Opinion

Opinion issued February 10, 2011

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-09-00996-CV

———————————

Joseph W. & Michelle G. Kelly, as the property owners and the

property owners ,

Appellants

V.

Harris

County Appraisal District and the appraisal review board of harris county

appraisal district ,

Appellees

On Appeal from the 127th Judicial District Court

Harris County, Texas

Trial Court Case No. 2006-58443

MEMORANDUM OPINION

In

this ad valorem property tax case, appellants, Joseph W. and Michelle G. Kelly,

as real property owners, challenge the trial court’s rendition of summary

judgment in favor of appellees, the Harris County Appraisal District (“HCAD”)

and the Appraisal Review Board of Harris County (the “ARB”) (collectively, the “taxing

authorities”), on the Kellys’ claims that the subject real property was

unequally and excessively appraised. In their

sole issue, the Kellys contend that the trial court erred in granting summary

judgment in favor of the taxing authorities on the ground that they had agreed

upon the appraisal value of the subject property at an ARB hearing. [1]

We

affirm.

Background

The

Kellys own a 5,257 square foot single-family residence in Harris County,

Texas. For tax year 2006, HCAD appraised

the property as having a market value of $1,538,766 and assessed ad valorem

taxes on the property based on that value.

The Kellys filed a protest of that valuation and designated an agent to

act as their representative at an administrative hearing, which was held before

a three-member panel of the ARB. At the

beginning of the hearing, the Kellys’ agent, Thomas Orsak, signed and submitted

a written statement to the ARB expressing his opinion that the property had a

value of $1,365,210. Orsak and Shelly

Summers, who represented HCAD’s chief appraiser, attended the hearing at which the

representatives of the parties offered the following sworn testimony:

[Summers]: Account

0914350000004. My name is Shelly

Summers, and I am under oath.

[Owner’s Agent]: I’m

Thomas Orsak, and I am under oath. And

it hasn’t been sold in the last year.

[Board Member]: And your

opinion of value?

[Owner’s Agent]: My

opinion of value is 1,365,210.

. . . .

[Owner’s Agent]: My

basis in value is the ISD ratio which actually takes the subject property sale

at 1,379,000 times 0.99 for 1,365,210. . . . So, 1,379,000 times the 0.99 is my opinion of

value at 1,365,210 since there are no other comparable sales since then.

[Board Member]: Any

comments or questions from the panel? No?

[Summers]: Our

comparable property analysis is a random sample of nine properties in the area

and then properly adjudged for the differences between two to get a median

market value. In this case, the median

market value is 1,628,900. We noticed

the property at 1,538,766. Therefore,

there is no unequal within the area.

Looking at the ISD, this does show an unequal with the indicated market

value which would be the sales price since this total remodel back in 2003 of

1,379,000. So, therefore, there is some

unequal within the ISD. Therefore, the

district’s recommendation is 1,365,210.

[Board Member]: Okay.

Any comments or questions from the panel? If not, we’re going to go to Mr.

Orsak. You don’t have anything else, Mr. Orsak? Okay, we’ll close testimony.

Concur?

[Board Member]: Concur.

[Board Member]: Panel

has reached a decision regarding the account ending in 0004 for the tax year

2006 based on testimony that was presented to the panel to determine that the

property was unequally appraised and set a value at $1,365,210.

After the hearing, the ARB subsequently ordered HCAD

to correct the appraisal role accordingly, and the ARB sent to the Kellys a

copy of its order, which informed the Kellys as follows:

YOU HAVE THE RIGHT TO APPEAL

THIS ORDER TO THE DISTRICT COURT. IF YOU

WANT TO APPEAL, YOU SHOULD CONSULT AN ATTORNEY IMMEDIATELY. YOU MUST FILE A PETITION WITH THE DISTRICT

COURT WITHIN 45 DAYS OF THE DATE YOU RECEIVE THIS NOTICE.

In September

2006, the Kellys filed suit against the taxing authorities, alleging that the

property had been unequally and excessively appraised. The taxing authorities answered with a

general denial and later moved for summary judgment “based on the agreement of

value between the parties” and the enforceability of the agreement. [2] In response, the Kellys denied the existence

of any agreement between its agent and the chief appraiser of HCAD as to the

value of the property.

Standard of Review

Summary

judgment is proper only when the evidence shows that there are no issues of

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

law. Tex.

