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For=20 The In these interlocutory appeals, =
MHCB=20
(USA) Leasing and Finance Corp. ("MHCB") and Valero =
Refining-Texas, L.P.=20
("Valero Refining") =
(together, "the=20
protesting parties"), who were plaintiffs below, and
This dispute concerns the 2004 = appraised=20 value, for ad valorem tax purposes, of Valero Refining's Delayed = Coker=20 Unit ("the Coker Unit"), which is a refinery unit located in Texas = City,=20 Texas. Valero Refining did not always = own the=20 Coker Unit. Before March 2004, MHCB owned the Coker Unit, and = Valero=20 Refining leased the unit from MHCB. Under its lease agreement with = MHCB,=20 Valero Refining was contractually obligated to pay property taxes = on the=20 Coker Unit. It was not until March 9, 2004 that Valero Refining = purchased=20 the Coker Unit from MHCB. In December 2003, while MHCB =
still owned=20
the Coker Unit, Robert T. Lehn, working for a private appraisal =
company on=20
behalf of the District's chief appraiser, The appraisal process for the = Coker Unit=20 that had begun in December 2003 was part of a larger appraisal of = what=20 appears to have been all of the Valero Energy corporate family's = Galveston=20 County industrial properties. Starting in March 2004, after Valero = Refining had purchased the Coker Unit, Lehn and Trey Novosad, the = Director=20 of Ad Valorem Tax for Valero Energy, worked together on the = appraisal=20 values for all of the pertinent properties in Galveston County, = including=20 Valero Refinery's Coker Unit. In early May 2004, Lehn and Novosad = reached=20 an agreement to appraise the Valero Refinery Coker Unit at = $60,525,090 for=20 the 2004 tax year ("the Appraisal Agreement"). The protesting = parties=20 provided evidence that the Appraisal Agreement was memorialized in = two=20 documents: in an initial appraisal worksheet, in which Lehn had=20 hand-written the words "MHCB--Delayed Coker Unit 60=B1," and in a = second=20 appraisal worksheet, which in typed print listed the "Coker Unit = at Valero=20 Refining" as having a "grand total" value of = $60,525,090.00. On May 18, 2004, the District = issued a=20 notice of appraised value ("the first notice"), appraising the = Coker Unit=20 at $60,525,090. The protesting parties did not contest the = appraised value=20 set by the first notice, even though the new value significantly = exceeded=20 the Coker Unit's 2003 appraised value, because the 2004 appraised = value=20 was consistent with that required by the Appraisal = Agreement. Within days of the first = notice's=20 issuance, Lehn contacted Novosad to explain that the Texas City = appraisal=20 office was "under pressure" to explain certain appraisal figures. = Then, on=20 June 14, 2004, the Board held a meeting at which the District's = chief=20 appraiser submitted the 2004 records for all industrial accounts,=20 including those for the Coker Unit. At that meeting, the Board = appears to=20 have questioned the $60,525,090 appraisal value for the Coker Unit = because, shortly thereafter, on June 21, 2004, Lehn contacted = Novosad to=20 advise him that [s]ome are laughing at the = values I put=20 on Y'all and on BP in Tx City, but more are very unhappy--saying = anyone=20 else would've put more on you two. I'm getting threatened by HCAD = protests=20 being blamed on equity and I'm getting what appears to be a = possible tax=20 unit challenge from Tx City--it's your new Coker [Unit]=20 . . . . On June 22, 2004, Lehn = contacted Novosad=20 to inform him that the 2004 appraisal for the Coker Unit would = have to be=20 increased by $100 million because of "information being brought to = light"=20 that Lehn "hadn't properly considered," among other things. That = same day,=20 the District issued a revised notice of appraised value for the = Coker Unit=20 ("the second notice"), which appraised the Coker Unit at = $193,370,890. The=20 record does not show that the second notice was issued upon order = of the=20 Board; rather, the evidence indicates that the second notice = issued before=20 any protest had been filed concerning the 2004 appraisal of the = Coker Unit=20 and that the second notice may have been based on revised = appraisal=20 figures submitted to the District by Lehn. The protesting parties filed a =
joint=20
protest of the District's 2004 reappraisal and second notice on =
July 19,=20
2004. In their live petition, the = protesting=20 parties asserted two alternative sets of allegations. Primarily, = they=20 alleged as follows: that the District had acted = "outside its=20 statutory authority" and "abused its discretion" by having issued = the=20 second notice in violation of the Appraisal Agreement, rendering = the=20 second notice invalid, and "because [the District] acted = outside its=20 authority" in rejecting the Appraisal Agreement, the Board also = "acted=20 outside its authority and abused its discretion by denying [the = protesting=20 parties'] protest regarding the invalidity and void character" of = the=20 second notice that the District issued after having rejected the = Appraisal=20 Agreement. We will refer to these = allegations as the=20 protesting parties' "Primary Allegations." In conjunction with the = Primary=20 Allegations, the protesting parties sought declarations = that the Appraisal Agreement was a = "binding=20 contract" for an appraisal value of $60 million; the District's second notice of = the=20 appraised value was void; the District's chief appraiser = had abused=20 his discretion and exceeded his authority by having issued the = second=20 notice, and that notice was thus "invalid and void"; the District had "breached its=20 contractual agreement with [the protesting = parties]"; the Board had "exceeded its = authority" by=20 having taken any action that resulted from the second notice or = increased=20 the amount appraised in the first notice; and the District and Board were = estopped from=20 valuing the Coker Unit at more than the value in the Appraisal=20 Agreement. The protesting parties also = sought=20 injunctive relief in the following forms: "enforcement" of the Appraisal = Agreement=20 by correcting the 2004 tax rolls to reflect the value for the = Coker Unit=20 reached in the Appraisal Agreement; "relief from the Second Notice = and [the=20 District's] assessment of taxes" based upon the second notice, = including=20 the cancellation and setting aside of the Board's pertinent final = order;=20 and "reimbursement of other fees = and fines=20 that have accrued and/or have been assessed against [the = protesting=20 parties] because of [the District's and Board's] improper and void = conduct." The protesting parties further = sought=20 attorney's fees and court costs. The District and Board filed a =
