Stephens County, Texas, and Its Tax Assessor-Collector Terry Sullivan v. Chris Eaton and Karen Eaton ( 2015 )

Opinion filed February 12, 2015
In The
Eleventh Court of Appeals
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No. 11-13-00280-CV
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STEPHENS COUNTY, TEXAS, AND ITS TAX
ASSESSOR-COLLECTOR TERRY SULLIVAN, Appellants
V.
CHRIS EATON AND KAREN EATON, Appellees
On Appeal from the 90th District Court
Stephens County, Texas
Trial Court Cause No. CV 30877
MEMORANDUM OPINION
This is an interlocutory appeal from an order in which the trial court denied
Appellants’ pleas to the jurisdiction that asserted governmental immunity from
suit. See TEX. CONST. art. XI. Chris Eaton and Karen Eaton, Appellees, sued
Stephens County and its Tax Assessor-Collector Terry Sullivan and alleged
“purported irregularities” in a prior tax foreclosure judgment and sale at which
Appellees purchased a ten-acre tract of land. Appellants answered and filed pleas
to the jurisdiction in which they asserted governmental immunity from suit. The
trial court denied both pleas. Appellants timely filed this interlocutory appeal.
TEX. CIV. PRAC. & REM. CODE ANN. § 51.014 (West 2015). In two issues,
Appellants argue that the trial court erred when it denied their pleas to the
jurisdiction and when it allowed Appellees, as tax sale purchasers, to collaterally
attack the delinquent tax judgment. In their sole cross-point, Appellees allege that
Appellants’ actions violated their due process rights in the underlying delinquent
tax suit and resulting judgment. We reverse the trial court’s order in which it
denied the pleas to the jurisdiction, and we dismiss Appellees’ claims for lack of
subject-matter jurisdiction.
Background Facts
On January 7, 2009, Stephens County filed suit against Juanita Faye Davis
and George Dewey Davis, Jr. to collect delinquent property taxes owed on real
property that consists of approximately ten acres: “A2487 T & P BLK 6, SEC 4,
TRACT SE/4, ACRES 10, UDI 100.00% being that property more particularly
described in Vol. 60, Page 420 of the Deed Records, Stephens County, Texas.”
Citation by personal service was served on George Dewey Davis, Jr. on
January 22, 2009, and the return was filed with the trial court on January 28, 2009.
Citation by personal service was never issued for Juanita Faye Davis. An affidavit
for citation by publication upon both Juanita Faye Davis and George Dewey Davis,
Jr. was filed on October 26, 2009. Citation by publication was approved and the
publication was properly printed on November 7, 2009, and November 14, 2009.
Neither of the Davises appeared or answered the delinquency suit.
On March 11, 2010, Stephens County obtained a final judgment for
$2,432.45 in delinquent taxes, penalties, interest, and costs on the property for the
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tax years 2004 through 2009 and judicial foreclosure on the tax lien on the
property. An order of sale for the property was issued to satisfy the tax debt. The
ten-acre property was sold at a sheriff’s sale on October 5, 2010, to Chris Eaton
and/or Karen Eaton in consideration for $4,500. The tax deed from the sheriff’s
sale was filed in the property records for Stephens County on November 5, 2010.
On December 27, 2012, the Eatons filed a petition against Stephens County
and Terry Sullivan, in her capacity as tax assessor-collector, to cancel the sheriff’s
deed and recover the amount paid at the sheriff’s sale, plus the taxes paid since the
acquisition of the property. The Eatons alleged that the underlying deficiency suit,
default judgment, and subsequent sheriff’s sale were void for numerous reasons:
(1) lack of service on Juanita Faye Davis, (2) perjured testimony about the service
on both the Davises, and (3) an erroneous legal description of the property. The
Eatons also conditionally sued two other claimants to the property, the Knox No. 1
Family Limited Partnership and the Bullock Family Estate, LLC, for a judicial
partition of the property. These parties have not joined in this appeal.
