Court Opinion

ID: 4130208
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:01:33.656292+00
Date Added: 2024-06-11T14:31:53.804278
License: Public Domain

December    17, 1990

Honorable Terry D. WcRachern           Opinion   No.   m-1261
District Attorney
Hale and Swisher Counties              RS: Whether a taxing unit is
Bale County Courthouse                 entitled  to the      exception
Plainview, Texas   79072               Srom the waiver of swereiqn
                                       immunity for claims     arising
                                       from tax collection under the
                                       Texas Tort Claims Act when it
                                       acquires real   property    pur-
                                       want to section 34.05 of the
                                       Tax Code   (RQ-2046)

Dear Nr.   RcRachern:

       Gwermnental      entities      traditionally      have    enjoyed
absolute immunity from tort         liability.           v. Texes~ T
w,       540 S.W.2d 297 (Tex. 1976).
Keeton, !&g hew of TQ&S        ch. 25 (5th ed. 1984).       Chapter 101
of the    Civil Practice      and Remedies     Code, the    Texas   Tort
Claims    Act,    constitutes     a leqi6latively-enacted        limited
waiver   of ccmnon-law sovereign immunity from tort liability.
m            v. city of Eppn      552 s-W.26 600 (Tex. Civ. App.        -
corpus Christi 1977, writ'ref#d n.r.e.).            Section 101.055(l)
of the code     excepts from the limited         waiver of    liability
those claims art;:;&       from the asseoument       or collection     of
taxes ; thus,                 arising    fram    the   as6essment      or
collection     of   taxes    are barred      under   the   doctrine    of
swereiqn     immunity.

      A taxing  Unit that   is   a party   to a delinquent     tax
judgment may   purchase   the   real property    upon which    the
delinquent taxes   are owed if tbe bid at a tax se;;,,:;
insufficient.    Tax   Code f 34.05;     BOB Attorney
opinion   J&S-1232 (1990).     You  ask   a neries    of general
questions regarding whether and under what circumstances          a
county, a hose-rule city, or an independent school       district
that purchases   such   property   say ba liable     in tort     in
situations involving real property      purchased at a tax    sale
for delinquent taxes.    Specifically you ask:

                                   p. 6734
Honorable        Terry   D. McEachern   - Page 2   (JM-1261)

        What liability,   if any, do the   referenced
        taxinq entities have with respect to proper-
        ties *struck   off"1 to them  for delinquent
        taxes at sheriffga sale?

In addition, you ask           seven other questions     in the form   of
*sub-IasueaP:

            1.       With respect to the liability       question
                     presented,  would   expiration      of    the
                     two-year riqht   of redemption       have   a
                     bearing on liability7

            2.       Would whether the property warn "&tuck
                     ofP before    or after June   15, 1989,
                     have a bearing on the liability issue?

            3.       Would whether the entities are actively
                     pursuing a marketing plan have a bear-
                     ing on the liability issue?

            4.       Would any of the governmental   entities
                     be liable for a lack of maintenance    of
                     the propertiee  during   the period    of
                     redemption?

            5.       Would any of the governmental   entitie8
                     be liable under tort law for railing to
                     cure and/or warn of a nuieance or at-
                     tractive   nuisance    existing on    the
                     wstruck off” properties?

            6.       Would any of the qovarmental    entities
                     be liable for razing a dangerous  stNc-
                     ture on "8tNOk  Off" real property?

            7.       Would there be equal liability       reqard-
                     lesn of whether the primary         grantee,

      1. In the argot ot the ad valorem tax profesnion,        the
phraie "StNCk   ofi" refers  to properties purchased by taxing
unite at a tax   sale when bids   are insufficient.      Tax  Code
9 34.05.   Such properties   are maid to be q stNck      oSP   the
tax roll while they    are in the possession     oi taxing   unita
because such properties are exempt from taxation.        w   &&9
mWoak,    207 S.W.Zd 894 (Tax. 1949)   (footnote   added).

                                        p. 6735
Honorable     Terry   D. WcEachern   - Page 3   (JM-1261)

                  for itself and in trust for the   other
                  entities, was a municipality, a county,
                  or a school?

      Your sub-questions are general and hypothetical.         They
are not ones that can properly be answered by this          office.
Their speculative and fact-bound nature makes it appropriate
for your office to advise     its clients upon the     development
of appropriate    facts   in particular   cases.     Sac   Attorney
General opinion    JW-1224   (1990) at 15.       We   cannot   make
findings of    fact in the    opinion proceee.      Therefore,    we
cannot answer your first, second, third, fourth, fifth,          and
sixth "sub-queetions"     as matters    of law.      Your   seventh
"sub-questionS    will   be addressed    inferentially     in    the
discussion of your first question.

