Family law: Attempted appeal dismissed for lack of appellate jurisdiction
Crayton v. Crisp (Tex. App.- Austin, Dec. 22, 2007)(Patterson)
DISMISSED FOR WANT OF JURISDICTION: Opinion by Justice Patterson (Before Justices Patterson, Puryear and Henson)
03-06-00635-CV
James Earl Crayton, Sr. v. Doris Lanett Crisp--Appeal from County Court at Law No. 3 of Williamson County
FROM THE COUNTY COURT AT LAW NO. 3 OF WILLIAMSON COUNTY
NO. 05-915-FC3, HONORABLE DONALD HIGGINBOTHAM, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Appellant filed his notice of appeal in the instant cause on October 24, 2006, without paying the filing fee or filing an affidavit of indigence. (1) Pursuant to Texas Rule of Appellate Procedure 20.1, this Court abated the instant appeal and remanded this cause to the trial court to conduct an evidentiary hearing on appellant's claim of indigence. See Tex. R. App. P. 20.1(h)(4), (i). The trial court gave notice to the parties and held a hearing on October 31, 2007.
The trial court found that appellant did not file a proper affidavit of indigence. Tex. R. App. P. 20(i); see Higgins v. Randall County Sheriff's Office, 193 S.W.3d 898, 899-900 (Tex. 2006).
Thereafter, the reporter filed the reporter's record of the hearing on indigency with this Court, and the district clerk filed the clerk's record. Appellant has since filed a proper affidavit of indigence with this Court in compliance with Tex. R. App. P. 20.1(b), and we reinstated the case on November 19, 2007.
Based on the record now before us, it is clear that we lack jurisdiction over this appeal. In the underlying suit, appellant seeks a divorce from his wife, and he requested the trial court to appoint an "Attorney ad Litem" to represent him in the divorce proceedings. The record reflects that the trial court denied appellant's request for appointed counsel on October 11, 2006. Appellant appeals from the trial court's interlocutory order denying the request for appointed counsel.
This Court lacks jurisdiction over an appeal from an interlocutory order unless jurisdiction is specifically provided by statute. See Stary v. DeBord, 967 S.W.2d 352, 352-53 (Tex. 1998); Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992). No statute authorizes an interlocutory appeal from an order denying a motion for appointed counsel. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2007); Belton v. Conagra Poultry Co., No. 10-03-00291-CV, 2004 Tex. App. LEXIS 11781, at *1 (Tex. App.--Waco 2004, pet. denied) (per curiam) (not designated for publication); In re S.L.K., No. 2-04-197-CV, 2004 Tex. App. LEXIS 10583, at *1-2 (Tex. App.--Fort Worth 2004, no pet.) (not designated for publication). Accordingly, we dismiss this appeal for want of jurisdiction.
__________________________________________
Jan P. Patterson, Justice
Before Justices Patterson, Puryear and Henson
Dismissed for Want of Jurisdiction
Filed: December 21, 2007
1. Appellant filed a letter stating that he was indigent.
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Saturday, January 19, 2008
Sunday, August 26, 2007
Austin court of appeals affirms denial of motion to compel arbitration - agreement to arbitrate not shown
Appellate panel also holds that trial court's ruling on motion to reconsider denial of motion to compel arbitration is not subject to interlocutory appeal. Aggrieved party must appeal arbitration denial itself within 20-day time-frame allowed for accelerated appeals. Case involved both attempted interlocutory appeal of order denying arbitration under the TAA and mandamus petition predicated on applicability of FAA.
AXA Financial, Inc.; AXA Advisors, L.L.C.; AXA Equitable Life Insurance Co., f/k/a Equitable Life Assurance Society of The United States and John Lefferts v. C. Daniel Roberts as Chapter 7 Trustee of the Bankruptcy Estate of L. Kent Abney, No. 03-07-00079-CV (Tex.App.- Austin, Aug 23, 2007)(Opinion by Justice Patterson)(arbitration in employment context, securities dealers)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 345th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-06-003736, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N BY JUSTICE JAN PATTERSON
In this combined original proceeding and accelerated interlocutory appeal, AXA Financial, Inc., AXA Advisors, L.L.C., AXA Equitable Life Insurance Co., f/k/a Equitable Life Assurance Society of the United States, and John Lefferts (collectively "relators") bring a petition for writ of mandamus and an interlocutory appeal complaining of the trial court's order denying arbitration. We previously consolidated the two proceedings, (1) and now dismiss the interlocutory appeal for lack of jurisdiction and deny the writ of mandamus.
FACTUAL AND PROCEDURAL BACKGROUND
C. Daniel Roberts, as Chapter 7 Trustee of the Bankruptcy Estate of L. Kent Abney, filed suit against relators in 2006, alleging breach of contract, fraud, breach of fiduciary duty, and constructive fraud stemming from Abney's association and employment relationship with relators. (2)
In his pleadings, Abney alleges (1) that he served in various roles for the AXA entities from the mid-1990s to 2002, including as a "registered representative/agent selling financial products," manager, and "National Liaison to Professional Advisors," and (2) that Lefferts also worked for the AXA entities and with Abney from the mid-1990s to 2002, including allegedly sharing compensation with Abney due to "Abney's position and work." Abney's pleadings allege that he relinquished his role as manager in 2000 based upon representations by Lefferts and others that he would be offered a headquarters liaison position, and that relators wrongfully terminated his "Associate Agency Manager" contract after not following through on their commitment to Abney on the liaison position in 2002.
In response, relators in their answers raised the defense that Abney's claims were subject to binding arbitration. Thereafter, relators filed a motion to compel arbitration before the National Association of Securities Dealers ("NASD") and to stay the court proceedings pending the completion of arbitration. In their motion to compel, relators alleged that Abney executed a Uniform Application for Securities Industry Registration or Transfer ("Form U-4") (3) in approximately 1987. They further alleged that the Form U-4 contained a pre-dispute arbitration clause that incorporated by reference the arbitration provisions of the NASD Code, and that the Form U-4 and the NASD Code require arbitration of Abney's asserted claims.
Relators, however, did not include the 1987 executed Form U-4 as evidence in support of their motion. Relators attached as evidence an amended Form U-4 that Abney signed in May 2005, along with a NASD Rule 3080 Acknowledgment form and a 2005 letter from AXA Equitable Life Insurance Company to Abney. (4) The 2005 Form U-4 shows that Abney's firm was AXA Advisors, LLC. The NASD Rule 3080 Acknowledgment form includes the following language:
The NASD Form U-4 contains a pre-dispute arbitration clause. You should read that clause now. Before signing the Form U-4, you should understand the following: (1) You are agreeing to arbitrate any dispute, claim or controversy that may arise between you and your firm, or a customer, or any other person, that is required to be arbitrated under the rules of the self-regulatory organizations with which you are registering.
Abney, however, executed both the 2005 U-4 Form and the Rule 3080 Acknowledgment form subject to an attachment in which he expressly refused to consent to pre-dispute arbitration and reserved his right to file suit in a court of law.
Prior to a hearing on the motion to compel, the parties entered into a Rule 11 Agreement that Abney would not seek a continuance of the hearing in exchange for relators limiting their evidence to the evidence attached to their motion to compel. The parties further agreed that if relators located a 1987 Form U-4 signed by Abney, that they would produce it prior to the hearing, and Abney reserved the right to seek a continuance and additional discovery at that point.
At a hearing on relators' motion to compel, neither party presented any evidence or requested an evidentiary hearing. After the hearing, the trial court denied the motion with prejudice, finding that relators had failed to carry their burden to establish a valid agreement to arbitrate the disputed claims between the parties:
After considering Defendants' Motion to Compel Arbitration and Stay Proceedings, the response, the pleadings, the evidence, and the arguments of counsel, if any, the Court finds that Defendants have failed to sustain their burden of proving the existence of a valid agreement to arbitrate the claims asserted in this dispute. Consequently, the Court finds Defendants' Motion to Compel Arbitration and Stay Proceedings to be without merit and DENIES the motion with prejudice.
Relators then filed a motion to reconsider, attaching additional evidence in support of their motion to compel. As additional evidence, relators provided an affidavit from a custodian of records, Form U-4s that Abney allegedly signed in 1989, 1994, and 2003, and a NASD Rule 3080 Acknowledgment form that Abney allegedly signed in 2003. The 2003 Form U-4 states that it is a "U4-Amendment." The affidavit from a custodian of records of "AXA Financial/AXA Equitable Life Insurance Company" states that the Form U-4s and the Rule 3080 acknowledgment were kept in the ordinary course of business and that Equitable Life Assurance Society of the U.S. was a predecessor company to "AXA Financial/AXA Equitable Life Insurance Company."
The Form U-4s, similar to the 2005 Form U-4, contain language that Abney "agree[s] to arbitrate any dispute, claim or controversy that may arise between [Abney] and [his] firm, . . . or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization with which [he] register[s]." On the Form U-4s, Abney indicated that he was registering with NASD. The identified firm is "Equitable Life Assurance Society of the U.S." on the 1989 and 1994 Form U-4s, and the identified firm is "AXA Advisors, LLC" on the 2003 Form U-4.
Abney did not file a response to the motion to reconsider. The trial court considered the motion by submission and denied it. Relators' interlocutory appeal under the Texas Arbitration Act ("TAA") (5) and their petition for writ of mandamus under the Federal Arbitration Act ("FAA") (6) followed.
ANALYSIS
When a trial court denies a motion to compel based on the TAA, the motion is reviewed by interlocutory appeal. Tex. Civ. Prac. & Rem. Code Ann. § 171.098 (West 2005). When the trial court denies a motion to compel based on the FAA, the motion is reviewed by mandamus. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992) (orig. proceeding). Because relators seek to compel arbitration under the TAA by interlocutory appeal and under the FAA by mandamus, we have consolidated the two proceedings and are rendering a decision disposing of both simultaneously. (7)
Interlocutory appeal under the TAA
Turning first to relators' interlocutory appeal under the TAA, the interlocutory appeal of the denial of a motion to compel arbitration is accelerated. Tex. Civ. Prac. & Rem. Code Ann. § 171.098; Tex. R. App. P. 28.1. To timely perfect an accelerated appeal, the notice of appeal must be filed within twenty days after the order or judgment. Tex. R. App. P. 26.1(b); In re K.A.F., 160 S.W.3d 923, 927 (Tex. 2005).
Citing no authority, relators contend that their notice of appeal was timely because their appeal is from the trial court's denial of the motion to reconsider and their notice was filed within 20 days of that order, and the motion to reconsider was independently appealable. They contend that, by attaching additional evidence to the motion to reconsider, they started a new timetable for perfecting the accelerated appeal from the trial court's denial of their motion to compel arbitration. We disagree.
