Vera v. Tue

United States Court of Appeals,

Fifth Circuit.

No. 95-10314

Summary Calendar.

Ray VERA, dba Vera's Bonding Company, and Larry Vera, dba Vera's

Bonding Company, Plaintiffs-Appellants,

v.

Charles TUE, Sheriff of Hale County, TX, et al., Defendants-

Appellees.

Jan. 31, 1996.

Appeal from the United States District Court for the Northern

District of Texas.

Before KING, SMITH and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

The principal issue on this appeal is whether the district

court properly held that the Sheriff was entitled to immunity from

this civil rights suit. Finding that the Sheriff was not so

entitled, we reverse in part and affirm in part.

I. FACTS AND PROCEDURAL HISTORY

Ray Vera, d/b/a Vera's Bonding Company, and Larry Vera, d/b/a

Vera's Bonding Company (collectively the Bonding Company), filed

the instant civil rights suit under 42 U.S.C. § 1983 against

Charles Tue, Sheriff of Hale County, Texas, and Hale County, Texas,

alleging libel, slander, official misconduct, and denial of due

process and equal protection in suspending the Bonding Company's

right to act as surety on bail bonds. The Bonding Company alleged

the following facts in the complaint. The Bonding Company provided

surety bonds in Hale County, Texas, for persons accused of criminal

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offenses seeking to obtain release pending trial. The surety bonds

were tendered to various courts and officers for approval,

including Sheriff Tue.

In October 1990, Sheriff Tue gave written notice "[t]o Whom It

May Concern" that "Vera Bonding Company will not be allowed to make

a bond exceeding $500...." After receiving the notice, Larry Vera,

through counsel, contacted Sheriff Tue; the parties compromised,

and the notice was withdrawn.

Two years later, on October 29, 1992, Sheriff Tue sent a

letter to the Bonding Company advising that "[e]ffective November

5, 1992, all your bonding privileges in Hale County will be

suspended." The letter listed certain reasons for the suspension.

Sheriff Tue purported to act for all magistrates and other officers

located in Hale County, Texas, authorized by law to approve surety

bonds. The letter indicated that copies were sent to nine judges

of various courts in Hale County, Texas. The Bonding Company

replied to the letter through counsel, requesting that Sheriff Tue

substantiate his contentions. Sheriff Tue responded but refused to

furnish much of the information requested.

The Bonding Company filed suit in state court against Sheriff

Tue and Hale County seeking a temporary injunction, a permanent

injunction, and damages. After a hearing, the trial court denied

the request for a temporary injunction. Ultimately, the suit was

dismissed without prejudice for want of prosecution.

The Bonding Company subsequently filed the instant suit in the

district court. The defendants answered the Bonding Company's

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complaint, raising the defenses of qualified and sovereign

immunity. The defendants also filed a motion for summary judgment,

or in the alternative a motion to dismiss, attaching Sheriff Tue's

affidavit in support of the motion. Sheriff Tue asserted that he

suspended the Bonding Company's bail bond writing privileges

because: Larry Vera solicited jail trustees for assistance in

making bonds, Larry Vera perused jail records without authorization

to discover information, Vera was disrespectful to the judges, and

the Bonding Company's ratio of collateral to outstanding bonds fell

below the acceptable level after Raul Vera withdrew his portion of

the company's collateral. Sheriff Tue also stated that he was

"aware of no statute, court decision, or other law which provides

for a procedure to follow when a Texas sheriff, in exercising his

duty of oversight under the state law of Texas, determines that

bail bonds should not be accepted from certain sureties."

The Bonding Company filed a response, attaching Larry Vera's

affidavit in support. In that affidavit, Larry Vera denied, among

other things: violating the terms of the 1990 compromise between

Sheriff Tue and the Bonding Company; looking at the jail records

without permission; entering any secured part of the jail without

authorization; bonding anyone over the amount of $7,500 without

authorization. The affidavit also provided that:

Sheriff Tue's actions taken against me are based on personal

grievances and personal interests. Sheriff Tue's wife, Kay

Tue, was working for Ace Bail Bonding, in Hale County, in

October of 1992. Sheriff Tue's sister-in-law is also employed

and/or is the owner of Exit Bail Bonds in Hale County. I

believe that since my business made the majority of the bonds

in Hale County that Sheriff Tue was trying to put me out of

business so that Exit Bail Bonding would thereafter prosper.

