Wilbarger County Appraisal District and Wilbarger County Appraisal Review Board v. Oncor Electric Delivery Company NTU, LLC ( 2022 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-21-00264-CV
WILBARGER COUNTY APPRAISAL DISTRICT AND WILBARGER COUNTY
APPRAISAL REVIEW BOARD, APPELLANTS
V.
ONCOR ELECTRIC DELIVERY COMPANY NTU, LLC, APPELLEE
On Appeal from the 46th District Court
Wilbarger County, Texas
Trial Court No. 29118, Honorable Dan Mike Bird, Presiding
October 25, 2022
OPINION
Before QUINN, C.J., and PARKER and DOSS, JJ.
Appellants, Wilbarger County Appraisal District (“Wilbarger CAD”) and Wilbarger
Appraisal Review Board (“Wilbarger ARB”), appeal the trial court’s order denying their
plea to the jurisdiction and motion for summary judgment. We reverse the trial court’s
order and render judgment granting Appellants’ plea to the jurisdiction.
FACTUAL AND PROCEDURAL BACKGROUND
This lawsuit is a challenge to the appraisal roll value for property of appellee, Oncor
Electric Delivery Company NTU LLC, contained within Wilbarger County in tax year 2019.
Since analysis of the issues presented by Appellants will require substantial identification
of relevant facts, we will limit our presentation of the background here to the procedural
history that led to this appeal.
In June of 2019, an agent for Oncor’s predecessor-in-interest, Sharyland Utilities
LP, entered into a “Settlement and Waiver of Protest” with the appraiser for Wilbarger
CAD in which the parties agreed that the market value of “transmission lines” in Wilbarger
County was $55,068,090 for tax year 2019. Despite this agreement, in February of 2020,
Oncor filed a motion for correction of appraisal roll claiming that a clerical error and
consideration of property that is not in Wilbarger County affected Oncor’s tax liability for
tax year 2019. The Wilbarger ARB heard Oncor’s claims and denied them both. Oncor
then filed suit for judicial review against Appellants. Appellants filed a plea to the
jurisdiction and motion for summary judgment1 contending that the 2019 agreement
between Sharyland and Wilbarger CAD was final and binding and that Appellants are
immune from Oncor’s claim under the Uniform Declaratory Judgments Act. After holding
a hearing on Appellants’ motions, the trial court denied both. Appellants timely filed notice
of interlocutory appeal. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8).
1 Appellants’ motion for summary judgment challenges the trial court’s jurisdiction over Oncor’s
declaratory judgment claim as well as reasserting challenges contained in their plea to the jurisdiction which
assert that Oncor’s claims under section 25.25 are prohibited due to their agreement under section
1.111(e). Consequently, our rendition of judgment in favor of Appellants renders their challenges asserted
in their motion for summary judgment moot.
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STANDARD OF REVIEW
Subject matter jurisdiction is essential to a court’s power to decide a case and may
be challenged by a plea to the jurisdiction. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d
547, 553–54 (Tex. 2000). A ruling on a plea to the jurisdiction is reviewed de novo. Tex.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). A trial court may
consider evidence when deciding a plea to the jurisdiction and must do so when
consideration of evidence is necessary to resolve the jurisdictional issue. Bland Indep.
Sch. Dist., 34 S.W.3d at 555. If the evidence creates a fact question regarding the
jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction and the fact
issue will be decided by the factfinder. Miranda, 133 S.W.3d at 227–28. If the relevant
evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial
court will rule on the plea as a matter of law. Id. at 228.
EFFECT OF PROPERTY CODE SECTION 1.111(e) AGREEMENT
By their first issue, Appellants contend that Oncor cannot be granted a change in
the appraised value of its property under Texas Tax Code section 25.25 following entry
of a binding and final agreement with the tax appraiser under Tax Code section 1.111(e).
Oncor sued to correct the appraisal roll under Texas Tax Code Chapters 25 and
42. These sections authorize a property owner, after receiving an appraisal review
board’s determination of a motion to correct an appraisal-roll error, to bring suit in district
court to compel the board to change the appraisal roll. See TEX. TAX CODE ANN.
