee or title, or any certificate or instrument representing or secured by an interest in any or all of the capital, property, assets, profits or earnings of any company, investment contract, or any other instrument commonly known as a security, whether similar to those herein referred to or not. The term applies regardless of whether the ‘security' or ‘securities’ are evidenced by a written instrument. Provided, however, that this definition shall not apply to any insurance policy, endowment policy, annuity. contract, optional annuity contract, or any contract or agreement in relation to and in consequence of any such policy or contract, issued by an insurance company subject to the supervision or control of the Texas Department of Insurance when the form of such policy or contract has been duly filed with the Department as now or hereafter required by law. [Emphasis added].

Tex.Civ.Stat.Ann. art. 581-4(A)(Vernon Supp.2004-05).

Obviously, the Texas statutory definition does not contain the term certificate of deposit. Despite this omission, the State seeks to persuade us that three Federal civil cases provide a test that support the trial court’s finding that these nominal certificates of deposit are securities. See Securities and Exchange Commission v. Howey, 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946); Marine Bank v. Weaver, 455 U.S. 551, 102 S.Ct. 1220, 71 L.Ed.2d 409 (1982); Reves v. Ernst & Young, 494 U.S. 56, 110 S.Ct. 945, 108 L.Ed.2d 47 (1990).

In Howey, the Supreme Court found that a land sales and service investment contract was a security when it was, “a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party....” Howey, 328 U.S. at 298-99, 66 S.Ct. at 1103. This ease provides what is called the Howey or the “investment contract” test. This test may well have application but its application is dependent not upon a legal construction but rather the facts of a given case.

In Marine Bank, the Supreme Court held that a certificate of deposit issued by an American bank was not a security within the meaning of the Securities Exchange Act, because. Congress did not intend the securities act to provide a broad remedy for all frauds. Marine Bank, 455 U.S. at 556, 559, 102 S.Ct. at 1223-24, 1225. The Marine Bank Court based its conclusion on the fact that federal banking regulations were broad enough and deposit insurance was sufficient to protect purchasers of certificates of deposit at least up to $100,000. Id. at 552-53 n. 1, 102 S.Ct. at 1222 n. 1. The State contends that the Courts dicta that “[i]t is unnecessary to subject issuers of bank certificates of deposit to liability under the antifraud provisions of the federal securities laws since the holders of bank certificates of deposit are abundantly protected under the federal banking laws” supports a conclusion that a bank certificate of deposit that is not protected under banking laws must be a security. Marine Bank, 455 U.S. at 559, 102 S.Ct. at 1225.

There is a logical fallacy in that conclusion; it assumes the very thing it seeks to prove. In fact, the Court noted in Marine Bank, 455 U.S. at 551, 102 S.Ct. at 1220, in that case that the Securities and Exchange Commission joined by the Federal Deposit Insurance Corporation, the Border of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency filed an amicus curie that argued that the certificate of deposit in that case was not a security.

In Reves, the Court found that by applying a “family resemblance” test, uncolla-teralized and uninsured promissory, notes with a constantly revised interest rate payable on demand were securities, even though they bear little resemblance to one of the enumerated categories of instruments that are securities. Reves, 494 U.S. at 67, 110 S.Ct. at 952. Just like the Howey test, such a test could have application but again all determinations depend more on fact than legal construction.

Finally, the State points to civil cases in which courts have said, “in searching for the meaning and scope of the word ‘security’ in the Act, form should be disregarded for substance and the emphasis should be on economic reality.” Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 553, 19 L.Ed.2d 564 (1967), citing Howey, 328 U.S. at 298, 66 S.Ct. at 1102. We find a stark contrast, however, in a leading Texas criminal case, Bruner v. State, 463 S.W.2d 205 (Tex.Crim.App.1970) where the Court held that because of the highly penal nature of the Securities Act, any doubt as to whether an offense has been committed should be resolved in favor of the accused. Bruner, 463 S.W.2d at 215.

Moreover, we find Tcherepnin distinguishable not only because of its civil nature, but also because of the types of instruments sold. In Tcherepnin, purchasers received dividends based on the association’s profits, not a fixed rate of interest, as in the present case. Tcherepnin, 389 U.S. at 337, 88 S.Ct. at 553-54.

In Bruner, clients were encouraged to invest money into a cleaning products marketing company that would guarantee dividend and profit payments. Id. at 207. In addition, investors would receive a portion of profits from sales made to guests whom investors would bring to dinner parties given by the company. Id. A state securities regulator testified that it was his opinion that the investment contracts offered by the company were, in fact, securities. Id. at 210. There, as here, the court was unconvinced. The Bruner Court said the State’s logic was flawed because the profits did not rely solely on the efforts of others, as required by the Howey test. Id. at 214.

