Opinion ID: 895305
Heading Depth: 3
Heading Rank: 1

Heading: Standing Under the MCAs

Text: In holding the Firefighters had no standing to sue for alleged breaches of the MCAs, the court of appeals invoked the doctrine of inclusio unius est exclusio alterius , 290 S.W.3d at 271, which is the presumption that purposeful inclusion of specific terms in a writing implies the purposeful exclusion of terms that do not appear. See Newman v. Blum , 9 S.W. 178, 178 (Tex. 1888). Both MCAs state they were negotiated “by and between the Houston Professional Fire Fighters Association and the City of Houston, Texas.” Both provide that grievances may be resolved either through the statutory grievance procedures of Local Government Code sections 143.127–.134, or by judicial resolution under section 143.206 upon “application by either party.” Section 143.206 (which the MCAs incorporate by reference) likewise speaks in terms of “either party” and “other party.” Tex. Loc. Gov’t Code § 143.206(b). “The state district court of the judicial district in which the municipality is located has full authority and jurisdiction on the application of either party aggrieved by an action or omission of the other party . . . .” Id. (emphasis added). From this language, applying the inclusio unius doctrine, the court of appeals concluded that only the Union and the City had standing to sue for breach of the MCAs. 290 S.W.3d at 271. Although inclusio unius is a sound maxim of construction, judicial review cannot start and end on such a narrow basis when, as here, there is another valid ground to confer standing—the Firefighters’ status as third-party beneficiaries under the MCAs. Texas law recognizes that third parties have standing to recover under a contract that is clearly intended for their direct benefit. Stine v. Stewart , 80 S.W.3d 586, 589 (Tex. 2002) (per curiam). In determining whether there is intent to benefit a third party, we look to the entire agreement, giving effect to all its provisions. Id. at 590. The contract need not have been executed solely to benefit the noncontracting party. Id. at 591. We do not create a third-party benefit by implication; the presumption is the parties contracted only for themselves, absent a clear showing of intent otherwise. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co. , 995 S.W.2d 647, 651–52 (Tex. 1999). However, the agreement need not state “third-party beneficiary” or any similar magic words. See Stine , 80 S.W.3d at 590–91. Finally, a third party cannot enforce a contract if the third party benefits only incidentally from it. MCI , 995 S.W.2d at 651–52. The MCAs reflect an intent to benefit the Firefighters as third parties to the agreements—indeed, the Union was required by its duty of representation to seek benefits for the Firefighters in the agreements. Both agreements make this purpose plain in their preambles by stating that one purpose is to provide certain wages, hours, and conditions of employment. 1 7 Both agreements directly guarantee benefits to the Firefighters, in particular in terms of salary and termination payments, 1 8 overtime pay, 1 9 and vacation leave. 2 0 These benefits are not offered to the world at large as a general beneficence, but are limited to the Firefighters through the definition of “employee” 2 1 included in the agreements. These guarantees of compensation are not promised to the City or to the Union, but to the Firefighters. As such, the City and the Union expressed a clear intent to benefit the Firefighters when they contracted through the MCAs. 2 2 Accordingly, the Firefighters have standing to enforce the agreements. 2 3