City of Dallas v. Albert
| Decision Date | 26 August 2011 |
| Docket Number | No. 07–0284.,07–0284. |
| Citation | 354 S.W.3d 368,54 Tex. Sup. Ct. J. 1609 |
| Parties | CITY OF DALLAS, Petitioner, v. Kenneth E. ALBERT, et al., Respondents. |
| Court | Texas Supreme Court |
OPINION TEXT STARTS HERE
Barbara E. Rosenberg, Peter Brooke Haskel, James B. Pinson, Assistant City Attorney, E. Leon Carter, Munck Carter P.C., Richard A. Sayles, John Andrew Conway, Sayles Werbner, P.C., Madeleine B. Johnson, Southwest Airlines, Office of the Vice President, Thomas P. Perkins Jr., Dallas City Attorney, Deborah G. Hankinson, William Richard Thompson II, Hankinson Levinger LLP, Dallas, TX, for City of Dallas.
William M. Boyd, John R. Stooksberry, Boyd Veigel, P.C., McKinney, TX, E. Lee Parsley, Texas Civil Justice League, Jay B. Stewart, Terry L. Scarborough, V. Blayre Pena, Hance Scarborough, LLP, Austin, TX, for Kenneth E. Albert.
Eric G. Calhoun, Travis & Calhoun, P.C., Dallas, TX, for Dallas Police.B. Craig Deats, Deats Durst Owen & Levy, P.L.L.C., Austin, TX, for Amicus Curiae Texas State Association of Fire Fighters.Philip A. Lionberger, Office of the Attorney General, Austin, TX, for Amicus Curiae State of Texas.Ophelia F. Camina, Susman Godfrey LLP, Dallas, TX, for Boyd Veigel, P.C.Justice JOHNSON delivered the opinion of the Court, in which Justice WAINWRIGHT, Justice MEDINA, Justice GREEN, Justice GUZMAN, and Justice LEHRMANN joined, and in which Chief Justice JEFFERSON and Justice HECHT joined except to Part II–B.
This appeal involves a pay dispute between the City of Dallas and many of its police officers and firefighters. Pursuant to a referendum approved by the voters, the City adopted an ordinance addressing the pay of “each sworn police officer and fire fighter and rescue officer employed by the City of Dallas.” Claiming the City did not properly pay them according to the ordinance, some firefighters and police officers (collectively, the Officers) sued the City. They sought both a declaratory judgment construing the ordinance and damages for breach of contract. The City counterclaimed, alleging that if the Officers had not been paid correctly, they had been overpaid instead of underpaid and the City was entitled to reimbursement for the overpayments. The City eventually sought dismissal of the Officers' claims on the basis of governmental immunity, then later dismissed its counterclaim. The trial court denied the City's immunity claim and this interlocutory appeal followed. During the pendency of the appeal, the Legislature amended the Local Government Code to provide for a limited, retroactive waiver of certain local governmental entities' immunity from suit.
The main issues before us involve governmental immunity from suit. We will address the issues in the order that the court of appeals did: (1) what is the effect on the City's immunity of its filing, then non-suiting, the counterclaim; (2) what is the effect, if any, of the Legislature's retroactive waiver of immunity; (3) whether the City has immunity from the Officers' declaratory judgment action; and (4) whether the City lacks immunity from suit because the pay ordinance was adopted by referendum. We conclude that (1) by nonsuiting its counterclaim the City did not reinstate complete immunity from the Officers' pending claims; (2) the case must be remanded for the trial court to consider whether, by amending the Local Government Code, the Legislature waived the City's immunity; (3) the City has immunity from the declaratory judgment action; and (4) the ordinance having been adopted by referendum did not result in waiver or abrogation of the City's immunity.
Pursuant to a referendum that voters passed, the City of Dallas adopted an ordinance in 1979 addressing pay for police officers, firefighters, and rescue workers. See Tex. Loc. Gov't CodeE § 9.005(a), (b). The ordinance provided for a 15% pay raise and that “the current percentage pay differential between grades in the sworn ranks of [the Officers] shall be maintained.” 1
A dispute arose between the City and the Officers over whether the ordinance provided for a one-time pay raise or whether it provided for a one-time pay raise and also required the percentage pay differential to be maintained indefinitely so that if higher-ranking Officers received raises, lower-ranking Officers also received raises in order to maintain the differential. In 1994, the Officers sued the City.