We do not say that something called a certificate of deposit is not a security. We simply say that whether a certificate of deposit or some other labeled instrument is a security can not be determined in the abstract but must be determined after a careful consideration of the context. It is, in other words, a fact question that should have been put to the jury with appropriate instructions. But because the jury did not hear the key witness who provided the necessary context, substance, and reality surrounding the sale, even if they had been properly instructed, they would not have had sufficient facts to make such a determination. We must therefore sustain the sole issue presented and remand the case for a new trial.

      . This opinion is one of three essentially identical opinions. Appellant was charged in cause numbers F-0200019-T, F-0200037-T, and F-0200035-T of the offense of selling unregistered securities under the Texas Securities Act.

      . As the record suggests and Bailey’s counsel confirmed during oral argument, the three indictments here were among thirty-four indictments against Bailey. The other indictments were made under the Penal Code and have been adjudicated.

      .A viatical contract or settlement is defined as an agreement that is solicited, negotiated, offered, entered into, delivered, or issued for delivery in this state under which a person pays anything of value that is: (A) less than the expected death benefit of a policy insuring the life of an individual who has a catastrophic or life-threatening illness or condition; and (B) paid in return for the policy owner’s or certificate holder's assignment, transfer, bequest, devise, or sale of the death benefit under or ownership of the policy. Tex.Ins. Code Ann. 1111.001(3) (Vernon Supp.2003).

      . Tex.Civ.Stat.Ann. art. 581-4 (Vernon Supp 2004-05).

      . Tex.Bus. & Com.Code Ann. 3.104(j)(Vernon 2002).


author: TERRIE LIVINGSTON, Justice. LEE ANN DAUPHINOT, Justice,'

text:
    TEXAS DEPARTMENT OF TRANSPORTATION, Appellant, v. Mary G. ANDREWS, Individually, Mary Elizabeth Andrews Crockett, Individually, Kathryn Andrews Anderton, Individually, and Charley J. Andrews, III, Individually, and all as Representatives of the Estate of Charley Julius Andrews, Appellees.
    No. 2-03-286-CV.
    Court of Appeals of Texas, Fort Worth.
    Sept. 23, 2004.
    Rehearing En Banc Overruled Jan. 6, 2005.

      Greg Abbott, Asst. Atty. Gen., Barry R. McBee, First Asst. Atty. Gen., Edward D. Burbach, Deputy Atty. Gen. for Litigation, Grady Click, Chief, Transportation Division Asst. Atty. Gen., Susan Desmarais Bonnen, Margarita Manzano Corbett, Ronald E. Garner, Asst. Atty. Generals, Austin, for Appellant.
    Law Offices of Mallory & Sturns, Carl E. Mallory and Louis E. Sturns, Arlington, for Appellees.
    Stradley & Wright, Edwin E: Wright, III, Thomas Y. Murto, III, Dallas, for Amicus Curiae Austin Bridge and Road, Inc.
    PANEL B: LIVINGSTON, DAUPHINOT, and WALKER, JJ.
   OPINION

TERRIE LIVINGSTON, Justice.

Introduction

Appellant, the Texas Department of Transportation (TXDOT), appeals from the trial court’s order denying its plea to the jurisdiction. See Tex. Civ. PRAC. & Rem. Code Ann. §§ 51.014(a)(8), 101.001(3)(A) (Vernon Supp.2004-05). TXDOT contends that it is entitled to sovereign immunity from suit arising from a car accident on Highway 360. Appellees claim that the accident resulted from TXDOT’s failure to place warning signs and properly maintain traffic control devices in the area of the accident. Because we conclude that appel-lees did not raise a fact question as to whether TXDOT’s immunity from suit has been waived, we vacate the trial court’s order denying TXDOT’s plea to the jurisdiction and dismiss the claims against TXDOT.

Background Facts

On October 30, 1999, appellee Mary G. Andrews and her husband, Charley Julius Andrews, were driving on Highway 360 when Mary drove onto a paved area (the “extension”) that ended in a fifteen-foot drop-off. Their car went off the embankment, and Charley, the passenger, was injured in the resulting crash and later died.

