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Mount Vernon United Methodist Church v. Harris County

Court of Appeals of Texas, Fourteenth District

April 25, 2017


         On Appeal from the 127th District Court Harris County, Texas Trial Court Cause No. 2015-65353.

          Panel consists of Justices Boyce, Jamison, and Brown.


          Marc W. Brown Justice

         Mount Vernon United Methodist Church appeals from an order authorizing Harris County, on behalf of itself and countywide taxing authorities[1] (collectively, the "Taxing Authorities"), to withdraw monies from Mount Vernon's condemnation award on deposit in the trial court's registry. The Taxing Authorities sought to recover the values of ad valorem taxes, and a demolition lien, concerning condemned real property (the "Property"). In its first issue, Mount Vernon argues that "the order"[2] should be reversed because the preexisting demolition lien was extinguished and not subject to collection. In its second issue, Mount Vernon asserts that it is exempt from paying taxes on the Property. We affirm.

         I. Background

         Harris County petitioned to condemn the Property. Special Commissioners awarded Harris County fee simple title to the Property and awarded the sum of $401, 751.00 to Mount Vernon. Harris County deposited an amount equal to the award into the trial court's registry. Mount Vernon filed a statement of no objection to the award. The Taxing Authorities subsequently intervened and moved to withdraw a portion of the award from the registry to recover two debts concerning the Property. The debts, arising from two separate Harris County Appraisal District ("HCAD") accounts, are: (1) $16.88 for delinquent ad valorem taxes on the account ending in 0015; and (2) $6, 283.86 for a demolition lien on the account ending in 0002. The HCAD account ending in 0015 has no HCAD-approved tax exemption. Mount Vernon accordingly paid taxes for the Property on the 0015 account in 2014 and 2015.

         The City of Houston, an Intervenor, is the lienholder of the demolition lien. The demolition lien is perfected and recorded. The lien attached to the Property in 1985, before the County commenced the condemnation proceedings. Mount Vernon purchased the Property subject to the demolition lien in 1987.

         The trial court granted the Taxing Authorities' motion to withdraw in an order dated May 20, 2016. Mount Vernon moved for reconsideration, and the trial court denied the motion in an order dated July 25, 2016. Mount Vernon appealed both orders on July 26, 2016. The trial court signed its Final Judgment on Award on August 15, 2016.

         II. Analysis

         The Taxing Authorities argue as a threshold matter that Mount Vernon waives its right to allege error regarding the reconsideration order because Mount Vernon's brief "does not contain any [i]ssue [p]resented, or any legal analysis or argument, regarding the Reconsideration Order." We agree. Mount Vernon waives any alleged error regarding the trial court's denial of the reconsideration order.

         A. The trial court did not abuse its discretion by granting the Taxing Authorities' motion to withdraw funds to recover the value of its demolition lien.

         Mount Vernon appeals the order to withdraw funds and argues in its first issue that the Taxing Authorities could not withdraw funds on deposit in the trial court's registry to recover the value of the demolition lien because the lien was extinguished by virtue of Harris County taking title to the Property. We review a trial court's order to withdraw funds from or return funds to the court registry for an abuse of discretion. See Sommers v. Concepcion, 20 S.W.3d 27, 36 (Tex. App.-Houston [14th Dist.] 2000, pet. denied) ("[W]e find that the decision whether to order return of funds [to the trial court's registry] is discretionary"); see also Burns v. Bishop, 48 S.W.3d 459, 467 (Tex. App.-Houston [14th Dist.] 2001, no pet.) ("Funds on deposit in the registry of a trial court are always subject to the control and order of the trial court, and the court enjoys great latitude in dealing with them."). Under an abuse of discretion standard, a trial court abuses its discretion if its decision is arbitrary, unreasonable, or made without reference to any guiding principles. Cire v. Cummings, 134 S.W.3d 835, 839 (Tex. 2004). "A trial court does not abuse its discretion if it bases its decision on conflicting evidence and some evidence supports its decision." In re Barber, 982 S.W.2d 364, 366 (Tex. 1998). We view the evidence in the light most favorable to the trial court's ruling and indulge every presumption in its favor. Aquaduct, L.L.C. v. McElhenie, 116 S.W.3d 438, 444 (Tex. App.-Houston [14th Dist.] 2003, no pet.).

         In a condemnation proceeding, a condemnor may take constructive possession of the condemned property when it deposits the condemnation award, to order of condemnee, into the trial court's registry. See Tex. Prop. Code Ann. § 21.021 (West 2014); Hooks v. Fourth Court of Appeals, 808 S.W.2d 56, 60-61 (Tex. 1991) (orig. proceeding). Upon condemnor's deposit, "the interest of each condemnee is established in and attaches to [the award] as security for any possible damage suffered by reason of his dispossession." Fort Worth Concrete Co. v. State, 400 S.W.2d 314, 317 (Tex. 1966). Additionally, upon condemnor's deposit, a lienholder's security interest in the condemned property vests in the condemnation award so that he is compensated for the destruction of the lien. Olivares v. Birdie L. Nix Tr., 126 S.W.3d 242, 250 (Tex. App.-San Antonio 2003, pet. denied). Accordingly, the lienholder is "entitled to participate in the condemnation proceedings" and "may, under appropriate circumstances, recover a portion of the condemnation [award]." Wynnewood Bank & Trust v. State, 767 S.W.2d 491, 493 (Tex. App.-Dallas 1989, no writ).

         We reject Mount Vernon's contention that the demolition lien was "extinguished" and not subject to collection following Harris County's acquisition of title to the Property. Mount Vernon relies on State v. City of San Antonio, 209 S.W.2d 756, 757 (Tex. 1948), and Lubbock I.S.D. v. Owens, 217 S.W.2d 186, 188 (Tex. Civ. App.-Amarillo 1949, writ ref'd), and states that those cases stand for the proposition that any proceeding to collect any lien on government-owned property is void. We disagree. City of San Antonio and Owens held that any proceeding to collect a tax lien against government-owned property is void because Article XI, Section 9, of the Texas Constitution exempts government-owned property from forced sale and taxation. City of San Antonio, 209 S.W.2d at 757; Owens, 217 S.W.2d at 188. City of San Antonio and Owens are entirely ...

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