Michael M. Carter v. Harris County Appraisal District and the Appraisal Review Board of Harris County Appraisal District ( 2013 )

Opinion issued June 11, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-12-00917-CV
———————————
MICHAEL M. CARTER, Appellant
V.
HARRIS COUNTY APPRAISAL DISTRICT AND THE APPRAISAL
REVIEW BOARD OF HARRIS COUNTY APPRAISAL DISTRICT,
Appellees
On Appeal from the 334th District Court
Harris County, Texas
Trial Court Case No. 2010-67745
OPINION
In this ad valorem tax case, appellant Michael M. Carter sued the Harris
County Appraisal District and the Appraisal Review Board of Harris County
Appraisal District (collectively, the “Taxing Authorities”) seeking judicial review
of the board’s decision regarding the appraised value of real property owned by
Carter. The Taxing Authorities moved to dismiss for lack of subject-matter
jurisdiction, contending that Carter did not substantially comply with the statutory
requirements of Tax Code section 42.08.1 The trial court granted the motion and
dismissed the suit with prejudice. On appeal, Carter presents four issues
challenging the trial court’s judgment.
We reverse and remand.
Background
Michael M. Carter owns real property (“the Property”) in Houston, Harris
County, Texas. For tax year 2010, Harris County Appraisal District (“HCAD”)
appraised the value of the Property to be $2,448,837.00. Carter filed a protest of
the appraised value with the Appraisal Review Board of Harris County Appraisal
District (“ARB”). The protest resulted in the appraised value of the Property being
lowered to $2,365,000.00. Based on this lower appraised value, the ad valorem
taxes owed by Carter on the Property for tax year 2010 was $54,835.95.
On October 13, 2010, Carter filed suit against ARB and HCAD seeking
judicial review of the appraisal board’s final decision regarding the appraised value
of the Property. The 2010 taxes on the Property were due by February 1, 2011.
1
See TEX. TAX CODE ANN. § 42.08 (Vernon Supp. 2012).
2
Carter did not pay the taxes by this date. After obtaining a loan, Carter paid the
taxes on March 24, 2011.
On August 1, 2011, the Taxing Authorities moved to dismiss the suit for
lack of subject-matter jurisdiction. They asserted that Carter did not substantially
comply with the prepayment requirements of Tax Code section 42.08(b).2 The
Taxing Authorities pointed out that section 42.08(b) requires the taxpayer to pay at
least the taxes due on the portion of the taxable value of the property not in dispute
before the delinquency date. They asserted that compliance with the subsection
42.08(b)’s prepayment requirement is a prerequisite to maintaining judicial review
of the ARB’s final decision and that a failure to comply with the prepayment
requirement results in the trial court’s loss of subject-matter jurisdiction over the
suit. The Taxing Authorities averred that, because Carter had not paid the taxes by
the delinquency date, the trial court was required to dismiss the suit for lack of
subject-matter jurisdiction pursuant to section 42.08(b).
Carter responded to the dismissal motion. He also filed “Plaintiff’s Property
Tax Code Section 42.08(d) Motion for Substantial Compliance and/or Excusing
Prepayment.” In the motion, Carter asserted that he had been financially unable to
pay the 2010 taxes in full by the delinquency date. Carter supported his claim with
2
See id.
3
his own affidavit or “oath” in which he testified that he had not been financially
able to pay the taxes when they became delinquent.
Carter averred in his affidavit, in relevant part, as follows:
The ad valorem taxes for the property were due before February
1, 2011. The ad valorem taxes for the property were not paid prior to
February 1, 2011 because as of January 31, 2011, the due date, I was
financially unable to pay those taxes in full. In early March 2011, still
unable to pay the taxes, I contacted Propel Financial Services to
obtain a loan to pay the taxes. On March 24, 2011, I contracted for a
loan to pay the taxes, with all penalties and interest thereon. The
taxes were paid directly by Propel after closing on the loan. Although
some funds were deposited into the account between January 31, 2011
and March 30, 2011, the funds were used to pay the mortgage on the
property and operating costs associated with the business. Had funds
been available to pay both operating costs, along with the mortgage,
and the taxes, I would have paid both. If the mortgage had not been
paid, the property would have been subject to foreclosure. If the
operating costs had not been paid, the business would not have had
any additional income as it would not have been able to operate. If
fund[s] had been available to pay the taxes any time prior to the
delinquency date or any time prior to the taxes being paid in March, I
would not have incurred the debt of an interest-bearing loan to pay the
taxes.
