Opinion
No. 14-04-00859-CV
Opinion filed October 27, 2005.
On Appeal from the 270th District Court, Harris County, Texas, Trial Court Cause No. 03-40164.
Affirmed in Part, Reversed in Part.
Panel consists of Chief Justice HEDGES and Justices FOWLER and FROST.
OPINION
This is an interlocutory appeal taken from the trial court's order denying the plea to the jurisdiction of appellants Houston Independent School District, City of Houston, and Harris County (hereinafter collectively "the Taxing Authorities"). Appellees Lance and S.R. Dreyer (hereinafter collectively "the Dreyers") brought this suit seeking an equitable bill of review, declaratory relief, and recoupment based on an alleged overpayment of taxes. Appellee 1615 Corporation later joined as an additional plaintiff in an amended petition against the Taxing Authorities. The parties all filed motions for partial summary judgment. In their motion, the Taxing Authorities asserted, among other things, that the trial court lacked subject-matter jurisdiction. The trial court denied this motion. Bringing this interlocutory appeal under section 51.014(a)(8) of Texas Civil Practices Remedies Code, the Taxing Authorities assert three issues in regard to the trial court's subject-matter jurisdiction. As explained below, we lack appellate jurisdiction over the Taxing Authorities' administrative-remedies argument because, even if it were correct, it would not deprive the trial court of jurisdiction. The Dreyers' partial payment of the tax judgment does not moot this case because a live controversy between the parties still exists. The Dreyers lack standing to bring the petition for equitable bill of review, but they have standing to assert the declaratory-judgment and recoupment claims. Appellee 1615 Corporation lacks standing regarding the declaratory-judgment and recoupment claims but has standing to seek an equitable bill of review. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.
I. Factual and Procedural Background
This action stems from an underlying lawsuit brought by various taxing authorities for unpaid taxes during the years of 1984 through 1999, plus penalties and interest, on the property described as Lot Six (6), Block Three (3), Edgemont Addition, in Harris County, Texas, more commonly known as 1615 North Boulevard, Houston, Texas 77006 (hereinafter referred to as the "Property"). On October 2, 2000, the 270th Judicial District Court of Harris County, Texas granted the Taxing Authorities' motion for summary judgment and entered a final judgment in rem (hereinafter referred to as the "Judgment") in favor of the Taxing Authorities and against all entities or individuals with a potential interest in the Property.
These taxing authorities in the underlying action included: (1) Houston Independent School District, (2) Harris County Education District, (3) Harris County, (4) Harris County Education Department, (5) Port of Houston of Harris County Authority, (6) Harris County Flood Control District, (7) Harris County Hospital District, (8) City of Houston, and (9) Houston Community College System.
The Judgment foreclosed tax liens against the Property and awarded the Taxing Authorities their delinquent taxes, penalties, interest, and costs for the tax years of 1984 through 1999. The total amount of the Judgment is $351,535.27, plus postjudgment interest. S.R. Dreyer is the current owner of the Property, but she and her husband (Lance Dreyer) were not parties to this underlying tax suit and did not have an interest in the Property when the trial court signed the Judgment. From December 2000 through December 2002, the Dreyers paid approximately $383,279.52 against the Judgment.
The record indicates that, except for the taxes allegedly owed to the Houston Independent School District for the 1998 and 1999 tax years, the Dreyers paid all of the taxes, penalties, and interest awarded in the Judgment. The record does not explain why the Dreyers made payments against the Judgment before the execution of the July 18, 2001 deed. However, the September 17, 2001 deed stated that it was effective as of December 21, 2000.
Before the Dreyers acquired an interest in the Property, 1615 Corporation and W.C.J. Marquart, III jointly owned the Property. On July 18, 2001, 1615 Corporation conveyed what it believed to be a "100% interest" in the Property to P.W. Dreyer. On August 27, 2001, after realizing that it did not own an entire 100% interest, 1615 Corporation acquired a deed from W.C.J. Marquart, III, which conveyed Marquart's interest in the Property to 1615 Corporation. The following day, 1615 Corporation executed a second deed in connection with this interest in favor of P.W. Dreyer. On September 17, 2001, 1615 Corporation executed a third deed conveying all interest in the Property to P.W. Dreyer and made the deed "effective as of December 21, 2000." Finally, on November 1, 2002, P.W. Dreyer executed a deed that conveyed the Property to S.R. Dreyer, who currently lives on the Property with her husband, Lance Dreyer.
