Court Opinion

ID: 3095620
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:31:37.668458+00
Date Added: 2024-06-11T11:51:20.850946
License: Public Domain

COURT OF APPEALS
                        SECOND DISTRICT OF TEXAS
                             FORT WORTH

                            NO. 02-13-00006-CV

FORT WORTH INDEPENDENT                                            APPELLANT
SCHOOL DISTRICT

                                      V.

JOSEPH PALAZZOLO                                                   APPELLEE

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          FROM THE 271ST DISTRICT COURT OF WISE COUNTY

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                       MEMORANDUM OPINION1

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                              I. INTRODUCTION

     Appellant Fort Worth Independent School District (FWISD) appeals the trial

court‘s denial of its motion for summary judgment challenging Appellee Joseph

Palazzolo‘s claims under the Texas Whistleblower Act. In two issues, FWISD

     1
      See Tex. R. App. P. 47.4.
argues that the trial court lacks subject-matter jurisdiction over Palazzolo‘s

claims. We will reverse and render.

                                 II. BACKGROUND

      FWISD employed Palazzolo as an assistant principal at Arlington Heights

High School (AHHS). Between late 2009 and mid-2010, Palazzolo reported to

several organizations and FWISD officials that FWISD employees had falsified

student attendance records, misused booster club funds, improperly enforced

disciplinary procedures against minority students, and engaged in inappropriate

sexual relationships with each other.

      In mid-June 2010, Palazzolo received an appraisal report issued by the

principal of AHHS that provided in relevant part that Palazzolo ―need[ed]

improvement‖ in a particular aspect of his position as an assistant principal.

Around the same time, Palazzolo learned that he had been reassigned from

AHHS to an assistant principal position at the International Newcomers Academy

(INA) for the upcoming 2010–2011 school year. Palazzolo‘s pay rate would be

less than his pay at AHHS.

      Palazzolo subsequently filed a Level I grievance with FWISD outlining the

reports that he had made and claiming that he had been reassigned to INA in

retaliation for making those reports. He sought to have his reassignment to INA

revoked, to be paid the same salary that he was paid at AHHS, to have his

appraisal report voided, to receive no future threats and be assured of no future

retaliation, and to enter into a two-year contract with FWISD.

                                         2
      After a conference was held, the hearing officer concluded that Palazzolo

had not been reassigned in retaliation for making reports, instead determining

that he had been reassigned for other, unrelated matters; explained that

Palazzolo‘s pay rate was not supposed to have been reduced below the amount

that he earned as an assistant principal at AHHS; amended Palazzolo‘s appraisal

report to reflect that he met or exceeded expectations in all performance areas;

explained that Palazzolo was currently serving the second year of a two-year

contract that expired at the conclusion of the 2010–2011 school year; and

confirmed that Palazzolo would be treated in compliance with FWISD policy and

the law. Shortly thereafter, FWISD reassigned Palazzolo to Western Hills High

School (WHHS) at a rate of pay similar to what he had made at AHHS.

      Palazzolo pursued a Level II grievance. At a conference on that matter, he

indicated that he wanted to remain at WHHS.        The hearing officer granted

Palazzolo‘s request and, in response to Palazzolo‘s previous requests, confirmed

that he would be paid an assistant principal‘s salary for the upcoming year,

confirmed that his appraisal report had been amended, explained that he was

serving the second year of a two-year contract, and assured him that he would

be treated in a manner consistent with FWISD policy and the law.

      Thereafter, Palazzolo pursued a Level III grievance. At the hearing on that

matter, he told the FWISD Board of Trustees that he had ―no problem being

reassigned,‖ that he was ―fine with either school, Arlington Heights or Western

Hills,‖ and that he was ―fine with the evaluation‖ that he had previously

                                       3
challenged and that had been amended. The Board voted that no action be

taken at the time on Palazzolo‘s whistleblower claims.

      Approximately two weeks later, Palazzolo sued FWISD for violating the

Whistleblower Act. He alleged that FWISD retaliated against him for making the

reports by (1) transferring him from AHHS, (2) making the negative appraisal

report, and (3) lifting a trespass warning against the parent of an AHHS student

who had allegedly threatened his daughter when she was a student at AHHS.