Interlocutory orders may be appealed only if permitted by statute and only to the extent jurisdiction is conferred by statute. Jack B. Anglin, 842 S.W.2d at 272. The applicable provision of the TAA permitting interlocutory appeals from the denial of a motion to compel arbitration refers only to orders "denying an application to compel arbitration" and not to motions to reconsider the denial. Tex. Civ. Prac. & Rem. Code Ann. § 171.098.
Relators' motion to reconsider was not independently appealable under the TAA so as to start a new timetable for perfecting the accelerated appeal. See id. (Subsection 171.098(b) specifies that "The appeal shall be taken in the manner and to the same extent as an appeal from an order or judgment in a civil action."); Tex. R. App. P. 28.1; In re K.A.F., 160 S.W.3d at 926-27 (motion for new trial does not extend time to perfect accelerated appeal); Digges v. Knowledge Alliance, Inc., 176 S.W.3d 463, 464 (Tex. App.--Houston [1st Dist.] 2004, no pet.) (motion to reconsider order granting special appearance not "independently appealable"; court lacked jurisdiction over accelerated interlocutory appeal for failure to timely file notice of appeal); Denton County v. Huther, 43 S.W.3d 665, 667 (Tex. App.--Fort Worth 2001, no pet.) (order denying motion to reconsider and renewed plea to the jurisdiction not a distinct appealable interlocutory order with separate timetable for appeal).
Because relators failed to file their notice within the time prescribed from the order denying the motion to compel and because they only appealed the motion to reconsider, this Court lacks jurisdiction to consider the appeal. We, therefore, dismiss relators' interlocutory appeal under the TAA for lack of jurisdiction and consider relators' petition for mandamus under the FAA.
Mandamus under the FAA
Relators contend that the trial court abused its discretion by denying their motion to compel arbitration and their motion for reconsideration under the FAA. We disagree.
1. Standard of Review
Mandamus will lie only to correct a clear abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). Mandamus is appropriate to correct a clear abuse of discretion when there is no adequate remedy by appeal. In re D. Wilson Construction Co., 196 S.W.3d 774, 780-81 (Tex. 2006). There is no adequate remedy by appeal when a trial court improperly denies a motion to compel arbitration under the FAA, and mandamus is the proper means for reviewing an order denying arbitration under the FAA. Id.
To be entitled to compel arbitration under the FAA, relators had the initial burden to establish (i) the existence of a valid arbitration agreement between the parties and (ii) that the claims Abney asserted against them fell within the scope of that agreement. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005); In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 572-73 (Tex. 1999). "Generally under the FAA, state law governs whether a litigant agreed to arbitrate, and federal law governs the scope of an arbitration clause." In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005). When the movant has proven there is an arbitration agreement between the parties, a presumption arises that all disputed issues between the parties must be arbitrated. Kellogg, 166 S.W.3d at 737; In re Jebbia, 26 S.W.3d 753, 757 (Tex. App.--Houston [14th Dist.] 2000, orig. proceeding).
2. The Procedure to be Followed on a Motion to Compel Arbitration
A motion to compel arbitration is similar to a motion for partial summary judgment, subject to the same evidentiary standards. In re Jebbia, 26 S.W.3d at 756-57. No presumption of arbitrability arises until the court has found there is an enforceable arbitration agreement. Id.
To compel arbitration on a summary motion, a trial court must first determine as a matter of law that the parties have agreed to arbitrate. Id. (citing Jack B. Anglin, 842 S.W.2d at 269). This burden of establishing the existence of the arbitration agreement is generally evidentiary. See In re Oakwood Mobile Homes, 987 S.W.2d at 573 (establishing the existence of the agreement, "Here, Oakwood met its burden of presenting evidence of an arbitration agreement that governs the dispute between the parties.") (emphasis added; citations omitted); In re Koch Indus., Inc., 49 S.W.3d 439, 444 (Tex. App.--San Antonio 2001, orig. proceeding) ("The party seeking arbitration has the initial burden to present evidence of an arbitration agreement.").
Because a benefit of arbitration may lie in the expedited and less expensive disposition of a dispute, a trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations. Jack B. Anglin, 842 S.W.2d at 269. I
n arriving at this procedure, the Texas Supreme Court drew from established summary judgment procedure. Id.; In re Jebbia, 26 S.W.3d at 756-57. But, if the party alleging an arbitration agreement cannot prove an agreement exists and that it requires arbitration of the issues in dispute as a matter of law on the basis of affidavits, pleadings, discovery, and stipulations, "it must seek an evidentiary hearing to compel arbitration." In re Jebbia, 26 S.W.3d at 758; see also Jack B. Anglin, 842 S.W.2d at 269; In re Bunzl USA, Inc., 155 S.W.3d 202, 208 (Tex. App.--El Paso 2004, orig. proceeding).
The initial burden of the party seeking to compel arbitration--to establish the arbitration agreement's existence--includes proving the entity seeking to enforce the arbitration agreement was a party to it or had the right to enforce the agreement notwithstanding. Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 836-38 (Tex. App.--Houston [1st Dist.] 2002, no pet.) (successor employer did not meet initial burden of showing an arbitration agreement that it could enforce as non-signatory); Pepe Int'l Dev. Co. v. Pub Brewing Co., 915 S.W.2d 925, 931
(Tex. App.--Houston [1st Dist.] 1996, no writ) (combined appeal and orig. proceeding) (certain defendants were not parties to contracts and could not compel arbitration under the terms of the contracts).
If that summary proof intrinsically raises issues about the enforceability, scope or existence of the agreement, the movant's summary proof should include any evidence that resolves those issues without creating an issue of material fact. In re Jebbia, 26 S.W.3d at 757. To resist summary arbitration, the non-movant need only raise an issue of material fact as to the party's entitlement to arbitration. Id.
3. Establishing the Existence of an Arbitration Agreement
Public policy favors the submission of disputes to arbitration, but arbitration is a creature of contract, and a clause requiring arbitration will be interpreted under contract principles. In re Big 8 Food Stores, Ltd., 166 S.W.3d 869, 876 (Tex. App.--El Paso 2005, orig. proceeding); Mohamed, 89 S.W.3d at 835; Belmont Constructors, Inc. v. Lyondell Petrochemical Co., 896 S.W.2d 352, 357 (Tex. App.--Houston [1st Dist.] 1995, no writ).
A party seeking to compel arbitration must establish its right to that remedy under the contract. A clause requiring arbitration will be enforced according to its plain meaning unless this would defeat the intention of the parties. The parties' agreement and intent to submit to arbitration must be unambiguous. In re Big 8 Food Stores, 166 S.W.3d at 875; Porter & Clements, L.L.P. v. Stone, 935 S.W.2d 217, 220 (Tex. App.--Houston [1st Dist.] 1996, orig. proceeding). When we are called upon to decide whether the parties have agreed to arbitrate, we do not resolve doubts or indulge a presumption in favor of arbitration. In re Jebbia, 26 S.W.3d at 757; see also American Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 537-38 (5th Cir. 2003). Instead, we apply standard contract principles to determine whether a valid arbitration agreement exists. Lang, 321 F.3d at 538; see also Ysleta Indep. Sch. Dist. v. Godinez, 998 S.W.2d 700, 702 (Tex. App.--El Paso 1999, no pet.); In re Big 8 Food Stores, 166 S.W.3d at 876.
The existence of a valid agreement is determined by the substantive contract law of Texas. Tenet Healthcare, Ltd. v. Cooper, 960 S.W.2d 386, 388 (Tex. App.--Houston [14th Dist.] 1998, writ dism'd w.o.j.). For there to be an arbitration agreement under Texas contract law, there must be: (1) an offer; (2) an acceptance in compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution of the contract with the intent that it be mutual and binding. McCulley Fine Arts Gallery, Inc. v. "X" Partners, 860 S.W.2d 473, 477 (Tex. App.--El Paso 1993, no writ).
The issue then is whether relators sustained their burden to show that Abney contractually agreed to arbitrate the claims that he has asserted against each of them under the Form U-4s or other documents that were before the trial court. See Oakwood Mobile Homes, 987 S.W.2d at 573. We conclude that relators did not sustain their burden of proving the existence of a valid agreement to arbitrate the claims asserted in this dispute with the evidence they presented with either their motion to compel arbitration or their motion to reconsider.
4. Motion to Compel Arbitration
In support of their motion to compel arbitration, relators attached documents to their motion, all of which were signed in 2005 after the dispute occurred--a Form U-4 executed by Abney, a NASD Rule 3080 Acknowledgment form, and a letter from AXA Equitable Life Insurance Company to Abney. The motion was unverified and no affidavit was attached to the motion--only documents were attached.
The documents do not support compelling Abney to arbitrate the claims in his lawsuit. The forms were executed after the relevant time period asserted in Abney's pleadings and, on the forms, Abney expressly refused to arbitrate claims. AXA's letter to Abney was also from 2005.
In sum, relators failed to produce any evidence of an agreement to arbitrate the dispute between the parties. The only alleged agreement before the court was a Form U-4 in which Abney specifically refused to arbitrate his claims. Reviewing the submitted evidence in light of Abney's pleaded claims, we cannot say that the trial court abused its discretion in denying the motion to compel arbitration.
5. Motion to Reconsider
Relators attached additional evidence to their motion to reconsider--Form U-4s allegedly signed by Abney in 1989, 1994, and 2003, a NASD Rule 3080 Acknowledgment form allegedly signed by Abney in 2003, and the custodial affidavit, but relators did not raise any new ground for compelling arbitration in the motion. They sought reconsideration based upon the additional evidence that was "not previously available." Relators contend on appeal, the evidence was properly before the court, citing Texas Rule of Civil Procedure 270 and In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 68-69 (Tex. 2005), and that the additional evidence requires the court to compel arbitration.
Texas Civil Procedure Rule 270 provides that a trial court may allow additional evidence to be offered at any time when it clearly appears to be necessary to the administration of justice. Tex. R. Civ. P. 270. A trial court's decision whether to reopen the evidence for the purpose of admitting new evidence is reviewed under the abuse of discretion standard. Naguib v. Naguib, 137 S.W.3d 367, 372-73 (Tex. App.--Dallas 2004, pet. denied). In determining whether to permit additional evidence, one factor that a trial court may consider under rule 270 is the moving party's due diligence in obtaining the evidence. Id. at 372. Relators' explanation for not attaching the additional evidence to their initial motion to compel was that it was "previously unavailable." This explanation fails to demonstrate due diligence in obtaining the documents.
Relators also contend that evidence attached to their motion to reconsider was properly before the court based upon In re Nexion. In In re Nexion, the initial motion to compel was sought under the TAA, and the motion to reconsider was sought under the FAA relying on evidence that supported a finding that "interstate commerce" was involved. 173 S.W.3d at 68-69. The court granted the writ and ordered arbitration on the new ground asserted in the motion to reconsider. Id. Relators, in contrast, did not urge a new ground in their motion to reconsider. In re Nexion does not address a movant's procedural requirements for the admission of new evidence when no new ground is asserted in a motion to reconsider and leave to file additional evidence was not sought or granted.
