REVERSED AND RENDERED; Opinion Issued
October 26, 2004.
In The
Court of Appeals
Fifth District of Texas at
Dallas
............................
No. 05-03-00642-CV
............................
ESTATES OF ROBERT D. ELKINS and
ELIZABETH P. ELKINS, RODNEY R. ELKINS, INDEPENDENT
EXECUTOR, PRISCILLA ROUGHTON, JOE
ELKINS and ROGER ELKINS, Appellants
V.
COUNTY OF DALLAS, DALLAS
COMMUNITY COLLEGE DISTRICT, PARKLAND HOSPITAL
DISTRICT, DALLAS COUNTY SCHOOL
EQUALIZATION FUND, CITY OF DALLAS AND DALLAS INDEPENDENT
SCHOOL DISTRICT, Appellees
.............................................................
On Appeal from the
298th Judicial District Court
Dallas County, Texas
Trial Court Cause No.
99-30329-T-M
.............................................................
OPINION
Before Justices
Whittington, Lang and Lang-Miers
Opinion By Justice
Lang-Miers
Appellants
Estates of Robert D. Elkins and Elizabeth P.
Elkins, Rodney R.
Elkins, Independent Executor, Priscilla Roughton,
Joe Elkins and Roger Elkins (“Estates”)
appeal the trial court's judgment in favor of
Appellees County of Dallas, Dallas Community
College District, Parkland Hospital District,
Dallas County School Equalization Fund, City of
Dallas and Dallas Independent School District
(“taxing authorities”) for delinquent
ad valorem taxes, interest and penalties, attorney
ad litem fees, and other costs. In three issues,
the Estates complain that the evidence is neither
legally nor factually sufficient to support the
judgment because it did not create a prima facie
case, the trial court erred in permitting the
taxing authorities to disregard the Estates' terms
and conditions of payments (which we interpret also
as a contention that the evidence is legally and
factually insufficient to support the
judgment),
[fn1] and the trial court erred in
awarding the taxing authorities costs.
We
hold that the evidence supporting the judgment is
legally insufficient, and we reverse the trial court's judgment and
render a take-nothing judgment against the taxing
authorities.
PROCEDURAL BACKGROUND
The
taxing authorities sued Rodney R. Elkins in his
capacity as independent executor of the estate of Robert D.
Elkins and Elizabeth Elkins for unpaid taxes on
property located at 9226 Mercer Dr., Dallas.
They also sued Pricilla Elkins Roughton, Joe C.
Elkins and Roger P. Elkins in their individual
capacities. Attachments to the petition
purported to be a Property Tax Notice and a
Delinquent Property Tax Statement, neither of
which was certified. Both documents showed
“Rodney R Elkins et al” as owner of
the property on Mercer Dr. Rodney R. Elkins,
independent executor of the estate of Elizabeth
P. Elkins, Prissy Roughton, and Roger P. Elkins
filed an answer denying that the account on
which the taxing authorities sued was accurate,
correct, or “that it show[ed] all
payments made to Plaintiffs or credits to which
Defendants [were] entitled.”
At
trial, Plaintiffs' exhibits 1 through 7 were
admitted. They included certified copies of Property Tax Notices,
Transaction Histories, and Tax Pay Detail
Inquiries. All of these documents showed
“Rodney R. Elkins et al” as the
owner of the property. The taxing authorities
did not present any testimony.
Defendants'
exhibits 1 through 33 were also admitted. These
documents included
letters from attorney Rodney R. Elkins to the
taxing authorities; cancelled checks showing
monies paid to the taxing authorities; a 1997
Property Tax Statement showing a partial
payment; a Property Tax Receipt for 2000 taxes;
and numerous charts prepared by the Estates
showing taxes, penalties, interest and payments
for the tax years 1996 through 2000. The
Estates' evidence indicates that they directed
the taxing authorities to apply certain
payments to certain taxes. The Estates
presented the testimony of Rodney R.
Elkins.
Issues on
Appeal
In
their first issue, the Estates complain that
(1) the taxing authorities offered no
evidence that the
defendants below owned the real property in
question during the years for which the ad
valorem taxes were assessed, (2) the documents
offered into evidence did not establish a prima
facie case as to every material fact necessary
to establish the taxing authorities' cause of
action, and (3) the Estates rebutted any
presumption created by the taxing authorities'
evidence. In their second issue, the Estates
assert that the trial court's finding that they
owe the taxing authorities $3,845.72 in
delinquent taxes, interest and penalties is
unsupported by the evidence.
