Court Opinion

ID: 4465119
Source: CourtListenerOpinion
Date Created: 2019-12-18 07:10:38.852644+00
Date Added: 2024-06-11T14:53:41.443214
License: Public Domain

Opinion issued December 17, 2019.

                                       In The

                               Court of Appeals
                                      For The

                           First District of Texas
                             ————————————
                               NO. 01-18-01114-CV
                            ———————————
      MOUNT VERNON UNITED METHODIST CHURCH, Appellant
                                         V.
     HARRIS COUNTY, TEXAS, CITY OF HOUSTON, HOUSTON
  INDEPENDENT SCHOOL DISTRICT, AND HOUSTON COMMUNITY
                COLLEGE SYSTEM, Appellees

                    On Appeal from the 152nd District Court
                             Harris County, Texas
                       Trial Court Case No. 2014-29708

                          MEMORANDUM OPINION

      Appellant Mount Vernon United Methodist Church is attempting to appeal

from an order denying its petition to withdraw the excess proceeds from a property

tax foreclosure sale. We affirm the trial court’s judgment.
                                   Background

      On April 4, 2016, the trial court signed a final judgment awarding appellees

Harris County, Texas, City of Houston, Houston Independent School District, and

Houston Community College System delinquent taxes and costs concerning real

property belonging to the Peace Community Development Corporation. The real

property was subsequently sold at a tax sale and the excess proceeds from the tax

sale were placed in the trial court’s registry on September 27, 2016. On May 11,

2018, appellant received an assignment of the excess proceeds from the Peace

Community Development Corporation by and through its Executive Director,

Mildred Bright, who was a named party in the delinquent tax litigation.

      On September 4, 2018, appellant filed a post-judgment petition to withdraw

excess funds. A copy of the assignment is attached to the petition. See TEX. TAX

CODE § 34.04(a). Appellees did not file a response. On September 17, 2018,

appellant set the petition for submission without an oral hearing. On October 11,

2018, the tax master issued a report recommending that appellant’s motion to

withdraw be denied “on the basis of the record.” The trial court denied the petition

on October 13, 2018.

      Appellant filed a request for findings of fact and conclusions of law and a

notice of past due findings of fact and conclusions of law. The trial court denied

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appellant’s request on December 10, 2018, and appellant filed its notice of appeal

on December 13, 2018.

                   Excess Proceeds from Tax Foreclosure Sales

      The proceeds from tax foreclosure sales are governed by sections 34.03 and

34.04 of the Tax Code. Section 34.04(a) allows any person to file a “petition in the

court that ordered the seizure or sale setting forth a claim to the excess proceeds”

within two years after the property was sold. TEX. TAX CODE § 34.04(a). The court

shall order the proceeds to be paid to each party that establishes its claim to the

proceeds. See id. § 34.04(c). If no claimant establishes entitlement to the proceeds

within this period, the “clerk shall distribute the excess proceeds to each taxing unit

participating in the sale in an amount equal to the proportion its taxes, penalties, and

interests bear to the total amount of taxes, penalties, and interest due all participants

in the sale.” Id. § 34.03(b).

                                     Jurisdiction

      Appellees argue that the court does not have jurisdiction over this appeal

because the order is interlocutory and Tax Code section 34.04 does not allow appeals

from an order denying a petition for excess proceeds. Appellant argues that the order

is final and appealable and that depriving appellant of an appeal in this case violates

its Equal Protection and Due Process rights guaranteed by the United States and

Texas Constitutions.

                                           3
      Unless specifically authorized by statute, Texas appellate courts have

jurisdiction only to review final judgments. McFadin v. Broadway Coffeehouse,

LLC, 539 S.W.3d 278, 283 (Tex. 2018). A judgment is final for purposes of appeal

if it disposes of all pending parties and claims. Id. (citing Lehmann v. Har-Con

Corp., 39 S.W.3d 191, 195 (Tex. 2001)).

      In a delinquent property tax proceeding, the final judgment is the order

granting judgment to the taxing units for the unpaid taxes. See Royal Indep. Sch.

