Court Opinion

ID: 7360627
Source: CourtListenerOpinion
Date Created: 2022-07-26 10:09:54.768483+00
Date Added: 2024-06-11T16:20:30.572255
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                     NO. 03-21-00069-CV

                               J-W Power Company, Appellant

                                                v.

                         Sterling County Appraisal District, Appellee

              FROM THE 51ST DISTRICT COURT OF STERLING COUNTY
            NO. 2685, THE HONORABLE CARMEN DUSEK, JUDGE PRESIDING

                           MEMORANDUM OPINION

               J-W Power Company appeals a take-nothing summary judgment rendered by the

trial court in J-W Power’s appeal of an order of the Sterling County Appraisal Review Board. See

Tex. Tax Code §§ 25.25(g), 42.01(a)(1)(B), 42.21(a), 42.23. J-W Power had filed with the Board

a motion requesting that it correct past tax years’ appraisal rolls by removing from the rolls

compressors that J-W Power had leased to others, citing as support two statutes addressing

the taxation of “dealer’s heavy equipment inventory.” See generally id. §§ 23.1241–23.1242,

discussed by EXLP Leasing, LLC v. Galveston Cent. Appraisal Dist., 554 S.W.3d 572 (Tex. 2018).

The Board denied J-W Power’s motion. See Tex. Tax Code § 25.25(c)(2), (3). J-W Power then

appealed the Board’s order by filing in the trial court a petition for review against the Sterling

County Appraisal District (SCAD). The court granted SCAD’s motion for summary judgment,

ordering that J-W Power take nothing on all its claims. In four appellate issues, J-W Power

contends that the trial court erred by granting the summary judgment. We affirm.
                                       BACKGROUND

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

oil-and-gas fields. Its customers use the compressors in counties throughout Texas, but when one

of its compressors is not under lease, J-W Power keeps the compressor at a storage yard in Ector

County. During the tax years at issue, J-W Power leased compressors to customers who used them

in Sterling County. Sections 23.1241 and 23.1242, as amended effective January 1, 2012, provide

generally that items leased from a “dealer’s heavy equipment inventory” may be appraised for

taxation only in the county in which the inventory is based and maintained. See Act of May 21,

2011, 82d Leg., R.S., ch. 322, §§ 1–10, 2011 Tex. Gen. Laws 938, 938–41; EXLP Leasing,

554 S.W.3d at 581–86.

               Even after these changes were passed by the legislature and approved by the

governor, Sterling County authorities appraised for ad valorem tax purposes J-W Power’s

compressors located in Sterling County. J-W Power protested the appraisals, under the procedures

in Section 41.41. The Board denied the Section 41.41 protests, and J-W Power did not challenge

the denials in court.

               In early 2018, the Supreme Court of Texas issued EXLP Leasing, which explains

how Sections 23.1241 and 23.1242 work. See 554 S.W.3d at 572. J-W Power then filed with the

Board a motion under Section 25.25(c)(2) and (3) to correct the county’s appraisal rolls for tax

years 2013 through 2016. It argued that under EXLP Leasing’s analysis of Sections 23.1241 and

23.1242, the Sterling County authorities should not have appraised for taxation any of J-W Power’s

compressors in Sterling County because they were all part of a “dealer’s heavy equipment

inventory.” See id. at 574–75, 581–86. J-W Power argued that because the inventory was “based

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and maintained” in Ector County, see id. at 586, only Ector County could appraise the inventory’s

compressors for ad valorem tax purposes, see id. at 574–75, 581–86.

              After a hearing, the Board denied J-W Power’s Section 25.25(c) motion. J-W

Power appealed the denial via its petition for review against SCAD. SCAD answered and moved

for a summary judgment on all J-W Power’s claims. J-W Power filed a response, but the trial

court granted SCAD’s motion and rendered a final take-nothing judgment in SCAD’s favor,

specifying that “all relief to the Plaintiff” was “being denied.” J-W Power now appeals.

             SUMMARY JUDGMENT IN SCAD’S FAVOR—RES JUDICATA

              “Because the standard of review applying to summary judgments is

well-established, we do not recite it here.”        Scientific Mach. & Welding, Inc. v. Rose,

No. 03-20-00564-CV, 2022 WL 850409, at *2 n.2 (Tex. App.—Austin Mar. 23, 2022, no pet.)

(mem. op.) (citing Tex. R. Civ. P. 166a(c); Valence Operating Co. v. Dorsett, 164 S.W.3d 656,

661 (Tex. 2005)). “Where, as here, a trial court’s order granting summary judgment does not

specify the ground or grounds relied on for its ruling, summary judgment will be affirmed on

appeal if any of the theories presented to the trial court and preserved for appellate review are

meritorious.” Long v. Southwest Funding, L.P., No. 03-15-00020-CV, 2017 WL 672445, at *2

(Tex. App.—Austin Feb. 16, 2017, no pet.) (mem. op.).

