Burns v. Harris Cty Bail Bond

United States Court of Appeals,
Fifth Circuit.
No. 96-20798.
Carol BURNS, Plaintiff-Appellant,
v.
HARRIS COUNTY BAIL BOND BOARD, Defendant-Appellee.
April 21, 1998.
Appeal from the United States District Court for the Southern
District of Texas.
Before KING and JONES, Circuit Judges, and KENDALL,1 District
Judge.
KENDALL, District Judge:
Carol Burns appeals the district court's decision granting
summary judgment to the Harris County Bail Bond Board on Burns's
claims that the Board had violated her constitutional rights to due
process and equal protection in its refusal to renew her licenses.
We affirm the judgment of the district court.
I. BACKGROUND
This case arises out of the defendant/appellee Harris County
Bail Bond Board's ("the Board") decisions not to renew the bail
bondsman's property license and agent license of
plaintiff/appellant Carol Burns ("Burns"). Pursuant to the Texas
Bail Bond Act, Tex.Civ.St.Ann. art. 2372p-3, the Board supervises
and regulates all phases of the bail bonding business in Harris
County. No person may act as a bail bondsman in Harris County
without a license issued by the Board. Bail Bond Act § 3(a)(1).
1
District Judge of the Northern District of Texas, sitting by
designation.
The ten members of the Board, designated by statute, are: a
district and a county court judge having jurisdiction over criminal
matters, a justice of the peace, the presiding judge of the City of
Houston's municipal court, the county judge or a member of the
commissioners court designated by the county judge, the district
attorney, the county sheriff, the district clerk, the county
treasurer, and a licensed bail bondsman elected by other licensees.
Bail Bond Act § 5(b). The Board meets once each month to govern
the execution of bail bonds in Harris County. Bail Bond Act §
5(d).
At issue are Burns's bail bondsman (property) license and
agent license. The statute requires that a property bondsman post
collateral with the county to secure bonds written on the license.
Bail Bond Act § 6(f). A property bondsman may write bonds that
total 10 times the amount of collateral. When that limit is
reached, the bondsman's ability to write bonds must be temporarily
suspended by the Board, without prior notice or hearing, until the
value of the collateral is increased or the value of the
outstanding bonds is decreased. Bail Bond Act § 10(f). The Board
must revoke the license with prior notice or hearing if the
licensee fails to pay any final judgment connected with the
licensee's bonding business within 30 days and there is
insufficient collateral to satisfy the final judgment. Bail Bond
Act § 9(b).
In 1987 Burns applied to the Board for, and was granted, a
bail bond license. This license expires 24 months after the date
of its issuance unless an application for renewal is granted by the
Board. Bail Bond Act § 8(a). The Board renewed Burns's bail bond
license in March 1989 and March 1991. In December 1991 the Board
issued the International Fidelity Insurance Company ("IFIC") a
license to write bail bonds in Harris County, with Burns as IFIC's
agent on the license. The agent's license subjects the insurance
company's rather than the agent's assets to liability to the State
for bond forfeiture.
On March 10, 1993, Burns appeared before the Board at its
regular monthly meeting seeking the renewal of her bail bond
license, which was to expire on March 21, 1993. During the
hearing, Burns conceded that she lived in Austin and only traveled
to Harris County every two weeks to attend to the business of her
bail bond company, she had failed to list in her application one of
her contract employees, she failed to list her husband as an
employee despite the fact that he handled many of the matters in
the Houston office, and she had never dealt with certified mail
containing information about final judgments and had no idea how
those documents were handled. Burns's husband, John Burns, had
been a licensed bail bondsman in Harris County for a number of
years, but lost his license when he accumulated $479,000 in
outstanding judgments that he owes to Harris County. See Harris
County Bail Bond Bd. v. Burns, 881 S.W.2d 61, 64 (Tex.App.—Houston
[14th Dist.] 1994, writ denied) ("The facts presented by the Board
did suggest that [Burns] had little involvement with her business
and that John Burns for all practical purposes was operating under
his wife's license.").
Assistant City Attorneys Grace Loya and Robert Miklos and City
Assistant Chief Clerk Mark Muellerweiss testified that Burns owed
the City of Houston more than $45,000 in outstanding bond
forfeiture judgments, and that Burns and her husband had known
about them for more than a year but made no effort to resolve them.
Board chairman Sheriff Johnny Klevenhagen noted that Burns's
license had been automatically suspended three days before that for
exceeding her ratios by some $36,000. Upon motion to renew Burns's
license, there were three votes for and three votes against.
