                                                                                      ACCEPTED
                                                                                  03-15-00019-CV
                                                                                          6315674
                                                                       THIRD COURT OF APPEALS
                                                                                  AUSTIN, TEXAS
                                                                             7/31/2015 3:49:43 PM
                                                                                JEFFREY D. KYLE
                                                                                           CLERK
                            No. 03-15-00019-CV

                                                            FILED IN
                                                     3rd COURT OF APPEALS
        IN THE COURT OF APPEALS FOR THE THIRD JUDICIAL DAUSTIN,
                                                         ISTRICTTEXAS
                            AUSTIN, TEXAS            7/31/2015 3:49:43 PM
                                                       JEFFREY D. KYLE
                                                             Clerk

                            JEFF KAISER, P.C. AND
                          JEFFERY BENEDICT KAISER
                                                 Appellants,

                                     vs.

                            THE STATE OF TEXAS,
                                               Appellee.



        Appeal from the 98th District Court of Travis County, Texas,
         No. D-1-GV-13-000790, Honorable John Wisser presiding


                            BRIEF OF APPELLEE


KEN PAXTON                           Sean M. O’Neill
Attorney General of Texas            State Bar No. 24070354
                                     Assistant Attorney General
CHARLES E. ROY                       sean.oneill@texasattorneygeneral.gov
First Assistant Attorney General     Kevin R. Sauer
                                     State Bar No. 24088355
JAMES E. DAVIS                       Assistant Attorney General
Deputy Attorney General              kevin.sauer@texasattorneygeneral.gov
For Civil Litigation                 Bankruptcy & Collections Division
                                     P.O. Box 12548, MC 008
RONALD R. DEL VENTO                  Austin, Texas 78711-2548
Assistant Attorney General           Tel: (512) 475-4567
Chief, Bankruptcy & Collections      Fax: (512) 936-1409
Division                             COUNSEL FOR APPELLEE


        ORAL ARGUMENT CONDITIONALLY REQUESTED
                 IDENTITY OF PARTIES AND COUNSEL


The following is a list of all parties to the proceedings in the trial court below,
together with the names and addresses of all counsel in accordance with Texas
Rule of Appellate Procedure 38.1(a):

Defendants/Appellants:                       Plaintiff/Appellee:

Jeff Kaiser, P.C. and Jeffery                The State of Texas
Benedict Kaiser

Appellate Counsel                            Appellate Counsel
for Defendants/Appellants:                   for Plaintiff/Appellee:

George F. May                                Sean M. O’Neill
TWOMEY | MAY, PLLC                           Kevin R. Sauer
2 Riverway, 15th Floor                       OFFICE OF THE ATTORNEY GENERAL
Houston, Texas 77056                         BANKRUPTCY & COLLECTIONS
                                             DIVISION
                                             P.O. Box 12548
                                             Austin, Texas 78711-2548

Trial Counsel                                Trial Counsel
for Defendants/Appellants:                   for Plaintiff/Appellee:

Jeffery B. Kaiser                            John C. Adams
JEFF KAISER, P.C.                            OFFICE OF THE ATTORNEY GENERAL
Enterprise Bank Tower                        BANKRUPTCY & COLLECTIONS
2211 Norfolk St. Ste 528                     DIVISION
Houston, Texas 77098                         P.O. Box 12548
                                             Austin, Texas 78711-2548
Harold N. May
TWOMEY | MAY, PLLC
2 Riverway, 15th Floor
Houston, Texas 77056




                                        ii
                                    TABLE OF CONTENTS

                                                                                                        Page

IDENTITY OF PARTIES AND COUNSEL ....................................................... ii
INDEX OF AUTHORITIES ................................................................................. v
ABBREVIATIONS AND RECORD REFERENCES .........................................xi
STATEMENT OF THE CASE........................................................................... xii
STATEMENT REGARDING ORAL ARGUMENT ....................................... xiii
ISSUES PRESENTED .......................................................................................xiv
STATEMENT OF FACTS ....................................................................................1
        I.      Appellants’ Late Filing of Tax Reports ............................................1
        II.     The State’s Filing of a Tax Lien and Suit .........................................1
        III.    Trial and Judgment ............................................................................2
SUMMARY OF THE ARGUMENT .................................................................... 5
ARGUMENT AND AUTHORITIES.................................................................... 7
        I.      Appellants Failed to Carry the Burden of Proof on
                Their Affirmative Defense of Limitations ........................................7
                A.       Appellants failed to elicit evidence of a relevant
                         date for limitations that could make suit
                         untimely under section 111.202 ..............................................7
                B.       Under the plain language of section 111.202, the
                         State’s filing of a tax lien made suit timely ..........................10
                C.       Even under Appellants’ interpretation of section
                         111.202, Appellants failed to produce evidence
                         that limitations had run .........................................................17
                D.       Appellants’ alternative argument that a four year
                         limitations period under the Remedies Code
                         barred suit is contrary to express provisions of
                         the Remedies Code ...............................................................18
        II.     The State Offered Legally and Factually Sufficient
                Evidence to Support the Trial Court’s Judgment
                Awarding Delinquent Taxes ...........................................................19

                                                     iii
                A.       Appellants fail to address finding number nine,
                         which independently supports the trial court’s
                         judgment ...............................................................................19
                B.       The State introduced legally sufficient evidence
                         of the franchise tax delinquency at trial ................................20
                C.       The record contains factually sufficient evidence
                         of the franchise tax delinquency ...........................................23
                D.       The Trial Certificate, standing alone, is legally
                         and factually sufficient evidence of liability at
                         trial ........................................................................................25
        III.    The State Offered Legally Sufficient Evidence to
                Support the Trial Court’s Award of $2,500.00 in
                Attorney’s Fees ...............................................................................30
CONCLUSION AND PRAYER .........................................................................36
CERTIFICATE OF COMPLIANCE WITH RULE 9.4......................................37
CERTIFICATE OF SERVICE ............................................................................37




                                                        iv
                                INDEX OF AUTHORITIES

CASES                                                                                         Page(s)

Ayeni v. State,
      440 S.W.3d 707 (Tex. App.—Austin 2013, no pet.).................................27

Barras v. Barras,
     396 S.W.3d 154 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) ... 15

Bauer v. Williams,
     No. 03-07-00494-CV, 2008 WL 3166311
     (Tex. App.—Austin Aug. 8, 2008, no pet.) ...............................................32

Bubnis v. Leander Indep. Sch. Dist.,
     No. 03-13-00196-CV, 2015 WL 1478207
     (Tex. App.—Austin Mar. 25, 2015, no pet. h.) (mem. op.) ......................23

Bullock v. American Heart Ass’n,
      360 S.W.3d 661 (Tex. App.—Dallas 2012, pet. denied) ....................15–16

Cain v. Bain,
      709 S.W.2d 175 (Tex. 1986) ...............................................................23, 25

Calvert v. Eng’rs & Fabricators, Inc.,
      440 S.W.2d 320 (Tex. App.—Austin 1969, writ ref’d n.r.e.) ..................... 9

City of Keller v. Wilson,
       168 S.W.3d 802 (Tex. 2005) .....................................................................23

Crowson v. Crowson,
     No. 03-11-00795-CV, 2013 WL 6665022
     (Tex. App.—Austin Dec. 13, 2013, pet. denied) ................................15, 18

El Apple I, Ltd. v. Olivas,
       370 S.W.3d 757 (Tex. 2012) ..................................................32, 33, 34, 35

Elkins v. State,
      No. 03-98-00698-CV, 2000 WL 963160
      (Tex. App.—Austin July 13, 2000, pet. denied) .......................................19
                                                   v
EMC Mortg. Corp. v. Davis,
    167 S.W.3d 406 (Tex. App.—Austin 2005, pet denied) ...........................30

Ferrant v. Graham Assocs., Inc.,
     No. 02-12-00190-CV, 2014 WL 1875825
     (Tex. App.—Fort Worth May 8, 2014, no pet.) ........................................33

Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc.,
     960 S.W.2d 41 (Tex. 1998) .......................................................................21

Garibay v. State,
     No. 03-01-00500-CV, 2002 WL 1992299
     (Tex. App.—Austin Aug. 30, 2002, no pet.) .............................................18

Gen. Motors Corp. v. Saenz,
     873 S.W.2d 353 (Tex. 1993) ...............................................................27–28

Hatcher v. State,
     81 S.W.2d 499 (Tex. 1935) .......................................................................14

Hertzberg v. Austin Diagnostic Clinic Assoc., P.A.,
      No. 03-07-00072-CV, 2009 WL 2913620
      (Tex. App.—Austin Sept. 11, 2009, no pet.) ............................................33

Horvath v. Hagey,
     No. 03-09-00056-CV, 2011 WL 1744969
     (Tex. App.—Austin May 6, 2011, no pet.) ...............................................20

Hylton v. State,
      665 S.W.2d 571 (Tex. App.—Austin 1984, no writ) ................................26

In re A.B.P.,
       291 S.W.3d 91 (Tex. App.—Dallas 2009, no pet.) ...................................30

Kawaja v. State,
     No. 03-05-00491-CV, 2006 WL 1559343
     (Tex. App.—Austin June 8, 2006, no pet.) .........................................26, 27




                                                  vi
Kinnard v. Braziel Cooler-Freezer Mfg., Inc.,
     No. 10-06-00103-CV, 2007 WL 2315962
     (Tex. App.—Waco Feb. 14, 2007, no pet.) ...................................31, 32, 35

Lawyers Sur. Corp. v. State,
     825 S.W.2d 802 (Tex. App.—Austin 1992, no writ) ..........................13, 14

Legere v. Legere,
      No. 03-12-00046-CV, 2013 WL 692450
      (Tex. App.—Austin Feb. 22, 2013, no pet.)..............................................32

Lund v. Giauque,
      416 S.W.3d 122 (Tex. App.—Fort Worth 2013, no pet.) .........................14

Metroplex Mailing Servs., LLC v. RR Donnelley & Sons Co.,
     410 S.W.3d 889 (Tex. App—Dallas 2013, no pet.) ............................30, 34

Ocean Transp., Inc. v. Greycas, Inc.,
     878 S.W.2d 256 (Tex. App.—Corpus Christi 1994, writ denied) ........ 8, 10

Parker v. State,
     36 S.W.3d 616 (Tex. App.—Austin 2000, no pet.)...................................29

Parker v. State,
     40 S.W.3d 555 (Tex. App.—Austin 2001, no pet.)...................................29

Penny v. State,
     No. 03-97-00399-CV, 1998 WL 394173
     (Tex. App.—Austin July 16, 1998, no pet.) (mem. op.) ...........................27

