REVERSED and REMANDED; Opinion issued April 29, 2005
In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-04-00803-CV
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DALLAS CENTRAL APPRAISAL DISTRICT and
APPRAISAL REVIEW BOARD OF DALLAS COUNTY, TEXAS, Appellants
V.
GREGORY SCOTT CUNNINGHAM, Appellee
.............................................................
On Appeal from the 101st Judicial District Court
Dallas County, Texas
Trial Court Cause No. 03-06921-E
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OPINION
Before Justices Bridges, O'Neill, and Mazzant
Opinion By Justice Mazzant
Dallas Central Appraisal District (DCAD) and Appraisal Review Board of
Dallas County, Texas (collectively appellants) appeal the trial court's summary judgment granted
in favor of homeowner Gregory Scott Cunningham. Appellants argue that because the market
value of Cunningham's property was not established as a matter of law and fact issues exist as to
that value, the court erred in granting summary judgment. We agree and reverse the trial court's
judgment.
Background
The parties do not contest that Cunningham owns the property in question or
that the prior year's appraised value was $200,000.00. See Footnote1 Instead, the
parties disagree as to the application of the tax code 23.23 in determining the 2003 market
value. See Footnote2
Cunningham received his notice of residential appraised value for 2003 in
which DCAD stated it had appraised, per state law, the taxable property at its fair market
value. According to the notice, the market value was $374,330.00. The notice, however,
referenced the cap provided for in the tax code and listed the capped value of
Cunningham's property to be $225,000.00. Also included on the notice were taxable values
for 2002 and 2003 as well as the homestead exemption values for the various taxing
jurisdictions. The notice further stated the estimated levy for the year would be $5,177
based on the current year's proposed value and last year's tax rates. See
Footnote3
Cunningham completed the bottom portion of the notice as his notice of
protest for year 2003 and opined the property's value was $220,000.00. Cunningham
asserted his protest was due to the constitutional cap on increase.
The Appraisal Review Board conducted a hearing and issued its notice of final
order stating the protest was denied and the appraisal records were correct; the correct value
was $374,330.00. Cunningham appealed this decision to the trial court requesting the court to
both fix the value of the property as of January 1, 2003 at $220,000.00 and compel the
imposition of the proper assessed value . . . . Cunningham also sought costs and attorney's
fees. Cunningham moved for summary judgment, stating the evidence established without
controversy that appellants were precluded by section 23.23(a)(2) of the tax code from
increasing the appraised value by more than 10%. Cunningham also requested the trial court to
enter judgment declaring the fair market value of the Property to be $220,000.00. See
Footnote4 Cunningham attached the agreed judgment reflecting the 2002 value of the
property and his affidavit in which he stated the cost of the improvements [he] made to the
Property between January 1, 2002 and January 1, 2003 was $0.00. Cunningham provided no
other evidence with his motion.
The trial court granted the summary judgment. It stated the appraised value
was limited to $225,000.00. The court also stated the property had a total market value of
$225,000.00 on January 1, 2003. This appeal followed in which appellants complain the trail
court erred in adjudging the market value of the property.
Standard of Review
We review a summary judgment de novo to determine whether a party has
established its right to summary judgment as a matter of law. Dickey v. Club Corp. of Am., 12
S.W.3d 172, 175 (Tex. App.-Dallas 2000, pet. denied). A party moving for a traditional
summary judgment must show no material fact issue exists and it is entitled to judgment as a
matter of law. Tex. R. Civ. P. 166a(c); M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28
S.W.3d 22, 23 (Tex. 2000) (per curiam).
Statutory interpretation presents a question of law that is also subject to de
novo review. See Mitchell Energy Corp. v. Ashworth, 943 S.W.2d 436, 437 (Tex. 1997).
We consider a statute as a whole rather than in isolated provisions, giving meaning in harmony
and consistent with other provisions. Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex.
2001).
Discussion
In his original petition, Cunningham requested the trial court to fix the value
of the property at $220,000.00. Cunningham did not specify if he sought the trial court to
address the appraised value, based on tax code section 23.23, or the market value, as
discussed in tax code section 23.01. However, in his summary judgment, Cunningham requested
the trial court to enter judgment declaring the fair market value of the Property to be
$220,000.00. To obtain summary judgment, he was required to show he was entitled to the
judgment as a matter of law. Appellants contend Cunningham failed to establish the market
value of the property as a matter of law.
The trial court's judgment states the appraised value of the property was
limited under tax code section 23.23(a)(2). It stated that because of this limitation, the total
market value of the property was $225,000.00. See Footnote5 Appellants argue
this reasoning was incorrect and insufficient to support summary judgment. We agree.
The tax code distinguishes between market value and appraised value in
both the definitions and the explanation of determining appraisals. The tax code defines market
value as a price the property would transfer for under prevailing conditions. Tex. Tax Code
Ann. 1.04(7) (Vernon 2001). See Footnote6 Appraised value, on the other
hand, is the value determined as provided by Chapter 23 of this code. Id. 1.04(8).
Chapter 23 addresses methods and procedures for determining appraisals. The
market value refers to the value at which all property is appraised as of January 1 each year.
See id. 23.01(a) (Vernon Supp. 2004-05). To determine a property's market value, the
appraisal district applies generally accepted appraisal methods and techniques. Id. 23.01(b).
