Opinion issued July 26, = 2007
For=20 The
HOUSTON =
INDEPENDENT=20
SCHOOL DISTRICT, CITY OF HOUSTON, HARRIS COUNTY, HARRIS COUNTY =
EDUCATION=20
DEPARTMENT, PORT OF HOUSTON AUTHORITY OF HARRIS COUNTY, HARRIS =
COUNTY=20
FLOOD CONTROL DISTRICT, HARRIS COUNTY HOSPITAL DISTRICT, AND =
HOUSTON=20
COMMUNITY COLLEGE SYSTEM, Appellants OLD =
FARMS OWNERS=20
ASSOCIATION, INC., WESTHEIMER OLD FARMS I, LTD., SUSAN C. LEE, =
TRUSTEE OF=20
THE TRUST CREATED UNDER ARTICLE IV OF THE WILL OF KATHERINE P. =
BARNHART,=20
DECEASED, AND DAVID NGUYEN INDIVIDUALLY AND D/B/A DAVID NGUYEN=20
CONSTRUCTION, Appellees
On =
Appeal from the=20
270th District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2002-15418
O P I N =
I O=20
N In this ad valorem tax case, =
the=20
appellant taxing authorities, which include Harris County and =
other taxing=20
units, We reverse=20
and remand.
On January=20
1, 1997, the Trust Created under Article IV of the Will of =
Katherine P.=20
Barnhart, Deceased ("the Article IV Trust" or "the trust") owned=20
approximately 4.3 acres of property ("the property") in Houston. =
At the=20
time, Ronald E. Lee was the trustee. Mr. Lee officed at 1706 Post =
Oak=20
Boulevard in Houston and had been at that location since 1993. =
From 1993=20
until 1996, Mr. Lee received tax statements for the property at =
that=20
address, and the Article IV Trust paid the taxes on the property =
for those=20
years. On July 18,=20
1997, the trust sold 4.2562 acres of the property to Westheimer =
Old Farm=20
Ltd. The trust retained ownership of the remaining .0609 acres of =
the=20
property. The address=20
error was corrected in HCAD's records in 1999. At that time, HCAD =
provided=20
the correct address to the Harris County tax collector's office to =
use in=20
sending out tax notices. Also in 1999, the taxing units filed suit =
against=20
Mr. Lee, as trustee, to recover the delinquent 1997 taxes for the=20
property. In 2002,=20
the taxing units again filed suit to recover the 1997 taxes. The =
suit=20
named the following as defendants: Old Farms Owners Association, =
Inc.,=20
Westheimer Old Farms I, Ltd., Susan C. Lee, Trustee of the Trust =
Created=20
under Article IV of the Will of Katherine P. Barnhart, Deceased, =
and David=20
Nguyen, Individually and d/b/a David Nguyen Construction. The case=20
was initially heard by a tax master. At the hearing before the tax =
master,=20
the Article IV Trust argued that the penalties and interest =
associated=20
with the 1997 taxes were canceled based on the 1985 amendment to =
Tax Code=20
section 33.04. In=20
contrast, the taxing units contended that the 2001 amendment of =
section=20
33.04 applied, not the 1985 amendment. The effective date of the =
2001 act=20
was September 1, 2001. Citing a=20
savings clause in the 2001 act, the Article IV Trust argued that =
the 1985=20
version of section 33.04 applies in this case. The savings clause=20
provides, in part, "A delinquent tax that is the subject of a =
collection=20
suit filed before the effective date [of September 1, 2001] of =
this Act is=20
governed by Section 33.04, Tax Code, as that section existed =
immediately=20
before the effective date of this Act, and the former law is =
continued in=20
effect for that purpose." The Article=20
IV Trust also asserted that penalties and interest may be awarded =
only on=20
a "delinquent" tax. The trust points out that a tax becomes =
delinquent=20
only when a tax bill has been delivered to the taxpayer. The trust =
asserted that it had not received a bill for the 1997 tax year. =
The trust=20
offered evidence that the 1997 tax bill had been sent to the =
incorrect=20
4550 Post Oak Place address and that the tax bill had been =
returned to the=20
Harris County tax collector's office as "undeliverable." Mr. Lee =
testified=20
that he never received a tax bill for the 1997 tax =
year. By offering=20
into evidence certified tax records showing the amount of base =
taxes,=20
penalties, and interest for the property, the taxing units =
asserted that,=20
pursuant to Tax Code section 33.47, they established a prima facie =
case=20
regarding every material fact necessary to prove their cause of =
action. At the=20
conclusion of the hearing, the tax master recommended that the =
taxing=20
units recover the 1997 base taxes, but not recover penalties and =
interest=20
on those taxes. The tax master's report contains findings in =
support of=20
his recommendation regarding the penalties and interest. The tax =
master=20
found that the trustee never received notice of the taxes. The tax =
master=20
also found that penalties and interest on the 1997 taxes were =
waived=20
because the Article IV Trust, through its trustee, had not =
received a=20
delinquency notice as required by the 1985 version of Tax Code =
