Daniel Sierra, Margaret Chalker, Judy Starnes, and Janice Wright v. James Nelson, State Commissioner of Education And Lake Worth Independent School District

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-00-00161-CV

Daniel Sierra, Margaret Chalker, Judy Starnes, and Janice Wright, Appellants

James Nelson, State Commissioner of Education; and Lake Worth Independent

School District, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT

NO. 98-13998, HONORABLE W. JEANNE MEURER, JUDGE PRESIDING

This case involves a salary dispute between the Lake Worth Independent School District (the District) and four teachers employed by the District--Daniel Sierra, Margaret Chalker, Judy Starnes, and Janice Wright (the Teachers). Following a presentation by the Teachers, the District's board of trustees (the School Board) denied the Teachers' grievance regarding the dispute. The Teachers then appealed the decision to the Commissioner of Education (the Commissioner), who found in favor of the District. The district court affirmed. The Teachers seek a reversal of the district court judgment, claiming that (1) the substantial evidence review conducted by the Commissioner denied the Teachers due process and violated their constitutional right to open courts; (2) the Commissioner erred by failing to apply the rules of evidence to his review of the record; and (3) the Commissioner's decision is not supported by substantial evidence. We will affirm the Commissioner's decision and the district court's judgment.

BACKGROUND

The District may employ its teachers through written term,⁽¹⁾ probationary,⁽²⁾ or continuing⁽³⁾ contracts. See Tex. Educ. Code Ann. § 21.002 (West 1996). If a teacher wishes to resign after signing the contract, he or she must do so at least forty-five days before the school year commences. See Tex. Educ. Code Ann. §§ 21.105(a), .160(a), .210(a) (West 1996). Once this date passes, a teacher becomes bound by the contract and must remain with the District for the upcoming school year. See id. §§ 21.105(c), .160(c), .210(c) (West 1996). Each year the District sets the teachers' salaries when it adopts the budget for that school year.

On August 11, 1995, the Teachers met with the District's superintendent Klaus Driessen to discuss tenure longevity pay. During that meeting, the superintendent distributed a document that included the proposed pay scale for the 1995-1996 school year and an estimated pay scale for the 1996-1997 school year. The District had not yet adopted either of the proposed pay scales at the time of the meeting. The District eventually adopted a salary schedule for the 1995-1996 school year on August 21, 1995.

The Teachers began the 1996-1997 school year on August 12, 1996, although the District did not adopt a budget for that year until August 26, 1996. The budget included salaries that were less than what had been proposed during the August 11, 1995 meeting. In fact, the District adopted the same salary schedule for the 1996-1997 school year that had been in place the previous year. However, the District allowed qualified teachers to move up one step on the salary schedule, thereby increasing their salary. Because the school year had already begun, the Teachers did not have the option of resigning after the District adopted the salary schedule. See id. §§ 21.105(a), .160(a), .210(a).

Following the District's approval of the budget, the Teachers filed a grievance, claiming they were entitled to the salary that had been proposed at the August 11, 1995 meeting under the doctrines of equitable and promissory estoppel. After the grievance was denied by the principal and the superintendent, the Teachers were given an opportunity to present their grievance to the School Board. The Teachers' presentation consisted of argument by counsel and affidavits prepared by the Teachers in support of their claim. In response, counsel for the District also presented arguments to the School Board along with exhibits. Neither side offered sworn testimony or formally offered any exhibits into evidence. The School Board denied the Teachers' grievance. On appeal, the Commissioner conducted a substantial evidence review of the School Board's decision and affirmed it. In his decision, the Commissioner stated that "when a grievance is appealed to the Commissioner, the provisions of the Administrative Procedure Act⁽⁴⁾ do not apply; . . .[and] [b]oard members need not limit their consideration to evidence that meets the standards of the Texas Rules of Civil Evidence." The Commissioner then concluded that no false representation was made to the Teachers and no promise was made that would reasonably induce action or forbearance, and so the elements of equitable and promissory estoppel were not satisfied. The Teachers sought judicial review of the Commissioner's decision in district court, and the district court affirmed the Commissioner's decision. By three issues, the Teachers appeal the trial court's judgment affirming the Commissioner's decision.

