Opinion issued February = 28,=20 2008
In=20 The
Appellants,=20
Koll Bren Fund VI LP (Koll Bren) and Hartman 3100 Weslayan =
Acquisition, LP=20
(Hartman), appeal dismissal of their suit for judicial review of=20
resolution of an ad valorem tax-valuation protest for the 2005 tax =
year.=20
The trial court dismissed the suit, without prejudice, in response =
to a=20
plea to the jurisdiction by appellee, Harris County Appraisal =
District=20
(HCAD).
The=20
property at issue is located at 3100 Weslayan Street, Houston, =
Texas=20
77027. It is undisputed that Koll Bren sold the property to =
Hartman by=20
special warranty deed dated August 20, 2004. On January 1, 2005,=20
therefore, Koll Bren was no longer the owner of the property; =
instead,=20
Hartman was the owner, by virtue of the August 20, 2004 transfer. =
Koll=20
Bren nonetheless filed a notice of protest as owner of the =
property for=20
the year 2005. In the protest, Koll Bren claimed that it owned the =
property in tax year 2005, and that the ad valorem tax valuation =
of the=20
property for that tax year was excessive. After=20
conducting a hearing on the protest, the Appraisal Review Board of =
HCAD=20
(Board) issued an order, dated August 26, 2005, stating the =
Board's=20
determination that initial ad valorem valuation of the property at =
$5,961,630 should be reduced to $5,420,000 for the tax year 2005. =
It is=20
undisputed that the Board issued its order to Koll Bren, and that =
Hartman=20
did not appear in the protest hearing before the Board. On October=20
13, 2005, Koll Bren timely challenged the Board's determination by =
filing=20
an original petition for judicial review with the trial court. =
See=20
id. =A7 42.21(a) (Vernon 2001). Koll Bren continued to assert =
that it=20
owned the property. Over 15 months later, on December 27, 2006, =
Koll Bren=20
amended its pleadings to include Hartman as a plaintiff in the =
suit for=20
judicial review. Shortly thereafter, HCAD filed a plea to the =
jurisdiction=20
contending that the trial court lacked jurisdiction because Koll =
Bren did=20
not own the property on January 1, 2005 and therefore had no =
standing to=20
seek judicial review. HCAD provided the trial court with a copy of =
the=20
deed by which Koll Bren conveyed the property to Hartman on August =
20,=20
2004. The trial court sustained HCAD's plea to the jurisdiction =
and=20
dismissed the cause without prejudice.
