### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-03-00441- CV

Chr ist ophe r G ar dini, App e lla nt

v.
Texas Workforce Com m ission and Dell Pr oducts, L.P., Appellees

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 98TH JUDICIAL DISTRICT NO. GN203942 , HO NORAB LE ROSE SP ECTOR, JUDGE P RESIDING

M E M O R

A N D U M O P I N I O N
Chr ist o p h e r

G a r d i n i a p p e a l s f r o m a t a k e - no thi ngsumma

ry jud g me nt r e nd e re d a g a ins t him on his claim for unemploy ment compensation r esulting from the ter mination of his employ

ment with Dell Product s , L
. P . This appea l is controlled by the Texas Supreme Court’s holding that attachingthe administrative r ec o rd from Te x as Workforc e Commissi on hear ings a s a whole to a motion for summary judgme nt does not provide c ompetent summary -judg ment evidenc e supporting the Commiss ion’s decision in a trial de novo-substantial e vidence revie w. See Nue rnberg v. Tex as Employme nt Comm’n , 858 S.W .2d 364, 365 (Tex. 1993) (per curiam). Be cause appellee s attache d the re cord f

rom the Commissi on’s hea ring s as a whole to their motion for summary judgme nt, and beca use the re cord doe s not otherwise c ontain evidenc e showing as a matter of l aw that substantial2

evidenc e supported the Commi ssion’s decision, we will r ever se the summary judgme nt and re mand the c a us e fo r f ur the r p ro c e e din g s.
BACK GR OUND Gar dini worked as a suppl y quality eng ineer senior consultant for Dell. The c ompany terminated his e m p l o y

ment on Fe bruar

y 13, 2002. He a

pplied for a

nd rec eived une mploy

ment benef its. De l l ch al l enged the awa rd of be nefits, asser

ting that Ga

rdini was ter

minated for misconduct. “‘Misconduct’ mea ns mismanag ement of a

position of employ

ment by action or inaction, neg lect that jeopa rdizes the life or pr operty of anothe r, intentional wrong doing or malfea sance , intentional violation of a law, or violation of a policy or rule adopted t o en s u re the order ly work a nd the safe ty

of employ ees.” Tex. L ab. Code Ann. § 201.012 ( West 1996). The Commission’s appeal tribunal he ld a telephone hearing in which Gardini did not pa rt ic ipate be c a

us e , a s w a s sh ow n late r, he did no t r e c e ive no tic e . H is s up e rv iso r, Pa ul C ro c ke tt, te sti fi e d th a t G ard ini wa s f ir e d f or ins ub or din a tio n. Cr oc ke tt t e sti fi e d th a t, whil e in T ha ila nd wi th
a su pp lie r f or De ll, Ga rd ini too k a

wo man f ro m a str ip c lub to h is h ote l r oo m; Cr oc ke tt t e rm e d th is conduct “ unethical.” Duringa dis pute—appa rently over pa

y ment—the woman damag ed Ga rdini’s hotel room, then dema

nded pay ment from the supplier. T he suppl i er pa id the woman and the n repor ted the incident to De ll. Crockett testified that, a fter G ardini conf irmed these e vents occ urre d, Crockett told him “not to contact or g o to in any way , shape or form” the supplier. Crocke tt testified that Dell was conce rned that the supplier could use the inc ident ag ainst Gardini and D ell in future business neg otiations. Crockett testi fied that, despite t his war ning, Gardini contacted the supplier
. Upon l ear ning of this contac t, Dell fired Gar dini. Crockett testified, “ We told him that he wa s being3

fired be cause of the position he pla ces D ell with the supplier re lationship and for insubordination.

. . . [W]e did

me nti on the c on du c t r e lativ e to the Th ail and in cid e nt.
. . . H e wa s to ld s pe c if ic a lly why he wa s let g o.” The tribunal ruled that Ga rdini was n o t elig ible to collect unemploy ment benef its because he wa s fired f

or misconduct. Af

ter re ceivingthe decision, Gar dini c omplained that he had not r ece ived notice of the telephonic he aring
. The tribunal he ld a sec ond telephonic he aring , both to determine w hether Gar dini sh ow e d g oo d c a

us e fo r f a ili ng to pa

rt ic ipate in the fi rs t he ari ng and to he ar e vid e nc e on the me ri ts. Ga rd ini pa rt ic ipate d b ut Cro c ke tt did no t, de sp ite a sse rt ion s by De ll re pr e se ntativ e s th a t he wo uld do so . Th e tr ibu

