### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03
- 19
- 00351
- CV

Glenn Hegar, Comptroller of Public Accounts of the State of Texas, and Ken Paxton,

Attorney General of Texas, Appellant s

v. J.D. Fields & Company, Inc., Appellee

FROM THE 98TH DI STRICT COURT OF TRAV IS COUNTY NO. D
- 1
- GN
- 15
- 003931 , THE HONORABLE CATH ERINE MAUZY, JUDGE P RESIDING

O P I N I O N This appeal arises from a tax protest suit filed by J.D. Fields & Company

. See Tex. Tax Code § 112.052 (establishing cause of action)

. Th e Comptroller of Public Accounts appeals from the denial of its motion for summary judgment , arguing sovereign immunity bars J.D. Fields’ s suit. 1 We will affirm.

B ACKGROUND

The material facts are undisputed for purposes of this appeal. J.D. Fields is a pi pe and piling distributor headquartered in Houston

. In 2008, the Comptroller audited J.D. Fields ’ s sales

- tax compliance for the reporting period s between April 1, 2005 to May 31, 2008. The audit revealed that J.D. Fields was collecting local sales tax ba sed on the location where the pipes were

1 J.D. Fields sued the Comptroller and the Attorney General, see Tex. Tax Code § 112.053(a) (requiring that both officials be n amed as defendan ts in tax pro test suit), and both moved for summary judgment. We refer to them collectively as the Comptroller because their interests align.2

delivered rather than where the sale took place as required by law

. See id. § § 321

. 108 (e),

. 203(a). The C omptroller ’s auditor, Marisol Purcell , informed J.D. Fields’ s Chief Financial Officer, Steve Fredrich, of th e results in September 2008. Fredrich and Purcell met the following month for an exit conference to conclude the audit. Fredrich told Purcell he intended for the company to start collecting taxes based on the sale location on January 1, 2009 , unless s h e told him to start immediately. According to Fredrich, Purcell replied : “ N o, I think that will be fine.” 2

In 2012, the Comptroller audited J.D. Fields for the reporting periods between June 1, 2008 , and April 30, 2011. The final report reflected tha t J.D . Fields continued to improperly collect local taxes from June 1, 2008 , to December 31, 2008, resulting in a delinquency of $731,039.17 plus interest. J.D. Fi elds requested relief from the assessment on the ground that it failed to collect the taxes in re liance on Purcell’s representation to Fredrich. See 34 Tex. Admin

. Code § 3.10(c) (Tex. Comp. Pub. Accts., Taxpayer Bill of Rights) (“The [C] omptroller will g ive relief to a taxpayer who follows erroneous advice given to the taxpayer by an agency emp lo yee .”); see also id. § 3.5(b)(3)(K) (Waiver of Penalty or Interest) (providing that C omptroller “will consider” factors including “reliance on advice provided by the [C] omptroller’s office pursuant to § 3.10(c) of this title” when deciding request to wai ve pe nalty or interest). The Comptroller denied relief.

J.D. Fields paid $860,055.76 (the delinquency plus interest) under protest and sued to recover the full amount. See Tex. Tax Code §§ 112.051

– .058 (Suit After Protest Payment)

. J.D. Fields argued th at th e Comptroller erred by failing to grant relief under Rules

2 We take this description of the exit conference f rom J.D. Fields’ s pleadings and Fredrich’s de position testimon y. The Comp troller disputes this version of events but concedes we must take it as true when reviewing its jurisdictional challenge. See , e.g. , Heckman v. Williamson County , 369 S.W.3d 137, 150 (Tex. 2012)

.3

3.10 and 3.5

. The Comptroller filed a motion for summary judgment arguing , in relevant part, that sovereign immunity bar s this claim. The district court denied the motion, and t he Comptrol ler tim ely appealed the jurisdictional issue

.
L EGAL STANDARDS Sovereign immunity from suit “prohibits suits against the state unless the stat e consents and waives its immunity.” Nazari v. State , 561 S.W.3d 495, 500 (Tex. 2018). Immunity from suit “impl icate s a court ’ s subject

- matter jurisdiction , ” id. , and may be asserted “through a plea to the jurisdiction or other procedural vehicle, such as a motion for summary judgment,” see Alamo Heights Indep endent Sch ool Dist rict v. Clark , 544 S.W.3d 755, 770 (Te x. 20 18). When a government al entity challenges jurisdiction on immunity grounds, the plaintiff

“ must affirmatively demonstrate the court’s jurisdiction by alleging a valid waiver of immunity .”
S ee Ryder Integrated Logistics, Inc. v. Fayette County , 453 S.W.3 d 92 2, 927 (Tex. 2015) (per curiam) (quoting Dallas Area Rapid Transit v. Whitley , 104 S.W.3d 540, 542 (Tex. 2003)).

