Friday, May 11, 2012

Running the risk of missing the appellate deadline


The appellate clock keeps ticking
Can the 15-day grace period to file notice of appeal after it is due be taken for granted? -- Don’t be too sure. The deadline reprieve is not a matter of right, even if a very good excuse -- not to mention a compelling reason for tardiness -- may not be required under established precedent.   In an opinion released yesterday, the appellate panel keeps up the reader’s suspense for a few paragraphs while discussing the rule and the circumstances in the particular case, but ultimately says it will grant the extension and consider the appeal on the merits. Pasted below is the relevant part of the lengthy opinion, which constitutes yet another installment in a veritable litigation saga, and also offers some of other interesting stuff that makes fodder for separate blawg posts (such as attorney immunity from tort liability for wrongful conduct engaged in in the course of representing a client and dismissal on special exception for failure to state a legally viable cause of action).  
Easton v. Phelan
No. 01-10-01067-CV (Tex.App. – Houston [1st Dist.] May 10, 2012, no pet. h.)
Timeliness of notice of appeal
  
Because the August 30 orders constituted a final judgment and Easton and Whatley filed a timely motion for new trial, the parties had 90 days after the orders were signed to file a notice of appeal.  See Tex. R. App. P. 26.1(a); Farmer v. Ben E. Keith Co., 907 S.W.2d 495, 496 (Tex. 1995) (per curiam).  The 90th day following the date that the orders were signed was Sunday, November 28, 2010.  Because the 90th day was a Sunday, the actual deadline by which the parties should have filed a notice of appeal was the following day, Monday, November 29.  See Tex. R. App. P. 4.1(a).  Since Easton and Whatley filed notice of the present appeal on December 6, the filing was untimely.

Before filing their own motion to dismiss this appeal, Easton and Whatley argued in response to the appellees’ motions to dismiss that, in the event that this court concludes that the notice of appeal was untimely, we should treat their notice of appeal as a motion to extend the time for filing an appeal.  They assert that a court of appeals must exert jurisdiction whenever a notice of appeal is filed within 15 days of the applicable deadline.  See Tex. R. App. P. 26.3.

Notices of appeal filed within the 15 days of the relevant deadline for filing such a notice are treated as implied motions for extension of time to file notice of appeal.  Verburgt v. Dorner, 959 S.W.2d 615, 617 (Tex. 1997).  However, contrary to Easton and Whatley’s assertion, we are not obliged to grant an implied motion for extension filed within the 15-day grace period.  See Tex. R. App. P. 26.3 (providing that “appellate court may extend the time to file the notice of appeal,” emphasis added).  Whether we grant a motion for extension hinges on whether the appellant provides a reasonable explanation for the untimeliness of the filing, that is, a “plausible good faith justification for filing their notice of appeal when they did.”  Hone v. Hanafin, 104 S.W.3d 884, 887 (Tex. 2003) (per curiam); see also Tex. R. App. P. 10.5(b)(1)(C) & 26.3(b).  “Absent a finding that an appellant’s conduct was deliberate or intentional, the court of appeals should ordinarily accept the appellant’s explanations as reasonable.”  Hone, 104 S.W.3d at 887.  Thus, under the liberal standard applied in these cases, any reason short of deliberate or intentional noncompliance qualifies as reasonable.  See id. at 886–87.  A misunderstanding of the law and the appellate timetables may be considered a reasonable explanation.  Garcia v. Kastner Farms, Inc., 774 S.W.2d 668, 670 (Tex. 1989) (holding that appellant had provided reasonable explanation when he erroneously believed that appeal bond could only be filed after receiving trial court’s findings of fact and conclusions of law); but see Kidd v. Paxton, 1 S.W.3d 309, 310 (Tex. App.—Amarillo 1999, no pet.) (finding counsel’s excuse “implausible and, therefore, unreasonable” when purported misunderstanding of law would not explain why notice of appeal was filed 26 days beyond counsel’s hypothetically correct deadline).  For this court to grant an extension, the appellant is not required to concede that its notice of appeal was untimely filed.  Hone, 104 S.W.3d at 888.

On December 6, 2010, less than 30 days after the trial court denied their motion for new trial, Easton and Whatley filed a second notice of appeal from “the court’s Judgment signed August 30, 2010, and the denial of the Motion for New Trial rendered on November 8, 2010.”  After the Locke Lord attorneys and Thompson Coe attorneys filed motions for involuntary dismissal of the appeal for want of jurisdiction, see Tex. R. App. P. 42.3(a), Easton and Whatley maintained in a written response filed on February 14, 2011 that “[t]he denial of the motion for new trial, by itself, is a stand alone and appealable order which forms the basis of a point of error in the appeal.”  In their opening brief on the merits of this case, they allege that the trial court denied their motion for new trial and that a “timely notice of appeal was given . . . to the denial of the motion for new trial.”  Moreover, in their reply brief, they state, “If this Court should now find that the judgment is final . . . then the appellate timetable began when the district court denied the motion for new trial, and not before, as a timely-filed motion for new trial extends the time period.”

From Easton and Whatley’s filings in this court, it is apparent that they believe that the appellate timetables commence from a denial of a motion for new trial and that filing a notice of appeal within 30 days of such denial is timely.  Their apparent belief is mistaken, because even when the trial court denies a motion for new trial, the appellate timetables commence from the date that the final judgment is signed.  See Tex. R. App. P. 26.1(a).  Nevertheless, a mistake regarding the law is a reasonable explanation for the purpose of deciding whether to grant an implied motion for extension.  See Garcia, 774 S.W.2d at 670; Doe v. Brazoria Cnty. Child Protective Servs., 226 S.W.3d 563, 571 (Tex. App.—Houston [1st Dist.] 2007, no pet.).  Therefore, treating the notice of appeal as an implied motion for extension of time to file a notice of appeal, we grant the motion.  Tex. R. App. P. 26.3. 

SOURCE: HOUSTON COURT OF APPEALS - 01-10-01067-CV – 5/10/12

Thursday, May 10, 2012

Motion for summary judgment must state grounds – Duh!

MSJ 101: State your defense when moving for summary judgment on an affirmative defense (and plead it, too).
  