On June 10, 2003, the Taxing Authorities attempted to foreclose on the Property because of an alleged remaining tax balance of $18,864.89. On July 18, 2003, the Dreyers filed their "Original Petition for Bill of Review and Declaratory Judgment." Later, 1615 Corporation joined the suit as a plaintiff. On September 8, 2003, the trial court signed a temporary injunction preventing a foreclosure sale.
On January 21, 2004, the Dreyers and 1615 Corporation amended their pleadings. They sought an equitable bill of review, declaratory judgment, and recoupment of alleged overpayments of taxes on the Property. The Dreyers and 1615 Corporation sought to set aside the Judgment, arguing that it contains an official mistake in the tax calculations for years 1988 through 1991. Their argument is that the Property has been continuously used as a single-family homestead but that the trial court did not use any homestead exemption in calculating the amount of taxes owed for 1988 through 1991, thereby causing the amount of the Judgment to be substantially greater than it should have been. The Dreyers assert that, because of this failure to account for the homestead exemption, they overpaid the property taxes by approximately $108,722.38. They also allege that the Taxing Authorities committed fraud by representing in the underlying lawsuit that the Property was not a homestead during the tax years of 1988 through 1991. Further, the Dreyers and 1615 Corporation sought a declaration that the Property was used and occupied as a single-family homestead in the years 1988 through 1991.
The parties filed motions for partial summary judgment. In their motion, the Dreyers and 1615 Corporation argued they were entitled to the relief sought in their pleadings as a matter of law and sought reinstatement of the single-family homestead exemption for 1988 through 1991, a credit for the amount of taxes they claim were overpaid, and recoupment of that amount. In their response and motion for partial summary judgment, the Taxing Authorities asserted as their main contention that the trial court lacked subject-matter jurisdiction over the Dreyers' and 1615 Corporation's claims because (a) all taxes, penalties, and interest during the years of 1988 through 1991 have been paid; (b) the Dreyers lack standing because they were not parties to the underlying action; (c) 1615 Corporation lacks standing because it does not own the Property; and (d) the trial court lacks subject-matter jurisdiction because the Dreyers and 1615 Corporation failed to exhaust their adequate and available administrative remedies under the Tax Code.
In addition, the Taxing Authorities argued that the Dreyers' and 1615 Corporation's alleged meritorious defense is barred as a matter of law and that the summary-judgment evidence negates the Dreyers' and 1615 Corporation's claim of fraudulent conduct and mistake by the Taxing Authorities and/or "official mistake." These issues go to the merits and are not before us in this appeal.
The trial court denied the Taxing Authorities' motion for partial summary judgment, which was based, in part, on lack of subject-matter jurisdiction. The Taxing Authorities have filed this interlocutory appeal challenging the trial court's denial of the part of the motion that sought dismissal for lack of subject-matter jurisdiction. See TEX. CIV. PRAC. REM. CODE ANN. § 51.014 (a)(8) (Vernon 1997).
II. ISSUES PRESENTED
The Taxing Authorities present the following issues for appellate review:
(1) Does the alleged failure of the Dreyers and 1615 Corporation to exhaust their administrative remedies under the Texas Property Tax Code deprive the trial court of jurisdiction over their claims?
Although this is the Taxing Authorities' third issue, we address it first because we must determine whether we have appellate jurisdiction over this issue.
(2) Does the Dreyers' payment of taxes, penalties, and interest moot the claims of the Dreyers and 1615 Corporation against the Taxing Authorities, thereby depriving the trial court of subject-matter jurisdiction?
(3) Do the Dreyers have standing to bring their claims despite the fact that they were not parties to the underlying tax suit?
(4) Does 1615 Corporation have standing to bring the petition for bill of review and for declaratory judgment despite the fact that it did not own the Property at the time the Taxing Authorities attempted foreclosure?
Although the Taxing Authorities combined issues three and four as their second issue in their appellate brief, to avoid confusion, we address these questions as two separate issues.
