Bilinsco Inc. and Linda Boyd v. Harris County Appraisal Review Board and Harris County Appraisal District

Opinion issued July 22, 2010

In The

Court of Appeals

For The

First District of Texas

NO. 01-09-00877-CV

BILINSCO INC. AND LINDA BOYD, Appellants

V.

HARRIS COUNTY APPRAISAL DISTRICT AND HARRIS COUNTY

APPRAISAL REVIEW BOARD, Appellees

On Appeal from the 113th District Court

Harris County, Texas

Trial Court Cause No. 2008-51053

O P I N I O N

This

is a property tax appraisal dispute. Bilinsco,

Inc., and Linda Boyd (collectively, “Bilinsco”) sued the Harris County Appraisal

District (“the district”) and the Harris County Appraisal Review Board (“the board”)

to challenge the board’s valuation of Bilinsco’s property for 2008. Bilinsco served citation on the board, but

did not serve the district until eleven months after filing its petition for review. The trial court granted summary judgment in

favor of the district and the board based on Bilinsco’s failure to diligently

serve the district, a necessary party to the suit. On appeal, Bilinsco contends that (1) a fact

issue exists whether it had a reasonable excuse for failing to timely serve the

district; and (2) the applicable limitations period should be equitably tolled. We hold that the trial court properly granted

summary judgment and therefore affirm.

Background

Bilinsco challenged the district’s

2008 valuation of its property before the board. After the board upheld the district’s

valuation, Bilinsco mailed copies of its notice of appeal and anticipated

petition to the district and the board. Bilinsco

filed suit against the district and the board within forty-five days of

receiving notice of the board’s order. [1] At the time of filing, Bilinsco requested that

the clerk issue citation and arranged to serve both defendants; however, only

the board was served with citation. The

board answered, responded to Bilinsco’s requests for disclosure, and served its

own requests for disclosure, interrogatories, and requests for production.

Ten months after Bilinsco filed suit,

the district and the board filed a plea to the jurisdiction, contending that

the trial court never acquired jurisdiction over the petition because Bilinsco

never served the district, a necessary party to the appeal. The trial court denied this plea nearly a

month later, and Bilinsco requested that the clerk issue and serve citation on

the district. The district answered and

noted that it had not been timely served.

Both defendants then moved for traditional summary judgment, contending

that because Bilinsco did not diligently serve the district, the trial court

did not acquire jurisdiction over the case.

In response, Bilinsco contended that

it had raised a valid excuse for its failure to timely serve the district: these parties had often been involved in

litigation over valuation assessments, and in each case, the same attorneys

represented both the district and the board and would file an answer on behalf

of both defendants. In this case, Bilinsco

assumed that, when the board answered, it answered on behalf of the district as

well, and thus the district had generally appeared and waived service. As summary judgment evidence, William Boyd,

co-owner of the property, president of Bilinsco, and attorney of record, described

the usual procedure between the parties in valuation disputes. Boyd also averred that, in the board’s

response to Bilinsco’s request for disclosure, the style of the case referred

to both the district and the board as “Defendant.” The board identified no potential parties to

the case, and the board’s attorney signed the disclosures as “Attorney for Defendant.” Bilinsco contended that, through this

conduct, the district and the board misled it into believing that the district had

been served and had appeared in the case.

The trial court granted summary judgment.

Discussion

Standard of Review

We

review de novo the trial court’s grant of a motion for summary judgment. Mann

Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848

(Tex. 2009). The party moving for

traditional summary judgment bears the burden of showing that no genuine issue

of material fact exists and the party is entitled to judgment as a matter of

law. Tex.

R. Civ. P. 166a(c). To determine

if the non-movant raises a fact issue, we review the evidence in the light most

favorable to the non-movant, crediting favorable evidence if reasonable jurors

could do so, and disregarding contrary evidence unless reasonable jurors could

not. See

Fielding , 289 S.W.3d at 848 (citing City

of Keller v. Wilson , 168 S.W.3d 802, 827 (Tex. 2005)).

