ANHEUSER-BUSCH, L.L.C., Appellant v. HARRIS COUNTY TAX ASSESSOR-COLLECTOR, Appellee
NO. 01-15-00422-CV
Court of Appeals of Texas, Houston (1st Dist.).
Opinion issued October 11, 2016
Rehearing En Banc Overruled April 25, 2017
Vince Ryan, Harris County Attorney, Keith Toler, Assistant County Attorney, Houston, TX, for Appellee..
Panel consists of Justices Jennings, Massengale, and Huddle.
OPINION
Rebeca Huddle, Justice
Ordinarily, Harris County property taxes must be paid before the default February 1 delinquency date to avoid assessment of penalties and interest. Appellant Anheuser-Busch paid its 2012 Harris County property taxes on February 21, 2013, three weeks after the default delinquency date, by which time Appellee, Harris County Tax Assessor-Collector (“HCTAC“), had assessed $631,114.08 in penalties and interest for untimely payment. Anheuser-Busch
Background
In 2012, Anheuser-Busch owned seven properties in Harris County that are the subject of this suit. Under the Texas Tax Code, tax assessors are required to “prepare and mail a tax bill to each person in whose name the property is listed on the tax roll and to the person‘s authorized agent.”
According to the affidavit of Elizabeth Doss, HCTAC‘s Director of the Property Tax Division, HCTAC timely mailed a tax bill for each of Anheuser-Busch‘s seven properties in November 2012, well before the February 1 default delinquency date. Doss averred that five of the seven Anheuser-Busch tax bills were mailed to Duff & Phelps, L.L.C., Anheuser-Busch‘s authorized agent for those five properties. Doss further averred that the remaining two tax bills were mailed directly to Anheuser-Busch because it had not appointed an authorized agent for those two properties.1 Importantly, the parties agree that none of the seven tax bills were mailed to both Anheuser-Busch and Duff & Phelps.
Anheuser-Busch determined the amount of property taxes it owed on its seven properties by checking the Harris County Appraisal District website. Then, on January 23, 2013—one week before the default delinquency date—Anheuser-Busch mailed HCTAC a check in the amount owed: $9,015,011.93. HCTAC received the check on January 28, 2013, but learned on February 5, 2013, that Anheuser-Busch‘s bank did not honor the check due to internal fraud prevention protocols. HCTAC sent Anheuser-Busch a “delinquent tax bill,” which assessed $631,114.08 in penalties and interest in addition to the $9,015,011.93 tax owed.
On February 21, 2013, Anheuser-Busch tendered a check in the amount of $9,015,011.93, which bore the following notation: “To extent applied to penalty and interest, paid under protest.” The enclosed cover letter requested that HCTAC waive the assessed penalties and interest. Doss concluded that Anheuser-Busch was not “entitled to a refund” of the assessed penalties and interest because the dishonored check was the fault of Anheuser-Busch, not HCTAC.
Anheuser-Busch later paid the assessed penalties and interest, again noting on its check: “Paid under protest and duress.” With that check, Anheuser-Busch enclosed
Both sides moved for summary judgment. In its order denying Anheuser-Busch‘s motion, the trial court wrote:
[HCTAC] did not strictly comply with Section 31.01(a) of the Tax Code, but [Anheuser-Busch] had actual notice of the tax, and attempted to pay it prior to the due date. Sections 312.005 and 312.006 of the Government Code direct this Court to diligently attempt to ascertain legislative intent, and to construe statutes to achieve their purpose. The Court ascertains that the purpose of the Tax Code provision at issue is to make sure the taxpayer has notice, not to provide a loophole which allows the taxpayer to avoid timely payment.
The trial court subsequently granted HCTAC‘s motion and entered a take-nothing judgment. Anheuser-Busch appealed.
Governmental Immunity
Before reaching the merits, we address HCTAC‘s contention that the trial court lacked subject-matter jurisdiction because Anheuser-Busch failed to establish a waiver of sovereign immunity. “Sovereign immunity protects the State from lawsuits for money damages.” Tex. Nat. Res. Conservation Comm‘n v. IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002). When bringing suit against a governmental unit, the plaintiff bears the burden of establishing the court‘s subject matter jurisdiction by alleging a valid waiver of immunity. Dallas Area Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003). We review immunity issues under a de novo standard. Tex. Dept. of Transp. v. Sefzik, 355 S.W.3d 618, 620 (Tex. 2011) (per curiam).