Chairman Klevenhagen postponed Board action on Burns's renewal
until the end of the meeting so that Burns could negotiate a
payment schedule with the City. After a break, the Board again
voted three to three on the motion to renew Burns's license, and
the motion failed for want of a majority. Burns knew at that time
that her license would not be renewed after its expiration a few
days later.
On March 11, 1993, Burns requested a copy of the transcript of
the meeting from the Harris County District Clerk. By letter dated
March 25, 1993, the Clerk informed Burns that an opinion had been
requested from the Texas Attorney General as to whether the
transcript of the March 10, 1993 meeting was exempt from
disclosure, so that the Clerk could not release the transcript to
Burns at that time.
In the meantime, on March 14, 1993, Burns filed suit in Harris
County District Court to appeal the Board's decision as provided by
the Texas Bail Bond Act. On July 12, 1993 a trial de novo was
conducted in the 127th Judicial District Court of Harris County by
Judge Sharolyn Wood. On August 6, 1993, Judge Wood ordered Burns's
renewal application be approved and her bail bond license be
reinstated retroactive to March 21, 1993. Burns resumed writing
bail bonds on her license. The Board timely filed a notice of
appeal from this decision.
On December 8, 1993 Burns appeared before the Bail Board
concerning the renewal of her IFIC agent license. Burns was
represented by counsel at this hearing. The Board determined that
her application contained several deficiencies, such as the
omission of a collateral log, which pursuant to the Bail Bond Act
must be submitted to the Board for inspection prior to renewal of
a license. Bail Bond Act § 4(b). The Board did not vote on
Burns's renewal application for the agent license that day, but
postponed further action until the application's deficiencies were
remedied. Chairman Klevenhagen noted that the Board cannot act on
an application that does not meet the statutory requirements.
Burns never again submitted an application to the Board for the
agent license, and it expired on December 21, 1993.
On June 14, 1994, the Texas Court of Appeals, Fourteenth
District, reversed Judge Wood's order that Burns's bail bond
license be renewed. The Court of Appeals held that the district
court abused its discretion in granting Burns a license because at
the time of trial Burns had an unpaid final judgment of $5,000 on
a bond forfeiture which was more than 30 days old and was on appeal
without a supersedeas bond. The Court of Appeals concluded that
Burns was in violation of section 9(b)(6) of the Bail Bond Act and
that her application for renewal was properly denied by the Board.
The Texas Supreme Court denied Burns's application for writ of
error on February 8, 1995, and Burns filed a motion for rehearing.
While that motion was pending before the Texas Supreme Court, on
March 8, 1995 the Board considered Burns's application for a new
bail bond license. During the hearing, Burns and her lawyer were
asked questions regarding whether the property she pledged as
collateral was community or separate property. They could provide
no proof that the property was Burns's separate property, as
required by section 6(a)(4)(E) of the Bail Bond Act. The Board
denied Burns's application for a new license by a 5-2 vote. Burns
had also applied to the Board to renew her previous bail bond
license, but the Board chairman removed consideration of the
renewal from the agenda because the Board maintained she had no
license to renew.
On March 15, 1995, Burns filed suit against the Bail Board in
the 11th Judicial District Court of Harris County, appealing the
Board's decision to deny her application for a new license at the
March 1995 meeting. The suit also alleged that the Board had
violated her constitutional rights pursuant to 42 U.S.C. § 1983.
The Board timely removed the suit to the U.S. District Court for
the Southern District of Texas. The district court bifurcated the
case and remanded the state law claims, retaining the claims
pursuant to § 1983. The issues remanded to state court were
resolved on summary judgment against Burns, and that case is now on
appeal.
As for the claims in federal court, by Order entered July 25,
1996, the district court granted the Board's motion to dismiss and
for summary judgment. The district court converted the motion to
dismiss into a motion for summary judgment after Burns submitted
numerous exhibits outside the pleadings in her response. Burns has
appealed the district court's decision to grant summary judgment
for the Board on all of her claims.
II. STANDARD OF REVIEW
When matters outside the pleadings are presented to and not
excluded by the district court, the district court must convert a
motion to dismiss into a motion for summary judgment. Fed.R.Civ.P.
12(b); Flores v. Sullivan, 945 F.2d 109, 110 n. 3 (5th Cir.1991).
The district court properly converted the Board's motion in this
case. We review the granting of summary judgment de novo, applying
the same criteria used by the district court. Texas Medical Ass'n
v. Aetna Life Ins. Co., 80 F.3d 153, 156 (5th Cir.1996). Summary
judgment is proper when the pleadings and evidence illustrate that
no genuine issue exists as to any material fact and that the movant
is entitled to judgment or partial judgment as a matter of law.
