les-eckert-and-aberdeen-insurance-services-inc-v-jose-montemayor-in-his ( 2005 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-04-00507-CV
Les Eckert and Aberdeen Insurance Services, Inc., Appellants
v.
Jose Montemayor, in his Official Capacity as Commissioner of Insurance for
the State of Texas and Texas Department of Insurance, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. GN303607, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING
MEMORANDUM OPINION
In this case, we review the district court’s grant of summary judgment against
Aberdeen Insurance Services, Inc. (Aberdeen Insurance), and Les Eckert concerning an order of the
Commissioner of Insurance releasing Aberdeen Insurance from statutory supervision. See Tex. Ins.
Code Ann. art. 21.28-A (West Supp. 2004-05). We will affirm.
BACKGROUND
The underlying dispute concerns two distinct sets of statutory procedures in the
Commissioner’s arsenal of powers he may exercise to regulate Texas insurers and protect Texas
insurance consumers. See id. §§ 81.001-85.052 (West Supp. 2004-05) (Discipline and
Enforcement); art. 21.28-A (Insurer Delinquencies and Prevention of Insurer Delinquencies;
Supervision of Insurers and Proceedings, Conservatorships, Liquidations—Additional and Alternate
Provisions). The first is the Commissioner’s disciplinary power and the ability to enforce the
insurance code against regulated insurers. Id. §§ 81.001-85.052. Under his disciplinary powers, the
Commissioner may, after notice and opportunity for a hearing, cancel or revoke an insurer’s
authorization to engage in the business of insurance in Texas if the Commissioner finds that insurer
to be in violation of, or to have failed to comply with, the insurance code or the Commissioner’s
rules. Id. § 82.051; see also id. § 82.001 (definition of authorization). The Commissioner may also
assess an administrative penalty, suspend the insurer’s authorization, or issue cease-and-desist
orders. Id. § 82.052. He may also order restitution. Id. § 82.053. The focus of the Commissioner’s
disciplinary powers is to sanction and penalize insurers who violate insurance code provisions and
to protect the public from unfair acts and fraudulent or hazardous conduct. See id. §§ 82.051-.053,
83.051.
However, the legislature has decided that “existing provisions and conditions of law
and the ordered procedures of law are sometimes not adequate, nor appropriate under all
circumstances, in respect of a need to remedy the financial condition and the management of certain
insurers.” Id. art. 21.28-A, § 1. Thus, it has created the second set of statutory procedures at issue
here—a system of supervision “to provide for rehabilitation and conservation of insurers.” Id. By
“authorizing and requiring the additional facility of supervision and conservatorship by the
commissioner,” the legislature authorized the Commissioner to attempt to rehabilitate and conserve
insurers and “to avoid, if possible and feasible, the necessity of temporary or permanent
receivership.” Id. In contrast to the Commissioner’s disciplinary powers, the legislature’s goal in
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conferring these supervisory powers is to preserve insurer assets and, without regard to whether any
wrongdoing has occurred, to ensure public confidence in the ability of the state to regulate the
insurance industry. Id.
Upon a determination that an insurer is insolvent, that the continuance of its business
would be hazardous to the public, that it has exceeded its statutory powers, or that it has failed to
comply with the law, the Commissioner shall place the insurer under supervision and impose
requirements for the termination of supervision. Id. art. 21.28-A, § 3. Supervision may last for up
to 180 days. Id. During the period of supervision, the Commissioner may hold a hearing to review
the insurer’s progress in complying with the terms of supervision, after which the Commissioner may
release the insurer from supervision or take charge of the insurer as conservator. Id. art. 21.28-A,
§§ 3, 5. During conservatorship, the Commissioner may continue to operate the insurer’s business
or may direct the Attorney General to file a petition in Travis County to revoke the insurer’s charter.
Id. art. 21.28-A, § 5. The legislature has given the Commissioner discretion to determine the
appropriateness of supervision, compliance with its terms, and the proper course of action within the
supervisory powers granted. Id.
