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In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-13-00412-CV

____________________

SIGNAL INTERNATIONAL TEXAS L.P., Appellant

V.

ORANGE COUNTY, TEXAS, ORANGE COUNTY

APPRAISAL DISTRICT AND ORANGE COUNTY

TAX ASSESSOR-COLLECTOR, Appellees

_______________________________________________________ ______________

On Appeal from the 163rd District Court 

Orange County, Texas

Trial Cause No. B-120281-C 

________________________________________________________ _____________

MEMORANDUM OPINION

This case involves an assessment of ad valorem taxes. Appellant, Signal 

International Texas L.P. (“Signal”), appeals the district court’s order dated June 18, 

2013, dismissing Signal’s suit and granting the pleas to the jurisdiction filed by the 

defendant-appellees, Orange County Appraisal District (“OCAD”), Orange 
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County, Texas (“the County”), and the Orange County Tax Assessor-Collector, in 

her official capacity, (“OCTA”) (collectively the “Taxing Entities”). We affirm.

UNDERLYING FACTS

The principal underlying facts are not in dispute. Signal filed its Original 

Petition on August 15, 2012, seeking relief against the Taxing Entities regarding an

assessment amount of $335,838.79 in ad valorem taxes assessed on Signal’s 

personal property located at Signal’s facility in Orange County, Texas. Before the 

tax assessment was levied, Signal’s representatives met with the OCAD appraisal 

agent, Pritchard & Abbott, and Signal submitted its 2011 Tax Year Rendition of its 

personal property to OCAD on or about March 22, 2011. The Signal Rendition set 

a total value of $31,729,090.00 for all of Signal’s personal property, and it 

specifically included a barge (“the Atlas Barge”) as a Signal asset with a value of 

$12,854,762.75.

Signal and OCAD later reached an agreement on the value of all of the 

Signal personal property and on the total ad valorem assessment for the 2011 tax 

year. Their Settlement Agreement was reduced to writing and signed by all parties 

on or about May 13, 2011. The Settlement Agreement set Signal’s property 

valuation at $31,729,090.00, and it included the Atlas Barge as one of the items on 

the inventory of property attached to the agreement. 
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According to Signal, the Atlas Barge was constructed pursuant to a 2009 

Charter Agreement between Signal and Signet Maritime Corporation giving Signet 

an option to purchase the barge. The barge was completely constructed by Signal 

as of April of 2010, and on or about May 6, 2010, Signet moved the Atlas Barge 

from Texas to Pascagoula, Mississippi, without notifying Signal. According to 

Signal, Signet then moved the barge on May 31, 2010, to Mexico, where it 

remained for the entirety of 2011. 

Signal contends it did not discover that the Atlas Barge left Texas until 

December of 2011, and Signal alleges that it notified Pritchard & Abbott on 

January 4, 2012, that Signal made a mistake when Signal rendered the Atlas Barge 

as part of its personal property for tax year 2011. Signal requested that Pritchard & 

Abbott request a correction and relief from the 2011 tax assessment in an amount 

of $335,838.79 (that portion of the 2011 ad valorem tax attributed to the Atlas 

Barge asset). In February of 2012, Signal sent OCAD a letter about the disputed 

amount. Pritchard & Abbott later notified Signal that it could not change the 

agreed-upon settlement amount and that the county tax roll had already been 

certified, but Pritchard & Abbott agreed to remove the Atlas Barge from the 2012 

assessment as long as the barge did not return to Orange County, Texas, during 

2012. The County included the tax amount allocated to the Atlas Barge. In March 
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2012, Signal received from OCAD a Notice of Delinquent Taxes, stating that 

Signal then owed $359,347.51.

In May 2013, Signal filed its First Amended Original Petition seeking what 

Signal describes in its appellate brief as “equitable relief of rescission or

reformation of the Settlement Agreement[,]” as well as “injunctive relief”

preventing seizure of the Atlas Barge. The Taxing Entities filed pleas to the 

jurisdiction, seeking a dismissal for lack of subject matter jurisdiction. On June 18, 

2013, the trial court entered an order dismissing Signal’s claims against the Taxing 

Entities with prejudice for lack of subject matter jurisdiction, and Signal filed this 

appeal.

