# Harris County Appraisal District v. Jacob S. MacDonald and 1615 Tabor LLC

> Texas Court of Appeals, 1st District (Houston) · August 12, 2021

URL: https://www.frixlaw.com/law-library/cases/4765965

## Case

- **Court:** Texas Court of Appeals, 1st District (Houston)
- **Decided:** August 12, 2021
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

Opinion issued August 12, 2021

In The

Court of Appeals
For The

First District of Texas
———————————
NO. 01-19-00990-CV
———————————
HARRIS COUNTY APPRAISAL DISTRICT, Appellant
V.
JACOB S. MCDONALD AND 1615 TABOR, LLC, Appellees

On Appeal from the 190th District Court
Harris County, Texas
Trial Court Case No. 2018-29796

MEMORANDUM OPINION

In this interlocutory appeal,1 appellant, Harris County Appraisal District

(“HCAD”), challenges the trial court’s order denying its plea to the jurisdiction in

1
See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(8).
the suit brought against it by appellees, Jacob S. McDonald and 1615 Tabor, LLC

(“1615 Tabor”) (collectively, the “property owner”), seeking judicial review of the

denial of a “correction motion” by the Harris County Appraisal Board (the “Board”).

In its sole issue, HCAD contends that the trial court lacks subject-matter jurisdiction

over the property owner’s suit.

We reverse and render.

Background

In its petition, the property owner alleged that McDonald “is the current owner

and [1615 Tabor] is the former owner of real property” identified by HCAD Account

Number 0102510000013, located in Harris County, Texas (the “property”). And

1615 Tabor “timely filed a [Texas Tax Code] [s]ection 25.25 correction motion

with” the Board and HCAD for tax year 2017.2 1615 Tabor’s “correction motion

was submitted on the basis that the City of Houston established ordinances affecting

the . . . property by creating a minimum lot size requirement and a minimum

building line requirement,” which “negatively affected the value of

the . . . property.” McDonald, who had assumed ownership of the property,

presented the motion for hearing, which “resulted in a final order denying correction

and setting the appraised value of the property.”

2
See TEX. TAX CODE ANN. § 25.25(c).
2
The property owner sought judicial review by the trial court of the Board’s

order denying its correction motion under Texas Tax Code Chapter 42.3 It requested

that the trial court reverse the Board’s denial of its correction motion and sought

monetary relief4 and attorney’s fees.5

HCAD answered, generally denying the allegations in the property owner’s

petition. HCAD also filed a plea to the jurisdiction, asserting that the trial court

lacked subject-matter jurisdiction over the property owner’s suit. HCAD explained

that the property owner, through an appointed agent, protested the property’s 2017

valuation before the Board. HCAD and the property owner’s agent “appeared at an

informal meeting on the protest on June 28, 2019.” At the informal meeting, the

property owner and HCAD agreed “that the total value of the . . . property should be

$260,000 market and appraised value for tax year 2017.”6 “This agreement was

reduced to writing and recorded in [HCAD]’s records.” HCAD attached a copy of

the completed “Informal Interview Settlement Form” to its plea to the jurisdiction.

The agreement reflects that HCAD had initially appraised the property at $293,396.

In agreeing to the $260,000 value, HCAD and the property owner acknowledged

3
See id. §§ 42.01–.43.
4
See id. § 42.43.
5
See id. § 42.29.
6
See id. § 1.111(e).
3
that they “underst[ood] that the settled value” was “final and not subject to further

protest or appeal.”

According to HCAD, despite “enter[ing] into a written agreement with”

HCAD in which it “agree[d] to a market and appraised value of the . . . property for

tax year 2017,”7 the property owner “filed a [c]lerical [e]rror [c]orrection motion[8]

with the [Board], which was denied.” HCAD argued that because it had “agreed

with [the property owner’s] requested value at an informal . . . hearing,” the

$260,000 agreed appraised and market value of the property was final, the Texas

Tax Code “prohibit[ed] any further appeal of th[e] agreed value,” and the trial court

“lack[ed] jurisdiction over th[e] [property owner’s] action.”

