Susan Wheeler v. Honorable Mayor William White, Chief Harold Hurtt and Officer's Civil Service Commission--Appeal from 281st District Court of Harris County
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Affirmed and Majority and Dissenting Opinions filed May 6, 2010.
In The
Fourteenth Court of Appeals
____________
NO. 14-08-00490-CV
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SUSAN WHEELER, Appellant
V.
HONORABLE MAYOR WILLIAM WHITE, CHIEF HAROLD HURTT, AND
OFFICER’S CIVIL SERVICE COMMISSION, Appellees
On Appeal from the 281st District Court
Harris County, Texas
Trial Court Cause No. 2005-25844
DISSENTING OPINION
The outcome of this case turns on the construction of a written contract. The
fundamental rules of contract construction are premised on a court’s consideration of all
of a contract’s terms. But this court cannot apply these rules in this case because the
record contains only a portion of the contract. Though the appellees/defendants sought
relief in the trial court based on a fifty-five page contract, they provided the trial court
with only four of the contract’s pages. With a limited exception recognized only in cases
involving insurance policies, binding precedent requires that the court consider the whole
contract before granting relief based on it. Rather than follow precedent from the
Supreme Court of Texas and from this court requiring reversal and remand so that the
trial court can review the entire contract, the majority instead holds for the first time in
Texas jurisprudence that, in a non-insurance context, a party can obtain relief based on a
written contract without providing the court with all of the contract terms. I respectfully
dissent.
Today’s holding conflicts with binding precedent.
Today’s holding conflicts with this court’s holding in Crawford v. Pullman, Inc.,
630 S.W.2d 377, 379–80 (Tex. App.—Houston [14th Dist.] 1982, no writ), a case that
also involved unprovided portions of a written contract in a non-insurance context. In
Crawford, the trial court granted a traditional motion for summary judgment in favor of a
plaintiff suing on two lease agreements. See id. Though it was clear from the front pages
of the lease agreements that there were terms on the reverse sides, the plaintiff provided
the trial court with only the front sides. See id. Although the appellant did not complain
about the appellee’s failure to provide all of the terms of the agreements, this court held
that the trial court erred in granting summary judgment without reviewing all the
provisions of the written contracts. See id. Noting that the missing provisions (on the
unprovided reverse sides) could be relevant to whether the appellee was entitled to
judgment as a matter of law, this court held that a summary-judgment movant was not
entitled to relief based on the two contracts because it did not prove all of the provisions
of those contracts. See id.
In the case under review, appellees/defendants Mayor William White and Chief
Harold Hurtt, in their official capacities, and the Officer’s Civil Service Commission
(collectively hereinafter the ―City Parties‖) filed a plea to the jurisdiction in which they
asserted that the trial court lacked jurisdiction over the claims asserted by
appellant/plaintiff Susan Wheeler, based on the terms of the ―Meet and Confer
2
Agreement‖ between the Houston Police Officers’ Union and the City of Houston
(hereinafter ―Agreement‖). The trial court and this court review this type of a challenge
in a plea to the jurisdiction under a legal standard substantially similar to the standard
used to determine whether a traditional motion for summary judgment should be granted.
Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227–28 (Tex. 2004). In
Crawford, this court held that a party could not obtain relief by means of a traditional
motion for summary judgment if that relief is based on a contract and the record does not
contain proof of all of the contract’s terms. See Crawford, 630 S.W.2d at 379–80. The
Crawford case is on point and precludes this panel from affirming the trial court’s ruling
based on an alleged lack of standing under the Agreement. See id. Because there is no
decision from the Supreme Court of Texas or this court sitting en banc that is on point
and contrary to the Crawford decision, this panel is bound by Crawford. See Chase
Home Finance, L.L.C. v. Cal W. Reconveyance Corp., No. 14-08-00115-CV, 2010 WL
660166, at *9 (Tex. App.—Houston [14th Dist.] Feb. 25, 2010, no pet. h.). But even if
Crawford were not binding precedent, this court still should follow its sound rationale for
requiring parties to produce the entire contract before the court grants any relief under it.
