De Leon v. Brownsville GMS, Ltd.

CESAR DE LEON, Appellant, v. BROWNSVILLE GMS, LTD. AND MICHAEL BENNETT, Appellees.

NUMBER 13-19-00393-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

May 6, 2021

On appeal from the 445th District Court of Cameron County, Texas.

MEMORANDUM OPINION

Before Justices Benavides, Hinojosa, and Tijerina

Memorandum Opinion by Justice Benavides

Appellant Cesar De Leon, a former City Commissioner for the City of Brownsville (City), appeals an order denying his motion to dismiss the claims made against him in his individual capacity based on the election of remedies provision of the Texas Tort Claims Act (TTCA). See TEX. CIV. PRAC. & REM. CODE ANN. § 101.106. In the underlying lawsuit, appellees, Brownsville GMS, Ltd. (GMS) and Michael Bennett, the general manager of GMS (the GMS parties), sued the City and various officials for alleged violations of the Texas Open Meetings Act and the competitive bidding procedures required by Chapter 252 of the Texas Local Government Code. See TEX. GOV'T CODE ANN. §§ 551.001-.146 (codifying the Texas Open Meetings Act); TEX. LOC. GOV'T CODE ANN. §§ 252.001-.063 (delineating the purchasing and contracting authority of municipalities). The GMS parties sued De Leon in his individual capacity for tortious interference with GMS's prospective business relations and alleged that he acted with malice. Concluding that the GMS parties' claims against De Leon are barred by the TTCA, we reverse and render.¹

I. BACKGROUND

GMS and Bennett filed suit against the City, the Honorable Tony Martinez in his official capacity as Mayor of Brownsville and member of the Brownsville City Commission, Rose M. Z. Gowen, Ricardo Longoria Jr., Joel Munguia, Jessica Tetreau, and Ben Neece (collectively with Martinez, Gowen, Longoria, Munguia, Tetreau and Neece, the "City Commissioners") in their official capacities as members of the Brownsville City Commission, and De Leon in his individual capacity. Through their "Verified First Amended Petition and Application for Temporary Injunction and Permanent Injunction," GMS and Bennett alleged that GMS had provided commercial and industrial waste collection to the City for more than thirty years and during that period, the City had utilizeda competitive bidding process. In 2016, the City "again awarded its contract" to GMS; however, during the negotiation process the City made GMS's confidential proposal information publicly available to its competition. GMS and Bennett stated that De Leon "began a negative lobbying campaign against GMS," "complained that GMS had not donated money to [De Leon's] campaign," and made false statements regarding GMS. The GMS parties alleged that De Leon worked with Redfish, a competitor, to derail GMS's negotiations with the City. They asserted that the City ultimately engaged in two different bidding processes, rejected GMS's contract, and selected one of GMS's competitors to handle the City's industrial and commercial waste. They asserted that the defendants' actions violated the Texas Local Government Code and the Open Records Act. The GMS parties sought declaratory relief and temporary and permanent injunctive relief.

As relevant to this case, GMS and Bennett sued De Leon in his individual capacity for tortious interference with prospective business relations. Their verified first amended petition states, in relevant part:

81. GMS was prepared to enter into a contract with Brownsville for commercial and industrial waste collection services. GMS had fully negotiated the contract with Brownsville staff and had executed the contract. All that remained was for the City Commission to approve the execution of the contract by Brownsville.

82. Defendant De León knew of GMS's prospective contract with Brownsville and intentionally interfered with it, including by causing the City Commission to reject GMS's executed contract which was presented to it by Brownsville and all bids from the first RFP process, as well as by causing the City Commission to award the contract to Republic Services.

83. Defendant De León's actions in interfering with GMS's prospective contract were independently tortious and in violation of multiple statutes, regardless of the effect those actions had on GMS's prospective contract.

84. GMS could not know, nor by the exercise of reasonable diligence could have known of the facts giving rise to this claim until De León's statements describing how he stopped GMS because GMS had not contributed to his campaign or otherwise given him money were made public in late September 2017.

85. Defendant De León's actions proximately caused injury to GMS, which resulted in lost profits from the prospective commercial and industrial waste collection contract with Brownsville.

