san-benito-consolidated-independent-school-district-v-mcginnis-lochridge ( 1997 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

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NO. 03-96-00643-CV

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San Benito Consolidated Independent School District, Appellant

v.

McGinnis, Lochridge & Kilgore, L.L.P.; and William H. Bingham,

Individually and in his Capacity as Partner and Agent of

McGinnis, Lochridge & Kilgore, L.L.P., Appellees

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FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT NO. 95-14336, HONORABLE SCOTT McCOWN, JUDGE PRESIDING

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San Benito Consolidated Independent School District (the "District"), appellant, brought suit against McGinnis, Lochridge & Kilgore, L.L.P. and attorney William H. Bingham (collectively the "Law Firm"), appellees, alleging legal malpractice in failing to file, on the District's behalf, a suit for judicial review of an order issued by the Commissioner of Education. The trial court granted the Law Firm's motion for summary judgment. On appeal, the District contends in three points of error that the trial court erroneously applied the substantial evidence rule and that the evidence raises a fact issue as to the existence of an attorney-client relationship. The District also argues that the Commissioner's decision is not supported by substantial evidence. We will affirm. FACTUAL AND PROCEDURAL BACKGROUND

On February 11, 1994, the Texas Commissioner of Education, Lionel R. Meno, issued a decision approving the detachment of 320.949 acres of land from the District and the attachment of the tract to the Harlingen Consolidated Independent School District. The District asserts that it engaged the Law Firm to prepare and file in Travis County district court a suit for judicial review of the Commissioner's order pursuant to Act of June 6, 1990, 71st Leg., 6th C.S., ch. 1, sec. 2.22, 1990 Tex. Gen. Laws 1, 22 (Tex. Educ. Code Ann. § 11.13(c), since repealed and recodified at Tex. Educ. Code Ann. § 7.057(d) (West 1996)) (hereinafter "former section 11.13(c)"). The Law Firm did not file the suit within the applicable time limit, and the District was left without a remedy. The District sued the Law Firm alleging negligence, breach of contract, and violations of the Deceptive Trade Practices Act, Tex. Bus. & Com. Code Ann. §§ 17.46-.63 (West 1987 & Supp. 1997).

The Law Firm filed a motion for summary judgment alleging there was no evidence of an attorney-client relationship. In the alternative, the Law Firm argued that even if a breach of duty had occurred, it did not cause the District any harm because the Commissioner's ruling was supported by substantial evidence and, therefore, the District would not have succeeded in its suit for judicial review. See Millhouse v. Wiesenthal, 775 S.W.2d 626, 627 (Tex. 1989) (to prove proximate cause in legal malpractice action, client must show underlying lawsuit would have been successful "but for" attorney's negligence). The trial court granted the Law Firm's motion for summary judgment by general order, ⁽¹⁾ and this appeal followed.

DISCUSSION

To obtain summary judgment, a movant must show there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). In deciding whether there is a disputed material fact issue precluding summary judgment, the trial court must take evidence favorable to the nonmovant as true. Id. Furthermore, the court must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in the nonmovant's favor. Id.

When a defendant seeks to obtain summary judgment based on a plaintiff's inability to prove its case, the defendant must conclusively disprove at least one element of each of the plaintiff's causes of action. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991). Only after a defendant conclusively disproves an essential element of the plaintiff's cause of action does the plaintiff shoulder the burden of producing controverting evidence and raising a fact issue as to the negated element. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). When a summary judgment order does not state the specific basis for the court's decision, we must uphold the order if any of the theories advanced in the motion for summary judgment were meritorious. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex. 1989).

In its first point of error, the District contends the trial court erroneously applied a "pure substantial evidence" review in determining whether the District could have succeeded in its appeal of the Commissioner's decision. The District argues that former section 11.13(c), the statute that gave the District the right to seek judicial review of the Commissioner's ruling, provided for "substantial evidence de novo" review. Substantial-evidence-de-novo review allows new evidence to be presented to the reviewing body, here the district court. ⁽²⁾ Thus, the District argues the trial court could not determine as a matter of law that the District would not have succeeded in its judicial challenge to the Commissioner's decision, because the reviewing district court would not have been limited to the administrative record in its review of the Commissioner's decision, and evidence not submitted to the Commissioner could have been presented to the court. See Wylie Indep. Sch. Dist. v. Central Educ. Agency, 488 S.W.2d 166, 168 (Tex. Civ. App.--Austin 1972, writ ref'd n.r.e.).

A proceeding of this nature before the Commissioner of Education is a "contested case." See Tex. Gov't Code Ann. § 2001.003(1), (7) (West Supp. 1997). A suit for judicial review of the Commissioner's decision is therefore governed by the Administrative Procedure Act ("APA"), Tex. Gov't Code Ann. § 2001.003(1) (West Supp. 1997). Under the APA, there are only two standards of review: "pure substantial evidence" and "pure trial de novo." See Tex. Gov't Code Ann. §§ 2001.173-.174 (West Supp. 1997). Accordingly, we reject the District's contention that substantial evidence de novo is the proper standard for judicial review.

