IN THE

TENTH COURT OF APPEALS

No. 10-11-00061-CV

KAY DAVIDSON, RICHARD MARTIN, 

AND MICHAEL JONES,

Appellants

v.

MCLENNAN COUNTY APPRAISAL DISTRICT, 

AND BILLY HUBERT, RANDY RIGGS, JOHN 

EMBRY, IVAN GREEN, AND ALLEN SYKES, IN 

THEIR OFFICIAL CAPACITIES AS BOARD MEMBERS 

OF THE MCLENNAN COUNTY APPRAISAL DISTRICT,

Appellees

From the 170th District Court

McLennan County, Texas

Trial Court No. 2010-1652-4

MEMORANDUM OPINION

Kay Davidson, Richard Martin, and Michael Jones (the Retirees) had retired from 

employment with the McLennan County Appraisal District (MCAD). Since their 

retirement, MCAD had allowed them to participate in health insurance coverage 

through MCAD by timely paying their own premiums. They found out in 2010 that 

they would no longer be allowed to participate in MCAD’s health insurance program. 
Davidson v. McLennan County Appraisal District Page 2

They brought a declaratory judgment action against MCAD and members of its Board 

of Directors1to keep MCAD from dropping them from the insurance program. They 

did not prevail. On appeal, Davidson and Martin, through one attorney, and Jones, 

through another attorney, contend the trial court erred in its judgment. We reverse and 

remand.

BACKGROUND

In 1997, MCAD’s Board of Directors passed Resolution 1997-1 (R 1997-1) to 

encourage MCAD’s employees to keep working for MCAD beyond their minimum 

years for retirement. The reward for continued employment was the ability for the 

employee and his or her spouse to participate in MCAD’s health insurance programs 

after retirement at their own expense. The resolution is set out in its entirety in 

Appendix A. The required term of employment was 15 continuous years with MCAD. 

Each of the Retirees had begun their employment with MCAD prior to the passing of R 

1997-1: Davidson in 1984, Martin in 1981, and Jones in 1991. 

In addition to other former employees of MCAD, the Retirees took MCAD up on 

this Resolution and did not retire when they originally could have retired. Davidson 

retired in 2009 after 25 years with MCAD, Martin retired in 2004 after 23 years with 

MCAD, and Jones retired in 2008 after 17 years with MCAD. 

 

1 Those members are Billy Hubert, Randy Riggs, John Embry, Ivan Green, and Allen Sykes. They, along 

with the McLennan County Appraisal District, are collectively referred to in this opinion as MCAD.
Davidson v. McLennan County Appraisal District Page 3

In 2009, at the recommendation of a new chief appraiser, MCAD rescinded R 

1997-1 with Resolution 2009-20. This resolution is set out in its entirety in Appendix B. 

It purports to be effective immediately as to all current and future employees and 

effective on December 31, 2010 as to the Retirees.

The Retirees filed a declaratory judgment action requesting a declaration from 

the trial court that: 

(1) the promises made by MCAD in R 1997-1 became enforceable unilateral 

contracts between MCAD and each plaintiff when each plaintiff performed the 

conditions set forth in R 1997-1; 

(2) pursuant to R 1997-1, upon timely payment of their premiums, they were 

entitled to the same insurance programs as current MCAD employees, including 

reimbursement by MCAD for any part of the year’s deductible, if such benefit is 

provided to current employees, until each plaintiff and/or his/her spouse reaches 

65 years of age; 

(3) their entitlement to the same insurance programs as current MCAD employees 

includes receiving the same health care benefits and paying the same amount in 

premiums as MCAD pays for its current employees; 

(4) if MCAD secures health insurance for plaintiffs which requires monthly 

premiums higher than MCAD pays for its current employees or any Retirees 

covered by Chapter 175 of the Texas Local Government Code, the unilateral 

contract between plaintiffs and MCAD requires each plaintiff to pay the same 

monthly premium amount paid by MCAD for each of its current employees, and 

that MCAD must pay the difference in such monthly amount and the amount of 

the higher premiums secured by MCAD for plaintiffs; and 

(5) R 2009-20 impairs the obligation of contract established between MCAD and 

plaintiffs in R 1997-1, in violation of Texas Constitution Article I, Section 16.

In addition to these declarations, the Retirees sought relief which included a 

permanent injunction and/or mandamus to prevent MCAD from breaching its contract 
Davidson v. McLennan County Appraisal District Page 4

with the Retirees pursuant to R 1997-1. After a bench trial, all relief requested by the 

Retirees was denied.

