CAUSE NO. D-1-GN-15-003492 CITY OF AUSTIN Plaintiff, § § § vs. § § TRAVIS CENTRAL APPRAISAL § DISTRICT, INDIVIDUAL PROPERTY § OWNERS WHO OWN C1 VACANT § LAND OR F1 COMMERCIAL REAL § PROPERTY WITHIN TRAVIS § COUNTY TEXAS; and GLENN HEGAR, § IN HIS OFFICIAL CAPACITY AS TEXAS § COMPTROLLER OF PUBLIC ACCOUNTS § Defendants. IN THE DISTRICT COURT TRAVIS COUNTY, TEXAS 126TH JUDICIAL DISTRICT DEFENDANT JUNK YARD DOGS, LP’s SPECIAL EXCEPTIONS TO PLAINTIFF CITY OF AUSTIN’S ORIGINAL PETITION TO THE HONORABLE JUDGE OF SAID COURT: NOW COMES Defendant Junk Yard Dogs, LP who files these Special Exceptions to Plaintiff’s Original Petition, pursuant to Rules 90 and 91 of the Texas Rules of Civil Procedure, and would respectfully show this Court as follows: Introduction 1. In its pleadings, the City of Austin has been vague and contradictory about which property values were included in its Challenge Petition at the ARB, which property owners they are suing in this appeal of the denial of their Challenge Petition, and which property would be subject to reappraisal for tax year 2015. The City must be required to correct its pleading as to the property owner parties affected by the City lawsuit because: a. It could affect the court’s jurisdiction over the parties; b. It could affect whether the City exhausted it administrative remedies; c. It could affect whether the City has engaged in picking and choosing which Defendant Junk Yard Dogs, LP’s Special Exceptions Page 1 of 7 properties to challenge values on, despite Tax Code restrictions that the City can only challenge values of a “category” of property, not individual property owners; d. It could affect whether the City’s judicial appeal has challenged values for property that is not categorized as C1 or F1; failed to challenge values on property that is categorized as C1 or F1; challenged C1 and F1 property outside the City of Austin, or failed to challenge all C1 and F1 property inside the City of Austin, including those in Williamson County and Hays County; e. It could affect whether the City is seeking relief in this appeal that affects properties that were not included within the scope of the City’s ARB challenge; f. It could affect whether the City, in its appeal, has excluded properties that were included within the scope of its ARB challenge; g. It could affect which property owners end up on the receiving end of orders issued by the Court and be subjected reappraisal and revised tax billing for tax year 2015; and h. It would affect which property owners must suffer the uncertainty and chaos associated with the City’s plea for relief in the form of revising the 2015 tax liability of tens of thousands of property owners. Defendants asks the Court to order the City of Austin to replead and clearly identify which properties (and owners) are the subject of this appeal. Facts Related to Special Exceptions Has the City Challenged C1 & F1 Property Countywide or only in Austin? 2. The City defined the scope of its challenge in its Challenge Petition as “The City of Austin challenges the C1 vacant land and F1 commercial real property categories in the district.” Exhibit 1 – City’s Challenge Petition (emphasis added). Since “the district’s” boundaries are conterminous with the boundaries of Travis County, a plain reading of the City’s Challenge Petition is that it applied to all Defendant Junk Yard Dogs, LP’s Special Exceptions Page 2 of 7 property in Travis County with a category code of C1 or F1 in the TCAD records. This Challenge Petition, was the last clear indication by the City as to what geographic area included the challenged C1 and F1 properties, i.e.,”the district.” From then on, the City has been obtuse in its filings about what geographic area their appeal applies to. 3. The City’s Notice of Appeal said the City “... filed a petition challenging the level of appraisals in C1, vacant land, and F1, commercial real property, categories for the tax year 2015.” The notice makes no mention of the geographic area in which the challenged properties are located. Exhibit 2 – TCAD’s 1st Notice with Notice of Appeal attached. 4. After the City gave notice that it would appeal the denial of its challenge by the ARB, TCAD sent a notice, dated July 18, 2015, apparently to all property owners of C1 and F1 property in Travis County. Exhibit 2 – TCAD’s 1st Notice. Then, TCAD sent another notice, dated July 28, 2015, apparently to property owners of C1 and F1 property in Travis County that is outside of the City of Austin, saying (in bold letters), “The City of Austin Notice to Appeal ONLY applies to C1 vacant land and F1 commercial real property within the City of Austin limits. We apologize for any inconvenience that may have occurred.” Exhibit 3 – TCAD’s 2nd Notice (emphasis in the original). 5. When, on August 24, 2015, the City filed its Original Petition and Request for Permanent Injunction to appeal the ARB denial of its Challenge Petition (a denial the City had requested from the ARB), the City’s opening, unnumbered paragraph described the challenged “Subject Properties” without designation of the geographic area in which the subject properties were located. Exhibit 4 – City’s Original Petition (referring to the “... undervaluation of properties in the C1 vacant land and F1 commercial real property categories (“Subject Properties”) by the Travis Central Appraisal District (“TCAD”).”). In Paragraph 5 of its Original Petition, the City defines the property owner parties as “Defendants owning property within Travis County, Texas identified by TCAD as C1 vacant land or F1 Defendant Junk Yard Dogs, LP’s Special Exceptions Page 3 of 7 commercial real property are listed in a document filed contemporaneously with this petition, and is incorporated here by reference....” Exhibit 4 at Page 2 (emphasis added). 