Fed.R.Civ.P. 56(c); Slaughter v. Southern Talc Co., 949 F.2d 167,
170 (5th Cir.1991). When a movant properly supports his motion
with competent evidence and demonstrated the absence of a genuine
issue of material fact, the burden then shifts to the nonmovant to
show that the entry of summary judgment is inappropriate. Duckett
v. City of Cedar Park, 950 F.2d 272, 276 (5th Cir.1992). Factual
controversies are resolved in favor of the nonmovant, but only when
both parties have submitted evidence of contradictory facts, thus
creating an actual controversy. Little v. Liquid Air Corp., 37
F.3d 1069, 1075 (5th Cir.1994) (en banc). In the absence of any
proof, however, the Court does not assume that the nonmovant could
or would prove the necessary facts. Id.
III. DISCUSSION
The issues Burns submits on appeal fall into three basic
categories: 1) Burns's specific challenges to the Board's
decisions of March 10, 1993, December 8, 1993, and March 8, 1995,
2) Burns's general challenges to the Board's decisions, and 3) the
issue of the Board's absolute immunity.
1.A. Issues Specific to the March 10, 1993 Meeting
Burns challenges on several grounds the granting of summary
judgment as to the March 10, 1993 meeting in which the Board denied
the renewal of her bail bond license. Burns asserts that she was
denied due process because the Board allowed presentation of
charges of misconduct of which she had no notice, allowed unsworn
and undocumented testimony to be considered, and denied renewal of
her license by a tie vote. Burns also claims that the Board
violated her rights to due process by refusing her access to the
record of the March 10, 1993 meeting. Finally, Burns asserts that
the Board violated her right to equal protection when it claimed
that she was not entitled to license renewal because of a final
judgment on a bond forfeiture on appeal, although it has renewed
the licenses of other bondsmen in the same situation.
The district court determined that all of Burns's claims with
regard to the March 10, 1993 hearing were barred by the statute of
limitations. The applicable statute of limitations is the forum
state's general personal injury limitations period, which is two
years. The cause of action would have accrued under federal law
when the plaintiff knows or has reason to know of the injury that
is the basis of the action. Since Burns filed suit on March 14,
1995, claims regarding any activity that occurred prior to March
14, 1993 are barred by the statute of limitations.
Although Burns concedes that the two year statute of
limitations applies, she argues that the statute of limitations
does not run until all of the elements of the claim are in place,
so that her cause of action did not accrue until March 21, 1993,
the date her license to write bail bonds expired. Burns contends
that actual injury is a necessary element of a claim, and that her
legal injury was the denial of a property right without due
process. Although the "without due process" component occurred on
March 10, 1993, the denial of the property right did not occur
until March 21, 1993.
We conclude that the district court correctly applied the law
in determining that Burns's claims regarding the March 10, 1993
Board meeting are barred by the statute of limitations. As no
federal statute of limitations exists for § 1983 actions, federal
courts defer to the forum state's general personal injury
limitations period. Owens v. Okure, 488 U.S. 235, 249-50, 109
S. Ct. 573, 581-82, 102 L. Ed. 2d 594 (1989); Flores v. Cameron
County, Tex., 92 F.3d 258, 271 (5th Cir.1996). In Texas, the
applicable period is two years. Tex.Civ.Prac. & Rem.Code §
16.003(a).
Although Texas law governs the limitations period, federal
law governs when a cause of action accrues. Jackson v. Johnson,
950 F.2d 263, 265 (5th Cir.1992); Piotrowski v. City of Houston,
51 F.3d 512, 516 n. 10 (5th Cir.1995). Under federal law, a cause
of action accrues "when the plaintiff knows or has reason to know
of the injury which is the basis of the action." Burrell v.
Newsome, 883 F.2d 416, 418 (5th Cir.1989); Gartrell v. Gaylor, 981
F.2d 254, 257 (5th Cir.1993). We affirmed the district court in
Brossette v. City of Baton Rouge, 837 F. Supp. 759, 762
(M.D.La.1993), aff'd, 29 F.3d 623 (5th Cir.), cert. denied, 513
U.S. 971, 115 S. Ct. 443, 130 L. Ed. 2d 353 (1994), wherein the
district court held that the plaintiff's § 1983 cause of action for
suspension of his liquor license accrued on the day he received
notice of the suspension. Identical circumstances are presented
here.
