Texas Education Agency v. Excellence 2000 INC. and Sherwin Allen
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Opinion
ACCEPTED 15-25-00148-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 9/22/2025 2:20 PM No. 15-25-00148-CV CHRISTOPHER A. PRINE CLERK
In the Court of Appeals FILED IN 15th COURT OF APPEALS for the Fifteenth District of Texas AUSTIN, TEXAS
______________________________ 9/22/2025 2:20:42 PM CHRISTOPHER A. PRINE Clerk TEXAS EDUCATION AGENCY, Appellant, v.
EXCELLENCE 2000, INC. AND SHERWIN ALLEN, Appellees. ______________________________
On Appeal from the 125th Judicial District Court Harris County, Texas Cause No. 2022-55524 ______________________________
BRIEF OF APPELLANT ___________________________________
KEN PAXTON KIMBERLY GDULA Attorney General of Texas Chief, General Litigation Division BRENT WEBSTER First Assistant Attorney General JOE NWAOKORO Texas Bar No. 24032916 RALPH MOLINA Assistant Attorney General Deputy First Attorney General Office of the Attorney General AUSTIN KINGHORN General Litigation Division Deputy Attorney General for Civil P.O. Box 12548, Capitol Station Litigation Austin, Texas 78711-2548 512.463-2120|Fax: 512.320.0667 joe.nwaokoro@oag.texas.gov
COUNSEL FOR APPELLANT
ORAL ARGUMENT REQUESTED IDENTITY OF PARTIES AND COUNSEL
Appellant: Texas Education Agency
Appellate and Trial Counsel for Appellant: Joe Nwaokoro Assistant Attorney General General Litigation Division Office of the Attorney General P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 512.463-2120|Fax: 512.320.0667 joe.nwaokoro@oag.texas.gov
Appellee: Excellence 2000, Inc.1
Appellate and Trial Counsel for Appellee: Melvin Houston Nikeyla Johnson 3033 Chimney Rock, Suite 610 Houston, Texas 77056 mhouston@gotellmel.com njohnson@contactjohnsonlawfirm.com
1 As Texas Education Agency (“TEA”) noted in its letter to the Clerk of July 28, 2025, the style of the case incorrectly lists Sherwin Allen as an Appellee. As shown in TEA’s Notice of Appeal, and in Plaintiff’s First Amended Petition, Excellence 2000, Inc. is the sole plaintiff. Mr. Allen was dropped as co-plaintiff in the amended petition pursuant to the trial court’s order granting TEA’s Special Exceptions. ii TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL..............................................ii INDEX OF AUTHORITIES ..................................................................... iv RECORD REFERENCES ......................................................................viii STATEMENT OF THE CASE ...............................................................viii STATEMENT REGARDING ORAL ARGUMENT .................................. x ISSUES PRESENTED .............................................................................. x STATEMENT OF FACTS ......................................................................... 2 SUMMARY OF ARGUMENT ................................................................. 12 STANDARD OF REVIEW....................................................................... 13 ARGUMENT ........................................................................................... 15 I. The State has sovereign immunity from trespass-to-try-title actions. ....................................................................................... 15 II. Even assuming it is not a disguised trespass to try title, Excellence lacks standing for a takings claim. ......................... 19 a. Excellence lacks standing to assert a takings claim because it has no vested property right. .............................................. 20 b. Excellence lacks standing to assert a takings claim because the properties belong to the State as a matter of law. ........... 25 c. Excellence’s taking claim is not redressable. .......................... 27 III. Even assuming that this is not a disguised trespass to try title claim, Excellence failed to plead a valid takings claim to overcome TEA’s sovereign immunity. ....................................... 29 IV. As a threshold issue, Excellence has not pleaded and cannot establish that TEA has eminent domain powers. ..................... 30 V. TEA acted under the scope of a valid contract and did not possess the requisite ‘intent to take’ under its eminent domain powers. .......................................................................... 31 VI. TEA’s actions did not result in a ‘taking’ of private property. . 33 VII. TEA did not acquire Excellence’s property for public use under its eminent domain powers. ............................................ 37 PRAYER .................................................................................................. 39 CERTIFICATE OF COMPLIANCE ........................................................ 40 CERTIFICATE OF SERVICE................................................................. 40 APPENDIX .............................................................................................. 42 iii INDEX OF AUTHORITIES
Cases Chambers-Liberty Counties Navigation District v. State, 575 S.W.3d 339 (Tex. 2019) .................................................................. 15
City of Keller v. Hall, 433 S.W.3d 708 (Tex. App.—Fort Worth 2014, pet. denied)................ 35
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) .................................................................. 20
Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958) .................................................................. 37
Commons of Lake Houston, Ltd. v. City of Houston, 711 S.W.3d 666 (Tex. 2025) .................................................................. 28
Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540 (Tex. 2003) .................................................................. 14
Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591 (Tex. 2001) .................................................................... 31
Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468 (Tex. 2012) .................................................................. 29
Heckman v. Williamson County, 369 S.W.3d 137 (Tex. 2012) ............................................................ 13, 19
Honors Acad., Inc. v. Tex. Educ. Agency, 555 S.W.3d 54 (Tex. 2018) .................................................................... 20
Hues v. Warren Petroleum Co., 814 S.W.2d 526 (Tex. App. – Houston [14th Dist.] 1991, writ denied) 30
iv In re Excellence 2000, Inc., 636 B.R. 475, 480-81 (Bankr. S.D. Tex. 2022) ..................................... 18
Kennedy Con., Inc. v. Forman, 316 S.W.3d 129 (Tex. App. – Houston [14th Dist.] 2010, pet. denied) 16
King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) .................................................................. 15
KMS Retail Rowlett, LP v. City of Rowlett, 593 S.W.3d 175 (Tex. 2019) .................................................................. 37
LTTS Charter School, Inc. v. C2 Constr., Inc., 342 S.W.3d 73 (Tex. 2011) .................................................................... 38
Lujan v.
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ACCEPTED 15-25-00148-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 9/22/2025 2:20 PM No. 15-25-00148-CV CHRISTOPHER A. PRINE CLERK
In the Court of Appeals FILED IN 15th COURT OF APPEALS for the Fifteenth District of Texas AUSTIN, TEXAS
______________________________ 9/22/2025 2:20:42 PM CHRISTOPHER A. PRINE Clerk TEXAS EDUCATION AGENCY, Appellant, v.
EXCELLENCE 2000, INC. AND SHERWIN ALLEN, Appellees. ______________________________
On Appeal from the 125th Judicial District Court Harris County, Texas Cause No. 2022-55524 ______________________________
BRIEF OF APPELLANT ___________________________________
KEN PAXTON KIMBERLY GDULA Attorney General of Texas Chief, General Litigation Division BRENT WEBSTER First Assistant Attorney General JOE NWAOKORO Texas Bar No. 24032916 RALPH MOLINA Assistant Attorney General Deputy First Attorney General Office of the Attorney General AUSTIN KINGHORN General Litigation Division Deputy Attorney General for Civil P.O. Box 12548, Capitol Station Litigation Austin, Texas 78711-2548 512.463-2120|Fax: 512.320.0667 joe.nwaokoro@oag.texas.gov
COUNSEL FOR APPELLANT
ORAL ARGUMENT REQUESTED IDENTITY OF PARTIES AND COUNSEL
Appellant: Texas Education Agency
Appellate and Trial Counsel for Appellant: Joe Nwaokoro Assistant Attorney General General Litigation Division Office of the Attorney General P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 512.463-2120|Fax: 512.320.0667 joe.nwaokoro@oag.texas.gov
Appellee: Excellence 2000, Inc.1
Appellate and Trial Counsel for Appellee: Melvin Houston Nikeyla Johnson 3033 Chimney Rock, Suite 610 Houston, Texas 77056 mhouston@gotellmel.com njohnson@contactjohnsonlawfirm.com
1 As Texas Education Agency (“TEA”) noted in its letter to the Clerk of July 28, 2025, the style of the case incorrectly lists Sherwin Allen as an Appellee. As shown in TEA’s Notice of Appeal, and in Plaintiff’s First Amended Petition, Excellence 2000, Inc. is the sole plaintiff. Mr. Allen was dropped as co-plaintiff in the amended petition pursuant to the trial court’s order granting TEA’s Special Exceptions. ii TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL..............................................ii INDEX OF AUTHORITIES ..................................................................... iv RECORD REFERENCES ......................................................................viii STATEMENT OF THE CASE ...............................................................viii STATEMENT REGARDING ORAL ARGUMENT .................................. x ISSUES PRESENTED .............................................................................. x STATEMENT OF FACTS ......................................................................... 2 SUMMARY OF ARGUMENT ................................................................. 12 STANDARD OF REVIEW....................................................................... 13 ARGUMENT ........................................................................................... 15 I. The State has sovereign immunity from trespass-to-try-title actions. ....................................................................................... 15 II. Even assuming it is not a disguised trespass to try title, Excellence lacks standing for a takings claim. ......................... 19 a. Excellence lacks standing to assert a takings claim because it has no vested property right. .............................................. 20 b. Excellence lacks standing to assert a takings claim because the properties belong to the State as a matter of law. ........... 25 c. Excellence’s taking claim is not redressable. .......................... 27 III. Even assuming that this is not a disguised trespass to try title claim, Excellence failed to plead a valid takings claim to overcome TEA’s sovereign immunity. ....................................... 29 IV. As a threshold issue, Excellence has not pleaded and cannot establish that TEA has eminent domain powers. ..................... 30 V. TEA acted under the scope of a valid contract and did not possess the requisite ‘intent to take’ under its eminent domain powers. .......................................................................... 31 VI. TEA’s actions did not result in a ‘taking’ of private property. . 33 VII. TEA did not acquire Excellence’s property for public use under its eminent domain powers. ............................................ 37 PRAYER .................................................................................................. 39 CERTIFICATE OF COMPLIANCE ........................................................ 40 CERTIFICATE OF SERVICE................................................................. 40 APPENDIX .............................................................................................. 42 iii INDEX OF AUTHORITIES
