Opinion
NUMBER 13-15-00026-CV
01-28-2016
CAMERON COUNTY APPRAISAL DISTRICT and FRUTOSO M. GOMEZ JR., Appellants, v. THORA O. ROURK, ET AL., Appellees.
On appeal from the 357th District Court of Cameron County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Perkes
Memorandum Opinion by Justice Perkes
Appellees, Thora O. Rourk, et al (collectively "Rourk") filed a lawsuit seeking a declaration that the assessment of ad valorem taxes on their respective travel trailers and recreational vehicles by appellants, Cameron County Appraisal District (Appraisal District), Frutoso M. Gomez, Jr., its chief tax appraiser, and Robert Romero, its district appraiser, "constituted [an] illegal and unauthorized act in violation of the Texas Constitution, art. III, as implemented by the Texas Tax Code Sec. 11.14." Rourk further sought to recover attorney's fees under the Texas Uniform Declaratory Judgment Act ("UDJA").
Named appellees are Thora O. Rourk, Elva Broker, Clara and Harry Schmoekel, Robert and Joan Niles, Carrol A. and Lois Iverson, William W. and Frances Wolfe, Terry and Jean Lathangue, A.J. and Betty Roy, Mabel Cheetham, Ryle Andrews, Larry and Mary Gustin, Lowell and Winona Krenger, George and Fran Wrasse, Donald E. and Virginia M. Sadler, Sheldon I. and Margurite C. Ross, Jewell and Martha Groover, Vassie Miller, Barry W. Hewitt and Shelia A. Hewitt, and Mike and Monica MacWilliam.
The trial court entered judgment finding that Gomez, in his official capacity as the Appraisal District's chief appraiser: (1) "acted without authority and in violation of statutory and constitutional provisions in assessing the travel trailers and/or park models"; (2) "failed to perform a purely ministerial act"; and (3) committed the acts in "violation of Texas Tax Code §11.14 (West 2008)." The trial court awarded Rourk attorney's fees in the sum of $70,848.48, together with contingent attorney's fees for appeal.
The Appraisal District and Robert Romero are not named in the final judgment, and the Appraisal District's name is not included in the style. Rather, Gomez is the only person named in the judgment, and the judgment states generically that "Defendant was represented by . . . attorney at law." The judgment does not state against whom the damages are being rendered.
By two issues, the Appraisal District argues: (1) the tax code provides exclusive remedies for complaints about tax appraisals; and (2) the trial court lacked jurisdiction over Rourk's claims under the UDJA. See TEX. TAX CODE ANN. § 42.29 (West, Westlaw through 2015 R.S.); TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West, Westlaw through 2015 R.S.). We reverse and render judgment.
I. BACKGROUND
A. Procedural History
This case is before this Court for the fourth time. In their original pleadings, numerous plaintiffs brought a class action against the Appraisal District seeking a declaratory judgment that their travel trailers and recreational vehicles were not subject to ad valorem taxation. In Rourk I, the Supreme Court affirmed the trial court's dismissal of certain plaintiff's for lack of jurisdiction and its denial of class certification, but remanded the cause to the trial court for a determination of fact issues involving the taxability of the remaining plaintiffs' travel trailers and recreational vehicles. See Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501 (Tex. 2006); see also Rourk v. Cameron Appraisal Dist., 131 S.W.3d 285 (Tex. App.—Corpus Christi 2004) (Rourk I), rev'd, 194 S.W.3d 501 (Tex. 2006).
In Rourk II, we held that the plaintiffs' travel trailers and recreational vehicles were not improvements or real property, but instead tangible personal property that was exempt from taxation. See Rourk v. Cameron Appraisal Dist., 305 S.W.3d 231, 236-39 (Tex. App.—Corpus Christi 2009, pet. denied) (Rourk II). However, we remanded the cause to the trial court to determine whether the remaining plaintiffs were entitled to recover their attorney's fees from the Appraisal District. See id.; see also TEX. TAX CODE ANN. § 11.14 (West, Westlaw through 2015 R.S.).
In Rourk III, we held that the trial court lacked subject matter jurisdiction over Rourk's declaratory judgment claim and related motion for attorney's fees against the Appraisal District because "[a]lthough the [UDJA] waives sovereign immunity, [the plaintiffs'] claims do not fall within the scope of these waivers." See Rourk v. Cameron Appraisal Dist., 443 S.W.3d 217, 220-21 (Tex. App.—Corpus Christi, 2013, no pet.) (Rourk III). We remanded the case, however, to permit Rourk an opportunity, if possible, to amend its pleading to cure the jurisdictional defect in view of El Paso v. Heinrich. See id; see also El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (clarifying ultra vires exception to doctrine of sovereign immunity). We noted that the plaintiffs had not sued any state officials, but we did not express any opinion on the merits of any such claim. See Rourk III, 443 S.W.3d at 220-21.
