Test Masters Educational Services, Inc. v. Houston Independent School District, Wanda Odom, Dr. James McSwain, John Doe & Jane Doe

Affirmed and Memorandum Opinion filed August 12, 2003

Affirmed and Memorandum Opinion filed August 12, 2003.

In The

Fourteenth Court of Appeals

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NO. 14-02-00237-CV

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TEST MASTERS EDUCATIONAL SERVICES, INC., Appellant

V.

HOUSTON INDEPENDENT SCHOOL DISTRICT, WANDA ODOM, DR. JAMES McSWAIN, JOHN DOE and JANE DOE, Appellees

On Appeal from the 234^th District Court

Harris County, Texas

Trial Court Cause No. 01-34360

M E M O R A N D U M   O P I N I O N

Appellant, Test Masters Educational Services, Inc., sued appellees, Houston Independent School District (AHISD@), Wanda Odom, and Dr. James McSwain seeking recovery for its claims of breach of contract, quantum meruit, and a suit on a sworn account.  The trial court entered summary judgment in favor of appellees based on their affirmative defenses of statutory and professional immunity.  We affirm.

Factual and Procedural Background

In September of 2000, Wanda Odom, a counselor at Lamar High School (ALHS@), contacted Test Masters regarding a course to help prepare LHS students to take the Pre‑Scholastic Aptitude Test (APSAT@).  Thereafter, Ms. Odom arranged a meeting between Test Masters and LHS=s principal, Dr. James McSwain. The parties agreed that Test Masters would provide six, 90-minute, instructional sessions for LHS students at a special rate of $99 per student.  The parties also agreed that Test Masters would provide all the instructional materials and one instructor for every fifty students.  LHS agreed to reserve a classroom for each group of fifty students to facilitate the instruction.

            Some 234 students signed up for the sessions and LHS collected the necessary fees from each student.  On the first day of instruction, Test Masters sent only one instructor, and brought some instructional materials, but not enough for every student.  LHS, at its own expense, copied additional materials.  The first three sessions lasted only 45 minutes instead of the 90 minutes allegedly promised.  After the third session, Dr. McSwain cancelled the remaining sessions.  He also asked Test Masters to send him an invoice for what it considered to be the fair value of services provided during the first three days of instruction.

On July 6, 2001, Test Masters brought suit against HISD for breach of contract, quantum meruit, and a sworn account. HISD moved for summary judgment, alleging it could not be held liable because it was not a party to the underlying contract.  Test Masters amended its petition on September 6, 2001, and added Ms. Odom and Dr. McSwain as defendants.  Test Masters also added claims of negligent misrepresentation and conversion against all the defendants.  HISD, along with Ms. Odom and Dr. McSwain, filed another motion for summary judgment alleging defenses based on statutory and professional immunity.  On December 13, 2001, the trial court granted both motions for summary judgment in favor of appellees from which this appeal ensued.

Standard of Review

A traditional motion for summary judgment is properly granted when the movant establishes there are no genuine issues of material fact to be decided and he is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991).  A defendant seeking summary judgment on a particular claim must negate, as a matter of law, at least one element of each of the plaintiff=s theories of recovery on that claim or plead and prove as a matter of law each element of an affirmative defense.  Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).  If the defendant establishes a right to summary judgment, the burden shifts to the plaintiff to present evidence raising a material fact issue.  Id.

In reviewing the granting of a summary judgment, we view the evidence in the light most favorable to the non‑movant and make every reasonable inference and resolve all doubts in favor of the non‑movant.  See Centeq Realty, 899 S.W.2d at 197.  When the trial court fails to specify the basis for its decision in its summary judgment order, the judgment must be affirmed if any of the theories presented in the motion will support the summary judgment.  Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). 

