Victory for Client in Tax-Appraisal-Protest Dispute in Austin Court of Appeals

In a mandamus proceeding before the Austin Court of Appeals, DGC client Catherine Tower, LLC prevailed in a landmark tax-appraisal-protest dispute implicating the rights of every real-property owner in the State of Texas.  See In re Catherine Tower, LLC, No. 03-17-00735, 2018 WL 3041088 (Tex. App.---Austin June 20, 2018, orig. proceeding).

In general, Texas taxpayers may protest their governmental property valuation in one of two ways:  (1) by challenging the governmental appraising entity's analysis in determining the property's fair-market value---i.e., a "fair-market-value" challenge; or (2) by challenging the governmental appraisal district's valuation of a property relative to the government's appraisal of other properties---i.e., an "equity-based" or "unequal-appraisal" challenge. 

This case involved a pivotal issue for Texas landowners:  whether evidence of a property's fair-market value is relevant in a Texas landowner's equity-based challenge to a governmental appraisal district's property valuation under Texas Tax Code Section 41.43(b)(3).  The Travis Central Appraisal District argued that an equity-based challenge and a fair-market-value challenge are one and the same, and that, therefore, market-value evidence is relevant in an equity-based protest.  Catherine Tower, on the other hand, explained that the two challenges require independent analyses under Texas law, and market value is not a factor in an equity-based challenge under the plain terms of Section 41.43(b)(3).  The Court agreed with Catherine Tower, writing:

[T]he analysis prescribed by Section 42.26(a)(3) does not independently determine the market value of either the subject property or the comparison properties.  Essentially, one merely takes the appraised values of the subject property and of the comparison properties as "found on the tax rolls" and compares them, and "the only independent analysis required is adjusting the appraised values [of the comparison properties] to put the properties on equal footing.  Section 42.26(a)(3) thereby differs from---and represents a less burdensome alternative to---the other statutory means through which a taxpayer may establish an unequal-appraisal claim. . . .  And that is the very purpose of Section 24.26(a)(3), as Catherine Tower emphasizes.

Id. at *5.

On mandamus, Catherine Tower was represented by Ryan Clinton, along with trial counsel Lorri Michel of the law firm Michel Gray in Austin.  The Austin Court of Appeals denied TCAD's petition for rehearing en banc.

Resources:

In re Catherine Tower Opinion
Catherine Tower's Petition for Writ of Mandamus