### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 8 -00 580 -CV

Susa n B. C om bs, Te xa s C om pt r oll e r of P ublic Ac c ount s , A ppe lla nt
v. B.A.R.D. Indu stries Inc. , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 419TH JUDICIAL DISTRICT NO. D-1- GN-08- 0010 71 , HO NORAB LE ORLI NDA NARAN JO , JUDGE PRESIDI NG

O P I N I O N Appellee B
. A
. R. D . I ndustries I nc. (“ BA RD”) f iled suit ag ainst the Comptroller under chapte r 74 of the T exas Prope rty Code, appea ling the Comptroller’s decision that it was not entitled to r ecove r damag es in c onnection with B ARD’s claim for delivere d proper ty
. See Tex. P rop. Code Ann. §§ 74.501, .506 (West 2007). Additionally , BA RD asserte d claims ag ainst the Comptroller for an unconstit utional taking, de nial of due pr ocess, a nd unlawful seizure. A sserting that BA RD’s
c ha pte r 7 4 a nd takin g s c la ims we re ba rr e d b y so ve re ig n immun ity , th e Com ptr oll e r f ile d a ple a to the jurisdiction, which t he trial c ourt denied. We will aff irm in part the trial c ourt’s orde r deny ing the Com ptr oll e r’ s p le a

to t he jur isd ic tio n a

nd re ve rs e and

dis mis s in

pa rt
.
F ACTUAL AND P ROCEDURAL BACK GR OUND I n May 2005, BA RD re ce i v edn o t i ce t h at t h e C o mp t ro l l er wa s h o l d i n g 1 5 5 , 3 8 7 share s of B ARD’s stock in the Goodrich Petroleum Corporation, which the Comptroller had re ceive d from2

an unr e late d th ir d p art

y a s un c la ime d pr op e rt

y in Ma y 20 03
. On

No ve mbe r 2 9, 20 05 , Ro be rt Al pe rt , BA RD’s President, sent a letter to the Comptroller claiming the Goodric h stock and instructingthe Comptroller not to sell the stock. Alpert also subm itted a claim form identifying the Goodrich stock as B ARD’s prope rty , per the Comptroller’s requir ed proc edure s. See id. § 7 4. 50 1( c ) ( “ Al l c la ims to which this section applies must be filed in acc ordanc e with pr ocedur es, contain the information, and be on f

orms presc ribed by

the comptroller.” ). On J anuar

y 20, 2006, the Comptroller notified BA RD that all 155,387 share s of the Goodrich stock had al re ad y been sold in 2004. The Comptroller te ndere d BA RD a che ck for $1,157,280, which, acc ording to the Comptroller, repr esente d the proc eeds of the sale of

all 155,387 share s. L ater

that y ear , BA RD filed a pr e-suit discover y action ag ainst the third party from whom the Comptroller had re ceive d the share s to determine why its Goodrich stock had bee n surre ndere d
as u n c la im e d p r o p e rty an d d e li v e r e d to th e Co mp tr o ll e r . O n D e c e mb e r 1 9 , 2 0 0 6 , a fter the Comptroller had been se rved w ith a copy of B ARD’s petition in that action, a re prese ntative from the unclaimed pr operty division of the Comptroller’s of fice submitt ed a le tter to BA RD that stated t h e f o l l o wi n g:
A re cent r eview of y our unclaimed proper ty claim #05169072 has re veale d an er ror in the calc ulated value of 155,387 shar es of Goodr ich Petroleum stock. Al tho ug h o nly 71 ,5 00 sh are s we re a c tua lly so ld in 200 4, wi th the ba lanc e be ingso ld in 2006, the value of

this entire stock sale wa s err oneously calc ulated on the lowe r 2004 price . Enclosed is a r efund c heck f or $1,337,190.83, which r epresents the re ma ini ngba lanc e ow e d to B .A .R. D. on the a bo ve re fe re nc e [d] c la im.3

BA RD maintains that, prior to rec eiv i n g t h i s l etter, it had not known that the Comptroller had maintained possession of any of its shar es of Goodrich stock following rec eipt of the Comptroller’s J anuar y 2006 letter infor

ming B ARD that all share s had alre ady been sold. The pa rt ie s d o n ot d isp ute that th e se c on d s a le —i.e. , th e F e b r u ar y 2 0 0 6 s a le of the
re ma ini ng83 ,8 87 sh are s— took p la c e thr e e mon ths a ft e r t he Com ptr oll e r r e c e ive d B ARD’ s c la im for a ll 155,387 shares a

nd its inst ructions not to sell the stock. Nor is it disputed that the Comptroll er reta ined the proc eeds f

rom the Fe bruar

y 2006 sale until Dec ember 2006, when B ARD rec eived the

“ re fu nd c he c k” fo r t

he ba lanc e ow e d f

ro m th e sa le of

a ll 1 55 ,3 87 sh are s. Asserting that it was entitl ed to furthe r compe nsation in addition to t he proc eeds f rom the 20 04 and