na l pla y e d the ta pe of Cr oc ke tt’ s e arl ie r t e sti mony , b ut G ard ini wa s n ot a ble to c ro ssexamine Crockett. Gar dini denied hiring a woman in the s t ri p club and de nied that any incident
occur red that damag ed his hotel room. Gar dini acknowledg ed that he was fired for contac ting the
su pp lie r, but den ie d that Croc ke tt told him no t to c on ta c t the su pp lie r. Ga

rd ini sa id h e be lie ve d th a t, despi t e his pending rea ssignment, he would be allowe d—and per haps re quired—to conta ct the supplier both to finish up his ex isting work and to per form his new job. Ac cording ly , he believe d he ac ted per

missibl y when he contac ted the supplier about an emer g ency production/shipping issue. He de scribed the confusion as “a n artifa ct of a

miscommunication.” Gar dini also claimed he w as
never told precisely

why he wa s fired, othe r than it was in De ll’s best interest. De ll repre sentatives
conce ded at the he aringthat, althoug h exe cu t i v es are for bidden from visiting se x ually -oriente d businesses, per sons in Gar dini’s job descr iption are not expressly forbidden to do so. The tribunal held that Gar dini did not s how that his f ailure to pa

rticipate in the first hear ing was for g ood cause , d ec l i n edt o re o p en t h e e v i d en ce , an d l ef tu n d i s tu rb edi t s ru l i n g fo r D el l af t er t h e f i rs th ea ri n g.4 On re vie w w ith in t

he a g e nc y , th e C o mm i s s i o n c o n c l u d e d

t h a t t h e t r i buna l e rr on e ou sly decide d that Gar dini lac ked g ood cause for not pa rticipating in the first hear ing. The Commission found that Ga

rdini established that he did not re ceive notice of the first hearing , and thus had g ood
cause for f

ailing to pa

rticipate. A fter r ev i ew i n g t he re cord f rom both hear ings, the Commi ssion
a ff ir me d th e de nia l of

be ne fi ts b y

a do pti ngthe tr ibu

na l’ s c on c lus ion s. At the district

c o u r t, th e p a r ti e s f il e d c r o s s - motions for summary judgme nt. Appellees
c on te nd e d th a t th e re wa s n o f a c t di sp ute a s to wh a t e vid e nc e wa s b e fo re the Com mis sio n a nd that,
as a matter of law , the Commiss ion’s decision wa s support ed by substantial evidence . Appellee s attache d a copy

of the Commission’s records ma intained in connec tion with Gardini’s claim for unemploy ment benef

its; t his included transcriptions of the two hea ring s, findings a

nd conclusions by the a pp e a l tr ibu

na l and the Com mis sio n, and

do c ume nts fi le d wi th the Com mis sio n by the pa rt ie s. After the sum m ar y -j u dg ment hear ing, G ardini filed objec tions to t he evide nce appellee s attache d to the ir motion. He objected to the attachme nt of the Commiss ion’s rec ord, base d on case-law a

uthority forbiddingthe blanket a dmission of the entire Commissi on rec ord. See Nue rn be rg , 8 58 S.W. 2d

a t 36 5; see also Leve lland Indep. Sch. Dist. v. Contreras , 865 S.W .2d 474, 476 (Tex. A

pp.—Amarillo 1993, writ denied) . Gar dini also objected that portions of the r ecor d cited in t he Com mis sio n’ s mo tio n f or summa ry jud g me nt c on ta ine d ina dmi ssi ble he ars ay and do ub le hear say . There is no response f rom appellee s to these objections in the clerk’s record. The district court g rante d appelle es ’ m otion, affirmingthe Commiss ion’s order without stating a ba sis and without ex pressly

ruling on the objections to the evide nce.The Te x as Employ ment Commi ssion (“TEC”) beca me the Te x as Workforc e Commissi on 1 in 1995. See Act of May 26, 1995, 74th L eg ., R.S., ch. 655, § 11.75, 1995 Tex. Gen. L aws 3543, 3621-22. Ac cording ly , case s involving TEC ar e informative in case s involving the Commission. 5 DI SCU SSIO N Gar dini raises eig ht issues conce rning the proc edure and dec isions made both at the Commi ssion and in the district court. We focus on his asse rtion that the d i s t ri ct co u rt err ed by g ra nti ngsumma

ry jud g me nt a g a ins t hi s c la ims be c a us e the re c or d d oe s n ot s up po rt the jud g me nt. Courts review the Commi ssion’s denial of be nefits in a trial de novo based on the
su bs tanti a l e vid e nc e ru le
. Te x. L a b. Cod e Ann. § 2 12 .2 02 (We st Su pp . 2 00 4- 05 ). Un de r t

