Colleen Conrad Fonte v. CBRCC, Inc., A/K/A Courtemanche & Associates

• Court: Court of Appeals of Texas
• Decided: July 26, 2012
• Docket: 01-10-00951-CV
• Status: Published

Opinion

Opinion issued July 26, 2012

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-10-00951-CV ——————————— COLLEEN CONRAD FONTE, Appellant V. CBRCC, INC., A/K/A COURTEMANCHE & ASSOCIATES, Appellee

On Appeal from the 295th District Court Harris County, Texas Trial Court Case No. 2010-27527

MEMORANDUM OPINION

To recover unpaid wages and unreimbursed business expenses, Colleen

Conrad Fonte sued her former employer, Courtemanche & Associates, for breach

of contract. The trial court dismissed her case. In two issues, Fonte contends that the trial court erred by (1) granting

Courtemanche’s plea to the jurisdiction and dismissing her suit for lack of

jurisdiction and (2) dismissing her suit with prejudice. We reverse and remand.

Background

Fonte executed an Employment Agreement with Courtemanche in

September 2008, and began working as a full-time Consulting Associate. By May

2009, the company’s financial situation compelled Courtemanche to reduce both

the hours and compensation of all of its consultants and staff by fifty percent.

Even more cuts were required, however, and on June 29, 2009 Courtemanche

informed Fonte that her employment was terminated effective the next day.

On October 27, 2009, Fonte filed a Payday Law wage claim with the Texas

Workforce Commission (TWC) seeking $22,756.41 in unpaid wages per her

Employment Agreement. See TEX. LAB. CODE ANN. §§ 61.001–.095 (West 2006

& Supp. 2011). Courtemanche’s objection to TWC’s jurisdiction to hear the claim

argued: “Employer’s principal place of business is in Charlotte, North Carolina and

Claimant serviced Employer’s clients in many states but not in Texas. Therefore,

it is Employer’s position that the Texas Payday Law is not applicable in this matter

and the Texas Workforce Commission has no jurisdiction in this matter.”

On April 30, 2010—while her Payday Law wage claim still pending—Fonte

filed suit against Courtemanche for breach of her Employment Agreement seeking

2 $22,756.41 in unpaid wages and $9,000.00 in unreimbursed business expenses.

Ten days later, TWC issued a Preliminary Wage Determination Order (PWDO)

sustaining Courtemanche’s objection and dismissing Fonte’s Payday Law claim for

lack of jurisdiction. Requesting an administrative hearing, Fonte challenged the

PWDO and, following an evidentiary hearing on July 7, the special hearing officer

found that TWC had jurisdiction.

As Fonte awaited her July 7th TWC hearing, however, Courtemanche, on

June 7, filed its answer and denial in the civil suit. With the TWC’s jurisdiction of

the Pay Day Wage claim established, Courtemanche, on July 19, then filed its plea

to the jurisdiction and motion to dismiss arguing lack of jurisdiction because, prior

to filing her suit, Fonte pursued the same damages via the TWC. The trial court

granted Courtemanche’s plea to the jurisdiction and dismissed the case with

prejudice on August 4, 2010. Fonte filed a timely motion for new trial and motion

to modify judgment, which the trial court denied on September 23, 2010. This

appeal followed.

Did Fonte’s Pending Payday Law Claim Deprive the Trial Court of Subject-Matter Jurisdiction? Citing to Igal v. Brightstar Information Technology Group, Inc., 250 S.W.3d

78 (Tex. 2008), Fonte argues that her pending Payday Law claim did not deprive

the trial court of subject-matter jurisdiction. In Igal the Texas Supreme Court held

that a final decision from the TWC bars a common-law claim for the same wages

3 based upon the doctrine of res judicata. 250 S.W.3d at 78. Courtemanche argues

that because Fonte has no final decision from the TWC, Igal is inapplicable and

moreover, Igal does not support Fonte’s argument that only res judicata—not

subject-matter jurisdiction—can bar common-law claims under these

circumstances.

