Recent Property Tax Cases
Recent Court Opinions
Updated : February 15, 2025
Rocksprings Val Verde Wind, LLC v. Casanova
2024 WL 5248451 (Tex. App. – San Antonio, December 31, 2024, no pet. hist.) (not reported)
Issues: Expert testimony; intangible property
The appraisal district appraised Rocksprings’s wind farm at $176M in 2018. In response to a protest, the ARB cut the value to $101M. The appraisal district took the dispute on to court. At the jury trial, the district presented the expert testimony of an appraiser named DeLacy. He believed that the wind farm was worth $200M based on the cost and income methods of appraisal. Rocksprings’s expert, Grafe, testified to a value of $67M. The two appraisers differed on how to handle the income that the wind farm generated from the sale of federal income tax credits. (The property generated far more in tax credits than it could actually use, and it sold the unused credits to other companies.) They also differed on how to handle the income from contracts through which electricity was sold to certain major consumers. (Purchasers like Wal-Mart paid based on private purchase agreements rather than paying the fluctuating market price.) The jury believed DeLacy and set the value at $197M. Rocksprings appealed.
The court of appeals reversed the trial court’s judgement based on the jury’s findings. The higher court thought that DeLacy had included the value of intangible property in his appraisal. Therefore, his testimony was not reliable, and it did not support the jury’s verdict. The court’s opinion quotes DeLacy’s testimony about role of intangible income in the appraisal of tangible property. According to the court, the tax credits and the private purchase agreements were intangibles which DeLacy had erroneously included in his appraisal. The court of appeals reversed the trial court’s judgment for the district and sent the case back to the trial court for a new trial.
Harris Central Appraisal District v. Houston Pipe Line Co. LP
2024 WL 5048984 (Tex. App. – Houston 1st Dist.], December 10, 2024, no pet. hist.) (to be published)
Issues: Timeliness of appeal; delivering ARB orders
The ARB ruled on Houston Pipe Line’s (HPL) 2022 protest and mailed notice of its order to the company’s tax consultant using certified mail. HPL filed suit to appeal the order five months later. The suit also named the ARB and alleged that the ARB had not delivered notice of its August 29, 2022, order. HPL claimed that its suit was timely because the period for filing had never begun or ended. The ARB and HPL reached an agreement under which the ARB sent HPL another copy of the August 29 order and HPL dropped the ARB from the suit. HPL thought that having the ARB send the order again would make HPL’s suit timely. The appraisal district then filed a plea to the jurisdiction claiming that the suit was not timely because it had not been filed within 60 days of the original delivery of the ARB’s order.
The district provided a declaration from a manager detailing how the ARB’s order and related notice were prepared and mailed by certified mail on August 29 to the tax consultant. Attached were copies of an internal log maintained by the ARB and a screenshot from the USPS website showing that the order was delivered on August 29. HPL provided a declaration from the tax consultant describing his company’s procedures for dealing with incoming mail. He said that there was no record of the company receiving the ARB order and that the company had never failed to record and handle such a notice when it was received. Both sides made objections to the other’s evidence, but the trial court never ruled on the objections. The trial court denied the district’s plea to the jurisdiction, and the district filed an interlocutory appeal.
The court of appeals affirmed the trial court’s decision. The higher court explained the district’s plea couldn’t be granted because the evidence left an unresolved issue of material fact, i.e., when the tax consultant first received notice of the ARB’s order. The district argued that the trial court should have sustained its objections that the declaration of the tax consultant was based on hearsay rather than personal knowledge. The court of appeals refused to consider that argument because the district had not objected to the trial court refusing to rule on the objections to the declaration. The higher court did consider whether the declaration was conclusory but decided that it wasn’t. The tax consultant provided sufficient factual support for his conclusion that his office had not received the ARB’s order when it was originally delivered.