section=20
33.04 and as discussed in Aldine Independent School Dist. v. =
Ogg,=20
122 S.W.3d 257 (Tex. App.--Houston [1st Dist.] 2003, no pet.). =
The taxing=20
units appealed the tax master's recommendation to the referring =
district=20
court. The parties agreed that base taxes were owed on the =
property for=20
the 1997 tax year. The issue that was tried to the trial court was =
whether=20
the taxing units were entitled to recover penalties and interest =
for the=20
1997 taxes. The parties supported their respective positions with =
the same=20
arguments that each had made to the tax master. The=20
evidence admitted at the tax master hearing was admitted in the =
trial=20
court. In addition, the taxing units admitted a copy of a =
delinquent tax=20
notice that had been sent to Mr. Lee at his correct address in =
2000. The=20
notice stated the amount of 1997 base taxes, penalties, and =
interest owed=20
on the property. Mr. Lee testified that he had never received a =
copy of=20
any delinquency notices, despite the fact that the record shows =
Harris=20
County had his correct address. Following a=20
de novo bench trial, the district court signed a judgment =
"overruling" the=20
taxing units appeal and adopted the tax master's findings as =
indicated in=20
the master's report. The trial court awarded the taxing units =
judgment=20
against the Article IV Trust, as owner of the 4.3 acres on January =
1,=20
1997, "for the full amount of the taxes owed for the 1997 tax year =
in the=20
amount of $51, 208.75." The district court also ordered that the =
Article=20
IV Trust was entitled to reimbursement from Westheimer Old Farms I =
for a=20
pro rata share of the 1997 taxes. Raising two=20
issues, the taxing units challenge the district court's judgment =
to the=20
extent that it does not award the taxing units penalties and =
interest for=20
the 1997 taxes.
In their=20
first issue, the taxing units challenge the trial court's =
determination=20
that the 1985 version of Tax Code section 33.04 applied to the =
instant=20
litigation rather than the 2001 version of that statute. =
Determining which=20
version of section 33.04 applies in this case is a question of =
law;=20
accordingly, our review is de novo. See State v. Shumake, =
199=20
S.W.3d 279, 284 (Tex. 2006). The taxing=20
units contend, as they did in the trial court, that the amendatory =
language of the 2001 act applies in this case. We agree. =
The savings=20
provision accompanying the 2001 amendatory language provides as=20
follows: Section=20
33.04, Tax Code, as amended by this Act, does not apply to taxes =
subject=20
to a delinquent tax suit pending before the effective date of this =
Act=20
[i.e., September 1, 2001]. Section 33.04, Tax Code, as amended by =
this=20
Act, applies to all other taxes that became delinquent before the=20
effective date of this Act or that become delinquent on or after =
that=20
date. Penalties and interest on a delinquent tax are not canceled =
under=20
Section 33.04, Tax Code, for failure to deliver any notice under =
that=20
section as it existed immediately before the effective date of =
this Act. A=20
delinquent tax that is the subject of a collection suit filed =
before the=20
effective date of this Act is governed by Section 33.04, Tax Code, =
as that=20
section existed immediately before the effective date of this Act, =
and the=20
former law is continued in effect for that purpose. Act of May=20
17, 2001, 77th Leg., R.S., ch. 1430, =A7 40, 2001 Tex. Gen. Laws =
5109,=20
5122. The instant litigation was =
filed in 2002;=20
thus, under the savings provision, the 2001 amendatory language =
governs in=20
this case. We disagree with the position taken by the Article IV =
Trust=20
that, because the taxing units had filed suit in 1999 against the =
trust,=20
the earlier version of section 33.04 applies, regardless of the =
fact that=20
the action was nonsuited in 2000. When a party nonsuits an action, =
the=20
parties are placed back in the same positions as before the filing =
of the=20
suit. Hagberg v. City of Pasadena, No. 01-05-00466-CV, =
2007 WL=20
494201, *5 (Tex. App.--Houston [1st Dist.] Feb. 15, 2007, no =
pet.);=20
see Crofts v. Court of Civil Appeals, 362 S.W.2d 101, 104 =
(Tex.=20
1962); Parker v. JPMorgan Chase Bank, 95 S.W.3d 428, 432 =
(Tex.=20
App.--Houston [1st Dist.] 2002, no pet.); Ashpole v. =
Millard, 778=20
S.W.2d 169, 171 (Tex. App.--Houston [1st Dist.] 1989, orig. =
proceeding).=20
In other words, we treat the 1999 suit as if it had never been =
filed.=20
See Bailey v. Gardner, 154 S.W.3d 917, 920 (Tex. =
App.--Dallas=20
2005, no pet.). For this reason, we conclude that the 2001 =
amendatory=20
language governs in this case. We sustain the taxing units' =
first=20
issue.