Failure to set forth affirmative defenses can’t be cured on appeal from improperly granted traditional summary judgment. Rather obvious point, but this opinion, released May 10, 2012, is still useful, as it provides a nice collection of caselaw cites that non-movants might want to invoke when faced with a woefully deficient motion for summary judgment -- with a view of avoiding an unnecessary appeal on a purely procedural issue. Better still if would-be movants who don't know what they are doing had a look at this opinion first.   
 EXCERPT FROM OPINION BY JUSTICE MASSENGALE 

We review de novo the trial court’s ruling on a motion for summary judgment.  Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).  When both sides move for summary judgment and the trial court grants one motion and denies the other, we review the summary-judgment evidence presented by both sides and determine all questions presented.  Id. at 848; Comm’rs Court of Titus Cnty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997).  In such a situation, we render the judgment the trial court should have rendered.  Mann Frankfort Stein & Lipp Advisors, 289 S.W.3d at 848; Agan, 940 S.W.2d at 81.

The party moving for traditional summary judgment bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c); see also Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215–16 (Tex. 2003).  A plaintiff moving for summary judgment must conclusively prove all essential elements of its claim.  See Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).  A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence.  See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).  If the movant meets its burden, the burden then shifts to the nonmovant to raise a genuine issue of material fact precluding summary judgment.  See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).  The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence.  Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam). 

A defendant moving for summary judgment must conclusively negate at least one essential element of each of the plaintiff’s causes of action or conclusively establish each element of an affirmative defense.  Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).  When reviewing a summary judgment, a court of appeals should consider summary judgment grounds that the trial court rules on and the movant preserves for appellate review that are necessary to a final disposition of the appeal.  Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).  In addition, in the interest of judicial economy, the appellate court may consider other grounds that the movant preserved for review and the trial court did not rule on.  Id. 

A motion for summary judgment must “state the specific grounds therefor.”  Tex. R. Civ. P. 166a(c); McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341–42 (Tex. 1993) (“a motion for summary judgment must itself expressly present the grounds upon which it is made”); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex. 1979).  A motion for summary judgment must identify or address the cause of action or defense at issue and its elements.  Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex. 1990).  “[A] trial court cannot grant a summary judgment motion on grounds not presented in the motion.”  Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009); see McConnell, 858 S.W.2d at 341.  “In determining whether grounds are expressly presented, we may not rely on briefs or summary judgment evidence.”  Sci. Spectrum, 941 S.W.2d at 912.

When a motion does not state any grounds for summary judgment, the non-movant should file exceptions in the trial court.  McConnell, 858 S.W.2d at 342.  Nevertheless, Rule of Civil Procedure 166a(c) requires the party moving for summary judgment to show that he is “entitled to judgment as a matter of law on the issues expressly set out in the motion.”  Tex. R. Civ. P. 166a(c).  Therefore, even if the non-movant did not except to the motion in the trial court, he may argue on appeal that the motion did not set forth sufficient grounds for summary judgment.  McConnell, 858 S.W.2d at 342; Clear Creek Basin Authority, 589 S.W.2d at 678 (“While it would be prudent and helpful to the trial court for the non-movant always to file an [exception,] answer or response, the non-movant needs no [exception,] answer or response to the motion to contend on appeal that the grounds expressly presented to the trial court by the movant’s motion are insufficient as a matter of law to support the summary judgment.”).  When a motion states one or more grounds for summary judgment, summary judgment cannot be upheld based on a different ground.  Sci Spectrum, 941 S.W.2d at 912. 

In APPELLANT’s fourth, fifth, and sixth issues, APPELLANT contends that the trial court erred by granting summary judgment because the motion for summary judgment did not raise an affirmative defense or present any claims or arguments to defeat APPELLANT’s causes of action.  The MOVANTS’ motion states that it “embraces their affirmative defenses as to all claims and issues raised by [APPELLANT].”  It further states that “[t]here is no genuine issue as to any material fact necessary to establish each and every element of Defendants’ affirmative defenses and Defendants are entitled to judgment against [APPELLANT], as a matter of law.”  Likewise, the final summary judgment order recites that “the Court finds that there is no genuine issue as to any material fact regarding Defendants’ affirmative defenses to the claims and allegations raised by [APPELLANT] and that Defendants are entitled to judgment in this cause, as a matter of law.”

“An affirmative defense is a matter asserted in avoidance of a party’s argument or position, rather than a matter asserted in denial of that party’s position.”  Compass Bank v. MFP Fin. Servs., Inc., 152 S.W.3d 844, 851 (Tex. App.—Dallas 2005, pet. denied); see Gorman v. Life Ins. Co. of N. Am., 811 S.W.2d 542, 546 (Tex. 1991) (“Pleading an affirmative defense permits introduction of evidence which does not tend to rebut the factual propositions asserted in the plaintiff's case, but which seeks to establish an independent reason why the plaintiff should not recover. . . .  In short, an affirmative defense is one of avoidance, rather than a defense in denial.”).  The MOVANTS did not plead any affirmative defense in their answers.  Although an unpleaded affirmative defense may support a summary judgment when raised in the motion, see McConnell, 858 S.W.2d at 339, the MOVANTS’ motion for summary judgment did not identify any particular affirmative defense or any elements of an affirmative defense.  See Roberts, 811 S.W.2d at 146 (“Grounds may be stated concisely . . . [b]ut they must at least be listed in the motion.”).  We hold that the motion for summary judgment did not specifically state grounds of an affirmative defense that could support the trial court’s judgment.  Tex. R. Civ. P. 166a(c); McConnell, 858 S.W.2d at 341–42.  We sustain APPELLANT’s sixth issue.         

Although the trial court expressly based its ruling on affirmative defenses, in the interest of judicial economy, we will consider all grounds for summary judgment that the MOVANTS properly presented to the trial court.  See Cincinnati Life Ins., 927 S.W.2d at 625.  Their motion for summary judgment stated that APPELLANT was suing to set aside a “(deed of trust) foreclosure sale,” that the MOVANTS sought entry of a take-nothing judgment against APPELLANT, that APPELLANT’s claims “are simply without merit,” that APPELLANT’s “claim that there is a defect in the chain of title is simply without merit, as can be seen by the attached Exhibits,” that “Defendants are guilty of no wrongdoing,” and that “there is no merit to any of Plaintiff’s claims and allegations.”