III. STANDARD OF REVIEW
This appeal arises from the trial court's denial of the Taxing Authorities' plea to the jurisdiction as asserted in their motion for partial summary judgment. Appellate courts have jurisdiction over appeals from interlocutory orders only if expressly provided by statute. Stary v. DeBord, 967 S.W.2d 352, 352-53 (Tex. 1998) (per curiam). Section 51.014(a)(8) of the Texas Civil Practice and Remedies Code provides for an interlocutory appeal from an order granting or denying a plea to the jurisdiction by a governmental unit. TEX. CIV. PRAC. REM. CODE ANN. § 51.014(a)(8) (Vernon Supp. 2004). Moreover, if the trial court denies the governmental entity's claim of no jurisdiction, whether it has been asserted by a plea to the jurisdiction, a motion for summary judgment, or otherwise, the Legislature has provided that an interlocutory appeal may be brought. See Tex. Civ. Prac. Rem. Code Ann. § 51.014(a)(8); San Antonio State Hosp. v. Cowan, 128 S.W.3d 244, 245 n. 3 (Tex. 2004). Our appellate jurisdiction in this interlocutory appeal is limited to the issues of subject-matter jurisdiction. See, e.g., Tex. Dep't of Transp. v. City of Sunset Valley, 8 S.W.3d 727, 730-31 n. 3 (Tex.App.-Austin 1999, no pet.) (holding in an appeal involving a plea to the jurisdiction under § 51.014 (a) (8), "[o]ur analysis is, of necessity, confined to only to [the parties'] jurisdictional arguments").
Section 51.014(a)(8) provides, in relevant part:
A person may appeal from an interlocutory order of a district court . . . that . . . grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in Section 101.001.
TEX. CIV. PRAC. REM. CODE ANN. § 51.014(a)(8). Furthermore, "governmental unit" is defined by section 101.001 to include all state agencies, political subdivisions, and "any other institution, agency, or organ of government the status and authority of which are derived from the Constitution of Texas or from laws passed by the legislature under the constitution." TEX. CIV. PRAC. REM. CODE ANN. § 101.001(3) (Vernon Supp. 2005). Thus, the Taxing Authorities in this case are governmental units. See, e.g., Seamans v. Harris County Hosp. Dist., 934 S.W.2d 393, 395 (Tex.App.-Houston [14th Dist.] 1996, no writ) (describing Harris County Hospital District as a "state agency"); Weeks v. Harris County Hosp. Dist., 785 S.W.2d 169, 170 (Tex.App.-Houston [14th Dist.] 1990, writ denied) ("Harris County Hospital District is a political subdivision of the State of Texas").
In reviewing a plea to the jurisdiction, we cannot examine the merits of the case. See Tomball Hosp. Auth. v. Harris County Hosp. Dist., ___ S.W.3d ___, ___, No. 14-04-00263-CV, 2005 WL 1771606, at *2 (Tex.App.-Houston [14th Dist.] July 28, 2005, no pet. h.) (dismissing summary judgment points for want of jurisdiction and addressing only the plea to the jurisdiction); see also City of Houston v. Rushing, 7 S.W.3d 909, 913 (Tex.App.-Houston [1st Dist.] 1999, pet. denied) (explaining that "[a] motion for summary judgment concerns the merits of a lawsuit" whereas "a plea to the jurisdiction concerns whether the pleadings state a cause of action that confers jurisdiction on the trial court"). Therefore, we have appellate jurisdiction only over the Taxing Authorities' jurisdictional issues. See, e.g., City of Sunset Valley, 8 S.W.3d at 730-31 n. 3; Rushing, 7 S.W.3d at 913.
IV. ANALYSIS
A. Would application of Tax Code section 42.09's exclusive-remedies provision deprive the trial court of jurisdiction?
We first address the Taxing Authorities' contention in their third issue that the trial court lacks subject-matter jurisdiction over this case because the Dreyers and 1615 Corporation failed to exhaust all of their administrative remedies under Chapters 41 and 42 of the Tax Code. In making this argument, they cite various sections of the Tax Code. See TEX. TAX CODE ANN. § 41.41 (a)(4) (9), 41.44(a), 41.45, 42.21(b), 42.09 (Vernon 2001). As a threshold issue, we must decide whether, presuming that the Taxing Authorities were to establish failure to exhaust administrative remedies, the trial court would be deprived of subject-matter jurisdiction. If it would not, then this court lacks jurisdiction over the Taxing Authorities' third issue. See Rushing, 7 S.W.3d at 913.
