Reversed=20
and Rendered and =
Opinion=20
filed August 19, 2008.
In The
Fourteenth Court=20
of Appeals
____________
NO. 14-07-00354-CV
____________
THE=20
APPRAISAL REVIEW BOARD OF HARRIS COUNTY APPRAISAL DISTRICT AND =
ROBERT=20
CUNNINGHAM, FORMER CHAIRMAN, =
Appellants
V.
O=3DCONNOR &=20
ASSOCIATES, WOLVERINE CROSBY =
LP, E=20
POINTE PROPERTIES I LTD, BAKER-ORR JOINT VENTURE, AND J. FREDERICK =
WELLING, Appellees
On Appeal from the =
127th District Court
Harris County, =
Texas
Trial Court Cause =
No. 2005-47070
O P I N I=20
O N
Appellants,=20
the Appraisal Review Board of Harris County Appraisal District =
(the Board)=20
and former chairman of the Board Robert Cunningham, appeal the =
trial=20
court=3Ds denial=20
of their plea to the jurisdiction. We conclude that because=20
appellees, O=3DConnor=20
& Associates, Wolverine Crosby Green LP, E Pointe Properties I =
Ltd.,=20
Baker‑Orr Joint Venture, and J. Frederick Welling, failed to =
exhaust their=20
administrative remedies before filing suit, the district court =
lacked=20
subject matter jurisdiction over this dispute. We reverse =
the trial=20
court=3Ds judgment=20
and render judgment dismissing the case for lack of subject matter =
jurisdiction.
I. =20
Factual and Procedural Background
O=3DConnor=20
& Associates originally filed suit against Harris County =
Appraisal=20
District (HCAD), chief appraiser Jim Robinson, the Board, and =
Cunningham=20
seeking mandamus, injunctive, and declaratory relief. =
O=3DConnor=20
alleged the appellants were violating procedures outlined in the =
Tax Code=20
for conducting property tax appraisal protest hearings. =20
O=3DConnor=20
claimed that, contrary to the Tax Code, the Board was postponing =
hearings,=20
refusing to consider property owners=3D =
evidence,=20
considering evidence that HCAD had not produced to property =
owners,=20
determining protests in favor of HCAD even when HCAD presented=20
insufficient or no evidence, and issuing only one order to resolve =
claims=20
contesting both the appraised value and unequal appraisal of the =
property.=20
In=20
response, the defendants filed a plea to the jurisdiction =
asserting that=20
because O=3DConnor had=20
not exhausted its administrative remedies as required by the Tax =
Code, the=20
district court lacked subject matter jurisdiction to hear =
O=3DConnor=3Ds=20
claims. The day before the hearing on the =
defendants=3D =
plea to=20
the jurisdiction, O=3DConnor=20
filed a first amended petition, adding plaintiffs Wolverine Crosby =
Green=20
LP, E Pointe Properties I Ltd., Baker‑Orr Joint Venture, and =
J. Frederick=20
Welling (collectively the ATaxpayers@). =20
The petition also alleged that the plaintiffs had either already =
filed or=20
would likely file protests of the appraised value of their =
property for=20
the 2005 tax year and that proper hearings in accordance with =
chapter 41=20
of the Tax Code were either untimely held or not held at =
all. =20
The trial=20
court denied the plea to the jurisdiction as to O=3DConnor=3Ds claims=20
in the original petition only; on appeal, this court dismissed the =
issue=20
as moot. See Harris County Appraisal Dist. v.=20
O=3DConnor=20
& Assocs., No.=20
14‑06‑00098‑CV, 2006 WL 3072079, at *3 (Tex. =
App.CHouston=20
[14th Dist.] Oct. 31, 2006, no pet.). =20
The case returned to the trial court, and after a second hearing =
on the=20
defendants=3D =
plea to=20
the jurisdiction, the trial court granted the plea as to HCAD and =
Robinson=20
and denied the plea as to the Board and Cunningham. Now =
before us on=20
the second appeal in this matter, the Board and Cunningham =
(collectively=20
the ATaxing=20
Authorities@) argue in=20
two issues that the district court erred in denying their plea to =
the=20
jurisdiction because the court lacked subject matter jurisdiction =
and=20
because appellees lack standing.