The trial court, unlike in In re Nexion, also had before it a Rule 11 Agreement between the parties. The parties agreed:
[Abney] agree[s] to forego discovery before the arbitration hearing with [relators'] agreement that [relators] will not rely on any evidence at the hearing other than what is attached to [relators'] Motion to Compel Arbitration. This is only about evidence and does not affect arguing the law. [Relators] did mention there is one possible exception: if [relators] do find a 1987 U-4 signed by Mr. Abney, [relators] will produce it prior to the hearing, can rely upon it and [Abney] reserves the right at that point to ask for continuance and some discovery.
There is no showing in the record that the Rule 11 Agreement between the parties was modified prior to filing the new evidence with the motion to reconsider. Under the Rule 11 Agreement, the relators bound themselves to the state of the evidentiary record as it was on the date of the hearing on the motion to compel. That record was not sufficient to compel arbitration. Without an agreed modification of the Rule 11 Agreement, relators were not free to alter the evidentiary record with new evidence. In light of the Rule 11 Agreement between the parties, we cannot say that the trial court abused its discretion in denying the motion to reconsider.
On the record properly before the trial court as of the date of the hearing on relators' motion to compel, the trial court reasonably concluded that relators did not establish the existence of an agreement to arbitrate the claims in dispute as a matter of law. Therefore, the court did not abuse its discretion by refusing to compel arbitration.
CONCLUSION
Having found relators' notice of appeal untimely under the TAA and not proper, we dismiss the interlocutory appeal for lack of jurisdiction. We further deny the writ of mandamus under the FAA. We conclude that the trial court did not abuse its discretion in denying the motion to compel arbitration and stay the proceedings and in denying the motion to reconsider.
__________________________________________
Jan P. Patterson, Justice
Before Justices Patterson, Pemberton and Waldrop
Dismissed for Want of Jurisdiction
Filed: August 23, 2007
1. See In re AXA Financial, Inc., 03-07-00078-CV (Tex. App.--Austin March 29, 2007) (mem. op.).
2. Abney declared bankruptcy in 2004, resulting in his claims being brought by the Chapter 7 bankruptcy trustee, C. Daniel Roberts.
3. A Form U-4 is an agreement between self-regulatory organizations, including NASD and an applicant. In re Prudential Ins. Co., 133 F.3d 225, 230 (3d Cir. 1998). The form was adopted in an effort to regulate the securities industry. Id. Texas courts have found the Form U-4 to be a contract that involves interstate commerce and its arbitration clause enforceable under the FAA. In re Merrill Lynch, Pierce, Fenner & Smith, Inc., 195 S.W.3d 807, 813 (Tex. App.--Dallas 2006, no pet.); Wachovia Securities, LLC v. Emery, 186 S.W.3d 107, 112 (Tex. App.--Houston [1st Dist.] 2005, orig. proceeding).
4. The letter from AXA Equitable Life Insurance Company addressed Abney's refusal to agree to pre-dispute arbitration. The letter advised him that he was bound by the rules of NASD when he signed the U-4 application in 1987, including a consent to arbitrate any matters that arose between Abney and his "firm." Abney objected to the letter as hearsay. There is no written ruling on the objection in the clerk's record and there is no reporter's record of the hearing.
5. Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-.098 (West 2005).
6. 9 U.S.C.A. §§ 1-16 (West 1999).
7. The FAA does not preempt the TAA unless the TAA would refuse to enforce an arbitration agreement that the FAA would enforce so that both acts may apply in a given case.
In re D. Wilson Construction Co., 196 S.W.3d 774, 779-80 (Tex. 2006). The Texas Supreme Court has reasoned that when a court of appeals is confronted with an interlocutory appeal and a mandamus proceeding seeking to compel arbitration that the better course of ction is to consolidate the two proceedings and render a decision that disposes of both simultaneously. In re Valero Energy Corp., 968 S.W.2d 916, 916-17 (Tex. 1998).
AXA Financial, Inc.; AXA Advisors, L.L.C.; AXA Equitable Life Insurance Co., f/k/a Equitable Life Assurance Society of The United States and John Lefferts v. C. Daniel Roberts as Chapter 7 Trustee of the Bankruptcy Estate of L. Kent Abney, No. 03-07-00079-CV (Tex.App.- Austin, Aug 23, 2007)(Opinion by Justice Patterson)(arbitration in employment context, securities dealers)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 345th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-06-003736, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N BY JUSTICE JAN PATTERSON
In this combined original proceeding and accelerated interlocutory appeal, AXA Financial, Inc., AXA Advisors, L.L.C., AXA Equitable Life Insurance Co., f/k/a Equitable Life Assurance Society of the United States, and John Lefferts (collectively "relators") bring a petition for writ of mandamus and an interlocutory appeal complaining of the trial court's order denying arbitration. We previously consolidated the two proceedings, (1) and now dismiss the interlocutory appeal for lack of jurisdiction and deny the writ of mandamus.
FACTUAL AND PROCEDURAL BACKGROUND
C. Daniel Roberts, as Chapter 7 Trustee of the Bankruptcy Estate of L. Kent Abney, filed suit against relators in 2006, alleging breach of contract, fraud, breach of fiduciary duty, and constructive fraud stemming from Abney's association and employment relationship with relators. (2)
In his pleadings, Abney alleges (1) that he served in various roles for the AXA entities from the mid-1990s to 2002, including as a "registered representative/agent selling financial products," manager, and "National Liaison to Professional Advisors," and (2) that Lefferts also worked for the AXA entities and with Abney from the mid-1990s to 2002, including allegedly sharing compensation with Abney due to "Abney's position and work." Abney's pleadings allege that he relinquished his role as manager in 2000 based upon representations by Lefferts and others that he would be offered a headquarters liaison position, and that relators wrongfully terminated his "Associate Agency Manager" contract after not following through on their commitment to Abney on the liaison position in 2002.
In response, relators in their answers raised the defense that Abney's claims were subject to binding arbitration. Thereafter, relators filed a motion to compel arbitration before the National Association of Securities Dealers ("NASD") and to stay the court proceedings pending the completion of arbitration. In their motion to compel, relators alleged that Abney executed a Uniform Application for Securities Industry Registration or Transfer ("Form U-4") (3) in approximately 1987. They further alleged that the Form U-4 contained a pre-dispute arbitration clause that incorporated by reference the arbitration provisions of the NASD Code, and that the Form U-4 and the NASD Code require arbitration of Abney's asserted claims.
Relators, however, did not include the 1987 executed Form U-4 as evidence in support of their motion. Relators attached as evidence an amended Form U-4 that Abney signed in May 2005, along with a NASD Rule 3080 Acknowledgment form and a 2005 letter from AXA Equitable Life Insurance Company to Abney. (4) The 2005 Form U-4 shows that Abney's firm was AXA Advisors, LLC. The NASD Rule 3080 Acknowledgment form includes the following language:
The NASD Form U-4 contains a pre-dispute arbitration clause. You should read that clause now. Before signing the Form U-4, you should understand the following: (1) You are agreeing to arbitrate any dispute, claim or controversy that may arise between you and your firm, or a customer, or any other person, that is required to be arbitrated under the rules of the self-regulatory organizations with which you are registering.
Abney, however, executed both the 2005 U-4 Form and the Rule 3080 Acknowledgment form subject to an attachment in which he expressly refused to consent to pre-dispute arbitration and reserved his right to file suit in a court of law.
Prior to a hearing on the motion to compel, the parties entered into a Rule 11 Agreement that Abney would not seek a continuance of the hearing in exchange for relators limiting their evidence to the evidence attached to their motion to compel. The parties further agreed that if relators located a 1987 Form U-4 signed by Abney, that they would produce it prior to the hearing, and Abney reserved the right to seek a continuance and additional discovery at that point.
At a hearing on relators' motion to compel, neither party presented any evidence or requested an evidentiary hearing. After the hearing, the trial court denied the motion with prejudice, finding that relators had failed to carry their burden to establish a valid agreement to arbitrate the disputed claims between the parties:
After considering Defendants' Motion to Compel Arbitration and Stay Proceedings, the response, the pleadings, the evidence, and the arguments of counsel, if any, the Court finds that Defendants have failed to sustain their burden of proving the existence of a valid agreement to arbitrate the claims asserted in this dispute. Consequently, the Court finds Defendants' Motion to Compel Arbitration and Stay Proceedings to be without merit and DENIES the motion with prejudice.
Relators then filed a motion to reconsider, attaching additional evidence in support of their motion to compel. As additional evidence, relators provided an affidavit from a custodian of records, Form U-4s that Abney allegedly signed in 1989, 1994, and 2003, and a NASD Rule 3080 Acknowledgment form that Abney allegedly signed in 2003. The 2003 Form U-4 states that it is a "U4-Amendment." The affidavit from a custodian of records of "AXA Financial/AXA Equitable Life Insurance Company" states that the Form U-4s and the Rule 3080 acknowledgment were kept in the ordinary course of business and that Equitable Life Assurance Society of the U.S. was a predecessor company to "AXA Financial/AXA Equitable Life Insurance Company."
The Form U-4s, similar to the 2005 Form U-4, contain language that Abney "agree[s] to arbitrate any dispute, claim or controversy that may arise between [Abney] and [his] firm, . . . or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organization with which [he] register[s]." On the Form U-4s, Abney indicated that he was registering with NASD. The identified firm is "Equitable Life Assurance Society of the U.S." on the 1989 and 1994 Form U-4s, and the identified firm is "AXA Advisors, LLC" on the 2003 Form U-4.
Abney did not file a response to the motion to reconsider. The trial court considered the motion by submission and denied it. Relators' interlocutory appeal under the Texas Arbitration Act ("TAA") (5) and their petition for writ of mandamus under the Federal Arbitration Act ("FAA") (6) followed.
ANALYSIS
When a trial court denies a motion to compel based on the TAA, the motion is reviewed by interlocutory appeal. Tex. Civ. Prac. & Rem. Code Ann. § 171.098 (West 2005). When the trial court denies a motion to compel based on the FAA, the motion is reviewed by mandamus. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992) (orig. proceeding). Because relators seek to compel arbitration under the TAA by interlocutory appeal and under the FAA by mandamus, we have consolidated the two proceedings and are rendering a decision disposing of both simultaneously. (7)
Interlocutory appeal under the TAA
Turning first to relators' interlocutory appeal under the TAA, the interlocutory appeal of the denial of a motion to compel arbitration is accelerated. Tex. Civ. Prac. & Rem. Code Ann. § 171.098; Tex. R. App. P. 28.1. To timely perfect an accelerated appeal, the notice of appeal must be filed within twenty days after the order or judgment. Tex. R. App. P. 26.1(b); In re K.A.F., 160 S.W.3d 923, 927 (Tex. 2005).
