Wilmer-Hutchins Independent School District v. Lionel Meno, the Commissioner of Education, Central Education Agency, Thomas E. Anderson, Jr., Interim Commissioner of Education, and Bobby Williams--Appeal from 126th District Court of Travis County

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-269-CV
WILMER-HUTCHINS INDEPENDENT SCHOOL DISTRICT,

APPELLANT

 
vs.
LIONEL R. MENO, COMMISSIONER OF EDUCATION; CENTRAL EDUCATION
AGENCY; THOMAS E. ANDERSON, JR., INTERIM COMMISSIONER
OF EDUCATION; AND BOBBY WILLIAMS,

APPELLEES

 
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. 91-13503, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING

PER CURIAM

Appellant Wilmer-Hutchins Independent School District seeks to appeal from a trial-court judgment awarding appellee Bobby Williams damages on a breach-of-contract claim. We will affirm the trial court's judgment.

 
I. BACKGROUND

In March 1987, the board of trustees of Wilmer-Hutchins Independent School District (WHISD) failed to renew appellee Bobby Williams' contract as an associate superintendent. The Term Contract Nonrenewal Act (TCNA), Tex. Gov't Code Ann. art. 21.201, .203(a) (West 1987). In its notice to Williams, WHISD stated it was reducing central administrative staff because of lower enrollment and funding. Williams appealed the board's decision to the Commissioner of Education (the "Commissioner") of the Central Education Agency (the "CEA"). TCNA, 11.13, 21.207 (West 1987 & 1991).

The Commissioner found that the board did not consider a written evaluation of Williams' performance before deciding to not to renew his contract and made a conclusion of law that this violated the TCNA, 21.202, & .204(a). (1) The Commissioner further found that the board did not consider whether other positions were open in the district for which Williams was qualified. The Commissioner concluded that these board actions were arbitrary and capricious and that Williams' appeal should be granted. The Commissioner awarded Williams the salary benefits of reinstatement in the same professional capacity for the succeeding school year.

In his motion for rehearing, Williams challenged the remedy the Commissioner awarded. Williams argued that he was entitled to reinstatement, compensation, and other related benefits attendant to his employment with WHISD, dating back to the date the board failed to renew his contract. First, Williams motion for rehearing recited that if the Commissioner's decision that "Petitioner is entitled to salary benefits of reinstatement in the same professional capacity for the succeeding school year" included the relief he prayed for, the decision was not in error. Alternatively, Williams argued that he was entitled to the requested relief as damages for common-law breach of contract on the theory that WHISD breached its contractual obligations to Williams when it wrongfully terminated his employment.

In his decision on rehearing, the Commissioner, relying on this Court's opinion in Cypress-Fairbanks Independent School District v. Texas Education Agency, 797 S.W.2d 336 (Tex. App.--Austin 1990), (2) rev'd, 830 S.W.2d 88 (Tex. 1992), strictly construed his authority to grant a remedy as limited to that provided under TCNA section 21.204(b), and ordered Williams employed in the same capacity for the succeeding school year. Both WHISD and Williams filed timely motions for rehearing.

On September 25, 1991, Williams filed suit in district court. Williams sought judicial review of the Commissioner's order and alleged a breach-of-contract cause of action. The district court granted Williams partial summary judgment on the issue whether WHISD breached Williams' contract. The court then heard evidence and rendered a final judgment (1) affirming the Commissioner's decision in all respects; (2) awarding Williams damages on his breach-of-contract claims; (3) awarding Williams pre- and post-judgment interest, attorney's fees, and costs; and (4) ordering WHISD to reinstate Williams as an assistant superintendent. WHISD appeals from this judgment.

 
II. DISCUSSION

In point of error one, WHISD asserts that the trial court erred in granting partial summary judgment on a breach-of-contract claim because material fact issues exist and plaintiff Williams is not entitled to summary judgment as a matter of law. The standards for reviewing a motion for summary judgment are well established. The movant for summary judgment has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. This Court must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in his favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

 

