City of Pearsall v. Robert Tobias ( 2015 )

ACCEPTED
04-15-00302-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
11/30/2015 7:00:18 PM
KEITH HOTTLE
CLERK
No. 04-15-00302-CV
FILED IN
4th COURT OF APPEALS
SAN ANTONIO, TEXAS
IN THE TEXAS COURT OF APPEALS
11/30/15 7:00:18 PM
FOURTH COURT OF APPEALS KEITHClerk
E. HOTTLE
AT SAN ANTONIO, TEXAS
CITY OF PEARSALL
APPELLANT
VS.
ROBERT M. TOBIAS, JR.
APPELLEE
Appealed from the 218th Judicial District Court
Frio County, Texas. Hon. Donna S. Rayes, Presiding Judge
REPLY BRIEF OF APPELLANT
CITY OF PEARSALL
ALBERT LÓPEZ
State Bar No. 12562350
LAW OFFICES OF ALBERT LÓPEZ
14310 Northbrook Drive, Suite 200
San Antonio, Texas 78232
(210) 404-1983 (Telephone)
(210) 404-1990 (Telecopier)
ATTORNEY FOR APPELLANT
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
INDEX OF AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -iii-
REPLY ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
I. Reply to the Statement of Facts regarding the City drafting the
terms of the agreement, which included terms that Appellant
claimed in the trial court proceedings and here as illegal.. . . -1-
II. Reply to the Statement of Facts regarding the City
unceremoniously terminated Appellee’s employment and the
Agreement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
III. Reply to the Statement of Facts regarding Tobias attempting to
resolve the dispute short of litigation but the City refusing to
discuss the matter and, further, that it refused to mediate after the
litigation began; and the City refused to make any offer of
settlement in this matter.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2-
IV. Reply to the Statement of Facts regarding the statement that when
Appellant realized that it could not get around the clear language
contained in Section 3.A., it contrived the novel proposition and
defense that the residency requirement the Appellant drafted in
Section 10. b. of the Agreement, was ultra vires making the entire
employment agreement null and void.. . . . . . . . . . . . . . . . . . . -2-
V. Reply to the Statement of Facts regarding that the trial court (J.
Saxon) made that decision without comment about the City’s
defenses, claims or assertions, including whether there were fact
issues to be considered; that Judge Saxon issued the Order fully
understanding that Tobias was “ready, willing and able to perform
his duties under this Agreement”.. . . . . . . . . . . . . . . . . . . . . . . -2-
-i-
VI. Reply to the Statement of Facts that District Court Judge Reyes
was incredulous to the Appellant’s claims and Appellee’s request
for clarification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
VII. Reply to Tobias’ argument that in the lower court, the Appellee
successfully argued that Section 271.152 of the Texas Local
Government Code permits a declaratory judgment action against
a municipality when it breaches a contract. Tobias also argues that
the Declaratory Judgment action was granted under the provision
of Section 271.152. We reply to the latter argument next. . . . -6-
VIII. Reply to the argument that immunity had been waived even where
the claims at issue included a declaratory judgment claim.. . -7-
IX. Reply to the argument that Chapter 271 of the Texas Local
Government Code overturned Tex. Natural Res. Conservation
Comm'n v. IT—Davy, 74 S.W.3d 849, 859-60 (Tex. 2002).. -10-
X. Reply to Tobias’ argument that the award of money damages and
attorneys fees under the declaratory judgment claim are also
available under section 271.153.. . . . . . . . . . . . . . . . . . . . . . . . -12-
CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
CERTIFICATE OF COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
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INDEX OF AUTHORITIES
CASES
Ben Bolt-Palito Blanco Consolidated Independent School District v. Texas
Political Subdivisions property/Casualty Joint Self-Insurance Fund, 212 S.W.
3d 320, (Tex. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
City of Houston v. Williams, 216 S.W.3d 827, 829 (Tex. 2007).. . . . . . . -11-
Lower Colo. River Auth. v. City of Boerne, 422 S.W.3d 60, 2013 (Tex. App.