Mary and the couple’s children, Mary Elizabeth Andrews Crockett, Kathryn Andrews Anderton, and Charley J. Andrews, III — individually and as representatives of the Estate of Charley Julius Andrews— sued TXDOT ' for negligence. Their claims fall into three general categories: (1) negligent design of the roadway and adjacent extension; (2) negligent failure to install and maintain appropriate traffic control devices before and around the extension to warn the public of the potential danger of the embankment; and (3) negligent failure to properly inspect and maintain the existing traffic control devices in the area after notice that they were inadequate. Appellees alleged specifically that the embankment is a special defect, and in the alternative, that it is a premise defect. TXDOT filed a plea to the jurisdiction alleging that it is entitled to sovereign immunity from suit, which the trial court denied. TXDOT filed this interlocutory appeal.

Standard of Review

Sovereign immunity defeats a trial court’s subject matter jurisdiction; thus, it is properly asserted in a plea to the jurisdiction. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex.2004). When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts affirmatively demonstrating that the trial court has jurisdiction over the case. Id. at 226. We construe the pleadings liberally in favor of the plaintiffs and look to the pleader’s intent. Id.

“[I]f 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.” Id. at 227; Bland ISD v. Blue, 34 S.W.3d 547, 555 (Tex.2000). If the evidence creates a fact question regarding jurisdiction, the trial court must deny the plea to the jurisdiction and leave its resolution to the fact finder. Miranda, 133 S.W.3d at 227-28. But “if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law.” Id. at 228. In other words, “after the state 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.

We review the trial court’s ruling on a plea to the jurisdiction de novo. Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). “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,” indulging every reasonable inference and resolving any doubts in the nonmovant’s favor. Miranda, 133 S.W.3d at 228.

Here, TXDOT challenged both appel-lees’ pleadings and the existence of jurisdictional facts. Thus, we must examine the evidence submitted by the parties to determine if appellees raised a fact question regarding jurisdiction. See id.

Analysis

Under the doctrine of sovereign immunity, the State and its agencies are generally immune from suit unless the State gives its consent to be sued. Sipes v. City of Grapevine, 146 S.W.3d 273, 278 (Tex.App.-Fort Worth 2004, no pet. h.); Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex.1997). The State, a governmental unit, is immune from both suit and liability for appellants’ injuries unless its immunity is waived by the terms of the Texas Tort Claims Act. See Tex. Civ. Prac. & Rem.Code Ann. §§ 101.021, 101.025 (Vernon 1997).

In their second amended petition, appel-lees claimed that the portion of Highway 360 where the accident occurred abruptly ends in a fifteen-foot embankment or drop-off. They claim that there were no “signs, barricades, or other markers” warning Mary or other motorists of this road condition. They further claim that the area was part of a “staged construction project” and that TXDOT breached a nondiscretionary duty to place and maintain traffic control devices in the area warning of the condition. Finally, appellees claim that TXDOT was negligent in fading to properly inspect the area and in failing to correct the absence or condition of traffic control devices in the area within a reasonable time after notice of the absence or condition of the devices. Thus, appellees’ claims fall into two broad categories: (1) that the condition of the area where the fifteen-foot drop-off is located constitutes a special defect; and (2) in the alternative, the area is a premise defect for which TXDOT had a nondiscretionary duty to provide and maintain adequate warnings and traffic control devices. TXDOT challenged both categories of claims in its plea to the jurisdiction.

Special Defect

The Tort Claims Act waives a governmental unit’s immunity from suit and liability for violation of the duty to warn of special defects. Tex. Civ. Prac. & Rem.Code Ann. § 101.060(c); State v. Wollesen, 93 S.W.3d 910, 913 (Tex.App.-Austin 2002, no pet.). A special defect is a condition of the same kind or class as “excavations or obstructions on highways, roads, or streets” that unexpectedly and physically impair a vehicle’s ability to travel on the roadway, thus presenting an unusual and unexpected danger to users of roadways. Tex. Civ. PRAC. & Rem.Code Ann. § 101.022(b); State v. Rodriguez, 985 S.W.2d 83, 85 (Tex.1999); Harris County v. Estate of Ciccia, 125 S.W.3d 749, 753 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). Whether a condition is a special defect is a question of law for the court. Rodriguez, 985 S.W.2d at 85; Ciccia, 125 S.W.3d at 753. To be a special defect, a condition must “be one which threatens normal users of a road even though such condition does not have to exist upon the surface of the roadway itself.” Morse v. State, 905 S.W.2d 470, 475 (Tex.App.-Beaumont 1995, writ denied); see Peterson v. City of Fort Worth, 966 S.W.2d 773, 775 (Tex.App.-Fort Worth 1998, no pet.). A condition located so far from the roadway that vehicular passengers and other normal users of the roadway are unlikely to encounter it is not a special defect. State Dep’t of Highways & Public Transp. v. Payne, 838 S.W.2d 235, 239 (Tex.1992) (op. on reh’g); Morse, 905 S.W.2d at 475. Further, “a special defect must be something out of the ordinary course of events rather than a long-standard, routine, or permanent defect.” Villarreal v. State, 810 S.W.2d 419, 422 (Tex.App.-Dallas 1991, writ denied); see Peterson, 966 S.W.2d at 776.

