Holmans v. Transource Polymers, Inc.

• Decision Date: 21 December 1995
• Docket Number: No. 2-95-035-CV,2-95-035-CV
• Citation: 914 S.W.2d 189
• Parties: 131 Lab.Cas. P 58,041 Charles F. HOLMANS, II, Appellant, v. TRANSOURCE POLYMERS, INC., a New York Corporation, Appellee.
• Court: Texas Court of Appeals

Page 189

914 S.W.2d 189

131 Lab.Cas. P 58,041

Charles F. HOLMANS, II, Appellant, v. TRANSOURCE POLYMERS, INC., a New York Corporation, Appellee.

No. 2-95-035-CV.

Court of Appeals of Texas Fort Worth.

Dec. 21, 1995.

Rehearing Overruled Feb. 1, 1996.

Charles F. Holmans, II, Dallas, for appellant.

Calhoun & Stacy, and V. Paige Pace, Thomas C. Jones, Ty Collin Simmons, Dallas, for appellee.

Before DAY, LIVINGSTON and HOLMAN, JJ.

OPINION

DAY, Justice.

This is an appeal from a dismissal order. The trial court dismissed appellant's common-law claim for unpaid wages for lack of subject-matter jurisdiction. Because we hold that the Payday Law ¹ did not preempt the court's jurisdiction to hear appellant's common-law claim for unpaid wages, we reverse and remand.

THE FACTS

On December 30, 1993, appellant filed a common-law debt action against Transource for alleged unpaid sales commissions and expenses totalling $31,055.71. Appellant subsequently filed a wage claim under the Payday Law provisions of the Labor Code with the Texas Employment Commission (TEC) seeking a determination regarding the same commissions and expenses allegedly owed to him by Transource. The TEC issued a Preliminary Wage Determination Order and determined that Transource owed appellant $25,705.91 for unpaid commissions. Transource filed an appeal of the Preliminary Wage Determination Order and requested a special hearing on the matter. On May 4, 1994, Transource withdrew its appeal and request for a special hearing and tendered a check in the amount of the TEC determination. On May 13, 1994, the TEC granted Transource's request to withdraw its appeal. On May 15, 1994, appellant notified the TEC that he wished to withdraw his administrative claim in order to pursue his suit in district court and requested the TEC to issue an order stating his claim had been withdrawn. The TEC responded, acknowledging receipt of appellant's request to withdraw his claim and that the TEC now considered the wage claim closed.

On August 17, 1994, Transource moved the district court to dismiss appellant's suit, arguing the court was without subject-matter jurisdiction because appellant failed to exhaust his administrative remedies provided by the Payday Law. After a hearing, the trial court granted the motion and dismissed the case.

In two points of error, appellant asserts the trial court erred: (1) in dismissing his common-law suit on the basis the court lacked subject-matter jurisdiction; and (2) to construe the Payday Law as providing for a mandatory and exclusive remedy would be an unconstitutional interpretation. For the reasons enunciated below, we agree with appellant's assertions.

DISCUSSION

The controlling issue in this case is whether the trial court correctly interpreted the Payday Law; that is, whether the Texas Legislature intended for the administrative procedure provided by the Payday Law to be the mandatory and exclusive remedy for wage claimants, effectively repealing the common law. Because the actual language of the statute does not exhibit an express intent to this effect, any such intent by the legislature must be inferred; therefore, this court must ascertain the intent of the legislature. TEX.GOV'T CODE ANN. § 312.005 (Vernon 1988) (Code Construction Act); Stauffer v. Henderson, 801 S.W.2d 858, 869 (Tex.1990) (Ray, J., dissenting).

Standard of Review

Statutory construction is a question of law. Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989). The cardinal rule of statutory construction is to ascertain the legislature's intent and to give effect to that intent. Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex.1994). When determining legislative intent, the court may look to the language of the statute, legislative history, the nature and object to be obtained, and the consequences that would follow from alternate constructions. Id. Additionally, it is to be presumed that the legislature intended to have a construction that makes the statute constitutional. TEX.GOV'T CODE ANN. § 311.021 (Vernon 1988); Dreyer v. Greene, 871 S.W.2d 697, 700 (Tex.1993) (Gammage, J., dissenting). Therefore, when the statute lends itself to two interpretations, one which is reasonable and within the constitution and one which would render the statute unconstitutional, we must adopt the interpretation which protects the statute's constitutionality.

