Ernesto A. Galvan v. Texas Low Cost Insurance Agency, Inc. ( 2002 )

                                   NUMBER 13-00-593-CV

                             COURT OF APPEALS

                   THIRTEENTH DISTRICT OF TEXAS

                                CORPUS CHRISTI

ERNESTO A. GALVAN,                                                          Appellant,

                                                   v.

TEXAS LOW COST INSURANCE AGENCY, INC.,                       Appellee.

                        On appeal from the 138th District Court

                                 of Cameron County, Texas.

                                   O P I N I O N

         Before Chief Justice Valdez and Justices Hinojosa and Castillo

                                  Opinion by Justice Castillo         

Ernesto Galvan appeals the order granting his former employer=s motion for summary judgment in a national origin discrimination lawsuit. By one issue, Galvan challenges the summary judgment, claiming that he provided more than a scintilla of probative evidence to raise a genuine issue of material fact as to the essential elements of his employment discrimination claim.  We reverse and remand.

Background

Galvan filed a discrimination lawsuit against Texas Low Cost Insurance Agency, Inc., asserting his employer unlawfully discriminated against him because of his national origin in violation of the Texas Commission on Human Rights Act (ATCHRA@).^[1]   The agency filed a motion for summary judgment against Galvan=s claims which the trial court granted.  In the same motion, the agency sought a summary judgment for its attorney=s fees, which was denied.  The summary as follows reflects unobjected-to evidence, which was contained in Galvan=s timely filed response before the trial court prior to the entry of the summary judgment.^[2]

In his verified charge of discrimination as filed with the TCHR, Galvan states that, in August 1997, prior to his employment termination, he was not considered for or given the opportunity to apply for the position of managing vice president and was demoted from his position as vice president after five years with the company. ^[3]  He states that the company president, not a member of the complained-of class, told him the reason for his demotion was that his position was being eliminated; however, he was not given a reason for not being promoted.   Galvan further states that he believes he was better qualified than the person selected for the position of managing vice president, also not a member of the complained-of class, who had no experience in property and casualty insurance. In his TCHR complaint, Galvan also states that in September 1997 the company president subjected him to comments such as AMexicans were lazy, fat,@ Adrive slow,@ and were Aalways taking siestas.@  Galvan alleged in his original petition that: (1) he was told his position was going to be eliminated although it still exists; (2) the managing vice president position was not but should have been announced; (3) he was not allowed to submit his information for promotion to managing vice president; and (4) he was demoted from his position as vice president with a pay reduction.  Galvan also alleged that the agency=s actions Ain constructively harassing@ him constituted discrimination. 

The employer filed a motion entitled Amotion for no-evidence summary judgment,A asserting generally that Galvan could not prove his cause of action since he, in particular, could not demonstrate there was any evidence to support his claim that, because of his national origin, he was subjected to any of the adverse employment actions proscribed by section 21.051 of the TCHRA after adequate time for discovery.^[4]  Together with its motion, the employer filed an attorney affidavit regarding its request for attorney=s fees.  Without specifying a reason, the trial court granted the motion and denied all relief not granted in the judgment, thereby disposing of the attorney=s fees request and making the judgment final and appealable. This appeal ensued.  

Standard of Review

The function of summary judgment is not to deprive litigants of the right to a trial by jury, but to eliminate patently unmeritorious claims and defenses.  City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex. 1979); Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972). On appeal, the proper standard of review for the grant of a motion for summary judgment is determined by whether the motion was granted on traditional or Ano-evidence@ grounds.  The determination of the nature of the motion for summary judgment is critical as the difference in relative burdens between the parties in the two types of summary judgments is significant. See Michael v. Dyke, 41 S.W.3d 746, 750-52 (Tex. App.BCorpus Christi 2001, no pet.)