A. WHISD Failed to Preserve Certain Issues for Review on Appeal

In his motion for partial summary judgment, Williams' pleaded he was entitled to summary judgment on the issue of liability on his breach-of-contract claim because WHISD: (1) failed to consider his performance evaluations before nonrenewing his contract, in violation of the TCNA; and (2) failed to consider Williams for other positions for which he was qualified. WHISD argues that the consideration of a teacher's evaluation before any decision is made to nonrenew is appropriate only if the decision to nonrenew a term contract is based upon a teacher's work performance reflected in such evaluation. WHISD argues that its decision to nonrenew was based on reasons unrelated to performance (e.g., the need to reduce personnel because of loss of enrollment and funding, and changes in program) and, thus, it is ludicrous to require the district to go through the hollow exercise of considering a teacher's evaluation when the reasons for nonrenewal are not related to performance. WHISD argues that consideration of Williams' performance evaluation would have had no effect on the decision to nonrenew. Therefore, the Commissioner acted arbitrarily and capriciously in requiring WHISD to consider Williams' performance evaluation.

WHISD did not raise these arguments in its response to Williams motion for partial summary judgment. Accordingly, we will not consider them on review of the trial court's order granting partial summary judgment. Tex. R. Civ. P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 676 (Tex. 1979) (issues not expressly presented to the trial court by written motion, answer, or other response shall not be considered on appeal as grounds for reversal); Tex. R. App. P. 52(a).

 

B. Requirement That Board Consider Performance Evaluations

Moreover, as a matter of law, WHISD was required to review Williams' performance evaluation before deciding not to renew his contract. The TCNA defines "teacher" to include a superintendent. TCNA, 21.201 (West 1987). Section 21.202 expressly provides that:

 

The board of trustees of each school district shall provide by written policy for the periodic written evaluation of each teacher in its employ at annual or more frequent intervals. Such evaluation shall be considered by the board of trustees prior to any decision by the board not to renew the term contract of any teacher.

 

TCNA, 22.202 (West 1987). The statute clearly required the board to consider Williams' performance evaluation before it decided not to renew his contract. If the legislature had intended to except from this requirement nonrenewals due to reduction in force, it could have so indicated in the statute. (3) The legislature did not.

 

C. Failure to Consider Williams for Other Positions

WHISD next assails the Commissioner's finding that the board acted arbitrarily and capriciously when it failed to consider whether other positions were available in the district for which Williams was qualified. WHISD also argues that the Commissioner acted arbitrarily and capriciously in denying WHISD's second motion for leave to file additional evidence related to the issue of Williams being considered for other positions. WHISD further argues that it was contractually bound by the terms of Williams contract not to consider Williams for any position other than associate superintendent. We need not address these arguments, because the Commissioner's determination that WHISD wrongfully decided not to renew Williams' contract can be sustained based on the Commissioner's finding that WHISD acted arbitrarily and capriciously when it decided not to renew Williams' contract without first considering his performance evaluation.

 

D. Other Alleged Fact Questions

Next, WHISD argues Williams is not entitled to judgment as a matter of law on his breach of contract claim, because (1) after the supreme court's decision in Grounds v. Tolar Independent School District, 707 S.W.2d 889, 891 (Tex. 1986), the Commissioner is without authority to provide Williams more relief than the statutory relief provided in TCNA section 21.204(b) and, thus, Williams has no recognized common-law claim for breach of contract; and (2) the district court's power under substantial-evidence review is limited (4) and, as a matter of law, the court could not grant Williams any remedy not specifically recognized or granted by the Commissioner in his specific findings, especially in the absence of any pleading or evidence by Williams that the Commissioner's decision was illegal, arbitrary or capricious, or not supported by substantial evidence. Specifically, WHISD cites Grounds for the proposition that when a cause of action is derived from a statute, the statutory provisions are mandatory and exclusive and must be complied with in all respects or the action is not maintainable. See Grounds, 707 S.W.2d at 891. WHISD argues that after Grounds, Williams' only recourse for wrongful nonrenewal of his contract is that provided by the TCNA and the only remedy to which Williams is entitled under the TCNA is that provided in section 21.204(b). Thus, argues WHISD, Williams has no common-law cause of action for breach of contract. We disagree.

 

(1) A Cause of Action for Breach of Contract Exists & Williams Established That WHISD Breached His Contract As A Matter of Law

The protections of the Term Contract Nonrenewal Act were a part of Williams' employment contract even though these protections were not expressly written into the contract. Laws which subsist at the time and place of the making of a contract form a part of it, as if they were expressly referred to or incorporated in its terms. Central Educ. Agency v. George West Indep. Sch. Dist., 783 S.W.2d 200, 201-02 (Tex. 1989). These protections were a material part of Williams' contract, which the district could not unilaterally abrogate without committing a breach. Id. at 202. Although these protections are statutorily derived, they exist as a term of the contract between the school district and the employee.

