Opinion
No. 01-09-00541-CV
Opinion issued April 29, 2010.
On Appeal from the 280th District Court Harris County, Texas, Trial Court Case No. 2008-55480.
Panel consists of Chief Justice RADACK and Justices ALCALA and HIGLEY.
MEMORANDUM OPINION
Appellants [collectively, the "Atrium entities" and the "Milbank entitites"] bring this appeal from the trial court's order granting Harris County Appraisal District's ["HCAD's"] plea to the jurisdiction. In its plea, HCAD contended the Milbank entities had no standing to seek judicial review of HCAD's resolution of an ad valorem tax protest because the Milbank entities were not the property owners for the relevant tax year. We affirm.
BACKGROUND
521 Atrium, LP sold the property located at 521 N. Sam Houston Parkway in Houston to the Milbank 521 entities by special warranty deed dated July 31, 2007. 505 Atrium, LP sold the property located at 505 N. Sam Houston Parkway in Houston to the Milbank 505 entities by special warranty deed dated July 31, 2007. 525 Atrium, LP sold the property located at 525 N. Sam Houston Parkway in Houston to the Milbank 525 entities by special warranty deed dated July 25, 2007. Therefore, according to the record, the Milbank entities were the legal owners of the properties on January 1, 2008. Nevertheless, the Atrium entities, but not the Milbank entities, filed notices of protest with HCAD's Appraisal Review Board concerning the 2008 tax assessment for these properties. On July 25, 2008, the chairman of the Appraisal Review Board signed an Order Determining Protest, ordering a reduction in the appraised value of the properties, which was delivered to the Atrium entities tax agent on August 1, 2008. The Milbank entities did not pursue a protest as the owners of the properties.
The Atrium entities filed an original petition for judicial review on September 11, 2008, "as the property owners," challenging the Appraisal Review Board's determination. The Atrium entities continued to assert that they owned the properties. On April 15, 2009, HCAD filed a plea to the jurisdiction, arguing that (1) the Atrium entities were not the owners of the properties of January 1, 2008, (2) only the property owner had standing to appeal from the Appraisal Review Board's order, and, therefore, (3) the trial court lacked subject-matter jurisdiction. HCAD attached copies of the general warranty deeds to its plea.
On May 1, 2009, the Atrium entities filed a response to HCAD's plea to the jurisdiction and a motion to substitute the Milbank entities as the plaintiffs pursuant to Rule 28 of the Texas Rules of Civil Procedure. On that same date, the Atrium entities also filed a first amended original petition adding the Milbank entities as plaintiffs in the suit for judicial review. The Atrium entities' response also alleged that they were "permitted and authorized to change the name of a party [to the suit for judicial review] pursuant to the provisions of Section 42.21(e) of the Property Tax Code."
On May 15, 2009, the trial court granted HCAD's plea to the jurisdiction. This appeal followed.
STANDARD OF REVIEW
Standing is a component of subject-matter jurisdiction that cannot be waived. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex. 2000). If a party has no standing, a trial court has no subject-matter jurisdiction to hear the case. Id. If a jurisdiction defect cannot be cured by an amendment, a party may file a plea to the jurisdiction, and, if the trial court finds the plea meritorious, it may grant it without allowing the plaintiff an opportunity to amend. See County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). A defendant may prevail on a plea to the jurisdiction by demonstrating that, even if all of 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. Harris County Appraisal Dist. v. O'Connor Assocs., 267 S.W.3d 413, 416 (Tex. App.-Houston [14th Dist.] 2008, no pet.). A trial court decides a plea to the jurisdiction by reviewing the pleadings as well as any evidence relevant to the jurisdictional inquiry. Blue, 34 S.W. 3d at 555. We review a trial court's ruling on a plea to the jurisdiction de novo, construing the pleadings liberally in favor of the plaintiff while considering the pleader's intent. Tex. Dep't of Parks Wildlife v. Miranda, 133 S.W.3d 217, 226, 228 (Tex. 2004). In a review of a plea to the jurisdiction, we cannot examine the merits of the case. See Houston Indep. Sch. Dist. v. 1615 Corp., 217 S.W.3d 631, 635 (Tex. App.-Houston [14th Dist.] 2006, pet. denied) (op. on reh'g).
