Indus. Communications v. Ward Appraisal

• Decision Date: 03 June 2009
• Docket Number: No. 08-07-00083-CV.,08-07-00083-CV.
• Citation: 296 S.W.3d 707
• Parties: INDUSTRIAL COMMUNICATIONS, INC., Appellant, v. WARD COUNTY APPRAISAL DISTRICT and Ward County Appraisal Review Board, Appellees.
• Court: Texas Court of Appeals

296 S.W.3d 707

INDUSTRIAL COMMUNICATIONS, INC., Appellant, v. WARD COUNTY APPRAISAL DISTRICT and Ward County Appraisal Review Board, Appellees.

No. 08-07-00083-CV.

Court of Appeals of Texas, El Paso.

June 3, 2009.

Rehearing Overruled July 15, 2009.

Brandy R. Manning, Haynes and Boone, LLP, Fort Worth, for Appellant.

Judith A. Hargrove, Hargrove & Evans, LLP, Austin, for Appellees.

Before CHEW, C.J., McCLURE, and CARR, JJ.

OPINION

ANN CRAWFORD McCLURE, Justice.

Industrial Communications, Inc. appeals from a summary judgment in favor of Ward County Appraisal District and Ward County Appraisal Review Board (the Taxing Entities). We sustain Issues One and Two; reverse the trial court's order granting summary judgment in favor of the Taxing Entities; reverse the trial court's order denying Industrial's motion for summary judgment; render judgment granting Industrial's motion for summary judgment on its declaratory judgment action; and render judgment awarding attorney's fees to Industrial.

FACTUAL SUMMARY

In July of 2000, Industrial Communications (Industrial) finalized its purchase of the accounts receivable and equipment of Industrial Communications of Pecos, Inc. (ICP). The equipment included three radio towers located on Barstow Hill in Ward County.¹ Industrial's headquarters was located in Odessa, Texas while ICP was located in Pecos. In June of 2000, Industrial's general manager, Charles E. Wood, began the process of registering Industrial's purchase of the three radio towers from ICP. On June 24, 2000, he accessed the internet and went to the Federal Communication Commission's website to register Industrial as the new owner of the three radio towers. Wood believed he had successfully registered Industrial as the owner of the three towers with the FCC, but he learned in 2006 that the online registration had been unsuccessful due to a software problem; consequently, the FCC did not show Industrial as the owner. Anita Miller, Industrial's Accounts Payable and Accounts Receivable Clerk, notified all customers and vendors of both Industrial and ICP of the address change when Industrial purchased ICP. Further, Industrial had an employee at the Pecos address from February 5, 2002 through June 30, 2003. Thereafter, Industrial made a change of address with the United States Post Office and requested that all mail sent to the Pecos address be forwarded to the Odessa address.

Beginning in tax year 2001, Industrial filed renditions on the property previously owned by ICP but the renditions did not include the three Barstow Hill radio towers. The renditions were accepted by Ward County, Industrial was taxed according to the rendered values, and Industrial timely paid its taxes. Sometime prior to April 1, 2004, Industrial's comptroller, Peggy Clemons, received a letter from Ward County Appraisal District advising Industrial about a law created by Senate Bill 340 which concerned the filing of business personal property renditions.² The letter advised that the new law, effective January 1, 2004, would impose tough penalties for failure to file a rendition with the appraisal district or for filing after the statutory deadline of April 15, 2004. Clemons thoroughly reviewed Industrial's depreciation schedules and discovered that the three Barstow Hill radio towers had been omitted and had never been rendered by either ICP or Industrial. On April 1, 2004, Clemons, on behalf of Industrial, prepared a business personal property rendition of taxable property listing the three Barstow Hill radio towers with a total value of $15,500³ and submitted it to the Ward County Appraisal District. Ward County Appraisal District accepted the rendition and assessed the 2004 taxes on the three towers in accordance with the rendered values. In October of 2004, Industrial received a 2004 tax bill for the Barstow Hill radio towers and other property rendered by Industrial and it paid this bill on January 1, 2005. The 2004 taxes on the Barstow Hill radio towers totaled $339.97. The Appraisal District also used the 2004 values for the three radio towers in the 2005 notice of appraised value.

