Summary
holding that although petition did not refer to 2006 tax year appraisal, record supported conclusion that petition's reference to 2005 tax year was mistake and “[t]here could be no confusion by the parties on that point”
Summary of this case from Huff Energy Fund, L.P. v. Longview Energy Co.Opinion
NO. 09-11-00517-CV
02-09-2012
JEFFERSON COUNTY APPRAISAL DISTRICT AND APPRAISAL REVIEW BOARD OF JEFFERSON COUNTY, Appellants v. GLEN W. MORGAN, Appellee
On Appeal from the 172nd District Court
Jefferson County, Texas
Trial Cause No. A-177,646
MEMORANDUM OPINION
Glen W. Morgan, as trustee, filed suit against the Jefferson County Appraisal District and the Appraisal Review Board of Jefferson County under Chapter 42 of the Texas Property Tax Code. Morgan's petition sought relief from ad valorem taxation for certain tax years. The appraisal district and appraisal review board filed a motion to dismiss for want of jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West Supp. 2011). The trial court denied the motion. Appellants filed this interlocutory appeal. See id.
THE DISPUTE
Jefferson County and Glen W. Morgan, trustee, entered into a lease agreement in December 2000. Morgan leased land at the Southeast Texas Regional Airport on which he intended to build a hangar. The leasehold interest in the land and the hangar were not placed on the tax appraisal rolls until 2006. In 2007, a fuel tank and fuel were added to the appraisal rolls in Morgan's name under a third account number.
Morgan filed a Notice of Protest on the land and on the hangar improvement taxes for 2006. The Notice of Protest stated in part as follows: "Please be advised that we hereby protest the 2006 Notice of Appraised Value for Property Tax Purposes regarding the above-referenced property . . . ." (emphasis in original). The protest asserted Morgan leased the property and did not own it; the property was improperly valued; and an improper method was used to determine the property's value. The appraisal review board held a hearing on the protest. Morgan received the appraisal review board's "Order Determining Protest" on August 11, 2006, and filed an appeal to district court on September 5, 2006. His original petition did not refer to tax year 2006, but instead referenced 2005, a year for which no taxes had been levied. In his second amended petition filed on July 2, 2007, Morgan referenced the tax appraisal for 2006, as well as for 2005 and 2007.
PLEA TO JURISDICTION
A plea to the jurisdiction challenges the district court's power to decide the subject matter of the dispute. Appraisal Review Bd. of Dallas Cent. Appraisal Dist. v. O'Connor & Assocs., 275 S.W.3d 643, 645 (Tex. App.—Dallas 2009, no pet.) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000)). The plaintiff has the burden of alleging facts that affirmatively establish the trial court's subject-matter jurisdiction. See Cypress Forest Pub. Util. Dist. v. Kleinwood Mun. Util. Dist., 309 S.W.3d 667, 672 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (citing Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). In reviewing the sufficiency of the plaintiff's pleadings, an appellate court construes the pleadings in the plaintiff's favor and looks at the plaintiffs intent. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226-27 (Tex. 2004); Townsend v. Appraisal Review Bd. of Montgomery Cnty., Tex., No. 09-11-00089-CV, 2011 Tex. App. LEXIS 7056, at *5 (Tex. App.—Beaumont Aug. 31, 2011, pet. denied). An incurable jurisdictional defect apparent from the face of the pleadings requires a dismissal. MAG-T, L.P. v. Travis Cent. Appraisal Dist., 161 S.W.3d 617, 624 (Tex. App.—Austin 2005, pet. denied).
Generally, the administrative procedures in the Property Tax Code are exclusive, and most defenses are barred if not raised therein. See Tex. Tax Code Ann. §§ 42.09 (West 2008), 42.21(a) (West Supp. 2011); Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex. 2006) (citing Tex. Tax Code Ann. § 42.21(a)). Failure to comply with the timelines set forth in the Code is a jurisdictional defect precluding judicial review. Tarrant Appraisal Dist. v. Gateway Ctr. Assocs., Ltd., 34 S.W.3d 712, 714 (Tex. App.—Fort Worth 2000, no pet.).
