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City of Denton v. Rushing

Court of Appeals of Texas, Second District, Fort Worth

March 23, 2017

CITY OF DENTON APPELLANT
v.
BRIAN RUSHING, CALVIN PATTERSON, AND KEVIN MARSHALL APPELLEES Mon Tues Wed Thur Fri Sat Sun Mon Tues Wed Thur Fri Sat Sun Mon Tues Wed Thur Fri Sat Sun

         FROM THE 362ND DISTRICT COURT OF DENTON COUNTY TRIAL COURT NO. 15-10369-362

          PANEL: WALKER, MEIER, and GABRIEL, JJ.

          OPINION

          SUE WALKER JUSTICE

         I. Introduction

         Appellant City of Denton perfected this interlocutory appeal from the trial court's denial of the City's plea to the jurisdiction and alternative motion for traditional summary judgment.[1] Appellees Brian Rushing, Calvin Patterson, and Kevin Marshall are nonexempt employees of the City working in the Utilities Department. Appellees filed a breach-of-a-unilateral-contract suit against the City to recover on-call pay they claimed the City owed them under Policy No. 106.06 of the City's Policies and Procedures Manual for on-call periods they had worked. Because the City's governmental immunity from Appellees' suit is waived by Texas Local Government Code section 271.152, we will affirm the trial court's denial of the City's plea to the jurisdiction or alternative motion for traditional summary judgment.

         II. Factual Background

         The following facts are undisputed. The City duly adopted a policies and procedures manual.[2] The policies in the manual apply to all regular full-time, regular part-time, temporary, and seasonal employees who work for the City. See City of Denton, Policies & Procedures Manual, Policy No. 7.00(I). Policy No. 106.06 contained in the City's policies and procedure manual defines and establishes the City's pay practices and administrative procedures for response time and on-call duty. Id., Policy No. 106.06.[3] It provides that employees must respond within thirty minutes while serving on call and "must adhere to all City policies including the Anti-Substance Abuse and Rehabilitation policy" while on call and further provides that the failure to report any variance from City policies while on call may result in forfeiture of on-call pay and in disciplinary actions, including termination. See id. Policy No. 106.06 also sets forth the pay the City will provide employees for on-call services and includes charts setting forth specific examples of how on-call pay is calculated. Id. The terms of the policy authorize department heads to require on-call service from employees at their discretion based on the needs of their department. Id.

         Appellees are regular, full-time, hourly-paid, non-exempt employees of the City. All three Appellees worked week-long on-call shifts[4] in addition to their normal work hours at least one week per month each year between 2011 and 2015. Appellee Patterson was disciplined when he was working an on-call shift and failed to respond within the required thirty-minute timeframe because his cell phone had died. The City did not pay Appellees the on-call pay required by policy 106.06 for the on-call time Appellees had worked.

         III. Procedural Background

         Appellees filed suit against the City for breach of a unilateral contract, alleging that a unilateral employment contract was created when the City, as the Appellees' employer, promised each of the Appellees in writing through its ordinances and policies the "on-call pay" benefits set forth in Policy No. 106.06 in exchange for each of the Appellees' performance of on-call services for the City, and each of the Appellees, as the City's employees, performed the on-call services demanded of them by the City. Appellees alleged the City breached this unilateral contract by failing to pay for the on-call services Appellees had provided and that their breach-of-unilateral-contract suit against the City fell within section 271.152's waiver of immunity. See Tex. Loc. Gov't Code Ann. § 271.152 (West 2016).

         The City filed a plea to the jurisdiction and alternative motion for traditional summary judgment. Both asserted that section 271.152's waiver of immunity did not apply to Appellees' suit for breach of a unilateral contract.[5] The City asserted that its governmental immunity was not waived and that the trial court lacked jurisdiction. According to the City, section 271.152 did not waive its immunity because no written contract existed, as required under section 271.152, and because a disclaimer in the City's policies and procedures manual evidenced the lack of a contract.[6] After a hearing, the trial court denied the City's plea to the jurisdiction and alternative motion for traditional summary judgment.

