Court Opinion

ID: 3124542
Source: CourtListenerOpinion
Date Created: 2015-10-16 14:54:51.262134+00
Date Added: 2024-06-11T12:07:27.657939
License: Public Domain

Opinion issued March 1, 2012

In The
Court of
Appeals
For The
First District
of Texas
————————————
NO. 01-11-00485-CV
———————————
Morad Mekhail d/b/a
Abtrust, Appellant
V.
Duncan-Jackson Mortuary, Inc. f/k/a Jackson
Mortuary, Inc., Appellee

 

 
On
Appeal from the 127th District Court
Harris
County, Texas

Trial Court Case No. 2010-48652
 

 
O P I
N I O N
Appellant, Morad
Mekhail d/b/a Abtrust,
appeals the trial court’s grant of summary judgment in favor of appellee,
Duncan-Jackson Mortuary, Inc. f/k/a Jackson Mortuary, Inc., setting aside a tax
sale of Duncan-Jackson Mortuary’s property. 
In five issues, Mekhail argues (1) payment of
an amount less than the amount of the earlier judgment did not render the tax
sale null and void, especially when the payment was not received until after
the tax sale; (2) the legal principal of “substantial compliance” does not
apply to the relevant statute; (3) Duncan-Jackson Mortuary’s payment by e-check
was not a sufficient mode of payment; (4) the trial court erred in granting
Duncan-Jackson Mortuary’s motion for summary judgment; and (5) the trial court
erred in denying his motion for summary judgment.
We reverse and remand for rendition of a take-nothing
judgment.
                                                                                                       
Background
At all relevant times prior to February 16, 2010,
Duncan-Jackson Mortuary owned the property at issue in this appeal.  On February 16, Harris County, on behalf of
itself and seven other taxing authorities, obtained a default
judgment against Duncan-Jackson Mortuary for delinquent taxes owed on the
property.  The judgment awarded Harris
County $16,961.30 in taxes, penalties and interest, and research fees.  The judgment set an interest rate of 1% on
the base tax amount starting from February 1, 2010.  The record reflects that the amount of
interest accrued as of July 2, 2010 was $522.10.  The judgment also awarded all court costs
($761.00 as of July 2, 2010), $110 for costs of service of process, and $35 for
a Tax Master Fee.  As of July 2, the total
amount owed under the judgment was $18,389.40.
An order of sale on the property was issued on April 21,
2010.  A constable’s sale was set for Tuesday,
July 6, 2010.  Duncan-Jackson Mortuary
was notified of the final judgment approximately four and one-half months prior
to the sale and received notice of the date of the sale approximately 25 days
prior to the sale.
On Friday, July 2, 2010, Duncan-Jackson Mortuary submitted
an electronic payment to the Harris County Tax Assessor-Collector through its
website.  It paid $17,483.40, based on
the Delinquent Property Tax Statement for the property.  The statement showed the total amount, if
paid in July 2010, to be $17,483.40. 
This is equal to the amount of the taxes, penalties, and interest plus
the interest on the taxes reflected in the judgment.  This amount does not include the court costs,
service of process fee, and Tax Master Fee that were also included in the
judgment.  
The parties dispute when the payment was actually received
by Harris County.  Regardless, the tax
sale proceeded on July 6.  Mekhail was the highest bidder for the property and
received a constable’s deed for the property.
On August 5, 2010, Duncan-Jackson Mortuary initiated the
underlying lawsuit, arguing that the tax sale should be set aside based on its
July 2 payment.  Mekhail
answered.  Harris County answered, but
did not otherwise participate in the litigation.
Ultimately, Duncan-Jackson Mortuary and Mekhail filed competing motions for summary judgment arguing
whether the evidence established as a matter of law that the tax sale could be
set aside.  The trial court ultimately
found in favor of Duncan-Jackson Mortuary and set aside the tax sale.  Mekhail brought
this appeal.
                                                                                       