Contract

In its first issue, Test Masters argues that fact issues exist as to whether it entered a valid contract with HISD.  AThe doctrine of sovereign immunity, unless waived, protects the State of Texas, its agencies, and its officials from lawsuits for damages, absent the State=s consent to be sued.@ Foster v. Denton Indep. Sch. Dist., 73 S.W.3d 454, 459 (Tex. App.CFort Worth 2002, no pet.).  The state does not waive its immunity from suit simply by entering into a contract. Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 408 (Tex. 1997).  Further, the Alaw is well settled in this state that an independent school district is an agency of the state.@ Barr v. Bernhard, 562 S.W.2d 844, 846 (Tex. 1978).

However, the Legislature may specifically waive immunity from suit.  One such waiver is found in Tex. Educ. Code Ann. ' 11.151 (Vernon 1996), which provides that the Atrustees of an independent school district may acquire and hold real and personal property, sue and be sued, and receive bequests and donations or other moneys or funds coming legally into their hands.@ (Emphasis added).  Thus, Test Masters can sue HISD for breach of contract.

However, before Test Masters can prevail on its suit for breach of contract, there must be a valid contract.  AIt is a well-established rule in Texas that where the Legislature has committed a matter to a political subdivision of the state, that subdivision may act only as a body corporate at a properly called meeting.@  Davis v. Duncanville I.S.D., 701 S.W.2d 15, 17 (Tex. App.CDallas 1985, writ dism=d w.o.j.).  Here, the undisputed summary judgment evidence was that the board of trustees did not approve or ratify the agreement with Test Masters. 

Instead, Test Masters sought to make an agreement with Dr. McSwain even though he never signed a contract.  Because HISD paid Test Masters for its 1998 instructional services which were also negotiated through the principal, Test Masters contends Dr. McSwain had apparent authority, if not delegated authority, to contract on behalf of HISD.  However, HISD could act only through its trustees.  AThe trustees as a body corporate have the exclusive power and duty to govern and oversee the management of the public schools of the district.@  Tex. Educ. Code Ann. ' 11.151(b) (Vernon 1996) (emphasis added).  Moreover, it is the board of trustees that is entrusted with the authority to Acontract with a public or private entity for . . . educational services for the district.@ 

Further, Apersons or entities contracting with governmental units are charged by law with notice of the limits of the authority of the governmental unit and are bound at their peril to ascertain if the contemplated contract is properly authorized.@  Base-Seal, Inc. v. Jefferson County, 901 S.W.2d 783, 788 (Tex. App.CBeaumont 1995, writ denied).  Statements or acts of individuals, not acting corporately as a body, are ineffectual.  City of Bonham v. Southwest Sanitation, Inc., 871 S.W.2d 765, 767 (Tex. App.CTexarkana 1994, writ denied).  Thus, HISD was not bound by the representations of Dr. McSwain and/or Ms. Odom.  Accordingly, Test Masters= first issue is overruled. 

Quantum Meruit

In its second and third issues, Test Masters argues the trial court erred in granting summary judgment on its quantum meruit claim because HISD received services and test materials, and HISD failed to request summary judgment on this claim.  To prevail under quantum meruit, the plaintiff must establish: A(1) valuable services and/or materials were furnished, (2) to the party sought to be charged, (3) which were accepted by the party sought to be charged, and (4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient.@  Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992) (emphasis added).  HISD did, in fact, request summary judgment on Test Masters= quantum meruit claim and presented evidence in support thereof with the affidavit of Leonard Strum, the Chief Financial Officer for HISD.  Thus, the question is whether the trial court properly granted summary judgment on the claim.

In his affidavit, Mr. Strum stated he had no knowledge of any agreement between LHS and Test Masters; he did not approve any such contract; no such contract was ever presented to nor considered by the HISD board of trustees; no such agreement was ever placed on the agenda for consideration by the HISD board of trustees; and the board took no action on the agreement whatsoever.  Test Masters attempts to rebut this assertion by offering proof that Strum signed two checks payable to Test Masters: one for $2,730 on November 25, 1998, and one for $2,350 on November 27, 2001.  Neither check, however, relates to the alleged contract at issue. 