      We understand your first question to ask whether claims
against a county, a home-rule city, or an independent sohool
district arising in connection   with real property   acquired
at a tax sale fall within the exception set forth in section
101.055(l)  of the code.   Section 101.055 excepts from to*
liability claims arisinq from certain governmental   functions
and provides in pertinent part:

            This   chapter   does    not   apply   to   a   claim
            arising:

                (1) in connection with the aeseeement or
            collection of taxes by a governmental unit.

We turn     first to municipalitiee.

      You suggest that Section 101.0215  of the code makes     a
municipality  liable for damages arising from tax   aollection
and thereby removes a home-rule   city from the exception    to
limited tort liability afforded   by Section 101.055(l).     We
disagree with your construction of section 101.0215.

      Section 101.0215 of the code was enacted    in 1967  ae
part of a bill amending   laws governing tort laws in Texas.
Acts 1987, 70th LSq., 1st C.S.,   ch. 2, J 3.02, at 47.   The
section provides:

                (a) A munidpip~      isar:t;;e u;gi   th;;
            chapter   for
            governmental   functions,    which are   those
            functions that are enjoined on a municipality
            by law and are given it by the state as part
            of the etatees   sovereiqnty. to be exercised

                                     p. 6736
Honorable   Terry   D. WcEachern   - Page 4   (JM-1261)

        by the municipality  in the  interest of            the
        general publio, includinq but not limited           to:

             . . . .

             (26) tax collection;

             . . . .

            (b) [Provides that this chapter doee   not
        apply to the liability of a muniaipalfty    for
        damage8 arising   from its pro rietary   func-
        tions, inoludinq   but  not lim P ted to three
        specific functions that are listed.]

            (c) The proprietary funatione of a muni-
        cipality do not include   those   governmental
        aativitiee listed under Sub8ection   (a).

      We construe    subseation (a) of aeation 101.0215, of   the
code to eifect       no  more than   a classiiication    of those
functions deemed     "governmental.*   We do not construe it to
impliedly repeal     subsection   (1) of section  101.055 of the
code.

     There is no indication in the legislative history          of
the bill   to support an assertion       that   the   legislature
intended section   101.0215 to   impliedly repeal     lubdivision
(1) of section 101.055.    m    3 BurWell, m        Tort  a       .
                       19a     5-1248   through   S-1257    (1968)
(hearinga before   the Senaie   Committee of the whole:       70th
Leqisl'eture, First Called Ses8ion,    June 2, 1987).     Indeed,
two authors addressed the newly-enacted    section 101.0215     in
the follcwinq way:

           The   Legislature    also   addressed   qovern-
        mental liability     and the Texa8 Tort     Claims
        Act (TTCA) . The most dramatic change to tbe
        TTCA is the     addition of    section   101.0215,
        which for the first time in Texas statutorily
        defines governmental functions and contains a
        nonexclusive    laundry   list    of 33     common
        z;;;rnmental functions     by way    of  illustra-
             .

Morrison C Auld, w     Pgf.q~m: An Ova                    51 Tex.   B.J.
1108,   1111 (Dec. 1988)   (foatnotee  omi&d)t                 m
Montford C Barber, -8
                                                                      25

                                   p. 6737
Honorable   Terry   D. McEachem - Page 5     (JM-1261)

Houston   L. Rev. 59, 117-30    (1988); Comment,   v
                                                            la
                                                     Accord-
inqly, we conclude that a municipality may avail itself   of
the exception   from limited  tort liability   set forth  in
section 101.055 of the Civil Practice and Remedies Code.

      With regard   to independent  school districts,    section
101.051 of the code waives sovereiqn       immunity for   school
districts and junior    colleges only with   regard to acts    or
omiesiona   arieinq   through   the negligent   use   of   motor
vehicles or motor-driven equipment.     Events may occur    that
fall within the scope of the section 101.055 exception and a
school district may avail itself    of the exception in those
instances.

      You also ask about counties      and it is to the     possible
liability of counties that       we now turn.       Certainly,    the
section 101.055(l) exception applies        to counties: no     other
provision of the code acts       to limit the    exception to the
waiver or to remove counties from its reach.         Noreover , the
tax sale   and redemption    process clearly     falls within      the
ambit of the phrase      waeeesement or collection of taxes."
&g -ad                  SW,      686 F.2d 1320 (8th Cir.       19S2),
&.     M,        459 U.S. 1147    (1983)   (construing     federal
counterpart to section 101.055(l) of Texas act).          The   issue
is determining    under   what fact situatione       the   exception
applies.    Only   two Texas     cases   have   construed     section
101.055(l) of the code or its predecessor: in each case, the
court, while   acknowledging     that   the   activities     involved
taxes, held that    the act6 or omissions complained of were
too indirect or too remote from the aesesement or collection
of taxes to fall within the section 101.055(l)             exception
from the waiver of liability.