Even though the Taxing Authorities cite all of the foregoing sections of the Tax Code, the basis of their argument is section 42.09, which states that the procedures prescribed by the Property Tax Code provide property owners with their exclusive remedies for adjudicating the grounds of protest authorized by the Property Tax Code. See Tex. Tax Code Ann. § 42.09(a). Section 42.09(a) states that a property owner may not raise any of these grounds as a basis for relief in a suit by the property owner to obtain a refund of taxes paid. See id. The other sections of the Tax Code cited by the Taxing Authorities are the procedures that, under section 42.09, allegedly provide the exclusive remedies for the Dreyers and 1615 Corporation. See Tex. Tax Code Ann. § 41.41 (a)(4) (9), 41.44(a), 41.45, 42.21(b). In this case the Dreyers and 1615 Corporation are not pursuing administrative remedies or seeking judicial review of any administrative action; rather, they seek to set aside and modify the Judgment by an equitable bill of review and to recoup taxes that the Dreyers allegedly overpaid. In this context, the only statute cited by the Taxing Authorities that might bar these claims is section 42.09. See TEX. TAX CODE ANN. § 42.09 (a). Therefore, we do not reach the issue of whether sections 41.41, 41.44, 41.45, or 42.21 of the Tax Code are jurisdictional. The Taxing Authorities' third issue is based on section 42.09(a), and so we must determine if the application of this section would deprive the trial court of jurisdiction.
The Property Tax Code is title 1 of the Tax Code, to which section 42.09(a) refers. See TEX. TAX CODE ANN. § 42.09(a).
These sections establish procedures for administratively protesting, among other things, the denial of a tax exemption and for seeking judicial review in the district court of such an administrative decision.
The Texas Supreme Court's opinion in Dubai Petroleum Co. v. Kazi guides our resolution of this issue. See 12 S.W.3d 71, 76-77 (Tex. 2000). In Kazi, the Texas Supreme Court disapproved of a long line of cases holding that, when a claim is based on a statute, the statutory provisions are mandatory, exclusive, and require compliance in all respects, otherwise the trial court lacks subject-matter jurisdiction. See id. at 75-77. The Kazi court sided with the modern trend that treats failure to comply with statutory requirements as defeating a claimant's right to relief but not defeating the trial court's jurisdiction:
[T]he modern direction of policy is to reduce the vulnerability of final judgments to attack on the ground that the tribunal lacked subject matter jurisdiction . . . The right of a plaintiff to maintain a suit, while frequently treated as going to the question of jurisdiction, has been said to go in reality to the right of the plaintiff to relief rather than to the jurisdiction of the court to afford it.
Id. at 76-77 (quotations omitted).
Prior to Kazi, several courts of appeals either held or indicated in dicta that application of section 42.09(a)'s exclusive-remedies provision would deprive a trial court of jurisdiction. See, e.g., Northwest Texas Conf. of the United Methodist Church v. Happy Indep. Sch. Dist., 839 S.W.2d 140, 143 (Tex.App.-Amarillo 1992, no writ) (holding that application of section 42.09 of the Tax Code deprives trial court of jurisdictional to consider alleged tax exemption); City of Shenandoah v. Swaggart Evangelistic Ass'n, 785 S.W.2d 899, 903 (Tex.App.-Beaumont 1990, writ denied) (holding that section 42.09 of the Tax Code deprived trial court of jurisdiction to consider alleged exemption because the Tax Code's provisions for protesting the denial of an exemption created right that did not exist at common law and thus courts only have jurisdiction to act in a manner provided by the statute that created those rights). The parties have not cited, and we have not found, a case from the Texas Supreme Court or from this court addressing whether the application of section 42.09 would deprive the trial court of jurisdiction. Furthermore, the parties have not cited, and we have not found, any case that determines whether, in light of the Kazi decision, the application of section 42.09 would deprive the trial court of subject-matter jurisdiction.
