City of Dallas v. Vsc, LLC, 05-05-01227-CV.

Citation242 S.W.3d 584
Decision Date04 January 2008
Docket NumberNo. 05-05-01227-CV.,05-05-01227-CV.
PartiesCITY OF DALLAS, Texas, Appellant v. VSC, LLC, Appellee.
CourtCourt of Appeals of Texas

Charles Estee, Dallas, for Appellant.

James C. Mosser, Mosser Mallers PLLC Lawyers, Dallas, for Appellee.

Before Justices MOSELEY, FITZGERALD, and FRANCIS.

OPINION ON REHEARING

Opinion by Justice FITZGERALD.

This Court's opinion of June 21, 2006 is withdrawn and our judgment of that date is vacated. The following is now the opinion of this Court.

The City of Dallas, Texas appeals the denial of its plea to the jurisdiction in VSC, LLC's suit alleging the City took its property without just compensation and seeking declaratory judgment. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(8) (Vernon Supp.2007). We affirm in part and reverse and dismiss in part.

BACKGROUND

In 2002, VSC operated a licensed vehicle storage facility, which authorized it to receive and store vehicles towed without the consent of their owners. TEX. OCC.CODE ANN. §§ 2303.001-.303 (Vernon 2004 & Supp.2007). VSC alleged Dallas police officers, with the approval, authorization, and direction of the City's policy makers, came onto VSC's property at various times and seized 277 vehicles.1 The officers asserted the vehicles either had been reported stolen, had altered serial numbers, or were involved in other felony offenses. See TEX. TRANSP. CODE ANN. § 501.158 (Vernon 2007). VSC, however, alleged that these vehicles were not part of any criminal action or investigation when they were towed, when they arrived at VSC's storage facility, or when the police seized them. VSC alleged the City disposed of these vehicles without notifying VSC and that the City retained all funds collected from the disposition of the seized vehicles. VSC alleged it had "a legitimate and recognized property interest" in the seized vehicles that the City destroyed through the disposition of the vehicles without notice to VSC.

VSC sued the City in state court alleging several state and federal causes of action. The City removed the case to federal district court. At VSC's request, the federal court remanded three of the causes of action to the state court and abated the remaining federal claims until disposition of the state-court litigation. Two of the causes of action alleged the City's seizure and subsequent disposition of the vehicles without notice to VSC was a constitutional "taking" of VSC's property interest in the vehicles and violated VSC's right to just compensation under article one, section seventeen of the Texas Constitution and the Fifth and Fourteenth Amendments to the United States Constitution. The third cause of action sought a declaratory judgment that (1) VSC is entitled to towing and storage fees for vehicles lawfully towed and stored at VSC's licensed storage facility even if the vehicles are reported stolen; (2) the City lacks authority to seize vehicles as stolen when VSC is entitled to towing and storage fees for those vehicles; and (3) even if the City is authorized to seize the vehicles from VSC's licensed storage facility, VSC is entitled to notice and a hearing under chapter 47 of the code of criminal procedure before the City disposes of the vehicles.

The City filed a plea to the jurisdiction asserting the trial court lacked jurisdiction over these claims. The trial court denied the plea to the jurisdiction. The City now brings this interlocutory appeal. TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(8).

PLEA TO THE JURISDICTION

In its first issue, the City generally asserts the trial court erred in denying the plea to the jurisdiction. "Whether a court has subject matter jurisdiction is a question of law." Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004); see also Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002). "When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause." Miranda, 133 S.W.3d at 226. "We construe the pleadings liberally in favor of the plaintiff and look to the pleader's intent." Id.; see Dallas Cent. Appraisal Dist. v. 1420 Viceroy Ltd. P'ship, 180 S.W.3d 267, 269 (Tex.App.-Dallas 2005, no pet.) ("[W]e liberally construe the pleadings in favor, of jurisdiction, focusing on the pleader's intent."). "[I]f a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised...." Miranda, 133 S.W.3d at 227. If the evidence creates a fact question regarding the jurisdictional issue, then the plea to the jurisdiction must be denied. Id. at 227-28. If the evidence is undisputed or fails to raise a fact question on the jurisdictional issue, then the trial court rules on the plea to the jurisdiction as a matter of law. Id. at 228. This procedure generally mirrors that of a summary judgment under rule of civil procedure 166a(c), and the burden is on the government to meet the summary judgment standard of proof. Id. This standard "protect[s] the plaintiffs from having to `put on their case simply to establish jurisdiction.'" Id. (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000)).

