Bronco Asset Management, LLC v. FYP, LLC D/B/A Texas Property Tax Loans, City of Mercedes, Mercedes Independent School District, Hidalgo County, South Texas ISD, Hidalgo County Drainage District 01, and South Texas College ( 2023 )

NUMBER 13-22-00078-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
BRONCO ASSET MANAGEMENT, LLC, Appellant,
v.
FYP, LLC D/B/A TEXAS PROPERTY
TAX LOANS, CITY OF MERCEDES,
MERCEDES INDEPENDENT
SCHOOL DISTRICT, HIDALGO COUNTY,
SOUTH TEXAS ISD, HIDALGO COUNTY
DRAINAGE DISTRICT #01, AND
SOUTH TEXAS COLLEGE, Appellees.
On appeal from the 370th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Benavides and Longoria
Memorandum Opinion by Justice Benavides
In this suit involving delinquent tax liens, appellant Bronco Asset Management,
LLC (Bronco) appeals from the trial court’s summary judgment in favor of appellees FYP,
LLC d/b/a Texas Property Tax Loans (FYP); City of Mercedes and Mercedes Independent
School District (collectively, the City); and Hidalgo County, South Texas ISD, Hidalgo
County Drainage District #01, and South Texas College (collectively, the County). By
three multifarious issues, Bronco argues the trial court erred in granting summary
judgment because: (1) FYP, the City, and the County did not meet their summary
judgment burden; (2) FYP’s summary judgment evidence was improperly considered over
Bronco’s objection; and (3) Bronco’s summary judgment evidence raised a genuine issue
of material fact as to the value of the property. We affirm in part and reverse and remand
in part.
I. BACKGROUND
On November 4, 2019, FYP filed its original petition for the recovery of delinquent
taxes. The County and the City subsequently intervened in the suit, alleging that Bronco
owed additional delinquent property taxes for tax years 2018 and 2019.
A. FYP’s Motion for Summary Judgment
On October 28, 2020, FYP filed a traditional motion for summary judgment,
seeking foreclosure on the tax liens it held. The attached summary judgment evidence
shows that Bronco, delinquent in payment of property taxes for the years 2006–17,
obtained a loan from FYP in the original amount of $309,965.60 and executed a
promissory note evincing the transaction on July 31, 2018. Both parties executed a tax
lien contract on the same date. As part of this transaction, Bronco executed sworn
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documents authorizing FYP to pay the delinquent taxes and authorizing the Hidalgo
County Tax Assessor-Collector to transfer the relevant tax liens on the property to FYP.
Also attached as evidence were sworn certificates signed by the Hidalgo County tax
assessor-collector certifying that FYP had paid the “taxes, penalties, interest, and
collection costs” on the property for tax years 2006–2010, 2012, and 2015–2017. All of
these documents were recorded with the Hidalgo County Clerk’s Office on August 14,
2018.
The promissory note provided that Bronco would make monthly payments of
$4,252.25 in satisfaction of the principal, accrued interest, and outstanding fees on the
loan. Interest accrued in the amount of 10.9% annually. Bronco also agreed to pay late
fees in the amount of “the lesser of (i) five cents for each $1 of the scheduled installment
or (ii) the maximum late charge, if any under applicable law, in order to defray the expense
of handling the delinquent payment.” Over the course of nearly a year, Bronco paid down
the principal on this note by $11,868.55. However, according to an affidavit sworn to by
Manuel Longoria, Chief Operations Officer and custodian of records for FYP, the last
payment Bronco made “was June 30, 2019[,] which was applied to [the] April 1, 2019
payment.” Thus, the total amount remaining on the principal when Bronco defaulted was
$298,097.05.
Attached as “Exhibit A” to the motion was what appears to be a printout of
information for the property taken from the Hidalgo County Appraisal District’s website.
This exhibit represented that the most recent appraised value of the property was
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$622,839.00. A “Pay-History and Pay-Off” document from October 19, 2020, which was
also attached as evidence, itemized the amounts Bronco still owed on the loan. According
to this document, Bronco owed a total of $357,752.70. Finally, two affidavits by FYP’s
attorney were attached that detailed the history of FYP’s attempts to collect on the loan
and the legal fees incurred in seeking to enforce the loan.
B. The City and the County’s Motions for Summary Judgment
On October 5 and November 9, 2020, respectively, the County and City filed their
separate motions for summary judgment. These motions also sought foreclosure on
delinquent tax liens, and each taxing unit attached as an exhibit a certified copy of the
respective entity’s tax roll entry reflecting the delinquency.