Editor’s Comment: Section 1.07 of the Tax Code says that a notice sent by first class mail is presumed delivered when it is deposited in the mail, but the presumption is rebuttable. Other courts have applied the same rule to notices sent by certified mail, but this court of appeals questioned that ruling. Because there was evidence on both sides of this delivery issue, any presumption that might have arisen was rebutted and it disappeared. Curiously, the court’s opinion did not mention the fact that the district’s evidence showed the ARB’s August 29 order being prepared, mailed, and received all on the same day.
The Compressor cases
Editor’s comment: The three case summaries that follow are all related, and they all involve the same issues. Rather than listing them with other cases in strict chronological order, we have decided to group them together here.
J-W Power Co. v. Irion County Appraisal District
2024 WL 4982488 (Tex. App. – Austin, December 5, 2024, no pet. hist.) (to be published)
Issues: Corrections to appraisal rolls
This opinion harkens back to the pipeline compressor controversy that began years ago. The Texas Supreme Court surprised everyone in 2018 when it ruled that the Tax Code’s method for appraising leased heavy equipment was constitutional. At that time, heavy equipment owners had filed many unsuccessful protests against appraisal districts who had insisted on appraising their property at its market value. But the owners had not appealed the adverse rulings from ARBs. As a result of the Supreme Court’s ruling, the owners tried filing motions to correct appraisal rolls under §25.25 of the Tax Code raising the same claims that ARBs had previously rejected. Lower courts ruled that the owners could not reprise the same rejected claims, but the Supreme Court overruled them. So, the lower courts were left to consider the merits of the §25.25 motions. In this case, the trial court entered a summary judgment in favor of the appraisal district, and J-W Power appealed once again.
The court of appeals affirmed the summary judgment for the district. The higher court explained that there had not been any multiple appraisals of the compressors in question. The compressors located in Irion County had been appraised there. J-W Power had filed declarations and monthly statements with the appraisal district in Ector where it claimed that the compressors were really taxable, but no taxes on the compressors were ever assessed in Ector County. J-W Power filing forms in Ector County did not mean that its compressors were actually appraised there.
The court of appeals also explained that the compressors did exist in Irion County. Even if J-W Power was correct that the law made the compressors legally taxable in Ector County, there was no question that they actually existed in Irion County. There was no basis for deleting them from the appraisal rolls in Irion County as property that did not exist at the locations shown on those rolls.
J-W Power Co. v. Sterling County Appraisal District
2024 WL 4982490 (Tex. App. – Austin, December 5, 2024, no pet. hist.) (to be published)
Issues: Corrections to appraisal rolls
This opinion involves the same issue decided in J-W Power Co. v. Irion County Appraisal District, discussed above. The only difference is the counties involved. The Austin Court of Appeals decided both cases and its opinions are almost identical.
J-W Power Co. v. Jack County Appraisal District
2024 WL 5162690 (Tex. App. – Fort Worth, December 19, 2024, no pet. hist.) (not reported)
Issues: Corrections to appraisal rolls
This case is only slightly different from the two J-W Power cases described above. In this case, J-W Power was contesting the appraisal of its 86 compressors located in Jack County. It argued that the compressors were also appraised as part of its heavy-equipment inventory in Palo Pinto County. The Palo Pinto CAD did have a heavy-equipment inventory account on its rolls for J-W Power in the relevant years. That account had been created in response to an order from a court in Palo Pinto County. The court order identified particularly the compressors that were included in the inventory account. Fourteen of those were physically located in Jack County, where they had also been appraised by the Jack CAD. Other evidence also showed that J-W Power reported the 14 compressors to the Palo Pinto CAD and paid taxes on them in Palo Pinto County. The Fort Worth Court of Appeals ruled that J-W Power had shown that those 14 compressors had been the subject of multiple appraisals because they were on the rolls in two counties. The court ordered that the 14 compressors be removed from the Jack CAD’s appraisal rolls. J-W Power’s other 72 compressors were not the subject of multiple appraisals. The Fort Worth Court of Appeals agreed with the Austin Court that a compressor that physically existed in the place described on an appraisal roll could not be said to have not existed in the form or at the location described in the roll.