Even if HISD received some benefit from the classes, that alone is not enough to support a quantum meruit claim.  Bashara v. Baptist Mem=l Hosp. Sys., 685 S.W.2d 307, 310 (Tex. 1985) (holding that to have a claim under quantum meruit, a party must show more than benefits received by the other party, but must also show efforts were undertaken Afor the person sought to be charged@).  Because HISD did not know of the alleged agreement, HISD could not possibly have received services or materials under circumstances that reasonably put it on notice that by receiving such services or materials Test Masters would look to it for payment.  See Heldenfels Bros., Inc., 832 S.W.2d at 41.  Accordingly, Test Masters= second and third issues are overruled.

Sworn Account

In its fourth issue, Test Masters argues the trial court erred in granting summary judgment to HISD on its sworn account claim because it provided three sessions, plus some course materials, to LHS students. To prevail on a sworn account claim in the absence of an express contract, a plaintiff must show: (1) there was a sale and delivery of the merchandise or performance of the services; (2) the amount of the account is just, that is, the prices are the usual, customary and reasonable charges for the merchandise or services; and (3) the amount is unpaid.  Worley v. Butler, 809 S.W.2d 242, 245 (Tex. App.CCorpus Christi 1990, no writ).

Even if Test Masters had an otherwise valid claim on a sworn account, HISD filed a verified denial.  AIt is settled that a defendant=s verified denial of the correctness of a plaintiff=s sworn account, in the form required by rule 185, destroys the evidentiary effect of the itemized account and forces the plaintiff to put on proof of its claim.@  United Bus. Machs. v. Entm=t Mktg., Inc., 792 S.W.2d 262, 263 (Tex. App.CHouston [1st Dist.] 1990, no writ).  AA plaintiff can properly recover summary judgment in such a case if it files legal and competent summary judgment evidence establishing the validity of its claim as a matter of law.@  Id. at 264.  Thus, the question is whether Test Masters identified enough evidence to prove its claim.

As a plaintiff in a suit on a sworn account, Test Masters was required to prove: (1) it provided services to HISD; (2) the amount of the account is Ajust,@ that is, the prices charged are pursuant to an express agreement, or in the absence of an agreement, the charges are usual, customary, or reasonable; and (3) the outstanding debt remains unpaid.  Powers v. Adams, 2 S.W.3d 496, 499 (Tex. App.CHouston [14th Dist.] 1999, no pet.).  The evidence established that Test Masters sent an invoice to Dr. McSwain, which detailed when it provided services, the time expended, and the rate per student.  The invoice also indicated the amount unpaid. 

However, the invoice incorrectly details when and what services were provided.  The invoice identifies six days of sessions held between October 10, 2000 and October 18, 2000.  Roger Israni, the president of Test Masters, admitted he did not teach all six sessions (due to Dr. McSwain=s cancellation of the agreement), but he nevertheless requested payment of $23,166, i.e., $99 per student for 234 students, the full price of 6 sessions.  Because Test Masters failed to establish that it actually performed services for all the sessions it charged HISD, its evidence was insufficient to establish a sworn account action.  See Thorp v. Adair & Myers, 809 S.W.2d 308 (Tex. App.CHouston [14th Dist.] 1991, no writ) (finding law firm had insufficient evidence for a sworn account claim when it failed to establish it actually performed the services or that the amount was Ajust@).  Accordingly, Test Masters= fourth issue is overruled. 

Statutory Immunity

In its fifth issue, Test Masters argues Ms. Odom and Dr. McSwain are not entitled to statutory immunity for breach of contract, negligent misrepresentation, and conversion.  The Texas Education Code provides that: 

(a) A professional employee of a school district is not personally liable for any act that is incident to or within the scope of duties of the employee=s position of employment and that involves the exercise of judgment or discretion by the employee, except in circumstances in which a professional employee uses excessive force in the discipline of students or negligence resulting in bodily injury to students. 