ISSUES ON APPEAL

In its first issue, Signal contends that the district court erred in granting the 

pleas to the jurisdiction and that the trial court had subject matter jurisdiction over 

Signal’s equitable claim because Signal has no recourse under the Texas Tax Code 

to correct the error and “mutual mistake” made by the parties. In issue two, Signal 

argues that it was not required to exhaust administrative remedies because the 

statutory provisions in the Tax Code do not govern Signal’s equitable claim. In 

issue three, Signal contends the trial court erred in dismissing Signal’s claims with 

prejudice and denying Signal an opportunity to replead to cure the jurisdictional 
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defects. The Taxing Entities argue that the trial court correctly dismissed the 

claims because (1) the Texas Tax Code provides the exclusive remedy for a 

property owner to protest the assessment of property for ad valorem taxes; (2) 

Signal failed to exhaust its administrative remedies; (3) Signal cannot collaterally 

attack the taxable situs of the Atlas Barge by seeking “equitable relief[;]” and (4) 

Signal entered into a final and binding property settlement agreement in 

accordance with section 1.111(e) of the Texas Tax Code, thereby waiving any 

rights of protest under the provisions of the Texas Tax Code.

STANDARD OF REVIEW

A plea to the jurisdiction challenges the trial court’s subject matter 

jurisdiction over the claims that a plaintiff has asserted in the lawsuit. Bland Indep.

Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). We review the trial court’s 

order on a plea to the jurisdiction de novo. Tex. Dep’t of Parks & Wildlife v. 

Miranda, 133 S.W.3d 217, 228 (Tex. 2004). In our de novo review, we do not 

weigh the merits of the plaintiff’s claims, but we consider the plaintiff’s pleadings 

and the evidence pertinent to the jurisdictional inquiry. Cnty. of Cameron v. 

Brown, 80 S.W.3d 549, 555 (Tex. 2002). The plaintiff bears the burden in a lawsuit 

to allege facts that affirmatively demonstrate the trial court’s subject matter 

jurisdiction. See Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 
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(Tex. 1993). “[W]e construe the pleadings in the plaintiff’s favor and look to the 

pleader’s intent.” Brown, 80 S.W.3d at 555. If the plea to the jurisdiction 

challenges the existence of jurisdictional facts, we will consider only the evidence 

relevant to the resolution of the jurisdictional issues raised. Miranda, 133 S.W.3d 

at 227.

DISCUSSION

The Tax Code establishes a detailed set of procedures that property owners 

must abide by to contest the imposition of property taxes. See Tex. Tax Code Ann. 

§§ 41.01-43.04 (West 2008 & Supp. 2014). As a general rule, “‘a taxpayer’s 

failure to pursue an appraisal review board proceeding deprives the courts of 

jurisdiction to decide most matters relating to ad valorem taxes.’” Cameron 

Appraisal Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex. 2006) (per curiam) (quoting 

Matagorda Cnty. Appraisal Dist. v. Coastal Liquids Partners, L.P., 165 S.W.3d 

329, 331 (Tex. 2005)); Kellair Aviation Co. v. Travis Cent. Appraisal Dist., 99 

S.W.3d 704, 709 (Tex. App.—Austin 2003, pet. denied) (“[E]ven constitutional 

entitlement can be waived when a party fails to follow the implementing 

legislation.”) (citing Aramco Associated Co. v. Harris Cnty. Appraisal Dist., 33 

S.W.3d 361, 364 (Tex. App.—Texarkana 2000, pet. denied)). A trial court’s 
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subject matter jurisdiction may not be waived and may be raised for the first time 

on appeal. See Tex. Ass’n of Bus., 852 S.W.3d at 445.

Chapter 41 of the Texas Tax Code expressly provides that a property owner 

may file an administrative protest of certain actions, including “unequal appraisal 

of the owner’s property[,]” “inclusion of the owner’s property on the appraisal 

records[,]” and “any other action of the chief appraiser, appraisal district, or 

appraisal review board that applies to and adversely affects the property owner.” 

See Tex. Tax Code Ann. § 41.41(a)(2), (3), (9) (West 2008). Chapter 42 then 

allows the property owner to seek judicial review of an adverse determination of an 

administrative protest. See id. § 42.01(a)(1)(A) (West Supp. 2014). More 

specifically, a taxpayer may protest the taxable situs of property pursuant to section 

41.42 of the Texas Tax Code by utilizing the procedures of chapters 41, 42, or 

section 25.25 of the Tax Code. See id. § 41.42 (West 2008).