Oncor Electric Delivery Co. NTU LLC v. Young Central Appraisal District
2024 WL 4455676 (Tex. App. – Fort Worth, October 10, 2024, no pet.) (not reported)
Issues: Appealability of ARB action; agreement resolving protest
This case is virtually identical to Oncor Electric Delivery Company NTU LLP v. Wilbarger County Appraisal District, which is summarized below. The Fort Worth Court of Appeals followed the ruling of the Texas Supreme Court in the Wilbarger County case.
Campbell v. Travis Central Appraisal District
2024 WL 3973900 (Tex. App. – Austin, August 29, 2024, no pet. hist) (not reported)
Issues: Homestead cap
In 2019, Campbell began renovating and substantially expanding his home. When the appraisal district appraised the property for 2020, the appraiser concluded that most but not all of the work had been done before January 1, 2020. The appraiser adjusted the homestead value cap to account for the value of partially finished new improvements. Cambell didn’t protest the 2020 appraisal. In 2021 the district calculated the cap and added more new-improvement value to account for work done after January 1, 2020. Campbell protested alleging that all the work had been finished in 2019 and that there were no new improvements added in 2020. When the ARB ruled against him, Campbell sued the appraisal district. Following a non-jury trial, the trial court ruled against Campbell. The court found that there were new improvements added to the house in 2020 and that the district had correctly determined the new-improvement value for that year. Campbell appealed.
The court of appeals affirmed the trial court’s judgment for the district. The court of appeals found that the evidence was legally and factually sufficient to support the judgement. Campbell had the burden of proof, but he failed to prove that the new improvements were all finished before January 1, 2020. The court cited evidence including: a conversation that the appraiser had with the contractor in late 2019; change orders from Campbell in late 2019; a January 2020 photo showing ongoing renovation; and a certificate of occupancy issued in 2020.
Editor’s Comment: The court of appeals generally approved the way that the district had dealt with Campbell’s renovation. The 2020 appraisal should have reflected the market value added to the house by work done in 2019, and the 2021 appraisal should have reflected the market value added in 2020.
Kamy Investments, LLC v. Denton County Appraisal Review Board
2024 WL 3611451 (Tex. App. – Fort Worth, August 1, 2024, no pet. hist.) (not reported)
Issues: Governmental immunity
Kamy failed to appear for ARB hearings concerning 2022 protests on its various properties. Kamy then filed multiple requests with the Comptroller seeking limited binding arbitrations. The ARB and Kamy agreed that the ARB would schedule new hearings and Kamy would withdraw its arbitration requests. But Kamy didn’t withdraw its requests. Instead, it went through with the arbitrations and lost most of them. Months later, Kamy sued the ARB claiming that it had a contractual right to new hearings on the basis of the agreement. The ARB filed a plea to the jurisdiction claiming that it was immune from the suit. The trial court dismissed the case, and Kamy appealed.
The court of appeals affirmed the trial court’s order and ruled that the ARB was immune. The higher court explained that the ARB, as a governmental unit is immune from suit unless that immunity has been waived somehow. The court rejected several of Kamy’s theories about how the ARB’s immunity might have been waived. The Tort Claims Act did not allow the suit against the ARB because no tort was involved. The limited-binding-arbitration law, §41A.015 of the Tax Code, did not allow the suit. Section 41.45(f) allows a property owner to sue an ARB on a claim that the ARB wrongfully refused to hear the owner’s protest. In this case, however, the ARB had attempted to conduct hearings, but Kamy had not appeared. Even when a suit is allowed by §41.45(f), the suit must be filed within sixty days after the property owner knows that the ARB will not hear his/her protest. Kamy’s suit was filed too late.
Further, a governmental entity may not be sued over a settlement agreement unless it could be sued over the underlying claim that was settled. Thus, the agreement between the ARB and Kamy did not create a right to sue the ARB where no such right had existed before. Chapter 271 of the Local Government Code sometimes allows a governmental entity to be sued over a contract for goods or services, but the agreement between Kamy and the ARB did not involve goods or services. There was no waiver of the ARB’s immunity.
