First Bank of Deer Park v. Harris County

OPINION ON MOTION FOR REHEARING

EVANS, Chief Justice,

dissenting.

I disagree with the holding of the majority opinion on rehearing, affirming the trial court's summary judgment. There are two principal reasons for my disagreement.

First, I disagree with the majority’s conclusion that section 42.09(a)(2) of the Texas Tax Code prohibits a taxpayer from filing suit for a refund under section 31.11 of the Tax Code, unless the party has first protested the tax under section 41.41 of the Tax Code. TEX. TAX CODE ANN. sec. 42.09(a)(2) (Vernon Supp.1991). As the majority recognizes, the Tax Code expressly authorizes a taxpayer to seek a refund of an erroneous payment of taxes by making application to the tax collector within three years from the date of judgment. TEX. TAX CODE ANN. § 31.11 (Vernon Supp. 1991). Here, it is undisputed that the Bank *596made timely application to the county tax collector, asserting a right to a refund for taxes erroneously paid and explaining that the United States Supreme Court had held the tax to be illegal and void. Because the Bank made timely application for a refund, it was entitled to assert its claim for a refund in the instant suit.

The majority also concluded that the Bank was precluded from seeking judicial relief because the Bank did not file a separate protest with the appraisal board as authorized by section 41.41. TEX. TAX CODE ANN. § 41.41 (Vernon Supp.1991). The majority reasoned that because the Bank did not pursue its administrative remedy under section 41.41, it was not entitled to sue for a refund under section 42.09.

I disagree with the majority’s analysis of the statute. Section 42.09(a) does provide that the “procedures” prescribed by “this title” will be the exclusive means for obtaining relief. But the term, “this title,” obviously refers to Title I of the Tax Code. Title I contains chapter 31, which includes section 31.11 relating to refunds of over-payments or erroneous payments, and chapter 41, which includes section 41.41 relating to a taxpayer’s right of protest. Also within Title I is chapter 42, which includes section 42.09. This section relates to the adjudication of a taxpayer’s grounds of protest in (1) defending against a suit to enforce collection of delinquent taxes, or (2) asserting a claim for relief in a suit to prevent tax collection or to obtain a refund of taxes paid.

Thus, while section 42.09 states that the procedures described by “this title” are exclusive, the statute clearly reflects the legislature’s intent to include “the procedures” prescribed by section 31.11, as well as those set forth in section 41.41. Since both sections are part of the same legislative enactment, both must be read together and given their intended effect. See Shaddix v. Kendrick, 430 S.W.2d 461, 463 (Tex.1968); J.I. Case Threshing Mach. Co. v. Howth, 116 Tex. 434, 439, 293 S.W. 800, 801 (1927). I would hold that the Bank, after having unsuccessfully sought a refund under section 31.11, was entitled to seek judicial relief in the district court.

Second, I disagree with the majority opinion in its analysis of the Bank’s burden of proof as nonmovant in the summary judgment proceeding. The County’s motion for summary judgment asserted that the Bank could not recover on its claim, even assuming that the assessments were illegal, because the taxes were voluntarily paid and the plaintiffs had not alleged an erroneous payment within the meaning of section 31.11. Thus, the County’s motion for summary judgment was based entirely on the premise that the Bank could not, as a matter of law, recover on the claim asserted in its petition.

When a defendant’s motion for summary judgment is directed solely at the plaintiff’s petition, and it simply challenges the sufficiency of the petition to allege an enforceable claim, the court must accept as true every allegation of the pleading against which the motion is directed. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); Gottlieb v. Hofheinz, 523 S.W.2d 7, 10 (Tex.Civ.App.-Houston [1st Dist.] 1975, writ dism’d). If the petition, when liberally construed, is sufficient in law to show a fact issue, the court must overrule the motion for summary judgment. Gottlieb, 523 S.W.2d at 10. Moreover, if the plaintiff’s petition does allege a legal cause of action, a defendant who seeks a take-nothing summary judgment must conclusively disprove one or more of the essential elements of the plaintiff’s claim. Swilley, 488 S.W.2d at 67; Nix v. Davis, 358 S.W.2d 225, 227 (Tex.Civ.App.-Houston [1st Dist.] 1962, no writ).

In its petition, the Bank alleged that the taxes were illegal, void, and unconstitutional, and had been so declared by the United States Supreme Court. The Bank denied that it had voluntarily paid the taxes, and it asserted instead that the taxes were paid as a result of the County’s fraud and duress and because of a mutual mistake. The Bank asserted a right to refund of such erroneously paid taxes under section 31.11, and it sought judgment against the County for all payments made in discharge of the *597illegal tax, plus interest, attorney’s fees, and costs.

In my opinion, the Bank’s petition alleged a legal right, an injury to such right, and damages sustained as a consequence of such injury. See 2 R. MCDONALD, TEXAS CIVIL PRACTICE IN DISTRICT AND COUNTY COURTS § 6.12 (rev. 1982). The Bank’s allegations of a right to a refund of the tax payments constitute a sufficient basis for the judicial determination of the Bank’s pecuniary loss. Thus, I would hold that the Bank’s allegations reflect claims for affirmative relief, and do not, as the majority concludes, allege affirmative defenses. See 2 R. McDONALD TEXAS CIVIL PRACTICE IN DISTRICT AND COUNTY COURTS § 6.17.1 (rev. 1982).

I would hold that the Bank’s petition reflects a genuine issue of material fact with respect to the voluntariness of its payments, as well as the related issue of fraud, duress, and mutual mistake. Because the County did not conclusively negate the Bank’s allegations, the Bank’s assertions must be taken as true, and the County was not entitled to a take-nothing summary judgment.

I would overrule the County’s motion for rehearing, and reverse the trial court’s summary judgment.