ISSUE ON APPEAL

In one issue, Davidson and Martin contend the trial court erred in failing to grant 

the relief to which they were entitled. To demonstrate the trial court’s error, they attack 

various findings and conclusions made by the trial court. In 23 issues, Jones does the 

same thing. The trial court issued findings of fact and conclusions of law, but not in the 

traditional sense; that is, the declarations were not categorized specifically as findings of 

fact or conclusions of law, are not in short or declarative statements, and were not 

numbered. The declarations of the trial court were made in an eight page document 

consisting of a series of paragraphs. We have categorized the declarations under attack 

by the Retirees and have numbered them to aid us in the disposition of this appeal.

Standard of Review

When a trial court issues findings of fact and conclusions of law following a 

bench trial, the trial court's findings of fact are reviewable for legal and factual 

sufficiency of the evidence by the same standards as applied in reviewing the legal and 

factual sufficiency of the evidence supporting a jury's finding. Anderson v. City of Seven 

Points, 806 S.W.2d 791, 794 (Tex. 1991). We review the trial court's conclusions of law de 

novo. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). As the 
Davidson v. McLennan County Appraisal District Page 5

reviewing court, we may review the trial court's legal conclusions drawn from the facts 

to determine their correctness. Id.

In reviewing a finding for legal sufficiency, we credit evidence that supports the 

finding if reasonable jurors could, and disregard contrary evidence unless reasonable 

jurors could not. See Kroger Tex. Ltd. P'ship v. Suberu, 216 S.W.3d 788, 793 (Tex. 2006); 

City of Keller v. Wilson, 168 S.W. 3d 802, 827 (Tex. 2005). In reviewing a factual 

sufficiency issue, the court of appeals must weigh all of the evidence in the record. 

Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). Findings may be overturned only if they 

are so against the great weight and preponderance of the evidence as to be clearly 

wrong and unjust. Id.

FINDINGS OF FACT

Although not presented to us in this order, to aid the clarity of this opinion, we 

address the trial court’s findings regarding the Texas Municipal League 

Intergovernmental Employee Benefits Pool first. 

TML and Group Health Insurance

In its findings of fact and conclusions of law, the trial court found that: 

(1) MCAD was unable to locate any insurance carrier willing to include the 

Retirees in a group health insurance plan for 2011; 

(2) there was no “group health insurance” available to MCAD which would 

allow the Retirees to continue to participate; 
Davidson v. McLennan County Appraisal District Page 6

(3) the Texas Municipal League Intergovernmental Employee Benefits Pool 

(TML) was the only source for coverage found by MCAD that would 

include the Retirees; 

(4) TML is not an insurance company, but a risk pool, and does not provide, 

sell, or offer group health insurance programs; and 

(5) participating in TML is significantly more expensive for MCAD as 

compared to participating in FirstCare without inclusion of the Retirees.2 

The Retirees attack these findings.

R 1997-1 provided that an employee, who at the time of retirement met the stated 

criteria and timely paid the required premiums, would “be permitted, along with their 

spouse,” “to continue participation in current or future group health insurance 

programs provided by the McLennan County Appraisal District for its employees.” 

The Retirees argue that R 1997-1 did not limit their participation in “group health 

insurance” to that which is provided by an insurance company. We agree with the 

Retirees.

The evidence established that there was group health insurance available to 

MCAD which could be provided by TML and that TML provided health insurance 

programs. It is irrelevant that TML may not be a traditional health insurance company. 

R-1997-1 did not limit group health insurance programs to those provided by 

traditional health insurance companies; the phrase, “group health insurance programs,” 

 

2 We have numbered sequentially only the findings and conclusions we will be discussing in this opinion. 

The identification by numbering of the findings and conclusions is solely to assist the Court and the 

reader and for no other purpose or meaning.
Davidson v. McLennan County Appraisal District Page 7

is broad and is not defined by the resolution; and the phrase is not modified by the 

term, “insurance companies,” or limited to programs provided by insurance companies. 

Although the trial court appears to have given it the more restrictive meaning of 

“traditional health insurance company,” no testimony was presented at trial to be able 

to interpret the phrase “group health insurance programs” as only those programs 

provided by traditional health insurance companies. 

There was also no testimony from the TML representative that TML was not an 

insurance provider; only that it was a risk pool. Even if TML was not a traditional 

insurance company, it provided insurance coverage. The TML representative testified 

at trial that over 30 years ago, TML was established by a group of municipal leaders 

because they were looking for a stable source of insurance coverage. TML is selffunded and stable, and members include entities such as cities, housing authorities, and 

appraisal districts. TML self-insures to $500,000 per claim, and above that, purchases 

unlimited lifetime reinsurance. Further, two insurance brokers who sought out 

insurance bids for MCAD healthcare coverage considered TML an insurance carrier.

