












 
 
 
 
 
 
 
 
 
                                                         In
The
                                                Court
of Appeals
                        Sixth
Appellate District of Texas at Texarkana
 
                                                ______________________________
 
                                                             No. 06-11-00054-CV
                                                ______________________________
 
 
              CITY OF CLARKSVILLE, CLARKSVILLE
INDEPENDENT
SCHOOL DISTRICT, RED RIVER
COUNTY, AND LANGFORD
CREEK WATER CONSERVATION
DISTRICT, Appellants
 
                                                                V.
 
                                          DRILLTECH, INC., Appellee
 
 
                                                                                                  

 
 
                                         On Appeal from the 6th Judicial District Court
                                                          Red
River County, Texas
                                                          Trial Court
No. CV02249
 
                                                                                                  

 
 
                                          Before Morriss, C.J.,
Carter and Moseley, JJ.
                                                          Opinion by Justice Carter




                                                                   O P I N I O N
 
            The City of Clarksville, Clarksville
Independent School District, Red River County, and Langford Creek Water
Conservation District (hereinafter collectively referred to as the Taxing
Units), appeal the trial court’s grant of a summary judgment in favor of
landowner Drilltech, Inc., finding that all tax liens
after its purchase of property in November 2008 were forfeited or
extinguished.  We affirm the trial
court’s judgment.  
I.          Factual
and Procedural Background
            This appeal focuses on the application of Section
31.08 of the Texas Tax Code, which reads: 

            (a)        At
the request of any person, a collector for a taxing unit shall issue a
certificate showing the amount of delinquent taxes, penalties, interest, and
any known costs and expenses under Section 33.48 due the unit on a property
according to the unit’s current tax records.  If the collector collects taxes for more than
one taxing unit, the certificate must show the amount of delinquent taxes,
penalties, interest, and any known costs and expenses under Section 33.48 due
on the property to each taxing unit for which the collector collects the taxes.
. . .
 
            (b)        Except
as provided by Subsection (c) of this section, if a person transfers property
accompanied by a tax certificate that erroneously indicates that no delinquent
taxes, penalties, or interest are due a taxing unit on the property or that
fails to include property because of its omission from an appraisal roll as
described under Section 25. 21,[1] the unit’s tax lien on the
property is extinguished and the purchaser of the property is absolved of
liability to the unit for delinquent taxes, penalties, or interest on the
property or for taxes based on omitted property. The person who was liable for
the tax for the year the tax was imposed or the property was omitted remains
personally liable for the tax and for any penalties or interest. 
 