Aside from stating that APPELLANT was seeking to set aside a foreclosure sale, the motion does not identify any of APPELLANT’s alleged causes of action.  It does not refer to any of the elements of any cause of action.  See Black, 797 S.W.2d at 27.  It does not explain how the lack of merit in APPELLANT’s contention of an earlier forgery in the chain of title relates to all of her alleged causes of action or why the court should render a take-nothing judgment if presented with conclusive proof that there is no defect in the chain of title.  The recitation of facts and the history of the transaction begins with Julia’s parents’ purchase of the house in question and does not anywhere address the alleged earlier forgery.  Although the MOVANTS’ appellate brief fills many of the gaps apparent in the motion for summary judgment, “summary judgments must stand on their own merits,” Clear Creek Basin Authority, 589 S.W.2d at 678, and we cannot uphold a summary judgment on the basis of “unstated” grounds.  See Roberts, 811 S.W.2d at 144.  Accordingly, we conclude that the MOVANTS’ motion was insufficiently specific as to the grounds upon which they sought summary judgment, and we hold that the trial court erred by granting summary judgment.  See McConnell, 858 S.W.2d at 342; Siegert, 961 S.W.2d 349–50.  Because this holding requires that we reverse and remand for further proceedings in the trial court, we need not address APPELLANT’s first three issues.
Conclusion
We reverse the trial court’s final summary judgment and remand for further proceedings.

SOURCE: HOUSTON COURT OF APPEALS – 01-11-00117-CV - 5/10/12 (Name of complaining party on appeal replaced with descriptive label “APPELLANT”, names of parties who filed defective motion in the 55th District Court below “MOVANTS”)  

Taxing entities successfully appeal to have penalties added to judgment for attorney's delinquent busines property taxes


Trial court had apparently cut Bellaire attorney who was behind in paying local taxes on personal business property some slack by not awarding penalty amounts in tax suit in addition to delinquent taxes; but court of appeals finds fault with such judicial leniency in appeal brought by a bevy of dissatisfied taxing entities, reverses the judgment, and remands for calculation and assessment of penalties.
  
City of Bellaire et al v. Sewell , No. 01-11-00131-CV (Tex.App.- Houston [1st Dist.] May 10, 2012, no pet. h.)
  
OPINION BY JUSTICE KEYES
 
Appellants, Harris County, the Harris County Department of Education, the Port of Houston Authority of Harris County, the Harris County Flood Control District, the Harris County Hospital District, the Houston Independent School District, and the Houston Community College System (collectively, “the taxing authorities”), sued Efrem Sewell, d/b/a The Law Offices of Efrem D. Sewell, P.C. (“Sewell”), to recover delinquent ad valorem taxes on Sewell’s business personal property.  The City of Bellaire (“the City”) intervened, also seeking delinquent ad valorem taxes.  The trial court awarded the delinquent base tax amounts to the taxing authorities and the City, but it did not award the penalties and interest that had accrued on the delinquent taxes.  In one issue, the taxing authorities and the City contend that the trial court erred by failing to award them the penalties and interest to which they were statutorily entitled under the Texas Tax Code.
 
We reverse and remand.
 
Background
 
The taxing authorities brought suit against Sewell for delinquent ad valorem taxes on his business personal property for the tax years 2002–2008 and sought $22,991.62 in delinquent taxes, penalties for failure to file statutorily required rendition statements, and statutory penalties and interest.  It is undisputed that Sewell did not render his business personal property for any of the tax years at issue.  The taxing authorities additionally sought recovery of “all delinquent taxes, penalties and interest, including taxes, penalties and interest becoming delinquent during the pendency of this suit,” such as the taxes and the associated penalties and interest for the 2009 tax year, which became delinquent during the pendency of the suit.  The taxing authorities joined the City as a party because it “may have a claim and lien for delinquent taxes against all or part of the same property.”  The City subsequently intervened and sought recovery of $4,542.71 in delinquent taxes, penalties, and interest for the 2002–2008 tax years and “all additional taxes which become delinquent on such property prior to judgment, as well as any additional penalties and interest which accrue prior to or after judgment.”
  
At a bench trial on November 29, 2010, the taxing authorities and the City introduced certified copies of Sewell’s delinquent tax statements for tax years 2002–2009, issued by the Harris County Tax Assessor-Collector, which reflected the base tax owed and the statutory penalties, interest, and rendition penalties assessed.  Sewell argued that collection of the delinquent taxes, penalties, and interest for the 2002–2004 tax years was barred by limitations, and the trial court agreed and rendered judgment to this effect.[1]  The final judgment included a table setting out the delinquent base tax, the penalties and interest accrued, and the total amounts owed to Harris County,[2] the Houston Independent School District, the Houston Community College System, and the City.  These amounts corresponded to the entries for the base taxes, penalties, and interest for each taxing unit for the tax years 2005–2009 as shown in the certified tax statements.  In the judgment, the trial court crossed out the columns for “Penalty & Interest” and “Total,” and instead handwrote a total of $12,834.59 underneath the “Delinquent Base Tax” column.  The trial court also awarded post-judgment interest and costs to the taxing authorities and the City and placed a tax lien against Sewell’s property.
 
The taxing authorities requested that the trial court file findings of fact and conclusions of law, and they later requested past-due findings and conclusions.  The trial court never responded.
  
Both the taxing authorities and the City moved for a new trial.  They argued that the certified tax statements established a prima facie case of the amount of delinquent taxes, penalties, and interest that Sewell owed to each taxing unit.  They noted that Sewell had complained at trial that the “[appraised] value [of his business personal property] was too high,” but they argued that no section of the Tax Code allows the trial court to waive the statutory penalties and interest on this basis and that the only waivers authorized by the Tax Code were not applicable to this case.  They argued that the trial court should have granted relief “in the full amount requested,” and they requested that the court modify its judgment to include the amount of assessed penalties and accrued interest as shown on the certified tax statements.  These motions were overruled by operation of law.
 
Penalties and Interest on Delinquent Ad Valorem Taxes
 
In their sole issue, the taxing authorities and the City contend that the trial court erred in awarding them only delinquent taxes because they are also statutorily entitled to the penalties and interest that have accrued on the delinquent taxes.
 
The Tax Code provides that generally, with exceptions not applicable here, ad valorem taxes are delinquent “if not paid before February 1 of the year following the year in which [the taxes are] imposed.”  Tex. Tax Code Ann. § 31.02(a) (Vernon 2008).  Tax Code section 33.01 provides that a delinquent tax incurs a penalty of six percent of the amount of the tax for the first calendar month the tax is delinquent, plus one percent for each additional month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent.  Id. § 33.01(a) (Vernon 2008).  If, however, the tax remains unpaid on July 1, the tax incurs a total penalty of twelve percent of the amount of the tax, regardless of how many months the tax has been delinquent.  Id.  Delinquent taxes continue to incur this penalty as long as the taxes remain unpaid, regardless of whether a judgment for the delinquent taxes has been rendered.  Id.  A delinquent tax also accrues interest at the rate of one percent for each month the tax remains unpaid, regardless of whether a judgment has been rendered.  Id. § 33.01(c).
 
