Brazoria Civic Club v. Brazoria Cty. Appraisal Dist.

694 S.W.3d 854

BRAZORIA CIVIC CLUB, Appellant

v.BRAZORIA COUNTY APPRAISAL DISTRICT, Appellee

NO. 14-22-00557-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed April 25, 2024

Rehearing Denied August 20, 2024

On Appeal from the 239th District Court, Brazoria County, Texas, Trial Court Cause No. 117254-CV

Veronica L. Davis, West Columbia, for Appellant.

Sandra Minderhout Griffin, Christopher Scott Jackson, Austin, for Appellee.

Panel consists of Chief Justice Christopher and Justices Bourliot and Wilson.

OPINION

Randy Wilson, Justice

In this property-tax dispute a property owner appeals the trial court’s interlocutory order granting the appraisal district’s jurisdictional plea and dismissing the owner’s claims against the appraisal district for lack of subject-matter jurisdiction. We grant in part and deny in part the appraisal district’s motion to dismiss this appeal as moot. As to the part of the appeal that is not moot, we conclude that the owner was able to protest each of its claims under the Property Tax Code. The procedures prescribed by the Property Tax Code for the adjudication of protests are the exclusive remedies for these claims, and the trial court lacks subject-matter jurisdiction to consider the property owner’s claims. Therefore, as to the remainder of the appeal, we affirm the trial court’s order granting the appraisal district’s jurisdictional plea.

I. Factual and Procedural Background

Appellant/plaintiff Brazoria Civic Club (the "Club") alleges that it is an unincorporated association formed in the early 1960s that qualifies as a charitable organization as provided by Tax Code section 11.18. The Club owns two tracts of real property in Brazoria, Texas, and a building on one of the tracts (collectively the "Properties"). The building was used as a meeting place by various organizations, churches, auxiliaries, and youth groups. Based on an application that was submitted by the Civic Club in the 1980s, the Properties apparently were treated by appellee/defendant Brazoria County Appraisal District (the "Appraisal District") as being entitled to an exemption from property taxation under Tax Code section 11.18.

Starting in the 2016 tax year, the Appraisal District stopped treating the Properties as being entitled to an exemption, and property taxes were assessed against the Properties. The Club alleges that the chief appraiser of the Appraisal District did not deliver to the Club a written notice under Tax Code section 11.43(c) that a new application for exemption was required. The Club contends that the Appraisal District removed the tax exemption from the Properties without prior notice.

The record reflects that on or about December 20, 2019, Brazoria County, City of Brazoria, Brazoria County Emergency Services District #2, Brazoria County Emergency Services District #6, Columbia-Brazoria Independent School District, Port Freeport, West Brazos Drainage District #11, and Special Road and Bridge District (the "Taxing Units") filed suit in Cause Number 106132-T in the 239th District Court seeking foreclosure of tax liens on the Properties based on property taxes, penalties, and interest due for tax years 2016 through 2019 (the "Foreclosure Suit").¹ The Taxing Units filed suit against "Brazoria Civic Club, An Entity of Unknown Type and Unknown Status" (the "Foreclosure Defendant"). It appears from the record that the only manner by which citation was served on the Foreclosure Defendant was by posting a copy of the citation at the usual and customary place for posting public notices at the door of the county courthouse in Brazoria County, Texas. On the motion of the Taxing Units, the trial court signed an order stating that the Foreclosure Defendant had not filed an answer and that the trial court appointed an attorney ad litem to defend the Foreclosure Suit on behalf of the Foreclosure Defendant ("Attorney Ad Litem").

On July 8, 2020, the attorney who represents the Club in this appeal sent a letter to the Appraisal District stating that (1) she attached a form 50-115 (Application for Charitable Organization Property Tax Exemption) for the Club; (2) she had represented the Club in a legal matter in the past; (3) she was notified by the Attorney Ad Litem that the Properties were scheduled for trial on July 17, 2020 regarding delinquent taxes; (4) to the best of her recollection the Club is an unincorporated association that had an exemption; (5) the Club did not received two letters that the Appraisal District sent to the Club’s former address in 2016. Attached to the letter was an application for a charitable organization property tax exemption on behalf of the Club for tax years 2016 through 2020 (the "First Application"). The First Application was signed by the Club’s Vice President and provided the Club’s current mailing address. According to the First Application, the Club is not organized exclusively to perform religious, charitable, scientific, literary, or educational purposes.

