Attorneys representing Kinder Morgan and four local taxing entities filed briefs with the Texas Supreme Court arguing their positions on the merits of Kinder Morgan’s appeal of District Judge Ernie B. Armstrong’s decision to not dismiss a case involving the company and taxing entities.
In his 175-page brief, attorney D. Brent Lemon — who represents Scurry County, Snyder ISD, Western Texas College and Cogdell Memorial Hospital — wrote that, “Kinder Morgan failed to timely present its jurisdiction argument to the trial court and court of appeals, failed to provide an established full record and failed to accurately disclose material facts to the Court, the petition for review should be denied. As Kinder Morgan failed to timely raise or prove an illegal tax ferret engagement was entered into by the Taxing Units and the appeals of the determinations of the appraisal review board are not void, the petition for review should be denied. The Court of Appeals did not err in holding the TCPA’s (Texas Citizen Participation Act) 60-day timeline to file a Motion to Dismiss begins to run when the defendant is served with a petition that provides ‘fair notice’ of the statutory claims asserted in this de novo appeal of an appraisal review board determination of a taxing unit challenge. The Court of Appeals did not err in holding Petitioners were not entitled to an extension to file their TCPA motion, as the issue was completely waived at the trial court and at the Court of Appeals, and there was no showing of good cause or any abuse of discretion.”
Kinder Morgan’s attorneys, in a 44-page response, wrote, “Texas courts lack subject-matter jurisdiction over this case because the Taxing Units’ engagement with their attorney, Mr. Lemon, is a contingent-fee, taxferret engagement that is void under Texas law; the Taxing Units had no authority to pursue this administrative appeal (from an appraisal review board) through a void engagement; and therefore this administrative appeal is void (was never perfected).”
They also wrote that, “in a case nearly identical to this one, after fully examining both sides’ evidence and contentions, the Pecos County court validated Kinder Morgan’s jurisdictional argument in all respects.”
In that case a district judge dismissed with prejudice a lawsuit that Iraan-Sheffield ISD brought against Kinder Morgan in which the school district was represented by Lemonn.
An earlier Kinder Morgan brief to the Texas Supreme Court emphasized that the taxing entities originally filed their lawsuit against Kinder Morgan and the Scurry County Appraisal District claiming errors had been made in setting mineral valuations.
The company argued that its motion to dismiss was filed in 132nd District Court within the deadline that would have been triggered when the taxing entities filed amended paperwork charging Kinder Morgan with fraud.
Lemon, along with U.S. Consults, LLC, will receive 40 percent of any settlement or judgment the taxing entities receive in the case.
The taxing entities in 2018, sought to have Kinder Morgan’s mineral values re-appraised, a request SCAD’s Appraisal Review Board (ARB) denied.
The taxing entities then filed a lawsuit in 132nd District Court in an effort to get a ruling that would order the re-appraisals. Kinder Morgan asked Armstrong to dismiss the case, but he ruled the company had filed its request too late. The 11th Court of Appeals upheld Armstrong’s ruling, which the company appealed to the Texas Supreme Court.
If Kinder Morgan is successful in its effort to have the lawsuit dismissed under the Texas Citizens Participation Act, the taxing entities could be required to pay the company’s legal fees related the lawsuit.
Kinder Morgan appealed its mineral valuations this year, which were upheld by the ARB, and has thus far withheld a portion of its ad valorem taxes payable until the case can be heard, which is tentatively scheduled for later this summer.