A.=20
Suit for Judicial Review When the=20
owner of a property has exercised its right to protest under =
Chapter 41,=20
section 42.01 of the Property Tax Code establishes a "right of =
appeal"=20
that entitles the owner to challenge that resolution. Appeal is by =
petition for review to the district court for the county, and =
review is by=20
trial de novo. Id. =A7=A7 42.21(a) (petition for review), =
42.23(a)=20
(scope of review) (Vernon 2001 & Supp. 2007). B.=20
Plea to Trial Court's Subject-Matter=20
Jurisdiction--Standing Standing is=20
a component of subject-matter jurisdiction that cannot be waived;=20
therefore, a party's lack of standing deprives a court of =
authority to=20
decide a pending case. Tex. Ass'n of Bus. v. Tex. Air Control=20
Bd., 852 S.W.2d 440, 445-46 (Tex. 1993); Tourneau =
Houston, Inc.=20
v. Harris County Appraisal Dist., 24 S.W.3d 907, 909 (Tex.=20
App.--Houston [1st Dist.] 2000, no pet.). Subject-matter =
jurisdiction is=20
essential to a court's power to decide a case and may be =
challenged by a=20
plea to the jurisdiction. Bland Indep. Sch. Dist. v. =
Blue, 34=20
S.W.3d 547, 553-54 (Tex. 2001). A trial court determines a plea to =
the=20
jurisdiction by construing the pleadings in the plaintiff's favor, =
but the=20
court may also examine and consider any evidence that pertains to =
the=20
jurisdictional inquiry. Id. at 555; see also Tex. =
Dep't of=20
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 223 (Tex. =
2004)=20
(describing trial court procedure for evidentiary hearing =
regarding=20
jurisdiction). We review a trial court's ruling on a plea to the=20
jurisdiction de novo; therefore, we construe the pleadings in the=20
plaintiff's favor and examine the pleader's intent. See =
Miranda,=20
133 S.W.3d at 225.
Koll Bren's=20
and Hartman's standing to bring the suit for judicial review =
underscores=20
their issue on appeal and its sub-issues. We address their =
standing as a=20
preliminary consideration because it pertains to subject-matter=20
jurisdiction. E.g., Tex. Workers' Comp. Comm'n v.=20
Garcia, 893 S.W.2d 504, 517-18 (Tex. 1995); Tourneau =
Houston,=20
Inc., 24 S.W.3d at 909. Standing=20
demands a real controversy between the parties that will be =
determined by=20
the judicial declaration sought. See Nootsie, Ltd. v. =
Williamson=20
County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996);=20
Garcia, 893 S.W.2d at 518. Without a breach of a legal =
right that=20
belongs to the plaintiff, no cause of action can accrue to the =
plaintiff's=20
benefit. See Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex.=20
1976). Rights and=20
responsibilities under the Property Tax Code derive from ownership =
of the=20
subject property. See, e.g., Tex. Tax Code Ann. =
=A7=20
32.07(a) (Vernon Supp. 2007) (stating that, "[P]roperty taxes are =
the=20
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
(emphasis added); Tex. Tax Code Ann. =A7 41.41(a)(1) (Vernon 2001) =
(recognizing right of property owner to determination of =
the=20
appraised value of property, among other rights); Id. =A7 =
41.412(a)=20
(recognizing right of protest in favor of party who acquires=20
ownership of property after January 1 of, and before =
deadline for=20
filing protest in, given tax year).
Sections=20
42.01 through 42.43 of chapter 42 of the Code govern suits for =
judicial=20
review, as sought by Koll Bren in this case. See id. =
=A7=A7 42.01-.43=20
(Vernon 2001 & Supp. 2007). These statutes demonstrate that =
the right=20
to judicial review derives from ownership of the subject property. =
Section=20
42.21(a) of the Code states the procedural requirements that a =
party who=20
seeks to appeal by the suit for judicial review must meet, as =
follows:=20
A =
party who appeals as provided by this chapter =
must file=20
a petition for review with the district court within 45 days after =
the=20
party received notice that a final order has been entered =
from=20
which an appeal may be had. Failure to timely file a petition for =
review=20
bars any appeal under this chapter. To qualify=20
as a "party" entitled to seek judicial review of an =
appraisal-review board=20
determination, Koll Bren and Hartman had to either (1) own the =