CONSTITUTIONAL TAKING

In its second, third, and fourth issues, the City asserts the trial court erred in denying its plea to the jurisdiction to VSC's takings claim under the Texas Constitution. The City does not have immunity from a valid takings claim under article one, section seventeen. Bell v. City of Dallas, 146 S.W.3d 819, 825 (Tex.App.-Dallas 2004, no pet.). If the plaintiff fails to allege a valid takings claim, the City retains its immunity to suit. Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex.2001); Bell, 146 S.W.3d at 825. Whether particular facts constitute a taking is a question of law. Little-Tex Insulation Co., 39 S.W.3d at 598; Bell, 146 S.W.3d at 825.

Article one, section seventeen of the Texas Constitution provides, "No person's property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person...." TEX. CONST. art. I, § 17. A takings cause of action consists of three elements: (1) an intentional act by the government under its lawful authority (2) resulting in a taking of the plaintiffs property (3) for public use. State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007); City of Dallas v. Jennings, 142 S.W.3d 310, 314 (Tex.2004); Little-Tex Insulation Co., 39 S.W.3d at 598.

Authorized Governmental Action

In its second issue, the City asks if "a takings claim [can] be based on alleged unauthorized or unlawful governmental action." The City argues that a takings claim must be based on authorized, lawful government actions. See Holland, 221 S.W.3d at 643; Jennings, 142 S.W.3d at 314; Little-Tex Insulation Co., 39 S.W.3d at 598. The City then asserts VSC alleged that the police officers' seizures of the vehicles stored by VSC were unlawful and unauthorized.

The City did not make this argument in its plea to the jurisdiction. Our jurisdiction is limited to reviewing the grant or denial of the plea to the jurisdiction. TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(8); Brenham Housing Auth. v. Davies, 158 S.W.3d 53, 61 (Tex.App.-Houston [14th Dist.] 2005, no pet.); City of Dallas v. First Trade Union Say. Bank, 133 S.W.3d 680, 686-87 (Tex.App.-Dallas 2003, pet. denied). We do not have jurisdiction to consider grounds outside the plea to the jurisdiction. Davies, 158 S.W.3d at 61; First Trade Union Say. Bank, 133 S.W.3d at 687 ("we limit our discussion to the order denying the plea to the jurisdiction filed by the City, not to some plea never filed with the trial court."). Accordingly, we cannot consider the City's argument. We overrule the City's second issue.

Taking

In its third issue, the City contends its seizure of the vehicles was not a taking under article one, section seventeen because the vehicles were seized pursuant to the City's police power, not its eminent domain power.

The City asserts that the damage or destruction of property that occurs when the government exercises its police power is not compensable under article one, section seventeen of the constitution. The City argues that the police had the power to seize stolen vehicles and vehicles with altered serial numbers. See TEX. TRANSP. CODE ANN. § 501.158(a) ("A peace officer may seize a vehicle or part of a vehicle without a warrant if the officer has probable cause to believe that the vehicle or part (1) is stolen; or (2) has had the serial number removed, altered, or obliterated."). The City asserts that all the vehicles seized were subject to this provision. Thus, the City argues, because all the seizures were pursuant to the City's police power and not its power of eminent domain, the seizures cannot be takings under article one, section seventeen.

Our review of applicable authority shows the fact that a taking, destruction, or damage that occurs pursuant to the valid exercise of police power does not bar the property owner's claim for compensation under article one, section seventeen. For example, in Steele v. City of Houston, 603 S.W.2d 786 (Tex.1980), the plaintiffs were the owners-lessors and the lessees of a house in which three escaped convicts took refuge. Id. at 788-89. Plaintiffs alleged the City, through its police officers, fired incendiary devices into the house in an attempt to apprehend the fugitives. The resulting fire destroyed the house and all its contents. The plaintiffs sued, alleging the destruction of their house and belongings entitled them to adequate compensation under article one, section seventeen.2 Id. The supreme court emphasized that its interpretation of article one, section seventeen "has moved beyond the earlier notion that the government's duty to pay for...

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