20 06 sa le s o f i ts G oo dr ic h s toc k, B ARD s ou g ht r e vie w und e r ch a pte r 74 of the pr op e rt

y code. See id. § 7 4. 50 1. Af te r c on du c tin g an inv e sti g a tio n, the Com ptr oll e r’ s of

fi c e inf or me d B ARD that its claim for additi onal compensation was denied, a sserting that “[t] here is no basis for the pay ment of such a

claim under

the Texas Property Code” a nd stating that the war

rant attached to the Dec ember

19, 2006 letter “ repr esents the Comptroller’s f inal pay ment on this claim.” B ARD a pp e a le d th e Com

ptr oll e r’ s r

uli ngpurs ua

nt t o s e c tio n 74 .5 06 of the pr op e rt y code. Se e id
. § 74.506(a) , (c) -(d) (providingfor de novo revie w in Travis County district court and
wa ive r o f S tate ’s immun ity fr om s uit

wi th r e sp e c t to su its br ou g ht u nd e r t his se c tio n) . B ARD alleg ed that it was e ntitled to monetary damag es bec ause the Comptroller’s tender of funds did not fully compensate B ARD for da m age s i t suffe red a s a re sult of the Comptroller’s failure to return B ARD’ s p ro pe rt

y and pr omp tly te nd e r f un ds re c e ive d f

ro m th e “ un lawf

ul s a l e . ” S p e c i f

ic a lly , B ARD
so ug ht t o r e c ov e r t

he dif fe re nc e be tw e e n th e va lue of the sto c k at th e tim e the Com ptr oll e r s old

itAl tho ug h th e Com ptr oll e r’ s p le a

did no t sp e c if

ic a lly a dd re ss whe the r t

he c ourt ha d s ub je c t- 1 matter juris d ic ti o no v e r

B A RD ’ s c la im s f

o r th e d u e p r o c e s s an d

u n la w f u l s e iz u r e c la im s , the Com ptr oll e r c omp la ins on

a pp e a l of the de nia l of

its ple a to t he jur isd ic tio n w ithre sp e c t to the se claims. I t is well established that subj ec t -matter jur isdiction can be r aised for the first time on appea l. See U

niversity of Tex. Sw. Me d. Ctr. v. Loutz enhiser , 140 S.W .3d 351, 358 (Tex. 2004). 4 and t he va lue a t it s p e ak o n N ov e mbe r 3 0, 20 06 , w hic h to ta le d a pp ro ximate ly

$1 ,5 70 ,0 62 .2 2. B ARD
a lso so ug ht t o r e c ov e r t

he int e re st e arn e d o n th e pr oc e e ds of the sa le of

the 83 ,8 87 sh are s. I n a dd iti on

to i ts c la ims u

n d e r t h e p r o p e r t y c o d e , B A RD a sse rt e d c on sti tut ion a l c la ims for a taking , denial of due process, and an unlawful seizure of its proper ty . BA RD alleg ed that the Com ptr oll e r t oo k it s p ro pe rt y fo r p ub lic us e wi tho ut a de qu a te c omp e ns a tio n, int e nti on a lly disreg ardingBA RD’s ri ghtful claim, ref using B ARD’s dema

nd that the prope rty

be re turned, a

nd order ing that the stock be sold three months afte r BARD asser ted i ts claim. As stated in BA RD’s amende d petition, “[s] elling the stock constitutes taking of the prope rty for public use beca

use the purp o s e o f t h e C omptroller’s ac tion was to g ener ate money for Te x as’s g ener al re venue f und pursuant to § 74.601(b)( 2).” BA RD further pleade d that, beca use compensation for the property was not paid contempora

neously with the taking , but instead was pa id “ nine months late r, afte r the stock had incr ease d in value,” B ARD had be en denie d just compensation.