DISCUSSION

I. Due Process and Open Courts

In their first point of error, the Teachers argue that the Commissioner's refusal to apply the formal rules of evidence as modified by the Administrative Procedure Act⁽⁵⁾ to his review of the School Board's decision resulted in a denial of due process and the constitutional right to open courts. According to the Teachers, although the School Board may consider whatever is presented by the parties, the Commissioner's substantial evidence review should be limited to a consideration of the evidence in the record that complies with some sort of recognized evidentiary standard. In the alternative, the Teachers claim that any constitutional violations resulting from the Commissioner's failure to apply the rules of evidence could be remedied if he were to conduct a de novo review of the School Board's decision.

Section 7.057(c) of the Texas Education Code unambiguously states that the Commissioner shall employ a substantial evidence standard of review when considering an appeal of a decision by a local school board. Tex. Educ. Code Ann. § 7.057(c) (West 1996). Under this standard, the Commissioner examines the record to determine whether the school board's decision resulted from a prejudicial error of law, such as an abuse of discretion, an action taken in excess of authority, a violation of law, or fact findings that are unreasonable in light of the evidence found in the record of proceedings before the school board. Ysleta Indep. Sch. Dist. v. Meno, 933 S.W.2d 748, 751 n.5 (Tex. App.--Austin 1996, writ denied). The Commissioner is restricted to the record before him and may not re-weigh the evidence, find facts, or substitute his judgment for that of the school board. Id. The record, at a minimum, must consist of an audible electronic recording or written transcript of all oral testimony or argument. Tex. Educ. Code Ann. § 7.057(f) (West 1996). The Administrative Procedure Act governing review of agency decisions does not apply when the Commissioner is reviewing the decision of a local school board. See Gilder v. Meno, 926 S.W.2d 357, 360 (Tex. App.--Austin 1996, writ denied).

The Teachers do not dispute that the Commissioner is statutorily required to conduct a substantial evidence review of the School Board's decision. And they do not argue that the local School Board should have conducted a trial-type hearing, subjecting the parties to the rules of evidence. Indeed, we find it significant that the Teachers never objected during the grievance proceeding to the School Board's failure to implement the rules of evidence or any trial-type hearing procedures. Rather, the Teachers argue that despite their failure to object, the Commissioner should have limited his review of the record to only those statements and exhibits that comply with the rules of evidence.

The Texas Constitution guarantees the right to open courts as follows: "All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law." Tex. Const. art. I, § 13. This provision includes at least three constitutional guarantees: "(1) courts must actually be operating and available; (2) the Legislature cannot impede access to the courts through unreasonable financial barriers; and (3) meaningful remedies must be afforded, 'so that the legislature may not abrogate the right to assert a well-established common law cause of action unless the reason for its action outweighs the litigants' constitutional right of redress.'" Trinity River Auth. v. URS Consultants, Inc., 889 S.W.2d 259, 261 (Tex. 1994) (quoting Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 448 (Tex. 1993)). The Teachers claim that they were denied this third guarantee.

The relevant test for such a challenge is as follows:

[L]egislative action withdrawing common-law remedies for well established common-law causes of action for injuries to one's "lands, goods, person or reputation" is sustained only when it is reasonable in substituting other remedies, or when it is reasonable exercise of the police power in the interest of the general welfare.

Lebohm v. City of Galveston, 275 S.W.2d 951, 955 (Tex. 1955). A litigant assailing a statute as a violation of the open courts guarantee must satisfy two criteria: the litigant must show (1) that he has a cognizable common law cause of action that is being restricted; and (2) that the restriction is unreasonable or arbitrary when balanced against the purpose and basis of the statute. See Trinity River Auth., 889 S.W.2d at 262 (quoting Sax v. Votteler, 648 S.W.2d 661, 666 (Tex. 1983)). We hold that under the circumstances of this case, the Teachers failed to satisfy the first part of this inquiry.

