Opinion

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN

NO. 3-93-269-CV

WILMER-HUTCHINS INDEPENDENT SCHOOL DISTRICT,

APPELLANT

vs.

LIONEL R. MENO, COMMISSIONER OF EDUCATION; CENTRAL EDUCATION

AGENCY; THOMAS E. ANDERSON, JR., INTERIM COMMISSIONER

OF EDUCATION; AND BOBBY WILLIAMS,

APPELLEES

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT

NO. 91-13503, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING

PER CURIAM

Appellant Wilmer-Hutchins Independent School District seeks to appeal from a

trial-court judgment awarding appellee Bobby Williams damages on a breach-of-contract claim.

We will affirm the trial court's judgment.

I. BACKGROUND

In March 1987, the board of trustees of Wilmer-Hutchins Independent School

District (WHISD) failed to renew appellee Bobby Williams' contract as an associate

superintendent. The Term Contract Nonrenewal Act (TCNA), Tex. Gov't Code Ann. art.

21.201, .203(a) (West 1987). In its notice to Williams, WHISD stated it was reducing central administrative staff because of lower enrollment and funding. Williams appealed the board's

decision to the Commissioner of Education (the "Commissioner") of the Central Education

Agency (the "CEA"). TCNA, §§ 11.13, 21.207 (West 1987 & 1991).

The Commissioner found that the board did not consider a written evaluation of

Williams' performance before deciding to not to renew his contract and made a conclusion of law

that this violated the TCNA, §§ 21.202, & .204(a). (1) The Commissioner further found that the

board did not consider whether other positions were open in the district for which Williams was

qualified. The Commissioner concluded that these board actions were arbitrary and capricious

and that Williams' appeal should be granted. The Commissioner awarded Williams the salary

benefits of reinstatement in the same professional capacity for the succeeding school year.

In his motion for rehearing, Williams challenged the remedy the Commissioner

awarded. Williams argued that he was entitled to reinstatement, compensation, and other related

benefits attendant to his employment with WHISD, dating back to the date the board failed to

renew his contract. First, Williams motion for rehearing recited that if the Commissioner's

decision that "Petitioner is entitled to salary benefits of reinstatement in the same professional

capacity for the succeeding school year" included the relief he prayed for, the decision was not

in error. Alternatively, Williams argued that he was entitled to the requested relief as damages

for common-law breach of contract on the theory that WHISD breached its contractual obligations

to Williams when it wrongfully terminated his employment.

In his decision on rehearing, the Commissioner, relying on this Court's opinion in

Cypress-Fairbanks Independent School District v. Texas Education Agency , 797 S.W.2d 336 (Tex.

App.--Austin 1990), (2) rev'd , 830 S.W.2d 88 (Tex. 1992), strictly construed his authority to grant

a remedy as limited to that provided under TCNA section 21.204(b), and ordered Williams

employed in the same capacity for the succeeding school year. Both WHISD and Williams filed

timely motions for rehearing.

On September 25, 1991, Williams filed suit in district court. Williams sought

judicial review of the Commissioner's order and alleged a breach-of-contract cause of action. The

district court granted Williams partial summary judgment on the issue whether WHISD breached

Williams' contract. The court then heard evidence and rendered a final judgment (1) affirming

the Commissioner's decision in all respects; (2) awarding Williams damages on his breach-of-contract claims; (3) awarding Williams pre- and post-judgment interest, attorney's fees, and costs;

and (4) ordering WHISD to reinstate Williams as an assistant superintendent. WHISD appeals

from this judgment.

II. DISCUSSION

In point of error one, WHISD asserts that the trial court erred in granting partial

summary judgment on a breach-of-contract claim because material fact issues exist and plaintiff

Williams is not entitled to summary judgment as a matter of law. The standards for reviewing

a motion for summary judgment are well established. The movant for summary judgment has the

burden of showing that no genuine issue of material fact exists and that it is entitled to judgment

as a matter of law. In deciding whether there is a disputed material fact issue precluding summary

judgment, evidence favorable to the nonmovant will be taken as true. This Court must indulge

every reasonable inference in favor of the nonmovant and resolve any doubts in his favor. Nixon

v. Mr. Property Management Co. , 690 S.W.2d 546, 548-49 (Tex. 1985).