I n response , t h e C o m p t roller f iled a plea

to the jurisdiction, arguing that BARD’ s
c l a i m s w e r e b ar

r e d b y s o v e r e i g ni m m u n i t y. After a hearing , the t rial court denied the Comptroller’s 1 plea, a nd this appeal followe d. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a )(8) (West 2008) (authorizing inter locutory appea l from orde r deny

ing g overnme ntal unit’s plea to jurisdiction). On appe al, the Comptroller ar g ues that t h e t ri al cour t’s order should be reve rsed be c a us e (1 ) B ARD f

a ile d to me e t th e jur isd ic tio na l r e qu ir e me nts of se c tio n 7 4. 30 4( d) of the pr op e rt

y5

code; ( 2) B ARD has not alleg ed ac tions that constitut e an unc onstitut ional t ak i n g; (3) the sa le of BA RD’s stock was not an unconstitutional seizure; and (4) BA RD failed to state t he basis for its lack of du e pr oc e ss c la im.
STA ND AR DS O F RE VI EW Sovereig n immunit y from sui t defe ats a trial court’s subject-matter jurisdiction and thus is proper ly asser

ted i n a plea to the jurisdiction. Texas De p’t of Parks &W

ildlif e v. M iranda , 133 S.W .3d 217, 225-26 (Tex
. 2004). Whether a court has subject-matter jurisdiction and whether a plaintiff ha s alleg ed facts t hat affirmatively demonstrate a t rial court’s jurisdiction are que stions of law r eviewe d de novo. Id. a t 22 6. “ L ike wi se , w he the r u nd isp ute d e vid e nc e of

jur isd ic tio na l f

a c ts establishes a tria l court’s jurisdiction is also a question of law .” Id.

I n this case, the Compt ro l l er ’s plea c halleng ed only BA RD’s pleading s, not the exis tence of jurisdictional fac ts. “When a plea to the jurisdiction challeng es the plea dings, w e de te rm ine if the ple a de r h a s a lle g e d f a c ts that a ff

ir mativ e ly de mon str a te the c ourt ’s jur isd ic tio n to hear the ca use.” Id. (c i t i n g Te

x a s A s s ’ n o

f B u s . v . Te

x a s A ir Co n tro l B d. , 852 S.W .2d 440, 446 (T e x. 19 93 )) . “ We c on str

ue the ple a din g s lib e ra lly in fa vo r of the pla int if

fs and loo k to the ple a de rs ’ intent.” Id. “I f the plea dings do not c ontain sufficien t fa ct s t o aff irmatively

demonstrate the trial court’s jurisdiction but do not aff irmatively demonstrate incurable defe cts in jurisdiction, the issue is one of pleading sufficie ncy and the plaintiffs should be affor ded the oppor tunity to amend.” Id. at 2 2 6 -2 7 (c i t i n g Cou nty

of C am e ro n v . B ro wn , 8 0 S
. W
. 3 d 5 4 9 , 5 5 5 (T ex . 2 0 0 2 ))
. “If t h e p l ea d i n gs aff irmatively

neg ate the e x istence of

jurisdiction, then a plea to the j urisdiction may be g rante d without allowing the pla intiffs an opportunity to amend.” Id. at 227.6 Our d e te rm inatio n o f whe the r B ARD h a s e sta bli sh e d a wa ive r o f i mmunit

y fo r i ts
c la ims ari sin g un de r t

he pr op e rt

y c od e inv olv e s st a tut or

y c on str uc tio n. Statut or

y c on str uc tio n is a question of law, whic h we rev i ew de novo. Texas Mun. Power Age ncy v . Public Util. Comm’n , 25 3 S. W.3 d 1 84 , 1 92 (T e x. 20 07 ). I n c on str uin g statut e s, our p ri mary ob je c tiv e is t o g ive e ff

e c t to the leg islature’s intent a s expressed in the statute’s lang uag e. Tex. Gov’ t Code Ann. § 3 1 2 .005 (We st 2 00 8) ; First Am. Tit le Ins. Co. v. Combs , 258 S.W .3d 627, 631-32 (Tex
. 2008). I f the wor ds of a statute ar e cl ea r and una mbiguous, we apply

them acc ording to their plain and c ommon meaning
. City of Rockwall v. Hughes , 246 S.W .3d 621, 625-26 (Te x . 2008).
DI SCU SSIO N P r o p e r t y C o d eC l a i ms By her f irst issue, the Comptroller argues that B ARD failed to establish a wa iver of
sovere ign immunity

for its claims ar ising unde r the prope rty code. A s t he par

ties acknow ledg e, section 74.304 g rants a limited waive r of sovereig n immunit y reg ardingclaims ag ainst the State for dama g e s to a

ba nd on e d o r u

nc la ime d p ro pe rt

y in t he State ’s po sse ssi on . Se c tio n 7 4. 30 4 p ro vid e s:
T h e c o mp t r o l l e r

i s n o t , i n t h e a

b s e n c e o f n e g l i g e n c e o r m i s h an d l i n g o f t h e p r o p e rt y, lia ble to t he pe rs on wh o c la ims the pr op e rt