To prevail on a protest of taxable situs, the property owner must establish 

that the property is on the appraisal roll of another district or is not taxable in the 

state. Id. After a hearing before the appraisal review board, the taxpayer or taxing 

unit may appeal to the district court for a de novo review of the board’s 

determination. See id. at §§ 42.21, 42.23. This is the exclusive method provided by 

the Tax Code for adjudicating a protest of situs. Sierra Stage Coaches, Inc. v. State 
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of Texas—Cnty. of Harris, 832 S.W.2d 191, 193 (Tex. App.—Houston [14th Dist.] 

1992, no writ). However, if the taxpayer enters into a section 1.111(e) agreement, 

the district court is deprived of jurisdiction over an appeal under section 42.01. See 

Curry v. Harris Cnty. Appraisal Dist., 434 S.W.3d 815, 822 (Tex. App.—Houston

[14th Dist.] 2014, no pet.).

The Taxing Entities argue the parties entered into a section 1.111(e) 

settlement agreement and the agreement is final and binding on the parties. See

Tex. Tax Code Ann. § 1.111(e) (West Supp. 2014). We first address a footnote in 

Signal’s reply brief wherein Signal states it “does not concede” that the Settlement 

Agreement was pursuant to section 1.111(e). Section 1.111(e) of the Texas Tax 

Code provides the following:

An agreement between a property owner or the owner’s agent and the 

chief appraiser is final if the agreement relates to a matter:

(1) which may be protested to the appraisal review board or on 

which a protest has been filed but not determined by the board; 

or 

(2) which may be corrected under Section 25.25 or on which a 

motion for correction under that section has been filed but not 

determined by the board.

Id. The written agreement, signed by Signal’s agent and a representative of the 

appraisal district, states that the parties “agreed to the settled value for the 2011 tax 

year in the amount of $31,729,090[.]” The agreement further states:
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I acknowledge that the subject matter of property described above has 

been settled to my satisfaction. I hereby waive my right to any further 

proceeding in this matter, any claim for exemptions other than those 

already granted for the tax year, or any other actions under Chapter 41 

or Chapter 25 of the Property Tax Code. 

An agreement is a section 1.111(e) agreement when the agreement is 

between the property owner or the owner’s agent and the chief appraiser, and the 

agreement concerns a matter that could have been protested to the appraisal review 

board or on which a protest has been filed but not determined by the board. Tex. 

Tax Code Ann. § 1.111(e); see, e.g., Bastrop Cent. Appraisal Dist. v. Acme Brick 

Co., 428 S.W.3d 911, 916-17 (Tex. App.—Austin 2014, no pet.); Hartman v. 

Harris Cnty. Appraisal Dist., 251 S.W.3d 595, 599 (Tex. App.—Houston [1st 

Dist.] 2007, pet. denied); Sondock v. Harris Cnty. Appraisal Dist., 231 S.W.3d 65, 

69 (Tex. App.—Houston [14th Dist.] 2007, no pet.). Upon review of the 

Settlement Agreement in the case at bar, we conclude that the agreement is a 

section 1.111(e) agreement because it concerns a matter that could have been 

protested to the appraisal review board. See Tex. Tax Code Ann. § 1.111(e); see 

also id. §§ 41.01(a)(1) (providing for appraisal review boards to determine 

property owners’ protests), 41.41(a)(1) (allowing for owner’s protest of a 

property’s appraised value), 41.42 (allowing for owner to protest the taxable situs 

of property). Section 1.111(e) agreements are final, even without approval or 
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adoption by the appraisal board. See BPAC Tex., LP v. Harris Cnty. Appraisal 

Dist., No. 01-03-01238-CV, 2004 Tex. App. LEXIS 9592, at *7 (Tex. App.—

Houston [1st Dist.] Oct. 28, 2004, no pet.) (mem. op.). Section 42.09(a)(2) 

provides, in relevant part, that:

procedures prescribed by this title for adjudication of the grounds of 

protest authorized by this title are exclusive, and a property owner 

may not raise any of those grounds . . . as a basis of a claim for relief 

in a suit by the property owner to . . . obtain a refund of taxes paid.

Tex. Tax Code Ann. § 42.09(a)(2) (West Supp. 2014). Signal contends that the 

equitable claims of contract rescission, reformation, and mutual mistake are 

inapplicable to a section 1.111(e) agreement. 

