Robinson v. Budget Rent a car Systems

• Decision Date: 14 June 2001
• Docket Number: FRED,RENT-A-CAR,RENT-A-CA
• Citation: 51 S.W.3d 425
• Parties: <!--51 S.W.3d 425 (Tex.App.-Houston 2001) JIM ROBINSON, AS CHIEF APPRAISER, HARRIS COUNTY APPRAISAL DISTRICT, Appellant V. BUDGETSYSTEMS, INC., d/b/a BUDGETHAAS MOTORS, INC., d/b/a FRED HAAS TOYOTA, and SPLASHTOWN, LTD., Appellees BUDGETSYSTEMS, INC., d/b/a BUDGETHAAS MOTORS, INC., d/b/a FRED HAAS TOYOTA, and SPLASHTOWN, LTD., Appellants v. JIM ROBINSON, AS CHIEF APPRAISER, HARRIS COUNTY APPRAISAL DISTRICT, Appellee NO. 01-98-01265-CV Court of Appeals of Texas, Houston (1st Dist.)
• Court: Texas Court of Appeals

Page 425

51 S.W.3d 425 (Tex.App.-Houston [1st Dist.] 2001)

JIM ROBINSON, AS CHIEF APPRAISER, HARRIS COUNTY APPRAISAL DISTRICT, Appellant

V.

BUDGET RENT-A-CAR SYSTEMS, INC., d/b/a BUDGET RENT-A-CAR, FRED HAAS MOTORS, INC., d/b/a FRED HAAS TOYOTA, and SPLASHTOWN, LTD., Appellees BUDGET RENT-A-CAR SYSTEMS, INC., d/b/a BUDGET RENT-A-CAR, FRED HAAS MOTORS, INC., d/b/a FRED HAAS TOYOTA, and SPLASHTOWN, LTD., Appellants v JIM ROBINSON, AS CHIEF APPRAISER, HARRIS COUNTY APPRAISAL DISTRICT, Appellee

NO. 01-98-01265-CV

Court of Appeals of Texas, Houston (1st Dist.)

June 14, 2001

Rehearing Overruled June 14, 2001.

On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 98-37721

[Copyrighted Material Omitted] Panel consists of Chief Justice Schneider and Justices Andell^* and Duggan.^**

MAJORITY OPINION

Schneider, Chief Justice

Taxpayers filed a motion for rehearing. We deny the motion, but withdraw our original opinion of August 31, 2000, and issue this one in its stead. We also withdraw the dissent of August 31, 2000, and reissue it on this date without change.

This case addresses whether the rendition provisions of Tax Code sections 22.01(a) and (b) are directory or mandatory, and whether compliance with such provisions can be judicially compelled. This is also an appeal on attorney's fees. We reverse the judgment on the Tax Code issue and render judgment for the Appraiser holding the statute requiring rendition is mandatory. We affirm the judgment of the trial court as it relates to the denial of attorney's fees.

Facts and Procedural History

The facts of this case are undisputed. Budget Rent-A-Car, Fred Haas Toyota, and Splashtown, Ltd. ("Taxpayers") were in business within the Harris County Appraisal District. Each owned, or managed and controlled, income producing personal property, but did not render such property for taxation for 1998. Jim Robinson, Chief Appraiser of the Harris County Appraisal District ("the Appraiser"), sought to compel Taxpayers to render personal property for taxation in accordance with Tax Code sections 22.01 (a) and (b). Taxpayers counterclaimed for attorney's fees and declaratory relief. The parties filed cross-motions for summary judgment. The trial court granted Taxpayers' motion for summary judgment, ordering that they recover judgment on their counterclaims and all costs, but denying recovery of attorney's fees. The trial court also denied Taxpayers' motion for attorney's fees under the Uniform Declaratory Judgments Act and Rule of Civil Procedure 13. The Appraiser appeals the grant of summary judgment in favor of Taxpayers, and Taxpayers appeal on the issue of attorney's fees.

Standard of Review

The summary judgment rule provides a method of summarily ending a case that involves only a question of law and no fact issues. Tex. R. Civ. P. 166a (c); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985); Cigna Ins. Co. v. Rubalcada, 960 S.W.2d 408, 411-12 (Tex. App. Houston [1st Dist.] 1998, no pet.). When, as here, both sides move for summary judgment, and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both sides and determine all questions presented. Commissioner's Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997); Rubalcada, 960 S.W.2d at 411-12. We render such judgment as the trial court should have rendered. Agan, 940 S.W.2d at 81; Rubalcada, 960 S.W.2d at 411-12.

Are Tax Code Provisions in Sections 22.01 (a) and (b) Mandatory or Directory?

The central issue dividing the parties is whether the rendition provisions in Tax Code sections 22.01 (a) and (b) are directory or mandatory. Sections 22.01 (a) and (b) provide in pertinent part:

(a) . . . [A] person shall render for taxation all tangible personal property used for the production of income that he owns or that he manages and controls as a fiduciary on January 1.