In response, the property owner asserted that its suit involved “the appeal of

the decision by the . . . Board . . . to deny” the property owner’s motion to correct a

clerical error related to the property for the tax year 2017. 9 And the agreement

between the property owner and HCAD “had nothing to do with the correction of

the tax roll, which [was] the only issue for which [the property owner] . . . s[ought]

review.” According to the property owner, the agreement between it and HCAD

concerned the market and “appraised value of the [p]roperty,” not whether HCAD

7
See id. § 1.111(e)(2).
8
See id. § 25.25(c)(1).
9
See id.
4
“committed a clerical error in regard to th[e] property by failing to retrieve

information about city ordinances that placed restrictions on the [p]roperty’s use”—

which the property owner asserted was the basis for its request for judicial review

by the trial court. The property owner attached its correction motion to its response.

The trial court denied HCAD’s plea to the jurisdiction.

Standard of Review

Subject-matter jurisdiction is essential to a court’s power to decide a case.

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). The

plaintiff bears the burden of affirmatively demonstrating that the trial court has

subject-matter jurisdiction over its case. Heckman v. Williamson Cty., 369 S.W.3d

137, 150 (Tex. 2012); Tex. Ass’n of Bus., 852 S.W.2d at 446. A plea to the

jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject-matter

jurisdiction. Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); Villarreal v.

Harris Cty., 226 S.W.3d 537, 541 (Tex. App.—Houston [1st Dist.] 2006, no pet.).

We review a trial court’s ruling on a plea to the jurisdiction de novo. See Ben

Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Tex. Political Subdivs. Prop./Cas.

Joint Self-Ins. Fund, 212 S.W.3d 320, 323 (Tex. 2006); City of Houston v. Vallejo,

371 S.W.3d 499, 501 (Tex. App.—Houston [1st Dist.] 2012, pet. denied). A

defendant may use a plea to the jurisdiction to challenge whether the plaintiff has

met its burden of alleging jurisdictional facts or to challenge the existence of

5
jurisdictional facts. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,

226–27 (Tex. 2004).

When a plea to the jurisdiction challenges the pleadings, we determine

whether the pleader has alleged facts that affirmatively demonstrate the trial court’s

jurisdiction. Id. at 226. We construe the pleadings liberally in favor of the pleader,

accept all factual allegations as true, and look to the pleader’s intent. Heckman, 369

S.W.3d at 150. If the pleadings are insufficient, the court should afford an

opportunity to replead if the defects are potentially curable but may dismiss if the

pleadings affirmatively negate the existence of jurisdiction. City of Houston v.

Guthrie, 332 S.W.3d 578, 586–87 (Tex. App.—Houston [1st Dist.] 2009, pet.

denied).

Review of a plea challenging the existence of jurisdictional facts mirrors that

of a matter-of-law summary-judgment motion. Mission Consol. Indep. Sch. Dist. v.

Garcia, 372 S.W.3d 629, 635 (Tex. 2012); Miranda, 133 S.W.3d at 228 (“[T]his

standard generally mirrors that of a summary judgment under Texas Rule of Civil

Procedure 166a(c). . . . By requiring the [S]tate to meet the summary judgment

standard of proof . . . , we protect the plaintiff[] from having to put on [its] case

simply to establish jurisdiction.”) (internal quotations omitted) (internal citations

omitted); see also TEX. R. CIV. P. 166a(c). “[A] court deciding a plea to the

jurisdiction . . . may consider evidence and must do so when necessary to resolve the

6
jurisdictional issues raised.” Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555

(Tex. 2000). And a court may consider evidence as necessary to resolve a dispute

over the jurisdictional facts even if the evidence “implicates both the

subject[-]matter jurisdiction of the court and the merits of the case.” Miranda, 133

S.W.3d at 226.

