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Fort Worth Transportation Authority v. Rodriguez

Supreme Court of Texas

April 27, 2018

Fort Worth Transportation Authority, McDonald Transit Associates, Inc., McDonald Transit, Inc., and Leshawn Vaughn, Petitioners,
Michele Rodriguez and New Hampshire Insurance Company, Respondents

          Argued November 8, 2017

          On Petition for Review from the Court of Appeals for the Second District of Texas

          Justice Green delivered the opinion of the Court in which Chief Justice Hecht, Justice Guzman, Justice Devine, and Justice Brown joined.

          Justice Blacklock did not participate in the decision.


          Paul W. Green, Justice

         In this statutory-construction case, we must interpret the damages-cap and election-of-remedies provisions of the Texas Tort Claims Act (TTCA) with respect to independent contractors performing essential governmental functions. After a pedestrian was struck and killed by a public bus in Fort Worth, her daughter sued the Fort Worth Transportation Authority (FWTA), its two independent contractors, and the bus driver under the TTCA. We must decide three issues: (1) whether the TTCA's damages cap applies individually or cumulatively for independent contractors performing essential governmental functions; (2) whether an employee of an independent contractor performing essential governmental functions is protected by the TTCA's election-of-remedies provision; and (3) whether the transit defendants should have been awarded attorney's fees arising out of interpleader. We hold that the damages cap applies cumulatively when, as here, an independent contractor performed essential governmental functions of a transportation authority. We also hold that the TTCA's election-of-remedies provision extends to cover an employee of an independent contractor performing essential governmental functions. Finally, we hold that the transit defendants are not entitled to attorney's fees. Accordingly, we reverse the judgment of the court of appeals and reinstate the trial court's judgment in favor of FWTA with respect to issues one and two. We affirm the court of appeals' denial of attorney's fees and remand of the case for a trial on the merits.

         I. Background

         Judith Peterson was walking across a street in downtown Fort Worth when she was struck and killed by a public bus driven by Leshawn Vaughn. Vaughn was an employee of McDonald Transit, Inc. (MTI), a subsidiary of McDonald Transit Associates, Inc. (MTA). Both MTA and MTI are independent contractors that operate Fort Worth's bus transportation system. Peterson's daughter, Michele Rodriguez, brought a wrongful death suit against Vaughn, FWTA, MTA, and MTI (collectively, the "Transit Defendants"). Rodriguez pled a single count of negligence against all defendants collectively, asserting a variety of acts or omissions, including: "making an improper and unsafe turn, " "driving at an unsafe and excessive speed, " "negligently hiring . . . Defendant Vaughn, " and "[f]ailing to establish and maintain safe and appropriate bus routes." These allegations are not allocated among or attributed to particular defendants, and with the exception of those allegations that clearly refer to the actions of the bus driver, discerning which defendants are alleged to have committed which acts or omissions is difficult.

         FWTA is a regional transportation authority under Texas Transportation Code chapter 452, and it provides public transportation services, including bus routes, to areas under its control. Tex. Transp. Code § 452.001(1). As such, FWTA performs "essential governmental functions" and its exercise of power under chapter 452 "is a matter of public necessity." Id. § 452.052. The Transportation Code permits an authority to "contract for the operation of all or a part of the public transportation system by[] an operator." Id. § 452.056(a)(3). Pursuant to this provision, FWTA contracted with MTI and MTA to provide management and operational services for its fixed-route bus operations. The contract specifically provided that "MTA and MTI are independent contractors of the FWTA" for purposes of section 452.056(d) of the Transportation Code, and that "[a]ll persons employed by MTA and MTI . . . are employees, agents, subcontractors or consultants of MTA and/or MTI, and not of the FWTA." Section 452.056(d) limits the liability of a private contractor performing the function of an authority under chapter 452 "to the extent that the authority or entity would be liable if the authority or entity itself were performing the function." Id. § 452.056(d).