The facts in this case are not in dispute. Les Eckert individually held a General
Property and Casualty license and a Surplus Lines license issued by the Texas Department of
Insurance (the Department). He was also the president and sole director and shareholder of
Aberdeen Insurance, which held Department-issued Corporate General Property and Casualty and
Corporate Surplus Lines licenses. On November 17, 2000, the Department notified Eckert that it
3
intended to pursue a disciplinary action against both him individually and Aberdeen Insurance.1 See
id. §§ 82.001-.056. The Department suspected that Aberdeen Insurance and Eckert, acting as agents
of third-party insurance carriers, wrongfully collected from customers amounts in excess of
premiums actually due for insurance coverage and failed to forward to the carriers a portion or all
of the premium funds due.2
On April 8, 2002,3 the Commissioner issued an official order placing Aberdeen
Insurance (but not Eckert individually) under supervision and appointing a conservator. The order
explained that the Commissioner had determined that (1) Aberdeen Insurance had not complied with
the terms of a previous supervision order; (2) Aberdeen Insurance’s management might have
engaged in unlawful transactions; (3) Aberdeen Insurance’s management might not have the
experience, competence, or trustworthiness to operate Aberdeen Insurance in a safe and sound
1
The appellate record does not contain the administrative record from the disciplinary
hearings held in connection with this disciplinary notice. The record does contain affidavits of Stan
Strickland and Elizabeth Fuller, Department staff attorneys, and the Commissioner’s findings of fact.
We have gleaned information concerning the disciplinary hearing from those documents.
2
The Commissioner ultimately concluded that Aberdeen Insurance and Eckert collected
$27,746.05 from Montrose River Café on a premium owed of $23,886.00 but failed to timely
forward any funds to the insurance carrier; $96,100.60 from EFA on premiums totaling $87,164.65
but forwarded only $5,463 to the insurance carrier; and $106,980.00, $7,338, and $122,002.18 from
Titan Specialties for three different insurance policies but failed to forward any of those amounts to
the insurance carrier. He also found that Aberdeen Insurance and Eckert entered into a premium
finance agreement in Titan’s name but without its authorization.
3
No party fully explains what happened between November 17, 2000, and April 8, 2002.
However, we note that, based on our record, the hearing on the disciplinary action was held on
December 20, 2002, pursuant to the Commissioner’s fifth amended notice of hearing.
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manner; (4) Aberdeen Insurance might not be able to pay its liabilities as they become due; and (5)
rehabilitation or conservation of Aberdeen Insurance would not be inefficient or impracticable. See
id. art. 21.28-A, § 3. The Commissioner also stated that supervision would be abated on a showing
that Aberdeen Insurance had complied with various requirements detailed in the order. Furthermore,
he would hold a hearing after notice, and, if he found compliance, abatement of the supervision order
would be warranted. However, if the Commissioner found that Aberdeen Insurance failed to show
compliance or if he found that Aberdeen Insurance violated a provision of article 21.28-A, he would
enter an order applying article 21.28-A remedies and sanctions. See id. §§ 3, 5. Elizabeth Fuller,
a staff attorney in the Legal & Compliance division of the Department, drafted the supervision order.
The Department set a hearing before an Administrative Law Judge (ALJ) at the State
Office of Administrative Hearings (SOAH) on October 1, 2002, to determine whether Aberdeen
Insurance had met the abatement terms set out in the supervision order. Aberdeen Insurance
requested a continuance because Eckert was attempting to sell the company’s assets. The
Department agreed to the continuance, and Fuller and Aberdeen Insurance submitted a joint motion
for continuance to the ALJ. The motion provided that the Department would request a new setting
if Eckert failed in his attempt to sell the assets. Both parties jointly asserted that Aberdeen Insurance
understood and agreed that it would “remain under a state of non-confidential supervision until this
matter is withdrawn from the docket or a hearing is held.”
The ALJ granted the motion, abating the case until at least after the completion of a
hearing on the separate disciplinary action. On January 6 and 7, 2003, the ALJ held a hearing on the
Commissioner’s disciplinary action against Aberdeen Insurance and Eckert. Fuller was not a part
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of that hearing. On February 23, Aberdeen sold its assets to a third party. On June 12, the ALJ
issued a Proposal for Decision in the disciplinary proceeding recommending the revocation of
Aberdeen Insurance’s and Eckert’s licenses. The Commissioner accepted this recommendation and
revoked Aberdeen Insurance’s licenses by order on August 14.
