                                                                                       ACCEPTED
                                                                                    14-15-00507-cv
                                                                   FOURTEENTH COURT OF APPEALS
                                                                                HOUSTON, TEXAS
                                                                             11/18/2015 1:47:53 PM
                                                                             CHRISTOPHER PRINE
                                                                                            CLERK




                             No. 14-15-00507-CV           FILED IN
                                                   14th COURT OF APPEALS
                                                      HOUSTON, TEXAS
________________________________________________________________
                                                   11/18/2015 1:47:53 PM
             IN THE FOURTEENTH COURT OF APPEALS    CHRISTOPHER A. PRINE
                                                            Clerk

                         FOR THE STATE OF TEXAS

________________________________________________________________

                              TRACIE JACKSON
                                 Appellant

                                     v.

  NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED
                   PEOPLE, D/B/A NAACP;


                        NAACP HOUSTON BRANCH;

                              YOLANDA SMITH
                                 Appellees

   ______________________________________________________________
ON APPEAL FROM THE 113 TH DISTRICT COURT OF HARRIS COUNTY TEXAS
       ________________________________________________________
                     REPLY BRIEF OF THE APPELLANT

Tracie J. Jackson
24053020
Frye, Oaks & Benavidez
3315 Mercer St.
Houston, TX 77021
713-227-1717
713-522-2610 Fax
Traciejackson@hushmail.com




                                     ORAL ARGUMENT REQUESTED
                                                TABLE OF CONTENTS
      I.         INTRODUCTION…………………………………………………………………………………………….1
II. APPELLEES ACTIONS CAUSED JACKSON TO LOSE A PROPERTY RIGHT IN THE NLRB
ORDER OF REINSTATEMENT.......................................................................................................2
III. JACKSON HAS STANDING TO SUE ON HER BEHALF AND ON BEHALF OF THE
MEMBERSHIP .................................................................................................................................2
IV.        APPELLEES CONCEDE JUDICIAL INTERVENTION IS MANDATED ..............................5
V. APPELLEES CONSTITUTION AND BYLAWS CREATE A CONTRACT AND FIDUCIARY
DUTIES TO ITS MEMBERS ............................................................................................................6
VI.        PREEMPTION DOES NOT APPLY IN THIS CASE .............................................................7
VII. THE NATIONAL OFFICE HAD PRIOR KNOWLEDGE THAT SMITH WAS AN UNFIT
EMPLOYEE......................................................................................................................................9
VIII.         JACKSON SUFFICENTLY ARGUED APPELLEES VIOLATED THE TEXAS BUSINESS
CODE          9
IX.        THE DEFAMTION CLAIMS ARE RIPE.............................................................................. 10
X. SMITH HAD A DUTY TO DISCLOSE THE PROPER SALARY TO JACKSON .................... 11
XI.        CONCLUSION .................................................................................................................... 12




                                                                       i
Cases

Associated Indem Corp. v. Cat Contracting, Inc. 964 S.W.2d 276, 288 (Tex 1998)...................................8
Bradford v. Vento, 48 S.W.3d 749, 754-51 (TX 2001) ......................................................................... 12
Heckman v. Williamson County, 369 S.W.3d 137 (Tex. 2012) ...............................................................3
Pope v. Darcey, 667 S.W.2d 270, 275 (Tex.App.-Houston [14 Dist.] 1984) ............................................7
                                                                                      th



Randall’s Food Mkts., Inc. v. Johnson , 891 S.W.2d 640,646 (Tex. 1995) ............................................... 11
Scoville v. SpringparkHomeowner'sAss'n, Inc., 784 S.W.2d 498, 502 (Tex. App. Dallas 1990, writ denied) 6
Solutioneers Consulting, Ltd. v. Gulf Greyhound Partners, Ltd., 237 S.W.3d 379, 385 (Tex.App.-Houston
  [14th Dist.] 2007, no pet.) .............................................................................................................. 12
Spoljaric v. Percival Tours, Inc. 708 S.W.2d 432, 435 (Tex.1986) ......................................................... 12
Trostle v. Trostle, 77 S.W.3d 908, 915 (Tex.App.-Amarillo 2002, no pet.) ..............................................7
TXI Transp. v. Hughes, 306 S.W.3 230, 240 (Tex. 2010) ................................................................... 10
                                                 rd