6. When the City filed its lawsuit, it notified the Travis County District Clerk by letter dated August 24, 2015 that the City did not want the C1 or F1 defendants served with citation. Exhibit 5 – City’s Letter to District Clerk. The description of the defendants, used by the City in that letter, also appears to describe the applicable geographic territory as “Travis County” (not just the City of Austin) that would apply to the defendants. Exhibit 5 (“This document lists all Defendants, and their registered agents, if any, owning property within Travis County, Texas identified by Travis Central Appraisal District as C1 vacant land or F1 commercial real property.”). Has the City Challenged All Austin C1 & F1 Property, Including Williamson & Hays County? 7. Adding further to the confusion, in Paragraph 22 of the City’s Original Petition, the City says, “In 2014, the City commissioned a study to determine the undervaluation of the Subject Properties within the City of Austin.” Exhibit 4 at Page 6. The court can take judicial notice that the city limits of Austin extend into Williamson County and Hays County. If the City is challenging C1 and F1 property “within the City of Austin,” that would include such property in Austin in Williamson and Hays County. Clarification of the City’s pleading is necessary to determine if the City challenged a complete “category” of property or only part of a category. Has the City Sued Non-C1/F1 Property Owners and Omitted C1/F1 Property Owners? 8. Counsel for Defendant Junk Yard Dog, LP commissioned a review of the City’s “defendants list” filed with the district clerk in this appeal. The fully documented review was conducted by Creative Data Consulting, comparing the City’s defendants list to TCAD’s records of C1 and F1classified property accounts. Exhibit 6 – Affidavit of Susan K. Bawcom. The conclusions from that review are startling: Defendant Junk Yard Dogs, LP’s Special Exceptions Page 4 of 7 a. All of the properties on the City’s Defendants’ List are in the City of Austin in Travis County only; b. A total of 1,645 C1 parcels and 151 F1 parcels in the City of Austin were inexplicably omitted from the City’s Defendants’ List; c. A total of 54 C1 parcels and 3,097 F1 parcels on the City’s Defendants List are NOT categorized as C1 or F1 parcels on TCAD’s records; d. A total of 13 parcels on the City’s Defendants’ List identified as C1-Vacant Land parcels, are actually improved property, not vacant and 11 more parcels do not have the C1-category designation in TCAD’s files and are improved property. Special Exceptions 9. For these reasons, Defendant specially excepts to the City’s Original Petition (and list of defendants contemporaneously filed with the petition and incorporated by reference in the Petition), (a) first unnumbered paragraph, and (b) Paragraph 5 because the description of the properties (and therefore the owner parties) is apparently at odds with the properties described in the underlying Challenge Petition or is so unclear and uncertain as to make it impossible to know which properties (and owners) are subject to this litigation. 10. The City’s Petition and defendants’ list does not give fair notice to the parties as to which properties are subject to the litigation and which properties the City proposes to have reappraised and reassessed for 2015. PRAYER For these reasons, Defendant Junk Yard Dogs, LP asks the Court to set its special exceptions for hearing, and, after the hearing sustain its special exceptions and order Plaintiff City of Austin to replead and cure its pleading defects and, if the City does not cure its defects, strike the defective portions of its pleading. Since the defective portions of the City’s pleading goes to the fundamental issue of which properties would be subject to the relief the City has requested, if the City does not cure the defective Defendant Junk Yard Dogs, LP’s Special Exceptions Page 5 of 7 portions of its pleading, Defendant asks the Court to dismiss the City’s case. Respectfully submitted, MICHELGRAY, LLP 812 W. 11th Street, Suite 301 Austin, Texas 78701 (512) 477-0200 Telephone (512) 477-6636 Facsimile By: /s/ Lorri Michel LORRI MICHEL State Bar No. 14009460 lorri@michelgray.com RAYMOND GRAY State Bar No. 08328250 raymond@michelgray.com JOSEPH M. HARRISON IV State Bar No. 09116150 jharrison@hddhlaw.com HARRISON & DUNCAN PLLC 1009 C Street, Suite 200 Floresville, Texas 78114-2223 Telephone: (830) 393-0500 Telecopier: (830) 393-4941 AleshireLAW, P.C. BILL ALESHIRE Bar No. 24031810 700 Lavaca, Suite 1400 Austin, Texas 78701 Telephone: (512) 320-9155 Facsimile: (512) 320-9156 Bill@AleshireLaw.com ATTORNEYS FOR DEFENDANT JUNK YARD DOGS, LP Defendant Junk Yard Dogs, LP’s Special Exceptions Page 6 of 7 CERTIFICATE OF SERVICE In accordance with Rule 21(a) of the Texas Rules of Civil Procedure, I certify that a true and correct copy of the foregoing document was sent on the 14th day of October, 2015, via E Service and /or email, to the following counsel of record: Andralee Cain Lloyd Andralee.Lloyd@austintexas.gov Michael Siegel Michael.siegel@austintexas.gov Attorneys for the City of Austin Deborah S. Cartwright dcartwright@olsonllp.com Todd Stewart tstewart@olsonllp.com Attorneys for Defendant TCAD Cynthia A. Morales cynthia.morales@texasattorneygeneral.gov Attorneys for Defendant Texas Comptroller James Popp jim.popp@property-tax.com Mark Hutcheson Mark.hutcheson@property-tax.com Attorney for Texas Association of Realtors, Lowes & Driskill Hotel /s/ Lorri Michel Lorri Michel Defendant Junk Yard Dogs, LP’s Special Exceptions Page 7 of 7