TAX YEAR 2006
Appellants argue that Morgan's appeal seeking judicial review for tax year 2006 was not timely filed as required by section 42.21(a). The applicable version of section 42.21(a) of the Texas Property Tax Code provides as follows:
A party who appeals as provided by this chapter must file a petition for review with the district court within 45 days after the party received notice that a final order has been entered from which an appeal may be had. Failure to timely file a petition bars any appeal under this chapter.Act of May 28, 1989, 71st Leg., R.S., ch. 796, § 44, sec. 42.21(a), 1989 Tex. Gen. Laws 3591, 3604 (amended 2009) (current version at Tex. Tax Code Ann. § 42.21(a) (West Supp. 2011)). Morgan filed his appeal in district court on September 5, 2006. The 45-day deadline was September 25, 2006. Because the second amended petition was filed after the 45-day deadline, however, appellants argue the trial court did not have jurisdiction over the suit and erred in denying appellants' motion to dismiss.
Appellants acknowledge that the leasehold interest in the land and the hangar were not placed on the appraisal rolls until tax year 2006. Appellants have further stated that although "[t]he Appraisal District was authorized to retroactively appraise the property and place it on the appraisal rolls for five prior years," it "chose not to do so." As appellants state, "When the property was placed on the appraisal rolls, Mr. Morgan was notified and he subsequently protested that notice . . . ."
Morgan argues that appellants had sufficient notice that he was challenging the appraisal value for the 2006 tax year. He references rules 45 and 47 of the Texas Rules of Civil Procedure. See Tex. R. Civ. P. 45, 47. Rule 45 states that "[a]ll pleadings shall be construed so as to do substantial justice." Rule 47(a) contains a "fair notice" requirement. Morgan maintains the pleadings gave the opposing parties fair notice of the claim involved.
There was no tax assessment in 2005 to protest. Although Morgan did not refer to the 2006 tax year in his original petition, the record supports a conclusion that the 2005 tax year reference was simply a mistake, and that the appeal to district court was for the 2006 tax year on which he had filed a notice of protest. At the time Morgan filed the petition for review in September 2006, the only taxes that could have been at issue were those for 2006. There could be no confusion by the parties on that point. See Dallas Cnty. Appraisal Dist. v. The Leaves, Inc., 742 S.W.2d 424, 430 (Tex. App.—Dallas 1987, writ denied) (Regarding obvious typographical error, there was no confusion as to which taxing-entity decision was appealed to district court, and the district court had jurisdiction.); but see Canales v. Kleberg Cnty. Appraisal Dist., No. 13-07-666-CV, 2008 Tex. App. LEXIS 6165, at **1-8 (Tex. App.—Corpus Christi Aug. 14, 2008, no pet.) (Original petition complained about 2002 order from the appraisal district, not the 2003 order; taxpayer did not exhaust his administrative remedies, and trial court did not err in granting taking authorities' motion to dismiss for want of jurisdiction.). We overrule issue one. The trial court has jurisdiction of Morgan's suit on tax year 2006.
TAX YEARS 2008 AND 2009
In issue two, appellants argue the trial court erred in denying their motion to dismiss because Morgan did not file a protest for tax year 2008 on the hangar account and did not file a protest in tax year 2009 for either the hangar account or the fuel tank account. Morgan argues that he contested the question of ownership through a declaratory judgment action in his pleadings and maintains that, because he is not the owner of the property, he does not have to exhaust the "yearly, repetitive administrative requirements." He contends he was not precluded from amending his previous petition to include the new years for which he sought review.
Generally, the statutory procedure for seeking judicial review of the appraisal board's order provides the exclusive remedy for the taxpayer. See Tex. Tax Code Ann. § 42.09. Morgan cites cases to support his claim that, after having exhausted his administrative remedies for tax year 2007, he could amend his petition and add tax years 2008 and 2009 without going through the administrative process. Specifically, he relies on Harris County Appraisal District v. Bradford Realty, Ltd., 919 S.W.2d 131 (Tex. App.—Houston [14th Dist.] 1994, no writ) and Estepp v. Miller, 731 S.W.2d 677 (Tex. App.—Austin 1987, writ ref'd n.r.e.). Bradford and Estepp would suggest that a taxpayer does not have to exhaust the administrative procedures for a subsequent tax year when a suit is already pending challenging the prior tax year on the same grounds. See Bradford, 919 S.W.2d at 132-34; Estepp, 731 S.W.2d at 680.