SUFFICIENCY OF THE EVIDENCE
After
a trial to the court, the trial court filed
findings of fact and conclusions of
law in support of its
final judgment. We review fact findings for
legal sufficiency under the same standards
that are applied in reviewing evidence
supporting a jury's verdict. Catalina
v. Blasdel, 881 S.W.2d 295, 297 (Tex.
1994). In evaluating legal sufficiency, we
view the evidence in the light most
favorable to the prevailing party. See
Transportation Ins. Co. v. Moriel, 879
S.W.2d 10, 24 (Tex. 1994). To support a
reversal, we must be persuaded that
reasonable minds could not differ on the
matter in question. Id. at 25
(citing William Powers, Jr. &
Jack Ratliff, Another Look at “No
Evidence” and “Insufficient
Evidence,” 69 Texas L. Rev. 515,
522-23 (1991)). On the other hand, we
review the trial court's decisions
involving mixed questions of law and fact
under an abuse of discretion standard.
See El Paso Natural Gas Co. v. Minco Oil
& Gas Co., 964 S.W.2d 54, 61 (Tex.
App.-Amarillo 1997), rev'd on other
grounds, 8 S.W.3d 309 (Tex. 1999).
Conclusions of law are reviewed de novo as
legal questions, and we afford no deference
to the lower court's decision. State v.
Heal, 917 S.W.2d 6, 9 (Tex. 1996);
Treadway v. Shanks, 110 S.W.3d 1, 5
(Tex. App.-Dallas 2000), aff'd, 110
S.W.3d 444 (Tex. 2003).
In
determining whether there is no evidence of
probative force to support a factual finding, we must
consider all of the evidence in the record
in the light most favorable to the party in
whose favor the verdict has been rendered,
and we must apply every reasonable
inference that could be made from the
evidence in that party's favor. Merrell
Dow Pharm., Inc. v. Havner, 953 S.W.2d
706, 711 (Tex. 1997). We will sustain a
no-evidence point when (a) there is a
complete absence of evidence of a vital
fact, (b) the court is barred by rules of
law or evidence from giving weight to the
only evidence offered to prove a vital
fact, (c) the evidence offered to prove a
vital fact is no more than a mere
scintilla, or (d) the evidence conclusively
establishes the opposite of the vital fact.
Uniroyal Goodrich Tire Co. v.
Martinez, 977 S.W.2d 328, 334 (Tex.
1998). If the evidence offered to prove a
vital fact is so weak that it does nothing
more than create a mere surmise or
suspicion of its existence, the evidence is
no more than a scintilla and constitutes no
evidence. Kindred v. Con/Chem, Inc.,
650 S.W.2d 61, 63 (Tex. 1983).
If
we find some evidence of probative value,
we test the factual sufficiency of
that evidence by
considering all of the evidence which
supports and which is contrary to the
factfinder's determination. Plas-Tex,
Inc. v. U.S. Steel Corp., 772 S.W.2d
442, 445 (Tex. 1989) (per curiam). Having
done so, we should set aside the judgment
only if the evidence that supports the
finding is so weak or is so against the
great weight and preponderance of the
evidence that it is clearly wrong and
manifestly unjust. Dow Chem. Co. v.
Francis, 46 S.W.3d 237, 241 (Tex.
2001).
PRESUMPTION AND BURDEN OF
PROOF
Tax
Code section 33.47(a) addresses
evidentiary concerns in delinquent
tax cases
and provides as follows:
(a) 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) (Vernon
2001).
Once
the taxing unit introduces the records
described above, it establishes
a prima
facie case as to every material fact
necessary to establish its cause of
action. Davis v. City of Austin,
632 S.W.2d 331, 333 (Tex. 1982). A
rebuttable presumption arises that the
taxes in question are due, delinquent
and unpaid. Flowers v. Lavaca County
Appraisal Dist., 766 S.W.2d 825,
828 (Tex. App.-Corpus Christi 1989,
writ denied). This presumption also
establishes that the defendant owned
the property on January 1 of the year
for which the tax was imposed. See
Alamo Barge Lines, Inc. v. City of
Houston, 453 S.W.2d 132, 134 (Tex.
1970); GE Capital Corp. v. City of
Corpus Christi, et al., 850 S.W.2d
596, 600 (Tex. App.-Corpus Christi
1993, writ denied).
After
the taxing authority makes its prima
facie case by introducing the
tax records
required by section 33.47(a), the
burden 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.
