Joseph R. Willie, II v. Harris County, City of Houston, Houston Independent School District, and Houston Community College System , 499 S.W.3d 907 ( 2016 )

Affirmed and Opinion filed July 26, 2016.
In The
Fourteenth Court of Appeals
NO. 14-15-00438-CV
JOSEPH R. WILLIE, II, Appellant
V.
HARRIS COUNTY, CITY OF HOUSTON, HOUSTON INDEPENDENT
SCHOOL DISTRICT, and HOUSTON COMMUNITY COLLEGE SYSTEM,
Appellees
On Appeal from the 11th District Court
Harris County, Texas
Trial Court Cause No. 2014-23734
OPINION
Joseph R. Willie, II appeals from a judgment issued in a suit to collect
delinquent property taxes. Among other things, the judgment ordered that taxing
authorities be reimbursed for costs associated with bringing suit from tax sale
proceeds. In two issues, Willie contends that (1) the trial court lost subject matter
jurisdiction when he paid the taxes, interest, and penalties due, and (2) appellees
were not entitled to recover costs because they did not prevail on the merits. We
affirm.
Background
Appellees, Harris County,1 City of Houston, Houston Independent School
District, and Houston Community College System, (collectively “Harris County”)
brought an action against Willie seeking to recover delinquent property taxes under
section 33.41 of the Texas Tax Code for tax years 2008 through 2013. In its
original petition, filed April 26, 2014, Harris County sought, among other things,
foreclosure of its lien against the property to recover “the total amount of all
delinquent taxes, penalties and interest, including penalties and interest becoming
delinquent during the pendency of this suit, costs of court, attorney’s fees, abstract
fees, and expenses of foreclosure sale.” In a suit to collect delinquent taxes, the
Texas Tax Code authorizes a taxing unit to recover: “all usual court costs,
including the cost of serving process . . . ; expenses of foreclosure sale; [and]
reasonable expenses that are incurred by the taxing unit in determining the name,
identity, and location of necessary parties and in procuring necessary legal
descriptions of the property . . . .” Tex. Tax Code § 33.48(a); see also Rogers v.
Fort Bend Ind. School Dist., No. 14-10-00968-CV, 2011 WL 2685742, at *1 (Tex.
App.—Houston [14th Dist.] July 12, 2011, no pet.) (mem. op.).2 The Code further
specifies that each of the listed costs constitutes a “charge against the property
subject to foreclosure in the suit and shall be collected out of the proceeds of the
sale of the property.” Tex. Tax Code § 33.48(b).
1
Collecting on behalf of Harris County Department of Education, the Port of Houston
Authority of Harris County, the Harris County Flood Control District, and the Harris County
Hospital District.
2
In its petition, Harris County described the “abstractor’s costs” as being for “procuring
data and information as to the name, identity and location of necessary parties, and in procuring
necessary legal descriptions of the property.”
2
On March 25, 2015, Willie tendered a cashier’s check to the Harris County
Tax Assessor in the amount of $19,198.47, which was the amount then due for the
delinquent taxes, interest, and associated penalties. Willie later filed a plea to the
jurisdiction, alleging that Harris County’s suit had been rendered moot by his
payment. At a hearing on April 20, 2015, an attorney representing Harris County
acknowledged that while Willie had paid the taxes, interest, and penalties due, he
had not paid the costs associated with bringing the lawsuit. In support of this
contention, Harris County presented two affidavits with attached documentation,
demonstrating that Harris County had incurred abstract and title research fees of
$250, service of process fees of $290, and district clerk fees of $538.50.
The trial court denied Willie’s plea to the jurisdiction. In its final judgment,
the court granted foreclosure of the tax liens and ordered the clerk to issue an order
of sale at Harris County’s request. The court further awarded Harris County the
fees referenced above, to be recovered from the proceeds of the foreclosure sale.3
In its findings of fact, the trial court noted, among other things, that at the time suit
was filed, taxes were delinquent on the property in question but that the taxes,
interest, and penalties were paid before trial. The court further found that “[a]s of
the date of the trial, District Court Costs and Abstract/Services Fees are due and
owing.” In its conclusions of law, the trial court determined that the due abstract
and title research fees were $250, service of process fees were $290, and district
clerk fees totaled $538.50.