(b) When required by the chief appraiser, a person shall render for taxation any other taxable property that he owns or that he manages and controls as a fiduciary on January 1.

Tex. Tax Code Ann. § 22.01 (a) - (b) (Vernon 1992) (emphasis added).

We generally construe the word "shall" as mandatory, unless legislative intent suggests otherwise. Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 961 (Tex. 1999); Schepps v. Presbyterian Hosp., 652 S.W.2d 934, 936 (Tex. 1983). In determining whether the legislature intended a provision to be mandatory or directory, we consider the plain meaning of the words used, as well as the entire act, its nature and object, and the consequences that would follow from each construction. Albertson's, 984 S.W.2d at 961; Schepps, 652 S.W.2d at 936 (citing Chisholm v. Bewley Mills, 287 S.W.2d 943, 945 (Tex. 1956)). In determining plain meaning "[w]ords and phrases shall be read in context and construed according to the rules of grammar and common usage." Tex. Gov't Code Ann. § 311.011(a) (Vernon 1998). The plain meaning of the term "shall" in sections 22.01 (a) and (b) supports a mandatory construction of the rendition provisions.

Taxpayers contend the legislative history of section 22.01 suggests a directory construction. Specifically, Taxpayers argue that because the legislature chose not to put a penalty provision in section 22.01 for failing to render, and has not enacted a penalty provision since that time, it must have intended section 22.01 to be directory. We disagree. The Texas Supreme Court has stated, "[w]hile failure to enact a bill may arguably be some evidence of intent, other reasons are equably inferable. Lack of time for consideration, opposition by a particular member or committee chair, efforts of special interest groups, or any other unidentified extraneous factor may, standing alone or combined together, act to defeat a legislative proposal regardless of the legislature's collective view of the bill's merits." El Chico Corp. v. Poole, 732 S.W.2d 306, 314 (Tex. 1987). Legislative inaction does not offer compelling evidence of legislative intent. See William D. Popkin, Materials on Legislation: Political Language and the Political Process, §12.04(a) (Foundation Press 2d ed. 1997). Therefore, we conclude the legislative intent does not suggest that the rendition provisions in section 22.01 are directory.

The dissent notes that the original draft version of section 22.01, as contained in 1979 Senate Bill 62, included a penalty provision, but was later amended prior to enactment to delete the penalty. The temptation, then, is to view the rejection of proposed language as an indication that the legislature did not intend the statute to include a penalty provision. However, rejection of language is not a statement about legislative purpose or the meaning of the statute. See Materials on Legislation: Political Language and the Political Process, §10.08. The "[r]ejection of proposed language does not necessarily imply an intent to reject its substance." See Report to the Attorney General, Using and Misusing Legislative History: A Re-Evaluation of the Status of Legislative History in Statutory Interpretation (1989), in Materials on Leglislation: Political Language and the Political Process §10.08. Proposed language before enactment of a statute may be rejected because: (1) the legislature intended the language to be a part of separate legislation; (2) the language was poorly drafted; (3) the language was superfluous; (4) the language was potentially damaging to the prospects of passing the bill. See id. Thus, it is improper to conclude the legislature did not intend section 22.01 to have a penalty provision by comparing the pre-enactment language and the enactment language.

The dissent also relies upon legislative actions after the passage of the statute to find the Tax Code provisions directory. The dissent notes that three bills were introduced seeking to add a penalty for taxpayers who do not render, but none were passed. However, legislative action or inaction after a statute has taken effect is likely to be "evidence of contemporary politics rather than prior legislative intent;" thus, legislative history which comes after a statute is not necessarily indicative of the drafter's intent. Id. at §12.02 (a). For example, the bills containing the penalty provision may not have passed because: (1) the legislature had more pressing business; (2) the legislature may have disagreed about how to impose the penalty provision; (3) the legislature may have disagreed about what kind of penalty provision to impose; (4) the composition of the legislature may have changed; or (5) committees or lobbyists may have blocked the passage of the statute. See id. The failure to impose a penalty provision three times after the statute was passed does not necessarily lead to the conclusion no penalty was intended. Thus, we do not find it proper to conclude that the Tax Code provisions are directory merely because a new group of legislators unsuccessfully introduced bills seeking to add a penalty for failure to render.

In their motion for rehearing, Taxpayers urge the legislative history of the statute suggests a directory scheme. The Code Construction Act provides that, "whether or not the statute is considered ambiguous on its face," a court construing it may consider, "among other matters the . . . legislative history." See Tex. Gov't. Code Ann. § 311.023. (Vernon 2001) (emphasis added). The Texas Supreme Court has recently addressed this issue in the context of the Tax Code. See Fleming Foods, Inc. v. Rylander, 6 S.W.3d 278, 283-84 (Tex. 1999). In deciding what weight to give legislative history when the statute was clear and unambiguous, the Court reasoned:

Under the Code Construction Act, see Tex. Gov't Code §§311.001-.032, which applies to the Tax Code, see Tex. Tax Code §101.002, courts may consider prior law, the circumstances under which the law was enacted, and legislative history among other matters to aid them in...