Bailey v. City of Austin

• Decision Date: 16 July 1998
• Docket Number: No. 03-97-00789-CV,03-97-00789-CV
• Parties: 77 Fair Empl.Prac.Cas. (BNA) 1169 Janice BAILEY, Renee Villeneuve, Michael Moon, Tom R. Cox, Wendy J. Foxworth, Kathryn Janes, Mary Ann Hubbard, and Kasey Smith, Appellants, v. THE CITY OF AUSTIN, Appellee.
• Court: Texas Court of Appeals

Page 180

972 S.W.2d 180

77 Fair Empl.Prac.Cas. (BNA) 1169

Janice BAILEY, Renee Villeneuve, Michael Moon, Tom R. Cox,

Wendy J. Foxworth, Kathryn Janes, Mary Ann

Hubbard, and Kasey Smith, Appellants, v. THE CITY OF AUSTIN, Appellee.

No. 03-97-00789-CV.

Court of Appeals of Texas,

Austin.

July 16, 1998.

Rehearing Overruled Aug. 13, 1998.

Mark L. Kincaid, Austin, for Appellant.

Andrew F. Martin, City Attorney, Frederick A. Hawkins, Assistant City Attorney, David Allan Smith, Assistant City Attorney, Austin, for Appellee.

Before POWERS, KIDD, and B.A. SMITH, JJ.

BEA ANN SMITH, Justice.

The main issue presented is whether Proposition 22, which amended the City of Austin's city charter by referendum, violates the equal protection provisions of the Texas Constitution. Appellants Janice Bailey, Renee Villeneuve, Michael Moon, Tom Cox, Wendy Foxworth, Kathryn Janes, Mary Ann Hubbard, and Kasey Smith sued the City of Austin complaining that Proposition 22 violates the Texas Constitution and the Texas Insurance Code, and that the City was also liable under breach of contract and promissory estoppel. The district court granted summary judgment in favor of the City after both parties filed motions for summary judgment. Appellants bring four issues on appeal. We will affirm in part and reverse and remand in part the district court's summary judgment.

BACKGROUND

At all relevant times, Bailey, Moon, Janes, and Hubbard were City employees, and Villeneuve, Cox, Foxworth, and Smith were their respective partners. Appellee is a municipality incorporated in the state of Texas. The City has traditionally offered life, health, and dental insurance plans to its employees, their spouses, and their dependent children as part of the benefits package it provides its employees. At issue is the health insurance: the City offers two HMOs and one self-funded plan ("City plan"). The City generally oversees and negotiates the HMO insurance plans for its employees; it administers and manages the City plan, much like a private insurance company. The City disseminates information and collects premiums which it deducts from the employee's paychecks for all three plans. The City pays an employee's premiums if she elects to be covered under the City plan; it pays only a portion if the employee is covered under either HMO. If an employee elects to extend health coverage to an eligible dependent, the City pays a portion of the dependent's premium due under any of the offered plans.

Sometime in 1993, the City Council of the City was urged to extend insurance benefits to "domestic partners" ¹ of City employees. The Human Resources Department gathered extensive information by contacting private employers and other cities regarding the costs and advantages of domestic partner benefits. Experts concluded that insurance rates would not be affected because there was no evidence that domestic partners constitute a "high-risk, high-cost group." The City gave several reasons for its decision to offer domestic partners benefits: (1) to implement policies and programs that are fair and equitable; (2) to maintain and recruit Although the projected cost was originally over $500,000 for the 1993-94 fiscal year, the actual cost at the end of the enrollment period was just over $100,000 for the fiscal year. ² When coverage began in January 1994, one hundred employees had signed up to receive domestic partner benefits; seventy-one of those employees enrolled an opposite-sex partner and twenty-nine enrolled a same-sex partner. Among its enrollees were employee Moon and his same-sex partner Cox, and employee Bailey and her same-sex partner Villeneuve. Employee Janes and her same-sex partner Foxworth were waiting for six months to elapse with the intention to file a declaration of domestic partnership. Employee Hubbard and her same-sex partner Smith were denied domestic partner benefits after the passage of Proposition 22.

quality employees; and (3) to provide adequate medical coverage for employee dependents. On September 2, 1993, the City Council approved a change to the City's personnel policy that defined eligible dependent to include "domestic partner," thereby extending health benefits to all domestic partners and their children. The City notified its employees that domestic partner benefits would be available. During the limited open-enrollment period, an employee could enroll her domestic partner under any of the health insurance plans. To qualify, the employee and partner had to file with the Travis County Clerk's office a formal Declaration of Domestic Partnership which requires the parties to attest to an emotionally committed relationship of mutual caring, mutual residency, joint responsibility for basic living expenses, and that no other partnership or marriage had existed in the last six months.

