In 1994, the City of Dallas, Texas settled a lawsuit with the Black Fire Fighters Association and with the Dallas Fire Fighters Association. In the settlement, the City agreed to provide an oral assessment as part of the examination given to candidates seeking a promotion to the rank of lieutenant and captain in the Dallas Fire Department.
In 1999, the City contracted with the Booth Research Group to develop an exam for promotions, including a written examination and the oral assessment portions. The examination was conducted in April and May, 2000. Thirty-five firefighters, whose promotions were either denied or delayed based upon the examination, joined with the Dallas Fire Fighters Association in suing the Booth Research Group for the conducting of the examination.
The heart of the firefighters’ claim was that they were third-party beneficiaries of the contract between the City and the Booth Research Group with respect to the conducting of promotional examinations, and that the Booth Research Group breached its obligations under the contract to conduct a fair examination.
The Texas Court of Appeals rejected the firefighters’ claims. The Court held that “the fact that a person might receive an incidental benefit from a contract to which he is not a party does not give him a right of action to enforce the contract. A third party may recover on a contract made between other parties only if the parties entered into the contract directly for the third party’s benefit.” Citing the presumption that “the parties contracted for themselves unless it clearly appears that they intended a third party to benefit from the contract,” the Court found that the firefighters were not third-party beneficiaries of the contract between the Booth Research Group and the City. In the Court’s view, the firefighters were not referenced as an intended beneficiary under the contract. “There is no evidence that the City and the Booth Research Group entered into the contract directly and primarily for the benefit of the firefighters. Further, any benefit to the firefighters is not clearly and fully spelled out. We cannot conclude that it is unmistakable that a benefit to the firefighters was within the Booth Research Group’s and the City’s contemplations.”
The firefighters argued that they were intended to benefit under the contract because the contract sought to fulfill the 1994 settlement requirements. The Court was unimpressed with the argument, finding that “the City did not contract with the Booth Research Group to relieve the City of its burden of providing an oral assessment center, it merely contracted with the Booth Research Group to develop the oral assessment. At most, the firefighters only incidentally benefit from the contract,” and were not able to file a lawsuit alleging a breach of the contract.
Dallas Fire Fighters Association v. Booth Research Group, Inc., 2005 WL 289417 (Tex.App. 2005).
This article appears in the April 2005 issue