Kilgore Indep. Sch. Dist. v. Axberg

• Citation: 535 S.W.3d 21
• Decision Date: 12 October 2017
• Docket Number: No. 06-17-00060-CV,06-17-00060-CV
• Parties: KILGORE INDEPENDENT SCHOOL DISTRICT, et al., Appellants v. Darlene AXBERG, John Claude Axberg, Sheila Anderson, and the State of Texas, Appellees
• Court: Court of Appeals of Texas

535 S.W.3d 21

KILGORE INDEPENDENT SCHOOL DISTRICT, et al., Appellants

v.Darlene AXBERG, John Claude Axberg, Sheila Anderson, and the State of Texas, Appellees

No. 06-17-00060-CV

Court of Appeals of Texas, Texarkana.

Date Submitted: September 13, 2017

Date Decided: October 12, 2017

Dennis J. Eichelbaum, Lead Counsel, Scott W. Thomas, Andrea L. Mooney, Eichelbaum Wardell Hansen Powell & Mehl, PC, Plano, TX, Attorneys for Appellant.

Kristofer S. Monson, Lead Counsel, David J. Hacker, Joel Stonedale, Michael C. Toth, Austin R. Nimocks, Andrew D. Leonie, III, Office of the Attorney General, Austin, TX, for State of Texas.

Jonathan Mitchell, Lead Counsel, John Scott, Scott PLLC, Daniel R. Smith, Popp Hutcheson, PLLC, Austin, TX, Forrest Smith, Friedman & Feiger, LLP, Dallas, TX, Timothy M. Hoch, Hoch Law Firm, Fort Worth, TX, for Darlene Axberg, John Claude Axberg, and Sheila Anderson.

Before Morriss, C.J., Moseley and Burgess, JJ.

OPINION

Opinion by Chief Justice Morriss

On June 29, 2015, the Board of Trustees of Kilgore Independent School District (KISD) voted to repeal KISD's local option homestead exemption (LOHE). That repeal came just fourteen days after Governor Greg Abbott signed Senate Bill No. 1 (SB1), which (A) was to become effective on the later passage of an enabling constitutional amendment by the voters, (B) increased a statewide homestead exemption, and (C) forbade any local taxing authority with a LOHE in place in 2014 from repealing that LOHE before the end of calendar year 2019. Darlene Axberg, John Claude Axberg, and Sheila Anderson (collectively Axberg) sued KISD, seven individual members of KISD's Board of Trustees in their official capacities, and the school superintendent, Cara Cooke, in her official capacity, alleging that KISD's repeal of the LOHE was invalid because it violated state law, that taxes subject to the LOHE had been illegally collected, and that Cooke and each of the Trustees committed various ultra vires actions. Axberg's petition sought a declaratory judgment, a permanent injunction, a tax refund, attorney fees, and costs. KISD, Cooke, and the Trustees filed a plea to the jurisdiction and motion to dismiss, which the trial court denied.

On appeal, KISD, Cooke, and the Trustees contend that the trial court erred in denying their plea to the jurisdiction and motion to dismiss because KISD is immune under governmental/sovereign immunity, Axberg failed to plead and support ultra vires claims against Cooke and the individual Trustees, Axberg failed to exhaust her administrative remedies, the claims against Cooke and the individual Trustees are barred by educator and official immunity, the claims against KISD are barred by the election of remedies, and the claims against the individual Trustees and Cooke should be dismissed as redundant of the claims against KISD.

We reverse the trial court's order in part, to the extent it refused to dismiss the ultra vires claims, and render judgment dismissing those claims; but we otherwise affirm the trial court's actions below and remand the remainder of this lawsuit for further proceedings consistent with this opinion. We take this action because (1) the Trustees voting on Board propositions and the superintendent executing Board directives are not ultra vires actions, (2) KISD is not immune to Axberg's claims, (3) Axberg was not required to exhaust administrative remedies, and (4) the election of remedies does not bar Axberg's claims against KISD.

The important facts are undisputed. Before 2015, Section 11.13(b) of the Texas Tax Code prohibited school districts from taxing the first $15,000.00 of the appraisal value of a resident's homestead (State Homestead Exemption). Act of May 29, 2015, 84th Leg., R.S., ch. 465, § 1, 2015 Tex. Gen. Laws 1779, 1779 (current version at TEX. TAX CODE § 11.13(b) (West Supp. 2016)). Under Section 11.13(n), a local government entity, such as a school district, had the option of instituting an additional homestead exemption, the LOHE, further exempting from taxation "a percentage of the appraised value" of the resident's home by adopting the exemption before July 1 of the tax year in which the LOHE would be claimed. TEX. TAX CODE ANN. § 11.13(n) (West Supp. 2016).¹