Signal relies on In re Willacy County Appraisal District, Cause No. 13-13-

00550-CV, 2013 Tex. App. LEXIS 13593 (Tex. App.—Corpus Christi Nov. 1, 

2013) (orig. proceeding), in arguing that, even assuming the Settlement Agreement 

was executed pursuant to section 1.111(e), contract law can be applied to reform or 

rescind a section 1.111(e) agreement. In re Willacy County Appraisal District is 

inapposite.

In re Willacy County Appraisal District involved a discovery dispute arising 

out of a property tax case. 2013 Tex. App. LEXIS 13593, at *1. The taxpayer, 

through its agent, filed a motion to correct ownership of certain inventory for the 

2009 tax year pursuant to section 25.25(c) of the Tax Code. After the filing of the 
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motion to correct, the taxpayer and the appraisal district’s chief appraiser reached 

an agreement on the motion that the appraisal district would make the changes 

requested in the motion and no hearing by the appraisal review board would be 

necessary. Id. at *2. The appraisal district reduced the appraised value as agreed 

and issued the taxpayer a refund of overpaid taxes. Id. In September 2011, the 

chief appraiser notified the taxpayer that the appraisal district changed the 

ownership of the same property to reflect that it was owned by the taxpayer as of 

September 1, 2009, pursuant to section 25.25(b) of the Texas Tax Code. Id. The 

notice provided that the taxpayer had a right to protest the chief appraiser’s action

to the appraisal review board. Id. at **2-3. The taxpayer protested on the grounds 

that the appraisal district was legally prohibited from changing the ownership 

under section 25.25(b). Id. The appraisal review board denied the taxpayer’s 

protest, and the taxpayer appealed to the trial court and argued that the 2010 

agreement was final and could not be reviewed or rejected by appraisal review 

boards. Id. at *3. 

The appraisal district filed an answer and denial, asserting that its actions

were authorized under the Tax Code, and asserting an affirmative defense of fraud 

or misrepresentation regarding the taxpayer’s motion to correct ownership. Id. at 

*4. The appraisal district propounded discovery to the taxpayer, and the taxpayer
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objected and did not respond. Id. The appraisal district filed a motion to compel the 

written discovery and sent a notice of intent to take a deposition of a representative 

of the taxpayer. Id. The taxpayer filed a motion to quash the deposition. Id. After a 

hearing, the trial court denied the appraisal district’s motion to compel and granted 

the taxpayer’s motion to quash, which resulted in the original proceeding wherein 

the appraisal district contended that the trial court abused its discretion in denying 

the appraisal district’s motion to compel and in granting the taxpayer’s motion to 

quash. Id. at **4-5. In conditionally granting the appraisal district’s petition for 

writ of mandamus, the court concluded that the defense of fraud “in this case is 

viable[,]” that the trial court abused its discretion by denying the appraisal district’s 

requested discovery to develop its affirmative defense, and that the appraisal 

district had no adequate remedy on appeal. See id. at **11-12.

We disagree with Signal’s assertions that Willacy “is directly on point to the 

matter at hand.” Willacy involved allegations of fraud and not “mutual mistake.” 

Furthermore, the Corpus Christi Court of Appeals in Willacy limited its review of 

the case to the issue of whether the appraisal district met its burden to establish its 

entitlement to mandamus relief. 2013 Tex. App. LEXIS 13593, at *9. To the extent 

Signal argues that Willacy confirms that the court has jurisdiction to apply 

common law contract defenses to section 1.111(e) agreements, we note that the 
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Court in Willacy explicitly stated, “We are not directed to, nor do we find any 

authority, that expresses an opinion on whether the defense of fraud may be used in 

the context of the present controversy under the tax code.” Id. at *10. The Court 

again explained that “[a]t this stage of the proceedings, we again express no 

opinion—as the parties implicitly invite us to do—regarding the merits, ultimate 

success, or applicability of such an affirmative defense” because those 

“considerations relate to the factual and procedural postures of the case” and not to 

whether the appraisal district met its burden to establish its entitlement to 

mandamus relief. Id. at **9-11.

Signal also contends Dallas Central Appraisal District v. 1420 Viceroy 

Limited Partnership, 180 S.W.3d 267 (Tex. App.—Dallas 2005, no pet.), supports 

Signal’s position that (1) principles of contract law are applicable to the Settlement 

Agreement here, and (2) Signal has no remedy under the Tax Code and therefore 

“cannot be faulted for its alleged failure to exhaust remedies which do not exist.” 