TML provided a quote of $379.92 per month to MCAD for employee health 

insurance coverage in 2011 that included the Retirees. FirstCare, who had provided 

health insurance coverage for MCAD for 2009 and 2010, provided a quote of $269.74 per 

month for 2011 which did not include the Retirees. TML’s quote is higher per month 

than FirstCare’s quote but it is the only provider, at the time of trial, which would 
Davidson v. McLennan County Appraisal District Page 8

include coverage for the Retirees. TML’s quote was, however, the lowest per month 

that would also cover a Chapter 175 retiree,3 Daisy White, who was a plaintiff in the suit 

against MCAD but is not a party to this appeal. And, as of the date of the trial, MCAD 

had not chosen a carrier for 2011 for its employees’ health insurance coverage and did 

not have all the final quotes for its 2011 employee health insurance coverage.

Thus, the evidence is legally insufficient to support the legal significance 

attributed to the trial court’s findings 1, 2, 4, and 5.

CONCLUSIONS OF LAW

Rather than the declarations the Retirees wanted, what they got, in a nutshell, 

were conclusions from the trial court that:

(1) Any rights plaintiffs might have had after retirement to continue participation in 

group health insurance programs was predicated upon the anticipated 

continuance of R 1997-1 and was subordinate to the right of the Board to abolish, 

rescind or terminate R 1997-1;

(2) Plaintiffs have no vested contract rights in any benefit(s) that might be provided 

under R 1997-1;

(3) Plaintiffs have no vested property rights in any benefit(s) that might be provided 

under R 1997-1;

(4) R 2009-20 does not breach any contract rights that plaintiffs claim they had;

 

3 Chapter 175 of the Local Government Code requires certain employing political subdivisions to provide 

health benefits coverage for Retirees under the group health insurance plan or group health coverage 

plan provided by or through the employing political subdivisions to its employees. TEX. LOC. GOV’T 

CODE ANN. Ch. 175 (West Supp. 2012). It applies to an employee who retires from an appraisal district on 

or after January 1, 2010. Id. § 175.001 (historical and statutory notes) (West Supp. 2012). Thus, Chapter 

175 applied to Daisy White.
Davidson v. McLennan County Appraisal District Page 9

(5) R 2009-20 does not impair any contract rights that plaintiffs claim they had;

(6) R 2009-20 does not impair any property rights that plaintiffs claim they had;

(7) R 2009-20 is not unconstitutional;

(8) R 1997-1 does not contractually or otherwise impose any financial requirement or 

financial obligation on MCAD to plaintiffs;

(9) MCAD is not legally obligated or required to incur any expense or financial 

obligation in connection with plaintiffs being permitted, along with their 

spouses, upon timely payment of the required premiums by the plaintiff to 

continue participation in current or future group health insurance programs 

provided by MCAD for its employees;

(10) If R 1997-1 creates a financial obligation on MCAD, it is a debt in violation 

of Article 11, Sec. 7 of the Texas Constitution and is void;

(11) R 1997-1 purports to obligate a future board and is thus, unconstitutional 

and void; and

(12) In performing tax assessing functions, one MCAD board cannot bind a 

future board.

Unilateral Contract

The Retirees argue that conclusions one through six are incorrect. These 

conclusions are predicated on the 1937 opinion in City of Dallas v. Trammell. City of 

Dallas v. Trammell, 101 S.W.2d 1009 (Tex. 1937). In Trammell, a retired police officer sued 

the City of Dallas after the City, pursuant to a statutory amendment by the Legislature, 

reduced the amount paid to retired employees from its pension fund. Id. at 1010. The 

Texas Supreme Court framed the question it had to decide as follows:

Does the employee, after retirement, have a vested right to participate in 

the pension fund to the extent of the full amount of the monthly 
Davidson v. McLennan County Appraisal District Page 10

installments granted to him at retirement; that is, does he have a vested 

right in the future installments which cannot be affected by subsequent 

legislation tending to diminish the amount of such installments?

Id. at 1011. The court answered in the negative, stating that

[i]n our opinion, the rule that the right of a pensioner to receive monthly 

payments from the pension fund after retirement from service, or after his 

right to participate in the fund has accrued, is predicated upon the 

anticipated continuance of existing laws, and is subordinate to the right of 

the Legislature to abolish the pension system, or diminish the accrued 

benefits of the pensioners thereunder, is undoubtedly the sound rule to be 

adopted.

Id. at 1013. 

However, Trammel is not applicable to the situation presented here. First, 

Trammel was a fact specific case. It dealt solely with State-created pension funds and 

the ability of the State Legislature to modify or abolish that fund. This case, on the 

other hand, pertains to a resolution passed by a governmental entity regarding health 

insurance coverage of certain retired employees. Further, Trammel is no longer the law 

even with regard to State-created pension funds. Article XVI, section 66 of the Texas 

Constitution, which was intended to protect retirement benefits of vested employees 

and to prohibit subsequent legislative changes that would reduce or impair these 

benefits, was proposed and adopted specifically to change the result of the Trammell

decision, albeit 70 years later. Tex. Att’y Gen. Op. No. GA-0615, 2008 Tex. AG LEXIS 27, 