         Under the contract, MTA agreed to furnish a Director of Transportation Services of FWTA's Operating Functions, who would be "responsible for the overall management and operation of all components of the FWTA's Operating Functions." MTI, a wholly owned subsidiary of MTA, agreed to carry out FWTA's operating functions and "employ all necessary and appropriate personnel . . . including drivers." The contract also provided that MTI would "procure all other goods and services reasonably necessary and useful to manage and operate the FWTA's public transportation system in accordance with the policies, procedures, budgets and other directives of the President of the FWTA"; that "[a]ll contractual obligations which are to be entered into or assumed by MTI personnel on behalf of the FWTA shall be in the name of the FWTA"; and that "[a]ll contractual obligations and related liability entered into on behalf of the FWTA in accordance with this paragraph shall become and remain valid obligations of FWTA."

         Rodriguez alleged in her pleadings that the Transit Defendants operated as a joint venture. Accordingly, she asserted that FWTA, MTA, and MTI were vicariously liable for Vaughn's negligence, if proven, under respondeat superior. Specifically, her pleadings included the following:

3.06 Hereinafter in this Petition, all Defendants other than Vaughn may be collectively referred to as "The [Transit] Defendants."
3.07 At all material times and in all material respects, The [Transit] Defendants owned, operated, managed, and/or controlled the bus transportation system operating in Fort Worth, Texas, commonly known as The T.
3.08 Upon current information and belief, The [Transit] Defendants were engaged in a joint enterprise or joint venture to operate and/or maintain such bus transportation system, and each had the actual right to control the business operations, policies, procedures, and activities of such system. Additionally and/or alternatively, they comprised and constituted a single business enterprise in such regard. Additionally and/or alternatively, they were managers, vice principals, agents, mere tools, instrumentalities, departments, and/or alter egos of each other or of one or another of them with regard to operation of such system. They are vicariously and/or jointly and/or severally liable for the conduct of one another in such regard.
3.09 Additionally and/or alternatively, at all material times, Defendant Vaughn was an agent, servant, and employee of MTA and/or MTI and was acting within the course and scope of her authority as such agent, servant and employee. Accordingly, MTA and MTI are liable to [Rodriguez] for her conduct under the doctrine of Respondeat Superior.

         Rodriguez sought declaratory relief that (1) FWTA was liable for the conduct of MTA, MTI, and Vaughn; and (2) pursuant to the Transit Defendants' contract, "whatever liability may be incurred by Vaughn-as an employee of [MTI] and/or [MTA]-constitutes part of the operating expenses of FWTA and shall be paid by FWTA, and that Vaughn is a third-party-beneficiary of such contract in such regard."

         As an authority under the Transportation Code, FWTA is considered a "governmental unit" for purposes of the TTCA. Tex. Civ. Prac. & Rem. Code § 101.001(3)(D). Generally, governmental units are entitled to immunity unless it has been waived. Reata Constr. Corp. v. City of Dall., 197 S.W.3d 371, 374-75 (Tex. 2006). Under the TTCA, the Legislature has waived the immunity of a governmental unit, such as FWTA, for personal injury or death proximately caused by the negligence of an employee acting within the scope of employment if the "death arises from the operation or use of a motor-driven vehicle." Tex. Civ. Prac. & Rem. Code § 101.021(1)(A). However, the liability arising out of this waiver of immunity is "limited to money damages in a maximum amount of $100, 000 for each person." Id. § 101.023(b). Recognizing that a regional transportation authority might delegate some or all of the operation of its public transportation system to one or more independent contractors, the Legislature contemplated liability for such a situation:

A private operator who contracts with an authority under this chapter is not a public entity for purposes of any law of this state except that an independent contractor of the authority that . . . performs a function of the authority . . . is liable for damages only to the extent that the authority or entity would be liable if the authority or entity itself were performing the function . . . .

Tex. Transp. Code § 452.056(d). Rodriguez seeks the statutory maximum of $100, 000 from each entity separately-FWTA, MTA, and MTI-for a total of $300, 000. The Transit Defendants counter that their liability is cumulatively limited to $100, 000 by the TTCA's damages cap.

         The TTCA also contains an election-of-remedies provision that protects government employees: "The filing of a suit under this chapter against a governmental unit constitutes an irrevocable election by the plaintiff and immediately and forever bars any suit or recovery by the plaintiff against any individual employee of the governmental unit regarding the same subject matter." Tex. Civ. Prac. & Rem. Code § 101.106(a). Rodriguez seeks to recover $5 million from Vaughn individually, arguing that she is not protected by this provision because she is an employee of an independent contractor (MTI), and not of a governmental unit (FWTA).