The Taxing Authorities rely on two cases that deal not with section 42.09 but with section 42.21. See Appraisal Review Bd. v. Int'l Church of the Foursquare Gospel, 719 S.W.2d 160, 160 (Tex. 1986) (holding that section 42.21 of the Texas Tax Code is jurisdictional and that failure to include county appraisal district as party within forty-five days after receiving notice that final order had been entered deprived the court of jurisdiction); Gregg County App. Dist. v. Laidlaw Waste Sys., Inc., 907 S.W.2d 12, 16 (Tex.App.-Tyler 1995, writ denied) (holding that section 42.21 is jurisdictional and must be complied with in all respects or action is not maintainable). These cases are not on point. In any event, these cases both rely on the legal rule that the Texas Supreme Court rejected in Kazi. Compare Kazi, 12 S.W.3d at 75-77, with Int'l Church of the Foursquare Gospel, 719 S.W.2d at 160; and Laidlaw Waste Sys., Inc., 907 S.W.2d at 16; see also Matagorda County App. Dist. v. Coastal Liquid Partners, L.P., 165 S.W.2d 329, 331, n. 5 (Tex. 2004) (noting that, although the Int'l Church of the Foursquare Gospel court held that section 42.21 is jurisdictional, the Texas Supreme Court has yet to address whether that holding survives Kazi).
In a decision rendered after Kazi, the Corpus Christi Court of Appeals stated in dicta that the application of section 42.09(a) would deprive the trial court of jurisdiction. See City of Pharr v. Boarder to Boarder Trucking Serv., Inc., 76 S.W.3d 803, 805-06 (Tex.App.-Corpus Christi 2002, pet. denied). In making its dicta statements, this court relied on the legal rule that the Texas Supreme Court rejected in Kazi. Compare Kazi, 12 S.W.3d at 75-77 with City of Pharr, 76 S.W.3d at 805-06. The Corpus Christi court also failed to cite Kazi or discuss its impact. See City of Pharr, 76 S.W.3d at 805-06.
Under section 42.09(a), except as provided in section 42.09(b), the Property Tax Code's procedures for adjudicating the grounds of protest authorized by the Property Tax Code are exclusive, and a property owner may not raise any of those grounds as the basis of a claim for relief in a suit by the property owner to arrest or prevent the tax-collection process or to obtain a refund of taxes paid. See TEX. TAX CODE ANN. § 42.09 (a). We conclude that section 42.09 does not strip district courts of jurisdiction to entertain independent suits seeking to arrest or prevent the tax-collection process or to obtain a refund of taxes paid. See New v. Dallas App. Rev. Bd., 734 S.W.2d 712, 716 (Tex.App.-Dallas, 1987, writ denied) (holding that the exclusive-remedies provision of section 42.09 did not deprive trial court of jurisdiction over independent suit seeking to block collection of taxes and challenging increase in appraised value of property, in a case in which there was a genuine issue of material fact as to whether notice of this increase was delivered to property owner). Rather than depriving district courts of jurisdiction or power to act, section 42.09 limits the grounds that property owners may raise "as a basis of a claim for relief in a suit by the property owner. . . ." See TEX. TAX CODE ANN. 42.09 (a)(2). Applying the Kazi rationale, we conclude that section 42.09(a), if it applies, affects a property owner's right to relief; it does not deprive the trial court of jurisdiction. See Kazi, 12 S.W.3d at 75-77; see also Univ. of Tex. Sw. Med. Ctr. at Dallas v. Loutzenhiser, 140 S.W.3d 351, 358-64 (Tex. 2004) (holding that trial court would not lack jurisdiction based on claimant's alleged failure to comply with Texas Tort Claims Act's requirement that notice of claim be given within six months of occurrence made the basis of suit against governmental unit); Hubenak v. San Jacinto Gas Transmission Co., 141 S.W.3d 172, 183-84 (Tex. 2004) (holding that trial court would not lack jurisdiction based on condemnor's alleged failure to comply with requirement of condemnation statute that condemnor file petition stating the condemnor and the property owner are unable to agree on the damages).