In his petition for review to the Commissioner, Williams alleged that his contract was wrongfully nonrenewed because the WHISD board of trustees failed to consider Williams' performance evaluation in violation of board policy and state law. See TCNA 21.202 (West 1987). Williams' summary-judgment proof included a true and correct copy of the Commissioner's decision on Williams' appeal of the board's failure to renew his contract. The Commissioner's decision recites the Commissioner's finding that the WHISD board of trustees failed to consider Williams' performance evaluation before deciding not to renew his contract. The Commissioner concluded that the board's action in failing to consider the evaluation was arbitrary and capricious. Thus, Williams has a cause of action for breach of contract based on WHISD's failure to obey the TCNA, and established WHISD breached his contract as a matter of law.

 

(2) Neither Grounds nor TNCA Limit Williams' Recovery to Remedy in Section 21.204(b)

At all times relevant to this cause, the TCNA required the board of trustees to give timely written notice of a proposed nonrenewal. (5) Section 21.204(b) provides:

 

In the event of failure to give such notice of proposed nonrenewal within the time herein specified, the board of trustees shall thereby elect to employ such employee in the same professional capacity for the succeeding school year.

 

TCNA, 21.204(b) (West 1987).

Grounds recites, in pertinent part:

 

Since the TCNA is the enabling statute that provides for the interpretation of term contracts between school districts and teachers and for appellate procedures, it is clearly within the Commissioner's power to determine a teacher's statutory rights, which may include reassignment in the "same professional capacity,". . . .

 

Grounds, 707 S.W.2d at 891-92.

Grounds does not limit Williams' remedy to that provided under section 21.204(b). The language in Grounds is permissive, not mandatory, and it implies that other remedies exist. Additionally, section 21.204(b) applies to the board of trustee's failure to give the notice required in section 21.204(a). The facts in this case do not involve the board's failure to give Williams timely notice that the board was considering nonrenewing his contract.

With the exception of the remedy for failure to provide timely notice of the proposed nonrenewal, the TCNA is silent regarding the relief available to a teacher when due process or contractual rights are violated because of a failure to adhere to the TCNA. This does not mean Williams is without a remedy if he suffers damages. Rather, we believe it means that the forum in which Williams must pursue his claims for damages is not administrative, but judicial. See Cypress-Fairbanks, 830 S.W.2d at 91 (commissioner of education is without authority to grant damages or injunctive relief); Central Educ. Agency v. George West Indep. Sch. Dist., 783 S.W.2d 200, 201-02 (Tex. 1989) (protections of TCNA are part of employment contract; district may not unilaterally abrogate protections without committing a breach); Grounds v. Tolar Indep. Sch. Dist., 872 S.W.2d 823, 827 (Tex. App.--Fort Worth 1994, writ denied) (award of nominal damages is mandatory when plaintiff-teacher establishes procedural-due-process violation, but fails to prove actual injury; court of appeals awarded damages district court should have awarded); Kawasaki Motors Corp. v. Texas Motor Vehicle Comm'n., 855 S.W.2d 792, 799 (Tex. App.--Austin 1993, no writ) (agency enforcement and adjudicative powers cannot be implied); Grounds v. Tolar Indep. Sch. Dist., 827 S.W.2d 10, 12 (Tex. App.--Dallas 1992) (teachers have cause of action for breach of contract when school districts fail to obey TCNA), rev'd on other grounds, 856 S.W.2d 417, 420 (Tex. 1993) (TCNA specifically designed to give teachers due-process rights when district decides not to renew teachers employment contract); Pasadena Indep. Sch. Dist. v. Emmons, 586 S.W.2d 151, 152 (Tex. Civ. App.--Houston [1st Dist.] 1979, writ dism'd) (petitioner not required to first seek from commissioner of education injunctive relief staying enforcement of board order when neither Texas Education Code nor APA expressly authorize commissioner to issue injunction or stay order; held, district court had jurisdiction to entertain petition for temporary injunction).

