COLE v. CITY OF TERRELL, (N.D.Tex. 2003)

BAREFOOT SANDERS, Senior District Judge

On October 24, 2003 this Court held an evidentiary hearing to determine whether William Cole, the Plaintiff in this case, had a due process property interest in his employment with the City of Terrell which was violated by the Defendants (the City of Terrell and the City Manager of Terrell, Gordon Pierce) when they terminated Mr. Cole's employment without providing him a hearing.

This determination is proper, according to the Fifth Circuit, because if Mr. Cole was entitled to a hearing, he should receive it before this Court adjudicates his other claims. See Ferguston v. Thomas, 430 F.2d 852, 858 (5th Cir. 1970) ("If a procedural deficit appears [where due process property violations in employment are alleged], the matter should, at that point, be remanded to the institution for its compliance with minimum federal . . . standards. This should be done so that the matter can first be made ripe for court adjudication by the [governmental entities] themselves.")

Before the Court are the pleadings in this case including: Defendant City of Terrell's Notice of Removal, filed January 22, 2003; Plaintiff's First Amended Original Complaint, filed July 24, 2003; Defendants' Answer to Plaintiff's First Amended Complaint, filed August 18, 2003; Defendants' Motion for Abatement of Case and "Remand" for Post-Termination Hearing, filed May 6, 2003; Plaintiff's Response thereto, filed May 27, 2003; Defendants' Reply, filed June 24, 2003; Plaintiff's Memorandum of Law, filed October 24, 2003; Plaintiff's Supplemental Brief Following Evidentiary Hearing, filed October 29, 2003; and Defendants' Post-Hearing Brief, filed October 29, 2003. Also before the Court are Plaintiff's and Defendant's Hearing Exhibits.

II. CURRENT STATUS OF THE CASE:

This is a removed case from the 86th Judicial District Court, Kaufman Co., Texas.

Plaintiff, William Cole, was employed by the City of Terrell ("City") from July 28, 1998 until he was terminated on July 17, 2002. (Pl.'s Mem. of Law at 1; Defs.' Ans. to Pl.'s First Am. Compl. at 1). Cole sues the City and its Manager, Gordon Pierce, for wrongful termination. Among his other claims in this lawsuit, Cole brings a cause of action based in an alleged denial of a due process hearing as to "just cause" for his termination.

The Parties agree that Cole was originally hired as the Building Official for the City. (PL's Mem. at 1; Defs. 1 Ans. at 1). The Parties disagree as to his title and job description at the time of his termination. The Defendants argue that on September 15, 1999 Cole was designated the Director of the Municipal Development Department ("MDD"), the position in which he remained until he was terminated. (Defs.' Post-Hearing Brief at 2). The Plaintiff admits that he became the Director of the MDD for the City, but argues that he also retained the position of the City Building Official until the time of his termination. (PL's Mem. of Law at 3).

Cole argues that as the Building Official he had a property interest in his continued employment with the City. He further argues that, because he had retained the position of Building Official at the time of his termination, the City violated his constitutional due process rights when he was not given a termination hearing. (PL's Am. Compl. at 2, 4). Defendants admit that Cole was discharged without a post-termination hearing, but they deny that he was entitled to one. (Defs.' Ans. to First Am. Compl. at 2; Defs.' Reply at 1).

A. Property Interest in Employment in Texas

The Fourteenth Amendment to the Constitution prohibits the deprivation of life, liberty, or property unless the deprived party has been afforded the benefit of those justice-safeguarding processes which are due by law. U.S. CONST, amend. XIV, § 1, cited in Muncy v. City of Dallas, 335 F.3d 394, fn. 1 (5th Cir. 2003). The Constitution, however, only requires due process in circumstances in which the aggrieved party has been deprived of a protected interest. Muncy, 335 F.3d at 398.

Certain public employment situations may endow an employee with a legally cognizable property interest. Id., citing Gilbert v. Homar, 520 U.S. 924 (1997) (observing that a public employee who is dismissable only for cause has a property interest in his continued tenure). However, a property interest is not incidental to public employment; it must be created by an independent source, such as state law. Muncy, 335 F.3d at 398. Ultimately, the question of whether a property interest exists is an individualized inquiry which is guided by the specific nature and terms of the particular employment at issue, and informed by the substantive parameters of the relevant state law. Id.