         The City perfected this appeal and raises three issues asserting that section 271.152 is inapplicable to Appellees' suit, that the City was entitled to summary judgment as a matter of law, and that the trial court lacks jurisdiction because the City possesses immunity.[7]

         IV. Analysis

         A. Standard of Review

         In filing a plea to the jurisdiction, a litigant challenges the trial court's subject-matter jurisdiction. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Because subject-matter jurisdiction is a question of law, we conduct a de novo review of the trial court's ruling on the plea. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). When a plea to the jurisdiction challenges the existence of jurisdictional facts, like the City's plea to the jurisdiction and motion for traditional summary judgment did, the reviewing court considers relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised. See id. If the evidence creates a fact question regarding the jurisdictional issue, then the plea to the jurisdiction must be denied. See id. at 227-28. But if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, then the court rules on the plea to the jurisdiction as a matter of law. Id. at 228. In ruling on a plea to the jurisdiction, a court does not consider the merits of the parties' claims. See id. at 226-28; Cty. of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002).

         B. The Law Concerning Waiver of Immunity by Section 271.152

         The waiver of immunity set forth in section 271.152 provides as follows:

A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of contract, subject to the terms and conditions of this subchapter.

Tex. Loc. Gov't Code Ann. § 271.152. For section 271.152's waiver of immunity to apply, three elements must be established: (1) the party against whom the waiver is asserted must be a "local governmental entity" as defined by section 271.151(3); (2) the entity must be authorized by statute or the constitution to enter into contracts; and (3) the entity must in fact have entered into a contract that is "subject to this subchapter, " as defined by section 271.151(2). City of Houston v. Williams, 353 S.W.3d 128, 134 (Tex. 2011).

         Under the third element, for a contract to be subject to section 271.152's waiver of immunity, it (1) must be in writing, (2) state the essential terms of the agreement, (3) provide for goods or services, (4) to the local governmental entity, and (5) be executed on behalf of the local governmental entity. Tex. Loc. Gov't. Code Ann. § 271.151(2) (West 2016) (defining "contract subject to this subchapter"); see also City of Houston, 353 S.W.3d at 135; Lubbock Cty. Water Control & Improvement Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297, 302 (Tex. 2014) (recognizing that the principle dispute in the appeal was whether the parties' contract was a contract subject to subchapter 271 and holding that "any written, authorized contract that states the essential terms of an agreement for providing services to the governmental entity triggers the waiver of immunity under chapter 271).

         C. Application of the Law to the Present Facts

         We examine whether the three elements necessary for section 271.152's waiver of immunity to apply are present here.

         1. First Element-Defendant Is a Local Governmental Entity

         Concerning the first element, the City is a home rule municipality, chartered under the Constitution of the State of Texas. See Tex. Loc. Gov't Code Ann. § 9.008(b) (West 2008). The City is, and admits in its briefing that it is, a municipality and hence a "local governmental entity" as defined by section 271.151(3). See id. § 271.151(3)(A); see also Tooke v. City of Mexia, 197 S.W.3d 325, 345 (Tex. 2006) ("A local governmental entity is defined to include a municipality."). Thus, the first element necessary to trigger section 271.152's waiver of immunity-that the party against whom the waiver is asserted must be a "local governmental entity" as defined by section 271.151(3)-was established.

         2. Second Element-Defendant Is Authorized to Enter into Contracts

         Concerning the second element, the City concedes in its briefing that it is authorized by statute or the constitution to enter into contracts (although, as discussed below, the City asserts the Texas constitution prohibited it from entering into this particular contract). Thus, the second element necessary to trigger section 271.152's waiver of immunity-that the entity must be authorized by statute or the constitution to enter into contracts-was established.

         3. Third Element-Defendant Entered into a Contract Subject to this Subchapter as Defined in Section 271.151(2)

         Concerning the third element, the City must have entered into a contract that is "subject to this subchapter" as defined by section 271.151(2); and section 271.151(2) defines "contract subject to this subchapter" as "a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity." Tex. Loc. Gov't Code Ann. § 271.151(2); see also City of Houston, 353 S.W.3d at 135 (breaking down the definition of "contract subject to this subchapter" into five requisites). The City argues that this third element is not met for numerous reasons: because Policy No. 106.06 is not a contract; because it does not contain all "essential terms of Appellees' employment for services"; because it does not contain "specified services or goods"; because it was not properly executed; and because the City allegedly had no authority to enter this particular contract, if it is a ...


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