Court Opinion

ID: 2885511
Source: CourtListenerOpinion
Date Created: 2015-09-07 18:35:03.533433+00
Date Added: 2024-06-11T13:30:29.662594
License: Public Domain

NO. 07-00-0509-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                       AT AMARILLO

                                         PANEL A

                                   OCTOBER 19, 2001

                          ______________________________

              LUBBOCK CENTRAL APPRAISAL DISTRICT, APPELLANT

                                             V.

 SILVERSTAR AVIATION, INC. NOW OMNIFLIGHT HELICOPTER , INC., APPELLEE

                        _________________________________

            FROM THE 140TH DISTRICT COURT OF LUBBOCK COUNTY;

              NO. 92-729-940; HONORABLE JIM BOB DARNELL, JUDGE

                          _______________________________

Before BOYD, C.J., and REAVIS and JOHNSON, JJ.

       Following a trial before the court, Lubbock Central Appraisal District (the District)

challenges the judgment that it take nothing in its action against Silverstar Aviation, Inc.,

now Omniflight Helicopter, Inc. (Omniflight) for 1990 taxes on a helicopter formerly owned

by Silverstar, but sold to Omniflight on December 27, 1989, plus penalty and interest.

Presenting only one point of error, the District contends that the trial court erred in ruling
for Omniflight because it failed to avail itself of the administrative remedies established by

the Texas Property Tax Code,1 thereby depriving the trial court of jurisdiction to consider

its situs defense in a suit for collection of delinquent taxes. Based upon the rationale

expressed herein, we affirm.

       The District does not challenge the sufficiency of the evidence. Thus, only the facts

necessary to disposition of this appeal will be discussed. Upon presentation of 18 written

stipulation of agreed facts, the trial court made findings of fact and conclusions of law. As

material here, the trial court found:

       •       The helicopter was permanently removed from Lubbock, Texas on
               June 30, 1989. On December 27, 1989, Silverstar sold its stock and
               assets. The transaction was not a matter of public record and the
               seller did not disclose that any aircraft was located then or previously
               in Lubbock, Texas.2

       •       On January 1, 1990, the new purchasers of the stock and assets of
               Silverstar continued to do business as Silverstar Aviation at 105-A
               Wappoo Creek Drive, Charleston, SC, although no notification of the
               Charleston address was given to the District until March 29, 1991.

       •       On January 1, 1990, the District assessed 1990 taxes in the amount
               of $16,953.53.

       1
       All references herein are to the Texas Tax Code Annotated (Vernon 1992 & Supp.
2001) unless otherwise designated.
       2
         Sales of aircraft are covered by federal law. 49 U.S.C. § 44107 (a)(2) (1997).
Although actual notice of the sale of the helicopter was not given to the District, similar to
real estate transactions, the District can monitor sales of aircraft in its district by contacting
the FAA at the Mike Monroney Aeronautical Center, Civil Aviation Registry, Public
Documents Room, Registry Building, Oklahoma City, Oklahoma.

                                                2
       •      The District mailed the 1990 appraisal notice dated May 10, 1990 to
              Silverstar Aviation, Inc., c/o Ad Valorem Tax Dept., 2400
              Thanksgiving Tower, Dallas, Tx, 75201-4713, the address of the
              previous owner.

       •      No written protest of situs or failure to receive notice of the 1990
              taxes was filed prior to the June 11, 1990 deadline for protests.

       •      Silverstar changed its name to Omniflight on June 11, 1990, but did
              not notify the District of the change until March 1991.

       •      The 1990 taxes became delinquent on February 1, 1991.

       •      A Delinquent Tax Notice was mailed to Silverstar, but it was mailed
              to the address of the previous owner.

       •      As of receipt of a letter dated March 29, 1991, the District was aware
              of Omniflight’s address change and that there was an error in the
              1990 tax roll. (This finding was not listed as a stipulation of fact).

       For reasons not explained by the record, when Omniflight did not send information

requested by the district attorney, the District filed suit on June 23, 1992, to collect the

delinquent taxes on the helicopter for the 1990 tax year, plus penalty, interest, attorney’s

fees, and costs. By its original petition which was patterned after section 33.43, among

other things, the District alleged that (1) the helicopter was situated within the boundaries

of the taxing entities for tax purposes for said year, and (2) the helicopter was located in

Lubbock County on January 1, 1990. In addition to seeking a money judgment, the District

also sought foreclosure of a tax lien and an order of sale and execution.3 In addition to its

       3
      As of May 2000, the sum due for taxes, penalties, and interest for the 1990 tax year
was $43,672.80.

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general denial, by its amended answer, pursuant to section 33.45, Omniflight alleged

numerous affirmative defenses summarized as follows:

       •      statute of limitations;

       •      the helicopter was not subject to taxation for 1990 because it was
              removed from the District after July 1, 1989, and not returned to the
              District; the principal place of business of Omniflight was not in
              Lubbock County at relevant times, and accordingly, the helicopter
              was not subject to taxation pursuant to Section 21.02 of the Texas
              Property Tax Code;

       •      Omniflight did not receive notice of the claims of the District before
              March 29, 1991, nor a hearing, which denied minimum constitutional
              due process rights under the Fourteenth Amendment of the United
              States Constitution and Article 1, Section 19 of the Texas
              Constitution.