Carter attached his checking account records and loan documents to the
affidavit to support his inability-to-pay claim. He also asserted that, by filing his
oath of inability to pay the 2010 taxes, Tax Code section 42.08(d) excused the
prepayment requirement found in section 42.08(b).3 Because he was financially
unable to pay the taxes when due, Carter requested the trial court to determine that
3
Id. § 42.08(d).
4
the prepayment requirement would constitute an unreasonable restraint on his
access to the courts.
The Taxing Authorities filed a reply. They asserted that Carter had failed to
substantially comply with section 42.08(d) because he had failed to timely file his
oath of inability to pay. The Taxing Authorities pointed to the fact that Carter had
filed the oath after the delinquency date. They also argued that Carter failed to
demonstrate an inability to pay the taxes.
The trial court held a hearing on the Taxing Authorities’ motion to dismiss
and on Carter’s subsection 42.08(d) motion requesting the trial court to determine
that he was excused from prepayment of the taxes. A transcript of the hearing,
however, does not appear in the record. The trial court signed an order granting
the Taxing Authorities’ motion to dismiss for lack of subject-matter jurisdiction,
dismissing Carter’s suit with prejudice.
This appeal followed. Identifying four issues, Carter asserts that the trial
court erred by granting the Taxing Authorities’ motion to dismiss and by its failure
to grant his motion requesting the trial court to excuse his prepayment of the taxes.
Standard of Review
Compliance with the prepayment requirements of section 42.08 is a
jurisdictional prerequisite to the district court’s subject matter jurisdiction to
determine a property owner’s rights. See U. Lawrence Boze’ & Assoc. P.C. v.
5
Harris Cnty. Appraisal Dist., 368 S.W.3d 17, 23 (Tex. App.—Houston [1st Dist.]
2011, no pet) (citing Lawler v. Tarrant Appraisal Dist., 855 S.W.2d 269, 271 (Tex.
App.—Fort Worth 1993, no writ)). Because the issue of whether a trial court has
subject-matter jurisdiction is a question of law, we review de novo a trial court’s
ruling on a motion to dismiss for lack of jurisdiction. See Mayhew v. Town of
Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); see also U. Lawrence Boze, 368
S.W.3d at 23 (conducting de novo review of grant of plea to the jurisdiction that
was based on failure to substantially comply with section 42.08); Dallas Cent.
Appraisal Dist. v. 717 S. Good Latimer Ltd., No. 05–09–00779–CV, 2010 WL
1729343, at *1 (Tex. App.—Dallas Apr. 29, 2010, pet. denied) (mem. op.) (same).
If a plea to the jurisdiction challenges the existence of jurisdictional facts,
we must consider relevant evidence submitted by the parties when necessary to
resolve the jurisdictional issues presented. Tex. Parks & Wildlife Dep’t v.
Miranda, 133 S.W.3d 217, 227 (Tex. 2004). When a challenge to the existence of
jurisdictional facts does not implicate the merits of the case and the facts are
disputed, the court must make the necessary fact findings to resolve the
jurisdictional issue. See id. at 226 (“Whether a district court has subject matter
jurisdiction is a question for the court, not a jury, to decide, even if the
determination requires making factual findings, unless the jurisdictional issue is
inextricably bound to the merits of the case.”).
6
Tax Code Section 42.08
Chapter 42 of the Tax Code governs judicial review of a determination made
by the ARB. See TEX. TAX. CODE ANN. §§ 42.01–42.43 (Vernon 2008 & Supp.
2012). Within that chapter, section 42.08 requires, in part, as follows:
Except as provided in Subsection (d), a property owner who appeals
as provided by this chapter must pay taxes on the property subject to
the appeal in the amount required by this subsection before the
delinquency date or the property owner forfeits the right to proceed to
a final determination of the appeal. The amount of taxes the property
owner must pay on the property before the delinquency date to
comply with this subsection is the lesser of:
(1) the amount of taxes due on the portion of the
taxable value of the property that is not in dispute; or
(2) the amount of taxes due on the property under the
order from which the appeal is taken.