joint plea=20
to the jurisdiction, challenging both the protesting parties' =
Primary=20
Allegations, based on the Appraisal Agreement, and their =
Alternative=20
Allegations, alleging that the reappraisals were excessive and =
unequal. As for the protesting parties'=20 Alternative Allegations, alleging that the reappraisals were = excessive and=20 unequal, the District and Board argued that the protesting parties = lacked=20 standing to seek judicial review under the Property Tax Code = either=20 because (1) Valero Refining's parent corporation, Valero Energy, = which had=20 not properly been designated as the agent of either protesting = party, had=20 filed the appraisal protest or, alternatively, (2) even if MHCB = had=20 standing, Valero Refining did not. The protesting parties = responded, as to=20 their Primary Allegations based on the Appraisal Agreement, that = the=20 declaratory relief that they sought did not require waiver of = immunity=20 from suit because it did not seek damages (although the protesting = parties=20 sought recovery of court costs and attorney's fees) and because it = sought=20 to establish whether the District and Board acted outside their = statutory=20 authority. Specifically, the protesting parties argued that suits=20 challenging governmental-unit or agency action that falls outside = of the=20 unit's or agency's statutory authority--which the protesting = parties=20 alleged that the failure to adhere to the Appraisal Agreement was=20 here--did not require legislative permission to proceed and did = not=20 require exhaustion of administrative remedies (although the = protesting=20 parties had exhausted administrative remedies anyway). The = protesting=20 parties further argued that, although their challenge to the 2004=20 reappraisals was based upon an agreement, their suit was still one = challenging the appraisal value, for which the Property Tax Code = waived=20 immunity from suit in the form of a suit for judicial review. That = is, the=20 protesting parties argued that, because the Property Tax Code = undisputedly=20 allowed them to maintain a suit for judicial review of their = protest to=20 adverse appraisal decisions, and also because they sought to = determine=20 whether the District and Board had acted illegally, it should make = no=20 difference that the basis for their protest and for the = declaratory and=20 injunctive relief that they sought was an appraisal agreement with = the=20 District. The protesting parties then = responded, as=20 to their Alternative Allegations alleging that the reappraisals = were=20 excessive and unequal, that (1) Valero Refining was the owner of = the Coker=20 Unit both at the time of the Appraisal Agreement's execution and = at all=20 pertinent times thereafter; (2) even at the time that Valero = Refining was=20 a lessee of the Coker Unit, it was contractually obligated to pay = property=20 taxes on the unit; and (3) the protest to the reappraisals and = second=20 notice was filed jointly under the names of MHCB and Valero = Refining, not=20 under the name of Valero Energy. The trial court granted the = District's=20 and Board's plea in part and denied it in part. The order=20 recited: IT IS HEREBY ORDERED, ADJUDGED, = and=20 DECREED that [the protesting parties'] cause of action against = [the=20 District and Board] for breach of contract is hereby DISMISSED for = lack of=20 subject matter jurisdiction. IT IS FURTHER ORDERED that the =
remaining=20
grounds asserted in [the District's and Board's] Joint Plea to the =
Jurisdiction and Supplemental Plea to the Jurisdiction relating to =
(1)=20
[the protesting parties'] claim that the [second notice] relating =
to the=20
subject property was legally invalid, and (2) concerning [the =
protesting=20
parties'] failure to follow necessary procedures for appeal and =
judicial=20
review of appraised value, We construe=20 this order to have dismissed for want of jurisdiction the = protesting=20 parties' Primary Allegations, which were based on the Appraisal = Agreement,=20 but to have retained their Alternative Allegations, which alleged = that the=20 reappraisals were excessive and unequal. Both the=20 protesting parties and the District and Board have = appealed.
A = governmental unit may challenge the trial court's subject-matter=20 jurisdiction by filing a plea to the jurisdiction. Tex. Dep't = of=20 Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999). In deciding = a=20 jurisdictional plea, a trial court considers the plaintiff's = pleadings and=20 any evidence pertinent to the jurisdictional inquiry. See = Bland Indep.=20 Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex. 2000); = see=20 also Tex. Natural Res. Conservation Comm'n v. White, = 46=20 S.W.3d 864, 867-68 (Tex. 2001). We review de novo a trial = court's=20 ruling on a jurisdictional plea, construing the pleadings in the=20 plaintiff's favor and looking to the pleader's intent. See = Tex.=20 Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, = 855 (Tex.=20 2002); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 = S.W.2d=20 440, 446 (Tex. 1993).
