Attorneys for the Parker County Appraisal District and the cities of Aledo and Willow Park are asking the Supreme Court of Texas to review a recent ruling by the Texas 2nd Court of Appeals on a local property tax issue.
The lawsuit centers around city taxes retroactively billed to residents of three Parker County subdivisions after there was a failure to add the properties to the respective city tax rolls.
In October 2008, the appraisal district sent bills to the property owners stating that the properties had been “omitted” from the appraisal rolls for the past five years and stating that the total for the previous years was due upon receipt.
The lawsuit was filed in response to a collection suit filed in 2010 by the city of Willow Park against the owners of one of the affected properties, Todd Brennan and Valerie Smith, residents of Willow Park Village.
The residents allege the city taxes for those properties were assessed in violation of the state tax code, something attorneys for the appraisal district and cities dispute.
The cities had no authority to tax the properties during those years because they didn’t notify the appraisal district that their boundaries had expanded to include the subdivisions and the cities failed to challenge the district’s records each year, the homeowners argue.
They are also alleging Hammonds improperly sent the bills two months before the appraisal review board added the records to the appraisal roll for the district.
A request that the case be dismissed because the court had no jurisdiction in the issue was granted by 43rd District Judge Trey Loftin in July 2011.
Attorneys for the cities and appraisal district have argued that, based on the tax code, the homeowners should have filed a protest with the Parker County Appraisal Review Board in a timely fashion before pursuing the case in district court.
In June, a three-judge panel for the Texas Second Court of Appeals in Fort Worth overruled that decision and found that the homeowners’ case could be heard in Parker County district court.
That decision is what the cities and appraisal district are asking the Supreme Court of Texas to consider.
“We believe the court of appeals ruled differently that other courts of appeals across the state have ruled on the same or similar facts,” said Attorney Judith Hargrove, who is representing the appraisal district, adding that they believe the 2nd Court of Appeals recent decision was contrary to a decision issued by the Supreme Court of Texas, as well.
“We believe it’s a very important issue for appraisal districts statewide,” Hargrove said.
Attorneys for the appraisal district argued that the district court had no jurisdiction in the case because the property owners did not exhaust their appeals before bringing their case to court and Loftin granted their plea to the jurisdiction.
“They should have filed protest,” Hargrove said. “They didn’t.”
Hargrove said the property owners could have had the remedy they were seeking but didn’t protest in time through the correct legal channels.
If the court of appeals decision stands, it could erode the stability of local tax rolls, she said.
Letting the decision stand could apply to other decisions made by chief appraisers, allowing those who disagree with decisions made by chief appraisers to skip the protest required by the tax code and take it immediately to court, changing how the property tax system works, according to Hargrove.
Joshua Carden, the attorney representing the property owners, said the property owners didn’t have anything to take to the appraisal review board.
Adding back taxes through an inappropriate method falls outside the framework set up by the tax code, according to Carden.
Imagine waking up to find a $4,000 tax bill, due immediately according to the cities, and then finding out they were never allowed to do that, Carden said.
The houses were on the district’s rolls being taxed by the county, hospital and school districts, but the cities did not go through the process needed to add them to their tax rolls, Carden said.
Not counting penalties or interest, the total amount of taxes at stake totals to more than $231,000; some property owners have bills as low as $700, others have bills as high as $12,500, according to Carden.
Some have paid the bills, others have not.
They are asking for refunds with interest for those who have paid, according to Carden.
“I’m fairly confident that the court of appeals’ well-reasoned decision will stand,” Carden said.
Fredrick Quast, an attorney representing the city of Aledo, said they filed a petition for review with the Texas Supreme Court Monday afternoon.
They have several issues, but the main one for the city has to do with whether the city should be a party to the lawsuit.
The issue is whether the chief appraiser complied with the law, and the City of Aledo believes the city is immune to being sued under those circumstances, Quast said.
The city also believes the court of appeals misinterpreted the tax code, Quist said.
The court of appeals’ reading of the tax code calls into question its constitutionality, according to Quist.
The Supreme Court of Texas only grants petitions to hear cases about 12 percent of the time, according to Quast.
If the court of appeals decision does stand, the case will return to district court in Parker County.
And if that happens, Carden said the next battle will be over whether the suit becomes a class action suit and includes the remaining affected property owners.