Tex. Tax Code Ann.
§ 31.08(a), (b) (West 2008). 
            Jason R. Petty and Beth Ann Petty
sold a 16.374-acre tract of land situated in Red River County to Drilltech, Inc., on November 7, 2008.  On November 4, 2008, Gooding Title Company
ordered tax certificates from Red River County and the County Appraisal
District.  Specifically, Red River County
was asked to “check your records for tax suit on this property,” with the
property description being “10.019 acres, 6.282 acres & .73 acres; Wade H. Vining Survey, Abst. #878.”  
            After describing the property as “A0878
Vining, W.H.,” both certificates list the land market
value as $15,330.00, and represent that improvements have a “0” value.  The tax certificate issued on November 4,
2008, by the Red River Appraisal District located in Clarksville, Texas,
indicates the request was made by Gooding Title and certifies that “after a
careful check of the tax record of this office, the following current/delinquent
taxes, penalties and interest are due” to Clarksville ISD.  It showed a total amount of $1,158.48 owed
for years 2006–2008, all of which were paid from the proceeds of the sale at
closing.  The County Tax Office issued a certification
that total taxes due from 2006 through November 2008 were $468.90, which were
also paid at closing.  
            In December 2009, Drilltech received a notice of intent to sue from the City
of Clarksville and Clarksville ISD for collection of delinquent taxes prior to Drilltech’s purchase of the property.  Drilltech sought
declaratory judgment that the certificates indicated that no taxes were due,
and thus, that the liens were forfeited under Section 31.08(b) of the Texas Tax
Code.[2]  The City and Clarksville ISD answered the
suit and filed a cross-claim seeking foreclosure of the property for delinquent
taxes in 2007 and 2008, along with penalties and interest, as well as a
personal judgment against the Pettys.[3]  Drilltech filed a
motion for summary judgment urging the trial court to apply Section 31.08.  
            The Taxing Units filed a
cross-motion for summary judgment and countered with the affidavit of Jan
Tinsley, chief appraiser for Red River County. 
After stating that she is “the custodian of all appraisal district
records and all tax records, both current and delinquent, for said school
district and city,” Tinsley explained that two taxing accounts were created for
the same property.  According to Tinsley,
Capital Appraisal Group, LLC, appraised complex properties, such as the one at
issue, for the district.  She stated, “Because
the appraisal district’s staff routinely appraises the land itself in-house, it
is administratively convenient to maintain two separate tax accounts, one for
the land appraised by the district and identified by its own unique account
number, and another account for the improvements situated thereon.”  As proof, Tinsley attached a contract for
appraisal services between the Appraisal District and Capital Appraisal Group,
LLC.[4]  A “Tax Year 2008 Industrial Property File”
demonstrated that Capital Appraisal had appraised improvements at $130,000.00
when the property was owned by the Pettys.    
            Urging that the appraisal value of
the land was only $15,330.00 “because the improvements situated upon the land
were separately appraised and assessed under another account number as is
customary in the case of industrial properties . . . , and the improvement
account is indeed delinquent for tax years 2007 and 2008,” the City and
Clarksville ISD argued that Drilltech should have
known additional taxes were due.  They
further argued that the only certificates produced showed delinquent taxes
owing and that Section 31.08 did not apply. 
Red River County and Langford Creek Water Conservation District
intervened in the suit, seeking $3,266.13 for 2007 and 2008 taxes, and filed
their own motion for summary judgment to recover taxes upon the improvements on
the land, seeking personal judgment against the Pettys
and foreclosure of their liens.  
            Drilltech
responded to the cross-motion for summary judgment by attaching summary
judgment evidence that the county routinely attached tax certificates
containing figures in the section for land and improvements for commercial
properties in response to Gooding’s requests. 
They attached the affidavit of Kay Witmer,
Escrow Officer for Gooding for eight years, which stated the following:
            One of my duties at Gooding Title
Co. is to place orders for tax certificates with Red River Appraisal District
and Red River County Tax Collector in connection with sales and/or mortgages of
real property in Red River County, Texas, in which Owner’s and/or Loan Title
Polices are ordered. 
 
            In placing these orders for tax
certificates, I use a form, . . . filled in by me and either faxed or e-mailed
to the above taxing entities. 
 
            . . . . 
 
            The orders for tax certificates
placed by me with the taxing entities are intended by me to cover taxes for
both the land described in the order and permanent improvements attached to
such land.  
 
            Only the land is described in the
order, and I have never placed a separate order for tax certificates on the
permanent improvements, which I understand to be a component part of the
land.  Neither taxing entity has ever
requested that I place a separate order for the land and the improvements. 
 
            The taxing entities respond to my
orders by issuing a tax certificate on the land, and where permanent
improvements are attached to the land, permanent improvements are included on
the tax certificate. 
 
            . . . . 
 
            In response to our orders, each
taxing entity furnishes Gooding Title Co. a tax certificate showing what, if
any, taxes, penalties and interest are due and owing on the land and
improvements (if any) which are the subject of the order. . . .
            
            . . . .
 
            Except for the omitted taxes on the
improvements in the Petty-Drilltech sale, which
resulted in this suit, I have no knowledge of either the Red River Appraisal
District or the Red River County Tax Collector making a claim for taxes,
penalties and interest allegedly due on improvements permanently attached to a
particular tract of land and which taxes, penalty and interest were omitted
from the tax certificate ordered and received by Gooding Title Co. 
 
