Fort Worth Transp. Auth. v. Rodriguez

• Decision Date: 27 April 2018
• Docket Number: NO. 16–0542,16–0542
• Parties: FORT WORTH TRANSPORTATION AUTHORITY, McDonald Transit Associates, Inc., McDonald Transit, Inc., and Leshawn Vaughn, Petitioners, v. Michele RODRIGUEZ and New Hampshire Insurance Company, Respondents
• Court: Texas Supreme Court

547 S.W.3d 830

FORT WORTH TRANSPORTATION AUTHORITY, McDonald Transit Associates, Inc., McDonald Transit, Inc., and Leshawn Vaughn, Petitioners,

v.Michele RODRIGUEZ and New Hampshire Insurance Company, Respondents

NO. 16–0542

Supreme Court of Texas.

Argued November 8, 2017

OPINION DELIVERED: April 27, 2018

Rehearing Denied June 22, 2018

Timothy G. Chovanec, Mark G. Creighton, Fort Worth, TX, for Fort Worth Transportation Authority, McDonald Transit Associates, Inc., McDonald Transit, Inc., and Leshawn Vaughn

John V. Fundis, Dallas, TX, J. Mark Sudderth, for Michele Rodriguez and New Hampshire Insurance Company

Janith Lewis-Bryant and John Scott Carlson, Dallas, TX, for Amicus Curiae Dallas Area Rapid Transit.

Justice Green delivered the opinion of the Court in which Chief Justice Hecht, Justice Guzman, Justice Devine, and Justice Brown joined.

In this statutory-construction case, we must interpret the damages-cap and election-of-remedies provisions of the Texas Tort Claims Act (TTCA) with respect to independent contractors performing essential governmental functions. After a pedestrian was struck and killed by a public bus in Fort Worth, her daughter sued the Fort Worth Transportation Authority (FWTA), its two independent contractors, and the bus driver under the TTCA. We must decide three issues: (1) whether the TTCA's damages cap applies individually or cumulatively for independent contractors performing essential governmental functions; (2) whether an employee of an independent contractor performing essential governmental functions is protected by the TTCA's election-of-remedies provision; and (3) whether the transit defendants should have been awarded attorney's fees arising out of interpleader. We hold that the damages cap applies cumulatively when, as here, an independent contractor performed essential governmental functions of a transportation authority. We also hold that the TTCA's election-of-remedies provision extends to cover an employee of an independent contractor performing essential governmental functions. Finally, we hold that the transit defendants are not entitled to attorney's fees. Accordingly, we reverse the judgment of the court of appeals and reinstate the trial court's judgment in favor of FWTA with respect to issues one and two. We affirm the court of appeals' denial of attorney's fees and remand of the case for a trial on the merits.

I. Background

Judith Peterson was walking across a street in downtown Fort Worth when she was struck and killed by a public bus driven by Leshawn Vaughn. Vaughn was an employee of McDonald Transit, Inc. (MTI), a subsidiary of McDonald Transit Associates, Inc. (MTA). Both MTA and MTI are independent contractors that operate Fort Worth's bus transportation system. Peterson's daughter, Michele Rodriguez, brought a wrongful death suit against Vaughn, FWTA, MTA, and MTI (collectively, the "Transit Defendants"). Rodriguez pled a single count of negligence against all defendants collectively, asserting a variety of acts or omissions, including: "making an improper and unsafe turn," "driving at an unsafe and excessive speed," "negligently hiring ... Defendant Vaughn," and "[f]ailing to establish and maintain safe and appropriate bus routes." These allegations are not allocated among or attributed to particular defendants, and with the exception of those allegations that clearly refer to the actions of the bus driver, discerning which defendants are alleged to have committed which acts or omissions is difficult.

FWTA is a regional transportation authority under Texas Transportation Code chapter 452, and it provides public transportation services, including bus routes, to areas under its control. TEX. TRANSP. CODE § 452.001(1). As such, FWTA performs "essential governmental functions" and its exercise of power under chapter 452 "is a matter of public necessity." Id. § 452.052. The Transportation Code permits an authority to "contract for the operation of all or a part of the public transportation system by[ ] an operator." Id. § 452.056(a)(3). Pursuant to this provision, FWTA contracted with MTI and MTA to provide management and operational services for its fixed-route bus operations. The contract specifically provided that "MTA and MTI are independent contractors of the FWTA" for purposes of section 452.056(d) of the Transportation Code, and that "[a]ll persons employed by MTA and MTI ... are employees, agents, subcontractors or consultants of MTA and/or MTI, and not of the FWTA." Section 452.056(d) limits the liability of a private contractor performing the function of an authority under chapter 452 "to the extent that the authority or entity would be liable if the authority or entity itself were performing the function." Id. § 452.056(d).