      In v~ountv          v. w,           489 S.W.Zd 140 (Tex. Civ.
Am.   - Houston [14th Diet.]     1972, writ ref’d    n.r.e.)
inatter -1,                  the plaintiff brought suit undkhre:hee
Texas   Tort    Claims   Act for     injuries    suffered    when
unattached    wall    panel   fell against     her   in tbe      coun~f:
courthouse.      The   plaintiff   was    present. in the        county
courthouse for     the purpose    of transferring      an automobile
title and obtaining license plates: the tax involved was the
motor vehicle     tax.   The   court held    that even     though   the
plaintiff was present in the county courthouse for a purpose
related to tax       et the    t1m.e that   she was
provision    of   the   act excluding      any claim injurede
                                                         arising    2::
connection with the aaseesment or collection of taxes by any
governmental unit did not apply.

                                  p. 6738
Honorable   Terry   D. KcEachern - Page 6     (JM-1261)

      The aourt noted   that the Texas act was modeled     after
the Federal   Tort Claims   Act, 28 U.S.C. 56 2671-2680,     and
that the federal act contained an exception to the waiver of
liability,   28 U.S.C.    6 2680(o),  that   is   substantially
equivalent to what    is now section  103.0!35(1) of the   code.
Relying upon   federal cases construing      the  Fsderal   Tort
Claims Act, the court declared:
          Appellee'e injuries had      nothing e            to
          do with taxes.    While    she was in the Harris
          County Courthouse      for   that   purpose,     her
          injuries were sustained by th;rzFliqence
          county    employees     apart            any     2:
          situation. . . . So far aa we can       determine,
          all other   federal eases     ariainq under     this
          exception to liability have as their         factual
          basis an aeeeesment or collection       considered
          wrongful by the plaintiff. . . . It cannot
          be said with reason that this occurrence         was
          the result of    "the aeseesment or collection
          of taxes by a unit of government."

B                at 1467   (smphaeie added)   (citations   of   federal
cases   omitted).

      In pr&kj&l   v. St&&   779 S.W.2d 945 (Tex. App. - Fort
worth 1989),    w,      787 S.W.Zd    369   (1990)   (hereinafter
-1,         the court   of appeals affirmed    a district    court
order that the state was immune under the Texas Tort        Claims
Act in an instance in which    the plaintiff was injured by       a
car driven by an employee      of  ths comptroller     of  public
accounts.   The employee was   traveling from one business      to
another  to collect delinquent taxes or to discuss collecting
delinquent taxes owed    to the state.    The court of    appeals
held that the claim arose from the ssse88ment or collection
of taxes and that the euit was barred by sovereign immunity.

     The Texas Supreme Court disagreed.  In overturning  the
court of appeals construction  of section 101.055(l) of the
code, the court noted that the Texas act was patterned after
the federal act and held:

          Prior to the pessaqe       of the Texas     Torts
          Claims Act, the federal counterpart had       been
          construed    to   limit   the   United    States'
          governmental    immunity   to alaims    regarding
          injuriee   which   result
          assesamant or collection -  of taxes. from
                                                 . . . thw

                                  p. 6739
Honorable    Terry     D. WcEachern   - Page 7   (JM-1261)

            adopt  a nlmilar   construction           ior   Seotion
            lOl.OSS of the Tort Claims Act.
787 S.W.2d     at 370     (emphasis   in original)     (citations      omitt-
ld).2
     Finally, in regard   to its construction                  of     section
101.055(l) of the Code, the court deolared:

         fW]e,conclude that    the legislature    intended
         to limit the   Comptroller's   immunity to only
         those   acts  or omissions    which    constitute
         implementation of policy decisions on how       to
         colleat or assess taxes.

      50th s                and QzJ&U       construe the T8XaS Tort
Claims Act exception from limited liability for alaims aris-
ing from th8 aeeeesment.or       collection of taxes narrowly      to
require that any acts or omissions falling within the excep-
tion must relate m             to the assessment or collection of
taxes., Indeed, w             can be understood to require      that
immunity be liIUit8d Only to       %hose   acts or omissions   which
constitute implementation       of   policy decision8 on how       to
collect or assess       taxes."     IpL    The  acts   or omissions
complained of in both      cases were held     to be too   indirect,
too remote     tram the    assessment of collection       of taxes.
Consequently,     the  courts held    that   the exception   to the
limited waiver     of sovereign immunity did not apply     and  that
the tort action could be maintained.