Burns cannot salvage her time-barred claims by contending that
they did not accrue until she actually lost her bail bond license
eleven days after the Board meeting. Burns was present at the
March 10, 1993 Board meeting and was put on notice that day that
her license would not be renewed. All of her claims concerning
this Board meeting arise from the Board's rejection of her renewal
application on March 10, 1993, not from the expiration of her
license by operation of law on March 21, 1993. Burns's claims were
not timely filed, and the district court properly dismissed them.
1.B. Issues Specific to the December 8, 1993 Meeting
Burns challenges the granting of summary judgment in favor of
the Board with respect to the Board's December 8, 1993 meeting,
when it postponed a vote on the renewal of Burns's license to act
as an agent for IFIC. Burns contends that the Board violated her
due process rights when it refused to allow her a hearing on her
renewal application for the agent's license, and that she received
no proper notice before her property right to this license was
withdrawn. In addition, Burns argues that as a matter of law she
was not required to appeal to state court the Board's refusal to
allow her a hearing, because any appeal to the state court would
have not remedied the due process violations committed by the
Board, as there is no remedy for the amount of time she was out of
business.
The district court determined that, as Burns never appealed
the Board's decision to table the consideration of her IFIC agent
license renewal application, Burns did not exhaust her
administrative remedies. Burns cannot argue that her due process
rights were violated when she skipped an available state remedy.
The district court noted that if, as Burns argued, she did not have
standing to appeal the Board's decision, she certainly would not
have standing to assert a civil rights claim based on that
decision.
We conclude that the district court correctly granted summary
judgment for the Board on Burns's claims concerning the December 8,
1993 Board meeting. Despite the Board's invitation to do so, Burns
never subsequently appeared before the Board to seek approval of a
corrected IFIC agent license application. In addition, Burns chose
not to exercise her right to appeal the Board's decision to table
a vote on her application.
The Texas Bail Bond Act provides that an appeal may be taken
from an adverse decision by the Board within 30 days by filing a
petition in district court in the county in which the license is
issued or refused. The appeal is by trial de novo, and the Board's
decision has full force and effect pending the determination of the
appeal. Bail Bond Act § 11. Burns was unquestionably familiar
with this appellate process, as by December 8, 1993 she had already
appealed the Board's decision of March 10, 1993 denying the renewal
of her bail bond license. As the district court noted, a plaintiff
cannot argue that her due process rights have been violated when
she has failed to utilize the state remedies available to her.
Myrick v. City of Dallas, 810 F.2d 1382, 1388 (5th Cir.1987);
Browning v. City of Odessa, 990 F.2d 842, 845 n. 7 (5th Cir.1993).
1.C. Issue Specific to the March 8, 1995 Meeting
Finally, Burns challenges the granting of summary judgment
with respect to the Board's March 8, 1995 meeting, claiming that
the Board violated Burns's rights to due process when it refused to
consider her application to renew her bail bond license. The
district court found no due process violation in the Board's
refusal to consider Burns's application. Burns had applied to
renew her license on the basis of Judge Wood's 1993 decision to
reinstate the license. That decision had already been reversed on
appeal by the Texas Court of Appeals, the writ of error had been
denied by the Texas Supreme Court, and all that remained of the
appeals process was a decision by the Texas Supreme Court on
whether or not to grant a rehearing. The district court noted that
the Board's March 10, 1993 rejection of her license renewal
application had full force and effect pending the determination of
Burns's appeal. Bail Bond Act § 11. Burns contends that she had
a property right in the bail bond license because once Judge Wood
had tried her appeal of the Board's decision and issued the
license, the Board's decision had no further effect.
We find Burns's claim to be contrary to the plain language of
the Bail Bond Act. Burns had no property interest in a bail bond
license on March 8, 1995—she had no valid license on that date. By
that time, the Court of Appeals for the Fourteenth District had
reversed Judge Wood's reinstatement of Burns's license, Harris
County Bail Bond Bd. v. Burns, 881 S.W.2d at 64, and the Texas
Supreme Court had denied a writ of error. The only potential
circumstance that could abrogate the full force and effect of the
Board's decision would be the grant of a rehearing and subsequent
reversal by the Texas Supreme Court, a circumstance which was a
long shot at best and indeed never occurred.2 The fact that Burns
previously held a property license (which had expired some two
years earlier) is insufficient to create a property interest
entitled to due process protection in March 1995. Smith v. Travis
County Bail Bond Bd., 559 S.W.2d 693, 694 (Tex.Civ.App.—Austin
1977, no writ) (applicant whose license had expired had no property
right subject to protection because he had no claim of entitlement
to a bail bond license).
