Tercero v. TX Southmost College ( 2022 )

Case: 22-40004 Document: 00516494925 Page: 1 Date Filed: 10/04/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
October 4, 2022
No. 22-40004
Lyle W. Cayce
Clerk
Lily F. Tercero,
Plaintiff—Appellee,
versus
Texas Southmost College District,
Defendant—Appellant.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 1:16-CV-282
Before Clement, Duncan, and Wilson, Circuit Judges.
Per Curiam:*
Lily F. Tercero brought her procedural due process and breach of
employment contract claims against Texas Southmost College District,
prevailing at trial and on her first appeal. In this second appeal limited to the
issues remanded to the district court, TSC requests we grant judgment
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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notwithstanding an adverse jury verdict. For the reasons below, we
AFFIRM.
I
As laid out in the previous appeal:
Appellant, Dr. Lily F. Tercero, was the president of
Appellee, Texas Southmost College District, until the
college’s board voted to remove her from the position after a
termination hearing. Tercero then filed this action in the
district court. She brought, against TSC, a Fourteenth
Amendment procedural due process claim under 42 U.S.C. §
1983 and Texas state law breach of contract claims, which
alleged that TSC (1) owed her the balance of her salary and
benefits remaining on her employment contract because it
terminated her without good cause; and (2) violated her
contractual right to certain processes, including the right to
cross-examine adverse witnesses and present exculpatory
evidence.
The district court denied summary judgment on
Tercero’s breach of contract claims and her procedural due
process claim based on the termination hearing itself. In doing
so, the district court concluded that TSC was not entitled to
governmental immunity on the breach of contract claims.
A jury then found that TSC breached Tercero’s
employment contract and deprived her of procedural due
process. It awarded her $674,878.66 in damages on her breach
of contract claims and $12,500,000 in damages on her due
process claim for “[d]iminished earning capacity, lost career
and business opportunities, loss of reputation, humiliation,
embarrassment, inconvenience, and mental and emotional
anguish and distress.” After trial, the district court awarded
Tercero $117,685.67 in attorneys’ fees from TSC in connection
with these claims.
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Post-judgment, TSC filed (1) a motion to dismiss
Tercero’s breach of contract claims—arguing that TSC is
entitled to governmental immunity on the claims—and,
alternatively, a renewed motion for judgment as a matter of law
on the breach of contract claims; (2) a renewed motion for
judgment as a matter of law on Tercero’s procedural due
process claim and the damages awarded on the claim; and (3) a
motion for a new trial or remittitur on the damages awarded on
the due process claim.
The district court dismissed Tercero’s breach of
contract claims for lack of jurisdiction, concluding that TSC
was entitled to Eleventh Amendment immunity on these
claims. It also granted the renewed motion for judgment as a
matter of law on the due process damages award only, holding
that Tercero was entitled to nominal damages because,
although sufficient evidence supported the jury’s finding of a
due process violation, there was an absence of sufficient
evidence showing that Tercero’s injuries were caused by the
due process deprivation. Finally, the court conditionally
granted a new trial or remittitur and vacated its prior award of
attorneys’ fees. Tercero timely appealed contesting the district
court’s post-judgment rulings.
Tercero v. Tex. Southmost Coll. Dist., 989 F.3d 291, 295–96 (5th Cir. 2021).
In our first opinion, we held that TSC, a junior college district under
Texas law, did not have immunity from suit in federal court. Id. at 297–98.
We, consequently, reversed the district court’s dismissal of Tercero’s breach
of employment contract claim and reinstated the jury’s verdict. Id. at 299.
We further remanded the case to the district court so it could consider TSC’s
insufficiency of the evidence arguments raised in its renewed motion for
judgment as a matter of law and handle the matter of attorneys’ fees. Id. at
299–301.
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On remand, the district court requested and received supplemental
briefing. It found that TSC failed to proffer conclusive evidence warranting a
judgment notwithstanding the verdict pursuant to Federal Rules of Civil
Procedure 50. Judge Rodriguez summed up TSC’s arguments, stating:
In essence, [TSC] selectively quotes Tercero’s testimony and
then urges the [c]ourt to adopt one possible interpretation that
does not support the jury’s decision. Such an approach is
diametrically opposed to the standard that actually governs.
And [TSC] repeats this error with each ground that the jury
considered when determining if [TSC] had good cause to
terminate Tercero under the Employment Agreement.
The district court denied TSC’s motion for judgment as a matter of law and
entered a final judgment on the verdict, including attorneys’ fees, in
Tercero’s favor. Later, the district court amended its judgment to include
pre-judgment interest. TSC timely filed a notice of appeal.