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The district court granted summary judgment for the

defendants, concluding that the Bonding Company failed to indicate

how its right to earn a living by writing bail bonds was deprived

by the Sheriff. It also determined that because the Bonding

Company "failed to demonstrate that Defendant's acts were

irrational, [the Bonding Company] ... failed to properly establish

their equal protection claim." The court concluded that because

the Bonding Company "failed to establish deprivation of a property

or liberty interest, Defendant's qualified immunity remains intact,

protecting him from liability in this matter." In its order

granting summary judgment, the district court did not address

explicitly the Bonding Company's claims against Hale County, Texas.

Nonetheless, its written judgment granted summary judgment in favor

of both defendants.

II. STANDARD OF REVIEW

This Court reviews a grant of summary judgment de novo, using

the same standard applicable in the district court. Matagorda

County v. Law, 19 F.3d 215, 217 (5th Cir.1994). "Summary judgment

is appropriate if the record discloses "that there is no genuine

issue as to any material fact and that the moving party is entitled

to judgment as a matter of law.' " Id. (quoting Fed.R.Civ.P.

56(c)). "The pleadings, depositions, admissions, and answers to

interrogatories, together with affidavits, must demonstrate that no

genuine issue of material fact remains." Id. at 217. Inferences

from the facts are drawn most favorably to the nonmovant. If the

record as a whole could not lead a rational trier of fact to find

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for the nonmovant, then there is no genuine issue for trial. Id.

III. QUALIFIED IMMUNITY

We must determine whether the district court erred in

granting Sheriff Tue qualified immunity. The first step in this

two-step analysis is to determine whether the plaintiff has

asserted the violation of a clearly established constitutional

right under the prevailing state of the law. Al-Ra'id v. Ingle, 69

F.3d 28, 31 (5th Cir.1995). If so, we then must decide whether the

defendant's conduct was objectively reasonable in light of the law

at the time of the conduct in question. Id. In other words, if a

reasonable official would know that his actions were in violation

of the plaintiff's constitutional rights, it would lead to a

conclusion that the conduct was not objectively reasonable.

The Bonding Company contends that the right to earn a living

by writing bail bonds is a property interest protected by the Texas

Constitution. In support of that contention, it cites Font v.

Carr, 867 S.W.2d 873 (Tex.App.—Houston [1st Dist.] 1993) and Smith

v. Decker, 158 Tex. 416, 312 S.W.2d 632 (1958). Sheriff Tue argues

that the cases cited by the Bonding Company are inapplicable

because those cases deal with the effect of Texas statutes that

govern the bail bond business in counties containing populations of

a certain size, and Hale County does not fall within that statutory

range. See Tex.Rev.Civ.Stat.Ann., Art. 2372p-3.1

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Article 2372p-3 applies to counties with a population of

more than 110,000 or counties of less than 110,000 if a bail

board has been created. That provision governs the licensing and

regulation of bail bondsmen.

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Although it is true that, unlike the bail bond businesses

involved in Font and Smith, the bond business in Hale County is not

governed by article 2372p-3 or its predecessor, we are not

convinced that the above-cited cases may be read so narrowly.

Indeed, in Font, the Texas Supreme Court plainly stated that "[t]he

right to earn a living by writing bail bonds is a property interest

protected by the Texas Constitution." 867 S.W.2d at 875.

Moreover, in Smith, the Texas Supreme Court explained that the

appellants, who were in the business of writing bail bonds, had "a

vested property right in making a living, subject only to valid and

subsisting regulatory statutes...." Accordingly, it appears that

article 2372p-3 does not create the property interest but instead,

Additionally, the parties agree that Article 17.11 of

the Texas Code of Criminal Procedure governs the bail bond

business in Hale County. Art. 17.11 provides as follows:

Every court, judge, magistrate or other officer

taking a bail bond shall require evidence of the

sufficiency of the security offered; but in every

case, one surety shall be sufficient, if it be made to

appear that such surety is worth at least double the

amount of the sum for which he is bound, exclusive of

all property exempted by law from execution, and of

debts or other encumbrances; and that he is a resident

of this state, and has property therein liable to

execution worth the sum for which he is bound.

Provided, however any person who has signed as a

surety on a bail bond and is in default thereon shall

thereafter be disqualified to sign as a surety so long

as he is in default on said bond. It shall be the duty

of the clerk of the court wherein such surety is in

default on a bail bond, to notify in writing the

sheriff, chief of police, or other peace officer, of

such default. A surety shall be deemed in default from

the time the trial court enters its final judgment on

the scire facias until such judgment is satisfied or

set aside.