2. General Challenges to the Board's Decisions
Burns also challenges the granting of summary judgment for
the Board on several general grounds. Burns contends that the
Board violated her rights by participating in a conspiracy to put
her out of business for illegal motivations. Burns asserts that
the Board is liable for actions of its individual members when the
2
The Texas Supreme Court denied Burns's motion for rehearing
on March 23, 1995, fifteen days after this Board meeting.
actions of those members represent action by the Board. Burns also
asserts that the notice that a meeting will be held and publication
of a statute are inadequate notice that a property right will be
taken away.
The district court held that the Board can only be held liable
for the acts committed by the entity as a whole, and only for
actions taken in its monthly meetings. The separate actions of
individual members of the Board are insufficient to bind the Board
as a governmental entity. Thus, Burns's allegations of conspiracy
and other wrongdoing by a few members as individuals do not give
rise to a viable claim under § 1983. As for the claim of
inadequate notice, the district court concluded that Burns was
afforded adequate and timely notice of the Board hearings in
compliance with due process standards.
Burns contends that three unnamed individual members of the
Board conspired to put her out of business because her husband owed
a substantial amount in bond forfeiture judgments incurred on his
license. She contends that the Board is indeed liable for the
actions of its individual members (conspiracy, failure to provide
her with a transcript, notifying the state court of appeals that
Burns had a final judgment on a bond forfeiture on appeal) when
those actions represent actions by the Board. Finally, Burns
argues that notice that a meeting will be held and publication of
a statute are inadequate notice in this case that a property right
will be taken because the Board could provide more specific notice.
Considering first the conspiracy and Board liability claims,
we note that Burns sued the Board, not the members individually.
A conspiracy necessarily involves two or more persons; it is
elementary that an entity cannot conspire with itself. See
Hilliard v. Ferguson, 30 F.3d 649, 653 (5th Cir.1994) (a school
board and its employees constitute a single legal entity which is
incapable of conspiring with itself). The district court correctly
determined that the separate actions of individual members of the
Board are not sufficient to bind the Board as an entity. Bee
County v. Roberts, 437 S.W.2d 62, 64 (Tex.Civ.App.—Corpus Christi
1968, no writ); Rowan v. Pickett, 237 S.W.2d 734, 738
(Tex.Civ.App.—San Antonio 1951, no writ). Pursuant to the Bail
Bond Act, the Board can take action only when a quorum of four
members is present. Bail Bond Act § 5(d). A governmental entity
cannot be held vicariously liable for the alleged constitutional
wrongs of its employees, and is only liable when it can be fairly
said that the entity itself is the wrongdoer. Collins v. City of
Harker Heights, 503 U.S. 115, 121-22, 112 S. Ct. 1061, 1066-67, 117
L. Ed. 2d 261 (1992).
As for Burns's challenge to the notice provided her by the
Board, in essence Burns asks us to insert additional notice
provisions into the Bail Bond Act not contemplated by the Texas
Legislature. Procedural due process consists of notice and the
opportunity to be heard. Cleveland Bd. of Educ. v. Loudermill, 470
U.S. 532, 542, 105 S. Ct. 1487, 1493, 84 L. Ed. 2d 494 (1985). Due
process "requires only notice that is both adequate to apprise a
party of the pendency of an action affecting its rights and timely
enough to allow the party to present its objections." Matter of
Christopher, 28 F.3d 512, 519 (5th Cir.1994).
The Board provided notice in accordance with the Texas Open
Meetings Act, Tex.Gov't Code § 551.001. Notice is given in
compliance with due process standards simply by the publication of
a statute. Breath v. Cronvich, 729 F.2d 1006, 1011 (5th Cir.),
cert. denied, 469 U.S. 934, 105 S. Ct. 332, 83 L. Ed. 2d 268 (1984).
Persons asserting a property right, as Burns does in her bail bond
license, are charged with knowledge of relevant statutory
provisions affecting the control or disposition of that property.
Id. We conclude that the district court correctly determined that
Burns received adequate and timely notice under the Bail Bond Act.
3. Absolute Immunity of the Board
The district court determined that the Board was entitled to
absolute immunity with respect to rejecting or revoking Burns's
licenses. As the foregoing discussion has resolved each of Burns's
claims, we need not reach this issue, and we decline to do so.
IV. CONCLUSION
For the foregoing reasons, the district court's award of
summary judgment to the Harris County Bail Bond Board on the merits
of the claims brought by Carol Burns is AFFIRMED.