Plas-Tex, Inc. v. U.S. Steel Corp.,
      772 S.W.2d 442 (Tex. 1989) .....................................................................23

Randall v. Goodall & Davison, P.C.,
     No. 03-12-00005-CV, 2013 WL 3481518
     (Tex. App.—Austin July 2, 2013, pet. denied) .........................................21

Ragsdale v. Progressive Voters League,
     801 S.W.2d 880 (Tex. 1990) (per curiam) ................................................30

                                                  vii
Ridge Oil Co., Inc. v. Guinn Invs., Inc.,
      148 S.W.3d 143 (Tex. 2004) .....................................................................32

Shepherd v. Ledford,
     962 S.W.2d 28 (Tex. 1998) .......................................................................16

Shields v. State,
      27 S.W.3d 267 (Tex. App.—Austin 2000, no pet.)...................................19

Southwestern Bell Media, Inc. v. Lyles,
     825 S.W.2d 488 (Tex. App.—Houston [1st Dist.] 1992, writ denied) ..... 23

State v. Barbee,
       No. 03-99-00560-CV, 2000 WL 766274
       (Tex. App.—Austin June 15, 2000, pet. denied)...........................10, 11, 12

State v. Durham,
       860 S.W.2d 63 (Tex. 1993) .......................................................................19

State v. Glass,
       723 S.W.2d 325 (Tex. App.—Austin 1987, writ ref’d n.r.e) ....................26

Sundance Oil Co. v. Aztec Pipe & Supply Co., Inc.,
     576 S.W.2d 780 (Tex. 1978) ...............................................................28, 29

Sundown Farms, Inc. v. State,
     89 S.W.3d 291 (Tex. App.—Austin 2002, no pet.)...................................27

Vo Eng’g, Ltd., Co. v. Cai,
     No. 03-13-00529-CV, 2015 WL 513269
     (Tex. App.—Austin Feb. 4, 2015, no pet. h.)....................20–21, 22, 23, 25

Wilson v. State,
      272 S.W.3d 686 (Tex. App.—Austin 2008, pet. denied) ....................12, 13

Wimmer v. State,
    No. 03-03-00135-CV, 2004 WL 210629
    (Tex. App.—Austin Feb. 5, 2004, pet. denied) .........................................22



                                                   viii
Wood v. Pyramid Cmty. Dev. Corp.,
     No. 14-13-00990-CV, 2014 WL 6602424
     (Tex. App.—Houston [14th Dist.] Nov. 20, 2014, no pet.) ....................7, 8

Woods v. William M. Mercer, Inc.,
     769 S.W.2d 515 (Tex. 1988) ....................................................................... 7

RULES

Tex. R. App. P. 47.7 ............................................................................................11

Tex. R. Civ. P. 94.................................................................................................24

Tex. R. Civ. P. 185...............................................................................................28

Tex. R. Civ. P. 299...............................................................................................20

Tex. R. Evid. 406 .................................................................................................25

STATUTES

Tex. Gov’t Code § 2107.006 .........................................................................30, 34

Tex. Tax Code § 111.008.......................................................................................9

Tex. Tax Code § 111.013...................................................................19, 25, 27, 29

Tex. Tax Code § 111.016.....................................................................................29

Tex. Tax Code § 111.022.......................................................................................9

Tex. Tax Code § 111.060.....................................................................................22

Tex. Tax Code § 111.202..............................................................................passim

Tex. Tax Code § 111.207.....................................................................................17

Tex. Tax Code § 113.006.....................................................................................16

Tex. Tax Code § 171.152.......................................................................................3
                                                         ix
Tex. Tax Code § 171.255.................................................................................2, 29




                                                     x
              ABBREVIATIONS AND RECORD REFERENCES

PARTIES:

“Appellee” or “State” means Plaintiff/Appellee the State of Texas.

“Appellants” means Defendants/Appellants Jeff Kaiser, P.C. and Jeffery Benedict
Kaiser.

“Jeffery Kaiser” means Appellant Jeffery Benedict Kaiser.

“Comptroller” means “The Comptroller of Public Accounts for the State of
Texas.”


RECORD REFERENCES:

Citations to the Clerk’s Record appear as...................................... “(CR [page#].)”
Citations to the Reporter’s Record appear as ... “([Vol #] RR [page#] at [line#].)”
Citations to Appellants’ Brief appear as .............................“(Kaiser Br. [page#].)”




                                              xi
                         STATEMENT OF THE CASE

Nature of the Case:           Appellee, the State of Texas (the “State”), filed
                              suit to recover delinquent franchise taxes from
                              Jeff Kaiser, P.C. The State also brought suit
                              against the Corporation’s officer Jeffery Benedict
                              Kaiser (“Jeffery Kaiser”) to recover the
                              delinquent taxes under Texas Tax Code section
                              171.255.

Course of Proceedings:        Trial was to the bench on October 27, 2014.
                              After the close of testimony, the court took the
                              case under advisement, issuing judgment on
                              December 2, 2014. Appellant requested findings
                              of fact and conclusions of law and the trial court
                              issued such findings and conclusions on
                              December 22, 2014.

Trial Court:                  The 98th District Court, Travis County, Texas;
                              the Honorable John Wisser, presiding.

Trial Court’s Disposition:    The trial court entered final judgment for the
                              State. The final judgment found Appellants
                              jointly and severally liable to the State for
                              $34,776.53 in franchise tax and interest, $2,500
                              in attorney’s fees, as well as post-judgment
                              interest.




                                     xii
             STATEMENT REGARDING ORAL ARGUMENT

Appellee does not believe that oral argument is necessary to resolve this appeal

because the appeal involves a limited record and Appellants’ primary issue

regarding the statute of limitations may be resolved by Appellants’ failure to

adduce any evidence to support the defense. However, if this Court determines

that oral argument is required, Appellee requests time to present their position to

the Court.




                                        xiii
                            ISSUES PRESENTED

1.   Where Appellants adduced no evidence of a relevant date that fell more

     than three years prior to suit, did they fail to carry their burden to establish

     the affirmative defense of limitations under section 111.202 of the Texas

     Tax Code?

2.   Where the last filed tax lien was filed within three years of the State filing

     suit, is suit timely under the plain language of section 111.202 of the Texas

     Tax Code?

3.   Where Appellants filed tax reports reciting an amount owed, did not plead

     payment, and adduced no evidence of payment, was the Court’s judgment

     that the tax debt remained due and owing legally and factually insufficient?

4.   Where the State’s attorney testified about his experience, the complexity of

     the case, the total amount of fees, and the reasonableness of the fees, was

     there legally sufficient evidence to award $2,500.00 in attorney’s fees after

     a bench trial?




                                        xiv
                            STATEMENT OF FACTS

I.    Appellants’ Late Filing of Tax Reports

      Jeffery Benedict Kaiser (“Jeffery Kaiser”) is the sole officer and director of

Jeff Kaiser, P.C. (3 RR 26.) Jeff Kaiser, P.C. was incorporated in Texas in mid-

2001. (3 RR 25.) Jeff Kaiser, P.C. failed to file its initial franchise tax report. In

2003, the Comptroller of Public Accounts for the State of Texas (“Comptroller”)

forfeited Jeff Kaiser, P.C.’s corporate privileges for failure to file the report. (Id.)

      In August of 2008, Jeffery Kaiser filed bankruptcy. (3 RR 26.) On

December 22, 2008, during the pendency of the bankruptcy, Jeffery Kaiser late-

filed franchise tax reports for Jeff Kaiser, P.C. for the reporting years of 2004,

2005, 2006, and 2007. (3 RR 25.) The reports showed $32,579.00 in franchise

tax due on gross receipts of more than one million dollars. (3 RR 10–11, 14–15,

17–18, 21–22.) Neither Jeffery Kaiser nor Jeff Kaiser, P.C. remitted the franchise

tax stated on those reports to the Comptroller. On July 15, 2009, Jeffery Kaiser’s

Chapter 7 bankruptcy case was concluded; he received a general discharge. (3

RR 26.)

II.   The State’s Filing of a Tax Lien and Suit

      On April 15, 2013, the Comptroller filed a State Tax Lien against Jeff

Kaiser, P.C. for the delinquent franchise taxes. (2 RR 12–13; 3 RR 8–9, 26.) On

August 2, 2013, the State of Texas (“State”) filed suit on behalf of the Comptroller

                                           1
against Jeff Kaiser, P.C. and Jeffery Kaiser to recover the unpaid franchise taxes,

plus applicable penalties and interest. (CR 3–10.) The State alleged that Jeffery

Kaiser was individually liable for the unpaid franchise taxes under section

171.255 of the Texas Tax Code (“Tax Code”), which makes the officer of a

corporation whose corporate privileges have been forfeited for failure to file a

report individually liable for all debts of the corporation incurred after the due

date of the report. (CR 4.)

III.   Trial and Judgment

       The trial on the State’s claims was before Judge John Wisser, presiding

over the 98th District Court of Travis County, Texas. At trial, the State and

Appellants entered into evidence a Joint Stipulation that resolved numerous

factual issues. (2 RR 6 at 11–13; 3 RR 25–30.) Trail witnesses included Rose

Fitzgerald, an investigator from the Office of the Attorney General, and Jeffery

Kaiser.

       Ms. Fitzgerald testified to her experience with the investigation of tax debts

owed to the Comptroller and her experience with the Comptroller’s mainframe

computer system. (2 RR 9–10.) In her testimony, she authenticated a Texas

Comptroller’s Certified Claim for Texas Franchise Tax (“Trial Certificate”),

which stated the amount of the State’s claim, and testified as to the calculation of

the interest that had accrued from the date included in the Trial Certificate to the

                                          2
date of trial.   (2 RR 10–11.)        Ms. Fitzgerald also authenticated a computer

printout from the Comptroller’s mainframe system, which itemized the franchise

tax delinquency as of the date of trial, and the tax lien filed by the Comptroller on

April 15th, 2013. (2 RR 11–13.)

       Mr. Kaiser testified that he was the “sole shareholder” of Jeff Kaiser, P.C.

and that he had signed and late-filed 1 the franchise tax reports for Jeff Kaiser, P.C.

for the reporting years of 2004, 2005, 2006, and 2007 on December 22, 2008. (2

RR 14–21.)        Mr. Kaiser noted that the reports included interlineations that

involved a line drawn through the amount owed and a zero written to the side.

(Id.) Mr. Kaiser testified that he had not made the interlineations. (Id.)

       The State’s attorney, John Adams, recalled Ms. Fitzgerald to inquire about

the interlineations. (2 RR 23–24.)          She testified that an interlineated zero

indicated that the reported amount was not paid when the report was filed and that

the Comptroller’s practice when a taxpayer files a report but doesn’t remit

payment is “[g]enerally, this very thing, we’ll either draw a line across the amount

that is due and put a zero on there to show no payments were paid towards this

amount.” (2 RR 25–26.)