Chapter 23 defines three specific methods for determining a property's market value: the cost,
income, and market data comparison methods. Id. 23.0101 (Vernon 2001).
In contrast, section 23.23-the section Cunningham relied on for his summary
judgment motion-does not address how to determine the market value. Instead, section 23.23
addresses the limit, or cap, on the appraised value of a residence homestead. Id.
23.23(a) (Vernon Supp. 2004-05). See Footnote7 Further, section 23.23
distinguishes between the amount calculated based on the limit to the appraised value-that
amount under section 23.23(a)-and the market value; both values are to be included in the
appraisal records. See id. 23.23(b) See Footnote8
We conclude the market value is determined based on an assessment
completed by the application of generally accepted appraisal methods and techniques, and it
is not computed under section 23.23. Once the market value is determined, however, the
appraisal district utilizes that number to determine if there is a limitation on the appraised value
of a residence homestead by comparing it to the prior year's appraised value. See id.
23.23(a). If the new market value-as was determined using the accepted appraisal methods
and techniques referenced in section 23.01(b)-is less than the sum of (1) the prior year's
appraised value; (2) 10% of last year's appraised value; and (3) the value of any new
improvements, then the market value will be used as the appraised value as the computed
value under section 23.2.3(a). Under this circumstance, the two values (the market value and
the section 23.23(a) appraised value) would thus be the same. However, if the market value
is greater than the sum of (1) the prior year's appraised value; (2) 10% of last year's appraised
value; and (3) the value of any new improvements, then the section 23.23(a) appraised value
will be the sum of those three amounts. In this type of situation, the section 23.23(a) appraised
value will be different from the market value.
Conclusion
Cunningham requested the trial court to establish the market value of the
property because of the limitation to the appraised value under section 23.23(a)(2). However,
we have concluded section 23.23 does not address the determination of the market value.
Therefore, Cunningham did not establish as a matter of law that the market value was equal to
the appraised value as limited under section 23.23(a) or subject to the limitations of section
23.23(a). Further, Cunningham's request to declare the market value to be $220,000.00 is
contrary to DCAD's market value determination of $374,330.00. Therefore, a fact issue
existed as to the market value of the property. Accordingly, we hold the trial court erred in
granting summary judgment. See M.D. Anderson Hosp., 28 S.W.3d at 23. We resolve
appellants' sole issue in their favor. We reverse the trial court's judgment and
remand for further proceedings.
AMOS L. MAZZANT
JUSTICE
040803F.P05
Footnote 1 The record contains an Agreed Judgment stating the property had a total
market value on January 1, 2002" of $200,000.00. During oral argument, DCAD stated it did
not agree with this Agreed Judgment. This issue of the 2002 market value, however, is not
germane to this appeal, and we make no determination as to the 2002 market value.
Footnote 2 In his brief, Cunningham states that he stipulated in the Trial Court that the total
value of any improvements made to the Property during the year 2002, was that asserted by the
Appellants, to wit: $5,000.00. However, in his affidavit accompanying his summary judgment
motion, Cunningham stated the value of the improvements was $0.00. The trial court concluded
the appraised value of the property was $225,000.00, which appears to incorporate a value for
improvements at $5,000.00. But Cunningham does not appeal the $225,000.00 figure; therefore,
the value of the improvements is not before this Court in this appeal. We make no determination
as to the value of the improvements.
Footnote 3 The notice, however, did not identify the amount that was used as the
proposed value in computing that estimated levy, nor did it define the term proposed
value on the face of the notice.
Footnote 4 During oral argument, Cunningham denied that he asked the trial court to change
the market value of the property as was reflected in the original notice sent to Cunningham. He
asserted he merely wanted the appraised value to be changed. However, the record shows the
specific request in the summary judgment motion asking the trial court to enter judgment
declaring the fair market value to be $220,000.00.
Footnote 5 The trial court first stated the appraised value was limited under section
23.23(a)(2) of the tax code then stated it is, therefore, ordered, adjudged and decreed that
the house . . . had a total market value of $225,000.00 . . . . (Emphasis added.)
Footnote 6 In section 1.04, the tax code defines market value as
the price at which a property would transfer for cash or its equivalent under
prevailing market conditions if:
(A) exposed for sale in the open market with a reasonable time for the seller to find a
purchaser;
(B) both the seller and the purchaser know of all the uses and purposes to which the
property is adapted and for which it is capable of being used and of the enforceable
restrictions on its use; and
(C) both the seller and purchaser seek to maximize their gains and neither is in a position to
take advantage of the exigencies of the other.
Tex. Tax Code Ann. 1.04(7).
Footnote 7 Section 23.23(a) of the tax code states,
(a) The appraised value of a residence homestead for a tax year may not
exceed the lesser of:
(1) the market value of the property; or
(2) the sum of:
(A) 10 percent of the appraised value of the property for the last year in which the property
was appraised for taxation times the number of years since the property was last appraised;
(B) the appraised value of the property for the last year in which the property was
appraised; and
(C) the market value of all new improvements to the property.
Id. 23.23(a).
Footnote 8 Section 23.23(b) states,
(b) When appraising a residence homestead, the chief appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market value of the property and the amount
computed under Subsection (a)(2).
Id. 23.23(b)