Citing no authority, relators contend that their notice of appeal was timely because their appeal is from the trial court's denial of the motion to reconsider and their notice was filed within 20 days of that order, and the motion to reconsider was independently appealable. They contend that, by attaching additional evidence to the motion to reconsider, they started a new timetable for perfecting the accelerated appeal from the trial court's denial of their motion to compel arbitration. We disagree.
Interlocutory orders may be appealed only if permitted by statute and only to the extent jurisdiction is conferred by statute. Jack B. Anglin, 842 S.W.2d at 272. The applicable provision of the TAA permitting interlocutory appeals from the denial of a motion to compel arbitration refers only to orders "denying an application to compel arbitration" and not to motions to reconsider the denial. Tex. Civ. Prac. & Rem. Code Ann. § 171.098.
Relators' motion to reconsider was not independently appealable under the TAA so as to start a new timetable for perfecting the accelerated appeal. See id. (Subsection 171.098(b) specifies that "The appeal shall be taken in the manner and to the same extent as an appeal from an order or judgment in a civil action."); Tex. R. App. P. 28.1; In re K.A.F., 160 S.W.3d at 926-27 (motion for new trial does not extend time to perfect accelerated appeal); Digges v. Knowledge Alliance, Inc., 176 S.W.3d 463, 464 (Tex. App.--Houston [1st Dist.] 2004, no pet.) (motion to reconsider order granting special appearance not "independently appealable"; court lacked jurisdiction over accelerated interlocutory appeal for failure to timely file notice of appeal); Denton County v. Huther, 43 S.W.3d 665, 667 (Tex. App.--Fort Worth 2001, no pet.) (order denying motion to reconsider and renewed plea to the jurisdiction not a distinct appealable interlocutory order with separate timetable for appeal).
Because relators failed to file their notice within the time prescribed from the order denying the motion to compel and because they only appealed the motion to reconsider, this Court lacks jurisdiction to consider the appeal. We, therefore, dismiss relators' interlocutory appeal under the TAA for lack of jurisdiction and consider relators' petition for mandamus under the FAA.
Mandamus under the FAA
Relators contend that the trial court abused its discretion by denying their motion to compel arbitration and their motion for reconsideration under the FAA. We disagree.
1. Standard of Review
Mandamus will lie only to correct a clear abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). Mandamus is appropriate to correct a clear abuse of discretion when there is no adequate remedy by appeal. In re D. Wilson Construction Co., 196 S.W.3d 774, 780-81 (Tex. 2006). There is no adequate remedy by appeal when a trial court improperly denies a motion to compel arbitration under the FAA, and mandamus is the proper means for reviewing an order denying arbitration under the FAA. Id.
To be entitled to compel arbitration under the FAA, relators had the initial burden to establish (i) the existence of a valid arbitration agreement between the parties and (ii) that the claims Abney asserted against them fell within the scope of that agreement. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005); In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 572-73 (Tex. 1999). "Generally under the FAA, state law governs whether a litigant agreed to arbitrate, and federal law governs the scope of an arbitration clause." In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005). When the movant has proven there is an arbitration agreement between the parties, a presumption arises that all disputed issues between the parties must be arbitrated. Kellogg, 166 S.W.3d at 737; In re Jebbia, 26 S.W.3d 753, 757 (Tex. App.--Houston [14th Dist.] 2000, orig. proceeding).
2. The Procedure to be Followed on a Motion to Compel Arbitration
A motion to compel arbitration is similar to a motion for partial summary judgment, subject to the same evidentiary standards. In re Jebbia, 26 S.W.3d at 756-57. No presumption of arbitrability arises until the court has found there is an enforceable arbitration agreement. Id.
To compel arbitration on a summary motion, a trial court must first determine as a matter of law that the parties have agreed to arbitrate. Id. (citing Jack B. Anglin, 842 S.W.2d at 269). This burden of establishing the existence of the arbitration agreement is generally evidentiary. See In re Oakwood Mobile Homes, 987 S.W.2d at 573 (establishing the existence of the agreement, "Here, Oakwood met its burden of presenting evidence of an arbitration agreement that governs the dispute between the parties.") (emphasis added; citations omitted); In re Koch Indus., Inc., 49 S.W.3d 439, 444 (Tex. App.--San Antonio 2001, orig. proceeding) ("The party seeking arbitration has the initial burden to present evidence of an arbitration agreement.").
Because a benefit of arbitration may lie in the expedited and less expensive disposition of a dispute, a trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations. Jack B. Anglin, 842 S.W.2d at 269. I
n arriving at this procedure, the Texas Supreme Court drew from established summary judgment procedure. Id.; In re Jebbia, 26 S.W.3d at 756-57. But, if the party alleging an arbitration agreement cannot prove an agreement exists and that it requires arbitration of the issues in dispute as a matter of law on the basis of affidavits, pleadings, discovery, and stipulations, "it must seek an evidentiary hearing to compel arbitration." In re Jebbia, 26 S.W.3d at 758; see also Jack B. Anglin, 842 S.W.2d at 269; In re Bunzl USA, Inc., 155 S.W.3d 202, 208 (Tex. App.--El Paso 2004, orig. proceeding).
The initial burden of the party seeking to compel arbitration--to establish the arbitration agreement's existence--includes proving the entity seeking to enforce the arbitration agreement was a party to it or had the right to enforce the agreement notwithstanding. Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 836-38 (Tex. App.--Houston [1st Dist.] 2002, no pet.) (successor employer did not meet initial burden of showing an arbitration agreement that it could enforce as non-signatory); Pepe Int'l Dev. Co. v. Pub Brewing Co., 915 S.W.2d 925, 931
(Tex. App.--Houston [1st Dist.] 1996, no writ) (combined appeal and orig. proceeding) (certain defendants were not parties to contracts and could not compel arbitration under the terms of the contracts).
If that summary proof intrinsically raises issues about the enforceability, scope or existence of the agreement, the movant's summary proof should include any evidence that resolves those issues without creating an issue of material fact. In re Jebbia, 26 S.W.3d at 757. To resist summary arbitration, the non-movant need only raise an issue of material fact as to the party's entitlement to arbitration. Id.
3. Establishing the Existence of an Arbitration Agreement
Public policy favors the submission of disputes to arbitration, but arbitration is a creature of contract, and a clause requiring arbitration will be interpreted under contract principles. In re Big 8 Food Stores, Ltd., 166 S.W.3d 869, 876 (Tex. App.--El Paso 2005, orig. proceeding); Mohamed, 89 S.W.3d at 835; Belmont Constructors, Inc. v. Lyondell Petrochemical Co., 896 S.W.2d 352, 357 (Tex. App.--Houston [1st Dist.] 1995, no writ).
A party seeking to compel arbitration must establish its right to that remedy under the contract. A clause requiring arbitration will be enforced according to its plain meaning unless this would defeat the intention of the parties. The parties' agreement and intent to submit to arbitration must be unambiguous. In re Big 8 Food Stores, 166 S.W.3d at 875; Porter & Clements, L.L.P. v. Stone, 935 S.W.2d 217, 220 (Tex. App.--Houston [1st Dist.] 1996, orig. proceeding). When we are called upon to decide whether the parties have agreed to arbitrate, we do not resolve doubts or indulge a presumption in favor of arbitration. In re Jebbia, 26 S.W.3d at 757; see also American Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 537-38 (5th Cir. 2003). Instead, we apply standard contract principles to determine whether a valid arbitration agreement exists. Lang, 321 F.3d at 538; see also Ysleta Indep. Sch. Dist. v. Godinez, 998 S.W.2d 700, 702 (Tex. App.--El Paso 1999, no pet.); In re Big 8 Food Stores, 166 S.W.3d at 876.
The existence of a valid agreement is determined by the substantive contract law of Texas. Tenet Healthcare, Ltd. v. Cooper, 960 S.W.2d 386, 388 (Tex. App.--Houston [14th Dist.] 1998, writ dism'd w.o.j.). For there to be an arbitration agreement under Texas contract law, there must be: (1) an offer; (2) an acceptance in compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) execution of the contract with the intent that it be mutual and binding. McCulley Fine Arts Gallery, Inc. v. "X" Partners, 860 S.W.2d 473, 477 (Tex. App.--El Paso 1993, no writ).
The issue then is whether relators sustained their burden to show that Abney contractually agreed to arbitrate the claims that he has asserted against each of them under the Form U-4s or other documents that were before the trial court. See Oakwood Mobile Homes, 987 S.W.2d at 573. We conclude that relators did not sustain their burden of proving the existence of a valid agreement to arbitrate the claims asserted in this dispute with the evidence they presented with either their motion to compel arbitration or their motion to reconsider.
4. Motion to Compel Arbitration
In support of their motion to compel arbitration, relators attached documents to their motion, all of which were signed in 2005 after the dispute occurred--a Form U-4 executed by Abney, a NASD Rule 3080 Acknowledgment form, and a letter from AXA Equitable Life Insurance Company to Abney. The motion was unverified and no affidavit was attached to the motion--only documents were attached.
The documents do not support compelling Abney to arbitrate the claims in his lawsuit. The forms were executed after the relevant time period asserted in Abney's pleadings and, on the forms, Abney expressly refused to arbitrate claims. AXA's letter to Abney was also from 2005.
In sum, relators failed to produce any evidence of an agreement to arbitrate the dispute between the parties. The only alleged agreement before the court was a Form U-4 in which Abney specifically refused to arbitrate his claims. Reviewing the submitted evidence in light of Abney's pleaded claims, we cannot say that the trial court abused its discretion in denying the motion to compel arbitration.
5. Motion to Reconsider
Relators attached additional evidence to their motion to reconsider--Form U-4s allegedly signed by Abney in 1989, 1994, and 2003, a NASD Rule 3080 Acknowledgment form allegedly signed by Abney in 2003, and the custodial affidavit, but relators did not raise any new ground for compelling arbitration in the motion. They sought reconsideration based upon the additional evidence that was "not previously available." Relators contend on appeal, the evidence was properly before the court, citing Texas Rule of Civil Procedure 270 and In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 68-69 (Tex. 2005), and that the additional evidence requires the court to compel arbitration.
Texas Civil Procedure Rule 270 provides that a trial court may allow additional evidence to be offered at any time when it clearly appears to be necessary to the administration of justice. Tex. R. Civ. P. 270. A trial court's decision whether to reopen the evidence for the purpose of admitting new evidence is reviewed under the abuse of discretion standard. Naguib v. Naguib, 137 S.W.3d 367, 372-73 (Tex. App.--Dallas 2004, pet. denied). In determining whether to permit additional evidence, one factor that a trial court may consider under rule 270 is the moving party's due diligence in obtaining the evidence. Id. at 372. Relators' explanation for not attaching the additional evidence to their initial motion to compel was that it was "previously unavailable." This explanation fails to demonstrate due diligence in obtaining the documents.
