Hegar, Comptroller of Public Accounts of State of Texas, et al., v Zertuche Construction, LLC, 03-19-00238-CV (Tex. App. – Austin, Jan. 22, 2021).
This is a tax collection case, but the main thrust is the procedural ruling on injunctions where the Austin Court of Appeals held that Zertuche Construction’s temporary injunction order was void due to a lack of trial setting.
The Comptroller audited Zertuche’s sales-and-use tax report, determined it owed additional taxes, and imposed penalties and interest. After a decision upholding an assessment of approximately $2.6 million, Zertuche submitted a written protest letter and followed the procedural steps for challenging the holding. Zertuche filed suit challenging the assessment and seeking an injunction to prohibit the Comptroller from taking action to collect the taxes owed under the assessment. The Comptroller responded by filing a plea to the jurisdiction. The trial court conducted a combined hearing on the Comptroller’s plea to the jurisdiction and Zertuche’s application for a temporary injunction to enjoin tax collection. The trial court issued a temporary injunction order prohibiting tax collection, but did not rule on the plea. The Comptroller and AG appealed.
Rule 683, dealing with temporary injunction orders, requires that an order granting a temporary injunction state the reasons for its issuance and set “the cause for trial on the merits with respect to the ultimate relief sought.” See Tex. R. Civ. P. 683. The trial court’s order stated “[t]he parties will set this matter for trial as soon as possible after the resolution of EBS Solutions [case pending in Texas Supreme Court] if Defendants’ Plea to the Jurisdiction and Motion to Dismiss for Lack of Jurisdiction is denied by this Court.” Thus, rather than set a date for trial, the order provides that the parties will set the matter for trial. Although a specific trial date need not be set in the order, the order must “set the cause for trial on the merits” and that “rule 683 implicitly requires the injunction to order the cause be calendared on the trial court’s docket.” Because the temporary injunction order does not set the cause for trial on the merits the Court of Appeals determined the order was void.
If you would like to read this opinion click here. Panel consists of e Justices Goodwin, Baker, and Kelly. Memorandum Opinion by Justice Kelly.