Sledd v. Garrett

Panel members of the Harris County Appraisal Review Board perform quasi-judicial functions that are protected by judicial immunity.

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Click here for the full text of this decision FACTS:A property tax consultant represents property owners protesting valuations of the Harris County Appraisal District. The consultant is compensated on a contingent-fee basis determined by the amount of reduction, if any, he obtains in his clients’ appraised property values. The consultant represented Three Birds Property Co. d/b/a John Eagle Acura (the property owner) at a formal protest hearing before a three-member panel of the Harris County Appraisal Review Board, comprised of Garrett, Landry and Mahon (collectively, the “panel members). The consultant protested the district’s appraisal of the property owner’s property. The consultant also alleged errors in the district’s valuation report and claimed the district provided insufficient documentation of its valuation. The consultant requested the board to set the property owner’s property value at $394,990, rather than the board’s appraised value of $2,307,190. The panel members did not make the drastic reduction the consultant requested, but they recommended a reduction in the appraised value of his client’s property to $1,950,000. The board then accepted this valuation. The consultant and the property owner did not appeal the board’s valuation of the property. The consultant filed this claim, pro se, in district court against the panel members individually, seeking to hold them personally liable for their valuation of the property owner’s property. The consultant claims the panel members were negligent because they ignored Texas Tax Code �41.43, which requires the district to establish value by a preponderance of the evidence. The consultant claims this alleged negligence by the panel members caused him damage due to his reduced contingency fee. The trial court granted the panel members’ motion for summary judgment, and the consultant appeals. HOLDING: In Butz v. Economou, 438 U.S. 478 (1978), the U.S. Supreme Court identified a nonexclusive list of factors for determining whether administrative officials perform quasi-judicial functions entitling them to judicial immunity: 1. the need to assure the officials may perform their functions without harassment or intimidation; 2. the presence of safeguards that reduce the need for private damages actions as a means of controlling unconstitutional conduct; 3. insulation from political influence; 4. the importance of precedent; 5. the adversarial nature of the process; and 6. the resolution of error by appeal. The Texas Tax Code establishes appraisal review boards for each appraisal district as a forum for property owners to protest appraisal-district valuations. Board decisions may be appealed by the property owner to a state district court. In large appraisal districts such as the Harris County Appraisal District, more than three members comprise the appraisal review board; the entire board does not sit at each protest hearing. A panel of three members of the board conducts the hearings and recommends a valuation to the entire board, which then makes the final decision. Panel members hearing a protest have duties similar to judges. The Texas Tax Code uses judicial terminology to describe the panel members’ function. For example, an appraisal review board may “sit” in panels to “conduct protest hearings.” Panel members have the power to subpoena witnesses and documents. Like a litigant in a court proceeding, the property owner may offer sworn testimony, evidence, or argument at the hearing before the panel. As in judicial proceedings, adequate notice of the hearing is required as well as the opportunity to present argument or evidence to support the property owner’s protest. Panel members must be able to rule on the valuation issues that come before them free from harassment or intimidation by property owners or their representatives. Panel decisions can have a significant effect on a property owner’s taxes, and the financial repercussions of such decisions could motivate disappointed property owners or their agents to seek recovery of civil damages from members of the board. A protest hearing before panel members is an adversarial process, and the property owner’s ability to appeal to the district court supports the second, third and sixth Butz factors. It is undisputed that the panel members were acting as a panel for the board and that their function at the protest hearing was to adjudicate the valuation protest. The consultant sued the panel members for their allegedly actionable conduct as panel members regarding the formal protest hearing. Applying the Butz factors to the undisputed summary-judgment evidence, the court concludes that the panel members perform quasi-judicial functions and that judicial immunity bars the consultant’s claims against the panel members in this case. The consultant argues the panel members are not entitled to judicial immunity because they do not make a final decision but only submit their recommendation to the board for final determination. This argument lacks merit. As members of the board, the panel members acted within their authority and performed their functions in deciding the appropriate valuation. In smaller appraisal districts, the entire appraisal review board hears and decides all protests, and there is no recommendation before a final determination is made. Because the appraisal district in Harris County is larger, three board members cannot hear all the protests. The resulting recommendation procedure should not preclude judicial immunity from attaching to functions performed by panel members in larger counties when it would otherwise attach to panels comprised of the entire board in smaller counties. OPINION:Frost, J.

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