A. WHISD Failed to Preserve Certain Issues for Review on Appeal

In his motion for partial summary judgment, Williams' pleaded he was entitled to

summary judgment on the issue of liability on his breach-of-contract claim because WHISD: (1)

failed to consider his performance evaluations before nonrenewing his contract, in violation of the

TCNA; and (2) failed to consider Williams for other positions for which he was qualified. WHISD argues that the consideration of a teacher's evaluation before any decision

is made to nonrenew is appropriate only if the decision to nonrenew a term contract is based upon

a teacher's work performance reflected in such evaluation. WHISD argues that its decision to

nonrenew was based on reasons unrelated to performance (e.g., the need to reduce personnel

because of loss of enrollment and funding, and changes in program) and, thus, it is ludicrous to

require the district to go through the hollow exercise of considering a teacher's evaluation when

the reasons for nonrenewal are not related to performance. WHISD argues that consideration of

Williams' performance evaluation would have had no effect on the decision to nonrenew.

Therefore, the Commissioner acted arbitrarily and capriciously in requiring WHISD to consider

Williams' performance evaluation.

WHISD did not raise these arguments in its response to Williams motion for partial

summary judgment. Accordingly, we will not consider them on review of the trial court's order

granting partial summary judgment. Tex. R. Civ. P. 166a(c); City of Houston v. Clear Creek

Basin Auth. , 589 S.W.2d 671, 676 (Tex. 1979) (issues not expressly presented to the trial court

by written motion, answer, or other response shall not be considered on appeal as grounds for

reversal); Tex. R. App. P. 52(a).

B. Requirement That Board Consider Performance Evaluations

Moreover, as a matter of law, WHISD was required to review Williams'

performance evaluation before deciding not to renew his contract. The TCNA defines "teacher"

to include a superintendent. TCNA, § 21.201 (West 1987). Section 21.202 expressly provides

that:

The board of trustees of each school district shall provide by written policy for the

periodic written evaluation of each teacher in its employ at annual or more frequent

intervals. Such evaluation shall be considered by the board of trustees prior to any

decision by the board not to renew the term contract of any teacher.

TCNA, § 22.202 (West 1987). The statute clearly required the board to consider Williams'

performance evaluation before it decided not to renew his contract. If the legislature had intended

to except from this requirement nonrenewals due to reduction in force, it could have so indicated

in the statute. (3) The legislature did not.

C. Failure to Consider Williams for Other Positions

WHISD next assails the Commissioner's finding that the board acted arbitrarily and

capriciously when it failed to consider whether other positions were available in the district for

which Williams was qualified. WHISD also argues that the Commissioner acted arbitrarily and

capriciously in denying WHISD's second motion for leave to file additional evidence related to

the issue of Williams being considered for other positions. WHISD further argues that it was

contractually bound by the terms of Williams contract not to consider Williams for any position

other than associate superintendent. We need not address these arguments, because the

Commissioner's determination that WHISD wrongfully decided not to renew Williams' contract

can be sustained based on the Commissioner's finding that WHISD acted arbitrarily and

capriciously when it decided not to renew Williams' contract without first considering his

performance evaluation.

D. Other Alleged Fact Questions

Next, WHISD argues Williams is not entitled to judgment as a matter of law on his

breach of contract claim, because (1) after the supreme court's decision in Grounds v. Tolar

Independent School District , 707 S.W.2d 889, 891 (Tex. 1986), the Commissioner is without

authority to provide Williams more relief than the statutory relief provided in TCNA section

21.204(b) and, thus, Williams has no recognized common-law claim for breach of contract; and

(2) the district court's power under substantial-evidence review is limited (4) and, as a matter of law,

the court could not grant Williams any remedy not specifically recognized or granted by the

Commissioner in his specific findings, especially in the absence of any pleading or evidence by

Williams that the Commissioner's decision was illegal, arbitrary or capricious, or not supported

by substantial evidence. Specifically, WHISD cites Grounds for the proposition that when a cause

of action is derived from a statute, the statutory provisions are mandatory and exclusive and must

be complied with in all respects or the action is not maintainable. See Grounds , 707 S.W.2d at

891 . WHISD argues that after Grounds , Williams' only recourse for wrongful nonrenewal of his

contract is that provided by the TCNA and the only remedy to which Williams is entitled under

the TCNA is that provided in section 21.204(b). Thus, argues WHISD, Williams has no

common-law cause of action for breach of contract. We disagree.

(1) A Cause of Action for Breach of Contract Exists & Williams Established That

WHISD Breached His Contract As A Matter of Law

The protections of the Term Contract Nonrenewal Act were a part of Williams'

employment contract even though these protections were not expressly written into the contract.