1
 The correct due dates for these franchise tax reports were March 15, 2004, March 15, 2005,
March 15, 2006, and March 15, 2007 respectively. Tex. Tax. Code § 171.152(c).

                                            3
      Mr. Adams then testified as to attorney’s fees. He first addressed his

experience and noted that the case was “somewhat more complex” than the

average tax case because it involved issues of the effect of bankruptcy on

franchise taxes and the application of a statute of limitations. (2 RR 27–28.) He

testified that he had spent at least 10 hours “working on legal research, reviewing

the documents, drafting and preparing for a hearing on a motion for summary

judgment and attending the motion for summary judgment hearing.” (2 RR 28.)

He then testified that his time would be “worth at least” $250.00 per hour. (2 RR

29.) Appellants’ counsel moved to strike Mr. Adams’ testimony, arguing that Mr.

Adams was required to produce detailed time records. (2 RR 29–31.) Appellants’

counsel did not secure a ruling on Appellants’ oral motion to strike. (2 RR 31 at

12–14.)

      After testimony was complete, Appellants’ counsel moved to withdraw

stipulation number 12, which stated that the “franchise taxes delinquent from Jeff

Kaiser, P.C. are accurately stated and quantified in Exhibit B to Plaintiffs Original

Petition[.]” (2 RR 33–34; 3 RR 26.) The State agreed to withdrawal of the

stipulation. (2 RR 34 at 21–22.) The trial court subsequently entered judgment

for the State for $34,776.53 in franchise taxes and $2,500.00 in attorney’s fees.

(CR 81.) Pursuant to Appellants’ request, the trial court issued findings of fact

and conclusions of law. (CR 82–87.) The trial court’s findings include a finding

                                         4
that on “the date of trial of this case, the sum of $34,776.53 in franchise taxes,

penalties and interest was due from Jeff Kaiser, P.C.” (CR 85.) Appellants then

timely initiated this appeal. (CR 88–89.)

                      SUMMARY OF THE ARGUMENT

       Appellants argue that the trial court erred in failing to dismiss the State’s

claims on the basis of limitations. Appellants fail to acknowledge that, as an

affirmative defense, the burden was on Appellants to establish their defense of

limitations. Under the relevant statute, section 111.202 of the Tax Code, the State

has three years to file suit from 1) the date a deficiency determination becomes

due, 2) the date a jeopardy determination becomes due, or 3) the last filing of a

tax lien. Appellants offered no evidence of the date a deficiency or jeopardy

determination became due, and the only evidence of a tax lien was a lien filed

within months of suit. Because Appellants failed to offer, let alone seek admission

of, evidence that would demonstrate that a limitations period began more than

three years prior to suit, they could not carry their burden to show that one expired

prior to suit.

       In any event, under the plain language of section 111.202, the State’s filing

of a tax lien made suit timely. The statute allows suit within three years of the

last filed lien. Because the State’s first lien was filed less than four months prior

to suit, suit was timely under the statute.

                                          5
      Appellants also argue that the trial court’s judgment was 1) based solely on

the prima facie evidentiary effect of the Comptroller’s Trial Certificate and 2) that

the admission of tax reports with interlineations vitiated any evidentiary effect of

the Trial Certificate. Appellants are wrong on both counts. The trial court made

a finding of fact sufficient to support entry of the judgment, which stated that on

“the date of trial of this case, the sum of $34,776.53 in franchise taxes, penalties

and interest was due from Jeff Kaiser, P.C.” (CR 85.) Nothing in that finding

requires reference to the Trial Certificate. Because the finding was supported by

legally and factually sufficient evidence, including tax reports filed by Jeffery

Kaiser stating the amounts due and a document from the Comptroller stating the

current balance, the judgment is supported by legally and factually sufficient

evidence without reference to the Trial Certificate.

      The Trial Certificate, however, independently supports the judgment.

Appellants assert that the admission of tax reports with interlineations by the

Comptroller eliminates the prima facie effect of the Trial Certificate. This Court

has held that the heavy burden placed on a taxpayer opposing a Comptroller’s

certificate at trial requires the taxpayer to conclusively establish that he owes no

tax. The State admitted testimony that the Comptroller’s practice is to make

interlineations identical to those in Appellants’ reports when payment is not

remitted with filed reports. Therefore, there is evidence that such interlineations

                                         6
are consistent with the existence, not absence, of Appellants’ tax liability.

Because Appellants did not conclusively prove that they owed no tax, the Trial

Certificate is sufficient evidence to support entry of the judgment.

      Finally, Appellants challenge the award of $2,500.00 in attorney’s fees,

asserting that the absence of documentary evidence requires reversal.

Documentary evidence is not a prerequisite in Texas to recovery of traditional

attorney’s fees. Because the State’s attorney testified to his experience, the

complexity of the case, the services he performed, and that $2,500.00 was a

reasonable fee for those services, the award of attorney’s fees is proper.

                     ARGUMENT AND AUTHORITIES

I.    Appellants Failed to Carry the Burden of Proof on Their Affirmative
      Defense of Limitations

      A.     Appellants failed to elicit evidence of a relevant date for
             limitations that could make suit untimely under section 111.202.

      Appellants had the burden of proof at trial to prove that the State did not

timely file suit; they failed to carry this burden. Wood v. Pyramid Cmty. Dev.

Corp., No. 14-13-00990-CV, 2014 WL 6602424, at *9 (Tex. App.—Houston

[14th Dist.] Nov. 20, 2014, no pet.) (citing, inter alia, Woods v. William M.

Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). Under section 111.202 of the

Tax Code, suit is timely if filed within 3 years after a deficiency or jeopardy

determination has become due and payable or within 3 years after the last


                                         7
recording of a state tax lien. Tex. Tax Code § 111.202. Because Appellants did

not offer any evidence of the date a deficiency or jeopardy determination became

due and payable and because the first recording of a state tax lien occurred within

three years of suit, the trial court did not err in denying Appellants’ affirmative

defense. Ocean Transp., Inc. v. Greycas, Inc., 878 S.W.2d 256, 268 (Tex. App.—

Corpus Christi 1994, writ denied) (overruling defendant’s limitations challenge

following jury trial where defendant failed to prove when limitations accrued).

       Surprisingly, Appellants admit that no evidence of the date of a deficiency

determination or jeopardy determination was adduced at trial. (Kaiser Br. 15, 17,

23, 25, 26, 31.) Appellants fail to appreciate that they bore the relevant burden to

admit this evidence.2 Wood, 2014 WL 6602424, at *9.

       At trial and on appeal, Appellants make the awkward legal argument that

their failure to produce any evidence as to the date a deficiency or jeopardy

determination became due means that limitations should run from the date that




2
  Appellants erroneously assert that the absence of evidence of the date of a deficiency or
jeopardy determination means that no determination or assessment occurred. (Kaiser Br. 25
(“The Comptroller did not audit, assess, or otherwise disagree with the tax due on the reports
filed by Jeff Kaiser, P.C.”); Kaiser Br. 26 (“There was no timely assessment of additional taxes,
no jeopardy determination, and no deficiency determination.”).) This is a logical fallacy.
Where the only burden either side had was Appellants’ burden to establish the date of a jeopardy
or deficiency determination, their failure to do so cannot establish non-occurrence of a
determination.

                                               8
Appellants chose to late-file their franchise tax reports. (Kaiser Br. 18, 22, 23.)

But that date has no support in the text of the statute. Tex. Tax Code § 111.202.3

       Section 111.202 has three specific dates that are relevant to limitations: the

date a deficiency determination became due and payable, the date that a jeopardy

determination became due and payable, or the last filing of a lien. The filing date

of a late-filed tax report is none of these. The Tax Code makes clear that a

deficiency determination occurs after the Comptroller exercises his discretion and

determines he “is not satisfied with a tax report or the amount required to be paid”

in the report. Tex. Tax Code § 111.008. Similarly, a jeopardy determination is a

discretionary determination when the “comptroller believes” collection is

jeopardized by delay. Tex. Tax Code § 111.022. Appellants’ unilateral action of

late-filing   cannot     automatically     trigger    either    of   these    discretionary

determinations.

       Appellants could have elicited testimony as to the date of any deficiency or

jeopardy determination, but did not. Such determinations are generally noticed

by virtue of a letter sent to the taxpayer, a record of which is kept by the

Comptroller. Tex. Tax Code § 111.008(b). Thus, Kaiser himself could have


3
  Furthermore, this Court has considered this argument under pre-codification tax statutes and
rejected it because such an interpretation would render “the four-year period for making
deficiency determinations . . . meaningless.” See Calvert v. Eng’rs & Fabricators, Inc., 440
S.W.2d 320, 325 (Tex. App.—Austin 1969, writ ref’d n.r.e.) (interpreting Article 20 of Title
122A, Taxation-General, the predecessor to the Texas Tax Code).

                                              9
testified to the date he received such a letter. Or Appellants could have questioned

the State’s witness, Rose Fitzgerald, as to the date either determination was made.

Or Appellants could have propounded discovery on the State and then admitted

Comptroller records into evidence. Appellants took none of these actions; instead

Appellants asserted that limitations ran from a date with no support in section

111.202. In doing so, Appellants failed to establish the defense of limitations.

See Ocean Transp., 878 S.W.2d at 268 (overruling defendant’s limitations

challenge following jury trial where defendant failed to prove when limitations

accrued).

      B.     Under the plain language of section 111.202, the State’s filing of
             a tax lien made suit timely.

      The plain language of section 111.202 states that the Comptroller “may

bring an action in the courts of this state” to recover taxes “at any time within

three years after the last recording of a lien.” Tex. Tax Code § 111.202. It is

uncontested that the State filed its first tax lien against Jeff Kaiser, P.C. on April

15, 2013 and filed suit on August 2, 2013. (See 3 RR 26.) Under the plain

language of the statute, suit was filed within three years after the last recording of

a lien and was therefore timely. See State v. Barbee, No. 03-99-00560-CV, 2000

WL 766274, at *4 (Tex. App.—Austin June 15, 2000, pet. denied) (not designated

for publication) (holding suit timely because lien was filed within three years after

the last recording of a lien).
                                         10
       Appellants assert that the statute’s plain language cannot be taken at face

value. But that is exactly what this Court did in Barbee, the only case to consider

the lien language. 4 There, the taxpayer asserted that limitations on one of the

State’s claims had run in 1992, more than three years before the State filed suit,

because a “Tax Statement of Account” sent out in 1989 was a deficiency or

jeopardy determination. Barbee, 2000 WL 766274, at *4. While the State

disputed the taxpayer’s characterization of the notice and argued that later notices

issued in 1994 constituted the original deficiency determination, the Barbee Court

held that, “more importantly,” the suit was timely because the State had filed its

first lien against Barbee in 1995, less than “nine months before it filed suit.” Id.