his hy br id standard of

revie w, the trial court must deter mine whether

there is substantial evidence to support the ruling of the ag ency

by examining the evide nce pr esente d in trial, not the rec ord cr eate d by the ag ency . M

e r c e r v . R os s , 701 S.W .2d 830, 831 (Tex. 1986). Whether the Commission’s decision
w a s s u p p o rte d b y s u

b s ta n ti a l e v id e n c e is a qu e s ti o n o f la w . A r r ellano v. Texas Em ployment Comm’n , 810 S.W .2d 767, 770 (Tex. App.—San Antoni o 1991, writ denied)
. The Commission’s 1 decision ca

rries a presumption of validity , and the pa rty seekingto set aside the a g ency ’s dec ision has the burde n of showingthat it was not supported by substantial evidence
. Se e City of S an An ton io v. Texas W

ater Comm’n , 407 S.W .2d 752, 758 (Tex. 1966)
. The trial court may hear any evidenc e in e xis te n c e a t t

h e ti me o f

th e h e ar in g b e f

o r e th e a p p e a l t r ib u n a l r e g a

r d le s s o f w h e th e r it w as int ro d u ce d at the administrative he aring
. City of Houston v. Tippy , 9 9 1 S. W. 2 d 3 3 0 , 3 3 3 ( T e x. App.—Houston [1st Dist.] 1999, no pet.) ( citing F iremen’ s & Policeme n’s Civil Serv. Comm’n v

. Brinkmey er , 662 S.W .2d 953, 956 (Tex. 1984)).6 Courts may

g rant summary judgme nts in c ases trie d under the substantial evidence rule. Cru z v. City of San An ton io , 424 S.W .2d 45, 47 (Tex. Civ. App.—S an Antonio 1968, no writ). Mo va nts mus t sh ow t hat th ere is no g e nu ine iss ue of mate ri a l f

a c t and that th e y are e nti tle d to j u d gm en tas a m at t er

o f l aw ; we ac ce p tas t ru e e v i d en ce fa v o rab l e t o t h e n o n -m o v an tan d i n d u l ge in ever y rea sonable infe renc e and resolve any doubts in the non-movant’s fa vor. Nixon v. Mr. Prop. Mgmt. Co. , 690 S.W .2d 546, 548-49 (Tex
. 1985). Summary -judg ment proce dure does not provide for tria l by

deposition or aff

idavit. See G aines v. Ham man , 358 S.W .2d 557, 563 (Tex. 1962). The tr ia l c ourt de te rm ine s if any fa c t iss ue s e xist; it do e s no t e va luate the e vid e nc e and de c ide the c a se on aff idavits. Gulbenkian v . Penn , 2 52 S.W. 2d 92 9, 93 1 ( Te x. 19 52 ); Ro ss v . Te x as On e P’

sh ip , 796 S.W .2d 206, 209 (Tex. App.—Dallas 1990), writ denied per curiam , 806 S.W .2d 222 (Tex. 1991). Sum mary jud g me nts e lim inate pate ntl y un me ri tor iou s c la ims or

un te na ble de fe ns e s; the pr oc e ss i s not meant to deprive litigants of a full hear ing on the merits of any rea l issue of fac t. Tex. R . Civ. P. 1 66 a (c ); see G ulbenkian , 252 S.W .2d at 931.

We r e vie w the tr ia l c ourt ’s jud g me nt b y c omp ari ngthe Com mis sio n’ s d e c isi on wi th the evidenc e prese nted to the trial court a nd the g overninglaw. Potts v. Texas Employm ent Comm’n , 8 8 4 S
. W
. 2 d

8 7 9 , 8 8 2 ( T e x . Ap p . — D a l l a s 1 9 9 4 , n o w r i t )
. W e d e t e r m i n e w h e t h e r t h e s u m m ar

yjudgme nt evidence established as a matter of la

w that substantial evidenc e exist ed t o s upport the Commi ssion’s decision. Id . at 883. When the trial cour t does not specify

the basis for a

summary judg me n t, th e a

p p e a li n g p arty mu s t s h o w it is e r r o r to b a s e it o n an y g r o u n d a s s erte d in the summary -judg ment motion. See Star-Tele gram, Inc. v . Doe , 915 S.W .2d 471, 473 (Tex. 1995).7 Ga rd ini c on te nd s, a s he did in h is o pp os iti on to t he mot ion

fo r s umm ary

jud g me nt, that the evidenc e supportingthe summary judgmen t i s inadmissible. He ar g ues that the administrative re cord c ontai n ed hear say . Evidence prese nted in a cha lleng e to a de nial of unemploy ment benef