C. Bronco’s Response
Bronco filed objections and special exceptions in response to the motions for
summary judgment. Bronco specifically objected to FYP’s “Exhibit A” on the grounds that
it was unauthenticated and contained hearsay. Attached to the response as evidence was
an affidavit signed by Rafic de los Santos, the managing member of Bronco. The record
does not contain a ruling on Bronco’s objections.
D. The Summary Judgment1
The trial court granted all three motions for summary judgment and its final
summary judgment itemized the amounts awarded to FYP as follows:
1 The trial court originally granted summary judgment in favor of FYP, the City, and the County on
June 1, 2021. However, the trial court later granted Bronco’s motion for new trial, and the parties relitigated
their motions for summary judgment. The trial court signed its amended final summary judgment, which is
the order on appeal, on November 17, 2021.
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Plaintiff FYP . . . shall recover judgment against Defendant Bronco . . . its
taxes, penalties and interest, due and owing, and unpaid against the
property . . . for the years 1998–2004, 2006–2010, 2012, [and] 2015–2017
in the principal amount of $298,097.05 plus interest in the amount of
$67,922.26, late fees of $5,102.64, Attorney’s Fees/[]Foreclosure fees of
$5,186.00, Miscellaneous fees of $637.83, for a total of $376,945.78
(through May 3, 2021[,] and accruing interest at the rate of $89.02 per diem)
at the rate of ten and 9/10 percent (10.900%) per annum, and foreclosure
of the constitutional and statutory liens upon real property described herein
as to Defendant Bronco . . . .
The judgment also awarded to the City and the County a total of $40,262.05 and
$17,285.93, respectively. Lastly, the judgment adjudicated the value of the property as
$622,839.00. This appeal followed.
II. STANDARD OF REVIEW
We review de novo a trial court’s decision to grant summary judgment. Lujan v.
Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). “Summary judgment is appropriate only
when there are no disputed issues of material fact and the moving party is entitled to
judgment as a matter of law.” Tex. Com. Bank, N.A. v. Grizzle, 96 S.W.3d 240, 252 (Tex.
2002); see TEX. R. CIV. P. 166a(c). Traditional motions for summary judgment “must stand
on their own merits, and the non-movant’s failure to answer or respond cannot supply by
default the summary judgment proof necessary to establish the movant’s right.” City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Only when the
movant meets its burden to prove it is entitled to judgment as a matter of law does the
burden then shift to the nonmovant to raise a genuine issue of material fact that precludes
summary judgment. Lujan, 555 S.W.3d at 84.
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When reviewing a traditional motion for summary judgment, we accept the
nonmovant’s evidence as true and indulge every reasonable inference and resolve any
doubts in the nonmovant’s favor. Provident Life & Acc. Ins. v. Knott, 128 S.W.3d 211, 215
(Tex. 2003). When the trial court’s order does not specify the grounds for its summary
judgment, “we must affirm the summary judgment if any of the theories presented to the
trial court and preserved for appellate review are meritorious.” Id. at 216.
III. ANALYSIS
A. FYP
By four sub-issues, Bronco asserts that summary judgment in FYP’s favor was
improper because: (1) the amounts awarded to FYP in the judgment are not supported
by the summary judgment evidence; (2) the motion for summary judgment failed to
specifically reference the grounds for summary judgment and the evidence relied upon;
(3) the trial court should have sustained Bronco’s objection to FYP’s “Exhibit A”; and (4) a
genuine issue of material fact precluded the trial court from finding the market value of
the property to be $622,839.00. We begin by discussing the relevant law governing FYP’s
status as a transferee of a valid tax lien.
1. Property Tax Liens
Property taxes are unique because they, “by definition, are tied to land or personal
property, unlike other types of taxes, which may be tied to a person or entity.” Willacy
Cnty. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 42 (Tex. 2018).
“On January 1 of each year, a tax lien attaches to property to secure the payment of all
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taxes, penalties, and interest ultimately imposed for the year on the property, whether or
not the taxes are imposed in the year the lien attaches.” TEX. TAX CODE ANN. § 32.01(a).
Property taxes are due upon receipt and become “delinquent if not paid before February
1 of the year following the year in which [they are] imposed.” Id. § 31.02(a). “If property
taxes are not paid by the owner or by another person . . . , the taxing unit may secure
payment by legal action, including foreclosure on the lien, seizure and sale of personal
property to satisfy the bill, or a suit to enforce personal liability for taxes.” Sebastian
Cotton, 555 S.W.3d at 43.