We take as true all evidence favorable to the non-movant and we indulge

every reasonable inference and resolve any doubts in the non-movant’s favor. Id. at

228. If the defendant meets its burden to establish that the trial court lacks

jurisdiction, the plaintiff is then required to show that there is a material fact question

regarding the jurisdictional issue. Id. at 227–28. If the evidence raises a fact issue

about jurisdiction, the plea cannot be granted, and a fact finder must resolve the

issue. Id. On the other hand, if the evidence is undisputed or fails to raise a fact

issue, the plea must be determined as a matter of law. Id. at 228; Garcia, 372 S.W.3d

at 635.

Plea to the Jurisdiction

In its sole issue, HCAD argues that the trial court erred in denying its plea to

the jurisdiction because the property owner entered into an agreement with HCAD

under Texas Tax Code section 1.111(e) about the value of the property, the

agreement was final, the Board had no authority to review or reject the agreement,

7
and “there [was] no determination from the [Board] over which the trial court had

jurisdiction.”

Sovereign immunity and its counterpart, governmental immunity, exist to

protect the State and its political subdivisions from lawsuits and liability for money

damages. Garcia, 372 S.W.3d at 635; Tex. Nat. Res. Conservation Comm’n v.

IT-Davy, 74 S.W.3d 849, 853 (Tex. 2002). Although the terms “sovereign

immunity” and “governmental immunity” are often used interchangeably, sovereign

immunity “extends to various divisions of state government, including agencies,

boards, hospitals, and universities,” while governmental immunity “protects

political subdivisions of the State, including counties, cities, and school districts.”

See Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist., 212 S.W.3d at 324; Odutayo

v. City of Houston, No. 01-12-00132-CV, 2013 WL 1718334, at *2 n.8 (Tex. App.—

Houston [1st Dist.] Apr. 18, 2013, no pet.) (mem. op.). Without an express waiver

of sovereign immunity or governmental immunity, courts do not have subject-matter

jurisdiction over suits against the State or its political subdivisions. See State v.

Shumake, 199 S.W.3d 279, 283 (Tex. 2006); Miranda, 133 S.W.3d at 224–25.

“An appraisal district is a political subdivision of the [S]tate.” TEX. TAX CODE

ANN. § 6.01(c). As such, appraisal districts generally are immune from suit. See

Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. 2003). In a suit

against a tax appraisal district, the property owner must affirmatively demonstrate

8
the trial court’s jurisdiction by alleging a valid waiver of immunity. See Dallas Area

Rapid Transit v. Whitley, 104 S.W.3d 540, 542 (Tex. 2003).

“We interpret statutory waivers of immunity narrowly, as the Legislature’s

intent to waive immunity must be clear and unambiguous.” Mission Consol. Indep.

Sch. Dist. v. Garcia, 253 S.W.3d 653, 655 (Tex. 2008). The Texas Tax Code

provides a limited statutory waiver of immunity that allows property owners to seek

judicial review of an appraisal review board’s determination of a motion to correct

filed under Texas Tax Code section 25.25.10 See TEX. TAX CODE ANN.

10
An appraisal review board:
(1) determine[s] protests initiated by property owners;
(2) determine[s] challenges initiated by taxing units;
(3) correct[s] clerical errors in the appraisal records and the
appraisal rolls;
(4) act[s] on motions to correct appraisal rolls under [s]ection
25.25;
(5) determine[s] whether an exemption or a partial exemption is
improperly granted and whether land is improperly granted
appraisal . . .; and
(6) take[s] any other action or make[s] any other determination
that this title specifically authorizes or requires.
TEX. TAX CODE ANN. § 41.01(a). But an appraisal review board is prohibited from
“review[ing] or reject[ing] an agreement between a property owner or the owner’s
agent and the chief appraiser under [Texas Tax Code] [s]ection 1.111(e).” Id.
§ 41.01(b); see also id. § 1.111(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; or (2) which may be corrected under
[s]ection 25.25 or on which a motion for correction under that section has been filed
but not determined by the board.”).
9
§ 42.01(a)(1)(B); Houston Cement Co. v. Harris Cty. Appraisal Dist., No.

14-12-00491-CV, 2013 WL 3243281, *2 (Tex. App.—Houston [14th Dist.] June 25,

2013, no pet.) (mem. op.); see also Bustos v. Bexar Appraisal Dist., No.

