Atlantic Richfield Co. v. Warren Ind. Sch. Dist.

• Decision Date: 19 February 1970
• Docket Number: No. 7095,7095
• Citation: 453 S.W.2d 190
• Parties: ATLANTIC RICHFIELD COMPANY et al., Appellants, v. WARREN INDEPENDENT SCHOOL DISTRICT et al., Appellees.
• Court: Texas Court of Appeals

Page 190

453 S.W.2d 190

ATLANTIC RICHFIELD COMPANY et al., Appellants, v. WARREN INDEPENDENT SCHOOL DISTRICT et al., Appellees.

No. 7095.

Court of Civil Appeals of Texas Beaumont.

Feb. 19, 1970.

Rehearing Denied March 26, 1970.

Orgain, Bell & Tucker, Beaumont, Blades, Crain & Winters, Houston, for appellants.

Reynolds, White, Allen & Cook, Houston, for appellees.

KEITH, Justice.

The appeal is from an adverse judgment rendered in a suit wherein Atlantic Richfield Company and Sinclair Oil & Gas Company (hereinafter referred to collectively as plaintiffs) sought injunctive relief from the adoption of the ad valorem tax rolls of the defendant School District (hereinafter referred to as defendant). Plaintiffs also sought writs of mandamus to require the Boards of Equalization to assess all property within the District upon an equal and uniform basis. ¹ Trial was to a jury, and the court, after setting aside certain findings in favor of plaintiffs and refusing to set aside other adverse findings, rendered judgment for the defendant upholding the assessments and the levy of taxes based thereon. Also, judgment was rendered for the District for the taxes involved in each of the respective years, 1967 and 1968. Plaintiffs appeal.

The plaintiffs contended that the Board of Equalization in each of the years involved, adopted a fundamentally erroneous plan of taxation which resulted in their substantial injury. This theory had support in the pleadings and plaintiffs procured twenty-four jury findings in support of various factual aspects of this theory. We summarize the issues, the first numeral referring to the year 1967 while the numeral in brackets refers to the identical issue submitted as to the year 1968:

No. 1 (13), the assessor used and the Board adopted a method of arriving at the valuation of improvements based upon 80% And then 75% Of 80% Of the 1962 ² value of the improvements as shown upon the assessor's cards.

No. 2 (14), this procedure resulted in the assessor using and the Board adopting a valuation method for such improvements 'without regard to the January 1, 1967 market value thereof.'

No. 3 (15), this procedure also resulted 'in such improvements being placed on the tax rolls for 1967 at 45% Of a sum which was substantially below January 1, 1967 market value thereof.'

No. 4 (16), with respect to land upon which improvements had been placed after 1962, the Tax Assessor used and the Board of Equalization adopted a method of arriving at the 1967 valuations based upon '80% And then 75% Of 80% Of the value of the improvements as shown' upon the assessor's cards.

No. 5 (17), this method of valuation resulted in the valuation of such improvements 'without regard to the January 1, 1967 market value thereof.'

No. 6 (18), this procedure 'resulted in such improvements being placed on the tax rolls for 1967 at 45% Of a sum which was substantially below the January 1, 1967 market value thereof.'

No. 7 (19), 'without regard to the January 1, 1967 market value, the Tax Assessor used and the Board of Equalization adopted a method of determining the value of unimproved lands * * * that had not been subdivided or improved since 1962 by deducting 10% From the 1962 value of such lands as shown on the Tax Assessor's property cards.'

No. 8 (20), this procedure 'resulted in such (unimproved) lands being placed on the tax rolls for 1967 at 45% Of a sum which was substantially below the January 1, 1967 market value thereof.'

No. 9 (21), 'without regard to the January 1, 1967 market value, the Tax Assessor used and the Board of Equalization adopted a plan or formula for determining the value of lots sold in subdivisions which had been created after 1962.'

No. 10 (22), this procedure resulted in 'such lots being placed on the tax rolls for 1967 at 45% Of a sum which was substantially below the January 1, 1967 market value thereof.'

No. 11 (23), 'without regard to the January 1, 1967, market value thereof, the Tax Assessor used and the Board of Equalization adopted a method of determining the value of unsold lots in subdivisions created after 1962, which consisted of using as the value of such unsold lots 90% Of the 1962 value per acre shown on the Tax Assessor's property cards.'

No. 12 (24), this resulted 'in such unsold lots being placed on the Tax Rolls for 1967 at 45% Of a sum which was substantially below the January 1, 1967 market value.'