On September 5, 2003, Aberdeen Insurance and Eckert filed this original action
against the Commissioner, the Department, and Fuller in her official and individual capacities4 in
district court, alleging that the Department “rekindled” the disciplinary hearing in violation of their
due process rights because they had not been given an opportunity to show compliance with the
supervision order. Aberdeen Insurance and Eckert also alleged a violation of due process of law
because Fuller had advised Aberdeen Insurance of a “right to a hearing regarding the Supervision
Order” and then intentionally refused them a hearing. See 42 U.S.C.A. § 1983 (West 2003).5 They
sought an injunction to prevent enforcement of the revocation order and declarations both that the
revocation order is unenforceable and that they have a right to a supervision hearing according to the
terms of the supervision order drafted by Fuller.
On September 19, the Commissioner denied Aberdeen Insurance’s motion for
rehearing on the revocation. At some point after September 19, Aberdeen Insurance and Eckert
4
For ease of reference, we will refer to these three parties together as “appellees” when
discussing the legal issues on appeal. However, we will continue to refer to the Commissioner, the
Department, and Fuller separately when discussing the facts of this case or where the issues affect
them in different ways.
5
Section 1983 confers a private right of action against a person who deprives another of
federal constitutional rights. 42 U.S.C.A. § 1983 (West 2003).
6
appealed the revocation order to district court and sought a temporary restraining order. The district
court held a hearing on the temporary restraining order on September 29. During that hearing,
Aberdeen Insurance and Eckert cited as support their contention that they had not been given a
hearing to show compliance with the supervision order. Stan Strickland, chief of the Department’s
Financial Counsel Section, was present at that hearing6 and told the court that the Department would
release Aberdeen Insurance from supervision. Counsel for Aberdeen Insurance and Eckert did not
object. The district court denied Aberdeen Insurance and Eckert’s request for a temporary restraining
order to stay application of the revocation order.
On October 15, the Commissioner issued an order, drafted by Fuller, releasing
Aberdeen Insurance from supervision. The order noted Aberdeen Insurance’s previous request for
a continuance of the hearing on the supervision order and the separate disciplinary proceedings that
led to the revocation order. Also noting that the district court denied the request to stay application
of the revocation order and that Aberdeen Insurance was no longer conducting business, the
Commissioner released Aberdeen Insurance from supervision. The Commissioner expressly stated
that release from supervision did not ratify or signify approval of any actions taken by Aberdeen
Insurance or Eckert.
Thereafter, appellees moved for summary judgment on this action based on the
supervision-revocation order. See Tex. R. Civ. P. 166a(c). In the motion, they argued that
compliance with Strickland’s representation to the district court during the appeal hearing cannot
6
An attorney from the financial litigation division of the Office of the Attorney General
appeared as attorney of record for the Commissioner, the Department, and Fuller at that hearing.
7
give rise to a section 1983 cause of action or to a right to other relief; that Aberdeen Insurance and
Eckert have not suffered damage because Aberdeen Insurance sold all its assets before the
supervision order was revoked; that Fuller is entitled to qualified immunity in her individual
capacity; that the Commissioner and Fuller met their burden of proof on their affirmative defense
of official immunity; that the case is moot because Aberdeen Insurance has been released from
supervision; that Aberdeen Insurance has no legal right to judicial review of the supervision order;
that appellees’ actions were authorized by law; and that this case is a collateral attack on the
revocation order. The district court granted the motion for appellees. This appeal of the district
court’s grant of summary judgment concerning the supervision-revocation order followed.7
DISCUSSION
Aberdeen Insurance and Eckert present eight issues on appeal, alleging that the
district court erred in granting summary judgment because: (1) Strickland’s in-court representation
that the Department would release Aberdeen Insurance from supervision was ambiguous and, in any
event, the Department could not release Aberdeen from supervision without first providing notice
and a hearing according to the terms of the supervision order; (2) Aberdeen Insurance and Eckert
have suffered damages even though all Aberdeen Insurance’s assets have been sold; (3) Fuller is not
entitled to qualified immunity in her individual capacity; (4) Fuller has not met her burden of proof
on her affirmative defense of official immunity; (5) the case is not moot even though Aberdeen
Insurance has been released from supervision; (6) Aberdeen Insurance has a legal right to judicial
7
This appeal does not concern the district court’s hearing concerning the license revocation
order that resulted from the disciplinary hearing.
