Opinion issued May 10, = 2007=20
For=20 The
HARRIS =
COUNTY=20
APPRAISAL DISTRICT, HARRIS COUNTY REVIEW BOARD, CITY OF LA PORTE, =
LA PORTE=20
INDEPENDENT SCHOOL DISTRICT, 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 SAN =
JACINTO=20
COMMUNITY COLLEGE DISTRICT, Appellants BLUE =
FLASH EXPRESS,=20
L.L.C., Appellee
On =
Appeal from the=20
234th District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2003-50513
MEMORANDUM=20
OPINION
In March=20
2002, Blue Flash, a trucking company with a facility in Harris =
County,=20
Texas, filed a rendition with the District listing its business =
personal=20
property for taxation. Blue Flash listed a total of 67 vehicles, =
which=20
included both vehicles that it had owned and vehicles that it had =
leased.=20
The District listed the vehicles under two accounts: account =
number=20
0595563, which included the 33 vehicles that Blue Flash owned, and =
0950209, which included the 34 vehicles that Blue Flash leased. On =
January=20
1, 2003, Blue Flash paid the taxes on account number 0595563 (the =
owned=20
vehicles), but not on account number 0950209 (the leased =
vehicles).=20
In July=20
2003, Blue Flash filed with the Board a correction motion under =
section=20
25.25 of the Texas Property Tax Code to correct account number =
0595563=20
("the account number 0595563 correction motion") for the 2001 and =
2002 tax=20
years. The account number 0595563 correction motion alleged that =
the=20
property had been over-appraised by more than one third for both =
of these=20
years. The Board issued an order granting Blue Flash's account =
number=20
0595563 correction motion, decreasing the appraised value of the =
property=20
from $409,400 to $189,390 to reflect interstate =
allocations. In May of=20
2003, Blue Flash received a 2002 tax statement for account number =
0950209=20
(the leased vehicles). On September 5, 2003, the City of La Porte =
and La=20
Porte Independent School District filed a suit to collect =
delinquent taxes=20
against Blue Flash, alleging that taxes were due to them for tax =
year 2002=20
on account number 0950209. 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 San =
Jacinto=20
Community College District On=20
September 26, 2003, after the delinquency date for the 2002 =
taxes, On May 10,=20
2004, Blue Flash filed its third-party petition against the =
District and=20
Board in the Taxing Entities' collection suit, alleging that it =
had been=20
denied due process of rights because the District and Board had =
failed to=20
provide it proper notice of account number 0950209 under section =
25.19 of=20
the Texas Property Tax Code, that the District and Board had=20
over-appraised its property and were attempting to assess value =
and to tax=20
property improperly, and that the District and Board were aware of =
errors,=20
but refused to correct them. Blue Flash alleged that it was =
entitled to a=20
mandatory injunction compelling the District and Board to correct =
the 2002=20
appraisal roll to reflect the proper appraised value of its =
property and=20
to refund to Blue Flash any excess taxes paid. On October 28, =
2005, Blue=20
Flash amended its answer and third-party petition, alleging that =
(1)=20
account number 0950209 was a duplicate account and that Blue Flash =
had=20
been unlawfully double taxed on the same property; (2) Blue Flash =
had not=20
received proper or valid notice of appraised value in compliance =
with=20
section 25.19 of the Texas Property Tax Code; (3) the values for =
Blue=20
Flash's personal property were excessive because it was entitled =
to a=20
partial exemption; (4) Blue Flash was wrongly denied an =
opportunity to=20
comply with the administrative review procedures of the Texas =
Property Tax=20
Code
The=20
District and Board filed their motion for partial summary judgment =
on the=20
grounds that Blue Flash had not exhausted its administrative =
remedies and,=20
therefore, the trial court lacked jurisdiction over Blue Flash's=20
declaratory judgment cause of action against them. The trial court =
denied=20
the District and Board's motion for partial summary judgment in an =
order=20
dated April 10, 2006, reciting that the trial court had =
jurisdiction and=20
that material issues of fact existed. Blue Flash filed its motion =