Statutes

NLRA................................................................................................................................................8
Tex. Bus. Org 252.010(a) .................................................................................................................. 10
Treatises

18A Am. Jur. 2d 32. Corporations § 323 (1985) ....................................................................................6




                                                                         ii
             I.     Introduction
      The NAACP, the Houston Branch and Yolanda Smith have broken the law,

eroded public trust, and circumvented the constitution and bylaws. Appellees have

made a mockery out of the purpose and mission of the Association, which is to

create an even playing field for those who have been oppressed and subjected to

discrimination.

      Judicial intervention is mandated because Appellees have not followed the its

constitution and bylaws which has caused injury not only to Appellant Jackson, but

to the members of the Houston Branch as a whole, including the newly elected

officers who were expelled from their positions and membership in the Association.

Appellees have breached their fiduciary duties owed to Appellant and the

membership. Appellees have defamed Appellant and other members of the

Houston Branch; negligently retained the employment services of Smith despite

knowledge of her unlawful activities; and Smith fraudulently failed to disclose salary

information to Jackson at the beginning of her employment.

      The Court must be reminded that the trial Court did not render an analysis in

its’ decision to grant Appellees’ summary judgment motions. Appellees raise several

points in their brief that are flat out erroneous and an attempt to mislead and

confuse the Court. Appellees argue judicial intervention is unnecessary; Jackson

claims are employment based; Jackson lacks standing to sue; or the claims are time


                                           1
barred. Due to the nonprofit status and the importance of this organization, allowing

Appellees to continue in this unlawful irresponsible behavior would be a travesty and

a disservice the public in general.

             II.     APPELLEES ACTIONS CAUSED JACKSON TO LOSE A
                     PROPERTY RIGHT IN THE NLRB ORDER OF
                     REINSTATEMENT

       Appellees attempt to confuse the Court by stating Jackson is asserting

employment claims. This is not true. Jackson has property and business right in the

July 2012, NLRB order of reinstatement (CR 232-247, 746-747). This right was

usurped by the National office’s negligent retention of Smith’s services. It is

irrelevant and insignificant that was an at-will employee. Id. Questions of material

fact remain, regarding whether TAJF would have in fact rescinded the BCLS grant if

Smith had not been retained, thus allowing Jackson to be reinstated to her position.

The Court must note TAJF did not rescind the grant until Smith was placed back

into her position.

             III.    JACKSON HAS STANDING TO SUE ON HER BEHALF
                     AND ON BEHALF OF THE MEMBERSHIP

      Appellees argue Jackson lacks standing to bring these claims, the claims are

preempted, or that Jackson failed to appropriately raise the claims in her appellate

brief. However, the amount of evidence, most of which is provided by Appellees,

substantiate Jackson’s claims.



                                           2
      Appellees ignore the fact that Jackson was a member of the Association and

the Houston Branch during the relevant period of October 2010 until October 2011

      (CR 742). Appellees erroneously argue because Jackson was not a member of

the Houston Branch Executive Committee (EC), she was not injured and lacks

standing to sue on behalf of the membership. Ironically, Appellees do not argue

that their constitution and bylaws were followed and there were no violations.

      As a member of the Houston Branch, Jackson voted for the 2011 newly

elected EC members that terminated Smith’s employment. Jackson was a member

of the Association when the Article X complaint was filed against Smith and no

action was taken on the complaint by the National office. Jackson was a member of

the Association, when the officers she, and other members voted for, were

unlawfully suspended and expelled for attempting to exercise their fiduciary duties to

the members of the Houston Branch. The injury incurred by Jackson and all of the

other Houston Branch members is usurpation of their voting rights .

      Further, the case law cited by Appellees on this issue does not support their

claims. Appellees cite Heckman v. Williamson County, 369 S.W.3d 137 (Tex.

2012) for the proposition that an appellant must suffer a specific injury in order to

have standing. However, in that case the Texas Supreme Court did find that

Heckman suffered the injury of not being informed of his right to counsel and




                                           3
therefore had standing not only to sue on his own behalf, but also on behalf of the

other defendants who had not been advised of that right. Id. at 159.

