Wagoner v. Rainbow Group, Ltd., No. 03-03-00478-CV (TX 7/29/2004)
| Decision Date | 29 July 2004 |
| Docket Number | No. 03-03-00478-CV.,03-03-00478-CV. |
| Parties | BONNIE WAGONER AND MORGANA MORGAN, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, Appellants v. RAINBOW GROUP, LTD. AND ALAN SAGER,<SMALL><SUP>1</SUP></SMALL> Appellees. |
| Court | Texas Supreme Court |
Appeal from the District Court of Travis County, 53rd Judicial District, No. 92-02221A, Honorable Darlene Byrne, Judge Presiding.
Reversed and Remanded.
Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
In this case, we must consider, in light of our opinion in Rainbow Group, Ltd. v. Johnson, No. 03-00-00559-CV, 2002 Tex. App. LEXIS 6359 (Tex. App.—Austin Aug. 30, 2002, pet. denied) (), the effect of a judgment severing the individual claims from the class claims of hairstylists employed by Supercuts who did not testify at the initial trial. In that case, we affirmed both an award of damages against Supercuts in quantum meruit and a denial of a breach-of-contact claim against Supercuts only as to testifying class members. The district court in its final judgment in that case severed the cause of action of all non-testifying plaintiffs and retained jurisdiction over their case under a new cause number. Then, the district court granted Supercuts' plea to the jurisdiction in that severed case, deciding that the class plaintiffs presented no judiciable cause. For the reasons stated below, we reverse the district court's grant of the plea to the jurisdiction and remand for further proceedings.
This is the third appeal related to a damages suit against Supercuts. In Rainbow Group, Ltd. v. Johnson, 990 S.W.2d 351 (Tex. App.—Austin 1999, pet. dism'd w.o.j.) (Rainbow Group I), we affirmed the district court's order certifying the class in this case. Then, in Rainbow Group, Ltd. v. Johnson, No. 03-00-00559-CV, 2002 Tex. App. LEXIS 6359 (Tex. App.—Austin Aug. 30, 2002, pet. denied) () (Rainbow Group II), we affirmed both the trial court's award of damages in quantum meruit and its denial of a breach-of-contract claim as to the claims of testifying class members. To understand the issues in the case before us now, we begin with a summary of the facts and procedural background before we discuss the events that have occurred since we decided Rainbow Group II.
In 1991, certain hairstylists filed suit against their employer Supercuts in federal court for unpaid and overtime wages, complaining that they were not paid the federal minimum wage under the Fair Labor Standards Act ("FLSA"), 29 U.S.C.A. §§ 201-219 (West 1988), for all hours of work they performed. Subsequently, the hairstylists voluntarily dismissed the case.
In 1992, hairstylist Josephine Johnson and others filed suit in state district court on behalf of themselves and all other individuals employed by Supercuts as hairstylists during the previous four years. The hairstylists requested certification as a class and alleged that they had entered into oral employment contracts with Supercuts providing payment at a fixed hourly rate, and that Supercuts had breached the contracts by refusing to pay the stylists for time spent at the hair salons "off the clock" and attending mandatory meetings. The district court granted the hairstylists' motion for class certification, which Supercuts appealed. The hairstylists subsequently filed an amended petition alleging claims incorporating FLSA, complaining that they were not paid the federal minimum wage for all hours during which they were required to be at work. On the basis of their amended petition, Supercuts removed the case to federal district court. The hairstylists filed a motion to remand, which was denied.