*14, 20 (2008). Accordingly, Trammell does not apply to this case. 
Davidson v. McLennan County Appraisal District Page 11

The Retirees contend, and we agree, that this case is governed by the recent 

Texas Supreme Court opinion of City of Houston v. Williams and its earlier opinion in 

Vanegas v. Am. Energy Servs. City of Houston v. Williams, 353 S.W.3d 128 (Tex. 2011); 

Vanegas v. Am. Energy Servs, 302 S.W.3d 299 (Tex. 2009). In Williams, 540 former 

Houston Firefighters brought suit against the City alleging the wrongful underpayment 

of lump sums due upon termination of their employment. Id. at 131. Although the 

central issue was whether the Legislature waived immunity so that the firefighters 

could sue the City, an issue not raised in this case, the Court had to first determine 

whether the firefighters, through certain city ordinances and agreements, had a contract 

for goods or services that would bring their suit within the waiver of immunity 

provision of Section 271.152 of the Local Government Code.4 LOC. GOV’T CODE ANN. § 

271.152 (West 2005). After reviewing the law regarding unilateral contracts and 

recognizing that ordinances can be construed as contracts, the Court held that because 

the ordinances collectively constituted an offer that was communicated to the 

firefighters which the firefighters accepted by performance, the promise was a 

 

4 Section 271.152 provides:

A local governmental entity that is authorized by statute or the constitution to enter into 

a contract and that enters into a contract subject to this subchapter waives sovereign 

immunity to suit for the purpose of adjudicating a claim for breach of the contract, 

subject to the terms and conditions of this subchapter. 

Id. A "contract subject to this subchapter" is defined as "a written contract stating the essential terms of 

the agreement for providing goods or services to the local governmental entity that is properly executed 

on behalf of the local governmental entity." Id. § 271.151(2). Here, although MCAD disputes that the 

Retirees had a contract, it does not contend that it is immune from suit. 
Davidson v. McLennan County Appraisal District Page 12

unilateral contract that became binding when the firefighters performed. Williams, 353 

S.W.3d at 138. 

In Vanegas, the Court was asked to decide the enforceability of an employer's 

alleged promise to pay five percent of the proceeds of a sale or merger of the company 

to its original employees who were still employed at the time of the sale or merger. 

Vanegas, 302 S.W.3d at 300. Again, after reviewing the law regarding unilateral 

contracts, the Supreme Court held that the employer’s promise became enforceable 

upon the employee’s performance of continuing their employment with the company 

until it was sold. Id. at 304.

The Retirees argue that they have a unilateral contract with MCAD which 

became enforceable when they continued working for MCAD until they met the terms 

of R 1997-1. Unlike a bilateral contract, in which both parties make mutual promises, a 

unilateral contract is created when a promisor promises a benefit if a promisee 

performs. City of Houston v. Williams, 353 S.W.3d 128, 135 (Tex. 2011); Vanegas v. Am. 

Energy Servs., 302 S.W.3d 299, 303 (Tex. 2009); Hutchings v. Slemons, 174 S.W.2d 487, 489 

(Tex. 1943) (bilateral contract). The requirement of mutuality is not met by an exchange 

of promises; rather, the valuable consideration contemplated in "exchange for the 

promise is something other than a promise," i.e., performance. Williams, 353 S.W.3d at 

136 (citing Restatement of Contracts § 12 cmt. a (1932)). A unilateral contract becomes 

enforceable when the promisee performs. Vanegas, 302 S.W.3d at 303. The Texas 
Davidson v. McLennan County Appraisal District Page 13

Supreme Court has explained that "'[a] unilateral contract occurs when there is only one 

promisor and the other accepts . . . by actual performance,'" rather than by the usual 

mutual promises. Id. at 302 (quoting 1 Richard A. Lord, Williston on Contracts § 1.17 

(4th ed. 2007)).

Here, MCAD, through R 1997-1, recognized that it 1) considered its loyal and 

dedicated employees to be among its most valuable assets; 2) had provided a retirement 

program for its employees through membership in the Texas County and District 

Retirement System; 3) wished to demonstrate its appreciation to its long tenured 

employees and to encourage its employees to remain in its employment for the mutual 

benefit of it and its employees; and 4) believed that allowing its retired employees and 

their spouses to continue to be covered under its group medical insurance program at 

the retired employee’s expense would provide added incentive to employees to 

continue in its employment beyond the minimum number of years required for service 

retirement. It then promised:

That effective January 1, 1998 each employee, who as of that date 

meets the following criteria will be permitted, along with their spouse, 

upon the timely payment of the required premiums by the employee[,] to 

continue participation in current or future group health insurance 

programs provided by the McLennan County Appraisal District for its 

employees.

