Opinion
No. 01-07-00436-CV
Opinion issued April 17, 2008.
On Appeal from the 280th District Court Harris County, Texas, Trial Court Cause No. 2006-51934.
Panel consists of Chief Justice RADACK and Justices JENNINGS and BLAND.
MEMORANDUM OPINION
In this ad valorem property tax case, appellants, Paul M. and Carolyn S. Mann (collectively, "the Manns"), appeal from a summary judgment rendered in favor of appellees, Harris County Appraisal District ("HCAD") and the Appraisal Review Board of Harris County Appraisal District ("the Board") (collectively, "the taxing authorities"), on the Manns' claims that the subject property was unequally and excessively appraised. In their sole issue, the Manns contend that the trial court erred in granting summary judgment in favor of the taxing authorities. We affirm.
BACKGROUND
The Manns own a 13,107 square foot single family residence located at 1907 River Oaks Boulevard in Harris County, Texas. For tax year 2006, HCAD appraised the property at a value of $4,551,268 and assessed ad valorem taxes on the property based on that value. The Manns filed a protest of that valuation with the Board, and their designated agent, Clarence Cooper, acted as their representative at the protest hearing. Ed Wolff represented HCAD's chief appraiser at the protest hearing. The following sworn testimony was given at the hearing by the parties' representatives:
[Board Member]: Please tell us why you think the market value ought to be $4,154,700.
[Manns' Representative]: Thank you very much.
If we look at this property from a market value standpoint, we have had (inaudible) sales transaction that took place in this particular market place. Review Sales No. 1, No. 3 and — No. 1, 2, and 3. Sale No. 1 is about 40 — 14,800 square feet, similar to the size of the subject; sold for $152.80 a square foot. Sale No. 2 sold for $59.60 a square foot, and Sale No. 3 sold for $148.83 a square foot. We did exclude Sale No. 2 because it does not appear to be the same as what the market is doing. (Inaudible) consider $150 a square foot for the subject's property using those two sales, No. 1 and No. 3; and that gives you our opinion of value, 4,154,700.
[Board Member]: Okay. Any questions of the property owner's agent, panel members?
[Board Member]: No, sir.
[Board Member]: No, sir.
[Board Member]: Hearing that, Mr. Wolff, would you give us the district's presentation and recommendation, please?
[HCAD's representative]: (Inaudible) property analysis see if the property has been unequally appraised. This analysis was at the time homes from the neighborhood, all — neighborhood or nearby neighborhoods that are comparable and similar to the subject, made suggestions for any differences and its price per square foot at median at this time is three hundred fifty ninety two. The subject at three forty-seven forty-two, which means this property has not been unequally appraised. Comparable sales analysis did not go up in the homes for the property unless they were real similar to this property.
I did look at — the one sale that was similar in size was No. 1 that sold for 4,250,000. However, this — this property is about 30 years older than the subject. The subject was built in 1971 and — it was built in 1971. The subject was built in 1940 and (inaudible) made adjustments of 30 years' depreciation (inaudible) built. So they both have remodels, but still this home is much older than the subject. Since there's not one other sale — comparable sale sold in the neighborhood or in nearby (inaudible) neighborhoods, it's the district's opinion there is not enough evidence to support an increase in the property. So it's the district's opinion the value should be lowered to three hundred and nine — three hundred — 3,900,000 and that the property does not — do not feel like the property is unequally appraised.
[Board Member]: Questions of the district panel members.
[Board Member]: I'm trying to understand what Mr. Wolff said.
[Board Member]: Was it — is that your value, three —
[Board Member]: Three million nine —
[Board Member]: Three million nine hundred?
[HCAD's representative]: Actually, I take that back. I'm sorry. I will — I will agree with the — with the — with — with —
[Manns' Representative]: Agent.
[Board Member]: The agent?
[HCAD's representative]: — the agent. 4,154,700.
[Manns' Representative]: (inaudible)
[Board Member]: Any questions of the district panel members?
[Board Member]: No
[Board Member]: No, sir.
[Board Member]: Okay, Back to you two gentlemen. Any final comments?
[Manns' Representative]: Unconditional.
[Board Member]: We concur.
[Board Member]: Concur.
[Board Member]: Concur.
[Board Member]: The panel has reached its decision in reference to account ending in last four digits 0008 property (inaudible). The owner's opinion of value for the property by their agent is $4,154,700. (Inaudible) district appropriate consideration for an increase (inaudible).