Cases Chambers-Liberty Counties Navigation District v. State, 575 S.W.3d 339 (Tex. 2019) .................................................................. 15
City of Keller v. Hall, 433 S.W.3d 708 (Tex. App.—Fort Worth 2014, pet. denied)................ 35
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) .................................................................. 20
Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958) .................................................................. 37
Commons of Lake Houston, Ltd. v. City of Houston, 711 S.W.3d 666 (Tex. 2025) .................................................................. 28
Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540 (Tex. 2003) .................................................................. 14
Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591 (Tex. 2001) .................................................................... 31
Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d 468 (Tex. 2012) .................................................................. 29
Heckman v. Williamson County, 369 S.W.3d 137 (Tex. 2012) ............................................................ 13, 19
Honors Acad., Inc. v. Tex. Educ. Agency, 555 S.W.3d 54 (Tex. 2018) .................................................................... 20
Hues v. Warren Petroleum Co., 814 S.W.2d 526 (Tex. App. – Houston [14th Dist.] 1991, writ denied) 30
iv In re Excellence 2000, Inc., 636 B.R. 475, 480-81 (Bankr. S.D. Tex. 2022) ..................................... 18
Kennedy Con., Inc. v. Forman, 316 S.W.3d 129 (Tex. App. – Houston [14th Dist.] 2010, pet. denied) 16
King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) .................................................................. 15
KMS Retail Rowlett, LP v. City of Rowlett, 593 S.W.3d 175 (Tex. 2019) .................................................................. 37
LTTS Charter School, Inc. v. C2 Constr., Inc., 342 S.W.3d 73 (Tex. 2011) .................................................................... 38
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)............................................................................... 19
Martin v. Amerman, 133 S.W.3d 262 (Tex. 2004) .................................................................. 15
Matzen v. McLane, 659 S.W.3d 381 (Tex. 2021) .................................................................. 30
Rogers v. Ricane Enters., Inc., 884 S.W.2d 763 (Tex. 1994) .................................................................. 15
Sani v. Powell, 153 S.W.3d 736 (Tex. App. – Dallas 2005, pet. denied) ....................... 16
Scott v. Alphonso Crutch LSC Charter Sch., Inc., 392 S.W.3d 165 (Tex. App. – Austin 2010, pet. denied) (mem. op.) .... 21
State Bar of Tex. v. Gomez, 891 S.W.2d 243 (Tex. 1994) .................................................................. 19
State v. Elliott, 212 S.W. 695 (Tex. App.—Galveston 1919, writ ref’d) ........................ 31
v State v. Holland, 221 S.W.3d 639 (Tex. 2007) .................................................................. 33
Steele v. City of Houston, 603 S.W.2d 786 (Tex. 1980) .................................................................. 37
Tex. Dep’t of Transp. v. A.P.I. Pipe and Supply, LLC, 397 S.W.3d 162 (Tex. 2013) .................................................................. 20
Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637 (Tex. 2004) .................................................................. 20
Tex. Educ. Agency v. Academy of Careers & Tech., Inc., 499 S.W.3d 130 (Tex. App.—Austin 2016, no pet.) .............................. 38
Tex. Educ. Agency v. Excellence 2000, Inc., 2024 WL 3817123 (Tex. App. – Houston [1st Dist.] Aug. 15, 2024, no. pet. h.) (per curiam) (mem. op.) .............................................................. 8
Tex. Gen. Land Office v. Porretto, 369 S.W.3d 276 (Tex. App. – Houston [1st Dist.], 2011), aff’d in part, rev’d in part, 448 S.W.3d 393 (Tex. 2014) ............................................ 20
Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) .................................................................... 18
Tex. Parks & Wildlife Dep’t v. Callaway, 971 S.W.2d 145 (Tex. App. – Austin 1998, no writ) ............................. 18
Texas Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) .................................................................. 14
Transformative Learning Sys. v. Tex. Educ. Agency, 572 S.W.3d 281 (Tex. App. – Austin 2018, no pet.) ....................... 27, 34
Statutes Tex. Edu. Code §12.128 ........................................................................... 36
Tex. Educ. Code § 12.107(a)(1) ................................................................ 33 vi Tex. Educ. Code § 12.1071(a) ............................................................ 25, 32
Tex. Educ. Code § 12.128(a) ............................................................ passim
Tex. Educ. Code § 12.128(b)(1) ................................................................ 21
Tex. Educ. Code § 12.128(c)(1) ...................................................... 4, 27, 29
Tex. Educ. Code § 45.105(c) .............................................................. 32, 34
Tex. Educ. Code § 7.021 .......................................................................... 30
Tex. Educ. Code §12.128(a)(2) ................................................................. 25
vii RECORD REFERENCES
“CR” refers to the clerk’s record. “SuppCR” refers to the supplemental clerk’s record. “RR” refers to the amended reporter’s record.
STATEMENT OF THE CASE
Nature of the Case: Plaintiff formerly operated two open- enrollment charter schools that received state funding. 1 CR 21-23; 2 CR. 1266- 1269; 2 RR. 9:21-22. Its charter was revoked in 2016, and Defendant acquired the properties in accordance with Texas law and under the parties' contract. 1 SuppCR. 594. Plaintiff alleges that Defendant's repossession of the properties constitutes an unlawful governmental taking in violation of Texas Constitution Article I, Section 17. 2 CR. 1266-1270. Course of Proceedings: Defendant filed its first Plea to the Jurisdiction on April 4, 2023, which was denied on April 5, 2024, without assigning reasons. 1 CR. 17-32; 212. Defendant’s appeal was denied as untimely. Defendant also filed Special Exceptions on February 26, 2025, which, among others, challenged Plaintiff’s tort claim and co-plaintiff Sherwin Allen’s (“Allen”) standing. 1 SuppCR. 861. The Special Exceptions were granted on April 30, 2025. Defendant filed its second Plea on March 11, 2025. 1 CR.213-230. Pursuant to the trial court's order granting the Special Exceptions, Plaintiff
viii amended its petition on June 3, 2025, dismissing Allen as a party and its common law fraud claim. 1 CR. 1285- 1286. Following this amendment, on June 12, 2025, Defendant filed its Amended Reasserted Plea to the Jurisdiction, which adopted and incorporated the March 11, 2025, Plea. 2 CR. 1303. The Plea was heard on July 18, 2025. 4 RR. 1-23; 2 CR. 1308.
Trial Court Disposition: The Honorable Kyle Carter, 125th Judicial District Court, entered an Order on July 18, 2025, denying Defendant’s Plea to the Jurisdiction. 2 CR. 1332; 1338. Defendant then timely filed its Notice of Appeal on July 23, 2025, under Texas Rule of Appellate Procedure 4.2. 2 CR. 1338.
ix STATEMENT REGARDING ORAL ARGUMENT
At the heart of this case is a title dispute masquerading as a takings
claim. Defendant respectfully requests that the Court grant oral
argument as this case presents issues regarding: (1) whether Plaintiff’s
takings claim is a disguised trespass-to-try-title action; (2) even
assuming it is not a disguised trespass-to-try-title action, whether
Plaintiff has standing to assert a takings claim given its admitted use of
State funds to acquire the properties, which are presumptively State
property under Texas law; and (3) even if it is not a disguised trespass-
to-try-title action, whether Plaintiff has alleged an actionable takings
claim. Oral argument will assist the Court in evaluating these matters.
ISSUES PRESENTED
1. Whether a plaintiff can evade sovereign immunity by framing a trespass-to-try-title claim as a takings claim?
2. Even assuming it is not a disguised trespass-to-try title claim, whether a plaintiff has standing to assert a takings claim when it admitted acquiring real property with State funds?
3. Even if it is not a disguised trespass-to-try title claim, whether the trial court erred by denying Defendant’s Plea to the Jurisdiction when Plaintiff failed to plead any of the elements necessary to state
x a facially valid takings claim or even establish that Defendant has eminent domain powers?
xi TO THE HONORABLE COURT OF APPEALS:
This is a dispute over ownership of two real properties that the
State claimed several years before Plaintiff’s lawsuit. Plaintiff
Excellence 2000, Inc. (“Excellence”) is the former operator of two open-
enrollment charter schools, which received state funds under a charter
contract. The former charter schools, Children First Academy of Houston
and Children First Academy of Dallas, repeatedly self-reported solely
state assets on their financial statements, compiled annually by an
independent auditor.
Following a lengthy investigation that revealed multiple material
violations of the charter contract, Defendant Texas Education Agency
(“TEA”) revoked Excellence’s charter in 2016 and repossessed both
properties under Texas law and in accordance with the charter contract’s
terms. In September 2016, Excellence unsuccessfully sued TEA in Travis
County, alleging unlawful taking of these same properties. In that case,
Excellence expressly admitted purchasing these properties with State
funds and acknowledged that the State claimed ownership. In September
2021, Excellence unsuccessfully filed for Chapter 11 bankruptcy, where
-1- ownership was also litigated. Excellence admitted in filings with the
bankruptcy court that the State claimed ownership and stated that its
bankruptcy plan depended on who owned these properties.
In September 2022, Excellence filed this lawsuit alleging takings.
Pleadings and hearings below centered on ownership of these properties.
The trial court erred in denying TEA’s Plea to the Jurisdiction because:
(i) Excellence’s claim is a disguised trespass to try title claim barred by
sovereign immunity, (ii) even assuming it is not a disguised trespass to
try title claim, Excellence lacks standing for a takings claim, and (iii)
even if it is not a camouflaged trespass to try title claim, Excellence failed
to plead a viable takings claim. Accordingly, this Court should reverse.
STATEMENT OF FACTS
This appeal concerns a civil case brought by Appellee Excellence
2000, Inc., which operated an open-enrollment charter school, Children’s
First Academy, under a 1998 charter contract (“Contract”) with
Excellence. 1 CR. 6-9; 21-23. The Contract outlined the terms of the
agreement between Excellence and TEA. 1 CR. 270-277. Excellence
began receiving state funds in 2000. 2 RR. 9:21-22. Excellence purchased
-2- property for the Children First Academy of Houston in November 2001
and property for the Children First Academy of Dallas in 2007. 2 CR.