(b-1) This subsection applies only to an appeal in which the property
owner elects to pay the amount of taxes described by Subsection
(b)(1). The appeal filed by the property owner must be accompanied
by a statement in writing of the amount of taxes the property owner
proposes to pay.
Id. § 42.08(b), (b-1) (Vernon Supp. 2012). Generally, with some exceptions not
applicable here, “taxes are due on receipt of the tax bill and are delinquent if not
paid before February 1 of the year following the year in which imposed.” Id.
§ 31.02(a) (Vernon 2008). In this case, Carter does not contend that he complied
with subsection 42.08(b). It is undisputed that he did not pay any portion of the
taxes before the delinquency date. “Courts have repeatedly held that if the
7
property owner does not pay any portion of the assessed taxes by the delinquency
date, even if it later pays some or all of the taxes after the due date, the property
owner has not substantially complied with section 42.08(b).” U. Lawrence Boze’,
368 S.W.3d at 27.
Instead, Carter asserts that he was excused from complying with subsection
42.08(b) because he complied with subsection 42.08(d), which provides an
exception to the prepayment requirement of subsection (b). Subsection 42.08(d)
excuses a property owner from subsection 42.08(b)’s prepayment requirement if
(1) he files an “oath of inability to pay the taxes at issue” and (2) the trial court
determines that “such prepayment would constitute an unreasonable restraint on
the party’s right of access to the courts.” 4 TEX. TAX CODE ANN. § 42.08(d); see U.
Lawrence Boze’, 368 S.W.3d at 30. The Taxing Authorities argued in their
4
Subsection (d) reads, in relevant part, as follows:
After filing an oath of inability to pay the taxes at issue, a
party may be excused from the requirement of prepayment of
tax as a prerequisite to appeal if the court, after notice and
hearing, finds that such prepayment would constitute an
unreasonable restraint on the party’s right of access to the
courts. . . . If the court determines that the property owner
has not substantially complied with this section, the court
shall dismiss the pending action. If the court determines that
the property owner has substantially but not fully complied
with this section, the court shall dismiss the pending action
unless the property owner fully complies with the court’s
determination within 30 days of the determination.
Id. § 42.08(d).
8
dismissal motion that Carter did not substantially comply with section 42.08(d)
because he did not timely file his oath of inability to pay. They also asserted that
Carter failed to show by his oath that he was unable to pay the 2010 taxes; thus,
prepayment of the taxes did not constitute an unreasonable restraint on his right of
access to the courts.
The record is silent regarding the basis on which the trial court granted the
Taxing Authorities’ plea to the jurisdiction. The trial court’s judgment dismissing
the suit is only supportable if we presume that the trial court agreed with the
Taxing Authorities and made at least one of the following implied determinations:
(1) Carter’s filing of the oath of inability to pay did not substantially
comply with subsection (d).
(2) Carter failed to show, by his oath, that he was unable to pay the
2010 taxes by the delinquency date; therefore, prepayment of the 2010
taxes would not constitute an unreasonable restraint on his right of
access to the courts.
In deciding this appeal, we must determine whether Carter fully or
substantially complied with subsection (d) when he filed his oath of inability to
pay. We also must determine whether the record supports the conclusion that
prepayment of the 2010 taxes would not constitute an unreasonable restraint on
Carter’s right of access to the courts because Carter failed to show that he was
financially unable to pay the taxes before delinquency.
9
A. Compliance with Subsection 42.08(d)
The Taxing Authorities contend that Carter failed to comply, substantially or
otherwise, with subsection 42.08(d) because Carter filed his oath of inability to pay
after the tax delinquency date, i.e., after January 31, 2011. Section 42.08 does not
immediately require full compliance upon filing the suit for judicial review; if a
property owner “substantially complies,” the owner receives a thirty-day grace
period to fully comply before the trial court is required to dismiss the action. TEX.
TAX CODE ANN. § 42.08(d). “Substantial compliance” means that one has
performed the “essential requirements” of a statute and it “excuse[s] those
deviations from the performance required by statute which do not seriously hinder
the legislature’s purpose in imposing the requirement.” U. Lawrence Boze’, 368
S.W.3d at 27 (citing Mo. Pac. R.R. Co. v. Dallas Cnty. Appraisal Dist., 732
S.W.2d 717, 721 (Tex. App.—Dallas 1987, no writ)).
