ON MOTION FOR REHEARING
Our opinion of December 19, 1990, is withdrawn and the following is substituted therefor.
At issue in this cause is the extent of a school district's governmental immunity and its liability for initiating condemnation proceedings. The district court granted a motion for summary judgment based on governmental immunity and the absence of a taking under article I, section 17 of the Texas Constitution. We will affirm the judgment of the district court.
In 1984 the Austin Independent School District (AISD) board of trustees voted to negotiate to purchase or condemn twentyfour acres of land owned by Robert W. Dillard and Diane Dillard (the Dillards). This land was to be used for a new high school in south Austin. The Dillards were amenable to selling their land to AISD and platted the land and obtained various surveys and permits that were necessary in order to develop the property, allegedly spending $151,000.00 of their own money in the process. AISD later purchased a different tract of land for the school from Gary Bradley in February 1986.
The Dillards sued for damages in excess of three million dollars for both their expenses in developing the property and for diminution in value of the land, alleging causes of action for breach of contract, promissory and equitable estoppel, breach of the duty of good faith negotiation, slander of title, fraud, gross negligence, and a taking under article I, section 17 of the Texas Constitution. The trial court found that: (1) no contract existed between the Dillards and AISD; (2) the doctrines of promissory and equitable estoppel are inapplicable because AISD is protected by governmental immunity; (3) governmental immunity barred causes of action based on fraud, slander of title, gross negligence, and breach of the duty of good faith negotiation; and (4) the Dillards's property was
When a defendant moves for summary judgment on the basis of an affirmative defense such as governmental immunity, it must conclusively prove all essential elements of that defense. Smiley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972). AISD, thus, had the burden of showing that no genuine issue of material fact existed and that it was entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985).
1. GOVERNMENTAL IMMUNITY
In their first point of error, the Dillards claim the trial court erred in holding that governmental immunity barred the application of the doctrines of promissory and equitable estoppel against AISD. We agree with the trial court.
A. General Principles
Governmental immunity consists of two basic principles of law.
Second, the state has immunity from liability even though the state has consented to be sued. Missouri Pac. R.R., 453 S.W.2d at 813; State v. Isbell, 127 Tex. 399, 94 S.W.2d 423, 424 (1936); Tex.Civ.Prac. & Rem.Code Ann. § 107.002(b) (Supp.1991) (legislative resolution granting permission to sue the state does not waive immunity from liability); see, e.g., Tort Claims Act §§ 101.021, .023, .025(a), .107 (1986 & Supp. 1991). An important corollary is that the state is generally not liable for the acts of public servants. E.g., Lowe v. Texas Tech Univ., 540 S.W.2d 297, 298 (Tex.1976); Whitfield v. City of Paris, 84 Tex. 431, 19 S.W. 566, 567 (1892) (doctrine of respondeat superior does not apply against the state); City of Galveston v. Posnainsky, 62 Tex. 118, 125 (1884); Tex.Civ.Prac. & Rem.Code Ann. §§ 104.001-.008 (1986 & Supp.1991) (state liability for conduct of public servants).
A critical exception, however, is that the state waives its immunity from liability when it contracts:
Fristoe v. Blum, 92 Tex. 76, 45 S.W. 998, 999 (1898); see State v. Elliott, 212 S.W. 695, 698 (Tex.Civ.App.1919, writ ref'd). The state is still immune from suit sounding in contract, however, even though the state has consented to liability by the act of contracting. Elliott, 212 S.W. at 698 ("Because of her sovereignty, the state is not
Although the justifications for governmental immunity have long been criticized, the supreme court has said that the waiver of governmental immunity is a matter properly addressed to the legislature, not the courts. Lowe, 540 S.W.2d at 298.
B. The Governmental/Proprietary Distinction
The distinction between municipalities and other governmental units is fundamental to Texas governmental-immunity jurisprudence. In City of Galveston v. Posnainsky, the supreme court first carved out an exception to governmental immunity by defining a municipality's liability in terms of its governmental and proprietary functions. In writing the Posnainsky opinion, Justice Stayton set out the basis for the distinction between governmental and proprietary functions as follows:
In so far as a quasi corporation exercises powers exclusively public in their character, forced upon it without its consent, simply because the state can thus, through such local agencies, more easily and effectively discharge duties essentially its own, it is but proper that no action should be maintained against it for the negligence, or even misfeasance, of its officers, unless the action be given by an expression of the same sovereign will which arbitrarily imposed the duty.
It would seem that, in so far as municipal corporations of any class, and however incorporated, exercise powers conferred on them for purposes essentially public—purposes pertaining to the administration of general laws made to enforce the general policy of the state,— they should be deemed agencies of the state, and not subject to be sued for any act or omission occurring while in the exercise of such power, unless, by statute, the action be given; that, in reference to such matters, they should stand as does sovereignty, whose agents they are, subject to be sued only when the state, by statute, declares they may be.
In so far, however, as they exercise powers not of this character, voluntarily assumed—powers intended for the private advantage and benefit of the locality and its inhabitants,—there seems to be no sufficient reason why they should be relieved from that liability to suit and measure of actual damage to which an individual or private corporation exercising the same powers for a purpose essentially private would be liable.