Our Court addressed this issue in UL, Inc. v. Pruneda,

No. 01-09-00169-CV, 2010 WL 5060638 (Tex. App.—Houston [1st Dist.] Dec. 9,

2010, no pet.) (mem. op.). Defendants there argued that because the plaintiff first

obtained a final decision from TWC on his claim for unpaid commissions, (1) he

was barred from subsequently pursuing his common-law claim for the same unpaid

commissions in civil court based upon the affirmative defense of res judicata,

citing to Igal, and (2) TWC’s final decision deprived the trial court of subject-

matter jurisdiction over plaintiff’s common-law claims. Although we agreed that

such claims could be barred under Igal based upon res judicata, we disagreed with

the defendants’ contention that once a claimant pursued his claim to a final

determination or judgment, by either TWC or a court of law, he was

jurisdictionally barred from proceeding in the other forum. We stated: “The Texas

Supreme Court’s analysis in Igal demonstrates that a claimant, who has pursued an

administrative claim with TWC to a final wage determination, is barred by res

judicata, not by some jurisdictional impediment to pursuing common-law claims in

4 a court of law.” Pruneda, 2010 WL 5060638, at *7. Thus, under Igal, Fonte’s

pending Payday Law claim is not a jurisdictional bar that prevents her from

proceeding with her common-law claims. See id.

Courtemanche further argues that case law precludes Fonte from pursuing

both an administrative Payday Law claim and a civil suit simultaneously.

Although the cites of neither party expressly address the issue of the simultaneous

pursuit of administrative and civil claims for the same unpaid wages, such

simultaneous proceedings are, however, inconsistent with the judicially-created

doctrine of primary jurisdiction, see RONALD L. BEAL, TEXAS ADMINISTRATIVE

PRACTICE AND PROCEDURE § 5.5.9, at 41–45 (2010), which operates to allocate

power between courts and agencies when both are vested with concurrent original

jurisdiction over a dispute. See also Subaru of Am., Inc. v. David McDavid Nissan,

Inc., 84 S.W.3d 212, 221 (Tex. 2002) (citing Foree v. Crown Cent. Petroleum

Corp., 431 S.W.2d 312, 316 (Tex. 1968)). An agency has primary jurisdiction

over a dispute when both the agency and the courts have authority to make an

initial determination, and the trial court defers to the agency to decide the issue

because (1) the agency has expertise in handling the complex problems in the

agency’s purview and (2) great benefit is derived from the agency uniformly

interpreting its laws, rules, and regulations. Subaru, 84 S.W.3d at 221. “If the

primary jurisdiction doctrine requires a trial court to defer to an agency to make an

5 initial determination, the court should abate the lawsuit and suspend finally

adjudicating the claim until the agency has an opportunity to act on the matter.”

Id. While Fonte argued for abatement for the first time in her motion for new trial,

citing to Butnaru v. Ford Motor Co., 84 S.W.3d 198, 208 (Tex. 2002) and Subaru,

84 S.W.3d at 220–22,1 the parties never raised the issue of primary jurisdiction

before the trial court.

Courtemanche further argues that Fonte’s pending Payday Law claim

deprives the trial court of subject-matter jurisdiction over her common-law claims

citing to Hull v. Davis, 211 S.W.3d 461, 466 (Tex. App.—Houston [14th Dist.]

2006, no pet.) and 11th Street Bingo Ass’n v. Simonson, No. 13-02-399-CV, 2004

WL 1117161, at *2–3 (Tex. App.—Corpus Christi May 20, 2004, no pet.) (mem.

op.). As this Court noted in Pruneda, however, neither court of appeals had the

benefit of the Supreme Court’s analysis and decision in Igal. Pruneda, 2010 WL

5060638, at *7 n.1.

Accordingly, Fonte’s pending Payday Law Claim does not deprive the trial

court of subject-matter jurisdiction over her common-law claims for the same

wages under Igal and its progeny, Pruneda. The trial court—without the benefit of

this Court’s analysis and reasoning in Pruneda at the time it made its ruling—erred

1 Although it is referred to as “primary jurisdiction,” the doctrine is in fact prudential, not jurisdictional. See Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220 (Tex. 2002). 6 in granting Courtemanche’s plea to the jurisdiction and dismissing her suit for lack

of jurisdiction. We sustain Fonte’s first issue.

Having sustained her first issue, Fonte’s second issue is moot.

Conclusion

We reverse the trial court’s judgment and remand the case for further

proceedings consistent with this opinion.

Jim Sharp Justice

Panel consists of Justices Jennings, Sharp, and Brown.