Bradford relied on the holding in Estepp, but Estepp was decided prior to the 1989 amendment of section 42.21 and the addition of subsection (c). Section 42.21(c) sets out the procedure for challenges in multiple-year circumstances. The statute permits appeal of the subsequent order of the appraisal review board by either timely amending the existing petition or by filing a new petition for the subsequent year. The statute anticipates the exhaustion of the administrative remedy in the subsequent year and a subsequent order that is subject to another appeal.
Appellants rely on Atascosa County Appraisal District v. Tymrak, 858 S.W.2d 335 (Tex. 1993). The Court outlined in detail the steps that must be followed to challenge an appraisal for subsequent years. Tymrak, 858 S.W.2d at 336-37. The taxpayer must timely file a notice of protest and appear (personally, by affidavit, or by representative) at a protest hearing. Id. at 336 (citing Tex. Tax Code Ann. §§ 41.44, 41.45). After these steps are timely completed, the taxpayer must timely file his petition in the trial court. The final disposition affects only the appraised value of the property for that one tax year. Id. at 337. Unless a property owner repeats this process and files another petition or files an amended petition in a pending lawsuit concerning a previous year, the taxpayer will lose his right to litigate the appraised value for a subsequent year, even when a lawsuit challenging the appraised value of the same property for a previous year is pending. Id. (citing Tex. Tax Code Ann. § 42.21(c)); see also Henderson Cnty. Appraisal Dist. v. HL Farm Corp., 956 S.W.2d 672, 674-76 (Tex. App.—Eastland 1997, no pet.) (taxpayer required to exhaust administrative remedies for each year at issue in appeal). The Board's appraised value was the subject of the challenge in Tymrak, and an award of attorney fees under Chapter 42 of the Tax Code was Tymrak's focus. Unlike the present case, the question of ownership was not challenged.
In Cameron Appraisal District v. Rourk, an ad valorem tax case, the Supreme Court stated that "[t]he administrative procedures [under the Property Tax Code] are 'exclusive' and most defenses are barred if not raised therein." Rourk, 194 S.W.3d at 502. The Court then noted that "[t]hose who do not file administrative protests may still assert that (1) they did not own the property, or (2) the property was outside the boundaries of the taxing unit." Id. at 502 n.2 (citing Tex. Tax Code Ann. § 42.09(b)). Although the statute the Court cited for that proposition refers to raising non-ownership as an affirmative defense in a tax-collection suit, we think the Legislature did not intend the doctrine of exhaustion of remedies to preclude raising the issue of non-ownership under the circumstances of this case. See id.
Here, the trial court has jurisdiction over other tax years and will be determining the ownership issue for those years. Assuming all material factual circumstances are the same in 2008 and 2009, the question of law regarding ownership will apparently be the same as in the other tax years. Under these circumstances, the trial court has jurisdiction to declare the effect of any ownership ruling on the 2008 and 2009 tax years. However, with respect to all other issues involved in the 2008 and 2009 tax years for the relevant accounts for which no protest or appeal was filed, the trial court lacks jurisdiction. Issue two is sustained in part and overruled in part.
CONCLUSION
We reverse the trial court's order denying appellants' plea to the jurisdiction regarding tax year 2008 on the hangar account and tax year 2009 for both the hangar account and the fuel tank account on all issues other than ownership of the property. Except as to the issue of ownership, the trial court did not have jurisdiction over those accounts for those years. We affirm the trial court's order denying appellants' plea to the jurisdiction regarding tax year 2006 on the land account and the hangar account, and remand the case to the trial court for further proceedings consistent with this opinion.
AFFIRMED IN PART; AND REVERSED AND REMANDED IN PART.
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DAVID GAULTNEY
Justice
Before Gaultney, Kreger, and Horton, JJ.