To reiterate, Carter filed suit seeking judicial review of the ARB property
valuation decision on October 13, 2010. In his petition, Carter stated, “Pursuant to
[Tax Code] Section 42.08, Plaintiff intends on timely paying all taxes due on the
property, or the taxes due on the undisputed portion of the value of the property,
or, if unable to timely pay the lesser of these amounts, Plaintiff requests relief from
the Court.” As pled, Carter left open the three options available to him under
section 42.08: (1) pay all the taxes by the delinquency date; (2) pay the taxes on the
10
undisputed portion of the value of the property; or (3) seek relief from the trial
court, i.e., request to be excused from prepayment of the taxes by filing an oath of
inability to pay.
The 2010 taxes became delinquent on February 1, 2011. Before that time,
Carter did not pay any portion of the taxes or otherwise specifically inform the
Taxing Authorities that he was unable to timely pay either the full or the
undisputed portion of taxes. Carter obtained a loan and paid the full amount of
taxes, plus penalties and interest, on March 24, 2011.
The Taxing Authorities filed their motion to dismiss Carter’s suit for lack of
subject-matter jurisdiction on August 1, 2011. They argued that dismissal was
required pursuant to subsection 42.08(b) because Carter had failed to pay any
portion of the taxes before the February 1 delinquency date.
On August 11, 2011, Carter responded to the dismissal motion and a filed a
motion pursuant to subsection 42.08(d), requesting the trial court to excuse him
from subsection 42.08(b)’s prepayment requirement. In support of the motion,
Carter filed oath of inability to pay in which he testified that he had been
financially unable to pay the taxes in full by the due date of January 31, 2011. The
oath was supported by records from his checking account and documents
evidencing the loan he had taken to pay the taxes.
11
Under these facts, we must determine whether Carter substantially or fully
complied with subsection 42.08(d) by filing his oath of inability on August 11,
2011—more than six months after the delinquency date—even though he had not
informed the Taxing Authorities prior to delinquency that he was unable to pay.
The court in Dallas Central Appraisal District was presented with a similar fact
pattern. There, the taxpayer filed its original petition seeking judicial review of the
appraisal board’s determination on August 15, 2008. 2010 WL 1729343, at *1.
The taxpayer’s deadline to pay taxes on the subject property was February 1, 2009.
Id. The taxpayer filed its oath of inability to pay on May 6, 2009. Id. The
appraisal district asserted that “because [the taxpayer] failed to file its oath of
inability to pay until approximately three months after the delinquency date, its
oath was not timely filed and did not give [the appraisal district] proper notice.”
Id. at *2. The appraisal district argued that the taxpayer “failed to substantially
comply with the statute.” Id. The appraisal district asserted that the trial court
erred by denying its plea to the jurisdiction. Id.
The appellate court determined that the taxpayer had complied with
subsection 42.08(d) when it filed its oath of inability to pay after the delinquency
date and without previous notice to the taxing authority. See id. The court
reasoned, “The statute does not provide a deadline for filing an oath of inability to
pay and we are not inclined to create one by judicial mandate.” Id. The court
12
noted that the appraisal district had acknowledged that subsection 42.08(d) does
not contain an explicit deadline for filing the oath. See id. at *2 n.1.
We agree with the Dallas Court of Appeals. As that court recognized, “We
are required to construe the taxing statute strictly against the taxing authority.” Id.
at *2 (citing Wilson Communications, Inc. v. Calvert, 450 S.W.2d 842, 844 (Tex.
1970)). We should liberally construe a statute designed to relieve a property owner
from the harshness of the forfeiture of appeals to accomplish its statutory purpose.
U. Lawrence Boze’, 368 S.W.3d at 26 (citing J.C. Evans Constr. Co., Inc. v. Travis
Cent. Appraisal Dist., 4 S.W.3d 447, 449 (Tex. App.—Austin 1999, no pet.);
Jackson Hotel Corp. v. Wichita Cnty. Appraisal Dist., 980 S.W.2d 879, 882 (Tex.
App.—Fort Worth 1998, no pet.)).