§§ 25.25(g), 42.01(a)(1)(B).2 These provisions vest the district court with jurisdiction to
2 Further references to provisions of the Texas Tax Code will be by reference to “section _” or “§ _.”
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decide the viability of Oncor’s claims under section 25.25. However, an agreement
between a property owner and the chief appraiser is final when the agreement relates to
a matter which may be corrected under section 25.25 or on which a motion for correction
under that section was filed but not determined by the board. Id. § 1.111(e)(2). Because
section 1.111 agreements are final, they are not subject to protest by a property owner or
statutory suit for judicial review. Bastrop Cent. Appraisal Dist. v. Acme Brick Co., 428
S.W.3d 911, 917 (Tex. App.—Austin 2014, no pet.); MHCB (USA) Leasing & Fin. Corp.
v. Galveston Cent. Appraisal Dist., 249 S.W.3d 68, 84 (Tex. App.—Houston [1st Dist.]
2007, pet. denied). By its express terms, a section 1.111 agreement that relates to a
matter which may be corrected under section 25.25 precludes correction under section
25.25. TEX. TAX CODE ANN. § 1.111(e)(2).
In the present case, Oncor’s predecessor, Sharyland Utilities LP, entered into an
agreement with the appraiser for Wilbarger CAD regarding the market value of
“transmission line(s)” owned by Sharyland for tax year 2019. In the agreement, Sharyland
stated, “I hereby withdraw my protest and waive any further proceeding in this matter.”
Neither party disputes that this agreement was a section 1.111(e) agreement. In January
of 2020, Oncor filed a motion under section 25.25 seeking to correct a “clerical error”
relating to the length of transmission lines contained in Wilbarger County. The Wilbarger
ARB denied the motion. After Oncor sought judicial review, Appellants filed a plea to the
jurisdiction and motion for summary judgment in which they argued that Oncor’s motion
is precluded by its predecessor-in-interest’s section 1.111 agreement, which were denied
by the trial court.
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The section 1.111 agreement regarding the value of Sharyland’s property for tax
year 2019 “resolv[es] the dispute” regarding valuation of Oncor’s electric transmission
lines. Houston Cement Co. v. Harris Cnty. Appraisal Dist., No. 14-12-00491-CV, 2013
Tex. App. LEXIS 7635, at *2 (Tex. App.—Houston [14th Dist.] June 25, 2013, no pet.)
(mem. op.). The agreement identifies that the total value of transmission lines in
Wilbarger County for 2019 is $55,068,090. This agreement “clearly expresse[s] harmony
of opinion as to the final values of [Sharyland’s transmission lines] in the signed,
specifically written agreement.” Id. at *6. Because the value of Sharyland’s transmission
lines was a matter on which protests could have been filed, the agreement is final as to
those values. TEX. TAX CODE ANN. § 1.111(e)(1); Houston Cement Co., 2013 Tex. App.
LEXIS 7635, at *6. The finality of this agreement prohibits Oncor from pursuing judicial
review of the valuation of its transmission lines in Wilbarger County. See Houston
Cement Co., 2013 Tex. App. LEXIS 7635, at *5 (quoting MHCB (USA) Leasing, 249
S.W.3d at 84, for proposition that section 1.111(e) agreements are “final and not subject
to protest by the property owner or subject to a property owner’s statutory suit for judicial
review under chapter 42”); see also Acme Brick Co., 428 S.W.3d at 917 (same).
Oncor contends that the 2019 agreement does not preclude an appraisal review
board or court from correcting a clerical error affecting the appraisal roll’s indication of the
value of its property. Oncor’s argument is that the 2019 agreement contains a clerical
error because it included miles of transmission lines that were not actually located in
Wilbarger County. This argument is similar to one advanced in Houston Cement. There,
the taxpayer and the Harris County Appraisal District reached section 1.111 agreements
regarding the appraised value of taxpayer property for the 2009 and 2010 tax years.