The Barbee Court made it clear that the 1995 lien and the 1994 deficiency notices

each made suit timely without regard to whether a deficiency or jeopardy

determination was made more than three years earlier in 1989:

               Even if we were to assume Barbee is correct that the
               October 1989 “Statement of Account” was a deficiency or
               jeopardy determination for purposes of section 111.202,
               the State nevertheless filed its lien against Barbee on
               February 20, 1995, just nine months before it filed suit.
               Because it filed suit within three years after this “last
               recording of a lien” and within three years after sending
               Barbee the “Notices of Tax Due,” we conclude that the
               State’s suit on the March 1989 taxes is not barred by any
               statute of limitations.

4
  Barbee was issued prior to January 1, 2003 and was not designated for publication. It is
therefore not binding precedent on this Court, but may be cited and considered for its persuasive
value. Tex. R. App. P. 47.7.

                                               11
Id. This holding in Barbee is entirely consistent with the result reached by the

trial court below. The State filed its first lien on April 15, 2013 and the State filed

suit on August 2, 2013, less than four months later. (See 3 RR 26.) As in Barbee,

“the State’s suit [for] taxes is not barred by any statute of limitations.” 2000 WL

766274, at *4.

       Barbee is incompatible with Appellants argument that the State “must

initiate a lawsuit within three years of the date the taxes were due” unless “the

State files a lien against the taxpayer within the limitations period[.]” 5 (Kaiser

Br. at 13.) In Barbee, the taxes at issue were “due and payable in March 1989,”

but the State’s first lien was not filed until 1995, more than three years later. 2000

WL 766274, at *3–4.

       Choosing not to address Barbee, Appellants cite Wilson v. State, 272

S.W.3d 686 (Tex. App.—Austin 2008, pet. denied), and imply that its statement

that “the Comptroller may bring an action . . . within three years after the

deficiency has become due and payable” stands for the proposition that the date a

tax becomes due and payable triggers the running of a three-year limitations



5
 Appellants’ interpretation of the statute is a moving target. (Compare, e.g., Kaiser Br. at 17–
18 (“the State had three years from the date the taxes were due to file either a lien or a lawsuit”)
with Kaiser Br. at 31 (“A lien must be filed during the [four year] time in which a tax may be
assessed . . .”)). The above quoted formulation is the interpretation set forth in Appellants’
“Issues Presented.” (Kaiser Br. at 13).

                                                12
period. (Kaiser Br. at 30 (arguing that limitations should run from the “day a late

report is filed[,]” because that is when the tax became “due and payable”).)

Wilson provides no support for this proposition. Appellants’ citation to Wilson is

selective and misleading; the following sentence in the opinion clarifies that the

relevant date the “deficiency has become due and payable” for section 111.202

purposes, absent tolling, was August 18, 2003. Wilson, 272 S.W.3d at 689

(emphasis added). A brief review of the facts recited in Wilson makes plain that

August 18, 2003 was the date a deficiency determination became due, not the date

the underlying taxes—for the period from April 1999 through January 2003—

became due. Id. at 687 (“[The] Comptroller . . . commenced a sales tax audit of

Wilson Nursery for the period of April 1, 1999, through January 31, 2003” and

“the Comptroller sent Wilson Nursery a notification of audit results. The

notification stated that . . . the amount would become final on August 18,

2003[.]”). Thus, Wilson provides no support to Appellants’ argument; instead, it

reinforces a plain language interpretation of section 111.202.

      Appellants also cite to dicta from Lawyers Surety Corporation v. State, 825

S.W.2d 802 (Tex. App.—Austin 1992, no writ). (Kaiser Br. 27–29.) The issue

in Lawyers Surety was not construction of section 111.202; instead, the issue was

whether section 111.202 applied to the claim at all. Lawyers Sur., 825 S.W.2d at

803. In Lawyers Surety, the State brought suit against a surety to recover the value

                                        13
of bonds issued by the surety to secure gasoline and diesel fuel taxes. Id. at 802–

03. The State expressly conceded that, as to the taxpayer, limitations had run and

barred suit, but argued that the claim against the surety was not barred. Id. at 803.

The Lawyers Surety Court held that the bond was “simply collateral security and

incidental to the taxpayer’s statutory obligation” and that under controlling

Supreme Court precedent “action is also barred on the bond” where “when suit is

barred for breach” of the taxpayer’s liability. Id. (citing Hatcher v. State, 81

S.W.2d 499 (Tex. 1935)). The language cited by Appellants is obiter dictum

arising after this Court had already found its decision governed by controlling

Supreme Court authority and merely supplies additional rationale for the

proposition that if limitations “is established, it should apply to the surety as well

as the principal[,]” which is an issue not present in this case. Id. at 804; see also

Lund v. Giauque, 416 S.W.3d 122, 129 (Tex. App.—Fort Worth 2013, no pet.)

(“Obiter dictum is a statement not necessary to the determination of the case and

that is neither binding nor precedential.”).

       Appellants also contend for the first time on appeal that, because the lien

enumerated only the 2004 taxes, it is only applicable to limitations for that year.6

(Kaiser Br. 33.) Appellants are estopped from making this argument because they



6
 Again, this argument ignores the fact that it was Appellants’ burden to prove limitations.
Wood, 2014 WL 6602424, at *9.

                                            14
stipulated that the lien was “for the delinquent Franchise Taxes.” (3 RR 26.)

Other stipulations make clear that the language “the delinquent Franchise Taxes”

refers to all taxes sued upon and not merely those arising in a particular year. (See

3 RR 25–26 (Joint Exhibit 1, referring to the “franchise taxes” that are

“delinquent” as those that were those included in the Comptroller’s certificate,

which references all four years, which was attached to the joint exhibit).)

Appellants also waived this argument because they did not make it below, 7 did

not challenge an express finding that the lien was “for the taxes . . . owed . . . for

the tax years 2004, 2005, 2006, 2007,” and because they do not cite to a single

case or statute in their brief to support the argument. See Crowson v. Crowson,

No. 03-11-00795-CV, 2013 WL 6665022, at *7 (Tex. App.—Austin Dec. 13,

2013, pet. denied) (holding that an alternative argument that document failed to

meet a particular statutory requirement was waived by appellant’s failure to raise

the claim in trial court); Barras v. Barras, 396 S.W.3d 154, 169 (Tex. App.—

Houston [14th Dist.] 2013, pet. denied) (failure to request additional or amended

findings of fact relevant to defendant’s limitations defense waived the defense);

Bullock v. American Heart Ass’n, 360 S.W.3d 661, 665 (Tex. App.—Dallas 2012,




7
  In the trial transcript, there are only three references to the year 2004; each of those involves
the 2004 tax report, not the lien. (2 RR 16 at 9–11, 17 at 3–12.)

                                                15
pet. denied) (“Failure to cite legal authority or provide substantive analysis of the

legal issue presented results in waiver of the complaint.”).

          In any event, any tax lien “is sufficient to cover all taxes of any nature”

accrued “before or after the filing of the notice.” Tex. Tax Code § 113.006.8

Thus, the lien filed for the 2004 franchise tax report year also secures Appellants’

unpaid taxes for the report years 2005, 2006, and 2007. Appellants’ argument

would lead to the absurd result that a lien, which when foreclosed would allow

recovery of all taxes at issue, would be insufficient for limitations purposes as to

those same taxes. No language in section 111.202 supports Appellants’ argument.

Rather, section 111.202 allows suit to recover the “amount delinquent[,]” not the

amount enumerated in a lien. Tex. Tax Code § 111.202. The Court should reject

Appellants’ argument that the lien is only relevant to limitations for a claim for

2004 taxes because Appellants are estopped from making this argument by their

own stipulation and because the argument is not supported by any provision of

the Tax Code. See Shepherd v. Ledford, 962 S.W.2d 28, 33 (Tex. 1998) (holding

that defendants were estopped from re-arguing facts that appeared in a stipulation

to the trial court because such facts were “judicially admitted”).




8
    This is also clearly stated on the lien admitted into evidence in this case. (3 RR 8.)

                                                  16
      C.     Even under Appellants’ interpretation of section 111.202,
             Appellants failed to produce evidence that limitations had run.

      Though Appellants construction of the statute below and on appeal is

inconsistent, they admit that a lien is valid for limitations purposes if filed within

the four year assessment period. (Kaiser Br. 31 (“A lien must be filed during the

time in which a tax may be assessed . . .”), 40 (“If the State had, before [the date

assessment limitations expired,] filed a lien, the State could have extended the

time it had to initiate this action . . .”).) Appellants argue that the assessment

period 9 began running on December 22, 2008, when they late-filed their reports.

But Appellants ignore Tax Code section 111.207, which states that a “bankruptcy

case . . . suspends the running of the period . . . for the assessment of any tax.”

Tex. Tax Code § 111.207. Here, the franchise tax reports were filed during the

pendency of Jeff Kaiser’s bankruptcy, which was concluded on July 15, 2009. (3

RR 26, 28 (Joint Exhibit 1, stipulations No. 14, No.16, and discharge document).)

Thus, the assessment period would only begin to run on July 16, 2009 and would

then conclude on July 16, 2013, three months after the State filed its lien. (CR

85.) Because Appellants concede that a lien filed within the assessment window

is valid for limitations purposes and the stipulated facts demonstrate that the lien

was filed within that assessment window, suit could not be barred by limitations.

(Kaiser Br. 31–32; 3 RR 26.)



                                         17
       D.      Appellants’ alternative argument that a four year limitations
               period under the Remedies Code barred suit is contrary to
               express provisions of the Remedies Code.

       Appellants briefly argue that, if this suit is not barred by Tax Code section

111.202, “the Court should . . . find the State’s claims subject to the Texas Civil

Practice and Remedies Code, section 16.004’s 4-year statute of limitations on the

collection of a debt or the 4-year residual statute of limitations in section 16.051.”

(Kaiser Br. at 33.) As with many arguments raised in Appellants’ brief, this

argument was not asserted below, and is therefore waived. See Crowson, 2013

WL 6665022, at *7. But even if not waived, the argument is easily rebutted. The

State is never subject to the limitations periods provided by either of these statutes.