In the tax master proceeding =
and in the=20
trial court, the Article IV Trust asserted that the 1997 tax never =
became=20
delinquent because the 1997 tax bill was neither sent to nor =
received at=20
Mr. Lee's current address. Thus, the taxing units were not =
entitled to=20
penalties and interest. In their second issue, the taxing units =
contend=20
that the Article IV Trust did not present legally or factually =
sufficient=20
evidence to rebut the presumption that the taxing units met their=20
statutory burden with regard to delivery of the 1997 tax bill. =
Tax bills must be mailed by =
October 1 of=20
the year for which taxes are assessed, or as soon thereafter as=20
practicable. Tex. Tax Code Ann. =A7 31.01(a) (Vernon Supp. 2006). =
Taxes are=20
due on receipt of the tax bill and are delinquent if not paid by =
February=20
1 of the year following the year imposed. Tex. Tax Code Ann. =A7 =
31.02(a)=20
(Vernon Supp. 2006). In Ogg, we explained that, if a =
taxing unit=20
has an address for a taxpayer on its tax roll, but nonetheless =
fails to=20
meet the statutory requirements with regard to the sending of the =
tax bill=20
to the taxpayer, the tax never becomes "delinquent," and penalties =
and=20
interest cannot be collected. See 122 S.W.3d at 270-71. =
As=20
discussed in Ogg, a taxing unit is required only to mail =
the tax=20
bills to the address found in its most recent records. Id. =
at 271=20
(citing Tex. Tax Code Ann. =A7 1.07(b)). Tax Code subsection 33.47(a) =
addresses=20
evidentiary concerns in delinquent tax cases and provides as=20
follows: (a) In a suit to collect a =
delinquent=20
tax, the taxing unit's current tax roll and delinquent tax roll or =
certified copies of the entries showing the property and the =
amount of the=20
tax and penalties imposed and interest accrued constitute prima =
facie=20
evidence that each person charged with a duty relating to the =
imposition=20
of the tax has complied with all requirements of law and that the =
amount=20
of tax alleged to be delinquent against the property and the =
amount of=20
penalties and interest due on that tax as listed are the correct=20
amounts. Tex. Tax Code Ann. =A7 33.47(a) =
(Vernon=20
2001). Once the taxing unit introduces these records, it =
establishes a=20
prima facie case as to every material fact necessary to establish =
its=20
cause of action. Davis v. City of Austin, 632 S.W.2d 331, =
333=20
(Tex. 1982); Ogg, 122 S.W.3d at 264. When the taxing unit =
establishes a prima facie case in a tax delinquency suit, a =
rebuttable=20
presumption arises that the taxing entity has taken all actions =
necessary=20
to obtain legal authority to levy the tax, including proper =
delivery of=20
all required tax notices. Ogg, 122 S.W.3d at =
264. Here, the taxing units =
introduced=20
certified copies of tax statements from the Harris County tax =
collector's=20
office showing the delinquent taxes, penalties, and interest owing =
for the=20
property. Accordingly, the taxing units were entitled to a =
presumption=20
that they satisfied the statutory requirements entitling them to =
collect=20
the penalties and interest for the 1997 tax. See Tex. Tax =
Code=20
Ann. =A7 33.47(a); Ogg, 122 S.W.3d at 264. This would =
include the=20
presumption that the 1997 tax bill was sent to the Article IV =
Trust as=20
statutorily required. See Ogg, 122 S.W.3d at =
264. After the taxing units made =
their prima=20
facie case by introducing the official tax records, the burden =
then=20
shifted to the Article IV Trust to show, by introducing competent=20
evidence, that the taxing units had not satisfied the statutory=20