Laws which subsist at the time and place of the making of a contract form a part of it, as if they

were expressly referred to or incorporated in its terms. Central Educ. Agency v. George West

Indep. Sch. Dist. , 783 S.W.2d 200, 201-02 (Tex. 1989). These protections were a material part

of Williams' contract, which the district could not unilaterally abrogate without committing a

breach. Id. at 202 . Although these protections are statutorily derived, they exist as a term of the

contract between the school district and the employee.

In his petition for review to the Commissioner, Williams alleged that his contract was

wrongfully nonrenewed because the WHISD board of trustees failed to consider Williams'

performance evaluation in violation of board policy and state law. See TCNA § 21.202 (West

1987). Williams' summary-judgment proof included a true and correct copy of the

Commissioner's decision on Williams' appeal of the board's failure to renew his contract. The

Commissioner's decision recites the Commissioner's finding that the WHISD board of trustees

failed to consider Williams' performance evaluation before deciding not to renew his contract.

The Commissioner concluded that the board's action in failing to consider the evaluation was

arbitrary and capricious. Thus, Williams has a cause of action for breach of contract based on

WHISD's failure to obey the TCNA, and established WHISD breached his contract as a matter

of law.

(2) Neither Grounds nor TNCA Limit Williams' Recovery to Remedy in Section

21.204(b)

At all times relevant to this cause, the TCNA required the board of trustees to give

timely written notice of a proposed nonrenewal. (5) Section 21.204(b) provides:

In the event of failure to give such notice of proposed nonrenewal within the time

herein specified, the board of trustees shall thereby elect to employ such employee

in the same professional capacity for the succeeding school year.

TCNA, § 21.204(b) (West 1987).

Grounds recites, in pertinent part:

Since the TCNA is the enabling statute that provides for the interpretation of term

contracts between school districts and teachers and for appellate procedures, it is

clearly within the Commissioner's power to determine a teacher's statutory rights,

which may include reassignment in the "same professional capacity,". . . .

Grounds , 707 S.W.2d at 891-92 .

Grounds does not limit Williams' remedy to that provided under section 21.204(b).

The language in Grounds is permissive, not mandatory, and it implies that other remedies exist.

Additionally, section 21.204(b) applies to the board of trustee's failure to give the notice required

in section 21.204(a). The facts in this case do not involve the board's failure to give Williams

timely notice that the board was considering nonrenewing his contract.

With the exception of the remedy for failure to provide timely notice of the

proposed nonrenewal, the TCNA is silent regarding the relief available to a teacher when due

process or contractual rights are violated because of a failure to adhere to the TCNA. This does

not mean Williams is without a remedy if he suffers damages. Rather, we believe it means that

the forum in which Williams must pursue his claims for damages is not administrative, but

judicial. See Cypress-Fairbanks , 830 S.W.2d at 91 (commissioner of education is without

authority to grant damages or injunctive relief); Central Educ. Agency v. George West Indep. Sch.

Dist. , 783 S.W.2d 200, 201-02 (Tex. 1989) (protections of TCNA are part of employment

contract; district may not unilaterally abrogate protections without committing a breach); Grounds

v. Tolar Indep. Sch. Dist. , 872 S.W.2d 823, 827 (Tex. App.--Fort Worth 1994, writ denied)

(award of nominal damages is mandatory when plaintiff-teacher establishes procedural-due-process

violation, but fails to prove actual injury; court of appeals awarded damages district court should

have awarded); Kawasaki Motors Corp. v. Texas Motor Vehicle Comm'n. , 855 S.W.2d 792, 799

(Tex. App.--Austin 1993, no writ) (agency enforcement and adjudicative powers cannot be

implied); Grounds v. Tolar Indep. Sch. Dist. , 827 S.W.2d 10, 12 (Tex. App.--Dallas 1992)

(teachers have cause of action for breach of contract when school districts fail to obey TCNA),

rev'd on other grounds, 856 S.W.2d 417, 420 (Tex. 1993) (TCNA specifically designed to give

teachers due-process rights when district decides not to renew teachers employment contract);

Pasadena Indep. Sch. Dist. v. Emmons , 586 S.W.2d 151, 152 (Tex. Civ. App.--Houston [1st

Dist.] 1979, writ dism'd) (petitioner not required to first seek from commissioner of education

injunctive relief staying enforcement of board order when neither Texas Education Code nor APA

expressly authorize commissioner to issue injunction or stay order; held, district court had

jurisdiction to entertain petition for temporary injunction).