property,=20
(2) be the properly designated agent of the owner, or (3) be the =
lessee of=20
the property under the circumstances stated in section 41.413. A =
person or=20
entity who does not meet one of these criteria, but nonetheless =
seeks=20
judicial review of an appraisal-review board determination, has =
neither a=20
"legal right" to enforce, see Nobles, 533 S.W.2d at 927, =
nor any=20
"real controversy" at issue, see Nootsie, Ltd., 925 =
S.W.2d at=20
661, and, therefore, no standing under the Code. See =
Nobles, 533=20
S.W.2d at 927; Nootsie, Ltd., 925 S.W.2d at 661; =
Tourneau=20
Houston, Inc., 24 S.W.3d at 909 (addressing question of =
standing of=20
owner or agent to protest ad valorem taxation and =
resulting lack=20
of standing to seek judicial review). A.=20
Koll Bren's Standing to Seek Judicial Review Despite=20
claiming ownership of the property in its protest to the Board's=20
valuation, Koll Bren conceded in the trial court that it did not =
own the=20
property on January 1, 2005, having transferred it to Hartman the =
previous=20
August 20 by special warranty deed. Having never claimed rights =
under the=20
Property Tax Code as either lessee or agent, the only possible =
basis on=20
which Koll Bren could assert standing under the Code is section=20
42.01(1)(A), which governs the right of a property owner to appeal =
to the=20
district court by petition for review. Tex. Tax Code Ann. =A7 =
42.01(1)(A).=20
But Koll Bren did not own the property on January 1, 2005 and thus =
had no=20
legal right to appeal under section 42.01(1)(A) and, therefore, no =
standing to seek judicial review in the district court. See =
id.;=20
Nobles, 533 S.W.2d at 927; Nootsie, Ltd., 925 =
S.W.2d at=20
661; Tourneau Houston, Inc., 24 S.W.3d at 909. Koll =
Bren's lack=20
of standing as owner thus precludes Koll Bren's "party" status =
under=20
section 42.21(a). See Tex. Tax Code Ann. =A7 =
42.21(a). Having=20
acquired the property on August 20, 2004, Hartman acquired =
standing, as=20
"new owner," to protest the valuation by the appraisal-review =
board, as=20
provided by chapter 41. See id. =A7 41.412(a). But =
Hartman did not=20
pursue its chapter 41 right of protest; instead, Koll Bren pursued =
that=20
remedy, despite lack of ownership. Thus, the Board did not ever =
determine=20
"a protest" by the actual "property owner," specifically, Hartman, =
on=20
which Hartman could premise any "right of appeal" as "property =
owner."=20
See id. =A7 42.01(a). The=20
provisions of the Property Tax Code further provide that its =
remedies for=20
adjudication of property-tax protests are "exclusive," except as =
provided=20
by that statute. Id. =A7 42.09. Accordingly, failure to =
comply with=20
those procedures deprives the reviewing court of jurisdiction. =
See=20
Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex. =
2006);=20
Matagorda County Appraisal Dist. v. Coastal Liquids Partners,=20
L.P., 165 S.W.3d 329, 331 (Tex. 2005); Reed v. =
Prince, 194=20
S.W.3d 107-08 (Tex. App.--Texarkana 2006, pet. denied); see =
also=20
Houston Indep. Sch. Dist. v. 1615 Corp., 217 S.W.3d 631, 637 =
(Tex.=20
App.--Houston [14th Dist.] 2006, pet. denied) (deferring to=20
Cameron's holding, with reservations). Because=20
Hartman did not pursue its chapter 41 right to protest the =
valuation=20
before the Board, the Board never determined "a protest" by =
Hartman as=20
"the property owner." See Tex. Tax Code Ann. =A7 =
42.01(a). Having=20
concluded that neither Koll Bren nor Hartman had standing to =
challenge the=20
Board's determination of Koll Bren's protest by seeking judicial =
review in=20
the trial court, we turn to Koll-Bren's and Hartman's sub-issues.=20
In their=20
first issue, Koll Bren and Hartman contend that the trial court =
erred by=20
granting HCAD's plea to the jurisdiction because section 42.21(e)=20
authorized Koll Bren to amend its petition to "correct or change =
the name=20
of a party." In their third issue, they argue that Koll Bren's =
petition=20
for judicial review encompasses Hartman because Koll Bren sought =
review=20
"as the property owners and the property owners." Section=20