II. =20
Subject Matter Jurisdiction
A plea to=20
the jurisdiction is a dilatory plea seeking to defeat a=20
plaintiff=3Ds claims,=20
regardless of merit, by challenging the district court=3Ds=20
jurisdiction to hear the subject matter of the dispute. =
Bland=20
Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. =
2000). To=20
prevail, the defendant must show that even if all the=20
plaintiff=3Ds pleaded=20
allegations are true, an incurable jurisdictional defect remains =
on the=20
face of the pleadings that deprives the trial court of subject =
matter=20
jurisdiction. Brenham Hous. Auth. v. Davies, 158 =
S.W.3d 53,=20
56 (Tex. App.CHouston=20
[14th Dist.] 2005, no pet.). We review a trial =
court=3Ds ruling=20
on a plea to the jurisdiction de novo. See Tex.=20
Dep=3Dt of Parks=20
& Wildlife v. Miranda, 133=20
S.W.3d 217, 226 (Tex. 2004). When a plea to the jurisdiction =
challenges the pleadings, we determine if the pleader has alleged =
facts=20
affirmatively demonstrating the court=3Ds=20
jurisdiction to hear the cause. Id. We construe =
the=20
pleadings liberally and look to the pleader=3Ds=20
intent. Id.
Trial=20
courts are courts of general jurisdiction, and they are presumed =
to have=20
subject matter jurisdiction unless a contrary showing is made, =
such as=20
when the legislature bestows exclusive original jurisdiction on an =
administrative body. See Tex. Const. art. V, =
' =
8;=20
Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d =
212, 220=20
(Tex. 2002). An agency has exclusive jurisdiction when a =
pervasive=20
regulatory scheme indicates that the legislature intended for the=20
regulatory process to be the exclusive means of remedying the =
problem to=20
which the regulation is addressed. Subaru, 84 S.W.3d =
at=20
221. Typically if an agency has exclusive jurisdiction, a =
party must=20
exhaust all administrative remedies before seeking judicial review =
of the=20
agency=3Ds=20
action. Id. Until then, the trial court lacks =
subject=20
matter jurisdiction and must dismiss the claims within the=20
agency=3Ds=20
exclusive jurisdiction. Id. =
The Tax=20
Code is a classic example of a pervasive regulatory scheme, =
evidencing a=20
legislative intent to vest the appraisal review boards with =
exclusive=20
jurisdiction. See Jim Wells County v. El Paso Prod. Oil =
& Gas=20
Co., 189 S.W.3d 861, 871 (Tex. App.CHouston=20
[1st Dist.] 2006, pet. denied). The Tax Code sets forth=20
administrative procedures for aggrieved property owners to protest =
their=20
tax liabilities. See generally Tex. Tax Code Ann. ch.=20
41B42 (Vernon=20
2008). A property owner may protest to the Board the =
appraised value=20
of the owner=3Ds=20
property, the inclusion of the property on the appraisal records, =
a=20
failure by the chief appraiser or the Board to provide the =
property owner=20
with any notice to which the owner is entitled, and any other =
action by=20
the chief appraiser, appraisal district, or Board that applies to =
and=20
adversely affects the property owner. Id. =
__ =
41.41(a)(1), (3), (9), 41.411(a). The Board must schedule a =
hearing=20
on the property owner=3Ds=20
protest. Id. _ =
41.45(a). The Tax Code specifies how the Board is to conduct =
appraisal hearings and includes provisions for the taking of =
evidence and=20
the burden of proof. Id. __ =
41.43,=20
41.66B.67. =20
A property owner may bring suit in district court against the =
appraisal=20
district and the Board (1) after the owner has been denied a =
hearing to=20
which the owner is entitled or (2) to appeal an order by the Board =
determining the owner=3Ds=20
protest. Id. __ =
41.45(f),=20
42.01(1)(A). Review in the district court is by trial de =
novo, and=20
the district court may enter any order necessary to preserve =
rights=20
protected by and impose duties required by the law. Id.=20
__ =
42.23(a),=20
42.24(3). Therefore, the Board has exclusive jurisdiction =
over=20
property tax disputes, and property owners generally must exhaust =
their=20
administrative remedies before seeking judicial review. =
See=20
MAG‑T, L.P. v. Travis Cent. Appraisal Dist., 161 S.W.3d =
617, 624 (Tex.=20
App.CAustin=20
2005, pet. denied).
In their=20
first issue, the Taxing Authorities argue that the trial court =
erred in=20
denying their plea to the jurisdiction because chapter 41 of the =
Tax Code=20
is a pervasive regulatory scheme, vesting the Board with exclusive =
original jurisdiction over tax appraisal protests. The =
Taxing=20
Authorities claim that before bringing suit in district court, the =
Taxpayers were required to exhaust their administrative remedies =
by=20
obtaining an appraisal protest hearing before the Board and then =
appealing=20
the order from the hearing in the manner dictated by chapter 42 of =
the Tax=20
Code. The Taxpayers concede that generally a property owner =
must=20
exhaust his administrative remedies before proceeding to judicial =
appeal=20
in the district court. However, the Taxpayers argue that =
even though=20
they did not complete the administrative process, the district =
court still=20
has subject matter jurisdiction to hear their claims because (1) =
section=20
41.45(f) of the Tax Code allows the district court to compel the =
Board to=20
hold a hearing, (2) article V, section 8 of the Texas Constitution =
gives=20
the district courts mandamus power to compel public officials to =
perform=20
nondiscretionary acts, and (3) judicial interference in an =
administrative=20
scheme is permissible when the agency is acting outside its =
statutorily=20
conferred powers.