The federal district court conducted a bench trial on the merits and found that the hairstylists failed to establish that Supercuts breached employment contracts with the hairstylists. The hairstylists appealed both that finding and the denial of their motion to remand to the Fifth Circuit. The Fifth Circuit determined that the federal district court lacked subject-matter jurisdiction because the hairstylists had pleaded an independent state contract claim. It thus vacated the federal district court's judgment and remanded the case to that court with instructions to remand the case to state district court. See Casey v. Rainbow Group, Ltd., 109 F.3d 765 (5th Cir. 1997) (opinion not published). After remand to state court, Supercuts resumed its appeal of the district court's certification of the class. We affirmed the certification in Rainbow Group I. Then, in a bifurcation order agreed on by all parties, the district court agreed to first decide the "liability issues common to the class, if any, and the individual liability issues and the damages issues if any of those class members who testify live or by deposition." It also announced that it would determine the "individual liability issues, if any, and the amount of damages, if any, suffered by the non-testifying class members" at subsequent proceedings. It ordered that testimony introduced at any hearing could be used at any subsequent hearing.
The hairstylists then filed a second amended petition, adding a quantum meruit claim. The district court conducted a bench trial on the merits and found that it was Supercuts' policy that hairstylists were entitled to clock-in at the beginning of their shifts and upon returning from lunch, and they had a right to be compensated for those hours. Despite that policy, the district court also found that many store managers directed hairstylists not to clock-in at those times when there were not enough customers in the store. The court found that Supercuts received a benefit from this system and threatened hairstylists with discipline or loss of employment if they were not present in the stores during their scheduled work hours. It concluded that the hairstylists were not off the clock voluntarily and that they expected to be paid for the time spent waiting for costumers and attending mandatory meetings.
The trial court consequently rendered judgment for the thirteen hairstylists who testified, concluding that "plaintiffs have established all of the requirements for recovery in quantum meruit for the time they sat off the clock and attended mandatory shop and product knowledge meetings." It also limited the scope of its judgment to the issue of Supercuts' liability to the thirteen plaintiffs for whom the court made individual awards in quantum meruit. It further declared that the "claims of the remaining class members and any fees or costs incurred as a result of the prosecution of those claims are hereby severed from the claims of the above named [p]laintiffs." The district court then reserved jurisdiction over the severed claims and assigned them a new cause number. The appeal of that judgment was Rainbow Group II, and, among the ten issues presented, this Court affirmed both the district court's judgment denying the hairstylists' breach-of-contract claim and its award of damages in quantum meruit.2
After we announced our decision in Rainbow Group II, the case proceeded on the class claims of the hairstylists who did not testify during the trial in that case on the last pleading filed in that case. That pleading claimed both breach-of-contract and quantum meruit damages. The hairstylists first moved to amend the class certification order in two ways. Because the named plaintiffs in the original cause had received individual relief in Rainbow Group II, the remaining hairstylists requested the court to substitute Wagoner and Morgan as named plaintiffs in the severed cause. In addition, they moved to reform the class-certification order to include the quantum meruit claim as it existed in the pleading.
Supercuts responded by first filing a plea to the jurisdiction, in which it asserted that the trial court It then stated that, after our decision in Rainbow Group II, it paid the judgment to those plaintiffs who prevailed "on their individual quantum meruit claims." It concluded by arguing that the only class claims in the original cause were for breach of contract, and, those class claims having been denied in Rainbow Group II, the severed cause of action was an "empty case" that could not be amended.
The hairstylists amended the petition, substituting Wagoner and Morgan as named plaintiffs for the severed cause. Supercuts then filed a response to the remaining hairstylists' request to amend the class certification. It argued again that the trial court lacked jurisdiction in the severed cause of action. It also argued that a class action was an inappropriate vehicle for quantum meruit claims, that the statute of limitations had run, and that the doctrine of laches barred the continuing cause.3 The district court granted Supercuts' plea to the jurisdiction, finding a lack of justiciable cause. This appeal followed.
On appeal, the hairstylists present one issue—that the district court erred in granting Supercuts' plea to the jurisdiction. We agree.
Subject-matter jurisdiction is essential to the authority of a court to decide a case. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). A plea to the jurisdiction challenges the trial court's authority to determine the subject matter of a specific cause of action. Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n, 16 S.W.3d 61, 65 (Tex. App.—Austin 2000, no pet.). In order to prevail, the party asserting the plea to the jurisdiction must show that even if all...
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