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serves only to regulate the property interest of writing bail

bonds.

Alternatively, assuming for purposes of this appeal that

Sheriff Tue's restricted interpretation of the Texas cases is

correct, we find that the Bonding Company has shown the existence

of an interest protected by due process. The Supreme Court has

explained that "[w]here a person's good name, reputation, honor, or

integrity is at stake because of what the government is doing to

him, notice and an opportunity to be heard are essential." Board

of Regents of State Colleges v. Roth, 408 U.S. 564, 573, 92 S.Ct.

2701, 2707, 33 L.Ed.2d 548 (1972) (internal quotation marks and

case citations omitted) (brackets in opinion). As such, due

process requires an opportunity to refute the allegations before

the accusing officials.

In the case at bar, in the previously mentioned 1990 written

notice, Sheriff Tue declared that Vera Bonding Company was not

allowed to make a bond exceeding $500 "due to being eight to ten

times overextended on their collateral." Sheriff Tue asserted that

"on several occasions Larry Vera has exhibited some very bad

conduct toward both Judge Frank Curry and to Judge Bill Hollars.

(one case almost resulting in Judge Curry holding him in contempt

of court)." Also in that letter, Sheriff Tue accused Vera of

offering to pay the jail trusty to solicit bonding business.

Subsequently, a compromise was reached, and the notice withdrawn.

Two years later, Sheriff Tue notified the Bonding Company that

all its bonding privileges in Hale County were suspended. Sheriff

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Tue set forth certain reasons for the suspension; including

allegations that Vera had solicited bonds for gain, nineteen bond

forfeitures (some of which had settled), complaints from the judges

regarding Vera's dress and demeanor, and the amount of outstanding

bonds exceeded the "limit" (especially after Raul Vera removed his

collateral). As previously set forth, the letter indicated that

Sheriff Tue sent copies of this letter to nine judges.

In view of the allegations made by Sheriff Tue against Vera in

the process of suspending the Bonding Company's privileges, it is

clear that Vera's reputation and integrity were at stake. See

Roth, 408 U.S. at 573, 92 S.Ct. at 2707. Therefore, notice and an

opportunity to be heard were essential to protect Vera's rights.

In the letter suspending the Bonding Company's privileges, Sheriff

Tue expressly denied Vera an opportunity to refute the allegations;

instead, Sheriff Tue derisively invited Vera to file suit.

Accordingly, the Bonding Company has asserted the violation of a

clearly established constitutional right under the current state of

the law.

We must now determine whether Sheriff Tue's conduct was

objectively reasonable at the time he suspended the Bonding

Company's privileges. In Edmonson v. County of Van Zandt, Nos. 92-

4727, 93-4079, 93-4431, 15 F.3d 180 (5th Cir. Jan. 14, 1994)

(unpublished), the owner of Canton Bail Bonds (Edmonson) filed a §

1983 action against several defendants, including the Sheriff of

Van Zandt County, alleging a conspiracy to monopolize the bail bond

business in the County and to drive him out of business. The

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district court found the defendants liable and enjoined them from

impeding Edmonson's bail bond business.

On appeal, this Court noted that the Sheriff had revoked

Edmonson's bail bonding license on at least three occasions without

providing any notice and thereafter refused to provide Edmonson

with access to the information on which the suspension was based.

We easily concluded that Edmonson's bail bonding license was a

property right that entitled him to some due process protection,

explaining that "[i]t is well established that "a reasonable,

continued expectation of entitlement to a previously acquired

benefit constitutes a cognizable property interest for purposes of

due process protection.' " Edmonson, slip op. at 4 (citations and

internal quotation marks omitted).2 We then opined that "it was

clearly established that some process was due before Edmonson could

be deprived of his license." Edmonson, slip op. at 4. Because the

sheriff's department provided no process to Edmonson prior to the

revocation of the license, a clearly established right was

violated.

In regard to the second step of the qualified immunity

analysis, the Sheriff in Edmonson argued that simply preferring one

bail bonding company over another had not been previously held to

2

Our opinion provided that Edmonson had a bail bondsman

license in Van Zandt County, which indicates that the bonding

business in Van Zandt County was governed by Article 2372p-3.