Here, TXDOT presented evidence that in the area where the accident occurred, Highway 360 does not end but instead gently curves to the right and transitions and becomes part of the frontage road. The embankment was located at the end of approximately 1,000 feet of paved area, the extension, that does not curve but goes straight ahead and is separated from the main roadway by a solid, four-inch-wide yellow striped line that follows the curve of the roadway to the right. The extension is not open to the public and was left as-is since 1992 to serve as a tie-in for a future addition to Highway 360. The extension does not have any roadway striping and, in contrast to the actual roadway, has no discoloration from traffic usage. Orange plastic barrels, or drums, also divide the extension from the roadway as it curves along the yellow line to the right.

The end of the extension itself is marked by a red and white barricade. Although it appears from photographs attached to the plea to the jurisdiction that the embankment at the end of the extension is not clearly visible from the beginning of the extension, the barricade is clearly visible. TXDOT also presented evidence that while the part of Highway 360 where the accident occurred is part of a “phased construction project,” construction on this particular section was completed July 28, 1992 and approved by TXDOT August 7, 1992, seven years prior to this accident.

TXDOT contends that the embankment at the end of the extension is not a special defect because it would not be encountered by normal users of the roadway. Appel-lees contend they raised a fact issue regarding whether the extension was regularly used by motorists and not unintended for use by the public as TXDOT claims.

TXDOT presented an affidavit from Lewis Rhodes, an engineer, indicating that from 1992 to 1999 at least forty-seven million drivers had traveled past the roadway in' the location of the accident. In that time, only one other accident had occurred at 'the same location, and it involved alcohol.

Appellees attached several deposition excerpts to their response to TXDOT’s plea to the jurisdiction. One excerpt was from the deposition of Scott Peterson, a Euless police officer, who testified that police officers use the extension as a normal turnaround and that he uses it for that purpose probably ten times a day. He recalled another accident there involving a possible DWI and said he had heard of others, but no more than five. In another deposition excerpt, a witness to Mary and Charley’s accident testified that the extension was “painted just like a regular road up to where it dropped off.”

TXDOT contends that evidence of the volume of drivers passing by that location, the fact that only police officers routinely use the area, and that there have been only two to five accidents in that location, shows that the embankment at the end of the extension is not a condition encountered by normal users of the roadway. We agree.

The transportation code defines roadway as “the portion of a highway, other than the berm or shoulder, that is improved, designed, or ordinarily used for vehicular travel.” Tex. TRAnsp. Code Ann. § 541.302(11) (Vernon 1999). While a witness to the accident indicated in deposition testimony that the extension was marked like a highway to where it dropped off, appellees presented no evidence disputing the existence of the yellow line, right-hand side road delineators, and barricade. Even if evidence that police officers used the extension as a turnaround shows some “normal use” of the extension, that normal use is limited to turning around; thus, the embankment would never be encountered by a person using the extension for that purpose. Further, TXDOT produced evidence showing that the condition of the roadway at the time of the accident conformed to TXDOT’s original design and had not been changed since the roadway had been completed in 1992. See Villarreal, 810 S.W.2d at 422.

Viewing the evidence in the light most favorable to appellees, we conclude as a matter of law that the embankment is not a special defect.

Premise Defect

In addition to claiming that the embankment is a special defect, appellees further contend that the embankment is a premise defect for which TXDOT is liable. A governmental entity’s liability for a premise defect that is not a special defect is limited. Immunity is not waived for premise defects that arise out of the governmental entity’s performance or nonperformance of discretionary functions. Tex. Crv. Prac. & Rem.Code Ann. § 101.056; Sipes, 146 S.W.3d at 279. More specifically, the Tort Claims Act does not waive sovereign immunity for

(1) the failure of a governmental unit initially to place a traffic or road sign, signal, or warning device if the failure is a result of discretionary action of the governmental unit; or
(2) the absence, condition, or malfunction of a traffic or road sign, signal, or warning device unless the absence, condition, or malfunction is not corrected by the responsible governmental unit within a reasonable time after notice; or
(3) the removal or destruction of a traffic or road sign, signal, or warning device by a third person unless the governmental unit fails to correct the removal or destruction within a reasonable time after actual notice.

