Are Attorney Fees in Property Tax Cases Mandatory or Discretionary


If I win in court and my property taxes are lowered, is the Appraisal District Required to pay my attorney’s fees?

attorney fees

Public policy clearly influenced the legislature to provide for attorney’s fees in property tax valuation cases, in order to discourage taxing agencies from unreasonable taxation efforts, by recognizing the consequences for such efforts. Atascosa County Appraisal Dist. v. Tymrak, 815 S.W.2d 364, 372 (Tex.App. – San Antonio 1991), aff’d, 858 S.W.2d 335 (Tex.1993).  When an excessive appraisal is issued, a property owner is forced to pay more in taxes than is actually required. To recover the amount of money overpaid, the property owner must go through the onerous task and added expense of preparing and filing a lawsuit against the government.  Section 42.29 of the Texas Property Tax Code provides the requisite statutory authority to award attorneys fees to the property owner:

  • “(a) A property owner who prevails in an appeal to the court under section 42.25 or 42.26, … may be awarded reasonable attorney’s fees. The amount of the award may not exceed the greater of:
    • (1) $15,000; or
    • (2) 20 percent of the total amount by which the property owner’s tax liability is reduced as a result of the appeal.”

TEX. TAX CODE ANN. § 42.29 (emphasis added). Sections 42.25 and 42.26 are the Tax Code sections dealing with over-market valued properties and those properties unequally appraised, respectively.  If you prevail in an appeal to the District Court and the Court finds the appraised and market value of the Property to be lower than what it was, is an attorney’s fees award under Section 42.29 mandatory by law or discretionary (meaning it’s up to the judge to decide)?

Three (3) separate Texas Courts of Appeals (Dallas, Austin, and San Antonio) have all held that the award of attorney’s fees under Texas Property Tax Code § 42.29 is mandatory. No case has held that Section 42.29 fees are discretionary.

I. Zapata County Appraisal District v. Coastal Oil & Gas Corp.

In Zapata, judgment was rendered upon a jury verdict in favor of the property owner, but he was denied attorneys fees in a separate bench trial.  Zapata County Appraisal Dist. v. Coastal Oil & Gas Corp., 90 S.W.3d 847, 853 (Tex.App.- San Antonio 2002, no pet.). The San Antonio Court of Appeals held the trial court erred in denying the property owner’s request for attorneys fees, despite the property owners brief acknowledging that the award of fees was discretionary. Id. At 850.  The Zapata Court found attorneys fees mandatory based upon the Texas Supreme Court case of Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex.1998).

In Bocquet, the Supreme Court was asked what standard of review governs an award of attorney’s fees under the Declaratory Judgments Act, which provides that “the court ‘may’ award attorney fees.” Id.  The court held that the statute “affords the trial court a measure of discretion in deciding whether to award attorney fees or not.” Id.  But, the court noted, statutes providing that “a party may recover,” “party shall be awarded,” or “party is entitled to” attorney’s fees mandate an award of fees. Id.; see also C. Green Scaping, L.P. v. Westfield Ins. Co., 248 S.W.3d 779, 789 (Tex.App.-Fort Worth 2008, no pet.) (applying Bocquet and comparing discretionary language in section 38.001 of civil practice and remedies code to mandatory language in section 2253.07 of government code); Rosenblatt v. Freedom Life Ins. Co., 240 S.W.3d 315, 319–20 (Tex.App.-Houston [1st Dist.] 2007, no pet.) (applying Bocquet to determine fees mandatory under former article 21.21 of the insurance code) Id. In other words, it is not the use of the word “may” that determines whether an award of attorney’s fees is discretionary or mandatory but some other principle.”

The Zapata Court traced the line of cases cited in Boquet to Justice Holman’s opinion in Kimbrough v. Fox,  631 S.W.2d 606 (Tex.App.-Fort Worth 1982, no writ), in which the underlying principle was first enunciated:

“The question is whether … the legislature granted the litigant permission to recover the fees or whether it granted the trial court permission to either award or deny such fees.

We conclude that if the legislature had intended to vest the permission or discretion in the trial court, the permissive language would have provided  that the court may award (such fees).