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Houston Cement Co., 2013 Tex. App. LEXIS 7635, at *2. Both agreements contained
itemized descriptions of the initial and final appraised values of several types of property,
including inventory. Id. In January 2011, the taxpayer filed a motion to correct the
appraisal roll under section 25.25(c) arguing that, due to clerical errors, both valuations
included inventory that had been in transit in 2009 and 2010 and had not yet arrived in
Harris County by the beginning of the respective tax years. Id. Following the Appraisal
Review Board’s dismissal of the motion for lack of jurisdiction, the taxpayer sought judicial
review in district court. Id. at *2–3. In rejecting the taxpayer’s argument that the trial court
had jurisdiction, the appellate court explained that,
[The taxpayer] and [Harris County Appraisal District] clearly expressed
harmony of opinion as to the final values of [the taxpayer’s] combined
business personal property and of its inventory in the signed, specifically
written agreements. Because those final values were matters on which
protests either could have been filed or had been filed but not yet
determined by the board, the agreements are final as to those values. See
TEX. TAX CODE ANN. § 1.111(e)(1).
Therefore, [Harris County Appraisal District’s] plea to the jurisdiction did not
rest on an overly broad interpretation of section 1.111(e) that disregarded
its subsections. In fact, because the value of inventory was a specific matter
to which the agreements related, the agreements precluded [the taxpayer’s]
lawsuit even under [the taxpayer’s] construction of the statute.
Id. at *6–7.
Oncor attempts to distinguish Houston Cement due to those agreements being
specific in their identification of the taxpayer’s property, including inventory. Even though
the agreements in Houston Cement specifically identified the property upon which the
valuation was based and the taxpayer was able to establish that some of that property
was not located in Harris County during the 2009 and 2010 tax years, the reviewing court
still concluded that the taxpayer’s suit was barred “because the value of inventory was a
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specific matter to which the agreements related . . . .” Id. at *7 (emphasis added).
Similarly, in the present case, the 2019 agreement between Sharyland and Wilbarger
CAD specifically indicates that it is valuing “transmission line(s).” We see no difference
in the agreements in the Houston Cement case, where the value of inventory was
specified in the agreements but the agreements did not accurately reflect the value of
actual inventory on hand, and the agreement in the present case, where the value of
“transmission line(s)” was specified in the agreement but the agreement did not
accurately reflect the actual value of the transmission lines present.
Likewise, in Acme Brick, a section 1.111 agreement was held binding on the
appraisal district even though the district would have been able to rescind its decision in
the absence of the agreement. In Acme Brick, the taxpayer and district reached an
agreement that the taxpayer’s property qualified for a pollution-control exemption. Acme
Brick Co., 428 S.W.3d at 914. However, the district subsequently removed the exemption
on the basis that it did not have the required exemption application in its records. Id. The
taxpayer filed a protest with the appraisal review board, which denied the protest. Id. The
taxpayer then filed suit in district court. Id. at 914–15. The trial court granted summary
judgment in favor of the taxpayer. Id. at 915. On appeal, the reviewing court identified
that, “[t]he document signed by [the district’s agent] and [the taxpayer] specifically states
that the property values (including the application of the exemption) have been agreed
upon . . . .” Id. at 916 (parenthetical in original). The court ultimately held “that section
1.111(e)’s directive that ‘an agreement between a property owner or the owner’s agent
and the chief appraiser is final’ means that the appraisal district may not take subsequent
action that is contrary to that agreement, even in situations in which the Property Tax
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Code would otherwise allow it to reconsider a previous decision.” Id. at 918. Thus, like
in Houston Cement, an agreement regarding the value of property cannot be challenged
on the basis that information extraneous to the agreement alters that value.
We conclude that the section 1.111 agreement between Sharyland and Wilbarger
CAD made final the value of transmission lines contained within Wilbarger County in tax
year 2019. Like in Houston Cement, the subsequent discovery that the agreed valuation
was based on erroneous information does not negate the finality of the agreement or
render it subject to challenge. Houston Cement Co., 2013 Tex. App. LEXIS 7635, at *7.