In Texas, employment at-will is presumed unless the employment relationship has been expressly altered in one of two ways: by contract or by express rules or policies limiting the conditions under which an employee may be terminated. Id., citing City of Midland v. O'Bryant, 18 S.W.3d 209, 215 (Tex. 2000); Loftis v. Town of Highland Park, 893 S.W.2d 154, 155 (Tex.App.-Eastland 1995, no writ); Vida v. El Paso Employee's Federal Credit Uniton, 885 S.W.2d 177, 182 (Tex.App.-El Paso 1994, no writ).

The Fifth Circuit has recognized that a property interest is created where the public entity has abrogated its right to terminate an employee without cause. This abrogation may take the form of a handbook or policy which limits the conditions under which the employment may be terminated. Muncy, 335 F.3d at 398.

In Texas, where a governmental entity has an express policy that an employee is entitled to continued employment until there arises "just cause" for his dismissal, the employee possesses a constitutionally protected property interest in his or her continued employment, and is entitled to minimum due process considerations before he or she can be deprived of that interest. See Bueno v. City of Donna, 714 F.2d 484, 492 (5th Cir. 1983).

The Court finds that the Building Regulations of the Terrell City Code § 4-1 create a property interest in the position of Building Official. These regulations give the Building Official an expectation of continuing employment. They state, in relevant part: (a) "the executive official in charge of [the office of chief building official] shall be known as the building official" and (b) the building official "shall continue during good behavior and satisfactory service. He shall not be removed from office except for cause after full opportunity has been given him to be heard on specific charges." (PL's Ex. 6, Building Regulations § 4-1, City of Terrell Code).

The question before the Court is: was Mr. Cole the Building Official for the City of Terrell at the time of his termination in July of 2002? If he was, he had a property interest in his continuing employment at the time of his termination and a constitutional right to a termination hearing. If he was not, he presents no evidence that he was similarly protected in his appointment as the Director of the MDD.

Plaintiff presents evidence that he was the Building Official at the time he was hired on July 28, 1998. (Pl.'s Ex. 10, City's Response to Plaintiff's Request for Admission No. 3, admitting that "[o]n July 28, 1998, Defendant City of Terrell's City Council confirmed its City Manager's appointment of Plaintiff William Cole to be Building Official of Defendant City of Terrell."). He also presents evidence that the Building Regulations § 4-1 of the Terrell City Code were in effect at the time he was hired and at the time he was terminated. (Pl.'s Ex. 10, City's Response to Plaintiff's Request for Admission Nos. 8, 9). Plaintiff argues that because he remained the "chief executive in charge" of the Building Inspection Department of the City until his termination, he continued to be the Building Official (with property rights to his position) until the time of his termination.

Plaintiff points to City Manager Gordon C. Pierce's letter to him dated July 24, 1998 which offered him the position of Building Official. That letter states: "Upon your arrival, additional duties will be assigned and the title of the position will change to either Director of Community services or Director of Development Services." (Pl.'s Ex. 1). Plaintiff argues that this letter shows that his being named the Director of the MDD involved a title change, not a position change.

In addition, the Plaintiff points to a Memorandum from Mr. Cole to Mr. Pierce dated April 22, 1999 proposing a revision of the City's customer service policy. (Defs. Ex. 1). This Memorandum which, among other things, proposed changing the name of the Building Inspections Department to the Municipal Development Department, was presented to and approved by the City Council at its meeting of May 4, 1999. (Id.). Plaintiff argues that this memorandum shows that the Building Inspections Department, of which Mr. Cole was the Building Official/chief executive, was not discontinued by the City, but only renamed as part of a policy revision meant to "centralize request (sic) for municipal services, permits, and information." (Pl.'s Supplemental Brief at 3).

The Defendants argue that although Mr. Cole was hired as the Building Official on July 28, 1998, he left that position on September 15, 1999 when he was designated by the City Council as the Director of Municipal Development. (Defs.' Post-Hearing Br. at 1-2). Evidence for this change in position includes a City Personnel Action Form dated September 15, 1999 which authorizes a 5% increase in salary for Mr. Cole along with a 2% COLA, and states that his position on that date was: Director. (Defs.' Ex. 4).

The September 15, 1999 Personnel Action Form and other Personnel Action Forms presented by the Defendants and the Plaintiff indicate that at some point between January 1, 1999 and September 15, 1999 Cole changed departments. Personnel Action Forms from September 22, 1998, September 28, 1998, and January 6, 1999 reflect that Cole worked in the Building Inspection Department. Forms from September 15, 1999 until his termination indicate that he worked in the Municipal Development Department. (Defs.' Ex. 4 Memos/Personnel Action Forms from September 15, 1999; April 7, 2000; October 10, 2000; April 16, 2001; and October 17, 2001).