Dist. v. Ragsdale, 273 S.W.3d 759, 763–64 (Tex. App.—Houston [14th Dist.] 2008,

no pet.). An order on a petition for distribution of excess proceeds from a tax

foreclosure sale made pursuant to Tax Code section 34.04 is a post-final-judgment

proceeding. See id. at 764.

      Although an order in a post-final-judgment proceeding is not a final judgment,

such an order “may be appealable if an appeal is statutorily authorized or if the order

has the nature of a mandatory injunction that resolves property rights.” Jack M.

Sanders Family P’ship v. Roger T Fridholm Revocable Living Trust, 434 S.W.3d
236, 242 (Tex. App.—Houston [1st Dist.] 2014, no pet.); see also Alexander Dubose

Jefferson & Townsend LLP v. Chevron Phillips Chem. Co., L.P., 540 S.W.3d 577,

586–87 (Tex. 2018) (holding that some post-judgment orders can be final and

appealable judgments if they function similarly to mandatory injunctions). “A

post-judgment order operates as a mandatory injunction when it resolves property

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rights and imposes obligations on the judgment creditor or interested third parties.”

Jack M. Sanders Family P’ship, 434 S.W.3d at 242.

      Although section 34.04(e) authorizes interlocutory appeals from orders

“directing that all or part of the excess proceeds be paid to a party,” there is no

statutory authorization for interlocutory appeals from an order denying a petition for

excess funds, such as the one in this case. TEX. TAX CODE § 34.04(e); see also 2012

Properties, LLC v. Garland Indep. Sch. Dist., No. 05-15-01002, 2016 WL 3902585,

at *3–4 (Tex. App.—Dallas July 14, 2016, pet. denied) (mem. op.) (holding section

34.04(e) authorizes only interlocutory appeals of orders granting petitions for excess

proceeds and dismissing interlocutory appeal of order denying petition for excess

proceeds for want of jurisdiction).

      The order denying appellant’s petition, however, is nevertheless appealable if

it has the nature of a mandatory injunction that resolves property rights. See Jack M.

Sanders Family P’ship, 434 S.W.3d at 242. The record reflects that appellant was

the only party to file a petition for excess proceeds during the two-year period. The

trial court’s order denying appellant’s petition for excess funds, which was entered

after the two-year period expired, effectively resolved the question of the disposition

of the excess funds because at that point, no claimant had established that it had a

right to the funds, and the clerk was required to “distribute the excess proceeds to

each taxing unit” without any further intervention by the court. TEX. TAX CODE

                                          5
§ 34.03(b); cf. Jack M. Sanders Family P’ship, 434 S.W.3d at 242. Appellees, the

taxing units, were effectively awarded the excess proceeds by default.

      Appellees argue that the order is interlocutory and not appealable because it

“is consistent with and does not work a material change in the adjudicative portions

of the original judgment; it merely effectuates the judgment.” McFadin, 539 S.W.3d

at 284. The final judgment foreclosed on the property, awarded appellees “the total

sum of money due for taxes, penalties, interest, and attorney fees with penalty and

interest continuing to accrue . . . plus all costs of court,” and ordered the property to

be sold in order to satisfy the judgment. The judgment did not award appellees the

excess funds from the foreclosure sale, which is the result of the trial court’s order

denying appellant’s petition.

      Appellant’s reliance on 2012 Properties, L.L.C. for the proposition that the

court does not have jurisdiction over appellant’s appeal of an order denying the

withdrawal of excess funds is also misplaced. In 2012 Properties, L.L.C., the

claimant timely filed its petition for excess proceeds and the trial court denied the

petition more than a year before the two-year deadline for a party to establish its

right to the proceeds had expired. See 2016 WL 3902585, at *2. As a result, the

denial of the order in 2012 Properties, L.L.C did not resolve any property rights with

respect to the funds. Pursuant to the statute, the money was required to remain in the

                                           6
court’s registry for the rest of the two-year period unless a party established its

entitlement to all or some of the proceeds during that time.

