York v. State

• Decision Date: 29 June 2012
• Docket Number: No. 09–0905.,09–0905.
• Citation: 55 Tex. Sup. Ct. J. 1013,373 S.W.3d 32
• Parties: Larry YORK d/b/a York Tank Trucks, Petitioner, v. STATE of Texas and Wise County, Texas, Respondent.
• Court: Texas Supreme Court

373 S.W.3d 32

55 Tex. Sup. Ct. J. 1013

Larry YORK d/b/a York Tank Trucks, Petitioner,

v.STATE of Texas and Wise County, Texas, Respondent.

No. 09–0905.

Supreme Court of Texas.

Argued Dec. 6, 2011.

Decided June 29, 2012.

Samuel Clifford Bishop, Bishop & Bishop, Decatur, TX, for Larry York.

Harold Joseph Liller, Law Enforcement Div., Attorney General's Office, David A. Talbot Jr., Consumer Protection, Office of the Attorney General, David S. Morales, Office of the Attorney General of Texas, Deputy First Assistant Attorney General, Clarence Andrew Weber, Kelly Hart & Hallman LLP, Gregory W. Abbott, Attorney General of Texas, Kristofer S. Monson, Assistant Solicitor General, Daniel T. Hodge, First Asst. Attorney General, William J. “Bill” Cobb III, Office of the Attorney General, Austin, TX, James C. Ho, Gibson Dunn & Crutcher LLP, Dallas, TX, for Respondent State of Texas.

Christopher N. Forbis, Sewell and Forbis, Decatur, TX, Thomas M. Michel, Griffith, Jay & Michel, LLP, Fort Worth, TX, for Respondent Wise County.

Justice HECHT delivered the opinion of the Court.

Petitioner sued for a declaration that a final judgment awarding his property to the State was rendered in violation of the Bankruptcy Code's automatic stay ¹ and therefore void. Petitioner also sued for damages for the lost use of his property as a constitutionally compensable taking. We hold that a judgment that violates the automatic stay is void and subject to collateral attack in state court, but that a judicial award of property to the State is not, in these circumstances, a taking. We reverse the judgment of the court of appeals ² and remand the case to the trial court.

I

In October 2006, Trooper Tim Godwin of the Department of Public Safety (“DPS”), in his words, “stopped a York water Tanker” in Paradise, Texas, in Wise County.³ The investigative report by Sergeant David Martinez states that the 1981 M&D model tank trailer was being operated by York Tank Truck, a local oilfield business owned by Larry York. The York name was emblazoned on the side of the trailer. The trailer's registration receipt designated the renewal recipient as York Vacuum, another name for York's business, and listed the trailer's owner as the McNutt Co. in Snyder, Texas. ⁴ But the trailer had no vehicle identification number (VIN), so Martinez impounded it, as a peace officer is authorized to do by Texas law, which then permits the seized vehicle to be treated as stolen for purposes of custody and disposition.⁵

DPS contacted York, who not surprisingly claimed the trailer was his. Harold McNutt, owner of the McNutt Co., had sold the trailer to York's father in the late 1980s or early 1990s, and York had acquired it when he bought his father's business in 1993. York stated the trailer was his, but that the registration had just not been transferred yet. McNutt had in fact assigned title to York, and York had pledged and delivered the original title to the Roscoe State Bank to secure the loan he had used to buy his father's business. DPS did not attempt to contact the McNutt Co.⁶ York told DPS he thought the VIN plate had been removed and destroyed while the trailer was being repaired. A painter in Snyder later provided an affidavit stating that the VIN plate had been discarded in the process of repainting the trailer. DPS determined that no similar trailer had been reported stolen in Texas.

Though no one but York claimed the trailer, in February 2007 the State petitioned the justice court under Chapter 47 of the Texas Code of Criminal Procedure to determine who should have possession. The State asserted that “each person or company known ... as being a reasonably likely party to have an interest in [the trailer]” was listed in its pleading. The only party listed was York Vacuum Service. Notice of the proceeding was given to York but not to the McNutt Co. York appeared pro se and produced registration renewal receipts, inspection records, insurance cards, repair records, and photographs to show that the trailer was his, but he did not and could not produce the title certificate since it was held by the Roscoe State Bank. The only evidence offered by the State was that the VIN was missing. No other evidence was offered to show that this 1981 trailer was stolen property. Following the hearing, the justice court awarded the trailer to the State for use or disposal by the Sheriff of Wise County.⁷ The County stored the trailer.