              “Issues not expressly presented to the trial court by written motion, answer or other

response shall not be considered on appeal as grounds for reversal” of a summary judgment. Tex.

R. Civ. P. 166a(c). Thus, J-W Power may win reversal on appeal only on issues that it presented

to the trial court in writing. See Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462,

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467 (Tex. 1998); McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993);

Travis v. City of Mesquite, 830 S.W.2d 94, 99–100 (Tex. 1992).

               One of the grounds on which SCAD moved for summary judgment was its assertion

that J-W Power’s claims were barred by res judicata.1 In its third appellate issue, J-W Power

asserts that the trial court erred by granting summary judgment based on res judicata.2 The parties

do not dispute the underlying facts, for example, that J-W Power filed Section 41.41 protests that

were denied and what J-W Power wrote on the protest forms. They instead dispute the legal import

of the underlying facts. Cf. Solomon v. Stone, No. 05-17-00889-CV, 2018 WL 2926676, at *1

(Tex. App.—Dallas June 7, 2018, no pet.) (mem. op.) (“We review de novo the trial court’s

conclusion of law that res judicata applied under the undisputed facts.”).

               “The doctrine of res judicata, or claim preclusion, bars causes of action that have

already been fully adjudicated or that, with the use of diligence, could have been brought in the

prior suit.” Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 225 (Tex. 2022) (citing Eagle

Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex. 2021)). “The doctrine is necessary to

‘bring an end to litigation, prevent vexatious litigation, maintain stability of court decisions,

promote judicial economy, and prevent double recovery.’” Eagle Oil & Gas, 619 S.W.3d at 705

(quoting Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007)). “Res judicata

       1
          More specifically, SCAD argued that J-W Power’s Section 25.25(c) motion about the
relevant tax years was barred by res judicata because of the substance of the claims that were
denied in J-W Power’s Section 41.41 protests about the same tax years.
       2
         J-W Power’s appellate briefing refers to SCAD’s failure to plead res judicata in its
answer, but J-W Power “did not alert the trial court to [SCAD]’s alleged pleading defect during
summary judgment proceedings or at any other time prior to judgment.” See Godoy v. Wells Fargo
Bank, N.A., 575 S.W.3d 531, 537 (Tex. 2019). J-W Power thus “waived its complaint about
[SCAD]’s pleadings.” See id.

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requires proof of three elements: ‘(1) a prior final judgment on the merits by a court of competent

jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action

based on the same claims as were raised or could have been raised in the first action.’” Rosetta

Res. Operating, 645 S.W.3d at 225 (quoting Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652

(Tex. 1996)).

                Under the first element, J-W Power correctly acknowledges that administrative

bodies’ final decisions, like courts’ final decisions, can have preclusive effect under res judicata.3

See, e.g., Igal v. Brightstar Info. Tech. Grp., Inc., 250 S.W.3d 78, 87–88 (Tex. 2008) (certain final

orders of Workforce Commission are res judicata), superseded by statute on other grounds as

recognized in Engelman Irrigation Dist. v. Shields Bros., 514 S.W.3d 746, 750 n.28 (Tex. 2017);

Tricon Tool & Supply, Inc. v. Thumann, 226 S.W.3d 494, 511 (Tex. App.—Houston [1st Dist.]

2006, pet. denied) (“The doctrine of res judicata also applies to the relitigation of claims previously

determined by an administrative agency.”). J-W Power concedes this point on appeal, saying in

its reply brief, “J-W Power does not dispute that res judicata can apply to [Appraisal Review

Board] orders.”

                Instead, the arguments it raised in its summary-judgment response were limited to

res judicata’s third element. J-W Power argued that the orders denying its Section 41.41 protests

did not address the “same claims” on which it based its Section 25.25(c) motion.

       3
          See Willacy Cnty. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 50
(Tex. 2018) (referring to county appraisal review board as type of administrative agency); Beltran
Gutierrez v. City of Laredo, No. 04-17-00838-CV, 2019 WL 691443, at *2 (Tex. App.—San
Antonio Feb. 20, 2019, pet. denied) (mem. op.) (same); see also Cameron Appraisal Dist. v. Rourk,
194 S.W.3d 501, 502 (Tex. 2006) (per curiam) (stating, in suit involving county appraisal district:
“The Texas Constitution expressly allows the Legislature to bestow exclusive original jurisdiction
on administrative bodies. There is no question the Legislature intended to do so here.” (internal
citation omitted)).

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               When deciding whether a later proceeding is based on the “same claims” resolved

by an earlier final adjudication, courts compare the “basic nature” of the claims presented in the

two proceedings. See Rosetta Res. Operating, 645 S.W.3d at 226; see also Barr v. Resolution Tr.

Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 630 (Tex. 1992) (requiring “analysis of the factual

matters that make up the gist of the complaint, without regard to the form of action” (emphasis

added)). For example, the Supreme Court of Texas concluded that res judicata precluded all of a

plaintiff’s claims that related to the “same transaction,” even if some of the claims were merely

contingent at the time of the first proceeding. See Getty Oil Co. v. Insurance Co. of N. Am.,

845 S.W.2d 794, 799 (Tex. 1992). In the same opinion, the Court cited with approval a Fifth

Circuit decision in which that court decided that a liability theory different from the one a

plaintiff had brought in an earlier proceeding was still precluded by res judicata because the

deprivation of “the right [the plaintiff] seeks to redress is the same” across both proceedings. Id.

at 799 n.5 (quoting Ocean Drilling & Expl. Co. v. Mont Boat Rental Servs., Inc., 799 F.2d 213,

217 (5th Cir. 1986)).

               Also relevant here, the Court in Igal held that under res judicata, a Workforce

Commission (TWC) final order under the Payday Law precluded the same claimant’s later suit

raising common-law claims for unpaid wages. See 250 S.W.3d at 87–88, 93. The Court reasoned:

“The fact that the Payday Law provides an alternative remedial scheme to the common law does

not prevent res judicata from applying to TWC orders. Both courts and administrative agencies

may provide remedies for injuries actionable under the common law.” Id. at 87. Thus, “[t]he

Payday Act is not an employee’s sole and exclusive remedy for a claim based on past wages but

is rather an alternative remedy that is cumulative of the common law,” meaning that the TWC

“offers an alternate means to the same remedy.” Id. at 88.

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               On its Section 41.41 protest form, J-W Power claimed that “[a]ll compressors

owned by J-W Power Company in Sterling County” were “part of a heavy equipment inventory

and qualify to be valued under Section[s] 23.1241 and 23.1242 of the Texas Property Tax Code,”

with the result that “[a]ssessing them separately creates a double assessment.” Then in its

Section 25.25(c) motion J-W Power asserted: “All compressors in this county . . . were dealer’s

heavy equipment inventory. Accordingly, the compressors should be valued and taxed under

section[s] 23.1241 and 23.1242 of the Texas Tax Code. The appraisal district assessed these

compressors separately as business personal property, which created a double assessment.” The

basic nature of the claims brought in the Section 41.41 protests and in the Section 25.25(c) motion

is thus the same—with the claims stated nearly verbatim.

               J-W Power raises several arguments to challenge this conclusion, but each is

foreclosed by the res judicata principles set forth by the Supreme Court of Texas. J-W Power

argued first in its summary-judgment response that its claims in this suit differ from those in its

Section 41.41 protests because the present claims were brought under Section 25.25(c), a different

statute. But the basic nature of the claims did not change, see Rosetta Res. Operating, 645 S.W.3d

at 226 (assessing the “basic nature of the [plaintiff]s’ claim”), even if they were brought under a

new statutory theory, see Getty Oil, 845 S.W.2d at 799 n.5 (different liability theory precluded by

res judicata when deprivation of “the right [the plaintiff] seeks to redress is the same” across both

proceedings (quoting Ocean Drilling & Expl., 799 F.2d at 217)).

               J-W Power’s next summary-judgment argument—that Section 25.25(c) motions

provide different remedies than do Section 41.41 protests, thus making claims under each

statute necessarily different—is also foreclosed. Differing remedies for violations of the same

rights are precluded by res judicata when the basic nature of the underlying claims stays the same.

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See Igal, 250 S.W.3d at 87–88; Getty Oil, 845 S.W.2d at 799 n.5 (quoting Ocean Drilling & Expl.,

799 F.2d at 217).

               J-W Power also raised Section 25.25(l) as support for its position. Section 25.25(l)

provides that Section 25.25(c) motions may proceed “regardless of whether, for a tax year to which

the motion relates, the owner of the property protested under Chapter 41 an action relating to the

value of the property that is the subject of the motion.” See Tex. Tax Code § 25.25(l) (emphasis

added). But J-W Power’s motion and supporting reliance on EXLP Leasing did not concern the

compressors’ value—that is, they did not challenge the mathematical formula that the Sterling

County authorities used to compute the compressors’ market value for tax purposes. J-W Power

was instead asserting that the compressors were not a taxable form of property located in Sterling

County at all—an issue separate from the appraisal-formula question—because, according to J-W

Power, the compressors constituted “dealer’s heavy equipment inventory” when the inventory

was based and maintained in another county. See MidCon Compression, L.L.C. v. Reeves Cnty.