It's this panel's determination that this property has not been unequally appraised. However, it is somewhat overappraised; and we've set the 2006 market value for this property at $4,154,700.
This concludes this hearing.
After the hearing, the Board issued an Order Determining Protest setting the appraised value of the property at $4,154,700 for tax year 2006. A copy of this order was delivered to the Manns, and the Manns subsequently filed suit in district court to appeal the Board's decision. The taxing authorities answered the suit and filed a motion for summary judgment, arguing that there was an agreement as to the appraised value of the property, and that, under the tax code, such an agreement is final with no right to appeal. In response, the Manns denied the existence of any agreement to an appraised value. The trial court granted the taxing authorities' motion for summary judgment, and dismissed the Manns' claims. This appeal followed.
PROPRIETY OF SUMMARY JUDGMENT Standard of Review
Summary judgment is proper under Texas Rule of Civil Procedure 166a(c) only when the movant establishes that there is no genuine issue of material fact, and that the movant is entitled to judgment as a matter of law. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); Long v. State Farm Fire Cas. Co., 828 S.W.2d 125, 126-27 (Tex.App.-Houston [1st Dist.] 1992, writ denied). In reviewing the granting of summary judgment, we assume all evidence favorable to the nonmovant is true. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996). We indulge every reasonable inference and resolve any reasonable doubt in the nonmovant's favor. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
A defendant is entitled to summary judgment based on an affirmative defense by proving all elements of the affirmative defense as a matter of law, such that there is no genuine issue of material fact. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995); Randall's, 891 S.W.2d at 644. Once the defendant produces evidence entitling him to summary judgment, the plaintiff must present evidence raising a fact issue. Walker, 924 S.W.2d at 377; Haight v. Savoy Apartments, 814 S.W.2d 849, 851 (Tex.App.-Houston [1st Dist.] 1991, writ denied).
Law and Analysis
The taxing authorities moved for summary judgment, arguing that, as a matter of law, the Manns are precluded from appealing to the trial court because an agreement as to appraised value was reached between HCAD (through its agent) and the Manns (through their agent).
Section 1.111(e) of the tax code provides as follows:
(e) An agreement between a property owner or the owner's agent and the chief appraiser is final if the agreement relates to a matter:
(1) which may be protested to the appraisal review board or on which a protest has been filed but not determined by the board[.]
Tex. Tax Code Ann. § 1.111(e) (Vernon 2001) (emphasis added).
The Manns argue that section 1.111(e) does not apply because (1) no "agreement" existed, and (2) even if an agreement did exist, the protest was determined by the Board. The Manns also claim that, since section 1.111(e) does not apply, they are entitled to an absolute right to appeal under Section 42.21(a) of the Tax Code, and the denial of an appeal violates their due process rights. Thus, we must determine if (1) there was an "agreement" under section 1.111(e); (2) if there was an agreement, whether the matter was determined by the Board so that does (e)(1) apply; and (3) if the Manns' due process rights were violated.
Was there an "agreement"?
Because the Tax Code does not define the term "agreement," we use the ordinary meaning of the term. See Sondock v Harris County Appraisal District, 231 S.W.3d 65, 69 (Tex.App.-Houston [14th Dist.] 2007, no pet.) (citing Tex. Gov't Code Ann. § 312.002). The American Heritage Dictionary defines an "agreement" as "the act of agreeing"; harmony of opinion; accord." The American Heritage Dictionary of the English Language (4th ed. 2006). When the property owners and the appraisal district share the same opinion as to the value of the property, an agreement exists. See Sondock, 231 S.W.3d at 69.
The facts in Sondock are almost identical to the facts in this case. In that case, the Sondocks' property had an assessed value of $919,556. At the protest hearing, the Sondocks argued to the Board that their property should have been valued at $880,500. Id. at 67. HCAD's representative responded that the assessed value should be lowered to $880,000. Id. When the Board asked if there was any rebuttal, the property owners answered no. Id. at 68. The Board then announced that the value of the property would be the value given by the property owners. Id. The Sondocks appealed, arguing that they had not reached an agreement with HCAD because they had not "announced" such an agreement. Id. at 69. The court of appeals disagreed, holding that such an "announcement" was not required by the Tax Code, and that the agreement was reached when HCAD "concurred" with the Sondocks' valuation. Id.