Jurisdiction

On

appeal, the district first contends that Bilinsco’s failure to diligently serve

it with process “precluded the trial court’s jurisdiction” over the

proceeding. We agree with the San

Antonio and Austin Courts of Appeals that failure to serve the appraisal

district within the statutory time period for filing a petition for review is

not a jurisdictional bar to the appeal. See Brooks v. Burnet Cent. Appraisal Dist. ,

306 S.W.3d 419 , 421–22 (Tex. App.—Austin 2010, no pet.); Bexar County Appraisal Dist. v. Walton Castroville SHRL Investors, III,

LP , Nos. 04-05-00046-CV, 04-05-00047-CV, 2005 WL 1475388 , at *2 (Tex.

App.—San Antonio June 22, 2005, no pet.) (mem. op.); see also Tex. Educ. Agency v. Donna Indep. Sch. Dist. , 221 S.W.3d

791, 796 (Tex. App.—Corpus Christi 2007, no pet.) (“[Section 21.307 of the

Texas Education Code] does not state that service must be obtained within a

specific time period. In fact, it does

not mention service at all. In the

absence of such direction from the legislature, this Court will not impose

service of citation within a very short limitations period as a jurisdictional

prerequisite to suit.”). We instead

treat Bilinsco’s failure to timely serve the district as an affirmative defense

that may be waived. See Proulx v. Wells , 235 S.W.3d 213, 216 (Tex. 2007) (per curiam)

(“[O]nce a defendant has affirmatively pled the limitations defense and shown

that service was effected after limitations expired, the burden shifts to the

plaintiff to explain the delay.”).

Reasonable Excuse for Untimely Service

Bilinsco

first contends that the trial court erred in granting summary judgment because

it presented a reasonable excuse for its failure to timely serve the district—the

conduct of the district and the board’s attorneys misled Bilinsco into

believing that the district had appeared in the case and waived service. For a district court to have jurisdiction

over an appeal of an appraisal review board’s order determining protest, the

plaintiff must file a petition for review against the county appraisal district

within forty-five days of receiving notice of the order. See

Tex. Tax Code Ann.

§ 42.21(a) (Vernon 2008); see also

id. § 42.21(b) (“Any other petition for review under this chapter must

be brought against the appraisal district.”).

A timely filed suit does not interrupt the applicable statute of

limitations unless the plaintiff “exercises due diligence in the issuance and

service of citation.” Proulx , 235 S.W.3d at 215 (citing Murray v. San Jacinto Agency, Inc. , 800

S.W.2d 826, 830 (Tex. 1990)); Ashley v.

Hawkins , 293 S.W.3d 175, 179 (Tex. 2009) (“[S]ervice outside the

limitations period may still be valid if the plaintiff exercises diligence in

procuring service on the defendant.”).

If the plaintiff diligently effects service after limitations expires,

the date of service relates back to the date of filing. Proulx ,

235 S.W.3d at 215 .

Once

the defendant affirmatively pleads limitations and demonstrates that it was not

served until after limitations expired, the summary judgment burden shifts to

the plaintiff to explain the delay. Id. at 216 . The plaintiff must present evidence

demonstrating the efforts made to serve the defendant and explaining “every

lapse in effort or period of delay.” Id.

In determining diligence, the court assesses whether the plaintiff (1)

acted as an ordinarily prudent person would act under the same or similar

circumstances, and (2) was diligent up until service upon the defendant. Id.

The

clerk of the court has the duty, upon request by the plaintiff, to issue and

deliver the citation as directed. Tex. R. Civ. P. 99(a). A party “may ordinarily rely on the clerk to

perform his duty within a reasonable time.”

Boyattia v. Hinojosa , 18

S.W.3d 729 , 733–34 (Tex. App.—Dallas 2000, pet. denied). When, however, a party learns, or by the

exercise of diligence should have learned, that the clerk failed to issue

citation, “it is incumbent upon the party to ensure that the job is done.” Id.

at 734 . In Boyattia , the plaintiff requested citation, however, after three

months, the clerk still had not issued the citation. Id. Boyattia presented no evidence that she

attempted to ensure delivery and she “wholly ignore[d] her duty to have the

citation served on the defendant during a lengthy period of time the citation

remain[ed] with the clerk.” Id.