R. Civ. P. 166a(c). We may affirm

a summary judgment only when the record shows that a movant has disproved at

least one element of each of the plaintiff’s claims or has established all of

the elements of an affirmative defense as to each claim. Id .;

Cathey v. Booth , 900 S.W.2d 339, 341 (Tex. 1995). The movant has the burden of showing that

there is no genuine issue of material fact and that it is entitled to judgment

as a matter of law. Id. In deciding whether

there is a disputed material fact issue precluding summary judgment, proof

favorable to the non-movant is taken as true, and the court must indulge every

reasonable inference and resolve any doubts in favor of the non-movant. Nixon

v. Mr. Prop. Mgmt. Co , 690 S.W.2d 546 , 548 – 49 (Tex. 1985).

Analysis

In their sole issue, the Kellys

argue that the trial court erred in granting summary judgment in favor of the

taxing authorities because (1) no agreement as to the appraised value of the

property existed between the Kellys and the chief appraiser, (2) the Kellys

have an “absolute” statutory right to seek a judicial appeal from any order

determining the appraised value of the property made by the ARB, and (3) the

denial of an appeal violates their due process rights.

In their summary-judgment motion,

the taxing authorities asserted that the Kellys’ claims, as a matter of law, are

barred because they, through their designated agent, had reached a final and enforceable

agreement with HCAD as to the value of the subject property. They also asserted that the Tax Code precludes

the Kellys from contesting the appraisal in the trial court. See Tex. Tax Code Ann . § 1.111(e) (Vernon

2008).

In pertinent part, section 1.111(e)

provides as follows:

(e)

An agreement between a property owner

or the owner’s agent and the chief appraiser is final if the agreement relates to a matter:

(1)

which may be protested to the appraisal review board or on which a

protest has been filed but not determined by the board

Id. (emphasis

added).

Generally, a property owner is

entitled to appeal an order of the appraisal review board determining a protest

by the property owner. Tex. Tax Code Ann. § 42.01(1)(A)

(Vernon 2008). However, section 1.111(e)

agreements are “final and not subject to protest by the property owner or

subject to a property owner’s statutory suit for judicial review under chapter

42.” MHCB (USA) Leasing and Finance Corp. v. Galveston

Cent. Appraisal Dist. , 249

S.W.3d 68, 84 (Tex. App.—Houston [1st Dist.] 2007, pet. denied); see Tex. Tax Code Ann. §§ 41.01(b),

42.01(1)(A) (Vernon 2001); Sondock v. Harris County Appraisal Dist. , 231 S.W.3d 65, 69

(Tex. App.—Houston [14th Dist.] 2007, no pet.) ;

BPAC Tex., L.P. v. Harris County Appraisal Dist. , No. 01-03-01238-CV,

2004 WL 2422033 , at *3 (Tex. App.—Houston [1st Dist.] October 28, 2004, no

pet.) (mem. op.).

The

Kellys argue that their appeal is not precluded by section 1.111(e) because “no

agreement with the chief appraiser was made as required by section 1.111(e) of

the code.” They emphasize that the

“order nowhere states or confirms that any agreement was made regarding the

value between the property owner’s agent and the chief appraiser (or the

appraisal district for that matter).”

They assert that the taxing authorities “offered no summary judgment

evidence whatsoever supporting any contention that the chief appraiser, as

opposed to the appraisal district, was a party to any agreement.”

The

Kellys note that this Court and the Court of Appeals for the Fourteenth

District have issued several opinions [3] that at “first blush” seem

to be controlling, but assert that these cases “are all easily

distinguishable.” They argue that because

the cases “hinge[d] upon an agreement” between the agent of the property owner agent

and HCAD the “issue” of whether the purported agreements were in fact made with

the chief appraiser “was never raised or discussed,” and the agreements were

not shown to be with the chief appraiser as required by statute,” “each of

those decisions was incorrect and contrary to law.”

After

the parties filed their briefs with this court, the Fourteenth Court of Appeals

issued an opinion addressing the issue of whether an agreement with an HCAD

representative is an agreement with the chief appraiser under section 1.111(e).

See

KM TS Spring Cypress L.L.C. v. Harris

County Appraisal Dist. , No. 14-09-00978-CV, 2010 WL 3921126 , at *1 (Tex.