y fo r d a ma g e s in c ur

re d w hil e the pr op e rt

y or the proc eeds f

rom the sale of

the property are in the comptroller’ s possession. But in any event the liability of the state is limited to the extent of the proper ty delivere d under this cha

pter a nd rema i n i n g in the possession of the comptroller at the time a suit is fil ed.
Te x. Pr op . Co de Ann. § 7 4. 30 4( d) (We st 2 00 7) . Thu s, in or de r to es ta bli sh a wa ive r of

immun ity from liability , the stat u t e i m p o s es the followingjurisdictional require ments: (1) the Comptroller7

must have ac ted neg lige ntly or mish an d led the prope rty ; (2) dama g e to the prope rty for whic h a claimant may rec over must have been incurre d while the prope rty or the proc eeds f

rom the sale of the prope rty

w e r e in th e Co mp tr o ll e r ’ s p o s s e s s io n ; a n d ( 3 ) th e p r o p e rty

mu s t h a v e b e e nd e li v ere d under c hapter

74 and re mained in the Comptroller’s possession at the time a suit was filed. See id. Concedingthat “administrative e rror s were made in the ha ndlin g o f the share s” of B ARD’s Goodric h stock, the Comptroller does not dispute that B ARD has prope rly alleg ed “ne g lige nce or mishandling of the prope rty .” See id. Th e Com ptr oll e r ur g e s, ho we ve r, that BA RD ’s ple a din g s fa il t o a sse rt a
c la im f or dama g e to p ro pe rt

y that w a s d e liv e re d to the Com ptr oll e r und e r ch a

pte r 74 a nd wa s st ill in the C omptroller’s possession at the time suit was filed. See id. B e c a us e we int e rp re t th e statut e to r e qu ir e that th e “ pr op e rt y de livered un der this c ha pte r” mus t be the same pr op e rt y that is “re mai n i n g in the possession of the comptroller at the time a suit is filed,” see id. , w e a g re e wi th the Comptroller that BA RD has failed to state a claim for which immunit y has been w aived under c hapter

74. I n its amended pe tition, BARD soug ht to recove r dama g es for “the Com p t roller’ s failure to return B ARD’s prope rty and to promptly

tender funds re ceive d from its unlawful sale ,” which “deprived BARD of the i ncre ased value of the sec urities and the inter est ea rned while in the wrong ful possession of the Comptroller.” A ccor ding to BARD’s pleading s, the prope rty that was delivere d under c hapter

74 is the Goodrich stock cer tificates, while the prope rty that the Comptroller “is still, at the tim e of f

iling suit, in possession of” is “B ARD’s intere st that w as ear ned while the Com ptr oll e r po sse sse d B ARD’ s pr op e rt y and a ft e r B ARD a sse rt e d ow ne rs hip .” Th e statut e , b y its pla in l angua g e , d oe s n ot w a ive immun ity un le ss the pr op e rt

y g ivi ngri se to d a ma g e s is bo th8

“deliv er ed under this cha pter” and “ re ma ini ngin t he po sse ssi on ” of

the Com ptr oll e r whe n s uit

is filed. Cf. W

hitehead v. J

ohnson , 9 49 S.W. 2d

47, 48 (Tex
. Ap p. —E a stl and 19 97 , n o w ri t) (construingprevious ver sion of section 74.304 and holdingthat claimant wa s not entitled to re cover
un de r m ine ra l in te re st h e had purc ha se d at tax for e c los ur e sa le wh e n St a te mis take nly de liv e re d f

un ds to p re vio us int e re st h old e r b e c a us e tho se fu

nd s were no lon g e r r e ma ini ngin s tate trea surer ’s po s s es s i o nat t i m e o f s u i t ). Be cau s e B AR D’ s p l ea d i n gs af fi rm at i v el y

n ega t e t h e e x i s t en ce of subject-m at ter jurisdiction, we hold that the tria l court er red in de nying the Comptroller’s plea to the jurisdiction wit h re s p ec t to BARD’ s claims under the proper ty code. See M

iranda , 133 S.W .3d at 227. We sustain the Compt roller’ s first issue.
Unc ons tit utio nal Ta kin g By he r s e c o n d is s u e , th e Co mp tr o ll e r

u r g e s th a t t

h e f a c ts a ll e g e d

b y B A RD d o n ot establish an unconstitutional taking under A rticle I , section 17 of the T exas Con s t i t u t ion, which provides, in per

tinen t part: “No pe rson’s prope rty shall be take n, damag ed or de stroy ed for or applied to public use without ade quate c ompensation beingmade, unless by the conse nt of such per son.” Tex. Co n s t
. ar t . I , § 17. There fore , in order to e stablish a taking s claim, a plaintiff must prove: (1) the g overnme ntal entity intentionally perf

ormed certain acts, (2) that resulted in a “taking ” of pr operty , (3) f or public use. Gene ral Servs. Comm’n v . Litt le-Tex Insulation Co., Inc. , 39 S.W. 3d

59 1, 59 8 ( Te x. 20 01 ); Texas W orkforce Comm’n v. Midfirst Bank , 40 S.W .3d 690, 697 (Tex. App.—Austin 2001, pet. denied).

