Texas 4th Court of Appeals Reverses Judgment Against Maverick County in Ethelivina Felan’s Tax Rate Lawsuit

By: Miguel Munoz, Eagle Pass Business Journal, Inc., Copyright 2018

The Texas Fourth Court of Appeals in San Antonio, Texas reversed the Judgment against Maverick County Judge David R. Saucedo and Maverick County Commissioners Court rendered on June 12, 2017 by visiting District Judge W.B. Kirkendall to hold a tax rate rollback election on the 2016 County Tax Rate in an opinion released on Wednesday, April 11, 2018, written by Justice Patricia O. Alvarez, dismissing Ethelvina Felan’s lawsuit for lack of jurisdiction due to not filing a petition for injunction prior to Maverick County Commissioners Court adoption of the faulty 2016 Tax Rate.

The Fourth Court of Appeals noted that “both parties agree the 2016 rollback tax rated, adopted by the Commissioners’ Court on September 12, 2016, was incorrectly calculated.”  The Court of Appeals quoted Section 26.04(c) of the Texas Tax Code as follows: “A person who owns taxable property is entitled to an injunction prohibiting the taxing unit in which the property is taxable from adopting a tax rate if the assessor or designated officer or employee of the unit, as applicable, has not complied with the computation or publication requirements of this section and the failure to comply was not in good faith.”  Thus, the Court of Appeals held that “this statutory remedy allows a taxpayer, under certain circumstances, to file suit against the taxing unit to prevent the adoption of a tax rate.  Because the statute specifically provides a means for the taxpayer to address the miscalculation of the rollback tax rate, we hold Section 26.04(g) is the sole remedy for any taxpayer challenges to the calculations of the rollback tax rate under chapter 26 of the Texas Tax Code.”

The Fourth Court of Appeals held that “Felan’s complaint rests on the miscalculation of the rollback tax rate. Absent a recalculation of the rollback tax rate, Felan could not allege or establish the 2016 adopted tax rate exceeded the 2016 rollback tax rate. As a result, Felan’s only cause of action against Maverick County and its officers is provided by Section 24.06(g), and her exclusive remedy was the ability to seek an injunction prohibiting Maverick County from adopting the tax rate. Standing under section 24.06(g), however, requires the taxpayer to file the injunction prior to adoption of the tax rate. By her own admission, prior to the County’s adoption of the tax rate, Felan knew about the miscalculation and that the temporary injunction was the proper avenue in which to challenge the miscalculation, but she chose not to act. Because Felan failed to comply with section 24.06(g), which was her exclusive remedy for challenging Maverick County’s miscalculation of the rollback tax rate, the trial court was without jurisdiction to hear her claims.  Accordingly, we reverse the trial court’s order and dismiss Felan’s underlying lawsuit for want of jurisdiction.”

While the Fourth Court of Appeals decision focused on a procedural defect made by Maverick County taxpayer Ethelvina Felan in not filing a petition for injunction pursuant to Section 26.04(g) of the Texas Tax Code before Maverick County Commissioners Court approved the incorrect 2016 Tax Rate on October 3, 2016, the fact remains that Maverick County Commissioners Court by and through Maverick County Tax Assessor-Collector Isamari Sanchez-Villarreal did miscalculate the 2016 County Tax Rate by failing to take into consideration $3.1 Million in Sales Taxes received by Maverick County in 2015.

Although Maverick County Commissioners Court won their appeal of visiting Judge W.B. Kirkendall’s Judgment of June 12, 2017 on a procedural technicality that dismissed taxpayer Ethelvina Felan’s lawsuit regarding the 2016 County Tax Rate, Maverick County taxpayers raised the issue whether Maverick County Commissioners Court are going to do the moral and ethical thing to either hold a tax rollback election or refund the approximately $1.8 Million in excess County taxes raised due to the miscalculated 2016 County Tax Rate.

Maverick County taxpayer Ethelvina Felan has issued a press release that she intends to be filing a Motion for Rehearing before the entire Fourth Court of Appeals in San Antonio, Texas as the three Justice panel that heard and decided the appeal erred in their decision.