Jurisdiction
As stated, in his first issue, Willie contends that the trial court lost subject
matter jurisdiction when his payment of the taxes, interest, and penalties rendered
3
Harris County’s claims were brought in rem; thus, the final judgment was not in
personam against Willie but only ordered recovery through foreclosure on the property.
3
the dispute between the parties moot. We review a trial court’s ruling on a plea to
the jurisdiction de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d
217, 228 (Tex. 2004); Shannon v. Mem’l Drive Presbyterian Church U.S., 476
S.W.3d 612, 619 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). The
mootness doctrine limits courts to deciding cases in which an actual controversy
exists between the parties. Fed. Deposit Ins. Corp. v. Nueces Cnty., 886 S.W.2d
766, 767 (Tex. 1994). A case becomes moot if there ceases to be a justiciable
controversy between the parties, such as when “the issues presented are no longer
‘live.’” Heckman v. Williamson Cty., 369 S.W.3d 137, 162 (Tex. 2012).
Willie relies on our sister court’s opinion in City of Houston v. First City to
assert that the cashier’s check he tendered to Harris County for $19,198.47 served
as a “payment in full” or an “accord and satisfaction” to resolve the controversy
between the parties. 827 S.W.2d 462 (Tex. App.—Houston [1st Dist.] 1992, pet.
denied). In that case, First City remitted checks to the taxing authorities
accompanied by transmittal letters that specifically set forth how the payments
were to be applied. Id. at 468. The taxing authorities thereafter applied the
payments in a different way than stated in the conditions, which resulted in some
taxes remaining unpaid. Id. The court, however, held that an accord and
satisfaction had occurred because the checks included conditions that the taxing
authorities accepted when they received and then cashed the checks. Id. at 471-
72.4
The circumstances in the present case are distinguishable from those in First
City. Although Harris County issued a receipt showing Willie paid the amount
4
“It is a fundamental principle of contract law that when a check is tendered to a party
and that check lists certain conditions, and the conditions are accepted, a contract is formed when
the party receiving the check cashes it or deposits it. Where such a tender is made in an effort to
discharge or modify an existing and disputed obligation between the parties, the acceptance of
such tender constitutes an ‘accord and satisfaction.’” First City, 827 S.W.2d at 472.
4
then due on his taxes, Willie’s cashier’s check did not include any notes or
attachments that indicated it was a payment in full of all obligations or otherwise
conditioning acceptance of the check on settlement of all disputes between the
parties. As explained above, the Tax Code authorizes a taxing unit to recover
certain costs incurred in a suit to collect delinquent taxes. Tex. Tax Code §
33.48(a). Harris County had indeed sought such costs in its original petition, and it
presented evidence supporting those costs at the hearing.5
In our more analogous opinion in Rogers, the property owner paid the
delinquent taxes, interest, and penalties before trial but refused to pay court costs
and research fees totaling $495. 2011 WL 2685742, at *1. The trial court held that
having filed suit to collect delinquent taxes, the taxing unit was statutorily entitled
to the court costs and research fees, and we affirmed, citing section 33.48(a). Id.6
Similarly, here, although Willie paid his delinquent taxes, penalties, and interest
before trial, he did not pay the remaining costs and fees to which Harris County
was statutorily entitled in bringing suit. A live controversy therefore existed at the
5
We further note that accord and satisfaction is an affirmative defense that must be
pleaded or tried by consent or it is waived. See Tex. R. Civ. P. 94; In re C.M., 996 S.W.2d 269,
270 (Tex. App.—Houston [1st Dist.] 1999, no pet.). Willie did not plead accord and satisfaction
and does not specifically assert that it was tried by consent.