When a jurisdictional plea challenges the pleadings, as here, we “determine if the plaintiff has alleged facts that affirmatively de monst rate t he court’s jurisdiction to hear the case.” Meyers v. JDC/Firethorne, Ltd. , 548 S.W.3d 477, 486 (Tex. 2018) (citing Texas Dep ’ t of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004)). In doing so, we “construe the plaintiff’s pleading s lib erally , taking all factual assertions as true, and look to the plaintiff’s intent.” Heckman v. Williamson County , 369 S.W.3d 137, 150 (Tex. 2012). We review a trial court’s resolution of a jurisdictional plea de novo. Meyers , 548 S.W.3d at 486.

T he pa rties’ a rguments turn on questions of statutory construction. Statutory construction presents a question of law t hat we review de novo. Aleman v. Texas Med. Bd. ,4

573 S.W.3d 796, 802 (Tex. 2019) . Our goal when c onstruing a statute is to ascertain an d giv e effect to the Legislature’s intent. Id. We ascertain that intent from the plain meaning of the words chosen “ u nless a different meaning is supplied, is apparent from the context, or the plain meaning of the words leads to absurd or nonsensical res ults. ” Caden a Comercial USA Corp.

v. Tex as Alcoholic Beverage Comm’n , 518 S.W.3d 318, 32 5 (Tex. 2017). However, w e do not determine the meaning of an individual provision in isolation but consider “ the context and framework of the entire statute and meld its words in to a cohesive reflection of legislative intent. ” Id. at 326. W e further “ presume that the Legislature chooses a statute’s language with care, including each word chosen for a purpose, while purposefully omitting words not chosen.”
TGS

- NOPEC Geop hysical Co. v. Combs , 340 S.W.3d 432, 439 (Tex. 2011)

.
D ISCUSSION We begin our analysis with the pro test statute. See generally Tex. Tax Code §§ 112.051

– .058. A taxpayer who intends to bring a protest suit contending that a tax or fee “is
unlawful or tha t the pu blic official charged with the duty of collecting the tax or fee may not legally demand or c ollect the tax or fee” must both “pay the amount claimed by the state” and submit a written protest that states “fully and in detail each reason for recover ing the payment.” Id. § 112.051(a)

– (b). If a taxpayer fulfills both requirements, section 112.052 waives sovereign immunity and allows the taxpayer to sue the State before the 91st date after the date of the protest payment. Id. § 112.052; see In re Nes tle USA, Inc. , 359 S.W.3d 207, 212 (Tex. 2012) (orig. proceeding) (holding chapter 112’s provision o f taxpayer rights of action waives sovereign immunity from suit). The Comptroller acknowledges that J.D. Fields complied with these5

procedural requi rements but arg ues that the Legislature has not waived immunity for J.D. Fields’ s substantive claim.

T he Comptroller ’s principal argument is that J.D. Fields has asserted an equitabl e estoppel claim instead of alleging th at th e Comptroller cannot legally collec t the taxe s at issue

. See Tex. Tax Code § 112.051(a)

. We disagre e . Equitable estoppel “arises where by fault of one, another has been induced to change his position for the worse.” Office of Atty. Gen. v. Scholer , 403 S.W.3d 859, 862 (Tex. 2013)

. “ The doct rine operates ‘ to prevent injustice and protect those who have been misled. ’ ” Id. (quoting Roberts v. Haltom City , 543 S.W.2d 75, 80 (Tex. 1976) ). While J.D. Fields alleged that it relied on Purcell’s misstatement to its detriment , J.D. Field s does
not a llege that equitable principles entitle it to a refun d. Instea d, it argues th at th e Comptroller ’s rules entitled it to a refund and that the Comptroller failed to follow those rules. That the Comptroller’s rules require it to take certain equ itable considerat ions into account when deciding claims for relief does not affect the Comptroller’s obligation to follow those rules when deciding claims

. See Harris Cty

. Appraisal Dist. v. Texas Workforce Comm’n , 519 S.W.3d 113, 119 (Tex. 2017) (explain ing wel l

- settled rule that agency errs if it “does not follow the clear, unambiguous language of its own regulation in making a decision”); see also Rodriguez v. Serv ice Lloyds Ins. , 997 S.W.2d 248, 254 (Tex. 1999) (holding administrative rules “have the s ame force as
statut es”). We conclude that J.D. Fields has not asserted an equitable estoppel claim. 3

3 Our conclusion makes it unn ecessary to addres s the Compt roller’s alternate arguments that allowing courts to adjudicate equitable estoppel claims in tax protest suits violates the state constitution’s separation

- of

- powers provision and its prohibition on suspending the operation of statutes. See Tex . R. App. P . 47.1 (“The court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the a ppeal.”).6 Even if J.D. Fields has not asserted an estoppel claim , t he Comptroller maintains it would retain immunity because the Legislature has g iven the Comptro ller “sole discretion ” to settle tax claims

. See Houston Belt & Terminal Ry. Co. v. City of Houston , 487 S.W.3d 154, 161, 163 (Tex. 2016) (explaining that immunity absolutely protects exercises of discretion “where no specific, substantive or objective st andards gov ern the ex ercise of judgment”). As a result, the Comptroller argues its immunity absolutely bars a claim to enforce the provisions of Rules 3.5 and 3.10, which merely set out how the Comptroller will exercise that aut hority.