      In its analysis, the Court stated a plaintiff’s injury must be traced to the

defendant’s actions and must be one that can be redressed by the Court. In regard

to Appellant’s claims on behalf of the ousted EC members, Appellant, in addition to

the other members of the Houston Branch, had their voting rights usurped, a right

guaranteed to them under the Association’s constitution and bylaws. This injury is

directly traceable to the National office’s action of expelling only the newly elected

EC members, who not only reported Smith’s malfeasance in office but terminated

her employment based in part on that malfeasance. In essence, the expelled EC

members were performing their fiduciary duties to the Houston Branch and its

members and were punished for it. This injury can and should be redressed by this

Court in the form of an injunction and declaratory judgment.

       The National office also argues that Jackson lacks standing to bring claims

that occurred prior to her membership status and employment. It is assumed that

Appellee is referring to its 2006 audit of the Houston Branch CR 203-221). Again,

Appellee attempts to mislead this Court. Jackson submits the findings of the 2006

audit as proof of Appellees prior knowledge of Smith’s malfeasances, thus making

her unfit as to serve as an executive director. This prior knowledge establishes the




                                            4
basis of Appellees’ fiduciary duties, to Jackson, as an employee and member and the

other members of the Houston Branch.

              IV.   APPELLEES CONCEDE JUDICIAL INTERVENTION IS
                    MANDATED

      Appellees concede that the actions of a volunteer association is subject to

judicial intervention when the action transgress the bounds of reason and deprive a

member of a valuable right or property interest (Appellees brief pg. 12). In this case

Jackson, as a member lost the property right in the NLRB’s order to reinstate her

employment. The National office’s reinstatement of Smith was the cause in fact of

TJAF rescinding the grant that employed Jackson. Material questions of fact exist

regarding whether the grant would have stayed if place if Smith had not been

reinstated.

      Likewise, the ousted EC members lost their property rights to membership

and respective offices each held due to the actions of the National office. The

National office effectively thwarted the newly elected EC members attempts to right

the wrongs created by Smith, all against the mandates of the constitution and bylaws.

Appellees failed to allow members to inspect the books of the Houston Branch as

mandated by Texas law; the National office had prior knowledge of Smith’s

malfeasance, but ignored the warnings of the newly elected EC members regarding

missing money and Smith’s failure to turn documents over to the EC; Smith

committed unfair labor practices against Houston Branch employees in violation of

                                          5
federal law and the mission of the Association Appellees blatant disregard for the

rules and regulations, despite the presence of unlawful activity. This is a concern

that affects the public at large, as such judicial intervention is mandated.

             V.     APPELLEES CONSTITUTION AND BYLAWS CREATE
                    A CONTRACT AND FIDUCIARY DUTIES TO ITS
                    MEMBERS

       Appellees constitution and bylaws establish a contract between it, its units and

its members. In considering the bylaws of non-profit organizations, Texas courts

must construe the declaration and bylaws according to the general rules that apply to

the construction of contracts . Scoville v. SpringparkHomeowner'sAss'n, Inc ., 784

S.W.2d 498, 502 (Tex. App. Dallas 1990, writ denied); see also 18A Am. Jur. 2d

32. Corporations § 323 (1985). Appellant offers the following language from

Appellees’ constitution and bylaws as evidence of an existence of contract between

Appellees and its members. “An individual can only become a member if the

person agrees to abide by the rules and policies of the Association and the decisions

of its elected officers and officials and by paying membership dues” (CR 120).

“Members have the right to make amendment proposals to the constitution, have

voting rights in the election of branch officers, and may run for office” (CR 167). In

keeping with the laws of this state, it is clear that Appellee’s constitution and bylaws

create a contract with its members that establish benefits as a result of compliance

with the rules and decisions of the officers. Those benefits include assisting the

Association in enacting and enforcing state and federal laws designed to protect the

                                            6
civil rights of American citizens to secure political, educational, social, and economic

equality to said citizens ( Id.).