Common Law versus Statutory Remedies

Appellant's suit for unpaid wages in the district court was a common-law action for debt. Transource argues that the remedial scheme established by the Payday Law abolished and replaced the common-law remedy regarding claims for unpaid wages. Relying on the Texas Supreme Court's reasoning in Mingus v. Wadley, 115 Tex. 551, 558, 285 S.W. 1084, 1087 (1926), Transource maintains that a suit for unpaid wages is a purely statutory action because the Payday Law, although not providing a remedy unknown to the common law, provides a reasonable substitute for the common-law rights abolished by the statute. If the assertion were true, then Transource would be correct in arguing that where the cause of action and remedy for its enforcement are derived not from the common law but from the statute, the statutory provisions are mandatory and exclusive, and must be complied with in all respects or the action is not maintainable. Id. However, we hold that a cause of action for unpaid wages is not purely statutory because, as explained further below, the remedial scheme provided by the Payday Law does not provide a reasonable substitute for the constitutional right to a jury trial, which is guaranteed for actions recognized at common law prior to the adoption of the Texas Constitution. Therefore, appellant's cause of action is not purely statutory.

Transource cites the Supreme Court's decision in Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483 (Tex.1991), as a case analogous to the present dispute. In Schroeder, the court construed the provisions of the Texas Commission on Human Rights Act. ² There, the claimant attempted to bring a civil action in district court without having filed an administrative claim as provided in the statute. Id. at 484. The Supreme Court held that, despite the absence of a specific statement, pursuit of the administrative procedures was a prerequisite to bringing a civil action, and the intent of the legislature to provide for a mandatory exhaustion requirement was apparent from the statute as a whole. Id. at 487. Appellant argues that Schroeder is distinguishable from the present case because the claim in that case was based entirely on a remedy created by the statute and not found at common law. We agree. The claimant's cause of action in Schroeder was based on a remedy that did not exist at common law and was created by the statute; therefore, the statutory provisions were mandatory and exclusive or the action would not be maintainable because of lack of jurisdiction. Id. at 488 (quoting Green v. Aluminum Co. of Am., 760 S.W.2d 378, 380 (Tex.App.--Austin 1988, no writ)). In the present case, the remedy was not created by the statute but was well-recognized at common law.

Under Texas law, in a situation where common law and a statute both provide remedies, the statutory remedy is cumulative of the common-law remedy unless the statute expressly or impliedly negatives or denies the right to the common-law remedy. Navistar Int'l Transp. Corp. v. Crim Truck & Tractor Co., 791 S.W.2d 241, 245 (Tex.App.--Texarkana 1990), aff'd, 823 S.W.2d 591 (Tex.1992); Byler v. Garcia, 685 S.W.2d 116, 119 (Tex.App.--Austin 1985, writ ref'd n.r.e.). Here, the Payday Law does not expressly provide that the statutory scheme is exclusive; therefore, if the statute is meant to be exclusive, it would be by implication only.

Abrogation by implication of a cause of action and remedy recognized at common law is disfavored and requires a clear repugnance between the common law and statutory causes of action. Coppedge v. Colonial Sav. & Loan Ass'n, 721 S.W.2d 933, 938 (Tex.App.--Dallas 1986, writ ref'd n.r.e.). Transource asserts that a statute in derogation of the common law is not to be construed strictly. It is recognized, however, that if a statute deprives a person of a common-law right, the statute will, nevertheless, be strictly construed and will not be extended beyond its plain meaning or applied to cases not clearly within its purview. Smith v. Sewell, 858 S.W.2d 350, 354 (Tex.1993). It is clearly evident from the language of the statute that the objective of the Payday Law is to deter employers from withholding wages by providing wage claimants an avenue for the enforcement of wage claims, many which would often be too small to justify the expense of a civil lawsuit. Although the statute established a statutory scheme providing for the recovery of unpaid wages, the legislature neither expressly declared nor necessarily implied an intention to abrogate the common-law remedy of an action for debt. We conclude that the statutory action for unpaid wages under the Payday Law did not repeal the common-law action, but instead provided a choice of remedies for the wage claimant. The intent of the legislature to create a choice is further evidenced by an analysis of the constitutionality of the statute.

Constitutional versus Unconstitutional Interpretations

As mentioned above, if the statute provides a reasonable substitute for the common-law rights it abolishes, then the provisions of the statute will be mandatory and exclusive, and the action will be considered to be purely statutory. Thus, the inquiry becomes whether the remedy provided by the Payday Law reasonably substitutes the common-law action it would abolish if the administrative remedy were construed to be exclusive. This question rests on the wage claimant's right to a jury trial on his common-law claim.

It is well-established that the Texas Constitution provides that the right to a trial by...