A few days later, York, now with legal counsel, attempted to appeal, but notice of appeal in such proceedings must be given orally at the conclusion of the hearing,⁸ which York did not know to do, and therefore his appeal was untimely. York also filed a bill of review to set aside the judgment, but it was denied.

Years earlier, in January 2003, York had filed for protection under Chapter 13 of the Bankruptcy Code, and that case remained pending in 2007. York scheduled the trailer as an asset of his estate and listed Roscoe State Bank as a secured creditor. York says that he did not inform DPS or the justice court of the bankruptcy case because he did not know until after he retained counsel that it might have afforded him protection from the justice court proceeding. In August 2007, York brought this action against the State and Wise County to declare the justice court judgment in violation of the Bankruptcy Code's automatic stay and therefore void. He also alleged that the defendants had intentionally misused the Chapter 47 proceeding to deprive him of his property and asserted damages for the loss of its use as a compensable taking under Article I, Section 17(a) of the Texas Constitution.⁹

The defendants asserted immunity, and York moved for partial summary judgment on his claim for declaratory relief. The trial court dismissed the case for want of jurisdiction, concluding that the justice court judgment was not void but was only voidable, and only if the bankruptcy court, rather than the state court, determined (i) that the trailer was not stolen but was part of York's estate, and (ii) that the justice court proceeding did not fall within the police power exception to the automatic stay.¹⁰ The trial court's findings and conclusions did not mention York's takings claim.

A divided court of appeals reversed and remanded.¹¹ The court held that a judgment rendered in violation of the automatic stay is void, not merely voidable, and that a state court has jurisdiction to make that determination, even though the bankruptcy court might later disagree.¹² But the court also held that a challenge to a judgment based on the automatic stay is subject to the general rule in Texas that a final judgment cannot be collaterally attacked with extrinsic evidence.¹³ Nothing in the parts of the justice court record presented as evidence showed that York had filed for bankruptcy, or that the automatic stay affected the proceeding.¹⁴ Because a violation of the automatic stay could be shown only with extrinsic evidence, the court of appeals concluded that the justice court judgment could not be collaterally attacked.¹⁵

As to York's takings claim, the court of appeals concluded that subsisting fact issues precluded dismissal. “The crux of York's complaint,” the court stated, was whether the State and County, “with knowledge that York actually owned the trailer, intentionally utilized [the Chapter 47 proceeding] to divest him of ownership.” ¹⁶ “A fair reading of his complaint”, the court continued, “is that the county, at least, has been using the statute as a means to take physical possession of property owned by private citizens without compensation.” ¹⁷ The court observed that the defendants' faulty interpretation of Chapter 47 as a forfeiture provision supported York's claim that they were using the statute to take property rather than return it to its rightful owner.¹⁸ So did the facts:

York has put forth considerable, credible evidence of his ownership of the vehicle, regardless of the missing VIN. [The defendants] have not controverted that evidence. Although from York's affidavit testimony it appears that the evidence he presented to the justice court showed that McNutt Co., rather than York, was the true owner of the property, Sergeant Martinez's testimony does not indicate that he ever contacted or attempted to contact McNutt Co.; he simply concluded that since York could not produce the original VIN plates that the property was “deemed” stolen and that there was no way of ever tracing ownership. McNutt Co. was never served in the ... proceeding or named as an interested party. This is significant because if McNutt Co. were the owner, as evidenced on the DPS registration receipts, and was allowing York to use the property, also as evidenced by the DPS registration receipts, then York would have a superior right to possess the trailer as against [the defendants], regardless of whether the trailer was deemed stolen or not. It seems logical that if DPS were acting in furtherance of the true purpose of [Chapter 47], to return property to its rightful owner, that Sergeant Martinez would at least have included McNutt Co. in his investigation. The evidence that he contacted York instead, coupled with York's allegations (and [defendants'] admissions that [they] are treating [Chapter 47] as a forfeiture statute), is enough to at least raise a fact issue sufficient to survive appellees' jurisdictional challenge to York's alleged takings claim.¹⁹

The court also concluded that because the justice court judgment authorized the County to use or dispose of the trailer in its discretion, a fact issue remained whether the trailer had been taken for a public purpose.²⁰ The dissent argued only that York's taking claim was precluded by the justice court's determination that he did not own the trailer.²¹

York, the State, and the County each petitioned for review. We granted all three petitions.²² We turn first to York's declaratory judgment claim, then to his takings...