ONCOR ELECTRIC DELIVERY COMPANY NTU LLC v. SMITH COUNTY TAX ASSESSOR COLLECTOR ISD ISD ISD ESD ISD ISD ISD ISD ESD (2026)

OPINION

In two issues, Oncor Electric Delivery Company NTU, LLC appeals the trial court's order granting a plea to the jurisdiction and summary judgment with prejudice in favor of Smith County Tax Assessor-Collector, and related Taxing Units (the Taxing Units). We reverse and remand.

Background

In December 2024, Oncor sued the Taxing Units under the Texas Tax Code and the Uniform Declaratory Judgments Act seeking a refund of “erroneously assessed” taxes in the amount of $399,728.87.

For the 2022 tax year, Oncor received property tax statements from the Taxing Units totaling $4,714,432.38. According to Oncor, on January 31, 2023, the day before the default delinquency date, many Dallas United States Postal Service locations were closed due to a severe winter storm event. Oncor found an open USPS location and deposited the checks with the sole employee present for the full amount of Oncor's property tax obligations to the Taxing Units in a postage-paid envelope, but the USPS delayed shipment to Smith County.

The tax assessor-collector deemed Oncor in default, and applied Oncor's payment first to penalty and interest for the various Taxing Units, and then to base tax. The Taxing Units then issued “2022+ Tax Statements” which left a balance in base tax allegedly owed, and sought to recover that amount, plus additional penalties and interest, resulting in $399,728.87 in additional amounts owed. Oncor paid this amount by check which bore the notation “paid under protest,” with a cover letter which stated:

This payment is involuntary and is made under protest pursuant to Tax Code [S]ection 31.115 ․ The additional amounts shown being due on the enclosed delinquent tax statements are being erroneously and unlawfully imposed. Oncor intends to claim a refund for those amounts and file suit if its refund claim is denied.

Oncor submitted an application for tax refund of overpayment or erroneous payments, which the tax assessor-collector denied. Oncor then filed suit.

In its third amended petition, Oncor alleged that it paid the 2022 taxes timely, the Taxing Units “had no lawful basis” to charge $399,728.87, and Oncor paid the additional amounts “under protest.” Oncor sought (1) a statutory refund under Tax Code Section 31.11(k), and (2) a declaratory judgment. Further, Oncor alleged various constitutional challenges to Tax Code Section 31.11(k).

In their jurisdictional plea, the Taxing Units moved for dismissal based solely on the pleadings and argued that Oncor's claims do not demonstrate a waiver of governmental immunity because Section 31.11 only waives immunity for an overpayment or erroneous payment of principal taxes and not penalties or interest. The Taxing Units also filed a traditional motion for summary judgment as to Oncor's constitutional challenges to Tax Code Section 31.11. After a hearing, the trial court granted the Taxing Units' plea to the jurisdiction and motion for summary judgment. This appeal followed.

Plea To the Jurisdiction

In its first issue, Oncor contends that the trial court erred in granting the Taxing Units' jurisdictional plea.

Standard of Review and Applicable Law

A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject-matter jurisdiction. Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Such a plea may challenge whether the plaintiff has met its burden of alleging jurisdictional facts or may challenge the existence of jurisdictional facts. See Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226–27 (Tex. 2004). We review de novo a trial court's ruling on a plea to the jurisdiction. Id. at 228. When the plea challenges the pleadings, we determine whether the plaintiff has met its burden of alleging facts affirmatively demonstrating that the trial court has subject-matter jurisdiction. See City of Keller v. Hall, 433 S.W.3d 708, 712–13 (Tex. App.—Fort Worth 2014, pet. denied). We construe the pleadings liberally in the plaintiff's favor, accept all factual allegations as true, and look to the plaintiff's intent. Heckman v. Williamson Cty., 369 S.W.3d 137, 150 (Tex. 2012). If the pleadings are insufficient to establish jurisdiction but do not affirmatively demonstrate an incurable defect in jurisdiction, the plaintiff should be afforded the opportunity to amend. See Miranda, 133 S.W.3d at 226–27.

It is well established that “where a claim for declaratory or injunctive relief is brought seeking the refund of illegally collected tax payments, governmental immunity will not apply if the taxpayer alleges that the payments were made as a result of fraud, mutual mistake of fact, or duress, whether express or implied.” Anheuser-Busch, L.L.C. v. Harris Cty. Tax Assessor-Collector, 516 S.W.3d 1, 5 (Tex. App.—Houston [1st Dist.] 2016, no pet.); Nivens v. City of League City, 245 S.W.3d 470, 474 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (citing Dallas Cty. Cmty. Coll. Dist. v. Bolton, 185 S.W.3d 868, 876–79 (Tex. 2005)). This is the case because “revenue generated from a tax determined to be illegal should not be treated as property of the State or municipality to which the principles of sovereign immunity apply, and an illegally collected fee should be refunded if paid as a result of fraud, mutual mistake of fact, or duress, without respect to waiver of sovereign immunity.” Nivens, 245 S.W.3d at 474 (citing Camacho v. Samaniego, 954 S.W.2d 811, 822 (Tex. App.—El Paso 1997, writ denied), Austin Nat'l Bank of Austin v. Sheppard, 123 Tex. 272, 71 S.W.2d 242, 246 (1934)). In such circumstances, no legislative consent to sue is required. Id.