 

(3) District Court Is The Appropriate Forum to Seek Damages

Administrative agencies and officials have no "inherent" powers. They receive government power by delegation from the Legislature, except in a few instances of constitutional delegation not applicable here, and they have no power outside the legislative grant. They may exercise only those powers conferred upon them by law in clear and express statutory language, for no additional authority will be implied by judicial construction, and they may not create for themselves any new and additional power in excess of that granted. Cypress-Fairbanks, 797 S.W.2d at 340.

Section 21.207 of the TCNA provides:

 

(a) If a teacher is aggrieved by the decision of the board of trustees, he may appeal to the State Commissioner of Education pursuant to Section 11.13 of this Code. The commissioner may not substitute his judgment for that of the board of trustees, unless the decision below was arbitrary, capricious, unlawful, or not supported by substantial evidence.

 

(b) Either party may appeal the commissioner's decision to a district court in Travis County.

 

TCNA, 21.207(a), (b) (West 1987).

Section 11.13 provides, in relevant part:

 

(a) [P]ersons having any matter of dispute among them arising under the school laws of Texas or any person aggrieved by the school laws of Texas or by actions or decisions of any board of trustees or board of education may appeal in writing to the commissioner of education, who, after due notice to the parties interested, shall hold a hearing and render a decision without cost to the parties involved, but nothing contained in this section shall deprive any party of any legal remedy.

 

(c) Any person, county, or school district aggrieved by any action of the Central Education Agency or decision of the commissioner of education may appeal to a district court in Travis County, Texas. . . . Upon trial the court shall determine all issues of law and fact, . . . .

 

TCNA, 11.13 (a), (c) (West 1991) (emphasis added).

The TCNA does not expressly authorize the CEA through its Commissioner to award Williams damages resulting from WHISD's wrongful nonrenewal of his contract. Moreover, the adjudication of Williams' breach-of-contract claim is not necessary to the Commissioner's determination whether Williams' contract was wrongfully nonrenewed in violation of his due-process rights and, thus, is not an adjudicative power implied as necessary for the agency to achieve its statutory purpose. See Kawasaki, 855 S.W.2d at 798 (agency may not, on a theory of necessary implication from a specific power, erect and exercise new and additional power).

Williams was required to appeal to the Commissioner the board's decision to nonrenew his contract. Once Williams exhausted his administrative remedies at the agency level regarding the issue whether WHISD wrongfully nonrenewed his contract, Williams could then bring in the district court his cause of action for breach of contract. (6) Williams' remedies for his common-law breach of contract cause of action in the district court are not limited to the remedy provided in the TCNA. See Myrtle Springs Reverted Indep. Sch. Dist. v. Hogan, 705 S.W.2d 707, 709-10 (Tex. App.--Texarkana 1985, writ ref'd n.r.e.) (specifying damages available based on a breach of contract claim arising out of wrongful nonrenewal), cert. denied, 480 U.S. 906 (1987). We must now determine whether Williams could, in the same suit, bring his breach-of-contract cause of action and seek review of the Commissioner's order.

 

(4) Review in District Court

WHISD argues that the district court is limited to substantial-evidence review of the Commissioner's order and that it cannot award Williams more relief than the Commissioner granted in his order, especially in the absence of any pleading or evidence by Williams that the Commissioner's decision was illegal, arbitrary, or capricious, or not supported by substantial evidence. We agree that review of the commissioner's order is governed by the substantial-evidence standard of review. Tex. Educ. Code Ann. 21.207(b) (West 1987); APA--Tex. Gov't Code Ann. 2001.174 (West Pamph. 1994); Cypress-Fairbanks, 797 S.W.2d 340. WHISD, however, fails to acknowledge that Williams brought not only a suit for judicial review of the Commissioner's order, but an independent cause of action for breach of contract.

The Commissioner decided only the issue whether WHISD wrongfully failed to renew Williams contract. The district court tried Williams' cause of action for the breach-of-contract and damages as an original action. Thus, the district court's determination of William's breach-of-contract claims cannot be characterized as judicial review of the agency's action. (7) Accordingly, the district court was not limited to substantial-evidence review of Williams' breach-of-contract claim (8) and could award appropriate relief apart from the relief the Commissioner awarded. We overrule point of error one.

In point of error two, the district asserts that the trial court erred in denying WHISD's pleas to the jurisdiction with respect to any common-law claim for breach of contract and any damages resulting therefrom. In point of error three, the district asserts that the trial court erred in granting Williams any remedy other than one year's salary. WHISD's arguments under these points of error raise nothing not already raised under point of error one. Accordingly, we overrule points of error two and three.