Among the unwelcome consequences of today’s decision is this court’s inability—
in the absence of a complete agreement—to apply settled principles of contract
construction. In construing the Agreement, this court’s primary concern is to ascertain
the true intentions of the parties as expressed in the Agreement. See J.M. Davidson, Inc.
v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). To achieve this end, this court must
examine and consider the entire Agreement in an effort to harmonize and give effect to
all the provisions of the Agreement so that none will be rendered meaningless. See id.;
MCI Telecomm. Corp. v. Texas Util. Elec. Co., 995 S.W.2d 647, 650–52 (Tex. 1999)
(holding that, to determine whether a party may sue under an agreement as a third-party
beneficiary, a court must examine the entire agreement in an effort to harmonize and give
effect to all the agreement’s provisions so that none will be rendered meaningless).
No
single provision of the Agreement should be given controlling effect; rather, all the
3
provisions of the Agreement must be considered with reference to the whole instrument.1
See id. Applying these rules is impossible when the court is not provided with the entire
contract.
It would have been the work of a moment to submit a complete copy of the
Agreement, yet the City Parties provided the trial court with less than ten percent of the
document. Though the record contains approximately half of the Agreement’s terms,2
half of the terms are unknown to this court. Construction of the Agreement based only
on the portions in our record may render one or more of the omitted terms meaningless.
This court, however, has no way of knowing whether or to what extent the unknown
provisions impact the known ones and no way to harmonize any provisions of the
Agreement that may conflict or appear to conflict with the majority’s construction of the
Agreement.
Piecemeal parts of a contract have no separate existence. Every part of a contract
adjusts itself to every other part, each assuming equal dignity as to legal validity. This
means that in a contract-construction analysis, the ninety percent of the Agreement the
City Parties did not submit is entitled to just as much consideration as the ten percent the
City Parties did submit. Nonetheless, under the majority’s analysis, neither the trial court
nor this court need consider or even examine the entire Agreement in an effort to give
effect to all the Agreement’s provisions.
It is not unusual for contracts, especially lengthy ones, to contain provisions which
seem to conflict. In these cases, the contract itself sometimes indicates which of two or
more conflicting provisions should prevail.
For example, in Helmerich & Payne
Interational Drilling Company v. Swift Energy Company, this court confronted a
paragraph in a contract with a clause stating ―notwithstanding anything to the contrary
1
Similarly, whether a contract is ambiguous is a question of law that courts decide by examining the
contract as a whole in light of the circumstances present when the parties entered into the contract. See
Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996).
2
At most, the record contains all the odd-numbered pages and five even-numbered pages of the fifty-fivepage Agreement.
4
contained in this agreement‖ and held that it took precedence over another paragraph that
lacked such a clause, even though the paragraph lacking the clause was directly contrary
to the paragraph with the clause. See 180 S.W.3d 635, 642–43 (Tex. App.—Houston
[14th Dist.] 2005, no pet.). Article 5 of the Agreement, on which today’s decision turns,
does not contain any clause stating ―notwithstanding anything to the contrary contained
in this agreement.‖ Therefore, any omitted provision of the Agreement that contains such
a clause would preempt and render ineffective anything to the contrary in article 5. See
id.
Though Webster and other precedents hold that no single provision of the
Agreement can be given effect without considering it in light of the rest of the
Agreement, the majority indicates that, in some cases, courts can give effect to part of a
contract without considering the remainder of the contract. The majority cites C&C
Partners v. Sun Exploration & Production Co., for this proposition. See 783 S.W.2d 707,
714 (Tex. App.—Dallas 1989, writ denied), disapproved of on other grounds, Formosa
Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 47 (Tex.
1998). However, a review of the C&C Partners case reveals that it stands for the
unremarkable proposition that, even though courts should consider a provision in light of
all other provisions of the contract, in some cases, only one provision speaks to an issue,
and the other provisions do not alter the analysis. See id. In the C&C Partners case, the
court had before it all of the provisions of the contracts in question. See id. at 714–15.
Furthermore, that case does not stand for the proposition that in some cases a court may
construe one part of a contract without considering it in light of all the other provisions of
the contract. See id. Even if the C&C Partners court had so held, this holding would
conflict with Webster as well as with a recent en banc opinion from this court. See
Webster, 128 S.W.3d at 229; Ross v. Union Carbide Corp., 296 S.W.3d 206, 219 (Tex.