1008-1009. Excellence's financial audits, which were approved by its
board, showed that its revenue came almost exclusively from state funds,
with the remainder coming from federal funds. 1 CR. 221-222; 392-676;
2 CR. 678-976. These financial audits establish that Excellence funded
its charter school almost entirely with State funds and purchased each
school’s property with those funds. Id.
Materially, the most recent financial audit from 2015 reflects that
state funding totaled $5,256,980, federal funding totaled $438,081, and
local funding totaled $0. 1 CR. 23; 43. Nothing indicates that private or
other local funds were used to purchase school property, make
improvements to school property, or make mortgage payments. Id.
In 2014, following a lengthy investigation that concluded that
Excellence had committed multiple material violations of the Contract,
TEA revoked Excellence’s charter on July 31, 2016. 2 CR. 949; 1 SuppCR.
594-598.
-3- Section 12.128(c) of the Texas Education Code authorizes TEA to
“take possession and assume control of the property” of a charter school
that ceases to exist and to supervise the disposition of its assets. Tex.
Educ. Code §12.128. Section 12.128(c)(1) provides that TEA “shall direct
the charter holder to dispose of the property” of a closed charter school by
(i) retaining or liquidating the property and reimbursing the state, (ii)
transferring the property to TEA or a school district, (iii) closing the
operations of charter school or (iv) any combination of the above. Tex.
Educ. Code §12.128(c)(1). TEA’s decision “is final and may not be
appealed.” Id., §12.128(f).
Acting pursuant to its mandatory duty to recover the assets of a
closed charter school, TEA repeatedly requested that Excellence return
all charter school assets, including real properties. 1 SuppCR 596-607.
Excellence failed to comply. Id.; see also 1 CR. 238. Pursuant to Texas
law and the charter contract, and consistent with Excellence's self-
reported financial disclosures indicating that the assets belonged to the
state, TEA took possession of the charter school’s properties after its
charter was revoked. 2 CR. 1268; Tex. Educ. Code §12.128.
-4- Excellence does not dispute that assets that belong to the charter
school should revert to the state. 4 RR. 13: 24-14:5. It only contends that
it owns the real properties because they are titled in its name: “The
charter school had assets; books, desks, chairs, and things like that.
Those things go back to the State. There’s no problem with that. He
didn’t dispute any of that. But the property, he had clear title to the
property from the beginning.” 4 RR. 14:1-5. TEA maintained that the
Contract required title in the name of the charter holder; hence, title in
Excellence's name is immaterial, and the properties are charter school
assets that belong to the state because they were purchased with state
funds. 1 CR. 221, 276.
Excellence unsuccessfully sued TEA in Travis County, Texas, in
September 2016, alleging an unlawful taking of these two properties. 1
CR. 215. In that lawsuit, Excellence expressly admitted using state funds
to acquire the properties and acknowledged that TEA claimed ownership.
1 CR. 232-251.
In September 2021, Excellence filed for Chapter 11 bankruptcy,
where it litigated ownership of the properties with TEA. 1 CR. 215, 256-
-5- 260; 2 CR. 1246-1249. Tellingly, one of the motions that Excellence filed,
“Debtor’s Unopposed Emergency Motion to Continue Hearing on
Ownership and Title,” acknowledged that ownership of these properties
was disputed, stating as follows:
1. This Court had set the hearing on the title and ownership of the school properties of the Debtor for Wednesday, December 8, 2021, for 9:00 am. … 3 This matter involves the ownership of real properties located in Houston and Dallas. The TEA claims it is the rightful owner of the properties by virtue of providing funds to Excellence 2000. Excellence 2000 claims it is the owner of the properties.
2 CR. 1246-1249 (emphasis added).
Another motion it filed, “Emergency Motion for Debtor to Extend
Date to File Chapter 11 Plan of Reorganization,” also recognized that
ownership of the property was disputed, stating in part:
9. If the State of Texas owns the Properties, then the Debtor cannot use the Properties in its reorganization. Further, there may be no need for a reorganization if the State of Texas owns the Properties. 10. The ownership of the Properties is the critical issue in this case. If the Debtor owns the Properties, then it should be able to assume control and move forward on its reorganization. ...
-6- 14. Until ownership is determined, the case is effectively “on hold.” 15. While the Debtor could file a plan, the plan will depend on ownership. If the State is ultimately determined to own the Properties, then the plan may not and probably is not necessary.
1 CR. 256-260 (emphasis added). Evident in Excellence’s pleadings above
is its uncertainty on property ownership, notwithstanding that it held
title.
On September 1, 2022, Excellence and its former co-plaintiff,
Sherwin Allen ("Allen") filed this lawsuit alleging takings and common
law fraud, alleging that TEA’s repossession of the charter school assets
constituted an unlawful taking. 1 CR. 6-12. TEA filed a plea to the
jurisdiction on April 4, 2023, which the trial court denied on April 5, 2024,
without assigning reasons. 1 CR. 17-32; 212. Regarding takings, TEA’s
first plea asserted failure to plead a viable takings claim for which
immunity is waived for two reasons: (i) state funds were used to acquire
the properties; therefore, intent to take cannot be established, and (ii) the
purported taking was based on the Contract, and there can be no taking
when the state acts under color of right. 1 CR. 17-31. In response to the
-7- plea, Excellence claimed that no state funds were used and the properties
were acquired with private funds. 1 CR. 40-50.
TEA did not receive notice of the order denying its plea until May
8, 2024, and filed its first notice of interlocutory appeal on May 16, 2024.
1 SuppCR. 814. The appeal was dismissed as untimely and did not
address TEA’s jurisdictional arguments. See Tex. Educ. Agency v.
Excellence 2000, Inc., No. 01-24-00368-CV, 2024 WL 3817123 (Tex. App.
– Houston [1st Dist.] Aug. 15, 2024, no. pet. h.) (per curiam) (mem. op.).
Upon remand, the parties engaged in discovery. Excellence deposed
TEA’s employees, inspected the properties, and provided written
discovery responses. 1 SuppCR. 836-842. On February 26, 2025, TEA
filed Special Exceptions, which, among others, challenged then-plaintiffs’
tort claim and co-plaintiff Allen’s standing. 1 SuppCR. 861. The trial
court granted the Special Exceptions on April 30, 2025. TEA filed its
second Plea on March 11, 2025. 1 CR.213-230. Pursuant to the trial
court's order granting the Special Exceptions, Excellence amended its
petition on June 3, 2025, dismissing Allen as a party and its common law
fraud claim. 1 CR. 1285-1286. Following this amendment, on June 11,
-8- 2025, TEA filed its Reasserted Plea to the Jurisdiction, which adopted
and incorporated the March 11, 2025, Plea. 2 CR.1298-1300. On June
12, 2025, TEA filed its Amended Reasserted Plea.2 2 CR. 1303.
The March 11, 2025 Plea, which was adopted, restated and
incorporated into the Amended Reasserted Plea, asserted three new
bases for challenging jurisdiction and introduced new evidence to
establish that (i) the takings claim is a disguised trespass to try title
claim for which immunity is not waived, (ii) lack of standing, and (iii)
mootness. Id.; 1 CR. 213-230. The newly discovered evidence included
Excellence's petition and affidavit in its 2016 lawsuit admitting using
state funds to acquire the properties and TEA’s ownership claim,
pleadings in Excellence’s 2021 Chapter 11 bankruptcy where title was
also litigated, Excellence’s sworn application for property tax exemption
in Harris County where it indicated that the Houston property was a
charter school asset, and pleadings in a 2023 Harris County case showing
that Excellence, Allen and his wife, Jeanette Allen, received $50,000 for
2 The Amended Reasserted Plea made a non-substantive revision to correct a typo in its heading.
-9- an easement on the Houston property that was allegedly wholly taken.
Id.
Importantly, for the Houston property, undisputed Harris County
property tax records show that on April 11, 2002, Excellence filed a sworn
“Application for Private School Property Tax Exemption for 2001-2002”
(emphasis added). 1 CR. 329-387. Excellence’s responses indicated that
the charter school owned the property; it was not Excellence’s private
property.
Based on the new evidence, TEA also maintained that the takings
claim is unviable and therefore did not waive jurisdiction. The Plea was
heard on July 18, 2025. 4 RR. 1-23; 2 CR. 1308.
After repeatedly claiming to have purchased the properties with
private funds (2 CR. 1008-1009, 1 CR. 42-43; 2 CR. 979, 1015; 2 RR. 8:11-
9:15; 3 RR. 10:1-3), Excellence conceded, in its response to the Plea, that
it used state funds to acquire the properties, claiming that “Prior to
September 1, 2001, TEA authorized charter schools to purchase private
property using state funds.” 2 CR. 1308.
- 10 - At the July 18, 2025, hearing on TEA’s Plea, Excellence openly
admitted that it used state funds to acquire these properties. 4 RR. 13:8-
14:25. The trial court noted that, given this significant admission, it no
longer had a fact issue on whether Excellence used state funds to acquire
the properties. 4 RR. 13:8-21. Nonetheless, the court denied the plea
without assigning reasons. 2 CR. 1302. On July 23, 2025, TEA appealed
the trial court's order of July 18, 2025, denying its plea. 2 CR. 1338.
- 11 - SUMMARY OF ARGUMENT
The trial court erred in denying TEA’s Plea to the Jurisdiction
because Excellence’s takings claim is, in substance, a disguised trespass
to try title claim barred by sovereign immunity. Sovereign immunity is
not waived for title disputes, regardless of how they are characterized,
and cannot be circumvented through artful pleading.
First, TEA has claimed ownership of the real properties several
years before Excellence filed this latest iteration of a takings claim, and
the parties have litigated ownership long before Excellence sued. The
posture of the case below, including Excellence’s feeble efforts to prove
ownership, implicated the State’s immunity from title disputes. Both
parties claim title, making this a title dispute.