The criteria to be met was that at the time of their retirement, the employee must be 

eligible for retirement under the Texas County and District Retirement Program; be 

covered by MCAD’s group insurance program; and have had continuous service as an 
Davidson v. McLennan County Appraisal District Page 14

employee of MCAD for 15 or more years. MCAD does not contest that the Retirees met

the resolution’s criteria. According to the resolution, the benefit of continued 

participation in current or future group health insurance programs would terminate on 

the employee’s or spouse’s 65th birthday, whichever is later.

By R 1997-1, MCAD, recognizing that it wanted to keep its employees for more 

than just a minimum term of employment and as an incentive to keep its employees 

beyond that minimum term, promised employees who had 15 or more years of 

continuous service with MCAD the benefit of continued participation, past the 

employee’s retirement, in “current or future group health insurance programs.” It is 

undisputed that the Retirees in this case each continued their employment beyond the 

minimum number of years required for service retirement and met the other conditions 

of the resolution. Thus, the Retirees accepted MCAD’s promise by performance, i.e., by 

continuing employment until they also met the terms of the resolution. 

Denial and Defense

MCAD argues that there was no unilateral contract because there was no 

meeting of the minds. However, “no meeting of the minds” has no application in a 

unilateral contract. See Pace Corp. v. Jackson, 284 S.W.2d 340, 346 (Tex. 1955). Even if it is 

applicable, the determination of whether there is a meeting of the minds is based upon 

objective standards of what the parties said and did and not on their subjective state of 
Davidson v. McLennan County Appraisal District Page 15

mind. City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 720 (Tex. App.—

Fort Worth 2008, pet. dism’d). 

Through R 1997-1, MCAD offered the Retirees the ability to participate in group 

health insurance programs if they worked beyond their minimum number of years 

required for service retirement and until they qualified under the resolution. It is 

undisputed that the Retirees accepted the offer by performance. So firmly were their 

minds bound together as to the meaning of R 1997-1 that MCAD honored the 

resolution’s terms for seven other former employees over a period of 12 years before the 

new chief appraiser, who started with MCAD in 2009, recommended rescission of the 

resolution. Those former employees and the time they participated in the health 

insurance program provided by R 1997-1 are set out in Appendix C. Accordingly, 

objectively there was a meeting of the minds between the parties. The subjective beliefs 

of a board member and a former chief appraiser of MCAD as to whether or not it would 

cost MCAD any money to perform once the offer was accepted do not factor into the 

analysis of whether there was a meeting of the minds.

MCAD also contends that it was excused from performing due to the doctrine of 

impossibility or impracticability. According to this doctrine, where a party's 

performance is made impracticable by the occurrence of an event the non-occurrence of 

which was a basic assumption on which the contract was made, the party’s duty to 

render that performance is discharged. Centex Corp. v. Dalton, 840 S.W.2d 952, 954 (Tex. 
Davidson v. McLennan County Appraisal District Page 16

1992) (citing RESTATEMENT (SECOND) OF CONTRACTS § 261 (1981)). The event which 

MCAD alleges made its performance impractical was its inability to locate a group 

health insurance company that would insure both the active and retired employees. As 

was discussed earlier, TML offered health care coverage for both the active employees 

and the Retirees. As previously discussed, that TML may not have been a traditional 

insurance company is irrelevant. MCAD’s performance was not excused by 

impossibility or impracticability.

Conclusion

R 1997-1 was a unilateral contract that became enforceable when the Retirees 

each accepted MCAD’s promise by performing. The trial court’s conclusions one 

through six are erroneous.

Debt

The Retirees next complain about the trial court’s conclusion that, even though it 

believed R 1997-1 did not create any financial obligation on the part of MCAD, to the 

extent that the resolution does create a financial obligation, it is void because it creates a 

debt in violation of the Texas Constitution. The trial court went on to specifically 

conclude that requiring MCAD to participate in TML so that the Retirees could 
Davidson v. McLennan County Appraisal District Page 17

“continue” under R 1997-1 would create a debt under article XI, section 7 of the Texas 

Constitution without the conditions of article XI, section 7 being met.5 

Article XI, Section 7 provides: 

All counties and cities bordering on the coast of the Gulf of Mexico are 

hereby authorized upon a vote of the majority of the qualified voters 

voting thereon at an election called for such purpose to levy and collect 

such tax for construction of sea walls, breakwaters, or sanitary purposes, 

as may now or may hereafter be authorized by law, and may create a debt 

for such works and issue bonds in evidence thereof. But no debt for any 

purpose shall ever be incurred in any manner by any city or county unless 

provision is made, at the time of creating the same, for levying and collecting a 

sufficient tax to pay the interest thereon and provide at least two per cent (2%) as 

a sinking fund, except as provided by Subsection (b); and the condemnation of the 

right of way for the erection of such works shall be fully provided for.

TEX. CONST. ART. XI, § 7. (Emphasis added). It is this last sentence that is the source of 

the trial court’s conclusion.