Sovereig n immunit y

does not shield a g overnm en t al en tity from an a ction for compensation under the taking s clause. State v. Holland , 221 S.W .3d 639, 643 (Tex. 2007);Significa ntly , BA R D d o es n o t argue that the Comptroller ha d no rig ht to possess and 2 dis po se of the 71 ,5 00 sh are s that we re so ld in 20 04 , c on te nd ing ins te a d that su c h us e of the pr op e rt y and re te nti on of int e re st “i s con sti tut ion a l only in the a bs e nc e of a c la im b y the ow ne r. Up on

a c la im by the owner , the use of the proper ty and re tention of interest be comes a n unconstitutional taking.” 9 Li tt le

- Te xI n s u lation , 39 S.W .3d at 598. B ut when a pla intiff fails to alleg e fa cts that constitute a t ak i n g, dismiss al for w ant of jurisdiction is appropriate. Litt le-Tex Insulation , 3 9 S. W. 3 d

a t 600 (d ism iss inginv e rs e -c on de mnatio n c la im f or wa nt o f j ur isd ic tio n b e c a

us e a ll egati on s d id n ot s tate taking s claim). Whether the fac ts alleg ed ar e suff icient to constitute a taking is a question of law. Id. at 598. I n its petiti on, BA RD alleg ed that the Comptroller’s fa i l u re to promptly return the 83,887 share s, her pr olonge d rete ntion of the proce eds from its sale, a nd her c ontinued rete ntion of t h e i n t e r e s te ar

n e d t h e r e o nam o u n tt o a

t a k i n g o f i t s p r o p e rt y. BA RD alleg ed, and the Comptroller

2 does not dispute, that afte r being notified of BA RD’s claim to a ll 155,387 share s of Goodrich stock, the Com ptr oll e r t e nd e re d p ay

me nt p ur po rt e dly re pr e se ntingthe pr oc e e ds fr om t he e nti re sa le , in
essenc e re cog nizi ng the validity of B ARD’s cla im to the property
. All of the intentional ac tions that BA RD identifies in its petition took place afte r (1) BARD notified the Comptroller of its claim and instructed the Comptroller not to sell the stock and (2) the Comptroller tender ed the sales pr ocee ds in alleg ed satisfa ction of B ARD’s cla im of ownership.

A taking s claim requir es an intentional a ct of the state
. S te e le v . Ci ty

of Houston , 603 S.W .2d 786, 792 (Tex. 1980). Mere neg lige nce is not a compensa ble taking
. Id. at 790. The question here is w hether BA RD has alleg ed that the Comptroller intentionally deprive d BA RD of i t s p r o p e rt y o r

t h a tt h e C o mp t r o l l e r

m e r e l y a c t e d

n e g l i g e n t l y i nf

a i l i n g t o r e tu r

nB A R D ’ s p r o p e rt y.10 “ Our s up re me c ourt

ha s h e ld t

hat a ta kin g s c la im mus t be ba se d o n inte nti on a l st a te
a c tio n th a t is with in i ts a uth or ity .” Fi re me n’ s I ns . Co. v . Bo ar

d o f R e ge nts of t heUn iv . o f Te x . S y s. , 9 0 9 S
. W
. 2 d

5 4 0 , 5 4 3 (T ex . Ap p . —

Au s t i n1 9 9 5 , wr i td en i ed ) ( ci t i n g Ste e le , 603 S.W .2d at 792; Sta te v . H ale , 1 46 S.W. 2d

73 1, 73 7 ( Te x. 19 41 )). Onl y wh e n th e state ha s p ro pe rl y e xer c ise d it s
au thority may the state be liable under