            I have never been advised by either
taxing entity that land and permanent improvements are customarily carried on a
separate account on industrial property.[5]  
 
            The trial court found that “all tax
liens on the real property” were forfeited or extinguished, and found that Drilltech would not be personally liable for any taxes
owed.  
II.        Standard
of Review
            The standard for reviewing a
traditional motion for summary judgment is well established.  See
Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 800
(Tex. 1994); Nixon v. Mr. Prop. Mgmt. Co.,
690 S.W.2d 546, 548–49 (Tex. 1985).  We
review de novo a summary judgment to determine whether a party’s right to
prevail is established as a matter of law.  Dickey
v. Club Corp. of Am., 12 S.W.3d 172, 175 (Tex. App.—Dallas 2000, pet.
denied).  A party moving for traditional
summary judgment is charged with the burden of establishing that there are no
genuine issues of material fact and it is entitled to judgment as a matter of
law.  Tex.
R. Civ. P. 166a(c); M.D. Anderson
Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d
22, 23 (Tex. 2000) (per curiam).  A matter is conclusively established if
ordinary minds could not differ as to the conclusion to be drawn from the
evidence.  Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982).  “When both sides move for summary judgment, as
they did here, and the trial court grants one motion and denies the other,
reviewing courts consider both sides’ summary-judgment evidence, determine all
questions presented, and render the judgment the trial court should have
rendered.”  Gilbert Tex. Constr., L.P. v.
Underwriters at Lloyd’s London, 327 S.W.3d 118, 124 (Tex. 2010) (citing Embrey v. Royal Ins. Co. of Am., 22 S.W.3d
414, 415–16 (Tex. 2000)).
III.       The
Trial Court Properly Granted Summary Judgment 
            Both parties argue about the meaning
of the phrase “indicat[ing]
that no delinquent taxes, penalties, or interest are due.”  Tex.
Tax  Code Ann. § 31.08(b).  On the certificates, the property was
described by location, description, and situs address
and contained a space for valuation for improvements.  Because the improvement valuation was listed
as “0,” Drilltech argued that the tax certificates
showed no taxes owing.  The Taxing Units
argue that the tax certificate itself must contain a statement that no
delinquent taxes, penalties, or interest are due.  
            A tax bill for real property must
include the appraised value and taxable value of the property and the amount of
taxes imposed on the property by the unit. 
Tex. Tax Code Ann. § 31.01(c)(11)(A),
(C) (West Supp. 2011).  Real property in
the Tax Code specifically includes improvements made on the land.  Tex.
Tax Code Ann. § 1.04(2)(B) (West 2008). 
Before an executory contract is signed by the
purchaser of property, the seller is required to provide the purchaser with a
tax certificate from the collector to ensure proper disclosure of tax
payments.  Tex. Prop. Code Ann. § 5.070(a)(1) (West 2004).  Section 9.3040 of the Texas Administrative
Code requires the following affirmation to accompany the list of delinquent
taxes, penalties, and interest, and any known costs and expenses on the tax
certificate:  “a careful check of the tax
records of the office has been made on the specified property and the tax
certificate indicates the amount of delinquent taxes.”  34 Tex.
Admin. Code § 9.3040 (2011) (Comptroller of Pub. Accounts, Tax Record
Requirements).  The definition of
“property” in the Texas Tax Code includes “any matter or thing capable of
private ownership.”  Tex. Tax Code Ann. § 1.04(1) (West
2008).  Section 31.08(a) reads that “[a]t
the request of any person, a collector for a taxing unit shall issue a
certificate showing the amount of delinquent taxes, penalties, interest, and
any known costs and expenses under Section 33.48 due the unit on a property
according to the unit’s current tax records.” 
Gooding Title specifically requested that tax certificates be issued on
the “property,” and provided the property address.  Thus, the Taxing Units were required to issue
a tax certificate showing the sums due according to the current tax records for
both the value of the land and the improvements.  
            The tax certificates specifically
certified and guaranteed that only the amounts listed were due “for the above
described property” and “on the described property.”  No indication of delinquent taxes owing for
any improvements were shown.  Therefore,
the certificates “erroneously indicate[d] that no delinquent taxes, penalties,
or interest [were] due”[6] with respect to any
improvements.  Tex. Tax Code Ann. § 31.08(b).  Therefore, we find Drilltech
proved its entitlement to summary judgment as a matter of law. 
IV.       Conclusion

            We affirm the judgment of the trial court. 
 