App.—Houston [14th Dist.] Oct. 7, 2010, no. pet. h.) (mem. op.). In KM

TS , the property owners argued that their appeal to the trial court was not

precluded by their appraisal agreement because they had no agreement with the

chief appraiser and section 1.111(e) requires such an agreement to be between

the property owner or the owner’s agent and the chief appraiser. Id . The court rejected the property owners’

argument and held that an agreement between a property owner and an HCAD

representative is an agreement under section 1.111(e) that precludes

appeal. KM TS , 2010 WL 3921126 , at *2.

It noted that the Tax Code allows a chief appraiser to delegate

authority to his employees. See Tex.

Tax Code Ann . § 6.05(e) (Vernon 2008), § 41.45(c) (Vernon Supp. 2010).

Here, similarly, the Kellys’ agent

and a representative of HCAD agreed to the value of the Kellys’ property at

their protest hearing. The Tax Code does

state, “The chief appraiser shall appear at each protest hearing before the

appraisal review board to represent the appraisal office.” Tex.

Tex. Code Ann. § 41.45(c).

However, the “chief appraiser may delegate authority to his employees.” Id. § 6.05(e). In fact, it is not uncommon for an HCAD

representative to appear at protest hearings on behalf of the chief appraiser. See Sondock , 231

S.W.3d at 69 (at protest hearing, “HCAD’s representative” offered an opinion on

value of the property); Loposer v. Harris County Appraisal Dist. , No.

14-07-00956-CV, 2009 WL 2146151 , at *1 (Tex. App.—Houston [14th Dist.] July 21,

2009, no pet.) (mem. op.) (“HCAD’s representative” testified at protest hearing

to property’s market value); Prince v. Harris County Appraisal Dist ., No.

14-07-00919-CV, 2009 WL 20975 , at *1 (Tex. App.—Houston [14th Dist .] Jan. 6, 2009,

no pet.) (mem.op.) (“an HCAD representative” appeared at protest hearing); Mann v. Harris County Appraisal Dist. , No. 01-07-00436-CV, 2008 WL 1747807 , at *1 (Tex.

App.—Houston [1st Dist.] Apr. 17, 2008, no pet.)

(mem. op.) (“[E.W.] represented HCAD’s chief appraiser at the protest

hearing”).

The Kellys assert that

the above cases are distinguishable because the property owners did not raise

the issue of whether the chief appraiser was present to enter an

agreement. As noted above, a chief

appraiser has the authority to delegate his duties and to have a representative

appear at protest hearings. Tex. Tax Code Ann. §§ 6.05(e),

41.45(c). Here, the ARB held a protest

hearing, an HCAD representative appeared on behalf of the chief appraiser, no

objection was made that the chief appraiser was not present, and, during the

hearing, an agreement was made between the Kellys agent and the HCAD

representative as to the value of the property.

We hold that the agreement is final and not subject to protest or

subject to judicial review under chapter 42.

MHCB , 249 S.W.3d at 83 ; see Tex.

Tax Code Ann . §§ 41.01(b), 42.01(1)(A).

The

Kellys further assert that they had an “absolute right to appeal” to the trial

court because the ARB issued an order which authorized the appeal and the tax code

provides that a property owner is “entitled” to appeal an order of an appraisal

review board. Tex. Tax Code Ann. § 42.21(a). However, a section 1.111(e) agreement is

final regardless of whether it is later approved or adopted by the board. Sondock ,

231 S.W.3d at 69 ; Mann , 2008 WL

1747807 , at *5. At the moment an

agreement is reached, it becomes final, thus, rendering any subsequent

determinations by the board regarding the value irrelevant. Sondock ,

231 S.W.3d at 69 . At the time the

agreement between the Kellys and HCAD’s representative was reached, the board

had not determined the Kellys protest of the initial appraised value of the

property. Because the agreement became

final, and the subsequent approval and order by the board was irrelevant, the

Kellys did not have an ARB order to appeal.

See Mann , 2008 WL 1747807 , at

*6 (“we conclude that the protest was not ‘determined by the Board,’ even

though, after the parties reached an agreement, the Board entered an ‘Order

determining Protest’ that set the appraised value at the amount agreed to by

the parties”).