Under the contract, MTA agreed to furnish a Director of Transportation Services of FWTA's Operating Functions, who would be "responsible for the overall management and operation of all components of the FWTA's Operating Functions." MTI, a wholly owned subsidiary of MTA, agreed to carry out FWTA's operating functions and "employ all necessary and appropriate personnel ... including drivers." The contract also provided that MTI would "procure all other goods and services reasonably necessary and useful to manage and operate the FWTA's public transportation system in accordance with the policies, procedures, budgets and other directives of the President of the FWTA"; that "[a]ll contractual obligations which are to be entered into or assumed by MTI personnel on behalf of the FWTA shall be in the name of the FWTA"; and that "[a]ll contractual obligations and related liability entered into on behalf of the FWTA in accordance with this paragraph shall become and remain valid obligations of FWTA."

Rodriguez alleged in her pleadings that the Transit Defendants operated as a joint venture. Accordingly, she asserted that FWTA, MTA, and MTI were vicariously liable for Vaughn's negligence, if proven, under respondeat superior. Specifically, her pleadings included the following:

3.06 Hereinafter in this Petition, all Defendants other than Vaughn may be collectively referred to as "The [Transit] Defendants."

3.07 At all material times and in all material respects, The [Transit] Defendants owned, operated, managed, and/or controlled the bus transportation system operating in Fort Worth, Texas, commonly known as The T.

3.08 Upon current information and belief, The [Transit] Defendants were engaged in a joint enterprise or joint venture to operate and/or maintain such bus transportation system, and each had the actual right to control the business operations, policies, procedures, and activities of such system. Additionally and/or alternatively, they comprised and constituted a single business enterprise in such regard. Additionally and/or alternatively, they were managers, vice principals, agents, mere tools, instrumentalities, departments, and/or alter egos of each other or of one or another of them with regard to operation of such system. They are vicariously and/or jointly and/or severally liable for the conduct of one another in such regard.

3.09 Additionally and/or alternatively, at all material times, Defendant Vaughn was an agent, servant, and employee of MTA and/or MTI and was acting within the course and scope of her authority as such agent, servant and employee. Accordingly, MTA and MTI are liable to [Rodriguez] for her conduct under the doctrine of Respondeat Superior .

Rodriguez sought declaratory relief that (1) FWTA was liable for the conduct of MTA, MTI, and Vaughn; and (2) pursuant to the Transit Defendants' contract, "whatever liability may be incurred by Vaughn—as an employee of [MTI] and/or [MTA]—constitutes part of the operating expenses of FWTA and shall be paid by FWTA, and that Vaughn is a third-party-beneficiary of such contract in such regard."

As an authority under the Transportation Code, FWTA is considered a "governmental unit" for purposes of the TTCA. TEX. CIV. PRAC. & REM. CODE § 101.001(3)(D). Generally, governmental units are entitled to immunity unless it has been waived. Reata Constr. Corp. v. City of Dall. , 197 S.W.3d 371, 374–75 (Tex. 2006). Under the TTCA, the Legislature has waived the immunity of a governmental unit, such as FWTA, for personal injury or death proximately caused by the negligence of an employee acting within the scope of employment if the "death arises from the operation or use of a motor-driven vehicle." TEX. CIV. PRAC. & REM. CODE § 101.021(1)(A). However, the liability arising out of this waiver of immunity is "limited to money damages in a maximum amount of $100,000 for each person." Id. § 101.023(b). Recognizing that a regional transportation authority might delegate some or all of the operation of its public transportation system to one or more independent contractors, the Legislature contemplated liability for such a situation:

A private operator who contracts with an authority under this chapter is not a public entity for purposes of any law of this state except that an independent contractor of the authority that ... performs a function of the authority ... is liable for damages only to the extent that the authority or entity would be liable if the authority or entity itself were performing the function ....

TEX. TRANSP. CODE § 452.056(d). Rodriguez seeks the statutory maximum of $100,000 from each entity separately—FWTA, MTA, and MTI—for a total of $300,000. The Transit Defendants counter that their liability is cumulatively limited to $100,000 by the TTCA's damages cap.

The TTCA also contains an election-of-remedies provision that protects government employees: "The filing of a suit under this chapter against a governmental unit constitutes an irrevocable election by the plaintiff and immediately and forever bars any suit or recovery by the plaintiff against any individual employee of the governmental unit regarding the same subject matter." TEX. CIV. PRAC. & REM. CODE § 101.106(a). Rodriguez...