86. GMS seeks actual damages within the jurisdictional limits of this Court.

87. In addition, Defendant De Leon acted with malice in intentionally interfering with GMS's prospective contract and causing injury to GMS, which entitles GMS to exemplary damages. See TEX. CIV. PRAC. & REM. CODE [ANN.] § 41.002.

Thereafter, De Leon filed a motion to dismiss the claims brought against him in his individual capacity. He asserted that GMS and Bennett filed claims against him "for actions allegedly taken in the general scope of his duties as a City Commissioner," and that the election of remedies provisions of the TTCA provides for dismissal of the tort claims against him because the suit was based on "actions taken within the general scope of his duties regarding the same subject matter." He therefore alleged that the suit against him should be dismissed under § 101.106(f). See TEX. CIV. PRAC. & REM. CODE ANN. § 101.106(f) (providing for dismissal of a suit against an employee of a governmental unit based on conduct within the general scope of that employee's employment if it could have been brought under this chapter against the governmental unit). De Leon supported his motion to dismiss with (1) an excerpt from the city charter describing the duties of and compensation for a city commissioner, and (2) an excerpt from De Leon's deposition in which he testified that he was paid $8.00 for each commission meeting that he attended,however, rather than accepting the salary, he directed the deputy city manager to donate that money to an organization of the manager's choice.²

GMS and Bennett filed a response in opposition to De Leon's motion to dismiss arguing that (1) dismissal would not serve the purpose of the TTCA's election of remedies provision; (2) the claims against De Leon fell outside the scope of his employment; and (3) suit against De Leon in his individual capacity "is the only avenue to recover for his tortious interference."

On August 13, 2019, the trial court denied De Leon's motion to dismiss, and this appeal ensued. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(5) (authorizing an interlocutory appeal from the denial of a motion for summary judgment that is based on a government officer or employee's assertion of immunity); Austin State Hosp. v. Graham, 347 S.W.3d 298, 301 (Tex. 2011) (holding that "an appeal may be taken from orders denying an assertion of immunity, as provided in section 51.014(a)(5), regardless of the procedural vehicle used"). De Leon raises three issues through which he contends that: (1) the assigned senior judge abused its discretion in refusing to withdraw from the case after a timely and proper objection; (2) upon a timely and proper objection, the assigned senior judge had no authority to take any further action other than withdrawal and any subsequent orders he entered were void; and (3) the GMS parties' suit against the Cityand De Leon for claims involving the same subject matter, arising out of the same actions and occurrences, constituted an irrevocable election under Texas Civil Practice & Remedies Code § 101.106 to pursue their tort claims only against the City, thus entitling De Leon to dismissal of the claims against him. The GMS parties have filed a response, and De Leon has filed a reply thereto.

II. OBJECTIONS TO ASSIGNED JUDGE

In De Leon's first two issues, he contends (1) that the assigned judge abused his discretion in refusing to withdraw from the case after timely and proper objection, and (2) the assigned judge's orders are void. In our opinion in the companion case issued this same date, we have resolved these issues against De Leon. See City of Brownsville v. Brownsville GMS, Ltd., No. 13-19-00311-CV, 2020 WL ___, at * (Tex. App.—Corpus Christi-Edinburg May 6, 2021, no pet. h.) (mem. op.). Accordingly, we overrule De Leon's first two issues.

III. ELECTION OF REMEDIES

In his third issue, De Leon asserts that the only claims made against him were for tortious interference with GMS's prospective business relations and malice through his actions as a City Commissioner. De Leon argues that as a paid city official, he is considered an employee of the City and any claims made against him are presumed to be in his official capacity and against the City. De Leon asserts that the GMS parties chose to pursue remedies against the City for claims that involved the same facts and subject matter as did their claims against him, and that "irrevocable election" therefore precluded the GMS parties' claims against him individually. De Leon thus contends that he is entitled to the dismissal of all claims against made against him.

In response, the GMS parties assert that the trial court correctly denied De Leon's motion to dismiss under the TTCA's election of remedies provision because the provision applies only to current employees and does not apply to former employees. The GMS parties also contend that they are suing De Leon for third-party tortious interference with prospective business relationships, and this cause of action does not invoke the immunity protections of the TTCA because the same claim could not be brought against the City. The GMS parties argue that if De Leon were to succeed in having their claims...