Article I , section 17. Id. (c i t i n g N u s s b a u m v . Be ll Co un ty , 76 S.W . 430, 432 (Tex. 1903)). Gover nmental entities are not responsible, howe ver, “ for damag es
cause d by the neg lects or wrong s committed by their off icer s.” Nussbaum , 76 S.W . at 432. B ARD’s pleading s alleg e that the Comptroller’s decision to w ithhold the interest ear ned on the proc eeds of the Fe bruar

y 2006 stock sale was made during the chapte r 74 appea ls pr ocess, wh er eb y the Comptroller is statutorily authorized to review

claims such as the one broug ht by BA RD, and that by the authority

of the unc laimed p ro p er t y s t atute, the Comptroller wa s empower ed to use the proper ty for the be nefit of the State. T h u s , co n s t ru ed libera lly and in B ARD’s favor, B ARD’s pleading s alleg e a taking of the intere st, based on the Comptroller’s intentional a cts within the scope
o f h e r c h a p t e r 7 4 a u t h o r i t y. The Compt roller’ s only

argument in response to B ARD’s taking s claim is that her actions do not constitute a takingbeca use “the share s at issue wer e deliver ed to the Comptroller as unclaimed pr operty” and thus, “ there can be no taking of B ARD’s prope rty as there was no intention by the Comptroller to deprive B ARD of its proper ty afte r t he holder’s delivery of t he property to the Comptroller.” This argument, howeve r, does not addre ss BARD’ s claim as to the dela y in returning the stock or the pr ocee ds from the sale there of, including the intere st earne d on the proc eeds, after11

BA RD asserte d its claim to the stock in November 2005 or, at t he very least, after the Compt roller
rec eived the pr ocee ds from the F ebrua ry 2006 sale. As a basis for rec overy of the interest ear ned from the proce eds aft er the Fe bruar y 2006 sale, B ARD’s theory is consistent with this Court’s discussion in Cla rk v . S tra y ho rn , 184 S.W .3d 906 (Tex. App.—Austin 2006, pet. denied). I n Cla rk, t h e p l ai n t i ff

as s er t e d a t ak i n gs claim for the interest ea

rned on a bandoned pr operty

in the Comptroller’s possession b e for e t he plaintiff’s asse rtion of owner ship. Id. at 909-10. Clark’ s claim was larg ely premised on his asse rtion that the funds in the Comptroller’s possession we re he ld i n trust for the owne r until they wer e claimed, a nalog izi ng to case s discussing a n owner ’s rig ht to interest

e arne d on interplea der f

unds and I OL TA ac counts, se e W

e bb ’s Fa bu lou s Pha rm ac ie s, In c . v . B e c k

with , 449 U.S. 155, 164-65 (1980); Phillips v. W

ashington L egal Found. , 5 24 U. S. 156 , 172 (1 99 8) . T his Court re je c te d th a t argume nt, holding instea d that, under Te x as’s unc laimed proper ty statute, proper

ty is held for the be nefit of the State and that “the St ate’ s use of unc laimed prope rty and re tention of any

interest ea

rned before the

own e r a sse rts a c lai m is not an unconstitutional t ak i n g.” Cla rk, 1 84 S.W. 3d a t 91 5 ( e mph a sis
a dd e d). We s tate d: “ Un til a m iss ing

own e r a sse rts a c lai m , it is wholl y appropr iate for

the Com ptr oll e r t o use un c la ime d pro pe rt y fo r the be ne fi t of the State ins te a d o f a llo wi nga wi nd fa ll t o a private holder or

permitting the funds to lie fallow.” Id. at 914-15 (e mphasis added) . The c ases
we have found from other jurisdictions are consistent with Cla rk in holding that the state’s re tention
o f i n t e r e s te ar

n e d o np r e s u mp t i v e l y a

b an d o n e d p r o p e rt y before a c laim of ownership is made is not a taking
. See Cwik v. Topinka , 9 05 N. E. 2d 30 0, 30 6-08 ( I ll. Ct. Ap p. 20 09 ); Ro wle ttev . S tate , 65 6 N .E .2 d 6 19 , 6 21 -2 6 (N. C. C t. A pp . 2 00 8) ; Hooks v . Kennedy , 961 So.2d 425, 430-3212

(L a . Ct. App . 2 00 7) ; Smyth v. Carter , 845 N.E.2d 219, 222-25 ( I nd. Ct. App. 2006). Bu t c f. Sogg

v . Zu rz , 90 5 N. E. 2d 18 7, 19 0- 93 (O hio 20 09 ) ( un de r O hio statut or y sc he me , unc la ime d p ro pe rt y is not presumptively

abandone d; theref

ore, state ’s re tention of interest e arne d wa s unconstitutional takin g ); Ca n e l v

. Topinka , 818 N.E.2d 311, 320-25 ( I ll. 2004) (althoug h state may reta in inte re

st
ear ned on pre sumptively

abandone d proper

ty , it may not retain di vi dends acc ruing on unclaimed share s of stock).