for=20
summary judgment on the Taxing Entities' collection causes of =
action and=20
its declaratory cause of action against the District and Board. In their=20
issues one and two, the District and Board argue that the trial =
court=20
erred by denying their motion for partial summary judgment and by =
granting=20
Blue Flash's motion for summary judgment because Blue Flash's =
failure to=20
comply with the administrative review procedures of the Texas =
Property Tax=20
Code deprived the trial court of jurisdiction. A =
motion=20
for summary judgment may raise a challenge to a trial court's=20
subject-matter jurisdiction. City of Hedwig Vill. Planning =
&=20
Zoning Comm'n v. Howeth Invs., Inc., 73 S.W.3d 389, 391 (Tex. =
App.--Houston [1st Dist.] 2002, no pet.). A plaintiff bears the =
burden of=20
alleging facts affirmatively showing that a trial court has =
subject-matter=20
jurisdiction. Tex. Dep't of Parks & Wildlife v. =
Miranda, 133=20
S.W.3d 217, 236 (Tex. 2004); see Bland ISD v. Blue, 34 =
S.W.3d=20
547, 554 (Tex. 2000); Tex. Ass'n of Bus. v. Tex. Air Control =
Bd.,=20
852 S.W.2d 440, 446 (Tex. 1993). A court should take the =
plaintiff's=20
allegations to be true and construe all inferences in favor of=20
jurisdiction. Tex. Ass'n of Bus., 852 S.W.2d at 446. The =
question=20
of whether a trial court has subject-matter jurisdiction over a =
claim is=20
one of law, and we thus review it de novo. See Miranda, =
133=20
S.W.3d at 226. If an=20
agency has exclusive jurisdiction to determine a matter, a =
litigant's=20
failure to exhaust all administrative remedies before seeking =
judicial=20
review of the administrative body's actions deprives the court of=20
subject-matter jurisdiction over claims within the body's =
exclusive=20
jurisdiction, and the court must generally dismiss such claims =
without=20
prejudice. Tex. Gov't Code Ann. =A7 2001.171 (Vernon 2000); =
Subaru of=20
Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 =
(Tex.=20
2002); see Tex. Gov't Code Ann. =A7 311.034 (Vernon Supp. =
2006)=20
("statutory prerequisites to suit, including the provision of =
notice, are=20
jurisdictional requirements in all suits against a governmental =
entity.").=20
Taxing authorities have exclusive jurisdiction over tax disputes, =
and=20
taxpayers must therefore exhaust their administrative remedies =
before=20
seeking judicial review. See Gen. Elec. Credit Corp. v. =
Midland Cent.=20
Appraisal Dist., 826 S.W.2d 124, 125 (Tex. 1991) (recognizing =
that=20
taxpayer is required to exhaust administrative procedures before=20
challenging tax assessment); Webb County Appraisal Dist. v. =
New Laredo=20
Hotel, 792 S.W.2d 952, 954-55 (Tex. 1990) (holding that =
taxpayer who=20
failed to appear at administrative protest hearing was deemed to =
have=20
failed to exhaust his administrative remedies, thus depriving =
district=20
court of its jurisdiction to hear case); ABT Galveston Ltd. =
P'ship v.=20
Galveston Cent. Appraisal Dist., 137 S.W.3d 146, 157-58 (Tex. =
App.--Houston [1st Dist.] 2004, no pet.) (stating that taxpayer =
who did=20
not timely file protest was deemed to have failed diligently to =
pursue or=20
to exhaust its administrative remedies under Texas Property Tax =
Code, thus=20
depriving district court of jurisdiction to hear claim); =
Dallas County=20
Appraisal Dist. v. Lal, 701 S.W.2d 44, 46-47 (Tex. =
App.--Dallas 1985,=20
writ ref'd n.r.e.) (holding that taxpayer's suit challenging =
excessive=20
property tax valuation be dismissed for lack of jurisdiction =
because=20
taxpayer failed to exhaust administrative remedies); see also=20
Tex. Tax Code Ann. =A7 42.09(a) (Vernon 2001) (stating that =
remedies=20
set forth in Texas Property Tax Code are exclusive An=20
aggrieved party is excused from exhausting its administrative =
remedies=20
under certain circumstances: (1) an administrative agency purports =
to act=20
outside its statutory powers; (2) the issue presented is purely a =
question=20
of law; (3) certain constitutional issues are involved; (4) the=20
administrative remedies are inadequate, and the exhaustion of=20
administrative remedies would cause irreparable injury; and (5) =
failure to=20
provide the taxpayers notice of the appraised property's value =
deprives=20