The Taxing Authorities contend that a possible legislative objective of
subsection 42.08(d) is to notify the interested parties of the property owner’s
inability to pay, thereby notifying the taxing units of the tax dollars that will not be
paid prior to the delinquency date. Cf. J.C. Evans, 4 S.W.3d at 452. Nonetheless,
from its language, it is clear that a definite legislative objective of subsection
42.08(d) is to insure that property owners, who are financially unable to prepay
their tax liability, have access to the courts to challenge the valuation of their
property. See id. It is possible that the legislature chose not to require a taxpayer
13
to file his oath of inability before the delinquency date in order to encourage him to
continue seeking funds to pay his taxes.
We are also mindful that a statute’s silence can be significant. See PPG
Industr., Inc. v. JMB/Houston Centers Partners L.P., 146 S.W.3d 79, 84 (Tex.
2004). The legislature could have required a taxpayer to file his oath of inability to
pay before delinquency to preserve his right to judicial review, but subsection
42.08(d) contains no such requirement. In contrast, subsection 42.08(b) expressly
provides that a taxpayer will forfeit his right to judicial review if he does not pay at
least the undisputed portion of the taxes before the delinquency date.
“Our role in statutory construction is merely to give effect to the
Legislature’s intent by examining the plain meaning of the statute.” City of Round
Rock v. Rodriguez, No. 10–0666, 2013 WL 1365906, at *8 (Tex. Dec. 8, 2011)
(citing Molinet v. Kimbrell, 356 S.W.3d 407, 414 (Tex. 2011) (“It is the
Legislature’s prerogative to enact statutes; it is the judiciary’s responsibility to
interpret those statutes according to the language the Legislature used. . . .”). Here,
we must give effect to the statute’s silence on the issue of when the oath of
inability to pay must be filed. See id. (citing Seay v. Hall, 677 S.W.2d 19, 25 (Tex.
1984) (“While this court may properly write in areas traditionally reserved to the
judicial branch of government, it would be a usurpation of our powers to add
language to a law where the [L]egislature has refrained.”); Simmons v. Arnim, S.W.
14
66, 70 (Tex. 1920) (“[Courts] are not the law-making body. They are not
responsible for omissions in legislation. They are responsible for a true and fair
interpretation of the written law.”)).
We hold that, to comply with subsection 42.08(d), a taxpayer is not required
to file the oath of inability to pay, or otherwise to notify the taxing authorities of
his inability to pay, before the delinquency date. See TEX. TAX CODE ANN.
§ 42.08(d); Dallas Cent. Appraisal Dist., 2010 WL 1729343, at *2. In this case,
Carter timely filed his oath of inability to pay when he filed it on August 11, 2011.
In their brief, the Taxing Authorities also link Carter’s subsection 42.08(d)
compliance to compliance with subsection 42.08(b-1). Subsection (b-1) requires
the taxpayer to accompany his suit for judicial review with a statement in writing
of the amount of taxes he proposes to pay when he elects to pay only the
undisputed portion of the taxes before the delinquency date, as allowed by
subsection 42.08(b)(1). See TEX. TAX CODE ANN. § 42.08(b-1). The Taxing
Authorities contend that that Carter was required to plead specifically whether he
intended to pay the taxes in full or to pay only the undisputed amount. They point
out that Carter did not specify the amount that he would pay.
Contrary to the Taxing Authorities’ contention, subsection 42.08(b-1)
requires the taxpayer to identify the amount he intends to pay only if he elects to
pay the lesser, undisputed amount. See id. If he does not make the election, a
15
taxpayer will be required to pay the full amount of taxes or substantially comply
with subsection 42.08(d). See id. § 42.08(b), (b-1), (d). If he does neither, he will
forfeit his right to judicial review. See id. § 42.08(b), (d).
Here, Carter stated in his petition that he would pay either the full amount or
the undisputed amount. Because he did not elect to pay only the undisputed
amount, Carter was required, by default, to pay the full amount of taxes by the
delinquency date, or to comply with subsection 42.08(d). See id. Here, the issue is
whether Carter complied with subsection 42.08(d), not whether he complied with
the prepayment requirements of subsection 42.08(b). The Taxing Authorities have
not shown how Carter failed to comply with subsection 42.08(d) when he did not
elect to pay the undisputed portion of the taxes. 5
The Taxing Authorities had the burden to show that Carter did not
substantially comply with subsection 42.08(d). See U. Lawrence Boze’, 368
S.W.3d at 26. In this respect, the Taxing Authorities asserted that Carter had not
5
The Taxing Authorities also assert that Carter did not comply with subsection
42.08(d) because he did not enter into an installment payment plan with HCAD as
permitted by the Tax Code. They cite J.C. Evans Construction Co. v. Travis
Central Appraisal District in which the appellate court held that the taxpayer had
substantially complied with subsection 42.08(d) by entering into an installment
payment plan with the appraisal district. See 4 S.W.3d 447, 452 (Tex. App.—
Austin 1999, no pet.). Entering into a payment agreement with the taxing
authority may be one way to substantially comply with subsection 42.08(d).
