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Advanced Powder Solutions, Inc. v. Harris County Appraisal District

Court of Appeals of Texas, Fourteenth District

June 13, 2017

ADVANCED POWDER SOLUTIONS, INC., Appellant
v.
HARRIS COUNTY APPRAISAL DISTRICT, Appellee

         On Appeal from the 157th District Court Harris County, Texas Trial Court Cause No. 2015-20038

          Panel consists of Justices Boyce, Jamison, and Brown.

          OPINION

          Marc W. Brown Justice

         Advanced Powder Solutions, Inc., filed a motion to correct the 2013 appraisal rolls. The Appraisal Review Board ("ARB") determined that it did not have jurisdiction to consider or grant the relief requested and dismissed Advanced Powder's motion. Advanced Powder appealed to the trial court. The Harris County Appraisal District ("HCAD") filed a plea to the jurisdiction contending Advanced Powder did not pay its 2013 taxes before they became delinquent. The trial court granted HCAD's plea and dismissed the suit without stating its reasons. In five issues, Advanced Powder contends the trial court erred in granting HCAD's plea to the jurisdiction and motion to dismiss. We conclude that Advanced Powder forfeited its right to a final determination on its motion by failing to timely pay the taxes due under section 25.26 of the Texas Tax Code. As a result, Advanced Powder did not exhaust its administrative remedies and the trial court did not have jurisdiction to make a final determination on the motion. We affirm the judgment of the trial court.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Advanced Powder began doing business in Harris County at 12245 FM 529 Road, Building H, Houston, Texas 77041 in March 2012. Advanced Powder was subject to Harris County property taxes starting in 2013. HCAD mailed a Notice of Appraised Value ("Notice") to Advanced Powder at 12245 FM 529 RD STE H, Houston, TX 77041-2815. The Notice stated an appraised value of $1, 287, 743 for inventory located at 12247 FM 529 RD H, Houston, TX 77041, a location where Advanced Powder has never done business. Advanced Powder did not receive the Notice.[1] Advanced Powder did not timely pay the 2013 taxes and a tax warrant was issued on July 24, 2014. The tax warrant was executed and served on Advanced Powder on September 16, 2014. Advanced Powder paid the full amount of taxes owed at that time.

         Advanced Powder filed a Form 25.25, Real Property Request/Motion ("Correction Motion") to correct the appraisal roll related to its 2013 taxes on September 30, 2014. See Tex. Tax Code Ann. § 25.25 (West 2015). A hearing on the Correction Motion was held before the ARB. At the hearing, the ARB panel inquired whether the undisputed amount of the 2013 taxes had been paid timely. See id. § 25.26 (West 2015). Advanced Powder presented no evidence to establish the payment of 2013 taxes before the delinquency date of February 1, 2014. The ARB dismissed the Correction Motion based on a lack of jurisdiction to consider or grant the relief requested.

         The ARB issued an order of dismissal stating "[t]he board determined that it does not have jurisdiction to consider or grant the relief requested." Advanced Powder appealed that decision to the trial court. HCAD filed a plea to the jurisdiction and motion to dismiss contending the trial court did not have jurisdiction because Advanced Powder did not timely pay its 2013 taxes. In the alternative, HCAD argued Advanced Powder was not entitled to a correction under section 25.25(c) because the appropriate procedure to challenge the assessed value of property was under chapter 41 or section 25.25(d).[2] The trial court signed an order granting HCAD's plea to the jurisdiction and motion to dismiss on April 8, 2016. This appeal followed.

         II. ANALYSIS

         In five issues, Advanced Powder challenges the trial court's grant of HCAD's plea to the jurisdiction and motion to dismiss. First, Advanced Powder contends the trial court erred in granting HCAD's motion to dismiss because it met the requirements for a correction of the appraisal roll under section 25.25(c). Second, Advanced Powder contends the trial court erred if it granted HCAD's plea under section 42.01(a)(1)(B) because Advanced Powder stated a claim within the trial court's jurisdiction under that section. Third, Advanced Powder contends the trial court erred if it granted HCAD's plea based on the payment requirements of section 25.26 because it met the payment requirements under section 42.08(b). Fourth, Advanced Powder contends the trial court erred if it granted HCAD's plea under section 42.01(a)(1)(C) because that section is inapplicable. Finally, Advanced Powder contends the trial court erred if it granted HCAD's plea based on any failure to exhaust administrative remedies.