In t h e p r e s e n t c a s e , a c l a i m o f o w n e r s h i p w a s a s s e rt e d b y t h e o w n e r o f t h e p r o p e rt y,
and the Com ptr oll e r h a s poin te d to no autho ri ty ind ic a tin g that an a c tio n und e r t he takin g s c la

us e in these circumstance s is barre d. Whil e ther e is no unconstitutional taking of interest on prope rty

that is presumed a

bandoned, se e Cla rk, 184 S.W .3d at 910, once the owner asser ts a valid claim to the proper ty , it is no l ong er pr esumed a bandoned. T hus, an unreasonable rete ntion of the proper ty —or the proc eeds f

rom its sale—may

constitute a taking . A “tempor ary” takingrequire s compensation j u s t as much as a

“per manent” taking. F

ir s t E n g li s h Ev a n g e li c a l L u th e r a n Ch u r c h v . Co u n ty of Lo s Angeles , 4 82 U. S. 3 04 , 3 18 -1 9 ( 19 87 ); se e als o Morton GrovePark Dist. v. Ame rican Nat’l Bank & T r u st Co. , 399 N.E.2d 1295, 1298-99 ( I ll. 1980) (re tention of landowne r’s c ondemnation
awa rd duri ng30 -m on th a

pp e a l pr oc e ss c on sti tut e d takin g , and c ounty ha d to pa y land ow ne r i nte re st
ear ned on aw ard)
.

Wit h respe ct to the Comptroller’s sale of the stock itself, howe ver, BA RD has alleg ed intentional ac ts that s o u n d i n t ort, which a re not c ompensable unde r the taking s clause. Se e Fi re ma n’

s I ns . , 9 09 S.W. 2d

a t 54 3. B ARD’ s pe tit ion state s th a t th e Com

ptr oll e r “ int e nti on a lly d i s re gar d ed B ARD’s rig htful claim to its shares of Goodr ich Petroleum stock and or dere d that13

the stock be sold thre e months a fter BA RD soug ht its return.
. . . The actions of the Comptroller are analog ous to an unlawful conver sion. B ARD owned pe rsonal prope rty over which the Comptroller unlawfu l l y ex er cised dominion.” These pleading s do not alleg e lawf ul Compt roller a ctions—a prer equisite for a

compensa

ble taking
. See M

ac’Av oy v. Sm ithsonian Insti tution , 757 F. Supp. 60, 70 (D .D .C. 19 91 ); Adams v. United States , 20 Cl. Ct . 132, 137 (1990).

We hold that the trial court did n o t er r in denying the Comptroller’s plea to the jurisdiction with respe ct t o BA RD’s constitutional takings c laim based on the Comptroller’ s failure to promptly

return the 83,887 share s, her pr olonge d rete ntion of the proce eds from its sale, and he r continued retention of the interest ea rned the reon. A ccor dingly , we ove rrule the Comptroller’s second issue.
Se izure I n her third issue, the Comptroller a rgues that B ARD’s plea dings a ffirmatively show that th e State ’s re te nti on

of its pr op e rt

y do e s n ot c on sti tut e a

F ourt h Am end ment se izur e . B ARD pleade d that the Comptroller’s fa ilure to retur n “the proper

ty ” following its claim of owner ship was
an unrea sonable seizure for which the State had fa iled to provide ade quate moneta ry compensation. BA RD’s petition does not specify whether the property that was alleg edly seized ref ers only to the stock ce rtificate s or also t o the proceeds from the s ale of the s tock and the interest ea rned the reon. BA RD asserte d its claim under Ar ticle I , section 9 of the Te x as Constitut ion, which is c o te r mi n o u s w it

h c la im s u n d e r

th e F o u rth

A me n dme n t o f

th e U n it e d

St a te s Co n s ti tuti o n. Se e Fl or es v . S

tate , 172 S.W .3d 742, 744 (Tex. App.—Houston [ 1 4 t h Di s t.] 2005, no pet.). Violation of the Four

th Amendment re quires an intentional a cquisition of phy sical control, whic h14

must it self be w illful. Brower v. County of Inyo , 489 U.S. 593, 596 (1989). “T his is im plicit in the word ‘seizure,’ which ca

n hardly be applied to a

n unknowing act.” Id. I t ha s a lso be e n h e ld t hat a “seizure” under the Four th Amendment “c onnotes a for cible dispossessi o n from the owne r.” Caldwell v. United States , 3 38 F .2 d 385 , 38 8 ( 8th Cir . 1 96 4) ; ac c or