(3) District Court Is The Appropriate Forum to Seek Damages

Administrative agencies and officials have no "inherent" powers. They receive

government power by delegation from the Legislature, except in a few instances of constitutional

delegation not applicable here, and they have no power outside the legislative grant. They may

exercise only those powers conferred upon them by law in clear and express statutory language,

for no additional authority will be implied by judicial construction, and they may not create for

themselves any new and additional power in excess of that granted. Cypress-Fairbanks , 797

S.W.2d at 340 .

Section 21.207 of the TCNA provides:

(a) If a teacher is aggrieved by the decision of the board of trustees, he may

appeal to the State Commissioner of Education pursuant to Section 11.13 of

this Code. The commissioner may not substitute his judgment for that of the

board of trustees, unless the decision below was arbitrary, capricious,

unlawful, or not supported by substantial evidence.

(b) Either party may appeal the commissioner's decision to a district court in

Travis County.

TCNA, § 21.207(a), (b) (West 1987).

Section 11.13 provides, in relevant part:

(a) [P]ersons having any matter of dispute among them arising under the school

laws of Texas or any person aggrieved by the school laws of Texas or by

actions or decisions of any board of trustees or board of education may appeal

in writing to the commissioner of education, who, after due notice to the

parties interested, shall hold a hearing and render a decision without cost to

the parties involved, but nothing contained in this section shall deprive any

party of any legal remedy .

(c) Any person, county, or school district aggrieved by any action of the Central

Education Agency or decision of the commissioner of education may appeal

to a district court in Travis County, Texas. . . . Upon trial the court shall

determine all issues of law and fact, . . . .

TCNA, § 11.13 (a), (c) (West 1991) (emphasis added).

The TCNA does not expressly authorize the CEA through its Commissioner to

award Williams damages resulting from WHISD's wrongful nonrenewal of his contract.

Moreover, the adjudication of Williams' breach-of-contract claim is not necessary to the

Commissioner's determination whether Williams' contract was wrongfully nonrenewed in

violation of his due-process rights and, thus, is not an adjudicative power implied as necessary

for the agency to achieve its statutory purpose. See Kawasaki , 855 S.W.2d at 798 (agency may

not, on a theory of necessary implication from a specific power, erect and exercise new and

additional power).

Williams was required to appeal to the Commissioner the board's decision to

nonrenew his contract. Once Williams exhausted his administrative remedies at the agency level

regarding the issue whether WHISD wrongfully nonrenewed his contract, Williams could then

bring in the district court his cause of action for breach of contract. (6) Williams' remedies for his

common-law breach of contract cause of action in the district court are not limited to the remedy

provided in the TCNA. See Myrtle Springs Reverted Indep. Sch. Dist. v. Hogan , 705 S.W.2d

707, 709-10 (Tex. App.--Texarkana 1985, writ ref'd n.r.e.) (specifying damages available based

on a breach of contract claim arising out of wrongful nonrenewal), cert. denied , 480 U.S. 906

(1987). We must now determine whether Williams could, in the same suit, bring his breach-of-contract cause of action and seek review of the Commissioner's order.

(4) Review in District Court

WHISD argues that the district court is limited to substantial-evidence review of

the Commissioner's order and that it cannot award Williams more relief than the Commissioner

granted in his order, especially in the absence of any pleading or evidence by Williams that the

Commissioner's decision was illegal, arbitrary, or capricious, or not supported by substantial

evidence. We agree that review of the commissioner's order is governed by the substantial-evidence standard of review. Tex. Educ. Code Ann. § 21.207 (b) (West 1987); APA-- Tex. Gov't

Code Ann. § 2001.174 (West Pamph. 1994); Cypress-Fairbanks , 797 S.W.2d 340 . WHISD,

however, fails to acknowledge that Williams brought not only a suit for judicial review of the

Commissioner's order, but an independent cause of action for breach of contract.

The Commissioner decided only the issue whether WHISD wrongfully failed to

renew Williams contract. The district court tried Williams' cause of action for the breach-of-contract and damages as an original action. Thus, the district court's determination of William's

breach-of-contract claims cannot be characterized as judicial review of the agency's action. (7)

Accordingly, the district court was not limited to substantial-evidence review of Williams' breach-of-contract claim (8) and could award appropriate relief apart from the relief the Commissioner

awarded. We overrule point of error one.

In point of error two, the district asserts that the trial court erred in denying

WHISD's pleas to the jurisdiction with respect to any common-law claim for breach of contract

and any damages resulting therefrom. In point of error three, the district asserts that the trial

court erred in granting Williams any remedy other than one year's salary. WHISD's arguments

under these points of error raise nothing not already raised under point of error one. Accordingly,

we overrule points of error two and three.