Tex. Civ. Prac. & Rem.Code Ann. § 101.060(a); Rodriguez, 985 S.W.2d at 85.

Because roadway design is a discretionary function, sovereign immunity is not waived for flawed roadway design. Rodriguez, 985 S.W.2d at 85; Ciccia, 125 S.W.3d at 753. The installation of safety features, such as barricades and signs, is part of a governmental unit’s discretionary roadway design. State v. Miguel, 2 S.W.3d 249, 251 (Tex.1999); City of El Paso v. Ayoub, 787 S.W.2d 553, 554 (Tex.App.-El Paso 1990, writ denied) (holding that design, placement, and upgrading of barricades is an exercise of discretionary power).

TXDOT contends in its appeal that the trial court erred in dismissing its plea to the jurisdiction because appellees’ claims attempt to hold TXDOT liable for performing discretionary activities. Appellees claim that TXDOT failed to comply with a non-discretionary duty to provide certain warnings in accordance with the federal and state Manuals on Uniform Traffic Control Devices and the State Department of Highways Barricade and Construction Standards.

Texas Manual on Uniform Traffic Control Devices

Appellees and the dissent claim that, although roadway design is generally a discretionary activity, TXDOT failed to comply with the Texas Manual on Uniform Traffic Control Devices, which requires the use of certain warning signs and other traffic control devices for dangers such as the embankment. Appellees claim this duty is nondiscretionary. The dissent incorrectly implies that compliance with the Texas Manual is mandatory, and is therefore nondiscretionary. But the Texas Manual does not set legal standards for liability under the Tort Claims Act. See State Dep’t of Highways & Pub. Transp. v. King, 808 S.W.2d 465, 466 (Tex.1991). The statute authorizing implementation of the Texas Manual indicates that TXDOT may implement the standards imposed therein. Tex. Transp. Code Ann. § 544.002 (Vernon 1999). Thus, any decision by TXDOT to alter the warning devices set forth in the Texas Manual was discretionary. See id.; King, 808 S.W.2d at 466. We hold that any alleged failure by TXDOT to comply with the Texas Manual on Uniform Traffic Control Devices did not result in a waiver of immunity under section 101.060(a)(1). Tex. Civ. Prac. & Rem. Code Ann. § 101.060(a)(1). Additionally, because TXDOT’s duty to comply with the Texas Manual is discretionary, the dissent has incorrectly characterized compliance under the manual as a mandatory duty. See King, 808 S.W.2d at 466.

Federal Manual on Unifonn Traffic Control Devices

Appellees also contend that TXDOT had a mandatory duty under the federal Manual on Uniform Traffic Control Devices to erect warning signs and barricades. However, appellees offered no evidence indicating that the federal manual imposed any mandatory duties on TXDOT.

The standards in the federal manual apply to “any highway project in which Federal highway funds participate.” 23 C.F.R. § 655.603(a) (2004). Appellees presented evidence that federal highway funds were used in connection with the construction of the roadway and extension where the accident occurred. However, appellees presented no evidence showing that the roadway and extension do not conform to the standards set forth in the federal manual.

TXDOT presented excerpts from the federal manual. Section 1A.09 provides that “[t]his Manual describes the application of traffic control devices, but shall not be a legal requirement for their installation.” Following that section, a subsection entitled “Guidance” states as follows:

The decision to use a particular device at a particular location should be made on the basis of either an engineering study or the application of engineering judgment. Thus, while this Manual provides Standards, Guidance, and Options for design and application of traffic control devices, this Manual should not be considered a substitute for engineering judgment.

The appellees attached to their response to TXDOT’s plea to the jurisdiction excerpts from the federal manual. The excerpt regarding warning signs states that “[t]he determination of the sign or signs to be erected shall be on the basis of an engineering study using the following sections as guidelines.” This indicates that the ultimate decision regarding placement of the signs is left to the discretion of the engineers.

Also attached to appellees’ response is “Figure 6-2” from the federal manual, which depicts the placement of warning signs and barricades on a closed road with a detour, similar to the one at issue in this case. But, again, nothing indicates that the items shown on the diagram are mandatory. The title of the diagram is “Typical application of traffic control devices on a 2-lane highway where the entire roadway is closed and a bypass detour is provided.” The excerpted page that discusses barricades and channeling devices indicates that barricades “may be used to mark” the end of a roadway and that “[tjraffic cones and tubular markers are sometimes used outside of construction and maintenance areas for general traffic control purposes.” [Emphasis added.]