Stephens County and Sullivan, in her capacity as tax-assessor collector, filed
an answer in which they asserted several affirmative defenses, which included
governmental immunity and official immunity to all of the Eatons’ claims, as well
as a limitations bar under Tax Code section 34.07. TEX. TAX CODE ANN. § 34.07
(West 2008). After hearings on May 9, 2013, and September 12, 2013, the trial
court denied both Appellants’ pleas to the jurisdiction.
Analysis
In their two issues, Appellants argue that the trial court erred when it denied
their pleas to the jurisdiction and that Appellees do not have standing to
collaterally attack the judgment in the delinquent tax suit as they were not actual,
necessary, or proper parties.
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A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat
a cause of action without regard to the merits of the claim. Bland Indep. Sch.
Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). In deciding a plea to the
jurisdiction, a court must not weigh the merits of the claim but should consider
only the plaintiff’s pleadings and the evidence pertinent to the jurisdictional
inquiry. Cnty. of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). Because
the question of subject-matter jurisdiction is a legal question, we review the trial
court’s ruling on a plea to the jurisdiction under a de novo standard of review.
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); see also Tex.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226–28 (Tex. 2004).
Governmental immunity encompasses both sovereign immunity and official
immunity. Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex. 1997). Stephens
County has asserted both sovereign immunity for itself, as a political subdivision
of Texas, and official immunity for Terry Sullivan, in her official capacity as the
elected tax assessor-collector of Stephens County. Although both are types of
governmental immunity, sovereign immunity and official immunity are two
distinct doctrines aimed at different policies. McCartney v. May, 50 S.W.3d 599,
605 (Tex. App.—Amarillo 2001, no pet.). Sovereign immunity, unless waived,
protects the State of Texas, its agencies, and officials from lawsuits for damages.
Fed. Sign, 951 S.W.2d at 405. On the other hand, official immunity protects a
governmental employee from suit for incidents that arise out of her good faith
performance of discretionary acts, so long as the employee acted within the scope
of her authority. Wadewitz v. Montgomery, 951 S.W.2d 464, 466 (Tex. 1997); City
of Lancaster v. Chambers, 883 S.W.2d 650, 653 (Tex. 1994). However, Sullivan
has only been sued in her official capacity as tax assessor-collector. A claim
against a state employee in her official capacity is, in effect, a claim against the
state, to the extent that the state is a party. McCartney, 50 S.W.3d at 606.
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Sullivan, as the tax assessor-collector, may assert sovereign immunity as a defense.
Therefore, absent an applicable waiver, sovereign immunity deprives a trial court
of subject-matter jurisdiction over claims against both Stephens County and
Sullivan. Miranda, 133 S.W.3d at 224.
The issue in this case is whether the State waived immunity through the
limited waiver provided for under the Tax Code. TAX § 34.07. In some
circumstances, a tax sale purchaser may file an action against the taxing unit to
have a void or defective tax sale vacated and set aside and to recover the purchase
price. Id. § 34.07(d), (e). The action must be “instituted before the first
anniversary of the date of sale or resale.” Id. § 34.07(f). There is uncontroverted
testimony that the tax sale occurred on October 5, 2010. The Eatons did not file
their lawsuit until December 27, 2012, more than two years after the tax sale.
While the Tax Code allows a waiver of sovereign immunity, the Eatons filed their
lawsuit after the statutory deadline and are not entitled to the waiver of
governmental immunity under the Tax Code. See id.; White v. Eastland Cnty., 12
S.W.3d 97, 100 (Tex. App.—Eastland 1999, no pet.) (Although the statute waives
sovereign immunity to a limited extent, immunity is still the rule where the act
does not apply.). There is no exception in either the statutory language or case law
that waives governmental immunity or the statute of limitations based on equitable
reasons. See Tex. Adjutant Gen.’s Office v. Ngakoue, 408 S.W.3d 350, 353 (Tex.