its must be admissible. The supr eme court has held that, in a trial de novo, the administrative re cord is not admissible; por tions may be admissible, but the re cord a s a unit is not admissible. N

u e rn b e rg , 8 5 8 S
. W.2d at 365. The proce dural history of Nue rn be rg

is s tr iki ng ly
s i m i l ar t o t h e fa ct s h er e. T h e C o m m i s s i o n i n i t i al l y aw ar d ed u n em p l o y m en tb en ef

i t s t o Nu ernb er g, and the a ppeal tribuna l affir

med the aw ard a fter the employ er failed to pa rticipate. The tribunal late r found g ood cause for the e mploy er’ s failure to participate , hear d evidenc e, and r ever sed the a war d of bene fits. See Nuernberg v. Texas Employm en t Co mm ’n , 8 4 6 S. W. 2 d

4 1 , 4 1

- 4 2 ( T e x. App.—Waco 1992) ( “

Nuernberg Appeal ”) , rev’d , 858 S.W .2d at 365. The Commission affirmed the decis io n , th e tr ia l c o u rt gr an te d s u mm ar y ju d g me n t t o th e e mp lo y e r an d th e Co mm is s io n , and the court of appeals affirmed. Nuernberg Appeal , 846 S.W .2d at 44. The supr eme c ourt reve rsed in a per curiam opinion, co n cl u d i n g that the summary judgme nt was not based on c ompetent evidenc e: The hy brid, de novo-substantial e vidence standard of revie w for a

ppeals fr om the TEC, outlined in [ Me rc e r v . R os s , 701 S.W .2d 830, 831 (Tex. 1986)], prohibit s the trial court f

rom revie wing the ag ency rec ord itsel f. I ndividual items withi n the a g e nc y re c or d ma

y be int ro du c e d at tri a l, but the y

mus t be int

ro du c e d in de pe nd e ntl y and pursua

nt to the Texas Rul es of Civil Evidence. Be cause the TEC prese nted the ag ency rec ord in its entirety

to the trial court, ther e wa s no competent e vidence on wh ic h to ba se a

summa ry jud g me nt.
Nue rn be rg , 8 58 S.W. 2d

a t 36 5. A c ourt

of a pp e a ls i n a

su bs e qu e nt c a se sim ila

rl y he ld t hatSi n c e w r it in g th e Nuer nb e rg opinion, the supreme c ourt has adopte d Texas Rule of 2 Appellate Proc edure 36 conce rning filing of the age ncy rec ord i n administrative appeals. That rule, h o w e v e r , a

p p li e s o n ly

to c a s e s d e te r

mi n e d u n d e r th e A dmi n is tr a ti v e Pr o c e d u r e A c t ( “ A PA ” )
. T e x. R. App. P. 36.1. Determinations of entitlement to unemploy ment benef

its are e x pressly

not subject to the APA. Tex. Gov’t Code Ann. § 2001.224 (West 2000). 8 [t ]he public recor ds ex ce p tion to the hearsa y rule doe s not nece ssarily permit the introduction of the entire TEC rec ord into evidenc e bef ore the revie wing court. F or example, he arsa

y statements within the TEC rec ord will not be saved fr om exclusi on by the public re cords e x ception. [ Mary Lee Found. v. T exas Em ployment Comm’n , 817 S.W .2d 725, 728 (Tex. A p p . — T exarkana 1991, no writ)]. W hile the fa ct fi nd ing s ma de by

the TE C and

c on ta ine d in

the TE C re c or d do fi t w ith in t he pu bli c rec ords exception, such finding s are not r eleva nt on a trial de novo a

nd are there fore inadmissible. Id . “I f the fa ct finding s of the TEC wer e admissible proof of the ir own tr uth in a tr ia l de no vo , th e su

bs tant ial e vid e nc e re vie w w ou ld b e me anin g le ss be c a us e the TE C c ou ld b oo tstra p it se lf to s ub sta nti a l evi de nc e in ev e ry

c a se me re ly by finding what it neede d to prove.” Id
. Levelland , 865 S.W .2d at 476.