04-19-00781-CV, 2021 WL 2118373, at *3 (Tex. App.—San Antonio May 26,

2011, no pet.) (mem. op.) (describing waiver of governmental immunity by Texas

Tax Code as “limited”). But this statutory waiver does not extend to judicial review

of an agreement between a property owner or the owner’s agent and an appraisal

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

has been filed but not determined by the board” or “which may be corrected under

[Texas Tax Code] [s]ection 25.25 or on which a motion for correction under that

section has been filed but not determined by the board.” See TEX. TAX CODE ANN.

§ 1.111(e). An agreement under Texas Tax Code section 1.111(e) about a property’s

value (a “section 1.111(e) agreement”) is final, and thus does not come within the

statutory waiver of immunity allowing judicial review. See id.; see also id.

§ 41.01(b) (“The [appraisal review] board may not review or reject an agreement

between a property owner or the owner’s agent and the chief appraiser under

[s]ection 1.111(e).”); MHCB (USA) Leas. & Fin. Corp. v. Galveston Cent. Appraisal

Dist. Review Bd., 249 S.W.3d 68, 83–84 (Tex. App.—Houston [1st Dist.] 2007, pet.

denied). And once the tax appraisal roll is final, “it may not be changed except to

correct a name or address, a determination of ownership, a description of property,

10
multiple appraisals of a property, an erroneous denial or cancellation” of certain

statutorily authorized exemptions, “or a clerical error or other inaccuracy as

prescribed by board rule that does not increase the amount of tax liability.” TEX.

TAX CODE ANN. § 25.25(b).

In its plea to the jurisdiction, HCAD satisfied its initial burden to prove that

the trial court lacked subject-matter jurisdiction by showing that the property

owner’s agent and the Board entered into a section 1.111(e) agreement about the

2017 property value that made the property owner’s correction motion based on

HCAD’s manner of calculating the property’s 2017 value unreviewable. See id.

§ 1.111(e) (agreement under section 1.111(e) “is final”). In response, the property

owner argued that the Board’s denial of its correction motion was reviewable as a

decision under Texas Tax Code section 25.25(c)(1) because, despite the section

1.111(e) agreement, HCAD “committed a clerical error in regard to this property by

failing to retrieve information about city ordinances that placed restrictions on the

[p]roperty’s use,” which affected the appraised value. See TEX. TAX CODE ANN.

§ 25.25(c)(1) (allowing appraisal review board, on motion of chief appraiser or

property owner, to “order changes in the appraisal roll for any of the five preceding

years to correct . . . clerical errors that affect a property owner’s liability for a tax

imposed in that tax year”). In denying HCAD’s plea to the jurisdiction, the trial

court implicitly found that the property owner properly invoked the statutory waiver

11
of immunity under the Texas Tax Code. See id. § 42.01(a)(1)(B) (entitling property

owner to appeal order of appraisal review board determining motion filed under

section 25.25).

Although the property owner, in its response to the plea to the jurisdiction,

asserted that the agreement between it and HCAD “concerned only the appraised

value of the property” and had “nothing to do with the correction of the tax roll,” the

appraised value of a property is an integral part of the tax roll. Each year, the chief

appraiser for an appraisal district prepares and certifies “to the assessor for each

taxing unit participating in the district that part of the appraisal roll for the district

that lists the property taxable by the unit.” Id. § 26.01(a). Calculation of the property

tax owed on a particular property begins with the appraised value set forth in the

appraisal roll. See id. § 26.09(c). And “[t]he appraisal roll with amounts of tax

entered as approved by the governing body constitutes the unit’s tax roll.” Id.

§ 26.09(e). The error the property owner alleges—HCAD’s failure to consider

“information about city ordinances that placed restrictions on the [p]roperty’s use”

in appraising the property’s value—specifically involves whether the agreed value

of $260,000, and thus, the tax owed, which is calculated based on that value, is

correct. We conclude that the error alleged by the property owner concerns the same

subject matter as the section 1.111(e) agreement between the property owner and

HCAD. Thus, the property owner’s correction motion is subject to judicial review

12
only if it alleges a clerical error susceptible to correction. See id. §§ 25.25(c)(1),

42.01(a)(1)(B).

