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SOUTHEAST TEXAS RECORD

Friday, March 29, 2024

Houston church loses appeal over excess proceeds from a property tax foreclosure sale

State Court
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Texas First District Court of Appeals Justice Russell Lloyd | txcourts.gov/

HOUSTON – A Houston church that sought excess proceeds from a property tax foreclosure sale still won't be getting those funds following a state appeals court's recent ruling.

In its eight-page memorandum opinion issued Dec. 17, the Texas First District Court of Appeals affirmed a lower trial court's denial of Mount Vernon United Methodist Church's petition to withdraw the excess proceeds from the foreclosure sale.

The appeals court also dismissed any pending motions as moot.


Justice Russell Lloyd wrote the opinion in which Justice Gordon Goodman and Justice Sarah Beth Landau concurred.

Mount Vernon's attempt at an appeal stemmed from an April 2016 signing by a Harris County District Court of final in favor of Harris County, the city of Houston, Houston Independent School District and the Houston Community College System, according to the background portion of the opinion. The final judgment awarded delinquent taxes and costs concerning real property belonging to the Peace Community Development Corp. to those governmental bodies. The governmental bodies are "appellees" in the opinion.

In May 2018, Mount Vernon received an assignment of the excess proceeds from the Peace Community Development Corp. from the corporation's executive director, who had been part of the underlying delinquent tax litigation.

The following September, Mount Vernon filed a post-judgment petition to withdraw excess funds, which was opposed by the tax master "on the basis of the record" and the district court denied the church's petition in October 2018. Mount Vernon filed its notice of appeal the following December.

In their response, the appellees argued that the appeals court has no jurisdiction over the appeal under the state's tax code, which does not allow appeals from an order denying a petition for excess proceeds.

Mount Vernon countered that the order was is final and appealable and that denying the church's appeal would violate constitutional Equal Protection and Due Process rights.

"Unless specifically authorized by statute, Texas appellate courts have jurisdiction only to review final judgments," Lloyd wrote, citing relevant precedent. "A judgment is final for purposes of appeal if it disposes of all pending parties and claims."

An order in a post-final-judgment proceeding is not a final judgment but may be "appealable" is such an appeal is statutorily authorized or "if the order has the nature of a mandatory injunction that resolves property rights," Lloyd wrote.

The appeals court found that it did have jurisdiction over Mount Vernon's appeal but overruled the church's claim that the district court was wrong when it didn't issue findings of fact and conclusions of law.

Lloyd also overruled Mount Vernon's claim that the church had established its right to the excess funds in the court's registry.

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