Under section 16.061 of the Texas Civil Practices and Remedies Code, “[a] right

of action of this state or a political subdivision of the state . . . is not barred by any

of the following sections: 16.001–16.004, [and] 16.051[.]” See Garibay v. State,

No. 03-01-00500-CV, 2002 WL 1992299, at *3 (Tex. App.—Austin Aug. 30,

2002, no pet.) (not designated for publication) (rejecting application of statute of

limitations found in section 16.003 of the Civil Practices and Remedies Code to

the State’s tort claim to recover unpaid taxes on the basis of section 16.061). Thus,

absent any restrictions imposed by the Tax Code, the State would not be subject


9
 Assessment limitations was not pled as a defense, nor was it raised at trial. (CR 11–12.)
Additionally, Appellants did not seek or secure any finding related to an assessment limitations
defense. (CR at 82–87.)

                                              18
to sections 16.004 or 16.051, and as with other debts, could never be barred from

collecting a tax debt. See Elkins v. State, No. 03-98-00698-CV, 2000 WL 963160

at *2, n. 3 (Tex. App.—Austin July 13, 2000, pet. denied) (not designated for

publication) (holding that under section 16.061, claim by State to recoup student

loan debt was not subject to limitations); c.f. Shields v. State, 27 S.W.3d 267, 275

(Tex. App.—Austin 2000, no pet.) (citing State v. Durham, 860 S.W.2d 63, 67

(Tex. 1993) for the general proposition that “the State in its sovereign capacity is

not subject to the defense of limitations”).

II.   The State Offered Legally and Factually Sufficient Evidence to
      Support the Trial Court’s Judgment Awarding Delinquent Taxes

      A.     Appellants fail to address finding number nine, which
             independently supports the trial court’s judgment.

      In Section III of their brief, Appellants challenge the legal and factual

sufficiency of the State’s evidence at trial. (Kaiser Br. 34–38.) Appellants’

argument rests on a flawed assumption that the trial court’s judgment necessarily

relies only on the prima facie evidence provided by the Comptroller’s Trial

Certificate pursuant to Tax Code section 111.013 of the Tax Code. (See Kaiser

Br. 19, 35, 37, 41 (repeatedly arguing that State “relied entirely upon the

presumption” and “introduced no other evidence”).)          Appellants appear to

argue—without citation to supporting authority—that the inclusion of a

conclusion of law stating that the Trial Certificate constituted prima facie


                                         19
evidence means that 1) the trial court did not consider or weigh any other

evidence, and 2) that the judgment may only be supported by the Trial Certificate.

(See Kaiser Br. 11, 13, 19, 36, 37, 38, 41 (arguing that the trial court “did not

engage in any weighing of the evidence”).) Appellants’ argument requires this

Court to ignore not only case law regarding omitted findings 10, but also an express

finding by the trial court that on “the date of trial of this case, the sum of

$34,776.53 in franchise taxes, penalties and interest was due from Jeff Kaiser,

P.C.” 11 (CR 85.) The finding makes no mention of the Trial Certificate or prima

facie evidence and itself independently supports the judgment. The trial court’s

judgment should be affirmed because there is legally and factually sufficient

evidence, beyond the Trial Certificate, to support this finding.

       B.      The State introduced legally sufficient evidence of the franchise
               tax delinquency at trial.

       To successfully challenge the legal sufficiency of an adverse finding on

which Appellants did not have the burden of proof at trial, they “must demonstrate

that there is no evidence to support the adverse finding.” Vo Eng’g, Ltd., Co. v.



10
   An appellate court presumes any omitted findings favorable to the judgment where: (1) an
element of the ground of recovery was included in the findings of fact; (2) the omitted element
has not been properly requested; and (3) the omitted finding is supported by the evidence. See
Tex. R. Civ. P. 299; Horvath v. Hagey, No. 03–09–00056–CV, 2011 WL 1744969, at *6 (Tex.
App.—Austin May 6, 2011, no pet.).
11
  Given the existence of this finding, Appellants’ assertion that “[t]he trial court’s [sic] made
no finding of fact concerning the evidence of delinquency” is baseless. (Kaiser Br. 36–37.)

                                               20
Cai, No. 03-13-00529-CV, 2015 WL 513269, at *2 (Tex. App.—Austin Feb. 4,

2015, no pet. h.). Anything more than a mere scintilla of evidence is legally

sufficient to support a finding. Id. (citing Formosa Plastics Corp. USA v. Presidio

Eng’rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998)); see also Randall v.

Goodall & Davison, P.C., No. 03-12-00005-CV, 2013 WL 3481518, at *5 (Tex.

App.—Austin July 2, 2013, pet. denied) (mem. op.) (reversing trial court’s grant

of summary judgment dismissing negligence claims because plaintiff produced

more than a mere scintilla of evidence in response to defendant’s no-evidence

summary judgment motion).

       Contrary to Appellants’ claim that “[t]he State introduced no evidence other

than the Comptroller’s ‘trial’ certificate,” the State introduced ample evidence of

Appellants’ franchise tax delinquency at trial.12 (See Kaiser Br. 37.) At trial, in

addition to the Trial Certificate, (3 RR 5), the State introduced a printout from the

Comptroller’s mainframe system showing the franchise tax delinquency as of the

date of trial, (3 RR 7), and copies of Jeff Kaiser, P.C.’s Texas Corporation

Franchise Tax Reports for the 2004, 2005, 2006, and 2007 reporting years signed

by Appellant Jeffery Kaiser, (3 RR 10–11, 14–15, 17–18, 21–22).13 These



12
   Appellants do not challenge the sufficiency of the evidence to support Jeffery Kaiser’s
individual liability for the debts of Jeff Kaiser, P.C.
13
  Appellee additionally introduced a document reflecting the interest calculation from the date
of the Trial Certificate to the date of trial (3 RR 6.)

                                              21
documents were admitted into evidence without objection. (2 RR 12 at 5–8, 21

at 19–22.)

      Appellant Jeffery Kaiser admitted at trial that he signed the Franchise Tax

Reports for the 2004, 2005, 2006, and 2007 reporting years on behalf of Jeff

Kaiser, P.C. (2 RR 17 at 3–5, 18 at 2–4, 19 at 8–11, 20 at 7–8.) The Franchise

Tax Reports stated the amount of franchise tax due, the Comptroller’s printout

demonstrated that the amount remained delinquent, and section 111.060 of the

Tax Code provides the rate at which interest accrues on such delinquent taxes.

The evidence is much more than a scintilla; the trial court could have relied on

these documents, taken judicial notice of the pre-judgment interest section of the

Tax Code, and calculated the exact amount awarded. See, e.g., Vo Eng’g, 2015

WL 513269, at *2; see also Wimmer v. State, No. 03-03-00135-CV, 2004 WL

210629, at *4–5 (Tex. App.—Austin Feb. 5, 2004, pet. denied) (affirming

calculation of interest on tax claim by court).




                                         22
      C.     The record contains factually sufficient evidence of the franchise
             tax delinquency.

      To mount a successful challenge to the factual sufficiency of the evidence

on an issue, Appellants must show that the finding is “so contrary to the evidence

as to be clearly wrong and manifestly unjust.” Vo Eng’g, 2015 WL 513269, at *2

(citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)).            In making its

determination, a reviewing court must consider all evidence supporting and

contradicting the challenged finding. Bubnis v. Leander Indep. Sch. Dist., No.

03-13-00196-CV, 2015 WL 1478207, at *4 (Tex. App.—Austin Mar. 25, 2015,

no pet. h.) (mem. op.) (citing Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442,

445 (Tex. 1989)) (overruling factual sufficiency challenge to judgment rendered

following jury verdict). Where trial is to the bench, the trial court is the “sole

judge of the credibility of the witnesses” and “[a]s long as the evidence falls

‘within the zone of reasonable disagreement,’” appellate courts should not

substitute their judgment for that of the trial court. Vo Eng’g, 2015 WL 513269,

at *2 (citing Southwestern Bell Media, Inc. v. Lyles, 825 S.W.2d 488, 493 (Tex.

App.—Houston [1st Dist.] 1992, writ denied); City of Keller v. Wilson, 168

S.W.3d 802, 822 (Tex. 2005)).

      Appellants’ factual sufficiency challenge appears to be based on

handwritten interlineations of lines through the amount of tax due stated on each

of the four Texas Franchise Reports and the appearance of “0’s” next to those
                                       23
lines. (See Kaiser Br. 35, 37–38; 3 RR 10, 14, 17, 21.) Appellants claim that

“[t]he State’s sole fact witness testified that she had reviewed but no personal

knowledge [sic] of the statement made in the Comptroller’s certificate, and

admitted that the Comptroller’s office had altered the tax reports to put ‘zero’ as

the tax due without explanation.”14 (See Kaiser Br. 35 (citing 2 RR 26–27).) This

is a misstatement of the trial testimony and ignores the substance of the State’s

fact witness’s testimony.

       The State presented testimony from Rose Fitzgerald, an investigator at the

Office of the Attorney General’s Bankruptcy and Collections Division with

knowledge of the practices of the Comptroller derived from over 20 years of

experience handling collections of delinquent taxes. (2 RR 24 at 15–17.) Ms.

Fitzgerald testified that when a taxpayer files a tax report, but fails to remit

payment with that report, Comptroller’s staff will generally “draw a line across

the amount that is due and put a zero on there to show no payments were paid

towards this amount.” (2 RR 24 at 21–25, 25 at 1.) Despite the existence of this

clear and direct explanation, Appellants have not merely ignored Ms. Fitzgerald’s

14
   Appellants never proposed a factual scenario that explains how interlineations made by the
Comptroller to tax returns filed by Jeffery Kaiser could alter Appellants’ liability. To the extent
Appellants argue that the interlineations could create a fact issue as to whether the Comptroller
released or discharged Jeff Kaiser, P.C.’s liability or that Jeff Kaiser, P.C. paid the tax, these
are all affirmative defenses that were not pled or argued and would be Appellants’ burden to
establish. See Tex. R. Civ. P. 94 (“In pleading to a preceding pleading, a party shall set forth
affirmatively accord and satisfaction, . . . discharge in bankruptcy, . . . payment, release, . . .
waiver, and any other matter constituting an avoidance or affirmative defense.”).

                                                24
testimony, they have baldly asserted that Ms. Fitzgerald “admitted that the

Comptroller’s officer had altered the tax reports to put ‘zero’ as the tax due

without explanation.” (Kaiser Br. 16 (emphasis added).)

        Ms. Fitzgerald’s testimony provided evidence that the Comptroller’s

routine practice is to mark out the amount due and put a zero next to that amount

when a taxpayer submits a report without making a payment. See Tex. R. Evid.