A tax lien is a “creature of statute,” and the enforceability of transferred tax liens is
governed by § 32.06 of the tax code. Genesis Tax Loan Servs. v. Kothmann, 339 S.W.3d
104, 108–09 (Tex. 2011); see TEX. TAX CODE ANN. § 32.06. A property owner may
authorize another to pay the taxes imposed by a taxing unit on the owner’s property. TEX.
TAX CODE ANN. § 32.06(a-1). In that situation, the tax lien on the property may be
transferred from the taxing authority to the person who pays the taxes on behalf of the
owner. Id. § 32.06(a-2). A property owner may also enter into a contract for the payment
of delinquent property taxes with a licensed property tax lender. Id. § 32.065(a); TEX. FIN.
CODE ANN. § 351.002(1). Funds advanced by the transferee under such a contract “are
limited to the taxes, penalties, interest, and collection costs paid as shown on the tax
receipt, expenses paid to record the lien, plus reasonable closing costs.” TEX. TAX CODE
ANN. § 32.06(e). If a transferee pays the property owner’s taxes and any penalties,
interest, and collection costs imposed, the collector for the taxing unit must issue a receipt
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to the transferee and must certify that the taxes have been paid by the transferee on
behalf of the property owner and that the taxing unit’s lien has been transferred to the
transferee. Id. § 32.06(b). The transferee must then record the tax lien with the deed
records of each county in which the encumbered property is located. Id. § 32.06(d). The
transferee is then “subrogated to and is entitled to exercise any right or remedy possessed
by the transferring taxing unit, including or related to foreclosure or judicial sale.” Id.
§ 32.065(c).
“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.” Id. § 33.41(a). “[T]he transferee of a tax lien is entitled to foreclose the lien in the
manner provided by law for foreclosure of tax liens.” Id. § 32.06(c). A tax lien transferee
“may file its claim and seek foreclosure in the suit for all amounts owed the transferee
that are secured by the transferred tax lien, regardless of when the original transfer of tax
lien was recorded or whether the original loan secured by the transferred tax lien is
delinquent.” Id. § 33.445(a); see Ovation Servs., LLC v. Richard, 624 S.W.3d 610, 617
(Tex. App.—Tyler 2021, no pet.).
2. Summary Judgment Evidence
Because it is dispositive, we next address Bronco’s contention that FYP’s
summary judgment evidence did not establish its entitlement to summary judgment.
According to Longoria’s affidavit:
Payment of the Note is secured by liens arising for ad valorem taxes,
penalties, interests, and costs in accordance with Article VII, Section 15,
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Texas Constitution. [Bronco] signed sworn document(s) authorizing the
transfer of the tax liens as required under [§] 32.06(a-1), Texas Property
Code. The tax liens for 1998–2004, 2006–2010, 2012, 2015–2017 were
transferred to Transferee as evidenced by certified statement(s) by the
applicable taxing units in accordance with [§] 32.06(b), Texas Property Tax
Code . . . . Payment of the Note is further secured by Tax Lien Contract
dated July 31, 2018 . . . .
However, FYP did not provide the applicable certified statements for the years 1998–
2004, nor did it provide proof that there were any delinquent taxes remaining with respect
to those liens when the contract was made. Consistent with the sworn documents
executed by de los Santos authorizing the transfer of tax liens, the certified statements of
transfer of tax lien executed by the tax assessor-collector for Hidalgo County established
only that tax liens for the years 2006–2010, 2012, and 2015–2017 were transferred to
FYP. FYP’s contention that the obligation in the tax lien contract was secured, in part, by
the tax liens for years 1998–2004, when no evidence demonstrates that an amount on
those tax liens was delinquent at the time the contract was made, calls into question
whether the tax lien contract is void. See TEX. TAX CODE ANN. § 32.06(a-7) (“A contract
between a transferee and a property owner that purports to authorize payment of taxes
that are not delinquent or due at the time of the authorization . . . is void.”); id. § 32.065(i)
(“An agreement under this section that attempts to create a lien for the payment of taxes
that are not delinquent or due at the time the property owner executes the sworn
document under [§] 32.06(a-1) is void.”).
Further, funds advanced by the transferee under such a contract “are limited to the
taxes, penalties, interest, and collection costs paid as shown on the tax receipt, expenses
paid to record the lien, plus reasonable closing costs.” Id. § 32.06(e). The tax lien contract
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reflects that the initial balance of the note—the funds advanced—was $309,965.60. The
applicable certified statements sworn to by the Hidalgo County Tax Assessor-Collector
reflect that the total amount FYP secured through the transfers of the tax liens (including
taxes, penalties, interest, and collection costs) was $297,816.60. See id. The total amount
of recording costs reflected by the summary judgment evidence is $244.00. See id. This
means the difference between the funds advanced under the contract—$309,965.60—
and the “taxes, penalties, interest, . . . collection costs . . . , [and] expenses paid to record
the lien”—$298,060.60—is $11,905. See id.