As a result, Boyattia lacked diligence in procuring service, and the

trial court correctly granted summary judgment.

Id. Thus, we examine the record for any effort

Bilinsco made to check on service. There

is none.

Bilinsco argues, however, that

confusion about whether the district already had appeared excuses any

delay. Our case is similar to one that the

Fort Worth Court of Appeals resolved, in which the plaintiff sued two county

entities, Tarrant County and the Tarrant County Sheriff’s Department,

represented by the same district attorney, but served only the sheriff’s

department. See Tarrant County v. Vandigriff , 71 S.W.3d 921, 923 (Tex.

App.—Fort Worth 2002, pet. denied). The

Fort Worth Court held that, despite the confusion that resulted from the two

parties and their representation by a single counsel, Vandigriff offered no

reasonable excuse for the delay in service.

Id. at 926 . The court held that Vandigriff “should have

discovered through the exercise of diligence that [Tarrant County] was not

properly served.” Id. Importantly, a co-defendant

who has appeared does not have a duty to “bring to [the plaintiff’s] attention

the fact that she had failed to procure service on [the other defendant].” Id. ;

see also Tex. Tax. Code Ann. § 42.21(d) (stating that property

owner may serve appraisal district by serving chief appraiser or other officer

or employee of district, while owner may serve appraisal review board by

serving chairman of board).

Here,

Bilinsco did not follow up on service upon the district until after the trial

court denied the board’s plea to the jurisdiction in July 2009, almost eleven

months after Bilinsco filed its petition.

Bilinsco ultimately bore the obligation to ensure that citation is

delivered to all defendants. See Vandigriff , 71 S.W.3d at 926 ; Boyattia , 18 S.W.3d at 734 .

Bilinsco

explains that it, the board, and the district have previously been involved in

valuation disputes, and each time it appeals a board order, it forwards the

notice of appeal and a copy of the petition to both defendants. The same law firm represents both the board

and the district and the firm “always file[s] Answers for both Defendants, in

every case.” Bilinsco’s attorney further

averred that:

In this case, I requested on behalf of Plaintiffs,

Request for Disclosures to both Defendants.

I received a Response assuming that it was [a] Response for both

Defendants. Harris County Appraisal

Review Board and Harris County Appraisal District are identified as

‘Defendant.’ The title to the document

was ‘Defendant’s Responses.’ The

Responses were signed by Olson & Olson as attorneys for ‘Defendant.’

The district points to the board’s

answer and responses to Bilinsco’s disclosure requests, which indicate that

only the board had appeared, and argues reliance on these documents is not

reasonable, particularly since the response was on behalf of a single

“defendant”: the style of the board’s

response to Bilinsco’s Request for Disclosure states “Defendant,” instead of

“Defendants.” The board began its

response by stating:

Pursuant to Rule 194.2 of the Texas Rules of Civil

Procedure, Defendant provides the following information in response to

Plaintiff’s Request for Disclosure:

(a)

the correct names

of the parties to the lawsuit;

RESPONSE: The

style in Plaintiff’s petition lists the Plaintiff as Bilinsco, Inc., and Linda

Boyd. The correct name of the Defendant

is Harris County Appraisal Review Board.

Furthermore, the board entitled its

answer “Defendant’s Original Answer” and stated “Now Comes the Harris County

Appraisal Review Board, Defendant in the above-numbered and entitled

cause.” The board’s attorneys signed the

answer as “Attorneys for Defendant” and also requested Rule 194 disclosures

from Bilinsco in a separate document, signing that document as “Attorneys for

Defendant Harris County Appraisal Review Board.”

Bilinsco

sued on August 25, 2008 and served the board in late September. The board answered on October 22, but it did

not respond to Bilinsco’s Request for Disclosure until April 9, 2009. Even if the board’s disclosure response could

reasonably lead Bilinsco to believe that opposing counsel was responding on

behalf of both defendants, and thus both defendants had appeared, Bilinsco did

not receive these responses until more than five months after only the board

answered and more than seven months after Bilinsco filed suit. Bilinsco offers no fact issue as to whether a

reasonable excuse exists for its failure to serve the district during the seven

months prior to receiving the board’s discovery responses. We therefore hold that the summary judgment

record establishes Bilinsco’s lack of diligence in procuring service and the

trial court correctly granted summary judgment.