406.15 This explanation fully accounts for the interlineations in a manner that

supports the continued existence of the debt and therefore the judgment. Even if

reasonable minds could disagree as to the credibility of Ms. Fitzgerald’s testimony

or the meaning of the interlineations on the Franchise Tax Reports, under the

proper standard of review, Appellants’ factual sufficiency challenge must fail

because the trial court’s finding that the franchise tax debt remained due is not “so

contrary to the evidence as to be clearly wrong and manifestly unjust.” See Vo

Eng’g, 2015 WL 513269, at *2 (citing Cain v. Bain, 709 S.W.2d at 176).

       D.      The Trial Certificate, standing alone, is legally and factually
               sufficient evidence of liability at trial.

       Independent of the legal and factual sufficiency argument above, the Trial

Certificate is, pursuant to section 111.013 of the Tax Code, prima facie evidence


15
  “Habit; Routine Practice – Evidence of a person's habit or an organization's routine practice
may be admitted to prove that on a particular occasion the person or organization acted in
accordance with the habit or routine practice. The court may admit this evidence regardless of
whether it is corroborated or whether there was an eyewitness.” Tex. R. Evid. 406.
                                              25
of the debt sufficient to support the trial court’s judgment. Citing law related to

other statutes and to judicially-created presumptions, while ignoring cases

addressing the very statute at issue here, Appellants erroneously argue that the

Trial Certificate has no evidentiary value because the interlineations on the reports

created a “fact issue” as to liability. (Kaiser Br. 11, 19, 36–37, 41.) As this

Court’s precedent makes clear, a Comptroller’s certificate is sufficient to support

a judgment even where a defendant admits evidence to dispute the tax liability.

      This Court has long held that to overcome the prima facie effect of

Comptroller’s certificates “the taxpayer must conclusively establish that he owes

no tax.” Kawaja v. State, No. 03-05-00491-CV, 2006 WL 1559343, at *2 (Tex.

App.—Austin June 8, 2006, no pet.) (citing State v. Glass, 723 S.W.2d 325, 327

(Tex. App.—Austin 1987, writ ref'd n.r.e.)). The taxpayer must present “evidence

tending to support the contrary as would be conclusive, or evidence which would

be so clear and positive it would be unreasonable not to give effect to it as

conclusive.” Id. (citing Hylton v. State, 665 S.W.2d 571, 572 (Tex. App.—Austin

1984, no writ)). In Kawaja, the defendant, by affidavit, stated that his business

records were destroyed by a flood, that he applied a low markup on beer, and that

he had never sold tobacco products, presumably challenging the basis for the

audit. Id. at *2–3. This Court held that defendant had not overcome the prima

facie effect of the Comptroller’s certificate because he had not “come forward

                                         26
with evidence conclusively establishing that he owed no tax.” Id. at *2. Here,

Appellants did not come forward with any testimony suggesting that they did not

owe tax and Appellants have never contended that they paid the franchise taxes

they reported owing to the Comptroller. Instead, they rely on interlineations in

tax documents for which the record contains an explanation that does not relieve

them of liability. See supra, at II.C. Because Appellants’ evidence is far less

conclusive than evidence this Court has previously found insufficient to defeat

judgment based on a Comptroller’s certificate,16 the evidence cannot require

reversal here.

       Appellants largely ignore cases addressing section 111.013 of the Tax

Code. Instead they cite to a case involving a judicially-created presumption for

their argument that “when the party benefiting from a presumption introduces

evidence contrary to the evidence on which the presumption is based, the

presumption is lost.” (See Kaiser Br. 35 (citing to Gen. Motors Corp. v. Saenz,



16
   See also Ayeni v. State, 440 S.W.3d 707, 712 (Tex. App.—Austin 2013, no pet.) (holding
that affidavits which attached sales tax returns and vendor receipts were insufficient to defeat
summary judgment because they did not state “Ayeni’s total sales amounts” and therefore did
not raise a question of fact “as to the correct amount of sales taxes owed”); Sundown Farms,
Inc. v. State, 89 S.W.3d 291, 294 (Tex. App.—Austin 2002, no pet.) (holding that invoices
presented by taxpayer could not rebut the presumption because they were “not sufficiently
detailed to compel the conclusion that the services described were exempt”); Penny v. State,
No. 03-97-00399-CV, 1998 WL 394173, at *2 (Tex. App.—Austin July 16, 1998, no pet.)
(mem. op.) (not designated for publication) (holding that appellants who testified that they
transferred the business and presented a warranty deed showing conveyance of the property did
not overcome the presumption of correctness the Comptroller’s certificate).

                                              27
873 S.W.2d 353 (Tex. 1993).) In General Motors, the Texas Supreme Court

considered the ‘Magro presumption’ in products liability cases, which provides a

presumption that, for the purposes of causation, an adequate warning from the

manufacturer would have been read and heeded. 873 S.W.2d at 357–59. The

General Motors Court made clear that the only effect of the Magro presumption

is “to shift the burden of producing evidence to the party against whom it

operates.” Id. at 359. Though cases have described the prima facie effect of a

Comptroller’s certificate as a “presumption of correctness,” it does not follow

from the use of the word ‘presumption’ that judicially-created presumptions,

which merely shift the burden of production, operate in the same manner as a

Comptroller’s certificate that is granted evidentiary weight by statute.

      Appellants also cite to Sundance Oil Co. v. Aztec Pipe & Supply Co., Inc.,

576 S.W.2d 780 (Tex. 1978), for the proposition that a sworn account is deficient

and “not prima facie evidence of the debt when the movant’s own pleadings and

exhibits raise a fact question of whether the nonmovant was a party to the

transaction.” (See Kaiser Br. 35.) Suits on sworn account are governed by Texas

Rule of Civil Procedure 185, which states that the filing of specific pleadings with

exhibits and affidavits “shall be taken as prima facie evidence . . . unless the party

resisting such claim” files a verified denial. Tex. R. Civ. P. 185. Sundance merely

stands for the proposition that where the pleadings and exhibits required by Rule

                                         28
185 are internally inconsistent, they do not meet the requirements of Rule 185 and

cannot trigger its evidentiary effect. In this case, the only document required to

trigger section 111.013’s evidentiary effect is the Trial Certificate. Because that

Certificate unambiguously discloses Appellant Jeff Kaiser, P.C.’s liability for

unpaid franchise tax, penalties, and interest, Sundance is irrelevant. (3 RR 5.)

       Finally, Appellants cite to Parker v. State, 40 S.W.3d 555 (Tex. App.—

Austin 2001, no pet.), arguing that interlineations on the tax reports “raised an

issue regarding taxes assessed and collected that was not addressed in the

certificate.” (Kaiser Br. 37.) Parker is inapplicable to this case. In Parker, the

State brought suit against an individual pursuant to section 111.016 of the Tax

Code to recover sales tax, penalties, and interest originally incurred by his

corporation. Parker v. State, 36 S.W.3d 616, 617–18 (Tex. App.—Austin 2000,

no pet.). The Parker Court held that the State was required to “prove the actual

amount he received or collected,” a necessary element of section 111.016, because

that element—actual collection—was not addressed in the certificate. Id. at 618.

Unlike Parker, the State’s claim against Jeff Kaiser, P.C.,17 which requires only

proof of the amount and its delinquency, is not subject to any additional element

not addressed by the Trial Certificate.



17
  Appellant Jeffery Kaiser’s individual liability under section 171.255 of the Tax Code for any
delinquency of Jeff Kaiser, P.C. was not challenged below and has not been raised on appeal.

                                              29
III.   The State Offered Legally Sufficient Evidence to Support the Trial
       Court’s Award of $2,500.00 in Attorney’s Fees

       Under the traditional method of awarding fees applicable in this case,

documentary evidence is not a prerequisite. Metroplex Mailing Servs., LLC v. RR

Donnelley & Sons Co., 410 S.W.3d 889, 900 (Tex. App.—Dallas 2013, no pet.)

(citing In re A.B.P., 291 S.W.3d 91, 99 (Tex. App.—Dallas 2009, no pet.)). It has

consistently been held that an attorney’s testimony about his experience, the total

amount of fees, and the reasonableness of the fees charged is sufficient to support

an award. Id.; see also Ragsdale v. Progressive Voters League, 801 S.W.2d 880,

881 (Tex. 1990) (per curiam) (requiring consideration of factors including nature

and complexity of case, nature of services provided by counsel, time required for

trial, amount of money involved, client’s interest that is at stake, responsibility

imposed upon counsel, and skill and expertise required). Where an appellant, as

here, challenges the amount of attorney’s fees awarded, 18 those amounts are

reviewed under a legal sufficiency standard, viewing the evidence in a light that

tends to support the disputed finding and disregarding evidence and inferences to

the contrary. EMC Mortg. Corp. v. Davis, 167 S.W.3d 406, 418 (Tex. App.—

Austin 2005, pet. denied). “If more than a scintilla of evidence supports the

challenged finding, the legal sufficiency challenge must fail.” Id. Because the


18
  Appellant has not challenged the availability of attorney’s fees in this case, which were
awarded under section 2107.006 of the Texas Government Code.

                                            30
State’s counsel testified as to his experience, the total amount of fees, and the

reasonableness of the fees, there is more than a scintilla of evidence to support the

State’s $2,500 attorney fee award and Appellants’ challenge should be rejected.

Kinnard v. Braziel Cooler-Freezer Mfg., Inc., No. 10-06-00103-CV, 2007 WL

2315962, at *3 (Tex. App.—Waco Feb. 14, 2007, no pet.) (overruling legal

sufficiency challenge to trial court’s award of attorney’s fees where counsel

testified as to a reasonable rate and an approximate number of hours expended).

      The State’s trial counsel, John Adams, began his attorney’s fee testimony

by briefly outlining his experience, which includes over 15 years of practice with

the Office of the Attorney General. (2 RR 27–28.) Mr. Adams then testified as

to the complexity of the case and expressly identified two unique issues that

contributed to the complexity: the question of whether bankruptcy discharged

franchise taxes and application of the statute of limitations. (2 RR 28.) Mr.

Adams went on to identify the tasks he performed prior to trial including “legal

research, reviewing . . . documents, drafting and preparing for a hearing on a

motion for summary judgment and attending the motion for summary judgment

hearing. (2 RR 28.) Finally, Mr. Adams testified that these tasks took him at least

10 hours and that a reasonable rate would be $250 dollars per hour. (2 RR 28–

29.) After Mr. Adams completed his testimony, counsel for Appellants asked

whether Mr. Adams had kept time records and moved to strike Mr. Adams’

                                         31
testimony, 19 but did not cross-examine Mr. Adams regarding his experience, his

actions in the case, or the reasonableness of the fee requested.

