Court Opinion

ID: 3098788
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:54:07.573766+00
Date Added: 2024-06-11T12:16:05.213324
License: Public Domain

IN THE
                       TENTH COURT OF APPEALS

                             No. 10-08-00011-CV
                             No. 10-08-00012-CV

AHF-ARBORS AT HUNTSVILLE I, LLC,
AND AHF-ARBORS AT HUNTSVILLE II, LLC
                                                     Appellants
v.

WALKER COUNTY APPRAISAL DISTRICT,
                                                     Appellee

                        From the 12th District Court
                           Walker County, Texas
                    Trial Court Nos. 0522992 and 0522994

                     MEMORANDUM OPINION

       In these two related appeals, Appellants AHF-Arbors at Huntsville I, LLC

(Arbors I) and AHF-Arbors at Huntsville II, LLC (Arbors II) appeal from orders

denying their motions for summary judgment and from orders granting Appellee

Walker County Appraisal District’s no-evidence motions for summary judgment. We

will affirm.

       These cases center around two Huntsville apartment complexes, each owned
respectively by Arbors I and Arbors II (collectively referred to as Arbors). Arbors

sought an exemption from the Walker County Appraisal District (the Appraisal

District) from ad valorem taxes for part of the 2003 tax year under subsection 11.182(b)

of the Property Tax Code on the ground that its business operations satisfied that

subsection and because Arbors I and Arbors II are limited liability companies whose

sole member is Atlantic Housing Foundation, Inc., a state-certified charitable

organization and community housing development organization (CHDO). See TEX.

PROP. TAX CODE § 11.182(b) (Vernon 2008). The Chief Appraiser and Appraisal Review

board denied the requested exemption, which Arbors appealed in the trial court.

       The Appraisal District filed a no-evidence motion for summary judgment in each

case, asserting there was no evidence that:

       a.     AHF-Arbors (I and II) is a charitable institution;

       b.     AHF-Arbors (I and II) met the organizational requirements of section
              11.182(b);

       c.     AHF-Arbors (I and II) has rented without profit to low or moderate
              income individuals or families, under section 11.182(c);

       d.     AHF-Arbors (I and II) has made expenditures in lieu of taxes, under
              section 11.182(d);

       e.     AHF-Arbors (I and II) has met the audit requirements of section 11.182(g);

       f.     AHF-Arbors (I and II) applied for or received an exemption before
              January 1, 2004;

       g.     AHF-Arbors (I and II) met the requirements of 42 U.S.C. § 12704.

       Arbors moved for summary judgment, contending that it was exempt from ad

valorem taxes because Atlantic Housing Foundation, Inc., the sole member of its limited

AHF-ARBORS v. Walker County Appraisal District                                     Page 2
liability company, is a state-certified, tax-exempt charitable organization and CHDO

and because Arbors itself is also an exempt entity under subsection 11.182(b) because of

its nonprofit operations. In each case, the trial court sustained all of the Appraisal

District’s objections to Arbors’s summary-judgment evidence, denied Arbors’s motion

for summary judgment, and granted the Appraisal District’s no-evidence motion for

summary judgment without stating any grounds.           Asserting three issues, Arbors

appeals.

        We review a trial court’s summary judgment de novo. Provident Life & Accident

Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In reviewing a traditional motion for

summary judgment, we must consider whether reasonable and fair-minded jurors

could differ in their conclusions in light of all of the evidence presented. See Goodyear

Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). We must consider all the

evidence in the light most favorable to the nonmovant, indulging every reasonable

inference in favor of the nonmovant and resolving any doubts against the motion. See

id. at 756.

        A no-evidence motion for summary judgment is essentially a motion for pretrial

directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006); see also

Humphrey v. Pelican Isle Owners Ass’n, 238 S.W.3d 811, 813 (Tex. App.—Waco 2007, no

pet.). Once such a motion is filed, the burden shifts to the nonmoving party to present

evidence raising an issue of material fact as to the elements specified in the motion.

Tamez, 206 S.W.3d at 583. The nonmovant must produce “summary judgment evidence

raising a genuine issue of material fact.” TEX. R. CIV. P. 166a(i); see id. Comment 1997

AHF-ARBORS v. Walker County Appraisal District                                     Page 3
(“To defeat a motion made under paragraph (i), the respondent is not required to

marshal its proof; its response need only point out evidence that raises a fact issue on

the challenged elements.”). A genuine issue of material fact exists if more than a

scintilla of evidence establishing the existence of the challenged element is produced.

King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). More than a scintilla of

evidence exists when the evidence “rises to a level that would enable reasonable and

fair-minded people to differ in their conclusions.” Id. (quoting Merrell Dow Pharms., Inc.

v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). On the other hand, the evidence amounts to

no more than a scintilla if it is “so weak as to do no more than create a mere surmise or

suspicion” of fact. Id. When determining if more than a scintilla of evidence has been

produced, the evidence must be viewed in the light most favorable to the nonmovant.

Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004).