Posnainsky, 62 Tex. at 125, 127, quoted in City of Austin v. Daniels, 160 Tex. 628, 335 S.W.2d 753, 755 n. 3 (1960).
Although courts in the past have differed on the scope of governmental immunity and on which subdivisions of the state may exercise proprietary functions, it is now the settled law of this state that governmental immunity extends to all agencies, political subdivisions, and other institutions which are derived from the state constitution and laws. See Tort Claims Act § 101.001(2) (Supp.1991).
The supreme court has said that when a governmental unit is exercising governmental powers it is not subject to estoppel. Leeco Gas & Oil Co. v. County of Nueces, 736 S.W.2d 629, 630 (Tex.1987); City of Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex.1970); see City of San Angelo v. Deutsch, 126 Tex. 532, 91 S.W.2d 308, 310 (1936). This is a corollary to the governmental-immunity rule that the state is not liable for the acts of public servants. See e.g., Lowe, 540 S.W.2d at 298; Whitfield, 19 S.W. at 567; Posnainsky, 62 Tex. at 125; Tex.Civ.Prac. & Rem.Code Ann. §§ 104.001-008 (1986 & Supp.1991) (state liability for conduct of public servants).
The supreme court in Deutsch explained the rationale for the state's immunity from estoppel as follows:
Deutsch, 126 Tex. at 536 (text differs from text in Southwestern Reporter), 91 S.W.2d at 310 (punctuation as in 126 Tex. 532, 536, 91 S.W.2d 308). Deutsch also stated that a city may be estopped even when it is acting in its public capacity if it has received or accepted benefit from the transaction. Deutsch, 91 S.W.2d at 311-12.
D. The Current Controversy
An independent school district is an agency of the state which carries out only governmental functions, and, consequently, is entitled to governmental immunity. Braun v. Trustees of Victoria Indep. School Dist, 114 S.W.2d 947, 949-50 (Tex.Civ.App.1938, writ ref'd) (holding that Tex.Const.Ann. art. VII, § 1 (1955) establishes the matter of public education as a governmental function for all purposes).
To support their position, the Dillards cite us to the supreme court's opinion in Prasifka. In Prasifka the court said that "a municipality may be estopped in those cases where justice requires its application, and there is no interference with the
We are aware that our holding that estoppel can apply only to governmental units that exercise proprietary functions, i.e., municipalities, runs contrary to opinions of some of our sister courts of appeals. See, e.g., Arrington v. County of Dallas, 792 S.W.2d 468, 472 (Tex.App.1990, writ denied); Clear Lake City Water Auth. v. Winograd, 695 S.W.2d 632, 640 (Tex.App.1985, writ ref'd n.r.e.)
On rehearing, the Dillards argue that the supreme court's recent opinion in Bowman v. Lumberton Independent School District extends the Prasifka estoppel exception to independent school districts. Bowman, 801 S.W.2d 883 (Tex. 1990). We disagree. In Bowman the supreme court stated, "It is true that the general rule is that `when a unit of government is exercising its governmental powers, it is not subject to estoppel,' subject to an exception that municipalities and similar local units of government `may be estopped in those cases where justice requires its application, and there is no interference with the exercise of its governmental functions.'" Bowman, 801 S.W.2d at 888 (citing Prasifka, 450 S.W.2d at 836) (emphasis added). The court, however, did not hold that a school district was subject to the Prasifka exception, but rather that the school district was subject to estoppel because of the existence of a contract. We believe that the Bowman decision is an extension of the longstanding doctrine that the state is not immune from liability when it contracts. See Fristoe, 45 S.W. at 999.
We decline to interpret Bowman as extending the Prasifka estoppel exception because we do not believe the supreme court has overruled its previous opinions in Deutsch and Posnainsky. Our understanding of the Texas common law of governmental immunity is that only municipalities
II. ARTICLE I, SECTION 17 TAKING
In their second point of error, the Dillards contend that the trial court erred in holding that: (1) governmental immunity barred their cause of action under article I, section 17 of the Texas Constitution; and (2) the Dillards's property was not "taken" as required by article I, section 17. Tex. ConstAnn. art. I, § 17 (1984). AISD does not dispute that article I, section 17 constitutes a waiver of governmental immunity for the taking, damaging, or destruction of property for public use. Steele v. City of Houston, 603 S.W.2d 786, 791 (Tex.1980).
The 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." The Dillards do not allege that their property was "taken," but rather that it was "damaged" by AISD's adoption of the resolution authorizing negotiation for purchase or condemnation of the property, which allegedly rendered the land useless for other purposes and diminished its value.
It is the settled rule that a direct physical invasion of property is not required under article I, section 17 to entitle an owner to compensation. DuPuy v. City of Waco, 396 S.W.2d 103, 108 (Tex. 1965). However, the mere initiation of condemnation proceedings is but an incidental damage that is not compensable as a taking or damage even though it may interfere with the marketability of the property. See City of Houston v. Biggers, 380 S.W.2d 700, 704 (Tex.App.1964, writ ref'd n.r.e.), cert, denied, 380 U.S. 962, 85 S.Ct. 1105, 14 L.Ed.2d 153 (1965), cited with approval in City of Austin v. Teague, 570 S.W.2d 389, 392 (Tex.1978). Point of error 2 is overruled.