Second, even assuming that it is not a title dispute, Excellence lacks
standing for a takings claim after admitting that it acquired the
properties with State funds. In addition, Excellence's ownership claim is
based solely on holding title. But it was required by both the Contract
and by statute to hold the title in its time so long as the charter school
- 12 - was in operation. Therefore, it has no vested interest in the real
properties.
Third, even if it is not a disguised trespass to try title claim, no
taking occurs when the State asserts title to property it reasonably
believes it owns or acts under statutory and contractual rights to recover
State property held in trust after charter revocation. There is no taking
when the property was not acquired for ‘for public use’ and Excellence
has not even pleaded and established, as a threshold matter, that TEA
has eminent domain powers.
Because immunity is not waived for Excellence’s camouflaged
trespass to try title claim, and even if it is not a disguised trespass to try
title claim, Excellence lacks standing, and its claim does not invoke any
waiver of TEA’s sovereign immunity, this Court should reverse the trial
court’s decision.
STANDARD OF REVIEW
“A plea to the jurisdiction challenges the court’s authority to decide
a case.” Heckman v. Williamson County, 369 S.W.3d 137, 149 (Tex. 2012).
The plaintiff bears the burden to affirmatively demonstrate the trial
- 13 - court’s jurisdiction. Id. at 150. “When a plea to the jurisdiction challenges
the pleadings, [the court] determine[s] if the pleader has alleged facts
that affirmatively demonstrate the court’s jurisdiction to hear the cause.”
Texas Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.
2004). The court must determine whether it has jurisdiction under the
Constitution or by statute at the earliest opportunity. Id. “If the
pleadings affirmatively negate the existence of jurisdiction, then a plea
to the jurisdiction may be granted without allowing the plaintiffs an
opportunity to amend.” Id. at 227.
Sovereign immunity deprives a trial court of subject-matter
jurisdiction in lawsuits against the state unless the state consents to suit.
Tex. Dep’t. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex.
2004). “In a suit against a governmental unit, the plaintiff must
affirmatively demonstrate the court’s jurisdiction by alleging a valid
waiver of immunity.” Dallas Area Rapid Transit v. Whitley, 104 S.W.3d
540, 542 (Tex. 2003). It is well established that the State and its agencies
enjoy sovereign immunity unless the Legislature has granted an express
waiver of immunity. See, e.g., Wichita Falls State Hosp. v. Taylor, 106
- 14 - S.W.3d 692, 694-96 (Tex. 2003). The waiver must be unambiguous. Id.
Any ambiguities in an alleged waiver of sovereign immunity are
construed in the State’s favor. Id. at 697. This court reviews the trial
court’s decision de novo. Chambers-Liberty Counties Navigation District
v. State, 575 S.W.3d 339, 345 (Tex. 2019).
ARGUMENT
I. The State has sovereign immunity from trespass-to-try- title actions.
Trespass to try title is “a procedure by which rival claims to title or
right of possession may be adjudicated.” King Ranch, Inc. v. Chapman,
118 S.W.3d 742, 755 (Tex. 2003). “To recover in a trespass to try title
action, the plaintiff must recover upon the strength of his own title.”
Rogers v. Ricane Enters., Inc., 884 S.W.2d 763, 768 (Tex. 1994). A
trespass to try title action is “the method for determining title to ... real
property.” Martin v. Amerman, 133 S.W.3d 262, 267 (Tex. 2004) (citation
omitted).
Title determinations against the State itself are barred by
sovereign immunity absent legislative consent to sue. State v. Lain, 349
S.W.2d 579, 582 (Tex. 1961). “Any suit that involves a dispute over the
- 15 - title to land is, in effect, an action in trespass to try title, whatever its
form.” Sani v. Powell, 153 S.W.3d 736, 745 (Tex. App. – Dallas 2005, pet.
denied); see also Kennedy Con., Inc. v. Forman, 316 S.W.3d 129, 135 (Tex.
App. – Houston [14th Dist.] 2010, pet. denied) (“Any suit involving a
dispute over the title to land is an action in trespass to try title, whatever
its form and regardless of whether legal or equitable relief is sought.”).
Here, the parties unambiguously contest title to the two properties
at issue. In the court below, Excellence conceded that ownership of these
properties is disputed, acknowledging that “there is a fact issue as to
ownership and what funds were used to purchase the two properties.” 1
CR. 49. Excellence’s pleadings below establish that title ownership is
disputed: “The crux of immunity claim lies in the ownership of two
properties Excellence 2000 purchased to operate its charter schools.” 1
CR. 35. “TEA has long completed all administrative functions of closing
the schools and now wrongfully alleges it owns the properties instead of
Plaintiff and denied Plaintiff access to the two properties. Plaintiff
disputes TEA’s allegation that it owns the two properties and filed suit.”
- 16 - 1 SuppCR. 836. Thus, Excellence concedes that this is a title dispute: it
filed suit to challenge TEA’s ownership claim.
Further, in a hearing on the first plea, the trial court distilled the
issue to an ownership dispute: “If they spent the State’s money to bu[y]
this property, then it’s the State’s. If they used their own money, then
there’s a question there that I have.” 3 RR. 12:21-24.
As shown above, the ownership dispute long predated this lawsuit.
Excellence conceded in its 2016 lawsuit that TEA claimed ownership. 1
CR. 237-238, 250. For example, it alleged in its prior unsuccessful
lawsuit that it “was directed to execute[] deeds to the property in favor of
the Texas Education Agency and to turn over all keys to the buildings,
vehicles, and other similar property”, 1 CR. 238, and that “[TEA] has
persisted in demanding that Excellence 2000, Inc. execute deeds to both
the Dallas and Houston properties to TEA claiming the buildings are now
‘owned’ by TEA.” 1 CR. 240.
Excellence also conceded in its Chapter 11 bankruptcy that
ownership of these properties was contested. 1 CR. 215, 255-260; 2 CR.
1246-1249. The bankruptcy court's order denying one of Excellence's
- 17 - motions reiterated that ownership was disputed. In re Excellence 2000,
Inc., 636 B.R. 475, 480-81 (Bankr. S.D. Tex. 2022). Because this case
involves a dispute of ownership of real property, it is a trespass to try
title claim masquerading as a takings claim.
Excellence’s lawsuit is merely creative pleading to circumvent
TEA’s sovereign immunity. Excellence is basically asserting a trespass
to try title claim without the required legislative consent, fully
recognizing that TEA has long claimed ownership. Its lawsuit is a
disguised trespass to try title claim that is barred by sovereign immunity.
Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849, 855-56
(Tex. 2002). It is well-settled that a suit for title to real property of the
State or one of its agencies may not be maintained without legislative
consent. Tex. Parks & Wildlife Dep’t v. Callaway, 971 S.W.2d 145, 152
(Tex. App. – Austin 1998, no writ) (“A suit for title to land against the
state or its agency cannot be maintained without legislative consent.”).
Excellence’s takings claim requires trying the State’s title to the disputed
property, which is barred by sovereign immunity. Lain, 349 S.W.2d at
582. This Court should therefore reverse for lack of jurisdiction.
- 18 - II. Even assuming it is not a disguised trespass to try title, Excellence lacks standing for a takings claim.
Even assuming that Excellence’s takings claim is not a disguised
trespass-to-try title, it lacks standing to assert a takings claim. “A court
has no jurisdiction over a claim made by a plaintiff who lacks standing to
assert it.” Heckman, 369 S.W.3d at 150. “Subject matter jurisdiction
requires that the party bringing the suit have standing, that there be a
live controversy between the parties, and that the case be justiciable.”
State Bar of Tex. v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). “If the
plaintiff lacks standing to bring any of his claims, the court must dismiss
the whole action for want of jurisdiction.” Id. at 150–51 (emphasis in
original).
To establish standing, a plaintiff must meet three elements: (1) an
injury-in-fact that has (2) a causal connection to the complained-of
conduct which is “fairly traceable” to the challenged action of the
defendant, and (3) the injury is likely to be redressed by a favorable
decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992).
“It is fundamental that, to recover under the constitutional takings
clause, one must first demonstrate an ownership interest in the property
- 19 - taken.” Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 644
(Tex. 2004). The plaintiff bears the burden of proving an ownership
interest in the allegedly taken property. Tex. Gen. Land Office v.
Porretto, 369 S.W.3d 276, 288 (Tex. App. – Houston [1st Dist.], 2011), aff’d
in part, rev’d in part, 448 S.W.3d 393 (Tex. 2014).
a. Excellence lacks standing to assert a takings claim because it has no vested property right.
If the party bringing the suit does not own the disputed land, the
takings claim is not viable, and the trial court lacks jurisdiction to hear
the case. Tex. Dep’t of Transp. v. A.P.I. Pipe and Supply, LLC, 397 S.W.3d
162, 166 (Tex. 2013). To have standing to sue for takings, a party must
have a vested property interest at the time of the alleged taking. City of
Keller v. Wilson, 168 S.W.3d 802, 808 (Tex. 2005). A vested right is
“something more than a mere expectancy based upon an anticipated
continuance of an existing law.” Honors Acad., Inc. v. Tex. Educ. Agency,
555 S.W.3d 54, 61 (Tex. 2018). A right is “vested” when it has some
definitive, rather than potential, existence. Scott v. Alphonso Crutch LSC
- 20 - Charter Sch., Inc., 392 S.W.3d 165, 171 (Tex. App. – Austin 2010, pet.
denied) (mem. op.).
Section 12.128(b)(1) of the Texas Education Code states: “Subject to
Subsection (b-2), while an open-enrollment charter school is in operation,
the charter holder holds title to any property described by Subsection (a)
or (b) and may exercise complete control over the property as permitted
under the law.” Tex. Educ. Code § 12.128(b)(1) (emphasis added).
Subsection (a) relates to property purchased with funds received by a
charter school, while subsection (b) relates to property purchased before
September 1, 2001, with at least 50% public funds. Id. § 12.128(a), (b).
Here, Excellence has admitted to purchasing these properties with State
funds. At the hearing on TEA’s Plea, Excellence admitted that it used
state funds to acquire these properties. 4 RR. 13:8-14:25.