FWISD moved for summary judgment on Palazzolo‘s claims regarding the

transfer and the appraisal report, arguing that Palazzolo had failed to establish a

waiver of FWISD‘s governmental immunity because he did not properly initiate

FWISD‘s grievance process.      FWISD also moved for summary judgment on

Palazzolo‘s trespass-warning claim, arguing that the trial court lacked subject-

matter jurisdiction over that claim because FWISD‘s lifting of the trespass

warning was not an adverse employment action. The trial court denied FWISD‘s

motion in its entirety, and this accelerated, interlocutory appeal followed. See

Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West Supp. 2013).

                           III. INITIATION REQUIREMENT

      In its first issue, FWISD argues that the trial court erred by denying its

motion for summary judgment as to Palazzolo‘s transfer and appraisal-report

claims because by advising the Board of Trustees at the Level III grievance

hearing that he had ―no problem being reassigned‖ and that he was ―fine‖ with

the appraisal report, Palazzolo circumvented the purpose of—and therefore

                                        4
failed to satisfy—the Whistleblower Act‘s administrative initiation requirement.

According to FWISD, because initiation is a jurisdictional prerequisite to

maintaining suit, the trial court lacked subject-matter jurisdiction over Palazzolo‘s

claims.

      Palazzolo responds that he timely initiated FWISD‘s grievance procedure,

that he had no obligation to participate in the process, and that FWISD did not

redress all of the relief that he had requested in his grievance.

      The absence of subject-matter jurisdiction may be raised in a motion for

summary judgment. Bland ISD v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). In a

summary judgment case, the issue on appeal is whether the movant met the

summary judgment burden by establishing that no genuine issue of material fact

exists and that the movant is entitled to judgment as a matter of law. Tex. R. Civ.

P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d
844, 848 (Tex. 2009). Once the movant produces sufficient evidence to establish

the right to summary judgment, the burden shifts to the nonmovant to come

forward with competent controverting evidence that raises a fact issue. Van v.

Pena, 990 S.W.2d 751, 753 (Tex. 1999). If the evidence creates a fact question

regarding jurisdiction, the trial court cannot grant the motion, and the fact

question will be resolved by the factfinder. Tex. Dep’t of Parks & Wildlife v.

Miranda, 133 S.W.3d 217, 227–28 (Tex. 2004). We review the trial court‘s ruling

de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010).

                                          5
      The Whistleblower Act provides that a ―state or local governmental entity

may not suspend or terminate the employment of, or take other adverse

personnel action against, a public employee who in good faith reports a violation

of law by the employing governmental entity or another public employee to an

appropriate law enforcement authority.‖       Tex. Gov‘t Code Ann. § 554.002(a)

(West 2012). The Act also contains an express waiver of the State‘s sovereign

immunity.    See id. § 554.0035 (West 2012).        However, before filing suit, a

claimant ―must initiate action under the grievance or appeal procedures of the

employing state or local governmental entity relating to suspension or termination

of employment or adverse personnel action.‖          Id. § 554.006(a) (West 2012)

(emphasis added). If a final decision is not rendered before the sixty-first day

after the date procedures are initiated, the employee may elect to exhaust the

applicable procedures previously initiated or terminate procedures and timely file

suit. Id. § 554.006(d)(1), (2).

      This court, like other courts, has previously determined that section

554.006(a)‘s initiation requirement is a jurisdictional prerequisite, such that

compliance is essential to the trial court‘s jurisdiction over a claimant‘s

whistleblower action. See Tarrant Cnty. v. McQuary, 310 S.W.3d 170, 174 (Tex.

App.—Fort Worth 2010, pet. denied); see also Tex. Gov‘t Code Ann. § 311.034

(West 2013) (―Statutory prerequisites to a suit, including the provision of notice,

are jurisdictional requirements in all suits against a governmental entity.‖); Prairie

View A&M Univ. v. Chatha, 381 S.W.3d 500, 510–11 (Tex. 2012) (reasoning that

                                          6
section 311.034, as amended, ―evinces the Legislature‘s intent that all statutory

prerequisites are now jurisdictional requirements as to governmental entities and

are properly asserted in a plea to the jurisdiction‖); Fort Bend ISD v. Gayle, 371
S.W.3d 391, 394–95 (Tex. App.—Houston [1st Dist.] 2012, pet. denied); Jordan

v. Ector Cnty., 290 S.W.3d 404, 406 (Tex. App.—Eastland 2009, no pet.). Thus,

Palazzolo‘s transfer and appraisal-report claims are barred by governmental

immunity and must be dismissed if he did not satisfy section 554.006(a)‘s

initiation requirement.2 See Univ. of Houston v. Barth, 178 S.W.3d 157, 161–62

(Tex. App.—Houston [1st Dist.] 2005, no pet.).