Tex. Educ. Code Ann. ' 22.051(a) & (c) (Vernon 1996).  One is entitled to summary judgment if he conclusively proves as a matter of law that: (1) he is a professional employee; (2) his actions were incident to or within the scope of his duties; (3) his duties involved the exercise of judgment or discretion; and (4) he did not use excessive force or negligence in disciplining a student.  See id. 

Under HISD policy, counselors are available to students on a regular and emergency basis to provide personal and academic guidance.  Ms. Odom, LHS=s counselor, initially contacted Test Masters.  She spoke with Mr. Irani briefly about the PSAT courses, and set up a meeting for Mr. Irani to meet Dr. McSwain.  By doing that, Ms. Odom educated herself on preparing students for the PSAT exam, which would improve her ability to provide academic guidance to LHS students. As such, Ms. Odom=s act of contacting Test Masters was incident to the scope of her duties, and clearly involved the exercise of her judgment or discretion, which cloaks her with professional immunity. See Tex. Educ. Code Ann. ' 22.051(a) (Vernon 1996).

The school principal has the responsibility of individual school management, administration, and educational leadership.  The primary role of the principal is to ensure an effective instructional program for all students under his jurisdiction.  By meeting with Test Masters and setting up PSAT instructional sessions, Dr. McSwain ensured LHS students received an effective instructional program.  As such, Dr. McSwain=s act involved the exercise of his judgment or discretion, and thus, he is also cloaked with professional immunity.  See Tex. Educ. Code Ann. ' 21.051(a) (Vernon 1996).  Accordingly, Test Masters= fifth issue is overruled.

Discovery

In its sixth issue, Test Masters contends the trial court erred in prohibiting it from conducting discovery. We review the trial court=s actions allowing or denying discovery under an abuse of discretion standard.  See TransAm. Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991).  A trial court abuses its discretion when it acts in an unreasonable and arbitrary manner, without reference to guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241B42 (Tex. 1985).  Under Rule 166a(b), a defendant may, at any time, move for summary judgment in his favor.  Tex. R. Civ. P. 166a(b) (emphasis added). Alternatively, a defendant may move for a Ano-evidence@ summary judgment only after an adequate time for discovery.  Tex. R. Civ. P. 166a(i).

Here, both motions for summary judgment filed by appellees were traditional motions asserting affirmative defenses, rather than no-evidence motions for summary judgment.  Thus, Test Masters was not afforded the same allowance for discovery as with a no-evidence motion for summary judgment.  See Tex. R. Civ. P. 166a (b) & (i).  As such, the appellees could file the traditional motions for summary judgment at any time, and the trial court could rule in favor of appellees if Ano genuine issue@ of material fact existed. See Tex. R. Civ. P. 166a(b) & (c). 

Test Masters argues that discovery was needed to determine the parties= contractual relationship which would include evidence of past course of dealing between Test Masters and HISD, whether Ms. Odom and/or Dr. McSwain had authority to act on behalf of HISD, and whether HISD ratified the alleged contract at issue.  According to her affidavit, Ms. Odom never entered any agreement and/or contract with Test Masters.  Dr. McSwain stated that he never had permission to contract on behalf of HISD, and the board of trustees never ratified any agreement with Test Masters. Because HISD was not bound by the representations of Dr. McSwain and/or Ms. Odom, any additional evidence pertaining to whether HISD formed a contract with Test Masters would be irrelevant.  See City of Bonham, 871 S.W.2d at 767 (holding that statements of individuals, not acting corporately as a body, are ineffectual). Accordingly, Test Masters= sixth issue is overruled.

The judgment of the trial court is affirmed.

/s/        J. Harvey Hudson

Justice

Judgment rendered and Memorandum Opinion filed August 12, 2003.

Panel consists of Justices Yates, Hudson, and Frost.