Thus, under the Texas Education Code, Excellence had a right and
duty to hold title to the two real properties in its name. That right and
duty ended once its charter was revoked and the school closed. Tex. Educ.
Code § 12.128(b)(1).
- 21 - Excellence was also required by the Contract to hold title in its
name. Section 36 of the Contract states in pertinent part: “Charterholder
shall have and maintain throughout the term of the charter a lease
agreement, title or other legal instrument granting to Charterholder the
right to occupy and use one or more facilities suitable for use as the
charter school facilities described by the charter.” 1 CR. 276 (emphasis
added). Thus, it held title in its name at TEA’s behest.
Excellence’s claim of ownership hinges solely on possessing title;
however, it lacks a vested property interest because (i) it was required by
law and by the Contract to keep title in its name, and (ii) the right and
duty to hold title ended upon revocation of its charter. However, merely
having title cannot be equated with personal ownership, distinct and
separate from operating the charter school.
It is evident from the foregoing that Excellence’s interests in the
two properties are not vested but instead are “mere expectancies” created
by the law and the Contract. Excellence's title is therefore contingent on
the continuation of its charter and operation of a school, not definite.
- 22 - Instructively, TEA specifically cited violation of Section 36 of the
Contract in its investigative report dated November 17, 2014, relating to
the Dallas property, after discovering a recording of personal ownership
interest in the charter school's property. 1 CR. 220-221; 292-316. TEA
cited Excellence for breach of Section 36 of the Contract. 1 CR. 293.
Excellence and Allen neither questioned TEA’s authority, contended that
the Dallas property was privately owned, nor alleged that it was not a
charter school asset. 1 CR. 310-316. Instead, the breach was cured by
promptly reconveying the property to Excellence. Id. The deed would
not have been transferred back to Excellence to remedy the breach were
it not a charter school asset.
Further, Excellence admitted in its prior lawsuit: “The Houston
property was purchased prior to September 1, 2001, and partially paid
for with non-public funds.” 1 CR. 250 (emphasis added). Excellence
further conceded that, for the Houston property, “$145,000 was paid
using private funds, and state funds were used to pay the remaining
balance of about $565,000.00” (emphasis added). 1 CR. 236. It claimed
a “vested property interest in its deeds and the equity value of its real
- 23 - estate which is in excess of the amount of state funds used to purchase
the lease [sic] property.” 1 CR. 241. (emphasis added).
That Excellence sought to recover “the equity value … in excess of
the amount of state funds used to purchase the … property” is telling,
and again, recognizes that state funds were used to buy both properties.
Pleadings in another case that are inconsistent with a party’s position in
a present action are evidence. Excellence’s admission that these
properties were assets of the charter school, and therefore, state assets,
predated this lawsuit.
Moreover, as shown above, in its response to the Plea, Excellence
admitted using state funds to purchase the properties, claiming that
“TEA authorized charter schools to purchase private property using state
funds.” 2 CR. 1308. At the hearing on the Plea, it also conceded using
state funds to acquire these properties. 4 RR. 13:8-14:25. These
admissions are fatal to its claim.
- 24 - b. Excellence lacks standing to assert a takings claim because the properties belong to the State as a matter of law.
Even if it is not a camouflaged trespass to try title claim, Excellence
still lacks standing for a takings claim because the two properties belong
to TEA as a matter of law. TEA’s undisputed evidence shows that
Excellence used funds received after September 2, 2001; consequently,
under Section 12.128(a), these two properties are “property of this state
held in trust by the charter holder for the benefit of the students of the
open-enrollment charter school.” Tex. Educ. Code §12.128(a)(2). When
Excellence’s charter was revoked and its schools ceased to operate,
Section 12.128(c) authorized TEA to take possession and assume control
of these two properties. Id. at §12.128(c).
This is the law, and Excellence agreed to this outcome when it
accepted funding from the State. “A charter holder who accepts state
funds under Section 12.106 after the effective date of a provision of this
subchapter agrees to be subject to that provision, regardless of the date
on which the charter holder’s charter was granted.” Tex. Educ. Code §
12.1071(a).
- 25 - Excellence’s audited financial statements not only agree that the
assets it acquired with public funds constitute public property under
Chapter 12 of the Texas Education Code but also reflect 100% state
ownership of the Dallas and Houston properties. 1 CR. 221-222; 392-676;
2 CR. 681-976. And as shown above, in its response to the Plea and at
the July 18, 2025, hearing, Excellence changed course when confronted
with its past admission of using state funds to purchase the properties:
after repeatedly insisting that it purchased the properties with only
private funds (2 CR. 1008-1009, 1 CR. 42-43; 2 CR. 979, 1015; 2 RR. 8:11-
9:15; 3 RR. 10:1-3), it openly admitted that it bought them with state
funds. 2 CR. 1308; 4 RR. 13:8-14:25.
Section 12.128 of the Education Code states that if state funds
contributed to the purchase of charter school property, that property
becomes state property even if private funds were also used: “property
purchased with state funds received by a charter holder . . . after
September 1, 2001: (1) is considered to be public property for all purposes
under state law; (2) is property of this state held in trust by the charter
holder for the benefit of the students of the open-enrollment charter
- 26 - school; and (3) may be used only for a purpose for which a school district
may use school district property.” Tex. Educ. Code § 12.128(a). These
properties were bought after September 1, 2001. 1 CR.288-289.
Section 12.128 outlines the requirements and scope of TEA’s
authority to take possession of charter school property. Transformative
Learning Sys. v. Tex. Educ. Agency, 572 S.W.3d 281, 287 (Tex. App. –
Austin 2018, no pet.). When a school’s charter is revoked and ceases to
operate, TEA must seize school property that the charter holder
purchased using any state funds received after September 1, 2001. Id. at
287–88; see also Tex. Educ. Code § 12.128(c)(1). This operates based on
when the funds were received, not when the property was purchased. See
Transformative Learning Sys., 572 S.W.3d at 287–88. A purchase
“encompasses the act of acquiring property by paying the entire purchase
price at the time of sale or over time through mortgage payments.” Id. at
289.
c. Excellence’s taking claim is not redressable.
“[S]tanding requires a concrete injury that is both traceable to the
defendant’s conduct and redressable by court order.” Commons of Lake
- 27 - Houston, Ltd. v. City of Houston, 711 S.W.3d 666, 687 (Tex. 2025)
(citation omitted). Section 12.128(a) of the Texas Education Code states
that property purchased with state funds received by a charter holder is
“considered to be public property for all purposes under state” and is
“held in trust by the charter holder.” Tex. Educ. Code § 12.128(a).
Critically, Section 12.128(c) authorizes TEA to “(1) take possession and
assume control of the property described by Subsection (a) of an open-
enrollment charter school that ceases to operate; and (2) supervise the
disposition of the property in accordance with this subchapter.” Id.
§12.128(c).
As discussed above, once a charter school ceases to operate, for
property purchased with state funds, Section 12.128(c) of the Texas
Education Code empowers TEA to “take possession and assume control
of the property” and supervise the disposition of its assets. Tex. Educ.
Code §12.128. Section 12.128(c)(1) provides that TEA “shall direct the
charter holder to dispose of the property” of a closed charter school by (i)
retaining or liquidating the property and reimbursing the state, (ii)
transferring the property to TEA or a school district, (iii) closing the
- 28 - operations of charter school or (iv) any combination of the above. Tex.
Educ. Code §12.128(c)(1). TEA’s decision “is final and may not be
Excellence repeatedly rebuffed TEA’s request to return all charter
school assets and transfer the deed to the agency. TEA’s directive is
unappealable. Excellence’s lawsuit seeks to circumvent the statutory bar
on challenging TEA’s decision regarding the assets of a closed charter
school. As such, Excellence’s claim is not redressable.
III. Even assuming that this is not a disguised trespass to try title claim, Excellence failed to plead a valid takings claim to overcome TEA’s sovereign immunity.
Even if Excellence’s takings claim is not a disguised trespass-to-try
title, it still failed to plead a viable takings claim to overcome TEA’s
sovereign immunity. “In the absence of a properly pled takings claim,
the state retains immunity.” Hearts Bluff Game Ranch, Inc. v. State, 381
S.W.3d 468, 476 (Tex. 2012).
To establish a viable governmental takings claim, a plaintiff must
demonstrate: “(1) the State intentionally performed certain acts, (2) that
resulted in a ‘taking’ of property, (3) for public use.” Matzen v. McLane,
- 29 - 659 S.W.3d 381, 393 (Tex. 2021) (citation omitted). Because Excellence
has not even established that TEA has eminent domain powers, much
less sufficiently alleged any of these takings’ elements, its takings claim
is barred by TEA’s sovereign immunity. Therefore, this Court should
reverse and remand with instructions to dismiss Excellence’s suit.
IV. As a threshold issue, Excellence has not pleaded and cannot establish that TEA has eminent domain powers.
Conspicuously absent in Excellence’s pleadings below is any
showing that TEA has eminent domain powers to support its takings
allegation. Nowhere in its pleadings below does Excellence cite to any
authority to even suggest that TEA has or acted pursuant to its eminent
domain powers. The statutory powers that the Texas Legislature
conferred on TEA do not include the power of eminent domain. See Tex.
Educ. Code § 7.021 (listing TEA’s powers and duties). TEA never claimed
to act pursuant to eminent domain powers.
In Hues v. Warren Petroleum Co., 814 S.W.2d 526, 531 (Tex. App. –
Houston [14th Dist.] 1991, writ denied), the Fourteenth Court of Appeals
rejected a takings claim because, among others, defendants had “no
powers of eminent domain, and therefore, did not have any right of
- 30 - inverse condemnation.” Similarly, Excellence’s claim fails for the
independent reason that it failed to show, as an initial matter, that TEA
even has eminent domain powers. TEA did not claim to exercise eminent
domain powers but rather exercised its statutory right to repossess state
property after the charter was revoked. Tex. Educ. Code § 12.128(c).
V. TEA acted under the scope of a valid contract and did not possess the requisite ‘intent to take’ under its eminent domain powers.