Whether an error alleged by the property owner is a “clerical error” is a

question of statutory construction. LFD Holdings v. Cameron Cty. Appraisal Dist.,

Nos. 13-10-00672-CV, 13-10-00673-CV, 2012 WL 29337, *2 (Tex. App.—Corpus

Christi–Edinburgh Jan. 5, 2012, pet. denied) (mem. op.). The Texas Tax Code

defines “clerical error” as an error:

(A) that is or results from a mistake or failure in writing, copying,
transcribing, entering or retrieving computer data, computing, or
calculating; or

(B) that prevents an appraisal roll or a tax roll from accurately
reflecting a finding or determination made by the chief appraiser, the
appraisal review board, or the assessor; however, “clerical error” does
not include an error that is or results from a mistake in judgment or
reasoning in the making of the finding or determination.

TEX. TAX CODE ANN. § 1.04(18).

In Dallas Central Appraisal District v. Southwest Airlines, the Dallas Court

of Appeals observed that the Texas Tax Code did not define “computing” or

“calculating,” so the appellate court looked to the dictionary definition of those terms

and determined that they referred to the mathematical process used to calculate the

value of the property, but not the formula chosen to arrive at the numbers used to

make that calculation. See No. 05-10-00682-CV, 2012 WL 210964, at *3 (Tex.

App.—Dallas Jan. 24, 2012, pet. denied) (mem. op.). Other courts, including this

13
Court, have likewise rejected property owners’ attempts to characterize the selection

of factors used to calculate appraisal value as “clerical errors.” See Marubeni Am.

Corp. v. Harris Cty. Appraisal Dist., 168 S.W.3d 860, 861, 863 (Tex. App.—

Houston [1st Dist.] 2004, no pet.) (rejecting assertion property owner’s computation

of inventory value using internal reports containing incorrect data instead of

warehouse report, which was not available at time of original rendition, was clerical

error); Stacy Family Enters., Inc. v. Tarrant Appraisal Dist., No. 02-13-00170-CV,

2013 WL 6564299, at *3–4 (Tex. App.—Fort Worth Dec. 12, 2013, no pet.) (mem.

op.) (property owner’s complaint appraisal district deliberately used method

involving accepting property owner’s renditions of its inventory’s market value

instead of conducting independent valuation and making no further depreciation

deductions sought substantive reevaluation of appraised value and thus was not

claim of clerical error); Lack’s Valley Stores, Ltd. v. Hidalgo Cty. Appraisal Dist.,

No. 13-10-00500-CV, 2011 WL 2475843, at *3 (Tex. App.—Corpus Christi–

Edinburgh June 23, 2011, pet. denied) (mem. op.) (appraisal district’s failure to

account for depreciation “was the byproduct of a deliberate determination” and “not

properly defined as a clerical error”).

Here, the property owner does not seek to correct a mathematical error in

calculation, but to include another factor in the methodology used to arrive at the

appraised value of the property. Because the error alleged by the property owner is

14
not a clerical one, we conclude that the property owner failed to affirmatively show

that the Board’s denial of its correction motion was reviewable by the trial court as

a decision under Texas Tax Code section 25.25(c)(1). See TEX. TAX CODE ANN.

§ 42.01(a)(1)(B) (“A property owner is entitled to appeal . . . a motion filed under

[s]ection 25.25.”). As a result, the Texas Tax Code does not waive governmental

immunity, and the trial court lacks subject-matter jurisdiction over the property

owner’s suit against HCAD. We hold that the trial court erred in denying HCAD’s

plea to the jurisdiction.

We sustain HCAD’s sole issue.

Conclusion

We reverse the order of the trial court denying HCAD’s plea to the jurisdiction

and render judgment dismissing the property owner’s suit for lack of subject-matter

jurisdiction.

Julie Countiss
Justice

Panel consists of Chief Justice Radack and Justices Landau and Countiss.

15

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4765965. Public record. Not legal advice.