Taxing authorities can easily recognize if they are being sued in an independent suit raising the grounds of protest authorized by the Texas Property Code. Neither section 42.09's purpose nor the efficient administration of justice would be served by allowing taxing authorities to raise section 42.09(a)'s exclusive-remedies bar for the first time on appeal or by allowing appellate courts to raise it on their own motion. See, e.g., City of Shenandoah, 785 S.W.2d at 903 (stating that court could raise what it considered to be the jurisdictional bar of section 42.09(a), although taxing authorities did not raise this objection at trial level, which included a jury trial, and even though taxing authorities did not assign error on appeal as to this issue). Under Kazi and its progeny, we conclude that application of section 42.09's exclusive-remedies provision would not deprive the trial court of jurisdiction. Because the Taxing Authorities' third issue asserting their section 42.09 argument does not go to the trial court's jurisdiction, we lack appellate jurisdiction over this issue, and we make no determination regarding the merits of this argument. See Rushing, 7 S.W.3d at 913.
B. Does payment of taxes, penalties, and interest moot the claims of the Dreyers and 1615 Corporation against the Taxing Authorities, thereby depriving the trial court of subject-matter jurisdiction?
In their first issue, the Taxing Authorities argue that the trial court lacks subject-matter jurisdiction over the Dreyers and 1615 Corporation's claims because these claims are moot, based on the Dreyers' payment of the taxes, penalties, and interest for the years at issue — 1988 through 1991. The Taxing Authorities argue that "payment of a judgment by a third person who was not a party to the suit moots the case regardless of whether the payment was voluntary or involuntary." See Employees Fin. Co. v. Lathram, 369 S.W.2d 927, 930 (Tex. 1963). The Taxing Authorities' argument lacks merit, and the authorities they cite are not applicable to the facts in this case.
Generally, standing and absence of mootness are two prerequisites to subject-matter jurisdiction. See Williams v. Lara, 52 S.W.3d 171, 178 (Tex. 2001) (addressing standing); Speer v. Presbyterian Children's Home Serv. Agency, 847 S.W.2d 227, 229 (Tex. 1993) (addressing absence of mootness). If the plaintiff lacks standing or if the controversy becomes moot, there is no live controversy, and the trial court has no subject-matter jurisdiction. Williams, 52 S.W.3d at 184; Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000). Any ruling by the trial court is impermissibly advisory and therefore void. Williams, 52 S.W.3d at 184; Valley Baptist Med. Ctr., 33 S.W.3d at 822. A case becomes moot if a live controversy ceases to exist, if the parties lack a legally cognizable interest in the outcome, or if the trial court's actions cannot affect the parties' rights. See Pinnacle Gas Treating, Inc. v. Read, 104 S.W.3d 544, 545 (Tex. 2003); Williams, 52 S.W.3d 171, 184 (Tex. 2001); Nat'l Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999). A case may become moot when the initial controversy between the parties ceases. Nat'l Collegiate Athletic Ass'n, 1 S.W.3d at 86.
The main authority on which the Taxing Authorities rely, Employees Finance Co., 369 S.W.2d at 930, is distinguishable for two reasons. First, it is not a case that involves an equitable bill of review. Second, that case held that an appellant's payment of the full amount of the judgment mooted its appeal because the appellant could have posted a supersedeas bond. Id. at 930. In this case, the Dreyers have not paid the full amount of the judgment.
A true controversy exists in this case because the Taxing Authorities themselves are seeking to foreclose on the Property for non-payment of property taxes covered by the judgment under attack. In addition, the Dreyers and 1615 Corporation, regardless of payment of taxes, penalties, and interest for the years 1988 through 1991, have a justiciable claim based on their petition for an equitable bill of review, in which they seek to set aside the underlying tax judgment. See Highlands Church of Christ v. Powell, 640 S.W.2d 235, 236-37 (Tex. 1982) (holding that in an ad valorem tax case payments made to avoid additional penalties or foreclosure were not "voluntary" and would not preclude an appeal). The Dreyers and 1615 Corporation request that the alleged overpayment of taxes be returned to them, with interest and costs or be credited to their account for the years paid.
Based on this record, we conclude that the mootness argument lacks merit. Because the issue of foreclosure and alleged overpayment of taxes are still unresolved, a live controversy between the parties still exists, and the trial court's actions can affect the parties' rights. See Pinnacle Gas Treating, 104 S.W.3d at 545; Nat'l Collegiate Athletic Ass'n, 1 S.W.3d at 86. Accordingly, we overrule the Taxing Authorities' first issue.