Although Omniflight’s amended answer was filed on October 9, 1992, the District did not

file a supplemental pleading nor other responsive pleading thereto. Similarly, the District

did not file nor present any special exceptions or otherwise specifically point out by written

exceptions any deficiencies pursuant to Rules 90 and 91 of the Texas Rules of Civil

Procedure and, although section 33.43 specifies the form of an original petition to collect

delinquent taxes, it does not exempt the District from compliance with Rules 90 or 91 or

other rules where applicable. Although the trial court held that Omniflight’s letter dated

March 29, 1991, did not meet the requirements of a notice of protest under section 41.41

or a motion to the appraisal review board per section 25.25(c), the trial court concluded

that the District should take nothing by its suit under “principles of equity.”

                                              4
       By its sole point of error, the District contends the trial court erred in ruling for

Omniflight because the corporation’s failure to avail itself of the administrative remedies

established by section 42.09 deprived the trial court of jurisdiction to consider its

affirmative defenses. We disagree. The District’s contention is grounded on section 42.09

cited by the District in its brief on appeal however, the words jurisdiction or administrative

remedies do not appear in section 42.09. Instead, the section uses the term grounds of

protest. As material here, section 42.09 (a) of Title 1, Chapter 42 provides in part that

       . . . procedures prescribed by this title for adjudication of the grounds of
       protest authorized by this title are exclusive, and a property owner may not
       raise any of those grounds . . . .

(Emphasis added). By its brief, the District contends

       •      the issues of situs and failure to receive notice were not properly
              raised;

       •      issues such as situs and the failure to receive notice must be raised
              in a protest . . . and may not be raised in defense of a suit to enforce
              collection of delinquent taxes

followed by a general reference to section 42.09. Although Title 1 includes 13 chapters

which include at least 405 sections and Rule 38.1(h) of the Texas Rules of Appellate

Procedure requires that briefs contain appropriate citations to authorities, the District does

not identify which of the 405 sections of Title 1 are implicated as a ground of protest and

covered by section 42.09. Because the District has not cited or designated which of the

                                              5
405 sections of Title 1 are implicated as its grounds for its point of error, the District’s

general reference to section 42.09 presents no supporting authority or argument for its

proposition and presents nothing for review. Upchurch v. Albear, 5 S.W.3d 274, 285 (Tex.

App.--Amarillo 1999, pet. denied); and Board of County Com’rs v. Amarillo Hosp., 835
S.W.2d 115, 129 (Tex.App.--Amarillo 1992, no writ).

           In addition, a party cannot raise an issue, constitutional or otherwise, for the first

time on appeal which was not presented to the trial court. Dreyer v. Greene, 871 S.W.2d
697, 698 (Tex. 1993). In order to preserve a complaint for appellate review, the record

must show that the District raised its contention in the trial court. See Tex. R. App. P.

33.1(a).

       By its trial pleadings, the District did not by special exception, supplemental

pleading in accordance with Rules 90 and 91 of the Texas Rules of Civil Procedure, or

otherwise contend that the trial court was without jurisdiction to consider the situs defense,

or otherwise assert that the situs defense had been waived or was not properly before the

court. By its failure to address the affirmative defenses presented by Omniflight pursuant

to section 33.45, the District waived any defect, omission, or fault in Omniflight’s pleadings.

J.K. & Susie L. Wadley Research Inst. v. Beeson, 835 S.W.2d 689, 693 (Tex.App.--Dallas

1992, writ denied). Further, because the District did not raise or present its contention to

the trial court, it cannot be raised for the first time on appeal. See Tx. Dept. of Prot. And

Reg. Ser. v. Sherry, 46 S.W.3d 857, 861 (Tex. 2001) (following the rule in Dreyer).

                                                 6
However, because subject matter jurisdiction is an issue that may be raised for the first

time on appeal, Tex. Ass’n of Business v. Air Control Bd., 852 S.W.2d 440, 445 (Tex.

1993), in order to complete our analysis, we must next determine whether Omniflight’s

failure to avail itself of administrative remedies deprived the trial court of jurisdiction to

consider the situs defense.

