AFFIRM; and Opinion Filed May 8, 2014.




                                        S   In The
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                     No. 05-13-00067-CV

 DALLAS COUNTY CITY OF GRAND PRAIRIE, GRAND PRAIRIE INDEPENDENT
   SCHOOL DISTRICT, DALLAS COUNTY COMMUNITY COLLEGE DISTRICT,
 PARKLAND HOSPITAL DISTRICT, DALLAS COUNTY SCHOOL EQUALIZATION
                           FUND, Appellants
                                 V.
          BOBBY E. SIDES AND MARSHA LYNNE SIDES, Appellees

                      On Appeal from the 101st Judicial District Court
                                   Dallas County, Texas
                           Trial Court Cause No. TX-10-30780

                                         OPINION
                        Before Justices Lang-Miers, Myers, and Lewis
                                  Opinion by Justice Lewis
       The County of Dallas, the City of Grand Prairie, the Grand Prairie Independent School

District, the Dallas County Community College District, the Parkland Hospital District, and the

Dallas County School Equalization Fund (collectively, the “Taxing Authorities”) appeal the trial

court’s Order Relating to Excess Proceeds. The order awarded appellees excess proceeds from

the Taxing Authorities’ foreclosure of a tax lien and sale of property to satisfy that lien. The

Taxing Authorities challenge (1) the trial court’s conclusion they lacked standing to present

evidence on the issue of abandonment of the property, and (2) the actual exclusion of that

evidence of abandonment. Appellees seek an award of attorney’s fees, claiming the Taxing
Authorities’ appeal is frivolous. We affirm the trial court’s order, but we decline to award

attorney’s fees in this case.

                                          Background

        The Taxing Authorities sued appellees for more than $900,000 in unpaid property taxes

on a large piece of commercial property in Grand Prairie; the taxes had accrued between 1988

and 2010. The parties entered into an agreed judgment for the amount owed, and that judgment

is not at issue on appeal.

        After the judgment was signed, the Taxing Authorities sold the property. The delinquent

taxes were paid in full from the proceeds, and excess proceeds of $1,068,186.69 were deposited

in the trial court’s registry.    Appellees sought to recover the excess funds.      The Taxing

Authorities responded, (1) seeking to have unpaid taxes from 2011 and 2012 paid from the

proceeds, and (2) opposing any distribution of the proceeds to appellees on the ground that

appellees had abandoned their right to claim those proceeds. Faced with competing claims for

the proceeds, the trial court requested briefing from the parties.     The court then issued a

preliminary letter ruling, stating:

        The court has received the briefs requested by the court and filed by the parties,
        and will hold that the “Taxing Authorities” do not have standing to assert
        abandonment as a reason to not allow Defendants recovery of excess proceeds.
        The Court will hear Defendants’ motion for Excess Proceeds on October 24, 2012
        at 10:30 a.m. If the “Taxing Authorities” desire to offer proof on the
        abandonment issue for appellate purposes, affidavits for that purpose should be
        filed prior to October 10, 2012. And, if Defendants counter affidavits are filed
        [sic], they should be filed by October 17, 2012. The Court does not intend to hear
        any evidence on the issue of abandonment.

At the hearing, the court expanded on its ruling concerning the defense of abandonment:

        Let me just state that in furtherance of the ruling announced in my September
        18th letter, I’ll not hear nor consider any evidence or objections to evidence in
        furtherance or reply to the tax authorities’ theory of abandonment of tax excess
        proceeds. Under Tax Code Section 34.021 and those sections following, the only
        provision I find for losing the right to excess proceeds is not filing before the
        second anniversary of the date of the sale.
                                               –2–
          Our statutes being permissive and not exclusionary, the issue of abandonment
          cannot and will not be considered by this Court. A bill of review is not
          appropriate in this situation just to urge a claim never recognized by statute or
          prior case law.

The appellees offered evidence that Bobby Sides held legal title to the property at the time of the

tax foreclosure and sale. The Taxing Authorities offered evidence of post-judgment unpaid

taxes. Ultimately, the trial court ordered the post-judgment taxes to be paid from the excess

proceeds and ordered the remaining balance to be released to appellees. The Taxing Authorities

appeal.