Setting Aside Tax Sale
In his first issue, Mekhail
argues the trial court erred by setting aside the tax sale because
Duncan-Jackson Mortuary did not pay the full amount of the judgment and did not
pay it before the date of the tax sale.
A.            
Standard of Review
We review a trial court’s granting of a summary judgments de novo.  Provident Life & Accident Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003).  Summary judgment is
properly granted only when a movant establishes that there are no genuine
issues of material fact and that it is entitled to judgment as a matter of
law.  Tex. R.
Civ. P. 166a(c). 
As must the trial court, we must indulge every reasonable inference in favor of
the nonmovant, take all evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant.  Valence Operating Co.
v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).  When an order granting summary judgment does
not specify the grounds upon which the trial court ruled, we must affirm if any
of the summary judgment grounds is meritorious. 
Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473
(Tex. 1995).
When, as here, both parties file motions for summary
judgment and the trial court grants one motion and denies
the other, we determine all presented questions and may render a different
judgment if appropriate.  SAS Inst., Inc. v. Breitenfeld,
167 S.W.3d 840, 841 (Tex. 2005); CU Lloyd’s v. Feldman, 977 S.W.2d 568,
569 (Tex. 1998).  Each party must carry
its own burden, both as movant and in response to the other party’s motion, as nonmovant.  State v. Japage
P’ship, 80 S.W.3d 618, 620 (Tex. App.—Houston
[1st Dist.] 2002, pet. denied) (citing CU Lloyd’s, 977 S.W.2d at 569).
B.            
Analysis
Section 34.08 of the Texas Tax Code allows a party to file
an action challenging the validity of a tax sale.  Tex. Tax Code Ann. § 34.08 (Vernon
2008). 
Duncan-Jackson Mortuary brought its action to set aside the tax sale,
arguing that its payment to Harris County on July 2 rendered the tax sale on
July 6 invalid based on section 33.53 of the Tax Code.  See
Tex. Tax Code Ann. § 33.53 (Vernon 2008).
Duncan-Jackson Mortuary’s and Mekhail’s
motions for summary judgment argue two sides of the same issue: whether, under
authority of section 33.53, Duncan-Jackson Mortuary was entitled to have the
tax sale set aside.  Under subsection (e)
of the section 33.53,
(e)      If
the owner pays the amount of the judgment before the property is sold, the
taxing unit shall:
(1)     release the tax lien held by the taxing unit on the
property; and
(2)     file for record with the clerk of the court in which the
judgment was rendered a release of the lien.
Id.
§ 33.53(e).
Duncan-Jackson Mortuary acknowledges that it did not pay
the full amount of the judgment ($18,389.40) prior to the tax sale.  Strictly speaking, then, it has not satisfied
the requirement of subsection (e). 
Duncan-Jackson Mortuary argues it should nevertheless be entitled to set
aside the tax sale based on either of two legal principles: (1) de minimis non curat lex and (2) substantial
compliance.  
Neither of these legal principles has been previously
applied to section 33.53.  We must
determine, then, whether either of these principles applies.
1.             
De Minimis Non Curat Lex
De minimis non curat lex is an infrequently used legal theory that “the law
does not care for, or take notice of, very small or trifling matters.”  Green v. Parrack, 974 S.W.2d 200, 206
(Tex. App.—San Antonio 1998, no pet.). The principle applies to very
small amounts of money.  See Phillips v. Parrish, 814 S.W.2d 501,
506 (Tex. App.—Houston [1st Dist.] 1991, writ denied) (holding five dollar
calculation error is de minimis); Jones-Holt
Enters., Inc. v. Hips, 643 S.W.2d 773, 776 (Tex. App.—San Antonio 1982, no
writ) (holding four dollar loss is de minimis); Thornhill v. Sharpstown Dodge Sales, Inc., 546 S.W.2d 151, 153 (Tex.
Civ. App.—Beaumont 1976, no writ) (holding 42 cent overcharge is de minimis).  The principle does not apply, however, just
because the number complained of is small. 
Green, 974 S.W.2d at 206 (holding
21 inch encroachment on property that is sixty-seven feet wide is not de minimis).  The law is invoked to excuse negligible
deviations from the letter of the law.  Id. 