FYP made no assertion below or on appeal that the unaccounted for $11,905 is a
reasonable closing cost. See id. The Finance Commission of Texas is required to “adopt
rules relating to the reasonableness of closing costs, fees, and other charges permitted”
by § 32.06. Id. § 32.06(a-4)(2). According to the administrative code, “[t]he general
maximum fee for closing costs is $900.” 7 TEX. ADMIN. CODE ANN. § 89.601(c)(3).
Assuming that FYP charged the maximum fee for closing costs, this still would not explain
$11,005 of the principal, as no evidence demonstrated that this amount was secured by
the transfer of a tax lien.
The summary judgment evidence shows that the amount awarded to FYP exceeds
“all amounts owed . . . that are secured by the transferred tax lien[s].” See TEX. TAX CODE
ANN. §§ 32.06, 32.065, 33.445(a). Because of this discrepancy, FYP has failed to
establish it is entitled to summary judgment as a matter of law. See Lujan, 555 S.W.3d at
84; cf. Harris v. Jackson & Walker, L.L.P., No. 05-93-01795-CV, 1995 WL 23008, at *3
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(Tex. App.—Dallas Jan. 20, 1995, no writ) (not designated for publication) (“The Firm’s
own summary judgment evidence establishes a genuine issue of material fact.”). We
sustain Bronco’s first issue as to FYP.
B. The City and the County
Bronco contends that the City’s and the County’s motions for summary judgment
should have been denied because “none of the motions state the elements of the
movants’ cause(s) of action and none of the motions have specific references to the
summary judgment evidence to support the movants’ claims.” We disagree. “While it is a
better practice to specifically cite to the summary-judgment evidence in the motion itself,
Rule 166a(c) does not require it.” Regional Specialty Clinic, P.A. v. S.A. Randles &
Assocs., P.C., 625 S.W.3d 895, 902 (Tex. App.—Houston [14th Dist.] 2021, no pet.); see
also Jimmie Luecke Child. P’ship, Ltd. v. Droemer, No. 03-20-00096-CV, 2022 WL
243162, at *4 (Tex. App.—Austin Jan. 27, 2022, pet. denied) (mem. op.) (“[W]e have
previously noted that [Rule 166a(c)] ‘contains no requirement that the evidence be
referenced more specifically than being incorporated into the motion,’ . . . especially
when, as here, the summary judgment record is not voluminous . . . .”). The summary
judgment record is far from voluminous in this case. In total, the City’s and the County’s
motions and evidence span approximately twelve pages.
Additionally, the City’s motion for summary judgment explained that its suit was
“predicated upon the existence of a tax lien . . . on property owned by [Bronco].” The City
referenced portions of the tax code relating to foreclosures on tax liens and requested
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that “[j]udgment be entered in favor of [the City’s] tax liens against the property.” Likewise,
the County sought “[j]udgment awarding taxes, penalties, interest, attorney’s fees[,] and
court costs, as a matter of law, together with foreclosure of their tax liens against
[Bronco].” The County cited relevant portions of the tax code and corresponding exhibits.
Both the City and the County argued in their motions that the certified copies of the
delinquent tax rolls attached were prima facie evidence of their claims. Bronco does not
claim that the motions for summary judgment did not provide fair notice of the relief being
sought. We conclude that the City and the County expressly presented the grounds for
summary judgment in their motion. See McConnell, 858 S.W.2d at 340 (“Grounds may
be stated concisely, without detail and argument.” (quoting Roberts, 811 S.W.2d at 146)).
Next, to the extent Bronco objects to the sufficiency of the evidence to support the
judgments in favor of the City and the County, we conclude these entities met their
summary judgment burden.
In a suit to collect a delinquent tax, the taxing unit’s current tax roll and
delinquent tax roll or certified copies of the entries showing the property and
the amount of the tax and penalties imposed and interest accrued constitute
prima facie evidence that each person charged with a duty relating to the
imposition of the tax has complied with all requirements of law and that the
amount of tax alleged to be delinquent against the property and the amount
of penalties and interest due on that tax as listed are the correct amounts.
TEX. TAX CODE ANN. § 33.47(a).