The statute, however, states that “the claimant may … also recover … a reasonable amount as attorney’s fees.”

The location of the word “may,” and an analogous construction by our Supreme Court of a claimant’s right to statutory treble damages in Woods v. Littleton[,  554 S.W.2d 662 (1977)] … persuades us that the language of [the statute] grants to the litigant the permission to recover the fees he is able to prove reasonable.

We hold that upon such proof, the award is mandatory.” Id.  at 609.

The Zapata Court held that section 42.29(a) providing a taxpayer “may be awarded” attorney’s fees was analogous to statutes providing that “a party may recover” attorneys fees as opposed to those providing “the court may award”, and thus held that an award of attorneys fees under Section 42.29 of the Texas Tax Code is mandatory. Zapata County, 90 S.W.3d at 853-54.

II. Aaron Rents, Inc. v. Travis Central Appraisal District

In Aaron Rents, a furniture company succeeded on its action against the taxing authority, but the trial court denied recovery of attorney’s fees. Aaron Rents, Inc. v. Travis Cent. Appraisal Dist., 212 S.W.3d 665 (Tex.App.-Austin 2006, no pet.).  On appeal, the court concluded the action involved an “excessive appraisal” in which the property owner prevailed, and the court held attorney’s fees were mandatory under section 42.29 of the Tax Code. Id. at 676.

The Court noted the difficulty in its determination given that section 42.29 is neither clearly one or the other of the types of statutes distinguished in Bocquet. Id. at 672.  The Court also noted the use of passive voice in the statute, and opined that the wording could be rearranged and with additional words added could be construed to mean that attorneys fees were discretionary. However, the court declined to engage in wordplay to ascribe meaning to a statute that contradicts the meaning expressed in an unaltered reading of the statute. Citing City of Garland v. Dallas Morning News, 22 S.W.3d 351, 358 (Tex.2000) (courts must take statutes as they find them and should not give strained readings to statutes). Instead, the Court understood its task was to interpret the statute as written. See In re Doe, 19 S.W.3d 346, 351 (Tex. 2000) (statutes must be interpreted as written).

The Court also noted that the legislature is presumed to be aware of case law interpreting statutes it enacts and pointed out that Section 42.29 was originally enacted after the distinction in attorney’s fees was articulated in Kimbrough. See Act of May 26, 1983, 68th Leg., R.S., ch. 905, § 1, sec. 42.29, 1983 Tex. Gen. Laws 5033; General Servs. Comm’n v. Little–Tex Insulation Co.,  39 S.W.3d 591, 596 (Tex. 2001).  In doing so the Court stated:

“When it enacted the statute, the legislature did not specify that the “court may award attorney’s fees”; rather, the legislature specified that the prevailing taxpayer “may be awarded” attorney’s fees. The phrase a “property owner may be awarded attorney’s fees” is the functional equivalent of the phrase a “party may recover attorney’s fees,” which the supreme court has stated entitles a party to attorney’s fees. See Bocquet,  972 S.W.2d at 20. Had the legislature intended to give trial courts the discretion to deny fees to a prevailing property owner, they would have drafted the statute accordingly. See Kimbrough,  631 S.W.2d at 609.”

The court also examined language in a prior version of the statute which stated that a prevailing party was “entitled to reimbursement for reasonable attorney’s fees” and noted that “the bill analysis attached no significance” to the change from the former language of the statute to that which appears in the current version. Id.

The Aaron Rents court also pointed to the unusual circumstances of this type of claim in support of the conclusion that the award of attorney’s fees to a prevailing property owner is not discretionary by stating:

“The statute in question mandates the issuance of attorney’s fees after a party has proven that the government has issued an excessive appraisal of the party’s property. See Tex. Tax Code Ann. §§ 42.25 (remedy for excessive appraisal), 42.29. When an excessive appraisal is issued, a property owner is forced to pay more in taxes than is actually required. To recover the amount of money overpaid, the property owner must go through the onerous task and added expense of preparing and filing a lawsuit against the government. Given this fact setting, it is reasonable to conclude the legislature intended parties to recover the amount of attorney’s fees incurred in pursuing their claims when they prevail.”