This Court previously has held that “where a claim for declaratory or injunctive relief is brought seeking the refund of illegally collected tax payments, governmental immunity will not apply if the taxpayer alleges that the payments were made as a result of fraud, mutual mistake of fact, or duress, whether express or implied.” Nivens v. City of League City, 245 S.W.3d 470, 474 (Tex. App.-Houston [1st Dist.] 2007, pet. denied) (citing Dallas Cty. Cmty. Coll. Dist. v. Bolton, 185 S.W.3d 868, 876-79 (Tex. 2005)). This is the case because “revenue generated from a tax determined to be illegal should not be treated as property of the State or municipality to which the principles of sovereign immunity apply, and an illegally collected fee should be refunded if paid as a result of fraud, mutual mistake of fact, or duress, without respect to waiver of sovereign immunity.” Id. (first citing Camacho v. Samaniego, 954 S.W.2d 811, 822 (Tex. App.-El Paso 1997, writ denied), then citing Austin Nat‘l Bank of Austin v. Sheppard, 123 Tex. 272, 71 S.W.2d 242, 246 (1934)). In such circumstances, no legislative consent to sue is required. Id.
In Nivens, a number of taxpayers asserted claims for money had and received, breach of contract, and mistake, but they did not seek declaratory or injunctive relief regarding the assessment and refund of allegedly illegal municipal utility district taxes. Nivens, 245 S.W.3d at 475. The taxpayers also failed to allege that payments had been made as a result of fraud, mutual mistake of fact, or duress. Id. As a result, we held that their claims were barred by governmental immunity. Id.
The Fourteenth Court of Appeals reached a similar result in Tara Partners, Ltd. v. City of S. Houston, 282 S.W.3d 564
Unlike the plaintiffs in Nivens and Tara Partners, Anheuser-Busch seeks only a declaratory judgment that it did not owe penalties or interest assessed and pleaded that it paid the disputed penalties and interest under duress to avoid additional interest from accruing. Paragraph 8 of the First Amended Petition asserts: “Because [HCTAC] continued to accrue interest on the alleged deficiency, [Anheuser-Busch] paid $631,114.08 on December 2, 2013 under protest and under duress in order to stop additional interest from accruing.” The Texas Supreme Court has noted that the threat of continually accruing interest may constitute duress. See, e.g., Miga v. Jensen, 96 S.W.3d 207, 211, 224-25 (Tex. 2002) (explaining that compulsion “implied by the threat of statutory penalties and accruing interest” constitutes economic duress). Because Anheuser-Busch seeks a declaratory judgment and alleged that it paid the penalties and interest under duress, we conclude that no legislative consent to sue is required. Id. (threat of penalties and accruing interest may constitute economic duress); Nivens, 245 S.W.3d at 474 (governmental immunity does not apply if taxpayer seeking declaratory relief regarding refund of illegally collected tax payments alleges that payments were made as a result of duress).
Merits of Summary Judgment
Anheuser-Busch contends that the trial erred in granting summary judgment in HCTAC‘s favor because HCTAC failed to comply with
A. Standard of Review
We review the trial court‘s decision to grant or deny a traditional motion for summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). If a trial court grants summary judgment without specifying the grounds for granting the motion, we must uphold the trial court‘s judgment if any of the grounds are meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.-Houston [1st Dist.] 2005, pet. denied). We will consider all the evidence in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in favor of the nonmovant. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex. 2007) (per curiam).
Our primary objective in construing statutes is to give effect to the Legislature‘s intent. Tex. Lottery Comm‘n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010). “We rely on the plain meaning of the text as expressing legislative intent unless a different meaning is supplied by legislative definition or is apparent from the context, or the plain meaning leads to absurd results.” Id. (citing City of Rockwall v. Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008)). “We presume the Legislature selected language in a statute with care and that every word or phrase was used with a purpose in mind.” Id. (first citing In re Caballero, 272 S.W.3d 595, 599 (Tex. 2008), then citing Chastain v. Koonce, 700 S.W.2d 579, 582 (Tex. 1985)).
We are further obliged to consider a statute as a whole rather than construing individual provisions in isolation. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (2001). We must presume that in enacting a statute, the Legislature intended the entire statute to be effective.
B. Applicable Law
The Tax Code also prescribes the taxpayer‘s payment deadline—or “delinquency date” in the parlance of the Tax Code—which may vary depending on when an assessor mails a tax bill. The general rule is that taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which imposed.