Here, while Duncan-Jackson Mortuary paid the taxes,
penalties, and interest plus the interest on the taxes reflected in the
judgment, it did not pay the court costs, service of process fee, and Tax
Master Fee that were also included in the judgment.  The unpaid amount, as of July 2, was $906.  We hold that this is not a de minimis
amount.
2.             
Substantial Compliance
“‘Substantial compliance’ means one has performed the
‘essential requirements’ of a statute. 
The term has been applied to excuse deviations from a statutory
requirement if such deviations do not seriously hinder the legislature’s
purpose in imposing the requirement.”  J.C. Evans Constr. Co., Inc.
v. Travis Cent. Appraisal Dist., 4 S.W.3d 447, 451
(Tex. App.—Austin 1999, no pet.) (citing
Mo. Pac. R.R. Co. v. Dallas Cnty. Appraisal Dist., 732 S.W.2d 717, 721 (Tex. App.—Dallas 1987, no
writ)).  Substantial
compliance is “determined on a case by case basis, depending in part on the
size of the amount paid timely, the size of the amount left unpaid by the [deadline],
and the promptness of the late payment.” 
Harris Cnty.
Appraisal Dist. v. Dipaola Realty
Assocs., 841 S.W.2d 487, 490 (Tex. App.—Houston
[1st Dist.] 1992, writ denied).
The principle of substantial compliance has been applied
to two statutes in the Tax Code: sections 34.21 and 42.08.  See
Tex. Tax Code Ann. §§ 34.21, 42.08 (Vernon Supp. 2011); see, e.g., Page v. Burk, 582 S.W.2d 512, 514 (Tex. Civ. App.—Dallas 1979, no
writ) (applying substantial compliance to section 34.21); J.C. Evans Constr., 4 S.W.3d at 451 (applying substantial compliance
to section 42.08). 
Neither of these applications of the substantial compliance doctrine
persuades us to apply that doctrine to section 33.53(e).
Chapter 42 of the Tax Code generally concerns appeals by
property owners of the values imposed on property by various taxing authorities.  See
Tex. Tax Code Ann. §§ 42.01–.43 (Vernon 2008 & Supp. 2011).  Section 42.08 requires a property owner to
pay taxes on the property before the delinquency date in order to maintain the
right to judicial review.  Id. § 42.08(b).  The statute specifically incorporates the
concept of substantial compliance in a determination of whether the party has
forfeited its right to judicial review.[1]  Id. § 42.08(d).  Chapter
42 does not apply to actions to set aside a tax sale.
Section 34.21 concerns a property owner’s right to redeem
the property after it has been purchased at a tax sale.  Id. § 34.21. 
While it does not specifically mention substantial compliance, there are
a number of factors that justify its application.  
First, it has been the practice in Texas since at least
1909 to liberally construe redemption statutes in favor of redemption.  Jackson
v. Maddox, 53 Tex. Civ. App. 478, 480, 117 S.W. 185, 185 (Fort Worth 1909,
no writ) (holding “law authorizing the redemption of lands sold ought to receive a liberal and benign construction in
favor of those whose estates will be otherwise devested”);
Rogers v. Yarborough, 923 S.W.2d 667,
669 (Tex. App.—Tyler 1996, no writ). 
This long-standing practice weighs in favor of not strictly construing
the requirements of the statute and, instead, of weighing multiple factors to
determine whether the payment was sufficient to avoid “seriously hinder[ing] the legislature’s purpose in imposing the
requirement.”  See J.C. Evans Constr., 4 S.W.3d at 451.
Second, the statute acknowledges and provides for certain
ambiguity in the amount that must be paid. 
In order to redeem property under the statute, the property owner must
pay, among other things, “costs on the property.”  Tex.
Tax Code Ann. § 34.21(a), (b)(1),
(c).  Costs are defined to include “the
amount reasonably spent by the purchaser for maintaining, preserving, and
safekeeping the property.”  Id. § 34.21(g)(2)(A).  A determination of what constitutes an
“amount reasonably spent by the
purchaser” can be a disputed and subjective determination.  Moreover, it is not information that will
always be readily available to the original owner.  To this end, the statute allows the original
owner to seek a statement of costs from the purchaser.  Id. § 34.21(i).  If a dispute does arise as to what is owed,
the original owner can redeem the property by making a certain payment to the
county tax assessor-collector along with an affidavit including specified
representations.  Id. § 34.21(f).  
The statute does not contain clear and precise
requirements that would allow for a strict construction of its
application.  Because certain matters in
the statute are subjective and readily subject to dispute, it follows that a
practice of determining whether the original owner has substantially complied
with the statute becomes necessary.
We turn now to determining whether a similar justification
exists to apply a substantial compliance analysis is warranted for payments
made under section 33.53.  It is
important to note that Duncan-Jackson Mortuary did not attempt to redeem the
property subject to section 34.21 after the sale, did not argue that any of its
actions in filing the suit constituted an attempt to redeem the property
post-sale, and did not argue in its motion for summary judgment that section
34.21 applied to it.  Accordingly, Duncan-Jackson
Mortuary cannot and does not argue in this appeal that it is entitled to a substantial
compliance analysis under section 34.21. 
Instead, it argues that it is entitled to a substantial compliance
analysis because a payment of money owed under section 33.53 is analogous to a
payment of money owed under section 34.21. 
We disagree.
First, we note that there is no corresponding historical
practice of liberally construing section 33.53 or its predecessors despite the