Relators also contend that evidence attached to their motion to reconsider was properly before the court based upon In re Nexion. In In re Nexion, the initial motion to compel was sought under the TAA, and the motion to reconsider was sought under the FAA relying on evidence that supported a finding that "interstate commerce" was involved. 173 S.W.3d at 68-69. The court granted the writ and ordered arbitration on the new ground asserted in the motion to reconsider. Id. Relators, in contrast, did not urge a new ground in their motion to reconsider. In re Nexion does not address a movant's procedural requirements for the admission of new evidence when no new ground is asserted in a motion to reconsider and leave to file additional evidence was not sought or granted.
The trial court, unlike in In re Nexion, also had before it a Rule 11 Agreement between the parties. The parties agreed:
[Abney] agree[s] to forego discovery before the arbitration hearing with [relators'] agreement that [relators] will not rely on any evidence at the hearing other than what is attached to [relators'] Motion to Compel Arbitration. This is only about evidence and does not affect arguing the law. [Relators] did mention there is one possible exception: if [relators] do find a 1987 U-4 signed by Mr. Abney, [relators] will produce it prior to the hearing, can rely upon it and [Abney] reserves the right at that point to ask for continuance and some discovery.
There is no showing in the record that the Rule 11 Agreement between the parties was modified prior to filing the new evidence with the motion to reconsider. Under the Rule 11 Agreement, the relators bound themselves to the state of the evidentiary record as it was on the date of the hearing on the motion to compel. That record was not sufficient to compel arbitration. Without an agreed modification of the Rule 11 Agreement, relators were not free to alter the evidentiary record with new evidence. In light of the Rule 11 Agreement between the parties, we cannot say that the trial court abused its discretion in denying the motion to reconsider.
On the record properly before the trial court as of the date of the hearing on relators' motion to compel, the trial court reasonably concluded that relators did not establish the existence of an agreement to arbitrate the claims in dispute as a matter of law. Therefore, the court did not abuse its discretion by refusing to compel arbitration.
CONCLUSION
Having found relators' notice of appeal untimely under the TAA and not proper, we dismiss the interlocutory appeal for lack of jurisdiction. We further deny the writ of mandamus under the FAA. We conclude that the trial court did not abuse its discretion in denying the motion to compel arbitration and stay the proceedings and in denying the motion to reconsider.
__________________________________________
Jan P. Patterson, Justice
Before Justices Patterson, Pemberton and Waldrop
Dismissed for Want of Jurisdiction
Filed: August 23, 2007
1. See In re AXA Financial, Inc., 03-07-00078-CV (Tex. App.--Austin March 29, 2007) (mem. op.).
2. Abney declared bankruptcy in 2004, resulting in his claims being brought by the Chapter 7 bankruptcy trustee, C. Daniel Roberts.
3. A Form U-4 is an agreement between self-regulatory organizations, including NASD and an applicant. In re Prudential Ins. Co., 133 F.3d 225, 230 (3d Cir. 1998). The form was adopted in an effort to regulate the securities industry. Id. Texas courts have found the Form U-4 to be a contract that involves interstate commerce and its arbitration clause enforceable under the FAA. In re Merrill Lynch, Pierce, Fenner & Smith, Inc., 195 S.W.3d 807, 813 (Tex. App.--Dallas 2006, no pet.); Wachovia Securities, LLC v. Emery, 186 S.W.3d 107, 112 (Tex. App.--Houston [1st Dist.] 2005, orig. proceeding).
4. The letter from AXA Equitable Life Insurance Company addressed Abney's refusal to agree to pre-dispute arbitration. The letter advised him that he was bound by the rules of NASD when he signed the U-4 application in 1987, including a consent to arbitrate any matters that arose between Abney and his "firm." Abney objected to the letter as hearsay. There is no written ruling on the objection in the clerk's record and there is no reporter's record of the hearing.
5. Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-.098 (West 2005).
6. 9 U.S.C.A. §§ 1-16 (West 1999).
7. The FAA does not preempt the TAA unless the TAA would refuse to enforce an arbitration agreement that the FAA would enforce so that both acts may apply in a given case.
In re D. Wilson Construction Co., 196 S.W.3d 774, 779-80 (Tex. 2006). The Texas Supreme Court has reasoned that when a court of appeals is confronted with an interlocutory appeal and a mandamus proceeding seeking to compel arbitration that the better course of ction is to consolidate the two proceedings and render a decision that disposes of both simultaneously. In re Valero Energy Corp., 968 S.W.2d 916, 916-17 (Tex. 1998).
Thursday, August 9, 2007
Interlocutory appeal of frivolous-suit sanctions dismissed
Order imposing sanctions for filing claim without proper factual basis not appealable in the absence of a final judgment. Austin appeals court finds it lacks jurisdiction and dismisses the attempted appeal.
T. Christopher Robson v. Garrett Gilbreath and David Gilbreath, No. 03-06-00364-CV (Tex.App.- Austin, Aug. 9, 2007)(Opinion by Justice Waldrop)(sanctions appeal, DWOJ)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 126th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. D-1-GN-04-002474, HONORABLE DARLENE BYRNE, JUDGE PRESIDING
MEMORANDUM OPINION BY JUSTICE WALDROP
In this interlocutory appeal, T. Christopher Robson challenges the trial court's order sanctioning him $10,000 for failure to conduct a reasonable inquiry prior to filing a claim against David Gilbreath. Appellate courts have jurisdiction to consider immediate appeals of interlocutory orders only if a statute expressly provides appellate jurisdiction. Stary v. DeBord, 967 S.W.2d 352, 353 (Tex. 1998).
A sanctions order is not among the trial court rulings that is subject to interlocutory appeal. See, e.g., Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2006). Accordingly, we have no jurisdiction and dismiss this appeal.
In response to an inquiry from this Court's clerk regarding the lack of finality and appealability of this order, Robson filed a motion to abate this appeal. He asserted that the case had been settled except for the sanctions, that the settlement required approval by a probate court, and that a final judgment would be presented to the district court for signature "immediately" after the settlement was approved as expected at a hearing set for July 10, 2007. Robson's notice of appeal challenging the sanctions order could then be treated as a premature filing that became effective and deemed filed the day of, but after, the final judgment. See Tex. R. App. P. 27.1(a). More than four weeks have passed without additional communication from the parties or the trial court. We have not been informed whether the settlement was approved and have not been provided with a supplemental clerk's record containing an order or judgment that would make Robson's premature notice effective and bestow jurisdiction upon this Court. We lack jurisdiction over this appeal.
We deny the motion to abate and dismiss this appeal.
T. Christopher Robson v. Garrett Gilbreath and David Gilbreath, No. 03-06-00364-CV (Tex.App.- Austin, Aug. 9, 2007)(Opinion by Justice Waldrop)(sanctions appeal, DWOJ)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 126th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. D-1-GN-04-002474, HONORABLE DARLENE BYRNE, JUDGE PRESIDING
MEMORANDUM OPINION BY JUSTICE WALDROP
In this interlocutory appeal, T. Christopher Robson challenges the trial court's order sanctioning him $10,000 for failure to conduct a reasonable inquiry prior to filing a claim against David Gilbreath. Appellate courts have jurisdiction to consider immediate appeals of interlocutory orders only if a statute expressly provides appellate jurisdiction. Stary v. DeBord, 967 S.W.2d 352, 353 (Tex. 1998).
A sanctions order is not among the trial court rulings that is subject to interlocutory appeal. See, e.g., Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2006). Accordingly, we have no jurisdiction and dismiss this appeal.
In response to an inquiry from this Court's clerk regarding the lack of finality and appealability of this order, Robson filed a motion to abate this appeal. He asserted that the case had been settled except for the sanctions, that the settlement required approval by a probate court, and that a final judgment would be presented to the district court for signature "immediately" after the settlement was approved as expected at a hearing set for July 10, 2007. Robson's notice of appeal challenging the sanctions order could then be treated as a premature filing that became effective and deemed filed the day of, but after, the final judgment. See Tex. R. App. P. 27.1(a). More than four weeks have passed without additional communication from the parties or the trial court. We have not been informed whether the settlement was approved and have not been provided with a supplemental clerk's record containing an order or judgment that would make Robson's premature notice effective and bestow jurisdiction upon this Court. We lack jurisdiction over this appeal.
We deny the motion to abate and dismiss this appeal.
Wednesday, August 1, 2007
Professor's age discrimination complaint filed too late
Robert J. Klebe v. University of Texas System, University of Texas Health Science Center at San Antonio, and Brian Herman, No. 03-05-00527-CV (Tex.App.- Austin, Jul. 31, 2007)(Opinion by Chief Justice Law
Appeal from 353rd District Court of Travis County - Affirmed
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. GN403520, HONORABLE PETER M. LOWRY, JUDGE PRESIDING
MEMORANDUM OPINION BY JUSTICE KEN LAW
Robert Klebe brings this interlocutory appeal in his age discrimination suit against the University of Texas System, the University of Texas Health Science Center, and Brian Herman, former Chair of the Department of Cellular and Structural Biology at the Health Science Center. The trial court granted appellees' plea to the jurisdiction and dismissed Klebe's suit. In two issues, Klebe complains that the trial court erred in finding that his complaint was filed too late and in finding that sovereign immunity barred his federal complaint from being brought in state court. We affirm the trial court's judgment.
Background
Klebe was a tenured faculty member in the Department of Cellular and Structural Biology at the University of Texas Health Science Center at San Antonio, a component institution of the University of Texas System. Klebe's immediate supervisor at all relevant times was Brian Herman, Chair of the Department of Cellular and Structural Biology.
Sometime in 1998, Herman notified tenured faculty members who were engaged in research that, under departmental policy, they needed to secure outside funding for part of their salaries. On June 20, 2003, Herman sent Klebe a letter informing Klebe that his salary would be reduced by 25% effective September 1, 2003. The letter included the exact reduction in annual and monthly pay. It also discussed the reason for the reduction as Klebe's failure to raise adequate outside funding and was accompanied by Klebe's faculty evaluations for the past four years. On September 1, 2003, his salary was reduced by 25%.
On January 29, 2004, Klebe filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging age discrimination as the motivating factor for his salary reduction. Klebe listed September 1, 2003, the effective date of the reduction, as the date on which the discriminatory act occurred. This complaint was filed 220 days after Herman's notification letter to Klebe about the pay decision, and 151 days after the reduction went into effect. The EEOC issued a notice of right to sue on August 24, 2004, and Klebe filed his original petition on October 22, 2004.