In three=20 issues, the District and Board challenge the trial court's denial = of their=20 jurisdictional plea asserted against what they describe as the = protesting=20 parties' "suit for declaratory judgment." A.=20 The District's and Board's Appellate = Challenges The=20 District's and Board's appellate challenges evidence a partial=20 misunderstanding of the effect of the trial court's ruling. The = trial=20 court's order dismissed the protesting parties' Primary = Allegations, which=20 included their claims for declaratory relief based on the statute=20 governing appraisal agreements. What the trial court refused to = dismiss=20 were the protesting parties' Alternative Allegations, which = challenged the=20 reappraisals as excessive and unequal and which constituted a suit = for=20 judicial review of the District's and Board's adverse actions = affecting=20 the 2004 appraised value of the Coker Unit. Therefore, after the = order,=20 the only claims pending before the trial court were those = constituting the=20 suit for judicial review (the Alternative Allegations), which was = not=20 based on the Appraisal Agreement; in contrast, the order dismissed = the=20 claims seeking declaratory and injunctive relief based on the = Appraisal=20 Agreement (the Primary Allegations). Only the=20
District's and Board's third issue challenges the protesting =
parties'=20
claims that the trial court did not dismiss: the Alternative =
Allegations=20
that the reappraisals were excessive and unequal. The District's =
and=20
Board's first and second issues, in contrast, challenge the =
protesting=20
parties' Primary Allegations, which the trial court =
dismissed and=20
which ruling is favorable to the District and Board. B.=20 Standing In their=20
third issue, the District and Board argue that the protesting =
parties did=20
not have standing to protest the District's 2004 reappraisal and =
the=20
second notice, or to seek judicial review of the Board's adverse =
ruling on=20
that protest, because they did not follow the Tax Code's strict =
protest=20
procedures. Specifically, they argue that either MHCB or Valero=20
Refining--depending on which owned the Coker Unit at the relevant=20
time--could protest the District's complained-of actions and seek =
judicial=20
review of the Board's adverse decision on that protest, but not =
both=20
parties. The=20 Property Tax Code, contained within Title I of the Tax Code,=20 provides: [P]roperty=20 taxes are the personal obligation of the person who owns or = acquires the=20 property on January 1 of the year for which the tax is imposed=20 . . . . A person is not relieved of the obligation = because=20 he no longer owns the property. Tex. Tax=20 Code Ann. =A7 32.07(a) (Vernon Supp. 2006). Given that it has = personal=20 liability for property taxes, a property owner may protest, among = other=20 matters, a determination of the appraised value of the owner's = property.=20 Id. =A7 41.41(a)(1) (Vernon 2001). The property = owner may also=20 appeal (that is, seek judicial review of) an order of the = appraisal review=20 board determining its protest. Id. =A7 42.01(1)(A) = (Vernon=20 2001). When the property's ownership changes after January 1 of, = and=20 before the deadline for filing a protest in, a given tax year, the = new=20 owner may pursue a protest in the same manner as could the = property owner=20 who owned the property on January 1 of that year. Id.=20 =A7 41.412(a) (Vernon 2001). A = property=20 owner may, alternatively, designate a lessee or other person to = act as its=20 agent for any purpose under the Property Tax Code relating to the = owner or=20 its property. Id. =A7 1.111(a) (Vernon 2001). The = designation of=20 the owner's agent must be in writing, must be signed by the owner = (among=20 other authorized persons), and must also clearly indicate that the = agent=20 is authorized to act on the owner's behalf in tax matters relating = to the=20 owner or the property. Id. =A7 1.111(b) (Vernon 2001). = If the=20 owner or its agent does not file a tax protest, then a person = leasing real=20 property who is contractually obligated to reimburse the property = owner=20 for property taxes may protest the property's appraised value.=20 Id. =A7 41.413(b) (Vernon 2001). Either the owner = (or its=20 agent) or the lessee described in section 41.413 may file a = protest, but=20 both cannot do so. See id. One who is=20 not the owner, the owner's designated agent, or an authorized = lessee under=20 section 41.413 lacks standing to protest an adverse appraisal = decision.=20 See Tourneau Houston, Inc. v. Harris County Appraisal = Dist., 24=20 S.W.3d 907, 909 (Tex. App.--Houston [1st Dist.] 2000, no pet.) = (owner or=20 agent); see also Coastal Liquids Transp., L.P. v. Harris = County=20 Appraisal Dist., 46 S.W.3d 880, 886 (Tex. 2001) (indicating = in dictum=20 that whether one is authorized lessee under section 41.413 or is = owner's=20 designated agent under Tax Code section 1.111(a) is matter of = standing,=20 not capacity). Lack of standing to protest an ad valorem tax = appraisal=20 deprives a court of subject-matter jurisdiction to entertain a = suit for=20 judicial review based on that protest because standing is a = component of=20 subject-matter jurisdiction. See Tourneau Houston, Inc., = 24=20 S.W.3d at 909 (holding that trial court lacked jurisdiction to = consider=20 suit for judicial review filed by entity that was neither owner of = property nor owner's properly designated agent); see also = Texas Ass'n=20 of Bus., 852 S.W.2d at 445-46 (holding that standing is = component of=20 subject-matter jurisdiction). Valero=20
Refining became the Coker Unit's owner after January 1, 2004, but =
before=20
the deadline for filing a protest had passed--indeed, before any =
2004=20
appraisal had been rendered for the Coker Unit. Therefore, Valero =
Refining=20
had standing to protest the District's 2004 reappraisal and second =
notice.=20
See Tex. Tax Code Ann. =A7 41.412(a). The Property =
Tax Code=20
makes no provision for both the current owner, under section =
41.41, and=20
the new owner, under section 41.412, to file a protest for the =
same=20
property in a given tax year. We sustain=20 the District's and Board's third issue to the extent that they = complain of=20 MHCB's standing to protest the District's 2004 reappraisal and = second=20 notice, to seek judicial review of the Board's adverse decision on = that=20 protest, and thus to assert the Alternative Allegations, which = concerned=20 whether the 2004 appraisal was excessive and unequal. We overrule = the=20 District's and Board's third issue to the extent that they = complain of=20 Valero Refining's standing to take these actions.