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review of the supervision order; (7) appellees’ actions were not authorized by law; and (8) this case
is a permissible collateral attack on the license-revocation order that resulted from the disciplinary
proceeding.
Standard of review
The propriety of a ruling on a traditional motion for summary judgment raises a
question of law, which we review de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex.
1994); see Tex. R. Civ. P. 166a(c). Summary judgment is properly granted only when the movant
establishes that there are no genuine issues of material fact and that it is entitled to judgment as a
matter of law. Tex. R. Civ. P. 166a(c); Pustejovsky v. Rapid-Am. Corp., 35 S.W.3d 643, 645-46
(Tex. 2000); Missouri Pac. R.R. v. Lely Dev. Corp., 86 S.W.3d 787, 790 (Tex. App.—Austin 2002,
pet. dism’d). Evidence is viewed in the light most favorable to the non-movant with all reasonable
inferences indulged and any doubts resolved in favor of the non-movant. Pustejovsky, 35 S.W.3d
at 645-46; Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985). A defendant
seeking summary judgment must as a matter of law negate at least one element of each of the
plaintiff’s theories of recovery or plead and prove each element of an affirmative defense. Missouri
Pac., 86 S.W.3d at 790. Not until the defendant establishes its right to summary judgment does the
plaintiff bear the burden of raising a fact issue. Id. Because the trial court’s order does not specify
the grounds for its summary judgment, we must affirm the summary judgment if any of the theories
presented to the trial court and preserved for appellate review are meritorious. Provident Life &
Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003); Cincinnati Life Ins. Co. v. Cates, 927
S.W.2d 623, 626 (Tex. 1996).
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Fuller’s immunity
Because Aberdeen Insurance and Eckert sued Fuller under section 1983, a resolution
of the issues concerning her immunity are independent of the issues concerning the revocation of the
supervision order itself. Thus, we will first consider the arguments presented by Aberdeen Insurance
and Eckert that Fuller is entitled neither to official immunity nor to qualified immunity and then turn
to their arguments concerning the revocation.
Official immunity
In their fourth issue, Aberdeen Insurance and Eckert argue that Fuller failed to meet
her burden of proof on her affirmative defense of official immunity. A suit against state employees
in their official capacities is equivalent to a suit against the State; accordingly, employees acting in
their official capacities share the State’s sovereign immunity. See Kentucky v. Graham, 473 U.S.
159, 167 (1985); Texas Dep’t of Health v. Rocha, 102 S.W.3d 348, 353 (Tex. App.—Corpus Christi,
2003, no pet.). The Texas Supreme Court has long recognized that sovereign immunity, unless
waived, protects the State of Texas, its agencies, and its officials from lawsuits for damages, absent
legislative consent to sue the State. Federal Sign v. Texas S. Univ., 951 S.W.2d 401, 405 (Tex.
1997). Sovereign immunity does not, however, bar plaintiffs from seeking equitable relief from
violations of law or a determination of rights under the law. Federal Sign, 951 S.W.2d at 404.
In this case, Fuller claims official immunity against the section 1983 claims of
Aberdeen Insurance and Eckert. Official immunity is an affirmative defense. University of Houston
v. Clark, 38 S.W.3d 578, 580 (Tex. 2000); City of Lancaster v. Chambers, 883 S.W.2d 650, 653
(Tex. 1994). Thus, the burden is on the defendant to establish all elements of the defense. Clark,
10
38 S.W.3d at 580; Chambers, 883 S.W.2d at 653. The elements of the defense of official immunity
are (1) the performance of a discretionary function (2) in good faith (3) within the scope of the
employee’s authority. Kassen v. Hatley, 887 S.W.2d 4, 9 (Tex. 1994); Chambers, 883 S.W.2d at
653.
On appeal, Aberdeen Insurance and Eckert concede that Fuller was performing a
discretionary function. We thus begin by determining whether Fuller conclusively established that
she acted in good faith. A person acts in good faith if a reasonably prudent person in the same or
similar circumstances would have taken the same action. Colbert v. Hollis, 102 S.W.3d 445, 448
(Tex. App.—Dallas 2003, no pet.); see also City of Coppell v. Waltman, 997 S.W.2d 633, 638 (Tex.