                                          Abandonment

          The Taxing Authorities acknowledge that Texas law does not recognize abandonment of

title to real property. See Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex. 1989). They

argue, however, that appellees abandoned or waived their “incorporeal rights” associated with

the property, including the right to claim excess proceeds from the sale of the property. The

Taxing Authorities contend appellees abandoned this right “by denying ownership by action and

by legal documents.”

                                      The Trial Court’s Ruling

          In their first issue, the Taxing Authorities argue the trial court erred “by finding the

Taxing Authorities did not have legal standing to present any evidence on a number of theories

including abandonment of right to excess proceeds.” The Taxing Authorities focus on the word

“standing,” in the letter the trial court wrote concerning its preliminary ruling on the Taxing

Authorities’ claim that appellees had abandoned the property.         We agree with the Taxing

Authorities that the tax code gives them standing to make a claim for excess proceeds. See TEX.

TAX CODE ANN. § 34.04(a) (West 2008) (“A person, including a taxing unit . . . may file a

petition in the court that ordered the seizure or sale setting forth a claim to the excess

proceeds.”). Moreover, the Taxing Authorities’ claim for unpaid taxes holds statutory priority
                                                –3–
over the appellees’ claim as former owners of the property. See id. § 34.04(c)(2), (5). However,

at the hearing on the competing claims to the excess proceeds, the trial court made clear its ruling

was actually based on the substance of the Taxing Authorities’ claim, not on their standing to

bring that claim or any other. 1 As the hearing began, the judge stated that he would not hear or

consider any evidence of abandonment of excess proceeds—he would not allow the Taxing

Authorities “to urge a claim never recognized by statute or prior case law.” Instead, the judge

pointed out that he had reviewed the tax code sections at issue, and “the only provision [he

found] for losing the right to excess proceeds is not filing before the second anniversary of the

date of the sale.” Based on this record, we conclude the trial court’s decision not to consider the

Taxing Authorities’ theory of abandonment was a substantive legal ruling concerning the legal

viability of that claim, based on the court’s understanding of Texas law, not based on

jurisdiction..

                                    The Taxing Authorities’ Abandonment Argument

            As we stated above, settled Texas law does not recognize the abandonment of title to real

property. Rogers, 772 S.W.2d at 80. The Taxing Authorities attempt to distinguish their

argument by casting the dispute as one of ownership.                                      They claim that certain aspects of

ownership—here the right to the excess proceeds—can somehow be abandoned while title is not

abandoned.

           Ownership is significant in at least two statutes at issue in this case. First, the Texas Tax

Code states the basic premise of property tax liability:                                     “property taxes are the personal

obligation of the person who owns or acquires the property on January 1 of the year for which

the tax is imposed.” TEX. TAX CODE ANN. § 32.07(a) (emphasis added). And second, when

     1
        We note that the Taxing Authorities’ first issue complains of the trial court’s ruling on “a number of theories including abandonment of
right to excess proceeds.” Our review of the record establishes that the Taxing Authorities have not identified any theory other than abandonment
of the right to excess proceeds that they wished to present, but were foreclosed from presenting to the trial court.



                                                                     –4–
defining the recipient of excess proceeds after all obligations are paid, the code states the

proceeds go “to each former owner of the property, as the interest of each may appear.” Id. §

34.04(c)(5) (West Supp. 2013) (emphasis added).

          Statutory construction is a legal question, which we review de novo. State ex rel. State

Dept. of Highways & Pub. Transp. v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002). The tax code

does not define “owner” or simply “to own.” But the general rule is well-settled: “The person

having legal title to property is generally considered to be the owner thereof for purposes of

taxation.” Childress County v. State, 127 Tex. 343, 349 (1936). The Taxing Authorities relied

below on the fact that appellees held legal title to the property for purposes of collecting the

unpaid property taxes. 2 The fact that one or more of the appellees held title to the property

before it was sold also establishes their right to claim the excess proceeds as the former owner. 3

          Given that status of ownership, the trial court correctly identified the only possible

impediment to appellees’ recovery of the excess proceeds: a failure to bring their claim within

two years. See TEX. TAX CODE ANN. § 34.04(a). Appellees brought their claim timely. Because

they made a claim based on ownership, within two years, they were entitled to the excess

proceeds.

          We overrule the Taxing Authorities’ first issue.