The excerpts provided by appellees do not show that TXDOT had a nondiscretion-ary duty to place certain warning signs and other traffic control devices in the area around the accident site; all decisions were to be made in accordance with engineering judgment. Accordingly, we conclude that any failure by TXDOT to comply with the federal Manual on Uniform Traffic Control Devices did not result in a waiver of immunity under section 101.060(a)(1). Tex Civ. Prac. & Rem.Code Ann. § 101.060(a)(1).

Barricade and Construction Standards

Finally, appellees contend that TXDOT had a mandatory duty to comply with; or force the contractor who built the road to comply with, the State Department of Highways and Transportation Barricade and Construction Standards, which they attached to their response. They claim the standards are incorporated into the construction contract between TXDOT and the contractor. However, appellees did not produce any portion of the contract or any other authority showing that either TXDOT or the contractor was required to abide by.these standards. Furthermore, TXDOT presented deposition testimony from two TXDOT engineers indicating that the contractor completed construction of the project in accordance with the plans and specifications attached to the contract. Thus, we conclude that appellees did not raise a fact issue as to whether the standards imposed any mandatory duty on TXDOT.

Absence or Removal of Traffic Signs, Signals, or Warning Devices

Appellees also claim that TXDOT had a duty to maintain the barrels blocking the extension, that it was negligent in its inspection of the barrels, and that it failed to correct misalignment of the barrels within a reasonable time after notice. Appellees presented evidence that the barrels were frequently knocked apart and that perhaps only two barrels placed far enough apart for a car to drive through were present on the day of the accident. They also presented evidence that responsibility for placement of the barrels was a maintenance function for which TXDOT was responsible.

TXDOT presented an affidavit from the Assistant Maintenance Section Supervisor for TXDOT, who indicated that he and other TXDOT employees “regularly patrolled the area to check for barrels that may have been dislodged and to insure that general alignment was maintained.” In addition, he stated that he had driven past the area between 8:00 and 9:00 a.m. on the morning of the accident and “observed that the delineation barrels were aligned and in place.” He further stated that “[f]rom the Friday before to the Monday following the accident, no member of the public and no TXDOT employee is known to have observed or reported any dislodged barrel in the subject transition area.”

Appellees presented evidence that TXDOT did not have a routine inspection policy regarding the barrels, only an informal inspection policy. A maintenance supervisor drove past the area every morning on his way to work and “hopefully he would notice” if the barrels were out of proper alignment. The dissent asserts that the majority’s conclusion regarding this issue is based on disputed evidence because the condition and position of the barrels on the day Andrew’s car entered the barricade were disputed. However, appellees presented no evidence that TXDOT knew the barrels were out of alignment on the day of the accident or that TXDOT did not follow its inspection policy on the day of the accident.

A governmental entity retains its immunity for decisions involving the negligent formulation of policy, but not the negligent implementation of policy. See Mogayzel v. Tex. Dep’t of Transp., 66 S.W.3d 459, 465 (Tex.App.-Fort Worth 2001, pet. denied). Thus, appellees cannot show that TXDOT’s immunity has been waived with respect to the policy of inspection that it had in place regarding the barrels, whether informal or not. Furthermore, appellees presented no evidence showing that TXDOT did not follow the procedure that was in place.

Although appellees presented evidence indicating that the barrels were frequently knocked apart and had to be realigned, they presented no evidence raising a fact question as to whether TXDOT had notice that the barrels were out of alignment within a reasonable time before the accident. In addition, they presented no evidence that the frequent misalignment of the barrels prevented them from performing their function of informing drivers at highway speeds not to enter the extension. See Lawson v. Estate of McDonald, 524 S.W.2d 351, 356 (Tex.Civ.App.-Waco 1975, writ ref'd n.r.e.) (concluding that condition of traffic control device “refers to the maintenance of a sign or signal in a condition sufficient to properly perform the function of traffic control for which it is relied upon by the traveling public”). Thus, appellees failed to raise a fact question as to whether TXDOT’s immunity under section 101.060(a)(2) had been waived. Tex. Civ. Peac. & Rem.Code Ann. § 101.060(a)(2). Because the appellees only raised issues of fact relating to formulation of the inspection policy and failed to present any evidence to raise a fact issue as to whether TXDOT failed to comply with that policy, the dissent has incorrectly characterized the majority’s holding as an activity involving implementation of policy.