       Oral testimony similar to Mr. Adams’ is regularly held to be legally

sufficient to support attorney’s fees. 20 See Legere v. Legere, No. 03-12-00046-

CV, 2013 WL 692450, at *8 (Tex. App.—Austin Feb. 22, 2013, no pet.) (affidavit

testifying that attorney had been licensed in Texas since May 2001, that his hourly

rate of $250 “is a reasonable rate for a family law attorney in Travis County” and

that “he had worked more than 40 hours trying to resolve the case” was sufficient

to support a $2,500 fee award); Kinnard, 2007 WL 2315962, at *3 (overruling

legal sufficiency challenge to trial court’s award of attorney’s fees where counsel

testified as to a reasonable rate and an approximate number of hours expended).

       In their brief, Appellants cite El Apple I, Ltd. v. Olivas, for the premise that,

because the State did not rely on documentary evidence, the State’s evidence in

support of its attorney’s fee award was legally insufficient. 21 370 S.W.3d 757


19
  The motion to strike was implicitly denied by the entry of the trial court’s judgment. That
denial has not been challenged by Appellant.
20
  Attorney fee testimony is “taken as true as a matter of law” if the testimony, like Mr. Adams’
testimony, “is not contradicted by any other witness and is clear, positive, direct, and free from
contradiction[,]” especially where, as here, the opposing party had an opportunity to disprove
the testimony but failed to do so. Legere, 2013 WL 692450, at *7.
21
  Appellants erroneously refer to an abuse of discretion standard for reviewing the amount of
an attorney’s fee award. That is the standard for whether attorney’s fees should be available in
the first instance. See Bauer v. Williams, No. 03-07-00494-CV, 2008 WL 3166311, at *2 (Tex.
App.—Austin Aug. 8, 2008, no pet.) (in UDJA context, explaining that the “question of a
judge’s decision to award or not award attorney’s fees is reviewed on appeal for an abuse of
discretion”) (citing Ridge Oil Co., Inc. v. Guinn Invs., Inc., 148 S.W.3d 143, 162 (Tex. 2004)).
                                               32
(Tex. 2012). The legal issues in Olivas are inapposite to the present appeal. In

Olivas, the Supreme Court analyzed an attorney’s fee claim under the Texas

Commission on Human Rights Act (TCHRA). Id. at 758–59. As the Supreme

Court explained, “Texas courts have looked to federal law in applying” the

TCHRA, including its attorney’s fee provision, and imported the federal “lodestar

method” used in Title VII attorney’s fee claims into the TCHRA. Id. at 760. Thus,

the Olivas Court’s analysis of the legal sufficiency requirements for the federal

“lodestar method”22 is not relevant to a claim for attorney’s fees that arises under

another statute. See, e.g., Ferrant v. Graham Assocs., Inc., No. 02-12-00190-CV,

2014 WL 1875825, at *7, 8 (Tex. App.—Fort Worth May 8, 2014, no pet.)

(summarizing intermediate court decisions holding that Olivas “does not require

admission of hourly time records in all cases” and holding that Olivas does not

“mean that evidence of attorney’s fees is legally insufficient in an ordinary, non-

lodestar, hourly-fee breach of contract case unless contemporaneous time records


As this Court has stated, a challenge to the evidentiary support for the amount of fees is a
challenge to legal sufficiency. Hertzberg v. Austin Diagnostic Clinic Assoc., P.A., No. 03-07-
00072-CV, 2009 WL 2913620, at *6 (Tex. App.—Austin Sept. 11, 2009, no pet.) (“[W]e review
the amount of attorney’s fees awarded under a legal-sufficiency standard[.]”). Indeed, that is
the basis for reversal in the case on which Appellants’ rely. Olivas, 370 S.W.3d at 764 (“[W]e
hold that the fee application and proof in this case did not provide the trial court legally
sufficient evidence to calculate a reasonable fee award[.]”).
22
  Throughout its opinion in Olivas, the Supreme Court regularly caveated its legal holdings as
only applicable where, unlike here, an attorney is “applying for a fee under the lodestar
method.” Olivas, 370 S.W.3d at 759–60 (“Although state procedural rules govern the
determination of attorney’s fees in a suit brought under state law, Texas courts have looked to
federal law in applying our own statute, including section 21.259(a) of the TCHRA. . .”).

                                              33
are admitted into evidence.”); see also Metroplex Mailing Servs., 410 S.W.3d at

900 (“[Olivas] has no bearing on non-lodestar awards of fees such as those made

in breach of contract cases.”). Indeed, in Olivas, the Supreme Court twice

distinguished Texas caselaw that the court summarized as holding that “detailed

billing records or other documentation” are not required “as a predicate to an

attorney's fees award” specifically because those cases involved “a different

statute and a different issue.” 370 S.W.3d at 762 (“While Texas courts have not

routinely required billing records or other documentary evidence to substantiate a

claim for attorney's fees, the requirement has merit in contested cases under the

lodestar approach.”). Finally, the fee statute in this case states that the Attorney

General can recover fees “in the same manner as provided by general law[,]”

thereby expressly rejecting any heightened standard, like the standard in Olivas.

Tex. Gov’t Code § 2107.006.

       But Olivas is not only legally distinguishable, it is also factually distinct.

In Olivas, the plaintiff sought to recover $464,000 in attorney’s fees for 890 hours

of work by multiple attorneys and legal assistants in a case where the plaintiff was

successful on only one of multiple claims and recovered only slightly more than

$100,000 in damages.23 That is to say that, in Olivas, the attorney’s fees amounted


23
  Olivas, 370 S.W.3d at 765 (“The jury awarded Olivas $1,700 in back pay and $103,000 for
past and future compensatory damages[,] . . . $464,000 [in] attorney fees and $6,500 [in]
paralegal fees[,] . . . [but t]he court of appeals reversed the back-pay award. . .”).

                                           34
to more than 450% of the damages awarded; a ratio that would raise any jurist’s

eyebrow. In contrast, here the State sought a fee that amounted to less than 7%

of the debt at issue and sought compensation for only 10 hours of work preparing,

briefing, and attending both a summary judgement motion and a bench trial where

Plaintiff prevailed on all claims.

      Appellants’ argument rests entirely on Olivas, a case that is factually and

legally inapplicable. Mr. Adams’ attorney’s fee testimony was clear and direct

and comported with the general standard for attorney’s fees that governs this case.

It provided more than a scintilla of evidence to support the attorney’s fee award.

Appellants’ legal sufficiency argument should be rejected. See Kinnard, 2007

WL 2315962, at *3 (overruling legal sufficiency challenge to trial court’s award

of attorney’s fees where counsel testified as to a reasonable rate and an

approximate number of hours expended).




                                        35
                 CONCLUSION AND PRAYER

The State respectfully asks this Court affirm the trial court’s Judgment.

                                Respectfully Submitted,

                                KEN PAXTON
                                Attorney General of Texas

                                CHARLES E. ROY
                                First Assistant Attorney General

                                JAMES E. DAVIS
                                Deputy Attorney General
                                For Civil Litigation

                                RONALD R. DEL VENTO
                                Assistant Attorney General
                                Chief, Bankruptcy & Collections Division

                                /s/ Sean M. O’Neill
                                KEVIN R. SAUER
                                Assistant Attorney General
                                State Bar No. 24088355
                                kevin.sauer@texasattorneygeneral.gov
                                SEAN M. O’NEILL
                                Assistant Attorney General
                                State Bar No. 24070354
                                sean.oneill@texasattorneygeneral.gov
                                Bankruptcy & Collections Division
                                P. O. Box 12548, MC 008
                                Austin, Texas 78711-2548
                                Tel.: (512) 463-2173
                                Fax: (512) 936-1409
                                ATTORNEYS FOR APPELLEE
                                THE STATE OF TEXAS




                                 36
              CERTIFICATE OF COMPLIANCE WITH RULE 9.4

1.    This brief complies with the type-volume limitation of Texas Rule of

Appellate Procedure 9.4(i)(2)(B) because, according to the Microsoft Word 2013

word court function, it contains 9,159 words on pages xi and 1–36, excluding the

parts of the brief exempted by Texas Rule of Appellate Procedure Rule 9.4(i)(1).

2.    This brief complies with the typeface requirements of Texas Rule of

Appellate Procedure 9.4(e) because it has been prepared in Microsoft Word 2013

using a conventional typeface in 14-point font except for footnotes, which are 12-

point font.


                                       /s/ Kevin R. Sauer
                                       KEVIN R. SAUER


                        CERTIFICATE OF SERVICE

      I certify that a true and correct copy of the foregoing Brief of Appellee was
served electronically on:

      George F. May
      TWOMEY | MAY, PLLC
      2 Riverway, 15th Floor
      Houston, Texas 77056


                                       /s/ Kevin R. Sauer
                                       KEVIN R. SAUER




                                        37
                            No. 03-15-00019-CV


        IN THE COURT OF APPEALS FOR THE THIRD JUDICIAL DISTRICT
                            AUSTIN, TEXAS


                            JEFF KAISER, P.C. AND
                          JEFFERY BENEDICT KAISER
                                                 Appellants,

                                     vs.

                            THE STATE OF TEXAS,
                                               Appellee.



         Appeal from the 98th District Court of Travis County, Texas,
          No. D-1-GV-13-000790, Honorable John Wisser presiding


                               APPENDIX TO
                            BRIEF OF APPELLEE



Tab 1: Trial Court Judgment

Tab 2: Trial Court’s Findings of Fact and Conclusions of Law

Tab 3: Section 111.202 of the Texas Tax Code
Appendix

 TAB 1
                                               DC         BK14336 PG222
                                                                                     Fllad in The District Court
                                                                                       of Travis Cc:Jnty, Texas



                                            NO. D-l-GV-13-000790                     At                              M.
                                                                                      Amatia Rodri uez-Mendoza, Ci..:1k

     THE STATE OF TEXAS                                                   IN THE DISTRICT COURT OF


     VS
                                                                          TRAVIS COUNTY. TEXAS

     JEFF KAISER, P.C. AND JEFFERY
     BENEDICT KAISER, A/KIA JEFFREY
     B. KAISER                                                            98TH JUDICIAL DISTRICT


                                            FINAL JUDGMENT

           BE IT REMEMBERED that on October 27, 2014. the above-entitled and numbered cause
    came before the Court for trial; and the Court proceeded to consider the pleadings and the
    evidence admitted at trial, and the arguments of counsel: and the Court found that judgment
    should be rendered for Plaintiff; it is therefore
           ORDERED that Plaintiff. THE STATE OF TEXAS, recover from Defendants JEFF
    KAISER. P.C. AND JEFFERY BENEDICT KAISER. A/KIA JEFFREY B. KAISER, jointly

•   and severally, the sum of $34, 776.53. which sum represents the franchise tax. penalties and
    interest. shown in the Comptroller' s certificates admitted into evidence in this matter, plus
    interest at the statutory rate specified in Ch. 111.010 of the Texas Tax Code on those amounts
    from October 27. 2014 until paid: and it is further
           ORDERED that        Plaintiff~   the State of Texas. recover from the Defendants JEFF
    KAISER, P.C. AND JEFFERY BENEDICT KAISER. A/KIA JEFFREY B. KAISER, jointly
    and severally, the sum of $2,500.00 as its reasonable and necessary attorney's foes; plus court
    costs herein incurred and court costs which may hereafter be incurred in the collection of this
    judgment if the same be necessary, for all of which execution and other process necessary to
    enforce this judgment may issue.
           This judgment finally disposes of all parties and all claims and is appealable.




