Court Opinion

ID: 12969
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:22:45+00
Date Added: 2024-06-11T15:03:33.937318
License: Public Domain

United States Court of Appeals,

                            Fifth Circuit.

                             No. 96-40658.

                Barry MALLEK, et al., Plaintiffs,

               Barry Mallek, Plaintiff-Appellant,

                                  v.

 The CITY OF SAN BENITO, A Local Governmental Body and Political
Subdivision of the State of Texas; The City Commission for the
City of San Benito, Texas, Defendants-Appellees.

                            Sept. 17, 1997.

Appeals from the United States District Court for the Southern
District of Texas.

Before DUHÉ and BARKSDALE, Circuit Judges, and COBB,1 District
Judge.

     DUHÉ, Circuit Judge:

     Plaintiff-Appellant Barry Mallek appeals the dismissal—through

two partial summary judgments and one judgment as a matter of

law—of his wrongful termination claim against Defendant-Appellee

City of San Benito, Texas.    For reasons that follow, we vacate and

remand.

                                  I.

     On 26 March 1992, Barry Mallek received from Carla Schuller,

acting City Manager for the City of San Benito, a telefax letter

confirming Mallek's acceptance of a job offer as Chief of Police

     1
      District Judge of the Eastern District of Texas, sitting by
designation.

                                   1
for the City of San Benito.2   On 7 April 1992, Mallek was publicly

introduced to the San Benito City Commission as the City's new

Chief of Police. The Commission voiced no objection or disapproval

to Mallek's appointment at that time.   After the introduction, the

Commission convened in executive session allegedly to discuss

Mallek's appointment.   The Commissioners took no formal vote in

executive session nor did they pass a resolution or ordinance

approving or disapproving of Mallek's appointment.

     Mallek assumed his duties as Chief of Police on 22 April 1992,

subsequent to which several newly-elected members of the Commission

took office.   In the execution of his duties, Mallek spoke out to

the City Manager, the police officers, the media, and the citizens

of San Benito of alleged violations of law occurring in an area

known as Skid Row. On 30 April 1992, the City Attorney sent Mallek

a letter stating that Schuller, as acting City Manager, had no

authority to extend to him an offer of employment.   Nevertheless,

Mallek continued to perform his duties, and the City paid him

accordingly.   On 5 May 1992, the reconstituted Commission met for

the first time, and following another executive session, offered

Mallek a contract with terms less favorable than those offered in

    2
     Pursuant to this offer, Mallek (1) had an indefinite term of
employment with pay guaranteed for two years;      (2) was given
$42,500/year in salary;      (3) could be terminated only upon
conviction of a felony;   and (4) was entitled to severance pay
equal to two years' salary if he was terminated for reasons other
than conviction of a felony.

                                 2
Schuller's   letter.3   Mallek   rejected   the   Commission's   offer,

believing he already had a valid employment contract pursuant to

the March 26 letter.     Thereafter, Mallek was removed from the

City's payroll and was discharged from his position as Chief of

Police.

     Mallek filed suit in state court, alleging breach of contract,

violation of the Texas "Whistleblower" Act, V.T.C.A. Gov't Code §

554.002(a) (Vernon 1994) (formerly Tex.Rev.Civ.Stat.Ann. art. 6252-

16(a), § 2), and other state causes of action that he does not

pursue on appeal.   The City moved for partial summary judgment on

these claims.   Before the state court ruled on this motion, Mallek

amended his complaint to allege causes of action under 42 U.S.C. §

1983, claiming that he was terminated (1) without procedural and

substantive due process of law, in violation of the Fourteenth

Amendment, and (2) in retaliation for exercising his right to free

speech, in violation of the First Amendment.        Mallek also seeks

fees under 42 U.S.C. § 1988 for these alleged violations.          The

state court thereafter granted the City's motion for partial

summary judgment on Mallek's state causes of action.     Mallek moved

for reconsideration, and the state court granted Mallek's motion.

