Weslaco Independent School District and Richard Rivera v. Adan Perez Jr.

NUMBER 13-12-00581-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

WESLACO INDEPENDENT SCHOOL
DISTRICT AND RICHARD RIVERA, Appellants,

v.

ADAN PEREZ JR., Appellee.

On appeal from the 332nd District Court
of Hidalgo County, Texas.

MEMORANDUM OPINION
Before Justices Rodriguez, Benavides and Longoria
Memorandum Opinion by Justice Benavides

By four issues, which we reorganize as one issue with four sub-issues,

appellants, Weslaco Independent School District (the District) and Richard Rivera appeal
the trial court’s denial of their plea to the jurisdiction. We reverse and render, in part,

and remand, in part.

I. BACKGROUND

From 2004 until June 2010, appellee Adan Perez Jr. was employed as the

District’s risk manager. In this position, Perez oversaw the District’s employee benefit

plans, including the school district’s self-funded workers’ compensation fund and health

insurance program. In June 2010, Perez’s employment with the District was terminated.

In March 2011, Perez filed suit against WISD and Rivera, the District’s superintendent.

By his live petition,1 Perez alleged that in early 2009, he became of aware of the

District’s purported desire and action to withdraw funds from the District’s self-funded

insurance programs “for the specific purpose of beginning construction of a new ‘Press

Box’ at [the District’s] football stadium.” Perez asserted in his petition that he was

“rebuked” when he informed the District’s chief financial officer that such withdrawal of

funds was illegal. Perez further asserted that he made several attempts to meet with

Rivera about the issue, but “was denied access” to him. Perez alleges that he continued

to present his complaints to his supervisor, as well as “other administrators and members

of [the District’s] Board of Trustees.” According to Perez’s petition, the District and

Rivera sought to “silence” him and put a plan in place to terminate his employment.

Perez’s lawsuit against the District and Rivera asserted various causes of action

1
Perez initially filed suit in Hidalgo County district court. The District then filed a notice of removal
to the United States District Court for the Southern District of Texas, McAllen Division. See 28 U.S.C.A. §
1446 (2013). Perez subsequently amended his complaint and the cause was remanded back to Hidalgo
County district court.

2
including: (1) breach of contract; (2) breach of Perez’s right of reasonable expectation to

renewal of his contract; (3) violations of the Texas Whistleblower Act, see TEX. GOV’T

CODE ANN. § 554.002 (West 2004), by the District and Rivera, in his individual capacity;

(4) constitutional violations of due course of law rights, equal protection rights, and free

speech under the Texas Constitution; and (5) common-law retaliation. Perez sought

actual, exemplary, and statutory damages, attorney’s fees, pre- and post-judgment

interests, costs, and any other relief in law and in equity.

The District filed a plea to the jurisdiction asserting that the trial court lacked

jurisdiction over Perez’s claims of (1) breach of contract; (2) breach of right of reasonable

expectation to renew his contract, (3) constitutional violations for damages, and (4)

retaliation. 2 The trial court held a hearing and denied the District’s plea. This

interlocutory appeal ensued. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8)

(West Supp. 2011).

II. PLEA TO THE JURISDICTION

By their single issue with four sub-issues, appellants assert that the trial court

erred by denying their plea to the jurisdiction.

A. Standard of Review

A plea to the jurisdiction challenges a trial court’s subject matter jurisdiction. City

of Dallas v. Carbajal, 324 S.W.3d 537, 538 (Tex. 2010) (per curiam). Whether a court

has subject matter jurisdiction is a question of law that we review de novo. Id.

2
The District also filed a motion to dismiss pursuant to section 101.106(e) of the civil practice and
remedies code, which the trial court denied, and the District appealed. We address those issues in a
companion appeal under Cause Number 13-12-590-CV.

3
 When a plea to the jurisdiction challenges the pleadings, we determine if the

pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to hear

the cause. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004)

(citing Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)).

We construe the pleadings liberally in favor of the plaintiff and look to the pleaders’

intent. Miranda, 133 S.W.3d at 226. If the pleadings do not contain sufficient facts to

affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively demonstrate

incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff

should be afforded an opportunity to amend. Id. However, if the pleadings

affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be

granted without allowing the plaintiff an opportunity to amend. Id. (citing County of

Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002)). Even a failure to allege sufficient

facts to demonstrate jurisdiction does not necessarily authorize immediate dismissal.

City of Austin v. L.S. Ranch, Ltd., 970 S.W.2d 750, 753 (Tex. App.—Austin 1998, no

pet.). It is only where the court can see that, even by amendment, no cause of action

can be stated consistent with the facts alleged that the court is without jurisdiction.

Bybee v. Fireman's Fund Ins. Co., 331 S.W.2d 910, 917 (Tex. 1960) (quoting Lone Star

Fin. Corp. v. Davis, 77 S.W.2d 711, 715 (Tex.Civ.App.-Eastland 1934, no writ); see also

Chambers v. City of Austin, No. 03-00-00595-CV, 2001 WL 726372, at *2 (Tex.