In their=20 sole issue, the protesting parties challenge the trial court's = granting of=20 the District's and Board's jurisdictional plea against, and its = dismissal=20 of, the Primary Allegations, which were ultimately based on the = Appraisal=20 Agreement. In a nutshell, the protesting parties assert that these = allegations, which they have at times described as a suit to = enforce the=20 Appraisal Agreement with the District, were not barred by = governmental=20 immunity from suit for the following reasons: the=20 protesting parties did not seek monetary damages, but sought only=20 declaratory and injunctive relief--with the exception of = attorney's fees,=20 which were not barred by governmental immunity from suit in a=20 declaratory-judgment suit; the=20 declarations that the protesting parties sought--that, by having = breached=20 the Appraisal Agreement, the District and Board acted outside of = their=20 statutory authority--did not require waiver of governmental = immunity from=20 suit; the=20 declarations that the protesting parties sought were ones to = interpret a=20 governmental unit's or agency's authority, for which claims = governmental=20 immunity from suit did not apply or was waived; and even if=20 governmental immunity from suit applied to their = declaratory-judgment=20 claims, the protesting parties could nonetheless seek enforcement = of the=20 Appraisal Agreement under the authority of Texas A&M Univ. = Kingsville v. Lawson, 87 S.W.3d 518 (Tex. = 2002). The=20 protesting parties also argue that the relief that they sought = under the=20 Primary Allegations was not merely redundant of that which they = sought in=20 the Alternative Allegations in their suit for judicial review of = the=20 Board's final order. A.=20 The Nature of the Protesting Parties' Primary=20 Allegations As for=20 their Primary Allegations, the protesting parties sought only = declaratory=20 and injunctive relief, plus attorney's fees and court costs, in = their suit=20 challenging the District's and Board's reappraisals as violative = of the=20 statute governing appraisal agreements. That is, the protesting = parties=20 sought declarations that the District and Board exceeded their = statutory=20 authority by unilaterally rejecting the Appraisal Agreement (the=20 District), reappraising the Coker Unit (the District), and = ordering an=20 even higher appraisal of the Coker Unit (the Board). B.=20 Governmental Immunity From Suit 1.=20 Constructs of Immunity from Suit Applicable to the=20 District The=20 District is a political subdivision of the State. Tex. Tax Code = Ann.=20 =A7 6.01(c) (Vernon 2001). Governmental immunity, which is = derived from=20 the State's sovereign immunity, shields political subdivisions of = the=20 State from suit and liability. Tooke v. City of Mexia, = 197 S.W.3d=20 325, 332 (Tex. 2006). 2.=20 Constructs of Immunity from Suit Applicable to the=20 Board Likewise,=20
persons aggrieved by the action of an administrative agency, like =
the=20
Board, There are,=20
however, some well-settled exceptions to this general rule. One =
such=20
exception is that, even in the absence of a statute that allows =
for=20
judicial review, one may challenge in court an agency action that =
exceeds=20
the agency's jurisdiction. See Hitchcock v. Bd. of Trustees of =
Cypress-Fairbanks Indep. Sch. Dist., No. 01-06-00376-CV, 2007 =
WL=20
1500305, at *8 (Tex. App.--Houston [1st Dist.] May 24, 2007, no =
pet.);=20
MAG-T, L.P. v. Travis Cent. Appraisal Dist., 161 S.W.3d =
617, 625=20
(Tex. App.--Austin 2005, pet. denied). Despite this and other =
exceptions to the=20
exhaustion-of-remedies requirement, when a statute provides a =
means to=20
attack an agency's order, one may not maintain a =
declaratory-judgment=20
action that seeks remedies that are merely redundant of those =
available by=20
the statutory means. C. The Property Tax = Code's=20 Protest Scheme A statute is construed to waive = a=20 governmental entity's immunity from suit only if the waiver is by = clear=20 and unambiguous language. Tex. Gov't Code Ann. =A7 311.034 = (Vernon=20 2005); City of LaPorte v. Barfield, 898 S.W.2d 288, 291 = (Tex.=20 1995). Such a statutory waiver exists in the Property Tax Code for = property-owner contests to certain appraisal decisions of = appraisal review=20 boards. That waiver takes the form of administrative remedies to = exhaust,=20 which we set out below. A property owner, the owner's =
designated=20
agent, Within 45=20 days of its having received notice of a final, appealable order by = the=20 appraisal review board on its protest, the protesting party may = seek=20 judicial review of that order. Id. = =A7=A7 42.01(1)(A), 42.015,=20 42.21 (Vernon 2001). Judicial review is by trial de novo. = Id. =A7 42.23(a) (Vernon Supp. 2006). In that suit for = judicial=20 review, the trial court "may not admit in evidence the fact of = prior=20 action by the appraisal review board . . . , except to = the=20 extent necessary to establish its jurisdiction." Id. =A7 = 42.23(b)=20 (Vernon Supp. 2006). The trial court's decision in such a suit for = judicial review may (1) fix the appraised property's value, (2) = enter=20 orders ensuring equal treatment under the law, or (3) "enter other = orders=20 necessary to preserve rights protected by and impose duties = required by=20 the law." Id. =A7=A7 42.24, 42.25, 42.26 (Vernon 2001 = & Supp.=20 2006). The protesting party who prevails in a suit for judicial = review=20 concerning the property's appraised value, or concerning an = unequal=20 appraisal for the property, may be awarded reasonable attorney's = fees not=20 exceeding certain fixed amounts. Id. =A7 42.29 (Vernon=20 2001). With=20 certain exceptions inapplicable here, the "procedures prescribed = by this=20 title [the Property Tax Code] for adjudication of the grounds of = protest=20 authorized by this title are exclusive, and a property = owner may=20 not raise any of those grounds: . . . as a basis of a = claim for=20 relief in a suit by the property owner to arrest or prevent the = tax=20 collection process or to obtain a refund of taxes paid." = Id. =A7=20 42.09(a)(2) (Vernon 2001) (emphasis added). The failure to exhaust = the=20 Property Tax Code's exclusive, administrative remedies deprives = the trial=20 court of jurisdiction to review most adverse ad valorem tax = decisions.