42.21(a) requires a property owner must file its petition for =
review of an=20
appraisal-review board determination "within 45 days after the =
party has=20
received notice that a final order has been entered from which an =
appeal=20
may be had." Tex. Tax Code Ann. =A7 42.21(a). Subsection (e)(1) of =
this=20
statute further provides that a "timely filed petition" may =
"subsequently=20
be amended" to "correct or change the name of a party." =
Id. =A7=20
42.21(e)(1). Koll Bren and Hartman contend that because Koll Bren =
timely=20
filed its petition for review, subsection (e) authorized Koll Ben =
to amend=20
the petition to include the actual owner, Hartman. We disagree.=20
Koll Bren=20
and Hartman emphasize that section 42.21(e) imposes no strict time =
limits,=20
in contrast to the 45-day limit of section 42.21(a). Yet, the =
Supreme=20
Court of Texas recently affirmed that appraisal-review =
determinations=20
become final if not appealed to the district court within 45 days. =
Cameron Appraisal Dist., 194 S.W.3d at 502 (citing Tex. =
Tax Code=20
Ann. =A7 42.21(a)). Koll Bren sought judicial review within the =
45-day time=20
limit of 42.21(a) in this case, but Koll Bren had no standing and =
was thus=20
not a proper "party" to bring the suit for judicial review under =
Property=20
Code sections 42.01(1)(A) and 42.21(a). No proper party having =
appealed to=20
the district court within 45 days, the trial court never acquired=20
subject-matter jurisdiction, and the Board's valuation became =
final when=20
those 45 days expired. See Cameron Appraisal Dist., 194 =
S.W.3d at=20
502; Taufiq ex rel. Patrick O'Connor and Assocs., Inc. v. =
Harris=20
County Appraisal Dist., 6 S.W.3d 652, 654 (Tex. App.- Houston =
[14th=20
Dist.] 1999, no pet.); see also M.D. Anderson Cancer =
Center=20
v. Novak, 52 S.W.3d 704, 711 (Tex. 2001) (holding, in context =
of=20
class action, that lack of standing of individual plaintiff when =
suit was=20
filed deprived court of subject-matter jurisdiction of =
individual's claims=20
and claims of class members). The=20
contention that section 42.21(e) authorized Koll Bren to amend its =
petition to add the true owner, Hartman, is further flawed because =
the=20
contention assumes that Hartman was a proper party. As noted =
above, though=20
a proper party, as new owner, to protest the valuation determined =
by the=20
appraisal-review board, see Tex. Tax Code Ann. =A7 =
41.412, Hartman=20
did not exercise that right. Having not exercised its right as =
owner,=20
Hartman was not a proper party to seek the chapter 42 remedy of=20
petitioning the district court for judicial review. See =
id. =A7=A7=20
42.01(a), 42.21(1)(A), 42.09. Koll Bren's=20
and Hartman's contention, in their third issue, that Koll-Bren's =
filing=20
the petition "as the property owners and the property owners" =
likewise=20
assumes that Hartman was a proper party to seek judicial review, =
which it=20
was not. We overrule=20
the first and third sub-issues.
In their=20
second issue, Koll Bren and Hartman contend that the trial court =
erred by=20
dismissing their petition for review because section 42.21 of the =
Tax Code=20
is not jurisdictional. In=20
challenging these statutory requirements, Koll Bren and Hartman =
rely on=20
Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 75 (Tex. =
2000), in=20
which the supreme court stated that "all claims are presumed to =
fall=20
within the jurisdiction of the district court unless the =
Legislature or=20
Congress has provided that they must be heard elsewhere." =
Kazi=20
overruled Mingus v. Wadley, 285 S.W. 1084 (Tex. 1926), =
which=20
recognized the "general rule," that statutory provisions are =
"mandatory=20
and exclusive, and must be complied with in all respects" when a =
"cause of=20
action and remedy for its enforcement are not derived from the =
common law=20
but from the statute." Kazi, 12 S.W.3d at 75. Before=20
Kazi, the supreme court upheld, as mandatory and =
jurisdictional,=20
the statutory prerequisites for a petition for judicial review of =
a=20
resolution of a valuation protest to the district court. See =
Appraisal=20
Review Bd. v. Int'l Church of Foursquare Gospel, 719 S.W.2d =
160, 160=20