Section=20
41.45(f) states that the district court may compel the Board to =
hold a=20
hearing when a property owner has been denied a hearing to which =
he is=20
entitled. Tex. Tax =
Code=20
Ann. _ =
41.45(f). The Taxpayers contend that the hearing to which a =
property=20
owner is entitled under section 41.45(f) is one conducted =
according to the=20
law and ending with a proper order. According to the =
Taxpayers,=20
because the Board is failing to conduct hearings in accordance =
with the=20
procedures outlined in the Tax Code, section 41.45(f) gives the =
district=20
court jurisdiction over their claims. We disagree with this=20
interpretation of section 41.45(f).
When=20
interpreting a statute, we view a statute=3Ds terms in=20
context, and our objective is to determine and give effect to the=20
legislature=3Ds=20
intent. See Tex.=20
Gov=3Dt=20
Code Ann.=20
' =
312.005=20
(Vernon 2005); Liberty Mut. Ins. Co. v. Garrison Contractors, =
Inc.,=20
966 S.W.2d 482, 484 (Tex. 1998). Moreover, we presume that =
the=20
legislature would not do a useless act. See Webb County =
Appraisal=20
Dist. v. New Laredo Hotel, Inc., 792 S.W.2d 952, 954 (Tex.=20
1990). Chapter 42 provides an administrative remedy to =
property=20
owners who claim they did not receive a properly conducted hearing =
by=20
allowing the property owner to obtain de novo review by timely =
filing suit=20
in district court. Tex. Tax=20
Code Ann. __ =
42.01(1)(A), 42.21(a), 42.23(a). Adopting the =
Taxpayers=3D =
interpretation of section 41.45(f) would allow property owners to=20
circumvent the appeal provisions in chapter 42 and sue in district =
court=20
simply by alleging the Board failed to adhere to procedural=20
guidelines. Interpreting section 41.45(f) as creating =
another avenue=20
of appeal to the district court would essentially render the =
appeal=20
provisions in chapter 42 meaningless. We hold that on the =
facts of=20
this case, section 41.45(f) does not provide a basis for the =
district=20
court to exercise subject matter jurisdiction. See also =
Appraisal=20
Review Bd. of Harris County Appraisal Dist. v. Spencer Square =
Ltd, 252=20
S.W.3d 842, 845 (Tex. App.CHouston=20
[14th Dist.] 2008, no pet.) (declining to read section 41.45(f) as =
providing an additional avenue to attack appraisal review board=20
orders).
The=20
Taxpayers also=20
assert that jurisdiction is appropriate because the Texas =
Constitution=20
empowers trial courts to issue writs of mandamus to compel public=20
officials to perform ministerial acts. Tex. Const. art V, =
_ 8 (ADistrict court judges =
shall=20
have the power to issue writs necessary to enforce their=20
jurisdiction.@). A mandamus =
will issue=20
only to correct a clear abuse of discretion or the violation of a =
duty=20
imposed by law and when there is no other adequate remedy at =
law. =20
Canadian Helicopters Ltd. v. Wittig, 876 S.W.2d 304, 305 =
(Tex.=20
1994). Mandamus is not appropriate when a party is afforded =
a trial=20
de novo on appeal. See Grimm v. Garner, 589 S.W.2d =
955,=20
956B57 (Tex. 1979) =
(holding right=20
to appeal and obtain trial de novo provided adequate remedy at =
law);=20
Blasingame v. Krueger, 800 S.W.2d 391, 394 (Tex. =
App.CHouston [14th Dist.] =
1990, no=20
pet.) (concluding mandamus was not appropriate because relators =
had=20
adequate remedy at law by virtue of trial de novo). The Tax =
Code=20
provides for de novo judicial review in the district court upon =
appeal of=20
a Board=3Ds order determining a =
protest. See Tex. Tax=20
Code Ann. _ 42.23(a). We =
conclude=20
that judicial appeal in this case provides an adequate remedy at =
law;=20
therefore mandamus is not appropriate.