the taxing authority of jurisdiction and voids the appraisal. =
See=20
Gibson v. Waco Indep. Sch. Dist., 971 S.W.2d 199, 200-03 =
(Tex.=20
App.--Waco 1998) (enumerating the exceptions), vacated on =
other=20
grounds, 22 S.W.3d 849 (Tex. 2000); see also =
Strayhorn=20
v. Lexington Ins. Co., 128 S.W.3d 772, 780 (Tex. App.--Austin =
2004),=20
affirmed, 209 S.W.3d 83 (Tex. 2006). B.=20
Analysis In its=20
motion for summary judgment, Blue Flash asserted that it was =
excused from=20
having to exhaust administrative remedies before seeking judicial =
review=20
because the District and Board (1) acted outside of their =
statutory=20
authority and (2) took actions that amounted to a deprivation of =
property=20
and a violation of Blue Flash's due process rights. 1.=20
Exception: Acting Outside of Statutory =
Authority Blue Flash=20
specifically argues that the District and Board acted outside =
their=20
statutory authority "by creating a duplicate account for property =
already=20
assessed and taxes paid in an existing account; by attempting to=20
retroactively apply a newly created account to prior tax years =
already=20
closed; by failing to give notice of the new account; by failing =
to give=20
notice of assessment on the new account by the unilateral refusal =
to grant=20
a properly requested hearing; by not recognizing or complying with =
their=20
own final orders; and by failing to perform their administrative =
functions=20
to delete their duplicate account and failing to conduct a =
statutorily=20
required hearing." We disagree. If a state=20
agency acts without authority, the aggrieved party may appeal =
directly to=20
the courts without having to exhaust administrative remedies.=20
Lexington Ins. Co., 128 S.W.3d at 780; Mitchison v. =
Houston=20
Indep. Sch. Dist., 803 S.W.2d 769, 773 (Tex. App.--Houston =
[14th=20
Dist.] 1991, writ denied). In such a case, the purposes underlying =
the=20
exhaustion rule are not applicable, judicial and administrative =
efficiency=20
are not served by waiting for remedies to be exhausted, and agency =
policies and expertise are irrelevant if the agency's final action =
will be=20
a nullity. Lexington Ins. Co., 128 S.W.3d at =
780. (a) If the=20
chief appraiser discovers that real property was omitted from an =
appraisal=20
roll in any one of the five preceding years or that personal =
property was=20
omitted from an appraisal roll in one of the two preceding years, =
he shall=20
appraise the property as of January 1 of each year that it was =
omitted and=20
enter the property and its appraised value in the appraisal =
records.=20
(b) The=20
entry shall show that the appraisal is for property that was =
omitted from=20
an appraisal roll in a prior year and shall indicate the year and =
the=20
appraised value for each year. Third, Blue=20
Flash argues that the District and Board acted outside of their =
statutory=20
authority by failing to give notice of an assessment on the new =
account=20
Fourth,=20
Blue Flash argues that the District and Board acted outside of =
their=20
statutory authority by not recognizing or complying with their own =
"final=20
orders." Blue Flash does not explain with which of their "own =
final=20
orders" the District and Board have failed to comply. The record =
reflects=20
that the District and Board issued three determinations related to =
this=20
appeal: (1) an order granting Blue Flash's account number 0595563=20
correction motion for the 2001 and 2002 tax years, which decreased =
the=20
appraised values to reflect interstate allocations; (2) a notice =
denying=20
Blue Flash's number 0950209 correction motion for the 2002 tax =
year=20
because neither the Board nor the District had the legal authority =
to=20
change the appraisal roll upon a motion filed after the =
delinquency date=20
for the 2002 tax year; Blue Flash=20
was entitled to protest the District and Board's alleged mistake,=20
i.e., the over-appraised value of its property =
for the=20
2002 tax year for account number 0950209, under either chapter 41 =
or=20
section 25.25 Lastly,=20
Blue Flash argues that the District and Board acted outside of =
their=20
statutory authority by failing to conduct a statutorily required =
hearing.=20
Blue Flash contends that on September 26, 2003, it filed a written =
