Fort Worth Court of Appeals affirms trial court’s authority under Civil Service Act to vacate a hearing examiner award, remand for a rehearing, and require a separate hearing examiner

Shea O’Neill v. City of Fort Worth, 02-21-00214-CV (Tex. App. – Fort Worth, Feb 3, 2022)

This is a civil service case (which has already gone up and down the appellate ladder) where the Fort Worth Court of Appeals affirmed the trial court’s ability to order a substituted hearing examiner in an appeal from an indefinite suspension. [Comment: Note, this is a 38-page opinion].

O’Neill was a firefighter for the City and was indefinitely suspended after being involved in a physical altercation with a citizen at a TCU football scrimmage.  He appealed to a hearing examiner who found for O’Neill. An appeal resulted to the Fort Worth Court of Appeals, which remanded the issue to decide if the hearing examiner improperly considered outside evidence. On remand, the court (specifically Judge Fitzpatrick) held the hearing examiner (Guttshall) violated the Civil Service Act (Tex. Loc. Gov’t Code §§143.010(g) and 143.053(d)) by considering evidence that was not presented in the final hearing.  The trial court vacated the examiner’s decision and ordered a rehearing. When the City recognized that the same hearing examiner (Guttshall) was set to preside over the rehearing, the City objected and filed a plea to the jurisdiction, which Guttshall denied. The City then filed suit (that resulted in the present appeal) under the Uniform Declaratory Judgments Act (UDJA) to hold Guttshall could not preside over the rehearing. The trial court held a trial on the merits under the UDJA claims and found Guttshall had exhibited bias, was no longer independent and ruled for the City. O’Neill appealed.

O’Neill argued the City’s declaratory-judgment lawsuit was barred by res judicata or collateral estoppel. The main issue presented to the trial court was whether Guttshall could preside over the rehearing regarding O’Neill’s appeal of his indefinite suspension. While O’Neill asserted the court failed to make the findings of fact on the issues he requested (so the findings entered could not be used in evaluating the appeal), the trial court, as the trier-of-fact has no duty to make additional or amended findings that are unnecessary or contrary to its judgment. O’Neill next asserted the City requested a rehearing when appealing Guttshall’s opinion to Judge Fitzpatrick so the issue of a hearing examiner was already addressed. Hence, his argument goes, since Judge Fitzpatrick did not expressly grant relief for a separate hearing examiner, only a rehearing, the issue was fully litigated. However, when an appellate court remands a case and limits a subsequent trial to a particular issue, the trial court may only determine that particular issue. Because of the remand, Judge Fitzpatrick was therefore constrained to decide only the City’s procured-by-unlawful-means claim and nothing provided for her to determine whether Guttshall had exhibited bias and was thus no longer an independent or impartial hearing examiner. As a result, res judicata and collateral estoppel are not triggered. Next, O’Neill asserted that since Guttshall denied the City’s plea, the issue was already addressed and the City cannot appeal. However, if the denial were considered the same as an arbitrator’s award (which O’Neill argued it was), such an award is appealable. But more importantly, the City’s plea to the jurisdiction and declaratory-judgment action accomplished separate purposes. The City’s plea was an objection to Guttshall presiding over the rehearing, which was a requirement to preserve the issue.  The UDJA claim went beyond mere preservation and sought express relief on the uncertainty of the issue under the wording of Chapter 143 (which does not expressly address this situation). Next, O’Neill argued the trial court erred by impliedly finding that subject-matter jurisdiction exists even though the City failed to exhaust its administrative remedies.  However, since the declarations sought are strictly limited to statutory interpretations, they are questions of law that do not require exhaustion. Next O’Neill argued that the trial court erred by fashioning a remedy not expressly authorized by the Civil Service Act, i.e., allowing a rehearing before a new hearing examiner. The trial court used guidance by referring to the Texas Arbitration Act (TAA) in interpreting/applying the Civil Service Act. The sections of the Civil Service Act make no provision for a scenario in which the district court vacates the hearing examiner’s award and remands the case for a rehearing. The court noted that the Texas Supreme Court has looked to the TAA in prior opinions to fill in the gaps when the Civil Service Act is silent.  Turning to the TAA concerning the issue here, it has a specific section dedicated to rehearings after an arbitration award is vacated. The Civil Service Act states in multiple locations that a hearing examiner must be independent and therefore neutral. When a hearing examiner is found to have developed bias against one party, they are not independent. To allow a biased hearing examiner to preside over the rehearing merely because the Civil Service Act is completely silent regarding rehearings is against the purpose of the Act. The trial court, following the Texas Supreme Court’s example for crafting remedies when the Civil Service Act provides none, is permitted to look to the TAA for guidance.  As a result, the trial court’s order is affirmed.

If you would like to read this opinion click here. Panel consists of Chief Justice Sudderth, Justice Bassel and Justice Walker. Memorandum Opinion by Justice Bassel.