The Kellys also assert that the denial

of their appeal to the trial court violates their right to due process. However, this Court previously considered and

rejected the same argument in Mann , Hartman , and BPAC . See Mann , 2008 WL 1747807 , at *6; Hartman , 251 S.W.3d at 601 ; BPAC , 2004 WL 2422033 , at *3. Likewise, the Fourteenth Court of Appeals has

rejected this argument. See KM TS , 2010 WL 3921126 , at *3; Sondock , 231 S.W.3d at 70 .

It is well-established

that the collection of taxes constitutes deprivation of property; therefore, a

taxing authority must afford a property owner due process of law. McKesson Corp. v. Div. of Alcoholic Beverages &

Tobacco , 496 U.S. 18 , 36–37, 110 S. Ct. 2238 ,

2250–51, (1990) . Texas courts have held that “[d]ue process

simply affords a right to be heard before final assessment; it does not detail

the review mechanism.” ABT Galveston

Ltd. P’ship v. Galveston Cent. Appraisal Dist. , 137 S.W.3d 146, 155 (Tex. App.—Houston [1st Dist.] 2004, no pet.)

(quoting Dallas County Appraisal Dist. v. Lal , 701 S.W.2d 44, 47 (Tex.

App.—Dallas 1985, writ ref’d n.r.e.) ); see Mann , 2008 WL 1747807 , at *6; Hartman ,

251 S.W.3d at 601; Sondock , 231 S.W.3d at 70 ;

BPAC ,

2004 WL 2422033 , at *3. In cases

involving taxation, due process is satisfied if a taxpayer is given an

opportunity to be heard before an assessment board at some stage of the

proceedings. See Mann , 2008 WL 1747807 , at *6; Hartman , 251

S.W.3d at 601 Sondock , 231 S.W.3d at 70 ;

BPAC , 2004 WL 2422033 , at *3. The courts in Mann , Hartman , Sondock , and BPAC each held that the property owners were not

deprived of their statutory due process rights when they were given an

opportunity to be heard before a review board and reached an agreement with the

taxing authority at that review. Hartman , 251 S.W.3d at 601;

Sondock , 231 S.W.3d at 70 ; BPAC , 2004 WL

2422033 , at *3.

Here, the Kellys filed

a protest and were given an opportunity to present arguments before the ARB. HCAD’s representative agreed with the Kellys’

valuation of the subject property and the Kellys made no objections or final

comments, even though they were given the opportunity to do so. We conclude that the Kellys’ due process

rights were not violated because they were given an opportunity to be heard

before the ARB and they reached an agreement with HCAD during their protest

review.

Accordingly, we hold that the trial

court did not err in granting summary judgment in favor of the taxing authorities. We overrule the Kellys’ sole issue.

Conclusion

We

affirm the judgment of the trial court.

Terry

Jennings

Justice

Panel

consists of Justices Jennings, Higley, and Brown.

[1] See

Tex. Tax. Code Ann . § 1.111(e)

(Vernon 2008).

[2] See

id.

[3]

See Loposer v. Harris County

Appraisal Dist. , 14-07-00956-CV, 2009 WL 2146151 (Tex. App.—Houston [14th

Dist.] July 21, 2009, no pet.) (mem. op); Amidei

v. Harris County Appraisal Dist. , No. 01-08-00833, 2009 WL 2050974 (Tex.

App.—Houston [1st Dist.] July 16, 2009, no pet.); Verm v. Harris County Appraisal Dist. , No. 14-06-01046-CV, 2008 WL

2580041 (Tex. App.—Houston [14th Dist.] July 1, 2008, no pet.) (mem. op.); Mann v. Harris County Appraisal Dist. ,

No. 01-07-00436-CV, 2008 WL 1747807 (Tex. App.—Houston [1st Dist.] Apr. 17,

2008, no pet.) (mem. op.); Hartman v. Harris

County Appraisal Dist. , 251 S.W.3d 595 (Tex. App.—Houston [1st Dist.] 2007,

no pet); Sondock v. Harris County

Appraisal Dist. , 231 S.W.3d 65 (Tex. App.—Houston [14th Dist.] 2007, no

pet.); BPAC Texas, LP v. Harris County

Appraisal Dist. , No.

01-03-01238-CV, 2004 WL 2422033 (Tex. App.—Houston [1st Dist.] Oct. 28, 2004,

no pet.) (mem. op.).