549 S.W.3d 849
Tex. App.2018Background
- Comptroller assessed EBS Solutions $298,520 in franchise taxes, penalties, and interest for 2009–2012; EBS paid two $75,000 installments and then sued seeking recovery of amounts paid and injunctive relief.
- EBS filed under the Tax Code protest and injunction provisions and submitted an "oath of inability to pay," asking the trial court to excuse full prepayment; the trial court agreed prepayment would unreasonably restrain access to courts.
- Comptroller filed a plea to the jurisdiction arguing EBS failed to meet Tax Code prepayment/bond requirements (Tex. Tax Code §§112.051, .101) and that EBS could not rely on §112.108 because this Court previously declared the amended §112.108 unconstitutional.
- The district court denied the plea; Comptroller appealed interlocutorily. The appellate court reviews jurisdiction de novo and must decide whether EBS satisfied statutory prerequisites to invoke the court’s jurisdiction.
- The panel majority (en banc) concluded EBS did not comply with mandatory prepayment requirements for protest or injunctive suits and, because §112.108 remains invalid under this Court’s precedent, EBS had no statutory exception; the district court therefore lacked jurisdiction and its denial of the plea is reversed and remanded to allow amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EBS met Tax Code prepayment requirements to bring a protest suit | EBS paid part of assessment and filed an oath of inability to pay; full prepayment is unconstitutional | Comptroller: Tax Code requires full payment; partial payment insufficient | Held: EBS did not satisfy prepayment required for protest suits; jurisdiction lacking |
| Whether EBS could seek injunctive relief without full prepayment or bond | EBS relied on §112.108 oath of inability to pay and trial-court finding excusing prepayment | Comptroller: §112.108 (amended) is unconstitutional and cannot excuse prepayment | Held: EBS failed to meet statutory preconditions for injunctive relief; §112.108 remains invalid in this Court’s precedent |
| Whether the invalidation of §112.108 allows non‑prepayment declaratory actions or otherwise excuses prepayment | EBS argued prepayment requirement violates open-courts; could rely on declaratory or §112.108 exception | Comptroller: Only statutory prerequisites in chapter 112 apply; plaintiffs must comply or rely on available declaratory avenues but EBS didn’t | Held: Following R Communications II and this Court’s Bandag decision, declaratory actions (limited) exist, but EBS invoked chapter 112 remedies and must meet those prerequisites; failure to do so defeats jurisdiction |
| Remedy after jurisdictional dismissal | EBS urged court to retain case because trial court excused prepayment | Comptroller urged dismissal | Held: Reversed denial of plea to jurisdiction and remanded for further proceedings; plaintiff may be allowed to amend because pleadings do not affirmatively negate possible jurisdiction |
Key Cases Cited
- R Commc'ns, Inc. v. Sharp, 875 S.W.2d 314 (Tex. 1994) (state supreme court held §112.108 unconstitutional and restored limited access to declaratory relief without prepayment)
- Lall v. Central Appraisal Dist. of Rockwall County, 924 S.W.2d 686 (Tex. 1996) (prepayment condition that bars access to courts violates open-courts guarantee)
- Weck v. Sharp, 884 S.W.2d 153 (Tex. 1994) (post-R Communications II: taxpayers may seek declaratory relief to challenge tax assessments without prepayment)
- Heinrich v. El Paso County, 284 S.W.3d 366 (Tex. 2009) (ultra vires suits against state actors in official capacity are permissible and provide prospective relief)
- Texas Dep't of Transp. v. Sefzik, 355 S.W.3d 618 (Tex. 2011) (UDJA is a procedural device and does not enlarge jurisdiction; sovereign immunity waived only as to certain challenges)
- Cobb v. Harrington, 190 S.W.2d 709 (Tex. 1945) (declaratory relief allowed where suit does not seek money from the treasury and challenges scope/authority of tax law)