App.—Houston [14th Dist.] 2009, pet. filed) (en banc). ―[W]e must presume that the
parties to a contract intended every clause to have some effect, we cannot selectively
grant controlling effect to the individual provisions appellants cite. Instead, we examine
5
the entire contract and harmonize its provisions so that none are rendered meaningless.‖
Ross, 296 S.W.3d at 219 (emphasis in original) (citations omitted).
The majority suggests that Wheeler and the City Parties have agreed that all
portions of the Agreement relevant to the jurisdictional issues in this case are in the
record. This is inaccurate. Though Wheeler has assigned error as to the trial court’s
conclusion that she lacks standing, no party has asserted that all relevant portions of the
Agreement are in the record, so neither side has taken a position on this issue.
Nonetheless, one might presume that if the parties thought other portions of the
Agreement were relevant, then they would have made sure that at least those portions of
the Agreement were in the record. However, in the absence of the parties’ express
position on this issue, this court simply does not know the parties’ mental thought
processes.3
More importantly, even if the parties had stipulated that the parts of the Agreement
that are absent from the record are totally irrelevant to the issues in this case, it is not
clear that the court could give effect to this stipulation. Texas courts generally treat
contract terms more as the law between the parties than as a fact that can be stipulated
away.
For example, even if Wheeler and the City Parties had stipulated that the
Agreement is unambiguous, this court still would have to conduct an independent inquiry
into whether the Agreement is ambiguous, and if this court were to conclude that the
Agreement is ambiguous, it would so hold, despite the stipulation of the parties to the
contrary. See, e.g., Watkins v. The Krist Law Firm, P.C., No. 14-02-00291-CV, 2003 WL
21786173, at *3–5 (Tex. App.—Houston [14th Dist.] Aug. 5, 2003, pet. dism’d) (mem.
op.) (holding that contract was ambiguous even if the parties agreed that the contract was
unambiguous); City of Bunker Hill Vill. v. Memorial Vills. Water Auth., 809 S.W.2d 309,
3
For example, one or both sides may have believed that this court could rely on the copy of the
Agreement that is in the record from the temporary-injunction hearing. Likewise, one or both sides
mistakenly may have believed that the partial, one-sided copy of the Agreement in the record from the
temporary-injunction hearing is a complete, two-sided copy.
6
310 (Tex. App.—Houston [14th Dist.] 1991, no writ) (holding that court was not bound
by parties’ agreement that contracts were unambiguous and holding that contracts were
ambiguous).
Courts determine a contract’s meaning from all the contract’s language, not from
the piecemeal portions of the contract cited (or provided) by the parties. See Tower
Contracting Co. v. Flores, 302 S.W.2d 396, 399 (Tex. 1957); Crawford, 630 S.W.2d at
379–80. Indeed, a court can base its construction of a contractual provision on parts of
the contract not cited to the court by any party. See Stonehill-PRM WC I, L.P. v. Chasco
Constructors, Ltd., L.L.P., No 03-08-00494-CV, 2009 WL 349136, at *6–8 (Tex. App.—
Austin Feb. 11, 2009, no pet.) (mem. op.); Christus Spohn Health Sys. Corp. v. Nueces
County Hosp. Dist., 39 S.W.3d 626, 629–31 (Tex. App.—Corpus Christi 2000, no pet.).
A court simply cannot properly apply the rules of contract construction to isolated pages,
nor can a court properly determine the meaning of a contract’s terms without examining
them in the context of the entire agreement.
The majority concludes that, under Miranda, the City Parties did not need to prove
up the entire Agreement or provide the trial court with all of its terms. See ante at p. 7.
However, the plaintiffs in Miranda asserted tort claims based on personal injuries. See
Miranda, 133 S.W.3d at 220–21. There was no issue in Miranda as to whether a party
can obtain relief based on a contract without providing the court with all of the contract
terms; indeed, there were no contracts involved in Miranda. See id. at 220–34.
As noted by the majority, the Miranda court established that the procedure for
adjudicating pleas to the jurisdiction involving evidence is substantially similar to the
standard used to determine whether a traditional motion for summary judgment should be
granted.
See id. at 227–28.
The Miranda court noted that, in these cases, the
governmental entity is required ―to meet the summary judgment standard of proof.‖ Id.
at 228. The Miranda court established that these pleas to the jurisdiction should follow
the procedure for traditional motions for summary judgment; however, nothing in
Miranda changed the law regarding this procedure that the Miranda court applied to
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pleas to the jurisdiction. Therefore, Miranda did not address or disapprove in any way
the Crawford case from this court. Compare id. at 226–29, with Crawford, 630 S.W.2d
at 379–80.