      Based on the unique facts in this case, we conclude that the order functions

similarly to a mandatory injunction, and therefore, we hold that we have jurisdiction

over appellant’s appeal. See Jack M. Sanders Family P’ship, 434 S.W.3d at 242; see

also Alexander Dubose Jefferson & Townsend LLP, 540 S.W.3d at 586–87.

                    Findings of Fact and Conclusions of Law

      In its first issue, appellant argues that the trial court erred by not issuing

findings of fact and conclusions of law.

      Findings of fact and conclusions of law are required upon request in any case

tried in the district or county court without a jury pursuant to Texas Rule of Civil

Procedure 296. See TEX. R. CIV. P. 296, 297. Rule 296, however, does not apply to

post-judgment hearings. See Johnson v. J.W. Constr. Co., 717 S.W.2d 464, 467–68

(Tex. App.—Fort Worth 1986, no writ); see also Shearn v. Brinton-Shearn, No. 01-

17-00222-CV, 2018 WL 6318450, at *11 (Tex. App.—Houston [1st Dist.] Dec. 4,

2018, no pet.) (mem. op.) (“[A] trial court’s duty to file findings of fact and

conclusions of law does not extend to post-judgment hearings.”). An order on a

petition for distribution of excess proceeds from a tax foreclosure sale is a

post-final-judgment proceeding. See Royal Indep. Sch. Dist., 273 S.W.3d at 764.

                                           7
      Because Rule 296 does not apply to post-judgment hearings and the trial court

had no duty to make findings of fact and conclusions of law, we hold that the trial

court did not err in not filing the requested findings of fact and conclusions of law.

See Shearn, 2018 WL 6318450, at *11.

      We overrule appellant’s first issue.

                            Petition for Excess Proceeds

      Appellant argues that the trial court erred by denying its petition because it

established its right to the excess funds in the court’s registry.

      Appellees contend that the trial court did not err when it denied the petition

because the assignment did not satisfy the requirements of Tax Code section

34.04(f)(4) and (5).1 Section 34.04(f)(4) and (f)(5)(I) state:

      A person may not take an assignment or other transfer of an owner’s
      claim to exceed proceeds unless: . . . (4) the assignee or transferee pays
      the assignor or transferor on the date of the assignment or transfer an
      amount equal to at least 80% of the amount of the assignor’s or
      transferor’s claim to the excess proceeds [and] (5) the assignment or
      transfer document contains a sworn statement by the assignor or
      transferor affirming . . . (I) that the consideration paid was an amount
      equal to at least 80 percent of the amount of the assignor’s or
      transferor’s claim to the excess proceeds.

TEX. TAX CODE §§ 34.04(f)(4), (f)(5)(I).

1
      Appellant argues that appellees have not preserved this argument for appeal because
      they did not file any pleadings in the trial court contesting or objecting to the
      assignment of the excess funds. Appellees, however, are not challenging or
      complaining about the trial court’s judgment; they are raising this argument as an
      “alternative position to seek affirmance of the judgment.” See City of San Antonio
      v. Winkenhower, 875 S.W.2d 388, 391 (Tex. App.—San Antonio 1994, pet. denied).
                                            8
        Appellant attached a copy of the sworn assignment to the petition. The

assignor, however, avers in the assignment that “the amount of consideration given

for the assignment is $ 1.00 and other good and valuable consideration.” The

assignment further states that “the amount of the excess proceeds contained in the

registry of the Court is $33,172.35.” Thus, the assignor’s sworn statement

affirmatively reflects that the assignment does not comply with the requirements of

section 34.04(f)(4) because the consideration paid for the assignment ($1.00) was

far less than “80 percent of the amount of the assignor’s or transferor’s claim to the

excess proceeds” ($33,172.35). Because the assignment does not comply with the

requirements of section 34.04(f), we cannot say that the trial court erred by denying

the petition for excess funds.

        We overrule appellant’s second issue.

                                    Conclusion

        We affirm the trial court’s judgment. Any pending motions are dismissed as

moot.

                                                Russell Lloyd
                                                Justice

Panel consists of Justices Lloyd, Goodman, and Landau.

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