App.—Dallas 1998, pet. denied). In making this determination, we look to “whether a reasonable
official could have believed his or her conduct to be lawful in light of clearly established law and the
information possessed by the official at the time of the conduct.” Chambers, 883 S.W.2d at 656.
Accordingly, official immunity will protect all but the plainly incompetent or those who knowingly
violate the law. Id. The test is one of objective legal reasonableness, without regard to whether the
government official acted with subjective good faith. Id.
As a Department staff attorney, Fuller drafted the supervision order. She later set a
hearing for October 1, 2002, to determine Aberdeen Insurance’s compliance with the order. Eckert
then informed her that a sale of Aberdeen Insurance’s assets was imminent and asked for a delay of
the hearing. Fuller agreed and submitted a joint motion for continuance to SOAH. In that motion,
Fuller and Aberdeen Insurance represented that the Department would request a new setting if Eckert
failed in his attempt to sell Aberdeen Insurance’s assets. They also stated that Aberdeen Insurance
11
understood and agreed that it would “remain under a state of non-confidential supervision until this
matter is withdrawn from the docket or a hearing is held.” The ALJ granted the motion.
Fuller did not attend the SOAH disciplinary hearing that resulted in the revocation
of the licenses of Aberdeen Insurance and Eckert. Although she attended the appeal hearing in
district court regarding the revocation order, she did not participate; an assistant attorney general
represented the Department. At that hearing, Strickland told the district court that the Department
would release Aberdeen Insurance from supervision. As a result of that hearing and her knowledge
that Aberdeen Insurance had sold its assets and was no longer conducting business, Fuller drafted
an order releasing it from supervision. We find that Fuller met her burden of conclusively proving
that a reasonable official could have believed her conduct to be lawful in light of clearly established
law and the information possessed by her at the time of the conduct. See Chambers, 883 S.W.2d at
656. Thus, we determine that Fuller acted in good faith.
We now consider whether Fuller failed to act within the scope of her authority
because she did not comply with procedural rights granted in the supervision order.8 See Vitarelli
v. Seaton, 359 U.S. 535, 539 (1959). In Vitarelli, the Supreme Court considered the dismissal of an
employee of the federal Department of the Interior. Although he could have statutorily dismissed
the employee without giving any reasons, the Secretary of the Interior instead dismissed the
employee for “national security” reasons. Id. at 536. The Secretary had previously issued rules
governing discharge of government employees on security grounds, but he did not comply with those
8
Aberdeen Insurance and Eckert argue only that Fuller acted outside the scope of her
authority because she did not comply with procedural rights granted in the supervision order. They
do not present any other basis for reviewing her actions.
12
rules in dismissing Vitarelli. Id. at 538. The Supreme Court acknowledged that the Secretary had
the statutory authority to summarily discharge an employee in petitioner’s status without giving any
reason. Id. at 539. However, the Court decided that the Secretary, having chosen to proceed against
the employee on security grounds, was bound by the regulations that he had promulgated for dealing
with such cases. Id. at 539-40.
The supervision order in this case stated that Aberdeen Insurance could make a
showing that it had complied with the terms of the supervision order. If it did, the Commissioner
would abate the order. It also notified Aberdeen Insurance that “a hearing will be convened and
conducted at [SOAH] . . . to determine whether [Aberdeen Insurance] has fully complied with this
Order, and has met all requirements, as set forth in this Order, to abate the determination.” If the
Commissioner were to find, after a hearing, that Aberdeen Insurance failed to comply with the
supervision order, had committed acts in violation of the insurance code, or was in a condition or
status that would allow the Commissioner to exercise discretionary authority, the Commissioner
might enter an order applying authorized remedies or sanctions.
Notably, the order does not state that the only means of release from supervision is
through a hearing. The text of the order does not foreclose situations in which the Commissioner
might release Aberdeen Insurance from supervision without conducting a hearing. Instead, it only
establishes that the Commissioner would hold a hearing before applying any article 21.28-A
sanctions or remedies. This is the sort of procedural protection that article 21.28-A envisions. Such
a hearing affords Aberdeen Insurance the opportunity to show full compliance with the supervision
13
order, to obtain release from supervision, and to oppose the imposition of sanctions. But requiring
a hearing any time the Commissioner decides to release an insurer from supervision, as Aberdeen
Insurance and Eckert would here, would be an empty formality not anticipated by either article
21.28-A or the order. This is especially true when, as here, Aberdeen Insurance was no longer acting
as an insurer at the time it was released from supervision.
