City of Dallas v. Albert

354 S.W.3d 368, 54 Tex. Sup. Ct. J. 1609, 2011 Tex. LEXIS 636, 2011 WL 3796339
CourtTexas Supreme Court
DecidedAugust 26, 2011
DocketNo. 07-0284
StatusPublished
Cited by150 cases

This text of 354 S.W.3d 368 (City of Dallas v. Albert) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Dallas v. Albert, 354 S.W.3d 368, 54 Tex. Sup. Ct. J. 1609, 2011 Tex. LEXIS 636, 2011 WL 3796339 (Tex. 2011).

Opinions

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 [371]*371been 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 non-suiting 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.

I. Background

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 Code § 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 [372]*372pay 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 (stating a municipality “may plead and be impleaded in any court”) and Chapter II of the Dallas City Charter (stating the City may “sue and be sued” and “im-plead and be impleaded in all courts”). See Tex. Loc. Gov’t Code § 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 immunity2 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 /). 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 Code § 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 [373]*373have complete immunity once it filed a counterclaim for damages, but after it non-suited the counterclaim it was immune from all the Officers’ breach of contract claims. Id.

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Bluebook (online)
354 S.W.3d 368, 54 Tex. Sup. Ct. J. 1609, 2011 Tex. LEXIS 636, 2011 WL 3796339, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-dallas-v-albert-tex-2011.