In a traditional motion for summary judgment, the movant has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c); Swilley, 488 S.W.2d at 67.  In deciding whether there is a genuine issue of material fact, evidence favorable to the nonmovant will be taken as true, and all reasonable inferences made, and all doubts resolved, in his favor.  American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997).  Summary judgment is proper if the movant disproves at least one element of each of the plaintiff=s claims or affirmatively establishes each element of an affirmative defense to each claim.  Id.  The nonmovant has no burden to respond to a traditional summary judgment motion unless the movant conclusively establishes its cause of action or defense.  Swilley, 488 S.W.2d at 68.

By contrast, a no-evidence summary judgment is equivalent to a pretrial directed verdict and this Court applies the same legal sufficiency standard on review. Zapata v. Children's Clinic, 997 S.W.2d 745, 747 (Tex. App.BCorpus Christi 1999, pet. denied).  In an appeal of a no-evidence summary judgment, this Court reviews the evidence in the light most favorable to the non-movant, disregarding all contrary evidence and inferences.  Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997); Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995).  If the non-movant produces evidence to raise a genuine issue of material fact, summary judgment is improper.  Tex. R. Civ. P. 166a(i).  All that is required of the non-movant is to produce a scintilla of probative evidence to raise a genuine issue of material fact.  Zapata, 997 S.W.2d at 747. ALess than a scintilla of evidence exists when the evidence is >so weak as to do no more than create a mere surmise or suspicion of a fact.=@  Id.(citing Moore v. KMart Corp., 981 S.W.2d 266, 269 (Tex. App.BSan Antonio 1998, pet. denied)(quoting Kindred v. Con/Chem Inc., 650 S.W.2d 61, 63 (Tex. 1983)). Conversely, more than a scintilla exists when the evidence Arises to a level that would enable reasonable and fair-minded people to differ in their conclusions.@  Transportation Ins. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994).  The burden of producing evidence is entirely on the non-movant; the movant has no burden to attach any evidence to his motion.  Tex. R. Civ. P. 166a(i).

The mere labeling of a motion for summary judgment as a no-evidence summary judgment motion, however, is not determinative of its nature.  A party moving for summary judgment under rule of civil procedure 166(a)(i) must fulfill certain specific procedural requirements and is subject to certain restrictions.  Tex. R. Civ. P. 166(a)(i); Oasis Oil Corp. v. Koch Ref. Co. L.P., 60 S.W.3d. 248, 252 (Tex. App.BCorpus Christi 2001, no pet.).^[5]  Among these are that the motion must state the elements of the claim as to which there is no evidence; it must be specific in challenging the evidentiary support for a particular element of the claim; it may only be brought against claims upon which the nonmovant would have the burden of proof at trial; and it may not be conclusory or a general no-evidence challenge.  Tex. R. Civ. P. 166a(i) and cmt; Oasis Oil, 60 S.W.3d at 252.

Review of the motion for summary judgment filed in the present case reveals that, despite its title, within the same motion, appellee sought summary judgment on a claim for attorney=s fees, attached summary judgment evidence as to the attorney=s

fees, and utilized language appropriate to a traditional summary judgment by alleging entitlement to attorney=s fees as a matter of law.^[6]  The conclusion simply asserted that the appellee was entitled to summary judgment Afor the reasons asserted in this motion@ and asked the court to grant the summary judgment, without segregating the relief requested.

This Court has recently held that where it is not readily apparent that the  summary judgment motion is sought under 166a(i), the reviewing court will presume that the motion is filed under 166a and analyze it under the traditional summary judgment standard of review.  Hamlett v. Holcomb, No. 13-00-685-CV, 2002 Tex. App. LEXIS 1409, *4B*6 (Tex. App.BCorpus Christi, February 21, 2002, no pet. h.).  We note that there was apparently some confusion as to the legal basis for the summary judgment on the appellee=s part, as reflected in its response to appellant=s motion for new trial.  In that response, appellee argued that the court should deny the motion for new trial Abecause as a matter of law, there [was] no fact issue in the case and defendant was entitled to summary judgment,@ thus asserting the grounds for a traditional summary judgment motion while also claiming that appellant had Aprovided no evidence@ to support his claim.^[7]   It appears that appellee attempted to file a Ano-evidence@ summary judgment as to the appellant=s claims and a traditional summary judgment as to its own claims for attorney=s fees.  Out of an abundance of caution, however, we will consider the trial court=s decision against appellant=s claims under both a traditional and a no-evidence analysis. However, as we find, infra, that appellant had, at the time of the summary judgment, no burden under law to produce any evidence as to the sole issue being challenged and appellee did have a burden and failed to produce the required evidence, appellee=s motion for summary judgment fails under both the traditional and no-evidence standard of review.