The Teachers asserted claims of equitable and promissory estoppel in support of their grievance. To establish a claim of equitable estoppel, the Teachers had the burden of proving: "(1) a false representation or concealment of material facts, (2) made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted on, (4) to a party without knowledge, or the means of knowledge of those facts, (5) who detrimentally relied upon the misrepresentation." Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 489 (Tex. 1991). Promissory estoppel is triggered if the promisor should reasonably expect that the promise made will induce action or forbearance, the promise does in fact induce such action or forbearance, and the enforcement of the promise is necessary to avoid injustice. El Paso Healthcare Sys., Ltd. v. Piping Rock Corp., 939 S.W.2d 695, 698-99 (Tex. App.--El Paso 1997, writ denied). If a valid contract exists between the parties covering the alleged promise, promissory estoppel is inapplicable to the promise, and the party must seek damages under the contract. Id. at 699. Thus, in order to prevail on a promissory estoppel claim, a litigant must prove: (1) a promise; (2) foreseeability that the promisee would rely on the promise; and (3) substantial reliance by the promisee to his detriment. Id.

The Commissioner found that the Teachers had failed to prove two of the elements necessary for an equitable estoppel claim. Specifically, the Commissioner's decision states, "Since no false representation was made and the Teachers could have easily checked out their interpretation of what was said, the elements of equitable estoppel were not met in this cause." Similarly, the Commissioner made the following determination regarding the promissory estoppel claim: "In this case, since no promise was made that would reasonably induce action or forbearance, the elements of promissory estoppel were not met." The factual bases for the Commissioner's conclusions were as follows: the document with the estimated salary schedule for the 1996-1997 school year clearly labeled the figures as estimated; at the August 11, 1995 meeting, the superintendent told the Teachers that the figures were not certain but would be presented to the School Board; the superintendent did not indicate that the figures were guaranteed; it would not be reasonable to interpret the superintendent's statements regarding the salary schedule to be anything but provisional; and the Teachers could have easily verified whether the School Board had established a salary schedule for the 1996-1997 school year.

Contrary to the Teachers' contentions, these findings reflect that the Commissioner could have reached his conclusions without the "unsworn hearsay statements" allegedly offered by the District's attorney.⁽⁶⁾ Rather, the findings demonstrate that the Teachers failed to establish the elements necessary to assert their claims of equitable and promissory estoppel--that is, the Teachers failed to assert a cognizable cause of action. The Commissioner could reasonably have reached this conclusion based solely on the argument and exhibits presented by the Teachers. First, the document distributed by the superintendent during the 1995 tenure meeting and allegedly relied upon by the Teachers clearly includes the headings "Proposed 1995-96 Teacher Pay Scale" and "Estimated 1996-97 Teacher Pay Scale." (Emphasis added.) These two phrases should have alerted the Teachers that the proposed salaries had not yet been adopted by the School Board. And because the document included the terms "proposed" and "estimated," the Commissioner could have concluded from this document alone that no false representation was made to the Teachers and that no promise was made that would reasonably induce action or forbearance. Absent a cognizable cause of action, the Teachers are not entitled to a constitutionally protected open courts guarantee. We reject the Teachers' open courts challenge.⁽⁷⁾

The due course of law guarantee set forth in the Texas Constitution provides: "No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disenfranchised, except by the due course of the law of the land." Tex. Const. art. I, § 19.⁽⁸⁾ Our review of a due process claim requires a two-part inquiry: (1) whether a liberty or property interest is implicated, entitling the Teachers to due process protection; and (2) if so, what process is due. University of Texas Med. Center v. Than, 901 S.W.2d 926, 929 (Tex. 1995) (citing Logan v. Zimmerman Brush Co., 455 U.S. 422, 428 (1982), and Board of Regents of State Colleges v. Roth, 408 U.S. 564, 569-70 (1972)). "Absent life, liberty, or property interest, no right to due process exists." Stratton v. Austin Indep. Sch. Dist., 8 S.W.3d 26, 29 (Tex. App.--Austin 1999, no pet.). "Property rights are created and their dimensions defined by existing rules or understandings stemming from independent sources such as state law." Id. (citing Roth, 408 U.S. at 577, and Paul v. Davis, 424 U.S. 693, 711-12 (1976)). A constitutionally protected property interest exists if an individual has a legitimate claim of entitlement that is created, supported, or secured by rules or mutually explicit understandings. Id.; see Davis, 424 U.S. at 711-12 (courts refer to state law in determining whether property interest exists); Bishop v. Wood, 426 U.S. 341, 344-46 (1976) (state law determines which interests constitute property); Spring Branch Indep. Sch. Dist. v. Stamos, 695 S.W.2d 556, 561 (Tex. 1985) (property or liberty interest must find its origin in some aspect of state law). We hold that in this case, the Teachers had no protected property interest under state law, and therefore no right to due process exists.

