Over the last couple of years, not much has changed on the global front.
In 2012, unrest in the Middle East was at a fever’s pitch, people on the Eastern seaboard were bracing themselves for Hurricane Sandy and a Democrat president remained in the White House.
Locally, some things haven’t changed either.
It was in June 2012 that residents in portions of Parker County got their first reprieve when the Second Court of Appeals in Fort Worth declared that the Parker County Appraisal District and the Parker County Appraisal Review Board acted outside their statutorily-authorized power by assessing five years of Willow Park and Aledo city taxes against Appellants based on the omission of those taxing units from the district’s appraisal records. That sent the case back to the trial court for the taxpayers to argue their entitlement to a refund, as well as a class action to benefit their fellow affected taxpayers for tax years 2003 to 2007.
In the beginning
The case began in October 2010, when a claim was filed in Parker County District Court against Willow Park for enacting foreclosure proceedings on property owned by Todd Brennan and his wife, Valerie. Back in October 2008, the Parker County Appraisal District sent a tax bill to approximately 300 households notifying them that the chief appraiser had discovered the property had been omitted from the city’s appraisal roll for the years mentioned. By supplementing the value of the property to the city’s appraisal roll in 2008, the appraisal district attempted to assess back taxes for either the City of Aledo of the City of Willow Park for the 2003 to 2007 tax years.
The claim by the taxpayers was a counterclaim to Willow Park’s existing collection lawsuit alleging that the two failed to pay property taxes for 2005, 2006 and 2007. The Brennans (joined by other property owners in the same boat from both Willow Park and Aledo) claim they were not validly assessed taxes for the years in question, though they paid tax bills from other entities such as Parker County during the same time period. The property owners also asked for a class action case to be certified. The case first made it to the appeals court when almost a year to the date before, then Judge Trey Loftin of the 43rd District Court ruled on July 14, 2011 that he had no jurisdiction to hear the case. Joshua Carden, partner at Davis Miles McGuire Gardner, PLLC and attorney for the property owners in the case at the time celebrated the ruling but knew that the case was far from over.
Back in the trial court before newly-elected Judge Craig Towson, the City of Aledo argued that, as a matter of law, even if the taxing authorities’ actions were illegal, the taxpayers could not have a refund because most “voluntarily” paid their taxes on their properties, including the back taxes assessed for 2003 to 2007. Towson rejected that argument this summer, but also rejected the taxpayers’ motion for a class action, ruling that it was unclear whether the “voluntary payment rule” might apply to some taxpayers but not others, which defeated the uniformity of the potential class. Both sides appealed, and the Second Court of Appeals in Fort Worth heard the argument Oct. 28.
According to Carden, Aledo’s entire focus at the hearing on appeal virtually admitted the void status of the assessments, but then argued the “voluntary payment rule” to oppose any refunds.
“The voluntary payment rule argument suggests that even if there was a mistake of law or fact in paying money to another party, which is in this case the Cities, the taxpayers can’t get a refund unless they made it clear on the check or a letter submitted with the payment, that they disagreed with the assessment,” Carden said. “In their zeal to portray all payments made by the taxpayers as purely voluntary and therefore ineligible for refund, Aledo is now arguing that even if the taxpayers had refused to pay any of the tax bills, Aledo could not have legally collected them under the Tax Code.”
Carden argued for the taxpayers that, not only were these payments not voluntary in the face of the threats of penalties, interest, and possible foreclosure, but also that each taxpayer paid the money under implied duress of these threats and should thus be included in one big class action for refunds – with permission given to “opt out” of the class to anyone who might choose to do so.
Trey Cobb, the taxpayers’ property tax consultant with Kirkwood and Darby, said that the Appeals Court now has the opportunity to finish what it started two years ago.
“At the end of the day, a single decision by the Tax Assessor-Collector for both Cities made this mess for everyone – and a single action by the court should be all that it takes to fix it,” Cobb said. “A decision from the appellate court is not expected for several months.”
This ultimately affects approximately 300 property owners in Aledo and Willow Park. This comes at a particularly relevant moment since tax bills went out to most property taxpayers this month.