Appraisal Dist., 478 S.W.3d 804, 819 (Tex. App.—El Paso 2015) (“Although MidCon contends

that the dispute in this case concerns the correct appraisal value of the sixty-four compressor

packages, the dispute is not so much about whether the appraised value is excessive as it is about

whether Reeves and Loving Counties can tax the compressor packages as business personal

property at all.”), aff’d in part and rev’d in part on other grounds, 563 S.W.3d 207 (Tex. 2018)

(per curiam); Tex-Air Helicopters, Inc. v. Harris Cnty. Appraisal Dist., 15 S.W.3d 173, 176

(Tex. App.—Texarkana 2000, pet. denied) (“[T]he Legislature’s clear intent was that protests of

valuation of property for tax purposes in excess of ‘appraised or market value’ or unequal

valuation in comparison with other properties, are separate and distinct from protests based on

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whether property is taxable at all.” (interpreting Dallas Cent. Appraisal Dist. v. Seven Inv. Co.,

835 S.W.2d 75, 78 (Tex. 1992))).

               Finally in its summary-judgment response, J-W Power argued that its “opportunity

to fully litigate its claims under 25.25(c) did not become evident until” the Supreme Court decided

EXLP Leasing. Yet as Getty Oil shows, even claims that were merely contingent during the earlier

proceeding still may be precluded by res judicata from being pursued in a later proceeding. See

845 S.W.2d at 799. Plus, J-W Power took the position at oral argument that EXLP Leasing was

not a change in the law. Cf. Marino v. State Farm Fire & Cas. Ins. Co., 787 S.W.2d 948, 949–50

(Tex. 1990) (“[R]es judicata is not a defense in a subsequent action if there has been a change

in . . . the decisional law between the first judgment and the second suit.” (emphasis removed)).

And even if EXLP Leasing means that the Board’s denials of the Section 41.41 protests were

erroneous, res judicata protects erroneous final adjudications: “That the judgment may have been

wrong or premised on a legal principle subsequently overruled does not affect application of res

judicata.” Engelman Irrigation Dist., 514 S.W.3d at 749 (internal quotation omitted) (quoting

Segrest v. Segrest, 649 S.W.2d 610, 612 (Tex. 1983)).

               J-W Power expands on this issue on appeal, arguing that “[r]es judicata cannot bar

a claim that was not ripe at the time the first lawsuit was filed.” Cf. Eagle Oil & Gas, 619 S.W.3d

at 706. Ripeness “requires a plaintiff to have a concrete injury before bringing a claim.” Id. J-W

Power had such an alleged injury when it filed its Section 41.41 protests—the very injury it

complained of in the text of the protest form, which matches the description of the injury it

complained of in its Section 25.25(c) motion. Ripeness also requires courts to “consider whether,

at the time a lawsuit is filed, the facts are sufficiently developed so that an injury has occurred or

is likely to occur, rather than being contingent or remote.” Id. (internal quotation omitted) (quoting

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Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851–52 (Tex. 2000)). The facts were sufficiently

developed when J-W Power filed its Section 41.41 protests and at all times after—the Sterling

County authorities had already appraised the compressors in violation, J-W Power said, of

Sections 23.1241 and 23.1242.

                  J-W Power adds that its Section 25.25(c) claims only became ripe after the

appraisal rolls were certified because motions under Section 25.25(c) allow only for correction of

already-certified rolls. But, as noted above, res judicata analysis focuses on the basic nature of

the claims involved and not necessarily the vehicles or theories by which the claims are pressed.

See Rosetta Res. Operating, 645 S.W.3d at 226; Igal, 250 S.W.3d at 87–88; Getty Oil, 845 S.W.2d

at 799 n.5 (quoting Ocean Drilling & Expl., 799 F.2d at 217); Barr, 837 S.W.2d at 630.

                  In its brief on appeal, J-W Power argues for the first time that because the Board

didn’t dismiss the Section 25.25(c) motion out of hand but decided the Section 25.25(c) claims,

the Board must have interpreted the relevant statutes to conclude that res judicata did not apply.

But the Board’s order denying the Section 25.25(c) motion is not inconsistent with the Board’s

having concluded that the results of the Section 41.41 protests precluded the Section 25.25(c)

motion. The order says simply that the motion is denied, without specifying the reason or reasons

for the denial.

                  Because J-W Power has not successfully challenged res judicata as a ground for

the summary judgment, we must affirm it. We thus overrule the relevant portion of J-W Power’s

third issue and need not reach any other issue. See Tex. R. App. P. 47.1.

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                                       CONCLUSION

              We affirm the trial court’s judgment.

                                            __________________________________________
                                            Chari L. Kelly, Justice

Before Chief Justice Byrne, Justices Kelly and Smith

Affirmed

Filed: July 21, 2022

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