         Rodriguez filed her claim against the Transit Defendants on July 11, 2012. At that time, a separate lawsuit brought by New Hampshire Insurance Company against FWTA and Vaughn arising out of the same incident was already on file. N.H. Ins. Co. v. Fort Worth Trans. Auth., No. 067-258065-12 (67th Dist. Ct., Tarrant County, Tex. Oct. 23, 2014). New Hampshire Insurance sought subrogation to recoup workers' compensation death benefits paid to Rodriguez. Anticipating that it would be drawn into the litigation brought by New Hampshire Insurance, MTI filed a petition in intervention as a party-defendant, counter-claimant, and cross-claimant in that suit. Arguing that the $100, 000 damages cap under the TTCA applied cumulatively to all of the Transit Defendants, MTI filed an interpleader petition and tendered $100, 000 into the registry of the court in accordance with Texas Rule of Civil Procedure 43. See Tex. R. Civ. P. 43. In its interpleader petition, MTI stated that it would not deny liability for Rodriguez's injuries.

          Shortly thereafter, New Hampshire Insurance nonsuited its claim and the two suits were consolidated. This time, all of the Transit Defendants filed an amended interpleader petition, stating that though the claims were defensible, they would not raise a defense if the court determined that their total exposure was limited to $100, 000. After consolidation, the Transit Defendants filed a motion for partial summary judgment seeking dismissal of all claims, or in the alternative, a declaration that the $100, 000 tendered into the court's registry was the maximum amount owed under the TTCA for all claims against all defendants. Rodriguez also filed a motion for summary judgment, seeking a declaration that the damages cap applied to each defendant separately, and that the potential liability of Vaughn, as the employee of a private contractor, was not capped.

         The trial court denied Rodriguez's motion and granted summary judgment in favor of the Transit Defendants, ruling that FWTA, MTI, and MTA should be treated as a single governmental unit under the TTCA, limiting Rodriguez's claim to a maximum recovery of $100, 000. Further, the trial court dismissed Vaughn under the TTCA's election-of-remedies provision and denied the Transit Defendants' request for attorney's fees. See Tex. Civ. Prac. & Rem. Code § 101.106. The court of appeals reversed in part, holding that FWTA, MTI, and MTA were separate entities-each subject to a separate $100, 000 damages cap, for a total of $300, 000-and that Vaughn, an employee of MTI, was not an employee of a governmental unit and therefore was subject to unlimited personal liability and should not have been dismissed. __ S.W.3d__, __ (Tex. App.-Fort Worth 2016, pet. granted). The court of appeals affirmed the trial court's denial of attorney's fees, holding that the Transit Defendants had not provided sufficient evidence to support their requested fees. Id. at __. We granted the petition for review. 60 Tex. Sup. Ct. J. 1230 (June 19, 2017).

          II. Standard of Review

         We review the trial court's summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A traditional motion for summary judgment requires the moving party to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Provident Life, 128 S.W.3d at 215-16.

         On cross-motions for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. City of Garland v. Dall. Morning News, 22 S.W.3d 351, 356 (Tex. 2000). When the trial court grants one motion and denies the other, the reviewing court must determine all questions presented and render the judgment that the trial court should have rendered. Id. This case involves the interpretation of statutory language, which also demands de novo review "to ascertain and give effect to the Legislature's intent." Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009).

         III. TTCA's Damages Cap

         The parties ask us to interpret two separate provisions of the TTCA-Civil Practice and Remedies Code section 101.023 and Transportation Code section 452.056-to determine whether the TTCA's damages-cap provision applies cumulatively or separately when an independent contractor performs essential governmental functions. Under the TTCA, "liability of a unit of local government . . . is limited to money damages in a maximum amount of $100, 000 for each person." Tex. Civ. Prac. & Rem. Code § 101.023. Under the Transportation Code, a private operator who "performs the function of the authority . . . is liable for damages only to the extent that the authority or entity would be liable if the authority or entity itself were performing the function." Tex. Transp. Code § 452.056(d).

