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Click here for the full text of this decision FACTS:In 1992, the city demolished buildings on the property located at 8526 Pitner Road. The city assessed a fee for the cost of the demolition against the Pitner Road property, owned by L.A. Investments Inc. When L.A. Investments did not pay the demolition fee, the city filed a demolition lien on the Pitner Road property. On Feb. 15, 2000, the city, Spring Branch Independent School District and other taxing authorities obtained a judgment against L.A. Investments for delinquent taxes on the Pitner Road property. On May 15, 2000, the authorities obtained an Order of Sale in Tax Suit on June 22, 2000, the constable gave notice that the property would be sold at a public tax sale. With the approval of L.A. Investments, Saturn Capital Corp. purchased the tax lien from SBISD and later foreclosed on the tax lien at a public tax foreclosure sale. Saturn purchased the Pitner Road property at the tax sale. The city did not bid at the tax sale. At the time Saturn purchased the Pitner Road property, Saturn, taking the position that the tax sale extinguished all inferior liens, did not pay off the city’s demolition lien. In 2003, Saturn agreed to sell the Pitner Road property to Pitner Road Affordable Housing Ltd. However, the title company would not issue title insurance and close the sale unless the city released its demolition lien on the property. In addition, the purchaser was unwilling to go forward with the deal as long as the city refused to release its lien. Saturn, arguing the demolition lien was invalid because it had been extinguished by the tax sale, made demand on the city that it release the lien. The city refused to release the demolition lien until the lien had been paid in full. Faced with the loss of the sale of the Pitner Road property, Saturn paid the city the full amount of the demolition lien, $88,500.32, under protest and with full reservation of rights to litigate and recover the funds paid. Saturn then filed suit against the city seeking to recover its payment of the demolition lien. The city filed a plea to the jurisdiction arguing it was immune from Saturn’s suit, which the trial court granted. This appeal followed. HOLDING:Reversed and remanded. Sovereign immunity, the court stated, does not prevent a party who paid illegal government taxes and fees under duress from filing suit to seek their repayment. Under Texas Local Government Code �214.001(o), a demolition lien is subordinate to a tax lien. Therefore, a tax foreclosure sale extinguishes a demolition lien on the subject property. Because Saturn purchased the Pitner Road property at a properly conducted tax sale, the court held that the tax sale extinguished the city’s inferior demolition lien. Accordingly, Saturn took the Pitner Road property free from that lien. Next, the court found that because the tax sale extinguished the demolition lien, the city’s refusal to release the demolition lien and subsequent acceptance of Saturn’s payment of the lien amount constituted the collection of an illegal fee. The duress necessary to authorize the recovery of an illegal tax or fee, the court stated, is established when the unauthorized tax or fee is required, necessary, or shall be paid to avoid the government’s ability to charge penalties or halt a person from earning a living or operating a business. The court found that: 1. Saturn faced substantial damage to its business if the Pitner Road property sale did not go through; 2. the sale could not be completed unless the city released its extinguished demolition lien; and 3. Saturn paid off the extinguished demolition lien only after the city demanded payment in full before it would release the lien. Thus, the payment was not voluntary but made under duress. Accordingly, the court held that the suit did not implicate sovereign immunity and that Saturn could sue the city. OPINION:Anderson, J.; Hedges, C.J., and Anderson and Seymore, JJ.

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