requirements. See id. The presumption created by section =
33.47=20
disappears if and when the taxpayer meets its burden of producing=20
competent evidence to justify a finding against the presumed fact. =
Id. In other words, once the 33.47 presumption is =
established,=20
the trust had the burden "to go forward with [its] defensive =
evidence"=20
regarding whether the taxing units properly transmitted the tax =
bill.=20
See id. We determine whether the trust offered legally =
and=20
factually sufficient evidence to rebut this =
presumption. In an appeal from a bench =
trial, findings=20
of fact have the same weight as a jury's verdict on special =
issues.=20
Lee v. Lee, 981 S.W.2d 903, 905 (Tex. App.--Houston [1st =
Dist.]=20
1998, pet. denied). We review the legal and factual sufficiency of =
the=20
evidence supporting a trial court's findings of fact by the same =
standards=20
that we apply to reviewing the legal or factual sufficiency of the =
evidence supporting jury findings. Catalina v. Blasdel, =
881=20
S.W.2d 295, 297 (Tex. 1994). Thus, if the complaining party =
challenges the=20
legal sufficiency of the evidence underlying an adverse finding on =
which=20
the party did not have the burden of proof, then the party must=20
demonstrate on appeal that there is no evidence to support the =
finding.=20
Gennedy, 125 S.W.3d at 691. In such a review, we consider =
all the=20
evidence in the light most favorable to the prevailing party, =
indulging=20
every reasonable inference in that party's favor, and disregard =
all=20
evidence and inferences to the contrary. Id. at 692. We =
do not=20
disregard contrary evidence if there is no favorable evidence, or =
if=20
contrary evidence renders supporting evidence incompetent or =
conclusively=20
establishes the opposite. City of Keller v. Wilson, 168 =
S.W.3d=20
802, 810-11 (Tex. 2005). If more than a scintilla of evidence =
supports the=20
finding, the no-evidence challenge fails. Gennedy, 125 =
S.W.3d at=20
692. In our review of factual =
sufficiency of=20
the evidence, we must consider and weigh all of the evidence. =
Pool v.=20
Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). We will set =
aside a=20
verdict only if the evidence is so weak or if the finding is so =
against=20
the great weight and preponderance of the evidence that it is =
clearly=20
wrong and unjust. Id. Here, the evidence relied on by =
the trust=20
showed that the taxing units did not mail the 1997 tax bill to Mr. =
Lee at=20
his current address. The evidence also showed that Mr. Lee did not =
receive=20
a copy of the 1997 tax bill and that the bill was returned to the =
tax=20
collector as "undeliverable." Although this may suggest that the =
taxing=20
units did not mail the tax bills to Mr. Lee's most current =
address, such=20
evidence does not show that the taxing units did not mail the tax =
bills to=20
the most recent address for Mr. Lee that the Harris County tax =
collector=20
had listed in its records, as statutorily required. See =
Tex. Tax=20
Code Ann. =A7 1.07(b) (Vernon Supp. 2006); Ogg, 122 =
S.W.3d at=20
271. To the contrary, the evidence shows that the taxing units =
mailed the=20
tax bill to the most recent address contained in the Harris County =
tax=20
rolls, which address had been provided by HCAD to the tax =
collector's=20
office. We conclude that legally insufficient evidence was =
presented to=20
rebut the presumption that the taxing units properly sent the 1997 =
tax=20
bill. Accordingly, no evidence supports a conclusion that the =
taxing units=20
should be denied penalties and interest because the 1997 tax was =
never=20
"delinquent." We sustain=20
the taxing units second issue.