The taxing unit may also provide that taxes that remain unpaid on July 1 “incur an additional penalty to defray costs of collection” if the unit contracts with an attorney for collection purposes pursuant to Tax Code section 6.30.  Id. § 33.07(a) (Vernon 2008); see also id. § 6.30(c) (Vernon 2008) (“The governing body of a taxing unit may contract with any competent attorney to represent the unit to enforce the collection of delinquent taxes.  The attorney’s compensation is set in the contract, but the total amount of compensation provided may not exceed 20 percent of the amount of delinquent tax, penalty, and interest collected.”).  The amount of the penalty may not exceed the amount of compensation specified in the contract with the collections attorney.  See id. § 33.07(a).
 
Additionally, taxpayers are required to “render for taxation all tangible personal property used for the production of income that the person owns . . . on January 1.”  Id. § 22.01(a) (Vernon Supp. 2011) (listing requirements for rendition statement).  If a taxpayer fails to timely file a rendition statement, “the chief appraiser shall impose a penalty . . . in an amount equal to 10 percent of the total amount of taxes imposed on the property for that year by taxing units participating in the appraisal district.”  Id. § 22.28(a) (Vernon Supp. 2011); Sturgis Air One, L.L.C. v. Harris Cnty. Appraisal Dist., 351 S.W.3d 381, 386 (Tex. App.—Houston [14th Dist.] 2011, no pet.) (“An untimely rendition results in the ten percent penalty mandated by Section 22.28.”); Indus. Commc’ns, Inc. v. Ward Cnty. Appraisal Dist., 296 S.W.3d 707, 720 (Tex. App.—El Paso 2009, pet. denied) (“The Tax Code imposes substantial penalties on a person who fails to render property for taxation.”).
 
Tax Code section 33.011 contains provisions in which waiver of the assessed penalties by the governing body of the taxing unit is mandatory and waiver of the accrued interest is discretionary, as well as provisions in which waiver of both the penalties and the interest is discretionary.  See Tex. Tax. Code Ann. § 33.011 (Vernon 2008).  For these waivers to apply, both of these provisions require, among other things, the taxpayer to pay the delinquent tax not later than the 21st day after the date the taxpayer knows or should have known of the delinquency.  See id. § 33.011(a)(1), (3).  It is undisputed that Sewell has never paid any portion of the taxes assessed, and thus the waiver provisions of section 33.011 are inapplicable.
 
Tax Code section 33.41 authorizes a taxing unit, “[a]t any time after its tax on property becomes delinquent,” to file suit to enforce the taxpayer’s personal liability for the tax.  Id. § 33.41(a) (Vernon 2008).  In this suit, the taxing unit must “join other taxing units that have claims for delinquent taxes against all or part of the same property.”  Id. § 33.44(a) (Vernon 2008).  Section 33.47(a) provides:
  
In a suit to collect a delinquent tax, the taxing unit’s current tax roll and delinquent tax roll or certified copies of the entries showing the property and the amount of the tax and penalties imposed and interest accrued constitute prima facie evidence that each person charged with a duty relating to the imposition of the tax has complied with all requirements of law and that the amount of tax alleged to be delinquent against the property and the amount of penalties and interest due on that tax as listed are the correct amounts.
 
Id. § 33.47(a) (Vernon 2008).  Once a taxing authority in a delinquency suit introduces the tax records described in section 33.47(a) into evidence, it establishes a prima facie case “as to every material fact necessary to establish its cause of action.”  Nat’l Med. Fin. Servs., Inc. v. Irving Indep. Sch. Dist., 150 S.W.3d 901, 906 (Tex. App.—Dallas 2004, no pet.); see also Maximum Med. Improvement, Inc. v. Cnty. of Dallas, 272 S.W.3d 832, 835 (Tex. App.—Dallas 2008, no pet.) (stating same); Reinmiller v. Cnty. of Dallas, 212 S.W.3d 835, 836–37 (Tex. App.—Eastland 2006, pet. denied) (stating same); Aldine Indep. Sch. Dist. v. Ogg, 122 S.W.3d 257, 264 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (stating same).  A rebuttable presumption then arises that the taxes in question are due, delinquent, and unpaid.  Nat’l Med. Fin. Servs., 150 S.W.3d at 906.  After the taxing authority makes its prima facie case by introducing the required records, the burden of proof then shifts to the taxpayer to show, by introducing competent evidence, that he has paid the full amount of taxes, penalties, and interest or that there is some other defense that applies to his case.  Id.; see also Estates of Elkins v. Cnty. of Dallas, 146 S.W.3d 826, 829 (Tex. App.—Dallas 2004, no pet.) (“Unless the taxpayer establishes independent reasons why the taxing authority should not recover, the taxing authority is entitled to judgment.”).
 
Taxing units are statutorily entitled to penalties and interest on delinquent taxes pursuant to Tax Code chapter 33.  See Tex. Tax Code Ann. § 33.01(a) (“[A] tax delinquent on July 1 incurs a total penalty of twelve percent of the amount of the delinquent tax . . . .”), (c) (“A delinquent tax accrues interest at a rate of one percent for each month . . . the tax remains unpaid.”); see also Atl. Shippers of Tex., Inc. v. Jefferson Cnty., No. 09-10-00511-CV, 2012 WL 746299, at *5 (Tex. App.—Beaumont Mar. 8, 2012, no pet. h.) (“The Tax Code further provides that a delinquent tax incurs statutory penalties and accrues interest.”); Galveston Indep. Sch. Dist. v. Heartland Fed. Sav. & Loan Ass’n, 159 B.R. 198, 205 (S.D. Tex. 1993) (applying section 33.01(c) and holding, “[T]he Taxing Authorities are entitled to statutory interest for every month or portion of a month after August 26, 1991, in which the 1990 taxes remained unpaid”).  Tax Code section 33.52(b), which addresses the form of the judgment in a delinquent tax suit, provides that “[i]n lieu of stating as a liquidated amount the aggregate total of taxes, penalties, and interest due, a judgment may: (1) set out the tax due each taxing unit for each year; and (2) provide that penalties and interest accrue on the unpaid taxes as provided by Subchapter A [of chapter 33].”  Tex. Tax Code Ann. § 33.52(b) (Vernon Supp. 2011).  In either circumstance, the judgment must award applicable penalties and interest in addition to the delinquent tax.  Unless one of the waiver provisions of section 33.011 applies, which is not the case here, the trial court has no discretion to omit an award of penalties and interest from the judgment if the taxing units have established their prima facie entitlement to relief and the taxpayer provides no contrary evidence or legal arguments for why the penalties and interest should not be awarded.  See Atl. Shippers, 2012 WL 746299, at *5 (“[W]e conclude the summary judgment evidence establishes, as a matter of law, that Atlantic failed to pay its taxes by the statutory deadlines. . . .  We hold the trial court correctly concluded that Atlantic, as a matter of law, owed penalties and interest on tax years 2005, 2006, and 2007.”); see also Carrollton-Farmers Branch Indep. Sch. Dist. v. JPD, Inc., 168 S.W.3d 184, 188 (Tex. App.—Dallas 2005, no pet.) (“Once the appraised value is finally determined, the tax rolls are corrected and the current tax roll is used to calculate penalties and interest recoverable in a delinquency lawsuit under chapter 33.”); Richardson Indep. Sch. Dist. v. GE Capital Corp., 58 S.W.3d 290, 294–95 (Tex. App.—Dallas 2001, no pet.) (“By changing the amount of tax owed, the corrected tax bill changes the amount of tax on which delinquency penalties are assessed; however, it does not purport to eliminate the property owner’s liability for penalties from the failure to pay the original tax bill.”).
 