We construe Texas constitutional provisions in the same manner as we construe 

statutes. Harris County Hosp. Dist. v. Tomball Reg'l Hosp., 283 S.W.3d 838, 842 (Tex. 

2009); Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342, 344 (Tex. 2001). The guiding 

rule is to discern and give effect to the intent (or purpose) of the provision's drafters. 

Harris County Hosp. Dist., 283 S.W.3d at 842; City of El Paso v. El Paso Cmty. Coll. Dist., 

729 S.W.2d 296, 298 (Tex. 1986). We rely heavily on the literal text of a constitutional 

provision to give effect to its plain language. Harris County Hosp. Dist., 283 S.W.3d at 

 

5 By this opinion we do not hold that MCAD must utilize TML. The bid process had not closed for 2011 

at the time of trial and another year has begun. This presents additional issues not presented in the 

original proceeding which must be dealt with on remand and which also impairs our ability to render a 

dispositive judgment.
Davidson v. McLennan County Appraisal District Page 18

842; Doody, 49 S.W.3d at 344. If the plain language of a constitutional provision is clear 

and unambiguous, resort to extrinsic aids and rules of construction is inappropriate, 

and we give the language of the provision its common everyday meaning. City of 

Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008); State v. Shumake, 199 S.W.3d 279, 

284 (Tex. 2006). This rule provides an objective guidepost to discern the drafter's intent 

and ensures that ordinary citizens may "rely on the plain language . . . to mean what it 

says." Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex. 1999).

Assuming without deciding that Art. XI, § 7 generally applies to this particular 

situation, R 1997-1 is not a debt within the meaning of the Constitution. See McNeal v. 

City Of Waco, 33 S.W. 322, 324 (Tex. 1895) (“debt” as used in the Constitution means 

“any pecuniary obligation imposed by contract....”). MCAD’s payment of health 

insurance premiums for active employees was a matter of ordinary expenditure. Id. 

The premium expense for active employees’ insurance benefits was budgeted for each 

year by MCAD. The Retirees in this case paid their own insurance premiums. The 

possibility that the premiums for active employees may be higher when the Retirees are 

included in the group health insurance program is of no constitutional consequence.6 

Conclusion 10 is erroneous.

 

6 At the time of trial, TML was the only entity to provide a quote for health insurance coverage which 

included the Retirees and the bid process had not closed. Like most premiums for group insurance, the 

quote was based on the claims expenses MCAD had for the previous year. 
Davidson v. McLennan County Appraisal District Page 19

Obligate a Future Board

Next, the Retirees take issue with conclusions 11 and 12 that R 1997-1 purports to 

obligate a future board and is thus, unconstitutional and void; and that in performing 

“tax assessing functions,” one MCAD board cannot bind a future board. This concept 

of not obligating or binding a future board in performing its governmental functions is 

referred to as the “reserved powers doctrine.” As the Texas Supreme Court has 

explained about this doctrine,

Certain powers are conferred on government entities "for public purposes, 

and can neither be delegated nor bartered away." Jasper, 189 S.W.2d at 698. 

Government entities cannot "cede . . . away [such powers] through 

contracts with others so as to disable them from the performance of their 

public duties." Id.; see also Brenham v. Brenham Water Co., 67 Tex. 542, 4 

S.W. 143, 149 (Tex. 1887) ("[Municipal] corporations may make authorized 

contracts, but they have no power, as a party, to make contracts or pass 

bylaws which shall cede away, control or embarrass their legislative or 

governmental powers, or which shall disable them from performing their 

public duties."). 

Kirby Lake Dev., Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829, 843 (Tex. 2010). 

In Kirby Lake, the Clear Lake City Water Authority argued that previous 

agreements with Kirby Lake violated the reserved powers doctrine because the 

agreements imposed an ongoing obligation to submit bond proposals in future bond 

elections, such being the exercise of the Water Authority’s political power. Id. The 

Supreme Court, however, held that the doctrine did not apply because 1) the Water 

Authority did not contract to bargain away a future power but contracted to pay 

invoices if and when funds become available through a bond election, and because 2) a 
Davidson v. McLennan County Appraisal District Page 20

contractual obligation to include a bond reimbursement proposition in future elections 

does not affect the performance of the Water Authority’s public duties, such as the 

manner in which it holds elections or its power to determine how and to whom it will 

extend water services. Id. 

The Retirees argue that this case is controlled by Kirby Lake. MCAD disagrees 

and argues that this case is more like, and is thus controlled by, the Texas Supreme 

Court’s decision in Clear Lake City Water Authority v. Clear Lake Utilities Company, 549 

S.W.2d 384 (Tex. 1977). In Clear Lake, the Water Authority had the governmental power, 

the “public duty,” to determine whether, on any particular date, it would be in the best 

interests of all of its customers and the public in general, to extend water and sewer 

service to a particular person or entity. Id. at 392. The agreement at issue between the 

Water Authority and the Utilities obligated the Water Authority to meet all water and 

sewage treatment needs for Utilities and precluded the Water Authority from extending 

these services directly to a certain group of landowners, under terms and rates that it 

deemed best. Id. The Texas Supreme Court found that by the agreement, the Water 

Authority had attempted to bargain away its governmental power to determine 

"whether, on any particular date, it is in the best interests of all of its customers and the 

public in general, to extend water and sewer service to a particular person or entity." Id.

