Phifer v. Nacogdoches Cty Cent Appr Dist

• Decision Date: 31 October 2000
• Docket Number: CO-INDEPENDENT
• Citation: 45 S.W.3d 159
• Parties: (Tex.App.-Tyler 2000) DWIGHT L. PHIFER, ADMINISTRATOR OF THE ESTATE OF WALTER EARL BAILEY, DECEASED ANDEXECUTOR OF THE ESTATE OF ALIBE C. BAILEY, APPELLANTS v. NACOGDOCHES COUNTY CENTRAL APPRAISAL DISTRICT, APPELLEE NO. 12-99-00262-CV
• Court: Texas Court of Appeals

Page 159

45 S.W.3d 159 (Tex.App.-Tyler 2000)

DWIGHT L. PHIFER, ADMINISTRATOR OF THE ESTATE OF WALTER EARL BAILEY, DECEASED AND CO-INDEPENDENT EXECUTOR OF THE ESTATE OF ALIBE C. BAILEY, APPELLANTS v. NACOGDOCHES COUNTY CENTRAL APPRAISAL DISTRICT, APPELLEE

NO. 12-99-00262-CV

IN THE COURT OF APPEALS, TWELFTH COURT OF APPEALS DISTRICT, TYLER, TEXAS

October 31, 2000

Rehearing Overruled Jan. 17, 2001.

Discretionary Review Denied May 24, 2001.

APPEAL FROM THE 145TH JUDICIAL DISTRICT COURT OF NACOGDOCHES COUNTY,TEXAS

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Panel consisted of Davis, C.J., Hadden, J., and Worthen, J.,

OPINION ON REHEARING

JIM WORTHEN, Justice

By its motion for rehearing, the Nacogdoches County Central Appraisal District ("Appraisal District") contends this Court erred in determining that the Cherokee County Court at Law has jurisdiction over this case. Finding some merit to the Appraisal District's arguments raised on rehearing, we grant its motion for rehearing. We withdraw our opinion and judgment of April 25, 2000 and substitute the following opinion affirming the trial court's judgment.

Appellant, Dwight L. Phifer, Administrator of the Estate of Walter Earl Bailey¹ and Co-Independent Executor of the Estate of Alibe C. Bailey ("Phifer"), appeals from a judgment entered by the 145th Judicial District Court of Nacogdoches County ("district court"), awarding the Appraisal District delinquent property taxes and foreclosure of a tax lien on certain real property in Nacogdoches County. That property is also subject to a continuing probate proceeding in the County Court at Law ("probate court") in Cherokee County. Phifer raises four issues on appeal. We affirm the district court's judgment.

In 1973, W.E. Bailey died intestate in Cherokee County. His widow, Alibe C. Bailey, began probate proceedings in the probate court in Cherokee County and was named as administratrix of the estate of W.E. Bailey. At the time of his death, W.E. Bailey owned real property in the counties of Cherokee, Anderson, Gregg, Nacogdoches, and Smith. The estate has not paid real property taxes on any of this land during the pendency of the W.E. Bailey estate. The estate remains open solely due to the unpaid property taxes.

In 1989, the Appraisal District filed an original petition in the Nacogdoches County District Court to collect delinquent taxes and to foreclose upon the real property located in Nacogdoches County. The administratrix, Alibe C. Bailey, filed a plea in abatement on behalf of the W.E. Bailey estate. In 1992, Alibe C. Bailey died. In July 1994, the Appraisal District filed a claim in the Cherokee County probate proceedings for the delinquent taxes owed by the estate of W. E. Bailey on the real property located in Nacogdoches County. In October 1994, following the rejection of its claim by the W. E. Bailey estate, the Appraisal District filed suit in the probate court pursuant to the probate code to pursue its claim.

On August 13, 1997, the probate court entered an "Order Establishing Procedures for Escrow of Taxes Involving Sales of Real Estate" in the probate proceeding. This order was agreed upon by the taxing authorities in the five above-named counties and by Phifer, in both his dual capacities as administrator of the Estate of W. E. Bailey and Co-Independent Executor of the Estate of Alibe C. Bailey. The order contained the following paragraph:

3. The escrow fund shall be held by the administrator for the benefit of the estate and of the creditor taxing units of Smith Count [sic], Cherokee County, Gregg County, Nacogdoches County, and Anderson County, all of which taxing units have various disputed claims pending against the estate for ad valorem taxes; that such funds may not be expended or commingled with other funds of the estate until further ordered by the Court and with prior notice to the taxing units through their attorneys of record; and that the liens (if any are found to exist upon final completion of the tax litigation involving this Estate and the herein mentioned taxing authorities) held by the taxing units, charged against the property sold, and securing payment of ad valorem taxes, penalties, interest and costs, are transferred from the property sold and hereby Ordered attached to such escrow funds in lieu of the sold property itself; that such funds in escrow be held solely for the purpose of funding payment of the taxes on the property and on other properties of the estate upon the ultimate resolution of the pending tax litigation, but only to the extent that such taxes are established by judgment or other final Order of the Court; and that the specific property subject of this Order is sold free and clear of such liens, save and except the current year tax lien which tax year and amount is ordered to be prorated between the estate and purchaser unless the purchaser assumes payment of such current years taxes.