     3
      Pursuant to the terms of the Commission's offer, Mallek (1)
had an indefinite term of employment with pay guaranteed for one
year; (2) was entitled to $42,500/year in salary; (3) could be
terminated for cause; (4) would receive severance pay equal to one
year's salary if terminated without cause; and (5) was required to
become a certified Texas Peace Officer immediately, and to this
end, (6) would receive three weeks of paid leave to study and
obtain certification.

                                  3
Before a hearing could be held, however, the City removed the case

to federal district court for resolution of Mallek's federal

claims. Following removal, Mallek again moved for reconsideration,

but the federal district court declined to set aside the state

court's summary judgment, erroneously citing res judicata.

     Thereafter, the City moved for summary judgment on Mallek's

federal claims.     Because the state court granted summary judgment

against Mallek on his contract claim, the federal district court

reasoned    that   Mallek    had   no     protected      property      interest   in

continued employment, and it thus granted the City's motion for

summary judgment but only as to Mallek's Fourteenth Amendment/ §§

1983 and 1988 claims.       After two days of trial, the district court

ordered judgment as a matter of law for the City on Mallek's First

Amendment claims.     Mallek timely appeals.

                                        II.

      Because all of Mallek's claims stem from his allegation of

breach of    contract,      we   decide       first   whether    the   state   court

properly dismissed Mallek's contract claim on summary judgment. We

assume appellate jurisdiction over the state court order of summary

judgment    in   accordance      with   Resolution       Trust    Corporation     v.

Northpark Joint Venture, 958 F.2d 1313, 1316-17 (5th Cir.1992)

(stating, "A prior state court order is in essence federalized on

removal to the federal court....              If the federal court declines to

reconsider the state court summary judgment [order], then the

                                          4
federal court certifies that the rule is indeed consistent with

Rule 56(c).") (citations omitted).     This Court reviews a grant of

summary judgment de novo, viewing the facts and inferences in the

light most favorable to the non-movant.     See Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d
202 (1986); Resolution Trust Corp. v. Northpark Joint Venture, 958
F.2d 1313, 1316 (5th Cir.1992) (stating that where prior state

court order is summary judgment, federal court must ensure that

order complies with the requirements of Fed.R.Civ.Pro. 56(c)).

     The City bases its motion for partial summary judgment as to

Mallek's contract claim on three grounds:       (1) that Schuller's

March 26 telefax letter cannot form the basis of a valid contract

insofar as it was not made pursuant to the terms of the city

charter;   (2) that Article III, § 53 of the Texas Constitution

prohibits payment for any contract "made without authority of law";

and (3) that Mallek failed to mitigate his damages when he refused

the City's offer of employment.    We address each in turn.

                                  A.

      The City's charter authorizes its Manager to appoint the

Chief of Police, but only with the "advice and consent" of the City

Commission.   The City maintains that because it never passed a

resolution or ordinance consenting to Mallek's appointment, it

never gave its "advice and consent", which it insists is synonymous

with formal ratification.   We find the City's argument infirm.

                                  5
         The City charter states that the City Manager "shall appoint

all appointive officers, except [the] city attorney, and [the]