Discussion

Galvan brought his lawsuit under a provision of TCHRA, the state employment discrimination statute. Tex. Lab. Code Ann. '21.051 (Vernon 1996).  The legislature modeled the TCHRA after federal law for the express purpose of carrying out the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments. Tex. Lab. Code Ann. '21.001 (Vernon 1996); Ewald v. Wornick Family Foods Corp., 878 S.W.2d 653, 658 (Tex. App.BCorpus Christi 1994, writ denied)(citing to predecessor statute).  When reviewing an issue under the TCHRA, we may look to cases involving both the state statute and cases interpreting analogous federal provisions.  Caballero v. Cent. Power & Light Co., 858 S.W.2d 359, 361 (Tex. 1993); Benavides v. Moore, 848 S.W.2d 190, 193 (Tex. App.BCorpus Christi 1992, writ denied).  Federal legislation prohibits adverse employment actions for reasons of race, color, religion, sex, or national origin.  Civil Rights Act, Title VII, 42 U.S.C. ' 2000e-2(a) (1964).  Similarly, the TCHRA provides:

An employer commits an unlawful employment practice if because of race, color, disability, religion, sex, national origin, or age the employer:

(1)           fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with compensation or the terms, conditions, or privileges of employment; or

(2)           limits, segregates, or classifies an employee or applicant for employment in a manner that would deprive or tend to deprive an individual of any employment opportunity or adversely affect in any other manner the status of an employee.

Tex. Lab. Code Ann. '21.051 (Vernon 1996).                       

Burden Shifting Under McDonnell Douglas

In Apretext@ employment discrimination cases^[8] not fully tried on the merits, Texas courts apply a burden shifting analysis established by the United States Supreme Court. Texas Dep=t of Cmty. Affairs v. Burdine, 450 U.S. 248, 252-53 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973);  Texas Dep=t of Human Servs. v. Hinds, 904 S.W.2d 629, 636 (Tex. 1995).  First, the complainant must prove, by a preponderance of the evidence, a prima facie case of employment discrimination.  McDonnell Douglas, 411 U.S. at 802.  The precise elements of this showing will vary according to the allegations, Id. at 802 n.13, but the burden is Anot onerous.@  Burdine, 450 U.S. at 253.  Once this showing has been made, the burden shifts to the defendant employer to proffer Asome legitimate, nondiscriminatory reason@ for the adverse employment action.  McDonnell Douglas, 411 U.S. at 802.   Finally, if the employer carries this burden, the complainant must then prove, by a preponderance of the evidence, that the proffered non-discriminatory reasons are not the true reasons, but a mere pretext for discrimination.  Id. at 804; see also Burdine, 450 U.S. at 252-53; Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 477 (Tex. 2001).

When an individual claims discrimination based upon an employer=s failure to promote him, the complainant is required to establish a prima facie case that:  (1) he is a member of the protected class, (2) he sought and was qualified for an available employment position, (3) despite his qualifications, he was not selected for the position, and (4) the employer selected someone not a member of the protected class or otherwise continued to seek applicants with the complainant=s qualifications.  Bernard v. Gulf Oil Corp., 890 F.2d 735, 745 (5th Cir. 1989); Elgaghil v. Tarrant County Junior College, 45 S.W.3d 133, 139 (Tex. App.BFort Worth 2000, pet. denied)(citing Bernard, 890 F.2d at 745).  To prove a prima facie case of discrimination as to a demotion, a complainant must prove (1) he was demoted; (2) he was qualified for the position he occupied; (3) he was in the protected class at the time of the demotion; and (4) he was replaced by a person outside the protected class. Crawford v. Formosa Plastics Corp., 234 F.3d 899, 902 (5th Cir. 2000).

