Opinion ID: 5058
Heading Depth: 2
Heading Rank: 1

Heading: Irving I and II

Text: The property in question in FDIC v. Irving Indep. School Dist. and County of Dallas, No. 91–1582, has had successive yearly liens imposed on it to secure the payment of ad valorem taxes. Under Texas law, after 13 months of nonpayment, the lien securing the payment of ad valorem taxes also secures an additional sum to cover statutory interest, penalties, collection costs, and attorney's fees. On January 1, 1986, Irving Independent School District (Irving) placed the first of its five liens on the property. On January 1, 1987, Dallas County placed t he first of its four liens on the property. The ownership of the property itself has travelled the now familiar course from real estate developer to savings and loan to the Federal Savings and Loan Insurance Corporation (FSLIC) to the FDIC. The FDIC sold the property on December 31, 1990. The taxing authorities brought suit against the FDIC in state court to recover unpaid ad valorem real property taxes as well as additional statutory charges associated with that nonpayment (penalties, interest, costs of collection, and attorneys' fees). The FDIC removed the case to federal district court. In a memorandum decision filed July 18, 1990 (Irving I ),1 the district court granted part ial summary judgment in favor of the FDIC, holding that the FDIC was not liable for the additional charges denominated as penalties and interest. In a later decision issued April 18, 1991 (Irving II ),2 the district court held that the liens securing unpaid taxes, penalties, and interest for the years 1986 through 1988 were not extinguished by the later FDIC acquisition. In spite of the federal 1 Irving Independent School District v. Packard Properties, Ltd., 741 F.Supp. 120 (N.D.Tex.1990). 2 Irving Independent School District v. Packard Properties, Ltd., 762 F.Supp. 699 (N.D.Tex.1991). ownership of the property during 1989 the district court also preserved the lien for unpaid 1989 ad valorem taxes. The district court reasoned that, although the FDIC held title to the property on January 1, 1989, the applicable amendments to § 1825 were enacted after the lien date, and could not be applied retroactively. The only year for which all liens were abolished was 1990. The FDIC has filed a timely appeal from the court's holding in Irving II. Although the FDIC does not contest the validity of the liens as security for the taxes themselves, it does contest them insofar as they secure the payment of charges constituting penalties. Irving and Dallas County appeal the holdings in Irving I. They argue that the charges for nonpayment are not penalties but charges representing the cost to them of nonpayment of ad valorem taxes. The FDIC has not paid any local property tax on the Irving property since it became the owner.