We do not agree t hat the Com ptroller ’s d iscretion is absolute. A s the source of its unreviewable discretion, the Comptroller cites to subsection 111.103(a) of the Tax Code: “The [C] omptroller may settle a claim for a tax penalty or interest on a tax imposed by this title if the
tax payer exerci sed reasonable diligence to comply with the provisions of this title.” Tex. Tax Code § 111.103(a). S ubsection 111.103(a) grants the Comptroller discretionary authority to waive penalty or interest assesse d on past

- due taxes , s ee Up john Co mpan y v. Rylande r , 38 S.W.3d 600, 611 (Tex. App.

— Austin 2000, pet. denied) (discussing Comptroller’s “discretionary authority to waive one or both amounts”) , b ut makes the exercise of that discretion contingent on whether the taxpayer “exercised rea sonable dil igence , ” s ee Tex. Tax Code § 111.103(a). Thus, the statute provides a specific and objective standard to govern the Comptroller’s exercise of judgment. See Houston Belt , 487 S.W.3d at 161 . Moreover, othe r provisions of the Tax Code show t he L egislature knows how to grant the Comptroller complete discretion in making decisions , see , e .g. , Tex. Tax Code § 171.006(e) (“A determination by the comptroller under this section is final and may not be appealed.”) , and s ubsection 111.103(a) contains no such langua ge . Presumi ng that omission was intentional , as we must, s ee TGS

- NOPEC Geophysical , 340 S.W.3d at 439 , we reject the Comptroller’s assertion that it has7

unreviewable discretion to settle tax claims like the one presented here

. Cf. Henry v. Sul livan , 499 S.W.3d 545, 553 (Tex. App.

— Houston [14th Dist.] 2016, pet. denied) (“[W]hen the commissioners court performs an act that is entrusted to its discreti on, the district court has jurisdiction to determine whether the commissioners court abused that discretion .”)

.

The Com ptroller’s final argument hinges on the statutory directive that trial in a tax protest suit is de novo. See Tex. Tax Code § 112.054 (“T he trial of the issues in a suit under this subchapter is de novo.”). Trial de novo means tha t the reviewi ng court wil l try “each issue of fact and law in the manner that applies to other civil suits in this state as though there had not been an interveni ng agency action or decision.” Tex. Gov’t Code § 2001.173(a)

. The Comptroller argues that thi s prevents co urts from re viewing a settlement decision that no longer exists. But requiring a trial court to treat a dispute as if there has been no prior agency decision does not preclude the court from considering the underlying facts and determining if the agency

v iolated its own rules. In so doing, the court does not review t he agency’s decision but instead decid es the same issue a new . See id. ; NTS Commc’ns , Inc. v. Hegar , No. 03

- 16

- 00771

- CV,
2018 WL 2728065, at *3 (Tex. App.

— Austin June 7, 2018, pet . denied) (me m. op.) ( “A taxpayer who sues for a tax refund after an administrative hearing . . . is like a plaintiff in any other cause of action, and h ence carries the burden to establish its eligibility to a refund.” (quoting GATX Terminals Corp. v. Ryl ander , 78 S.W .3d 630, 634 (Tex. App.

— Austin 2002, no pet.)) ) ; see also Willacy Cty

. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd. , 555 S.W.3d 29, 50 (Tex. 2018) (explaining that “in a trial de novo, a court may consider arguments and evidence that are
introduced af

resh”). T he trial de novo procedure does not prevent a court from deciding J.D. Fields’ s claim.8 W e conclude that J.D. Fields’ s suit fits within the plain language of the waiver of immunity for claims “that the public official charged with t he duty of coll ecting the t ax or fee may not legally demand or collect the tax or fee

. ” S ee Tex. Tax Code § 112.05 1(a)

. We overrule the Comptrolle r’s issues on appeal

.
C ONCLUSION We affirm the denial of the Comptroller’s plea to the jurisdiction as set forth in its

mo tion for summ ary judgment

.

__________________________________________ Edward Smith, Justice Before Chief Justice Rose and Justices Triana and Smith
Aff irmed Filed: March 19, 2020