On September 29, 1997, shortly after agreeing to the above-referenced order in the probate court, and apparently after several years of inactivity in the district court, the Appraisal District resumed pursuit of its claim in the district court by filing its First Amended Original Petition. On October 14, 1998, with approval of the probate court, Phifer, in his dual roles, sold the estates' Nacogdoches County real property to Larry and Joyce Ellis. Phifer attempted unsuccessfully to have the district court case dismissed for lack of jurisdiction claiming that only the probate court could hear the Appraisal District's claims. After a hearing on the merits, the district court entered a judgment against Phifer, in his dual capacities, in the amount of $15,282.31. That judgment, signed May 18, 1999, further ordered the foreclosure of the Appraisal District's lien and the sale of the Nacogdoches County property. Phifer appealed, contesting the district court's jurisdiction and attacking the merits of the judgment.

In his first issue, Phifer contends that the Nacogdoches County District Court did not have jurisdiction over the Appraisal District's suit to collect delinquent taxes. He asserts that, pursuant to section 5 of the Texas Probate Code, the Cherokee County Court at Law, which has original probate jurisdiction over the Bailey estate, has the power to hear all matters "incident to an estate" and all petitions regarding probate and administration must be filed and heard in that court. See Tex. Prob. Code Ann. § 5(e) (Vernon Supp. 2000). He further contends that the Appraisal District's claims for delinquent taxes are claims "incident to an estate" as that phrase is used in section 5A. That phrase includes all claims against an estate and all actions for enforcement of liens on land incident to an estate. See Tex. Prob. Code Ann. § 5A(a) (Vernon Supp. 2000). Phifer also asserts that the Appraisal District's tax claim falls within the definition of "claims" in section 3(c) of the Probate Code, which provides that "claims" include liabilities of a decedent, including taxes. See Tex. Prob. Code Ann. § 3(c) (Vernon Supp. 2000). Further, Phifer argues that the probate court and the district court have concurrent venue and, pursuant to section 8, the probate court has jurisdiction because probate proceedings were instituted there before the tax suit was filed in district court. See Tex. Prob. Code Ann. § 8(a) (Vernon 1980).

The Appraisal District, however, contends that the district court in Nacogdoches County had jurisdiction pursuant to section 33.41(a) of the Texas Property Tax Code which states:

At any time after its tax on property becomes delinquent, a taxing unit may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both. The suit must be in a court of competent jurisdiction for the county in which the tax was imposed.

Tex. Tax Code Ann. § 33.41(a) (Vernon Supp. 2000). The Appraisal District asserts that under Estate of Crawford v. Town of Flower Mound, 933 S.W.2d 727 (Tex. App. Fort Worth 1996, writ denied), when there is a conflict between the Property Tax Code and the Probate Code concerning proper jurisdiction for a tax suit involving real property outside of the county where the probate is pending, then the Property Tax Code provision controls. Apparently inspired by the holding in Crawford, the Texas Legislature, in 1999, added Probate Code section 5C, entitled "Actions to Collect Delinquent Property Taxes," which reads in pertinent part as follows:

(a) This section applies only to a decedent's estate that:

(1) is being administered in a pending probate proceeding;

(2) owns or claims an interest in property against which a taxing unit has imposed ad valorem taxes that are delinquent; and

(3)is not being administered as an independent administration under Section 145 of this code.

(b) Notwithstanding any provision of this code to the contrary, if the probate proceedings are pending in a foreign jurisdiction or in a county other than the county in which the taxes were imposed, a suit to foreclose the lien securing payment of the taxes or to enforce personal liability for the taxes must be brought under Section 33.41, Tax Code, in a court of competent jurisdiction in the county in which the taxes were imposed.

Tex. Prob. Code Ann. § 5C(a), (b) (Vernon Supp. 2000).

In its motion for rehearing, the Appraisal District asserts for the first time that this Court must apply new section 5C to this case. It argues that section 5C reconciles any conflicts between the Probate Code's jurisdictional provisions and the Tax Code's provisions by requiring this suit to collect delinquent property taxes to be brought in Nacogdoches County, the county in which the taxes were imposed. Even if the Cherokee County Court at Law originally acquired jurisdiction of the Appraisal District's tax claims, it argues, that court was divested of jurisdiction on September 1, 1999,...