“Texas courts have long recognized that the State wears two hats:
the State as a party to the contract and the State as sovereign.” Gen.
Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex.
2001); see also Federal Sign v. Texas Southern University, 951 S.W.2d
401, 405 (Tex. 1997). When acting as a party to a contract, the State does
not have the ‘intent to take’ under its eminent domain powers:
The State, in acting within a color of right to take or withhold property in a contractual situation, is acting akin to a private citizen and not under any sovereign powers. In this situation, the State does not have the intent to take under its eminent domain powers; the State only has an intent to act within the scope of the contract.
Little-Tex Insulation Co., 39 S.W.3d at 599 (citation omitted). Such is the
case here. As discussed above, Excellence entered into the Contract with
- 31 - TEA to operate an open-enrollment charter school. 1 CR. 270-277. The
Contract was “conditioned on full and timely compliance by [Excellence]
with. . . applicable law.” 1 CR.277.
The Contract requires that all financial transactions be “separately
and clearly reflected in the accounting, auditing, budgeting, reporting,
and record keeping systems of the charter school.” 1 CR.274 at ¶27.
Additionally, Excellence “shall not apply, hold, credit, transfer, or
otherwise make use of funds, assets or resources of the charter school for
any purpose other than the operation of the charter school described in
the charter.” Id. These terms of the Contract mirror Texas law. See Tex.
Educ. Code § 12.107(a); Tex. Educ. Code § 45.105(c) (delimiting the use
of local funds).
Excellence does not dispute the veracity of the investigation, which
found material violations of the Contract—many of which were
financial—or the resulting revocation of the charter. 1 CR.292-301; 1
SuppCR. 592. Therefore, TEA acted under the Contract and relevant
Texas law by repossessing the school’s property after the charter was
revoked. Tex. Educ. Code § 12.128(c).
- 32 - Excellence cited State v. Holland, 221 S.W.3d 639 (Tex. 2007), in its
trial court briefing below. Ironically, Holland held that because the State
acted in accordance with a contract—even in the absence of an express
contract—it lacked the requisite “intent to take,” thereby retaining its
sovereign immunity. Id.
Similarly, here, even if Excellence can establish that TEA has, and
acted pursuant to, its eminent domain powers, TEA’s actions in
repossessing the State’s property were taken under the terms and scope
of the Contract. Therefore, TEA lacked the requisite intent to take under
as a matter of law. For this reason alone, the trial court's decision should
be reversed, and Excellence’s claim should be dismissed as barred by
sovereign immunity.
VI. TEA’s actions did not result in a ‘taking’ of private property.
Under Texas law, state funds received “by a charter holder . . . are
considered to be public funds for all purposes under state law[.]” Tex.
Educ. Code § 12.107(a)(1). The state funds received by a charter holder
are “held in trust . . . for the benefit of the students of the open-enrollment
charter school.” Id. § 12.107(a)(2). Texas law prohibits the charter holder
- 33 - from using these state funds held in trust for non-trust purposes. Id. §
12.107(a); § 45.105(c).
The Texas Education Code stipulates that property purchased with
state funds received by a charter holder after September 1, 2001 “(1) is
considered to be public property for all purposes under state law; (2) is
property of this state held in trust by the charter holder for the benefit of
the students of the open-enrollment charter school; and (3) may be used
only for a purpose for which a school district may use school district
property.” Tex. Educ. Code § 12.128(a). If the open-enrollment charter
school later ceases to operate, Section 12.128 requires TEA to “take
possession and assume control” of this public property. Id. § 12.128(c).
Section 12.128 operates based on when the funds were received, not when
the property was purchased. See Transformative Learning Sys. 572
S.W.3d at 287-88. Further, a purchase “encompasses the act of acquiring
property by paying the entire purchase price at the time of sale or over
time through mortgage payments,” not just its initial purchase. Id. at 289.
A ‘taking’ only occurs when the government takes or otherwise
unreasonably interferes with an owner’s right to use or enjoy their
- 34 - private property. City of Keller v. Hall, 433 S.W.3d 708, 713 (Tex. App.—
Fort Worth 2014, pet. denied). Here, Excellence acknowledges it began
receiving state funds in 2000. 2 RR. 9:21-22.
Excellence purchased its Houston property in November 2001 and
its Dallas property in 2007. 1 CR.288-289. Because both properties were
purchased post-September 1, 2001, and Excellence had already been
receiving state funds for approximately one year, the presumption is that
the properties are public property; public property does not fall under the
purview of a ‘taking.’ Tex. Educ. Code § 12.128(a); Hall, 433 S.W.3d at
713. Excellence has not and cannot rebut this presumption.
All evidence, including audits approved by Excellence’s board (1
CR. 221-222; 392-676; 2 CR. 678-976), belies Excellence’s prior
inconsistent assertion that it never commingled funds and that the
properties were purchased solely with private funds, and Excellence
cannot overcome the state property presumption. Additionally, even if
Excellence used private funds, it has not even kept sufficiently detailed
financial records and conceded that it simply does not have the records
- 35 - needed to sufficiently trace and segregate state and private funds. 2 RR.
11:13-12:7; 3 RR.11:17-12:10.
Significantly, after repeatedly stridently claiming to have
purchased the properties with private funds (2 CR. 1008-1009, 1 CR. 42-
43; 2 CR. 979, 1015; 2 RR. 8:11-9:15; 3 RR. 10:1-3) and introducing a
sham affidavit to support its false claim (1 CR. 60-62), once Excellence
was confronted with its admission in its 2016 lawsuit that it purchased
the properties with state funds, Excellence conceded that it indeed
purchased the properties with state funds. 1 CR. 236 at ¶13; 1 CR. 250;
2 CR. 1308; 4 RR. 13:8-14:25.
Therefore, by relevant law and Excellence's admissions, TEA
properly determined that the properties are state property and
repossessed them upon charter revocation, as authorized by Section
12.128 of the Texas Education Code. Tex. Edu. Code §12.128. Because
they are state, not private property, they were not ‘taken.’ Excellence's
takings claim is barred by sovereign immunity, and the trial court's
decision should be reversed.
- 36 - VII. TEA did not acquire Excellence’s property for public use under its eminent domain powers.
“Property is taken for public use only when there results to the
public some definite right or use in the business or undertaking to which
the property is devoted.” KMS Retail Rowlett, LP v. City of Rowlett, 593
S.W.3d 175, 186–87 (Tex. 2019) (internal quotations omitted); see also
Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828, 833 (Tex.
1958). “It is immaterial if the use is limited to the citizens of a local
neighborhood, or that the number of citizens likely to avail themselves of
it is inconsiderable, so long as it is open to all who choose to avail
themselves of it.” KMS Retail Rowlett, 593 S.W.3d at 187 (citation
omitted). Public use is defined solely as public works. Steele v. City of
Houston, 603 S.W.2d 786, 790 (Tex. 1980). The Texas Constitution
“limits compensation to damages ‘for or applied to public use,’ and
judicial restraints have narrowed that phrase to damages which arise out
of or as an incident to some kind of public works.” Id. This case has
nothing to do with public works. Hence, Excellence has neither alleged
nor established that TEA acquired the properties for public use.
- 37 - Further, “[b]ecause the state provides funds to charter schools to be
used exclusively for a public purpose, there is nothing unconstitutional
about its taking possession of property that the charter school purchases
with those funds—what the Legislature giveth, the Legislature may
taketh away.” Acad. of Careers & Tech., Inc., 499 S.W.3d at 136 (citation
and internal quotations omitted). “Charter schools are creatures of
statute that are an integral part of Texas's public-education system and
may be considered governmental units.” Tex. Educ. Agency v. Academy of
Careers & Tech., Inc., 499 S.W.3d 130, 135 (Tex. App.—Austin 2016, no
pet.); see also LTTS Charter School, Inc. v. C2 Constr., Inc., 342 S.W.3d
73, 76 (Tex. 2011)(noting that charter schools “are indisputably part of
the Texas public-education system”); id. at 78 (noting that charter
schools’ status and authority “derive wholly from the comprehensive
statutory regime”); id. at 82 (“Open-enrollment charter schools are
governmental units for Tort Claims Act purposes ....”).
Thus, even if TEA has eminent domain powers, TEA did not acquire
the properties for public use but rather reclaimed state property
- 38 - pursuant to Excellence's admissions and self-reported disclosures,
consistent with Texas law, and under the Contract.
PRAYER
For the foregoing reasons, this Court should reverse the judgment
of the trial court below and dismiss Excellence’s case with prejudice.
Respectfully submitted,
KEN PAXTON Attorney General of Texas
BRENT WEBSTER First Assistant Attorney General
RALPH MOLINA Deputy First Assistant Attorney General
AUSTIN KINGHORN Deputy Attorney General for Civil
KIMBERLY GDULA Chief, General Litigation Division
/s/ Joe Nwaokoro JOE NWAOKORO Assistant Attorney General Texas Bar No. 24032916 General Litigation Division
Office of the Attorney General
- 39 - P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Joe.nwaokoro@oag.texas.gov (512) 463-2120/Fax (512) 320-0667
ATTORNEYS FOR DEFENDANT-APPELLANT
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of Tex. R.
App. P. 9.4(e) because it has been prepared in a conventional typeface no
smaller than 14-point for text and 12-point for footnotes. This document
also complies with the word-count limitations of Tex. R. App. P. 9.4(i), if
applicable, because it contains 7,122 words, excluding parts exempted by
Tex. R. App. P. 9.4 (i)(1).
/s/ Joe Nwaokoro JOE NWAOKORO Assistant Attorney General
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document has
been served electronically through the electronic filing manager in
- 40 - accordance with Tex. R. App. P. 9.5(b)(1) on the 22nd day of September
2025, to:
Melvin Houston 3033 Chimney Rock, Suite 610 Houston, Texas 77056 mhouston@gotellmel.com
Nikeyla Johnson 3033 Chimney Rock, Suite 610 Houston, Texas 77056 njohnson@contactjohnsonlawfirm.com
Counsel for Appellee
- 41 - No. 15-25-00148-CV
In the Court of Appeals for the Fifteenth District of Texas ______________________________
TEXAS EDUCATION AGENCY, Appellant, v.
