AFFIRMED; Opinion Filed April 2, 2019.




                                                In The
                                 Court of Appeals
                          Fifth District of Texas at Dallas
                                        No. 05-18-00217-CV

                    MEI INVESTMENTS, L.P., Appellant
                                 V.
  DALLAS COUNTY, CITY OF SEAGOVILLE, DALLAS INDEPENDENT SCHOOL
   DISTRICT, DALLAS COUNTY COMMUNITY COLLEGE DISTRICT, DALLAS
    COUNTY SCHOOL EQUALIZATION FUND, AND PARKLAND HOSPITAL
                          DISTRICT, Appellees

                        On Appeal from the 101st Judicial District Court
                                     Dallas County, Texas
                             Trial Court Cause No. TX-15-02041

                              MEMORANDUM OPINION
                       Before Justices Bridges, Partida-Kipness, and Carlyle
                                Opinion by Justice Partida-Kipness
        MEI Investments, L.P. appeals the trial court’s judgment in favor of various taxing entities.

The appeal involves facts and legal issues related to those in MEI Investments, L.P. v. Dallas Cty.,

et al., No. 05-18-00197-CV (Tex. App.—Dallas April 2, 2019, no pet. h.) also decided today. In

five issues, appellant generally contends (1) the trial court erred in admitting the affidavit of its

principal into evidence, (2) the presumption under section 33.47(a) of the Texas Property Tax Code

cannot be applied to it, and (3) the evidence is legally and factually insufficient to support the trial

court’s judgment. For the reasons set forth below and expressed in MEI Investments, we affirm

the trial court’s judgment.
                                                BACKGROUND

           Dallas County, City of Seagoville, Dallas Independent School District, Dallas County

Community College District, Dallas County School Equalization Fund, and Parkland Hospital

District filed suit against Public Autos, Ltd. d/b/a Public Auto Sales (Public Autos) for delinquent

ad valorem property taxes for tax year 2014 and subsequent years which might later become due.

Attached to the petition as Exhibit “A” was a delinquent tax statement with the heading “George

Carol E, 908 S. Buckner Blvd, Dallas, TX 75217-4505” and listing taxes on “Personal Property

Public Auto Sales, 1105 N. U.S. Hwy 175.”

           In their second amended petition, the taxing entities added appellant as a defendant in the

lawsuit. According to Public Autos’ pleadings, appellant purchased Public Autos’ property

“including personal property that is the subject of the taxes in this lawsuit.” Appellant filed a

general denial answer and a motion for summary judgment, which the court denied. At the bench

trial on their claims, the taxing entities presented no live witness testimony and instead relied on

certified copies of delinquent property tax statements, assumed name certificates and other public

documents pertaining to Public Autos, an affidavit of appellant’s principal, Hussein K. Mahrouq,

as well as the official records of the Dallas Central Appraisal District.1 Appellant did not present

any evidence on its behalf. At the conclusion of the trial, the trial judge rendered judgment against

both Public Autos and appellant for $18,591.43 together with applicable penalties and interest.2

This appeal ensued.




    1
        This case and MEI Investments were tried together on January 23, 2018.
    2
     The judgment states Public Autos filed an answer to the petition and was duly notified of trial, but failed to
appear in court.
                                                        –2–
                                             ANALYSIS

       A. Admissibility of Affidavit

       In its first issue, appellant challenges the trial court’s admission of the affidavit of its

principal, Hussein K. Mahrouq. The taxing entities offered Mahrouq’s affidavit and attachments

to support their claim that appellant purchased the personal property on which the tax liability in

this case was based. Appellant first submitted Mahrouq’s affidavit to the Court in support of its

own summary judgment motion. At trial, however, appellant objected to the affidavit on the

grounds that affidavits are not allowed as evidence in contested proceedings unless permitted by

statute or rule. The trial court overruled the objection and admitted the affidavit and attachments

into evidence.

