BEA ANN SMITH, Justice.
On its own motion the Court has submitted this cause for en banc consideration. Appellant Aer-Aerotron, Inc. sued appellee Texas Department of Transportation for breach of contract. Asserting that Aerotron had not obtained legislative consent to sue, the Department claimed immunity from suit and moved to dismiss for want of jurisdiction. The trial court dismissed the cause solely on jurisdictional grounds.
We determine the trial court's jurisdiction from the good-faith factual allegations made by the plaintiff. See Brannon v. Pacific Employers Ins. Co., 148 Tex. 289, 224 S.W.2d 466, 469 (1949); Flowers v. Lavaca County Appraisal Dist., 766 S.W.2d 825, 827 (Tex.App.—Corpus Christi 1989, writ denied). Unless the defendant pleads and proves that such allegations were fraudulently made to confer jurisdiction, they are accepted as true. See Flowers, 766 S.W.2d at 827; see also Firemen's Ins. Co. v. Board of Regents of the Univ. of Tex. Sys., 909 S.W.2d 540, 542 (Tex.App.—Austin 1995, writ denied). The Department has not asserted any fraudulent pleading here. We take our recitation of facts from Aerotron's pleadings.
In 1991, the Department sought to standardize the radios used in its districts throughout the state. Aerotron made a bid to supply standard base-station radios and one model of remote-control units for use in the field. On April 25, 1991, the Department accepted Aerotron's bid and entered into a one-year contract for Aerotron to supply 75 base-station radios at $5490 each and 50 remote-control radios at $1136 per unit, for a total of $468,550.
On December 9, the Department extended the term of the contract for one year; the following day, it ordered 25 additional remote-control units. On January 3 and 6, 1992, Aerotron shipped 88 radios and the Department accepted them. On February 7, the Department ordered 75 additional base stations and 50 more remote-control units; on April 23 it ordered 25 more remote units. In the first year of the contract, the Department increased its purchase order from 125 to 300 radios, raising the total contract price to $993,900.
During the first part of 1992, the Department paid $396,804 for 127 radios it had received. In May 1992, after the Department had accepted more radios, it began to complain that some of the units failed to meet contract specifications. Aerotron addressed the problems and received the Department's acknowledgment that at least three of its four complaints had been corrected. On June 15, the Department ordered 50 additional base stations; on July 27, it ordered 25 more remote-control units. Aerotron asked the Department in August 1992 to pay invoices that had fallen due in March. In response to this request for payment, the Department raised additional complaints that the radios did not conform to specifications, despite its acceptance and request for additional radios.
On December 17, 1992, the Department demanded that Aerotron refund $396,804 for all radios that the Department had received and paid for, noting that it would return the radios as soon as it could get them "back from the districts." Additionally, the Department canceled the balance of its purchase order.
In a letter dated September 9, 1993, Aerotron's president Andrew Kostantinidis again requested payment, detailing the hardships that the Department's failure to pay had caused the company, forcing it to
Breach of Contract
It has long been recognized that sovereign immunity protects the State from lawsuits for damages, absent legislative consent to sue the State. See, e.g., Federal Sign v. Texas S. Univ., 951 S.W.2d 401, 405 (Tex.1997). The term "sovereign immunity" actually includes two principles: immunity from suit and immunity from liability. See id. Immunity from suit bars legal action against the State, even if the State acknowledges liability for the asserted claim, unless the legislature has given consent to sue. See id. Immunity from liability protects the State from judgments even if the legislature has expressly given consent to sue. See id. When the State enters into a contract with a private entity, it gives up its immunity from liability but not its immunity from suit. See id.