See Id. Unless the taxpayer
establishes independent reasons why the
taxing authority should not recover,
the taxing authority is entitled to
judgment. Hays Consolidated Ind.
School Dist. v. Valero Transmission
Co., 645 S.W.2d 542, 546 (Tex.
App.-Austin 1982, writ ref'd n.r.e.).
The
Estates argue that the exhibits offered
by the taxing authorities were not
sufficient to create the section
33.47(a) presumption of prima facie
proof necessary to support a judgment
for the taxing authorities. For
purposes of this appeal we will
presume, without deciding, that the
taxing authorities' evidence was
sufficient to establish a prima facie
case, because our holding on
appellant's second issue is dispositive
of the appeal.
THE ESTATES' REBUTTAL
OF PRIMA FACIE CASE
The
Estates maintain that if the taxing
authorities's evidence did, in
fact, create a legal presumption, that
presumption disappeared when the
Estates offered evidence to rebut
the taxing authorities's evidence.
The premise for this argument is
supported by D & M Vacuum
Service v. Zavala County Appraisal
Dist., which explains the
section 33.47(a) presumption as
follows:
The
presumption places upon the party
against whom it operates the burden
of producing evidence sufficient to
justify a finding of non-existence
of the presumed fact. . . . Under
this rule where the opponent
produces sufficient evidence to
justify a finding against the
presumed fact, the presumption
vanishes and the situation is the
same as it would have been had no
presumption been created. Further,
the evidence which gave rise to the
presumption remains to be weighed
by the trier and accorded its full
probative value, the same as if no
presumption had been
recognized.
D
& M Vacuum Service v.
Zavala County Appraisal Dist.,
812 S.W.2d 435, 438 (Tex.
App.-San
Antonio 1991, no writ)
(quoting 1 R. Ray, Tex.
Practice: Law of Evidence § 53
(1980)). Accordingly, if the
Estates offered evidence sufficient
to justify a finding against the
presumed fact, the presumption
disappeared as to that element of
the taxing authorities's cause of
action. The taxing authorities'
evidence then had to stand on its
own to prove that particular
element.
Ownership of the
Property
The
Estates offered no evidence that
they did not own the property on
January
1 of the years for which the taxes
were assessed. Consequently, the
presumption of ownership was not
rebutted, the taxing authorities
were under no obligation to offer
further evidence to prove
ownership, and that element of the
taxing authorities's cause of
action was established. Further,
non-ownership is an affirmative
defense that must be pleaded or it
is waived. See Tex. Tax Code
Ann. § 42.09(b) (Vernon 2001)
(lack of ownership is an
affirmative defense); Tex. R. Civ.
P. 94 (affirmative defenses must be
pleaded); see also Land Title
Co. of Dallas, Inc. v. F.M. Stigler
Inc., 609 S.W.2d 754, 756 (Tex.
1980) (holding that if an
affirmative defense is not pleaded,
it is waived); Barnett v.
Coppell N. Texas Ct., Ltd., 123
S.W.3d 804, 816 (Tex. App.-Dallas
2003,no pet.) (holding that if an
affirmative defense is not pleaded,
it is waived). Because the Estates
did not plead non- ownership as an
affirmative defense, they waived
error on that issue. We overrule
issue one.
Application of
Payments
We
must now determine if the Estates
offered evidence that rebutted the
taxing
authorities' statement of overdue
taxes, penalties, and interest. The
Estates offered proof that they
tendered checks to the tax office,
most with a cover letter specifying
the amount of taxes being paid to
each taxing authority. One such
letter instructed the tax office as
follows:
Attached
to this letter is my check number
200, in the amount of $591.41.
We
direct that you apply this payment
as follows:
$268.29
to 1997 Dallas County taxes;
$ 8.41
to 1997 Dallas County School
Equalization fund taxes
$ 66.74
to 1997 Dallas County Community
College District taxes; and,
$247.97
to 1997 Dallas County Hospital
District taxes.
Should
any sum remain after each of the
foregoing taxing authorities' taxes
have been paid for 1997, please apply any
remaining amount to taxes (but not
penalty, interest, or fees) owing
to Dallas County for any other tax
year.
A check
was attached to this letter and in
the memo area the maker of the
check instructed, “97 taxes -
apply per letter.”
Rodney
Elkins, the executor of the
Estates, testified at trial that
every time he sent a check, he instructed
the taxing authorities how to apply
the funds. The taxing authorities
cashed the checks instead of
refusing tender. He produced
ledgers which showed the taxes
assessed each year, payments made,
and penalty and interest accrued.