As stated above, the document distributed by Superintendent Driessen during the tenure meeting clearly labeled the salary figures as "estimated," and the Teachers were aware that the figures were subject to approval by the School Board. The estimated figures do not constitute state law or a mutually explicit understanding and therefore do not create a constitutionally protected property interest. At best, they create an expectation of a higher salary. We overrule the Teachers' due process complaint.

Because we hold that under these facts, the Teachers were not deprived of their constitutional right to open courts and due process, we reject their suggestion that a de novo review by the Commissioner would have protected these constitutional guarantees. We reiterate our holding in Ysleta Independent School District in which we stated that a de novo review would undermine the legislature's longstanding policy of encouraging local management and control of public schools. See 933 S.W.2d at 752.

II. Administrative Procedure Act

The Teachers next complain that the Commissioner erred in relying on unsworn hearsay statements that did not comply with the rules of evidence or the Administrative Procedure Act in reaching his decision and upholding the School Board's determination. We disagree with this contention for several reasons.

First, we note that the Teachers failed to raise this complaint in the form of an objection during the grievance proceeding before the School Board. Thus, the Teachers waived any complaints regarding the inclusion of hearsay statements in the record. See Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997) (opponent of testimony can waive complaint if he knows or should know that objection is necessary). Once the statements were made a part of the record, the Commissioner did not have the discretion to re-weigh the evidence, find facts, or substitute his judgment for that of the School Board. See Ysleta Indep. Sch. Dist., 933 S.W.2d at 751 n.5.

Second, even if the Commissioner had excluded the exhibits and argument presented by the District's attorney, he nevertheless had substantial evidence before him to affirm the School Board's decision. The bases for the Teachers' estoppel claims were the document reflecting the proposed salaries for the 1996-1997 school year and statements allegedly made by the superintendent. Yet, the document clearly labeled the salary figures as "proposed," and the Teachers confirmed that the superintendent never represented that the figures had been approved. Thus, based solely on the evidence submitted by the Teachers, without regard to the arguments or exhibits advanced by the District, the Commissioner could have concluded that the Teachers never established the elements necessary to support their estoppel claims.

Finally, this Court has previously held that the Administrative Procedure Act does not apply to the Commissioner's review of a local school board's determination. See Gilder, 926 S.W.2d at 360; see also Board of Trustees of the Big Spring Firemen's Relief & Retirement Fund v. Firemen's Pension Comm'r, 808 S.W.2d 608, 611 (Tex. App.--Austin 1991, no writ) (because the reviewing board did not have statewide jurisdiction, it was not an agency subject to former Administrative Procedure and Texas Register Act). Often, local school boards do not have the resources to conduct a full trial-type hearing and procure an administrative law judge for every grievance presented to them. And to mandate the Commissioner to employ rules that were not implemented by the school board would result in the Commissioner substituting his judgment for that of the school board's and rendering its determinations meaningless. Nevertheless, we emphasize that a local school board's decision will not be upheld if it resulted from a prejudicial error of law, such as an abuse of discretion, an action taken in excess of authority, a violation of law, or fact findings that are unreasonable in light of the evidence found in the record. Ysleta Indep. Sch. Dist., 933 S.W.2d at 751 n.5. The Teachers' second issue is overruled.

III. Substantial Evidence

In their final issue on appeal, the Teachers contend that the Commissioner's decision is not supported by substantial evidence.