In Federal Sign, the plaintiff company signed a contract with Texas Southern University ("TSU") to construct and deliver basketball scoreboards to TSU. Seven months later, before the scoreboards were delivered, TSU indicated it had decided to secure the scoreboards from another source. Federal Sign sued for breach of contract, asserting damages for lost profits and expenses. The trial court overruled TSU's plea to the jurisdiction, submitted the case to a jury, and rendered judgment on the jury verdict in favor of Federal Sign. On appeal, the supreme court considered a narrow issue: whether the State waives its immunity from suit by contracting with a private citizen. The majority held: "The act of contracting does not waive the State's immunity from suit." Federal Sign, 951 S.W.2d at 408. The court went on to explain, however, that its decision was limited to the particular facts presented:
The broad language found in the majority's opinion states that "it is the Legislature's sole province to waive or abrogate sovereign immunity." Id. at 409. Absent further discussion, that would end the matter. But we cannot ignore the court's clear suggestion that there may be circumstances where the State, by engaging in conduct involving more than signing a contract, may waive its immunity from suit. The court on one hand appears to say that only the legislature can waive or abrogate sovereign immunity, while on the other it indicates that state entities may by their conduct waive immunity from suit in some circumstances. We are constrained to harmonize the above language with the declaration of the majority and the concurring opinions that Federal Sign was expressly intended to be a limited ruling. We do so by focusing on the narrow issue that was before the supreme court: whether TSU's act of signing a contract waived its immunity from suit.
The Federal Sign majority held that it was up to the legislature to abrogate immunity from suit when the State merely enters a contract. We read the court's opinion to mean that only the legislature can generally pronounce that the mere act of signing a contract abrogates the State's immunity from suit, but an entity of the State may waive its immunity with regard to a particular contract if warranted by its conduct. Thus, our task is to confront the issue left unresolved by the supreme court in Federal Sign: did the Department engage in conduct, beyond the mere execution of the contract, that waived its immunity from suit?
We have outlined the Department's conduct in detail, taking as true the facts alleged in Aerotron's petition. See Firemen's Ins. Co., 909 S.W.2d at 542. Initially, the Department had 30 days to test the prototype of both radio units; it requested some modifications, which Aerotron made. The Department then approved the modified samples and authorized Aerotron to manufacture and ship 88 radio units. As further evidence of its approval of the product, the Department accepted and paid for 127 radios, twice extended the contract term, and continued to increase the number of units ordered. The Department first raised complaints about some of its radios in May 1992. Aerotron apparently satisfied its concerns because the Department ordered additional radios in June and again in July 1992. But in August 1992, when Aerotron asked the Department to pay $225,258 owing for radios in its possession, the Department responded by raising more complaints. Then in December 1992, more than a year and a half into the contract, the Department demanded that Aerotron refund all monies received under the contract and told Aerotron that it would return every radio. Aerotron again tried to work with the Department to modify the equipment to meet the Department's needs. Aerotron apparently succeeded, because the Department again ordered more radios in April 1993. In both July and August of that year, the Department promised to pay its balance due to Aerotron. But in October, the Department attempted to return all radios it had not paid for in lieu of paying its bill, demanded a full refund of all monies paid under the contract, and again canceled all pending orders.
The Department did more than sign this contract. Its actions over a period of two and a half years fully implicated it in the performance of the contract: the Department approved the radios after testing the samples; it twice extended the term of the contract; it more than trebled the number of radio units ordered throughout the contract term;
If conduct can ever waive immunity from suit, as the supreme court suggested in Federal Sign, we hold that under these circumstances the Department has waived its immunity from suit and must now appear to answer Aerotron's breach of contract claims. We note that since the supreme court handed down Federal Sign, two courts of appeals have identified circumstances in which the State, by its conduct, has waived its immunity from suit for breach of contract. See Texas S. Univ. v. Araserve Campus Dining Servs., Inc., 981 S.W.2d 929 (Tex.App.—Houston [1st Dist.] 1998, pet. denied); Alamo Community College Dist. v. Obayashi Corp., 980 S.W.2d 745 (Tex.App.—San Antonio 1998, pet. denied). We consider the circumstances presented in this cause to more fully implicate the Department in the performance of its contract than the conduct of the State in either of those cases. We sustain the points of error raised in Aerotron's first and second issues, and therefore do not address Aerotron's third issue.
Relying on the majority's instruction to read its holding in Federal Sign narrowly, we distinguish this cause in which the Department has done much more than merely sign a contract. Because that is all that the supreme court decided in Federal Sign, we accept the court's invitation to consider factually distinct circumstances where the Department by its conduct— accepting the radios, extending the term of the contract, increasing its orders, twice promising to pay the balance due, requesting and receiving technical modifications and assistance—has waived its immunity from suit for breach of contract. We therefore reverse the trial court's judgment dismissing Aerotron's cause of action for want of jurisdiction and remand the cause to that court for further proceedings.
Justice PATTERSON not participating.