                                                                        Jack
Carter
                                                                        Justice
 
Date
Submitted:          October 12, 2011
Date
Decided:             November 15, 2011
 




[1]Section
25.21 reads:
 
                (a)           If the chief appraiser discovers that real property was
omitted from an appraisal roll in any one of the five preceding years or that
personal property was omitted from an appraisal roll in one of the two
preceding years, he shall appraise the property as of January 1 of each year
that it was omitted and enter the property and its appraised value in the
appraisal records. 
 
                (b)           The entry shall show that the
appraisal is for property that was omitted from an appraisal roll in a prior
year and shall indicate the year and the appraised value for each year.  
 
Tex. Tax Code Ann. § 25.21 (West
2008).  


[2]Following
the trial court’s grant of Drilltech’s motion for
summary judgment, Drilltech’s cause of action against
the Taxing Units was severed from their causes of action against the Pettys.  The judgment
in this case became final when the Taxing Units nonsuited
their cross-claims against the Pettys on October 11,
2011. 
 


[3]Clarksville
ISD claimed $1,255.67 for 2007, and $1,352.00 for 2008.  The City claimed $1,027.00 was owed in both
2007 and 2008, and Clarksville ISD sought $1,255.67 for 2007 and $1,352.00 for
2008.  The penalties and interest amount
to $2,995.17, for an aggregate delinquency of $7,656.84.  


[4]The
contract attached was entered into on June 9, 2010, but there is some evidence
that Capital Appraisal Group assessed the property’s value prior to this date. 


[5]The
Taxing Units objected to the following portions of Witmer’s
affidavit on the bases that her intent and/or knowledge were not controvertible
or competent summary judgment evidence:  (1)
that her requests “are intended by me to cover taxes for both the land
described in the order and permanent improvements attached to such land”; (2)
her statement that she had no knowledge of the Taxing Units “making a claim for
taxes, penalties and interest allegedly due on improvements permanently
attached to a particular tract of land and which taxes, penalty and interest
were omitted from the tax certificate ordered and received by Gooding”; and (3)
that “in most cases, no one who owns or works for Gooding Title Co. knows what,
if any, improvements are attached to the land on which the certificates are
ordered.”  With respect to the third
statement, the Taxing Units also objected that Witmer
failed to demonstrate personal knowledge of what other employees would know.  Last, they complained that Witmer’s
statements that she understood the permanent improvements to be a component
part of the land and that Gooding considers all taxes owing are to be shown on
the tax certificate, were conclusory.  The Taxing Units separately appeal the trial
court’s overruling of all objections to Witmer’s
affidavit.  We find that the trial
court’s application of Section 31.08 dispositive of the appeal, without regard
to Witmer’s affidavit.  Therefore, we do not address the admission or
exclusion of the affidavit. 


[6]This
language in Section 31.08(b) has been revised several times.  The 1953 predecessor of the statute, Vernon
Annotated Civil Statutes Article 7258a, stated:  “When any certificate so issued shows all
taxes, interest, penalty and costs on the property therein described to be paid
in full to and including the year therein stated, the said certificate shall be
conclusive evidence of the full payment of all taxes, interest, penalty and
costs due on the property described in said certificate for all years to and
including the year stated therein.”  Int’l Paper Co. v. State, 380 S.W.2d 18,
19–20 (Tex. Civ. App.—Texarkana 1964, writ ref’d n.r.e.).  In 2005,
the Legislature revised the statute from “if a person transfers property
accompanied by a tax certificate erroneously showing that no delinquent taxes,
penalties, or interest are due” to “if a person transfers property accompanied
by a tax certificate that erroneously indicates that no delinquent taxes,
penalties, or interest are due.”  Act of
May 23, 2005, 79th Leg., R.S., ch. 846, § 2, 2005
Tex. Gen. Laws 2888, 2888–89 (current version at Tex. Tax Code Ann. § 81.08(b) (West 2008)).  In Int’l
Paper Co., we found that the purpose of Article 7258a was remedial.  “It gives the citizens of Texas a conclusive
right to believe in and rely upon the acts of their officers. . . .  The purpose of the statute was to relieve the
purchasers of property from the secret tax liens upon property for which they
have purchased and paid, or obligated themselves to pay for.  This relieves the purchaser of the
responsibility of buying property and later having a tax lien forced upon the
same and requiring him to pay off the tax lien in order to keep his
property.”  Id. at 22.  


