# MV Transp., Inc. v. GDS Transp., LLC Supreme Court of Texas, No. 24-0924 **MV Transp., Inc. v. GDS Transp., LLC, No. 24-0924 (Tex. May 8, 2026). 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.** Practice areas: civil procedure, governmental immunity ## Key issues - A fraud claim against a company performing a regional transit authority's function was properly dismissed under Rule 91a because Texas law allows damages against such a contractor "only to the extent that" the authority would be liable, and DART could not be liable for the claim. - The Court reinstated the dismissal of the fraud claim and remanded the rest of the case; it also cautioned about reviewing Rule 91a dismissals when key documents are missing from the record. ## Factual History 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 (Opinion, PDF p. 2). 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 (Opinion, PDF pp. 2-3). 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 (Brief on the Merits (GDS Transportation, LLC), PDF pp. 7-8, 10; Brief on the Merits (MV Transportation, Inc), PDF p. 17). ## Procedural History 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 (Opinion, PDF p. 3). 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 (Opinion, PDF pp. 3-4). The Supreme Court heard argument on March 3, 2026 (Opinion, PDF p. 1), and on May 8, 2026 reversed as to the fraud claim, reinstated its dismissal and remanded the remaining claims (Opinion, PDF p. 9). ## Issues Presented - MV Transportation (Brief on the Merits (MV Transportation, Inc), PDF p. 10): 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 (Brief on the Merits (GDS Transportation, LLC), PDF p. 6): 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. ## Standard(s) of Review 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 (Opinion, PDF p. 6). ## Legal Arguments **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 (Brief on the Merits (MV Transportation, Inc), PDF pp. 17, 37). **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 (Brief on the Merits (GDS Transportation, LLC), PDF p. 6). ## Stated Reasons the Court Should Take the Case 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 (Brief on the Merits (MV Transportation, Inc), PDF p. 17; Brief on the Merits (GDS Transportation, LLC), PDF p. 7). ## Oral Argument - **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) ## Practice Area Tags civil-procedure, governmental-immunity ## Procedural Posture/Vehicle 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 (Opinion, PDF pp. 1, 9). ## Amicus Involvement 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 (Opinion, PDF pp. 1-2, 7-9). ## Standard of Review De novo review of a Rule 91a dismissal based on the pleading and its exhibits (Opinion, PDF p. 6). ## Court's 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 (Opinion, PDF pp. 4-5). 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 (Opinion, PDF pp. 6-7). 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 (Opinion, PDF p. 7). 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 (Opinion, PDF pp. 8-9). ## 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 (Opinion, PDF pp. 2, 9). ## Vote Breakdown, Authorship, and Any Concurrence/Dissent Justice Young delivered the opinion of the Court, with no separate writings (Opinion, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/24-0924. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.