Court Opinion

ID: 9376918
Source: CourtListenerOpinion
Date Created: 2023-03-06 11:06:51.484283+00
Date Added: 2024-06-11T17:17:10.403111
License: Public Domain

In the
                            Court of Appeals
                    Second Appellate District of Texas
                             at Fort Worth
                            ___________________________
                                 No. 02-22-00227-CV
                            ___________________________

                          J-W POWER COMPANY, Appellant

                                              V.

   WISE COUNTY APPRAISAL DISTRICT AND WISE COUNTY APPRAISAL
                   REVIEW BOARD, Appellees

                         On Appeal from the 271st District Court
                                 Wise County, Texas
                              Trial Court No. TX13071

                      Before Birdwell, Walker, JJ.; and Gonzalez, J. 1
                       Memorandum Opinion by Justice Birdwell

       1
         The Honorable Ruben Gonzalez, Judge of the 432nd District Court of Tarrant County,
sitting by assignment of the Texas Supreme Court pursuant to Section 74.003(h) of the Government
Code. See Tex. Gov’t Code Ann. § 74.003(h).
                            MEMORANDUM OPINION

       Appellant J-W Power Company appeals the trial court’s order denying its

motion for partial summary judgment and granting Appellee Wise County Appraisal

District’s (WCAD) motion for summary judgment. Consistent with our recent

decision in a substantially similar appeal, J-W Power Co. v. Jack Cnty. Appraisal Dist. (The

Jack County Case), No. 02-22-00082-CV, 2023 WL 415517, at *6 (Tex. App.—Fort

Worth Jan. 26, 2023, no pet. h.) (mem. op.), we conclude that WCAD established the

applicability of res judicata and affirm the trial court’s judgment.

                                     I. Background

       J-W Power owns compressors that it leases to customers for use in oil and gas

production, and it maintains a fleet of its compressor inventory from its storage yard

located in Palo Pinto County. The Tax Code provides a specific method for appraisal

districts to value dealer’s heavy equipment inventory (DHEI), and under that statutory

scheme, compressors that J-W Power maintains at its Palo Pinto County yard should

be taxed by that county’s appraisal district, even if the compressors are physically

located in a different county during the tax year. See Tex. Tax Code Ann. §§ 23.1241–

.1242; EXLP Leasing, LLC v. Galveston Cent. Appraisal Dist., 554 S.W.3d 572, 583 (Tex.

2018) (holding that Sections 23.1241 and 23.1242 fix the taxable situs of DHEI at the

location where the dealer maintains its inventory). Nevertheless, for the 2013–2016

tax years, WCAD taxed the individual compressors owned by J-W Power that were

physically located within WCAD’s jurisdiction.

                                             2
A.    J-W Power’s Protests Under Tax Code Section 41.41

      For tax years 2013–2016, J-W Power filed protests with the Wise County

Appraisal Review Board (ARB) arguing that under the DHEI tax statutes, the taxable

situs of its leased compressors was not in Wise County and that WCAD should not

have been taxing its DHEI. See Tex. Tax Code Ann. § 41.41 (giving property owner

option to bring protest before an appraisal review board regarding, among other acts,

the “inclusion of the owner’s property on the appraisal records”). In each protest, the

ARB determined that the appraisal records were correct and should not be changed.

J-W Power did not appeal those determinations. See id. § 42.01 (giving property owner

right to appeal an appraisal review board’s protest determination).

B.    J-W Power’s Motion to Correct Under Tax Code Section 25.25
      After the Texas Supreme Court upheld the constitutionality of DHEI taxation

statutes, EXLP Leasing, 554 S.W.3d at 583, J-W Power moved to correct WCAD’s

appraisal rolls for the 2013–2016 tax years on the bases that its compressor inventory

was subject to “multiple appraisals of a property in that tax year” and that WCAD

improperly included its compressors because they did not “exist in the form or at the

location described in the appraisal roll.” See Tex. Tax Code Ann. § 25.25(c) (allowing

an appraisal review board, on motion of a property owner, to order changes in its

                                           3
appraisal roll for up to five previous years). The ARB ultimately denied J-W Power’s