request=20
for a hearing before the Board on its account number 0950209 =
correction=20
motion for tax year 2002. Blue Flash's request for a hearing was =
made in=20
its section 25.25 motion to correct, which was a fill-in-the-blank =
form=20
and which included the following, form-typed text: "I request the=20
Appraisal Review Board (ARB) schedule a hearing to decide whether =
or not=20
to correct the error in the appraisal roll. I request that the =
Appraisal=20
Review Board send notice of the time, date, and place fixed for =
the=20
hearing, not later than 15 days before the scheduled hearing." In =
its=20
November 7 notice denying Blue Flash's account number 0950209 =
correction=20
motion for its 2002 taxes, the Board advised Blue Flash that it =
was=20
entitled to a hearing before the Board even though the only action =
that=20
the Board could take would be to dismiss its "appeal for lack of=20
jurisdiction." The notice further explained that the Board was =
withdrawing=20
Blue Flash's motion from consideration and that if Blue Flash =
wished to=20
proceed to a formal hearing to present its appeal, it should =
contact the=20
Board in writing within 15 days of the date of the letter. =
The crux of=20
Blue Flash's argument again is that the District and Board made a =
mistake=20
by failing to hold a hearing. This is another complaint of =
"getting it=20
wrong," not of acting outside of statutory authority. See=20
Williams, 121 S.W.3d at 430. Blue Flash could have pursued =
its=20
administrative remedy to correct the Board's failure to hold that =
hearing,=20
but it did not. There is no evidence in the record that Blue Flash =
followed the instructions in the November 7 notice by contacting =
the Board=20
in writing within 15 days of the date of that notice, nor does =
Blue Flash=20
contend that it sent any such written request after it had =
received that=20
notice. Further, had the Board denied Blue Flash a hearing =
properly=20
requested after the date of the letter, Blue Flash would have been =
entitled to bring suit against the appraisal review board by =
filing a=20
petition or application in district court to compel the Board to =
provide=20
the hearing. See Tex. Tax Code Ann. =A7 25.25(m) =
(providing that=20
hearing on motion under section 25.25 be conducted in manner =
provided by=20
chapter 41 of the Texas Property Tax Code); see also id. =
=A7=20
2.=20
Exceptions: Constitutional Issues Involved and Failure to Provide =
Notice=20
See=20
id. at 266. As=20
discussed in the section above, Blue Flash was provided with =
statutory=20
administrative remedies under which it could have protested =
objectionable=20
District and Board actions, but chose not to avail itself of the=20
administrative remedies. See id. =A7=A7 25.25, 41.41(a), =
41.411(a).=20
Because Blue Flash was presented with an opportunity to be heard,=20
deprivations of property that stem from account number 0950209 for =
the=20
2002 tax year are not unconstitutional. We hold that Blue Flash =
received=20
the process that it was due when it was afforded an opportunity to =
protest=20
defective notice and to be heard on the merits of its tax dispute =
during=20
the administrative process. The constitutional-claims exception =
thus did=20
not excuse Blue Flash from exhausting its administrative remedies =
before=20
seeking judicial review. C.=20
Conclusion We have=20
already held that none of the exceptions that Blue Flash asserted =
on=20
appeal to the exhaustion-of-remedies doctrine applies to except =
Blue Flash=20
from pursuing its administrative remedies. Blue Flash failed to =
exhaust=20
all administrative remedies before seeking judicial review of the =
District=20
and Board's complained-of actions. Consequently, the district =
court was=20
deprived of subject-matter jurisdiction over Blue Flash's =
third-party=20
claim against the District and Board because that claim fell =
within the=20
administrative body's exclusive jurisdiction. The district court =
erred by=20
denying the District and Board's partial summary judgment motion =
to=20
dismiss for want of jurisdiction Blue Flash's cause of action =
against them=20
and by granting Blue Flash's motion for summary judgment. We =
sustain the=20
District and Board's issues one and two.