See Boyattia , 18 S.W.3d at

734 ; Vandigriff , 71 S.W.3d at 926 .

Equitable Tolling

Finally,

Bilinsco contends that the limitations period should be equitably tolled. Equitable tolling applies “where a claimant

actively pursued his judicial remedies but filed a defective pleading during

the statutory period, or where a complainant was induced or tricked by his

adversary’s misconduct into allowing filing deadlines to pass.” Bailey

v. Gardner , 154 S.W.3d 917, 920 (Tex. App.—Dallas 2005, no pet.). Courts have also applied equitable tolling

when the plaintiff sues the wrong defendant, does not name the proper defendant

until after limitations expires, and a “special relationship” exists between

the defendants, such that the added defendant “was aware of the facts, not

misled, and not disadvantaged in preparing a defense.” Walls

v. Travis County , 958 S.W.2d 944, 946 (Tex. App.—Austin 1998, pet. denied)

(citing Enserch Corp. v. Parker , 794

S.W.2d 2, 6 (Tex. 1990)). In Walls , the plaintiff sued Travis County,

but citation was served on the Travis County Sheriff’s Office, instead of the

county. Id. at 945 . The assistant

county attorney answered on behalf of the sheriff, but later signed a Rule 11

agreement and all discovery responses as “Attorney for Defendant Travis County”

and began all discovery responses with “Comes Now Defendant Travis

County.” Id. In this situation, the

Austin Court of Appeals held that equitable tolling applied because Travis

County’s actions showed that it was not misled, and it had notice of and a

reasonable opportunity to defend the claim.

Id. at 947–48.

In

distinguishing Vandigriff from Walls , the Fort Worth Court of Appeals

observed that: (1) Vandigriff did

not sue the wrong defendant, but instead sued and requested citation on both

the sheriff’s office and the county; (2) the district attorney signed all

discovery documents from the sheriff’s office as “Attorney for Defendant TCSD”

and made no mention of Tarrant County; and (3) the sheriff’s office “indirectly

notified” Vandigriff that it failed to properly serve Tarrant County in its

original answer and response to Vandigriff’s requests for disclosure, in which

it alleged a defect of parties. Vandigriff , 71 S.W.3d at 927 .

We

follow Vandigriff , because the

court’s reasoning applies here with equal force: Bilinsco did not sue the wrong defendant, but

instead sued and requested service of citation on both the district and the board

within section 42.21(a)’s forty-five-day window. Although only the district is a necessary

party to petitions to review an order determining protest, the plaintiff may

also sue the board “in addition to any other required party, if

appropriate.” Tex. Tax Code Ann. § 42.21(b). Thus, Bilinsco sued two proper defendants

within limitations, but only one of those defendants, the board, was timely

served. Similar to Vandigriff , all of the documents filed by the board in this case

indicated that the board was the party filing the documents, and the documents did

not indicate that they were filed on behalf of the district. See Vandigriff ,

71 S.W.3d at 927 . In this situation, in

which Bilinsco sued two proper defendants within the limitations period, we

decline to apply the equitable tolling exception to excuse Bilinsco’s failure

to timely serve the district.

Conclusion

We hold that the summary judgment

record establishes Bilinsco’s lack of diligence in serving the district. Further, because Bilinsco sued two proper

defendants within the limitations period, we hold that equitable tolling does

not apply. We therefore affirm the

judgment of the trial court.

Jane

Bland

Justice

Panel consists of Chief Justice

Radack and Justices Bland and Sharp.

[1] In

2009, the Texas Legislature amended section 42.21(a) of the Tax Code, which

governs the time period for appealing an adverse Board order to the district court,

to extend the time to file a petition for review from forty-five to sixty

days. See Tex. Tax Code Ann.

§ 42.21(a) (Vernon Supp. 2009); Act of June 19, 2009, 81st Leg., R.S., ch.

905, § 1, 2009 Tex. Gen. Laws 2435 , 2435.

Because this appeal to the district court was pending before the

Legislature amended section 42.21(a), we apply the previous version of the

statute.