=20 See Tex. Gov't Code Ann. =A7 311.034 (Vernon Supp. = 2006)=20 ("Statutory prerequisites to a suit, including the provision of = notice,=20 are jurisdictional requirements in all suits against a = governmental=20 entity."); Cameron = Appraisal=20 Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex. 2006); Midland = Cent.=20 Appraisal Dist. v. Plains Mktg., L.P., 202 S.W.3d 469, 474-75 = (Tex.=20 App.--Eastland 2006, pet. denied). D. The Property Tax = Code's=20 Provisions Concerning Appraisal Agreements The Property Tax Code = contemplates=20 agreements between property owners and appraisal districts' chief=20 appraisers. The Code first mentions such appraisal agreements in = its=20 general provisions relating to the appointment of agents to = represent the=20 property owner in certain circumstances: (e) An agreement between a = property owner=20 or the owner's agent and the chief appraiser is final if = the=20 agreement relates to a matter: (1) which may be protested to = the=20 appraisal review board or on which a protest has been filed but = not=20 determined by the board; . . . Tex. Tax Code Ann. =A7 =
1.111(e)(1) (Vernon=20
2001) (emphasis added). Given our standard of review, we =
must=20
assume that section 1.111(e)(1) governed the Appraisal Agreement =
here=20
because that agreement concerned a matter (i.e., the =
appraised=20
value for the Coker Unit) that could have been protested to the =
Board. In fact, the Property Tax Code =
precludes=20
an appraisal review board from even reviewing such agreements.=20
"In=20
1993, the Legislature amended section 1.111(e) by deleting the =
previous=20
requirement that the Board must approve of the agreement before it =
became=20
final." Sondock v. Harris County Appraisal Dist., No.=20
14-06-00676-CV, 2007 WL 1557424, at *3 (Tex. App.--Houston [14th =
Dist.]=20
May 31, 2007, no pet.) (citing Act of May 28, 1989, 71st Leg., =
R.S., ch.=20
796, =A7 2, 1989 Tex. Gen. Laws 3591, 3591, amended by =
Act of May=20
30, 1993, 73rd Leg., R.S., ch. 1031, =A7 1, 1993 Tex. Gen. Laws =
4440, 4440=20
(current version at Tex. Tax Code Ann. =A7 1.111(e))). By making =
this=20
change, the Legislature "intended to make it easier for parties to =
reach=20
agreements in the event of a dispute involving taxable property."=20
Id. Therefore, =
under the=20
current statutory scheme, an appraisal review board may determine =
property=20
owners' protests generally, The result=20
of the above statutes is two-fold. First, appraisal agreements =
between=20
property owners and chief appraisers are final and cannot be =
reviewed or=20
rejected by appraisal review boards. E. = Analysis 1. Whether the = Protesting=20 Parties' Primary Allegations Are Contract Claims that Sovereign = Immunity=20 from Suit Bars The protesting parties = implicitly=20 recognize that Tax Code section 42.01 does not provide for suit = for=20 judicial review of the Appraisal Agreement itself because they do = not=20 assert that their Primary Allegations, which are based on the = Appraisal=20 Agreement, are part of their statutory suit for judicial review. = Neither=20 have the protesting parties argued that the Property Tax Code = otherwise=20 waived governmental immunity from suit for their Primary = Allegations.=20 Rather, they have consistently argued that their Primary=20 Allegations--despite having their genesis in the Appraisal = Agreement--were=20 claims to which governmental immunity from suit (and the = requirement to=20 exhaust administrative remedies) did not apply. That is, the = protesting=20 parties have attempted to show jurisdiction over their Primary = Allegations=20 by demonstrating that those allegations fit into an exception to=20 governmental immunity from suit and the exhaustion-of-remedies = requirement=20 derived from it--specifically, that the District, by reappraising = the=20 Coker Unit and issuing the second notice in violation of the = Appraisal=20 Agreement, and the Board, by reappraising the Coker Unit in = violation of=20 the Appraisal Agreement that the District could not reject, acted = outside=20 their statutory authority. See Fed. Sign, 951 S.W.2d at = 404;=20 Helton, 126 S.W.3d at 116. In response, the District and = Board first=20 argue that the protesting parties cannot avail themselves of a=20 declaratory-judgment action merely to create jurisdiction that = would=20 otherwise not exist in the trial court. Specifically, the District = and=20 Board argue that the protesting parties' lawsuit is merely a suit = for=20 breach of contract and for "damages" (in the form of lessened tax=20 liability)--both of which claims are barred by governmental = immunity from=20 suit--disguised as a suit for declaratory relief. Among other = things, the=20 District and Board argue that [i]t is clear from [the = protesting=20 parties'] pleadings that they are not simply seeking a = determination that=20 [the District] exceeded its authority in issuing the Second = Notice.=20 Rather, they are seeking a determination that [the District] = exceeded its=20 authority by issuing the Second Notice due to the existence of = a=20 purported contract. Thus, [the protesting parties] are = seeking=20 declarations that a contract exists and that by acting contrary to = the=20 alleged contract, [the District and Board] exceeded their = statutory=20 authority. . . . [The protesting parties'] claim that = [the=20 District] acted outside of its statutory authority in issuing the = Second=20 Notice is in truth an impermissible attempt to validate and = enforce a=20 contract against [the District and Board]=20 . . . . (Emphasis added.) We agree with the protesting = parties that=20 their Primary Allegations do not implicate governmental immunity = from suit=20 and that, therefore, no waiver of immunity from suit is required = to=20 maintain them. Let us begin at the beginning. = The=20 District and Board (and occasionally even the protesting parties) = have=20 characterized the Appraisal Agreement as a "contract." It is not: = it is a=20 statutory agreement. A contract requires, among other things,=20 consideration, which is mutuality of obligation or a bargained-for = exchange of promises. See Fed. Sign, 951 S.W.2d at = 408-09. Not so=20 an appraisal agreement under section 1.111(e): such an agreement = requires=20 only "'the act of agreeing; harmony of opinion; accord.'"=20 Sondock, 2007 WL 1557424, at *2 (quoting Am. Heritage = Dict. of=20 the English Language (4th ed. 2006)). This distinction is important =