In their third point of error, the Dillards claim the trial court erred in holding that governmental immunity barred their claim for fraud. At first glance, this point appears to lack merit. The state has immunity from liability unless that immunity is waived. E.g., Missouri Pac.R.R., 453 S.W.2d at 813; Walling, Dallam at 525-26. The Dillards have failed to show any such waiver by the state. See Tort Claims Act § 101.057 (1986) (Act does not apply to intentional torts). However, there does exist a body of law regarding the acts of public servants that may account for the Dillards's belief that governmental immunity does not bar a claim for fraud.
It has long been the law in Texas that "acts of officials of the state which are not lawfully authorized are not acts of the State, and an action against the officials, by one whose rights have been invaded
There is case law, including cases from this Court, which states that actions of a governmental unit that are illegal, wrongful, or beyond statutory authority are not immunized by governmental immunity, and the suit is not one against the state.
Printing Industries was a suit against public servants, not a governmental unit, in which the court of civil appeals held that "the suit was maintainable as an action against the state officials acting outside their lawful authority, and that invasion of the rights of plaintiffs was alleged with sufficiency to maintain the suit." Printing Indus. Ass'n v. Director of the Dept. of Agric. & Env't, 588 S.W.2d 849, 852 (Tex. Civ.App.1979), rev'd on other grounds, 600 S.W.2d 264 (Tex.1980) (emphasis added). The supreme court reversed the court of civil appeals on the issue of the interpretation of article XVI, section 21 of the Texas Constitution, not on the issue of governmental immunity. Tex.Const.Ann. art. XVI, § 21 (Supp.1991). In fact, the supreme court said the court of appeals correctly stated the law concerning a suit by an entity or person whose rights have been violated by the unlawful action of a public servant. Printing Industries, 600 S.W.2d at 265.
Steel Importers was a declaratory judgment action concerning an order of the State Highway Commission that required all materials used in highway construction to be manufactured in the United States. The supreme court held that the order violated the competitive bidding statute, 1933 Tex.Gen.Laws, 1st C.S., ch. 103, § 1, at 286 [Tex.Rev.Civ.Stat. 6674h, since amended]. Although only listed as "et al." in the opinions of both the supreme court and the court of civil appeals, a review of the record reveals that the members of the Highway Commission, Herbert C. Petry, Jr., C.F. Hawn, and Hal Woodward, as well as the state highway engineer, D.C. Greer, were sued individually in addition to the Commission itself. The court of civil appeals stated, "We believe that appellees acted beyond their statutory authority and
After careful review of the case law, we believe that the better view is expressed in Bagg v. University of Texas Medical Branch, 726 S.W.2d 582 (Tex.App. 1987, writ ref'd n.r.e.). The Bagg court held that when a person sues over the violation of his rights resulting from the unlawful acts of public servants, the plaintiff must bring the action against some individual in authority at the governmental unit and not against the governmental unit itself. Id. at 584-85 & n. 2. This result is dictated by common sense. If the governmental unit is entitled to governmental immunity, a suit against the governmental unit is a suit against the State of Texas. Litigants may not circumvent the admittedly harsh barrier of governmental immunity by simply suing an agency or political subdivision of the state, rather than the state itself. Allowing suits directly against a governmental unit would result in the wholesale abrogation of the doctrine of governmental immunity, a policy decision beyond the purview of this Court.
Requiring a lawsuit against a public servant to be brought against the public servant personally is not a complete fiction.
Ex parte Young, 209 U.S. 123, 159, 28 S.Ct. 441, 454, 52 L.Ed. 714 (1908).
On a more practical level, requiring the suit to be brought against a public servant preserves the state's immunity from liability. A money judgment against a public servant may be indemnified by the state within limits set by the legislature, but this differs from a money judgment directly against the state or a subdivision thereof. See Tex.Civ.Prac. & Rem.Code Ann. §§ 102.001-006 (tort claims payments by local governments), 104.001-008 (state liability for conduct of public servants) (1986 & Supp.1991). Permitting a suit directly against a governmental unit that has acted "illegally, wrongfully, or beyond its statutory authority" would effectively gut the provisions of the Texas Tort Claims Act and the decisions of the supreme court interpreting the Act. We do not believe that this is the law, and, accordingly, we overrule point of error 3.
The Dillards' final point of error asserts that the trial court erred in holding that governmental immunity barred their claim for breach of the duty of good faith negotiation. See Tex.Prop.Code Ann. § 21.012 (1984). We do not read section 21.012 to create a cause of action for failure to negotiate in good faith, nor is there a general common-law duty of good faith. Federal Deposit Ins. Corp. v. Coleman, 795 S.W.2d 706, 708-09 (Tex.1990). Point of error 4 is overruled.
The judgment of the trial court is affirmed.
GAMMAGE, J., not participating.