       Interestingly enough, Appellees do not argue that breaches of duty have not

occurred, but only that Appellees did not owe an informal fiduciary duty to Jackson

or its members. The cases cited by Appellees are misleading and miss the mark as

these cases concern the relationships between corporations and their shareholders,

not a voluntary non-profit organization. Appellees owed Jackson a duty based on

her membership in the NAACP, not her employment status. Where the evidence is

disputed, as it is here, the existence of an informal, confidential relationship is a

question of fact and must proceed to a jury. Pope v. Darcey, 667 S.W.2d 270, 275

(Tex.App.-Houston [14th Dist.] 1984). In order to establish the existence of an

informal fiduciary relationship, the record must show that one of the parties relied

on the other “for moral, financial, or personal support or guidance.” Id. at 15 citing,

Trostle v. Trostle , 77 S.W.3d 908, 915 (Tex.App.-Amarillo 2002, no pet.).

Contrary to Appellees assertions, a confidential relationship needs to exist prior to

and apart from the disagreement at issue only if a business transaction is involved .

Associated Indem Corp. v. Cat Contracting, Inc . 964 S.W.2d 276, 288 (Tex 1998).

In the case at bar, there has been no business transaction between Appellees and its

members. Because the facts are disputed on this issue, questions of material fact

exist for a fact finder to resolve.

              VI.     PREEMPTION DOES NOT APPLY IN THIS CASE
                                            7
      Appellees assertions that Jackson’s state claims are preempted by federal law

are incorrect. Appellees again attempt to confuse the Court by categorizing

Jackson’s claims as employment based. Jackson’s NLRB charge alleged refusal to

hire based on the engagement of protected concerted activities. That activity,

demanding her wages in a timely manner, IS NOT the basis of this lawsuit. Instead,

Jackson argues she has lost her property right in the NLRB order of reinstatement

due to Appellees negligent retention of Smith, which is also a breach of Appellees

fiduciary duty to Jackson and the other members of the Houston Branch. Further,

the other state claims of breach of contract, fraud by disclosure, defamation of

character, and failure to allow members to inspect the books of the Houston

Branch are not within the purview of the NLRA.

      Under Appellees analysis, questions of material fact exists regarding whether

Appellees actions of retaining Smith’s services with the knowledge of the 2006 audit,

the unfair labor practice; Smith’s failure to inform Jackson that her 15 years of legal

experience entitled her to a salary paying $27,000 more than what she was offered;

and Smith defaming Jackson, are governed under Section 7 and 8 of the NLRA.

The NLRB investigated whether Appellees refusal to rehire Jackson was based on

her complaint of not being paid. Smith had not been terminated at the time

Jackson filed with NLRB. Further, Jackson was unaware at the time of filing the

charge that she had not been offered the correct salary of that Smith had defamed



                                           8
In other words, these causes of action occurred after Appellees unlawfully refused

to rehire Jackson. As such, this claim must proceed to a jury.

                 VII.     THE NATIONAL OFFICE HAD PRIOR KNOWLEDGE
                          THAT SMITH WAS AN UNFIT EMPLOYEE

        In regard to Jackson’s negligent retention claim, again Appellees play the

shell game by arguing that the 2006 audit of the Houston Branch occurred prior to

Jackson’s employment. This is irrelevant. What is relevant is that the National

office knew, via the 2006 audit report that Smith was an unfit employee, so much so

that Appellee made plans to force her to resign or take over the branch. Appellees

owed Jackson a duty of protection against Smith. An employer owes the duty of

protection to fellow employees and to the public at large. Further, at the time the

NLRB ordered the Branch to reinstate Jackson, she was a member of the

Association (CR 671) 1. TXI Transp. v. Hughes, 306 S.W.3 230, 240 (Tex. 2010).     rd




Contrary to Appellees contentions, Jackson’s damages occurred when TAJF

rescinding the BCLS grant, based on Smith returning to her position, not prior to

Smith’s termination and her subsequent reinstatement (CR 665-666,746). It was

Smith’s reinstatement that caused Jackson’s injury. Jackson has produced

competent evidence for this issue to proceed to a jury.