       In relevant part, the Mahrouq affidavit stated:

       3. I was familiar with an automobile business which had existed for many years in
       Dallas known as Public Auto Sales (“Public Auto”). . . .
       ....
       7. MEI purchased the following assets of Public Auto:

                 a. Real property with the address of 908 S. Buckner Blvd, Dallas, Texas. A
                 true and correct copy of the February 3, 2015 contract for this property is
                 attached hereto as Exhibit “1.”

                 b. Real property with the address of 905, 915 and 925 S. Buckner Blvd,
                 Dallas, Texas, as well as certain machinery, office equipment and service
                 vehicles described on Exhibit D to the contract and intellectual property
                 rights described on an Addendum to the contract. A true and correct copy
                 of the March 25, 2015 contract for this property is attached hereto as Exhibit
                 “2.”

       The contract attached to Mahrouq’s affidavit as an exhibit described the seller as “Public

Autos Sales Ltd.” With an address of “925 S. Buckner Blvd., Dallas, Texas 75217.” The

“Addendum” to that contract included a property address or description of 905, 915, 925 S.

BUCKNER BLVD., DALLAS, TX 75217 as well as the following provisions:

       Seller has been operating an automobile sales and financing enterprise (“the
       Business”) on the premises the subject of this Commercial Contract of Sale. In
                                                  –3–
       conjunction herewith, and as an integral part hereof, the following assets of the
       Business are included in the contemplated purchase and shall be conveyed by Seller
       to Purchaser at closing:
       A. All right, title and interest in and to the goodwill of the Business.
       B. All data and information used in operating the Business . . . .
       C. All intellectual property of the Business, specifically including any rights in and
       to any trade name or trademark used in the Business (including the names “Public
       Auto Sales,” “Public Warranty,” “Deals and Wheels Motor Company” and any
       derivations of, or names similar to, the foregoing and any marks associated with
       the foregoing).
       D. To the extent assignable, all right, title and interest of the Seller in and to the
       following assets (if any) of the Business:
       (1) Agreements and contracts with customers of the Business.
....
       (6) Business email and Internet address(es).
       (7) Credit card agreements.
       (8) Assumed name(s).
       (9) Advertising contracts.
       E. All personal property used in the Business including furnisher [sic], furnishings,
       office equipment, computers, telephones, office supplies, machinery, tools,
       equipment and specifically including, but not limited to, those properties, items,
       and assets listed on Exhibit D, attached . . . .

       We review a challenge to the admissibility of evidence for an abuse of discretion.

Whirlpool Corp. v. Camacho, 298 S.W.3d 631, 638 (Tex. 2009). We will uphold the trial court’s

ruling if there is any legitimate basis for it. See Owens-Corning Fiberglass Corp. v. Malone, 972

S.W.2d 35, 43 (Tex. 1998). As we explained in MEI Investments, the taxing entities offered

Mahrouq’s affidavit under rule 801(e)(2) and appellant agrees the affidavit is a statement of a party

opponent and therefore not hearsay under rule 801(e)(2) of the Texas Rules of Evidence. See MEI

Investments, No. 05-00197-CV, slip op. at 5–6. Consequently, the trial court did not abuse its

discretion by admitting the affidavit into evidence. See id.

       In reaching our conclusion, we are not persuaded by appellant’s argument that the affidavit

is inadmissible at trial even if it does not constitute hearsay. To support its position, appellant

relies on Kenny v. Portfolio Recovery Associates, LLC, 464 S.W.3d 29, 33 (Tex. App.—Houston

[1st Dist.] 2015, no pet.), and Ortega v. Cach, LLC, 396 S.W.3d 622, 630 (Tex. App.—Houston

[14th Dist.] 2013, no pet.). Neither of these cases involved an affidavit that the parties agreed was
                                                –4–
not hearsay, nor does either stand for the broad proposition that affidavits cannot be admitted as

evidence at trial. See MEI Investments, No. 05-00197-CV, slip op. at 5–6. Accordingly, we

resolve appellant’s first issue against it.