Under a substantial evidence review, we determine whether the record as a whole is such that reasonable minds could have reached the same conclusion as the Commissioner. Stratton, 8 S.W.3d at 30. We may not substitute our judgment for that of the Commissioner, and we may only consider the record on which he based his decision. Id. The test is not whether the Commissioner reached the correct conclusion, but whether some reasonable basis exists in the record for the action taken by the School Board. Id. The findings, inferences, conclusions, and decisions of the Commissioner are presumed to be supported by substantial evidence, and the burden is on the Teachers to prove otherwise. Id.

We need not restate the evidence on which the Commissioner based his conclusions. Our examination of the Teachers' other complaints reveals ample evidence in support of the Commissioner's decision. We hold that there is a reasonable basis in the record for the Commissioner's conclusion and overrule the Teachers' third issue.

CONCLUSION

Having overruled all of the Teachers' issues, we affirm the district court's judgment.

Mack Kidd, Justice

Before Justices Jones, Kidd and Yeakel

Affirmed

Filed: October 26, 2000

Do Not Publish

1. See Tex. Educ. Code Ann. §§ 21.201-.213 (West 1996).

2. See id. §§ 21.101-.106 (West 1996 & Supp. 2000).

3. See id. §§ 21.151-.160 (West 1996).

4. See Tex. Gov't Code Ann. §§ 2001.001-.902 (West 2000).

5. See Tex. Gov't Code Ann. § 2001.081 (West 2000).

6. Among the exhibits offered by the District's attorney was a letter from the superintendent, responding to the Teachers' grievance. Included in the letter is the assertion that other teachers at the tenure meeting had conveyed to the superintendent that they understood the proposed salary schedule to be a mere proposal and had placed no reliance on it. The Teachers argue that the letter included unsworn hearsay testimony from both the superintendent and the other teachers referenced in the letter, and therefore the Commissioner should not have been allowed to consider the letter in his substantial evidence review. However, a review of the Commissioner's findings of fact and conclusions of law reveals the Commissioner placed no reliance on this letter to reach his determination.

7. We note that section 7.057 of the Texas Education Code addresses the form of the record that must be presented to the Commissioner for his review, but does not address the substance of the local school boards' proceedings. See Tex. Educ. Code Ann. § 7.057(f) (West 1996). We caution that in conducting these proceedings, school boards are charged with providing aggrieved parties the procedural and legal safeguards to which they are entitled. See Gilder v. Meno, 926 S.W.2d 357, 363 (Tex. App.--Austin 1996, writ denied). And school boards should prepare a record that provides the Commissioner sufficient information to conduct a substantial evidence review. In this case, the Teachers failed to support their estoppel claims, and although the record was minimal, it substantiated the Commissioner's decision. However, if this had been a case in which the District were attempting to defeat the Teachers' claims and assert a defense based entirely on unsworn hearsay statements, we may have reached a different conclusion.

In addition, both the Commissioner of Education and the District cite to Friar v. Moses and Austin Indep. Sch. Dist., No. 3-99-394-CV (Tex. App.--Austin May 11, 2000, no pet.) (not designated for publication), in their briefs for the proposition that in conducting a substantial evidence review, the Commissioner need not review the admissibility of the evidence forming the basis of the school board's decision. Initially, we note that opinions not designated for publication have no precedential value. Tex. R. App. P. 47.7. More importantly, however, Friar presented a unique set of facts, and our holding was limited to a narrow factual context that included elements of waiver.

8. The United States Constitution provides: "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; . . . ." U.S. Const. amend. XIV, § 1. Although the Texas Constitution includes the terms "due course of law" while the federal Constitution employs the phrase "due process," we do not distinguish between the two in reviewing a due process complaint under the Texas Constitution. University of Texas Med. Center v. Than, 901 S.W.2d 926, 929 (Tex. 1995). Because the Teachers complain on appeal that they have been denied "due process" under the Texas Constitution, we will refer to this constitutional guarantee as "due process" in addressing their issue.

presumed to be supported by substantial evidence, and the burden is on the Teachers to prove otherwise. Id.