B.=20
Analysis We=20
recognize that the trial court has jurisdiction over the Taxing =
Entities'=20
collection suit against Blue Flash. See Tex. Tax Code =
Ann. =A7=20
33.41(a) (Vernon 2001) (stating that at any time after tax on =
property=20
becomes delinquent, taxing unit may file suit to foreclose lien =
securing=20
payment of tax, to enforce personal liability for tax, or both.)=20
Tim=20
Taft Panel consists of Justices =
Taft, Alcala,=20
and Hanks 1. The Taxing Entities did not file a motion =
for=20
summary judgmentseeking affirmative relief in the trial court.=20
Consequently, on appeal, the Taxing Entities request that this =
cause be=20
remanded on their delinquent tax suit against Blue Flash.=20
2. The delinquency date for the 2002 taxes =
was=20
February 1, 2003. See Tex. Tax Code Ann. =A7 31.02(a) =
(Vernon Supp.=20
2006) (stating that taxes are generally due on receipt of tax bill =
and are=20
delinquent if not paid before February 1 of following tax=20
year).=20
3. In its November 7, 2003 notice, the Board =
advised=20
Blue Flash that it was entitled to a hearing before the Board even =
though=20
the only action that the Board could take would be to dismiss its =
"appeal=20
for lack of jurisdiction." The correspondence further explained =
that the=20
Board was withdrawing Blue Flash's motion from consideration and =
that if=20
Blue Flash wished to proceed to a formal hearing to present its =
appeal, it=20
should contact the Board in writing within 15 days of the date of =
the=20
letter.=20
4. The record does not contain a copy of the =
November=20
20 notice. However, none of the parties disputes that it was =
issued.=20
See Tex. R. App. P. 38.1(f) (stating that, in civil case, =
appellate court will accept as true facts by appellant stated =
unless=20
another party contradicts them).=20
5. Although Blue Flash states in its brief =
that the=20
City of La Porte and La Porte Independent School District filed a =
motion=20
for summary judgment, the record on appeal does not reflect that =
any such=20
motion was filed, nor do the City of La Porte and La Porte =
Independent=20
School District contend that they filed a motion for summary =
judgment on=20
their collection cause of action against Blue Flash. 6. The Taxing Entities assert this argument =
on appeal,=20
as well. We discuss this argument's effect on their cause of =
action below.=20
7. Blue Flash also contends in its brief =
that the=20
jurisdiction of the trial court has been invoked under section =
42.01 of=20
the Texas Property Tax Code, for which there is not a deadline to =
seek=20
appellate review. See Tex. Tax Code Ann. =A7 42.01 =
(Vernon 2001).=20
Section 42.01 applies to a taxpayer's right to appeal a =
determination of=20
the appraisal review board. See id. Blue Flash is not =
appealing=20
any order or determination of the appraisal review board, but, =
rather,=20
asserts that the appraisal roll is defective as an affirmative =
defense to=20
the Taxing Entities' collection suit and as a declaratory judgment =
cause=20
of action against the District and Board. Although there is a=20
determination on Blue Flash's account number 0950209 correction =
motion for=20
the 2002 tax year based on whether Blue Flash was entitled to an=20
exemption, Blue Flash did not file a motion to correct for the =
2002 tax=20
year based on whether account number 0950209 was a duplicate =
account.=20
Moreover,=20
the Texas Property Tax Code has deadlines for appealing an order =
of the=20
appraisal review board. Section 42.06 provides that to exercise a =
right to=20
appeal an order of an appraisal review board, a party must file =
written=20
notice of appeal within 15 days after the date that the taxpayer =
received=20
the notice. See id. =A7 42.06(a) (Vernon 2001). =
Additionally,=20
section 25.25 provides that within 45 days after receiving notice =
of the=20
appraisal review board's determination the taxpayer may file suit =
to=20
compel the board to order a change in the appraisal roll. See=20
id.