The majority seems to suggest that, because the City Parties presented evidence
regarding the Agreement, the burden then shifted to Wheeler to present evidence
challenging the City Parties’ arguments regarding the Agreement. However, the City
Parties attached no evidence at all to their plea to the jurisdiction. On the day of the
hearing on their plea to the jurisdiction, the City Parties filed a brief that included four
pages purportedly from the Agreement. Under precedent from this court, Wheeler did
not have the burden to respond to these four pages of evidence because the City Parties
did not prove their entitlement to judgment as a matter of law by proving up the entire
Agreement. See Crawford, 630 S.W.2d at 379–80; Keathley v. J.J. Invest. Co., No. 0608-00082-CV, 2009 WL 1953436, at *3 (Tex. App.—Texarkana July 9, 2009, no pet.)
(mem. op.) (holding that movant for traditional summary judgment did not satisfy its
initial burden because, among other things, it failed to prove the terms of the contract).
The insurance-policy rule should not be extended to apply to all contracts.
From time to time, the Supreme Court of Texas has created special rules
applicable to the construction and interpretation of insurance contracts in recognition of
the unique relationship between the insured and the insurer. As discussed more fully
below, this species of contract rules is confined to the insurance context. Significantly,
because the case under review does not involve an insurance contract, these rules do not
apply to the Agreement, and this court should not expand these rules to other types of
contracts.
In Paragon Sales Company v. New Hampshire Insurance Company, the Supreme
Court of Texas held that an alleged third-party beneficiary under an insurance policy
could recover on the insurance policy without producing a copy of the entire policy. See
774 S.W.2d 659, 660–61 (Tex. 1989) (per curiam). The Paragon Sales court stated that
8
―Texas law does not require that a plaintiff seeking recovery under an insurance policy
must introduce the entire policy into evidence to prove the terms of the contract.‖ Id. at
661 (emphasis added). The Paragon Sales holding applies only to an insurance contract,
and the court did not state that this rule would apply in any other context.4 See id. at
660–61.
In Texas Farmers Insurance Company v. Murphy, the Supreme Court of Texas
held that an insurance company failed to preserve error in the trial court regarding an
affirmative defense to coverage. See 996 S.W.2d 873, 878–80 (Tex. 1999). In Murphy,
there was no failure to prove all the terms of the insurance policy. See id. The Murphy
court stated the following: ―A plaintiff seeking recovery under an insurance policy,
however, must prove only those provisions that allow recovery.
If there are any
contractual provisions that could limit or bar recovery, it is incumbent on the insurer to
plead and prove them.‖ Id. at 879 (emphasis added) (footnotes omitted). Thus, even in
these dicta from Murphy, the high court limited the statement of law to the insurance
context.5 See id. As with other rules, the Supreme Court of Texas created this exception
to apply in this singular context.
Applying this limited rule in a broader context
undermines longstanding principles of contract construction.
Because Paragon Sales and Murphy do not apply to the non-insurance context and
because this court is constrained by its prior precedent in Crawford, this court is dutybound to follow Crawford in the non-insurance context.6 See Chase Home Finance,
L.L.C., 2010 WL 660166, at *9.
4
Therefore, the Paragon Sales case is not on point and is not contrary to the Crawford case from this
court, discussed above. See Crawford, 630 S.W.2d at 379–80.
5
Therefore, the Murphy case is not on point and is not contrary to the Crawford case from this court,
discussed above. See Crawford, 630 S.W.2d at 379–80.
6
The majority concludes that, under Blue, the City Parties did not need to prove the entire Agreement or
provide the trial court with all of the terms of the Agreement. See ante at pp. 6–7. However, there was no
issue in Blue as to whether a party can obtain relief based on a contract without providing the court with
all of the contract terms; therefore, Blue is not on point or contrary to Crawford. See Bland Indep. Sch.
Dist. v. Blue, 34 S.W.3d 547, 555–56 (Tex. 2000).
9
The majority does not cite, and research does not reveal, any cases applying the
rule stated in Paragon Sales and Murphy to the non-insurance context. In a case of first
impression under Texas law, the majority decides to extend this rule to the non-insurance
context. Though the majority concludes that there is no reason why the non-insurance
context should be any different from the insurance context, material differences between
these contexts provide strong support for not extending this rule to the non-insurance
context.