San Antonio 2013, pet. filed).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-, -10-
Nat’l Public Finance Guarantee Corp. v. Harris County- Houston Sports
Authority, 448 S.W. 3d, 472, 484, (Tex. App. Houston [1st Dist.] 2014, no
pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-, -18-, -9-,-11-
Tex. Natural Res. Conservation Comm'n v. IT—Davy, 74 S.W.3d 849, 859-60
(Tex. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Zachry Constr. Corp. v. Port of Houston Auth., 449 S.W.3d 98, 107 (Tex.
2014). 449 S.W.3d 98, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
STATUTE
Tex. Loc. Gov't Code §271.152. . . . . . . . . . . . . . . . . . . . . . . . . . -4-, -5-,-6--11-
Tex. Loc. Gov't Code §271.153. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Tex. Loc. Gov't Code §271.155... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-, -5-
Tex. Gov’t Code §551.043... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
-iii-
REPLY ARGUMENT
TO THE HONORABLE FOURTH COURT OF APPEALS:
NOW COMES Appellant City of Pearsall and submits its reply argument.
I. Reply to the Statement of Facts regarding the City drafting the
terms of the agreement, which included terms that Appellant
claimed in the trial court proceedings and here as illegal.
To the extent that the statement implies that the City and the individual
Defendants unilaterally drafted the terms of the contract, there is no evidence
to support such assertion.
II. Reply to the Statement of Facts regarding the City
unceremoniously terminated Appellee’s employment and the
Agreement.
There was nothing abrupt or hasty about the Plaintiff’s termination. The
dismissal was a City Council meeting agenda item, CR 000039, presumably
posted at least 72 hours before the meeting. See Tex. Gov’t Code §551.043.
According to the minutes of the meeting, Tobias requested that the item be
discussed in open session. Id. A lengthy discussion took place in which several
members of the Council brought up instances where they considered that
Tobias had failed or was found lacking in the performance of his duties as City
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Manager. Id. During the meeting, Tobias answered questions and defended
his actions or lack of action. Id.
III. Reply to the Statement of Facts regarding Tobias attempting
to resolve the dispute short of litigation but the City refusing
to discuss the matter and, further, that it refused to mediate
after the litigation began; and the City refused to make any
offer of settlement in this matter.
None of these statements are supported by the record.
IV. Reply to the Statement of Facts regarding the statement that
when Appellant realized that it could not get around the clear
language contained in Section 3.A., it contrived the novel
proposition and defense that the residency requirement the
Appellant drafted in Section 10. b. of the Agreement, was
ultra vires making the entire employment agreement null and
void.
While the City raised the defense that the residency requirement in
Section 10. b. of the Agreement was ultra vires making the entire employment
agreement null and void, the remaining statements are argumentative and not
supported by the record.
V. Reply to the Statement of Facts regarding that the trial court
(J. Saxon) made that decision without comment about the
City’s defenses, claims or assertions, including whether there
were fact issues to be considered; that Judge Saxon issued the
Order fully understanding that Tobias was “ready, willing and
able to perform his duties under this Agreement”.
The trial court merely granted a declaratory judgment against the City
awarding money damages. While it is correct that the trial court made that
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decision without comment about the City of Pearsall’s defenses, claims or
assertions, it also was silent about Tobias’ being “ready, willing and able to
perform his duties under this Agreement”. RR Vol 1, pp. 3-21. In fact, in the
October 23, 2014 hearing, Tobias never raised that issue with the trial court.
During that hearing, the crux of Tobias’ argument in support of the request for
declaration of rights went to the City’s defensive issues, i.e., that the
employment contract was not ultra vires and, if it was, it was severable. Id.
These were the only two issues before the trial court on which Tobias sought
declaratory judgment.1 Judge David A. Ezra also acknowledged the true
nature of Tobias’ declaratory judgment action. In denying Tobias motion for
declaratory judgment as moot, Judge Ezra also found that “claim turns on
whether the contract provision conferring Plaintiff a severance upon
termination was made ultra vires, in violation of the City of Pearsall's Charter,
and; if so, whether the illegal provision can be severed from the contract or
whether the contract is invalidated as a whole.” CR 000091.
Tobias offered no evidence of his performance under the contract during
the October 23rd and December 2, 2014 hearings and did not argue in favor
1
This is consistent with Tobias pleading where the only issue pled in relation to the
declaratory judgment action was that “Section 11. D. severs the alleged ultra vires/illegal
provision from the rest of the legal agreement.” CR 000069.