B. Sufficiency of the evidence

         In its third and fourth issues, appellant contends that the evidence was legally and factually

insufficient to establish either the taxed property was owned by, or the taxes were owed by, the

entity with which appellant contracted. In its fifth issue, appellant asserts the evidence did not

support a finding that the taxed property was used in the operation of the business of the entity

with which appellant contracted.3 In its related second issue, appellant complains the trial court

erred in allowing the taxing entities to rely on the presumptions in section 33.47 of the tax code to

impose liability against it under tax code section 31.081.4

         Where, as here, the trial court did not issue findings of fact and none were requested, we

imply all necessary facts supporting the judgment that are supported by the evidence. See Shields

Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017). When a reporter’s record is filed on

appeal, these implied findings may be challenged for legal sufficiency. Id. We review the implied

findings using the same sufficiency standards applicable to jury verdicts. Id.

         In analyzing the legal sufficiency of the evidence, we view the evidence in the light most

favorable to the verdict, crediting evidence favoring the finding if reasonable factfinders could and



     3
       Although appellant purports to challenge both legal and factual sufficiency of the evidence, it provides no
argument or analysis with respect to its factual sufficiency challenge. Accordingly, appellant has waived its factual
sufficiency challenge. See TEX. R. APP. P. 38.1(i); see also Archer v. DDK Holdings LLC, 463 S.W.3d 597, 603 (Tex.
App.—Houston [14th Dist.] 2015, no pet.). We therefore address only legal sufficiency.
     4
       Section 33.47(a) states, “In a suit to collect a delinquent tax, the taxing unit’s current tax roll and delinquent tax
roll or certified copies of the entries showing the property and the amount of the tax and penalties imposed and interest
accrued constitute prima facie evidence that each person charged with a duty relating to the imposition of the tax has
complied with all requirements of law and that the amount of tax alleged to be delinquent against the property and the
amount of penalties and interest due on that tax as listed are the correct amounts.” Appellant has not challenged the
amount of taxes, penalties and interest owed by Public Auto Sales, Inc.; nor has it disputed whether the taxing entities
complied with the requirements of the law in assessing the tax.

                                                            –5–
disregarding contrary evidence unless reasonable factfinders could not. See Del Lago Partners,

Inc. v. Smith, 307 S.W.3d 762, 770 (Tex. 2010) (citing City of Keller v. Wilson, 168 S.W.3d 802,

822, 827 (Tex. 2005)). We will uphold the finding if more than a scintilla of competent evidence

supports it. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005) (per curiam);

see also City of Keller, 168 S.W.3d at 810. The final test for legal sufficiency is “whether the

evidence at trial would enable reasonable and fair-minded people to reach the verdict under

review.” City of Keller, 168 S.W.3d at 827. When conducting our legal sufficiency review, we are

mindful that the factfinder is the sole judge of the credibility of the witnesses and the weight to be

given their testimony. See id. at 819. We may not substitute our judgment for that of the factfinder.

See Windrum v. Kareh, No. 17-0328, 2019 WL 321925, at *5, *13 (Tex. Jan. 25, 2019).

       As we stated in MEI Investments:

       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). “This is true regardless of whether that person’s name is listed on
       the appraisal roll or tax bill.” Willacy Cty. Appraisal Dist. v. Sebastian Cotton &
       Grain, Ltd., 555 S.W.3d 29, 43 (Tex. 2018). “In other words, ownership gives rise
       to tax liability, and the appraisal roll and tax roll merely reflect such ownership—
       they do not establish ownership or create tax liability.” Id. at 44. “Simply put, tax
       liability exists independently of the appraisal roll or tax bill.” Id. at 45.

       “[A] person who purchases a business, an interest in a business, or the inventory of
       a business from a person who is liable under [the property tax code] for the payment
       of taxes imposed on personal property used in the operation of that business” must
       “withhold from the purchase price an amount sufficient to pay all of the taxes
       imposed on the personal property of the business, plus any penalties and interest
       incurred.” TAX CODE § 31.081(a)–(b). A purchaser who fails to withhold the
       required amount “is liable for that amount to the applicable taxing units to the extent
       of the value of the purchase price.” Id. § 31.081(c). “[A] person is considered to
       have purchased a business if the person purchases the name of the business or the
       goodwill associated with the business.” Id. § 31.081(g)(1).

