Hunt County Tax Appraisal Dist. v. Rubbermaid Inc.

• Decision Date: 15 August 1986
• Docket Number: No. 05-85-01258-CV,05-85-01258-CV
• Parties: HUNT COUNTY TAX APPRAISAL DISTRICT, et al., Appellants, v. RUBBERMAID INCORPORATED, Appellee.
• Court: Texas Court of Appeals

Page 215

719 S.W.2d 215

HUNT COUNTY TAX APPRAISAL DISTRICT, et al., Appellants, v. RUBBERMAID INCORPORATED, Appellee.

No. 05-85-01258-CV.

Court of Appeals of Texas,

Dallas.

Aug. 15, 1986.

Rehearing Denied Oct. 13, 1986.

Peter G. Smith, Dallas, for appellants.

G. Randall Hullett, Greenville, for appellee.

Before STEPHENS, WHITHAM and STEWART, JJ.

STEWART, Justice.

Hunt County Tax Appraisal District, et al. ("Appraisal Authorities") appeal the judgment of the trial court rendered in favor of Rubbermaid, Incorporated, reducing the appraised value of Rubbermaid's property on the appraisal authorities' tax appraisal roll to the amount of $4,500,000 for tax years 1982, 1983, and 1984. The appraisal authorities contend that the trial court erred in reducing the appraised value of Rubbermaid's property in 1982 and 1983 because the evidence establishes that Rubbermaid voluntarily paid these taxes in full, and therefore all questions as to the validity of these amounts became moot. The appraisal authorities further contend that the trial court erred by (1) determining that they were bound by the appraised value of Rubbermaid's property as it appeared on the appraisal authorities' appraisal roll, and that they were therefore denied trial de novo review; (2) denying the appraisal authorities' motion to strike the testimony of Rubbermaid's witness because his testimony was of no probative value; (3) determining that the market value of Rubbermaid's property as of January 1, 1982, 1983, and 1984, was $4,500,000 because there is insufficient evidence, or in the alternative, no evidence, to support such judgment or finding (4) overruling the appraisal authorities' motion to strike the testimony of Rubbermaid's witness, and their motion in limine to preclude it, because Rubbermaid is estopped to deny the market value rendered for the subject property for each tax year; and (5) awarding Rubbermaid attorney's fees because there is no evidence or, in the alternative, insufficient evidence to support such award. We agree with the appraisal authorities that Rubbermaid voluntarily paid its 1982 and 1983 taxes in full, but we overrule their other contentions. Accordingly, we reverse and render judgment that Rubbermaid take nothing for the tax years 1982 and 1983 and affirm the trial court's judgment on the value of Rubbermaid's property for the tax year 1984. Because of our ruling on the tax years 1982 and 1983, however, we must reverse and remand for new trial the issue of attorney's fees for Rubbermaid in the case concerning the 1984 tax year.

Rubbermaid owns 90.84 acres of land and improvements located at 7121 Shelby Street, Greenville, Hunt County, Texas. The property consists of a one-story steel frame building approximately thirty-four feet in height with 97,475 square feet of manufacturing area, 186,988 square feet of warehouse area, 3,843 square feet of mezzanine area, and an adjoining two-story office area of 3,843 square feet. The subject property is operated by Rubbermaid for its manufacturing operation of injection molding, making plastic houseware products varying from small wastebaskets to large garbage cans. The company also utilizes the property as a distribution center to ship its products to the Sunbelt and West Coast states.

Rubbermaid received notice from Hunt County Tax Appraisal District that the appraised value of the subject property for ad valorem tax purposes as of January 1, 1982 was $5,901,840.00 and as of January 1, 1983 and January 1, 1984 was $5,838,770.00. Thereafter, Rubbermaid protested the 1982, 1983 and 1984 appraised value of the subject property before appellant, Hunt County Tax Appraisal Review Board. The review board corrected the district's appraisal for 1982 and 1983 and upheld the district's 1984 appraisal, whereupon Rubbermaid timely filed written notice of appeal of the review board's orders and timely filed separate actions for each tax year against the appellants, seeking de novo review from the 1982, 1983, and 1984 appraised values of the subject property. By agreement, the trial court consolidated the three actions into one action for all purposes.

After a trial before the court, the trial judge rendered a judgment declaring that the appraised value of the property, according to the appraisal roll for each tax year, exceeded the market value of the property, and he ordered a reduction of the appraised value on the appraisal roll for each tax year in dispute to $4,500,000. The court further found that Rubbermaid was entitled to a refund of a portion of the ad valorem taxes paid various taxing units that were not party litigants to the action. The judgment also awarded Rubbermaid reasonable attorney's fees in the amount of $5,700 pursuant to sections 42.27 and 42.29 of the Texas Property Tax Code ¹ ("the Code").