C. Do the Dreyers have standing to bring their claims even though they were not parties to the underlying tax suit?
The Taxing Authorities next argue that the trial court lacked subject-matter jurisdiction over this case because the Dreyers do not have standing to bring a petition for bill of review to challenge a judgment to which they are not parties. We agree with the Taxing Authorities' argument that the Dreyers do not have standing to bring a petition for bill of review. As a general rule, a party possesses standing to file a bill of review if she is a party to the prior judgment or is someone who had a then-existing interest or right that was prejudiced thereby. See Rodriguez v. EMC Mort. Corp., 94 S.W.3d 795, 798 (Tex.App.-San Antonio 2002, no pet); Bynum v. Davis, 327 S.W.2d 673, 677 (Tex.Civ.App.-Houston 1959, no writ) (on reh'g). It is undisputed that the Dreyers are not parties to the Judgment and did they have any interest in the Property at the time of the Judgment. However, in addition to their request for bill-of-review relief, the Dreyers also seek declaratory relief regarding the alleged homestead exemption for 1988 through 1991 as well as recoupment of their claimed overpayments of taxes. Although we conclude that the Dreyers have no standing to bring a bill of review, this holding does not deprive them of standing as to their declaratory-relief and recoupment claims.
Because the question of standing is a legal question, we review de novo a trial court's ruling on a plea to the jurisdiction. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). Standing is a component of a court's subject-matter jurisdiction. Tex. Ass'n of Bus., 852 S.W.2d at 446 (Tex. 1993). The plaintiff has the burden of alleging facts that affirmatively demonstrate a court's jurisdiction to hear a cause. Id. A plea to the jurisdiction challenges a trial court's authority to hear a case by alleging that the factual allegations in the plaintiff's pleadings, when taken as true, fail to invoke the trial court's jurisdiction. Bybee v. Fireman's Fund Ins. Co., 331 S.W.2d 910, 917 (1960). We construe the allegations in the pleadings in favor of the pleader. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).
When a plaintiff fails to plead facts that establish jurisdiction, but the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the plaintiff should be afforded the opportunity to amend. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). On the other hand, if the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiff an opportunity to amend. Id. The standing doctrine requires that there be a real controversy between the parties, that will be determined by the judicial declaration sought. Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996). Only a claimant whose primary legal right has been breached has standing to seek redress for an injury. Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex. 1976). Stated differently, one has standing to sue only when one is personally aggrieved by an alleged wrong. Nootsie, 925 S.W.2d at 661. Implicit in these requirements is that litigants must be "properly situated to be entitled to [a] judicial determination." Austin Nursing Center, Inc. v. Lovato, __ S.W.3d. __, __, No. 03-0659, 2005 WL 1124764, at * 3 (Tex. May 13, 2005).
Looking at the pleadings in the light most favorable to the Dreyers, we conclude that the Dreyers have standing in this case. See Tex. Ass'n of Bus., 852 S.W.2d at 445. It is undisputed that the Dreyers have alleged that they suffered an injury after they purchased the Property, as the Dreyers are the individuals who claim to have paid the Judgment for taxes, penalties, and interest. In addition, they are the property owners who will be potentially affected by any foreclosure instigated by the Taxing Authorities. Because this appeal is limited to the jurisdictional issues, we do not reach the merits of the Dreyers' or 1615 Corporation's claims as stated in their pleadings. However, based on their allegations in their pleadings, the Dreyers have standing to sue because they claim to have been personally aggrieved by an alleged wrong. See Nootsie, Ltd., 925 S.W.2d at 661. Accordingly, we conclude that the Dreyers have standing in this case as to their declaratory-judgment and recoupment claims.
D. Does 1615 Corporation have standing to bring the petition for bill of review and for declaratory judgment even though it did not own the Property at the time the Taxing Authorities attempted foreclosure?