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of his “willing and able” argument. RR Vol 1, pp. 3-21; RR Vol. 2, pp. 1-9. The
only evidence before the trial court on this issue was the City’s uncontroverted
affidavit of Mayor Davina Rodriguez that conclusively showed that Tobias
failed to perform the agreement to the degree that his failure was an
anticipatory breach of the agreement, which authorized the City to terminate
the agreement. CR 000044-46.2 Therefore, the trial court could not have
issued its order with the “understanding” that Tobias was “ready, willing and
able to perform his duties under this Agreement” when Tobias did not present
any evidence or argument to support that contention. Both, Tobias’
arguments in support of the declaratory judgment action and the Court’s
December 2, 2014 order, ignored the performance issues raised by the City.3
Even if the trial court reached the issue whether Tobias was “ready,
willing and able to perform his duties under this Agreement,” as Tobias now
speculates, the resolution of that issue involved a purely factual dispute not
related to the issues raised in the declaratory judgment action, i.e, the ultra
2
This evidence was incorporated to the City’s response to the motion for declaratory
judgment by reference. CR 000099.
3
Later in his Brief, Tobias contend that section 271.152 waived immunity for
declaratory judgment. However, the City’s defenses under the contract are not waived. See
Section 271.155 (“This subchapter does not waive a defense or a limitation on damages available
to a party to a contract, other than a bar against suit based on sovereign immunity.”); Zachry
Constr. Corp. v. Port of Houston Auth., 449 S.W.3d 98, 107 (Tex. 2014).
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vires and severability defenses. As we noted in the City’s Brief, the resolution
of this factual dispute was beyond the scope of a declaratory judgment action.
Schuhardt Consulting Profit Sharing Plan v. Double Knobs Mt. Ranch, Inc.,
2014 Tex. App. LEXIS 13417 (Tex. App. San Antonio Dec. 17, 2014)(citing Hill
v. Heritage Resources, 964 S.W.2d 89, 140 (Tex. App. El Paso 1997, no pet.)(“
If a factual dispute is the only issue to be resolved, a declaratory judgment is
not the proper remedy.”).
Under the Court’s order on cross motions for summary judgment on the
breach of the contract claim, those fact issues remained in dispute. Hence, at
the time the declaratory judgment was signed the breach of contract claim
remained unadjudicated.
VI. Reply to the Statement of Facts that District Court Judge
Reyes was incredulous to the Appellant’s claims and
Appellee’s request for clarification.
Judge Rayes did not express any opinions about the merits of the
parties’ respective positions:
THE COURT: I don't think there's anything to clarify either. But,
procedurally speaking, what needs to happen is within your
Motion to Clarify you've asked -- you have indicated that you wish
to nonsuit the individual Defendants, if you will present me with
an order of nonsuit as to those Defendants, I will sign it. And then,
procedurally speaking, that makes this a final order and do what
you need to do. RR Vol 1 (Escamilla) at p. 16.
THE COURT: That's why I'm not redeciding it. Id.
-5-
THE COURT: I'm not redeciding anything. There needs to be finality–
Id.
THE COURT: Well, [Judge Saxon’s order] awards relief. It awards relief
of money, damages, it address attorney's fees -- and it addresses costs
of court and it denies all other relief, so without -- mean, I don't know
what her intent was, but it appears from looking at this, to me, that this
would be a final -- that this would dispose of all claims, and once the
other parties are nonsuited. Id. At p. 20.
VII. Reply to Tobias’ argument that in the lower court, the
Appellee successfully argued that Section 271.152 of the Texas
Local Government Code permits a declaratory judgment
action against a municipality when it breaches a contract.
Tobias also argues that the Declaratory Judgment action was
granted under the provision of Section 271.152. We reply to
the latter argument next.
As noted, the only arguments on which Tobias relied on in the October
23, 2014 hearing to support his request for a declaration of rights were the
ultra vires defense and the severability of the illegal provision. None of his
arguments addressed the adjudication of the breach of contract claim
pursuant to section 271.152, as Tobias now claims. The same is correct as to
the December 2, 2014 hearing. Before the December 2, 2014 Order was
signed, Tobias did not assert a section 271.152 claim or otherwise respond to
the City’s objections to the declaratory judgment action on the basis of lack of
jurisdiction.
