Renaye Ochoa and Thom Karlok v. City of Galveston

Opinion issued March 12, 2009 In The Court of Appeals For The First District of Texas NO. 01-08-00490-CV RENAYE OCHOA AND THOM KARLOK, Appellants V. CITY OF GALVESTON, TEXAS AND CAROLYN COX, AS DIRECTOR FOR CITY OF GALVESTON SERVICE COMMISSION, Appellees On Appeal from the 405th District Court Galveston County, Texas Trial Court Cause No. 08CV0312 MEMORANDUM OPINION Appellants, Renaye Ochoa and Thom Karlok, challenge the trial court's order, entered after a bench trial, denying them a temporary restraining order and a temporary injunction against appellees, the City of Galveston, Texas ("the City") and Carolyn Cox, as the director for the City of Galveston Service Commission, and the trial court's declaration regarding the City's Collective Bargaining Agreement (the "agreement") with the Galveston Municipal Police Association ("GMPA"). In two issues, Ochoa and Karlok contend that the trial court erred in admitting parol evidence regarding the agreement and in reforming the agreement. We affirm. Factual and Procedural Background In their petition, Ochoa and Karlok, sergeants in the City's Police Department, seek a declaration (1) of their right under the agreement to appeal their test results on the Police Lieutenant's Written Promotional Examination and an injunction preventing the City from promoting anyone to lieutenant until they have exhausted their appeals. Ochoa and Karlok each submitted an appeal of the testing and assessment procedures conducted pursuant to the agreement. Cox, as the director of the City's Service Commission, evaluated their appeals and ruled that section II(C) of the agreement "specifically prohibits any assessment center appeals." Ochoa and Karlok allege that Cox's ruling contradicts the express language of section III(C)(9) of the agreement. The trial court admitted into evidence the agreement, which in pertinent part provides: Promotional Evaluation for Sergeants and Lieutenants I. Purpose and preemption of civil service provisions To establish a procedure for a departmental promotional evaluation process for the ranks of police sergeant and police lieutenant. The promotional process will objectively and subjectively evaluate the job related knowledge, skills, and abilities of candidates for these ranks and establish a rank-ordered list of candidates for each position. This will be accomplished through a written examination, seniority in grade, and an assessment process. These procedures preempt any conflicting provisions of Chapter 143, Local Government Code. II. Method of scoring . . . . C. The City shall conduct Assessment Center testing, which shall be designed to assess job related skills and abilities necessary for the successful performance of each position as determined by a job analysis. Assessment center testing shall have a total maximum value of 50 points. The results of the Assessment Center testing and scores shall NOT be subject [to the] appeals process. . . . . III. Procedure . . . . C. Evaluation Procedure . . . . 9. Candidates may appeal the assessment process in accordance with the Civil Service Commission Rules. Candidates must file written notice of appeal with the Civil Service Director within ten (10) business days after the assessment process is completed. Ochoa and Karlok, members of the GMPA, both testified about the agreement. Ochoa could not recall whether he had read or voted for the agreement, explaining that the GMPA bargains for its members, who "just basically agree to agree." Karlok testified that he actually voted for the agreement. Both Ochoa and Karlok admitted that they did not know what had been said during negotiations over the most recent revisions to the agreement because neither of them had been a member of the GMPA bargaining team. On cross-examination, Karlok acknowledged that section III(C)(9), the clause in the agreement allowing for an appeal of the assessment process, had not been removed because "[t]hey made a mistake." Nevertheless, he maintained that "mistake or no mistake, it's still in there" and that "saying that it's a mistake doesn't make it go away." Jimmy De Los Santos, president of the GMPA, testified that he led the bargaining team that renegotiated the agreement with the City. During the negotiations he had not realized that section III(C)(9) contradicted the last sentence that they added to section II(C). De Los Santos testified that if he had looked at that provision, he would have "probably fixed" it because the parties intended that the assessment process not be subject to appeal. Cox testified that in the recent renegotiation of the agreement, the GMPA representatives and the City's negotiating team had agreed to add the language prohibiting appeals in section II(C). She confirmed De Los Santos's testimony that neither party had realized that the language in section III(C)(9) contradicted this addition. After the bench trial, the trial court ordered that section III(C)(9) be deleted from the agreement because the parties, based on a mutual mistake, had not deleted this language in the agreement. Reformation of the Agreement In their second issue, Ochoa and Karlok argue