Proposition 22 passed by a majority vote on May 7, 1994. It amends Austin's city charter to provide:

City employee benefits shall be as provided in the approved "Personnel Policies"; provided such City employee benefits shall in no case be extended to any persons other than an employee's parents, spouse, children (including step-children, children for whom a court ordered guardianship or conservatorship has been assigned, qualified children placed pending adoption, and eligible grandchildren), sisters, brothers, grandparents, and the parents and grandparents of an employee's spouse; except as otherwise provided in state or federal law and the term spouse as defined in the "Personnel Policies" shall mean the husband or wife of the employee.

(Emphasis added). On May 17, 1994, the City informed its employees that benefits for domestic partners and their children were terminated effective May 9. Appellants filed suit in district court alleging that the proposition was unconstitutional and in violation of the Texas Insurance Code, ³ and that the City was liable to pay domestic partner benefits under a contract theory or in the alternative, under promissory estoppel. Both parties filed motions for summary judgment. The district court denied appellants' motion and granted appellee's motion on unstated grounds. Appellants come now appealing the district court's judgment.

STANDING

The City contends that several of the appellants have no standing. To have standing the pleader must allege facts that affirmatively demonstrate the court's jurisdiction to hear the cause. Texas Ass'n of Business v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). When the trial court does not order a dismissal for want of jurisdiction, we consider standing for the first time on appeal. Id. Therefore, an appellate court should construe the petition in favor of the party, and if necessary review the entire record to determine if any evidence supports standing. Id. The general test for standing requires (1) a real controversy between the parties (2) that will be determined by the relief sought. Id. In other words, a plaintiff must assert some restriction of its own rights, not someone else's.

See Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504, 518 (Tex.1995).

In their second amended petition, appellants allege as fact that: (1) Bailey, Moon, Hubbard, and Janes are or were City employees; (2) Villeneuve, Cox, Smith, and Foxworth are their respective domestic partners; (3) Bailey and Moon applied for and received benefits that were terminated; (4) Hubbard applied for benefits that were refused to her; (5) Janes intended to apply for benefits that were subsequently terminated; and (6) all appellants sought declaratory judgment and injunctive relief declaring Proposition 22 and the City's conduct unconstitutional and in violation of certain statutes, and actual damages suffered due to the termination of benefits. Although the City claims that Moon and Janes never applied for or were eligible for benefits, the facts alleged as to Moon reveal otherwise. Additionally, Moon responded in an interrogatory that he applied for these benefits and that coverage was in effect until revoked by Proposition 22. As to Janes, the facts alleged are that she intended to apply but was waiting the required six months to qualify for domestic partnership status. Her responses to certain admissions reveal that (1) she accepted employment with the City relying on the promised domestic partner coverage, and (2) she left employment with the City because of the termination of partner benefits. Construing the record in favor of standing, we conclude that all appellants have asserted a restriction of their own rights and have demonstrated that between all appellants and the City a real controversy exists that can be determined by appellants' request for declaratory judgment, injunction, and damages.

STANDARD OF REVIEW

Generally upon review of a summary judgment, a court determines whether the movant has shown that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. See Tex.R. Civ. P. 166a(c); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985). When both parties move for summary judgment and the trial court grants one motion and denies the other, the appellate court should determine all questions presented. See Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). In the instant case, both parties moved for summary judgment on three of appellants' five causes of action. ⁴ Thus, both agree that a summary judgment appropriately decides: (1) whether Proposition 22 violates the equal protection clause of the Texas Constitution; (2) whether Proposition 22 violates the impairment of contracts clause of the Texas Constitution; and (3) whether Proposition 22 and the City's withdrawal of domestic partner benefits violates the unfair discrimination provision of the Texas Insurance Code. When reviewing a summary judgment granted on general or unstated grounds, we consider whether any theories set forth in the motion will support the summary...