     2. We      not8 that  in a       fOOtnOte   to    the paragraph      set
forth abW8,      the COUrt noted:

         Subsequent federal decisions continue to impose a
   requirement    that    the   injuries   arise   from   conduct
   &&g&ly    related    to the     seizure of   property or the
   aatherina of information necessary for tax          collection
   &pOSeS:      ~S88. e&,     Interfirst Bank.           N.A.    V,
   m,                 769 F.2d 299 (5th Cir. 1985),       &
   denied, 47J U.S. 1081, 106 S. Ct. 1458, 89 L. Ed. 2d 716;
   m           v. m,          663 F.28 654 (5th Cir.        1981);
   -8      v. u,                 521 F.2d 872 (9th Cir. 1975);
      tt v.               Revs                622 F. Supp. 537
   zD.Tennm                (Emphasis added:)

                                      p. 6740
Honorable    Terry   0. McEachern    - Page 8    (Ix-12611

     At the      other factual extreme is w                  v.   T&&&
m,       a      [hereinafter -1.        In m      the appellant
took a mortgage    on real   property owned by a corporation.
The real property was     subject to a prior mortgage and was
SUbj8Ct t0 IRS tax li8nS and Other judgment li8nS.     The   IRS
S8iS8d th8 property for nOnpayIII8nt Of taxes and SUbSegUently
purchased the property at a tax auction for th8     statutorily
calculated bid.    The   appellant did not bid at the   auction
nor did he ohallenge the validity of either the tax lien or
the auction sale.    The appellant, however, did tender to the
IRS a check equal to the     amount plus interest that the   IRS
paid for th8   prOp8rty and aSk8d t0 redeem th8      property.2
The IRS refused     to accept the tender or to permit        the
redemption.

      The appellant filed suit for dJUOag8S for the       allegedly
wrongful refusal of his      redemption offer.     In the  alterna-
tive, he sought    a writ    of mandamus    compelling the    United
States to convey the      real property to him     and to void   all
prior deedS it had given on the property.         The IRS asserted,
m,           that the claim arose       in respect of the    aSsass-
msnt or collection of a tax and was            thereby excepted    by
title 28, section     2680(c), of,the     United State8 Code    from
the limited Waiver Of tort liability effected by th8 federal
act.   The court agreed.     The   court held that the    exception
applied to third parties whose interests may be affected           by
tax collection    efforts   and that the     appellants claim    did
fall within the exception to the waiver:

            The   right  of redemption   arises   only     in
            connection with   the tax   levy,   and   is an
            integral facet   of such   a levy.      h  claim
            founded on redemption    rights is clearly      a
            claim "arising in respect of the     COlleCtiOn
            of a tax"   within   the meaning    of Section
            2680(c).

     Thus,     at one extreme   of
                               a spectmm,   claims arising    in
connection with a right of redemption   have been held to fall
within the  exception  to the waiver     b8CaUS8  such   claims
directly involve the assessment or collection Of taxes.      ht

      3. Subsection (b) of    SeOtion 6337 of    th8   Internal
Revenue code permits nontarpayer third parties, 6pecifically
"any person having any interest th8r8in. or a lien th8reOn,"
in addition to the owner-taxpayer,   to redeem property.

                                     p.   6741
Ronorable   Tarry   D. Wcpachem      - Page 4   (JM-1261)

the other lxtr8ne, claims arising from the acts or omissions
of emplOyeeS not directly   involved with the    inplementation
of policy decisions on how to collect     or assess taxes    and
only p8riphsrslly   involved with   tag collection   have   been
held not to fall within the exception.

      We conclude, as a matter of law, that alaims   arising
from acts or omissions regarding tax    sales and redemption
fall Within the SeCtiOn 101.055(l) exception t0 th8  limited
waiver of liability created by the Texas Tort Claims Act.

           Claims  arising     froza acts or omissions
        regarding  tax   sales    and redemption      fall
        within the  exception     set forth   in section
        101.055(l)  Of     the   civil   Pratt ices    and
        Rumdies Cod8 t0 th8 limit& Wait’82 Of tOti
        liability created    by th8 T8XaS Tort      Claims
        Act.

                                             JIM     WATTOX
                                             Attorney General   of Texas

MARY-
First Asuistant     Attorney   General

mu MccNEARY
RX8clltiV8 Assistant     Attorney    G8n8ral

JUDGE ZOUIE   STEAXLZY
Special hesietant httomey          General

RENEA HIcx8
special Assistant      Attorney    General

RICK GILPIN
Chairsan, Opinion      committee

Prepared by Jim MO8llinger
Assistant Attorney General

                                      p. 6742