In addition, the Department set a hearing before SOAH in the supervisory proceeding
for October 1, 2002. Aberdeen Insurance requested a continuance from the Department because it
anticipated the sale of its assets would render moot the need for a hearing. In that motion, Aberdeen
Insurance indicated that it understood that it could be released from supervision without a hearing.9
The Department joined the motion. The ALJ granted the motion and continued the case indefinitely.
After Strickland told the district court at the appeal of the revocation order that the Department
would release Aberdeen Insurance from supervision, Fuller drafted the release order. Given the
language of the order and the course of events here, we find that Fuller acted within her authority.
Because Aberdeen Insurance and Eckert concede that Fuller’s actions were
discretionary and because we find that she acted in good faith and within her authority, we hold that
9
In particular, Aberdeen Insurance stated:
Respondent understands and agrees that Respondent’s status will remain
unchanged pending the issuance of a decision or order by the commissioner and
that, consequently, Respondent will remain under a state of non-confidential
supervision until this matter is withdrawn from the docket or a hearing is held.
(Emphasis added.)
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Fuller established the affirmative defense of official immunity. We overrule the fourth issue
presented by Aberdeen Insurance and Eckert.
Qualified immunity
In their third issue, Aberdeen Insurance and Eckert also argue that the district court
erred in granting summary judgment for Fuller in her individual capacity because she is not entitled
to qualified immunity. In particular, they argue that Fuller violated their “constitutional and statutory
rights of due process” under section 1983 by not providing them the opportunity to show compliance
with the supervision order and by refusing them a hearing.
“In a suit against an officer for an alleged violation of a constitutional right, the
requisites of a qualified immunity defense must be considered in proper sequence.” Saucier v. Katz,
533 U.S. 194, 201 (2001). To determine if an official is subject to liability, we apply a two-prong
test. We first consider the allegations in the light most favorable to the party asserting the injury and
determine if the facts alleged show the officer’s conduct violated a constitutional right. Id. (citing
Siegert v. Gilley, 500 U.S. 226, 232 (1991)). If we find an alleged violation of a constitutional right,
we then consider if the right was “clearly established.” Id.
Concerning the violation of a constitutional right, we apply a separate two-part
inquiry to due-process claims—we must determine whether Aberdeen Insurance was deprived of a
protected interest, and, if so, what process was due. Logan v. Zimmerman Brush Co., 455 U.S. 422,
428 (1982). Concerning Aberdeen Insurance’s claimed protected interest, the supervision order
bound Aberdeen Insurance because Aberdeen Insurance held Texas insurance licenses and was
acting as an insurer. See Tex. Ins. Code Ann. art. 21.28-A, § 2(a). Through supervision, the
15
Commissioner set conditions for Aberdeen Insurance to continue its operations as a Texas insurer.
However, when Fuller drafted the supervision-release order, Aberdeen Insurance had no insurance
licenses because the Commissioner had already revoked its licenses through the separate disciplinary
procedure, and it had no assets because it had voluntarily sold them to a third party. See generally
id. art. 21.28-A. It was not acting as an insurer. See id. art. 21.28-A, § 2(a). It therefore had no
protected interests under the supervision statutory scheme or under the supervision order. We find
that Aberdeen Insurance was not deprived of a protected interest.
In addition, we fail to see what process Aberdeen Insurance could have been due. As
noted above, nothing in the supervision order establishes a requirement for a hearing for the
Department to release an insurer from supervision. Because the Commissioner did not apply any
article 21.28-A sanctions but instead removed Aberdeen Insurance from supervision, we find that
Aberdeen Insurance was not entitled to any particular procedure to remove it from supervision even
if it was deprived of a protected interest. Thus, the facts alleged do not show that Fuller’s conduct
violated a constitutional right of Aberdeen Insurance, and we have no need to consider the second
prong of the qualified-immunity test—whether a constitutional right was “clearly established.” See
Saucier, 533 U.S. at 201; Logan, 455 U.S. at 428. We overrule the third issue presented by
Aberdeen Insurance and Eckert.