B. Current Lawsuit
On remand, Rourk amended his pleading to add Frutoso Gomez, the Appraisal District's former chief tax appraiser, and Robert Romero, one of its appraisers, as defendants in their official capacity. The amended petition, citing Rourk II, alleged that Gomez and Romero "committed ultra vires acts that do not merit the protection of governmental or official immunity." The Appraisal District filed an amended answer, including a plea to the jurisdiction, asserting that Gomez and Romero were immune to suit because their actions were discretionary.
Rourk's "ninth amended original petition for declaratory judgment" retained the Appraisal District as a state-entity defendant to the UDJA claim. However, state agencies, like the Appraisal District, are immune from suits under the UDJA unless the legislature has waived immunity for the particular claim. See Tex. Dep't. of Transp. v. Sefzik, 355 S.W.3d 618, 619 (Tex. 2011) (per curiam). No such waiver exists for Rourk's claims. See Boll v. Cameron County Appraisal Dist., 445 S.W.3d 397, 400 (Tex. App.—Corpus Christi 2013, no writ) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(b) (West, Westlaw through 2015 R.S.)). Consequentially, we construe Rourk's pleading as an ultra vires action brought only against Gomez and Romero in their official capacities, rather than against the Appraisal District. See City of El Paso v. Heinrich, 284 S.W.3d 366, 373 (Tex. 2009).
During the hearing on Rourk's ultra vires claim and request for attorney's fees, Gomez testified generally about the history of the lawsuit and his role as chief appraiser. While Gomez conceded that our decision in Rourk II determined the taxability of each specific plaintiff's trailer, he explained that his duties included applying the general guidelines of the tax code to individual fact situations. Gomez further explained that he discusses the legal aspects of the tax code with attorneys and specifically requests guidance with terminology found within the tax code. Rourk's attorney testified regarding his qualifications and the attorney's fees that he incurred during the case.
Romero did not testify at the hearing.
After the hearing, the trial court issued a final judgment, finding that Gomez "acted without authority and in violation of statutory and constitutional provisions in assessing the plaintiffs' travel trailers[.]" The trial court further found that Gomez "failed to perform a purely ministerial act" and that his actions were in violation of section 11.14 of the Texas Tax Code. See TEX. TAX CODE ANN. § 11.14 (West, Westlaw through 2015 R.S.). The trial court awarded attorney's fees to Rourk pursuant to section 37.009 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009.
Rourk did not present any evidence during the hearing regarding Romero, and the trial court's judgment does not address the claims against Romero. The judgment states "[a]ll relief not granted is expressly denied." Romero is not mentioned in any of the briefs on appeal.
II. PLEA TO THE JURISDICTION & ULTRA VIRES CLAIM
By its second issue, which we address first, the Appraisal District asserts that the trial court erred in awarding attorney's fees under the UDJA. Specifically, the Appraisal District argues that by evaluating the taxability of the trailers, Gomez performed discretionary acts within the scope of his authority. The Appraisal District concludes that since declaratory relief is authorized only when a public official acts without legal authority or has failed to perform a ministerial act, Gomez is immune to suit.
A. Standard of Review
Appellate courts reviewing a challenge to a trial court's subject matter jurisdiction review the trial court's ruling de novo. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 229 (Tex. 2004) (citing Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002)). When reviewing a plea to the jurisdiction in which the pleading requirement has been met and evidence has been submitted to support the plea that implicates the merits of the case, we take as true all evidence favorable to the nonmovant. See id. (citing Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997)). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id.
B. Applicable Law
Sovereign immunity deprives a trial court of subject matter jurisdiction for lawsuits in which the state or certain governmental units have been sued unless the state consents to suit. See id. at 224. Suits to require state officials to comply with statutory or constitutional provisions are not prohibited by sovereign immunity but may proceed under the ultra vires exception. Tex. Dep't of Ins. v. Reconveyance Servs., Inc., 306 S.W.3d 256, 258 (Tex. 2010) (per curiam) (quoting Heinrich, 284 S.W.3d at 372); accord Tex. Dep't of Transp. v. Sefzik, 355 S.W.3d 618, 620 (Tex. 2011) (per curiam). The ultra vires exception waives a government official's immunity in certain circumstances including where "the officer acted without legal authority." Heinrich, 284 S.W.3d at 372; accord Sefzik, 355 S.W.3d at 620. An ultra vires suit must not complain of a government officer's exercise of discretion, but rather must allege, and ultimately prove, that the officer either acted without legal authority or failed to perform a purely ministerial act. Id.