EXCELLENCE 2000, INC. AND SHERWIN ALLEN, Appellees. ______________________________
On Appeal from the 125th Judicial District Court Harris County, Texas Cause No. 2022-55524 ______________________________
APPENDIX ___________________________________
Tab 1 Order Denying TEA’s Plea to the Appx. 001-002 Jurisdiction. 2 CR. 1332
Tab 2 Charter Contract. 1 CR. 270-277 Appx. 003-0011
Tab 3 Plaintiff’s 2016 Lawsuit. 1 CR. 232-251 Appx. 0012-0032
Tab 4 Tex. Educ. Code §12.107 Appx. 0033-0035
Tab 5 Tex. Educ. Code §12.128 Appx. 0036-0040
Tab 6 Tex. Educ. Code §12.1281 Appx. 0041-0044
- 42 - Tab 7 Tex. Educ. Code §45.105 Appx. 0045-0048
- 43 - TAB 1: ORDER DENYING TEA’S PLEA TO THE JURISDICTION. 2 CR. 1332
Appx. 001 6/12/2025 12:58:15 PM Marilyn Burgess - District Clerk Harris County Envelope No: 101943629 By: ANDERS, REGINA C Filed: 6/12/2025 12:58:15 PM Pgs-1 CAUSE NO. 2022-55524 PJURY EXCELLENCE 2000 INC. § IN THE DISTRICT COURT § Plainti.e; § 125rn JUDICIAL DISTRICT v. § § TEXAS EDUCATION AGENCY § HARRIS cou�, TEXAS Defendant § 0�<@ ◊� ORDER ON DEFENDANT'S PLEA TO THE JUR 1 �CTION ◊!f!p��
�
Plea to the Jurisdiction (the "Plea"). Upon consideratio� Plea, the responses and replies on file,
and the arguments of counsel, the Court has dete�� that the Plea i\�gt1·torious. It is therefore DE��- . ORDERED that Defendant' s Plea is hereby �B-&.""'2�i"i''tTu'l.�'l.''l.-S"'a"g�'iI'IS't'fi't'1�1'm'c11'1't"�'l'�"h'e"t'eTI'y � ���H��£-&.," g �
SO ORDERED. cf@ a�Jf!> Signed on this ----++---� '0----' 2025. ..--'-
Signed: �� 7/18/2025 (Jg JUDGE PRESIDING � ◊�
�
� �
Appx. 002
1332 TAB 2: CHARTER CONTRACT. 1 CR. 270-277
Appx. 003 Appx. 004 Appx. 005 Appx. 006 Appx. 007 Appx. 008 Appx. 009 Appx. 0010 Appx. 0011 TAB 3: PLAINTIFF’S 2016 LAWSUIT. 1 CR. 232-251
Appx. 0012 Appx. 0013 Appx. 0014 Appx. 0015 Appx. 0016 Appx. 0017 Appx. 0018 Appx. 0019 Appx. 0020 Appx. 0021 Appx. 0022 Appx. 0023 Appx. 0024 Appx. 0025 Appx. 0026 Appx. 0027 Appx. 0028 Appx. 0029 Appx. 0030 Appx. 0031 Appx. 0032 TAB 4: TEX. EDUC. CODE §12.107
Appx. 0033 KeyCite Yellow Flag Proposed Legislation Vernon’s Texas Statutes and Codes Annotated Education Code (Refs & Annos) Title 2. Public Education (Refs & Annos) Subtitle C. Local Organization and Governance Chapter 12. Charters (Refs & Annos) Subchapter D. Open-Enrollment Charter School (Refs & Annos)
V.T.C.A., Education Code § 12.107
§ 12.107. Status and Use of Funds
Currentness
(a) Funds received under Section 12.106 after September 1, 2001, by a charter holder:
(1) are considered to be public funds for all purposes under state law;
(2) are held in trust by the charter holder for the benefit of the students of the open-enrollment charter school;
(3) may be used only for a purpose for which a school may use local funds under Section 45.105(c);
(4) pending their use, must be deposited into a bank, as defined by Section 45.201, with which the charter holder has entered into a depository contract; and
(5) may not:
(A) be pledged or used to secure loans or bonds for any other organization, including a non-charter operation or out-of-state operation conducted by the charter holder or a related party, as defined by commissioner rule adopted under Section 12.1166; or
(B) be used to support an operation or activity not related to the educational activities of the charter holder.
Appx. 0034 (b) A charter holder shall deliver to the agency a copy of the depository contract between the charter holder and any bank into which state funds are deposited.
Credits
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995. Amended by Acts 2001, 77th Leg., ch. 1504, § 7, eff. Sept. 1, 2001. Amended by Acts 2019, 86th Leg., ch. 631 (S.B. 1454), § 4, eff. June 10, 2019.
Notes of Decisions (1)
V. T. C. A., Education Code § 12.107, TX EDUC § 12.107 Current through the end of the 2025 Regular and First Called Sessions of the 89th Legislature. End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
Appx. 0035 TAB 5: TEX. EDUC. CODE §12.128
Appx. 0036 Vernon’s Texas Statutes and Codes Annotated Education Code (Refs & Annos) Title 2. Public Education (Refs & Annos) Subtitle C. Local Organization and Governance Chapter 12. Charters (Refs & Annos) Subchapter D. Open-Enrollment Charter School (Refs & Annos)
V.T.C.A., Education Code § 12.128
§ 12.128. Property Purchased or Leased with State Funds
(a) Property purchased with funds received by a charter holder under Section 12.106 :
(1) is considered to be public property for all purposes under state law;
(2) is property of this state held in trust by the charter holder for the benefit of the students of the open-enrollment charter school;
(3) may be used only for a purpose for which a school district may use school district property; and
(4) is exempt from ad valorem taxation as provided by Section 11.11, Tax Code.
(a-1) Property leased with funds received by a charter holder under Section 12.106 :
(1) is considered to be public property for all purposes under state law;
(2) is property of this state held in trust by the charter holder for the benefit of the students of the open-enrollment charter school;
(3) may be used only for a purpose for which a school district may use school district property; and
Appx. 0037 (4) is exempt from ad valorem taxation as provided by Section 11.11, Tax Code.
(a-2) The owner of property that receives a tax exemption under Subsection (a) shall transfer the amount of tax savings from the exemption to the tenant or reduce the common area maintenance fee in a proportionate amount based upon the square footage of the exempt portion of the property.
(b) If at least 50 percent of the funds used by a charter holder to purchase real property are funds received under Section 12.106 before September 1, 2001, the property is considered to be public property to the extent it was purchased with those funds.
(b-1) Subject to Subsection (b-2), while an open-enrollment charter school is in operation, the charter holder holds title to any property described by Subsection (a) or (b) and may exercise complete control over the property as permitted under the law.
(b-2) A charter holder may not transfer, sell, or otherwise dispose of any property described by this section without the prior written consent of the agency if:
(1) the charter holder has received notice of:
(A) the expiration of the charter holder’s charter under Section 12.1141 and the charter has not been renewed; or
(B) the charter’s revocation under Section 12.115(c);
(2) the charter holder has received notice that the open-enrollment charter school is under discretionary review by the commissioner, which may result in the revocation of the charter or a reconstitution of the governing body of the charter holder under Section 12.115; or
(3) the open-enrollment charter school for which the charter is held has otherwise ceased to operate.
(c) The commissioner shall:
(1) take possession and assume control of the property described by Subsection (a) of an open-enrollment charter school Appx. 0038 that ceases to operate; and
(2) supervise the disposition of the property in accordance with this subchapter.
(c-1) Notwithstanding Subsection (c), if an open-enrollment charter school ceases to operate, the agency:
(1) for property purchased with state funds, shall direct the charter holder to dispose of the property through one of the following methods:
(A) retain or liquidate the property and provide reimbursement to the state as provided by Section 12.1281;
(B) transfer the property to:
(i) the agency under Section 12.1281(h); or
(ii) a school district or open-enrollment charter school under Section 12.1282;
(C) close the operations of the open-enrollment charter school under Section 12.1284; or
(D) take any combination of the actions described by Paragraphs (A), (B), and (C); and
(2) for property leased with state funds, may direct the charter holder to assign the charter holder’s interest in the lease to the agency.
(c-2) The agency may approve an expenditure of remaining funds by a former charter holder for insurance or utilities for or maintenance, repairs, or improvements to property described by this section if the agency determines that the expenditure is reasonably necessary to dispose of the property or preserve the property’s value.
(d) The commissioner may adopt rules necessary to administer this section.
Appx. 0039 (e) This section does not affect a security interest in or lien on property established by a creditor in compliance with law if the security interest or lien arose in connection with the sale or lease of the property to the charter holder.
(f) A decision by the agency under this section is final and may not be appealed.
Added by Acts 2001, 77th Leg., ch. 1504, § 18, eff. Sept. 1, 2001. Amended by Acts 2013, 83rd Leg., ch. 1140 (S.B. 2), § 37, eff. Sept. 1, 2013; Acts 2019, 86th Leg., ch. 631 (S.B. 1454), § 7, eff. June 10, 2019; Acts 2021, 87th Leg., ch. 916 (H.B. 3610), §§ 2, 3, eff. Sept. 1, 2021.
Notes of Decisions (15)
V. T. C. A., Education Code § 12.128, TX EDUC § 12.128 Current through the end of the 2025 Regular and First Called Sessions of the 89th Legislature. End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
Appx. 0040 TAB 6: TEX. EDUC. CODE §12.1281
Appx. 0041 § 12.1281. Disposition of Property Purchased With State Funds, TX EDUC § 12.1281
Vernon’s Texas Statutes and Codes Annotated Education Code (Refs & Annos) Title 2. Public Education (Refs & Annos) Subtitle C. Local Organization and Governance Chapter 12. Charters (Refs & Annos) Subchapter D. Open-Enrollment Charter School (Refs & Annos)
V.T.C.A., Education Code § 12.1281
§ 12.1281. Disposition of Property Purchased With State Funds
(a) A former charter holder of an open-enrollment charter school that has ceased to operate may retain property described by Section 12.128 if the former charter holder reimburses the state with non-state funds and the former charter holder:
(1) provides written assurance that the requirements of Section 12.1284 will be met; and
(2) receives approval from the agency.