II
TSC challenges the factual basis for the jury’s verdict on Tercero’s
breach of contract claim and the legal basis for her due process cause of
action. We reject both challenges.
We review a district court’s denial of a motion for judgment as a
matter of law de novo, applying the same standards as the district court. See,
e.g., Ill. Cent. R.R. Co. v. Guy, 682 F.3d 381, 392–93 (5th Cir. 2012). Judgment
as a matter of law is appropriate only when “a reasonable jury would not have
a legally sufficient evidentiary basis to find for the party on that issue.”
Abraham v. Alpha Chi Omega, 708 F.3d 614, 620 (5th Cir. 2013) (quoting
Fed. R. Civ. P. 50(a)). “This will only occur if the facts and inferences
point so strongly and overwhelmingly in the movant’s favor that jurors could
not reasonably have reached a contrary verdict.” Id. (quoting Brown v.
Sudduth, 675 F.3d 472, 477 (5th Cir. 2012)). “In evaluating such a motion,
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the court must consider all of the evidence in the light most favorable to the
nonmovant, drawing all factual inferences in favor of the non-moving party,
and leaving credibility determinations, the weighing of evidence, and the
drawing of legitimate inferences from the facts to the jury.” Price v. Marathon
Cheese Corp., 119 F.3d 330, 333 (5th Cir. 1997). “After a jury trial, [the]
standard of review is especially deferential.” Abraham, 708 F.3d at 620
(citation omitted, alteration in original). Also, we “must disregard all
evidence favorable to the moving party that the jury is not required to
believe.” Taylor-Travis v. Jackson State Univ., 984 F.3d 1107, 1112 (5th Cir.
2021) (citation and quotation marks omitted).
A
TSC argues that it had “good cause” to terminate Tercero’s
employment contract. First, it contends that “Dr. Tercero did not timely
keep [TSC’s] Board informed of the status of the . . . nursing program.”
Second, TSC argues “that Dr. Tercero did not lawfully procure the
College’s [windstorm insurance] policy.” We find the jury’s decisions on
both contentions adequately supported by the record.
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The district court instructed the jury regarding “good cause”:
. . . the only grounds for good cause that you may
consider are:
Refusal to carry out reasonable directives of the employee’s
supervisor;
Deliberate or reckless action that causes either actual or
potential loss, damage, or physical injury to the District, its
employees, students, or students’ property; or
Misrepresentation, including falsification of reports or records.
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You are further instructed that you may only consider the
factual allegations specified in grounds one through nine of the
August 3, 2016 Notice letter.
You are further instructed that a person is reckless when she
acts or fails to act in the face of an unjustifiably high risk of harm
that is either known or so obvious that it should be known.
TSC does not challenge these instructions. Instead, it argues Tercero
admitted at trial to the conduct TSC’s Board cited as “good cause” when it
terminated her. Specifically, it cites her failure to inform the board about the
impending suspension of TSC’s nursing program by the Texas State Nursing
Association. Because TSC does not allege misrepresentation or that Tercero
refused to carry out a reasonable directive from her supervisor, the college
must demonstrate conclusively that TSC suffered an actual or potential loss
due to Tercero’s deliberate or reckless conduct.
However, contrary to TSC’s position, the jury was entitled to accept
Tercero’s explanation that she kept the Board up to date and that the nursing
program’s status was an evolving situation. Tercero testified extensively
about this issue and her actions to address it. In 2013, the University of
Texas-Brownsville transferred several technical programs, including its
nursing school, to TSC. Consequently, TSC’s student performance numbers
reflected the influence of students never trained by its nursing school.
Tercero further justified her actions by informing the jury that the first TSC
students took their nursing exams in the fall of 2014, and that she was
negotiating with the Texas Nursing Association to modify TSC’s statistics.
Most dispositive regarding TSC’s argument on appeal, Tercero testified that
she gave the board regular updates starting in 2012 and continuing through
2016. She even organized a special, half-day board meeting about the ongoing
struggles of TSC’s nursing school.
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The Texas State Nursing Association ultimately suspended TSC’s
nursing program in April 2016, and Tercero informed the Board of the
program’s suspension in June of that year. The jury had ample evidence to
conclude that Tercero kept the Board informed of the nursing program’s
status throughout its suspension process and that, regardless, her actions
were not deliberate nor reckless and did not lead to a potential or an actual
loss. The district court was, therefore, correct to deny the motion for
judgment as a matter of law to the extent TSC premised it on Tercero’s
communication with the Board regarding the nursing school’s suspension.