An agency determination that is wrongly decided does not render that decision outside the agency's authority. MHCB (USA) Leasing and Fin. Corp. v. Galveston Cent. Appraisal Dist. Review Bd., 249 S.W.3d 68, 81 (Tex. App.—Houston [1st] Dist. 2007, pet. denied). Likewise, an incorrect agency determination rendered pursuant to the agency's authority is not a determination made outside that authority. See Williams v. Houston Firemen's Relief & Ret. Fund, 121 S.W.3d 415, 430 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ("[T]he crux of Williams's argument is that the trustees interpreted the statute in a way they should not have. This is a complaint of 'getting it wrong,' not of acting outside statutory authority."); Tex. Comm'n of Licensing & Regulation v. Model Search Am., Inc., 953 S.W.2d 289, 292 (Tex. App.—Austin 1997, no writ).
Ministerial acts are those "where the law prescribes and defines the duties to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment." Sw. Bell Tel., L.P. v. Emmett, 459 S.W.3d 579, 587 (Tex. 2015) (citing City of Lancaster v. Chambers, 883 S.W.2d 650, 654 (Tex. 1994)). Discretionary acts on the other hand require the exercise of judgment and personal deliberation. Id. (citations omitted); see Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704, 706 (Tex. 2003) (holding that a newly elected commissioners court exercised discretion in rejecting a contract approved by its predecessor); but see State v. Epperson, 42 S.W.2d 228, 231 (Tex. 1931) ("[A] tax collector's duty with reference to money belonging to persons who are entitled under valid contracts to receive money from him is purely ministerial.").
For an ultra vires claim to survive a plea to the jurisdiction, the plaintiff must allege facts that affirmatively demonstrate the court's jurisdiction to hear the cause. See Miranda, 133 S.W.3d at 226; see also Heinrich, 284 S.W.3d at 372. If the plaintiff's pleadings demonstrate jurisdiction but the defendant challenges the alleged facts, the trial court must determine whether a jurisdictional fact question exists. See Lubbock County Water Control & Imp. Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297, 305 (Tex. 2014) (explaining that a defendant bears the burden "to establish that it is a governmental entity entitled to governmental immunity" and a plaintiff must "establish, or at least raise a fact issue on, a waiver of immunity"); Miranda, 133 S.W.3d at 227. "If the evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, and the fact issue will be resolved by the fact finder." Miranda, 133 S.W.3d at 227-28.
C. Analysis
With the foregoing principles in mind, we turn to the question of whether Gomez's taxation determinations regarding the travel trailers and recreational vehicles qualify as a ministerial act or were undertaken without legal authority, placing the conduct within the ultra vires exception to governmental immunity.
1. Legal Authority
Rourk alleges that "[d]efendants failed to comply with statutory and constitutional provisions by wrongfully placing Plaintiffs' recreational vehicles on the tax rolls[.]" Rourk further specifically asserts that "[d]efendants . . . failed to lawfully apply tax code section 11.14(a)[.]"
We noted in Rourk III that the plaintiffs "are not challenging the validity of a provision of the tax code; instead, they are challenging [the Appraisal District's] actions under it[.]" Rourk III, 443 S.W.3d at 220. Likewise, we conclude that the substance of Rourk's amended allegations are complaints about Gomez's interpretation of the tax code, not that he acted illegally or without controlling authority. Rourk's allegations that Gomez failed to "lawfully apply tax code section 11.14" are analogous to a claim that he "got it wrong." See MHCB (USA) Leasing & Fin. Corp., 249 S.W.3d at 80-81. Such an allegation is insufficient to state an ultra vires claim. Creedmoor-Maha Water Supply Corp. v. Tex. Comm'n on Env't Quality, 307 S.W.3d 505, 517-18 (Tex. App.—Austin 2010, no pet.); see N. Alamo Water Supply Corp. v. Tex. Dep't of Health, 839 S.W.2d 455, 459 (Tex. App.—Austin 1992, writ denied) ("The fact that the [agency] might decide 'wrongly' in the eyes of an opposing party does not vitiate the agency's jurisdiction to make [the] decision."). We hold that Rourk's amended pleadings do not establish that Gomez acted without legal authority.
2. Ministerial Act
Rourk also claims that Gomez failed to perform a purely ministerial duty. In support, Rourk argues that our decision in Rourk II concluded that the definition of a "manufactured home" requires no discretion and reduced the determination of what is a "recreational vehicle" to a mathematical exercise, thereby precluding Gomez's discretion. See Rourk, 305 S.W.3d at 237. Rourk contends that our holding demonstrates that Gomez classified the trailers as "improvements" without any legal principal or authority. See id. Rourk's argument misconstrues our prior holding in Rourk II.