The Commission’s record is not admissible as a whole simpl y b ec ause it i s the Com mis sio n’s reco rd

atta c he d to a

summa ry -j ud g me nt a ff

ida vit . T he su

pr e me c ourt ’s ho ldi ngin Nue rn be rg , 858 S.W .2d at 365, has not been chang ed, altered, or disreg arde d. Thus, it is st ill the 2 law that, whil e the Com mis sion may int ro du c e pa rt s o f t he re c or d, it mus t in tr od

uc e tho se pa

rt s independe ntly and pursua nt to the applicable T exas Rules of Evidence
. Id . M or e imp or tant, it i s st ill the law that, whe n the Co m m i s s i o n attache s its entire rec ord to its moti on for summary judgme nt in the trial court, ther e is “no c ompetent evidenc e” on which to base a summary judgme nt. Id
. Appellee s contend that the tran s cr i pts of the sworn testimony at the tape -re corde d he ari ng s ar e a dmi ssi ble a s “r e c or ds , re po rt s, state me nts , o r d a ta c omp ilatio ns , in

any fo rm , o f p ub lic office s or ag encie s setting f orth . . . the ac tiviti es of the of fice or ag ency . . . .” See Tex. R. Evi d.9

803(8)( A). The y

point out that the evidence excluded as hea rsay in Mary Lee was a letter by a doctor and a te lephone c onversation with a doctor, and that the court did n o t ex cl u d e all of the swor n testimony g iven at the Commission hearing
. See817 S.W .2d at 727-28. They argue that Crocke tt’s testimony was not hea

rsay beca use it was sworn testimony befor e the appea l tribunal; they note that Ga rd i n i fa i l edt o at t en d

t h e f i rs th ea ri n g an d

fa i l edt o s u

b p o en a C ro ck et tat t h e s ec o n d h ea ri n g. The Commission’s attachment of th e re cord w ith an aff idavit from the Commissi on’s
c us tod ian of re c or ds do e s no t satis fy the re qu ir e me nt that the Com mis sio n int ro du c e the a dmi ssi ble parts of the rec ord indepe ndently . The re cord submit ted contains items that ar e irre levant to a tria l de novo-substantial e vidence revie w, such a s the Commis si on’s finding s. See Lev elland , 865 S.W .2d at 476. I t could, as Gardini contends, contain hear say , which is inadmissible despite being contained in a

public rec ord. Se e id
. Even if, as appellee s argue, Gardini’s testimony is admissible as t he admission of a p ar ty -opponent, it does not support the judg ment. SeeT e x. R. E v id
. 8 0 1 ( e ) ( 2 ) ( A )
. G ar d in i’ s t est imony does not provide a

ny evidenc e to support the conc lusion that he contac ted the supplier despite beingforbidden to do so; Ga rdini admits at most t hat he wa s to c hang e job re sponsibili ties and that he r ealized or lea rned a fterw ards that Croc kett did not want him to contact t he supplier. Ev e n a c omp le te re

je c tio n of Ga

rd ini ’s te sti mony do e s no t, in the a bs e nc e of oth e r e vid e nc e , s up ply
su bs tanti a l e vid e nc e to s up po rt the jud g me nt. Th e pr oc e dura l histo ry of thi s ca se do e s not e nc oura g e us to l imi t Nue rn be rg in a way that would permit the af

firmanc e of the ruling . The a ppeal tribuna l is the only

level at whic h actua l te sti mony wa s tak e n. Th e tr ibu na l rul e d in De ll’ s favo r af te r a he ari nga t w hic h G ard ini , w ith out hi s10

fault, wa s not allowed to participate. The tribuna l refuse d to consider h i s t es t i m o ny at a se cond hear ing. The Com mission rejected the tribunal’s dete rmination that Gardini lac ked g ood cause for not participatingin the first hea ri ng , but then adopted the tr ibunal’s conc lusions that were ba sed solely on the t estimony from the first hear ing. Despite havingthe authority to hear testimony

under the tr ia l de nov o- su

bs tanti a l evi de nc e re vie w, the tr ia l cou rt g ra nte d s umm ary

jud g me nt b a se d s ole ly on the Commiss ion’s rec ord. This is not a rec ord that per suades us to depa rt from the c onclusion in Nue rn be rg

that th e Com mis sio n’ s r e c ord, of fe re d w ho le sa le , is “ no c omp e te nt e vid e nc e ” to support the Commiss ion’s decision i n a trial de novo-substantial e vidence revie w. 858 S.W.2d at 365.
CO NC LU SION

Be cause we f

ind that the district court g rante d summary judgme nt to appellee s based
on a record that the supreme c ourt descr ibed in Nue rn be rg a s “ no c omp e te nt e vid e nc e ,” we re ve rs e the jud g me nt a

nd re mand to t he dis tr ic t c ourt

fo r f ur the r p ro c e e din g s.

Mack K idd, J ustice Be fore J ustices Kidd, B . A. Smith and Pury ear Reverse d and Remande d Filed: Nove mber 12, 2004