the City of San Antonio and Al Philippus v. Alberto Marin and Clyde Gentle ( 2002 )

No. 04-02-00051-CV CITY OF SAN ANTONIO and Al Philippus, Appellants v. Alberto MARIN and Clyde Gentle, Appellees From the 216th Judicial District Court, Gillespie County, Texas Trial Court No. 9191 Honorable Stephen B. Ables, Judge Presiding

Opinion by: Phil Hardberger, Chief Justice

Sitting: Phil Hardberger, Chief Justice

Catherine Stone, Justice

Paul W. Green, Justice

Delivered and Filed: May 31, 2002

REVERSED AND RENDERED

This is the second appeal before this court in which the City of San Antonio ("City") appeals a trial court's interlocutory order denying a plea to the jurisdiction challenging the appellees' failure to exhaust administrative remedies with regard to adverse personnel actions which the appellees allege violate the Texas Whistleblower Act. The sole issue being raised on appeal is whether the trial court erred in failing to grant the City's plea to the jurisdiction as to the appellees' whistleblower claims due to the appellees' failure to pursue or timely exhaust their administrative remedies. We conclude that the appellees are statutorily barred from pursuing their whistleblower claims, and we render judgment dismissing the whistleblower claims for lack of jurisdiction. We remand the cause for further proceedings with regard to all of the appellees' other claims.

Background

On January 2, 1996, Officer Alberto Marin ("Marin") and Officer Clyde Gentle ("Gentle") requested a hearing before a third party arbitrator for the purpose of resolving their complaints that certain adverse personnel actions taken by the City violated the Texas Whistleblower Act ("Act"). Two days later, on January 4, 1996, Marin and Gentle filed a lawsuit alleging violations of the Act and other claims (the "First Lawsuit"). In accordance with the grievance procedures contained in the parties' collective bargaining agreement, the American Arbitration Association ("AAA") sent the attorneys for the parties a list of proposed hearing examiners in January of 1996, and requested that the parties agree on an examiner. The letter indicated that if the parties were unable to mutually agree on a hearing examiner within five days, each party would alternately strike from the list, and the remaining name would be the hearing examiner.

Two months later, in March of 1996, the attorney for Marin and Gentle sent a letter to the City's attorney stating:

According to the procedures if the parties have not agreed to an arbitrator they alternately strike an arbitrator. It seems the City has always gone first. Please advise [when] you will proceed with striking an arbitrator.

A few days later, the City's attorney responded in writing, expressing his confusion regarding the contents of the March letter and stating that if the attorney wished to select arbitrators by the strike method to contact him. The City's attorney did not receive a response to this letter. Furthermore, the attorney for Marin and Gentle failed to respond to at least nine attempts by AAA to ascertain whether the parties had agreed on a hearing examiner. Finally, in December of 1998, AAA notified both attorneys that AAA had not received a response to its several inquiries and that the file would be closed on December 24, 1998, unless AAA was advised that the parties wished to proceed with arbitration prior to that date.

On June 24, 1999, the City filed a motion to abate the First Lawsuit until all administrative remedies were exhausted. At the hearing on the motion to abate, the attorney for Marin and Gentle stated that they had terminated the grievance procedures and filed the First Lawsuit instead. The trial court inquired:

THE COURT: All right. Right now, Mr. Boyd, if I were to say, "I'm going to give the City 30 days to complete the arbitration process," are you still going to refuse to name an arbitrator?

MR. BOYD: We don't - we have terminated the proceedings and we have filed suit, and that's our position.

The trial court denied the City's motion to abate, and the City appealed. We reversed the trial court's order, holding that Marin and Gentle violated the statutory provision prohibiting them from filing a lawsuit until 60 days after the City's grievance procedures were initiated, noting that the lawsuit was filed only two days after Marin and Gentle requested the arbitration hearing. City of San Antonio v. Marin, 19 S.W.3d 438, 441 (Tex. App.--San Antonio 2000, no pet.). We rendered judgment dismissing the First Lawsuit for lack of jurisdiction on February 16, 2000. Id. at 442.

On March 24, 2000, the attorney for Marin and Gentle advised the City that in view of our decision, Marin and Gentle desired to continue with the arbitration process and requested the City to submit the name of its agreed arbitrator. The City responded in writing that because the allegations or "rights" of Marin and Gentle were not properly or timely asserted, the claims were legally barred. On May 24, 2000, Marin and Gentle submitted a demand for arbitration to AAA. On June 30, 2000, the City objected to the appointment of an arbitrator based on the failure of Marin and Gentle to participate in the selection of an arbitrator earlier and based on the attorney's representations at the hearing on the motion to abate that Marin and Gentle had terminated the arbitration proceedings. On July 11, 2000, Marin and Gentle filed a second lawsuit asserting violations of the Act and other claims (the "Second Lawsuit").

In August of 2000, AAA acknowledged receipt of the City's objection and requested that the attorney for Marin and Gentle respond to the objections on or before August 14, 2000. In December of 2000, the City sent a letter to AAA, stating that the City's objections to the arbitration stood and that the City should not be responsible for any fee relating to the belated effort to arbitrate. AAA acknowledged receipt of this letter and requested that the attorney for Marin and Gentle respond by December 28, 2000. AAA's letter stated, "Absent comments to [the] contrary we assume you agree with the City's position and will assume this case withdrawn and close our file." On February 15, 2001, AAA sent a letter stating that if no response was filed by the parties before March 15, 2001, AAA's records would reflect that the matter had settled.

