Jackson Hotel Corp. v. Wichita County Appraisal Dist.

• Decision Date: 22 October 1998
• Docket Number: No. 2-97-112-CV,2-97-112-CV
• Citation: 980 S.W.2d 879
• Parties: JACKSON HOTEL CORPORATION, Appellant, v. WICHITA COUNTY APPRAISAL DISTRICT, Appellee.
• Court: Texas Court of Appeals

Page 879

980 S.W.2d 879

JACKSON HOTEL CORPORATION, Appellant, v. WICHITA COUNTY APPRAISAL DISTRICT, Appellee.

No. 2-97-112-CV.

Court of Appeals of Texas,

Fort Worth.

Oct. 22, 1998.

Geary, Porter & Donovan, David Kaplan, Dallas, for Appellant.

Hank Anderson, Wichita Falls, for Appellee.

Before DAY, LIVINGSTON and BRIGHAM, JJ.

OPINION

DAY, Justice.

This is an appeal from the trial court's order dismissing a property owner's lawsuit challenging an unfavorable property appraisal. This appeal does not concern the merits of the underlying case; rather, it involves only the threshold issue of whether the property owner's motion to determine whether it substantially complied with a provision of the tax code was untimely as a matter of law because it was filed after the delinquency date for payment of taxes. Because we hold that a property owner is not required to file its motion to determine substantial compliance before the tax delinquency date, we reverse and remand the trial court's order of dismissal.

I. BACKGROUND

The facts in this case are primarily undisputed. Appellant Jackson Hotel Corporation ("Jackson") owned the Wichita Falls Ramada Inn. For tax year 1995, the Wichita County Appraisal District ("District") set the appraised property value of the hotel's real and personal property at $5,619,080. Based on this appraisal, Jackson owed $133,219.96 in taxes, which would become delinquent after February 1, 1995. TEX. TAX CODE ANN. § 31.02(a) (Vernon 1992).

Jackson timely filed a protest with the Wichita County Appraisal Review Board ("Board") to challenge the District's evaluation of the property. The Board denied Jackson's protest and sustained the District's assessment. On August 16, 1994, Jackson filed for de novo review of the Board's decision in district court, contending that the District appraised the value of the property in an amount in excess of the appraised value required by law. The District responded by filing a general denial.

While this suit was pending, the February 1, 1995 delinquency date passed with no payment from Jackson. One week after the delinquency date, Jackson sold the property to a new owner and made provisions to pay the taxes at closing. On February 16, 1995--a little more than two weeks after the delinquency date--Jackson paid the total amount of taxes owed, including $9,325.40 in penalties and interest.

At some point after the late payment, the District apparently alleged that pursuant to the forfeiture provision in section 42.08 of the tax code, Jackson had forfeited its right to appeal the property appraisal by failing to timely pay taxes. Id. § 42.08(b) (Vernon Supp.1998). ¹ Although two courts of appeals had held that section 42.08's forfeiture provision violated the open courts provision of the Texas Constitution, at that time the Supreme Court of Texas had not yet ruled on the issue. As a result, the parties agreed to abate the appeal until after the supreme court rendered its decision in Central Appraisal Dist. v. Lall, 924 S.W.2d 686 (Tex.1996), a pending case that would ultimately decide the constitutionality of section 42.08. On June 14, 1996, the Texas Supreme Court issued an opinion striking down one portion of the forfeiture provision but upholding the remainder. ² Id. at 690.

Shortly after the supreme court issued its decision, the District filed a motion to dismiss Jackson's appeal. Relying on Lall, the District argued that because Jackson had failed to pay any 1994 taxes before the delinquency date, it had forfeited its right to appeal the unfavorable property appraisal. Jackson responded by filing an oath of inability to pay 1994 property taxes, alleging that it had been financially unable to pay the taxes prior to the delinquency date. TEX. TAX CODE ANN. § 42.08(d) (Vernon Supp.1998). Jackson also filed a motion for the trial court to determine whether it had substantially complied with the requirements of section 42.08 and thus preserved its right to appeal. Id.

On March 6, 1997, the trial court entered an order denying Jackson's motion to determine substantial compliance and granting the District's motion to dismiss. In its findings of fact and conclusions of law, the trial court concluded that because Jackson did not pay property taxes until after the February 1, 1995 delinquency date and did not file its oath of inability to pay 1994 taxes before the delinquency date, Jackson had not complied with the requirements in section 42.08 to preserve its right to appeal. In addition, the trial court concluded that because Jackson's motion to determine whether it had substantially complied with section 42.08 was not filed with the court until after the delinquency date for taxes, it was untimely as a matter of law. As a result, the trial court granted the District's motion to dismiss without addressing the merits of Jackson's motion to determine substantial compliance.