(Tex. 1986). Koll Bren and Hartman emphasize, however, that =
Church of=20
Foursquare Gospel relied, in turn, on the reasoning of=20
Mingus, which Kazi overruled. See =
Church of=20
Foursquare Gospel, 719 S.W.2d at 160 (citing Bullock v. =
Amoco=20
Prod. Co., 608 S.W.2d 899, 901 (Tex. 1980). Koll Bren and =
Hartman=20
also rely on a footnote in Matagorda County Appraisal =
Dist., in=20
which the supreme court stated, "[W]e have yet to address whether =
[the]=20
holding [in Church of Foursquare Gospel] survives" the =
holding in=20
Kazi that compliance with statutory requirements for =
asserting=20
wrongful death claims was "case determinative," but not a =
jurisdictional=20
question. Matagorda County Appraisal Dist., 194 S.W.3d at =
331=20
n.5. The supreme=20
court decided Matagorda County Appraisal District in 2005 =
and=20
decided Cameron Appraisal District in 2006, five and six =
years=20
after Kazi, respectively. Both cases affirm that the =
exhaustion=20
of remedies provisions of section 42.09 of the Property Tax Code =
are=20
mandatory and jurisdictional. See Cameron Appraisal =
Dist., 194=20
S.W.3d at 501-02 (holding that, "Because exhaustion of =
administrative=20
remedies was mandatory, we reverse.") (quoting Matagorda =
County=20
Appraisal Dist. 165 S.W.3d at 331); Matagorda County =
Appraisal=20
Dist., 165 S.W.3d at 331 (recognizing as "true [that] a =
taxpayer's=20
failure to pursue an appraisal review board proceeding deprives =
the courts=20
of jurisdiction to decide most matters relating to ad valorem =
taxes.")=20
(dicta). Koll Bren=20
and Hartman acknowledge these statements, but contend that they do =
not=20
apply. More specifically, they argue that section 42.09 of the =
Property=20
Code does not apply--and that section 42.01 is not jurisdictional =
in this=20
case--because "there is no question in this case that the =
administrative=20
review process was exhausted" by Koll Bren. Despite having invoked =
the=20
administrative process by filing a protest before the Board, it is =
undisputed, and Koll Bren concedes, that it did not own the =
property,=20
though it claimed ownership, both before the board and the =
district court.=20
Because Koll Bren did not own the property, it had no standing to =
seek=20
judicial review, which deprived the trial court of jurisdiction. =
We=20
decline to invoke Kazi policy concerns in order to =
premise the=20
standing of Hartman on an entity that lacks standing as a matter =
of law.=20
Koll Bren and Hartman have failed to demonstrate that section =
42.21(a) is=20
not jurisdictional. More=20
importantly, as explained above, Hartman also has no standing as =
matter of=20
law because it did not file a protest with the Board and thus =
failed to=20
exhaust the administrative procedures required to invoke the trial =
court's=20
jurisdiction to address the petition for review. See Tex. =
Tax=20
Code Ann. =A7 42.09. As the supreme court reiterated just =
recently, in=20
Cameron Appraisal District, "[W]e have repeatedly held =
that a=20
taxpayer's failure to pursue an appraisal[-]review board =
proceeding=20
deprives the courts of jurisdiction to review most matters =
relating to ad=20
valorem taxes." 194 S.W.3d at 502 (citing Tex. Tax Code Ann. =A7 =
42.09;=20
Matagorda County Appraisal Dist., 165 S.W.3d at 331, =
among other=20
cases). Given the=20
supreme court's having unequivocally enforced section 42.09 as =
mandatory=20
and jurisdictional, and Hartman's failure to exhaust its remedies =
by=20
filing a protest to the board, though authorized to do so by =
section=20
41.412, we hold that Hartman's failure to pursue its remedies also =
barred=20
the trial court's subject-matter jurisdiction to review =
determination of=20
the protest filed by Koll Bren in this case, and, therefore, that =
Koll=20
Bren's and Hartman's reliance on Kazi is further =
misplaced.=20
See Tex. Tax Code Ann. =A7 42.09; Cameron Appraisal =
Dist.,=20
194 S.W.3d at 501; Matagorda County Appraisal Dist., 165 =
S.W.3d=20
at 331; see also Reed, 194 S.W.2d at 107-08 (applying=20
exhaustion-of-remedies principles); Houston Indep. Sch. =
Dist.,=20
217 S.W.3d at 637 (deferring to Cameron =
precedent). We overrule=20
the second issue.
