City of Weslaco, Texas v. Castillo (Tex.App.- Corpus Christi, Sep. 27, 2007)

CITY OF WESLACO, TEXAS v. BAUDELIO CASTILLO, ET AL, No. (Tex.App.- Sep. 27, 2007)(Opinion by Justice Yanez)(Before Justices Yanez, Rodriguez and Garza) Appeal from 332nd District Court of Hidalgo County Dsposition: Affirmed as modified Memorandum Opinion by Justice Yañez Appellant, the City of Weslaco, Texas ("the City"), appeals from the confirmation of an arbitration award in favor of appellees, Baudelio Castillo, David Gamez, Jose Angel Rodriguez, Brent Kennedy, and Adan Sanchez. (1) In two issues, the City contends the trial court erred in (1) confirming the award because the arbitration panel exceeded its authority under the collective bargaining agreement ("CBA"), and (2) awarding attorneys' fees to appellees. We modify the judgment and, as modified, affirm. Background In 1998, appellees presented numerous complaints to the City regarding alleged acts of harassment, official oppression, retaliation and discrimination against them by then-Police Chief, J. D. Martinez, and other senior police department personnel. Appellees alleged that certain actions taken against them by Chief Martinez and others were in violation of the CBA between the parties. (2) On February 25, 1999, the parties signed an agreement to arbitrate the claims under the Uniform Arbitration Act. The agreement provides that the written decision of the two arbitration judges "shall be binding upon the sides." (3) The arbitration panel heard sworn testimony from approximately thirty witnesses in seventeen days of hearings held over several months, from February to June 1999. On August 30, 1999, the panel issued its decision. Among other things, the panel found that senior police officers had engaged in "intentional, oppressive and harmful acts" against appellees, that Chief Martinez "knew or should have known" of the senior officers' misconduct, and that by "fail[ing] to stop" the officers' abuse of their authority, Chief Martinez sanctioned the misconduct. The arbitration award also (1) awarded monetary damages to appellees, (4) (2) awarded appellees $20,000.00 in attorneys' fees, and (3) ordered the removal of certain written reprimands or charges from appellees' personnel files. On September 14, 1999, the City filed suit, seeking a declaratory judgment that the arbitration panel had exceeded its authority under the CBA and chapter 143 of the local government code. (5) Appellees answered and filed a counter-claim, seeking confirmation of the arbitration award. On November 20, 2000, appellees filed a motion for summary judgment, contending that the City, as the losing party seeking to vacate the arbitration award, had the burden to bring forth a complete record that would warrant vacating the award, and noting that it is undisputed that no complete record of the arbitration proceedings exists. On March 11, 2004, the City filed a motion for summary judgment, contending that the arbitration panel exceeded its authority under the CBA and chapter 143 of the local government code. The parties filed several supplemental answers and responses. On May 25, 2004, the trial court granted appellees' motion for summary judgment and affirmed the arbitration award. The May 25, 2004 order did not address the City's claims or the issues of attorneys' fees and interest. On December 13, 2005, the trial court issued an order, in which it (1) took notice that appellees had established attorneys' fees and expenses in the amount of $47,652.77, and (2) awarded appellees attorneys' fees in the amount of $40,000 (plus attorneys' fees in the event of appeal), plus pre- and post-judgment interest. This appeal ensued. Standard of Review and Applicable Law Where a party appeals a grant of summary judgment in a suit to vacate an arbitration award, we review the district court's ruling de novo. (6) As "long as the arbitrator's decision draws its essence from the collective bargaining agreement and the arbitrator is not fashioning his own brand of industrial justice," we will decline to vacate the award. (7) In applying the "essence" test, an arbitration award "must have a basis that is at least rationally inferable, if not obviously drawn, from the letter or purpose of the collective bargaining agreement. . . . The award must, in some logical way, be derived from the wording or purpose of the contract." (8) Although we accord an arbitrator's decision considerable deference regarding the merits of the controversy, the CBA circumscribes his jurisdiction. (9) An arbitrator may look beyond the written contract when interpreting a collective bargaining agreement if the instrument is ambiguous or silent upon a precise question. (10) Where the arbitrator exceeds the express limitations of his contractual mandate, judicial deference ends and vacatur or modification of the award is an appropriate