         The Transit Defendants argue that the plain language of these statutes does not allow the imposition of liability above $100, 000. For the reasons explained below, we agree. If FWTA operated its bus transportation system and employed its bus drivers directly, this case would not be before us. FWTA's liability would be limited to $100, 000 and Vaughn would be dismissed under the election-of-remedies provision. The fact that FWTA delegated its transportation-related governmental functions to independent contractors, as it is statutorily authorized to do, does not somehow expand the potential liability arising from those governmental functions. Rodriguez argues that the TTCA allows her to sue different entities for different causes of action arising from the same event, and each is liable to its own, respective $100, 000 cap. However, this argument does not comport with the language of the TTCA.

         A. Statutory Construction

         In construing statutes, our primary objective is to give effect to the Legislature's intent. Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010) (citing Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009)). We rely on the plain meaning of the text as expressing legislative intent unless a different meaning is supplied by legislative definition or is apparent from the context, or the plain meaning leads to absurd results. Id. (citing City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008)). A statute is ambiguous if its words are susceptible to two or more reasonable interpretations and we cannot discern legislative intent from the language alone. Tex. State Bd. of Exam'rs of Marriage & Family Therapists v. Tex. Med. Ass'n., 511 S.W.3d 28, 41 (Tex. 2017). When a statute is not ambiguous on its face, it is inappropriate to use extrinsic aids to construe the unambiguous statutory language. City of Rockwall, 246 S.W.3d at 626. But see Tex. Gov't Code § 311.023 (permitting courts to consider legislative history and other construction aids regardless of ambiguity).

         We read statutes contextually to give effect to every word, clause, and sentence, Melden & Hunt, Inc. v. E. Rio Hondo Water Supply Corp., 520 S.W.3d 887, 893 (Tex. 2017), because every word or phrase is presumed to have been intentionally used with a meaning and a purpose. ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 899 (Tex. 2017); Morton v. Nguyen, 412 S.W.3d 506, 516 (Tex. 2013). Words not statutorily defined bear their common, ordinary meaning unless a more precise definition is apparent from the statutory context or the plain meaning yields an absurd result. Paxton v. City of Dall., 509 S.W.3d 247, 256 (Tex. 2017). To determine a term's common, ordinary meaning, we typically look first to dictionary definitions. Tex. State Bd. of Exam'rs of Marriage & Family Therapists, 511 S.W.3d at 35. We analyze the statutes at issue in this case no differently, paying close attention to each word the Legislature has chosen.

         The plain language of Civil Practice and Remedies Code section 101.023 and Transportation Code section 452.056, each standing in isolation, is fairly easily understood. What is unclear in this case is the meaning of the two statutes read together. When interpreting each provision, we must consider the statutory scheme as a whole. 20801, Inc. v. Parker, 249 S.W.3d 392, 396 (Tex. 2008) ("[W]hen interpreting [a specific statute], we must consider its role in the broader statutory scheme."); Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex. 2001). Looking to the statutory scheme, we strive to give the provision a meaning that is in harmony with other related statutes. See City of Dall. v. Abbott, 304 S.W.3d 380, 384 (Tex. 2010); see also La Sara Grain Co. v. First Nat. Bank of Mercedes, 673 S.W.2d 558, 565 (Tex. 1984) ("Generally, courts are to construe statutes so as to harmonize [them] with other relevant laws, if possible.") (citing State v. Standard Oil Co., 107 S.W.2d 550 (Tex. 1937)). "Put differently, our objective is not to take definitions and mechanically tack them together . . . [;] rather, we consider the context and framework of the entire statute and meld its words into a cohesive reflection of legislative intent." Cadena Comercial USA Corp. v. Tex. Alcoholic Beverage Comm'n, 518 S.W.3d 318, 326 (Tex. 2017). Therefore, our analysis seeks to harmonize the two statutes at issue in this case, giving effect to both within the context of the TTCA and reflecting legislative intent.