In Rourk II, Rourk disputed whether the trailers were taxable improvements and ultimately whether the trailers could be taxed. Id. at 236. Resolving the issue required interpreting several sections and definitions in the tax code. See id. at 237-38 (citing TEX. TAX CODE ANN. §§ 1.04, 11.14, 11.432 (West, Westlaw through 2015 R.S.)). Ultimately, we reached the conclusion that the trailers manufactured after June 15, 1976 were exempt from taxation. Id. at 238. Our conclusion differed from the trial court, and we reversed accordingly. Id. at 240. Contrary to Rourk's assertions, Rourk II did not determine whether the tax code granted the tax appraiser the ability to exercise discretion, but instead decided the narrow issue of how specific provisions of the tax code applied to two distinct classes of plaintiffs. See id.
In order to determine the extent of the authority and discretion granted to Gomez with regard to the alleged ultra vires action, we examine the entire statute and do not consider words or parts of the statute in isolation. See Houston Belt & Terminal Ry. Co. v. City of Houston, 424 S.W.3d 663, 670 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (citing Tex. Lottery Comm'n v. First State Bank of DeQueen, 325 S.W.3d 628, 636 (Tex. 2010)). Statutory construction is a question of law, which we review de novo. Bragg v. Edwards Aquifer Auth., 71 S.W.3d 729, 734 (Tex. 2002). The tax provision at the heart of this dispute is one of the tax code provisions analyzed in Rourk II. See Rourk II, 305 S.W.3d at 237. In 2001, section 11.14(a) exempted "all tangible personal property, other than manufactured homes, that the person owns and that is not held or used for production of income." See id., (citing Act of April 20, 1989, 71st Leg., R.S., ch. 76, § 1, sec. 11.14(a), 1989 TEX. GEN. LAWS 391, amended by Act of April 1, 2003, 78th Leg., R.S., ch. 5, § 1, sec. 11.14(a), 2003 TEX. SESS. LAW SERV. 6).
We conclude that applying the tax code's exemptions requires discretion. The tax appraiser must determine whether the property is a manufactured home, a mobile home, or a recreational vehicle. See TEX. OCC. CODE ANN. § 1201.003(18), (20) (West, Westlaw through 2015 R.S.) (defining "manufactured home" and "mobile home" respectively); 24 C.F.R. § 3282.8 (2015) (defining "recreational vehicle"). Cf. Heinrich, 284 S.W.3d at 371 (holding ultra vires suit alleging violation of statute "leaving no room for discretion" is not barred); see Houston Belt, 424 S.W.3d at 672 ("The plain language of the definition of "impervious surface" thus does not preclude all "room for judgment" or "room for discretion" in determining what additional "similar" surface materials and "other" surface features would meet the definition."). Additional language in the tax code supports a determination that tax appraisals involve the exercise of discretion. With respect to appraising the non-income producing personal property, the tax code provides that the chief appraiser has the discretion to require a person to render for taxation "any. . . taxable property that he owns." TEX. TAX CODE ANN. § 22.01(b) (West, Westlaw through 2015 R.S.).
Construing the plain language within the context of the tax code as a whole, we conclude that the Legislature granted the chief tax appraiser with the ability to exercise his discretion. See Houston Belt, 424 S.W.3d at 672; see also McLane Co. v. Strayhorn, 148 S.W.3d 644, 650 (Tex. App.—Austin 2004, pet. denied) (concluding that sovereign immunity barred a suit against a comptroller who refused a letter of credit as collateral for receiving cigarette tax stamps without prepayment because the language of the statute at issue "evidence[d] a clear grant of discretion" to the comptroller to determine what constituted "similar types of collateral acceptable to the comptroller").
Rourk failed to state a valid ultra vires claim against Gomez and Romero, and the evidence presented at the hearing failed to show that they performed a purely ministerial act. Therefore, the trial court lacked jurisdiction to hear Rourk's UDJA claims.
The trial court lacked subject matter jurisdiction over Rourk's action against the Appraisal District. See City of El Paso v. Heinrich, 284 S.W.3d 366, 373 (Tex. 2009) ("[ultra vires] suits cannot be brought against the state, which retains immunity"); Rourk v. Cameron County Appraisal Dist., 443 S.W.3d 217, 220 (Tex. App.—Corpus Christi, pet. ref'd) ("appellants do not direct us to any portion of the UDJA that expressly waives [state] immunity for these claims").
We sustain the Appraisal District's issue regarding jurisdiction, and because the jurisdictional issue is dispositive of this appeal, we need not consider the Appraisal District's remaining issue. See TEX. R. APP. P. 47.5.
III. CONCLUSION
We reverse the trial court's judgment and dismiss Rourk's action for lack of subject matter jurisdiction.
GREGORY T. PERKES
Justice Concurring and Dissenting Memorandum Opinion by Chief Justice Rogelio Valdez. Delivered and filed the 28th day of January, 2016.