Cornelio Morales v. Hidalgo County Irrigation District 6
13-14-00205-CV
| Tex. App. | Sep 24, 2015Background
- Morales was hired as Hidalgo County Irrigation District No. 6 general manager under a written contract running Jan 1, 2010–Dec 31, 2014, with an annual minimum salary of $106,655 and a severance provision paying remaining contract compensation if the District terminated him for any reason other than death or disability.
- The District terminated Morales on August 25, 2011 for an alleged material breach and paid no severance; Morales sued for breach of contract seeking the remaining contract compensation and attorneys’ fees.
- The District asserted affirmative defenses of illegality (arguing the severance was a gratuitous grant of public funds violating Tex. Const. art. III, § 52(a)) and lack of consideration, and moved for traditional summary judgment on those defenses.
- Morales moved for partial summary judgment on breach of contract (excluding his fee claim); the trial court granted the District’s summary judgment and denied Morales’s motion and other discovery/post-trial motions.
- The court of appeals reviewed de novo whether the contract was illegal or lacked consideration and concluded the contract served a legitimate public purpose and contained adequate consideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the employment contract is illegal under Tex. Const. art. III, § 52(a) | Morales: contract is valid because it hires a public official and any incidental private benefit is permitted if a legitimate public purpose and clear public benefit exist | District: severance guarantees full salary for five years even if Morales never works, constituting a gratuitous grant of public funds (illegal) | Reversed: contract not unconstitutional; it serves legitimate public purpose and returns consideration (performance as GM) |
| Whether the contract lacks consideration | Morales: mutual promises (performance for pay) are adequate consideration | District: severance makes contract illusory/lacking consideration because payment may be due without performance | Reversed: performance obligations constitute consideration; contract not void for lack of consideration |
| Whether appellate court can review denial of Morales’s motion for partial summary judgment | Morales: trial court erred in denying his Rule 166a(c) motion showing no genuine issue on breach | District: not directly addressed; trial court denied Morales’s motion | Overruled: appellate review of denial not proper because parties moved on different grounds and Morales’s motion was not for final judgment |
| Whether other post-judgment motions (new trial, discovery compulsion) should be reached | Morales: trial court abused discretion by denying new trial and motions to compel depositions | District: not reached due to summary judgment | Not reached: court did not address remaining issues given disposition on illegality and consideration |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (standard for de novo review of summary judgment)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (evidence review standards on summary judgment and fact issues)
- Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010) (defendant may obtain traditional summary judgment by establishing affirmative defense elements conclusively)
- Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377 (Tex. 2002) (public funds not gratuitous if expenditure serves legitimate public purpose and yields clear public benefit)
- Ingram v. Dallas County Water Control & Improvement Dist. No. 7, 425 S.W.2d 366 (Tex. Civ. App. — Dallas 1968, no writ) (written employment contract for term carries consideration despite silence on termination for cause)
- Byrd v. City of Dallas, 6 S.W.2d 738 (Tex. 1928) (performance of duties is sufficient consideration for municipal employment payments)
- Plano Surgery Ctr. v. New You Weight Mgmt. Ctr., 265 S.W.3d 496 (Tex. App. — Dallas 2008, no pet.) (a contract that cannot be performed without violating law is void)