We believe the situation presented here is more like Kirby Lake rather than Clear 

Lake. Generally, an appraisal district “is responsible for appraising property in the 
Davidson v. McLennan County Appraisal District Page 21

district for ad valorem tax purposes of each taxing unit that imposes ad valorem taxes 

on property in the district.” TEX. TAX CODE ANN. § 6.01(b) (West 2008). R 1997-1 in no 

way bargains away MCAD’s ability to appraise property. In this context, the contract 

with the Retirees does not, in any way, prohibit MCAD from performing its public 

duties. Accordingly, conclusions 11 and 12 are erroneous.

Financial Obligation

The trial court also concluded: 

(13) MCAD is not legally obligated to incur any expense or financial obligation 

in connection with the Retirees being permitted to continue participation in 

current or future group health insurance programs provided to MCAD’s 

employees; 

(14) becoming a member of TML and incurring expense to permit continued 

participation in something that is not a group health insurance program is not 

required by R 1997-1; and 

(15) if the Retirees contend R 1997-1 contractually imposes any financial 

obligation on MCAD, they are incorrect.

By its conclusions, the trial court has determined, and MCAD has, in effect, 

argued, that it would be unlawful for MCAD’s budget to fluctuate because of or be 

affected by R 1997-1. There is nothing in the record to support this determination. Also 

by its conclusions, the trial court has determined that R 1997-1 created some expense or 

“financial obligation” above and beyond MCAD’s ordinary expenditures to be included 

in its budget. There is nothing in the record to support this determination. Further, we 
Davidson v. McLennan County Appraisal District Page 22

have already held that R 1997-1 was not limited to traditional health insurance 

companies.7

R 1997-1 was a unilateral contract that became enforceable when the Retirees 

each accepted MCAD’s promise by performing. Once the Retirees performed, MCAD 

became obligated to provide them with the ability to participate in current or future 

group health insurance programs if they timely paid the premiums. It does not require 

MCAD to provide any health insurance programs but does require that if MCAD 

provides a health insurance program for active employees, it must provide the same 

benefit to its qualifying former employees. The Retirees had always timely paid their 

premiums. MCAD paid their active employees’ healthcare premiums which had been 

the same amount as the Retirees’ premiums. Health care premiums had fluctuated 

through the years. In 2008, the health care premium was $363.15. In 2009, the premium 

dropped to $251.75, and in 2010, it rose to $272.91. And, just as premiums fluctuated, so 

did MCAD’s budget. 

Accordingly, the trial court’s conclusions 13 through 15 are erroneous.

CONCLUSION

To the extent the challenged findings and conclusions are insufficient or 

erroneous, Davidson’s and Martin’s sole issue and Jones’s issues one through nine and 

fourteen are sustained. Because of our disposition of these issues, we find it 

 

7 See Footnote 5 that by this opinion we do not hold MCAD must contract with TML.
Davidson v. McLennan County Appraisal District Page 23

unnecessary to address the remainder of the issues presented for review. TEX. R. APP. P. 

47.1.8 

The trial court’s judgment is reversed and this case is remanded to the trial court 

for further proceedings.

TOM GRAY

Chief Justice

Before Chief Justice Gray,

Justice Davis, and

Justice Scoggins

Reversed and remanded

Opinion delivered and filed August 30, 2012

[CV06]

 

8 There are a number of Jones’s issues that are inadequately briefed; but given our disposition of the 

controlling issues, that shortcoming has no effect on our judgment.
Davidson v. McLennan County Appraisal District Page 24

APPENDIX A

NO. 1997-1

WHEREAS, the McLennan County Appraisal District considers its loyal and 

dedicated employees to be among its most valuable assets; and,

WHEREAS, the McLennan County Appraisal District has provided a retirement 

program for its employees through membership in the Texas County and District 

Retirement System; and,

WHEREAS, the McLennan County Appraisal District wishes to demonstrate its 

appreciation to its long tenured employees and to encourage its employees to remain in 

its employment for the mutual benefit of the appraisal district and its employees; and,

WHEREAS, the McLennan County Appraisal District believes that allowing its 

retired employees and their spouses to continue to be covered under its group medical 

insurance program at the retired employee’s expense would provide added incentive to 

employees to continue in its employment beyond the minimum number of years 

required for service retirement,

NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF DIRECTORS OF 

THE McLENNAN COUNTY APPRAISAL DISTRICT:

That effective January 1, 1998 each employee, who as of that date meets the 

following criteria will be permitted, along with their spouse, upon the timely payment 

of the required premiums by the employee to continue participation in current or future 

group health insurance programs provided by the McLennan County Appraisal District 

for its employees.