     2
       Indeed, in the Taxing Authorities’ initial response to appellees’ Petition for Excess Proceeds, they stated, “On January 1, 2012,
Defendants Bobby and Marsha Sides held record title to the subject property.”
     3
       The Taxing Authorities make much of appellees’ original answer in the suit to collect the unpaid property taxes. The Taxing Authorities
sued both Bobby and Marsha Sides and made all their allegations against the “Defendants” collectively. However, as the Taxing Authorities
have acknowledged, only Bobby Sides was the record owner of the property. Thus the “Defendants” properly denied being liable to the Taxing
Authorities in the capacity in which they were sued. This was not a denial of ownership on the part of Bobby Sides.



                                                                    –5–
                           The Taxing Authorities’ Evidentiary Issues

       In their second issue, the Taxing Authorities contend the trial court erred in excluding

their evidence on the issue of “ownership” of the property when determining the appellees’ claim

to excess proceeds. Actually, the Taxing Authorities’ brief acknowledges the evidence it wished

to offer was evidence of abandonment, including testimony concerning code violations, lack of

maintenance on the property, and the existence of an “environmental cesspool.” We review a

trial court’s decision to admit or exclude evidence for an abuse of discretion. In re J.P.B., 180

S.W.3d 570, 575 (Tex. 2005).

        We have concluded the Taxing Authorities’ legal theory concerning abandonment of

ownership rights must fail. The right to the excess proceeds in this case was governed by Bobby

Sides’s holding legal title to the property before it was sold at foreclosure. None of the Taxing

Authorities’ evidence concerning activities or conditions on the property was relevant to the trial

court’s inquiry of who was entitled to the excess proceeds. A trial court does not abuse its

discretion by excluding evidence of an irrelevant legal theory. See TEX. RS. EVID. 401, 402.

       We overrule the Taxing Authorities’ second issue.

                                         Attorney’s Fees

       Appellees contend this appeal is frivolous and ask for attorney’s fees pursuant to rule 45

of the Texas Rule of Appellate Procedures. That rule provides:

       If the court of appeals determines that an appeal is frivolous, it may—on motion
       of any party or on its own initiative, after notice and a reasonable opportunity for
       response—award each prevailing party just damages. In determining whether to
       award damages, the court must not consider any matter that does not appear in the
       record, briefs, or other papers filed in the court of appeals.

TEX. R. APP. P. 45.

       “An appeal is frivolous if, at the time asserted, the advocate had no reasonable grounds to

believe judgment would be reversed or when an appeal is pursued in bad faith.” Njuku v.


                                               –6–
Middleton, 20 S.W.3d 176, 178 (Tex. App.—Dallas 2000, pet. denied). We have said we will

impose sanctions only under circumstances we find truly egregious. D Design Holdings, L.P. v.

MMP Corp., 339 S.W.3d 195, 205 (Tex. App.—Dallas 2011, no pet.). Although we have

rejected the Taxing Authorities’ contentions on appeal regarding the trial court’s disposition of

the excess proceeds, we do not conclude the circumstances of this appeal were truly egregious.

We decline to award appellees attorney’s fees pursuant to rule 45.

                                          Conclusion

       We affirm the trial court’s Order Relating to Excess Proceeds.




                                                    /David Lewis/
                                                    DAVID LEWIS
                                                    JUSTICE


130067F.P05




                                              –7–
                                         S
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

COUNTY OF DALLAS, CITY OF GRAND                     On Appeal from the 101st Judicial District
PRAIRIE, GRAND PRAIRIE                              Court, Dallas County, Texas
INDEPENDENT SCHOOL DISTRICT,                        Trial Court Cause No. TX-10-30780.
DALLAS COUNTY COMMUNITY                             Opinion delivered by Justice Lewis.
COLLEGE DISTRICT, PARKLAND                          Justices Lang-Miers and Myers
HOSPITAL DISTRICT, AND DALLAS                       participating.
COUNTY SCHOOL EQUALIZATION
FUND, Appellants

No. 05-13-00067-CV         V.

BOBBY E. SIDES AND MARSHA LYNN
SIDES, Appellees

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

        It is ORDERED that appellees Bobby E. Sides and Marsha Lynn Sides recover their
costs of this appeal from appellants County of Dallas, City of Grand Prairie, Grand Prairie
Independent School District, Dallas County Community College District, Parkland Hospital
District, and Dallas County School Equalization Fund.


Judgment entered this 8th day of May, 2014.




                                                   /David Lewis/
                                                   DAVID LEWIS
                                                   JUSTICE