       We commence our review of the jurisdiction question by focusing on the Court’s

decision in Robstown Independent School District v. Anderson, 706 S.W.2d 952 (Tex

1986), wherein the Court held that the defense of non-ownership had been waived

because it had not been presented to the appraisal review board. Id. at 953. However,

it is significant to note that the Court did not hold that the defense was not available

because of the absence of jurisdiction, rather, the Court held that the defense had been

waived. See also Sierra Stage Coaches, Inc. v. La Porte Sch. Dist., 832 S.W.2d 191, 193

(Tex.App.--Houston [14th Dist.] 1992 no writ), and Flowers v. Lavaca County Appraisal

Dist., 766 S.W.2d 825, 828 (Tex.App.--Corpus Christi 1989, writ denied) (holding that any

defense was waived for failure to exhaust administrative remedies). Further, Appraisal

Review Board v. International Church of the Foursquare Gospel, 719 S.W.2d 160 (Tex.

1986), is not applicable because it presented a question under section 42.21 in an action

commenced by the taxpayer wherein the appraisal district had not been named a party,

and did not involve affirmative defenses raised as required by section 33.45.

                                              7
        Moreover, by seeking foreclosure of it’s alleged lien and an order of sale for a

helicopter that had been removed from the district and sold to Omniflight, the District

sought relief which implicated the law regarding a transaction preempted by federal law.

See 49 U.S.C. § 44107 (a)(2) (1997). In State Securities Company v. Aviation Enterprises,

Inc., 355 F.2d 225, 229 (10th Cir. 1966), the court held that while Congress had preempted

the field and state recording statutes were not applicable to instruments of title covering

aircraft, questions of good faith purchaser status are resolved under state law. Here,

however, the District did not contend and the trial court did not find that Omniflight was not

entitled to the protection afforded a purchaser for value of the helicopter. Indeed, under

Texas law, Omniflight was not liable for any liability or obligation of Silverstar. (Emphasis

added). See Tex. Bus. Corp. Act Ann. art. 5.10B(2) (Vernon Supp. 2001); Holden v. Capri

Lighting, 960 S.W.2d 831, 833 (Tex.App.--Amarillo 1997, no pet.). The application of 49

U.S.C. § 44107, as material here, is demonstrated by the decision in CIM Intern v. United

States, 641 F.2d 671 (9th Cir. 1980). In CIM, the court held that a levy by the Internal

Revenue Service on an airplane of a taxpayer who had no equitable interest in the

airplane was wrongful. Id. at 679.

       Further, the District did not send any notices to Omniflight at its place of business

in Charleston, South Carolina, but instead mailed the 1990 appraisal notice, the 1990 tax

bill, and the delinquent tax notice to the Texas address of the former owner of the

helicopter. Without citing any authority that Texas statutes have extraterritorial effect, the

                                              8
District argues that Omniflight’s failure to avail itself of the administrative remedies

provided in the Texas Tax Code deprived the trial court of jurisdiction to consider its

affirmative defenses. Generally, state statues do not have extraterritorial effect. See State

of California v. Copus, 158 Tex. 196, 309 S.W.2d 227, 229 (1958), cert. denied, 356 U.S.
967, 78 S. Ct. 1006, 2 L. Ed. 2d 1074 (1958) (noting that the universally recognized general

rule is that statutes of a state ex proprio vigore4 have no extraterritorial effect).

       The District did not present its case on the theory that situs of the helicopter was

a non-issue. Instead, by its trial pleadings, the District alleged that the helicopter was

located within the district on January 1, 1990 and Omniflight responded by its affirmative

defenses. The District invoked the jurisdiction of the trial court when it commenced the

action to foreclose its alleged lien on the helicopter and obtain a money judgment against

Omniflight. Once jurisdiction was acquired, no subsequent fact or event could operate to

defeat jurisdiction.   Dallas Independent School District v. Porter, 709 S.W.2d 642, 643

(Tex. 1986).

       We do not consider Northwest Tex. Conf. v. Happy School D., 839 S.W.2d 140

(Tex.App.--Amarillo 1992, no writ), cited by the District to be controlling. Northwest did not

involve questions of affirmative defenses under section 33.45. Instead, by its response

to the district’s motion for summary judgment, Northwest, who had only asserted a general

       4
       Ex proprio vigore means by their or its own force. Black’s Law Dictionary, 582 (6th
ed. 1990).

                                               9
denial, sought a judicial as opposed to administrative determination that its real estate, not

an aircraft, was exempt from taxation under section 11.43. Also, Northwest did not present

questions relating to aircraft transactions preempted by federal law. Further, Webb County

App. D. v. New Laredo Hotel, 792 S.W.2d 952, 954 (Tex. 1990), cited in Northwest, is not

applicable because it involved a suit protesting tax value filed by the taxpayer and did not

concern affirmative defenses presented by the defendant.

        Accordingly, the District’s sole point of error is overruled and the judgment of the

trial court is affirmed.

                                                  Don H. Reavis
                                                    Justice

Do not publish.

                                             10