Reverse and Render and Opinion Filed October 29, 2020

In The

Court of Appeals

Fifth District of Texas at Dallas

No. 05-19-00875-CV

DALLAS CENTRAL APPRAISAL DISTRICT, Appellant

V.

CITY OF DALLAS, Appellee

On Appeal from the 160th Judicial District Court

Dallas County, Texas

Trial Court Cause No. DC-18-17139

MEMORANDUM OPINION

Before Justices Molberg, Carlyle, and Browning

Opinion by Justice Molberg

The City of Dallas (City) filed a petition for judicial review of the Dallas 

Central Appraisal District (DCAD) Review Board’s (Appraisal Review Board) final 

order denying the City’s request for a public property tax exemption on certain 

property leased by the City from a private party and used exclusively for public 

purposes.

The parties filed competing motions for summary judgment. After a hearing,

the trial court signed a final judgment in the City’s favor, ruling the City was entitled 

to a public property exemption from paying any ad valorem taxes on its leasehold 
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interest in the property. In its sole issue on appeal, the DCAD argues the property 

is not exempt from taxation because it is not owned by the City. We reverse the trial 

court’s judgment and render judgment for the DCAD that the City is not entitled to 

a tax exemption under section 11.11(a) of the Texas Tax Code. TEX. TAX CODE

§ 11.11(a).

BACKGROUND

The City leases property located at 3448 West Mockingbird Lane in Dallas, 

Texas, from Mockingbird Partners, L.P., a Delaware limited partnership

(Mockingbird Partners). Pursuant to the terms of the lease, the City is responsible 

for paying the taxes on the property. In its petition, the City alleged that in April 

2018, it received “the invoice for the 2018 ad valorem property taxes due on the 

Property.” The City alleged it filed a protest with the DCAD. By final order dated 

September 27, 2018, the Appraisal Review Board denied the City’s protest. The 

final order was addressed to “MOCKINGBIRD PARTNERS LP.” After receiving 

a copy of the Appraisal Review Board’s final order, the City sent the DCAD a letter 

of intent to appeal the final order to district court.

In its summary judgment motion, the City argued that while it does not own 

the property, it owns the leasehold, uses the property for the public purpose of 

housing the City’s Ground Transportation Department, and is responsible for paying 

the taxes on the property according to the terms of the lease. According to the City, 

the property therefore should enjoy exemption status under section 11.11 of the 
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Texas Tax Code. TEX. TAX CODE § 11.11(a). In its response and cross-motion for 

summary judgment, the DCAD argued that under section 11.11, the City would have 

to own the property for the exemption to apply, the City does not own the property, 

and, therefore, the DCAD is entitled to judgment as a matter of law.

ANALYSIS

We review a trial court’s ruling on a motion for summary judgment de novo. 

Tarr v. Timberwood Park Owners Ass’n, Inc., 556 S.W.3d 274, 278 (Tex. 2018). To 

prevail on a traditional motion for summary judgment, the movant must show no 

genuine issue of material fact exists and it is entitled to judgment as a matter of law. 

TEX.R.CIV. P. 166a(c). When both parties move for summary judgment on the same 

issue and the trial court grants one motion and denies the other, we consider the 

summary judgment evidence presented by both sides, determine all questions 

presented, and render the judgment the trial court should have rendered. Tarr, 556 

S.W.3d at 278.

Texas law requires all property to be taxed unless it is exempt. See TEX.

CONST. art. VIII, § 1. However, the legislature may “exempt from taxation public 

property used for public purposes. . . .” TEX. CONST. art. VIII § 2. Section 11.11 of 

the Texas Tax Code exempts from taxation property owned by a political subdivision 

provided the property is used for a public purpose. TEX. TAX CODE § 11.11(a)

(“[P]roperty owned by this state or a political subdivision of this state is exempt from 

taxation if the property is used for public purposes.”). Nevertheless, the law does 
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not favor tax exemptions and courts should construe statutory exemptions from 

taxation strictly and resolve all doubts against the granting of an exemption. Brazos 

Elec. Power Coop., Inc. v. Tex. Comm’n on Envtl. Quality, 576 S.W.3d 374, 383–

84 (Tex. 2019) (statutory taxation exemptions are strictly construed “because they 

undermine equality and uniformity by placing a greater burden on some taxpaying 

businesses and individuals rather than placing the burden on all taxpayers equally”) 

(quoting N. Alamo Water Supply Corp. v. Willacy Cty. Appraisal Dist., 804 S.W.2d 

894, 899 (Tex. 1991)).

