Houston Lighting & Power Co. v. Dickinson Independent School Dist.

• Decision Date: 05 August 1982
• Docket Number: No. B2992,B2992
• Citation: 641 S.W.2d 302
• Court: Texas Court of Appeals
• Parties: HOUSTON LIGHTING & POWER COMPANY, Appellant, v. DICKINSON INDEPENDENT SCHOOL DISTRICT, et al., Appellee. (14th Dist.)

Page 302

641 S.W.2d 302

HOUSTON LIGHTING & POWER COMPANY, Appellant, v. DICKINSON INDEPENDENT SCHOOL DISTRICT, et al., Appellee.

No. B2992.

Court of Appeals of Texas,

Houston (14th Dist.).

Aug. 5, 1982.

Edward Kliewer, III, William T. Armstrong, III, Foster, Lewis, Langley, Gradner & Banack, San Antonio, for appellant.

Doren Eskew, R. Douglas Muir, Robert S. Johnson, Eskew, Muir & Bednar, Austin, Roland Bassett, Mills, Shirley, McMicken & Eckel, Galveston, for appellee.

Before PRESSLER, MURPHY and ROBERTSON, JJ.

MURPHY, Justice.

We have reconsidered our decision in light of appellees' motion for rehearing and new authority urged in appellees' post-submission brief which inadvertently escaped the court's attention. We have granted appellees' motion for rehearing and now withdraw our original opinion and substitute the following decision.

Houston Lighting and Power Company (HL&P) appealed the trial court's judgment for recovery of delinquent ad valorem taxes, attorney's fees plus post-judgment interest on those amounts, and court costs in favor of appellees, Dickinson Independent School District (Dickinson), its Board of Trustees (Trustees), the Board of Equalization (Board), and the Tax Assessor-Collector, Mr. Wilson S. Deats (Deats). HL&P asserts twenty-two points of error on appeal challenging the findings of fact and conclusions of law, the state of the evidence, and the assessment of attorney's fees, post-judgment interest and court costs. We affirm.

HL&P owns the P.H. Robinson generating facility and cooling towers located within the Dickinson district which began property reappraisal in early 1980. Having received notice of a reappraisal of its properties, HL&P introduced valuation evidence including a sworn rendition at a public hearing held July 29, 1980, which the Board took under advisement. The Board reconvened on August 26, 1980, heard further evidence brought by HL&P and went into executive session to deliberate. The Board completed its deliberations and informed HL&P of the new assessed value placed upon its properties and adjourned. HL&P notified the Board it disagreed with the valuation assessed prior to adjournment. HL&P filed suit against appellees pursuant to Tex.Rev.Civ.Stat.Ann. art. 7345f (Vernon 1979). In its original petition filed September 30, 1980, HL&P challenged and sought to avoid the assessment on grounds of excessiveness and discrimination. HL&P's amended petition filed December 1, 1980, reiterated its assertions and sought injunctive relief and to mandamus Dickinson to re-value the subject property. Appellees, defendants below, filed their original answer generally denying HL&P's contentions on October 24, 1980. HL&P unconditionally tendered $729,042.73 for taxes due to Dickinson on or about January 22, 1981. In their first amended answer filed March 16, 1981, appellees asserted a plea in abatement in regard to HL&P's tender and a counterclaim for delinquent taxes. The trial court held a hearing on the plea in abatement on March 25, 1981 and found HL&P's tender of January 22, 1981, was not an equitable tender in good faith and entered an order sustaining the plea in abatement. HL&P's second amended petition filed June 4, 1981 reiterated its previous contentions and also asserted violations of Tex.Rev.Civ.Stat.Ann. arts. 6252-17 and 7244c (Vernon Supp.1982). The case came to trial on June 17, 1981 and the trial court signed its final judgment on August 11, 1981. In its findings of fact filed November 4, 1981, the trial court found, in pertinent part, that:

(1) The value of $253,025,790.00 for... the Power Company's property... is not in excess of said property's fair market value as of January 1, 1980.

(2) The Tax Assessor and Collector and the Board... assessed and equalized, respectively, the taxable property within the boundaries of the School District for the year 1980 at its fair market value as of January 1, 1980.

(3) On August 26, 1980, the Board... completed its inspection, hearings, examination, correction and equalization of values of all properties on the assessment lists or books... comprising the 1980 tax rolls, and approved same and finally adjourned.

(4) The Power Company's tender of its taxes for 1980 was not an equitable tender made in good faith.

(5) The Power Company failed to tender... the amount of taxes that it alleged, under its own theory, to be due and owing...

(6) The court duly heard and considered at the trial... all pleadings, evidence, stipulations, arguments of counsel, and prayers for relief including equitable relief, of the parties hereto; and the Court based its judgment and its findings of fact and conclusions of law upon all such elements, notwithstanding the interlocutory order sustaining the School District's plea in abatement.

