Updated 11:05am February 18, 2020, to add a statement attributed to the chief appraiser.
Court order means chief appraiser must seek board approval for each individual case in which she wants to challenge value decisions made by Travis Appraisal Review Board
Austin property tax attorney Lorri Michel of Michel Gray & Rogers on February 11, 2020, won a significant decision that overturns a three-year-old policy of the Travis Central Appraisal District (TCAD). (Cause No. D-1-GN-19-006394).
Her plea filed January 24, 2020, in TCAD vs. Texas Disposal Systems Landfill Inc. stated: “Failure to obtain written approval of the board of directors to appeal the Appraisal Review Board order determining TDSL’s 2019 protest on the property at issue deprives the trial court of jurisdiction.”
After considering TCAD’s filing and TDSL’s plea to the jurisdiction, on February 11, 2020, District Judge Catherine Mauzy signed a court order and final judgment that dismissed TCAD’s lawsuit against TDSL.
Michel’s plea pointed out that Tax Code Section 42.02(a) states, “On written approval of the board of directors of the appraisal district, the chief appraiser is entitled to appeal an order of the appraisal review board….”
The chief appraiser did not have written approval for that specific appeal, or others like it. Instead, she relied upon a board resolution issued nearly three years ago.
On May 30, 2017, the TCAD board of directors voted unanimously to pass a resolution that authorized the agency’s chief appraiser—on her own initiative—to appeal value decisions made by the Travis Appraisal Review Board (ARB).
The TCAD board chair and secretary-treasurer who signed that resolution are no longer on the board.
Chief Appraiser Marya Crigler, who’s been employed by TCAD for 30 years and was named chief appraiser in November 2011, has used the 2017 resolution as authority to file at least six lawsuits to overturn ARB decisions, according to research.
While that’s a relatively small number of lawsuits, the expense involved, and TCAD’s record of losing expensive litigation, raises questions about the TCAD board’s decision to cede blanket authority to the chief appraiser.
Court decision to bind future appeals
As a result of Mauzy’s decision, the chief appraiser will have to seek specific board authorization each time she wants to appeal an ARB value decision.
That will require putting a request on a board agenda, discussing it in a closed-door executive session, and having the board vote in an open meeting. All that would have to be done before the chief appraiser could issue a legal Notice of Appeal to the ARB and the property owner, then file suit in district court.
“I think Judge Mauzy got it exactly right. I think it [Judge Mauzy’s order] is legal precedence that TCAD must obtain written approval from its board of directors in order to sue a taxpayer,” Michel said. “The chief appraiser cannot rely on a general board resolution issued years before the taxpayer’s protest is even filed as authorization to sue a taxpayer.”
“The chief appraiser can’t appeal whatever she wants to appeal,” Michel said. “The statute was clearly intended for the decision to appeal to be specifically made by TCAD board of directors. It’s an important check and balance to the powers or abuse of power of the chief appraiser.”
Austin attorney Bill Aleshire, who represents property tax consulting firms Texas Protax and Five Stone Tax Advisers, as well as The Austin Bulldog, said, “As this case shows, the Tax Code does not allow an appraisal governing board to delegate its job to the chief appraiser in deciding to file suit against taxpayers who won their ARB protest hearing.
“This is just another example of the TCAD Board shirking its job of oversight of the chief appraiser. The law expects the Board to review each request from the chief appraiser to file suit against a taxpayer.”
Michel said, “TCAD is appealing Mauzy’s order to the Third Court of Appeals in Austin, asking the court to reverse the order. I am confident the Third Court will affirm her ruling.”
TCAD was represented by Austin attorney Mary Sanchez of Everett & Sanchez, and Mark Ryan Trachtenberg. Neither Sanchez or her partner, Karen Evertson, have responded to requests for comment.