Here, the taxing authorities and the City complied with section 33.47(a) by introducing into evidence certified copies of the delinquent tax statements for tax years 2002–2009.  These statements demonstrated the delinquent tax owed, the applicable penalties, including rendition penalties, and the accrued interest assessed for each taxing unit and each tax year.  The taxing authorities and the City thus established a prima facie case “as to every material fact necessary to establish [their] cause of action.”  Nat’l Med. Fin. Servs., Inc., 150 S.W.3d at 906.  The burden then shifted to Sewell to introduce competent evidence showing either that he paid the full amount of taxes, penalties, and interest, or that some other defense applied to his case.  Id.  Aside from asserting limitations with regard to the 2002–2004 tax years, which the taxing authorities and the City conceded, and arguing that his property was overvalued, which is not a proper defense in a suit to recover delinquent taxes,[3] Sewell asserted no other defenses, and he presented no evidence that he had paid the full amount of taxes, penalties, and interest.
 
We conclude that the taxing authorities and the City were statutorily entitled to penalties and interest accrued on Sewell’s delinquent taxes for tax years 2005–2009.  We hold that the trial court erred in failing to award the applicable penalties and interest to the taxing authorities and the City in its final judgment.[4]
 
We sustain the taxing authorities’ and the City’s sole issue.
 
Conclusion
 
We reverse the judgment of the trial court insofar as it failed to award applicable penalties and interest to the taxing authorities and the City and remand the case to the trial court for calculation of the amount of penalties and interest to which the taxing authorities and the City are statutorily entitled.

                                                                  Evelyn V. Keyes
                                                                   Justice
Panel consists of Justices Keyes, Bland, and Sharp.
--------------------------------------------------------------------------------

[1]           See Tex. Tax Code Ann. § 33.05(a)(1) (Vernon 2008) (“Personal property may not be seized and a suit may not be filed to collect a tax on personal property that has been delinquent more than four years.”).  The trial court ruled that “Plaintiff(s) HISD, HCCS, and HARRIS COUNTY take nothing against the Defendant(s) as to tax years 2002 through 2004” on the basis of limitations.  The taxing authorities do not challenge this ruling on appeal.  The trial court did not, however, so limit the City’s recovery.  Instead, the final judgment awarded $3,018.50 to the City.  This amount corresponds to the total amount of base taxes payable to the City for tax years 2002–2009 as reflected on the certified copy of the tax assessor-collector’s records.  On appeal, however, the City argues that it “does not request recovery of [the 2002–2004] tax years,” and it instead requests rendition of judgment in the amount of $3,858.05:  $2,196.19 for “2005–2009 base tax and rendition penalty” and $1,661.86 for statutory penalties and interest.  (Emphasis added.)

[2]           The trial court referred to Harris County, the Harris County Department of Education, the Port of Houston Authority of Harris County, the Harris County Flood Control District, and the Harris County Hospital District collectively as “Harris County.”

[3]           Complaints that the appraisal district overvalued the taxpayer’s property are properly raised in proceedings pursuant to Tax Code chapters 41 and 42, involving a protest of the appraised value before the appraisal review board and judicial review of the appraisal review board’s administrative determination in the district court.  See Tex. Tax Code Ann. §§ 41.01–.71, 42.01–.43 (Vernon 2008 & Supp. 2011).  Except for exceptions not applicable here, the administrative procedures for adjudicating valuation protests are “exclusive, and a property owner may not raise any of those grounds in defense to a suit to enforce collection of delinquent taxes.”  Id. § 42.09(a)(1) (Vernon 2008); see also Nev. Gold & Silver, Inc. v. Andrews Indep. Sch. Dist., 225 S.W.3d 68, 76 (Tex. App.—El Paso 2005, no pet.) (“[F]ailure to exhaust the administrative remedies precludes judicial review of the appraisal and also deprives the property owner of the right to raise such protest as a defense against a suit to enforce collection of delinquent taxes.”); Reed v. Prince, 194 S.W.3d 101, 107 (Tex. App.—Texarkana 2006, pet. denied) (“A taxpayer must meet specific and mandatory provisions of the Tax Code in order to challenge the amount of taxes assessed against a property.”) (citing Tex. Tax Code Ann. §§ 41.01–.71 (Vernon 2008 & Supp. 2011)).  Thus, because Sewell could not properly assert overvaluation as a defense to payment of the delinquent taxes, penalties, and interest, the trial court could not refuse to award penalties and interest to the taxing authorities and the City on this basis.
[4]           The City requests that we reverse and render judgment that it is entitled to $3,858.05, the total amount of delinquent taxes, rendition penalties, and section 33.01 penalties and interest for the 2005–2009 tax years as stated in the certified tax statements.  We note that section 33.01 provides that penalties and interest continue to accrue “as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered.”  Tex. Tax Code Ann. § 33.01(a), (c) (Vernon 2008).  We therefore remand this case to the trial court to determine the amount of penalties and interest to which the taxing authorities and the City are entitled under the Tax Code.