JURISDICTION OVER SUIT FOR JUDICIAL REVIEW
In a single issue, the appellants assert that the trial court erred in granting HCAD's plea to the jurisdiction. HCAD responds that the trial court lacked jurisdiction because, although the Atrium entities timely filed a petition for judicial review in the name of "as the property owners and the property owners" following the Appraisal Review Board's order, the Milbank entities, not the Atrium entities were the property owners at the relevant time. HCAD also argues that the Atrium entities could not amend their petition to include the Milbank entities pursuant to section 42.21(e)(1) of the Tax Code and Texas Rule of Civil Procedure 28.
Standing
This Court and the Fourteenth Court of Appeals have repeatedly addressed these jurisdictional issues. See Woodway Drive, LLC v. Harris County Appraisal Dist., No. 14-09-00340-CV, 2010 WL 1372702 (Tex. App.-Houston 14th Dist.] April 8, 2010, no pet. h.) (memo op.); See Woodway Drive, LLC v. Harris County Appraisal Dist., No. 14-09-00524-CV, 2010 WL 724174 (Tex. App.-Houston 14th Dist.] March 4, 2010, no pet.) (memo op.); Scott Plaza Assocs., Ltd. v. Harris County Appraisal Dist., No 14-09-00707-CV, 2010 WL 724189 (Tex. App.-Houston [14th Dist.] March 4, 2010, no pet.) (memo op.); SWP Remic Props. II, LP v. Harris County Appraisal Dist., No. 14-08-00425-CV, 2010 WL 26524 (Tex. App.-Houston [14th Dist] Jan. 7. 2010, no pet.) (memo op.); CL Louetta Village Square, LP v. Harris County Appraisal Dist., No. 14-08-00549-CV, 2009 WL 4913259 (Tex. App.-Houston [14th Dist.] Dec. 22, 2009, no pet.) (memo op.); Skylane West, Ltd. v. Harris County Appraisal Dist., No. 14-08-00507-CV, 2009 WL 4913256 (Tex. App — Houston [14th Dist.] Dec. 22, 2009, no pet.) (memo op.); KM-Timbercreek, LLC v. Harris County Appraisal Dist., No. 01-08-00689-CV, 2009 WL 3321332 (Tex. App.-Houston [1st Dist.] Oct. 15, 2009, no pet.); Mei Hsu Acquisition Corp. v. Harris County Appraisal Dist., No. 01-08-00690-CV, 2009 WL 3152152 (Tex. App.-Houston [1st Dist.] Oct. 1, 2009, no pet.) (memo op.); BACM 2002 PB2 Westpark Dr., LP v. Harris County Appraisal Dist., No. 14-08-00493-CV, 2009 WL 2145922 (Tex. App.-Houston [14th Dist.] June 21, 2009, no pet.) (memo op.); Koll Bren Fund, VI, LP v. Harris County Appraisal District, No. 01-07-00321-CV, 2008 WL 525799 (Tex. App.-Houston [1st Dist.] February 28, 2008, pet. denied) (memo op.). We reach the same outcome here in holding that the Atrium entities lacked standing to prosecute the Milbank entities' tax protest.
For a party to be entitled to judicial review, the party must be the record legal owner of the property and must protest the initial valuation to the Appraisal Review Board. Timbercreek, 2009 WL 3321332, at *3; Koll Bren, 2008 WL 525799, at *3. Section 42.21(a) of the Tax Code requires a party who appeals as provided by Chapter 42 of the Tax Code to timely file a petition for review with the district court. Failure to timely file a petition bars any appeal under the chapter. TEX. TAX CODE ANN. § 42.21(a) (Vernon Supp. 2009). Section 42.01 of the Property Tax Code specifies that a " property owner is entitled to appeal . . . an order of the appraisal review board determining . . . a protest by the property owner" as provided by sections 41.41 et seq. of the Tax Code. Id. § 42.01(1)(A) (Vernon 2008) (emphasis added). Alternatively, a property owner may designate a lessee or an agent to act on the property owner's behalf for any purpose under the Tax Code, including filing a tax protest. Id. §§ 1.111 (Vernon 2008) (authorizing a designated lessee or agent to act for a property owner), 41.413(b) (Vernon 2008) (authorizing a lessee to protest for the property owner in certain circumstances).