2013) (It is the Legislature’s sole province to waive or abrogate sovereign
immunity.). The trial court erred when it denied Appellants’ pleas to the
jurisdiction based on governmental immunity under the Tax Code. TAX § 34.07(f).
We sustain Appellant’s first issue.
Although Appellants may assert governmental immunity, we will address
Appellees’ collateral attack upon the delinquency judgment. Appellants argue that
Appellees lacked standing to collaterally attack the delinquency judgment. A
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collateral attack seeks to avoid the binding effect of a judgment in order to obtain
specific relief that the judgment currently impedes. PNS Stores, Inc. v. Rivera, 379
S.W.3d 267, 272 (Tex. 2012). When attacked collaterally, a judgment is presumed
valid. Id. at 273; see Loper v. Meshaw Lumber Co., 104 S.W.2d 597, 603 (Tex.
Civ. App.—Eastland 1937, writ dismissed). But that presumption disappears when
the record establishes a jurisdictional defect. PNS Stores, 379 S.W.3d at 273.
Accordingly, although we presume the default judgment is valid, we may look
beyond its face to determine whether the record affirmatively demonstrates that the
trial court lacked jurisdiction. Id.
A jurisdictional defect is sufficient to void a judgment when it either
(1) establishes that the trial court lacked subject-matter jurisdiction over the suit or
(2) exposes such personal jurisdictional deficiencies as to violate due process. Id.
(citing Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex. 2008)). Subject-matter
jurisdiction is not in question. We must, therefore, determine whether Appellees’
complaints of personal jurisdictional defects rise to the level of a due process
violation.
A complete failure or lack of service on a party with a property interest
adversely affected by the judgment constitutes a due process violation that
warrants setting aside the judgment. Sec. State Bank & Trust v. Bexar Cnty., 397
S.W.3d 715, 724 (Tex. App.—San Antonio 2012, pet. denied). A person who is
not a party to a judgment only has standing to collaterally attack the judgment if
his or her interests were directly and necessarily affected by the judgment.
Grynberg v. Christiansen, 727 S.W.2d 665, 666–67 (Tex. App.—Dallas 1987, no
writ). For example, lienholders with a prior lien on the property have an interest
directly and necessarily affected by the delinquency suit and must be joined in the
suit. TEX. R. CIV. P. 39(a); Sec. State Bank, 397 S.W.3d at 723–24. Failure to join
a preexisting lienholder of record violates the lienholder’s due process rights, and
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the void judgment may be collaterally attacked. Sec. State Bank, 397 S.W.3d at
723–24; Grynberg, 727 S.W.2d at 667.
On the other hand, a purchaser at a tax sale has no direct interest in the
underlying default judgment prior to his or her purchase of the property. Appellees
did not obtain their interest in the property until they purchased the property at the
sheriff’s sale. There is no precedent that allows a purchaser at a tax sale to attack
the delinquency judgment after the sale beyond what is enumerated under the Tax
Code. TAX § 34.07. Allowing a purchaser at a tax sale to bring a collateral attack
on the judgment that authorized the tax sale would bring uncertainty to the tax sale
process and undermine the finality of tax delinquency judgments. Browning v.
Prostok, 165 S.W.3d 336, 345–46 (Tex. 2005). Appellees had no interest that was
directly and necessarily affected by the delinquency judgment and cannot
collaterally attack the default judgment.
Moreover, a trial court’s judgment foreclosing a tax lien is only valid against
the parties joined in the suit. Sec. State Bank, 397 S.W.3d at 722; see John K.
Harrison Holdings, LLC v. Strauss, 221 S.W.3d 785, 791 (Tex. App.—Beaumont
2007, pet. denied); Loper, 104 S.W.2d at 599–600. The delinquency judgment
states that the Davises were duly cited by publication, and it is presumed as a
matter of law that service was proper and that they are bound by the judgment.