equally long existence of pre-sale requirements.  See
Act approved April 13, 1895, 24th Leg., R.S., ch. 42,
§ 13, 1895 Tex. Gen. Laws 50, 53, reprinted
in 10 H.P.N. Gammel, The Laws of Texas 1822–1897, at 780, 783 (Austin, Gammel Book Co. 1898).[2]
Second, we do not note any similar ambiguity in the money
that must be paid.  The statute requires
the owner to “pay the amount of the judgment.” 
Tex. Tax Code
Ann. § 33.53(e).  Duncan-Jackson Mortuary argued in its motion
for summary judgment, “The full costs adjudged against the property were not
finally determined nor known to Plaintiffs until after August 10, 2010, when
the abstract of judgment prepared on behalf of the Taxing Authorities was
filed.”  It offers no explanation for
this argument, however.  
Duncan-Jackson Mortuary was required to pay the amount of
the judgment.  Id.  It follows, then, that
the amount owed is determinable by looking at the judgment.  The only cost assessed in the judgment that
was not specifically stated or calculable based on information wholly contained
within the judgment was the court costs. 
That information was publicly available and readily ascertainable from
the Harris County District Clerk. 
Moreover, Duncan-Jackson Mortuary was notified of the final judgment
approximately four and one-half months prior to the sale and received notice of
the date of the sale approximately 25 days prior to the sale.  Duncan-Jackson Mortuary does not claim that
it was prevented from obtaining a copy of the judgment and a list of court
costs from the district clerk.  This
information is not subject to dispute.
Third, as we have noted above, substantial compliance is
“determined on a case by case basis, depending in part on the size of the
amount paid timely, the size of the amount left unpaid by the [deadline], and
the promptness of the late payment.”  Dipaola Realty Assocs., 841 S.W.2d at 490.  Subsection (e) of section
33.53 mandates that the taxing unit release the tax lien held on the property
and file the release of lien when the judgment has been paid before the
property is sold.  Tex. Tax Code Ann. § 33.53(e).  If this mandate was subject to case-by-case
review, this would inject unnecessary uncertainty into the process.  Because the substantial compliance review is
based on balancing a number of factors, the taxing unit would have no clear
guidance on when it can proceed with a tax sale when some, but not all, of the
judgment has been paid.[3]  This would “seriously hinder the
legislature’s purpose in imposing the requirement” that the entire judgment be
paid before the taxing authority is obligated to release the lien.  See J.C.
Evans Constr., 4 S.W.3d at 451.
Additionally, if we were to adopt the construction urged
by Duncan-Jackson Mortuary, part of the judgment would be at risk of never
being paid.  If substantial compliance
satisfies section 33.53(e), the taxing authority would be required to release
its lien and would have no means to enforce collection of the unpaid portion of
the judgment—here over $900.
Finally, a strict compliance rule would not create any
harsh effects, because if a property owner pays some, but not all, of the
judgment prior to a tax sale, the owner can still redeem the property after the
tax sale.  See Tex. Tax
Code Ann. § 34.21.  Even if there is some ambiguity in the
judgment that cannot be resolved prior to the tax sale, the property owner can
address that ambiguity in a redemption proceeding, where the substantial
compliance principle applies.
We hold that the principle of substantial compliance does
not apply to subsection (e) of section 33.53. 
Because it did not pay the full amount owed under the judgment, Duncan-Jackson
Mortuary was not entitled to have the tax sale set aside.  Accordingly, we sustain Mekhail’s
first issue.
In his fifth issue, Mekhail
argues that the trial court erred in denying his motion for summary judgment,
which argued that Duncan-Jackson Mortuary was not entitled to have the tax sale
set aside because it had not paid the full amount owed under the judgment.  For the same reasons cited above, we sustain
this issue.
Because they would not provide him with any greater
relief, we do not need to reach Mekhail’s remaining
issues.  See Tex. R.
App. P. 47.1 (requiring appellate opinions to
address every issue raised and necessary
to final disposition of appeal).
                                                                                                          
Conclusion
We reverse the judgment of the trial court and remand for
entry of a take-nothing judgment.
 
 
                                                                      Laura
Carter Higley
                                                                      Justice

 
Panel consists of Chief Justice Radack and Justices Higley and Brown.

[1]         Specifically, section 42.08 provides, in pertinent part:
 
If the court determines that the property owner has
not substantially complied with this section, the court shall dismiss the
pending action.  If the court determines that the property owner has
substantially but not fully complied with this section, the court shall dismiss
the pending action unless the property owner fully complies with the court’s
determination within 30 days of the determination.
 
          Tex. Tax Code Ann. § 42.08(d) (Vernon Supp. 2011).

[2]         Accessed through the University of North Texas Libraries, The
Portal to Texas History, http://texashistory.unt.edu/ark:/67531/metapth6733
(last accessed February 28, 2012).

[3]         Naturally, nothing prevents the taxing authority from
electing to cancel or postpone the tax sale. 
Our analysis is limited to whether the taxing authority is required to
cancel or postpone the tax sale.