That does not end our inquiry, however. Under a pure-trial-de-novo review, the decision of the lower agency or board is automatically vacated upon the taking of an appeal, and the reviewing tribunal not only hears new evidence, but also substitutes its discretion and judgment for that of the lower body. This type of review is technically not an "appeal" at all, but a new proceeding. See Central Educ. Agency v. Upshur County Comm'rs Court, 731 S.W.2d 559, 561 (Tex. 1987). On the other hand, under a pure-substantial-evidence review, the reviewing tribunal looks only at the record made before the fact-finding body, i.e., the agency or board, and determines only whether that body's findings and decision are reasonably supported by substantial evidence and are otherwise lawful. Imperial Am. Resources Fund, Inc. v. Railroad Comm'n, 557 S.W.2d 280, 285 (Tex. 1977). The determination of whether the Commissioner's decision is supported by substantial evidence is a question of law. See Firemen's & Policemen's Civ. Serv. v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex. 1984).

In the present case, if pure-trial-de-novo review applies, the Law Firm would, in order for summary judgment to be affirmed on this ground, have to show as a matter of law that the District could not have prevailed in a suit for judicial review no matter what evidence was presented to the trial court. The Law Firm has not satisfied this burden, because the summary judgment evidence does not prove as a matter of law that the District could not have presented new evidence that would show the result reached by the Commissioner to be unreasonable. On the other hand, if pure-substantial-evidence review applies, the district court is confined to the administrative record, i.e., the evidence presented to the Commissioner. If the scope of review is pure substantial evidence, the Law Firm would be entitled to summary judgment if it demonstrated that the Commissioner's decision was supported by substantial evidence, because in that event the District's suit for judicial review would not have succeeded and any breach of duty by the Law Firm could not have caused the District any damages. See Millhouse, 775 S.W.2d at 627. Therefore, a critical issue in this appeal is what sort of review the district court should exercise over a decision of the Commissioner of Education in a suit for judicial review under former section 11.13(c). ⁽³⁾

Former section 11.13(c) stated: "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 . . . ." This Court has held on numerous occasions that section 11.13 and its predecessors required judicial review by the substantial evidence rule, not pure trial de novo. See Havner v. Meno, 867 S.W.2d 130, 132 (Tex App.--Austin 1993, no writ); Hernandez v. Meno, 828 S.W.2d 491, 493 (Tex. App.--Austin 1992, writ denied); Clear Creek Indep. Sch. Dist. v. Commissioner of Educ., 775 S.W.2d 490, 493 (Tex. App.--Austin 1989, no writ); Alton Indep. Sch. Dist. v. Central Educ. Agency, 259 S.W.2d 737, 740-41 (Tex. Civ. App.--Austin 1953, no writ). Moreover, the APA provides that when the scope of judicial review is undefined, the court applies pure-substantial-evidence review. See Tex. Gov't Code Ann. § 2001.174 (West Supp. 1997); City of League City v. Texas Water Comm'n, 777 S.W.2d 802, 805 (Tex. App.--Austin 1989, no writ). We overrule point of error one. ⁽⁴⁾

Having concluded that former section 11.13(c) provides for pure-substantial-evidence review, we now address point of error two, in which the District contends the trial court erred in granting summary judgment because "there was sufficient evidence in the record to show that the Commissioner of Education committed reversible error." Under this point of error, the District argues in general terms that the Commissioner's decision is not supported by substantial evidence, but in doing so it does not specifically attack any of the Commissioner's fifteen findings of fact or seven conclusions of law. In Hooks v. Texas Department of Water Resources, 645 S.W.2d 874 (Tex. App.--Austin 1983, writ ref'd n.r.e.), this Court held that the party seeking judicial review must specify those findings of ultimate fact which it contends are not supported by findings of basic fact, in what respect the findings of basic fact do not support the findings of ultimate fact, and what findings of basic fact are not supported by substantial evidence. Id. at 881; cf. Bransom v. Standard Hardware, Inc, 874 S.W.2d 919, 927 (Tex. App.--Fort Worth 1994, writ denied) (unchallenged finding of fact is binding on appellate court). Because the District is effectively seeking judicial review of the Commissioner's decision, the District's broad assertion that the Commissioner's decision is not supported by substantial evidence is impossible to evaluate. To determine the validity of that point of error, we would have to examine every finding of fact to ascertain whether it is supported by substantial evidence and every conclusion of law to ascertain whether it is warranted by the findings of fact. This would amount to our making an independent search of the record for evidence and reasoning that supports the District's contention. We are under no duty to do so. See Tex. R. App. P. 74(f); Brandon v. American Sterilizer Co., 880 S.W.2d 488, 493 (Tex. App.--Austin 1994, no writ); Most Wonderful Price Hall v. Jackson, 732 S.W.2d 407, 412 (Tex. App.--Dallas 1987, writ ref'd n.r.e.). ⁽⁵⁾ We overrule point of error two.