On Appeal, most of Tobias arguments are grounded on the proposition
that that the trial court granted the declaratory judgment under the authority
-6-
of section 271.152. Tobias, however, fails to point to any portion of the record
in support of that proposition. Further, as noted, the December 2, 2014 Order
does not a adjudicate the pending breach of contract claim. The Order is silent
as to the breach of contract claim and denies all relief not specifically granted
which includes the breach of contract claim.
Contrary to Tobias’ argument, the record shows that Tobias raised
section 271.152 on February 20, 2015, in his Motion for Hearing to Clarify
Order Granting Declaratory Judgment. CR 000225; 000233. The fact that
for the first time Tobias attempted in that motion to incorporate the pending
breach of contract claim into the declaratory judgment order further confirms
the nature of the December 2, 2014 declaratory judgment order as a money
judgment on a stand-alone declaratory judgment action.
VIII. Reply to the argument that immunity had been waived
even where the claims at issue included a declaratory
judgment claim.
In support of this argument Tobias relies on Ben Bolt-Palito Blanco
Consolidated Independent School District v. Texas Political Subdivisions
property/Casualty Joint Self-Insurance Fund, 212 S.W. 3d 320, (Tex. 2006)
and Nat’l Public Finance Guarantee Corp. v. Harris County- Houston Sports
Authority, 448 S.W. 3d, 472, 484, (Tex. App. Houston [1st Dist.] 2014 no
-7-
pet.). The facts of these cases are distinguishable. First, these cases did not
involve a dispute over the facts pertaining to the validity of breach of contract
claim. Second, the declaratory judgment actions in these cases did not seek,
and the courts did not award, a money judgment. In Ben Bolt, the plaintiff
filed suit seeking a declaration that its loss was a covered occurrence under the
insurance agreement's terms. Id. at 133. The Supreme Court held that section
271.152 waived immunity from the Plaintiff’s claim arising out of the insurance
agreement. Id. at 327-28. The Supreme Court did not hold that immunity for
the underlying claim seeking a declaratory judgment was waived. Id. Instead,
the Court remanded the case to the trial court for further proceedings. Id.
Nat’l Public Finance Guarantee Corp. v. Harris County- Houston
Sports Authority does not stand for the proposition that section 271.152
waives immunity for Tobias’ declaratory judgment action. In Harris County,
National did not plead a breach of contract claim which clearly distinguishes
the facts from this case. Based on the language of section 271.152 (“A local
governmental entity that is authorized by statute or the constitution to enter
into a contract and that enters into a contract subject to this subchapter
waives sovereign immunity to suit for the purpose of adjudicating a claim for
breach of the contract, subject to the terms and conditions of this
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subchapter.”), the court of appeals dismissed National’s declaratory judgment
action holding that section 271.152 does not waive immunity of a
governmental entity that is not alleged to have breached a contract. Id. at 484.
In further support of its decision to dismiss the declaratory judgment action,
the court of appeals relied on this Court’s opinion in Lower Colo. River Auth.
v. City of Boerne, 422 S.W.3d 60, 2013 (Tex. App. San Antonio 2013, pet.
filed). In City of Boerne, this Court found that the plaintiff’s declaratory
judgment claim was essentially duplicative of its breach of contract claim. Id.
at 67. This Court further found that immunity for a declaratory judgment
under those circumstances was not waived and reversed the denial of a plea
to the jurisdiction. Id. The court of appeals in Harris County, applying City
of Boerne, reasoned that if immunity is not waived when the declaratory
judgment action duplicates the breach of contract claim, then immunity is also
not waived when a breach of contract claim under section 271.152 has not been
asserted. Harris County, 448 S.W.3d 484. Harris County did not hold that
immunity is waived for a declaratory judgment claim that is essentially a
mirror-image of a breach of contract claim. To the contrary, the court of
appeals relied on City of Boerne’s holding which contradicts Tobias’ argument
on the very point that Tobias’ declaratory judgment action “is not ‘for the
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purpose of adjudicating a claim for breach of contract,’ and thus does not fall
within section 271.152's waiver of immunity.” City of Boerne, 422 S.W.3d 67.
In his Brief, Tobias concedes that the breach of contract claim was “still before
the trial court when it awarded the declaratory judgment” and that the breach
of contract claim was not specifically dismissed by the trial court in any of its
orders. Tobias’ Brief at p. 9. The facts here are analogous to City of Boerne.