(7) On January 1, 1980, the Power Company owned the... property [at issue] located within the boundaries of the School District...

(8) The School District levied and assessed 1980 ad valorem taxes... of $2,533,481.68...

(9) The Power Company, after partial tender, is indebted to the School District for... $1,804,438.95.

(10) Attorney's fees for the School District of $300,861.77, an amount equal to 15% of the total recovery for taxes, penalty and interest, are... reasonable...

(11) For work necessary to be performed if the Power Company appeals..., attorney's fees for the School District of $100,287.26, an amount equal to 5% of the total recovery for taxes, penalty, and interest, are... reasonable.

(12) The Power Company's P.H. Robinson Electric Generating Plant, and Cooling Towers... is real estate...

In its conclusions of law, the trial court, in pertinent part, declared:

(1) Meetings of an independent school district board of equalization are not subject to Article 6252-17, Tex.Rev.Civ.Stat.Ann.

(2) Even if the enforcement provision of Section 3A of Article 6252-17, Tex.Rev.Civ.Stat.Ann., did apply... it would only apply to a failure to give sufficient notice of an intended meeting, and not to the failure to meet in open session.

(3) The meeting of the Board... on August 26, 1980, was an open meeting and would have ... complied with Article 6252-17... if said Act were applicable...

(4) The certification of approval... involved no discretion or judgment..., and was purely a ministerial function.

(5) The School District complied with the requirements of Article 7244c, Tex.Rev.Civ.Stat.Ann.

(6) Delinquent taxes... of $1,804,438.95 for the year 1980 are justly due, owing and unpaid by the Power Company...

(7) The School District is entitled to receive from the Power Company the current 1981 taxes prorated up to and including the date of judgment... to be credited against... [HL&P's] 1981 ad valorem tax liability...

(8) The School District is entitled to recover statutory interest... of 6% per annum from February 1, 1981 until August 11, 1981.

(9) The School District is entitled to recover statutory penalty of 8% of the unpaid... taxes.

(10) The School District is entitled to recover $200,574.51 or ... 10%... as attorney's fees together with statutory interest thereon from August 11, 1981.

(11) If the Power Company appeals... and if said appeal is being prosecuted and remains undecided on or after January 1, 1982, ... the School District is entitled to recover an additional $100,287.26 or ... 5%... for attorney's fees, together with interest thereon at the statutory rate from January 1, 1982, until paid.

(12) The School District is entitled to recover postjudgment interest at the rate of 9% per annum.

(13) The School District is entitled to and has a separate, valid, and subsisting lien on the property [at issue]... to secure payment...

On November 13, 1981, in response to HL&P's objections to its findings of fact and conclusions of law, the trial court filed the additional findings that the fair market value of all HL&P's property within the district was $258,438,360.00, which amount did not exceed fair market value. The court further found HL&P owned property within the district for which it did not submit a rendition and which was not assessed for taxation purposes in 1980, and that the Tax Assessor and Collector assessed and the Board equalized property other than HL&P's for 1980 at its fair market value. And finally, the court found HL&P had failed to prove its property had a value less than that set by the Board.

HL&P's first through third points of error challenge the trial court's findings that Dickinson and the Board complied with Article 7244c ¹ as to approval and certification of the tax rolls. HL&P maintains Dickinson adopted a tax rate prior to its approval and certification of the tax rolls, violating Art. 7244c §§ 1(a) and 2 and thereby nullifying the tax levy, and asserts the record is devoid of any evidence to prove Dickinson's compliance with Art. 7244c. The language of 7244c § 1(a) is clearly mandatory, and this mandatory language was not changed in the new Property Tax Code which took effect on January 1, 1982 and is applicable to independent school districts. See, 1979 Tex.Gen.Laws, Ch. 841, § 1 et seq. at 2217. Failure to comply with statutory directives in assessing taxes voids the assessment. Federal Land Bank of Houston v. State, 314 S.W.2d 621, 630 (Tex.Civ.App.--Amarillo 1958), rev'd on other grounds, 160 Tex. 282, 329 S.W.2d 847 (1959); Lumberton Municipal Utility District v. Cease, 596 S.W.2d 601, 604-05 (Tex.Civ.App.--Beaumont 1980, no writ). Dickinson must substantially comply with the requisite procedures exacted by statute in order to arrive at a valid tax levy. Dickinson's admission of its tax records raised a presumption that there was a valid levy and assessment of HL&P's tax liability made by a legally constituted taxing authority and that all conditions precedent to the levy and assessment were performed. Whaley v. Nocona Independent School District, 339 S.W.2d 265, 267 (Tex.Civ.App.--Ft. Worth 1960 writ ref'd); Stratton v. Del Valle Independent School District,...