8. Section 41.41(a)(9) of the Texas Property =
Tax Code=20
specifies that property owners are entitled to protest any action =
of the=20
chief appraiser, appraisal district, or appraisal review board =
that=20
applies to and adversely affects the property owner. Tex. Tax Code =
Ann. =A7=20
41.41(a)(9) (Vernon 2001). A protest under section 41.41 must be =
filed no=20
later than June 1 or the thirtieth day after the notice of =
appraised value=20
is delivered to the property owner, whichever is later. Id. =
=A7=20
41.44(a)(1) (Vernon Supp. 2006).=20
9. Under section 25.25(c) of the Texas =
Property Tax=20
Code, a property owner is given up to five years to request that =
the=20
appraisal review board change the appraisal roll to correct (1) =
clerical=20
errors, (2) multiple appraisals, or (3) the inclusion of property =
that=20
does not exist in the form or at the location described in the =
appraisal=20
roll. Tex. Tax Code Ann. 10. Section 31.04(a-1) of the Texas =
Property Tax Code=20
provides specific guidelines for when tax bills become delinquent =
if the=20
bill includes property that was erroneously omitted. See =
Tex. Tax=20
Code Ann. 11. The Taxing Authorities are required to =
provide=20
property owners notice in writing. See Tex. Tax Code Ann. =
=A7=20
25.19(a), (b), (g), (h), (j) (Vernon Supp. 2006). The notice must =
cite=20
appraised property value, segregate real and personal property =
appraisals,=20
and provide a detailed explanation of the time and procedure for=20
protesting the appraisal value. Id. Supplemental =
appraisal=20
records are the proper way to add omitted property to the =
appraisal roll,=20
subject to review, protest, and appeal under chapters 41 and 42 of =
the=20
Texas Property Tax Code. Id. =A7 25.23(a)(1), (d) (Vernon =
2001).=20
12. In addition, the Texas Property Tax =
Code=20
expressly provides that a taxpayer's failure to receive notice =
does not=20
affect the validity of the appraisal or "the imposition of any tax =
on the=20
basis of the appraisal." Tex. Tax Code Ann. =A7 25.19(d); =
Denton Cent.=20
Appraisal Dist. v. CIT Leasing, Corp., 115 S.W.3d 261, 265 =
(Tex.=20
App.--Fort Worth 2003, pet. denied); Dallas County Appraisal =
Dist. v.=20
Lal, 701 S.W.2d 44, 48 (Tex. App.--Dallas 1985, writ ref'd =
n.r.e).=20
13. On appeal, Blue Flash also argues that =
the notice=20
denying Blue Flash's number 0950209 correction motion for the 2002 =
tax=20
year was not an order and thus the District and Board "never heard =
Blue=20
Flash's motion" and "no final order existed." However, the Texas =
Property=20
Tax Code does not mandate that the District and Board issue an =
order on a=20
section 25.25 motion to correct. See Tex. Tax Code Ann. =
=A7 25.25.=20
To the contrary, section 25.25(g) provides that a property owner =
may file=20
suit to compel the board to order a change to the appraisal roll =
within 45=20
days after receiving notice of the appraisal review =
board's=20
determination. See id. =A7 25.25(g).=20
14. Section 25.25(d) of the Texas Property =
Tax Code=20
provides, "At any time prior to the date the taxes become =
delinquent, a=20
property owner or the chief appraiser may file a motion with the =
appraisal=20
review board to change the appraisal roll to correct an error that =
resulted in an incorrect appraised value for the owner's property. =
However, the error may not be corrected unless it resulted in an =
appraised=20
value that exceeds by more than one-third the correct appraised =
value."=20
Tex. Tax Code Ann. =A7 25.25(d). 15. Section 41.411 provides: (a) A=20
property owner is entitled to protest before the appraisal review =
board=20
the failure of the chief appraiser or the appraisal review board =
to=20
provide or deliver any notice to which the property owner is=20
entitled. (b) If=20
failure to provide or deliver the notice is established, the =
appraisal=20
review board shall determine a protest made by the property owner =
on any=20
other grounds of protest authorized by this title relating to the =
property=20
to which the notice applies. (c) A=20
property owner who protests as provided by this section must =
comply with=20
the payment requirements of Section 42.08 or he forfeits his right =
to a=20
final determination of his protest. Tex. Tax=20
Code Ann. =A7 41.411 (Vernon 2001).