In light of our disposition of points of error one and two, we need not address the District's remaining point of error regarding the existence of an attorney-client relationship.

CONCLUSION

We affirm the judgment of the trial court.

J. Woodfin Jones, Justice

Before Justices Powers, Jones and Hill*

Affirmed

Filed: August 14, 1997

Do Not Publish

* Before John G. Hill, Chief Justice (former), Court of Appeals, Second District of Texas. Sitting by assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1988).

1. In oral remarks made at or near the time the order was signed, the trial judge indicated he thought a fact issue was presented as to the existence of an attorney-client relationship, and that he was therefore not basing his decision on that ground. The summary judgment order, however, does not reflect such a ruling, and we may not consider the court's oral comments in determining the basis of his order. See Richardson v. Johnson & Higgins of Texas, Inc., 905 S.W.2d 9, 11-12 (Tex. App.--Houston [1st Dist.] 1995, writ denied).

2. Under a "substantial evidence de novo" review, the reviewing tribunal seeks to determine whether the findings made by the local agency or board are reasonably supported by substantial evidence and are otherwise lawful. The reviewing tribunal is not, however, confined to the record made below; rather, it receives evidence at a new hearing and, from that body of evidence, determines as a question of law whether the findings of the agency or board are lawful and supported by substantial evidence. See Firemen's & Policemen's Civ. Serv. v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex. 1984); Board of Trustees of Big Spring Fireman's Relief & Retirement Fund v. Fireman's Pension Comm'r, 808 S.W.2d 608, 612 (Tex. App.--Austin 1991, no writ). "[T]he reviewing tribunal conducts an evidentiary hearing for the limited purpose of determining 'whether at the time the questioned order was entered there then existed sufficient facts to justify the agency's order.'" Big Spring, 808 S.W.2d at 612 (quoting Gerst v. Nixon, 411 S.W.2d 350, 354 (Tex. 1966)). See also Gilder v. Meno, 926 S.W.2d 357, 366 (Tex. App.--Austin 1996, writ denied) (Jones, J., dissenting).

3. "The scope of judicial review of a state agency decision in a contested case is as provided by the law under which review is sought." Tex. Gov't Code Ann. § 2001.172 (West Supp. 1997).

4. In any event, a detachment and annexation proceeding clearly involves the exercise by the Commissioner of a "legislative function." Thus, even if the language of former section 11.13(c) providing for the court to "determine all issues of law and fact" could be construed as calling for pure-trial-de-novo review, such a standard of review would, in the present case, be unconstitutional, requiring us to adopt a different construction if one is reasonably possible. See Key Western Life Ins. Co. v. State Bd. of Ins., 350 S.W.2d 839, 846-48 (Tex. 1961); Davis v. City of Lubbock, 326 S.W.2d 699, 714 (Tex. 1959); see also Code Construction Act, Tex. Gov't Code Ann. § 311.021(1) (West 1988).

5. Moreover, to the extent we are able to identify the arguments contained in the body of the District's brief under point of error two, such arguments were not preserved for review in the District's motion for rehearing to the Commissioner. See Burke v. Central Educ. Agency, 725 S.W.2d 393, 396 (Tex. App.--Austin 1987, writ ref'd n.r.e.). In any event, the complaints that were preserved for review in the District's motion for rehearing appear to have ample evidentiary support in the record.

would have to examine every finding of fact to ascertain whether it is supported by substantial evidence and every conclusion of law to ascertain whether it is warranted by the findings of fact. This would amount to our making an independent search of the record for evidence and reasoning that supports the District's contention. We are under no duty to do so. See Tex. R. App. P. 74(f); Brandon v. American Sterilizer Co., 880 S.W.2d 488, 493 (Tex. App.--Austin 1994, no writ); Most Wonderful Price Hall v. Jackson, 732 S.W.2d 407, 412 (Tex. App.--Dallas 1987, writ ref'd n.r.e.). ⁽⁵⁾ We overrule point of error two.

In light of our disposition of points of error one and two, we need not address the District's remaining point of error regarding the existence of an attorney-client relationship.

CONCLUSION

We affirm the judgment of the trial court.

J. Woodfin Jones, Justice

Before Justices Powers, Jones and Hill*

Affirmed

Filed: August 14, 1997

Do Not Publish

* Before John G. Hill, Chief Justice (former), Court of Appeals, Second District of Texas. Sitting by assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1988).

1. In oral remarks made at or near the time the order was signed, the trial judge indicated he thought a fact issue was presented as to the existence of an attorney-client relationship, and that he was therefore not basing his decision on that ground. The summary judgment order, however, does n