Little-Tex Insulat. v. Gen. Serv. Comm'n.

• Citation: 997 S.W.2d 358
• Parties: (Tex.App.-Austin 1999) Little-Tex Insulation Company, Inc., Appellant v. General Services Commission, Appellee NO. 03-98-00297-CV
• Decision Date: 29 July 1999
• Court: Court of Appeals of Texas

Page 358

997 S.W.2d 358 (Tex.App.-Austin 1999)

Little-Tex Insulation Company, Inc., Appellant v. General Services Commission, Appellee

NO. 03-98-00297-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

July 29, 1999

Rehearing Overruled August 26, 1999

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NO. 95-02530, HONORABLE JOHN K. DIETZ, JUDGE PRESIDING

Affirmed in Part; Reversed and Remanded in Part

Before Justices Jones, B. A. Smith, and Yeakel

J. Woodfin Jones, Justice

Appellant Little-Tex Insulation Company, Inc. ("Little-Tex") sued appellee General Services Commission of the State of Texas ("Commission") seeking damages for breach of contract and for a violation of the "takings clause" of the Texas Constitution; the suit also requested judicial review of the Commission's decision to terminate the parties' contract. The Commission filed a plea to the jurisdiction asserting sovereign immunity as to the breach-of-contract and takings claims and filed special exceptions to the request for judicial review. The trial court sustained the special exceptions, granted the plea to the jurisdiction, and dismissed the suit. We will affirm in part and reverse and remand in part.

FACTUAL AND PROCEDURAL BACKGROUND

We determine the trial court's jurisdiction from the good-faith factual allegations made by the plaintiff. See Brannon v. Pacific Employers Ins. Co., 224 S.W.2d 466, 469 (Tex. 1949); Flowers v. Lavaca County Appraisal Dist., 766 S.W.2d 825, 827 (Tex. App.-Corpus Christi 1989, writ denied). Unless the defendant pleads and proves that such allegations were fraudulently made to confer jurisdiction, they are accepted as true. See Flowers, 766 S.W.2d at 827; Delk v. City of Dallas, 560 S.W.2d 519, 520 (Tex. Civ. App.-Texarkana 1977, no writ); Gordon v. Carver, 409 S.W.2d 878, 879 (Tex. Civ. App.-Amarillo 1966, no writ); see also Continental Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex. 1996). Because the Commission has not asserted any such fraudulent pleading here, we accept Little-Tex's allegations as true; our recitation of the facts is taken from Little-Tex's pleadings.

The Commission awarded Little-Tex a contract for the abatement of asbestos material on two floors of a state office building. The contract provided for payment of $140,170 for each floor, for a total of $280,340. During the abatement process, Little-Tex submitted payment invoices to the Commission; payment was remitted to Little-Tex for approximately $77,000 in satisfaction of the first invoice. After payment of the first invoice, a dispute arose between the parties concerning Little-Tex's performance, and the Commission refused to remit any further payment until Little-Tex addressed the Commission's concerns. The Commission eventually terminated the contract based on its contention that Little-Tex failed to correct certain contract violations previously the subject of a cure notice. At the time of the contract cancellation, Little-Tex had completed approximately 30% of the abatement on one of the two floors.

Little-Tex initially filed suit seeking damages for breach of contract and also requesting judicial review under the Administrative Procedure Act¹ ("APA") of the Commission's decision to terminate the contract. The Commission responded with special exceptions contesting the request for judicial review based on the absence of any statute conferring jurisdiction on the court. The trial court sustained the Commission's special exceptions but granted Little-Tex an opportunity to amend its pleadings to properly state a cause of action for judicial review.² Little-Tex filed an amended petition that omitted the request for judicial review, reasserted its breach of contract claims, and added a cause of action for a takings clause violation. The Commission filed a plea to the jurisdiction based on sovereign immunity. The trial court granted the plea and dismissed Little-Tex's suit in its entirety. In this appeal, Little-Tex challenges the trial court's decision to sustain the special exceptions and grant the plea to the jurisdiction.