                                                                           81
Appendix

 TAB 2
                                                                        Filed in The District Court
                                                                         of Travis County, Texas~

                                                                               OEC 2 2 2014
                                    D-1-G V-13-000790                    Al         Q/26 ~'M.
                                                                         Amalia Rodriguez-Mendoza, lerk

 THE STATE OF TEXAS                                   IN THE DISTRICT COURT OF



 vs.                                                        TRAVIS COUNTY, TEXAS



 JEFF KAISER, P.C. AND
 JEFFERY BENEDICT KAISER,                                  98TH JUDICIAL DISTRICT
 A/KJA JEFFREY B. KAISER

             FINDINGS OF FACT AND CONCLUSIONS OF LAW
       On the 27th day of October 272014, came on to be heard the above numbered and styled
cause. Having heard the testimony, admitted exhibits into evidence, and entertained argum ent of
counsel the Court makes the following findings and conclusions:


                                      FINDINGS OF FACT
    I. Jeff Kaiser, P.C. was a Texas Professional Corporation.
   2. Jeff Kaiser, P.C. was incorporated on or about July JO, 2001 by filing Articles of
       incorporation with the Texas Secretary of State.
   3. Jeff Kaiser was the initial director of Jeff Kaiser, P.C. listed m the Articles of
       lncorporation.
   4. Jeff Kaiser, P.C. did not file its first Franchise Tax/Public lnformation Report when due.
   5. On January 28, 2003 , the Texas Comptroller of Public Accounts forfei ted the corporate
       privileges of Jeff Kaiser, P.C. because the corporation fai led to file its first Franchise
       Tax/ Public lnfo nnation Report when that report was due.
   6. The Texas Secretary of State forfeited the corporate charter of Jeff Kaiser, P.C. on
       August 22, 2003.
   7. On December 22, 2008, Jeff Kaiser, P.C. filed Franchise Tax Returns for calendar years
       2004, 2005 , 2006, 2007 and 2008.




                                                                                                          84
8. The Texas Comptroller of Public Accounts has certified to the Texas Attorney General
   that Franchise Taxes are delinquent from Jeff Kaiser, P.C.
9. On October 27, 2014, the date of trial of this case, the sum of $34,776.53 in franchise
   taxes, penalties and interest was due from Jeff Kaiser, P.C.
I0. Jeff Kaiser, listed as the initial director of Jeff Kaiser, P.C. is the same person as Jeffery
   Benedict Kaiser, a/k/a Jeffrey B. Kaiser, the named individual defendant in this lawsuit.
11. Jeff Kaiser was the sole officer and director of Jeff Kaiser, P.C.
12. On April 15, 2013, the Texas Comptroller of Pub Iic Accounts filed a State Tax Lien
   against Jeff Kaiser, P.C. for the delinquent Franchise Taxes.
13. The franchise taxes delinquent from Jeff Kaiser, P.C. are accurately stated and quantified
   in Exhibit B to Plaintiffs Original Petition in this case, a Certified Claim for Texas
    Franchise Tax from the Texas Comptroller of Public Accounts.
14. Plaintiff brought suit against Defendants pursuant to Section 171.255 of the Texas Tax
   Code.
15. On August 8, 2008, Defendant Jeffery Benedict Kaiser filed for bankruptcy under
   Chapter 7 of the United States Bankruptcy Code in the Houston Division of the United
   States Bankruptcy Court; Case No. 08-35261.
16. The Plaintiff entered no appearance, nor filed any Proof of Claim in the Bankruptcy case
   of Jeffery Benedict Kaiser.
17. On July 15, 2009, Defendant Jeffery Benedict Kaiser was granted an unrestricted general
   discharge in the bankruptcy case.
18. On April 15, 2013, nine (9) years and eight (8) months after the forfeiture of the
   corporate charter of Jeff Kaiser, P.C.; and three (3) years and eight (8) months after
   Defendant Jeffery Benedict Kaiser's Bankruptcy Discharge, the Texas Comptroller of
   Public Accounts filed a tax lien against Jeff Kaiser, P.C. for the taxes allegedly owed by
   Defendant Jeff Kaiser, P.C. for the tax years 2004, 2005, 2006, and 2007.
19. On August 2, 2013, the State of Texas filed this lawsuit against Jeff Kaiser, P.C. , and the
   individual former officer/director of that corporation, Jeffery Benedict Kaiser.
20. August 2, 2013 is less than three years after April 15, 2013.
21. The attorney's fee requested by Plaintiff, The State of Texas, in the amount of $2,500.00
   is reasonable in this case.

                                                                                                2




                                                                                                     85
                               CONCLUSIONS OF LAW


I. This case was brought by the State of Texas to secure a judgment for delinquent franchise
   taxes against the permitted taxpayer, Jeff Kaiser, P.C. pursuant to Chapter 171 of the
   Texas Tax Code, and to impose personal liability for the delinquent franchise taxes on the
   individual defendant, Jeffery Benedict Kaiser, a/k/a Jeffrey B. Kaiser, pursuant to Texas
   Tax Code § 17 l.255.
2. In their Answer, Defendants raised the defense of the statute of limitation to Plaintiffs
   cause of action to recover delinquent franchise taxes.
3. The statute of limitation applicable to this case is Texas Tax Code § 111.202, which
   provides in part:        "At any time within three years after a deficiency or jeopardy
   determination has become due and payable or within three years after the last
   recording of a lien, the comptroller may bring an action in the courts of this state ... "
4. The State's recording of its tax lien on April 15, 2013 , commenced the running of the
   statute of limitation in this case.
5. The State's filing of suit on August 2, 2013 was timely under Texas Tax Code § 111.202.
   The State's cause of action for recovery of delinquent franchise taxes is not barred by the
   statute of limitation.
6. In his Answer, Defendant Jeffery Benedict Kaiser, a/k/a Jeffrey B. Kaiser raised the
   defense of Discharge in Bankruptcy to his personal liability for the franchise taxes made
   the subject of this lawsuit.
7. At or prior to trial, Defendant Jeffery Benedict Kaiser, a/k/a Jeffrey B. Kaiser abandoned
   the defense of Discharge in Bankruptcy to his personal liability for the franchise taxes
   made the subject of this lawsuit by failing to raise, argue or offer evidence to support the
   defense of Di scharge in Bankruptcy.
8. Regardless of Defendant's abandonment of the defense of Discharge in Bankruptcy, the
   taxes made the subject of this lawsuit are excepted from discharge in bankruptcy by the
   operation of Bankruptcy Code, 11 U.S.C. §523(a)( I)(B)(ii). That section excepts from
   discharge any taxes for which a return is required and for which the returns are filed after
   they were due, and after two years before the date of filing the petition in bankruptcy.



                                                                                                3




                                                                                                    86
9. Pursuant to Texas Tax Code § 111.013. the Texas Comptroller's Certified Claim for
   Texas Francllise Tax constitutes prima facie evidence of:
           (I) the stated tax or amount of the tax. after all just and lawful
           offsets, payments, and credits have been allowed:
           (2) the stated amount of penalties and interest;
           (3) the delinquency of the amounts; and
           (4) the compliance of the comptroller with the applicable
           provisions of this code in computing and determining the amount
           due.

10. Neither Defendant Jeff Kaiser. P.C. nor Defendant Jeffery Benedict Kaiser. a/k/a Jeffrey
   B. Kaiser offered evidence sufficient lo overcome the statutory presumptions in favor of
   the State's Certified Claim for Texas franchise Tax.
11. Pursuant to Texas Tax Code § 171.255. as an officer and director of JeIT Kaiser. P.C..
   Defendant Jeffery Benedict Kaiser. a/k/a Jeffrey B. Kaiser is personally liable for the
   delinquent franchise taxes of Jeff Kaiser, P.C. that accrued after the corporate privileges
   of Jeff Kaiser. P.C. were forfeited for the failure to file a report or pay a   tax   or penalty
   and before such corporate privileges were revived.
12. De!endanLS Jeff Kaiser. P.C. and Jeffery Benedict Kaiser. a/k/a Jeffrey B. Kaiser are
   jointly and severally liable for the delinquent franchise taxes made the subject of this
   lawsuit.
13. Plaintiff, The State of Texas. is entitled to recover attorney·s fees pursuant to TEX. GOVT
   CODE ANN.§ 2107.066.

14. Defondants Jeff Kaiser, P.C. and Jeffery Benedict Kaiser, a/k/a Jeffrey B. Kaiser are
   jointly and severally liable for the attorney's fees awarded lo Plaintiff in this case.



                           Signed on the 21" day of ~r. 2014.



                                                       WlSSER
                                                    PRESIDfNG




                                                                                                 4




                                                                                                      87
Appendix

 TAB 3
§ 111.202. Suit Limitation, TX TAX § 111.202




  Vernon's Texas Statutes and Codes Annotated
    Tax Code (Refs & Annos)
      Title 2. State Taxation (Refs & Annos)
        Subtitle B. Enforcement and Collection (Refs & Annos)
           Chapter 111. Collection Procedures (Refs & Annos)
              Subchapter D. Limitations (Refs & Annos)

                                                   V.T.C.A., Tax Code § 111.202

                                                     § 111.202. Suit Limitation

                                                             Currentness


At any time within three years after a deficiency or jeopardy determination has become due and payable or within three years
after the last recording of a lien, the comptroller may bring an action in the courts of this state, or any other state, or of the United
States in the name of the people of the State of Texas to collect the amount delinquent together with penalties and interest.


Credits
Acts 1981, 67th Leg., p. 1508, ch. 389, § 1, eff. Jan. 1, 1982.



Notes of Decisions (2)

V. T. C. A., Tax Code § 111.202, TX TAX § 111.202
Current through Chapters effective immediately through Chapter 46 of the 2015 Regular Session of the 84th Legislature

End of Document                                                         © 2015 Thomson Reuters. No claim to original U.S. Government Works.




                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                      1