Collateral attack
In their eighth issue, Aberdeen Insurance and Eckert argue that the district court erred
in granting summary judgment on the merits of its claim because they are entitled to collaterally
attack the revocation order. Aberdeen Insurance and Eckert concede that the merits of this case
16
constitute a collateral attack on the revocation order. They argue only that they are permitted to
collaterally attack the revocation order because they are seeking attorney’s fees under the Uniform
Declaratory Judgments Act (UDJA) and section 1983. See 42 U.S.C.A. § 1988(b) (attorney’s fees
available for section 1983 claims); Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (West 1997
& Supp. 2004-05) (UDJA). They also argue that injunctive relief through collateral attack is
appropriate to stay the revocation order. See Kettlewell v. Hot-Mix, Inc., 566 S.W.2d 663, 668 (Tex.
Civ. App.—Houston [1st Dist.] 1978, no writ).
Generally, an agency’s final order, like the final judgment of a court of law, is
immune from collateral attack. Public Util. Comm’n v. Allcomm Long Distance, 902 S.W.2d 662,
666 (Tex. App.—Austin 1995, writ denied); see also Alamo Express, Inc. v. Union City Transfer,
309 S.W.2d 815, 827 (Tex. 1958) (concluding that collateral attack on Railroad Commission order
was impermissible because administrative statutes provided sole method of attack). Because
administrative bodies are entitled to exercise, without interference from courts, only those functions
conferred by statute, a trial court’s intervention in an administrative proceeding may be permissible
when an agency’s actions exceed its statutory authority. Westheimer Indep. Sch. Dist. v. Brockette,
567 S.W.2d 780, 785 (Tex. 1978). Therefore, a well-recognized exception to the rule that agency
actions are normally immune from collateral attack occurs when an agency acts beyond the scope
of its statutorily conferred powers; a suit for declaratory or injunctive relief will lie in such a
situation. Allcomm Long Distance, 902 S.W.2d at 666. If administrative remedies are inadequate,
a plaintiff may pursue an injunctive collateral attack. See Aircraft & Diesel Equip. Corp. v. Hirsch,
331 U.S. 752, 773-74 (1947); Kettlewell, 566 S.W.2d at 668.
17
We have already decided that Aberdeen Insurance and Eckert have no valid due-
process claims. Aberdeen Insurance was neither deprived of any protected interest nor entitled to
any process to remove it from supervision. Thus, Aberdeen Insurance and Eckert cannot rely on
section 1983 to bring this collateral attack on the revocation order.
As a result, Aberdeen Insurance and Eckert present only one claim to support this
collateral attack—their request for attorney’s fees under the UDJA. See Tex. Civ. Prac. & Rem.
Code Ann. § 37.009 (West 1997). The purpose of the UDJA is “to settle and to afford relief from
uncertainty and insecurity with respect to rights, status, and other legal relations.” Tex. Civ. Prac.
& Rem. Code Ann. § 37.002(b) (West 1997). A party may not rely on the UDJA solely as a vehicle
to recover attorney’s fees. See Hageman v. Luth, 150 S.W.3d 617, 627 (Tex. App.—Austin 2004,
no pet.); Texas State Bd. of Plumbing Exam’rs v. Associated Plumbing-Heating-Cooling Contractors
of Tex., Inc., 31 S.W.3d 750, 753 (Tex. App.—Austin 2000, pet. dism’d by agr.). Thus, Aberdeen
Insurance and Eckert cannot rely on the UDJA’s provision for an award of attorney’s fees to support
this collateral attack on the revocation order.
Aberdeen Insurance and Eckert offer no further basis to support this claim against the
general rule that the Commissioner’s order is immune from collateral attack. See Allcomm Long
Distance, 902 S.W.2d 662 at 666. We overrule the eighth issue presented by Aberdeen Insurance
and Eckert.
CONCLUSION
We have decided that Fuller is entitled to both official and qualified immunity. We
have also determined that the claims of Aberdeen Insurance and Eckert concerning the
18
Commissioner’s order removing them from supervision constitutes an impermissible collateral attack
on the Commissioner’s license-revocation order. Because our decisions concerning these issues fully
resolve the dispute before us, we have no need to review the remaining issues presented by Aberdeen
Insurance and Eckert. We affirm the district court’s grant of summary judgment.
__________________________________________
Bob Pemberton, Justice
Before Justices B. A. Smith, Puryear and Pemberton
Affirmed
Filed: March 31, 2005
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