C. Analysis
Harmonizing relevant Tax Code provisions
The question of whether HCTAC was authorized to impose penalties and interest beginning on the February 1 default delinquency date turns on whether Anheuser-Busch‘s payment was due on that date. HCTAC argues that it was, but Anheuser-Busch argues that the default delinquency date was postponed for at least 21 days because HCTAC failed to mail tax bills to both Anheuser-Busch and its authorized agent by January 10, as required by
HCTAC concedes that Duff & Phelps was Anheuser-Busch‘s authorized agent for five of the seven properties at issue. It also concedes that HCTAC did not mail a tax bill to both Anheuser-Busch and Duff & Phelps for any of the seven properties at issue. We therefore consider whether HCTAC‘s failure to mail a tax bill to both Anheuser-Busch and Duff & Phelps postponed the February 1 default delinquency date.
Both the Texas Attorney General and this Court have considered and harmonized
We construe section 31.04 to govern only in instances in which a tax bill can be sent, but is mailed late; it has no application in an instance in which no tax bill can be sent because the name or address of the delinquent taxpayer is unknown. Our construction of section 31.04 harmonizes any apparent conflict with other statutory provisions [including subsection 31.01(g)] and renders any further reliance on abstruse principles of statutory construction otiose.
Op. Tex. Att‘y Gen. No. JM-1192 (1990).
This Court similarly has held that
The logic relied upon by the Attorney General and the Ogg court applies with equal force now that
Substantial compliance
HCTAC argues that it substantially complied with section 31.01(a) by mailing each tax bill to either Anheuser-Busch or its authorized agent, and that substantial compliance should be deemed sufficient. Under Texas law, performance of the essential requirements of a statute constitutes substantial compliance. Harris Cty. Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131, 135 (Tex. App.-Houston [14th Dist.] 1994, no writ) (quoting Harris Cty. Appraisal Dist. v. Krupp Realty Ltd. P‘ship, 787 S.W.2d 513, 515 (Tex. App.-Houston [1st Dist.] 1990, no writ) (“A deviation from the requirements of the statute which does not seriously hinder the legislature‘s purpose in imposing the requirement is ‘substantial compliance.‘“)).
Courts have held that substantial compliance is sufficient where the relevant provision of the Tax Code demands only substantial compliance. See, e.g., Bradford, 919 S.W.2d at 135 (holding substantial compliance is sufficient under
More to the point, the Legislature amended subsection 31.01(a) to require tax assessors to mail a tax bill to a property owner and its authorized agent, if any. When it did so, it did not alter the consequence of a tax assessor‘s failure to timely mail a required tax bill, which is set forth in
The Legislature is certainly capable of changing the consequence of a tax assessor‘s failure to send required tax bills. For instance, in 1985, if a taxing authority failed to deliver a required 5-year delinquency notice, “[p]enalties and interest on a tax delinquent more than five years or a multiple of five years are cancelled and may not be collected.” Act of May 26, 1985, 69th Leg., R.S., ch. 761, § 1, sec. 33.04, 1985 Tex. Gen. Laws 2600, 2601 (amended 1999) (current version at
As in the context of the now-extinct 5-year delinquency notices, the legislature was assuredly capable of amending
Waiver
HCTAC also argues that the summary judgment should be affirmed based on Anheuser-Busch‘s waiver. First, HCTAC asserts that Anheuser-Busch waived any complaint about imperfect notice by attempting to pay its tax bill before the default February 1 delinquency date. “Waiver is the intentional relinquishment of a right actually known, or intentional conduct inconsistent with claiming that right.” Ulico Cas. Co. v. Allied Pilots Ass‘n, 262 S.W.3d 773, 778 (Tex. 2008) (citations omitted). “The elements of waiver include (1) an existing right, benefit, or advantage held by a party; (2) the party‘s actual knowledge of its existence; and (3) the party‘s actual intent to relinquish the right, or intentional conduct inconsistent with the right.” Id. (citing Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996)).
Here, there is no evidence that Anheuser-Busch intended to relinquish its right to avoid penalties and interest by paying its 2012 tax bills before the default delinquency date. If anything, its attempt to pay its tax bills before the February 1 default delinquency date demonstrates that it sought to preserve its right to avoid penalties and interest. See Van Indep. Sch. Dist. v. McCarty, 165 S.W.3d 351, 353 (Tex. 2005) (“While waiver may sometimes be established by conduct, that conduct must be unequivocally inconsistent with claiming a known right.“). Accordingly, we find no merit in HCTAC‘s argument that Anheuser-Busch waived postponement of its delinquency date by attempting to tender payment before that date.