Analysis

Oncor pleaded two grounds for suit, Tax Code Section 31.11(k) and declaratory judgment. In response to Oncor's issue, Smith County asserts that Oncor's claims are entirely barred by the principle of governmental immunity and that Oncor has not pleaded sufficient facts to overcome this immunity.

 Tax Code Section 31.11(k)

We first address Oncor's contention that the district court had jurisdiction over its claim under Texas Tax Code Section 31.11(k) to seek a refund of overpaid taxes. Oncor's claim asserts that it timely paid taxes and seeks a refund for unlawfully charged penalties and interest, which it paid under protest.

Section 31.11 concerns refunds of overpayments or erroneous payments of taxes, and the version of the statute in effect for the relevant time period provided:

(a) If a taxpayer applies to the tax collector of a taxing unit for a refund of an overpayment or erroneous payment of taxes, the collector for the unit determines that the payment was erroneous or excessive, and the auditor for the unit agrees with the collector's determination, the collector shall refund the amount of the excessive or erroneous payment from available current tax collections or from funds appropriated by the unit for making refunds ․

(k) Not later than the 60th day after the date the collector for a taxing unit denies an application for a refund, the taxpayer may file suit against the taxing unit in district court to compel the payment of the refund ․

Act of May 31, 2021, 87th Leg., R.S., ch. 644, § 13, 2021 Tex. Gen. Laws 1297 (current version at Tex. Tax Code Ann. § 31.11(a), (k)).

The legislature's use of the word “taxes” in Section 31.11 does not include penalties and interest in this circumstance. See Harris Cnty. v. Falcon Hunter, LLC, No. 14-18-00247-CV, 2019 WL 470400, at *6 (Tex. App.—Houston [14th Dist.] Feb. 7, 2019, no pet.) (mem. op.). Thus, Oncor has not pleaded facts showing that its claim comes within the scope of a valid and applicable waiver of governmental immunity from suit under this provision.

 Common Law Claim for Declaratory Relief

We now turn to what we construe as Oncor's claim for equitable relief pursuant to a declaratory judgment action.

Oncor contends that it timely mailed the tax payments on January 31, 2023, and therefore the Taxing Units had no lawful basis to charge penalties and interest. A property owner's ad valorem taxes for a given year are delinquent if not paid before February 1 of the following year—with certain exceptions inapplicable here. See Tex. Tax Code Ann. § 31.02(a); Harris Cent. Appraisal Dist. v. LXMI Copper Cove Prop. Owner, LLC, No. 14-24-00624-CV, 2026 WL 88658, at *2 (Tex. App.—Houston [14th Dist.] Jan. 13, 2026, no pet.) (mem. op.). The property owner does not need to present proof that the tax assessor-collector received payment by the due date, however. Harris Cent. Appraisal Dist., 2026 WL 88658, at *2. Rather, a property owner's tax payment is timely if, on or before the due date, it is “properly addressed with postage or handling charges prepaid and ․ sent regular first-class mail or common or contract carrier,” and “the property owner furnishes satisfactory proof that it was deposited in the mail or with the common or contract carrier.” See Tex. Tax Code Ann. § 1.08(3); Harris Cent. Appraisal Dist., 2026 WL 88658, at *2. Moreover, the Taxing Units concede that if Oncor mailed the tax payments on January 31, the Taxing Units cannot charge penalties and interest.

As previously stated, governmental immunity does not apply to a common law claim for declaratory or injunctive relief that is brought seeking the refund of illegally collected tax payments made as a result of fraud, mutual mistake of fact, or duress, whether express or implied. See Bolton, 185 S.W.3d at 876–79; S. Montgomery Cnty. Mun. Util. Dist. v. Grace Cmty. Church-The Woodlands, Inc., No. 9-24-00173-CV, 2026 WL 827199, at *7 (Tex. App.—Beaumont Mar. 26, 2026, no pet.) (mem. op.); City of Bedford v. Apartment Association of Tarrant County, Inc., No. 02-16-00356-CV, 2017 WL 3429143, at *7–8 (Tex. App.—Fort Worth Aug. 10, 2017, pet. denied) (mem. op.); Anheuser-Busch, 516 S.W.3d at 5.