because, in=20
the typical situation in which a private party contracts with a=20
governmental unit, the former agrees to provide goods or services =
for=20
which the latter agrees to pay or to tender something of value in =
return.=20
This does not occur with an appraisal agreement. Virtually all of =
the=20
authority on which the District and Board rely involves the =
typical=20
contract between a private entity and a governmental unit, in =
which the=20
latter agrees to pay (or to provide something of value) for =
something of=20
value from the former. =95 "the=20 handling of contract claims against the government involves policy = choices=20 more complex than simply waiver of immunity," including whether to = rely on=20 administrative processes and what remedies to allow; =95 the=20 government should not be kept from responding to changing = conditions for=20 the public welfare by prior policy decisions reflected in = long-term or=20 ill-considered obligations; =95 the=20 Legislature is able to deal not only with these policy concerns = but also=20 with individual situations in deciding whether to waive immunity = by=20 resolution, case[] by case, or by statute. In=20
contrast, the protesting parties did not seek monetary damages, =
property,=20
or services from the District and Board: rather, they sought =
declarations=20
that the District's 2004 reappraisal and the second notice, issued =
after=20
the District had rejected the Appraisal Agreement, was void and =
that any=20
consideration by the Board of the appraised value was thus also =
void.=20
See & compare IT-Davy, 74 S.W.3d at 853 ("Sovereign =
immunity=20
protects the State from lawsuits for money damages.") =
(emphasis=20
added). The basis for the protesting parties' arguing that the =
2004=20
reappraisal and second notice were void was that section 1.111(e) =
deprives=20
the District of authority to rescind an appraisal agreement. That =
is, they=20
sought determinations that the District had acted contrary to law =
when it=20
unilaterally rejected the Appraisal Agreement and that the Board =
had also=20
acted outside its statutory jurisdiction in rejecting the agreed =
value=20
because once an appraisal agreement had been made, the Board had =
no=20
jurisdiction to review or to alter it. See Tex. Tax Code =
Ann.=20
=A7 41.01(b) (providing that appraisal review board =
Although the protesting =
parties'=20
pleadings at times described this case as a suit to enforce a =
statutory=20
agreement or even a "contract," their suit is actually one to =
determine=20
whether a governmental unit is statutorily bound--as a taxpayer =
is For these reasons, this case is = distinguishable from W.D. Haden Co. v. Dodgen, on which = the=20 District and Board rely. See 158 Tex. 74, 308 S.W.2d 838 = (1958).=20 In Dodgen, the plaintiff sought to force the State to = abide by=20 the original fee assessed under a license issued to the plaintiff, = alleging that the original fee was part of the "contract" = represented by=20 the permit. Id. at 76-77, 308 S.W.2d at 839. There = appears to=20 have been no question that the State had the power to require a = greater=20 fee for the license generally and no argument that its increasing = the fee=20 contravened state law. Although the plaintiff couched its = appellate=20 arguments in terms of whether the unilateral amendment of the = alleged=20 contract was "lawfully authorized," the only question was whether = the=20 State would breach the alleged contract that the license = represented by=20 its increasing the fee, not whether the State would act contrary = to=20 statute in doing so. See id. at 77-78, 308 S.W.2d at 840. = The=20 Dodgen court held that the State was not so bound; in so = holding,=20 the court distinguished the case from those in which a plaintiff = seeks to=20 determine whether State officials are acting outside their = statutory or=20 constitutional authority. See id. at 78-79, 308 S.W.2d at = 840=20 (distinguishing Cobb, 144 Tex. at 365-66, 190 S.W.2d at = 712=20 (holding that suit by taxpayers alleging that they fell outside=20 statutorily defined class subject to occupation tax, so that = State's=20 attempt to collect such tax from them was illegal, was not suit = against=20 State)). In the case before us, the =
protesting=20
parties in essence argue that section 1.111(e)--by the fact that =
it=20
renders appraisal agreements "final" upon their making--deprives =
an=20
appraisal district of the statutory authority to assess taxes =
contrary to=20
that agreement. The trial court dismissed all = of the=20 protesting parties' Primary Allegations for lack of subject-matter = jurisdiction, despite their being requests for only declarative = and=20 injunctive relief based, ultimately, on the interpretation of = section=20 1.111(e) and despite their seeking only a determination of whether = the=20 District and Board acted without authority in their respective = actions.=20 This was error for the reasons that we have indicated above. Under = these=20 circumstances, the DJA waives immunity from suit for the = attorney's fees=20 and court costs that the protesting parties also sought. See = Tex.=20 Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994); Tex. = Civ.=20 Prac. & Rem. Code Ann. =A7 37.009 (Vernon 1997) ("In any = proceeding=20 under this chapter, the court may award costs and reasonable = and=20 necessary attorney's fees as are equitable and just.") = (emphasis=20 added). 2. Whether the = Protesting=20 Parties' Primary Allegations Requesting Declaratory Relief Are = Redundant=20 of the Relief Sought in Their Suit for Judicial Review = (Alternative=20 Allegations) The District and Board argue = that the=20 trial court lacked subject-matter jurisdiction of the Primary = Allegations=20 for the further, and independent, reason that the declaratory and=20 injunctive relief that the protesting parties sought was merely = redundant=20 of the relief sought in their suit for judicial review--that is, = in their=20 Alternative Allegations--of the Board's order on their protest.=20 See Strayhorn, 101 S.W.3d at 572 (indicating = that when=20 statute provides means to attack agency's order, one may not = maintain=20 declaratory-judgment action that seeks remedies redundant of those = available by statutory means). We disagree. The Texas Tax Code =