Texas Disposal Systems Landfill, Inc. v. Travis Central Appraisal District
2024 WL 3076317 (Tex., June 21, 2024)
Issues: Judicial appeals; unequal appraisals
Landfill filed a protest alleging the incorrect and unequal appraisal of its property. Right before the ARB hearing, Landfill withdrew its incorrect-value claim. It relied solely on its unequal-appraisal claim. The ARB reduced the appraised value substantially. The appraisal district then filed suit to appeal the ARB’s order. The district alleged that the value set by the ARB was incorrect and unequal compared to other values. Landfill filed a plea to the jurisdiction arguing that the district could not allege an incorrect appraisal in the appeal because Landfill had withdrawn its incorrect-value claim before the ARB. The trial court granted the plea to the jurisdiction and dismissed the case. The district appealed.
The court of appeals reversed the trial court’s order and reinstated the case. The intermediate court ruled that the district could appeal on the grounds of market value. The district had nothing to complain about with respect to the appraised value until the ARB lowered that value. Then, the district’s only option was to take the matter to court. The Supreme court decided to consider the case.
The Supreme Court agreed that the trial court had jurisdiction over the appraisal district’s lawsuit, but the high Court’s reasoning differed substantially from that of the court of appeals. The Supreme Court ruled that the appraisal district could not prevail on a claim that was not considered by the ARB. The ARB considered only an unequal-appraisal claim, so the trial court could not grant relief to the district on the basis of an incorrect-value claim. The high Court sent the case back to the trial Court for further consideration.
One justice issued a dissenting opinion saying that the district should be able to raise an incorrect-value claim in court even if that claim was not decided by the ARB. The dissenting justice also disagreed about whether the failure to satisfy a statutory requirement was jurisdictional.
Editor’s Comment: In recent years, the Supreme Court has been focusing extensively on questions concerning whether statutory requirements are jurisdictional. In many instances, this is a distinction without a difference. It is the distinction between a court saying, “We cannot even consider your claim” and a court saying, “We can consider your claim, but you lose.” Still the Court celebrates this distinction with the enthusiasm of a puppy with a new chew toy. The justices generally favor saying, “A court can consider your claim, but you lose.”
Also noteworthy is the Court’s ambivalent discussion of whether a property’s market value is relevant to an unequal-appraisal claim. Earlier opinions from Texas courts have implied that market value has little relevance in a case involving the direct comparison of appraised values (rather than a comparison of appraisal ratios). Some courts have restricted an appraisal district’s ability to even discover evidence of market value. There is some language in this new opinion indicating greater relevance of market value to an unequal-appraisal claim.
Oncor Electric Delivery Company NTU LLP v. Wilbarger County Appraisal District
2024 WL 30757706 (Tex., June 21, 2024)
Issues: Appealability of ARB action; agreement resolving protest
In 2019, an electric utility called Sharyland owned property including two types of electrical lines, one type more valuable than the other. Sharyland reported quantities of the two types of lines to the appraisal districts in several West Texas counties. It protested the districts’ appraisals but then entered agreements with the districts concerning the total value of its lines. Sharyland sold the lines to Oncor. Oncor filed motions under §25.25(c) of the Tax Code to correct the 2019 appraisal rolls claiming that Sharland had reported the wrong quantities of the two types of lines. Sharyland had allegedly reported too much of the more valuable line and too little of the less valuable line, so the total value was less than the value to which Sharyland had agreed. The ARBs determined that they could not hear the motions because the matter had already been resolved by agreements. Oncor then sued the districts and the ARBs. Both responded with pleas to the trial court’s jurisdiction. After a hearing, the trial courts dismissed the case. Oncor appealed.
The appeals produced different results from different courts of appeals. The Amarillo Court of appeals, considering the case from Wilbarger County, ruled against Oncor. The Austin Court of Appels, considering the case from Mills County, ruled for Oncor. The Texas Supreme Court agreed to consider the two cases.