The Taxing Authorities contend that 1615 Corporation does not have standing in this action for two reasons. First, they argue that because the taxes for the years in dispute (1988 through 1991) have been paid by the Dreyers, 1615 Corporation does not have standing because there is no "live" controversy. As explained above in section B, the record establishes that not all of the taxes awarded in the Judgment have been paid. The Taxing Authorities themselves attempted to foreclose on the Property because of unpaid taxes due to the Houston Independent School District for the 1998 and 1999 tax years. The parties agreed to a temporary injunction enjoining any foreclosure sale of the Property. Moreover, regardless of whether the taxes have been paid, there is still a live controversy in this case because the Dreyers are seeking alleged overpayments of taxes on the Judgment.
We find no merit in the Taxing Authorities' argument that, because it no longer owns the Property, 1615 Corporation has no standing. In support of their argument, the Taxing Authorities rely on a line of cases that are not applicable to the facts in this case. See Parker v. Polland, 522 S.W.2d 950, 951 (Tex.Civ.App.-Beaumont 1975, writ ref'd n.r.e). In Parker, the Beaumont Court of Appeals held that a landowner had no justiciable interest in the land and thus could not maintain an action to set aside a sheriff's sale thereof, where fourteen days before filing suit, the landowner had conveyed all of his interest in the land involved to another and where there was no evidence that title to the land had been reconveyed to him. 522 S.W.2d at 951. This case, however, was not a bill-of-review proceeding and does not apply.
In addition, as a general rule, a party possesses standing to seek an equitable bill of review if it is a party to the prior judgment or one who had a then-existing interest or right that was prejudiced thereby. See Rodriguez, 94 S.W.3d at 798; Bynum, 327 S.W.2d at 677. It is undisputed that 1615 Corporation owned the Property when the trial court rendered the Judgment. 1615 Corporation was also a defendant in the case in which the Judgment was rendered. Thus, as to the petition for bill of review, 1615 Corporation has standing. See Rodriguez, 94 S.W.3d at 798; Bynum, 327 S.W.2d at 677.
On the other hand, insofar as the claims for declaratory relief and recoupment are concerned, 1615 Corporation does not have standing to bring these claims. First, 1615 Corporation did not make any payment toward the Judgment and no longer owns the Property on which the Taxing Authorities are attempting to foreclose. Second, because the Judgment was in rem, 1615 Corporation cannot be held personally liable for any amount of the Judgment, nor can it be held personally liable for any of the delinquent taxes. See Myers v. Int'l Trust, 263 U.S. 64, 73 (1923); Avila v. St. Luke's Luth. Hosp., 948 S.W.2d 841, 855 (Tex.App.-San Antonio 1997, pet. denied).
In Texas, the standing doctrine requires that there be both "a real controversy between the parties" and that the controversy "will be actually determined by the judicial declaration sought." Nootsie, 925 S.W.2d at 661. There is no real controversy between 1615 Corporation and the Taxing Authorities in regard to recoupment of the alleged overpayment of taxes or the application of the homestead exemption. In sum, we conclude that 1615 Corporation has standing in this case only as to its petition for an equitable bill of review.
V. CONCLUSION
Even if section 42.09 of the Tax Code applies to the Dreyers' and 1615 Corporation's claims, it would not deprive the trial court of jurisdiction. Therefore, we lack appellate jurisdiction over the third issue under section 51.014 (a)(8) of the Texas Civil Practice and Remedies Code. The Dreyers' partial payment of the taxes, penalties, and interest does not moot the claims of the Dreyers and 1615 Corporation against the Taxing Authorities. The Dreyers lack standing to bring the petition for equitable bill of review, but they do not lack standing as to their declaratory-judgment and recoupment claims. 1615 Corporation has standing to bring the petition for an equitable bill of review, but it lacks standing to assert its declaratory-judgment and recoupment claims.
Accordingly, as to the jurisdictional issues in this interlocutory appeal, we reverse the trial court's denial of the Taxing Authorities' plea to the jurisdiction to the extent that it holds that the Dreyers have standing to bring a petition for an equitable bill of review and to the extent that it holds that 1615 Corporation has standing to seek declaratory relief or recoupment of the alleged overpayment of taxes. In all other respects, we affirm the trial court's denial of the Taxing Authorities' plea to the jurisdiction, and we remand this case to the trial court for further proceedings consistent with this opinion.
Our holdings in this matter do not affect the merits of this action, as the merits are not before us in this interlocutory appeal. See City of Sunset Valley, 8 S.W.3d at 730-31 n. 3.