employees of the city, with [the] advice and consent of the city

commission."       Charter of City of San Benito, Art. XXV, § 2

(emphasis added).       Unlike the myriad of other charter provisions

that authorize action only by ordinance or formal resolution,4 this

provision authorizes action based more simply on the Commission's

"advice or consent."       Where, as here, a city's charter expressly

provides that certain actions shall be accomplished by ordinance,

"[t]he implication is that matters which are not specifically

required     to   be   dealt   with    by   ordinance    may   be   dealt   with

otherwise."        Barrington     v.    Cokinos,   339 S.W.2d 330,   337

     4
      See, e.g., Art. I, § 8 (stating that power to lease, grant,
sell, etc. public property is subject to enacting ordinance); Art.
VIII, § 1 (stating that ordinances relating to City's municipal
court shall be amended or repealed by ordinance); Art. IX, § 1(5)
(stating that enforcement of fire proof roofing prescriptions to be
by ordinance, rules, and regulations); Art. IX, § 1(44) (stating
that regulation of utility rates to be by ordinance); Art. XII, §
1 (stating that creation of equalization and appraisement board to
be by ordinance); Art. XIII, § 3 (stating that grant of franchise
possible only after franchise terms are published "in the form of
an ordinance");    Art. XIX, § 1 (stating that construction of
railroad shall be directed, regulated, and controlled by ordinance,
resolution, or direction of Commission's duly authorized officers);
Art. XXVII, § 17 (stating that warrant for payroll to issue by
ordinance); Art. XXVIII, §§ 14, 17 (stating that regulation of
certain utility-related matters to be controlled by ordinance);
Art. XXXI, § 8 (stating that "Commission shall by ordinance have
power to make a special charge against owners of abutting property
for such cost");    Art. XXXI, § 10 (stating that "Commission by
ordinance shall provide for the issuance of assignable certificates
covering the payment of such assessments"); and Art. XXXII, § 1
(stating that "Commission shall have power by ordinance to levy,
assess, and collect an annual ad valorem tax").

                                        6
(Tex.Civ.App.—Beaumont 1959), aff'd, 161 Tex. 136, 338 S.W.2d 133

(1960);   see also City of Kirbyville v. Smith, 104 S.W.2d 564, 566

(Tex.Civ.App.—Beaumont 1937, no writ) (stating that unless city

charter provides that city contracts be authorized by ordinance or

resolution, city may make contract resting in parol). We therefore

conclude that the Commission can lawfully consent to Mallek's

appointment to Chief of Police by means other than a formal

ordinance or resolution.

      Even   if   we   assume,   arguendo,   that   Mallek's   employment

contract was defective, we recognize that Texas law provides that

municipal contracts defectively executed " "may be ratified by the

acts and conduct of the governing body of such municipality. [Such

body's] agreement [to the contract] may be manifested by its acts

and conduct.' " Interstate Materials Corp. v. City of Houston, 236
S.W.2d 653, 655 (Tex.Civ.App.—Galveston 1951, writ ref'd n.r.e.)

(quoting B.F. Goodrich Rubber Co. v. Town of Collinsville, 101
S.W.2d 583, 584 (Tex.Civ.App.—Dallas 1937, no writ) (holding that

a city that has accepted the benefits of a contract it maintains

was defectively executed is estopped from denying the contract's

validity)). Our review of the summary judgment record reveals that

fact issues exist as to whether the Commission did, in fact,

through its acts and conduct, give its "advice and consent" to

Mallek's appointment.      The following summary judgment evidence

indicates that Mallek's claim should proceed:          (1) Schuller, as

                                    7
City Manager, and Mallek signed a written employment contract; (2)

Mallek was introduced to several (if not all) of the members of the

Commission as the new Chief of Police, and no member voiced an

objection;     (3) thereafter, on the same day, the Commission met in

executive session and did nothing to dispel Mallek's belief that

his   employment   contract   was   valid;   (4)   Mallek    assumed   the

responsibilities and duties of Chief of Police and performed those

duties for two weeks without objection from any member of the

Commission;     (5) Mallek was listed on the city's payroll sheets as

the Chief of Police, and he was paid accordingly during his two

weeks of service;    and, (6) the city manager also appointed a fire

chief and a city finance director, without the city council ever

having taken any formal action to approve or disapprove either of

those two appointments.

                                    B.5

          The third basis upon which the City bases its motion for

partial summary judgment is Mallek's failure to mitigate his

damages by refusing the City's offer of employment.         Mallek's duty

to mitigate, however, does not include the duty to accept a new and

different bargain with terms less favorable than those to which he

had previously agreed. Cf. Hadra v. Herman Blum Consulting Eng'rs,

      5
      In light of the foregoing discussion, we find unmeritorious
the City's argument that it is entitled to summary judgment on the
ground that Article III, § 53 of the Texas Constitution prohibits
payment for any contract "made without authority of law." As we
have discussed, fact issues remain as to whether the parties formed
an employment contract made with authority of law.