that the trial court erred in reforming the agreement by deleting section III(C)(9) because the evidence offered by the City and Cox is legally and factually "insufficient to prove a mutual mistake was made with respect to the [agreement]." We will sustain a legal sufficiency challenge if the record shows one of the following: (1) a complete absence of evidence of a vital fact, (2) rules of law or evidence bar the court from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). In conducting a legal sufficiency review, a court must consider evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it. Id. at 822. If the evidence allows only one inference, neither jurors nor the reviewing court may disregard it. Id. However, if the evidence at trial would enable reasonable and fair-minded people to differ in their conclusions, then the fact-finder must be allowed to do so. Id. A reviewing court cannot substitute its judgment for that of the fact-finder, so long as the evidence falls within this zone of reasonable disagreement. Id. In conducting a factual sufficiency review, we must consider, weigh, and examine all of the evidence that supports or contradicts the fact-finder's determination. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We may set aside a verdict only if the evidence supporting it is so contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). When conducting a factual sufficiency review, we must not merely substitute our judgment for that of the fact-finder. Golden Eagle Archery Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). The fact-finder is the sole judge of the credibility of witnesses and the weight to be given to their testimony. Id. Reformation of a contract by a trial court is appropriate when a portion of the contract is the result of the contracting parties' mutual mistake. Gilbane Bldg. Co. v. Keystone Structural Concrete, Ltd., 263 S.W.3d 291, 300-01 (Tex. App.--Houston [1st Dist.] 2007, no pet.) (citing Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex. 1987)). A mutual mistake occurs when the written contract does not accurately reflect the common intention of the parties. Marcuz v. Marcuz, 857 S.W.2d 623, 627 (Tex. App.--Houston [1st Dist.] 1993, no pet.). The party seeking reformation must prove that the written agreement contains or omits some term or provision because of a mutual mistake shared by the parties to the agreement. Thalman v. Martin, 635 S.W.2d 411, 414 (Tex. 1982). In proving a mutual mistake, a party may use parol evidence. Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605, 617 (Tex. App.--Houston [1st Dist.] 2005, no pet.) (citing Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990)). In regard to Ochoa and Karlok's legal sufficiency point, Cox testified that the City agreed to add the final sentence in section II(C) to ensure that there would be no appeals from the "results of the Assessment Center testing and scores." She testified that when she approved the agreement she did not realize that section III(C)(9) allowed appeals. Likewise, De Los Santos testified that the GMPA "representative team agreed that [they] did not need appeals" from the assessment process. From this evidence, the trial court could have reasonably found that the agreement contained section III(C)(9) because of a mutual mistake of the parties to the agreement. Accordingly, we hold that the evidence is legally sufficient to support the trial court's decision to reform the agreement. In regard to Ochoa and Karlok's factual sufficiency point, Ochoa and Karlok both admitted that they had not been involved in renegotiating the agreement. Although they could testify about their understanding of the agreement, they could not testify about the parties' intent to allow appeals from the assessment process. In fact, Karlok admitted that he believed that the parties, because they had made a mutual mistake, had neglected to omit section III(C)(9) from the agreement. Therefore, we conclude that the evidence supporting the trial court's order is not so contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust. Accordingly, we hold that the evidence is factually sufficient to support the trial court's decision to reform the agreement. We overrule Ochoa and Karlok's second issue. Construing the Contract In their first issue, Ochoa and Karlok argue that the trial court erred in considering parol evidence because the agreement is not ambiguous or, if ambiguous, should have been construed in their favor. However, a trial court does not reform a contract based on the contract's ambiguity, but rather based on the existence of a mutual mistake. E.g. Gilbane Bldg. Co., 263 S.W.3d at 300-01. In determining whether a mutual mistake exists, justifying reformation of an agreement, a trial court may consider parol evidence. Phoenix Network Techs., 177 S.W.3d at 617. Accordingly, we hold that the trial court did not err in considering parol evidence. We overrule Ochoa and Karlok's first issue. Conclusion We affirm the judgment of the trial court. Terry Jennings Justice Panel consists of Justices Jennings, Keyes, and Higley. 1. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (Vernon 2008).