HCTAC‘s second waiver argument is based on the terms of the Appointment of Agent form by which Anheuser-Busch designated Duff & Phelps as its authorized agent. In particular, HCTAC argues that the form, which incorrectly informs the taxpayer that “the affected offices are not required by law to send you duplicate copies,” operates as a waiver of
Voluntary payment rule
Finally, HCTAC contends that the voluntary payment rule prevents Anheuser-Busch from complaining of lack of notice because it issued a check to HCTAC before the default delinquency date. It has long been the rule in Texas that “a tax voluntarily paid cannot be recovered, though it had not the semblance of legality.” City of Houston v. Feizer, 76 Tex. 365, 13 S.W. 266, 267 (1890). This voluntary payment rule “secures taxing authorities in the orderly conduct of their financial affairs,” serves the “government‘s exceedingly strong interest in financial stability,” and “supports the age-old policies of discouraging litigation with the government.” Bolton, 185 S.W.3d at 876-77 (citations omitted). The voluntary payment rule also operates to prevent a party from misleading his opponent into believing the controversy is resolved before later contesting the payment and seeking recovery. Highland Church of Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982). When the facts are undisputed, as in this case, determination of whether a payment is voluntary is a question of law. Bolton, 185 S.W.3d at 880.
We reject HCTAC‘s voluntary payment rule argument because Anheuser-Busch does not seek recovery of the amount of property taxes it voluntarily paid in February 2013. It seeks only recovery of assessed penalties and interest, which it tendered under protest and duress to prevent accrual of additional interest. See Miga, 96 S.W.3d at 211, 224-25 (explaining that payment in attempt to avoid further accrual of interest is made under duress and not voluntary when debtor clearly expresses intent to contest payment and recovery). The summary judgment record contains no evidence that Anheuser-Busch‘s conduct suggested that the controversy was resolved; to the contrary, it announced its intent to pursue litigation. See Highland Church, 640 S.W.2d at 236. Accordingly, we conclude that the voluntary payment rule is inapplicable.
D. Application to Summary Judgment Evidence and Disposition
The parties agree that Anheuser-Busch duly appointed Duff & Phelps as its authorized agent with respect to five properties: Account Numbers 121-756-001-0001, 121-756-002-0001, 121-756-002-0002, 121-756-003-0001, and 2-0049253. HCTAC concedes that it did not mail a tax bill to each of Anheuser-Busch and its authorized agent with respect to these properties. Therefore, no material factual dispute exists with respect to these five properties. For the reasons discussed above, we conclude that, with respect to these five properties, Anheuser-Busch‘s delinquency date was postponed pursuant to
There is, however, a material factual dispute which prevents us from rendering judgment with respect to the remaining two properties: Account Numbers
Conclusion
For the reasons discussed above, we reverse the trial court‘s rendition of summary judgment in favor of HCTAC. With respect to Account Numbers 121-756-001-0001, 121-756-002-0001, 121-756-002-0002, 121-756-003-0001, and 2-0049253, for which the parties agree that an authorized agent had been duly appointed, we hold that HCTAC‘s failure to mail tax notices to both Anheuser-Busch and its authorized agent postponed the February 1 default delinquency date and precluded HCTAC from assessing penalties and interest as of February 1. Accordingly, we render judgment that Anheuser-Busch did not owe and is entitled to a refund of penalties and interest for 2012 Harris County property taxes with respect to these five properties.
With respect to Account Numbers 2-2028682 and 2-2144716, we conclude that there is a fact issue about whether Anheuser-Busch‘s appointment of an authorized agent was valid such that notice to both Anheuser-Busch and its authorized agent was required. Accordingly, we remand for further proceedings consistent with this opinion.
Phillippe TANGUY, 13500 Air Express, L.L.C. and 13500 Air Express, L.P., and PTRE Holdings, L.P., Appellants v. William G. WEST, as Chapter 7 Trustee of Richard Davis, Debtor, and Eva S. Engelhart, Receiver, Appellees
NO. 01-14-00455-CV
Court of Appeals of Texas, Houston (1st Dist.).
Opinion issued October 27, 2016
Rehearing Overruled April 4, 2017