The high Court ruled in favor of Oncor, but its ruling was very narrow and avoided many sensitive issues. The Court ruled that the trial courts did have jurisdiction over Oncor’s appeals. The agreements with the appraisal districts might mean that Oncore would ultimately lose its cases, but they did not mean that the trial courts could not even consider the cases. The Court’s opinion is unclear in many respects. Some parts indicate that the ARB’s never had the authority to consider Oncor’s motions, but other parts indicate that the ARB’s should have considered the motions but denied them based on the agreements. The trial courts should have considered Oncor’s suits even if the ARBs could not consider Oncor’s motions. A court faced with an agreement between an appraisal district and a property owner could at least interpret the agreement and determine its validity. In the Court’s words, “[A]though limitations on an ARB's authority to review or reject a Section 1.111(e) agreement may restrict the scope of a court's review, they do not defeat its jurisdiction.” The Court sent the cases back to the trial courts for further proceedings.
The Supreme Court’s opinion is probably most notable for the issues that it did not decide. Those issues include: 1) whether a property owner can escape an agreement by showing that the parties were mistaken about something when they made it; 2) whether Oncor could sue the ARBs; and 3) whether the errors alleged by Oncor could be corrected under §25.25(c) or (d).
Johnson v. Bastrop Central Appraisal District
2004 WL 3073766 (Tex. App. – Austin, June 21, 2024, no pet. hist.) (not reported)
Issues: Vexatious litigants; limited binding arbitration
Johnson had a long history of filing lawsuits against the appraisal district and people associated with it. Following an unsuccessful protest, he filed another suit claiming that his land qualified for 1-d-1 appraisal in 2022. The district filed a motion asking the trial court to declare Johnson a vexatious litigant and to require a surety bond in order for him to continue with the suit. The court granted the district’s motion. Instead of filing a bond, however, Johnson filed a plea to the jurisdiction seeking the dismissal of his own lawsuit. His theory was a little strange. He claimed that he had filed for limited binding arbitration following his ARB hearing, and that limited binding arbitration somehow deprived the ARB of the authority to determine his protest. Thus, there was no valid order of the ARB and nothing for him to appeal to the trial court. The trial court never ruled on Johnson’s plea to the jurisdiction. The court dismissed the case in response to the district’s motion because Johnson had never filed the required bond. Johnson appealed.
The court of appeals reversed the trial court’s ruling that Johnson was a vexatious litigant. The higher court explained that the district bore the burden of proving that Johnson had no reasonable probability of prevailing in his suit. The court was not satisfied with the evidence offered by the district to show that Johnson’s land did not have the required history of agricultural use. The evidence showed that Johnson had used his land for raising and training horses for polocrosse or sale or for feeding them fodder. According to the court’s opinion, however, the evidence was not sufficient to prove that agriculture was not the principal use of the land.
The court of appeals also addressed and rejected Johnson’s theory about limited binding arbitration. The court explained that the ARB’s order determining Johnson’s protest was final and appealable even though he had filed for limited binding arbitration. The ARB had the duty to issue the order notwithstanding the arbitration, and Johnson had the right to appeal it to the trial court. The court of appeals sent the case back to the trial court for further proceedings.
Bexar Appraisal District v. Johnson
2024 WL 2869321 (Tex., June 11, 2024)
Issues: Disabled veteran’s homestead exemption
Gregory and Yvondia Johnson were disabled veterans, married to each other but separated and living in different homes. The homes were both owned by the Johnsons jointly. The residence occupied by each spouse was his/her principal residence. Their disabilities were so severe that each of them could qualify for the 100% homestead exemption described in §11.131 of the Tax Code. Gregory was receiving the exemption on his residence when Yvondia applied for the exemption on her residence. The appraisal district denied the exemption on the theory that two spouses could not receive the same exemption on two different properties. Following an unsuccessful protest, she sued the district. The trial court entered a summary for the district. The court of appeals reversed the trial court and ruled for Yvondia. Then the Texas Supreme Court agreed to consider the case.