      The Whistleblower Act does not dictate what actions are required to

―initiate‖ a grievance or appeals procedure, but we must proceed with the

understanding that the goal of section 554.006 is to afford the governmental

entity an opportunity to investigate and correct its errors and to resolve disputes

before incurring the expense of litigation. See Leyva v. Crystal City, 357 S.W.3d
93, 99 (Tex. App.—San Antonio 2011, no pet.); City of Fort Worth v. Shilling, 266
S.W.3d 97, 102 (Tex. App.—Fort Worth 2008, pet. denied). In light of the parties‘

arguments, several cases are particularly instructive here.

       In Aguilar v. Socorro Independent School District, the school district

reassigned Aguilar from his position as Assistant Superintendent of Operational

      2
       We consequently reject Palazzolo‘s argument that this case should be
abated if we conclude that he failed to comply with section 554.006(a)‘s initiation
requirement.

                                        7
Services to an assistant principal position after he notified the superintendent that

he was working in conjunction with state and federal authorities in an ongoing

criminal investigation. 296 S.W.3d 785, 786 (Tex. App.—El Paso 2009, no pet.).

Aguilar filed a grievance with the school district, complaining of the alleged

demotion, but he refused to fully participate in the arbitration hearing that

followed. Id. at 786–87. The trial court granted the school district‘s plea to the

jurisdiction, finding that Aguilar had failed to properly grieve his reassignment,

and on appeal, Aguilar argued that he satisfied section 554.006‘s initiation

requirement by filing a grievance and obtaining a recommendation. Id. at 787–

88. The court of appeals rejected Aguilar‘s argument. It acknowledged that the

legislature had amended section 554.006 from requiring a claimant to exhaust

any applicable grievance or appeal procedure to requiring a claimant to initiate a

grievance or appeal procedure, a fact that Aguilar emphasized, but it found

persuasive a Fourth Court of Appeals decision reasoning that ―[t]o take the

Legislature‘s action in substituting the word ‗initiate‘ for the word ‗exhaust‘ in sub-

section (a) to mean that an employee could initiate a grievance procedure and

then, two minutes, two hours, or two days later, file a lawsuit under the Whistle-

Blower Act would not only render the remainder of the statute meaningless, it

would completely abdicate the purpose of Section 554.006.‖ Id. at 789 (quoting

City of San Antonio v. Marin, 19 S.W.3d 438, 441 (Tex. App.—San Antonio

2000), disapproved of on other grounds by Univ. of Tex. Med. Branch at

Galveston v. Barrett, 159 S.W.3d 631, 633 n.7 (Tex. 2005)).                The court

                                          8
concluded that Aguilar had circumvented the goal of the statute, thereby failing to

satisfy the jurisdictional prerequisite:

      By not complying with the arbitrator‘s requests for information or
      presenting information that would allow the arbitrator to reach a
      decision, Aguilar‘s action did not serve the purpose of the statute—
      to afford the employer ―the opportunity to correct its errors by
      resolving disputes before being subjected to the expense and effort
      of litigation.‖ Allowing a complainant to simply file a grievance and
      then refuse to participate in the grievance hearing before filing suit is
      analogous to the situation where a complainant files a grievance
      then files suit immediately thereafter. Aguilar‘s tactical decision
      completely circumvent[ed] the purpose of Section 554.006.

Id. at 790 (citations removed).