In response to this story, TCAD Communications Officer Cynthia Martinez on February 18, 2020, provided a statement to be attributed to Chief Appraiser Crigler: “We will continue to pursue the legal fight to ensure that businesses in Travis County pay their fair share of property taxes.”
Landfill value a longstanding dispute
In this particular case, TCAD sought to overturn the ARB’s decision about the value of the Texas Disposal Systems Landfill (TDSL) located on 345 acres in far south Travis County, just west of Creedmore.
TCAD’s challenge to the ARB’s decision about the landfill’s value seems all the more questionable because, as reported by The Austin Bulldog July 16, 2019, TDSL won a lawsuit against TCAD that cost nearly a million dollars—and lopped off about 90 percent of the market value TCAD had assigned to the property.
The refund to TDSL for taxes it had previously paid on the landfill in 2011 and 2013, with interest, cost about $800,000. That money had to be refunded—not by TCAD but by Del Valle ISD, Travis County, Travis Central Health, and Travis County Emergency Service Districts 11 and 15.
TDSL also won attorney’s fees of $105,000 in that case. TCAD’s own legal expenses were almost $88,000.
TDSL won final judgment in its lawsuit June 6, 2019, including a determination of the landfill’s value to be $1.4 million. But TCAD didn’t skip a beat in issuing a 2019 Notice of Value for $21.7 million—more than 15 times that value.
Using that court decision as evidence, Michel represented TDSL in its formal protest over the landfill’s 2019 valuation. After a hearing the ARB order issued August 26, 2019, determined the 2019 taxable value of the landfill was $2.8 million.
Despite getting smacked with a $1 million loss to TDSL over the landfill’s value just a few months earlier, on September 20, 2019, Crigler filed suit (Cause No. D-1-GN-19-006394). She did so without seeking permission from the current board of directors.
TCAD’s pleadings in that case state, “The market value of defendant’s property is greater than the [$2.8 million] determination of the ARB and the value set by the ARB results in unequal appraisal of subject property.”
Other TCAD suits could be tossed as well
Every still-active lawsuit the chief appraiser filed that relied on the 2017 board resolution is vulnerable to dismissal.
Research indicates four other lawsuits filed by the chief appraiser to appeal an ARB value decision are currently pending:
The Domain Mall—D-1-GN-17-004710 and D-1-GN-18-006672, TCAD v Domain Mall. Attorney Mark Hutcheson, a managing partner of Austin-based Popp Hutcheson, said, “We have also filed suit and we’re trying to work them out. We’re close to getting the cases resolved for the taxpayers at issue.”
Hill Country Galleria—D-1-GN-19-006776 TCAD v Hill Country Galleria. The defendant is represented by Dallas attorney Amy Sallusti of Geary Porter & Donovan PC. She did not return telephone messages seeking comment.
Airport Fast Park—D-1-GN-19-008152 TCAD v Airport Fast Park Austin LP. Dallas attorney Tracy Turner of Brusniak Turner Fine, said she would need to get her client’s permission before commenting.
TCAD sued Catherine Apartments in Cause No. D-1-GN-19-005676. Attorney Michel also represented Catherine Apartments. She said the parties reached an agreed judgment in that case January 8, 2020.
TDSL challenging other ARB values
Two other TDSL lawsuits are still pending against TCAD:
Cause No. D-1-GN-04-004240 for tax years 2014, 2015, 2016, and 2019. This case is set for trial April 6, 2020, Michel said.
Cause No. D-1-GN-17-003382 for tax years 2017 and 2018. No trial date has been set for this case.
Links to related documents:
Related Bulldog coverage:
Appraisal review board and appraisal district sued, January 6, 2020
TCAD flubs public notice for hearing on Proposed 2020 Budget, August 9, 2019
TCAD loses landfill lawsuit at cost of nearly $1 million, July 16, 2019
Ken Martin has been covering local government and politics in the Austin area since 1981 and investigating and reporting on Travis Central Appraisal District since 2011. See more on Ken on the About page.
Email [email protected].
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