Once the prima facie case is established, the burden of production shifts to the employer to produce evidence of some legitimate, non-discriminatory reason for the action.  St. Mary=s Honor Ctr. v. Hicks, 509 U.S. 502, 506-07, 511 (1993).  If the employer articulates a legitimate, non-discriminatory reason for the employment action, the burden of production shifts back to the complainant to prove that the employer=s articulated reason is a mere pretext for unlawful discrimination.  Id. Although the burden of production shifts, the complainant always bears the burden of persuasion.  Farrington v. Sysco Food Servs., Inc., 865 S.W.2d 247, 251 (Tex. App.BHouston [1st Dist.] 1993, writ denied). 

Analysis

Appellee=s motion for summary judgment argued that A[a]fter adequate time for discovery, plaintiff cannot provide evidence to support that because of his national origin he was subjected to any of the adverse employment actions proscribed by '21.051.@  This does not, in any way, attack any of the elements of a prima facie case of national origin discrimination as to either failure to promote or demotion.  Indeed, the prima facie elements are not even mentioned.  Appellee could have, in the same motion, challenged both the plaintiff=s proof as to the prima facie case and proof on the question of pretext.  See Bowen v. El Paso Elec. Co., 49 S.W.3d 902, 908 (Tex. App.BEl Paso 2001, no pet.).  However appellee=s sole attack on summary judgment was to appellant=s lack of evidence to prove that any adverse employment actions were taken because of his national origin.

Neither prima facie showing under either action filed by appellant requires proof that the adverse decision was taken because appellant was a member of the protected class.^[9]  Rather, a plaintiff fails to make his prima facie case if he fails to meet one of the required elements of a prima facie case, such as failing to prove that he was a member of a protected class or that he was qualified for the position he sought.^[10]  The establishment of a prima facie case is not dependant on proof of discriminatory intent, but rather, by virtue of proof of the prima facie elements, it essentially creates a presumption of unlawful discrimination which must then be rebutted by the employer.  St. Mary=s Honor Ctr, 509 U.S. at 506-07.  It is only after the employer has articulated legitimate non-discriminatory reasons for the presumptively discriminatory adverse action proven in the prima facie case that the plaintiff is required to provide proof that the action taken was because of discrimination against him as a member of the protected class rather than for the reasons proffered by the employer.  See id. at 507-508; Toennies, 47 S.W.3d at 477. Thus, an attack on the plaintiff=s proof of discriminatory intent by the employer is an attack on the plaintiff=s ability to meet this final burden of production rather than an attack on the plaintiff=s burden to establish his prima facie case.

The appellee=s motion for summary judgment, therefore, challenged only the lack of evidence at the pretext stage of the burden shifting analysis.^[11]  See St. Mary=s Honor Ctr., 509 U.S. at 507-08.   At such stage, the employee must produce evidence that the proffered reason is mere pretext for discrimination.  Id.   However, the burden of production does not shift to the employee unless and until the employer has proffered to the court a legitimate business reason for the adverse employment action. Id.