Section 25.25 motion, finding that the appraisal records should not be changed.2

C.     J-W Power’s Lawsuit Against WCAD

       J-W Power filed this suit alleging that for the 2013–2016 tax years, J-W Power

had self-reported its inventory in Palo Pinto County as DHEI and had made tax

payments to that county’s appraisal district. It further alleged that, for those same tax

years, its DHEI had been improperly listed on WCAD’s appraisal rolls as business

personal property. See id. § 22.01. It pleaded that WCAD had willfully, intentionally,

and arbitrarily assessed a tax on the property in those years in violation of Sections

23.1241 and 23.1242, and it asked for a refund for the relevant tax years and for

attorney’s fees. See id. § 42.43.3

       2
        The ARB initially dismissed the scheduled hearing on the motion due to a
procedural defect on J-W Power’s part. J-W Power then filed this suit against the ARB
asserting, in part, that it was entitled to a hearing on its Section 25.25 motion. The
ARB subsequently heard the motion and denied relief. In its first amended petition,
J-W Power alleged that it had been injured by the ARB’s delay. However, any such
allegations against the ARB have not been raised on appeal.
       3
        J-W Power also sued (thus far unsuccessfully) other taxing authorities on
similar claims. See J-W Power Co. v. Irion Cnty. Appraisal Dist., No. 03-21-00005-CV,
2022 WL 2836812, at *5 (Tex. App.—Austin July 21, 2022, pet. filed) (mem. op.); J-W
Power Co. v. Sterling Cnty. Appraisal Dist., No. 03-21-00069-CV, 2022 WL 2836807, at *5
(Tex. App.—Austin July 21, 2022, pet. filed) (mem. op.); J-W Power Co. v. Duval Cnty.
Appraisal Dist., No. 04-21-00172-CV, 2022 WL 789345, at *1 (Tex. App.—San
Antonio Mar. 16, 2022, no pet.) (mem. op.). Mandate has issued in the appeal against
Duval County Appraisal District. J-W Power currently has an appeal pending in the
San Antonio Court of Appeals in a suit against Frio County Appraisal District. J-W
Power Co. v. Frio Cnty. Appraisal Dist., No. 04-21-00564-CV (Tex. App.—San Antonio,
filed Dec. 20, 2021).

                                           4
      J-W Power then filed a motion for partial summary judgment. It asserted that

its summary judgment evidence established that it was in the business of leasing field

compressors for use in oil and gas production; that although some of its compressors

were physically located in Wise County on January 1 of each tax year, it maintained its

inventory of compressors in Palo Pinto County; that its inventory was taxable only as

DHEI in Palo Pinto County; and that it had tendered payments for each relevant tax

year to Palo Pinto County’s taxing authority.

      WCAD also filed a motion for summary judgment. The motion asserted that

Section 25.25 was not the appropriate vehicle to challenge taxable situs; that because

J-W Power had not appealed the denial of its previous 2013–2016 protests under

Section 41.41, it had failed to exhaust its judicial remedies; that J-W Power’s Section

25.25 motion constituted an impermissible attempt to reopen the ARB’s 2013–2016

orders in violation of res judicata; that J-W Power admitted that its compressors

existed in the form and at the location described on WCAD’s appraisal roll; and that

J-W Power’s DHEI Declarations provided in discovery proved as a matter of law that

the property was not the subject of multiple appraisals.

      Both sides filed objections to the other side’s evidence, but the trial court did

not rule on the objections. The trial court signed an order that granted WCAD’s

motion and denied J-W Power’s motion without stating the grounds for its ruling, and

it disposed of all claims against the ARB. J-W Power then filed this appeal.

                                           5
                                   II. Discussion

      In four issues, J-W Power argues that (1) WCAD could not appraise J-W

Power’s individual compressors that were physically located in Wise County in the

same tax years that J-W Power maintained its inventory in Palo Pinto County; (2) it

was entitled to relief because its DHEI did not exist in Wise County in the form or at

the location noted in WCAD’s appraisal rolls during the 2013–2016 tax years and was

improperly subjected to double taxation; (3) J-W Power’s motion to correct WCAD’s

appraisal rolls was not barred by res judicata or by J-W Power’s failure to exhaust

administrative remedies; and (4) WCAD possessed no power to devise its own DHEI

filing standards and apply them on behalf of Palo Pinto County. 4

      We recently upheld, on substantially similar facts and issues, a trial court’s

summary judgment on the basis of res judicata. See The Jack County Case, 2023 WL

415517, at *6. In that case, J-W Power filed protests under the Tax Code for tax years