In November 2004, Industrial received a delinquent account notice for the Barstow Hill radio towers for the 2003 tax year. The notice was addressed to ICP but sent to Industrial's address in Odessa. This was the first notice Industrial had received regarding the 2003 property taxes for the Barstow Hill radio towers because the prior notices, dated May 8, 2003, had allegedly been sent to ICP at its address in Pecos.⁴ The Appraisal District had obtained the ownership information and address listed on the prior notices from the Federal Communication Commission. According to this notice, the 2003 taxes due on the Barstow Hill radio towers was $6,826.52 because the Appraisal District showed the value of the three towers as $67,250 for the PRD tower, $74,750 for the Dowell tower, and $79,750 for the Bell tower. Although the Ward County Appraisal District accepted the 2004 rendition showing the total value of the three towers as $15,500, the 2003 appraised value of the towers was set at $221,750, a fourteen-fold increase. The 2003 taxes had become delinquent on February 1, 2004. Around November 15, 2004, Industrial received a notice of the Appraisal District's intent to sue. Like the delinquent account notice, the notice of intent to sue was addressed to ICP but it was mailed to Industrial's address in Odessa. Upon receipt of the notice of intent to sue, Clemons prepared a property tax notice of protest for the 2003 taxes, and in the cover letter, she complained about the Appraisal District's failure to provide notice. The Appraisal District and Appraisal Review Board refused to grant Industrial a hearing on its protest for the stated reason that the "deadline for filing a protest based on failure of the chief appraiser to deliver a notice to which the property owner is entitled has passed."

On January 4, 2006, Industrial filed suit against the Appraisal District and the Appraisal Review Board pursuant to Section 41.45(f) of the Tax Code seeking to compel the Appraisal Review Board to hold a hearing on its protest. Alternatively, Industrial sought a declaratory judgment that (1) the Texas Tax Code, as applied to Industrial, failed to provide due process; (2) the attempt to collect taxes, penalties, and interest from Industrial without adequate notice or a hearing violated Industrial's right to due process, and (3) the 2003 taxes assessed on the radio towers are void. Industrial filed a motion for summary judgment on all of its claims. The Appraisal District and the Appraisal Review Board filed a motion for summary judgment on the sole ground that Industrial had not exhausted the administrative remedies provided by the Property Tax Code. The trial court denied Industrial's motion for summary judgment and granted summary judgment in favor of the Appraisal District and the Appraisal Review Board.

SUMMARY JUDGMENT

Industrial presents two issues on appeal complaining that the trial court erred in granting the Taxing Entities' motion for summary judgment and denying Industrial's motion for summary judgment because taxes were assessed against Industrial's property without notice and a reasonable opportunity to be heard. The Taxing Entities respond that the trial court properly denied Industrial's motion for summary judgment because the Appraisal District complied with all notice requirements under the Property Tax Code by delivering notice of the 2003 appraisal to the record owner of the property, ICP. Further, they contend that the trial court properly granted summary judgment in their favor because Section 41.411 provides the exclusive administrative remedy for lack of notice and Industrial failed to exhaust its administrative remedies under that section.

Standard of Review

When both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review both parties' summary judgment evidence and determine all questions presented. Dow Chemical Company v. Bright, 89 S.W.3d 602, 605 (Tex.2002). In a traditional summary judgment case, the issue on appeal is whether the movant met its summary judgment burden by establishing that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. TEX.R.CIV.P. 166a(c); Southwestern Electric Power Company v. Grant, 73 S.W.3d 211, 215 (Tex.2002). The burden of proof is on the movant, and all doubts about the existence of a genuine issue of material fact are resolved against the movant. Southwestern Electric, 73 S.W.3d at 215. Evidence favorable to the non-movant will be taken as true in deciding whether there is a disputed issue of material fact. Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex.2004). All reasonable inferences must be resolved in favor of the non-movant. Id.

Taxpayer Entitled to Due Process

Collection of a tax constitutes a deprivation of property; therefore, a taxing unit must afford a property owner due process of law. McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, Dept. of Bus. Regulation of Florida, 496 U.S. 18, 36-7, 110 S.Ct. 2238, 2250-51, 110 L.Ed.2d 17 (1990); Appraisal Review Board of the El Paso County Central Appraisal District v. Fisher, 88 S.W.3d 807, 813 (Tex. App.-El Paso 2002, pet. denied). Due process affords a party the right to be heard before final assessment of the taxes; it does not detail the review mechanism. Denton Central Appraisal District v. CIT Leasing Corporation, 115 S.W.3d 261, 265-66 (Tex.App.-Fort Worth 2003, pet. denied). In cases involving taxation, due process is satisfied if the taxpayer is given an opportunity to be heard before some assessment board at some stage of the proceedings. Id.; Fisher, 88 S.W.3d at 813.

Due Process under the Texas Tax Code

Pursuant to Section 41.41 of the Tax Code, a property owner is entitled to protest...