d Un ite d S

tates v . W

hite , 268 F. Supp. 998, 1004 (D.D .C. 1966). Thus, BA RD cannot rec over for an unlawful seizure of the stock itself bec ause, ha

ving e stablished that the stock wa s lawfully delivere d to and receive d by the Comptroller as unclaimed property and that the Comptroller wa s unawa re of BA RD’s claim of
owner ship at the time of delivery , BA RD’s pleading s aff irmatively

neg ate the ne cessa

ry element of seizure. I n other wor ds, BARD c annot show that the Comptroller intentionally or willfully

acquir ed control over

the stock. Of ne cessity , the same is true of the proc eeds f rom the sale of the stock, bec ause the sale s im p ly e xc h an g e d

o n e f o r m o f a f u n g ib le a s s e t f

o r an o th e r . B A RD d o e s n o t a s s e rt t h a t t he Comptroller rec eived less than f air mar ket value at the time of the sale. F ina lly , the same mus t a lso be tr ue of the int e re st e arn e d o n th e pr oc e e ds of the sa le during the time that the proc eeds r emained in the posse ssion of t he C omptroller. The me re a ccr ual of int e re st o n a

n ass e t tha t wa s in iti a lly

re c e ive d la

wf ull y do e s n ot a

mou nt t o th e kin d o f “ fo rc ibl e d is p o s s e s s io nf

r o m t h e o w n e r ” n e c e s s ar

y to c o n s ti tute a

s e iz u r e u n d e r

th e F o u rth A me n dme n t. We sustain the Comptroller’s third issue.
Due Pr oc ess I nh er

fo u rt h an d

fi n al i s s u e, t h e C o mp t ro l l e r a rgu es t h at BA R D’ s p l ea d i n gs aff irmatively

show that it was af

forde d the proc ess due unde r cha pter 74 o f t h e p roperty

code f or15

appea ling a

Comptroller determination, whereby BA RD rec eived “ notice and the rig ht to be considere d.” In the Comptroller’s view, B ARD simply disag ree d with the Comptroller’s deter mination that there wa s no basis for B ARD’s asse rted re cover y . We ag ree . BA RD asserte d that it was denied due proce ss by the C o mptroller’s “unla wful
and un c on sti tut ion a l” de pr ivatio n o f i ts pr op e rt y wi tho ut p ro vid ingB ARD r e c ours e to obtain ad eq u at e compensation in contravention of Ar ticle I , section 19 of the T exas Const itution. Article I , section 19 provides in re levant par t that no citiz en shall be de prived of pr operty except by the due c ourse of

the law of

the land. See Tex. Cons t. art. I , § 19. A due pr ocess c laim require s the
cou rt to det erm ine (1 ) whe the r t he c la ima nt h a s a lib e rt y or pr op e rt y int e re st that is e nti tle d to proce dural due proce ss protec tion; and (2) if so, what proc ess is due. See University of Tex. Me d. Sch. v. Than , 901 S.W .2d 926, 929 (Tex. 1995).

We have r ecog nized that BARD has a proper ty interest in the intere st earne d on the proce eds fr om the sale of its prope rty , which is the subject of its takings c laim. By the proc eeding befor e the Comptroller a

nd by this suit , BA RD has b een affor ded the oppor tunity to be hea rd and to seek re course reg ardingthis alleg ed depr i v at i on—the ver y proce ss that it claims to have bee n denied. B ARD may

y et be succe ssful in its claim, at least i n part. BA RD is entitled to no further pr oc e ss. Ac c or din g ly , no ame ndme nt of B ARD’ s ple a din g s c ou ld g ive lif e to its du e pr oc e ss c la im. We sustain the Compt roller’ s fourth issue.
CO NC LU SION We reve rse the portion of the trial court’s order perta ining to B ARD’s cla ims under the pr op e rt

y cod e, for vio latio n o f d ue pr oc e ss, and

fo r a F ourt h A me ndme nt s e izur e ; w e dis mis s16

t h o s e c l ai m s fo r l ac k

o f s u b j ec t -m at t er

j u ri sdiction. Becau s e B AR D h as ad eq u at el y p l ea d eda t ak i n gs claim under

Article I , section 17 o f t h e Te x as Constitut ion, we af firm the district cour

t’s order de nyingthe Com

ptr oll e r’ s p le a

to t he jur isd ic tio n a s to that c la im.

J . Woodfin J ones, Chief Just ice
Be fore Chief J ustice Jones, J ustices Pury ear and He nson Affir med in Part; Reverse d and Dismissed in Part Filed: August 26, 2009