DISCUSSION

Request for Judicial Review

In its first issue, Little-Tex asserts that the trial court erred in sustaining the Commission's special exceptions regarding Little-Tex's APA claim because another part of the Texas Government Code authorizes judicial review of the Commission's decisions under contested-case procedures set out in the APA. We decline to address this issue. After the trial court sustained the Commission's special exceptions, Little-Tex filed an amended petition that omitted the cause of action for judicial review under the APA. Under settled law, "when a plaintiff fails to include in his amended petition a cause of action that he had included in a previously filed petition, that cause of action . . . is no longer before the trial court." State v. Tamminga, 928 S.W.2d 737, 740 (Tex. App.-Waco 1996, no writ). Such an omission "acts as a voluntary dismissal of that cause of action." Id. Because no cause of action for judicial review under the APA was before the trial court when the court ordered the cause dismissed, this issue is moot. We therefore dismiss Little-Tex's first issue.

Takings Claim

The takings clause of the Texas Constitution states that "[n]o 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. In the court below, Little-Tex sought monetary damages based on an alleged violation of the takings provision, arguing that the Commission "took" its labor and materials for the benefit of the public without just compensation. The trial court dismissed the takings claim pursuant to the Commission's plea to the jurisdiction asserting immunity from suit. Little-Tex contends the trial court erred in dismissing the claim because sovereign immunity does not preclude a cause of action for violation of the takings clause.

We agree that an action for compensation under the takings clause is a limited exception to the doctrine of sovereign immunity. See Firemen's Ins. v. Board of Regents of Univ. of Texas Sys., 909 S.W.2d 540, 543 (Tex. App.-Austin 1995, writ denied); Green Int'l, Inc. v. State, 877 S.W.2d 428, 433 (Tex. App.-Austin 1994, writ dism'd by agr.). The State waives sovereign immunity both as to suit and as to liability when, pursuant to its constitutional authority, it takes, damages, or destroys property for public use. See Green Int'l, 877 S.W.2d at 433. A plaintiff must allege a proper takings claim, however, in order to invoke this waiver of sovereign immunity.

To establish a takings claim, the plaintiff is required to plead and prove that (1) the State intentionally performed certain acts; (2) that resulted in a "taking" of property; (3) for public use. See Fireman's, 909 S.W.2d at 543; Green Int'l, 877 S.W.2d at 434. In Green International, we held that the contractor had not properly established a takings claim against the State because (1) there was no intent to take, and (2) the contractor consented to the taking. Id.

Little-Tex concedes that in Green International, this Court held that factual allegations nearly identical to those contained in Little-Tex's petition failed to state a proper takings claim. See Green Int'l, 877 S.W.2d at 434-36. Nevertheless, Little-Tex asks us to reverse the holding in Green International as being "contrary to established taking jurisprudence and the facts." We decline to do so.

Addressing the requirement that the State must have intended to take property for public use, this Court stated in Green International:

[W]henever the government acts within a color of right to take or withhold property in a contractual situation, the government cannot be said to have effected a taking because there was no intent to take, only an intent to act within the scope of the contract. Even if the government were to withhold property or payment it believed to be due the other party, the government would still be acting within the color of right to the extent it had a good faith belief that its actions were justified due to disagreements over payment due or performance under the contract.

877 S.W.2d at 434 (citations omitted).

In the present case, Little-Tex has not alleged that the State acted with specific intent to take its property for public use. Instead, Little-Tex's pleadings contain allegations affirmatively establishing a dispute between the parties over the ability of Little-Tex to perform the contract. Little-Tex claims the contract violations alleged by the Commission either never occurred or were quickly corrected. This contention actually bolsters the fact that the parties were engaged in a bona fide dispute over Little-Tex's performance under the contract. In addition, the pleadings reveal that the Commission paid a substantial sum to Little-Tex as it became due, discontinuing payment only after the dispute between the parties arose. Again, this bolsters the conclusion that the Commission had no intent to take Little-Tex's labor and material for public use. See Green Int'l, 877 S.W.2d at 435. The factual allegations by Little-Tex affirmatively demonstrate that the Commission was acting within its color of right in attempting to exercise its rights under the contract and therefore had no intent to "take" property for public use.

Moreover, the factual allegations in Little-Tex's pleadings show that it voluntarily entered into the contract with the State, voluntarily performed under that contract, and voluntarily gave possession of labor and materials to the State; thus, Little-Tex cannot argue that it did not consent to the Commission's possession. See id.; State v. Steck Co., 236 S.W.2d 866, 869 (Tex. Civ. App.-Austin 1951, writ ref'd) (entity that entered into contract with State, produced product, and delivered product to State did not have valid taking claim). In...