 
III. CONCLUSION

Finding no reversible error, we affirm the trial court's judgment.

 

Before Justices Jones, Kidd and B. A. Smith

Affirmed

Filed: January 11, 1995

Do Not Publish

1. 1 Section 21.202 provides:

 

The board of trustees of each school district shall provide by written policy for the periodic written evaluation of each teacher in its employ at annual or more frequent intervals. Such evaluation shall be considered by the board of trustees prior to any decision by the board not to renew the term contract of any teacher.

 

TCNA, 21.202 (West 1987). Section 21.204(a) provides:

 

In the event the board of trustees receives a recommendation for nonrenewal, the board, after consideration of the written evaluations required by Section 21.202 of this subchapter and the reasons for the recommendation, shall, in its sole discretion, either reject the recommendation or shall give the teacher written notice of the proposed nonrenewal on or before April 1 preceding the end of the employment term fixed in the contract.

 

Act of May 26, 1981, 67th Leg., R.S., ch.765, 2, 1981 Tex. Gen. Laws 2847, 2848 (Tex. Educ. Code Ann. 21.204(a), since amended).

2. 2 The Commissioner did not specify the language he relied on in construing his authority to grant a remedy. We note that the opinion recites that administrative agencies and officials have no inherent authority outside the legislative grant, and may exercise only those powers conferred upon them by law in clear and express statutory language. Cypress-Fairbanks Indep. Sch. Dist. v. Texas Educ. Agency, 797 S.W.2d 336, 340 (Tex. App.--Austin 1990), rev'd on other grounds, 830 S.W.2d 88 (Tex. 1992).

3. 3 For example the legislature has seen fit to except the district from the requirement that it receive recommendations from its school administration regarding nonrenewing a teacher when it is the general superintendent being considered for nonrenewal. See Tex. Educ. Code Ann. 21.203(c), .208 (West 1987).

4. 4 WHISD argues that the district court may only affirm the commissioner's decision, either in whole or in part, or reverse and remand the case for further proceedings if substantial rights of Williams have been prejudiced because the administrative findings are arbitrary or capricious, or characterized by abuse of discretion, or are a clearly unwarranted exercise of discretion. See Administrative Procedure Act--Tex. Gov't Code Ann. 2001.174 (West 1994) (hereinafter APA).

5. 5 Former section 21.204(a) provided:

 

In the event the board of trustees receives a recommendation for nonrenewal, the board, after consideration of the written evaluations required by Section 21.202 of this subchapter and the reasons for the recommendation, shall, in its sole discretion, either reject the recommendation or shall give the teacher written notice of the proposed nonrenewal on or before April 1 preceding the end of the employment term fixed in the contract.

 

Act of May 26, 1981, 67th Leg., R.S., ch.765, 2, 1981 Tex. Gen. Laws 2847, 2848 (Tex. Educ. Code Ann. 21.204(a), since amended).

6. 6 We do not address whether Williams was required to raise at the agency level his claim that he was entitled to damages for breach of contract. See Texas Educ. Agency v. Cypress-Fairbanks Indep. Sch. Dist., 830 S.W.2d 88, 90 (Tex. 1992) (suggesting that claims may be properly before the commissioner for some purposes even if the commissioner cannot finally adjudicate them or grant full relief without overstepping his jurisdictional bounds). See also Roberts v. Hartley Indep. Sch. Dist., 877 S.W.2d 506, 508 (Tex. App.--Amarillo 1994, writ denied) (terminated teacher must exhaust administrative remedies before seeking breach of contract damages in district court). Williams expressly raised the issue in his April 14, 1991, motion for rehearing.

7. 7 Accordingly, this was not a hybrid trial in which the district court applied two different standards of review to an agency order or action (mixing a trial de novo with a review under the substantial evidence rule), which is not permitted. Southwestern Bell Telephone v. Public Util. Comm'n, 571 S.W.2d 503, 511-12 (Tex. 1978).

8. 8 In its order granting Williams partial summary judgment, the district court decided only the question ofWHISD's liability for breach of Williams' contract. The district court held a haring on the damages issue. The applicable burden of proof on the damages issues was by a preponderance of the evidence. WHISD does not assert that the district court incorrectly applied the applicable burden of proof or standard of review.