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Fort Worth Independent School District v. Palazzolo

Court of Appeals of Texas, Second District, Fort Worth

June 13, 2019

Fort Worth Independent School District, Appellant
Joseph Palazzolo, Appellee

          On Appeal from the 271st District Court Wise County, Texas Trial Court No. CV12-07-438

          Before Sudderth, C.J.; Kerr and Birdwell, JJ.



         I. Introduction

         In 2012, Appellee Joseph Palazzolo, who had been one of Appellant Fort Worth Independent School District (FWISD)'s assistant principals, sued FWISD, alleging that it had violated the Whistleblower Act by firing him in retaliation for reporting its legal violations. Six years later,[1] FWISD filed a plea to the jurisdiction, which the trial court denied.

         In a single issue in this accelerated interlocutory appeal,[2] FWISD complains that the trial court lacks subject matter jurisdiction over Palazzolo's Whistleblower Act claim against it because Palazzolo did not file suit until after the Whistleblower Act's jurisdictional 30-day limitations period had run. We affirm.

         II. Background

         Palazzolo worked for FWISD in the 2007–2008 school year as a history teacher and was hired as an assistant principal for the 2008–2009 and 2009–2010 school years. His 2009 contract was for a two-year term, i.e., the 2009–2010 and 2010–2011 school years. The instant dispute arose in August 2010 when Palazzolo filed a complaint about FWISD with the Texas Education Agency (TEA) before the new school year started. Palazzolo IV, 498 S.W.3d at 677–78 (reciting allegations of attendance falsification, grade changing, inappropriate conduct with students, and hostile work environment).[3] FWISD placed Palazzolo on paid administrative leave, and on October 26, 2010, FWISD's Chief of Administration submitted a report to FWISD's Board, proposing that Palazzolo's employment be terminated for good cause "based upon six grounds that were unrelated to his reports of wrongdoing." Id. at 678 & n.2. The Board voted 6 to 3 to notify him of his proposed termination. Id.

         On October 28, 2010, the Board informed Palazzolo, in a four-page letter bearing the memo line "Notice of Proposed Termination of Employment Contract," that it would consider the proposal to discharge him from his employment with FWISD "subject to [his] statutory rights to protest and to request a hearing," under education code sections 21.211 and 21.253. The Board informed him that if he wished to protest "this proposed action to terminate [his] employment contract" and to request a hearing before the proposed action was taken, he had to "comply with the requirements specified by Section 21.253 of the Texas Education Code"-within 15 days of receiving the notice-by notifying the Board in writing and filing a written request for a hearing before a hearing examiner. See Presidio ISD v. Scott, 309 S.W.3d 927, 929 (Tex. 2010). Palazzolo opted to pursue his Chapter 21 rights to request a hearing on his proposed termination. See Tex. Educ. Code Ann. § 21.253; see also Palazzolo IV, 498 S.W.3d at 678.

         As the supreme court explained in Scott, the procedure for a term-contract teacher to seek review of a proposed termination under Chapter 21 begins with the request for a hearing before a hearing examiner, whose recommendation may be adopted or rejected by the board. 309 S.W.3d at 929. The teacher may then appeal the board's decision to the Commissioner of Education, and either side may appeal the Commissioner's decision to a district court:

          If a school district seeks to terminate a teacher, the teacher may request a hearing before a certified hearing examiner who develops the record, conducts a bench trial, and ultimately makes a written recommendation that includes proposed findings of fact, conclusions of law, and if the examiner so chooses, a proposal for granting relief. See Tex. Educ. Code §§ 21.251–.257. Next, the school district's board of trustees or board subcommittee considers the recommendation and may adopt, reject, or change the hearing examiner's conclusions of law or proposal for granting relief. Id. § 21.259.

If dissatisfied with the board's decision, the teacher may appeal to the Commissioner of Education. Id. § 21.301(a). The Commissioner "shall review the record of the hearing before the hearing examiner and the oral argument before the board of trustees or board subcommittee." Id. § 21.301(c). And, with exceptions not relevant here [procedural irregularities] the Commissioner shall consider the appeal "solely on the basis of the local record and may not consider any additional evidence or issue." Id. If the board terminates a teacher's contract, the
Commissioner may not substitute his judgment for the board's unless its decision was "arbitrary, capricious, or unlawful or is not supported by substantial evidence." Id. § 21.303(b). Once the teacher and school district receive notice of the Commissioner's decision, id. § 21.304, a party may file a request for rehearing, id. § 21.3041(a). "Either party" may then appeal the Commissioner's decision to a district court. Id. § 21.307(a).

Id. (footnote omitted).