On appeal, Jackson brings two points. First, it contends that the trial court erred in concluding as a matter of law that Jackson was required to file its motion to determine substantial compliance before the February 1, 1995 delinquency date. Second, Jackson argues that the trial court erred in concluding that Jackson's motion to determine substantial compliance was untimely as a matter of law because it was filed after the February 1, 1995 delinquency date.

In a single cross point, the District contends that pursuant to the forfeiture provision in section 42.08(b), we have no jurisdiction in this matter because Jackson forfeited its right to appeal by failing to pay taxes or file an oath of inability to pay before the delinquency date.

II. MOTION TO DETERMINE SUBSTANTIAL COMPLIANCE

The central issue in this case is whether the trial court correctly interpreted section 42.08 of the tax code, i.e., whether the legislature intended for a property owner to file its motion to determine whether it had substantially complied with the statutory provisions of section 42.08 before the delinquency date for taxes. ³ Because the express language of section 42.08 does not set a specific time for a property owner to file its motion to determine substantial compliance, any intent by the legislature to require the motion to be filed before the delinquency date must be inferred from the statute as a whole.

A. Standard of Review

Statutory construction is a question of law for the reviewing court. See Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989); Holmans v. Transource Polymers, Inc., 914 S.W.2d 189, 191 (Tex.App.--Fort Worth 1995, writ denied). The court's primary objective in construing a statute is to ascertain the legislature's intent and to give effect to that intent. See Mitchell Energy Corp. v. Ashworth, 943 S.W.2d 436, 438 (Tex.1997); Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex.1994); Holmans, 914 S.W.2d at 191. In determining the meaning of a statute, a court must consider the entire act, its legislative history, and the nature and object to be obtained. See Sharp v. House of Lloyd, Inc., 815 S.W.2d 245, 249 (Tex.1991); Holmans, 914 S.W.2d at 191; In re J.L.W., 919 S.W.2d 841, 843 (Tex.App.--El Paso 1996, no writ). The court must also consider the consequences that would follow from alternative constructions of the statute and avoid absurd results. See Sharp, 815 S.W.2d at 249; Glasscock Underground Water Conservation Dist. v. Pruit, 915 S.W.2d 577, 581 (Tex.App.--El Paso 1996, no writ). Finally, we must reject interpretations of a statute that defeat the purpose of the legislation so long as another reasonable interpretation exists. See Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 663 (Tex.1996); Citizens Bank v. First State Bank, 580 S.W.2d 344, 347-48 (Tex.1979).

Taxing statutes are construed strictly against the taxing authority and liberally for the taxpayer. See Wilson Communications, Inc. v. Calvert, 450 S.W.2d 842, 844 (Tex.1970); Dallas Cent. Appraisal Dist. v. Tech Data Corp., 930 S.W.2d 119, 122 (Tex.App.--Dallas 1996, writ denied). Furthermore, where a statute is designed to relieve a property owner from the harshness of a forfeiture law, it should be liberally construed to accomplish that purpose. See Freels v. Walker, 120 Tex. 291, 26 S.W.2d 627, 629 (1930); Jim Walter Homes, Inc. v. Gibbens, 608 S.W.2d 706, 711 (Tex.Civ.App.--San Antonio 1980, writ ref'd n.r.e.).

B. The Law

Under section 42.08, a property owner must pay taxes in the manner prescribed or forfeit the right to proceed to a final determination of its appeal of the appraisal board's decision. See TEX. TAX CODE ANN. § 42.08(b). However, subsection (d) provides an exception to this otherwise harsh rule. Under this exception, a property owner may file a motion to determine whether it has substantially complied with the requirements of section 42.08. See id. § 42.08(d). Section 42.08 directs the trial court that after the property owner files this motion, the court "shall hold a hearing to review and determine compliance with this section ... set[ting] such terms and conditions on any grant of relief as may be reasonably required by the circumstances." Id. After a hearing, if the trial court finds that the taxpayer substantially complied, the taxpayer may preserve its right to appeal by fully complying with the trial court's conditions and terms within 30 days of the decision. See id. If, on the other hand, the trial court determines that the taxpayer has not substantially complied, the property owner's action must be dismissed. See id.

C. Legislative Intent

Before May 1985, section 42.08(b) required the trial court, either on its own motion or that of an opposing party, to dismiss a property owner's appeal of an appraisal if the property owner had not paid its taxes before the delinquency date. Act of May 26, 1983, 68 th Leg., R.S., ch. 910, § 1, 1983 Tex. Gen. Laws 5049, 5049, amended by Act of May 9, 1985, 69 th Leg., R.S., ch. 195, § 1, 1985 Tex. Gen....