On appeal, the DCAD argues—as it argued in its response and cross-motion 

for summary judgment in the trial court—that section 11.11(a) does not apply 

because the City undisputedly does not own the property. Mockingbird Partners is 

the property owner. The City, however, claims it is entitled to a tax exemption under 

section 11.11(a) of the Texas Tax Code because a leasehold held by the state or a 

political subdivision thereof and used for a public purpose—such as the City’s lease 

of the property—constitutes “property” under section 11.11(a).

We agree with the DCAD. Section 11.11(a) applies only to property that is 

publicly owned by the state or a political subdivision of the state. For taxation 

purposes, this Court has defined the owner of real property as the “person or legal 

entity holding legal title to the property, or holding an equitable right to obtain legal 

title to the property.” Comerica Acceptance Corp. v. Dallas Cent. Appraisal Dist., 

52 S.W.3d 495, 497 (Tex. App.—Dallas 2001, pet. denied). “Public ownership, for 
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tax-exemption purposes, must grow out of the facts; it is a legal status, based on 

facts, that may not be created or conferred by mere legislative, or even contractual 

declaration. If the state does not in fact own the taxable title to the property, neither 

the Legislature by statute, nor the [parties], may make the state the owner thereof by 

simply saying that it is the owner.” Tex. Turnpike Co. v. Dallas Cty., 271 S.W.2d 

400, 402 (Tex. 1954). Here, the City does not hold legal or equitable title to the 

property. It is undisputed the property is privately owned by Mockingbird Partners 

and Mockingbird Partners possesses legal title. 

The City bears a heavy burden of proof and must show that it clearly falls 

within a statutory exception—which we strictly construe—to establish entitlement 

to a tax exemption. We conclude the City does not own the property at issue in this 

case and the trial court erred by granting summary judgment in the City’s favor, and 

by not granting summary judgment in the DCAD’s favor, with respect to the City’s 

claim for a tax exemption under section 11.11 of the Texas Tax Code.1

 

1 The City’s reliance on U.S. Postal Serv. v. Dallas Cty. Appraisal Dist., 857 S.W.2d 892 (Tex. App–

Dallas 1993), vacated 866 S.W.2d 209 (Tex. 1993), is misplaced. First, we note the Texas Supreme Court

expressly vacated this opinion; therefore, it has no precedential value. See TEX. R. APP. P. 56.3. However, 

even if the supreme court had not vacated U.S. Postal Service, it does not support the City’s position. In 

U.S. Postal Service, the United States Postal Service and its lessors sued the DCAD and the Appraisal 

Review Board over the taxation of the postal service’s leasehold interests. U.S. Postal Serv., 857 S.W.2d 

at 892. Ultimately, this Court determined that because state and local entities could not directly tax federal 

property, if the federal government owns the fee but leases the property to a private entity, the local 

government entity could only tax the private leaseholder’s interest. Id. at 894–95. In our analysis, this 

Court referenced section 11.12 of the Texas Tax Code for the proposition that Texas tax law exempts all 

property belonging to the United States. Id. at 894.
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We resolve the DCAD’s sole issue in its favor. We reverse the judgment of 

the trial court and render judgment for DCAD that the City is not entitled to a tax 

exemption under section 11.11(a) of the Texas Tax Code. TEX. TAX CODE

§ 11.11(a).

190875f.p05

/Ken Molberg//

KEN MOLBERG

JUSTICE
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Court of Appeals

Fifth District of Texas at Dallas

JUDGMENT

DALLAS CENTRAL APPRAISAL 

DISTRICT, Appellant

No. 05-19-00875-CV V.

CITY OF DALLAS, Appellee

On Appeal from the 160th Judicial 

District Court, Dallas County, Texas

Trial Court Cause No. DC-18-17139.

Opinion delivered by Justice 

Molberg. Justices Carlyle and 

Browning participating.

In accordance with this Court’s opinion of this date, the judgment of the trial 

court is REVERSED and judgment is RENDERED in favor of appellant 

DALLAS CENTRAL APPRAISAL DISTRICT.

It is ORDERED that appellant DALLAS CENTRAL APPRAISAL 

DISTRICT recover its costs of this appeal from appellee CITY OF DALLAS.

Judgment entered this 29th of October, 2020.