In Hartman v. Harris County Appraisal District, 2007 WL 2963686 (Tex.App.-Houston [1st Dist.] October 11, 2007, pet. filed), the landowner presented testimony at the protest hearing that the value of the property was 1.34 million dollars. Id. at *1. HCAD's representative agreed that 1.34 million dollars was an appropriate valuation, and the Board set the valuation accordingly. Id. at *2. The landowner argued on appeal that there was no agreement because the parties "merely recommended the same value." Id. at *3. This Court disagreed, holding that "when the [landowners'] agent and the appraiser each announced the same opinion as to the value of the propery, they were in `the act or fact of agreeing' and were expressing a `harmony of opinion'." Id. at *4.
In this case, both sides gave their valuations of the property. At the protest hearing, the Manns valued their property at $4,154,700, which was lower than the initial value of $4,551,268 given by the HCAD before the hearing. HCAD then stated an evaluation of $3,900,000, which was lower than the Manns' valuation. When the Board asked HCAD to confirm the value of $3,900,000, HCAD's representative stated that he agreed with the Manns' value of $4,151,700. The Board asked both parties if there were any final comments. HCAD's agent gave no answer, and the Manns' agent replied, "unconditional." Subsequently, all the board members concurred, the panel reached the decision that property value would be $4,151,700, and the Board issued an "Order Determining Protest" setting the appraised value of the property at $4,154,700 for tax year 2006.
The Manns argue that no "agreement" existed because neither party informed the appraisal review board panel that an agreement had been reached. The property owners in Sondock and Hartman also argued this point — that there was no agreement because the parties did not announce the agreement to the court. See Hartman, 2007 WL 2963686 at *3-4; Sondock, 231 S.W.3d at 69. However, both this Court and the 14th Court of Appeals have held that Section 1.111(e) does not require parties to formally announce an agreement before an agreement can be made. Hartman, 2007 WL 2963686 at *4; Sondock, 231 S.W.3d at 69. Based on a "harmony of opinion" between the property owners and HCAD as to the appraised value, the courts found that there was an agreement between the parties. Hartman, 2007 WL 2963686 at *4; Sondock, 231 S.W.3d at 69.
Similarly, the undisputed evidence shows that Manns reached an agreement with HCAD in this case. When the District changed its position and agreed with the property owners' value of $4,154,700, the property owners' agent made no objection. Furthermore, when the Board asked for any final comments from the parties, the property owners' agent replied, "unconditional." There is no controverting evidence in the record to raise a fact issue to whether there was a "meeting of the minds" as to the appraised value of the property.
Therefore, we hold that there was uncontroverted summary judgment evidence showing that the Manns and HCAD agreed as to the value of the property at the protest hearing.
Was the protest "determined by the Board?"
Section 1.111(e)(1) of the tax code states that an agreement between the parties must relate to a matter "which may be protested to the appraisal review board or on which a protest has been filed but not determined by the board." Id. (Emphasis added). According to the Manns, there was a determination by the board. Specifically, the Manns point to the "Order Determining Protest," which states that "the board with a quorum present determined that the property appraisal is incorrect and unequal and the value should be changed accordingly." (Emphasis added).
However, this Court and the Fourteenth Court of Appeals have held to the contrary. See Hartman v. Harris County Appraisal Dist., 2007 WL 2963686 (Tex.App.-Houston [1st Dist. October 11, 2007, pet. filed); BPAC Texas, LP as the Property Owners and the Property Owners v. Harris County Appraisal Dist. and the Harris County Appraisal Review Board, 2004 WL 2422033 (Tex.App.-Houston [1st Dist.] 2004, no pet.) (memorandum opinion); Sondock, 231 S.W.3d at 65. The BPAC case is also factually similar to this case.
In Hartman, Sondock and BPAC, the courts found that the parties came to an agreement, but, despite the fact that the Board subsequently entered an "Order Determining Protest, no determination was made by the Board. Hartman, 2007 WL 2963686 at *4; BPAC, 2004 WL 2422033 at *3; Sondock, 231 S.W.3d at 69 (stating that there was no determination by Board because Board was in process of hearing matter when agreement was reached). Pursuant to section 1.111(e), an agreement is final regardless of whether it is later approved or adopted by the Board. Hartman, 2007 WL 2963686 at *4; BPAC, 2004 WL 2422033 at *3; Sondock, 231 S.W.3d at 69.