Generally, courts construe insurance policies according to the same rules of
construction that apply to contracts. See Don’s Building Supply, Inc. v. Onebeacon Ins.
Co., 267 S.W.3d 20, 23 (Tex. 2008); State Farm Fire & Cas. Co. v. Reed, 873 S.W.2d
698, 699 (Tex. 1999). But, for reasons peculiar to the cases involving insurance policies,
there are exceptions to this general rule; for example, if an insurance contract is
ambiguous, courts must resolve the ambiguity by adopting the construction favorable to
the insured, rather than having the factfinder determine the parties’ mutual intent, as
would occur in the non-insurance context. See Don’s Building Supply, Inc., 267 S.W.3d
at 23 (stating that, in insurance context, ambiguous terms are construed in favor of the
insured rather than having a trial regarding the parties’ intent); Lenape Res. Corp. v.
Tennessee Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996) (stating, in non-insurance
context, that if a contract’s meaning is ambiguous, then the finder of fact must determine
the meaning of the ambiguous provision based on the mutual intent of the parties). This
is a material difference between contract interpretation principles governing the insurance
context and those governing the non-insurance context.
As a practical matter, insureds generally are not given a copy of the insurance
policy, a fact that is mentioned in the Paragon Sales case, in which the high court
discussed with approval a case stating that the nature of a suit between the insured and
insurer puts the insurer, who holds the insurance policies, on notice to produce them. See
Paragon Sales Co., 774 S.W.2d at 661. Therefore, the Paragon Sales rule can be
justified as protecting the insured, who generally does not have a copy of the insurance
10
policy, and imposing on the insurer the burden of proving the terms of the insurance
policy. However, this policy consideration does not support extending the Paragon Sales
rule to the non-insurance context, in which courts cannot and do not presume that one
party generally has a copy of the contract and the other party does not.
Absent this policy of protecting the insured, the potential problems of extending
the Paragon Sales rule to the non-insurance context mitigate against extending the rule.
Such an extension would contradict the common law requirement that courts must
examine and consider the entire contract so that, as much as possible, they can harmonize
and give effect to all the contract’s provisions. See Webster, 128 S.W.3d at 229. Such an
extension also would undermine the rule that courts, not parties, are responsible for
construing the language of the contract at issue. See Watkins, 2003 WL 21786173, at *3–
5; City of Bunker Hill Village, 809 S.W.2d at 310. In addition, extension of the Paragon
Sales rule would create practical problems for determining the binding effect of opinions
regarding contracts.
For example, the Agreement affects all Houston police officers. It would not be
fair to penalize a police officer, the Houston Police Officers’ Union (―Union‖), or the
City of Houston for the failure of the parties in this case to prove all the terms of the
Agreement, some of which, as noted, might contradict the court’s determination of the
Agreement’s meaning. Therefore, the court’s decision today should not be binding on
future cases in which the parties, as they almost always do, prove the entire Agreement.
The only cases in which the court’s opinion in this case should be binding are those in
which the parties prove precisely the same parts of the Agreement. But how will future
courts and parties establish which parts of the Agreement were before this court? The
majority does not specify the portions of the Agreement that it has considered. 7 In the
absence of such a statement, the court’s opinion today can have no future precedential
7
Even if courts specified the parts of the contract that they had before them, this specification could
become unwieldy, and it still would not solve the problem that the case would have limited precedential
value.
11
value regarding the construction and application of the Agreement. If the parties were
required to prove all the terms of the Agreement, then, under ordinary common law
principles, this court’s opinion would be binding in all future cases in this court with the
same or sufficiently similar facts and issues involving the Agreement.
Finally, there is no need to extend the Paragon Sales rule to the non-insurance
context. There appears to be no case in Texas jurisprudence in which the parties in a
non-insurance context were unable to prove all the terms of their contract. There is no
reason why the City Parties could not prove the entire Agreement if the court were to
reverse and remand.8
For the reasons stated above, even if this court were not bound by Crawford, it
still should not extend the Paragon Sales rule to the non-insurance context. By doing so,
the court creates an unnecessary risk of inconsistent holdings, undermines traditional
rules of contract analysis, and introduces uncertainty into a well-settled area of Texas
law.