provides=20
that the "procedures prescribed by this title [the Property Tax =
Code]=20
for adjudication of the grounds of protest authorized by this=20
title are exclusive . . . ." Tex. Tax Code =
Ann.=20
=A7 42.09(a) (Vernon 2001) (emphasis added). Likewise, a =
property owner=20
is entitled to appeal an order of the appraisal review board that=20
determines "a protest by the property owner as =
provided by=20
Subchapter C of Chapter 41" of the Texas Tax Code. Id.=20
=A7 42.01(1)(A) (Vernon 2001) (emphasis added). Under =
chapter 41=20
of the Texas Tax Code, although a property owner has the general =
right to=20
protest a "determination of the appraised value of the owner's =
property"=20
and "any other action of the chief appraiser, appraisal district, =
or=20
appraisal review board that applies to and adversely affects the =
property=20
owner," What the protesting parties = sought by=20 their Primary Allegations were declarations related to the = Appraisal=20 Agreement: that the District acted illegally in unilaterally = rejecting=20 that agreement and, therefore, that the Board also acted outside = its=20 jurisdiction by "review[ing] or reject[ing]" an agreement that the = District could not reject. See Tex. Tax Code Ann.=20 =A7 41.01(b). There is an open question, implicit in some of = the=20 parties' discussion at oral argument and that we need not decide = now, as=20 to whether the Board, which is statutorily prohibited from = "review[ing]"=20 the Appraisal Agreement, could consider these challenges, which = are based=20 on the Appraisal Agreement, in the protesting parties' = administrative=20 protest. If these challenges lay outside the Board's jurisdiction, = then=20 the protesting parties' Primary Allegations would clearly not be = redundant=20 of the issues that could be raised in their suit for judicial = review. In=20 any event, the relief that the protesting parties seek under their = Primary=20 Allegations differs from that sought in their Alternative = Allegations: in=20 the former, they seek to hold the District to the Appraisal = Agreement=20 ($60,525,090) because the District (and thus the Board) allegedly = acted=20 outside statutory authority in rejecting the agreement; in the = latter,=20 they seek a determination, alternatively, that the appraised value = in the=20 Board's final order was excessive for the use of a flawed = valuation=20 formula and that, had the Coker Unit been appraised equally with=20 comparable properties, its appraised value would have been = $37,732,240. In=20 light of the protesting parties' challenges and pleadings, we are = not=20 prepared to say that the relief that they sought in their Primary=20 Allegations was, as a matter of law, completely redundant of what = they=20 could seek in their suit for judicial review. 3. = Resolution We hold that the trial court = had=20 subject-matter jurisdiction to consider the protesting parties' = Primary=20 Allegations and that it erred in dismissing those claims upon the=20 jurisdictional plea of the District and Board. We sustain the protesting = parties' sole=20 issue.
We think it prudent to state = what we do=20 not decide by this opinion. First, as stated in footnote 12, = above, we do=20 not decide whether the Appraisal Agreement was, in fact, an = agreement=20 created under and subject to Texas Tax Code section 1.111(e). The = trial=20 court did not decide that matter because it related to the merits, = which=20 the trial declined to consider by having dismissed the Primary = Allegations=20 for want of jurisdiction. See Fort Bend County v. = Martin-Simon,=20 177 S.W.3d 479, 484 (Tex. App.--Houston [1st Dist.] 2005, no = pet.)=20 ("When a trial court learns that it lacks jurisdiction to = hear a=20 cause, the court must dismiss the cause and refrain from rendering = a=20 judgment on the merits."). Additionally, for purposes of this=20 interlocutory appeal, we must take as true the protesting parties' = factual=20 allegations that would support the Appraisal Agreement's being a=20 section-1.111(e) agreement. See Tex. Ass'n of Bus., 852 = S.W.2d at=20 446 (providing that, in review of ruling on jurisdictional plea, = court=20 must construe pleadings in plaintiff's favor and look to pleader's = intent). Second, we do not determine the = merits of=20 the protesting parties' Primary Allegations, that is, whether the = District=20 violated section 1.111(e) by unilaterally rejecting the Appraisal=20 Agreement and whether that violation rendered the second appraisal = and=20 notice void. By dismissing the protesting parties' Primary = Allegations,=20 the trial court declined to exercise its jurisdiction to make = these legal=20 determinations, and there is thus no ruling on the merits for us = to=20 review. See Martin-Simon, 177 S.W.3d at 484. Third, we do not determine the =
open=20
question, implicit in some of the parties' discussions at oral =
argument,=20
as to whether the Board could consider the protesting parties' =
protest at=20
all if, as the protesting parties assert, the District violated =
section=20
1.111(e) by rescinding the Appraisal Agreement, so that the second =
appraisal and notice were void and the Appraisal Agreement =
remained=20
intact. See Tex. Tax Code Ann. =A7 1.111(e) =
(providing that=20
appraisal agreements are final under some circumstances); =
We rule as follows: 1. We reverse the complained-of = order to=20 the extent that it denied the District's and Board's = jurisdictional plea=20 against MHCB for lack of standing to assert the Alternative = Allegations.=20 2. We further reverse the = complained-of=20 order to the extent that it granted the District's and Board's=20 jurisdictional plea against the Primary Allegations of the = protesting=20 parties and dismissed those claims. 3. We remand the cause for the = trial=20 court a. to render an order granting = the=20 District's and Board's jurisdictional plea to the extent that that = plea=20 asserted that MHCB lacked standing to assert the Alternative = Allegations,=20 b. to render an order = dismissing the=20 Alternative Allegations asserted by MHCB, c. to render an order denying = the=20 District's and Board's jurisdictional plea to the extent that that = plea=20 attacked the protesting parties' Primary Allegations, = and d. to conduct further = proceedings=20 consistent with this opinion.