SOURCE: HOUSTON COURT OF APPEALS [FIRST APPELLATE DISTRICT] - 01-11-00131-CV - 5/10/2012
CASE STYLE: City of Bellaire, Harris County, Houston Independent School District, Port of Houston Authority of Harris County, Harris County Flood Control District, Harris County Hospital District, Harris County Department of Education, and Houston Community College System, Appellants v. Efrem D. Sewell d/b/a The Law Offices of Efrem D. Sewell, P.C., Appellee

[case details added per request]

Wednesday, May 9, 2012

Wife's affidavit construed as a pleading, making her a co-plaintiff with the husband who brought suit pro se and could not file for her because he does not have a license to practice law

Nonattorney husband filed pro se suit against neighbor and wife executed attached affidavit, in which she referred to herself as plaintiff, but she did not herself sign the pleading. Court holds that her affidavit was sufficient to make her a pro se plaintiff. Subsequent nonsuit by husband did not include the wife, wherefore wife's cause of action remained pending and the county court in which the action was filed did not lose plenary jurisdiction to transfer the case to district court more than 30 days after husband's nonsuit.


OPINION EXCERPT

Jurisdiction

In his first issue on appeal, HUSBAND contends the District Court never had jurisdiction, thus its judgment is void. Specifically, HUSBAND argues that WIFE was never a party to the suit because she did not sign the petition, and, as a result, his nonsuit of April 25, 2007, which was approved by the County Court on April 30, 2007, disposed of all claims then pending in the suit. As a result, HUSBAND argues that the County Court lost plenary power on May 25, 2007, or at the very latest, on May 30, 2007. Therefore, HUSBAND contends that the County Court’s June 5, 2007 order transferring venue to the District Court was void, and the District Court lacked subject-matter jurisdiction. In his third issue on appeal, HUSBAND contends the trial court erred in overruling his motion for summary judgment, which was based on the same ground. Because this argument hinges on whether WIFE was ever a party to the suit, we address that issue first.

HUSBAND argues that because he is not a lawyer, he could not represent his wife, and that because she never signed the Original Petition, she was never a party to the suit. It is true that HUSBAND cannot represent his wife unless he is a member of the State Bar of Texas or otherwise qualifies for the limited practice of law. See Tex. Gov’t Code Ann. § 81.102 (Vernon 2005); Magaha v. Holmes, 886 S.W.2d 447, 448 (Tex. App.—Houston [1st Dist.] 1994, no writ).

However, under the facts of this case, we conclude that WIFE did in fact represent herself pro se in the filing of the lawsuit. While it is true that WIFE did not sign the petition, she did sign an affidavit attached to the petition in which she averred, “I am the Plaintiff.” And, not only was her affidavit attached to the petition with the notation “Plaintiff Original Petition” appearing in its lower left corner, paragraph 8 of the petition provides, “Plaintiff, Mrs. [LAST NAME], attaches Exhibit 2 as her affidavit and fully incorporates it herein by reference in this petition.” By signing the affidavit referring to herself as a Plaintiff, attaching that affidavit to the petition, and incorporating it by reference into the petition, WIFE has complied with the requirement that a pro se petition be signed. See Tex. R. Civ. P. 57. Additionally, a pleading shall not be deemed defective because of something that can be supplied by an exhibit attached to and referenced in a petition. See Tex. R. Civ. P. 57. WIFE ’s affidavit, which is attached to and incorporated by reference in the petition, provides her signature, which was missing from the petition itself. Thus, we conclude that WIFE was a party to the lawsuit.

We next consider what effect WIFE ’s participating in the lawsuit had on the County Court’s plenary power. HUSBAND argues that because his nonsuit disposed of all claims pending at the time it was filed, the trial court lost plenary power 30 days thereafter, which was several days before it signed the order to transfer jurisdiction to the District Court. Thus, HUSBAND contends the order transferring jurisdiction was void and the District Court never acquired subject-matter jurisdiction.

However, like the petition, the “Notice of Nonsuit with Prejudice to Refile” was signed only by HUSBAND, but not WIFE . Further, the notice provides, “COMES NOW Plaintiff, HUSBAND, and pursuant to Rule 162 of the Texas Rules of Civil Procedures serves notice on this Court that he is taking a nonsuit . . . on all claims against [DEFENDANT]” The nonsuit does not reference WIFE or her claims at all. Because Tony cannot represent WIFE , see Magaha, 886 S.W.2d at 448, and the nonsuit he filed does not even purport to do so, it did not dispose of WIFE ’s claims against [DEFENDANT]. Because WIFE ’s claims remained pending, the County Court retained plenary power over the suit when it transferred jurisdiction to the District Court. Thus, the transfer provided the District Court with subject-matter jurisdiction.[1]

We overrule HUSBAND’s first and third issues on appeal.

In issue two, HUSBAND contends that the June 5, 2007 order transferring the case to District Court was void. Specifically, HUSBAND argues that under Texas Rule of Civil Procedure 87, he was entitled to 45 days’ notice of a hearing on a motion to transfer venue. However, Rules 86 and 87 apply to motions to transfer venue from one county to another. See Tex. R. Civ. P. 86 & 87. The present case was being transferred from the County Court to the District court pursuant to Tex. Gov’t Code Ann. § 74.121(b)(1) (Vernon 2011), thus the 45 days’ notice required by Rule 87 is not applicable.

We overrule HUSBAND’s second issue on appeal.

SOURCE: HOUSTON COURT OF APPEALS - 01-09-00545-CV - 5/3/12 [names of pro se parties replaced with terms husband and wife; name of Defendant likewise substituted]

Tuesday, May 8, 2012

Massengale says Tax Code Section 171.255 [providing for personal liability of corporate officers when corporate privileges of corporation are forfeited based on non-payment of tax] does not provide an independent basis for personal jurisdiction over nonresident officer or director of Delaware company.

 
A panel of the First Court of Appeals, in an opinion penned by Justice Michael Massengale, has ruled that the manager of Delaware company could not be sued in Texas based on the corporation's forfeiture of corporate privileges in Texas for failure to pay state taxes in the absence of any other basis for personal jurisdiction over him. The appeals panel accordingly affirmed the individual defendant's dismissal from the pending suit against the Delaware company in the 333rd District Court Harris County in an interlocutory appeal.
  
Trial court judge: Joseph J. Halbach aka Tad Halbach 
      
ACS Partners, LLC v. Gross  (Tex.App. - Houston [1st Dist.] April 4, 2012, no pet. h.)
(personal jurisdiction over foreign defendant, grant of special appearance affirmed).
  