remedy. (11) Jurisdiction Initially, we address appellees' "motion to determine jurisdiction," in which they seek dismissal of the City's appeal, contending that: (1) the trial court's May 25, 2005 order disposes of all parties and issues and is therefore a final order, (2) the December 13, 2005 order is a nullity because the court's plenary power had expired, and (3) therefore, the City's filing of its notice of appeal was untimely. The City argues that the May 25, 2005 order "addressed the merits of the case but did not resolve the issue of attorneys['] fees and interest," and that the December 13, 2005 order "disposed of all issues as to all parties" and became the court's final judgment, from which the City timely appealed. A judgment is not final unless it disposes of all pending parties and claims in the record. (12) There can be no presumption that a motion for summary judgment addresses all of the movant's claims. (13) In cases in which only one final and appealable judgment can be rendered, a judgment issued without a conventional trial is final for purposes of appeal if and only if it either states with unmistakable clarity that it is a final judgment or actually disposes of all claims and parties then before the court, regardless of its language. (14) The law does not require that a final judgment be in any particular form. (15) Therefore, whether a summary-judgment order is a final judgment must be determined from its language and the record in the case. (16) Here, the May 25, 2005 order, entitled "Judgment Confirming Award," (1) states that appellees "are entitled to Summary Judgment and a judgment confirming the award of the arbitrator," and (2) orders that appellees "have judgment as specified in the Arbitrator's Order of August 30, 1999." It neither addresses the City's request for declaratory relief and attorneys' fees, nor does it contain a "Mother Hubbard" clause, stating that "all relief not expressly granted is denied." The December 13, 2005 order, entitled "Order Granting Defendants' Attorney's Fees and Interest on Judgment," (1) notes that both the City and appellees sought attorneys' fees under the Declaratory Judgment Act, (17) and (2) awards appellees attorneys' fees (including attorneys' fees on appeal) and pre- and post-judgment interest. The order further states that "[a]ll writs and processes for the enforcement and collection of this judgment or the costs of court may issue as necessary" and "[a]ll further relief not expressly granted in this judgment is hereby DENIED." We conclude that because the May 25, 2005 order did not dispose of the City's claims for declaratory judgment or attorneys' fees, it was not a final appealable order. In addition, although we recognize that a "Mother Hubbard" clause alone does not indicate that a judgment rendered without a conventional trial is final, (18) we nonetheless conclude that based on the language of the order and the record in this case, the December 13, 2005 order is a final, appealable order. Accordingly, we hold the City's notice of appeal was timely filed. Appellees' Motion for Summary Judgment In its first issue, the City complains the trial court erred in confirming the arbitration award because the arbitrators exceeded the scope of their authority under the CBA. Article I of the CBA states that the purpose of the agreement is "to provide for an equitable and orderly process that addresses salaries, working conditions, and employee-employer working relations that may arise" during the term of the agreement. Article XXII, section 7 of the CBA provides, in pertinent part, "[n]o police officer shall be discriminated against in any way because of activity on behalf of the Union." Article XXVII, entitled "Grievance Procedures," provides for arbitration of grievances. Subparagraph (2) of this section provides: The hearing on the grievance shall be informal and the rules of evidence shall not apply. The Arbitrator shall not have the power to add to, subtract from, to modify, the provisions of this agreement in arriving at a decision on the issue or issues presented; and shall confine his decision solely to the precise issue or issues submitted for arbitration, and shall have no authority to determine any other issues not directly presented in the grievance. The decision of the Arbitrator shall be final and binding upon the grievant and the City. Paragraph II of the arbitration award states that from November 1997 to August 1999, appellees were "harassed, intimidated, embarrassed, cajoled, denied advancement, suspended, removed from work positions within the Police department, forced to suffer monetary damage, suffered violations of their civil rights, and were publicly humiliated" by Chief Martinez and other senior police officers. In Paragraph VI(A), in which the arbitration panel offers its "Conclusion[s]," the award states