Each employee must at the time of their retirement:

a. Be eligible for retirement under the Texas County and District 

Retirement Program;

b. Be covered by the McLennan County Appraisal District’s group 

insurance program;
Davidson v. McLennan County Appraisal District Page 25

c. Have had continuous service as an employee of the McLennan County 

Appraisal District of fifteen (15) years or more; and,

d. This benefit will terminate on the employee’s or spouse’s sixty-fifth 

birthday whichever is later.

That it is hereby officially found and determined that the meeting at which this 

resolution is passed is open to the public as required by law and that public notice of 

the time, place, and purpose of said meeting was given as required.

PASSED AND APPROVED this 4TH day of JUNE, 1997.

 /s/

Rhea Cromwell, Chairman

McLennan County Appraisal District

ATTEST:

/s/

Rick Smith, Secretary
Davidson v. McLennan County Appraisal District Page 26

APPENDIX B

RESOLUTION NO. 2009-20

WHEREAS, the Board of Directors of the McLennan County Appraisal District had 

previously adopted Resolution 1997-1, which allowed certain retirees from the 

McLennan County Appraisal District to participate in the appraisal district’s group 

medical insurance policy, and;

WHEREAS, the Board of Directors of the McLennan County Appraisal District has 

determined that increased costs in providing group medical insurance to the employees 

of the appraisal district has made it financially infeasible to continue to extend this 

benefit, and;

WHEREAS, the Board of Directors of the McLennan County Appraisal District believes 

that to continue to extend to its retirees the option to participate in the appraisal 

district’s group medical insurance policy may jeopardize the ability of the appraisal 

district and the taxing units that support the appraisal district to provide group health 

insurance and otherwise adequately compensate the current employees of the appraisal 

district, and;

WHEREAS, the Board of Directors of the McLennan County Appraisal District has 

determined that it would be in the public interest to terminate the option previously 

provided to its retirees to participate in the appraisal district’s group health insurance 

policy,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE 

McLENNAN COUNTY APPRAISAL DISTRICT:

That effective immediately upon approval of this Resolution 2009-20, the option 

granted to retirees of the McLennan County Appraisal District to participate in the 

appraisal district’s group medical insurance policy as provided for in Resolution 1997-1 

is terminated and is no longer of force and effect as to all current and future employees 

of the McLennan County Appraisal District and as to all existing retirees of the 

McLennan County Appraisal District that are not as of the date of this Resolution 2009-

20 currently participating in the McLennan County Appraisal District’s group medical 

insurance policy.

That effective December 31, 2010, the option granted to retirees of the McLennan 

County Appraisal District to participate in the appraisal District’s group medical 

insurance policy as provided for in Resolution 1997-1 shall terminate and be of no force 
Davidson v. McLennan County Appraisal District Page 27

and effect as to retirees that as of the date of this Resolution 2009-20 are participating in 

the appraisal district’s group medical insurance policy.

That it is officially found and determined that the meeting at which this 

Resolution is passed is open to the public as required by law and that public notice of 

time, place, and purpose of said meeting was given as required.

RESOLVED, this the 2 day of December, 2009

/s/

Billy Hubert, Chairman

Board of Directors

ATTEST:

/s/

Randy Riggs, Secretary

McLennan County Appraisal District
Davidson v. McLennan County Appraisal District Page 28

APPENDIX C

PRIOR RETIREE HEALTH ELECTION WITH MCCAD

Name DOB Start date Years of Service as of 

1998

Break in 

service?

Date of 

retirement

How long they 

participated in 

the program

ALVIN ADAMS 5/20/1938 2/8/1982 16 YEARS NA 1/31/2001 2 YRS 4 MNTS 

(REACHED 65)

MAROLYN CORBIN 7/27/1940 10/1/1981 17 YEARS NA 2/28/2003 2 YRS 4 MTHS

(REACHED 65)

DIANNA CUMMINGS 6/29/1946 6/17/1985 13 YEARS NA 2/16/2007 5 MTHSDECEASED

DIANE FEHLER 3/10/1946 10/1/1981 17 YEARS NA 1/31/2007 9 MTS

SADIE HILL 8/2/1937 10/1/1981 17 YEARS NA 6/19/1998 4 YRS 4 MTHS 

(REACHED 65)

KYTHA RIVAS 11/8/1951 9/21/1981 24 YEARS NA 7/8/2005 2 MTHS

SHIRLEY 

YARBROUGH

7/23/1943 10/1/1981 17 YEARS NA 1/31/2001 7 YRS 7 MTHS 

(REACHED 65)