Heritage Operating, L.P. v. Barber Hill Indep. Sch. Dist., No. 14-14-00187-CV, 2015 Tex. App. LEXIS 6785 (Tex. App.—Houston [14th Dist.] July 2, 2015, no pet.)
Barber Hill Independent School District and other taxing units (collectively referred to as “Taxing Units”) sued Heritage Operating, L.P. (“Heritage”) for delinquent taxes owed on personal property for the 2004 tax year. While Heritage had paid taxes for preceding and subsequent tax years, it did not pay taxes for tax year 2004 because it claimed it did not receive the notice of appraisal. The Taxing Units filed a motion for summary judgment, attaching certified copies of the delinquent tax rolls and establishing a prima facie case. Heritage responded that it did not receive notice of appraised value as required by Texas Property Tax Code § 25.19 and argued that such failure to receive notice rebutted the Taxing Units’ prima facie case. The Taxing Units claimed that Heritage could have filed a protest under Tax Code §§ 41.44 (Notice of Protest) and 41.411 (Protest of Failure to Give Notice) but their failure to do so precluded them from raising the defense for the first time on summary judgment. The trial court granted the Taxing Units’ motion for summary judgment, and Heritage appealed.
The court of appeals acknowledged that Heritage was entitled to due process of law because the collection of taxes constitutes deprivation of property. However, the court rejected Heritage’s argument that it was not afforded due process. The court held that the administrative procedures for challenging valuation and notice are exclusive, and they must be exhausted before judicial review is sought or before the issue is raised as a defense in a delinquent tax suit. The court noted that it was undisputed that Heritage received a tax bill for the 2004 taxes and thus had a period of time within which to exhaust its administrative remedies.