In 2015, SB1 was passed and signed, raising the State Homestead Exemption to $25,000.00 and creating Section 11.13(n-1), which states, in relevant part, that "a school district ... that adopted an exemption under Subsection (n) for the 2014 tax year may not reduce the amount or repeal the exemption. This subsection expires December 31, 2019." TEX. TAX CODE ANN. § 11.13(n-1). SB1 states that it "applies beginning with the 2015 tax year" and that its provisions "take ... effect on the date on which the constitutional amendment proposed by S.J.R.1 ... take effect," but if the voters do not approve the amendment, then SB1 "has no effect." Act of May 29, 2015, 84th Leg., R.S., ch. 465, §§ 26, 27(a)(1), 2015 Tex. Gen. Laws 1779, 1786. Senate Joint Resolution 1 (SJR1) states, "The amendments to ... this constitution take effect for the tax year beginning January 1, 2015."² Id. Voters approved the amendments proposed by SJR1 on November 3, 2015.

During the 1980s, KISD adopted a LOHE, and it was still in effect for the 2014 tax year. On June 29, 2015, two weeks after the governor signed SB1, but four months before the election, KISD's Board of Trustees repealed its LOHE, effective for the 2015 tax year. On June 15, 2016, the Attorney General of Texas and the Texas Education Commissioner sent a joint letter to KISD Superintendent, Cara Cooke, warning her that the school district's repeal of its LOHE violated Section 11.13(n-1).

Axberg's suit against KISD, its seven Trustees in their official capacities, and Cooke, in her official capacity,³ alleged that they violated Section 11.13(n-1) by repealing the LOHE. The petition sought a declaratory judgment that Section 11.13(n-1) was constitutional, that Section 1-b(e), as amended by SJR1, prohibited school districts from repealing or reducing a LOHE at any time between January 1, 2015, and December 31, 2019, that KISD's repeal was void as a matter of law, and that the defendant officials acted ultra vires by repealing the LOHE and subsequently failing to reinstate the LOHE, which allowed the continued assessment and collection of taxes that would have been avoided by the LOHE. The petition also sought a permanent injunction mandating that KISD and the officials reinstate the LOHE for application in the 2015 through 2019 tax years and stop collection, a refund of the "illegally collected taxes" that Axberg claims to have paid "under duress," attorney fees, and costs. The State of Texas intervened in the case on Axberg's behalf.

In response to Axberg's lawsuit, KISD, Cooke, and the Trustees filed an answer, a motion to dismiss, and a plea to the jurisdiction. The motion to dismiss argued that it was "unnecessary and redundant" to name as defendants KISD, the individual Trustees in their official capacities, and Cooke in her capacity as superintendent, because Cooke was merely an employee of KISD, and the Trustees and KISD "are one and the same entity," and therefore either KISD or the named officials should be dismissed as parties. Attacking the jurisdiction, the defendants argued that (A) Axberg's suit was actually a suit for the recovery of money damages disguised as a declaratory judgment action; (B) the claims against the KISD and the Trustees in their official capacities were barred by governmental/sovereign immunity; (C) the claims against the Trustees and Cooke in their official capacities were barred by educator statutory immunity under the Education Code and the common law doctrine of official immunity; (D) Axberg had failed to plead a clear and unambiguous waiver of the Appellants' immunities; (E) the claims were barred by the election of remedies statute; and (F) Axberg had failed to exhaust all administrative remedies under the Tax Code for their tax claims and under the Education Code for their claims against Cooke and the Trustees. In their joint response to the defense motions, Axberg and the State argued that (A) KISD, Cooke, and the Trustees could not assert governmental or official immunity against Axberg's claims for declaratory judgment or injunctive relief because they had been accused of acting ultra vires, (B) the claims for a refund of illegally collected taxes were not claims for money damages and were not precluded by governmental or official immunity, (C) educator statutory immunity was inapplicable, (D) Axberg was not required to exhaust administrative remedies, and (E) KISD, Cooke, and the Trustees in their official capacities were proper parties.

After conducting a hearing on the matter, the trial court held that it had jurisdiction over the case as pled by Axberg.⁴ The trial court's written order denied both the motion to dismiss and the plea to the jurisdiction. The Appellants timely filed this appeal.

A plea to the jurisdiction is a dilatory plea that seeks the dismissal of a case for lack of subject-matter jurisdiction; its purpose is "to defeat a cause of action without regard to whether the claims asserted have merit." Harris Cty. v. Sykes , 136 S.W.3d 635, 638 (Tex. 2004) (quoting Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000) ). Whether a trial court has subject-matter jurisdiction is a question of law we review de novo. Westbrook v. Penley , 231 S.W.3d 389, 394 (Tex. 2007). In making that determination, we examine de novo whether the facts alleged in a pleading, and, if applicable, the evidence, affirmatively demonstrate a trial court's subject-matter jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004). Generally, a plea to the jurisdiction "should be decided without delving into the merits of the case." Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 554 (Tex. 2000). When reviewing a plea to the jurisdiction in which the pleading...