The high Court upheld the court of appeals and ruled that Yvondia could receive the exemption. The Court explained that several types of homestead exemptions are set out in §11.13, e.g., general school-tax exemptions and over-65 exemptions. That section includes prohibitions against property owners “double-dipping” the exemptions. Section 11.131, however, does not include the same prohibitions against double-dipping. It bestows a 100% homestead exemption on an individual disabled veteran without regard to whether he/she is married or part of a family. There was no dispute that Yvondia’s residence qualified as her homestead or that she was a severely disabled veteran. There was no reason to deny her the exemption. The Supreme Court’s ruling was limited to the disabled veterans’ homestead exemption and did not address other types of homestead exemptions.
Two of the Supreme Court’s justices dissented. They would have denied Yvondia the exemption. Generally, they reasoned that the Tax Code incorporates a traditional understanding that a family can receive only one homestead exemption of a particular type.
J-W Power Co. v. Sterling County Appraisal District
2024 WL 2869325 (Tex., June 7, 2024)
Issues: Correcting appraisal rolls
This is a lingering remnant of the compressor cases. The Tax Code directs appraisal districts to appraise leased heavy equipment (including pipeline compressors) at values far below actual market value. When that provision was enacted, appraisal districts resisted, arguing that the Texas Constitution required them to appraise property at market value. The dispute resulted in hundreds of lawsuits. In 2018, the Texas Supreme Court shocked everyone by ruling that the Constitution did not require appraisals based on market value. EXLP Leasing, LLC v. Galveston Central Appraisal District, 554 S.W.3d 572 (Tex. 2018). The Court upheld the Tax Code’s provisions (§§23.1241 and 23.1242). The Court further interpreted the Code to make compressors taxable at the owner’s location, not where the compressors were actually located. Some property owners, including J-W Power began trying to claim the benefit retroactively for past years.
J-W Power filed protests concerning its compressors located in Sterling County for several years prior to 2018. The ARB ruled against it, but J-W Power did not appeal. Then after the Supreme Court’s ruling in EXLP Leasing, J-W Power tried to contest the 2013-2016 appraisals retroactively by filing motions with the ARB under §25.25(c). It claimed that its compressors were subjected to multiple appraisals and that they had not existed in Sterling County. The ARB denied the motions, and J-W Power sued the district. The district asserted the defense of res judicata; it argued that the question of whether the property should be appraised as heavy-equipment inventory had already been finally decided by the ARB in the earlier protests and could not be raised again. The trial court entered summary judgment for the district, and J-W Power appealed.
The court of appeals affirmed the summary judgment for the district. J-W Power’s motion under §25.25(c) was the same claim asserted in the earlier protests. J-W Power cited §25.25(l), which states that a property owner may file a §25.25(c) motion even if the owner previously filed a protest relating to the value of the property. The court explained that the protests had not been protests about market value. They had specifically raised J-W- Power’s claim about heavy-equipment inventory. Section 25.25(l) did not allow J-W Power to raise the same claim again in a motion. When the ARB determined the protests, J-W Power had a ripe claim that it should have appealed.
The Texas Supreme Court then decided to hear the case. The high Court reversed the court of appeals. The Court reasoned that despite the language of §25.25(l) a property owner could raise a non-value claim in a protest, have that claim decided by the ARB, and then raise the identical claim in a §25.25(c) motion. The Court left open the question of whether the principle of res judicata might ever apply to an ARB order. The Court sent the case back to the court of appeals for further consideration.
Editor’s Comment: Following the Supreme Court’s opinion in EXLP Leasing, we wondered whether the Couty would ever again be able to make a decision so egregiously wrong. But they have done it. This opinion rejects the principle of res judicata, the concept that the same parties cannot litigate the same claims before the same tribunal over and over again. The principle is a cornerstone of Anglo-American law.
The legislature expressly said that a property owner who had raised a value claim in a protest before an ARB could later raise a different claim in a §25.25(c) motion. For example, a property owner might file a protest alleging that the appraised value of his/her property was unequal compared to the values of comparable properties. That would not prevent the owner from later filing a §25.25(c) motion alleging that the property appeared on the appraisal roll more than once. The Supreme Court now substitutes its own rule, a rule that a property owner who files a protest on any grounds can later assert the identical claim in a §25.25(c) motion.