         After the hearing examiner ruled in FWISD's favor on March 1, 2011,[4] and the Board adopted the examiner's recommendation a week later, Palazzolo appealed to the Commissioner, who reversed the hearing examiner's decision for procedural irregularities. Palazzolo IV, 498 S.W.3d at 678; see Tex. Educ. Code Ann. § 21.303(b), (c). In his June 29, 2011 decision, the Commissioner gave the Board two options: (1) hold a new hearing or (2) "pay [Palazzolo] any back pay and employment benefits from the time of termination until the time [he] would have been reinstated and one year's salary from the date [he] would have been reinstated." See Tex. Educ. Code Ann. § 21.304(e), (f). The Commissioner also identified the date full compensation was to be tendered to Palazzolo as "[t]he date [he] would have been reinstated."

         On July 25, 2011, FWISD sent Palazzolo the following letter,

Pursuant to the June 29, 2011, Decision of the Commissioner on Motion for Rehearing, enclosed with this letter is a check payable to you in the amount of eighteen thousand, one hundred fourteen dollars and sixteen cents ($18,114.16). This check covers your salary and benefits minus applicable deductions from March 9, 2011, until July 15, 2011, and provides the back pay and benefits as outlined in the Decision of the Commissioner on Motion for Rehearing referenced above. The enclosed check is your final check for the 2010-2011 school year.
The first paycheck for the 2011-2012 school year will be issued to employees on September 28, 2011.

         In the meantime, FWISD unsuccessfully appealed the Commissioner's decision to the district court. See id. § 21.307. FWISD's appeal of the district court's decision to this court was dismissed in March 2012. Palazzolo I, 2012 WL 858632, at *1.

         The general timeline of events relevant to this appeal, therefore, is as follows:

August 9, 2010: Palazzolo files his complaint with the TEA. Palazzolo IV, 498 S.W.3d at 678.
October 26, 2010: FWISD Board votes to notify Palazzolo of his proposed termination. Id.
October 28, 2010: FWISD Board sends "Notice of Proposed Termination of Employment Contract" to Palazzolo, referencing his right to protest and to request a hearing under Chapter 21 and providing a 15-day deadline to notify the Board of such request. Palazzolo complies with this deadline.
March 1, 2011: The hearing examiner rules in FWISD's favor.
March 8, 2011: The Board adopts hearing examiner's decision.
March 22, 2011: Palazzolo appeals to the Commissioner.
May 10, 2011: The Commissioner reverses the hearing examiner's decision.
June 29, 2011: On rehearing, the Commissioner restates his original decision and clarifies FWISD's two options.
July 15, 2011: Per FWISD's July 25, 2011 letter and the Commissioner's order, we infer that this would have been Palazzolo's reinstatement date.
July 25, 2011: FWISD complies with part of one of the Commissioner's two options while appealing the Commissioner's decision, paying Palazzolo back pay and benefits of $18,114.16, and states in its letter to him that the "first paycheck for the 2011-2012 year will be issued to employees on September 28, 2011."
February 14, 2012: At its Board meeting, the FWISD Board votes to pay Palazzolo a year's salary. See Tex. Educ. Code Ann. § 21.304(f).
February 17, 2012: FWISD sends a letter to Palazzolo's attorney enclosing checks for $10,740.87 and $67,088.49, payable to Palazzolo, "as final payment in the above referenced matter" [Joseph Palazzolo vs. Fort Worth ISD, Docket No. 038-R2-0311]. This letter contained no other explanation.
February 22, 2012: FWISD files a motion to dismiss its appeal in this court.
February 23, 2012: Palazzolo files a grievance with FWISD on a FWISD "Employee Complaint Statement Form" that references "Board
Policy DGBA (LEGAL) and (LOCAL)."[5] Chapter 21 complaints about the proposed nonrenewal or proposed termination of an employee's term contract are included in the DGBA (LOCAL) exceptions, but the policy specifically references Whistleblower complaints, which "may be made to the Superintendent or designee beginning at Level Two." On the form grievance, Palazzolo checks all of the levels-Level 1, Level 2 ("Appeal of Level 1 Decision"), and Level 3 ("Appeal of Level 2 Decision").[6]
February 28, 2012: FWISD sends a letter directly to Palazzolo stating that the FWISD Board had voted to pay him a year's salary as set forth in the Commissioner's decision and referencing the two checks he had been issued to cover his salary through February 17, 2012, with applicable deductions ($10,740.87), and a full year's salary with applicable deductions ($67,088.49). The letter further stated that the $67,088.49 was his "final check from the District with regard to [his] employment with Fort Worth ISD" and that his FWISD benefits would end the next day, on February 29, 2012.
February 29, 2012: FWISD sends a letter to Palazzolo, acknowledging his February 23 grievance and informing him that the "DGBA (LOCAL) policy" required him to attach the supporting documents he referenced in his grievance.[7]
March 1, 2012: Palazzolo files with the Commissioner a "petition of review of termination by Fort Worth Independent School District," complaining that he should be reinstated absent a clear intent to terminate his employment.[8]
March 14, 2012: This court grants FWISD's motion to dismiss and dismisses FWISD's appeal of the district court's ruling and the Commissioner's 2011 decision. Palazzolo I, 2012 WL 858632, at *1.
March 22, 2012: Palazzolo sends a letter to the FWISD superintendent asking for his grievance hearing to be scheduled and pointing out that the February 14, 2012 FWISD Board vote did not indicate that he was being terminated but that after the vote, "someone within FWISD took steps to end [his] pay and benefits with FWISD," which was why he filed his grievance.
April 19, 2012: Palazzolo sends a follow-up letter to the FWISD superintendent, again asking for his grievance hearing to be scheduled.
April 20, 2012: FWISD sends Palazzolo a letter informing him that his February 23, 2012 grievance would be put on a schedule for a Level 2 hearing sometime between May 2 and May 15.
April 20, 2012: (Same day as above.) Palazzolo's petition for review is dismissed by the Commissioner for want of jurisdiction because Palazzolo was attempting to appeal a board's decision under education code section 21.304(f), not a decision to terminate his contract under section 21.259 or a decision to not renew his contract under section 21.208. According to the Commissioner, he had no jurisdiction over Palazzolo's claim since the issues Palazzolo raised had to have first been raised at the school district level through the school board's grievance process.[9]
April 24, 2012: FWISD sends Palazzolo a letter informing him that the superintendent would hear his complaint on May 9, 2012, at 1:30 p.m. We infer from the record that this hearing was rescheduled.
May 1, 2012: The parties unsuccessfully mediate the dispute.
May 24, 2012: FWISD sends Palazzolo a letter reciting that his Level 2 grievance hearing was scheduled for the next day, May 25, 2012, at 2:30 p.m.
May 25, 2012: Palazzolo's Level 2 grievance is heard by the FWISD superintendent. The superintendent conducts the Level 2 hearing under both the DGBA policy, which applies only to district employees, and the GF policy, which concerns complaints by members of the public.
June 8, 2012: FWISD sends Palazzolo a letter explaining the superintendent's conclusion after the Level 2 grievance hearing that there was no evidence of retaliation and advising Palazzolo, "Should you wish to appeal this decision, you may do so in compliance with the timelines set forth in Board Policy." In the letter, FWISD summarized facts pertinent to the Level 2 grievance hearing, listing his termination date as March 8, 2011-the date the Board adopted the hearing examiner's recommendation-and noting that the Commissioner had reversed that decision on May 10, 2011, and had given FWISD two options in his June 29, 2011 decision, which FWISD had then appealed to the district court, which dismissed the appeal. The letter further recited that FWISD had appealed that dismissal to this court before it moved for dismissal of its appeal.
June 27, 2012: FWISD sends Palazzolo a letter informing him that the Board would consider his appeal of the Level 2 decision at its July 17, 2012 meeting at 5:30 p.m. and attaching a copy of the "Procedures for Employee Grievance/Complaint Appeals."
July 6, 2012: Palazzolo files his Whistleblower lawsuit. Palazzolo IV, 498 S.W.3d at 678.[10] While Palazzolo prevailed at trial on his Whistleblower claim, in 2016 we reversed the trial court's judgment based on jury charge error. See id. at 677, 686.[11]

         On remand, FWISD filed a plea to the jurisdiction, arguing that the trial court lacked jurisdiction because Palazzolo had filed his Whistleblower lawsuit more than 30 days after February 14, 2012, which FWISD identified as the conclusion of the Chapter 21 grievance process. Palazzolo responded by pointing out that between February 14, 2012, and his filing suit on July 6, 2012, FWISD and its attorneys fully participated in FWISD's Level 2 internal grievance process by which he challenged his actual-no longer proposed-termination. And he further pointed out the contradictory position that FWISD's own policies take on the matter. While FWISD's policies direct teachers to the Chapter 21 process to challenge a proposed contract termination,[12] they refer to the district's internal Level 2 grievance procedures as the proper vehicle for Whistleblower claims.[13] Palazzolo also referred the trial court to Palazzolo II, in which FWISD had successfully argued that the trial court had no jurisdiction over his earlier attempt at a Whistleblower lawsuit based on other FWISD actions because he had failed to exhaust the internal grievance procedures as required by FWISD's policies. 2014 WL 69889, at *1–2, *5–6 (holding that as to his transfer and appraisal-report claims, Palazzolo did not properly ...

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