In Dallas Central Appraisal District, 1420 Viceroy Limited Partnership 

(“Viceroy”) filed suit against Dallas Central Appraisal District (“DCAD”) seeking 

to recover a refund of penalties, fees, and interest allegedly imposed on its property 

without proper notice and in violation of due process of law. Id. at 268. Viceroy 

alleged it did not receive notice that taxes, penalties, fees, and interest were owed 
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on the property until August 2003, and it requested a waiver of penalties, fees, and 

interest pursuant to section 33.011 of the Tax Code, which was denied. Id. Viceroy 

filed a notice of protest with the appraisal board challenging the valuation of its 

property and requesting a refund of penalties, fees, and interest because the tax 

office never sent it proper notice of the charges. Id. After a hearing, the review 

board issued an order denying any relief to Viceroy. Id. Viceroy filed suit in 

district court, and the appraisal district filed a plea to the jurisdiction. Id. The trial 

court denied the plea to the jurisdiction and the appraisal district appealed. In 

affirming the trial court’s judgment, the Dallas Court of Appeals held that the 

exclusivity provision in section 42.09 was not applicable and did not preclude the 

trial court from exercising subject matter jurisdiction because “[t]he basis of 

Viceroy’s complaint in the trial court . . . is not a ground of protest contained in the 

property tax code.” Id. at 270-71.

We conclude that Viceroy is distinguishable from the present case because 

Viceroy did not involve a section 1.111(e) agreement and Signal’s basis of its suit, 

the taxable situs of the Atlas Barge, is a ground of protest specified in the Tax 

Code. Signal argues that the basis of its suit is “its request for the equitable 

remedies” which “is not a ‘ground of protest’ specified by the Code” for which 

there are remedies and, therefore, section 42.09(a)(2) does not apply to its suit. 
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According to Signal, the Tax Code does not address or prohibit Signal’s “right to 

seek equitable relief concerning extrinsic matters which merely relate to the Tax 

Code.” We disagree with Signal that its claims “concern[] extrinsic matters which 

merely relate to” the Tax Code. Signal’s equitable suit is an attempt to protest the 

taxable situs of the Atlas Barge outside of Texas’s designated statutory procedure, 

and therefore, the suit is prohibited by section 42.09(a)(2). The situs of property is 

an issue on which a property owner must first exhaust its administrative remedies 

before asserting the issue in a lawsuit. See Tex. Tax Code Ann. §§ 41.42, 42.09; 

Gen. Elec. Credit Corp. v. Midland Cent. Appraisal Dist., 826 S.W.2d 124, 124-25 

(Tex. 1991). The exclusive remedies and procedures in the Tax Code can be 

waived when the parties enter into a section 1.111(e) settlement agreement. See 

Tex. Tax Code Ann. § 1.111(e). Signal waived its right to protest under the Tax 

Code and waived all administrative remedies when it entered into the property 

settlement agreement. See id.; § 42.09(a)(2). Furthermore, because Signal chose to 

reach an agreement with OCAD as to the appraised value of its property instead of 

pursuing a protest, Signal was not deprived of its due process of law. See Hartman, 

251 S.W.3d at 601; Sondock, 231 S.W.3d at 70; BPAC, 2004 Tex. App. LEXIS 

9592, at **9-10. Therefore, we conclude that the trial court did not err in granting 

the Taxing Entities’ pleas to the jurisdiction and did not err in ruling that Signal 
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was required to exhaust administrative remedies under the Tax Code prior to 

seeking judicial relief. Issues one and two are overruled.

In light of our conclusions that the Settlement Agreement is a final 

resolution to Signal’s right to protest the taxable situs of the Atlas Barge and that 

Signal has no equitable claim to rescind the Settlement Agreement, Signal’s 

pleadings failed to plead facts that establish jurisdiction and affirmatively 

demonstrate an incurable defect. The district court did not err in dismissing 

Signal’s cause of action with prejudice. Issue three is overruled. We affirm the trial 

court’s judgment. 

AFFIRMED.

_________________________

 LEANNE JOHNSON

 Justice

Submitted on August 11, 2014

Opinion Delivered December 18, 2014

Before McKeithen, C.J., Horton and Johnson, JJ.