McKinley Iron Works, Inc. v. Texas Employment Commission

917 S.W.2d 468, 1996 Tex. App. LEXIS 810, 1996 WL 86202
CourtCourt of Appeals of Texas
DecidedFebruary 29, 1996
Docket2-95-128-CV
StatusPublished
Cited by17 cases

This text of 917 S.W.2d 468 (McKinley Iron Works, Inc. v. Texas Employment Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McKinley Iron Works, Inc. v. Texas Employment Commission, 917 S.W.2d 468, 1996 Tex. App. LEXIS 810, 1996 WL 86202 (Tex. Ct. App. 1996).

Opinion

OPINION

HOLMAN, Justice.

McKinley Iron Works, Inc. appeals a judgment upholding the Texas Employment Commission’s (TEC) decision that employee Jose Hernandez is entitled to receive unemployment benefits. We agree with the trial court that there was substantial evidence to support the TEC decision, and we affirm.

On April 22, 1993, McKinley filed suit for trial de novo review of a TEC decision allowing Hernandez the unemployment benefits. The trial court’s review was governed by article 5221b-4(i) of the Texas Revised Civil Statutes. 1 When McKinley rested its case in a bench trial, the court rendered judgment affirming the TEC decision.

McKinley brings five points of error, each asserting a different reason to support its complaint that the trial court erred in granting TEC and Hernandez an “instructed verdict.” TEC replies that use of the term *470 “instructed verdict” is a misnomer, because a judge does not instruct himself to render a verdict in a bench trial. McDaniel v. Carruth, 637 S.W.2d 498, 505 (Tex.App.-Corpus Christi 1982, no writ). When a defendant in a non-jury trial wishes to rest his case without putting on any evidence, he should move for judgment, not an instructed verdict. Id.

TEC/Hernandez initially moved for judgment, but apparently created the misnomer by later moving for a directed judgment. After hearing arguments by the attorneys, the trial court announced that TEC/Heman-dez’ motion for “directed verdict” would be granted.

Because each of the five points of error attack the so-called “instructed verdict” on grounds that require us to determine whether the trial court properly applied the substantial evidence rule, we will not address the points separately, but will consider them together.

When a statute allows trial de novo review of a state agency’s decision, this means there can be a trial, but only to determine the issues of whether the agency’s ruling is free of the taint of any illegality and is reasonably supported by substantial evidence. Firemen’s & Policemen’s Civil Serv. Comm’n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex.1984). “Substantial evidence” means that, upon the evidence as a whole, reasonable minds could have reached the same conclusion the agency reached. Texas State Bd. of Dental Examiners v. Sizemore, 759 S.W.2d 114, 116 (Tex.1988), cert. denied, 490 U.S. 1080, 109 S.Ct. 2100, 104 L.Ed.2d 662 (1989); Dotson v. Texas State Bd. of Medical Examiners, 612 S.W.2d 921, 922 (Tex.1981).

Principles that govern a trial court’s substantial evidence review are: (1) the court will hear and consider evidence to determine whether reasonable support for the agency’s order exists, but the agency remains the primary fact finding body, and the question for the trial court is strictly one of law; (2) the trial court may not substitute its own judgment for that of the state agency on controverted issues of fact; (3) if the agency heard substantial evidence that would support either an affirmative or a negative finding, the trial court must allow the agency’s order to stand, even if the court would have differed with the result; (4) the trial court may not set aside the agency’s ruling merely because there was conflicting or disputed testimony; and (5) the trial court is concerned only with the reasonableness of the agency’s order, not its correctness. Firemen’s & Policemen’s Civil Serv. Comm’n, 662 S.W.2d at 956.

Under these principles, if there was substantial evidence which supports the agency’s ruling, the trial court must yield to the discretion that was exercised by the agency empowered by law to make that ruling. Id. When conducting the trial de novo, the trial court may go no further than to examine the evidence heard by the agency and determine whether it was incredible, perjured, or unreasonable, id.; Trapp v. Shell Oil Company, 145 Tex. 323, 198 S.W.2d 424, 440 (1946), because evidence in those categories is deemed not substantial. Trapp, 198 S.W.2d at 440.

Evidence heard by an agency may even preponderate against its own ruling, yet still be “substantial evidence,” if it is more than a mere scintilla. City of El Paso v. Public Utility Comm’n of Texas, 883 S.W.2d 179, 185 (Tex.1994). Because of this, a reviewing court may not substitute its own judgment as to the weight of the evidence for that of the agency, and the reviewing court must concern itself with the reasonableness of the agency’s order, not its correctness. Id. Accordingly, our inquiry is not whether the agency came to the proper fact conclusion on the basis of conflicting evidence, but whether it acted arbitrarily and without regard to the facts. Trapp, 198 S.W.2d at 441 (citing Railroad Comm’n v. Shell Oil Co., 139 Tex. 66, 161 S.W.2d 1022, 1029 (1942)).

McKinley argues that TEC’s lawyer apparently misled the trial court to a mistaken conclusion that the court was limited to considering the TEC record. McKinley asserts that trial de novo requires the introduction of evidence in court, and that “the factual findings [by TEC] are not even relevant nor admissible evidence in a trial de novo.” For this, McKinley relies on Mary Lee *471 Found, v. Texas Employment Comm’n, 817 S.W.2d 725, 727 (Tex.App.-Texarkana 1991, writ denied) which holds that a court reviewing a TEC ruling must look to the evidence presented in the trial de novo and not to the record created by the agency. Id. Mary Lee concludes that evidence heard by TEC is not per se admissible in the trial de novo, unless admissible on its own merits under the general rules of evidence. Id. In Mary Lee, the trial court admitted the TEC record into evidence over the objection of the employer. Id. at 727. Mary Lee also suggests that if the TEC’s fact findings were admissible proof of their own truth in a trial de novo, a substantial evidence review would be meaningless, “because the TEC could bootstrap itself to substantial evidence in every case merely by finding what it needed to prove.” Id. at 728.

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917 S.W.2d 468, 1996 Tex. App. LEXIS 810, 1996 WL 86202, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mckinley-iron-works-inc-v-texas-employment-commission-texapp-1996.