Dallas Area Rapid Transit (DART) provides microtransit and paratransit services and in 2018 awarded MV Transportation, Inc. a "master agreement" under which MV was to manage those services, and MV's wholly owned subsidiary, MV Contract Transportation, Inc., then contracted with GDS Transport, LLC for vehicles and drivers.¹ Several months after GDS began performing it terminated the subcontract, and GDS sued DART, MV Transportation and MV Contract for breach of contract, quantum meruit, tortious interference, fraud and negligent misrepresentation, alleging they induced the subcontract with false representations about past business practices and statistics.² GDS says MV overstated expected trips and promised that new software would make the business profitable, while MV says it merely managed part of DART's regional service.³

All three defendants moved to dismiss under Rule 91a on immunity grounds, MV Transportation and MV Contract also invoked Transportation Code section 452.056(d), and the trial court dismissed GDS's tort claims against all three and its contract claims against MV Transportation and DART, severing and abating the rest.¹ The Fifth Court of Appeals (Dallas) reversed as to MV Transportation, holding the contract and fraud claims had a basis in law and that its immunity defense under section 452.056(d) was not established as a matter of law.² The Supreme Court heard argument on March 3, 2026,³ and on May 8, 2026 reversed as to the fraud claim, reinstated its dismissal and remanded the remaining claims.⁴

Petition for review from the Fifth Court of Appeals (Dallas) after a Rule 91a dismissal; argued March 3, 2026; opinion by Justice Young issued May 8, 2026.⁵

• MV Transportation:¹ whether section 452.056(d) limits to $0 a contractor's liability for fraud in a suit against a contractor performing a transportation authority's functions, because the authority's governmental immunity would give it $0 liability, including for fraud allegedly used to induce a subcontract with GDS.
• GDS:² whether the damages limit in section 452.056(d) applies only where a contractor is sued for performing the same function it performed for the authority, so that it does not protect MV against fraudulent concealment and misrepresentations that were not part of DART's functions.

Appellate courts review the merits of a Rule 91a ruling de novo, and a Rule 91a motion may rest on an affirmative defense that the petition's allegations establish, with the court considering only the pleading and its exhibits.¹

Whether section 452.056(d) bars the fraud claim.

MV Transportation (Petitioner): Under section 452.056(d) a private contractor performing a transit authority's function is liable only to the extent the authority would be, DART has governmental immunity for intentional torts like fraud that the Tort Claims Act does not waive, so MV's liability is $0, and the court of appeals wrongly treated its argument as one about derivative immunity.¹

GDS Transport (Respondent): The damages limit applies only where the contractor is sued for performing the same function it performed for the authority, and GDS sued for fraudulent concealment and misrepresentation not part of DART's functions, so MV gets no benefit from it.²

MV Transportation argued that the court of appeals erred in basic statutory construction and in confusing the statutory liability limit with derivative governmental immunity, and GDS responded that the case is unusual in its facts and limited to one narrow issue on one cause of action.¹

• Master agreement outside the record. Asked whether the Court can tell DART's function without the master agreement in the Rule 91a record, MV's counsel said yes, from the petition's allegations that DART delegated its authority. (Oral Argument, 0:03:38; 0:05:00)
• Reading the contract under Rule 91a. Asked why a court should not read a contract both sides call genuine, respondent's counsel said the rule limits courts to the allegations, and its wording differs from federal. (Oral Argument, 0:25:25; 0:27:41)
• Public policy versus text. A Justice told respondent's counsel the argument went straight to public policy, and asked why the statute does not treat an entity controlling a public function as exercising it. (Oral Argument, 0:33:52)
• Zero damages. Asked why zero damages is a fair result, MV's counsel gave three reasons, including that limiting liability does not change the legal landscape for a subcontractor like the respondent. (Oral Argument, 0:09:16)
• Intentional torts. MV's counsel said the Tort Claims Act has no waiver for intentional torts, so DART would have no liability and MV could have none. (Oral Argument, 0:11:18)
• Reasonable reader. Asked for the basis for a college-educated reader of statutes, MV's counsel conceded he was pulling it from the air, comparing it to a reasonable-person standard. (Oral Argument, 0:15:49)
• Attached to the petition. On rebuttal, asked if the agreement was attached to the petition, MV's counsel said he never saw it attached, only parts attached to the motion to dismiss. (Oral Argument, 0:37:48)
• Breach of lease. Asked why MV did not challenge the court of appeals' holding that the respondent can sue for breach of the vehicle lease, MV's counsel pointed to a damages cap. (Oral Argument, 0:13:49)

None noted

Holding

The trial court correctly dismissed the fraud claim under Rule 91a because GDS's live pleading establishes that MV Transportation exercised DART's function, and Transportation Code section 452.056(d) allows damages against such a contractor only to the extent DART would be liable, which all agree it would not be for fraud.¹

Reasoning

The master agreement was omitted from the appellate record, but the omission does not impede review because GDS's live pleading invokes the agreement as the basis for relief, so it is part of the pleading, and the parties agree on its material terms and dispute only their legal consequence.² Before this Court MV advanced only the statutory argument, which asks whether DART would be liable if it were itself performing the function, and DART's immunity under the Tort Claims Act, which does not waive immunity for intentional torts, would bar a fraud claim.³ Merely labeling conduct fraudulent does not remove it from the function a party was exercising, as in Cantey Hanger, and the question here is whether the alleged fraud arose within MV's exercise of DART's function.⁴ The question is not close, because the petition itself says DART transferred "total control" of its mobility-management operations, including hiring subcontractors, to MV Transportation, so the alleged fraud occurred within the scope of DART's duties and section 452.056(d) bars the claim.⁵

Disposition

Court of appeals' judgment reversed, the trial court's judgment of dismissal as to MV Transportation reinstated as to the fraud claim, and the case remanded to the trial court for further proceedings on any remaining claims.⁶

De novo review of a Rule 91a dismissal based on the pleading and its exhibits.¹

Justice Young delivered the opinion of the Court, with no separate writings.¹