(b) On receiving consent from the agency under Section 12.128(b-2) and a written agreement from any creditor with a security interest described by Section 12.128(e), the former charter holder may:
(1) sell property for fair market value; or
(2) transfer property to an open-enrollment charter school or a school district as provided under Section 12.1282.
(c) The amount of funds the state is entitled to as reimbursement for property of a former charter holder is:
(1) for property retained by the former charter holder, the current fair market value less the amount of any debt subject to a security interest or lien described by Section 12.128(e), multiplied by the percentage of state funds used to purchase the property; or
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0042 1 § 12.1281. Disposition of Property Purchased With State Funds, TX EDUC § 12.1281
(2) for property sold by the former charter holder, the net sales proceeds of the property multiplied by the percentage of state funds used to purchase the property.
(d) To determine the amount of state funds a former charter holder used to purchase property, the agency shall calculate:
(1) an estimated state reimbursement amount based on the last annual financial report filed under Section 44.008 available at the time the former charter holder retains or sells the property; and
(2) a final state reimbursement amount using the former charter holder’s final financial audit filed under Section 44.008.
(e) A former charter holder retaining property under Subsection (a) or selling the property under Subsection (b)(1) shall:
(1) file an affidavit in the real property records of the county in which the property is located disclosing the state interest in the property;
(2) place in escrow with the state comptroller an amount of non-state funds equal to 110 percent of the estimated state reimbursement amount not later than:
(A) the closing date of the sale of the property if the charter holder is selling the property; or
(B) the 90th day after the charter school’s last day of instruction if the charter holder is retaining the property; and
(3) not later than two weeks after the date the charter holder’s final financial audit is filed under Section 44.008, submit to the state the final state reimbursement amount using the funds in escrow in addition to any other funds necessary to pay the full amount of state reimbursement.
(f) A former charter holder may retain any funds remaining after complying with this section.
(g) As soon as the agency is satisfied that the former charter holder complied with Subsection (e), the agency shall file written notice of the release of the state interest in property the former charter holder retains under this section and authorize the return of any funds not used for state reimbursement to the former charter holder.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0043 2 § 12.1281. Disposition of Property Purchased With State Funds, TX EDUC § 12.1281
(h) Subject to the satisfaction of any security interest or lien described by Section 12.128(e), if a former charter holder does not dispose of property under Subsection (a) or (b), the former charter holder shall transfer the property, including a conveyance of title, to the agency in accordance with the procedures and time requirements established by the agency.
(i) Subject to the satisfaction of any security interest or lien described by Section 12.128(e), if the agency determines a former charter holder failed to comply with this section or Section 12.1282, on request of the agency, the attorney general shall take any appropriate legal action to compel the former charter holder to convey title to the agency or other governmental entity authorized by the agency to maintain or dispose of property.
(j) A decision by the agency under this section is final and may not be appealed.
(k) The commissioner may adopt rules necessary to administer this section.
Added by Acts 2019, 86th Leg., ch. 631 (S.B. 1454), § 8, eff. June 10, 2019.
V. T. C. A., Education Code § 12.1281, TX EDUC § 12.1281 Current through the end of the 2025 Regular and First Called Sessions of the 89th Legislature. End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0044 3 TAB 7: TEX. EDUC. CODE §45.105
Appx. 0045 § 45.105. Authorized Expenditures, TX EDUC § 45.105
KeyCite Yellow Flag Proposed Legislation Vernon’s Texas Statutes and Codes Annotated Education Code (Refs & Annos) Title 2. Public Education (Refs & Annos) Subtitle I. School Finance and Fiscal Management Chapter 45. School District Funds Subchapter E. Miscellaneous Provisions
V.T.C.A., Education Code § 45.105
§ 45.105. Authorized Expenditures
(a) The public school funds may not be spent except as provided by this section.
(b) The state and county available funds may be used only for the payment of teachers’ and superintendents’ salaries and interest on money borrowed on short time to pay those salaries that become due before the school funds for the current year become available. Loans for the purpose of payment of teachers may not be paid out of funds other than those for the current year.
(c) Local school funds from district taxes, tuition fees of students not entitled to a free education, other local sources, and state funds not designated for a specific purpose may be used for the purposes listed for state and county available funds and for purchasing appliances and supplies, paying insurance premiums, paying janitors and other employees, buying school sites, buying, building, repairing, and renting school buildings, including acquiring school buildings and sites by leasing through annual payments with an ultimate option to purchase, providing advising support as described by Section 48.0035(1), and educating students as described by Section 48.0035(2), and, except as provided by Subsection (c-1), for other purposes necessary in the conduct of the public schools determined by the board of trustees. The accounts and vouchers for county districts must be approved by the county superintendent. If the state available school fund in any municipality or district is sufficient to maintain the schools in any year for at least eight months and leave a surplus, the surplus may be spent for the purposes listed in this subsection.
(c-1) Funds described by Subsection (c) may not be used to initiate or maintain any action or proceeding against the state or an agency or officer of the state arising out of a decision, order, or determination that is final and unappealable under a provision of this code, except that funds may be used for an action or proceeding that is specifically authorized by a provision of this code or a rule adopted under this code and that results in a final and unappealable decision, order, or determination.
(d) An independent school district that has in its limits a municipality with a population of 150,000 or more or that contains at
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0046 1 § 45.105. Authorized Expenditures, TX EDUC § 45.105
least 170 square miles, has $850 million or more assessed value of taxable property on the most recent approved tax roll and has a growth in average daily attendance of 11 percent or more for each of the preceding five years as determined by the agency may, in buying school sites or additions to school sites and in building school buildings, issue and deliver negotiable or nonnegotiable notes representing all or part of the cost to the school district of the land or building. The district may secure the notes by a vendor’s lien or deed of trust lien against the land or building. By resolution or order of the governing body made at or before the delivery of the notes, the district may set aside and appropriate as a trust fund, and the sole and only fund, for the payment of the principal of and interest on the notes that part of the local school funds, levied and collected by the school district in that year or subsequent years, as the governing body determines. The aggregate amount of local school funds set aside in or for any subsequent year for the retirement of the notes may not exceed, in any one subsequent year, 10 percent of the local school funds collected during that year. The district may issue the notes only if approved by majority vote of the qualified voters voting in an election conducted in the manner provided by Section 45.003 for approval of bonds.
(e) The governing body of an independent school district that governs a junior college district under Subchapter B, Chapter 130,1 in a county with a population of more than 2.5 million may dedicate a specific percentage of the local tax levy to the use of the junior college district for facilities and equipment or for the maintenance and operating expenses of the junior college district. To be effective, the dedication must be made by the governing body on or before the date on which the governing body adopts its tax rate for a year. The amount of local tax funds derived from the percentage of the local tax levy dedicated to a junior college district from a tax levy may not exceed the amount that would be levied by five percent of the no-new-revenue tax rate for the tax year calculated as provided by Section 26.04, Tax Code, on all property taxable by the school district. All real property purchased with these funds is the property of the school district, but is subject to the exclusive control of the governing body of the junior college district for as long as the junior college district uses the property for educational purposes.
(f) Funds from a junior college district branch campus maintenance tax levied by a school district board of trustees under Section 130.253 may be used as provided by that section.
Added by Acts 1995, 74th Leg., ch. 260, § 1, eff. May 30, 1995. Amended by Acts 1997, 75th Leg., ch. 1071, § 23, eff. Sept. 1, 1997; Acts 2011, 82nd Leg., ch. 1163 (H.B. 2702), § 10, eff. Sept. 1, 2011; Acts 2015, 84th Leg., ch. 1242 (H.B. 382), § 3, eff. Sept. 1, 2015; Acts 2019, 86th Leg., ch. 943 (H.B. 3), § 3.053, eff. Jan. 1, 2020; Acts 2021, 87th Leg., ch. 1046 (S.B. 1365), § 3.02, eff. Sept. 1, 2021; Acts 2023, 88th Leg., ch. 644 (H.B. 4559), § 21, eff. Sept. 1, 2023; Acts 2025, 89th Leg., ch. 918 (H.B. 120), § 12, eff. June 20, 2025; Acts 2025, 89th Leg., ch. 1065 (H.B. 2), § 6.12, eff. June 20, 2025.
Notes of Decisions (42)
Footnotes
V.T.C.A., Education Code § 130.011 et seq.
V. T. C. A., Education Code § 45.105, TX EDUC § 45.105 Current through the end of the 2025 Regular and First Called Sessions of the 89th Legislature. End of Document © 2025 Thomson Reuters. No claim to original U.S. Government Works.
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0047 2 § 45.105. Authorized Expenditures, TX EDUC § 45.105
© 2025 Thomson Reuters. No claim to original U.S. Government Works. Appx. 0048 3 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.
Mary Sifuentes on behalf of Joseph Nwaokoro Bar No. 24032916 mary.sifuentes@oag.texas.gov Envelope ID: 105909571 Filing Code Description: Brief Requesting Oral Argument Filing Description: Appellants Brief_Appendix Status as of 9/22/2025 2:25 PM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Joe Nwaokoro Joe.Nwaokoro@oag.texas.gov 9/22/2025 2:20:42 PM SENT
Mary Sifuentes Mary.Sifuentes@oag.texas.gov 9/22/2025 2:20:42 PM SENT
Melvin Houston 793987 mhouston@gotellmel.com 9/22/2025 2:20:42 PM SENT
Nikeyla Johnson 24065505 njohnson@contactjohnsonlawfirm.com 9/22/2025 2:20:42 PM SENT
Related
Cite This Page — Counsel Stack
Texas Education Agency v. Excellence 2000 INC. and Sherwin Allen, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-education-agency-v-excellence-2000-inc-and-sherwin-allen-texapp-2025.