Defendants' motion to disregard these answers of the jury did not challenge the sufficiency of the evidence to support the findings of the jury; but, instead proceeded upon the theory that the series did not 'submit ultimate issues of facts upon which a Judgment could be predicated.' The elaboration of this motion gives these reasons in support thereof: the issues are merely evidentiary; such issues do not establish the market value of the respective classes of property inquired about; they do not establish any basis for determining 'in dollars and cents, substantial injury to the Plaintiffs'; they do not establish any basis 'for determining, in dollars and cents, the extent of any injury in excess taxes to the Plaintiffs'; they do not establish that the valuations placed upon the properties inquired about in the issues were the result 'of fraud or something other than a mere mistake or honest error in judgment' on the part of the Board (with attention being called to the fact that in other issues the Board was found to have acted in good faith); the issues do not establish 'the use of a deliberate and intentional scheme' by the Board to permit the properties inquired about to escape their fair burden of taxation; and, the issues do not establish that the Boards deliberately and intentionally used a different assessment ratio on plaintiffs' property from that used on the properties mentioned in the issues. District, in its brief, says:

'Appellees do not contest the findings of the jury in response to Issues 1 through 24 as being without support in the evidence, but rather contend that the Trial Court correctly disregarded said issues because said issues would not support a judgment for Appellants.'

Before turning to a consideration of the law applicable to the contentions made, we summarize the remainder of the special issues submitted to the jury: No. 25 (26), the jury did Not find that the Board 'adopted a method of valuation (of plaintiffs' properties) without regard to the January 1, 1967 market value.' No. 27, the market value of plaintiffs' oil and gas properties in 1967 was $21,928,760.00 and (No. 28) in 1968 the market value was $22,702,795.00. Finally, the jury found in answer to No. 29 (30) that the 1967 Board 'made a good faith effort to fairly and honestly assess all taxable property within the District at a fair, just, equal and uniform valuation for taxing purposes.'

The District summarizes the evidence relating to the assessment rolls, the tax levies, and the resulting amount of taxes raised in this manner:

'For the year 1967, after applying the assessment ratio of 45%, the total assessed valuation on the tax roll was $27,892,990.00 of which approximately $20,500,000.00 or 74% Was oil and gas property, and $7,138,260.00 or 25.6% Was local property. The application of the tax rate of $1.40 per $100 of assessed value produced total taxes in the amount of $390,501.86 for the year 1967.

'For the year 1968, the total assessed valuation on the tax roll was $29,685,018.00 of which $22,086,060.00 or approximately 74.5% Was oil and industrial property, and $7,486,048.00 or 25.2% Was local property. The application of the tax rate of $1.40 per $100 of assessed value produced total taxes in the amount of $415,590.25 for the year 1967 (sic).'

We note in passing that plaintiffs' properties were assessed and taxes levied as shown below:

1967--assessed value: $10,405,880.00 with taxes of $145,682.32.

1968--assessed value: $11,071,580.00 with taxes of $155,002.12.

Thus, plaintiffs' properties constituted approximately one-half of the Total assessment roll, exclusive of local property and plaintiffs were assessed with approximately 36% Of the Total amount of the taxes in the entire District in each of the two years involved. ³

District devotes a considerable portion of its brief urging its contention that plaintiffs failed 'to timely avail themselves of the remedies of mandamus and injunction to prevent Appellees from putting such a plan into effect.' We are not favorably impressed with this argument, either factually or legally. However, since it is urged, apparently seriously, we lengthen this opinion to dispose of the point.

The assessments for the two years involved were attacked in separate suits which were handled separately by the trial court until the entry of the order of consolidation in December, 1968, immediately before the trial of the cause.

No. 8142, involving 1967 taxes, was filed on October 25, 1967. The sequence of events, with the dates applicable to this suit, are these:

A. October 2, 3 and 4, 1967--plaintiffs appeared before the Board and offered their evidence, at which time they were advised that the Board would consider the evidence and announce the decision.

B. By letter dated October 13 (but postmarked October 16) from the Board to plaintiffs' counsel, the challenge of plaintiffs was rejected except for two or three minor adjustments of no particular consequence.

C. Suit was filed on October 25, 1967, one week after receipt of notification of the rejection of the complaint to the Board. The application for a temporary restraining order ex parte was denied by the trial judge and the hearing on the application for the temporary injunction was set for November 27, 1967.

D. The regular judge of the court having recused himself, the special judge assigned to hear the case had conflicting settings in his court and continued the hearing until April 23, 1968, at which time the same thing happened again and the hearing was then set for ...