On November 13, 2001, the City filed a plea to the jurisdiction in the Second Lawsuit, alleging that Marin and Gentle failed to pursue or failed to timely exhaust their administrative remedies with regard to their whistleblower claims. The trial court denied the motion.

Standard of Review

A trial court's ruling on a plea to the trial court's subject matter jurisdiction is reviewed de novo. Herring v. Welborn, 27 S.W.3d 132, 136 (Tex. App.--San Antonio 2000, pet. denied); Rylander v. Caldwell, 23 S.W.3d 132, 135 (Tex. App.--Austin 2000, no pet.). "[A] court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised." Bland Ind. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).

Failure to Exhaust Administrative Remedies

The lawsuit filed by Marin and Gentle alleged violations of the Act through two primary actions taken against them by the City, namely: (1) reassignment grievances; and (2) disciplinary suspensions. We must determine whether Marin and Gentle exhausted their administrative remedies as to each of these alleged actions.

Before bringing a lawsuit for a violation of the Act, a public employee must initiate action under the employing governmental entity's grievance procedures. See Tex. Gov't Code Ann. § 554.006(a) (Vernon Supp. 2002). Under section 554.005, an employee must sue within 90 days from the date an alleged violation of the Act occurs or was discovered through reasonable diligence; provided, however, time used in acting under a grievance procedure is excluded in calculating the 90 day limit. See Tex. Gov't Code Ann. §§ 554.005, 554.006(c) (Vernon 1994 & Supp. 2002). If a final decision is not rendered before the 61st day after the date the grievance procedures are initiated, the employee may elect to: (1) exhaust the grievance procedures, in which event the employee must sue not later than the 30th day after the date the grievance procedures are exhausted; or (2) terminate the grievance procedures, in which event the employee must sue within the time remaining under section 554.005 to obtain relief. Id. at § 554.006(d). When a formal grievance procedure contains several specific steps, the employee must initiate each of these steps in order to exhaust the grievance procedure. Gregg County v. Farrar, 933 S.W.2d 769, 776-77 (Tex. App.--Austin 1996, writ denied); see also Johnson v. City of Dublin, 46 S.W.3d 401, 405 (Tex. App.--Eastland 2001, no writ) (employee must initiate each step of the grievance procedure).

• Reassignment Grievances

The City introduced evidence of a formal six step procedure that an employee must follow with regard to reassignment grievances. If the employee is dissatisfied after having pursued each of these steps, the employee may appeal the grievance to arbitration. The City's uncontroverted evidence proved that the reassignment grievances filed by Marin and Gentle were resolved at the fifth step in the grievance procedure because neither Marin nor Gentle submitted the grievance for further consideration under step 6 of the procedure. Therefore, Marin and Gentle did not exhaust their administrative remedies as to the reassignment grievances. See Farrar, 993 S.W.2d at 776; Johnson, 46 S.W.3d at 405.

• Disciplinary Suspensions

The City introduced evidence that a different procedure applies when an employee is demoted or suspended. An employee's appeal of such a disciplinary action is submitted to arbitration provided that the employee appeals the decision in writing within ten days after receipt of a written statement pointing out the particular rule or rules alleged to have been violated and the specific act or acts alleged to be in violation. The parties are then required to attempt to mutually agree on an arbitrator. If they fail to agree within ten days after the appeal is filed, the parties are sent a list of seven, neutral, qualified arbitrators from AAA. The parties may mutually agree on one of the neutrals or, if they do not agree, must alternately strike names on the list within five days after receipt of the list, and the remaining name shall be the arbitrator. The parties must act to complete the arbitration selection process at the earliest possible date.

Marin and Gentle contend that the trial court properly denied the City's plea to the jurisdiction because they elected to proceed under section 554.006(d)(1) and filed suit only after the grievance procedure had been exhausted by the City's failure to participate in the arbitration. The City responds that at the hearing on the motion to abate in the First Lawsuit, Marin and Gentle elected to proceed under section 554.006(d)(2) by announcing their position that they had elected to terminate the grievance procedures.

We conclude that Marin and Gentle elected to terminate the grievance procedure either: (1) by failing to respond to the inquiries sent by AAA over a two and one-half year period of time; or (2) by announcing on the record at a court hearing, conducted more than sixty days after the grievance procedure had been initiated, that they had elected to terminate the grievance procedure. If we consider the failure to respond to AAA's inquiries as the terminating election, the grievance procedure was terminated at the very latest on December 24, 1998, after Marin and Gentle failed to respond to AAA's notice that the file would be closed on that date unless AAA was advised to the contrary.

The First Lawsuit was properly dismissed because it was filed two days after the grievance procedure was initiated. This Second Lawsuit must be dismissed because it was not filed until: (1) more than one and one-half years after AAA closed its file based on the failure by Marin and Gentle to respond to numerous inquiries, effectively terminating the grievance procedure by failing to act; and (2) more than one year after Marin and Gentle announced their election to terminate the grievance procedure in open court. In either event, the Second Lawsuit was filed more than 90 days from the date Marin and Gentle elected to terminate the grievance procedure. See Tex. Gov't Code Ann. § 554.006(d)(2) (Vernon Supp. 2002) (employee must file suit within 90 days from date employee elects to terminate grievance procedure).

Conclusion

The trial court's order is reversed, and judgment is rendered dismissing the appellees' whistleblower claims for lack of jurisdiction. The cause is remanded to the trial court for further proceedings with regard to appellees' other claims.

PHIL HARDBERGER,

CHIEF JUSTICE

DO NOT PUBLISH