Klebe's original petition claimed age discrimination under the Texas Labor Code. See Tex. Lab. Code Ann. §§ 21.001-.556 (West 2006). Klebe alleged that the salary reduction was being used to fund salaries for younger faculty because of a budgetary freeze on funds to hire new faculty and that he "had no duty to work as a fundraiser." Appellees filed a plea to the jurisdiction alleging that Klebe's complaint was untimely filed because it was filed over 180 days after Herman had informed Klebe of the decision to reduce his salary. Klebe filed a first and then a second amended petition adding a claim under the federal Age Discrimination in Employment Act (ADEA). See 20 U.S.C.A. §§ 621-634 (West 1999 & Supp. 2007). He argued that the ADEA claim granted him 300 days to file both the state and federal complaints with the EEOC.
Accordingly, he asserts that both claims were timely filed whether the limitations period began when Herman informed him of the reduction on June 20, or when the reduction went into effect on September 1.
On August 2, 2005, the trial court sustained appellees' plea to the jurisdiction and dismissed Klebe's claims under the Texas Labor Code and the ADEA. Klebe timely filed a notice of appeal from the order on August 5, 2005.
Discussion
Standard of review
A challenge to the trial court's subject matter jurisdiction may be asserted in a plea to the jurisdiction. Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). Orders sustaining a plea to the jurisdiction are reviewed de novo. Sweeny v. Jefferson, 212 S.W.3d 556, 561 (Tex. App.--Austin 2006, no pet.). We do not weigh the merits of the claim but consider only the plaintiff's pleadings and the evidence pertinent to the jurisdictional inquiry. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). A plaintiff must allege facts affirmatively demonstrating the trial court's jurisdiction to hear the case. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 443-44 (Tex. 1993). We construe the pleadings liberally in the plaintiff's favor and look to the pleader's intent. Miranda, 133 S.W.3d at 226. We accept all plaintiff's allegations as true and consider only the evidence pertinent to the jurisdictional inquiry. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).
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. Brown, 80 S.W.3d at 555. On the other hand, when a plaintiff fails to plead facts sufficient to establish jurisdiction, but the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the opportunity to amend. Id. If a plaintiff has been provided a reasonable opportunity to amend and the amended pleadings still do not allege facts sufficient to invoke jurisdiction, then the trial court should dismiss the plaintiff's action with prejudice. See Harris County v. Sykes, 136 S.W.3d 635, 639 (Tex. 2004).
Texas Labor Code complaint
Texas law prohibits age discrimination in employment. Tex. Lab. Code Ann. § 21.051 (West 2006). Aggrieved parties must file a complaint with the Civil Rights Division of the Texas Workforce Commission (1) no later than 180 days after the alleged unlawful employment practice occurred. Id. §§ 21.0015, 21.202. Failure to file a timely complaint with the commission deprives the trial court of subject-matter jurisdiction. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 486 (Tex. 1991) (citing Green v. Aluminum Co. of Am., 760 S.W.2d 378, 380 (Tex. App.--Austin 1988, no writ)). (2) Because one purpose of the Commission on Human Rights Act is to harmonize Texas law with federal laws addressing discrimination, federal case law may be cited as authority. Specialty Retailers, Inc. v. DeMoranville, 933 S.W.2d 490, 492 (Tex. 1996).
Klebe contends that he had 300 days, not 180, to file his labor code complaint because he was also filing a claim under federal law. He argues that filing both complaints with the Equal Employment Opportunity Commission gave him the 300 day timetable for both. (3) Federal and state courts have consistently rejected this contention. See Pope v. MCI Telecomm. Corp., 937 F.2d 258, 264 (5th Cir. 1991) (holding that state law claims are governed by state, not federal, limitations periods); DeMoranville v. Specialty Retailers, Inc., 909 S.W.2d 90, 92 (Tex. App.--Houston [14th Dist.] 1995), rev'd on other grounds, 933 S.W.2d 490 (Tex. 1996) (holding that "[a]lthough the Age Discrimination in Employment Act . . . has extended the time for filing to 300 days, the Texas time period is not affected."). Klebe's labor code claim was governed by the 180 day state law limitation period. Tex. Lab. Code Ann. § 21.202.
The limitation period begins when the employee is informed of the allegedly discriminatory employment decision, not when that decision "comes to fruition." Specialty Retailers, Inc., 933 S.W.2d at 490. Determining when the employer informs the employee is based on an objective standard, focusing on when the employee knew, or reasonably should have known, that the adverse employment decision had been made. Clark v. Resistoflex Co., 854 F.2d 762, 765 (5th Cir. 1988).
The Texas Supreme Court has held a complaint untimely filed when the employee was informed of the adverse employment decision over a year before filing her complaint. Specialty Retailers, 933 S.W.2d 490 (Tex. 1996). In Specialty Retailers, the employee was told she would be fired if her medical leave lasted longer than one year. Id. at 492. After one year of medical leave she was fired and filed her complaint. Id. The Texas Supreme Court held that the unlawful practice was the decision to fire her because of the duration of her disability; actual termination a year later was merely a result of that decision. Id. at 493. Because she was informed of the policy more than 180 days before filing her complaint, it was untimely filed and deprived the trial court of jurisdiction. Id.
In this case, Herman's June 20 letter to Klebe was very specific concerning the adverse employment action. The letter informed Klebe of the percentage reduction and also translated that reduction into dollars and cents. The letter gave a specific implementation date and a specific reason for the reduction. At this point, Klebe knew or should have known that an adverse employment decision had been made. (4)
However, Klebe makes general assertions that there was no authority to reduce his salary and that the Regent's Rules concerning the timing of any changes in employment contracts were not followed. The State asserts that appropriate policies were followed. Although not cited in the briefs, this Court has a recent case discussing the authority to make a decision as that might impact notice. Texas Parks & Wildlife Department v. Dearing involved an adverse job reclassification. 150 S.W.3d 452, 458-59 (Tex. App.--Austin 2004, pet. denied). In Dearing, state law prohibited the employer from reclassifying jobs if reclassification would result in lowered pay. Id. at 458. In anticipation of new legislative authority to make such reclassifications, the employer held group meetings with employees to discuss the employer's plans to reclassify certain positions. Id. About a month later the state legislature granted authority to make such reclassifications, which the employer did. Id.
An employee who alleged that his job was reclassified based on improper age considerations filed a complaint with the Texas Commission on Human Rights less than 180 days after the reclassifications went into effect. Id. The employer claimed the complaint was untimely because the limitations period started when the employee was informed of the possible reclassifications at the group meetings, which were held more than 180 days before the complaint was filed. Id.
This Court disagreed for two reasons. First, this court found that the alleged notice at the meetings was equivocal. Id. at 459. It was a fact question whether the employee should have reasonably known that the decision had been made to reclassify his job at that time. Id. Second, this court found that the employee could not have been "informed" of the decision at the meetings because at that time state law prohibited the employer from making the decision at all. Id. Distinguishing Specialty Retailers, we noted that it "concerned an employer's established company policy and unequivocal communication to the employee that the policy would be enforced as to her." Id. In contrast, Dearing concerned equivocal communication of "an employer's decision to take future action based on new legislation giving it authority for the first time to do so." Id.
Klebe has not brought himself within Dearing's ambit. Klebe asserted, in a general sense, that his employer did not have the authority to change his job conditions, based in part on his contention that his "contract" consisted in party of having a lower pay than the private sector but security in his job conditions. He also claimed that the Regent's Rules were not followed with regard to the timing of the change. However, none of Klebe's claims involve the same kind of legislative prohibition as was at issue in Dearing. Even accepting Klebe's pleadings as true and construing them liberally in his favor, the best they can show is that his employers may not have strictly followed internal procedures. They do not show that his employers were prohibited by state law from reducing his pay the same way state law prohibited the Dearing employer.
As of the June 20, 2003 letter, Klebe knew or reasonably should have known that appellees had decided to reduce his pay. Thus, he was informed of the alleged unlawful employment decision and the limitation period started on that date. Because he filed his complaint on January 29, 2004, over 180 days after the June 20, 2003 letter, his complaint was untimely and deprived the trial court of subject-matter jurisdiction to hear his claim. He had numerous opportunities to amend his pleadings to present facts sufficient to invoke the trial court's jurisdiction and failed to do so. (5) Accordingly, we affirm the trial court's order granting appellees' plea to the jurisdiction and dismissing Klebe's state law claim.
ADEA claim
The Eleventh Amendment bars state court suits for damages against the State for violation of federal law. Alden v. Maine, 527 U.S. 706, 712 (1999). The bar may be lifted by Congressional abrogation or state waiver. Id. at 755-756. The ADEA does not abrogate Eleventh Amendment immunity because the ADEA could not be enacted pursuant to section five of the Fourteenth Amendment. Kimel v. Florida, 528 U.S. 62, 83-84 (2000). A state may waive its Eleventh Amendment immunity if the state voluntarily invokes federal court jurisdiction or makes a "clear declaration" that it intends to submit itself to federal court jurisdiction. Meyers ex rel. Benzig v. Texas, 410 F.3d 236, 241 (5th Cir. 2005). The "clear declaration" to which Meyers refers is some type of statutory declaration of the State's intent to be bound. Sullivan v. University of Tex. Health Science Ctr., 217 Fed. Appx. 391, 2007 U.S. App. LEXIS 3190 (5th Cir. 2007). A "clear declaration" is made only when stated by "the most express language or by such overwhelming implication from the text as will leave no room for any other reasonable construction." Edelman v. Jordan, 415 U.S. 651, 673 (1974).
Therefore, Klebe must show that Texas has waived its sovereign immunity for suits under the ADEA. He offers no legislative pronouncement that expressly authorizes such a suit. Rather, he claims that there is an implied waiver in the Texas Commission on Human Rights Act (the Act) for all age discrimination claims, including the ADEA.
The Act provides a limited waiver of sovereign immunity when a governmental unit has committed employment discrimination on the basis of race, color, disability, religion, sex, national origin, or age. Tex. Lab. Code Ann. § 21.002 (8)(D) (defining "employer" to include political subdivision of state or county, municipality, state agency), § 21.051 (outlining circumstances under which "employer" commits unlawful employment practice); Texas Dep't of Criminal Justice v. Cooke, 149 S.W.3d 700, 704 (Tex. App.--Austin 2004, no pet.). However, the "complainant" who is authorized to bring such a suit, Tex. Lab. Code Ann. § 21.254, is defined as "an individual who brings an action or proceeding under this chapter." Id. § 21.002 (4) (emphasis added). Therefore, the plain language of the act appears to limit its waiver to suits brought under the Texas Act, not the ADEA. Accordingly, Klebe has not shown the kind of "express language" or "overwhelming implication" required to establish a waiver of Eleventh Amendment immunity. We overrule his second issue.