                                    8
632 F.2d 1242, 1245 (5th Cir.1980);        Hanna v. Lott, 888 S.W.2d 132,

138 (Tex.App.—Tyler 1994, no writ).

     The proposed contract offered by the City indeed offered terms

less favorable than those offered in Schuller's contract.             Under

the City's proposed contract, Mallek was guaranteed only one year's

salary, whereas under Schuller's contract, he was guaranteed two

years'    salary;    under   the    City's   contract,   Mallek   could   be

terminated for cause, whereas under Schuller's contract, he could

be terminated only if convicted of a felony;        and, finally, in the

event of his termination, under the City's contract, Mallek was

entitled to severance pay equal only to one year's salary and only

if he was terminated for reasons other than cause, whereas under

Schuller's contract, he was entitled to two years' salary as long

as his termination resulted from reasons other than a felony

conviction.

     We conclude, therefore, that the City has failed to offer any

grounds upon which its motion for partial summary judgment on

Mallek's breach of contract claim can survive.

                                    III.

         The Texas Whistleblower's Act prohibits a city from taking

adverse action against "a public employee who in good faith reports

a violation of law to an appropriate law enforcement authority."

V.T.C.A.     Gov't   Code    §     554.002   (Vernon     1994)    (formerly

Tex.Rev.Civ.Stat.Ann. art. 6252-16(a), § 2). The City's motion for

                                      9
partial    summary   judgment    on   Mallek's   whistleblower     claim   is

predicated upon its allegations that (1) Mallek had not reported to

the City any alleged violations of law;            and (2) Mallek had no

standing to bring this claim insofar as he is not a public

employee.

     The record reveals that fact issues exist as to whether Mallek

reported any violations of law, and as we discussed, fact issues

exist as to whether Mallek is, in fact, a public employee.           We thus

vacate the state court's summary judgment on this claim and remand

for additional proceedings.

                                      IV.

        Mallek maintains that the City terminated his employment

without    procedural   and    substantive   due   process   and    that   it

therefore unconstitutionally deprived him of his property interest

in continued employment, in violation of the Fourteenth Amendment

and 42 U.S.C. § 1983.         Mallek also seeks fees under 42 U.S.C. §

1988.     The City argues that Mallek's claim must fail insofar as

Mallek has not established that the parties formed an employment

contract and has therefore not established a property interest in

continued employment. We are unpersuaded by the City's argument in

light of our conclusion that fact issues exist as to whether Mallek

and the City contracted for Mallek's employment.             We therefore

vacate the district court's summary judgment on Mallek's Fourteenth

                                      10
Amendment claims and remand for additional proceedings.6

                                       V.

           Finally, Mallek maintains that the district court erred in

granting judgment as a matter of law against him on his First

Amendment claims.        We review a judgment as a matter of law de novo.

See   Seven-Up     Co.   v.   Coca-Cola    Co.,    86 F.3d 1379,   1387   (5th

Cir.1996).

      An essential element to Mallek's case is his allegation that

he    was     fired   for     exercising     his   First   Amendment     rights.

Recognizing this, the district court took Mallek's First Amendment

claims away from the jury, reasoning that insofar as Mallek had not

shown that he had been hired by the City, he could not show he had

been fired by the City. In light of our conclusion that fact issues

exist on this question of Mallek's employment status, we vacate the

court's judgment as a matter of law and remand for additional

proceedings.

                                       VI.

      In light of the foregoing, we VACATE AND REMAND.

       6
      The City argues in the alternative that even if Mallek did
have a property interest, his claim still fails insofar as (1) its
termination process did not deny Mallek procedural due process, and
(2) its decision to terminate Mallek was in accord with his
substantive due process rights. Because our review of the record
reveals factual disputes on these issues, we are unpersuaded by the
City's alternative arguments.

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