However, entering into such an agreement is not statutorily required nor is it the
only possible method of compliance.
16
timely filed his oath of inability to pay the 2010 taxes. The Taxing Authorities did
not meet their burden to show Carter did not timely file his oath. Carter, however,
demonstrated that he had complied with the timeliness aspect of subsection
42.08(d).6
B. Showing of Inability to Pay 2010 Taxes
The parties agree that requiring prepayment of the 2010 taxes would
constitute an unreasonable restraint on Carter’s right of access to the courts if
Carter showed that he was financially unable to pay the taxes on January 31, 2010.
The Taxing Authorities assert that the proof offered by Carter was inadequate to
show his inability to pay the taxes by that date.
Subsection 42.08(d) defines neither the required content of the oath of
inability to pay nor the evidentiary standards to be met by a taxpayer seeking to be
excused from prepayment under that subsection. See TEX. TAX CODE ANN.
§ 42.08(d). As the Dallas Court of Appeals noted, “Although the tax code does not
specify the form or contents of the oath of inability to pay, it has to be reduced to
writing in order to be filed with the trial court.” Optovision Techs., Inc. v. Dallas
Cent. Appraisal Dist., No. 05-04-01605-CV, 2005 WL 1524637, *3 (Tex. App.—
Dallas June 29, 2005, pet. denied). The court stated, “An affidavit is an oath
6
Although the statute requires only that a taxpayer “substantially comply” with
subsection 42.08(d), Carter fully complied with respect to the timeliness of the
filing of his oath of inability to pay, which is the compliance issue involved in this
suit.
17
reduced to writing, constituting prima facie evidence that an oath was taken.” Id.
It explained, “A document must meet several requirements to be considered an
affidavit: it must be signed by the party making it, sworn to before an officer
authorized to administer oaths, and officially certified by the officer under his seal
of office.” Id. The court concluded, “If these formalities are not met, the use of
the instrument as proof of the oath is vitiated. Id.
In this case, the Taxing Authorities do not dispute that the document filed by
Carter met the requirements of an affidavit. Instead, the Taxing Authorities point
out that Carter stated in his affidavit that he was unable to pay the “full amount” of
the taxes on January 31, 2011, the last day to pay the taxes before they became
delinquent. The Taxing Authorities assert that “the relevant question was not
whether [Carter] could pay the full amount, but whether [he] could pay any
amount.” (Emphasis in original.) We disagree.
As discussed supra, Carter did not expressly elect, as provided in subsection
42.08(b-1), to pay only the undisputed portion of the 2010 taxes. As a result,
Carter was required to pay the full amount of taxes by the delinquency date.
Whether Carter could have preserved his right to judicial review by paying any
amount of money the taxes before delinquency—that is, by substantially
complying with subsection 42.08(b)’s prepayment requirement—is not a question
before us. Here, Carter sought to be excused from the prepayment requirement
18
under subsection 42.08(d) by filing an oath of inability to pay the amount of taxes
due on January 31, 2011. The amount Carter owed on the due date was the full
amount of the taxes.
The Taxing Authorities also contend that Carter’s evidence was deficient for
the following reasons:
• Carter testified in his affidavit that he waited until after the delinquency
date to seek a loan to pay the delinquent taxes;
• Carter’s supporting checking account documentation was unintelligible;
• Carter did not negate other sources from which he could obtain funds to pay
the taxes;
• Carter did not show that the business operating on the property could not pay
the taxes;
• Most of the loan documents Carter offered were undated and unsigned; and
• Carter offered no oral testimony at the hearing to establish his inability to
pay.