Elkins testified that he got the
yearly tax assessment figure either
from a tax statement or from the
tax office. He also stated that he
computed the penalty and interest
as prescribed by the tax code.
Elkins's ledgers showed that all
taxes, penalties, and interest had
been paid in full, and that the
Estates were entitled to a refund.
Elkins asserted that the taxing
authorities were required by law to
apply the Estates' payments as he
instructed, and as shown on his
ledgers. The Estates also offered
into evidence a 1997 Property Tax
Statement issued by the City of
Dallas that showed the taxes
computed for the City of Dallas and
the D.I.S.D. This statement was
stamped “part pay” by
the City of Dallas tax office.
After
considering Elkins' testimony, his
ledgers, and the 1997 tax
statement, we hold that the Estates
rebutted the presumption that the
taxing authorities correctly
applied the Estates'
payments.
[fn2]
THE TAXING
AUTHORITIES' EVIDENCE
Because
the Estates rebutted the
presumption that the taxing
authorities correctly applied the
Estates' payments and that the
Estates had not paid the full
amount of taxes, penalties and
interest, the burden then
shifted to the taxing
authorities to show that the
payments were, in fact, applied
correctly and how much the
Estates owed the taxing
authorities. We hold that the
evidence offered by the taxing
authorities to prove its cause
of action constitutes no more
than a mere scintilla.
The
taxing authorities did not
produce a witness or present
testimony. Instead, they
presented various written
documents as exhibits to
support their position.
Plaintiff's Exhibit 1 is
entitled “Property Tax
Notice” and is dated
November 6, 2002. It purports
to show the tax due,
penalty/interest, and fees for
each of the taxing entities for
the years 1997 through 2000.
For example, it shows that the
following taxes are due to the
taxing authorities for the year
1997: Hospital District,
$37.09; Dallas Independent
School District, $731.68;
Dallas Community College
District, $9.98; School
Equalization Fund, $1.26;
Dallas County, $40.11; and the
City of Dallas, $488.86. The
grand total for all the years
is $3,845.72, the amount of the
judgment against the Estates.
If we compare the City of
Dallas amount with the 1997
property tax statement offered
into evidence by the Estates,
we know that Dallas actually
assessed a tax of $869.76 for
the year 1997, an amount
significantly different from
the $488.86 shown in the
property tax notice.
Plaintiff's
Exhibits 4 through 7 contain
documents entitled
“Transaction History.”
There is one for each year that
is in dispute. The transaction
history for 1997 shows the
following information:
TID
Year
Receipt
Tran
Base
Levy
Pen/Int Attorney
Total
Date
Type
DA
1997
1200349240
TPPA
-96.40
-37.60
-20.10 -154.10 000428
CK
DA
1997
1990453968
TPPA
-343.04 -82.33 -63.80
-489.17 990131 CK
DA
1997
1990453968
TPVA
343.04
82.33 63.80 489.17
990206
DA
1997
1990609384
TPPA
-180.88 -52.45 -35.00 -268.33
990630 CK
DA
1997
1990636218
TPPA
-51.19 -15.87 -10.06 -77.12
990831 CK
DA
1997
2000281796
TPPA
-52.43 -29.88 -12.35
-94.66 011024 CK
DC
1997
14925792
TPPA
-182.27 -51.03 -34.99
-268.29
990531 CK
TID
Year
Receipt
Tran
Base
Levy
Pen/Int Attorney
Total
Date
Type
DC
1997
14925792
TPPA
-182.27
-51.03
-34.99 -268.29 990531
CK
DC
1997
2000249105
TPPA
-41.60 -23.71 -9.80
-75.11 011004 CK
DC
1997
2000281796
TPPA
-4.31
-2.45 -1.01 -7.77
011024 CK
DCS
1997
14925792
TPPA
-5.70 -1.60 -1.10 -8.40 990531
CK
DCS
1997
2000249105
TPPA
-1.31 -.74 -.31 -2.36 011004
CK
DCS
1997
2000281796
TPPA
-.14
-.08 -.03 -.25 011024 CK
DO
1997
14925792
TPPA
-45.34 -12.69 -8.71
-66.74
990531 CK
There are two
additional pages reflecting
similar data for the year 1997.
Adding the total amounts applied
to the base levy,
penalties/interest, and
attorney fees, it appears as
though the Estates paid either
$3,329.74 or
$4,273.38
[fn3 for the
year 1997. The taxing
authorities failed to offer any
testimony or other evidence to
explain how to interpret the
transactions histories;
consequently, the transaction
histories constitute no
evidence of how the taxing
authorities applied the
Estates' payments.