Similarly, Terrell City Budgets from 1998-1999 through 2001-2002 reflect the City's restructuring of Mr. Cole's area, and Mr. Cole's change in employment status. (Defs.' Ex. 9). The 1998-1999 City Budget contains an organization chart which places Building Inspection Services — the Department to which Mr. Cole was originally hired — under the office of the Director of Inspection and Internal Services. (Defs.' Ex. 9-3). A similar chart for fiscal year 1999-2000, (after the City Council's reorganization of Customer Services in May 1999) shows Building Inspection Services (along with Neighborhood Services Code Enforcement, Equipment Replacement Fund, and Municipal Building Maintenance) under the office of the Director of Municipal Development — Mr. Cole's new title. (Defs.' Ex. 9-9).

There is also evidence that the position "Building Official" was abolished by the reorganization. The 1998-1999 City Budget shows that the Building Inspections Department, Account 010-20, included the position of "Building Official." The City Budget for 1999-2000 reflects the Customer Services reorganization: Account 010-20 is dedicated to the Municipal Development Department; there is no longer a Building Official, but rather a Director of Municipal Development. (Defs.' Ex. 9-12). The City Budget for 2001-2002 (the fiscal year in which Mr. Cole was terminated) shows the same: no Building Official, and a Director of Municipal Development for Account 010-20. (Defs.' Ex. 9-22, 9-23).

Defendants also provide job descriptions for the Building Official and the Director of Municipal Development which illustrate the difference between the positions. (Defs.' Ex. 6, 7). These job descriptions, combined with the organizational charts provided in the City Budgets clearly show that the Director of Municipal Development position involved much more responsibility and a wider range of activities and duties than the Building Official position.

The Job Description for Building Official limits the authority of that position to management of the Building Inspections Department. (Defs.' Ex. 7). The position's essential job functions were, for the most part, directed toward technical matters: "enforcement, interpretation and regulation of building, plumbing, electrical, mechanical, zoning and sign codes" (#1); planning and directing the work plan for code enforcement employees (#4); monitoring and evaluating plans for examination, building inspections, and code enforcement (#5); conferring with architects and contractors (#7); inspection of new construction (#9); and developing zoning ordinances and building codes (#10). (Defs.' Ex. 7). The Building Official needed to have experience with construction, building code enforcement or engineering, and administrative and supervisory responsibility. (Id.). Educational requirements for this position included the equivalent of an Associate's degree with "major coursework in construction, engineering, architecture or a related field." (Id.).

In contrast, the Job Description for the position of Municipal Development Director shows that it is an administrative, not a technical, position. It gives authority to manage the Municipal Development Department — the new Department created by the reorganization. (Defs.' Ex. 6). The essential job functions for this position are administrative: developing a departmental budget (#5); serving as liaison with other departments (#6); resolving sensitive issues with developers, the general public, and property owners (#7); preparing reports for the City and outside agencies (#8); and "staying abreast of trends and developments" in industrial and residential planning (#10). (Defs.' Ex. 6). None of the essential functions of the Director of Municipal Development have to do with the technical requirements of code enforcement or building inspections. This position requires experience in municipal planning and urban development along with supervisory experience, and an Associate's Degree (or equivalent) with "major coursework in public administration, engineering, urban planning." (Id.).

It is clear to the Court from the above Personnel Action Forms, City Budgets, and Job Descriptions that the position of Building Official for the City of Terrell (not present in budgets after 1998-1999) is a different position from the Director of the Municipal Development Department.

The Court finds that the Plaintiff, William Cole, was hired by the City of Terrell as its Building Official. At the time of his termination, however, he was the Director of the Municipal Development Department. As Building Official Mr. Cole had a property interest in his continued employment under the Terrell City Code. When he was appointed the Director of Municipal Development in 1999, he left the position of Building Official and lost the protections of that position.

Mr. Cole presented no evidence that the City of Terrell abrogated its right to terminate him from the position of Director of Municipal Development without cause. At the time he was appointed Director Mr. Cole became an at-will employee under Texas law. He had no property interest in that position. He, therefore, had no constitutional right to a due process hearing at the time of his termination.

After reviewing the briefs and evidence presented by the parties, the parties' oral arguments, and the relevant legal authorities, the Court finds that the Plaintiff, William Cole, was Director of Municipal Development at the time of his termination, and that he had no property interest in that position. The Court, therefore, HOLDS that under the law of the State of Texas Mr. Cole was not entitled to a due process hearing at the time of his termination.

Plaintiff's due process property interest claims are DISMISSED with prejudice.

SO ORDERED.