       Id., No. 05-18-00197-CV, slip op. at 6–7.

       Here, the contract attached to Mahrouq’s affidavit identifies the seller as “Public Autos

Sales Ltd.” The affidavit also indicates appellant purchased property of “Public Auto Sales”


                                                 –6–
located at 905, 908, 915, 925, 935, and 941 S. Buckner Blvd, Dallas Texas. The Addendum to the

attached contract stated the property that appellant purchased included all right, title, and interest

in, and to the goodwill of the business, and was used in the business seller was operating.

Moreover, there were publicly filed documents in evidence indicating an entity identified as Public

Autos, Ltd. was doing business at 1105 N. Hwy 175 in Seagoville, Texas as “Public Auto Sales”

with a registered office located at 925 S. Buckner, Dallas Texas. There were also public documents

in evidence showing Carol E. George was the vice president of Public Auto Sales, Inc. which also

conducted business as “Public Auto Sales,” and “Public Autos Ltd.”

        Based on the record before us, the evidence is legally sufficient to support an implied

finding that appellant purchased a business, an interest in a business, or inventory of a business

from a person who is liable under the property tax code for the payment of taxes imposed on

personal property used in the operation of that business. TEX. TAX CODE § 31.081(a), (g)(1) (“[A]

person is considered to have purchased a business if the person purchases the name of the business

or the goodwill associated with the business.”); see also Willacy Cty. Appraisal Dist. v. Sebastian

Cotton & Grain, Ltd., 555 S.W.3d 29, 43 (Tex. 2018) (“ownership gives rise to tax liability, and

the appraisal roll and tax roll merely reflect such ownership—they do not establish ownership or

create tax liability”). As in MEI Investments, because appellant did not withhold the required

amount from the purchase price pursuant to section 31.081(b), it became “liable for that amount

to the applicable taxing units to the extent of the value of the purchase price.” 5 See TAX CODE

§ 31.081(c). Because our legal sufficiency analysis does not rely on the presumptions in section

33.47, we need not address appellant’s contention that the taxing entities improperly utilized those

presumptions to establish liability. See Felt v. Harris Cty., No. 14-12-00327-CV, 2013 WL




    5
      MEI does not contend, and the record does not show, that the amount the trial court awarded in the judgment
exceeded the purchase price.
                                                      –7–
1738604, at *3 (Tex. App.—Houston [14th Dist.] Apr. 23, 2013, no pet.) (mem. op.) (taxing

authorities’ alleged improper reliance on section 33.47 presumption to show liability was

immaterial where record contained other competent, unrebutted evidence supporting liability).

                                        CONCLUSION

       Because we conclude the trial court did not err in admitting the affidavit and the evidence

was sufficient to support the trial court’s implied findings that appellant was liable for the

outstanding taxes, we affirm the trial court’s judgment.




                                                  /Robbie Partida-Kipness/
                                                  ROBBIE PARTIDA-KIPNESS
                                                  JUSTICE



180217F.P05




                                               –8–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 MEI INVESTMENTS, L.P., Appellant                     On Appeal from the 101st Judicial District
                                                      Court, Dallas County, Texas
 No. 05-18-00217-CV          V.                       Trial Court Cause No. TX-15-02041.
                                                      Opinion delivered by Justice Partida-
 DALLAS COUNTY, CITY OF                               Kipness. Justices Bridges and Carlyle
 SEAGOVILLE, DALLAS                                   participating.
 INDEPENDENT SCHOOL DISTRICT,
 DALLAS COUNTY COMMUNITY
 COLLEGE DISTRICT, DALLAS
 COUNTY SCHOOL EQUALIZATION
 FUND, AND PARKLAND HOSPITAL
 DISTRICT, Appellees

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

       It is ORDERED that appellees Dallas County, City of Seagoville, Dallas Independent
School District, Dallas County Community College District, Dallas County School Equalization
Fund, and Parkland Hospital District recover their costs of this appeal from appellant MEI
Investments, L.P.


Judgment entered this 2nd day of April, 2019.




                                                –9–