The
taxing authorities also offered
into evidence a “Tax Pay
Detail Inquiry”
for each of
the disputed years. The 1997
document reflects that the
taxing authorities applied
$3,623.95 to the taxes assessed
against the Estates for the
year 1997. Similar information
can be garnered from the
documents for each of the
remaining tax years in dispute.
These documents do not reflect
the amounts applied to each
individual taxing authority.
Additionally, the $3,623.95
documented as being applied to
the Estates's 1997 taxes is
different from the amount shown
in the 1997 transaction
history, $3,329.74 or
$4,273.38.
[fn4]
Discussion
The
question before us is whether
the above-cited evidence is
legally sufficient to support the
trial court's finding that the
Estates owe the taxing
authorities $3,845.72 in past
due taxes, penalties, interest
and fees. As illustrated above,
it is not possible to
understand the documentation
offered by the taxing
authorities to prove its case.
The taxing authorities did not
call a witness to testify that
the calculations were correct
and made in accordance with the
law. Neither was there
testimony as to how the
documents related to and
supported each other, the
meaning of the codes and
abbreviations on each of the
documents, or how the
penalties, interest and fees
were calculated. Most
importantly, the taxing
authorities did not offer any
testimony about how the
Estates' payments were
applied.
When
a taxing authority's prima
facie case is rebutted, the
documentation originally
offered into evidence does not
disappear. It must be
considered in a legal
sufficiency analysis. But it
will not be accorded greater
weight simply because it
previously created the
statutory presumption. See
Alamo Barge Lines, 453
S.W.2d at 133-34 (holding that
after taxpayer rebutted taxing
authority's prima facie case
that taxpayer owned tugboats,
taxing authority failed to
sustain its burden of
introducing evidence to refute
taxpayer's defensive evidence
of nonownership); GE v. City
of Corpus Christi, 850
S.W.2d 596, 601 (Tex.
App.-Corpus Christi 1993, writ
denied) (holding that when
prima facie proof of secured
party's possession of property
rebutted, tax roll listing the
units in question was no
evidence of possession). In
this case, once the presumption
that the taxing authorities
correctly applied the Estates'
payments disappeared, there is
no evidence of how the taxing
authorities applied the
Estates' payments-whether as
directed by the taxpayer, or
whether in some other manner.
Consequently, there is no
evidence that the amount the
taxing authorities contended
were owed by the Estates is
correct.
After
reviewing the evidence that
supports the trial court's
determination, we hold that the
evidence offered to prove how
the calculations were made is
no more than a mere
scintilla-that it is so weak
that it does nothing more than
create a mere surmise or
suspicion of its existence-and
is thus legally insufficient to
support the judgment. We
sustain appellant's issue as to
legal sufficiency.
CONCLUSION
Although the Estates
maintain that they actually
paid more taxes than
were due, they did not
file a counterclaim against
the taxing authorities
seeking a refund.
Accordingly, we reverse and
render judgment for the
Estates. Because we have
disposed of this appeal on
the basis of legal
insufficiency, it is
unnecessary that we address
the Estates' other issues.
-----------------------------
ELIZABETH
LANG-MIERS
JUSTICE
Footnote
1
See LGM Enterprises,
L.G. Mosley, and Jynnifer
Mosley v. County
of Dallas, et
al., No.
05-01-00244-CV, 2002 WL
436658 (Tex. App.-Dallas
March 21, 2002, pet.
denied) (not designated for
publication).
Footnote
2
The Estates urge us to
recognize the concept of
“accord and
satisfaction” in
the context of tax
cases, thus requiring the
taxing authorities to apply
funds as directed simply
because they cash or
deposit a check that gives
instructions on how to
apply the funds. The
Estates cite City of
Houston v. First City,
827 S.W.2d 462
(Tex.App.-Houston [1st
Dist.] 1992, writ denied)
in support of their
position. We decline to
adopt this holding,
however, because the
statute clearly describes
the circumstances under
which a taxing authority is
required to follow the
instructions of a taxpayer
as to the precise
distribution of funds.
These
“circumstances”
do not include the simple
act of depositing or
cashing a check. In tax
cases, the tax code
abrogates the common law
concept of “accord
and
satisfaction.”
Footnote
3
The amount depends on
whether or not we include
those totals that
seemingly duplicate a
previously reported
transaction.
Footnote
4
Again, the figure depends
on whether or not we
include those amounts
that seemingly duplicate
a previously reported
transaction.