Curbo v. State

• Decision Date: 29 July 1999
• Parties: (Tex.App.-Austin 1999) Valerie Curbo and Carol Funderburgh, Appellants, v. State of Texas, Office of the Governor, Appellee. NO. 03-98-00578-CV.
• Court: Texas Court of Appeals

Page 337

998 S.W.2d 337 (Tex.App.-Austin 1999)

Valerie Curbo and Carol Funderburgh, Appellants, v. State of Texas, Office of the Governor, Appellee.

NO. 03-98-00578-CV.

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN.

July 29, 1999.

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT NO. 97-13182 HONORABLE MARY PEARL WILLIAMS, JUDGE PRESIDING.

[Copyrighted Material Omitted]

Before Justices Jones, B. A. Smith and Yeakel

J. Woodfin Jones, Justice

Valerie Curbo and Carol Funderburgh (collectively, "plaintiffs") sued the Office of the Governor of the State of Texas ("defendant") alleging a violation of the Texas whistle-blower statute. See Tex. Gov't Code Ann. 554.001-.010 (West 1994 & Supp. 1999). The trial court dismissed the suit for lack of jurisdiction, finding that plaintiffs had not exhausted available grievance procedures and, therefore, had failed to fulfill the jurisdictional prerequisites set forth in the whistle-blower statute. See Gov't Code 554.006. Plaintiffs perfected this appeal. Because (1) the factual allegations in plaintiffs' petition establish the trial court's jurisdiction over the subject matter of the claim, and (2) we find no evidence that those allegations were made fraudulently or in bad faith, we reverse the order of dismissal and remand the cause.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs were employed by the Criminal Justice Division of the Governor's Office; Curbo was terminated on August 26, 1997 and Funderburgh on September 8, 1997. Curbo had worked for defendant for three years and Funderburgh for nine. Defendant maintains that plaintiffs were terminated for "exhibiting poor work performance and lack of professionalism." Plaintiffs argue that this explanation is merely pretextual and that in fact they were terminated for reporting to law enforcement representatives actions that they believed in good faith to be violations of law.

Both plaintiffs were terminated by Nancy Hugon, Executive Director of defendant's Criminal Justice Division, in the presence of a representative from defendant's human resources department. Following their respective termination meetings, plaintiffs were immediately required to turn over their keys, identification cards, credit cards, and parking permits, and were then escorted from defendant's premises. When Funderburgh inquired into the reasons for her termination, Hugon refused to discuss the matter. Neither Hugon nor representatives of defendant's human resources department volunteered information about grievance protocol.

Defendant maintains administrative information for employees in at least two places: (1) the Internal Employee Handbook of the Criminal Justice Division of the Office of the Governor ("internal handbook database"), an internal computer database accessible only from defendant's computers, and (2) the Office of the Governor Employee Manual, maintained in hard-copy form and distributed to employees. The internal handbook database contains the following provision regarding grievances:

If you have a problem that needs to be addressed, the following procedures should be followed:

1. Ask your section director to meet with you regarding the problem.

2. If your concerns cannot be addressed by this meeting you may request a meeting with Tom Jones or another section director to more fully discuss the grievance.

3. If the problem is still not addressed, you may ask for a formal grievance meeting with the executive director. (updated 9/7/96)

You may always discuss problems with Donna Reynolds, director of Human Resources, but you are encouraged to alert your section director if possible.

It does not appear that the hard-copy employee manual refers to this or any other grievance procedure. At no point during their employment were plaintiffs told of this grievance procedure, although evidence indicates that both Curbo and Funderburgh were aware that the internal handbook database existed. Curbo had even used the internal handbook database to investigate ways to seek redress for a prior disciplinary action taken against her.

Following Funderburgh's termination, Curbo telephoned Patricia McDaniel, an attorney then working as the director of Texas Crime Stoppers, Office of the Governor, at her office during working hours. At Curbo's request, McDaniel searched both the internal handbook database and the employee manual to find a grievance procedure that applied to terminated employees; she informed Curbo that she was unable to find such a procedure. Following this conversation, plaintiffs retained counsel to assist them with the resolution of their conflict with defendant. On November 18, 1997, plaintiffs' counsel delivered to defendant a letter that outlined plaintiffs' alleged causes of action and threatened a lawsuit unless defendant agreed to begin settlement negotiations and toll the statute of limitations pending their outcome. This position was confirmed in a subsequent phone conversation between plaintiffs' counsel and an attorney representing defendant in which plaintiffs were made available to discuss their grievances with defendant. Defendant did not respond to this offer by the agreed deadline, and plaintiffs filed suit on November 24, 1997, within the 90-day statute of limitations period set forth in the whistle-blower statute. See Gov't Code 554.005.

