BVS Construction v. Brazos County ( 2022 )

Case: 21-50821 Document: 00516299872 Page: 1 Date Filed: 04/28/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
April 28, 2022
No. 21-50821 Lyle W. Cayce
Clerk
In the Matter of BVS Construction, Incorporated
Debtor,
BVS Construction, Incorporated,
Appellant,
versus
Brazos County,
Appellee.
Appeal from the United States United States District Court
for the Western District of Texas
USDC No. 6:20-CV-0043
Before Jolly, Willett, and Engelhardt, Circuit Judges.
Per Curiam:*
BVS Construction, Inc. appeals a bankruptcy court order allowing the
claims of Brazos County against BVS for delinquent taxes. For the reasons
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-50821 Document: 00516299872 Page: 2 Date Filed: 04/28/2022
No. 21-50821
stated below, we AFFIRM.
BVS is a Texas company that has twice filed for Chapter 11
bankruptcy. BVS’ first bankruptcy petition was in 2014. During that
proceeding, Brazos County intervened as a creditor, claiming $336,271.42 in
delinquent property taxes for tax years 2011–2014. BVS objected, arguing
that, among other things, “the claim asserts taxes on property that was not
owned by [BVS].” The County disputed the assertion of non-ownership and
argued that BVS’ other objections to the County’s claim likewise lacked
merit. The bankruptcy court overruled BVS’ objection and entered a final
decree with respect to BVS’ bankruptcy petition in 2016. BVS did not appeal.
In 2019, BVS filed a second Chapter 11 petition. Brazos County again
intervened, claiming $500,950.06 in delinquent property taxes for tax years
2012–2019. BVS conceded the correctness of the amounts claimed for tax
years 2015–2019 but disputed the amounts for 2012–2014. BVS’ main
objection, just as in the first bankruptcy proceeding, was that the County had
improperly assessed taxes on property that BVS did not own. The bankruptcy
court concluded that BVS was collaterally estopped from contesting the
County’s claim because this same issue had been resolved in the County’s
favor in the 2014 bankruptcy action. The bankruptcy court entered a final
decree, which the district court affirmed on appeal. BVS now appeals the
district court’s judgment.
The issue presented is whether the bankruptcy court correctly held
that BVS was collaterally estopped from contesting the County’s claim of
delinquent taxes. “We review the decision of a district court, sitting as an
appellate court, by applying the same standard[] of review”—de novo—“to
the bankruptcy court’s . . . conclusions of law as applied by the district
court.” In re Gerhardt, 348 F.3d 89, 91 (5th Cir. 2003). “Whether collateral
2
Case: 21-50821 Document: 00516299872 Page: 3 Date Filed: 04/28/2022
No. 21-50821
estoppel applies is a question of law, which we review de novo.” Wills v.
Arizon Structures Worldwide, L.L.C., 824 F.3d 541, 545 (5th Cir. 2016).
Collateral estoppel, or issue preclusion, “is appropriate if (1) the issue
at stake is identical to the one involved in the prior action, (2) the issue was
actually litigated, and (3) the issue was necessary to support judgment in the
prior action.” Matter of Swate, 99 F.3d 1282, 1289 (5th Cir. 1996). For
preclusion purposes, “[a]n arrangement confirmed by a bankruptcy court has
the effect of a judgment rendered by a district court.” Miller v. Meinhard-
Com. Corp., 462 F.2d 358, 360 (5th Cir. 1972).
The bankruptcy court correctly held that BVS was collaterally
estopped from contesting the County’s claim for delinquent taxes. “BVS’s
central argument” in this case, according to its own briefing, “is that the
county’s assessments are incorrect because they include property BVS does
not own.” But BVS made the same argument in objecting to the County’s
tax claims during the 2014 proceeding, and the bankruptcy court in that
litigation necessarily resolved the issue against BVS in overruling its
objection. See In re Owners of Harvey Oil Ctr., 788 F.2d 275, 277–78 (5th Cir.
1986). BVS did not appeal the bankruptcy court’s final decree in the 2014
action. That decree constitutes a judgment, which precludes any subsequent
attempts by BVS to re-litigate the same issues. See BVS Constr., Inc. v.
Prosperity Bank, 18 F.4th 169, 173–74 (5th Cir. 2021).
BVS also argues that its objection to the County’s tax claims here
present a different issue from the one resolved against BVS in the 2014
bankruptcy proceeding because BVS’ objection in that action was to the
County’s claims for tax years 2011–2014, whereas its objection here relates
to tax years 2012–2019. In a hearing before the bankruptcy court, however,
BVS’ counsel conceded the correctness of the rendition amounts claimed by
the County for tax years 2015 – 2019. This disclaimer constituted a judicial
3
Case: 21-50821 Document: 00516299872 Page: 4 Date Filed: 04/28/2022
No. 21-50821
admission and as such is binding on BVS. See Martinez v. Bally’s Louisiana,
Inc., 244 F.3d 474, 477 (5th Cir. 2001). Thus, the dispute in this proceeding
concerned only the amounts claimed for tax years 2012–2014. The
bankruptcy court in the 2014 action necessarily resolved this same issue
against BVS in rejecting its objections to the taxes claimed for 2011–2014. See
In re Owners, 788 F.2d at 278.
The district court’s judgment is accordingly AFFIRMED.
4