We focus on whether Carter’s evidence adequately conveyed his inability to
pay the taxes due on January 31, 2011. Cf. Moreno v. Perez, 363 S.W.3d 725, 742
(Tex. App.—Houston [1st Dist.] 2011, no pet.) (reviewing affidavit of indigence,
in context of Rule of Appellate Procedure 20.1, to determine whether appellant had
adequately proven she was financially unable to pay for appellate record and
explaining that affidavit need not specifically address all the items enumerated in
Rule 20.1(b), including appellant’s ability to obtain a loan, if the affidavit
19
adequately conveyed appellant’s inability to pay). In so doing, we apply the
general rule in civil cases that the burden of proof is by a preponderance of the
evidence. See El Paso Refining, Inc. v. Scurlock Permian Corp., 77 S.W.3d 374,
382 (Tex. App.—El Paso 2002, pet. denied) (recognizing that usual standard of
review in civil cases is preponderance of evidence); see Moreno, 363 S.W.3d at
743 (placing preponderance-of-the-evidence burden on applicant offering affidavit
of indigence to obtain free appellate record when affidavit is contested)
We can find no basis to penalize Carter for failing to offer the evidence the
Taxing Authorities identify as lacking, particularly when subsection 42.08(d) does
not specify the items a taxpayer must prove to show that he was financially unable
to pay the taxes on the due date. Although it requires an oath of inability to pay,
subsection 42.08(d) does not require the submission of live testimony. See TEX.
TAX CODE ANN. § 42.08(d). We also continue to be mindful that we must liberally
construe a statute, such as subsection 42.08(d), that is designed to relieve a
property owner from the harshness of the forfeiture of the right to judicial review.
See U. Lawrence Boze’, 368 S.W.3d at 26.
In his sworn affidavit, Carter testified that “the ad valorem taxes for the
property were not paid prior to February 1, 2011 because as of January 31, 2011,
the due date, I was financially unable to pay those taxes in full.” His testimony
indicated that he was able to pay the taxes after the due date only by obtaining a
20
loan. Carter testified that “[i]f fund[s] had been available to pay the taxes any time
prior to the delinquency date . . ., I would not have incurred the debt of an interest-
bearing loan to pay the taxes.”
Carter’s banking records—offered in support of his testimony that he was
unable to pay—indicate that, on January 5, 2011, his checking account balance was
$1,389.28. By January 27, 2011, the balance was $1,144.90. On February 2,
2011, the account contained $886.23. The taxes owed by Carter on January 31,
2011 totaled $54,835.95.
The record contains no evidence calling into question the veracity of
Carter’s testimony regarding his inability to pay the taxes. Although the Taxing
Authorities point out that the bank records are difficult to read, there is no
indication that the account balances, which are legible, do not accurately reflect the
amount of money in Carter’s bank account in the days immediately preceding and
following the date the taxes were due. Nor is there any evidence to refute Carter’s
affidavit testimony that he had to resort to obtaining an interest-bearing loan to pay
the taxes.
We conclude that Carter demonstrated by a preponderance of the evidence
that he was financially unable to pay the taxes on January 31, 2010. Because he
made this showing, requiring Carter to prepay the taxes as a prerequisite to judicial
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review constitutes an unreasonable restraint on his right of access to the courts.
See TEX. TAX CODE ANN. § 42.08(d).
C. Summary
Carter complied with subsection 42.08(d) by timely filing his oath of
inability to pay on August 11, 2011. See id. Carter sufficiently proved that he was
financially unable to pay the taxes by the delinquency date. Because of his
financial inability, any requirement that Carter had to pay the taxes by the due date
to avoid forfeiture of his right to judicial review constitutes an unreasonable
restraint on his right of access to the courts. See id.
We hold that the trial court erred by granting the Taxing Authorities’ motion
to dismiss Carter’s suit for lack of subject-matter jurisdiction. We further hold that
the trial court erred to the extent that it implicitly denied Carter’s motion, under
subsection 42.08(d), to be excused from the prepayment requirement of subsection
42.08(b).
We sustain Carter’s four issues to the extent that they encompass the issues
discussed supra.7
Conclusion
7
We do not reach a number of sub-issues discussed by Carter in his general issues
because they are not necessary to the disposition of this appeal. See TEX. R. APP.
P. 47.1.
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We reverse the judgment of the trial court and remand for further
proceedings.
Laura Carter Higley
Justice
Panel consists of Justices Keyes, Higley, and Bland.
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