Because appellees failed to raise a fact question as to (1) whether TXDOT had a nondiscretionary duty to place and maintain warning signs and other traffic control devices in the accident area and (2) whether TXDOT had notice of the misalignment of the barrels within a reasonable time before the accident — and because we hold as a matter of law that the embankment at the end of the extension is not a special defect — we hold that the trial court erred in denying TXDOT’s plea to the jurisdiction. We sustain TXDOT’s issue on appeal.

Conclusion

Having determined that the trial court erred in denying TXDOT’s plea to the jurisdiction, we vacate the trial court’s order and dismiss appellees’ claims against TXDOT.

DAUPHINOT, J. filed a dissenting opinion.

LEE ANN DAUPHINOT, Justice,'

dissenting.

The majority holds that, although TXDOT undertook to install and maintain appropriate traffic control devices before and around the extension in question, it is immune ¡from suit because this activity involves formulation of policy, not implementation of policy. I disagree.

In general, the courts of this state have held that decisions made at a policy level instead of an operational level are exempt as policy decisions. The Supreme Court of Texas pointed out that the deciding question is whether the allegedly negligent conduct involves policy formulation or policy implementation. That is because a governmental entity’s negligent formulation of policy is immune from liability, while the negligent implementation of a policy will subject the entity to liability. This rule corresponds to the rule that once a government has decided to perform a discretionary act, the act must be performed in a non-negligent manner.

Whether a governmental entity’s actions fall within its discretionary power is a question of law for the court to determine. Texas courts are in agreement that “[mjaintenance activities undertaken at the operational level are not discretionary functions and are not immune from liability.”

The record before us reflects that sections 3F-1 and 6C-8 of the Texas Manual on Uniform Traffic Control Devices require that type III barricades, consisting of three horizontal rails with appropriate markings used to control traffic, be used in the following situations:

1. Roadway ends in a dead end or cul-de-sac with no outlet.
2. A ramp or lane closed for operational purposes.
3. The permanent or semipermanent closure or termination of a roadway.

Drums or barrels, on the other hand, are typically channeling devices used to direct traffic into the appropriate lane.

Nonetheless, TXDOT chose to block the closed roadway with drums, not barricades. Afterward, TXDOT’s daily maintenance and inspection of the drums, which they admit is required, consisted of hoping the maintenance supervisor would notice the placement of the drums on his way to work. TXDOT’s reason for the necessity of a daily inspection was that it expected some of the drums to get damaged and knocked apart frequently.

Mark Schluter, an area engineer for TXDOT, testified:

Q. Okay. But the reason you inspect them every day is because you expect some of them to get damaged and knocked apart and lost?
A. Yes, sir.
Q. All right. But yet on this roadway, even though you’re only using channeling devices in a fifty-mile-an-hour interstate freeway system, there is no routine inspection to see that they are put back in alignment every day. Is that what you’re telling the jury?
A. No, sir. Actually, the maintenance supervisor comes in every morning to work, so hopefully he would notice that.
Q. Well, I would like to hope that myself, sir, but what records do I have to show this jury that in fact it was done?
A. Don’t have any.
Q. So it’s just trust me, believe me, I love you? Is that it?
A. Yes, sir.

The condition and placement of the barrels at the time the Andrewses’ car entered the extension was disputed. Eyewitness Michael Samuel Houston testified:

Q. Were you aware of the presence of barrels or barricades at — on 360 just at the part where the road transitions to the right?
A. Yes, at times — I don’t know if they were there when this crash occurred or not.
Q. Okay.
A. But I know in the past I have seen barrels there—
Q. Okay.
A. —and possibly, you know — I do remember at one point, and I’ve driven this road since 1993 when I first moved here, maybe three barrels across with a rope across. On this day, I — there was no rope. There may have been a barrel or two, but I don’t know. I can’t tell you.
Q. Did you have the impression that the barrels were not in proper alignment on this particular day?
A. Oh, yeah.
Q. Okay.
A. Yeah, because the, the van just, you know, went straight up, up the hill there—

Marilyn Ruth Hall, who witnessed the Andrewses’ entry into the extension and fall from the end of the pavement, testified:

Q. Did you see some barricades or some sort of device in the area where Ms. Andrews’ vehicle went?
A. There was two big sand barrels but they were spaced way far apart. They should have been spaced a lot closer together and there was a barricade at the end of the — I guess ramp, you would call it. And that was just like a goal post ramp, kind of.
Q. Did you actually see the sign at the end of the ramp?
A. There was no sign. There was the barricade
Q. You also indicated that you had mentioned to your daughter or someone prior to this accident, that this location is very confusing?
A. Yes.
Q. And tell us again, ma’am, the Judge and jury, why you feel like this particular location is confusing?
A. Well, just the way the road veers that way. It’s — to me it’s very confusing and I don’t understand why they did it.
Q. Okay.
A. It’s not marked good enough to keep people out of there.