This Aburden of production@ is a real and tangible one. The employer must provide to the court not merely an explanation, but actual evidence regarding its alleged non-discriminatory reasons.  Id.  AThe defendant must clearly set forth, through the introduction of admissible evidence,@ reasons for the adverse employment decision which, if believed by the trier of fact, would support a finding that the employment decision was not made because of unlawful discrimination.  Id. at 507 (quoting Burdine, 450 U.S. at 254-55, and n. 8) (emphasis added). It is not enough that counsel argue the reason or respond in a pleading B there must be an actual production of evidence to the trial court.^[12]  Burdine, 450 U.S. at 255 n.9 (AAn articulation not admitted into evidence will not suffice. Thus, the defendant cannot meet its burden merely through an answer to the complaint or by argument of counsel.@)

In its motion for summary judgment, the employer challenged Galvan=s proof that the employment decision was made for discriminatory reasons.  On appeal, the employer contends that Galvan=s subjective beliefs are insufficient to prove mere pretext for discrimination.  But before any court can reach the subjective beliefs inquiry at the pretext stage of the burden shifting analysis, the employer is required to introduce into evidence, before the trial court, its stated non-discriminatory business reason for its adverse action against the employee.  Id.  This is so that the plaintiff may be accorded Aa fair opportunity to demonstrate that petitioner's assigned reason@ for the adverse action is a mere pretext for discrimination.  McDonnell Douglas, 411 U.S. at 807.

In order for the employer to prevail on an issue in which it has the burden of production, McDonnell Douglas requires that it proffer a non-discriminatory reason for the complained of adverse action.  Id.  Here, the employer did not adduce evidence of the reason for not promoting Galvan or for demoting him, an element of which it would have the burden of production at trial.^[13]  The trial court did not have before it the employer=s proffered non-discriminatory reason for its actions. The only evidence before the trial court was Galvan=s statement that he was not given a reason for not being promoted and that he was told he was being demoted because his position was being eliminated.  There is no evidence in the record from the employer as to its reasons for its actions, which may, or may not have corresponded with Galvan=s statements as to the employer=s reasons.   There is no means by which to measure whether Galvan=s evidence would have been sufficient to counter any explanation since no explanation was offered into evidence.   Since the employer never produced any evidence to the trial court presenting a legitimate, non-discriminatory reason for the complained of actions,  Galvan had no burden to prove that any particular reason was false, or, in other words, no burden, at that point in the proceedings, to produce any evidence that the adverse actions taken by the employer were done Abecause of his national origin.@  St. Mary=s Honor Ctr., 509 U.S. at 507-08; see also Burdine, 450 U.S. at 252-53.   Accordingly, we hold that the trial court erred in granting summary judgment under either traditional or Ano-evidence@ grounds.

Conclusion

We conclude that the summary judgment was improper. We reverse the judgment of the trial court and remand for further proceedings consistent with this opinion.

ERRLINDA CASTILLO

Justice

Do not publish.

Tex. R. App. P. 47.3(b).

Opinion delivered and filed

this 16th day of May, 2002.

---

^[1] Tex. Lab. Code Ann. ''21.001 - 21.556 (Vernon 1996 & Supp. 2002). Galvan filed the complaint with the Texas Commission on Human Rights (ATCHR@) alleging  discrimination based upon his national origin, AMexican.@ 

^[2] No challenge was made to the evidence proffered by Galvan. Defects, if any, in the form of evidence submitted will not be grounds for reversal unless specifically pointed out by objection by an opposing party with opportunity, but refusal, to amend.  Tex. R. Civ. P. 166a(f).

^[3] References to his employment termination are provided for historical reasons.  We note that in his original petition Galvan does not allege discrimination in employment termination or retaliation.  In his TCHR charge as attached to his summary judgment response, he complained of discrimination in the failure to promote, in his demotion, and in his employment termination.  In the affidavit attached to his response, he urges retaliation.  

^[4] Galvan filed his lawsuit on September 10, 1998, and the employer filed its motion for summary judgment on December 7, 1999. 

^[5]  As we stated in Oasis Oil, we must keep in mind the following caveats when reviewing no-evidence summary judgments:

1. the no evidence motion can only be brought against Aa claim or defense on which the adverse party would have the burden of proof at trial,@ Tex. R. Civ. P.  166a(i);

2. Athe motion must state the elements as to which there is no evidence,@ Id.

3. Athe motion must be specific in challenging the evidentiary support for an element of a claim,@ Tex. R. Civ. P. 166a cmt.;

4. Aparagraph (i) does not authorize conclusory motions or general no-evidence challenges to an opponent=s case,@ Id.;

5. Aits response need only point out evidence that raises a fact issue on the challenged elements,@ Id.;

6. Athe respondent is not required to marshal its proof.@ Id.

Oasis Oil v. Koch Ref. Co. L.P., 60 S.W.3d. 248, 252 (Tex. App.BCorpus Christi 2001, no pet.).