Oncor concedes that it did not present this common law argument to the trial court, but contends that its pleadings sufficiently raise jurisdiction for this argument. Although not well-articulated, Oncor brought a declaratory judgment action and alleged that (1) it paid the 2022 taxes timely, (2) the Taxing Units “had no lawful basis” to charge $399,728.87, (3) Oncor paid the additional amounts “under protest,” and (4) it sought return of the allegedly illegal tax payments made under protest. Regarding timeliness, Oncor alleged that it mailed the required tax payment on January 31, 2023, when Oncor senior accountant Matthew Aelvoet deposited the payments with the post office on that date, but the winter storm delayed delivery.¹

In Anheuser-Busch, our sister court addressed a similar issue. 516 S.W.3d at 1. In that case, a taxpayer was assessed over $600,000 in penalties and interest on its delinquent ad-valorem tax payment. Id. at 4. The taxpayer paid the penalty to avoid additional penalties and interest and then sued for its return. Id. at 5. The tax assessor-collector argued that it had governmental immunity and that the trial court lacked subject matter jurisdiction. Id. The court held that no legislative consent to sue was required because the taxpayer sought a declaratory judgment and alleged it paid the improper penalties and interest under duress. Id. Immunity did not protect the tax-assessor-collector from suit; consent to sue was not required. Id.

The Texas Supreme Court has noted that the threat of continually accruing interest may constitute duress. See Miga v. Jensen, 96 S.W.3d 207, 211, 224–25 (Tex. 2002) (explaining that compulsion “implied by the threat of statutory penalties and accruing interest” constitutes economic duress). Like the Anheuser-Busch taxpayer, because Oncor seeks a declaratory judgment and alleged that it paid the penalties and interest under protest, we conclude that no legislative consent to sue is required. 516 S.W.3d at 6 (concluding that threatened penalties and accruing interest may constitute economic duress); Nivens, 245 S.W.3d at 474 (concluding that governmental immunity does not apply when taxpayer alleges payments made under duress and seeks declaratory relief for refund of illegally collected tax payments).

Oncor could not rely upon Section 31.11(k) of the Texas Tax Code as a basis for waiver of the Taxing Units' immunity, but the trial court erred in granting the Taxing Units' plea to the jurisdiction because immunity does not bar Oncor's common law claim for declaratory relief seeking a refund of illegally collected tax payments. Because the pleadings do not affirmatively demonstrate an incurable jurisdictional defect, Oncor should be afforded the opportunity to amend its pleadings. See Miranda, 133 S.W.3d at 226–27; Bedford, 2017 WL 3429143, at *7–8 (concluding taxpayer's pleadings regarding refund claim do not affirmatively demonstrate an incurable jurisdictional defect and permitting opportunity to amend its pleadings). Accordingly, we sustain Oncor's first issue.

Summary Judgment

In its second issue, Oncor contends that the trial court erred in granting the Taxing Units' traditional motion for summary judgment regarding Oncor's open courts and due process constitutional challenges to Tax Code Section 31.11(k). Because we determined that this Section does not apply to the case at hand, we need not reach the constitutional challenges. See Hancock v. RJR Vapor Co., LLC, 734 S.W.3d 856, 866 (Tex. 2026); Tarr v. Timberwood Park Owners Ass'n, 556 S.W.3d 274, 283 n.6 (Tex. 2018) (“A court will not pass on the constitutionality of a statute if the particular case before it may be decided without doing so.”); see also Walters v. Livingston, 519 S.W.3d 658, 667 (Tex. App.—Amarillo 2019, no pet.) (“As an elemental statement of applicable law, a trial court cannot grant summary judgment based on a statute of limitations that does not apply to the cause of action in question.”). Nevertheless, given our conclusion that immunity does not bar Oncor's common law claim for declaratory relief, we likewise vacate this portion of the trial court's order granting summary judgment.

Disposition

Having sustained Oncor's first issue, we reverse the portion of the trial court's order granting defendants' plea to the jurisdiction, we vacate the portion of the trial court's order granting summary judgment, and we remand this matter to the trial court for further proceedings consistent with this opinion.

FOOTNOTES

1.   Oncor's allegations, supported by a declaration from Aelvoet, stated that (1) Aelvoet prepared the mail packages containing the tax payment checks with prepaid postage, and all were complete on the morning of January 31, (2) by 10:00 a.m., the roads were “iced over”, (3) he called the Dallas United States Post Office, which “was answered by a recording saying that all post office outlets were closed due to the winter storm”, and (4) he located an open post office on Ervay Street and deposited the mail that same day. Oncor further attached correspondence from the United States Postal Service delivery supervisor Morris Fields, which stated that “outgoing mail at [the Ervay Street outlet] did not go out due to severe inclement weather during January 31–February 2 ․” In Harris Cent. Appraisal Dist., the Dallas court of appeals addressed timeliness of depositing tax payment checks in a Dallas post office during the same winter storm on January 31 and held that the plea to jurisdiction was appropriately denied. Harris Cent. Appraisal Dist. v. LXMI Copper Cove Prop. Owner, LLC, No. 14-24-00624-CV, 2026 WL 88658, at *2-3 (Tex. App.—Houston [14th Dist.] Jan. 13, 2026, no pet.) (mem. op.) (Addressing tax payment under Tax Code Section 1.08's “mailbox rule” as jurisdictional prerequisite to appealing appraisal review board decision under Tax Code Chapter 42).

James T. Worthen, Chief Justice