On December 11, 2020, a bench trial was held in the Foreclosure Suit at which the Club did not appear. Four days later the trial court signed a final judgment ("Final Judgment") in which the trial court (1) stated that the Foreclosure Defendant had failed to appear or answer; (2) determined that the Taxing Entities had valid claims for delinquent taxes, penalties, interest, and costs that are secured by tax liens against the Properties; (3) stated amounts of valid claims for the Taxing Entities as to the first tract for tax years 2016 to 2019 in the aggregate amount of $1,494.62; (4) stated amounts of valid claims for the Taxing Entities as to the second tract for tax years 2016 to 2019 in the aggregate amount of $823.58; (5) determined that the market value of the first tract was $11,760; (6) determined that the market value of the second tract was $9,610; (7) rendered judgment in favor of the Taxing Units in rem only for the amounts stated in the judgment; (8) recognized tax liens on the Properties to secure the payments of these amounts and ordered foreclosure of the tax liens; and (9) ordered the Properties sold to satisfy the amounts secured by the tax liens.

On August 2, 2021, an Order of Sale was issued. On September 7, 2021, the first tract was sold at a public sale for $9,800, and the second tract was sold at a public sale for $6,000 (collectively, the "Tax Sales"). On December 22, 2021, the Appraisal District notified the Club that it had denied the First Application. Within thirty days the Club appealed this decision by filing a written notice of protest with the Brazoria County Appraisal Review Board ("ARB") in which the Club asserted that (1) the Club’s protest is based on the denial, modification, or cancellation of an exemption; (2) the Club’s protest is based on the failure to send required notice; (3) the Properties should not be taxed by any of the Taxing Units; (4) the Club’s exemption was improperly removed due to the failure to receive proper notice; (5) the Club did not receive notice of trial; and (6) the Club’s Vice President was not served with notice of the Foreclosure Suit or the sale of the Properties.

On January 20, 2022, the Club filed a second application with the Appraisal District seeking a tax exemption for tax years 2016 through 2022 (the "Second Application"). According to the Second Application, the Club is not organized exclusively to perform religious, charitable, scientific, literary, or educational purposes. On February 16, 2022, the Appraisal District notified the Club that (1) as to tax years 2021-2022, the Appraisal District had denied the Second Application for various reasons, including that the Club is not organized exclusively to perform religious, charitable, scientific, literary, or educational purposes; and (2) as to tax years 2016-2020, the Appraisal District had already denied the First Application, in which the Club sought an exemption for these tax years.

On March 28, 2022, the Club filed suit in the trial court below in Cause Number 117254-CV against the Taxing Units, the Appraisal District, and others (the "Club’s Suit"). In its live pleading when the trial court granted the Appraisal District’s plea to the jurisdiction ("Live Pleading"), the Club asserted that (1) the pleading is a bill of review as to the Final Judgment, a petition to set aside the Final Judgment, a petition for injunctive relief, and an appeal of the Appraisal District’s denial of exemption and other rulings; (2) though the Appraisal District was not a party to the Foreclosure Suit, the Appraisal District is a necessary party in the Club’s Suit because the Appraisal District’s removal of the Club’s tax exemption resulted in the Tax Sales of the Properties; (3) the Club is entitled to bill of review relief as to the Final Judgment because service of process was not effectuated on the Club in the Foreclosure Suit; (4) the Appraisal District denied the Club due process by removing the Club’s property tax exemption without notice or a hearing; (5) the Club did not receive notice of the trial in the Foreclosure Suit, and the trial court clerk did not send the Club notice of the Final Judgment; (6) the Final Judgment and the public sale of the Properties were void and should be set aside; and (7) the Club sought a temporary restraining order and temporary injunction prohibiting the buyers of the Properties at the Tax Sales from selling or disposing of either of the Properties. In the Live Pleading, the Club sought the following relief: (1) bill of review relief setting aside the Final Judgment; (2) an order setting aside the Order of Sale; (3) an order retroactively reinstating the Club’s property tax exemption; and (4) an award of damages and attorney’s fees.

The Appraisal District filed a plea to the jurisdiction ("Jurisdictional Plea") asserting among other things that (1) Tax Code section 41.41 allows a property owner to protest the denial of an exemption or any other action; (2) ...