Conclusion
We have found Klebe's state law claim barred by untimely filing of the administrative complaint and his ADEA claim barred by state sovereign immunity. Therefore, we affirm in its entirety the trial court's judgment granting appellee's first amended plea to the jurisdiction and dismissing appellant's claims under the Texas Labor Code and the Age Discrimination in Employment Act.
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices Pemberton and Waldrop
Affirmed
Filed: July 31, 2007
1. Such complaints were formerly filed with the Texas Commission on Human Rights. See Tex. Lab. Code Ann. § 21.0015 (West 2006) (transferring responsibility to Texas Workforce Commission).
2. In Texas Department of Protective & Regulatory Services v. Lynn, this Court discussed the continued viability of cases holding that the 180 day filing requirement implicated the trial court's subject-matter jurisdiction in light of recent cases expressing reluctance to characterize statutory elements or prerequisites as jurisdictional. No. 03-04-00635-CV, 2005 Tex. App. LEXIS 6682, at *14 (Tex. App.--Austin Aug. 19, 2005, pet. denied) (mem. op.) (discussing Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76-77 (Tex. 2000), and its progeny). Lynn distinguished the statutory requirements in those cases from the Commission on Human Rights Act's administrative process, which the supreme court has squarely held to be an exhaustion of remedies requirement. Id. (citing Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 485-88 (Tex. 1991)). Failure to exhaust administrative remedies remains truly a jurisdictional requirement. Id.
3. Because Texas is a deferral state, if an employee wishes to pursue a federal claim such as the ADEA, the time limit for filing that complaint with the EEOC is 300 days. This allows relevant state agencies to address the allegations first. See Stanley Stores, Inc. v. Chavana, 909 S.W.2d 554, 557 (Tex. App.--Corpus Christi 1995, writ denied). For the purposes of argument, appellees concede that appellant's ADEA claim was timely filed.
4. Klebe's pleadings contended that the very decision to impose a fund raising requirement, which occurred in 1998, was an act of age discrimination in that it was more difficult for older professors to secure grant funding than for younger professors.
5. Klebe had multiple opportunities to do so: he amended his pleadings twice and filed a reply and a post-submission brief in opposition to the plea to the jurisdiction.
Appeal from 353rd District Court of Travis County - Affirmed
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. GN403520, HONORABLE PETER M. LOWRY, JUDGE PRESIDING
MEMORANDUM OPINION BY JUSTICE KEN LAW
Robert Klebe brings this interlocutory appeal in his age discrimination suit against the University of Texas System, the University of Texas Health Science Center, and Brian Herman, former Chair of the Department of Cellular and Structural Biology at the Health Science Center. The trial court granted appellees' plea to the jurisdiction and dismissed Klebe's suit. In two issues, Klebe complains that the trial court erred in finding that his complaint was filed too late and in finding that sovereign immunity barred his federal complaint from being brought in state court. We affirm the trial court's judgment.
Background
Klebe was a tenured faculty member in the Department of Cellular and Structural Biology at the University of Texas Health Science Center at San Antonio, a component institution of the University of Texas System. Klebe's immediate supervisor at all relevant times was Brian Herman, Chair of the Department of Cellular and Structural Biology.
Sometime in 1998, Herman notified tenured faculty members who were engaged in research that, under departmental policy, they needed to secure outside funding for part of their salaries. On June 20, 2003, Herman sent Klebe a letter informing Klebe that his salary would be reduced by 25% effective September 1, 2003. The letter included the exact reduction in annual and monthly pay. It also discussed the reason for the reduction as Klebe's failure to raise adequate outside funding and was accompanied by Klebe's faculty evaluations for the past four years. On September 1, 2003, his salary was reduced by 25%.
On January 29, 2004, Klebe filed a complaint with the Equal Employment Opportunity Commission (EEOC) alleging age discrimination as the motivating factor for his salary reduction. Klebe listed September 1, 2003, the effective date of the reduction, as the date on which the discriminatory act occurred. This complaint was filed 220 days after Herman's notification letter to Klebe about the pay decision, and 151 days after the reduction went into effect. The EEOC issued a notice of right to sue on August 24, 2004, and Klebe filed his original petition on October 22, 2004.
Klebe's original petition claimed age discrimination under the Texas Labor Code. See Tex. Lab. Code Ann. §§ 21.001-.556 (West 2006). Klebe alleged that the salary reduction was being used to fund salaries for younger faculty because of a budgetary freeze on funds to hire new faculty and that he "had no duty to work as a fundraiser." Appellees filed a plea to the jurisdiction alleging that Klebe's complaint was untimely filed because it was filed over 180 days after Herman had informed Klebe of the decision to reduce his salary. Klebe filed a first and then a second amended petition adding a claim under the federal Age Discrimination in Employment Act (ADEA). See 20 U.S.C.A. §§ 621-634 (West 1999 & Supp. 2007). He argued that the ADEA claim granted him 300 days to file both the state and federal complaints with the EEOC.
Accordingly, he asserts that both claims were timely filed whether the limitations period began when Herman informed him of the reduction on June 20, or when the reduction went into effect on September 1.
On August 2, 2005, the trial court sustained appellees' plea to the jurisdiction and dismissed Klebe's claims under the Texas Labor Code and the ADEA. Klebe timely filed a notice of appeal from the order on August 5, 2005.
Discussion
Standard of review
A challenge to the trial court's subject matter jurisdiction may be asserted in a plea to the jurisdiction. Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). Orders sustaining a plea to the jurisdiction are reviewed de novo. Sweeny v. Jefferson, 212 S.W.3d 556, 561 (Tex. App.--Austin 2006, no pet.). We do not weigh the merits of the claim but consider only the plaintiff's pleadings and the evidence pertinent to the jurisdictional inquiry. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). A plaintiff must allege facts affirmatively demonstrating the trial court's jurisdiction to hear the case. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 443-44 (Tex. 1993). We construe the pleadings liberally in the plaintiff's favor and look to the pleader's intent. Miranda, 133 S.W.3d at 226. We accept all plaintiff's allegations as true and consider only the evidence pertinent to the jurisdictional inquiry. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000).
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. Brown, 80 S.W.3d at 555. On the other hand, when a plaintiff fails to plead facts sufficient to establish jurisdiction, but the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the opportunity to amend. Id. If a plaintiff has been provided a reasonable opportunity to amend and the amended pleadings still do not allege facts sufficient to invoke jurisdiction, then the trial court should dismiss the plaintiff's action with prejudice. See Harris County v. Sykes, 136 S.W.3d 635, 639 (Tex. 2004).
Texas Labor Code complaint
Texas law prohibits age discrimination in employment. Tex. Lab. Code Ann. § 21.051 (West 2006). Aggrieved parties must file a complaint with the Civil Rights Division of the Texas Workforce Commission (1) no later than 180 days after the alleged unlawful employment practice occurred. Id. §§ 21.0015, 21.202. Failure to file a timely complaint with the commission deprives the trial court of subject-matter jurisdiction. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 486 (Tex. 1991) (citing Green v. Aluminum Co. of Am., 760 S.W.2d 378, 380 (Tex. App.--Austin 1988, no writ)). (2) Because one purpose of the Commission on Human Rights Act is to harmonize Texas law with federal laws addressing discrimination, federal case law may be cited as authority. Specialty Retailers, Inc. v. DeMoranville, 933 S.W.2d 490, 492 (Tex. 1996).
Klebe contends that he had 300 days, not 180, to file his labor code complaint because he was also filing a claim under federal law. He argues that filing both complaints with the Equal Employment Opportunity Commission gave him the 300 day timetable for both. (3) Federal and state courts have consistently rejected this contention. See Pope v. MCI Telecomm. Corp., 937 F.2d 258, 264 (5th Cir. 1991) (holding that state law claims are governed by state, not federal, limitations periods); DeMoranville v. Specialty Retailers, Inc., 909 S.W.2d 90, 92 (Tex. App.--Houston [14th Dist.] 1995), rev'd on other grounds, 933 S.W.2d 490 (Tex. 1996) (holding that "[a]lthough the Age Discrimination in Employment Act . . . has extended the time for filing to 300 days, the Texas time period is not affected."). Klebe's labor code claim was governed by the 180 day state law limitation period. Tex. Lab. Code Ann. § 21.202.
The limitation period begins when the employee is informed of the allegedly discriminatory employment decision, not when that decision "comes to fruition." Specialty Retailers, Inc., 933 S.W.2d at 490. Determining when the employer informs the employee is based on an objective standard, focusing on when the employee knew, or reasonably should have known, that the adverse employment decision had been made. Clark v. Resistoflex Co., 854 F.2d 762, 765 (5th Cir. 1988).
The Texas Supreme Court has held a complaint untimely filed when the employee was informed of the adverse employment decision over a year before filing her complaint. Specialty Retailers, 933 S.W.2d 490 (Tex. 1996). In Specialty Retailers, the employee was told she would be fired if her medical leave lasted longer than one year. Id. at 492. After one year of medical leave she was fired and filed her complaint. Id. The Texas Supreme Court held that the unlawful practice was the decision to fire her because of the duration of her disability; actual termination a year later was merely a result of that decision. Id. at 493. Because she was informed of the policy more than 180 days before filing her complaint, it was untimely filed and deprived the trial court of jurisdiction. Id.
In this case, Herman's June 20 letter to Klebe was very specific concerning the adverse employment action. The letter informed Klebe of the percentage reduction and also translated that reduction into dollars and cents. The letter gave a specific implementation date and a specific reason for the reduction. At this point, Klebe knew or should have known that an adverse employment decision had been made. (4)
However, Klebe makes general assertions that there was no authority to reduce his salary and that the Regent's Rules concerning the timing of any changes in employment contracts were not followed. The State asserts that appropriate policies were followed. Although not cited in the briefs, this Court has a recent case discussing the authority to make a decision as that might impact notice. Texas Parks & Wildlife Department v. Dearing involved an adverse job reclassification. 150 S.W.3d 452, 458-59 (Tex. App.--Austin 2004, pet. denied). In Dearing, state law prohibited the employer from reclassifying jobs if reclassification would result in lowered pay. Id. at 458. In anticipation of new legislative authority to make such reclassifications, the employer held group meetings with employees to discuss the employer's plans to reclassify certain positions. Id. About a month later the state legislature granted authority to make such reclassifications, which the employer did. Id.
An employee who alleged that his job was reclassified based on improper age considerations filed a complaint with the Texas Commission on Human Rights less than 180 days after the reclassifications went into effect. Id. The employer claimed the complaint was untimely because the limitations period started when the employee was informed of the possible reclassifications at the group meetings, which were held more than 180 days before the complaint was filed. Id.
This Court disagreed for two reasons. First, this court found that the alleged notice at the meetings was equivocal. Id. at 459. It was a fact question whether the employee should have reasonably known that the decision had been made to reclassify his job at that time. Id. Second, this court found that the employee could not have been "informed" of the decision at the meetings because at that time state law prohibited the employer from making the decision at all. Id. Distinguishing Specialty Retailers, we noted that it "concerned an employer's established company policy and unequivocal communication to the employee that the policy would be enforced as to her." Id. In contrast, Dearing concerned equivocal communication of "an employer's decision to take future action based on new legislation giving it authority for the first time to do so." Id.