that the City, through its senior police officers, engaged in "official oppression, discrimination, and punitive retaliation" against appellees in violation of section 7 of the CBA. As noted above, section 7 of Article XXII of the CBA prohibits discrimination against officers because of Union activity. We find no other reference in the arbitration award to a specific section of the CBA. Accordingly, we conclude that the award is based on the arbitrators' conclusion that the City and its senior officers discriminated against appellees because of their Union activities. In their motion for summary judgment, appellees contend they are entitled to judgment because as the losing party seeking to vacate the award, the City has the burden to produce a complete record establishing a basis for modifying or vacating the award, and no such record exists. Appellees note that in Article XXIV of the CBA, providing for arbitration of disciplinary actions against police officers, paragraph six of section three provides: A stenographic transcription of the [arbitration] proceeding shall be made only upon written agreement of the parties prior to commencement of the hearing. Should there be no agreement, the party desiring the transcript may have the transcript made at its sole expense. Hearings may be recorded by audio tape by either party and a copy of the audio recording shall be made available to the other party upon request. In support of their motion, appellees presented the following summary judgment evidence: (1) a copy of the City's Motion to Continue (in which the City admits that it has the burden to bring forth a complete record of the proceedings giving rise to the adverse award); (2) affidavits of the arbitrators, appellees' counsel, and one of the appellees, all of which state that no complete record of the arbitration proceedings exists; and (3) a copy of the CBA. In support of its argument, appellees cite Eurocapital Group Ltd. v. Goldman Sachs & Co., 17 S.W.3d 426, 429 (Tex. App.-Houston [1st Dist.] 2000, no pet.); Kline v. O'Quinn, 874 S.W.2d 776, 790-91 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (op. on motions for reh'g); and Atrium Westwood VIII Venture v. Barrick Westwood Ltd. P'ship, 693 S.W.2d 699, 700-01 (Tex. App.-Houston [14th Dist.] 1985, no writ). We agree that these cases support appellees' argument that the City had the burden to bring forth a complete record establishing a basis for vacating or modifying the award. (19) Without a record, we presume that adequate evidence was presented to support the arbitrator's award. (20) The burden is on the City to establish that the arbitrators exceeded their authority; the City has not met its burden. The record before us does not include any evidence that the arbitrators exceeded their authority. We overrule the City's first issue and affirm the trial court's order confirming the arbitration award. Attorneys' Fees In its second issue, the City contends the trial court erred in awarding attorneys' fees to appellees because the CBA contains no provision authorizing the award of attorneys' fees. Appellees argue that "[w]here the CBA is silent, the arbitrator is presumed to have authority if it is necessarily implied by the authority to address the subject matter." The trial court's December 13, 2005 order granting appellees attorneys' fees notes that the City requested relief under the Declaratory Judgment Act and that appellees' request for attorneys' fees was also based on the Declaratory Judgment Act. (21) The order notes that the following cases "concerning the Declaratory Judgment Act" support appellees' request for attorneys' fees: Tex. Educ. Agency v. Leeper, 893 S.W.2d 432 (Tex. 1995); Farnsworth v. Deaver, 147 S.W.3d 662 (Tex. App.-Amarillo 2004, no pet.); Agan v. Comm'rs Court of Titus Co., 922 S.W.2d 640 (Tex. App.-Texarkana 1996), aff'd in part, rev'd in part, 940 S.W.2d 77 (Tex. 1997); City of El Paso v. Crum Const. Co., 864 S.W.2d 153 (Tex. App.-El Paso 1993, writ denied); and Knighton v. Int'l Bus. Machs. Corp., 856 S.W.2d 206 (Tex. App.-Houston [1st Dist.] 1993, writ denied). Although the cases cited in the trial court's December 13, 2005 order "concern" the Declaratory Judgment Act, the only case that involves arbitration is City of El Paso, and it is inapposite. (22) This Court has held that there is "no basis for recovery of attorneys' fees in a successful defense against an action to vacate an arbitration award." (23) In Int'l Bank of Commerce-Brownsville, we also rejected the argument (apparently relied on by the trial court in this case) that a party is entitled to attorneys' fees because it sought a declaratory judgment from the trial court. (24) Because we conclude the trial court erred in awarding appellees attorneys' fees, we sustain the City's second issue. (25) Conclusion We modify the trial court's judgment to delete the trial court's award of $40,000.00 in additional attorneys' fees for enforcing the arbitration award, plus the additional attorneys' fees for appealing to this Court, and for potentially appealing to the supreme court. (26) As modified, we affirm the trial court's judgment confirming the arbitration award. LINDA REYNA YAÑEZ, Justice Memorandum opinion delivered and filed this the 27th day of September, 2007. 