App.—Austin June 29, 2001, no pet.).

If the plea challenges the existence of jurisdictional facts, we consider relevant

evidence submitted by the parties when necessary to resolve the jurisdictional issue

4
raised, as the trial court is required to do so. Bland Ind. Sch. Dist. v. Blue, 34 S.W.3d

547, 555 (Tex. 2000). In a case in which the jurisdictional challenge implicates the

merits of the plaintiff’s cause of action and the plea to the jurisdiction includes evidence,

the trial court reviews the relevant evidence to determine if a fact issue exists. Miranda,

133 S.W.3d at 227. If a fact question exists, then the plea cannot be granted and the

fact issue will be resolved by the fact finder. Id. However, if the relevant evidence is

undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules

on the plea to the jurisdiction as a matter of law. Id.

B. Discussion

1. State Constitutional Claims for Damages

Appellants first argue that Perez failed to allege a cognizable cause of action for

violations of the Texas Constitution. We agree to the extent that Perez seeks damages

for these purported violations. In his petition, Perez specifically identifies violations

under the Texas Constitution of his “Due Course of Law rights,” “Equal Protection rights”

and “rights of free speech . . . concerning expression of matters of public concern.”

Additionally, Perez pleads for actual damages, exemplary damages, statutory damages,

attorney’s fees, interest, costs, and other relief in law and in equity. Case law is clear

that Texas does not recognize a common law cause of action for damages to enforce

constitutional rights. City of Beaumont v. Bouillion, 896 S.W.2d 143, 150 (Tex. 1995).

However, suits for equitable remedies for violation of constitutional rights are not

prohibited. Id. at 149. Accordingly, we conclude that the trial court lacks jurisdiction to

hear any causes of action in this case for damages to enforce constitutional rights.

5
 2. Common Law Retaliation Claim

Next, appellants argue, by their second sub-issue, that Perez alleged a common

law cause of action for retaliation that is not recognized in Texas. See Austin v.

HealthTrust, Inc.—The Hosp. Co., 967 S.W.2d 400, 401 (Tex. 1998) (holding that Texas

does not recognize a common law action for retaliatory discharge for whistleblowers).

Perez does not dispute this assertion. Therefore, we hold that the trial court erred in

denying appellants’ plea to the jurisdiction on Perez’s common law cause of action for

retaliation. See Bybee, 331 S.W.2d at 917; see also Chambers, 2001 WL 726372, at

*2.

3. Breach of Contract

In their third sub-issue, appellants contend that the trial court lacks jurisdiction to

hear Perez’s breach of contract claim as a result of his termination as an employee of the

District because Perez failed to exhaust his administrative remedies for these claims

under the Texas Education Code Section 7.057(a)(2)(B). TEX. EDUC. CODE ANN. §

7.057(a)(2)(B) (West Supp. 2011). We agree.

a. Exclusive Jurisdiction

An agency has exclusive jurisdiction when the Legislature has granted that agency

the sole authority to make an initial determination in a dispute. Subaru of Am. v. David

McDavid Nissan, 84 S.W.3d 212, 221 (Tex. 2002). If an agency has exclusive

jurisdiction, a party must exhaust all administrative remedies before seeking judicial

review of the agency’s action. Cash Am. Int’l, Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex.

2000). Until a party has exhausted all administrative remedies, the trial court lacks

6
subject matter jurisdiction and must dismiss any claim that is within the agency’s

exclusive jurisdiction. David McDavid Nissan, Inc., 84 S.W.3d at 221 (citing Tex. Educ.

Agency v. Cypress-Fairbanks I.S.D., 830 S.W.2d 88, 90 (Tex. 1992)). Because such a

dismissal does not implicate the claims’ merits, the trial court must dismiss the claims

without prejudice. David McDavid Nissan, 84 S.W.3d at 221. We review questions of

exclusive jurisdiction de novo. Id. at 222.

Under the education code, the Commissioner of Education has exclusive

jurisdiction over certain claims involving the “school laws” of the state, including

nonrenewal or breach of a school district employee’s contract. See Larsen v. Santa Fe

Ind. Sch. Dist., 296 S.W.3d 118, 128 (Tex. App.—Houston [14th Dist.] 2009, pet. denied)

(citing Gutierrez v. Laredo Ind. Sch. Dist., 139 S.W.3d 363, 366 (Tex. App.—San Antonio,

no pet.)); see also TEX. EDUC. CODE ANN. § 7.057(a)(2)(B) (giving the Commissioner of

Education exclusive jurisdiction over an appeal involving “provision of a written

employment contract between the school district and a school district employee, if a

violation causes or would cause monetary harm to the employee”). This grant of

exclusive jurisdiction requires such claimants to exhaust local school district grievance

procedures before filing suit. Larsen, 296 S.W.3d at 128.

b. District’s Local Policy

The record shows that Perez’s contract with the District was for a non-educator

under local policy DCE (Legal). DCE (Legal) provides that “[a]n employee whose

contract is not reissued at the end of the contract period may appeal to the [School

Board] in accordance with DGBA (Local).” DGBA (Local) outlines specific procedures

7
for redress of employee complaints or grievances, including: first, informal conferences

with the employee’s supervisor, principal, or other appropriate administrator; and

second, if an informal resolution is not reached, a formal process.