Oncor further argues that section 25.25 allows it to correct clerical errors or for the
improper inclusion of property in the appraisal roll valuations even if there is an agreement
regarding the value of the property. Section 25.25 of the Tax Code allows for changes to
the appraisal roll for clerical errors that affect a taxpayer’s tax liability (section 25.25(c)(1))
or to correct for the inclusion of property that does not exist in the form or at the location
described in the appraisal roll (section 25.25(c)(3)). In a separate subsection (section
25.25(d)), “incorrect appraised value” can be challenged. Oncor points out that a
challenge to an incorrect appraised value is precluded if the value of the property was
established as a result of a written agreement between the property owner and the
appraisal district. § 25.25(d-1)(2). There is not, however, such an express articulation
that an agreement precludes a challenge to clerical errors or incorrect inclusion of
property. As a result, Oncor contends that the legislature intended to allow for correction
of objective errors, even after the entry of a section 1.111 agreement. The problem with
this argument is that the legislature has expressly stated otherwise. The legislature has
provided that, “An agreement between a property owner . . . and the chief appraiser is
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final if the agreement relates to a matter which may be corrected under [s]ection 25.25 or
on which a motion for correction under that section has been filed but not determined by
the board.” § 1.111(e)(2). This provision clearly expresses that an agreement on any
matter which may be corrected under section 25.25 is final. Had the legislature intended
an agreement under section 1.111 to only preclude challenges asserted under section
25.25(d), it could have easily so specified. We cannot interpret the absence of language
in a statute in a manner contrary to express language contained elsewhere in the code.
Oncor argues, in the alternative, that the 2019 agreement is voidable because it
was based on mutual mistake. However, even the cases cited by Oncor establish that
the only ground for setting aside an agreement on valuation is fraud. See Willacy Cnty.
Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 51–52 (Tex. 2018)
(“Accordingly, we hold that when, as here, the Legislature has made an agreement
between a taxpayer and an appraisal district’s administrative official final, the validity of
such an agreement may be subject to attack on the basis of fraud, even if the agreement
is not otherwise subject to review or rejection.”); Acme Brick Co., 428 S.W.3d at 918 n.6
(acknowledging that an agreement’s validity might be subject to challenge in some
situations, such as fraud). Oncor’s claim that a section 1.111 agreement can be set aside
when it was based on a mutual mistake of fact has been expressly rejected. See Valerus
Field Sols., LP v. Matagorda Cnty. Appraisal Dist., No. 13-17-00520-CV, 2018 Tex. App.
LEXIS 8279, at *10–11 (Tex. App.—Corpus Christi–Edinburg Oct. 11, 2018, no pet.)
(mem. op.) (rejecting argument that mistake, like fraud, should allow for alteration of
section 1.111 agreement); Signal Int’l Tex. L.P. v. Orange Cnty., No. 09-13-00412-CV,
2014 Tex. App. LEXIS 13543, at *12, 16 (Tex. App.—Beaumont Dec. 18, 2014, pet.
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denied) (mem. op.) (declining to apply doctrine of mutual mistake to section 1.111
agreement).
We sustain Appellants’ first issue.
UNIFORM DECLARATORY JUDGMENTS ACT CLAIM
Appellants’ second issue contends that Oncor cannot bypass the pervasive
regulatory scheme of the Texas Tax Code by asserting its claim under the Uniform
Declaratory Judgments Act (UDJA). In response, Oncor clarifies that its UDJA claim
seeks to have the district court determine the scope, validity, and effect of the 2019
agreement under the Texas Tax Code.
Assuming, without deciding, that Oncor can maintain suit under the UDJA against
Appellants, our analysis above necessarily addresses the scope, validity, and effect of
the 2019 agreement under the Texas Tax Code. Consequently, we conclude that
Appellants’ second issue is moot.
WILBARGER ARB AS A PROPER PARTY
By their third issue, Appellants contend that Wilbarger ARB is not a proper party
to this lawsuit. Appellants base their argument on section 42.21(b), which provides that,
“A petition for review may not be brought against the appraisal review board.” § 42.21(b).
Oncor cites section 25.25(g) as providing that, after certain conditions are met, a party
“may file suit to compel the board to order a change in the appraisal roll . . . .” § 25.25(g).
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While these provisions seem to be in conflict, our decision that Oncor could not
bring suit to alter the appraisal roll regarding the value of its transmission lines means
that we need not resolve this conflict. Having determined that Oncor could not bring its
current suit against Appellants, we conclude that Appellants’ third issue is moot.
CONCLUSION
Concluding that the 2019 agreement precludes Oncor’s suit for judicial review, we
reverse the trial court’s order and render judgment granting Appellants’ plea to the
jurisdiction.
Judy C. Parker
Justice
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