Houston Municipal Employees Pension System v. Craig E. Ferrell, Jr. ( 2005 )

Opinion issued May 20, 2005  

In The  

Court of Appeals  

For The  

First District of Texas  

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  NO. 01-03-00925-CV

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HOUSTON MUNICIPAL EMPLOYEES PENSION SYSTEM,

Appellant  

V.

CRAIG E. FERRELL JR., AL PENA, B.L. CHEBRET, BRAD PIEL,

BUBBA CALDWELL, C. NEWMAN, COLE LESTER,

G.L. BLANKENSHIP, GARY GRYDER, GEORGE SHAW,

HAROLD BARTHE, J.J. BERRY, J.M. DEMARTIN, JEFF LARSON,

JOE PYLAND, JOHN MILLER, JOHN WALSH, JOHN YENCHA,

M. DONATO, M.R. CLARK, MATT CALLEY, PATRICIA MURRAY,

R.D. MOSLEY, R.L. MARTIN, ROBERT SONDOVAL,

RODNEY JOHNSON, SHAWN PALIN, T.J. CARR, TOM HAYES,

AND WARREN GIVENS, Appellees

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On Appeal from County Civil Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 789,357  

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CONCURRING OPINION  

          I join the Court’s judgment, and I also join much of its opinion. However, I write separately to express my disagreement with some of the majority’s reasoning.

          In holding that HMEPS does not have exclusive jurisdiction over the subject-matter of the plaintiffs’ declaratory-judgment suit, the majority distinguishes Williams v. Houston Firemen’s Relief & Retirement Fund, 121 S.W.3d 415 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (“Williams III”). I believe that we cannot distinguish Williams III on the basis on which the majority does. I would, therefore, expressly overrule Williams III to the extent that it holds that the retirement statute at issue in that case—which is similar in material respects to the one at issue in this case—conferred exclusive jurisdiction on the pension board to interpret the retirement statute.

What Williams III Did

          In Williams III, Williams sought to purchase prior service credit (“PSC”) for the Houston statutory firefighters’ retirement fund for the time that he had served with the fire departments of two other cities that did not have statutory retirement funds like Houston’s. Id. at 422. While Williams’s claim was pending, the Houston Firemen’s Relief and Retirement Fund (“the Fund”) interpreted the retirement statute’s PSC provision, and adopted corresponding guidelines, to deny PSC to firefighters who had previously worked for cities that did not have pension funds like Houston’s. Id. at 422. The Fund’s sole basis for adopting the guidelines was its interpretation of the retirement statute’s PSC provision. Id. at 442 n.2 (Taft, J., dissenting). Based solely on its guidelines and on the undisputed fact that Williams had not previously worked for qualifying cities, the Fund denied Williams’s PSC request. Id. at 422.

          Williams sued the Fund and others, asserting three categories of claims against the Fund: (1) challenges to the merits of the guidelines and the Fund’s PSC determination, which generally involved questions of statutory interpretation applied to undisputed facts; (2) constitutional claims; and (3) common-law claims. Id. at 424. Although Williams sought damages, he also sought a declaration that the retirement statute allowed him to obtain PSC and that the guidelines were thus erroneous; that is, he sought a declaration of the statute’s meaning. See id. The Fund sought summary judgment on both jurisdictional and substantive grounds. See id. at 427-33. The trial court granted the Fund’s summary judgment and rendered a take-nothing judgment against Williams on all of his claims against the Fund. Id. at 424-25.