MEMORANDUM OPINION
 
Appellant ACS Partners, LLC appeals the trial court’s interlocutory order granting appellee Allen Gross’s special appearance. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7) (West 2008); Tex. R. Civ. P. 120a. ACS argues that the trial court has personal jurisdiction over Gross, who is the manager of a Delaware limited liability company, because the company’s certificate of authority was forfeited for failure to satisfy Texas franchise tax requirements. We affirm the trial court’s order dismissing Gross from the case.
 
Background
 

In 2009, ACS contracted with Chateau Carmel, LP and Windswept Realty, LP, which are both Delaware limited partnerships, to perform improvements to two apartment complexes located in Houston and respectively owned by Chateau Carmel and Windswept. Alleging that it was not paid for work under those contracts, ACS sued GFI Houston Holdings Management, LLC and Allen Gross. GFI is a Delaware limited liability company, and Gross is a resident of New York. ACS alleged in its original petition that GFI was a general partner of both Chateau Carmel and Windswept, and that Gross was a manager of GFI. ACS further alleged that GFI and Gross are subject to the personal jurisdiction of the court “because they do business in Texas.”
 
Gross filed a special appearance supported by his sworn affidavit, wherein he testified that he was an employee of GFI, had a business address in New York City, and lived in the state of New York his entire life. GFI filed an answer but did not file a special appearance.
 
Before the trial court held a hearing on Gross’s special appearance, ACS filed a second amended petition. As to GFI, ACS alleged that jurisdiction is proper in Texas because “GFI is the general partner of the two entities that entered into the subject contracts in Texas . . . .” As to Gross, ACS alleged that jurisdiction is proper because GFI’s certificate of authority had been forfeited in 2005, and thus under an “alter ego theory,” GFI’s jurisdictional contacts became imputable to Gross. ACS did not allege any other facts in the second amended petition to support jurisdiction over Gross.
 
At the hearing on Gross’s special appearance, the trial court ordered the parties to submit legal briefs on the special appearance issue. ACS attached to one of its briefs a “Certificate of Account Status” issued by the Texas Comptroller of Public Accounts reflecting that GFI was not in good standing because “it has not satisfied all franchise tax requirements.” ACS argued that Section 171.255(a) of the Tax Code—which under certain circumstances makes corporate directors and officers liable for corporate debts incurred after a tax becomes due but is unpaid—operated not only to make Gross personally liable for the debts of GFI, but also to confer personal jurisdiction over Gross. See Tex. Tax Code Ann. § 171.255(a) (West 2008). ACS also presented to the trial court printouts from the Texas Secretary of State website. The documents showed that in “last updates” dated September 2006, GFI was listed as the general partner of Chateau Carmel and Windswept. They also showed that in a “last update” dated June 2003, Gross was listed as a manager of GFI.
  
Gross denied having sufficient contacts with Texas or the underlying litigation to be subject to personal jurisdiction in the state. Gross submitted his sworn affidavit stating that he was a resident of New York and not of Texas. Gross also stated that by the time Chateau Carmel and Windswept executed the contracts at issue, GFI was no longer the general partner of those companies. To support this, Gross submitted the affidavit of attorney Moshe Lehrfied, stating that in 2004 and 2005 GFI transferred all its interests in Chateau Carmel and Windswept to other entities. Lehrfield’s affidavit did not state, and the appellate record does not otherwise reflect, who owns or manages the transferee companies.
    
In response, ACS argued that even if GFI transferred all its interests in the limited partnerships before the 2009 contracts were executed, GFI remained liable for the debts of the limited partnerships because according to the 2006 “last updates” on record with the Secretary of State, GFI failed to amend the limited partnerships’ registrations as required by law to reflect the change in general partners. Thus, ACS argued, personal jurisdiction could be asserted over Gross by virtue of GFI’s status as the officially registered general partner and the forfeiture of GFI’s certificate of authority.
The trial court granted Gross’s special appearance, thereby dismissing him from the suit for want of jurisdiction. The trial court did not file findings of fact or conclusions of law related to that order.
 
Analysis
  I. Standard of review
  
Whether a trial court has personal jurisdiction over a nonresident defendant is a mixed question of fact and law. See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Glattly v. CMS Viron Corp., 177 S.W.3d 438, 445 (Tex. App.—Houston [1st Dist.] 2005, no pet.). The trial court’s factual findings concerning the existence of personal jurisdiction may be reviewed for legal and factual sufficiency, while the legal conclusions based upon those findings constitute a question of law subject to de novo review. See BMC Software, 83 S.W.3d at 794; Glattly, 177 S.W.3d at 445. When, as in this case, the trial court does not make findings of fact and conclusions of law in support of its determination on a special appearance, “all facts necessary to support the judgment and supported by the evidence are implied.” BMC Software, 83 S.W.3d at 795.
  
II. Personal jurisdiction
  

In the context of a special appearance, “the plaintiff and the defendant bear shifting burdens of proof in a challenge to personal jurisdiction.” Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 658 (Tex. 2010). Ordinarily, the plaintiff bears the initial burden of pleading allegations sufficient to assert personal jurisdiction over a nonresident defendant, and upon filing a special appearance, the nonresident defendant assumes the burden to negate all of the plaintiff’s alleged bases of personal jurisdiction. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002). “Because the plaintiff defines the scope and nature of the lawsuit, the defendant’s corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff’s pleading.” Kelly, 301 S.W.3d at 658.
  
The alleged basis for personal jurisdiction over a nonresident defendant must be consistent with both the Texas long-arm statute and the Due Process Clause of the Fourteenth Amendment. See Moki Mak River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); Lamar v. Poncon, 305 S.W.3d 130, 136 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). The long-arm statute lists several activities that constitute “doing business” in Texas for jurisdictional purposes. Tex Civ. Prac. & Rem. Code Ann. § 17.042 (West 2008); see also BMC Software, 83 S.W.3d at 795 (noting that listed activities are “not exclusive”).
  
ACS, as the plaintiff, bears the initial burden to allege in the trial court a valid basis for personal jurisdiction under the long-arm statute. Coleman, 83 S.W.3d at 807. However, in its live petition, ACS did not allege that Gross performed any of the acts listed in the long-arm statute, or that Gross did anything else that constituted “doing business” in Texas. “If the plaintiff fails to plead facts bringing the defendant within reach of the long-arm statute . . . the defendant need only prove that it does not live in Texas to negate jurisdiction.” Kelly, 301 S.W.3d at 658–59. The defendant can meet this burden by filing an affidavit testifying to that fact. See Touradji v. Beach Capital P’ship, L.P., 316 S.W.3d 15, 25 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (citing Kelly, 301 S.W.3d at 659).
  