Except for the resolution of disputed issues of fact, the declaratory judgment
action mirrors the breach of contract issues that was pending and litigated by
way of cross motions for summary judgment. Further, this Court’s dismissal
of Tobias’ declaratory judgment action would leave the pending and
unadjudicated breach of contract claim, for which immunity has been waived,
for trial. City of Boerne, 422 S.W.3d 67. Tobias’ own arguments demonstrate
that the trial court erred in granting a declaratory judgment which sole
purpose was, in the guise of a declaration of rights, to award money damages.
IX. Reply to the argument that Chapter 271 of the Texas Local
Government Code overturned Tex. Natural Res. Conservation
Comm'n v. IT—Davy, 74 S.W.3d 849, 859-60 (Tex. 2002).
Tobias failed to cite any case law, and we have found none, for the
proposition that Chapter 271 overruled IT—Davy. Chapter 271 is silent about
whether a contract claim for which immunity has been waived can be litigated
-10-
and adjudicated by way of a request for a declaration of rights that does not
adjudicate a contract claim, as Tobias has pursued here. See § 271.152 (“A
local governmental entity that is authorized by statute or the constitution to
enter into a contract and that enters into a contract subject to this subchapter
waives sovereign immunity to suit for the purpose of adjudicating a
claim for breach of the contract, subject to the terms and conditions of
this subchapter.” ). (emphasis supplied); see Harris County, 448 S.W.3d 472,
Any ambiguity about whether immunity was been waived must be resolved in
favor of retaining immunity. Id. IT-Davy held that if the sole purpose of such
a declaration is to obtain a money judgment, immunity is not waived.
IT-Davy, 74 S.W.3d at 860. IT-Davy has not been overruled. See City of
Houston v. Williams, 216 S.W.3d 827, 829 (Tex. 2007)(“... in every suit
against a governmental entity for money damages, a court must first
determine the parties' contract or statutory rights; if the sole purpose of such
a declaration is to obtain a money judgment, immunity is not waived.). As we
have noted above, Tobias’ request for a declaration of rights regarding the
application of the ultra vires theory and severability of contract provisions did
not seek to adjudicate the breach of contract claim. The December 2, 2014
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Order evidences that the sole purpose of the request for declaration of rights
was to obtain a money judgment.
X. Reply to Tobias’ argument that the award of money damages
and attorneys fees under the declaratory judgment claim are
also available under section 271.153.
Tobias’ argument only underscores the sole purpose of the declaratory
judgment action of obtaining a money judgment. Regarding the claim for
attorneys’ fees and costs, neither the pleadings nor the arguments in support
of a declaratory judgment that led to the December 2, 2014 order requested
attorney’s fees and costs pursuant to Section 271.153. On the face of the
December 2, 2014 order, fees and costs were awarded pursuant to the Texas
Declaratory Judgment Act for which immunity has not been waived.
CONCLUSION
For the foregoing reasons, the City of Pearsall respectfully requests that
this Court reverse the trial court’s orders and remand the case for further
proceedings. Appellant also prays the Court grant it any other relief to which
it may be entitled.
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Respectfully Submitted,
LAW OFFICES OF ALBERT LÓPEZ
14310 Northbrook Dr., Suite 200
San Antonio, Texas 78232
Telephone: (210) 404-1983
Fax: (210) 404-1990
By: /s/ Albert López
ALBERT LÓPEZ
State Bar No. 12562350
alopezoffice@gmail.com
ATTORNEY FOR DEFENDANT
CITY OF PEARSALL
CERTIFICATE OF SERVICE
I hereby certify that on November 30, 2015, I served a copy of the
foregoing according the rules of appellate procedure upon Reid E. Meyers,
Attorney at Law, 11118 Wurzbach Rd., San Antonio, TX 78230.
/s/ Albert López
Albert López
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CERTIFICATE OF COMPLIANCE
This brief complies with the work volume limitation because this brief
contains 2,757, excluding the parts of the brief exempted.
This brief complies with the typeface requirements because this brief
has been prepared in a proportionally spaced typeface using Wordperfect X7
in 14 point Georgia.
/s/ Albert López
Albert López
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