Wheeler has not judicially admitted that the prerequisites of section 143.361 have
been satisfied.
The majority correctly notes that, even if Wheeler lacked third-party beneficiary
status under the Agreement, this would not be a jurisdictional defect, and therefore it
could not support the trial court’s dismissal for lack of jurisdiction. See ante at p. 5;
Yasuda Fire & Marine Ins. Co. of Am. v. Criaco, 225 S.W.3d 894, 898 (Tex. App.—
Houston [14th Dist.] 2007, no pet.). Thus, for the majority’s analysis to be correct, the
Agreement not only must be enforceable, it also must have the force of a statute under
section 143.361 of the Local Government Code. See TEX. LOC GOV’T CODE ANN. §
143.361 (Vernon 2008). However, for section 143.3619 to apply to the Agreement, all of
8
This case does not present a situation in which the parties, despite reasonable efforts, are unable to prove
all of the terms of a contract. A situation in which the parties are unable to prove all of the contract terms
appears to be a rare one, given the dearth of cases dealing with it. However, if this situation arises, it
could be addressed, and there is no need to base the general rule in the non-insurance context on such an
unusual case.
9
Unless otherwise specified, all statutory references in this opinion are to the Texas Local Government
Code.
12
the following prerequisites (collectively hereinafter the ―Prerequisites‖) must be
established:
●
●
The Union must satisfy all the requirements for qualifying as
―bargaining agent‖ under section 143.352(1).
The Agreement must have been made under Chapter 143,
Subchapter J of the Texas Local Government Code.
●
The Agreement must have been ratified by a majority vote of the
City of Houston’s governing body.
●
The Agreement must have been ratified by a majority vote in an
election called by the Union and held under section 143.360.
See TEX. LOC GOV’T CODE ANN. §§ 143.352, 143.359–143.361 (Vernon 2008). The City
Parties did not prove that the Prerequisites were satisfied, and the majority does not
conclude otherwise. Nonetheless, the majority bases its analysis on an alleged judicial
admission by Wheeler in her petition that the Prerequisites have been satisfied.
Because no special exceptions were sustained as to Wheeler’s petition, this court
is to construe that petition liberally and in Wheeler’s favor.
See Horizon/CMS
Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex. 2000). ―A judicial admission must
be a clear, deliberate, and unequivocal statement.‖ Id. at 905. In her petition, Wheeler
alleges that the Union acts as the bargaining agent on behalf of all Houston Police
Officers. This statement might provide a sufficient basis for concluding that proof
regarding the first prerequisite above has been made unnecessary by a judicial admission
in Wheeler’s petition. However, there is no basis for concluding that Wheeler has
judicially admitted any of the other Prerequisites.
In her petition, Wheeler never
mentions any part of the Texas Local Government Code, and she does not assert that the
Agreement was made under any part of that statute. Wheeler does not assert that the
Agreement was ratified by the City of Houston’s governing body or by the Union.
Wheeler does not allege that the Agreement is enforceable under section 143.359 or
under any other statute. Under the applicable legal standard, Wheeler has not clearly,
deliberately, and unequivocally stated that the last three Prerequisites have been satisfied.
13
See Rente Co. v. Truckers Exp., Inc., 116 S.W.3d 326, 333 (Tex. App.—Houston [14th
Dist.] 2003, no pet.). The majority concludes to the contrary based on the following
chain of reasoning:
●
Wheeler seeks to enforce the Agreement.
●
Therefore, she premises her claims on the enforceability of the
Agreement.
If the Prerequisites are satisfied, then under section 143.359, the
Agreement is enforceable.
Therefore, Wheeler has judicially admitted that the Agreement is
enforceable and that the Prerequisites have been satisfied.
●
●
See ante at pp. 3–4.
Wheeler does assert that the Agreement is enforceable; however, she does not
assert that the Agreement is enforceable under the Texas Local Government Code or
because the Prerequisites have been satisfied. If the Prerequisites are satisfied, then
under section 143.359, ―[a] written agreement made under this subchapter between a
public employer and a bargaining agent is enforceable.‖ TEX. LOC GOV’T CODE ANN. §
143.359 (Vernon 2008) (emphasis added).