The City produced a certified copy of a delinquent tax statement. According to this
evidence, for tax years 2018 and 2019, Bronco owed a total of $14,430.18 to the City of
Mercedes and owed a total of $25,831.87 to the Mercedes Independent School District.
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The County also produced a certified copy of a delinquent tax statement. This statement
indicated that, if the taxes for tax years 2018 and 2019 were still unpaid after November
30, 2020, Bronco would owe a total of $11,277.28 in taxes and penalties to Hidalgo
County, a total of $1,945.48 in taxes and penalties to the Drainage District #01, a total of
$960.41 in taxes and penalties to South Texas ISD, and a total of $3,432.76 in taxes and
penalties to South Texas College.
“Once a taxing authority in a delinquency suit introduces the tax records described
in [§] 33.47(a) into evidence, it establishes a prima facie case ‘as to every material fact
necessary to establish its cause of action.’” City of Bellaire v. Sewell, 426 S.W.3d 116,
120 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (quoting Nat’l Med. Fin. Servs., Inc. v.
Irving Indep. Sch. Dist., 150 S.W.3d 901, 906 (Tex. App.—Dallas 2004, no pet.)).2 “After
the taxing authority makes its prima facie case by introducing the required records, the
burden of proof then shifts to the taxpayer to show, by introducing competent evidence,
that he has paid the full amount of taxes, penalties, and interest or that there is some
other defense that applies to his case.” Id. We conclude that the City and the County met
their summary judgment burdens concerning their foreclosure claims. We overrule
Bronco’s first issue as to the City and the County.
2 After the taxing authority makes its prima facie case by introducing the required records,
the burden of proof then shifts to the taxpayer to show, by introducing competent evidence,
that he has paid the full amount of taxes, penalties, and interest or that there is some other
defense that applies to his case.
City of Bellaire v. Sewell, 426 S.W.3d 116, 120 (Tex. App.—Houston [1st Dist.] 2012, no pet.). Bronco does
not contend that it paid the full amount owed. See id.13
C. Property Valuation
Finally, Bronco asserts that its summary judgment evidence raised a fact issue as
to the market value of the property. In a suit for foreclosure on a tax lien on property, the
court is required to determine the market value of the property and incorporate its finding
into the final judgment. TEX. TAX CODE ANN. § 33.50(a). “The appraised value of the
property according to the most recent appraisal roll approved by the appraisal review
board is presumed to be its market value on the date of trial.” See id. The City provided
this evidence, the admissibility of which Bronco does not contest on appeal. Once the
City produced this evidence, Bronco bore the burden “of establishing that the market
value of the property differs from that appraised value.” Id. The affidavit signed by de los
Santos and attached as evidence to Bronco’s summary judgment response states:
I am familiar with fair market values and how such values are determined. I
have education, training and experience in real estate and real estate
values and sales. The present fair market value of the subject property is
not $622,839.00 as purported by the Plaintiff and Intervenors nor was it that
amount when the taxes in questions were assessed. The value is
excessive. It does not reflect the current market conditions nor the
particularities of property values in Mercedes, nor the fact that the property
remains unrented or unleased and that we have not been able to market it
or lease it, despite diligent efforts.
However, a complaint that a property is overvalued “is not a proper defense in a
suit to recover delinquent taxes.” Sewell, 426 S.W.3d at 121–22. To contest the appraised
value of the property, the property owner must first adjudicate the issue through the
administrative proceedings laid out in Chapters 41 and 42 of the tax code. See TEX. TAX.
CODE ANN. §§ 41.01–.71, 42.01–.43. “[F]ailure to exhaust the exclusive administrative
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remedies precludes judicial review of the appraisal and also deprives the property owner
of the right to raise such protest as a defense against a suit to enforce collection of
delinquent taxes.” Nev. Gold & Silver, Inc. v. Andrews Indep. Sch. Dist., 225 S.W.3d 68,
76 (Tex. App.—El Paso 2005, no pet.). Bronco presented no evidence that it exhausted
its administrative remedies in contesting the appraised value of the property. Therefore,
the trial court did not err in concluding that Bronco failed to raise a fact issue concerning
the market value of the property. See id.; see also TEX. TAX CODE ANN. § 33.50(a).
We overrule Bronco’s third issue.
IV. CONCLUSION
We affirm the trial court’s judgment in all respects as it pertains to the City and the
County. We reverse the trial court’s judgment as it pertains to FYP and remand for further
proceedings consistent with this memorandum opinion.
GINA M. BENAVIDES
Justice
Delivered and filed on the
6th day of July, 2023.
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