The majority says that we should look only to the condition of the barricade at the end of the extension and not to the condition of the devices for preventing entry. I disagree, and, at best, the majority’s conclusion is based on disputed evidence. The majority bases its position on TXDOT’s argument that the injury occurred 1000 feet from the entrance to the extension. The Andrewses’ contention is that part of the problem is that motor vehicles were not adequately protected from inadvertent entry into an uncompleted extension that ended in a fifteen-foot drop-off. The speed limit at the entry to the extension was fifty miles per hour. A car traveling at that speed would reach the end of the extension in approximately fifteen seconds. Allowing for braking time, the danger to a vehicle entering the extension was imminent.

Police Officer Scott Peterson testified:

Q. Okay. How many other vehicles, to your, your personal knowledge, have driven off the embankment, the concrete down into the dirt below?
A. I can only state one for sure—
Q. Okay.
A. —other accident that I have knowledge of that has happened there.
Q. Okay. Isn’t it true that you’ve heard about a couple of more since the freeway opened?
A. I have heard of others, yes.
Q. Okay. And when you say others, would that be two or three or—
A. It’s not a large number. I’ve heard from other officers that have made comments, not only in our city but by Fort Worth officers that work that area, that they have worked accidents, but they’ve never indicated a number or how many, and I haven’t ever seen a report to reflect that.
Q. Okay. Based upon your general knowledge, would you say that that would be somewhere in the neighborhood of a couple or more to a maximum of five more vehicles that have driven off?
A. I would say—
MR. PEARCE: Objection to the form of the question. Subject to that, go ahead and answer.
A. I would say that would be an accurate assumption.
Q. Okay. An accurate reflection on the — what the import of these — the meaning of what these other officers have told you, even though you’re not going to pin it down because you can’t?
A. Right.

Certainly, based on the record before us, TXDOT did not establish immunity. Because there are disputed issues of fact regarding jurisdiction, the trial court did not err in denying TXDOT’s plea to the jurisdiction. For these reasons, I must respectfully dissent from the majority’s opinion. I would affirm the trial court’s denial of TXDOT’s plea to the jurisdiction and would hold that Appellees are entitled to their day in court.

      . Appellees also sued the contractor who constructed that portion of Highway 360.

      . A highway is defined as "the width between the boundary lines of a publicly maintained way any part of which is open to the public for vehicular travel.” Id. § 541.302(5).

      . Appellees provided evidence raising a fact question as to the placement and number of barrels between the extension and the roadway at the time of the accident. Even taking as true the evidence that there were only two barrels placed far enough apart for a car to travel through, we conclude that, in light of the yellow line and barricade, the distance between the roadway and the embankment, and that the condition of the extension is of a longstanding nature, the embankment does not constitute a special defect.

      . Just as we do not believe that evidence that police officers used the extension as a "normal turnaround” — and that, out of approximately 47 million drivers passing that area between 1992 and 1999, two to five may have entered the extension and had accidents there — shows that the embankment constituted a danger to normal users of the roadway, we likewise do not believe that the same evidence raises a fact issue regarding whether any misalignment of the barrels prevented the barrels from performing their intended function.

      . McKinney v. City of Gainesville, 814 S.W.2d 862, 866 (Tex.App.-Fort Worth 1991, no writ).

      . State v. Terrell, 588 S.W.2d 784, 787 (Tex.1979).

      . Alvarado v. City of Brownsville, 865 S.W.2d 148, 156 (Tex.App.-Corpus Christi 1993), rev’d on other grounds, 897 S.W.2d 750 (Tex.1995).

      . Norton v. Brazos County, 640 S.W.2d 690, 693 (Tex.App.-Houston [14th Dist.] 1982, no writ).

      . McKinney, 814 S.W.2d at 867.

      . Mitchell v. City of Dallas, 855 S.W.2d 741, 745 (Tex.App.-Dallas 1993), aff'd, 870 S.W.2d 21 (Tex.1994).