         B. Immunity

         "Sovereign immunity protects the State from lawsuits for money damages." Reata Constr. Corp., 197 S.W.3d at 374 (quoting Tex. Nat. Res. Conservation Comm'n v. IT-Davey, 74 S.W.3d 849, 853 (Tex. 2002) (plurality op.)). Under our tradition, the judiciary has defined the boundaries of the common law doctrine of sovereign immunity and determined under what circumstances immunity exists, and we have deferred to the Legislature to waive immunity. Id. at 374-75. We have recognized that political subdivisions, including governmental units such as FWTA, are entitled to such immunity-referred to as governmental immunity-unless it has been waived. Id. at 374. The TTCA provides a limited waiver of governmental immunity for certain suits against governmental entities, and it caps recoverable damages. See Tex. Civ. Prac. & Rem. Code §§ 101.021-.026; Mission Consol. Indep. School Dist. v. Garcia, 253 S.W.3d 653, 655 (Tex. 2008). Specifically, the TTCA waives governmental immunity to the extent that liability arises from "the operation or use of a motor-driven vehicle or motor-driven equipment." Tex. Civ. Prac. & Rem. Code § 101.021(1)(A); Garcia, 253 S.W.3d at 655-56. A key provision of the TTCA is the damages-cap provision: "[L]iability of a unit of local government under this chapter is limited to money damages in a maximum amount of $100, 000 for each person . . . ." Tex. Civ. Prac. & Rem. Code § 101.023(b).

         Policy justifications for immunity-and by extension, for limitations on waivers of immunity-revolve around protecting the public treasury. Brown & Gay Eng'g, Inc. v. Olivares, 461 S.W.3d 117, 121 (Tex. 2015). "At its core, the doctrine 'protects the State [and its political subdivisions] from lawsuits for money damages' and other forms of relief, and leaves to the Legislature the determination of when to allow tax resources to be shifted 'away from their intended purposes toward defending lawsuits and paying judgments.'" Id. (quoting IT-Davy, 74 S.W.3d at 853-54). Immunity thus protects the public as a whole. Id. This protection, however, comes at cost-in protecting the public by shielding government funds from the costs of litigation, immunity "places the burden of shouldering those costs and consequences on injured individuals." Id. (internal quotations marks omitted).

         This Court has historically taken a function-based approach to governmental immunity-when the parameters of whether an entity is a "governmental unit" are unclear, we distinguish between an entity performing a governmental function and one performing a proprietary function, affording immunity to the former but not the latter. E.g., Wheelabrator Air Pollution Control, Inc. v. City of San Antonio, 489 S.W.3d 448, 451-52 (Tex. 2016) (declining to extend governmental immunity to a municipally owned electric and gas utility because the operation and maintenance of a public utility is classified as a proprietary function); Rusher v. City of Dall., 18 S.W. 333, 334 (Tex. 1892) (extending governmental immunity to a police officer because the officer acted as an agent of the State in performing a governmental function on behalf of the State); City of Galveston v. Posnainsky, 62 Tex. 118, 125-26 (1884) (explaining that governmental immunity extends to a town when the town is performing duties "exclusively for public purposes"). The TTCA codified this proprietary-governmental distinction. See Turvey v. City of Houston, 602 S.W.2d 517, 519 (Tex. 1980) (noting that the TTCA expressly waived governmental immunity to the extent expressed in the statute but "preserved the claimant's common law remedy to seek unlimited damages for the negligent acts of a municipality while engaged in a proprietary function").

         Furthermore, while granting immunity has traditionally been the province of the judiciary, the Legislature has the power to change the common law classifications of certain functions as proprietary or governmental, even when doing so has the effect of extending immunity from suits that could have been maintained at common law. City of Tyler v. Likes, 962 S.W.2d 489, 503 (Tex. 1997). This authority stems from the Texas Constitution itself: "Notwithstanding any other provision of this constitution, the [L]egislature may by law define for all purposes those functions of a municipality that are to be considered governmental and those that are proprietary, including reclassifying a function's classification assigned under prior statute or common law." Tex. Const. art. XI, § 13. Thus, "[i]n determining the boundaries of immunity as it relates to whether a function is proprietary or governmental, . . . courts should be guided . . . by the TTCA's treatment of the proprietary-governmental distinction." Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427, 439 (Tex. 2016); see also Tex. Transp. ...

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