The court also relied on Gardner v. Warehouse Partners, No. 05–97–01501–CV, 2000 WL 284185 at *1 (Tex.App.-Dallas March 17, 2000, no pet.) (not designated for publication) in support of its conclusion. In Gardner, the Court concluded the language in section 92.0081 of the Property Code which provides that “the tenant may recover … reasonable attorney’s fees” is mandatory, not discretionary. Id. Comparing the section of the Property Code at issue in Gardner to Section 42.29, the Aaron Rents court noted that the subject of the relevant portions of both statutes “is a prevailing party, not the court.” Aaron Rents, 212 S.W.3d at 674. In other words, both statutes “[couple] the use of a prevailing party as the subject of the statute with the use of the word ‘may’ when describing the remedies available to a litigant.” Id.

 Accordingly, the Aaron Rents Court held that upon request by a prevailing party under Section 42.25, an award of reasonable attorney’s fees is mandatory under Section 42.29, and that because Aaron Rents made a request for attorney’s fees, the district court abused its discretion in failing to award reasonable attorney’s fees.

III. Martinez v. Dallas Central Appraisal District

In Martinez, the Dallas Court of Appeals conducted a thorough examination of the status of the law in regards to the issue of mandatory or discretionary attorneys fees under Section 42.29.  Martinez v. Dallas Cent. Appraisal Dist., 339 S.W.3d 184 (Tex.App.- Dallas 2011, no pet.). The Court noted that the distinction derived in Texas legal precedent falls upon whether the word “may” speaks to what the litigant may receive or what the court may award. The word “may” could mean the legislature granted a permission or power to trial courts, but it also could mean the legislature granted an entitlement to litigants. Crawford Services, Inc. v. Skillman Intern. Firm, L.L.C., 444 S.W.3d 265 (Tex.App. – Dallas 2014). For example, in the context of an award of attorney’s fees, statutes that state “the court ‘may’ award attorney’s fees” have been interpreted to afford “the trial court a measure of discretion in deciding” whether to award attorney’s fees. And statutes that state “a party ‘may recover’ attorney’s fees” have been interpreted to grant an entitlement to litigants to recover attorney’s fees but not a grant of discretion to the trial court to deny an award of attorney’s fees. Id.

Martinez provides the distinction drawn by the Bocquet court as being characterized as “hing [ing] upon whether the statute in question speaks to what the litigant may receive or what the court may award” and found that section 42.29 speaks to what property owners may receive.  Martinez, 339 S.W.3d at 191. The Martinez Court then concurred with and adopted the reasoning of the Zapata and Aaron’s Rent Courts concluding “the language in section 42.29 is mandatory, and affords the trial court no measure of discretion in determining whether to award attorney’s fees.” Id. at 192.

IV. No Case Has Held That Section 42.29 Fees Are Discretionary

Appraisal Districts may point to two cases in an attempt to support their position that attorney’s fees are discretionary under section 42.29. See Tex–Air Helicopters, Inc. v. Appraisal Review Bd., 940 S.W.2d 299, 304 (Tex.App.-Houston [14th Dist.] 1997),  aff’d, 970 S.W.2d 530 (Tex.1998);  Tex–Air Helicopters, Inc. v. Harris Co. Appraisal Dist., 15 S.W.3d 173, 177 (Tex.App.-Texarkana 2000, pet. denied). However, neither case held that section 42.29 fees are discretionary. In Tex–Air I, the court refused to address the attorney’s fees issue (other than its passing comment that section 42.29 fees are discretionary), because Tex–Air was not a prevailing party. Tex–Air Helicopters, Inc. 940 S.W.2d at 304. In Tex–Air II, the court affirmed the denial of attorney’s fees under 42.29, because Tex–Air did not prevail on an excessive or unequal appraisal claim, not because section 42.29 fees are discretionary. Tex–Air Helicopters, Inc., 15 S.W.3d at 177. Therefore, only Texas legal precedent holding that attorneys fees under 42.29 are mandatory exist. See also Sam Griffin Family Investments-I, Inc. v. Dallas Cent. Appraisal Dist., 2014 WL 3587354 (Tex.App.-Dallas July 21, 2014, mem. op.).

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