PNS Stores, 379 S.W.3d at 272. Therefore, the tax judgment is valid as to the
Davises’ interest in the property. Appellees cannot collaterally attack the default
judgment with respect to Juanita Faye Davis and George Dewey Davis, Jr.
While there may be issues as to whether service was accomplished in the
underlying tax suit, Appellees are not the proper parties to attack the judgment in a
collateral attack. The trial court erred when it allowed Appellees to make a
collateral attack on the delinquency judgment.
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In their sole cross-point, Appellees assert that the trial court violated their
due process rights in the delinquency judgment. Appellees cite multiple cases in
support of their argument; however, none of these cases are applicable in this case.
Pounds and State Mortgage involved parties with prior interests in the property.
See Pounds v. Jurgens, 296 S.W.3d 100, 111–12 (Tex. App.—Houston [14th Dist.]
2009, pet. denied); State Mortg. Corp. v Ludwig, 35 S.W.2d 267, 268 (Tex. Civ.
App.—San Antonio 1931), rev’d on other grounds, 48 S.W.2d 950 (Tex. 1932).
Preexisting interests that are significantly affected by the tax suit are entitled to
constitutional notice and due process. Sec. State Bank, 397 S.W.3d at 722.
However, there is no precedent that gives a purchaser at a tax sale the same
constitutional protections as prior interest holders.
Appellees assert that their due process rights were violated because other
prior interest holders’ rights were violated. Plaintiffs must assert their own legal
rights and interests and cannot rest their claims on the due process rights of third
parties. Warth v. Seldin, 422 U.S. 490, 499 (1975). Appellees cannot claim a due
process violation based on another’s due process rights. Id.
Appellees also argue that the delinquency judgment was void and, thus,
violated their due process rights, as there was no accurate legal description in
either the judgment or the subsequent sale. A property description is sufficient if
the writing furnishes within itself, or by reference to some other existing writing,
the means or data by which the particular land to be conveyed may be identified
with reasonable certainty. AIC Mgmt. v. Crews, 246 S.W.3d 640, 645 (Tex. 2008).
A judgment for foreclosure of a tax lien that fails to describe a definite tract of land
is void. Id. Texas law does not require courts to scrutinize the proceedings of a
judicial sale in order to defeat a deed; instead, courts must make every reasonable
effort to resolve a deed in favor of the judgment. Id. (citing Hermann v. Likens, 39
S.W. 282, 284 (Tex. 1897)). The property was described in the sheriff’s deed as
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noted above. The deed conveyed to the Eatons all the “right, title and interest”
owned in the property by Juanita Faye Davis and George Dewey Davis, Jr. on the
date of the judgment. We cannot conclude, based on the record presented, that the
deed was void as a matter of law. AIC Mgmt., 246 S.W.3d at 645. Furthermore,
deprivations of property caused by alleged misconduct of public officials do not
infringe on constitutional due process rights provided that post-deprivation
remedies exist. Murphy v. Collins, 26 F.3d 541, 543 (5th Cir. 1994). The Tax
Code provides two post-deprivation remedies for purchasers at a tax sale who
believe they have purchased property at a void or defective tax sale. TAX § 34.07.
Appellees were not parties to the delinquency suit, nor did they have any
interest in the property during the pendency of the suit or when the delinquency
judgment was rendered. Appellees’ interest attached when they purchased the
property at the sheriff’s sale. Thus, Appellees’ due process rights were not
violated by Appellants’ actions in the delinquent tax suit. We sustain Appellants’
second issue, and we overrule Appellees’ sole cross-point.
This Court’s Ruling
We reverse the trial court’s order in which it denied Appellants’ pleas to the
jurisdiction, and we dismiss Appellees’ suit against Appellants for lack of subject-
matter jurisdiction.
JOHN M. BAILEY
JUSTICE
February 12, 2015
Panel consists of: Wright, C.J.,
Willson, J., and Bailey, J.
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