We note that the Texas Legislature amended subsection 42.21(a) effective June 19, 2009, to extend the time to file a petition for review from 45 days to 60 days after the party receives notice that a final order has been entered from which an appeal may be had or at any time after the hearing but before the 60-day deadline. See Act of May 29, 2009, 81st Leg., R.S., ch. 905, §§ 1, 5, 2009 Tex. Gen. Laws 2435, 2435-36 (current version at TEX. TAX CODE ANN. § 42.21(a) (Vernon Supp. 2009)). These changes to this subsection do not affect our resolution of this issue.
Therefore, to qualify as a "party who appeals" by seeking judicial review of an Appraisal-Review Board's tax determination under section 42.21(a), the Atrium entities had to be an owner of the property, a designated agent of the owner, or the authorized lessee of the property under the circumstances stated in section 41.413. See Timbercreek, 2009 WL 3321332, at *3; Koll Bren, 2008 WL 525799, at *3. A party who does not meet one of the above criteria lacks standing under the Tax Code. Timbercreek, 2009 WL 3321332, at *3; Koll Bren, 2008 WL 525799, at *3. If the litigant lacks standing, the trial court is deprived of subject-matter jurisdiction to consider a suit for judicial review based on an ad valorem tax protest. Timbercreek, 2009 WL 3321332, at *3; Koll Bren, 2008 WL 525799, at *3.
Here, the Atrium entities did not own the properties of January 1, 2008. The Atrium entities did not claim rights to protest under the Tax Code as either a lessee or an agent. Therefore, the Atrium entities lacked standing to pursue judicial review as a "party who appeals" under section 42.21(a). The record does not reflect that the Milbank entities pursued their right of protest as the actual property owners. According to the record, the Milbank entities were was not named as parties until May 1, 2009, when the Atrium entities filed a first amended original petition. Therefore, the Appraisal Review Board had not determined a protest by the actual property owner, the Milbank entities, upon which the Milbank entities could premise a right to appeal as the property owner. See TEX. TAX CODE ANN. §§ 42.01(1)(A), 42.21(a); Timbercreek, 2009 WL 3321332, at *4.
Application of Section 42.21(e)(1)
HCAD also argued that the trial court had no jurisdiction because section 42.21(e)(1) does not allow an amendment to substitute the correct plaintiff after the 45-day period for filing suit has passed. We agree for the reasons stated in Koll Bren and Timbercreek.
Section 42.21(e) specifies that only petitions that are "timely filed under Subsection (a)" may later be amended to correct or to change a party's name. See TEX. TAX CODE ANN. 42.21(e)(1). To seek judicial review under Subsection (a), the plaintiff must be a "party who appeals as provided by [Chapter 42]," meaning the plaintiff must be the property owner, a properly designated agent, or a lessee. Id. § 42.21(a); see also id. §§ 1.111, 41.413(b).
The Atrium entities timely filed a petition for review; however, the Atrium entities did not own the property on January 1, 2008, and thus lacked standing to seek judicial review. See Timbercreek, 2009 WL 3321332, at *5. Appellants' argument that subsection 42.21(e)(1) operates to allow the Atrium entities to correct or to change the party's name presupposes that the Milbank entities were a proper party entitled to seek judicial review. Id. However, the Milbank entities did not pursue their right of protest as the property owners. When no proper party timely appealed to the district court, the trial court did not acquire subject-matter jurisdiction, and the Appraisal Review Board's determination became final. See id.