III. CONCLUSION

Finding no reversible error, we affirm the trial court's judgment.

Before Justices Jones, Kidd and B. A. Smith

Affirmed

Filed: January 11, 1995

Do Not Publish

1. 1 Section 21.202 provides:

The board of trustees of each school district shall provide by written policy for the

periodic written evaluation of each teacher in its employ at annual or more frequent

intervals. Such evaluation shall be considered by the board of trustees prior to any

decision by the board not to renew the term contract of any teacher.

TCNA, § 21.202 (West 1987). Section 21.204(a) provides:

In the event the board of trustees receives a recommendation for nonrenewal, the

board, after consideration of the written evaluations required by Section 21.202 of

this subchapter and the reasons for the recommendation, shall, in its sole discretion,

either reject the recommendation or shall give the teacher written notice of the

proposed nonrenewal on or before April 1 preceding the end of the employment term

fixed in the contract.

Act of May 26, 1981, 67th Leg., R.S., ch.765, § 2, 1981 Tex. Gen. Laws 2847 , 2848 ( Tex.

Educ. Code Ann. § 21.204 (a), since amended).

2. 2 The Commissioner did not specify the language he relied on in construing his authority to

grant a remedy. We note that the opinion recites that administrative agencies and officials have

no inherent authority outside the legislative grant, and may exercise only those powers conferred

upon them by law in clear and express statutory language. Cypress-Fairbanks Indep. Sch. Dist.

v. Texas Educ. Agency , 797 S.W.2d 336, 340 (Tex. App.--Austin 1990), rev'd on other grounds,

830 S.W.2d 88 (Tex. 1992).

3. 3 For example the legislature has seen fit to except the district from the requirement that it

receive recommendations from its school administration regarding nonrenewing a teacher when

it is the general superintendent being considered for nonrenewal. See Tex. Educ. Code Ann. §

21.203 (c), .208 (West 1987).

4. 4 WHISD argues that the district court may only affirm the commissioner's decision, either

in whole or in part, or reverse and remand the case for further proceedings if substantial rights

of Williams have been prejudiced because the administrative findings are arbitrary or capricious,

or characterized by abuse of discretion, or are a clearly unwarranted exercise of discretion. See

Administrative Procedure Act-- Tex. Gov't Code Ann. § 2001.174 (West 1994) (hereinafter APA).

5. 5 Former section 21.204(a) provided:

In the event the board of trustees receives a recommendation for nonrenewal, the

board, after consideration of the written evaluations required by Section 21.202 of

this subchapter and the reasons for the recommendation, shall, in its sole discretion,

either reject the recommendation or shall give the teacher written notice of the

proposed nonrenewal on or before April 1 preceding the end of the employment term

fixed in the contract.

Act of May 26, 1981, 67th Leg., R.S., ch.765, § 2, 1981 Tex. Gen. Laws 2847 , 2848 ( Tex.

Educ. Code Ann. § 21.204 (a), since amended).

6. 6 We do not address whether Williams was required to raise at the agency level his claim that

he was entitled to damages for breach of contract. See Texas Educ. Agency v. Cypress-Fairbanks

Indep. Sch. Dist. , 830 S.W.2d 88, 90 (Tex. 1992) (suggesting that claims may be properly before

the commissioner for some purposes even if the commissioner cannot finally adjudicate them or

grant full relief without overstepping his jurisdictional bounds). See also Roberts v. Hartley

Indep. Sch. Dist. , 877 S.W.2d 506, 508 (Tex. App.--Amarillo 1994, writ denied) (terminated

teacher must exhaust administrative remedies before seeking breach of contract damages in district

court). Williams expressly raised the issue in his April 14, 1991, motion for rehearing.

7. 7 Accordingly, this was not a hybrid trial in which the district court applied two different

standards of review to an agency order or action (mixing a trial de novo with a review under the

substantial evidence rule), which is not permitted. Southwestern Bell Telephone v. Public Util.

Comm'n , 571 S.W.2d 503, 511-12 (Tex. 1978).

8. 8 In its order granting Williams partial summary judgment, the district court decided only the

question ofWHISD's liability for breach of Williams' contract. The district court held a haring

on the damages issue. The applicable burden of proof on the damages issues was by a

preponderance of the evidence. WHISD does not assert that the district court incorrectly applied

the applicable burden of proof or standard of review.