       When competing motions for summary judgment are filed and one is granted

and the other is denied, the general rule is that an appellate court should determine all

questions presented and render the judgment the trial court should have rendered if the

motions sought final judgment. Texas Workers’ Comp. Comm’n v. Patient Advocates of

Tex., 136 S.W.3d 643, 648 (Tex. 2004); American Housing Found. v. Brazos County Appraisal

Dist., 166 S.W.3d 885, 887 (Tex. App.—Waco 2005, pet. denied).

       Arbors’s three issues on appeal are: (1) whether the trial court erred in granting

the Appraisal District’s no-evidence motion for summary judgment when case law

provides that Arbors qualifies for the tax exemption because it is wholly owned by a

certified charitable organization; (2) whether the trial court erred in ruling that there

AHF-ARBORS v. Walker County Appraisal District                                      Page 4
was no evidence that Arbors qualified for the tax exemption; and (3) whether Arbors’s

motion for summary judgment should have been granted because it qualifies as a tax-

exempt charitable organizations.

       Subsection (b) of section 11.182, which is entitled “Community Housing

Development Organizations Improving Property for Low-Income and Moderate-

Income Housing: Property Previously Exempt,” provides:

       (b) An organization is entitled to an exemption from taxation of improved
       or unimproved real property it owns if the organization:
              (1) is organized as a community housing development
              organization;
              (2) meets the requirements of a charitable organization provided by
              Sections 11.18(e) and (f);
              (3) owns the property for the purpose of building or repairing
              housing on the property to sell without profit to a low-income or
              moderate-income individual or family satisfying the organization’s
              eligibility requirements or to rent without profit to such an
              individual or family; and
              (4) engages exclusively in the building, repair, and sale or rental of
              housing as described by Subdivision (3) and related activities.

TEX. PROP. TAX CODE § 11.182(b).

       Exemptions from taxation are not favored by the law and will not be favorably

construed. North Alamo Water Supply Corp. v. Willacy County Appraisal Dist., 804 S.W.2d
894, 899 (Tex. 1991).       Statutory exemptions from taxation are subject to strict

construction 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. Id. Accordingly, the burden of proof of clearly showing that

the organization falls within the statutory exception is on the claimant seeking the

exemption. Id.

AHF-ARBORS v. Walker County Appraisal District                                         Page 5
        Among other Tax Code requirements to obtain a subsection 11.182(b) exemption,

Arbors must have complied with subsection 11.182(g), which the Legislature added to

section 11.182 in 2001:

              (g) To receive an exemption under Subsection (b) or (f), an
        organization must annually have an audit prepared by an independent
        auditor. The audit must include a detailed report on the organization’s
        sources and uses of funds. A copy of the audit must be delivered to the
        Texas Department of Housing and Community Affairs and to the chief
        appraiser of the appraisal district in which the property subject to the
        exemption is located.

Act of May 21, 2001, 77th Leg., R.S., ch. 1191, § 1, 2001 Tex. Gen. Laws 2694, 2696

(emphasis added) (current version at TEX. PROP. TAX CODE § 11.182(g) (Vernon 2008)).

        One of the grounds in the Appraisal District’s no-evidence motion for summary

judgment was that there was no evidence that Arbors had met subsection 11.182(g)’s

audit requirements.         In response, in each case Arbors filed summary-judgment

evidence, including the affidavit of Carol McBride, which states in pertinent part:

        Arbors has expended an amount equal to or greater than 40% of its annual
        tax savings on social programs in Walker County. Each year since its
        acquisition of the Property, Arbors has provided an audit to the chief
        appraiser detailing the fact that such expenditures have been made, and
        for the years 2004, 2005, and 2006, the audit has also included an opinion
        of the auditor that the Property, and Arbors as owner, has been in full
        compliance with Texas Tax Code Sec. 11.182.1

        On appeal, the Appraisal District urges that the trial court properly granted its

no-evidence motion for summary judgment on the ground that Arbors did not provide

summary-judgment evidence that it fully complied with subsection 11.182(g) because

1The trial court sustained the Appraisal District’s objections to this paragraph of McBride’s affidavit. We
will assume without deciding that the trial court’s ruling was erroneous.

AHF-ARBORS v. Walker County Appraisal District                                                      Page 6
McBride’s affidavit fails to show that Arbors delivered its audits to the Texas

Department of Housing and Community Affairs. We agree.

       To defeat the Appraisal District’s no-evidence motion, Arbors was required to

present some evidence that it delivered its audits to the Texas Department of Housing

and Community Affairs, but it did not do so. And to be entitled to summary judgment

on its own motion, Arbors must have clearly shown its compliance with subsection

11.182(g). North Alamo, 804 S.W.2d at 899. It failed to do so. The trial court could have

properly granted the Appraisal District’s no-evidence motion and denied Arbors’s

motion on subsection 11.182(g) alone. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d
623, 625 (Tex. 1996). We overrule Arbors’s second and third issues in each case and

need not address its first issue in each case.

       The trial court’s judgment in each case is affirmed.

                                                 REX D. DAVIS
                                                 Justice

Before Chief Justice Gray,
       Justice Reyna, and
       Justice Davis
Affirmed
Opinion delivered and filed July 21, 2010
[CV06]

AHF-ARBORS v. Walker County Appraisal District                                     Page 7