          We first considered over which of Williams’s causes of action the trial court had jurisdiction. Id. at 426-29. The retirement statute in Williams III made the Fund’s PSC determination final, without requiring the exhaustion of further administrative remedies, but then provided for judicial review of those determinations only when aggrieved firefighters were disabled or eligible for retirement. Id. at 427-28; see Act of May 27, 1975, 64th Leg., R.S., ch. 432, § 17, 1975 Tex. Gen. Laws 1135, 1145, repealed by Act of May 21, 1997, 75th Leg., R.S., ch. 1268, § 3, 1997 Tex. Gen. Laws 4794, 4811 (current version at Tex. Rev. Civ. Stat. Ann. art. 6243e.2(1), §§ 2(j), 12(a) (Vernon 2003)). It was undisputed that, at the time of his filing suit, Williams was neither disabled nor eligible to retire. See Williams III, 121 S.W.3d at 425. Among its other holdings, the Williams III majority held that the courts had no jurisdiction to review Williams’s challenges to the merits of the guidelines and the Fund’s PSC determination, necessarily including his declaratory-judgment cause of action seeking statutory interpretation under undisputed facts. See id. at 426-29, 433-35. The majority reasoned that the retirement statute (which is strikingly similar in material respects to the retirement statute here) granted the Fund exclusive jurisdiction over “Williams’s claims”—necessarily meaning, with respect to Williams’s claims based solely on statutory interpretation, exclusive jurisdiction to interpret the retirement statute. See id. at 427. The majority based this exclusive-jurisdiction holding on the “pervasive regulatory scheme” that the retirement statute allegedly established. Id.

          Although I agreed that the trial court lacked subject-matter jurisdiction over Williams’s various claims for damages, I dissented to the disposition concerning his causes of action based on pure statutory interpretation because I concluded that (1) the retirement statute did not grant exclusive jurisdiction to the Fund over matters of statutory interpretation; (2) the district court had inherent jurisdiction over Williams’s challenges based on statutory interpretation because they involved pure questions of law applied to undisputed facts, even though Williams did not yet meet the statutory requirements for judicial review; and (3) the trial court thus had subject-matter jurisdiction to interpret the statute at that time, i.e., to consider Williams’s declaratory-judgment cause of action. Id. at 440-49 (Taft, J., dissenting). I further explained:

Persons aggrieved by an administrative agency’s action have no absolute right to challenge that action in court: the right of judicial review of an agency determination exists only when  

1.a statute allows judicial review,

2.the agency’s action adversely affects a vested property right,

3.the agency’s action violates certain constitutional rights,

4.the action exceeds the agency’s jurisdiction, or

5.the agency action involves a pure question of law, such as the interpretation of a statute, when the agency does not have exclusive jurisdiction to determine that question of law.

Id. at 441 (Taft, J., dissenting) (citations omitted; emphasis added). I also responded as follows to a principal argument that the majority asserted against my conclusion:

Because the majority believes that the Fund has exclusive jurisdiction over legal questions, it concludes that my position would eviscerate agencies’ exclusive jurisdiction. That view misunderstands my position, which is simply that, in the absence of statutory authority to do so, courts may still consider pure questions of law that are raised by an agency’s action when the agency itself does not have exclusive jurisdiction over the particular question of law. If I read the retirement statute to grant the Fund exclusive jurisdiction over pure legal questions, I would not apply the pure-question-of-law exception here. I do not so read the statute, however.  

Id. at 447 (Taft, J., dissenting) (citations omitted; italicized emphasis in original; bolded emphasis added).

Why Williams III Cannot Be Distinguished

          HMEPS relies on Williams III to argue that the retirement statute here grants it exclusive jurisdiction over the subject-matter of the plaintiffs’ declaratory suit because we held that the similar retirement statute in Williams III granted the Fund exclusive jurisdiction over like matters. In today’s opinion, the majority distinguishes Williams III because

          [Williams] asserted numerous constitutional and common law “claims” against the Fund and sought “compensatory and punitive damages, declaratory relief, pre- and post-judgment interest, attorney’s fees and costs.” Treating his entire suit as an appeal from the Fund’s benefit decision, this court addressed all of Williams’s “claims,” including his request for declaratory relief regarding the Fund’s construction of the pertinent retirement statute, together in the context of the statutory scheme for the determination of benefits, and we held that the Fund “had exclusive jurisdiction over Williams’s claims.” This decision was based on the specific language of two pertinent statutory provisions that expressly addressed “rights of appeal” and judicial review of the Fund’s benefit decision. We noted that “[b]oth Williams’s cause of action and remedy for its enforcement [were] derived from statute, [and that] the statutory provisions for review [were] mandatory and exclusive.”