The Atrium entities contend that because suit was filed in their names "as the property owners and the Property Owners," the suit encompassed the Milbank entities, the record legal owner of the properties, as plaintiffs. Again, this contention presupposes that the Milbank entities were proper parties to seek judicial review under Chapter 42. See TEX. TAX CODE ANN. § 42.01(1)(A); Timbercreek, 2009 WL 3321332, at *5; BACM, 2009 WL 2145922, at *5. The Milbank entities did not pursue their administrative remedies by protesting the valuation of the property before the Appraisal Review Board and, thus, they failed to satisfy the jurisdictional requirements to seek judicial review. Timbercreek, 2009 WL 3321332, at *5; BACM, 2009 WL 2145922, at *5.
Application of Texas Rule of Civil Procedure 28
Lastly, the Atrium entities contend that the trial court erred in overruling their Rule 28 motion. They argue the trial court had jurisdiction to hear the case because Texas Rule of Civil Procedure 28, which governs suits by or against entities doing business under an assumed name, permits substitution of the Milbank entities as the Atrium entities "true name." Rule 28 states:
Any partnership, unincorporated association, private corporation, or individual doing business under an assumed name may sue or be sued in its partnership, assumed or common name for the purpose of enforcing for or against it a substantive right, but on a motion by any party or on the court's own motion the true name may be substituted.
TEX. R. CIV. P. 28. The Atrium entities contend that their name is the "common name" for the "true name" of the Milbank entities.
In this case, the Atrium entities attempted to substitute the Milbank entities by filing a motion and an amended petition arguing that Rule 28 permitted the substitution. For a party to take advantage of Rule 28 and to sue in its common name, "there must be a showing that the named entity is in fact doing business under that common name." Timbercreek, 2009 WL 3321332, at *6; Seidler v. Morgan, 277 S.W.3d 549, 553 (Tex. App.-Texarkana 2009, pet. denied). Whether an entity does business under an assumed or common name is a question of fact for the trial court. Sixth RMA Partners, L.P. a/k/a RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Timbercreek, 2009 WL 3321332, at *6.
The Atrium entities did not make a showing that the Milbank entities were in fact doing business under the common name of the Atrium entities, nor was there evidence that the entities, themselves, used the name the Atrium entities as an assumed or common name to warrant application of Rule 28. Compare Sixth RMA Partners, 111 S.W.3d at 52 (concluding that evidence supported assumed-name finding when Sixth RMA presented evidence that RMA Partners, L.P. was used as trade name for various RMA partnerships, RMA letterhead was used, and payments on notes were made to RMA) and Chilkewitz v. Hyson, 22 S.W.3d 825, 829 (Tex. 1999) (stating that some evidence supported application of Rule 28 when stationery and phone-number listing used by one-person professional association contained name of individual). Although the Atrium entities cite HCAD's records, which reflect the Atrium entities as the property owners even after the property sales, HCAD's records alone are not sufficient to establish that the Milbank entities operated their business under the common name of the Atrium entities. See Timbercreek, 2009 WL 3321332, at *7 (stating that only Timbercreek could establish whether it operated its business under an assumed or common name). There is no evidence that the Milbank entities held themselves out as the Atrium entities or requested HCAD to refer to it as the Atrium entities in its records. See id.
Accordingly, we conclude that the trial court did not err in denying the Rule 28 motion.
CONCLUSION
The Atrium entities and the Milbank entities lacked standing to bring suit, and therefore the trial court lacked subject-matter jurisdiction to hear the dispute. Because neither the Atrium entities nor the Milbank entities were a proper party entitled to judicial review under the Tax Code, section 42.21(e)(1) of the Tax Code did not apply to change the name of the plaintiff. Likewise, because there was no evidence in the record that the Milbank entities were doing business as the Atrium entities or that the entities used the name of the Atrium entities as a common name for the Milbank entities, Texas Rule of Civil Procedure 28 could not be used to substitute the Milbank entities for the Atrium entities. Therefore, the trial court did not err in granting HCAD's plea to the jurisdiction. We affirm the order granting HCAD's plea to the jurisdiction and dismissing for want of jurisdiction.