The Officers sought both a declaratory judgment interpreting the ordinance and damages for breach of contract. Regarding their damages claim, the Officers argued that (1) the ordinance amended their employment contracts and the City was contractually bound to maintain the percentage pay differential after its adoption; and (2) the City breached the Officers' contracts by raising the pay of higher-ranking Officers without also raising the pay of lower-ranking Officers to maintain the percentage pay differential required by the ordinance. The Officers sought money damages for back pay and benefits as well as interest.
The City responded to the Officers' suit, then some time later filed a counterclaim to recover alleged overpayments to the Officers. The City asserted that if the pay raises were improper, then any raises given because the City misconstrued the ordinance were void and the Officers who received the raises must repay them. Later, the City filed a plea to the jurisdiction based on governmental immunity from suit. The Officers countered that the City's immunity had been expressly waived by Local Government Code Section 51.075 () and Chapter II of the Dallas City Charter (). See Tex. Loc. Gov't CodeE § 51.075; Dallas City Charter ch. II, § 1(2), (3) (Aug.1999).
The trial court denied the City's plea to the jurisdiction, and the City filed an interlocutory appeal. See Tex. Civ. Prac. & Rem.Code § 51.014(8). While the City's appeal was pending, Texas sovereign immunity 2 law was both clarified and modified.
On the judicial front, we issued our first opinion in Reata Construction Corp. v. City of Dallas, 47 Tex.Sup.Ct.J. 408 (Tex.2004) ( Reata I ). We held that the City waived immunity from suit by asserting claims for affirmative relief in a lawsuit. Id. at 410. After Reata I issued, the City nonsuited its counterclaim. Then, on rehearing, we withdrew the Reata I opinion and substituted a new opinion. Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex.2006). In the new opinion we held that a governmental entity does not have immunity from suit for monetary claims against it that are “germane to, connected with, and properly defensive to” affirmative claims made by the entity, to the extent the claims against the entity offset the entity's claims. Id. at 378. The same day we decided Reata, we also decided Tooke v. City of Mexia, 197 S.W.3d 325 (Tex.2006). In Tooke, we held that the phrases “sue and be sued” and “plead and be impleaded” do not constitute clear and unambiguous waivers of governmental immunity. Id. at 342.
Further, while the case was pending at the court of appeals, the Legislature enacted Texas Local Government Code Sections 271.151–.160. See Act of May 23, 2005, 79th Leg., R.S., ch. 604, § 1, 2005 Tex. Gen. Laws 1548, 1548. Those provisions waive some local government entities' immunity from suit for certain contract claims. See Tex. Loc. Gov't CodeE § 271.152. The waiver of immunity is retroactive—it applies to claims based on contracts executed before the statute's effective date, so long as governmental immunity has not been previously waived with respect to the claims. Act of May 23, 2005, 79th Leg., R.S., ch. 604, § 2, 2005 Tex. Gen. Laws 1548, 1549.
In light of the judicial and legislative proceedings that took place after the trial court made its rulings, the court of appeals affirmed in part, reversed in part, and remanded the case for reconsideration by the trial court. 214 S.W.3d 631, 638. Regarding immunity, the court of appeals held that under Reata the City did not have complete immunity once it filed a counterclaim for damages, but after it nonsuited the counterclaim it was immune from all the Officers' breach of contract claims. Id. at 635. The court reasoned that the City's nonsuit of its counterclaim reinstated the City's immunity from suit because the Officers' claims were no longer germane to, connected with, or properly defensive to anything the City was asserting, and the City was not making monetary claims against the Officers so the Officers' damages claims could not be offsets to claims of the City. Id. at 635–36. The court of appeals remanded the case for the trial court to consider whether the Legislature retroactively waived the City's immunity through Local Government Code Sections 271.151–.160. Id. at 636–37. Regarding the declaratory judgment action, the court of appeals determined that the Officers' action could proceed, but cautioned that money damages could not be recovered under the guise of declaratory relief. Id. at 637. Finally, the court of appeals held that the adopting of the ordinance by means of referendum did not preclude the City's having immunity from the Officers' claims. Id. at 637–38.
The parties filed cross-petitions for review, which we granted.3
Governmental immunity is a common law doctrine. City of Galveston v. State, 217 S.W.3d 466, 471 (Tex.2007). Its boundaries are established by the judiciary, but we have consistently held that waivers of it are the prerogative of the Legislature. Id. Governmental immunity is comprised of immunity from both suit and liability. See Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999). Immunity from liability protects entities from judgments while immunity from suit deprives courts of jurisdiction over suits against entities unless the Legislature has expressly consented:
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