                 VIII. JACKSON SUFFICENTLY ARGUED APPELLEES
                       VIOLATED THE TEXAS BUSINESS CODE
1
 During the May 15, 2015 hearing, Appellees intentionally misled the Court by stated Jackson was not a member of
the Association at the time this lawsuit was filed in 2011. RR 30, lines 8-16.

                                                        9
      Appellees argue that Jackson failed to sufficiently argue Appellees violation

Tex. Bus. Org 252.010(a). Appellant sufficiently made this argument under the

judicial intervention portion of her brief (Appellant’s brief pg. 15). Appellant cited

the appropriate statute, in addition to providing evidence of her 2010-2011 NAACP

membership. Further, Appellant provided evidence of her request to inspect the

books as a member, via an email to Smith (CR 742).


IX.   THE DEFAMTION CLAIMS ARE RIPE
      Appellees contention that Jackson’s defamation per se claims are futile

because Jackson lacks standing, the claims are time-barred, or the defamation was

not published is without merit. Jackson has standing to sue as a member of the

Association who voted for those Houston branch officers that were expelled. In

regard to Jackson’s defamation claim on behalf of the expelled members, who are

listed in Appellant’s initial brief as Stephanie Collins, D.Z. Coefield, Linda Dunson,

Cari Barnes, and Glynis Gilder, the unlawful suspension and expulsion of the

officers was published when the Association replaced the expelled members,

without an election and without the input of the membership (CR 279). The

suspension and expulsion were unlawful actions taken against the newly elected

officers, who were merely attempting to protect the integrity of the Association.

      In regard to the defamation claims against the Branch and Smith, Appellant

alleges defamation per se pursuant to the Texas common law, as Smith’s statements

                                          10
are in reference to Jackson’s employment. As such Jackson is not required to prove

fault, making falsity presumed and placing the burden of proving truthfulness on

Appellees. Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640,646 (Tex.

1995). Appellees have the burden of proving these statements were not made with

malice.

      X.      SMITH HAD A DUTY TO DISCLOSE THE PROPER SALARY
              TO JACKSON
       In regard to Jackson defamation claim against Smith and the branch and her

claim of fraud by non-disclosure, Smith was aware of TAJF’s mandates and had a

duty to disclose the salary structure to Jackson as it is listed in the grant proposal that

was signed by her and the then Branch president. Bradford v. Vento, 48 S.W.3d

749, 754-51 (TX 2001) and Spoljaric v. Percival Tours, Inc. 708 S.W.2d 432, 435

(Tex.1986). Under this theory, a fiduciary relationship is not necessary.

Solutioneers Consulting, Ltd. v. Gulf Greyhound Partners, Ltd., 237 S.W.3d 379,

385 (Tex.App.-Houston [14th Dist.] 2007, no pet.), (explaining that duty to disclose

also may arise “when one party voluntarily discloses information, which gives rise to

the duty to disclose the whole truth,” “when one party makes a representation,

which gives rise to the duty to disclose new information that the party is aware

makes the earlier representation misleading or untrue,” or “when one party makes a

partial disclosure and conveys a false impression, which gives rise to the duty to

speak”). Based on this analysis,


                                            11
Appellant’s claim must proceed to a fact-finder.

        XI.      CONCLUSION


        Based on the foregoing and the facts, arguments and case law cited in

Appellant’s initial brief, each of these causes of action should proceed to a jury.

Respectfully submitted September 30, 2015:

                                                       Tracie Jackson

                                                     __________/s/___Tracie Jackson__
                                                     Tracie Jackson
                                                     Texas Bar No: 24053020
                                                     Frye, Oaks and Benavidez, PLLC
                                                     3315 Mercer St.
                                                     Houston, TX 77027
                                                     Tel. (713)227-1717
                                                     Attorney for Appellant Tracie Jackson


                                                  CERTIFICATE OF SERVICE

The undersigned certifies that on this the 17th day of November, 2015, a true and correct copy of the foregoing has
been forwarded via the U.S. mail to: Mr. A. John Harper II Morgan, Lewis & Bockius LLP 1000 Louisiana, Suite
4000 Houston, Texas 77002 aharper@morganlewis.com and William Van Fleet, The Hall Firm, 530 Lovett Blvd.,
Houston, TX 77006, Fax: 713-942-9566




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