This statute does not state that the
Prerequisites must be satisfied before any agreement can bind a public employer, and it
does not state that an agreement must be made under Chapter 143 for an agreement to
bind a public employer. Under the language of the statutes in question, if Chapter 143’s
provisions are satisfied, this statute provides one way for an agreement to be made that is
binding on a public employer. However, the statute does not state that it is the only way
for such an agreement to be made. In addition, even if it were the law that the Agreement
must satisfy Chapter 143 to be enforceable, Wheeler is free to make a good faith
argument that the law should be modified to allow the Agreement to be enforced even
though it does not satisfy the Prerequisites. In the judicial-admission analysis, this court
must focus on Wheeler’s pleading to see if it contains a clear, deliberate, and unequivocal
statement that the Prerequisites have been satisfied.
In its analysis, the majority
effectively implies into Wheeler’s petition an allegation that the Agreement is
14
enforceable under Chapter 143 or that the only way the Agreement can be enforceable is
under Chapter 143. These allegations are not in the petition, and this court must construe
that petition liberally in Wheeler’s favor. See Auld, 34 S.W.3d at 897.
The evidence before the trial court does not support a finding that the Prerequisites
are satisfied, and the record contains no stipulation or judicial admission by Wheeler to
this effect. Because the record contains no evidence, stipulation, or admission that the
Prerequisites were satisfied, the trial court erred to the extent it granted the City Parties’
plea to the jurisdiction based on their argument that section 143.361 applies to the
Agreement.
The City Parties’ argument regarding appeals from administrative orders lacks
merit.
In their plea to the jurisdiction, the City Parties also invoked a line of cases
holding that, absent statutory authorization, district courts have no jurisdiction to hear an
appeal from an administrative order, unless the order violates a constitutional provision.
See City of Amarillo v. Hancock, 239 S.W.2d 788, 790 (Tex. 1951). This argument fails
as a matter of law because Wheeler is not challenging any administrative order in this
lawsuit. In addition, the City Parties did not prove any applicable statutory regime, so
there is no way to determine on this record whether Wheeler has a right to bring this suit
under any applicable statutory regime.
The City Parties’ standing argument lacks merit.
In their plea to the jurisdiction, the City Parties asserted that Wheeler has no
standing to file this suit based on article 5 of the Agreement. However, to the extent this
standing argument is dependent upon the Agreement’s preemption of other statutes under
section 143.361, as discussed above, there is no evidence that the Prerequisites are
satisfied so that the Agreement has the force of a statute. To the extent the City Parties
were making a standing argument based on Wheeler’s alleged status as third-party
beneficiary under the Agreement and regardless of any statute, that argument, even if
successful, would go to the merits and would not provide a basis for affirming the trial
15
court’s dismissal for lack of jurisdiction. See Yasuda Fire & Marine Ins. Co. of Am., 225
S.W.3d at 898 (holding that lack of rights as a party or third-party beneficiary under a
contract goes to the merits and does not deprive the court of jurisdiction). In addition,
this court cannot determine whether Wheeler is a third-party beneficiary under the
Agreement because the entire Agreement has not been provided. See J.M. Davidson,
Inc., 128 S.W.3d at 229; MCI Telecomm. Corp., 995 S.W.2d at 650–52; Ross, 296
S.W.3d at 219; Crawford, 630 S.W.2d at 379–80.
Conclusion
The arguments raised by the City Parties do not entitle them to a dismissal for lack
of jurisdiction. This court should sustain Wheeler’s two issues, reverse the trial court’s
judgment, and remand the case to the trial court. Were this court to do so, on remand, the
City Parties could have the opportunity to (1) offer proof that the Prerequisites have been
satisfied so that section 143.361 applies and (2) provide the trial court with a complete
copy of the Agreement. Instead, the court breaks new ground today by holding that a
party in a non-insurance context can obtain favorable relief in court based on a contract
without providing the entire contract to the court. This holding is contrary to prior
precedent from this court requiring that such a party provide the entire contract. This
holding is also contrary to precedent from the Supreme Court of Texas and this court
sitting en banc requiring that this court examine and consider all of the Agreement’s
provisions. The Paragon Sales and Murphy cases are limited to the insurance context
and do not apply in this case. Any extensions of the rule stated in these cases should be
left to the Supreme Court of Texas.
/s/
Kem Thompson Frost
Justice
Panel consists of Chief Justice Hedges and Justices Yates and Frost. (Hedges, C.J.,
majority).
16
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