City of Dallas v. Albert (2011)
In City of Dallas v. Albert, 354 S.W.3d 368 (Tex. 2011), the Supreme Court determined that a governmental entity's nonsuit of its counterclaim did not reinstate the entity's immunity from suit for claims that would offset, in whole or in part, any recovery by the city and that were germane to, connected with, or properly defensive to the entity's claims. Id. at 374-75.
The Albert opinion explains:
"When a governmental entity asserts affirmative claims for monetary recovery, whether by filing suit or by counterclaim, the trial court acquires jurisdiction over the entity's claims and certain offsetting, defensive claims asserted against the entity." Id. at 375.
However, nonsuit of a governmental entity's counterclaim neither reinstates nor creates immunity for the entity. Id. at 376.
Where a party has affirmative claims pending at the time the governmental entity nonsuits its counterclaim, "the trial court retains jurisdiction over the party's claims to the extent it had acquired it." Id. at 375.