The appraisal authorities first contend that the trial court erred in determining that the appraised value of Rubbermaid's property exceeded the cash fair market value for tax years 1982 and 1983, because the evidence establishes that Rubbermaid voluntarily paid the 1982 and 1983 ad valorem taxes, making all questions as to their validity moot. Section 42.08 of the Code, as it existed in 1982 and 1983, required the property owner who appeals an ad valorem tax to pay the undisputed amount of the tax for the current year or the amount paid in the previous year, whichever was greater. Donald W. McBride, the Operations Manager for Rubbermaid, testified that Rubbermaid timely paid the taxes for the years 1982 and 1983, but that these taxes were not being paid voluntarily. He further testified that, at the time these taxes were paid, Rubbermaid was not certain of the undisputed amount, so it paid the full amount to avoid forfeiture of its right to appeal. The appraisal authorities contend that, because of the statute, such payment renders all questions as to the validity of the taxes moot. We agree.

It is well settled in Texas law that a person who voluntarily pays an illegal tax has no claim for repayment. National Biscuit Co. v. State, 134 Tex. 293, 135 S.W.2d 687 (1940); San Antonio Independent School District v. National Bank of Commerce of San Antonio, 626 S.W.2d 794 (Tex.App.--San Antonio 1981, no writ); Johnson Controls, Inc. v. Carrollton-Farmers Branch Independent School District, 605 S.W.2d 688, 689 (Tex.Civ.App.--Dallas 1980, writ ref'd n.r.e.). This rule is said to be one of sound public policy, the object of which is to discourage litigation and to secure the taxing authority in the orderly conduct of its affairs. Johnson Controls, Inc. v. Carrollton-Farmers Branch Independent School District, supra.

Rubbermaid does not refute the argument put forth by the appraisal authorities on this issue. Instead, it contends that it did not pay the tax voluntarily and that whether taxes are paid voluntarily or involuntarily is a question of fact to be determined by the trier of fact. Jay v. Devers, 563 S.W.2d 880 (Tex.Civ.App.--Eastland 1978, no writ); Rainey v. City of Tyler, 213 S.W.2d 57 (Tex.Civ.App.--Texarkana 1948, writ ref'd n.r.e.). Rubbermaid further contends that, since it can be inferred that the trial court made an implied finding that the taxes were not paid voluntarily, we cannot disturb this finding if it is supported by probative evidence. Texas Employers Ins. Assoc. v. Brumbaugh, 224 S.W.2d 761 (Tex.Civ.App.--Eastland 1949, writ ref'd n.r.e.). We agree with these principles of law, but we conclude that the evidence does not support a finding of involuntary payment.

At trial and on appeal, Rubbermaid relied on two theories to support its contention that its payment of the 1982 and 1983 ad valorem taxes was involuntary. First, it maintains that the taxes were paid under protest, as evidenced by McBride's testimony and its filing a lawsuit, and, after payment, appealing the action of the review board for each year in contention. However, a mere showing that ad valorem taxes were paid "under protest" will not support the taxpayer's claim for recovery. Austin National Bank of Austin v. Sheppard, 123 Tex. 272, 71 S.W.2d 242 (1934); Howell v. City of Dallas, 549 S.W.2d 36 (Tex.Civ.App.--Waco 1977, writ ref'd n.r.e.).

Second, Rubbermaid asserts that the 1982 and 1983 taxes were paid under implied duress and therefore paid involuntarily. It relies on the provisions of former section 42.08 of the Code to establish implied duress. That section read in pertinent part:

(b) A property owner who appeals ... must pay the tax due on the amount of value of the property involved ... that is not in dispute or the amount of tax paid on the property in the preceding year, whichever is greater, before delinquency date or he forfeits his right [to appeal].

Rubbermaid contends that the threat of the forfeiture of its right to appeal the review board's order is sufficient to raise a fact issue on the question of implied duress. We disagree. In cases in which the courts have held for the taxpayers, duress has been clearly established. In Austin National Bank v. Sheppard, and National Biscuit Co. v. State, the taxpayers, both foreign corporations, paid a tax or fee in lieu of forfeiting their right to do business in the state and their right of access to the courts. Thereafter, they filed suits attacking the constitutionality of the statutes involved. On appeal, the statutes were declared unconstitutional, and, in both cases, it was held that risk of such penalties and punishments constituted duress and thus that the payments were involuntary. Likewise, Crow v. City of Corpus Christi, 146 Tex. 558, 209 S.W.2d 922 (1948), and Lincoln Nat. Life Ins. Co. v. State, 632 S.W.2d 227 (Tex.App.--Austin 1982, writ ref'd n.r.e.), concerned commercial taxpayers faced with the threat of losing their rights to conduct business had they not paid the taxes demanded of them. Such is not the case here.

Nevertheless, Rubbermaid argues that section 42.08 had just become effective on ...