According to DGBA (Local), the first stage of the formal process is known as

“Level One.” Under this level, a complaint form must be filed within fifteen days of the

date the employee first knew, or with reasonable diligence should have known, of the

decision or action giving rise to the complaint or grievance. After an investigation, the

Level One hearing officer shall investigate and hold a conference with the employee

within ten days after receiving the written complaint and shall provide the employee with

a written response within ten days of the conference that sets forth the hearing officer’s

decision.

Under DGBA (Local), if the employee did not receive the relief requested at Level

One or if the time for a response has expired, the employee may request a conference

with the superintendent or designee to appeal the Level One decision under “Level Two.”

The appeal notice under Level Two must be filed in writing and within ten days of the

Level One response. A conference must be held within ten days of filing a Level Two

appeal notice, and a written decision must be made by the superintendent within ten

days following the conference.

Under DGBA (Local), if the employee did not receive the relief requested at Level

Two or if the time for a response has expired, the employee may appeal the decision to

the District’s board of trustees. A Level Three hearing is then conducted at a board

meeting at which the complaint will be on the agenda for presentation to the board.

8
After consideration, the board may then make a decision and give notice of it orally or in

writing at any time up to and including the next regularly scheduled board meeting. If

the board does not make a decision, the lack of response upholds the Level Two

decision.

c. Perez's Claims

Because Perez’s breach of contract claim concerns a non-renewal of

employment, we conclude that DGBA (Local) applies. Perez alleges that his

employment with the District terminated in June 2010, and the record shows that he filed

a Level One employee complaint form with the District on July 20, 2010, pursuant to

DGBA (Local)’s Level One procedures. The record then shows that in October 2010,

the District delayed setting a Level One grievance conference with Perez, scheduled one

for November 1, 2010, but then rescheduled the conference to December 1, 2010.

After the Level One conference, the District’s Level One hearing officer and

deputy superintendent, Ruben Alejandro, mailed a written response to Perez denying all

of Perez’s requested remedies and advised Perez of the procedures to file a DGBA

(Local) Level Two grievance. There is no evidence in the record that Perez filed a Level

Two or Level Three grievance pursuant to DGBA (Local) or appealed the District’s board

decision to the Commissioner of Education prior to the filing of the instant suit in March

2011.

Therefore, we conclude that the trial court lacked jurisdiction to hear Perez’s

breach of contract claim because Perez did not exhaust his administrative remedies

pursuant to the District’s local grievance policy and Texas Education Code. As a result,

9
the trial court erred by denying the District’s plea to the jurisdiction on this cause of

action. See David McDavid Nissan, 84 S.W.3d at 221.

4. Reasonable Expectation of Contract Renewal

Finally, in their fourth sub-issue, appellants argue that: (1) Perez insufficiently

establishes a breach of his right of reasonable expectation to renew his contract because

he cannot prove a property interest in continued employment; and (2) even if he did have

a claim, appellants are immune.

We take appellants’ first argument as a challenge to Perez’s pleadings. Thus,

we review whether Perez has alleged facts that affirmatively demonstrate the court’s

jurisdiction to hear the cause. Miranda, 133 S.W.3d at 226. Perez’s pleading alleges

that his contract with the District was not renewed in June 2010 after a bad employee

review in 2010, despite five years of prior “exemplary” reviews. As a result, Perez

alleges that appellants breached his right of reasonable expectation to renew his

contract. After liberally construing Perez’s pleadings in his favor and looking to his

intent, we conclude that the pleadings do not contain sufficient facts to affirmatively

demonstrate the trial court’s jurisdiction, but also do not affirmatively demonstrate

incurable defects in jurisdiction. Therefore, Perez should be afforded an opportunity to

amend his pleadings solely to this cause of action. Id.

Accordingly, we sustain appellants’ sub-issues one, two, and three and overrule

sub-issue four.

10
 III. CONCLUSION

We reverse the trial court’s denial of appellants’ plea to the jurisdiction and render

judgment that (1) Perez’s constitutional claims for damages and common-law retaliation

claim is dismissed with prejudice and (2) Perez’s breach of contract claim is dismissed

without prejudice. We remand Perez’s claim for breach of his right of reasonable

expectation to renew his contract because this pleading defect is one for which he

should be afforded an opportunity to amend.

__________________________
GINA M. BENAVIDES,
Justice

Delivered and filed the
25th day of July, 2013.

11