1. Appellees are police officers (or former officers) for the City of Weslaco. At the time of the arbitration, they were members of the Weslaco Municipal Police Union ("the Union"), then the bargaining agent for Weslaco police officers. 2. The applicable CBA was in effect from October 1, 1997, through September 30, 1999. 3. Emphasis in original. 4. The arbitration panel awarded monetary damages to appellees in the following amounts: (1) $10,170 to Baudelio Castillo, (2) $4,000 to Adan Sanchez, (3) $2,500 to Jose Angel Rodriguez, (4) $2,500 to David Gamez, and (5) $4,000 to "Bruce" [Brent] Kennedy. 5. See Tex. Loc. Gov't Code Ann. §§ 143.001-.363 (Vernon 1999 & Supp. 2006). 6. Houston Lighting & Power Co. v. Int'l Bhd. of Elec. Workers, Local Union No. 66, 71 F.3d 179, 181 (5th Cir.1995). 7. Id. at 182 (quoting Delta Queen Steamboat Co. v. Dist. 2 Marine Eng'rs Beneficial Ass'n, 889 F.2d 599, 602 (5th Cir. 1989)). 8. Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1325 (5th Cir.1994) (citation omitted). 9. Delta Queen Steamboat Co. v., 889 F.2d 599 at 602. 10. Id. 11. Id. 12. Cartwright v. Cologne Prod. Co., 182 S.W.3d 438, 443 (Tex. App.-Corpus Christi 2006, pet. denied) (citing Guajardo v. Conwell, 46 S.W.3d 862, 863-64 (Tex. 2001) (per curiam); Garcia v. Comm'rs Court, 101 S.W.3d 778, 784 (Tex. App.-Corpus Christi 2003, no pet.)). 13. Id. (citing McNally v. Guevara, 52 S.W.3d 195, 196 (Tex. 2001) (per curiam)). 14. Id. (citing Lehmann v. Har-Con Corp., 39 S.W.3d 191, 204 (Tex. 2001); Garcia, 101 S.W.3d at 784). 15. Id. (citing Lehmann, 39 S.W.3d at 195; Garcia, 101 S.W.3d at 784). 16. Id. (citing Lehmann, 39 S.W.3d at 195; Garcia, 101 S.W.3d at 784). 17. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Vernon 1997). 18. See First Nat'l Bank v. DeVillagomez, 54 S.W.3d 345, 348 (Tex. App.-Corpus Christi 2001, pet. denied). 19. See GJR Mgmt. Holdings, L.P. v. Raus, 126 S.W.3d 257, 263 (Tex. App.-San Antonio 2003, pet. denied); Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 267 (Tex. App.-Houston [14th Dist.] 1995, no pet.). 20. Anzilotti, 899 S.W.2d at 267; Kline v. O'Quinn, 874 S.W.2d 776, 783 (Tex. App.-Houston [14th Dist.] 1994, writ denied) (holding that without a transcription of the arbitration proceedings, we must presume adequate evidence to support the award); House Grain Co. v. Obst, 659 S.W.2d 903, 906 (Tex. App.-Corpus Christi 1983, writ ref'd n.r.e.) (same). 21. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (Vernon 1997) (providing that a court may award costs and reasonable and necessary attorneys' fees in proceeding under Declaratory Judgment Act). 22. The court in City of El Paso held that municipal corporations may be held liable for attorneys' fees in declaratory judgment actions. City of El Paso v. Croom Const. Co., Inc., 864 S.W.2d 153, 155 (Tex. App.-El Paso 1993, writ denied). 23. Int'l Bank of Commerce-Brownsville v. Int'l Energy Dev. Corp., 981 S.W.2d 38, 54 (Tex. App.-Corpus Christi 1998, pet. denied) (rejecting trial court's award of additional attorneys' fees in arbitration award under the FAA); see also Perry Homes v. Cull, 173 S.W.3d 565, 574 (Tex. App.-Ft. Worth- 2005, pet. granted) (noting a trial court may not add post-arbitration attorneys' fees to the arbitration award); Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 436 (Tex. App.-Dallas 2004, pet. denied) (noting, in reviewing arbitration award under TAA, that "If an arbitration award includes an award of attorneys' fees, a trial court may not award additional attorney fees for enforcing or appealing the confirmation of the award, unless the arbitration agreement provides otherwise."); Cooper v. Bushong, 10 S.W.3d 20, 26 (Tex. App.-Austin 1999, pet. denied) (noting, in challenge to arbitrator's decision pursuant to the TAA, that absent evidence to support modification of arbitrator's award, a court must confirm the award). 24. See Int'l Bank of Commerce-Brownsville, 981 S.W.2d at 54. 25. We note that although the arbitration award is silent as to pre- and post-judgment interest and costs, appellees' pleadings include a request for the award of interest and costs. The trial court's December 13, 2005 order awards pre- and post-judgment interest to appellees and adjudges all costs against the City. The City does not challenge the trial court's award of interests and costs, and accordingly, those elements of the trial court's judgment remain intact. 26. See Crossmark, 124 S.W.3d at 437.