Following a period of discovery, defendant contested plaintiffs' pleadings in a "Motion to Dismiss for Lack of Jurisdiction." Defendant's motion was accompanied by sworn documents and deposition excerpts. Plaintiffs filed a response that was accompanied by several affidavits. After a hearing at which the trial court considered the evidence submitted by the parties, the court granted defendant's plea and dismissed plaintiffs' causes, finding that plaintiffs failed to exhaust defendant's grievance procedures as required by the whistle-blower statute. See Gov't Code 554.006. Plaintiffs perfected this appeal.

DISCUSSION

To maintain a suit based entirely on a statutory cause of action, a party must comply with the jurisdictional prerequisites set forth in the statute. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 485 (Tex. 1991); Gregg County v. Farrar, 933 S.W.2d 769, 776 (Tex. App.- Austin 1996, writ denied). As this Court has stated in the context of a whistle-blower action, "[f]ailure to comply with the statutory requirements deprives the court of jurisdiction." Farrar, 933 S.W.2d at 777 (citing Schroeder, 813 S.W.2d at 485, and Green v. Aluminum Co. of Am., 760 S.W. 2d 378, 380 (Tex. App.-Austin 1988, no writ)). Section 554.006(a) of the Texas whistle-blower act requires that, before public employees may bring suit under the statute, they must "initiate action under the grievance or appeal procedures of the employing state or local governmental entity relating to suspension or termination of employment or adverse personnel action." Gov't Code 554.006(a); see also Farrar, 933 S.W.2d at 777. If it is unclear whether an applicable grievance procedure exists, however, a terminated employee's claim will not be barred by this statutory prerequisite. See Beiser v. Tomball Hosp. Auth., 902 S.W.2d 721, 724 (Tex. App.-Houston [1st Dist.] 1995, writ denied) ("[U]nder the whistle-blower statute, when . . . it is unclear whether the employer has a post termination grievance procedure . . . the terminated employee's claim is not barred . . . .").

In the present case, plaintiffs pleaded that the defendant did not maintain a grievance procedure related to the termination of employment and, therefore, the jurisdictional prerequisite of exhaustion had been met. In its motion to dismiss, defendant asserted that an existing grievance procedure did in fact apply to terminated employees, that plaintiffs failed to comply with this procedure, and that the trial court therefore did not have subject-matter jurisdiction to hear plaintiffs' claims. The trial court agreed with defendant, finding that plaintiffs failed to comply with an applicable grievance procedure and dismissing their case for lack of jurisdiction.

On appeal, plaintiffs assert that the trial judge erred in granting defendant's motion because: (1) defendant's grievance procedure did not apply to terminated employees, (2) even if the procedure did apply, plaintiffs took sufficient action to comply with the grievance procedure, and (3) defendant should be estopped from invoking the procedure because of affirmative acts by its employees.

The primary issue in dispute-whether defendant maintained a grievance procedure applicable to terminated employees-is relatively discrete, requiring either interpretation or construction of the language of the procedure. However, this discrete substantive issue arises in a pre-trial plea to the jurisdiction, slightly complicating what would otherwise be a straightforward legal or factual determination. We turn first to a discussion of existing law on pre-trial determination of a court's subject-matter jurisdiction in order to identify the appropriate standard for ruling on such pleas and reviewing them on appeal.

Basic Principles of Subject-Matter Jurisdiction

The jurisdiction of a trial court over the subject matter of a case is determined from the good-faith factual allegations contained in the plaintiff's pleadings. See Brannon v. Pacific Employers Ins. Co., 224 S.W.2d 466, 469 (Tex. 1949); Jud v. City of San Antonio, 184 S.W.2d 821, 822-23 (Tex. 1945). These factual allegations, including those related to any jurisdictional prerequisites, must be taken as true unless the defendant pleads and proves that they were fraudulently made to confer jurisdiction. See Austin Home Ctr. Assocs. v. State, 794 S.W.2d 593, 594 (Tex. App.-Austin 1990, no writ) (when pleaded facts confer subject-matter jurisdiction, plea to jurisdiction must explicitly allege that plaintiff's petition was fraudulently composed in order to confer jurisdiction); Flowers v. Lavaca County Appraisal...