2
TSC’s second argument that it had “good cause” to terminate
Tercero involves her purchase of the school’s windstorm insurance policy in
the spring of 2016. It contends that Tercero acted deliberately or recklessly
in renewing the school’s wind insurance policy without going through the
appropriate bidding process, violating TSC’s policies and, potentially, state
law. However, the jury had sufficient evidence to justify its decision that
Tercero’s actions were not deliberate or reckless acts that caused potential
or actual harm.
The record shows that in January 2016, the staff member responsible
for TSC’s wind insurance program left his position. Tercero testified that
she did not learn about the potential lapse of TSC’s wind insurance until
March 23, 2016—a little more than a week before the insurance would lapse
on April 1. She informed the jury that there was no time to conduct the formal
bidding process for a new policy and that she decided to renew the expiring
policy because hurricane season was fast approaching. Indeed, one TSC
board member said of Tercero’s conduct: “I commended her for being bold
enough to—to continue the coverage. . . . What—what’s important is, you
know, that we not go into the hurricane season without coverage.”
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Looking at this evidence, the jury reasonably concluded that Tercero
did not act recklessly or deliberately, nor did she cause TSC harm or potential
harm. Although issues regarding the wind insurance program eventually
embroiled TSC in a lawsuit, the jury reasonably concluded she chose the
correct, or at least a sensible, option from a set of bad outcomes.
Consequently, we reject TSC’s challenge to the jury verdict regarding
Tercero’s conduct in procuring the school’s wind insurance. Furthermore,
because both of TSC’s arguments fail to demonstrate conclusively that the
jury erred in finding the college liable for breach of contract, we affirm the
district court’s order denying the motion for judgment as a matter of law
regarding Tercero’s breach of contract claim.
B
TSC challenges the legal basis for the jury’s verdict finding it violated
Tercero’s due process rights. Specifically, TSC argues that Tercero’s
contract did not incorporate its standard personnel procedures and,
therefore, it cannot be held liable for not applying those procedures. The
district court found that the Board, in its notification letter, believed it was
subject to the college’s personnel procedures when terminating Tercero.
Judge Rodriguez also noted that if the Board desired to follow only specific
provisions of its employment procedures regarding the school’s president, it
should have made that clear in the contract. The college challenges this
finding, arguing that the agreement’s language does not provide her the right
to any of TSC’s termination procedures, and Tercero’s due process claim
necessarily fails as a matter of law.
As the Texas Supreme Court has directed regarding contractual
interpretation:
In construing [an] agreement, we first determine whether it is
possible to enforce the contract as written, without resort to
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parol evidence. Deciding whether a contract is ambiguous is a
question of law for the court. Coker v. Coker, 650 S.W.2d 391,
394 (Tex. 1983). In construing a written contract, the primary
concern of the court is to ascertain the true intentions of the
parties as expressed in the instrument. R & P Enters. v.
LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.
1980); City of Pinehurst v. Spooner Addition Water Co., 432
S.W.2d 515, 518 (Tex. 1968). To achieve this objective, we
must examine and consider the entire writing in an effort to
harmonize and give effect to all the provisions of the contract
so that none will be rendered meaningless. Universal C.I.T.
Credit Corp. v. Daniel, 243 S.W.2d 154, 158 (Tex. 1951). No
single provision taken alone will be given controlling effect;
rather, all the provisions must be considered with reference to
the whole instrument. Myers v. Gulf Coast Minerals Mgmt.
Corp., 361 S.W.2d 193, 196 (Tex. 1962); Citizens Nat’l Bank v.
Tex. & P. Ry. Co., 150 S.W.2d 1003, 1006 (Tex. 1941). A
contract is unambiguous if it can be given a definite or certain
legal meaning. Columbia Gas Transmission Corp. v. New Ulm
Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996).
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (cleaned
up).
Tercero’s contract states, in the relevant part, “TSC hereby employs
Dr. Tercero . . . to perform the functions and duties specified in the TSC
enabling statute and in accordance with TSC’s personnel procedures . . . .
Dr. Tercero is bound by the rules and procedures enacted by the Board . . . .”
TSC would like us to read this language as applying only to Tercero’s actions
and hold that these provisions do not bind the college. However, we hold the
language is unambiguous—TSC hired Tercero subject to its personnel
procedures. The Board believed this to be the case, citing the school’s
personnel procedures when it issued its “Notice of Proposed Action of
Dismissal” letter. We, therefore, hold that, as a matter of law, the district
court did not err by presenting Tercero’s due process claims to the jury.
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C
TSC’s final challenges relate to the district court granting attorneys’
fees and interest. Its arguments are predicated on our deciding the college’s
substantial challenges to the district court order in its favor. Because we
decline to do so, we uphold the district court’s grant of attorneys’ fees and
interest.
* * *
AFFIRMED
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