We affirm=20
the judgment of the trial court.
Panel=20
consists of Chief Justice Radack and Justices Jennings and Bland.=20
2. See Tex. Tax Code Ann. =A7 42.01 =
(Vernon=20
2001).=20
3. Tex. Tax Code Ann. =A7 42.21(e) (Vernon =
2001).=20
4. See Tex. Tax Code Ann. =A7 =
42.21(a) (Vernon=20
2001).=20
5. Appellate courts have jurisdiction to =
consider=20
appeals of interlocutory orders, provided a statute expressly =
provides=20
appellate jurisdiction. Stary v. DeBord, 967 S.W.2d 352, =
352-53=20
(Tex. 1998); see Tex. Civ. Prac. & Rem. Code Ann. =A7 =
51.014(a)(8) (Vernon Supp. 2007) (authorizing courts of appeal to =
review=20
interlocutory order that grants or denies plea to jurisdiction). =
Our=20
jurisdiction over this appeal, however, derives not from section=20
51.014(a)(8), but from section 51.012 of the Remedies Code, which =
governs=20
ordinary, traditional appeals from final judgments, see =
Tex. Civ.=20
Prac. & Rem.Code Ann. =A7 51.012 (Vernon 1997), because the =
trial court=20
rendered a final judgment when it dismissed Koll Bren's and =
Hartman's suit=20
for judicial review.=20
6. Koll Bren filed the protest through "an =
authorized=20
tax agent" identified as O'Connor & Associates.=20
7. After the trial court granted HCAD's plea =
to the=20
jurisdiction, Koll Bren and Hartman filed a motion for rehearing =
or,=20
alternatively, for new trial, by which they sought to introduce =
evidence=20
that Hartman attempted to identify itself as the owner of the =
property=20
after January 1, 2005, and that the Board held the hearing that =
resulted=20
in the final order in Hartman's name. The trial court sustained =
HCAD's=20
objections to Koll Bren's and Hartman's evidence and denied their =
motion.=20
Koll Bren's and Hartman's issues on appeal do not challenge these =
rulings=20
by the trial court.=20
8. The Tax Code envisions and provides for=20
circumstances, not applicable here, in which the owner of the =
property=20
designates a lessee or other person to act as the agent of the =
owner in=20
exercising the rights and responsibilities of the owner. See =
Tex.=20
Tax Code Ann. =A7 1.111 (Vernon 2001); see also id. =A7 =
41.413(b)=20
(Vernon 2001) (authorizing lessee of real property who is =
contractually=20
obliged to reimburse property owner for property taxes to protest=20
appraised value of property if owner does not protest). =
9. The right of appeal of a person leasing =
the=20
property is governed by Tex. Tax Code Ann. =A7 42.015.=20
10. Like Koll Bren, Hartman has never =
asserted rights=20
as lessee or agent.=20
11. Reading the third issue broadly and in =
accordance=20
with the supporting arguments, we construe the challenge as =
encompassing=20
the entirety of chapter 42 of the Property Tax Code, which governs =
judicial review.=20
12. In support of their jurisdictional =
challenge,=20
Koll Bren and Hartman also contend that the trial court strayed =
from the=20
pleadings in determining jurisdiction by considering evidence of =
ownership=20
of the property. We reject this contention, given that the =
ownership facts=20
in this case are undisputed. Moreover, Bland Indep. School =
Dist. v.=20
Blue, 34 S.W.3d 547, 554-55 (Tex. 2000) confirms that trial =
courts=20
may properly consider evidence pertinent to jurisdictional =
inquiry.=20
13. As the supreme court noted, the =
question whether=20
both owner and lessee can pursue chapter 41 protest was not a=20
jurisdictional issue in Matagorda County Appraisal Dist. v. =
Coastal=20
Liquids Partners, Inc., 194 S.W.3d 501, 331 (Tex.=20
2005).