      In Fort Bend Independent School District v. Gayle, Gayle resigned her job

as an administrator after learning that the school‘s administration had

recommended her termination. 371 S.W.3d at 393. Her attorney then sent a

written grievance to the school district, claiming that Gayle had been

constructively discharged in retaliation for reporting the school‘s failure to comply

with requirements of the Even Start Family Literacy Grant. Id. Thereafter, nearly

two months elapsed before Gayle‘s attorney and the school district were able to

agree on a date for the grievance hearing. Id. The day before the grievance

hearing was to occur, however, Gayle filed her whistleblower suit, and her

attorney notified the school that the grievance hearing was moot. Id. The trial

court denied the school district‘s plea to the jurisdiction. Id. On appeal, the

school district acknowledged that Gayle had properly filed a grievance, but citing

Aguilar, it argued that she had failed to satisfy section 554.006‘s initiation

                                           9
requirement because she did not participate meaningfully in the school district‘s

grievance procedure during the government-mandated sixty-day period. Id. at

395–96. Relying upon the statute‘s text—principally, that a claimant must initiate,

not exhaust, a grievance or appeal procedure—the court of appeals disagreed

that section 554.006 requires a claimant to participate in a hearing after properly

filing a grievance.   Id. at 396–99. The court thus concluded that Gayle had

satisfied section 554.006‘s initiation requirement by merely properly filing a

grievance before filing her whistleblower action. Id.

      Although it may appear so at first glance, Aguilar and Gayle are not

irreconcilable. Aguilar did not hold—contrary to Gayle‘s holding—that a claimant

who properly files a grievance must further meaningfully participate in that

procedure. Rather, the Aguilar court concluded that the claimant had failed to

satisfy section 554.006 because, although he filed a grievance and obtained a

recommendation, he additionally made the ―tactical decision [to] completely

circumvent[] the purpose of Section 554.006‖ by not complying with the

arbitrator‘s requests for information or presenting information that would have

allowed the arbitrator to reach a decision. 296 S.W.3d at 790. Thus, as we

construe both Gayle and Aguilar, a claimant satisfies section 554.006‘s initiation

requirement by timely invoking the governmental entity‘s grievance or appeal

procedure before filing a whistleblower action; however, if a party who invokes a

grievance or appeal procedure goes on to actively circumvent the governmental

entity‘s efforts to redress the complained-of conduct, that party does not comply

                                        10
with section 554.006‘s initiation requirement. This makes sense because, as the

Gayle court observed, ―Once a grievance is initiated, the governmental unit has

notice of the claim so it can begin its own investigation of the claim.‖ Gayle, 371
S.W.3d at 397 n.2.; see McQuary, 310 S.W.3d at 178 (―[T]he governmental entity

must be given reasonable notice that it has, in fact, made a mistake that can be

resolved before a lawsuit is filed.‖). But if a party proceeds to actively circumvent

that investigation, section 554.006‘s initiation requirement—which is meant to

afford the governmental entity an opportunity to investigate and correct its errors

and to resolve disputes before incurring the expense of litigation—is rendered

meaningless.

      Here, Palazzolo filed grievances against FWISD, see Gayle, 371 S.W.3d

at 396–99, but that does not end our inquiry. See Aguilar, 296 S.W.3d at 790. At

the Level III grievance hearing, Palazzolo informed the Board that he was ―fine

with [working at] either school, Arlington Heights or Western Hills,‖ and that he

was ―fine with the evaluation‖ that he had previously challenged and that had

been amended to reflect that he met or exceeded expectations in all performance

areas.   Having informed the Board that his transfer and appraisal-report

complaints were resolved, Palazzolo effectively led the Board to believe that as

to those complaints, there was no further investigation that needed to occur and,

equally important, no need to correct any potential misconduct allegedly

committed by FWISD. Although Palazzolo‘s conduct does not appear to be as

brazen as the claimant‘s conduct in Aguilar, the effect is nonetheless the same—

                                         11
Palazzolo actively circumvented FWISD‘s efforts to redress the complained-of

conduct by advising the Board that he had no dispute with his transfer and

appraisal report.3

      Palazzolo argues that the grievance process did not redress all of the

matters that he raised in his grievance and that he is entitled to seek to recover

actual damages, including mental anguish damages, for the matters that were

not part of the redress provided by FWISD. However, we are only concerned

here with the claims that Palazzolo has alleged in this litigation: as it is relevant

to this first issue, the transfer claim and the appraisal-report claim. There is no

dispute that these two matters were fully addressed at the Level III grievance

hearing, and Palazzolo has not asserted any other claims in this litigation derived

from one of the grounds that was set out in his grievance and that was allegedly

not addressed.