Laura=20
Carter Higley Panel=20
consists of Chief Justice Radack and Justices Keyes and=20
Higley. Justice=20
Keyes, dissenting.=20
1. The other taxing units are Houston =
Independent=20
School District, the City of Houston, 2. In 2001, the trust conveyed the .0609 =
acres to Old=20
Farms Owners Association, Inc.=20
3. Although the majority of the property had =
been sold=20
to Westheimer Old Farm Ltd. =
in July=20
1997, the trust was the record property owner for the entire 4.3 =
acres on=20
January 1, 1997.=20
4. At the time, Mr. Lee was no longer the =
trustee of=20
the Article IV trust. The new trustee was Susan C. Lee. It appears =
that 5. See Act of May 26, 1985, 69th =
Leg., R.S.,=20
ch. 761, =A7 1, sec. 33.04, 1985 Tex. Gen. Laws 2600, 2601.=20
6. See Act of May 26, 1985, 69th =
Leg., R.S.,=20
ch. 761, =A7 1, sec. 33.04(b), 1985 Tex. Gen. Laws 2600, 2601.=20
7. See Act of May 26, 1985, 69th =
Leg., R.S.,=20
ch. 761, =A7 1, sec. 33.04(c), 1985 Tex. Gen. Laws 2600, 2601.=20
8. Act of May 17, 2001, 77th Leg., R.S., ch. =
1430, =A7=20
40, 2001 Tex. Gen. Laws 5109, 5122-23.=20
9. See Tex. Tax. Code Ann. =A7 =
33.04 (Vernon=20
2001); see also Act of May 17, 2001, 77th Leg., R.S., ch. =
1430, =A7=20
40, 2001 Tex. Gen. Laws 5109, 5122 ("Penalties and interest on a=20
delinquent tax are not canceled under Section 33.04, Tax Code, for =
failure=20
to deliver any notice under that section as it existed immediately =
before=20
the effective date [of September 1, 2001] of this Act.").=20
10. Act of May 17, 2001, 77th Leg., R.S., =
ch. 1430, =A7=20
40, 2001 Tex. Gen. Laws 5109, 5122.=20
11. Tex. Tax Code Ann. =A7 33.47(a) (Vernon =
2001).=20
12. The 1997 purchase agreement =
13. Although not raised by the parties, the =
question=20
arises whether the 1999 amendment to 33.04 governs. Pursuant to =
former=20
33.04(b), the five-year delinquency notice here was required to be =
given=20
in 2000, i.e., the first year after 1997 divisible by five. The =
1999=20
amendment became effective January 1, 2000, Act of May 30, 1999, =
76th=20
Leg., R.S., ch. 1481, =A7 43(c), 1999 Tex. Gen. Laws 5097, 5114, =
and applied=20
to 33.04(b) notices given in and after 2000. Act of May 30, 1999, =
76th=20
Leg., R.S., ch. 1481, =A7 45, 1999 Tex. Gen. Laws 5097, 5114. The =
1999=20
amendment deleted the language requiring cancellation and made =
failure to=20
deliver the subsection (b) notice an affirmative defense. Act of =
May 30,=20
1999, 76th Leg., R.S., ch. 1481, =A7 16, sec. 33.04(d) 1999 Tex. =
Gen. Laws=20
5097, 5101. The 1999 amendatory language added that penalties and =
interest=20
were reinstated "if subsequent to the collector's failure to =
deliver the=20
notice required by Subsection (b), the collector delivers the =
notice in=20
any subsequent year divisible by five." Act of May 30, 1999, =
76th=20
Leg., R.S., ch. 1481, =A7 16, sec. 33.04(e) 1999 Tex. Gen. Laws =
5097, 5101.=20
14. We also note that the specific holding =
of=20
Aldine Independent School Distrtict v. Ogg is inapposite =
to=20
the=20
determination of whether penalties and interest were properly =
cancelled=20
for failure to deliver a section 33.04(b) notice in this case.=20
122 S.W.3d 257 (Tex. =
App.--Houston=20
[1st Dist.] 2003, no pet.). 15. Although it has been amended numerous =
times since=20
its enactment in 1985, Tax Code section 33.011 has always provided =
a=20
process for a taxpayer to request a waiver of penalties and =
interest if=20
the act or omission of an officer, employee, or agent of the =
appraisal=20
district or taxing unit caused or resulted in the taxpayer's =
failure to=20
pay the tax before delinquency. See Tex. Tax Code Ann. =
=A7 33.011=20
(Vernon 2001). Here, it is undisputed that the trust did not =
request a=20
waiver of penalties or interest pursuant to section 33.011.=20
16. Because we hold the evidence was =
legally=20
insufficient, we need not address whether the evidence was =
factually=20
insufficient.