  Williams requested a review, based on his interpretation of a “former” retirement statute, of the Fund’s method of calculating his future retirement benefits, and he sought an award of the credit, under his interpretation of the superseded statute. We pointed out that Williams was not eligible for retirement and that he could not use the courts to require the Fund to calculate his future unvested pension benefits under already superseded law. The retirement statute at issue expressly limited judicial review of the board’s decision accepting or rejecting a claim for benefits to members “eligible for retirement.” Accordingly, we agreed with the Fund that the statute, “on its face [did] not allow judicial review of the Fund’s credit determination until Williams [met its] requirements.”

  Williams III should not be read as holding that all declaratory judgment actions against administrative entities to determine the proper construction of pertinent statutes or to obtain a declaration of rights, status and legal relations under pertinent statutes are precluded under the exclusive jurisdiction doctrine. Here, the plaintiffs seek an interpretation of a current statute and a determination of their rights under that statute in accordance with the courts’ inherent power to construe statutes. We are dealing solely with a declaratory judgment action, not multiple claims that are, in effect, an improper appeal of an administrative decision. The DJA action before us is, in fact, an action for a declaration of the plaintiffs’ rights, status and legal relationship with HMEPS, not a request for judicial review of an administrative benefits determination that is unappealable under the express language of the statute.   

(Citations and footnote omitted.)

          I perceive three bases for the majority’s distinguishing Williams III, with none of which I agree.

          First, the majority appears to distinguish Williams III because Williams asserted damages claims along with his declaratory-judgment request to interpret the statute and to declare his rights under it. I disagree that Williams III may be distinguished on this basis. Williams’s having asserted damages claims along with his declaratory-judgment cause of action had no impact on the majority’s holding concerning Williams’s declaratory cause of action, which was based on statutory interpretation and a pure question of law. See id. at 433-34 (rejecting dissenting opinion’s contention that trial court had inherent jurisdiction, in absence of statutory basis for judicial review, to consider pure questions of law because of pension board’s exclusive jurisdiction over these matters); id. at 441-49 (Taft, J., dissenting) (explaining why court had jurisdiction to consider declaratory-judgment cause of action based on pure questions of law when agency did not have exclusive jurisdiction). Neither did Williams III involve a situation like that in Thayer v. Houston Municipal Employees Pension System, cited by the majority in this case, in which our Court held that Thayer could not “circumvent a governmental entity’s immunity from suit by characterizing a suit for money damages as a declaratory judgment claim.” 95 S.W.3d 573, 578 (Tex. App.—Houston [1st Dist.] 2002, no pet.). The majority in Williams III in no way indicated or based its holding on a conclusion that Williams had impermissibly recharacterized his damages claims as declaratory-judgment allegations.

          Second, the majority distinguishes Williams III because “[h]ere, the plaintiffs seek an interpretation of a current statute and a determination of their rights under that statute in accordance with the courts’ inherent power to construe statutes” and because “[h]ere, we are dealing solely with a declaratory judgment action, not multiple claims that are, in effect, an improper appeal of an administrative decision. The DJA action before us is, in fact, an action for a declaration of the plaintiffs’ rights, status and legal relationship with HMEPS, not a request for judicial review of an administrative benefits determination that is unappealable under the express language of the statute.” I disagree that Williams III may be distinguished on this basis, either. At the core of his declaratory-judgment cause of action, Williams sought a declaration that the retirement statute meant what he claimed that it did; that the Fund’s decision, which was based solely on the Fund’s erroneous statutory interpretation applied to undisputed facts, was thus erroneous; and that he was entitled to prior service credit under the statute. That is, with respect to his declaratory-judgment cause of action, Williams in essence alleged that the Fund had misconstrued the retirement statute. And, recognizing in my dissenting opinion in Williams III that “[c]ourts have jurisdiction to perform the inherently judicial function of determining pure questions of law, such as interpreting a statute,” I further recognized that Williams’s declaratory-judgment cause of action invoked that inherent jurisdiction, just as the plaintiffs’ pleadings do here. Id. at 443, 447 (Taft, J., dissenting).