2013–2016 after an appraisal district—Jack County Appraisal District (JCAD)—taxed

J-W Power’s compressors that were physically located within JCAD’s jurisdiction. Id.

at *1; see Tex. Tax Code Ann. § 41.41. The Jack County Appraisal Review Board (Jack

ARB) denied those protests and determined that the appraisal records were correct

and should not be changed, and J-W Power did not appeal those determinations. The

Jack County Case, 2023 WL 415517, at *2.

      J-W Power raised identical issues before this court in The Jack County Case,
      4

2023 WL 415517, at *1.

                                           6
       Just as it did in the instant case, J-W Power subsequently—after the Texas

Supreme Court’s decision in EXLP Leasing, 554 S.W.3d at 583—moved to correct

JCAD’s appraisal rolls for the 2013–2016 tax years on the bases that its compressor

inventory was subject to “multiple appraisals of a property in that tax year” and that

JCAD improperly included its compressors because they did not “exist in the form or

at the location described in the appraisal roll.” The Jack County Case, 2023 WL 415517,

at *2; see Tex. Tax Code Ann. § 25.25(c). When the Jack ARB denied relief, J-W

Power sued JCAD. The Jack County Case, 2023 WL 415517, at *3. Both J-W Power and

JCAD moved for summary judgment, and after the trial court granted JCAD’s

summary judgment motion and denied J-W Power’s, J-W Power appealed. Id. On

appeal before this court, J-W Power raised four issues identical to those it now raises

in this appeal. Id. at *1.

       In The Jack County Case, we began and ended our analysis with J-W Power’s

third issue in which it asserted that its Section 25.25 motion was not barred by res

judicata. Id. at *4. We concluded (1) that J-W Power’s Section 41.41 protests had

addressed the same matter that J-W Power raised in its Section 25.25 motion and in

its lawsuit, (2) that JCAD had established the applicability of res judicata, and (3) that

J-W Power had not negated the applicability of that affirmative defense. Id. at *6.

Accordingly, we overruled J-W Power’s third issue, and because the issue of res

judicata was dispositive, we affirmed the trial court’s summary judgment in favor of

JCAD without addressing J-W Power’s remaining issues. Id.

                                            7
        There are no substantive differences between J-W Power’s claims against

JCAD and its claims against WCAD, nor are there substantive differences between

The Jack County Case and this appeal.5 Thus, as we did in The Jack County Case, we begin

and end our analysis with J-W Power’s third issue in which it asserts that its Section

25.25 motion is not barred by res judicata. As detailed above, this court has already

overruled J-W Power’s third issue. See id. (overruling J-W Power’s third issue and

upholding summary judgment on the basis of res judicata). Here, then, we conclude

(1) that J-W Power’s Section 41.41 protests addressed the same matter that J-W

Power raised in its Section 25.25 motion and in its lawsuit, (2) that WCAD established

the applicability of res judicata, and (3) that J-W Power has not negated the

applicability of that affirmative defense. Accordingly, we hold that J-W Power’s claims

are barred by res judicata. We overrule J-W Power’s third issue—again. See id.

        Because we uphold the trial court’s summary judgment on the basis of res

judicata, we do not reach J-W Power’s remaining three issues. See Tex. R. App. P.

47.1.

        5
         In The Jack County Case, JCAD argued that J-W Power’s Section 25.25 motion
was barred by res judicata. Id. at *3. Here, WCAD similarly argues that J-W Power’s
Section 25.25 motion is barred by res judicata. And J-W Power’s argument that res
judicata does not apply to its Section 25.25 motion also mirrors The Jack County Case.
See id. at *4.

                                           8
                                   III. Conclusion

      Having overruled J-W Power’s dispositive third issue, we affirm the trial court’s

judgment. See Tex. R. App. P. 43.2(a).

                                                     /s/ Wade Birdwell

                                                     Wade Birdwell
                                                     Justice

Delivered: March 2, 2023

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