Therefore, although we found that Edmonson, a Texas bail

bondsman, had a clearly established property right entitling him

to due process protection, we did not address the question

(raised by the instant defendants) whether a bondsman in a county

that was not regulated by article 2372p-3 had a protected

property interest in writing bonds.

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be unlawful and thus the sheriff's conduct was objectively

reasonable at that time. We rejected that argument, concluding

that "[t]he contours of the rights at issue were sufficiently clear

that a reasonable official would understand that Defendants'

particular acts did violate those rights." Edmonson, slip at 4-5.

We then listed the particular acts3 and explained that "[n]o

reasonable officer could conclude that such invidiously

discriminatory conduct and policies would not infringe Edmonson's

rights." Id. at 5.

Similarly, in the instant case, we find that no reasonable

official could conclude that suspending Vera's bonding privileges

without providing him an opportunity to refute the previously

referenced allegations would not violate Vera's procedural due

process rights. Therefore, we reverse the district court's grant

of summary judgment in favor of Sheriff Tue on this claim.

Hale County, citing Monell v. Department of Social Services,

436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), argues that it

may not be held liable for the actions of Sheriff Tue because the

matters in question are not under the control of the Commissioners

Court, the governing body of Hale County. We have previously

3

We listed the following acts:

[T]hey enforced discriminatory treatment of Edmonson by

instructing employees to deny Edmonson and his company

privileges enjoyed by [Free State Bail Bond Service],

by harassing or intimidating jailers who questioned the

policy of favoritism towards [Free State Bail Bond

Service], by rewarding jailers or trusties who approved

of their policy or treated her business preferentially,

by harassing Edmonson, and by allowing and encouraging

solicitation of business only for Free State.

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determined that holding a Texas county liable for the actions of

its sheriff "does not run afoul of Monell's admonition against

respondeat superior liability on the part of the county for the

actions of its employees." Turner v. Upton County, Tex., 915 F.2d

133, 137 (5th Cir.1990), cert. denied, 498 U.S. 1069, 111 S.Ct.

788, 112 L.Ed.2d 850 (1991). We explained that the Sheriff, an

elected county official, had equal authority to the county

commissioners in that jurisdiction and that his actions constituted

those of the county just as much as those of the commissioners.

Id.; accord Familias Unidas v. Briscoe, 619 F.2d 391, 404 (5th

Cir.1980). Hale County is therefore liable for Sheriff Tue's

actions. The district court's grant of summary judgment in favor

of Hale County on this claim also must be reversed.

IV. EQUAL PROTECTION CLAIM

The Bonding Company argues that the defendants violated its

equal protection rights because the defendants' actions were not

rationally related to any governmental interest. The equal

protection clause "essentially" directs states to treat "all

persons similarly situated" alike. City of Cleburne, Tex. v.

Cleburne Living Center, 473 U.S. 432, 439, 105 S.Ct. 3249, 3254, 87

L.Ed.2d 313 (1985). It is violated only by intentional

discrimination. Lavernia v. Lynaugh, 845 F.2d 493, 496 (5th

Cir.1988). "Discriminatory purpose ... implies more than intent as

violation or as awareness of consequences[.] ... It implies that

the decisionmaker singled out a particular group for disparate

treatment and selected his course of action at least in part for

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the purpose of causing its adverse effect on an identifiable

group[.]" Id. (internal quotations, citations, and footnote

omitted) (emphasis in opinion). A violation of the equal

protection clause occurs only when, inter alia, the governmental

action in question classifies or distinguishes between two or more

relevant persons or groups. Brennan v. Stewart, 834 F.2d 1248,

1257 (5th Cir.1988).

The Bonding Company contends that it submitted summary

judgment evidence to the district court showing that Sheriff Tue's

sister-in-law and Sheriff Tue's wife had financial interests in

competing bonding companies in the Hale County area. Vera's

allegations, however, do not indicate that the Bonding Company was

a member of an identifiable group for equal protection purposes.

"[I]f the challenged government action does not appear to classify

or distinguish between two or more relevant persons or groups, then

the action—even if irrational—does not deny them equal protection

of the laws." Brennan, 834 F.2d at 1257. Viewing the facts in the

light most favorable to the Bonding Company, all it has shown is

nepotistic favoritism on the part of Sheriff Tue. Thus, the

district court did not err in granting summary judgment for Sheriff

Tue and Hale County on the Bonding Company's equal protection

claim.

Accordingly, the district court's grant of summary judgment is

AFFIRMED IN PART and REVERSED IN PART.

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