Tim Taft Justice Panel consists of Justices =
Taft, Keyes,=20
and Hanks.=20
1. Each appraisal district must establish an =
appraisal=20
office. Tex. Tax Code Ann. =A7 6.05(a) (Vernon Supp. 2006). =
"The chief=20
appraiser is the chief administrator of the appraisal office."=20
Id. =A7 6.05(c) (Vernon Supp. 2006).=20
2. The protest notice incorrectly listed =
Valero=20
Refining as the lessee of the Coker Unit.=20
3. The District and Board also moved for =
traditional=20
summary judgment, as did the protesting parties. However, the =
trial court=20
did not rule on these motions, but instead ruled only on the=20
jurisdictional plea.=20
4. We construe the court's reference to =
5. In their first issue, the District and =
Board=20
6. This challenge=20
is slightly different from the standing arguments asserted in the=20
District's and Board's jurisdictional plea. The reason for this =
change in=20
the District's and Board's argument appears to be the protesting =
parties'=20
belated assertion below that Valero Refining was the owner at all =
relevant=20
times. Nonetheless, because standing affects subject-matter =
jurisdiction,=20
and because one may not waive jurisdictional challenges, we review =
the=20
District's and Board's challenge. See Tex. Ass'n of Bus., =
852=20
S.W.2d at 445-46.=20
7. The protesting parties argue that both =
MHCB and=20
Valero were named in a single protest notice "out of an abundance =
of=20
caution" simply because MHCB still owned the Coker Unit on January =
1,=20
2004. Although one joint protest was filed, there were, in effect, =
two=20
protests submitted under one notice: MHCB's and Valero Refining's. =
8. See Tex. Tax Code Ann. =A7 =
6.41(a) (Vernon=20
Supp. 2006) (establishing appraisal review boards for each =
appraisal=20
district); Cameron Appraisal Dist. v. Rourk, 194 S.W.3d =
501,=20
501-02 (Tex. 2006) (describing appraisal-review-board proceeding =
as=20
administrative).=20
9. See Tex. Tax Code Ann. =A7 =
1.111(a).=20
10. See id. =A7 11. See id. =A7 41.412(a).=20
12. For purposes of our discussion, we =
assume without=20
deciding that Lehn's entering into the Appraisal Agreement was the =
equivalent of the chief appraiser's having done so and that =
Novosad, who=20
was employed by Valero Energy (Valero Refining's corporate parent) =
could=20
validly act as Valero Refining's section-1.111(a) agent for =
purposes of=20
entering into the Appraisal Agreement. See Tex. Tax Code =
Ann. =A7=20
1.111(e) (providing for agreement between appraisal district's =
chief=20
appraiser and property owner or owner's agent); =
cf.=20
Tourneau Houston, Inc., 24 S.W.3d at 909 (holding that =
subsidiary=20
corporation that was not designated as parent corporation's=20
section-1.111(a) agent could not seek judicial review of appraisal =
board's=20
decision). These matters go to the merits of the protesting =
parties'=20
Primary Allegations based on the allegedly valid Appraisal =
Agreement, and=20
we may not consider the merits of such matters in an interlocutory =
appeal=20
from the granting of a jurisdictional plea. Moreover, we must take =
as true=20
the factual allegations in the protesting parties' petition and =
construe=20
it in their favor, and, fairly read, that petition implied that =
the=20
parties' agents entered into the Appraisal Agreement. See Tex. =
Ass'n=20
of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 =
(providing that,=20
in review of ruling on jurisdictional plea, court must construe =
pleadings=20
in plaintiff's favor and look to pleader's intent) 13. Tex. Tax Code Ann. =A7 41.01(a)(1) =
(Vernon 2001).=20
14. See Tooke v. City of Mexia, =
197 S.W.3d=20
325, 332-33 (Tex. 2006) (considering suit for damages resulting =
from=20
breach of contract); Catalina Dev., Inc. v. County of El =
Paso,=20
121 S.W.3d 704, 706 (Tex. 2003) (holding that immunity from suit =
precluded=20
claim for breach of contract for sale of county property and =
request for=20
specific performance of contract); Travis County v. Pelzel =
&=20
Assocs., Inc., 77 S.W.3d 246, 247-48 (Tex. 2002) (considering =
suit=20
for damages resulting from breach of contract); Tex. Natural =
Res.=20
Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 853-54 (Tex. =
2002)=20
(considering suit for damages resulting from breach of contract); =
Gen.=20
Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, =
595-96=20
(Tex. 2001) (considering suit for damages resulting from breach of =
contract); Fed. Sign v. Tex. S. Univ. 15. See Sondock v. Harris County =
Appraisal=20
Dist., No. 14-06-00676-CV, 2007 WL 1557424, at *2 (Tex. =
App.--Houston=20
[14th Dist.] May 31, 2007, no pet.) (holding that trial court did =
not err=20
in rendering summary judgment for appraisal district, in suit for =
judicial=20
review of appraisal review board's ruling appraising property's =
value=20
pursuant to appraisal agreement entered into during protest before =
board,=20
because appraisal agreement was final and thus rendered any board =
orders=20
irrelevant); BPAC Tex., LP v. Harris County Appraisal =
Dist., No.=20
01-03-01238-CV, 2004 WL 2422033, at *3 (Tex. App.--Houston [1st =
Dist.]=20
Oct. 28, 2004, no pet.) (mem. op.).=20
16. The same can be said of the protesting =
parties'=20
allegations against the Board. The gist of those allegations is =
that,=20
because the District's Chief Appraiser acted contrary to law in =
rejecting=20
the Appraisal Agreement and issuing a second appraisal and notice, =
the=20
second notice and appraisal were void, and the Appraisal Agreement =
remained intact; because the Appraisal Agreement remained intact, =
the=20
Board also acted outside its jurisdiction in issuing an order =
that, in=20
effect, rejected the still-valid Appraisal Agreement.=20
17. Tex. Tax Code Ann. =
=A7 41.41(a)(1), (9)=20
(Vernon 2002).=20
18. The protesting parties' notice of =
protest to the=20
Board alleged that the second notice was invalid for unspecified =
reasons,=20
but the record does not show whether the Board considered the =
specific=20
argument that the second notice was invalid because statute bound =
the=20
District to the Appraisal=20
Agreement. |