Klebe has not brought himself within Dearing's ambit. Klebe asserted, in a general sense, that his employer did not have the authority to change his job conditions, based in part on his contention that his "contract" consisted in party of having a lower pay than the private sector but security in his job conditions. He also claimed that the Regent's Rules were not followed with regard to the timing of the change. However, none of Klebe's claims involve the same kind of legislative prohibition as was at issue in Dearing. Even accepting Klebe's pleadings as true and construing them liberally in his favor, the best they can show is that his employers may not have strictly followed internal procedures. They do not show that his employers were prohibited by state law from reducing his pay the same way state law prohibited the Dearing employer.
As of the June 20, 2003 letter, Klebe knew or reasonably should have known that appellees had decided to reduce his pay. Thus, he was informed of the alleged unlawful employment decision and the limitation period started on that date. Because he filed his complaint on January 29, 2004, over 180 days after the June 20, 2003 letter, his complaint was untimely and deprived the trial court of subject-matter jurisdiction to hear his claim. He had numerous opportunities to amend his pleadings to present facts sufficient to invoke the trial court's jurisdiction and failed to do so. (5) Accordingly, we affirm the trial court's order granting appellees' plea to the jurisdiction and dismissing Klebe's state law claim.
ADEA claim
The Eleventh Amendment bars state court suits for damages against the State for violation of federal law. Alden v. Maine, 527 U.S. 706, 712 (1999). The bar may be lifted by Congressional abrogation or state waiver. Id. at 755-756. The ADEA does not abrogate Eleventh Amendment immunity because the ADEA could not be enacted pursuant to section five of the Fourteenth Amendment. Kimel v. Florida, 528 U.S. 62, 83-84 (2000). A state may waive its Eleventh Amendment immunity if the state voluntarily invokes federal court jurisdiction or makes a "clear declaration" that it intends to submit itself to federal court jurisdiction. Meyers ex rel. Benzig v. Texas, 410 F.3d 236, 241 (5th Cir. 2005). The "clear declaration" to which Meyers refers is some type of statutory declaration of the State's intent to be bound. Sullivan v. University of Tex. Health Science Ctr., 217 Fed. Appx. 391, 2007 U.S. App. LEXIS 3190 (5th Cir. 2007). A "clear declaration" is made only when stated by "the most express language or by such overwhelming implication from the text as will leave no room for any other reasonable construction." Edelman v. Jordan, 415 U.S. 651, 673 (1974).
Therefore, Klebe must show that Texas has waived its sovereign immunity for suits under the ADEA. He offers no legislative pronouncement that expressly authorizes such a suit. Rather, he claims that there is an implied waiver in the Texas Commission on Human Rights Act (the Act) for all age discrimination claims, including the ADEA.
The Act provides a limited waiver of sovereign immunity when a governmental unit has committed employment discrimination on the basis of race, color, disability, religion, sex, national origin, or age. Tex. Lab. Code Ann. § 21.002 (8)(D) (defining "employer" to include political subdivision of state or county, municipality, state agency), § 21.051 (outlining circumstances under which "employer" commits unlawful employment practice); Texas Dep't of Criminal Justice v. Cooke, 149 S.W.3d 700, 704 (Tex. App.--Austin 2004, no pet.). However, the "complainant" who is authorized to bring such a suit, Tex. Lab. Code Ann. § 21.254, is defined as "an individual who brings an action or proceeding under this chapter." Id. § 21.002 (4) (emphasis added). Therefore, the plain language of the act appears to limit its waiver to suits brought under the Texas Act, not the ADEA. Accordingly, Klebe has not shown the kind of "express language" or "overwhelming implication" required to establish a waiver of Eleventh Amendment immunity. We overrule his second issue.
Conclusion
We have found Klebe's state law claim barred by untimely filing of the administrative complaint and his ADEA claim barred by state sovereign immunity. Therefore, we affirm in its entirety the trial court's judgment granting appellee's first amended plea to the jurisdiction and dismissing appellant's claims under the Texas Labor Code and the Age Discrimination in Employment Act.
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices Pemberton and Waldrop
Affirmed
Filed: July 31, 2007
1. Such complaints were formerly filed with the Texas Commission on Human Rights. See Tex. Lab. Code Ann. § 21.0015 (West 2006) (transferring responsibility to Texas Workforce Commission).
2. In Texas Department of Protective & Regulatory Services v. Lynn, this Court discussed the continued viability of cases holding that the 180 day filing requirement implicated the trial court's subject-matter jurisdiction in light of recent cases expressing reluctance to characterize statutory elements or prerequisites as jurisdictional. No. 03-04-00635-CV, 2005 Tex. App. LEXIS 6682, at *14 (Tex. App.--Austin Aug. 19, 2005, pet. denied) (mem. op.) (discussing Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76-77 (Tex. 2000), and its progeny). Lynn distinguished the statutory requirements in those cases from the Commission on Human Rights Act's administrative process, which the supreme court has squarely held to be an exhaustion of remedies requirement. Id. (citing Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 485-88 (Tex. 1991)). Failure to exhaust administrative remedies remains truly a jurisdictional requirement. Id.
3. Because Texas is a deferral state, if an employee wishes to pursue a federal claim such as the ADEA, the time limit for filing that complaint with the EEOC is 300 days. This allows relevant state agencies to address the allegations first. See Stanley Stores, Inc. v. Chavana, 909 S.W.2d 554, 557 (Tex. App.--Corpus Christi 1995, writ denied). For the purposes of argument, appellees concede that appellant's ADEA claim was timely filed.
4. Klebe's pleadings contended that the very decision to impose a fund raising requirement, which occurred in 1998, was an act of age discrimination in that it was more difficult for older professors to secure grant funding than for younger professors.
5. Klebe had multiple opportunities to do so: he amended his pleadings twice and filed a reply and a post-submission brief in opposition to the plea to the jurisdiction.
Friday, July 6, 2007
Kim v. Austin Community College (Tex.App.- Austin, Jul. 6, 2007)
Order Granting Motion for Continuance Not Final and Not Appealable
Koo-Hyun Kim vs. Austin Comm'ty College (Tex. App.- Austin, July 6, 2007)(Puryear)(unauthorized interlocutory appeal dismissed for lack of jurisdiction, DWOJ)
DISMISSED FOR WANT OF JURISDICTION: Opinion by Justice Puryear
Before Chief Justice Law, Justices Puryear and Henson
03-07-00320-CV
John Koo-Hyun Kim v. Austin Community College; Stephen B. Kinslow, as President of Austin Community College; Greg Abbott, Attorney General of Texas; Representative Jaime Valdez; and Myra McDaniel, as Attorney for Austin Community College
Appeal from 345th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-07-000586, HONORABLE GISELA D. TRIANA, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Appellant John Koo-Hyun Kim filed a notice of appeal, apparently seeking to appeal from the trial court's order granting appellees' motions for a continuance of a June 4, 2007 trial setting. Because we lack jurisdiction over this interlocutory appeal, we dismiss the cause for want of jurisdiction. See Tex. R. App. P. 42.3(a).
Generally, courts of appeals may only exercise jurisdiction over appeals from final orders or judgments. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001) ("A judgment is final for purposes of appeal if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree."). There are certain statutory exceptions to this rule, which explicitly allow interlocutory appeals from non-final orders. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2006) (listing permissible interlocutory appeals).
An appeal from a trial court's granting of a motion for continuance and delay of a trial setting may not be reviewed by interlocutory appeal. See In re A.J.L., No. 02-04-00050-CV, 2004 Tex. App. LEXIS 4993, at *1 (Tex. App.--Fort Worth, June 3, 2004, no pet) (mem. op.); Lovall v. Yen, No. 14-01-01108-CV, 2002 Tex. App. LEXIS 354, at *1-3 (Tex. App.--Houston [14th Dist.] Jan. 17, 2002, no pet.) (not designated for publication).
Appellant seeks to appeal from the trial court's order granting a continuance to appellees. We may not consider this complaint in an interlocutory appeal. Therefore, we must dismiss this cause for want of jurisdiction. See Tex. R. App. P. 42.3(a).
__________________________________________
David Puryear, Justice
Before Chief Justice Law, Justices Puryear and Henson
Dismissed for Want of Jurisdiction
Filed: July 6, 2007
Koo-Hyun Kim vs. Austin Comm'ty College (Tex. App.- Austin, July 6, 2007)(Puryear)(unauthorized interlocutory appeal dismissed for lack of jurisdiction, DWOJ)
DISMISSED FOR WANT OF JURISDICTION: Opinion by Justice Puryear
Before Chief Justice Law, Justices Puryear and Henson
03-07-00320-CV
John Koo-Hyun Kim v. Austin Community College; Stephen B. Kinslow, as President of Austin Community College; Greg Abbott, Attorney General of Texas; Representative Jaime Valdez; and Myra McDaniel, as Attorney for Austin Community College
Appeal from 345th District Court of Travis County
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. D-1-GN-07-000586, HONORABLE GISELA D. TRIANA, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Appellant John Koo-Hyun Kim filed a notice of appeal, apparently seeking to appeal from the trial court's order granting appellees' motions for a continuance of a June 4, 2007 trial setting. Because we lack jurisdiction over this interlocutory appeal, we dismiss the cause for want of jurisdiction. See Tex. R. App. P. 42.3(a).
Generally, courts of appeals may only exercise jurisdiction over appeals from final orders or judgments. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001) ("A judgment is final for purposes of appeal if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree."). There are certain statutory exceptions to this rule, which explicitly allow interlocutory appeals from non-final orders. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (West Supp. 2006) (listing permissible interlocutory appeals).
An appeal from a trial court's granting of a motion for continuance and delay of a trial setting may not be reviewed by interlocutory appeal. See In re A.J.L., No. 02-04-00050-CV, 2004 Tex. App. LEXIS 4993, at *1 (Tex. App.--Fort Worth, June 3, 2004, no pet) (mem. op.); Lovall v. Yen, No. 14-01-01108-CV, 2002 Tex. App. LEXIS 354, at *1-3 (Tex. App.--Houston [14th Dist.] Jan. 17, 2002, no pet.) (not designated for publication).
Appellant seeks to appeal from the trial court's order granting a continuance to appellees. We may not consider this complaint in an interlocutory appeal. Therefore, we must dismiss this cause for want of jurisdiction. See Tex. R. App. P. 42.3(a).
__________________________________________
David Puryear, Justice
Before Chief Justice Law, Justices Puryear and Henson
Dismissed for Want of Jurisdiction
Filed: July 6, 2007
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