Gross’s special appearance was supported by his sworn affidavit, in which he states that he is a full-time resident of New York, has been domiciled in New York for over forty years, does not reside in Texas, and has never resided in Texas. Thus, given ACS’s failure to allege jurisdictional facts relevant to the long-arm statute, Gross has met his burden to negate personal jurisdiction based upon his own forum contacts. See Kelly, 301 S.W.3d at 658–59; Touradji, 316 S.W.3d at 25.
  
However, ACS has also alleged personal jurisdiction over Gross based on an “alter ego theory.” This circumstance presents an exception to the general rule about the burdens of proof. See Tri-State Bldg. Specialties, Inc. v. NCI Bldg. Sys., L.P., 184 S.W.3d 242, 250 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (citing BMC Software, 83 S.W.3d at 798–99). When the plaintiff alleges jurisdiction based on an alter ego theory, it bears the initial burden to prove facts that justify imputing another party’s contacts with the forum to the defendant. See BMC Software, 83 S.W.3d at 799.
  
In BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002), the Texas Supreme Court referenced the alter ego exception for pleading burdens in the context of a plaintiff seeking to “fuse” a parent company and its subsidiary for jurisdictional purposes. See BMC Software, 83 S.W.3d at 798–99. Our court has “logically . . . extended” that exception to attempts to “fuse” a corporation with its corporate officers, “because the same presumption of legal separateness exists with regard to a corporation and its officers.” Tri-State, 184 S.W.3d at 250. Similarly, there is a presumption of legal separateness between a limited liability company and its managers. See McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 590 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (“Generally, members are not individually liable for the debts of the LLC.”). This presumption holds regardless of whether the limited liability company was formed in Texas or in Delaware. Compare Tex. Bus. Orgs. Code Ann. § 101.114 (West 2009) (providing that managers are ordinarily not liable for limited liability company’s debts), with Del. Code tit. 6, § 18-303(a) (same); see also Tex. Bus. Orgs. Code Ann. § 9.203 (West 2009) (“[I]n any matter that affects the transaction of intrastate business in this state, a foreign entity and each member, owner, or managerial official of the entity is subject to the same duties, restrictions, penalties, and liabilities imposed on a domestic entity to which it most closely corresponds or on a member, owner, or managerial official of that domestic entity.”). Therefore, ACS, as the plaintiff, bears the burden of proving that the forum contacts of GFI and Gross should be “fused” for jurisdictional purposes.
  
ACS does not premise its jurisdictional veil-piercing theory on the jurisdictional alter ego doctrine reflected in our state’s case law, which ordinarily requires the plaintiff to show that one of two entities exerted a level of control over the other such that in reality they constituted the same entity. See, e.g., PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 175 (Tex. 2007); BMC Software, 83 S.W.3d at 799. Rather, ACS asserts that Gross is subject to personal jurisdiction in Texas by virtue of the Tax Code, which provides in relevant part:
  
If the corporate privileges of a corporation are forfeited for the failure to file a report or pay a tax or penalty, each director or officer of the corporation is liable for each debt of the corporation that is created or incurred in this state after the date on which the report, tax, or penalty is due and before the corporate privileges are revived.
Tex. Tax Code Ann. § 171.255(a). ACS argues that the forfeiture of GFI’s certificate of authority pursuant to Section 171.255(a) means that GFI became “fused” with Gross for jurisdictional purposes such that GFI’s contacts in Texas are imputable to Gross.
  
“In construing statutes, ‘our primary objective is to ascertain and give effect to the Legislature’s intent.’” Hernandez v. Ebrom, 289 S.W.3d 316, 318 (Tex. 2009) (quoting City of Marshall v. City of Uncertain, 206 S.W.3d 97, 105 (Tex. 2006)). “However, it is cardinal law in Texas that a court construes a statute, ‘first, by looking to the plain and common meaning of the statute’s words.’” Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865 (Tex. 1999) (quoting Liberty Mut. Ins. Co. v. Garrison Contractors, 966 S.W.2d 482, 484 (Tex. 1998)). “Unambiguous statutory language is interpreted according to its plain language unless such an interpretation would lead to absurd results.” Hernandez, 289 S.W.3d at 318 (citing Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex. 1999)). When construing a statute according to its plain language, we “may not add language that is not implicitly contained in the language of the statute.” Villarreal v. Wells Fargo Brokerage Servs., LLC, 315 S.W.3d 109, 122 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Moreover, “[i]t is well-settled that section 171.255 must be strictly construed to protect those individuals against whom liability is sought because it is penal in nature and cannot be extended beyond the clear meaning of its language.” Tri-State, 184 S.W.3d at 251.
  
We conclude that the operation of Section 171.255 does not create a basis for asserting personal jurisdiction over a nonresident officer or director of an entity that enjoys or once enjoyed corporate privileges in Texas. Notably, Section 171.255 does not mention jurisdiction in any way. The “central concern of the inquiry into personal jurisdiction” is “the relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569, 2580 (1977). Even if the plaintiff proves that the entity’s privileges have been forfeited, that fact only establishes the potential liability of the entity’s officers or directors, not personal jurisdiction over those persons. This is because the defendant’s potential liability to the plaintiff is not dispositive of our personal-jurisdiction inquiry. Cf. Glattly, 177 S.W.3d at 449 (“Ultimate tort liability is not a jurisdictional fact; the merits of claims are not at issue during a special appearance; and the proof necessary to show personal jurisdiction is only that the purposeful act was committed in Texas.”). The crucial distinction between liability and personal jurisdiction must be observed because “personal jurisdiction involves due process considerations that may not be overridden by statutes or the common law.” PHC-Minden, 235 S.W.3d at 174. Given the absence of any mention of jurisdiction in Section 171.255, the important distinction between liability and personal jurisdiction, and the rule that Section 171.255 should be “strictly construed,” we conclude that Section 171.255 does not provide an independent basis for personal jurisdiction over Gross, a nonresident defendant.
  
Because ACS has failed to suggest any other factual basis for asserting personal jurisdiction over Gross, we overrule ACS’s sole issue.
  
Conclusion
  
We affirm the order of the trial court granting Gross’s special appearance and dismissing him from the suit.
  
Michael Massengale
  
Justice
  
Panel consists of Justices Keyes, Higley, and Massengale.