Court Opinion

ID: 6336232
Source: CourtListenerOpinion
Date Created: 2022-04-29 00:00:30.155598+00
Date Added: 2024-06-11T09:24:09.419929
License: Public Domain

Case: 21-50821       Document: 00516299872         Page: 1   Date Filed: 04/28/2022

              United States Court of Appeals
                   for the Fifth Circuit                        United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                                                   April 28, 2022
                                    No. 21-50821                  Lyle W. Cayce
                                                                       Clerk

   In the Matter of BVS Construction, Incorporated

                                                                             Debtor,

   BVS Construction, Incorporated,

                                                                        Appellant,

                                        versus

   Brazos County,

                                                                           Appellee.

              Appeal from the United States United States District Court
                          for the Western District of Texas
                              USDC No. 6:20-CV-0043

   Before Jolly, Willett, and Engelhardt, Circuit Judges.
   Per Curiam:*
          BVS Construction, Inc. appeals a bankruptcy court order allowing the
   claims of Brazos County against BVS for delinquent taxes. For the reasons

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-50821     Document: 00516299872           Page: 2   Date Filed: 04/28/2022

                                    No. 21-50821

   stated below, we AFFIRM.
          BVS is a Texas company that has twice filed for Chapter 11
   bankruptcy. BVS’ first bankruptcy petition was in 2014. During that
   proceeding, Brazos County intervened as a creditor, claiming $336,271.42 in
   delinquent property taxes for tax years 2011–2014. BVS objected, arguing
   that, among other things, “the claim asserts taxes on property that was not
   owned by [BVS].” The County disputed the assertion of non-ownership and
   argued that BVS’ other objections to the County’s claim likewise lacked
   merit. The bankruptcy court overruled BVS’ objection and entered a final
   decree with respect to BVS’ bankruptcy petition in 2016. BVS did not appeal.
          In 2019, BVS filed a second Chapter 11 petition. Brazos County again
   intervened, claiming $500,950.06 in delinquent property taxes for tax years
   2012–2019. BVS conceded the correctness of the amounts claimed for tax
   years 2015–2019 but disputed the amounts for 2012–2014. BVS’ main
   objection, just as in the first bankruptcy proceeding, was that the County had
   improperly assessed taxes on property that BVS did not own. The bankruptcy
   court concluded that BVS was collaterally estopped from contesting the
   County’s claim because this same issue had been resolved in the County’s
   favor in the 2014 bankruptcy action. The bankruptcy court entered a final
   decree, which the district court affirmed on appeal. BVS now appeals the
   district court’s judgment.
          The issue presented is whether the bankruptcy court correctly held
   that BVS was collaterally estopped from contesting the County’s claim of
   delinquent taxes. “We review the decision of a district court, sitting as an
   appellate court, by applying the same standard[] of review”—de novo—“to
   the bankruptcy court’s . . . conclusions of law as applied by the district
   court.” In re Gerhardt, 348 F.3d 89, 91 (5th Cir. 2003). “Whether collateral

                                         2
Case: 21-50821      Document: 00516299872           Page: 3    Date Filed: 04/28/2022

                                     No. 21-50821

   estoppel applies is a question of law, which we review de novo.” Wills v.
   Arizon Structures Worldwide, L.L.C., 824 F.3d 541, 545 (5th Cir. 2016).
          Collateral estoppel, or issue preclusion, “is appropriate if (1) the issue
   at stake is identical to the one involved in the prior action, (2) the issue was
   actually litigated, and (3) the issue was necessary to support judgment in the
   prior action.” Matter of Swate, 99 F.3d 1282, 1289 (5th Cir. 1996). For
   preclusion purposes, “[a]n arrangement confirmed by a bankruptcy court has
   the effect of a judgment rendered by a district court.” Miller v. Meinhard-
   Com. Corp., 462 F.2d 358, 360 (5th Cir. 1972).
          The bankruptcy court correctly held that BVS was collaterally
   estopped from contesting the County’s claim for delinquent taxes. “BVS’s
   central argument” in this case, according to its own briefing, “is that the
   county’s assessments are incorrect because they include property BVS does
   not own.” But BVS made the same argument in objecting to the County’s
   tax claims during the 2014 proceeding, and the bankruptcy court in that
   litigation necessarily resolved the issue against BVS in overruling its
   objection. See In re Owners of Harvey Oil Ctr., 788 F.2d 275, 277–78 (5th Cir.
   1986). BVS did not appeal the bankruptcy court’s final decree in the 2014
   action. That decree constitutes a judgment, which precludes any subsequent
   attempts by BVS to re-litigate the same issues. See BVS Constr., Inc. v.
   Prosperity Bank, 18 F.4th 169, 173–74 (5th Cir. 2021).
          BVS also argues that its objection to the County’s tax claims here
   present a different issue from the one resolved against BVS in the 2014
   bankruptcy proceeding because BVS’ objection in that action was to the
   County’s claims for tax years 2011–2014, whereas its objection here relates
   to tax years 2012–2019. In a hearing before the bankruptcy court, however,
   BVS’ counsel conceded the correctness of the rendition amounts claimed by
   the County for tax years 2015 – 2019. This disclaimer constituted a judicial

                                          3
Case: 21-50821     Document: 00516299872           Page: 4   Date Filed: 04/28/2022

                                    No. 21-50821

   admission and as such is binding on BVS. See Martinez v. Bally’s Louisiana,
   Inc., 244 F.3d 474, 477 (5th Cir. 2001). Thus, the dispute in this proceeding
   concerned only the amounts claimed for tax years 2012–2014. The
   bankruptcy court in the 2014 action necessarily resolved this same issue
   against BVS in rejecting its objections to the taxes claimed for 2011–2014. See
   In re Owners, 788 F.2d at 278.
          The district court’s judgment is accordingly AFFIRMED.

                                         4