6
But cf. Dallas City Homes, Inc. v. Dallas Cnty., No. 05–13–00033–CV, 2014 WL
2109376, at *4-5 (Tex. App.—Dallas May 14, 2014, no pet.) (mem. op.) (holding that when
taxing authority did not actually recover any delinquent taxes in lawsuit to collect delinquent
taxes, trial court erred in awarding costs to taxing authority). The decision in Dallas City Homes
appears to rely, at least to a degree, on a misapplication of our holding in Gano v. City of
Houston, 834 S.W.2d 585 (Tex. App.—Houston [14th Dist.] 1992, pet. denied). In Gano, we
held that a taxing authority was not entitled to attorney’s fees under section 33.48(a) because the
taxes had been paid prior to trial. Id. at 587. As explained in the opinion, however, section
33.48(a) at that time permitted the recovery of attorney’s fees “not exceeding 15 percent of the
total amount of taxes, penalties, and interest adjudged due the unit.” Id. at 586. We determined
that because no taxes, penalties, or interest had been “adjudged due the unit,” no attorney’s fees
could be awarded. Id. at 586-87. The current version of the attorney’s fee provision of section
33.48(a), as amended, does not contain the word “adjudged.” Furthermore, there is no similar
language in the subsections of 33.48(a) at issue here.
5
time of trial, the dispute was not moot, and the trial court retained jurisdiction.
See, e.g., Heckman, 369 S.W.3d at 162. Accordingly, we overrule Willie’s first
issue.
Prevailing Party
In his second issue, Willie contends that Harris County was not entitled to
recover its costs because it was not a successful or prevailing party on the merits as
required under Texas Rule of Civil Procedure 131 to recover costs. Tex. R. Civ. P.
131. Willie maintains that “[t]he merits of this case were whether delinquent real
property taxes, including any penalties and interest, were due at the time trial
commenced,” and he states that “[t]he trial court did not render, in its final
judgment, that any real property taxes were due and owing.” Thus, he concludes,
Harris County did not prevail on the merits. Willie does not specify what “costs”
he is challenging.
The costs referenced in Rule 131 generally encompass fees and charges
required by law to be paid to the court or its officers, the amount of which is fixed
by statute or the court’s rules, for example, filing and service fees. May v. Ticor
Title Ins., 422 S.W.3d 93, 106 (Tex. App.—Houston [14th Dist.] 2014, no pet.);
see also In re Nalle Plastics Family Ltd. P’ship, 406 S.W.3d 168, 175 (Tex. 2013)
(using similar definition of “costs” in interpreting sections of the Civil Practice and
Remedies Code). As explained in the previous section of this opinion, Harris
County alleged it was statutorily entitled to certain expenses under Tax Code
section 33.48(a), including abstractor’s fees, service of process fees, and district
clerk fees. See Rogers, 2011 WL 2685742, at *1. Some of those fees correspond
to the costs covered by Rule 131, but at least the abstractor’s fees do not.7
7
Unlike the former language related to the recovery of attorney’s fees addressed in Gano,
see supra n.4, there is no language in section 33.48(a) suggesting a taxing authority must obtain
6
Moreover, our review of the record clearly indicates that the trial court ruled in
favor of Harris County on the merits. The trial court’s findings of fact reflect that
at the time suit was filed, taxes were delinquent on the property in question, and
the taxes, interest, and penalties were paid only after suit was filed. Evidence
presented at the hearing supported these findings. The trial court further found that
by bringing a lawsuit to collect a delinquent tax, Harris County was entitled to
recover certain costs of court as well as the abstractor’s fee pursuant to section
33.48(a) of the Tax Code. In its final judgment, the trial court held that a valid tax
lien secured payment of the costs and fees, ordered foreclosure of the lien, and
ordered that the costs and fees be recovered from proceeds of the foreclosure sale.
In short, Harris County proved its entitlement to costs under section
33.48(a), and the trial court ruled in its favor. Therefore, even assuming Rule 131
applies in these circumstances, Harris County was a prevailing and successful
party. See Bayer Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 611-12 (Tex.
App.—Houston [14th Dist.] 2006, pet. denied) (“A ‘successful party’ under the
rules is one who obtains a judgment vindicating a civil right.”).
We overrule Willie’s second issue and affirm the trial court’s judgment.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Jamison, Donovan, and Brown.
a judgment awarding delinquent taxes to be entitled to the authorized costs and fees. It is
sufficient that the taxing authority file a lawsuit to collect then delinquent taxes. See Tex. Tax
Code § 33.48(a); see also Rogers, 2011 WL 2685742, at *1. Absent an accord and satisfaction,
as occurred in First City, 827 S.W.2d 462, see discussion supra, a taxpayer cannot avoid paying
these expenses once the suit is filed by paying only the amount of tax, interest, and penalty due.
7