⁶ Appellant does not contend on appeal that the motion is not a proper 166a(i) motion for failure to specifically set out the element being challenged, hence we do not consider that question.  See Callaghan Ranch Ltd. v. Killam, 53 S.W.3d 1, 3 (Tex. App.BSan Antonio 2000, pet. denied)(holding that an appellant may challenge, for the first time on appeal, the sufficiency of a 166a(i) motion as a matter of law for failing to specify the element it challenged); contra Walton v. Phillips Petroleum Co., 65 S.W.3d 262, 268 (Tex. App.BEl Paso 2001, no pet.).

⁷ Tex. Lab. Code Ann. '21.051 (Vernon 1996).

^[8]  The other type of employment discrimination case recognized by federal and state courts is the Amixed motive@ case where there is direct evidence of discriminatory animus. Price Waterhouse v. Hopkins, 490 U.S. 228, 244-45 (1989); Garcia v. City of Houston, 201 F.3d  672, 675-76 (5th Cir. 2000).  In such a case, the burden is shifted to the employer to show that, regardless of any discriminatory motive, legitimate reasons would have led to the same decision. Price Waterhouse, 490 U.S at 244-45; Garcia, 201 F.3d at 676. However, where race, national origin, or sex was a motivating factor for an employment action, even when there were other legitimate motivating factors, this action will be deemed an unlawful employment practice.  Garcia, 201 F.3d at 676 (discussing amendments made to Title VII in response to the Price Waterhouse decision).  Where the employer shows that it would have taken the same action absent the improper motivating factor, relief is limited to injunctive and declaratory relief, costs, and attorneys= fees.  Id.   However, a discrimination case will only be classified as a Amixed motive@ case where there is direct evidence of discrimination impacting on the adverse employment action. See Price Waterhouse, 490 U.S. at 276 (Justice O=Connor, concurring)(plaintiff must show Adirect evidence that an illegitimate criterion was a substantial factor in the decision@).  If there is only circumstantial evidence of discrimination, then the case will be classified as a pretext case.  Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 477 (Tex. 2001).

⁹ See  Bernard v. Gulf Oil, Corp., 890 F.2d 735, 745 (5th Cir. 1989); Crawford v. Formosa Plastics Corp., 234 F.3d 899, 902 (5th Cir. 2000).

¹⁰  For example, to prove his prima facie case of demotion, appellant would have had to show that he was demoted (e.g., demoted from a vice-president position to a district manager position with a pay cut); he was qualified for the position from which he was demoted (e.g. had been with the company for five years and served as vice-president); he was a member of a protected class at the time (e.g., of Mexican origin), and was replaced by someone outside of his protected class (e.g., of non-Mexican origin).

¹¹ Appellee apparently assumed the establishment of appellant=s prima facie case in its summary judgment motion.  For the purposes of our review of the trial court=s decision on such motion, we do likewise.

¹²  We recognize that this raises the question of whether a Ano-evidence@ summary judgment challenge can ever properly be made to this particular burden as the case law very clearly requires the introduction of evidence on the part of the movant.  However, as this question is not directly before us and its resolution is not required for our determination of this case, we need not decide this issue.

^[13] The employer could have proffered evidence as to this issue. Cf. Bowen v. El Paso Elec. Co., 49 S.W.3d 902, 909 (Tex. App.BEl Paso 2001, no pet.)(In a mixed traditional and no evidence motion for summary judgment, employer met burden of production by Aproducing evidence@ that employee was fired due to various non-discriminatory reasons.)