The Manns, relying on Matagorda County Appraisal District v. Coastal Liquids Partners, L.P., 165 S.W.3d 329, 331-32 (Tex. 2005), also argue that, by entering an order on the protest assessing the appraised value of the property, the Board impliedly rejected the appraisal district's claim that there had been an agreement reached by the taxpayer and the chief appraiser. In Matagorda County Appraisal District, one of the jurisdictional issues raised was whether an agreement reached between a property owner precluded a protest by the owner's lessee. See Matagorda County Appraisal Dist., 165 S.W.3d at 331. The supreme court, however, did not reach jurisdictional issue because it found that the property being protested by the lessee was not included in the agreement between the property owner and the appraisal district. Id. at 332. In so holding, the supreme court stated as follows:
While a board has no authority to change a settlement reached by a taxpayer and the chief appraiser, it certainly has the authority to take note of what property was included [in the agreement]. By entering an order assessing the appraised value of the two caverns here in Coastal's proceeding, the board impliedly rejected the District's claim [that the property was included in the landowner's settlement.]
Matagorda Co Appraisal Dist., 165 S.W.3d at 331-32. Matagorda County Appraisal District does not stand for the general proposition that, by entering an "Order Determining Protest," a board impliedly rejects the appraisal district's claim that an agreement has been reached. The holding in Matagorda County Appraisal District is simply that the board, by entering an "Order Determining Protest," can decide that the property at issue in the present protest was not the subject of an earlier agreement in a different protest.
Following the holdings of Hartman, Sondock and BPAC, we conclude that the protest was not "determined by the Board," even though, after the parties reached an agreement, the Board entered an "Order Determining Protest" that set the appraised value at the amount agreed to by the parties.
Was there a Due Process violation?
Appellants also argue that the district court's finding of an agreement denies them their due process rights. This Court considered, and rejected, the same argument in Hartman and BPAC. See Hartman, 2007 WL 2963686 at *5; BPAC, 2004 WL 2422033 at *3. The Fourteenth Court of Appeals has held likewise. See Sondock, 231 S.W.3d at 70.
It is well-established that the collection of taxes constitutes deprivation of property; therefore, a taxing authority must afford a property owner due process of law. McKesson Corp. v. Div. of Alcoholic Beverages Tobacco, 496 U.S. 18, 36-37, 110 S. Ct. 2238, 2250-51 (1990). Texas courts have held that "[d]ue process simply affords a right to be heard before the final assessment; it does not detail the review mechanism." ABT Galveston Ltd. P'ship v. Galveston Cent. Appraisal Dist., 137 S.W.3d 146, 155 Tex. App.-Houston [1st Dist.] 2004, no pet.) (quoting Dallas County Appraisal Dist. v. Lal, 701 S.W.2d 44, 47 (Tex.App.-Dallas 1985, writ ref'd n.r.e.)); see Hartman, 2007 WL 2963686 at * 5; Sondock, 231 S.W.3d at 70; BPAC, 2004 WL2422033 at *3. In cases involving taxation, due process is satisfied if a taxpayer is given an opportunity to be heard before an assessment board at some stage of the proceedings. See Hartman, 2007 WL 2963686 at * 5; Sondock, 231 S.W.3d at 70; BPAC, 2004 WL2422033 at *3 The courts in Hartman, Sondock and BPAC each held that the property owners were not deprived of their statutory due process rights when they were given an opportunity to be heard before a review board and reached an agreement with the taxing authority at that review. Hartman, 2007 WL 2963686 at *5; Sondock, 231 S.W.3d at 70; BPAC, 2004 WL 2422033 at *3.
In this case, the Manns filed a protest and were given an opportunity to present arguments before the Board. HCAD agreed with the Manns' valuation of the property, and the Manns made no objections after HCAD agreed with their value. Even though given the opportunity, the Manns made no final comments other than "unconditional." Therefore, we conclude that the summary judgment record established, as a matter of law, that the Manns' due process rights were not violated because they were given an opportunity to be heard before the board, and that they reached an agreement with HCAD during that review.
CONCLUSION
Accordingly, we hold that the trial court did not err in granting summary judgment in favor of the taxing authorities. We affirm the judgment of the trial court.