         We begin by addressing Advanced Powder's second, third, fourth, and fifth issues. Taken together, these issues challenge the trial court's grant of HCAD's plea contending it satisfied the jurisdictional requirements for a claim under section 25.25(c), which permits a tax roll to be corrected under certain circumstances. HCAD contends the trial court's judgment was proper and Advanced Powder forfeited its right to a final determination of its Correction Motion under section 25.26, which forecloses relief under section 25.25 unless the taxpayer timely pays under protest the undisputed taxes. We must determine whether the trial court has jurisdiction over a section 25.25(c) claim on appeal when the property owner admittedly did not timely pay its taxes under section 25.26.

         A. Standard of review

         A plea to the jurisdiction is a dilatory plea; its purpose is "to defeat a cause of action without regard to whether the claims asserted have merit." Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). The plea challenges the trial court's jurisdiction over the subject matter of a pleaded cause of action. Tex. Dep't of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). We review a trial court's ruling on a plea to the jurisdiction de novo. Id. at 228; Woodway Drive, L.L.C. v. Harris Cty. Appraisal Dist., 311 S.W.3d 649, 651 (Tex. App.-Houston [14th Dist.] 2010, no pet.).

         "When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause." Miranda, 133 S.W.3d at 226. We must accept as true all factual allegations in the petition, construe the pleadings liberally, and look to the pleader's intent. Id. at 226-27; Woodway Drive, 311 S.W.3d at 651. To prevail on a plea to the jurisdiction, the defendant must demonstrate that even if all the plaintiff's pleaded allegations are true, an incurable jurisdictional defect remains on the face of the pleadings that deprives the trial court of subject matter jurisdiction. Woodway Drive, 311 S.W.3d at 652. A trial court may consider the pleadings and any evidence pertinent to the jurisdictional inquiry. Id.

         B. Proceedings before the ARB

         "The Texas Tax Code provides detailed administrative procedures for those who would contest their property taxes." Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex. 2006). The administrative procedures in the Tax Code are exclusive. See Tex. Tax Code Ann. § 42.09 (West 2015). Exclusive original jurisdiction was bestowed upon appraisal review boards by the legislature in ad valorem tax cases. See Rourk, 194 S.W.3d at 502. "This administrative review process is intended to 'resolve the majority of tax protests at this level, thereby relieving the burden on the court system.'" Harris Cty. Appraisal Dist. v. ETC Marketing, Ltd., 399 S.W.3d 364, 367 (Tex. App.-Houston [14th Dist.] 2013, pet. denied) (citing Webb Cty. Appraisal Dist. v. New Laredo Hotel, Inc., 792 S.W.2d 952, 954 (Tex. 1990)).

         Advanced Powder filed its Correction Motion under section 25.25(c) of the Texas Tax Code. This section permits a property owner to correct errors in the appraisal roll after the time limits for a chapter 41 administrative protest to the ARB have expired, but limits the property owner's ability to change approved tax appraisal rolls. See U. Lawrence Boze' & Assocs., P.C. v. Harris Cty. Appraisal Dist., 368 S.W.3d 17, 25 (Tex. App.-Houston [1st Dist.] 2011, no pet.). If the chief appraiser and property owner do not agree on the correction, then the property owner is entitled to a hearing and determination of the motion by the ARB. Tex. Tax Code Ann. § 25.25(e).

         A property owner who files a section 25.25(c) motion must comply with the payment requirements of section 25.26 or forfeit the right to a final determination of the motion. Id. § 25.25(e). Section 25.26(b) requires that:

Except as provided by Subsection (d), a property owner who files a motion under Section 25.25 must pay the amount of taxes due on the portion of the taxable value of the property that is the subject of the motion that is not in dispute before the delinquency date or the property owner forfeits the right to proceed to a final determination of the motion.

Id. § 25.26(b). Generally "taxes are due upon receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which imposed." Id. ยง 31.02(a) (West Supp. 2016). Section 25.26(d) permits a property owner claiming indigence to be excused from the timely payment of taxes before the determination of a motion if the ARB finds payment would constitute an unreasonable ...


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