Hydrogeo, LLC, First Bank & Trust East Texas v. Quitman Independent School District

Court of Appeals of Texas·Decided August 11, 2015·No. 06-15-00007-CV·Published

Opinion

ACCEPTED 06-15-00007-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 8/11/2015 4:01:54 PM DEBBIE AUTREY CLERK

No. 06-15-00007-CV

In the Court of Appeals for the FILED IN 6th COURT OF APPEALS Sixth Judicial District of Texas TEXARKANA, TEXAS Texarkana, Texas 8/11/2015 4:01:54 PM DEBBIE AUTREY Clerk

HYDROGEO, LLC AND FIRST BANK & TRUST EAST TEXAS Appellants AND DEBERRY 3 OPERATING COMPANY, LLC, Appellants

v.

QUITMAN INDEPENDENT SCHOOL DISTRICT, WOOD COUNTY, UPPER SABINE WASTE DISPOSAL DISTRICT, AND WOOD COUNTY CENTRAL HOSPITAL DISTRICT, Appellees _______________________________________

On Appeal from the 402nd Judicial District Court Wood County, Texas

HYDROGEO, LLC and FIRST BANK & TRUST EAST TEXAS’ REPLY TO QUITMAN INDEPENDENT SCHOOL DISTRICT, WOOD COUNTY, UPPER SABINE WASTE DISPOSAL DISTRICT, AND WOOD COUNTY CENTRAL HOSPITAL DISTRICTS’ BRIEF

J. DON WESTBROOK Texas Bar No. 21215500 COGHLAN CROWSON, LLP 1127 Judson Road, Suite 211 Longview, Texas 75601 (903) 758-5543 (903) 753-6989 (fax) dwestbrook@ccfww.com ORAL ARGUMENT REQUESTED Attorneys for Hydrogeo, LLC and First Bank & Trust East Texas TABLE OF CONTENTS Page

INDEX OF AUTHORITIES.......................................................................... iii

SUMMARY OF REPLY ................................................................................ 1

ARGUMENT AND AUTHORITIES ............................................................. 3

A. Issue No. 1 ....................................................................................... 3

B. Issue No. 2 ....................................................................................... 9

GOOD CAUSE DOES NOT EXIST .............................................................. 7

COURT’S ERROR CAUSED IMPROPER JUDGMENT ............................ 8

TAXES WERE ASSESSED ON BOTH REAL AND PERSONAL PROPERTY ................................................................................................... 9

CONCLUSION ............................................................................................. 12

PRAYER ....................................................................................................... 12

CERTIFICATE OF COMPLIANCE ............................................................ 13

CERTIFICATE OF SERVICE ..................................................................... 14

INDEX OF APPENDICES ........................................................................... 15

ii INDEX OF AUTHORITIES

Cases Page

Williams vs. County of Dallas 194 S.W.3d 29 (Tex. App.—Dallas 2006 pet den’d) ................................................ 4, 5

Lopez vs. La Madeleine of Texas, Inc., 200 S.W.3d. 854 (Tex App. —Dallas 2006, no pet.) ....................................................... 6

Alvarado v. Farah Mfg. Co., 830 S.W.2d 911 (Tex. 1992) ..................................................................................... 7, 8

Perry Homes v. Cull, 258 S.W. 3d 580 (Tex. 2008) .......................................................................................... 8

Other Page

TEX. R. CIV. P. 193.6 ...........................................................................1-3, 6-8

TEX. R. CIV. P. 193.1 ..................................................................................... 4

TEX. R. CIV. P. 193.6 (b) ............................................................................... 4

Rule 44.4, Tex. R. App. P. .............................................................................. 8

Tex. Tax Code Ann. § 33.47(a) (Vernon 1992) ............................................. 8

Texas Attorney General Opinion No. DM-438, May 2, 1997 ..................... 10

Tex. Tax Code Ann. § 33.05 (Vernon 1992) ............................................... 10

Tex. Tax Code Ann. § 32.03 (Vernon 1992) ............................................... 11

iii SUMMARY OF REPLY

In Reply to Appellee QUITMAN INDEPENDENT SCHOOL DISTRICT,

WOOD COUNTY, UPPER SABINE WASTE DISPOSAL DISTRICT, AND

WOOD COUNTY CENTRAL HOSPITAL DISTRICT (hereinafter referred to as

either “Appellees” or “Taxing Entities”), Appellants HYDROGEO, LLC AND

FIRST BANK & TRUST EAST TEXAS, (hereinafter referred to as “Hydrogeo”)

offer the following argument.

Regarding Issue number 1 relating to the improperly admitted Exhibit “A”,

Taxing Entities concede the document in question was not produced prior to trial,

and apparently concede their failure to produce violated Texas Rules of Civil

Procedure 193.6. They also acknowledge the plain language of the Rule requires

exclusion, but nevertheless they argue the trial court’s admission of Exhibit “A” was

proper because there was good cause or because its admission did not cause unfair

surprise to Hydrogeo. Appellees’ Brief at 8-10.

Contrary to Taxing Entities’ statements to the trial court and in their Brief,

Exhibit “A” did not consist only of updated tax statements of previously produced

documents. Exhibit “A” contains seven pages, two of which (p. 4 and 7) were never

produced by Taxing Entities. Significantly, those two pages were emphasized by

Taxing Entities during the trial, and in Appellee’s Brief at p.15. Because at least a

portion of the documents was never produced, and because Taxing Entities’ 1 intentional withholding of the applicable documents caused Appellants to be at a

disadvantage during trial, Taxing Entities are unable to carry their burden of proving

a lack of unfair surprise.

Along those same lines, Taxing Entities wholly fail to show good cause for

their refusal to supply the documents prior to trial. In order to prevail on this

exception, they must show in the record some legitimate reason explaining their

failure to comply with Rule 193.6. Since Exhibit “A” shows Appellees had these

documents in their possession seventeen days prior to trial, but still chose not to

produce them, good cause does not exist. The improperly admitted Exhibit “A”

constitutes the only evidence offered by Taxing Entities at trial. Without it, their

claims must fail as a matter of law. The trial court’s decision to admit this document

in contravention of Rule 193.6 caused it to render an improper judgment, which

should be reversed and rendered.

Regarding Issue Number 2, Appellees apparently concede they had no right

to foreclose Hydrogeo’s personalty, but argue that since the Judgment forecloses on

only real property, Hydrogeo’s arguments are neither “relevant nor applicable”.

Brief p. 17. Hydrogeo has shown that Taxing Entities are required to tax the

personalty and realty separately, and in this case, should have segregated the portion

of the alleged tax lien which was unenforceable. Contrary to Taxing Entities’

2 representations, they did tax some of Hydrogeo’s personalty, at least according to

their own records.

Since at least a portion of the foreclosed tax lien originates from taxes on

Hydrogeo’s personalty, which apparently Appellees acknowledge was

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Hydrogeo, LLC, First Bank & Trust East Texas v. Quitman Independent School District, (Tex. Ct. App. 2015).

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Related

Perry Homes v. Cull
258 S.W.3d 580 (Texas Supreme Court, 2008)
Alvarado v. Farah Manufacturing Co.
830 S.W.2d 911 (Texas Supreme Court, 1992)
Williams v. County of Dallas
194 S.W.3d 29 (Court of Appeals of Texas, 2006)