Finally,=20
the Taxpayers contend that the exception to the =
exhaustion=20
of administrative remedies doctrine, which applies when an agency =
acts=20
outside its statutory authority, applies in the instant case =
because the=20
Taxing Authorities are acting outside their statutory =
authority. The=20
Taxpayers claim this excuses them from having to exhaust their=20
administrative remedies and allows them to appeal directly to the =
district=20
court. The Taxing=20
Authorities respond that the exception does not apply because the=20
Taxpayers failed to allege actions by the Taxing Authorities that =
are=20
completely outside their jurisdiction. We=20
agree.
The=20
general rule in Texas is that courts do not interfere with the =
statutorily=20
conferred duties and functions of an administrative agency. =20
Westheimer Indep. Sch. Dist. v. Brockette, 567 S.W.2d 780, =
785=20
(Tex. 1978). However, courts may intervene in administrative =
proceedings when an agency exercises authority beyond its =
statutorily=20
conferred powers. Id. This exception to the =
exhaustion=20
of administrative remedies doctrine is a variation of the rule =
that where=20
the administrative agency lacks jurisdiction, a trial court may =
intercede=20
before administrative remedies are exhausted. See City of =
Houston=20
v. Williams, 99 S.W.3d 709, 717 (Tex. App.CHouston=20
[14th Dist.] 2003, no pet.). AIn such a=20
case, the purposes underlying the exhaustion of remedies rule are =
not=20
applicable, judicial and administrative efficacy are not served, =
and=20
agency polices and expertise are irrelevant if the =
agency=3Ds final=20
action will be a nullity.@ =20
MAG-T, L.P., 161 S.W.3d at 625. However, the mere =
claim that=20
an administrative agency acted ultra vires does not authorize =
litigation=20
before administrative remedies are exhausted, nor does failure to=20
perfectly comply with all of the intricacies of the administrative =
process=20
necessarily constitute extra-jurisdictional action by an =
agency. =20
See City of Houston, 99 S.W.3d at 717; Friends of Canyon =
Lake,=20
Inc. v. Guadalupe‑Blanco River Auth., 96 S.W.3d 519, 528 =
(Tex.=20
App.CAustin=20
2002, pet. denied).
In=20
Friends of Canyon Lake, an environmental group alleged that =
the=20
Texas Natural Resource Conservation Commission (TNRCC) and the =
local river=20
authority had failed to correctly follow all the requirements of =
the water=20
rights permit application process. 96 S.W.3d at 528. =
The=20
plaintiff environmental group argued that this failure of =
compliance had=20
resulted in the TNRCC acting outside its statutory authority, and=20
therefore the group was excused from exhausting its administrative =
remedies. Id. The court held that for this =
exception to=20
apply, the environmental group was required to allege that the =
agency had=20
acted wholly outside its jurisdiction, not merely that it had =
failed to=20
meet certain statutory procedural requirements. Id. =
The=20
instant case presents a similar situation. The Taxpayers do =
not=20
allege that the Taxing Authorities are acting wholly outside the =
Tax Code=20
provisions. Instead, they claim that the manner in which the =
hearings are being conducted does not fully comply with the =
procedural=20
requirements of the Tax Code. Accordingly, we conclude the=20
Aacting=20
outside statutory authority@ =
exception=20
does not apply in this case. See City of Houston, 99 =
S.W.3d=20
at 717; Friends of Canyon Lake, Inc., 96 S.W.3d at =
528. =20
III. =20
Conclusion
The Tax Code is a =
pervasive=20
regulatory scheme, vesting the Board with exclusive original =
jurisdiction=20
over property tax appraisals. Accordingly, the Taxpayers =
were=20
required to exhaust their administrative remedies. Because =
they=20
failed to do so, we conclude the district court lacked subject =
matter=20
jurisdiction to hear the causes of action raised in the first =
amended=20
petition. We sustain=20
the Taxing Authorities=3D =
first=20
issue. Having done so, we need not address the Taxing=20
Authorities=3D =
second=20
issue concerning standing.
We reverse=20
the district court=3Ds order=20
denying the plea to the jurisdiction as to the Board and Robinson =
and=20
render judgment dismissing the causes of action raised by the =
Taxpayers=20
for want of subject matter jurisdiction.
/s/ =20
Leslie B. Yates
Justice
Judgment=20
rendered and Opinion filed August 19, 2008.
Panel=20
consists of Justices Yates, Anderson, and Brown.
O=3DConnor=3Ds original petition =
was not a=20
live pleading at the time of the trial court=3Ds ruling. =
Harris=20
County Appraisal Dist., 2006 WL 3072079, at *3. =
Therefore, we=20
concluded that any action this court took on the merits of the =
appeal=20
would not affect the rights of the parties because the parties =
could still=20
challenge the trial court=3Ds jurisdiction =
based on the=20
causes of action in the amended petition. Id.=20
=
|