          This is what the plaintiffs seek in this suit:

PRELIMINARY STATEMENT

Plaintiffs . . . join in filing this action seeking declaratory relief that establishes his [sic] entitlement to Pension Benefits in the HMEPS retirement system for all his [sic] years of service while working for the City of Houston (COH). Defendants wrongfully contend that they are not entitled to benefits during the period they were employed as police cadets which [sic] the City of Houston classified them as civilian employees. Plaintiff [sic] respectfully requests the court to grant the declaratory relief requested and injunctive relief under law and equity.

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A.Declaratory Judgment

. . .

11.A controversy has arisen concerning the credited years of service Plaintiffs should have in HMEPS retirement system. Accordingly Plaintiffs respectfully request that this Court grant declaratory relief declaring Plaintiffs [sic] correct length of service.

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PRAYER FOR RELIEF

Plaintiffs respectfully request that this Court, upon trial, enter judgment in favor of Plaintiffs against Defendants and grant the following relief:

1.Declaratory Judgment and injunctive relief; . . . .

The plaintiffs also alleged that the retirement statute’s and its statutory predecessor’s plain language supported their interpretation.

          I see no material difference between the declaration that Williams sought (at least to the extent that he sought a declaration based on matters of statutory interpretation, rather than based on estoppel or other grounds) and the declaration that the plaintiffs seek here. Additionally, the plaintiffs and Williams both sued the governmental unit that had denied them prior service credit, and each sought a declaration that would affect the governmental unit’s ruling. If Williams’s statutory-interpretation declaratory-judgment cause of action is not materially like the declaratory-judgment action here, then I do not know what would be.

          Third, the fact that the retirement statute that Williams sought to have interpreted had been superseded was not the basis of the majority’s holding in Williams III that the retirement statute granted exclusive jurisdiction to the Fund over matters of statutory interpretation. Moreover, as I explained in my dissenting opinion in Williams III, because the Fund had moved for summary judgment under the former retirement statute (and argued on appeal that that statutory version applied), the rules of summary judgment required that we apply the former statutory version in that case. See id. at 448 (Taft, J., dissenting).

Why Williams III Should Be Overruled

          Given my conclusion that Williams III cannot be distinguished on the basis cited by the majority, I would address the effect of Williams III on this appeal. I do not believe that the holding in Williams III can be reconciled with our holding in this case—which I join fully—that the retirement statute here does not confer exclusive jurisdiction on HMEPS over the subject matter of the plaintiffs’ declaratory-judgment action. Neither the statute at issue in this appeal nor the one considered in Williams III expressly states that the governmental unit has exclusive jurisdiction over matters of statutory interpretation. Likewise, for purposes of determining whether either statute confers exclusive jurisdiction by establishing a pervasive regulatory scheme, the retirement statute here is indistinguishable in material respects from that considered in Williams III. And the appellants in both suits asserted a declaratory-judgment action to determine the same matters: the interpretation of a retirement statute, what appears to have been a pure question of law in each case. See Williams III, 121 S.W.3d at 424. Simply put, if the retirement statute here does not confer exclusive jurisdiction on HMEPS to construe that statute, then neither did the statute in Williams III confer exclusive jurisdiction on the Fund to do so. Because the exclusive-jurisdiction holding in Williams III cannot be reconciled with our exclusive-jurisdiction holding in this case, and because I disagree with that holding in Williams III, I would overrule Williams III in that respect.

Conclusion  

          For these reasons, and for the reasons set out in my dissenting opinion in Williams III, I would overrule Williams III to the extent that it held that the retirement statute at issue in that case gave the relevant pension board exclusive jurisdiction over statutory interpretation.

          With these explanations, I join the judgment and join the majority opinion in all matters except for those addressed herein, to which extent I respectfully concur.

                                                                        Tim Taft

                                                                        Justice

Panel consists of Justices Taft, Jennings, and Hanks.

Justice Taft, concurring.