      We hold that FWISD met its burden to demonstrate as a matter of law that

Palazzolo did not properly initiate FWISD‘s grievance process and that Palazzolo

failed to come forward with evidence raising a fact question as to whether he

initiated a grievance under FWISD‘s grievance process. Because there is no

evidence that Palazzolo complied with section 554.006‘s initiation requirement, a

jurisdictional prerequisite, we hold that the trial court erred by denying FWISD‘s

      3
       As to Palazzolo‘s whistleblower complaints, the Board voted to not take
any action on the day of the hearing.

                                         12
motion for summary judgment as to Palazzolo‘s transfer and appraisal-report

claims. We sustain FWISD‘s first issue.

                               IV. TRESPASS WARNING

      In its second issue, FWISD argues that the trial court erred by denying its

motion for summary judgment as to Palazzolo‘s claim that FWISD retaliated

against him by lifting a trespass warning against the parent of an AHHS student.

According to FWISD, because lifting the trespass warning was not an adverse

employment action within the meaning of the Whistleblower Act, Palazzolo failed

to allege a violation of the Act and FWISD retained its immunity from suit, thus

depriving the trial court of subject-matter jurisdiction.

      The Whistleblower Act provides that ―[a] public employee who alleges a

violation of this chapter may sue the employing state or local governmental entity

for the relief provided by this chapter.‖        Tex. Gov‘t Code Ann. § 554.0035

(emphasis added). The Supreme Court of Texas has interpreted this language

to mean that the elements of a whistleblower claim ―can be considered to

determine both jurisdiction and liability.‖ State v. Lueck, 290 S.W.3d 876, 883

(Tex. 2009). Thus, the elements of a whistleblower claim ―must be included

within the pleadings so that the court can determine whether they sufficiently

allege a violation under the Act to fall within‖ the waiver of immunity from suit

provided by section 554.0035. Id. at 884.

      To prevail on a claim under the Whistleblower Act, a public employee must

demonstrate that he suffered an adverse employment action committed by the

                                          13
employer.   See Tex. Gov‘t Code Ann. § 554.002.        ―[A] personnel action is

adverse within the meaning of the Whistleblower Act if it would be likely to

dissuade a reasonable, similarly situated worker from making a report under the

Act.‖ Montgomery Cnty. v. Park, 246 S.W.3d 610, 614 (Tex. 2007). Several

nonexclusive factors that may be relevant to the inquiry include whether the

alleged adverse personnel action negatively affected the employee‘s prestige,

opportunity for advancement, working conditions, pay or income, or ability to

obtain outside employment. See id. at 615. An employee must establish a but-

for causal nexus between the protected activity and the employer‘s prohibited

conduct. See City of Fort Worth v. Zimlich, 29 S.W.3d 62, 67 (Tex. 2000).

      Here, Palazzolo alleged that FWISD retaliated against him by lifting a

trespass warning against the parent of an AHHS student who had allegedly

threatened his daughter when she was a student at AHHS.               However,

Palazzolo‘s summary judgment evidence confirms that FWISD did not lift the

trespass warning until after he had been reassigned to another school and after

he had made the decision to remove his daughter from AHHS. We hold that, as

a matter of law, FWISD‘s lifting the trespass warning after Palazzolo had been

reassigned to another school and after he decided to remove his daughter from

AHHS was not an adverse employment action within the meaning of the

Whistleblower Act. See Montgomery, 246 S.W.3d at 614; Zimlich, 29 S.W.3d at

67. Accordingly, the trial court erred by denying FWISD‘s motion for summary

                                      14
judgment as to Palazzolo‘s trespass-warning claim. We sustain FWISD‘s second

issue.4

                               V. CONCLUSION

      Having sustained FWISD‘s two issues, we reverse the trial court‘s

judgment denying FWISD‘s motion for summary judgment and render judgment

that Palazzolo take nothing on his claims under the Whistleblower Act. See Tex.

R. App. P. 43.2(c).

                                                BILL MEIER
                                                JUSTICE

PANEL: DAUPHINOT, MCCOY, and MEIER, JJ.

DAUPHINOT, J. concurs without opinion.

DELIVERED: January 9, 2014

      4
        We need not address FWISD‘s arguments that the trial court abused its
discretion by denying its objections to Palazzolo‘s summary judgment arguments
and evidence. See Tex. R. App. P. 47.1.

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