Dallas Central Appraisal District and the Dallas County Appraisal Review Board v. Southwest Airlines Co.,

 
REVERSE and RENDER; Opinion issued January 24, 2012
 
In The
Court of Appeals
Fifth District of Texas at Dallas
............................
No. 05-10-00682-CV
............................
 
DALLAS CENTRAL APPRAISAL DISTRICT AND DALLAS COUNTY APPRAISAL REVIEW
BOARD, Appellants
 
V.
SOUTHWEST AIRLINES CO., Appellee
.............................................................
On Appeal from the 116th Judicial District Court
Dallas County, Texas
Trial Court Cause No. 09-05720-F
.............................................................
MEMORANDUM OPINION
Before Justices Morris, Moseley, and Francis
Opinion By Justice Francis
 
This appeal involves section 25.25(c) of the Texas Tax Code,
which allows changes to the appraisal roll for the preceding five years
to correct a “clerical error” that affects a property owner's tax
liability. See Tex. Tax Code Ann. § 25.25(c) (West 2008). Southwest
Airlines Co. sued the Dallas Central Appraisal District and Dallas
County Appraisal Review Board alleging it had made such an error when
reporting the value of its aircraft for tax purposes for tax years 2003
through 2007. After considering cross motions for summary judgment, the
trial court agreed with Southwest and ordered the appraised value of
Southwest's aircraft reduced and the appraisal rolls corrected for those
years. The taxing authorities appealed. Because we conclude any
error by Southwest was not a clerical error as contemplated by the
statute, we reverse the trial court's judgment and render judgment that
 
Southwest take nothing on its claim.
Southwest is a certified air carrier engaged in the
transportation of cargo, passengers, or equipment for others for
consideration. The taxable value of aircraft used in interstate commerce
is determined through the use of an allocation formula. The allocation
methodology is based on a formula set out in section 21.05 of the tax
code that takes into account the fair market value of the aircraft and
degree of contact with the state. Specifically, the allocation
percentage is calculated by (1) taking the number of departures from the
State of Texas, (2) multiplying by 1.5, and (3) then dividing by 8,760
(the number of hours in a year). See Tex. Tax Code Ann. § 21.05(b) (West
2008). This percentage represents the amount of time the aircraft
operated in Texas during that year and is therefore the percentage of
the aircraft taxable in Texas. The allocation percentage is applied to
the fair market value of the aircraft to determine the taxable value.
Southwest filed business personal property renditions for each
of the years in question outlining what it believed to be the fair
market value of the aircraft fleet allocable to Dallas County. In making
its renditions, Southwest applied the above formula on the number of
departures of the fleet as a whole instead of completing the formula for
each individual aircraft. In 2008, in response to an inquiry from
another department, Southwest's property tax manager discovered that had
Southwest calculated the allocated value of its fleet on an
 
aircraft-by-aircraft basis, it would have paid nearly $25 million less
in taxes for the years in question.
Southwest filed a motion to correct error with the appraisal
review board asserting that section 21.05 mandates the allocated value
of each aircraft be separately calculated or computed, and that it
mistakenly calculated or computed the allocated value on a fleetwide
basis. Southwest asserted its alleged error was a clerical error under
section 25.25(c)(1) and requested the allocated value be recalculated
and the value of the fleet account for each year be reduced accordingly.
The board denied the motion, and Southwest sought judicial review.
In the trial court, both sides moved for summary judgment on the
issue of whether Southwest made a clerical error. Both sides included
Southwest's multi-page renditions for each of the tax years at issue. In
addition, the taxing authorities included the affidavit of Randall E.
Scott, business personal property manager for DCAD; Southwest included
the affidavit of Anne Norman, who prepared the rendition submitted to
DCAD. After considering the evidence, the trial court granted
Southwest's motion for summary judgment on its first two grounds,
concluding as a matter of law that (1) section 21.05 of the tax code
requires the formula for allocating the value of commercial aircraft be
applied on an aircraft-by-aircraft basis, not on a fleetwide basis, and
(2) Southwest mistakenly applied the allocation formula in section 21.05
on a fleetwide basis in tax years 2003 to 2007 and that this mistake was
 
a clerical error permitting correction. The trial court denied the
taxing authorities' summary judgment motion.
In two issues on appeal, the taxing authorities contend the
trial court erred in (1) concluding that Southwest's alleged error was a
clerical error and (2) following Southwest's interpretation of the tax
code, thereby jeopardizing the finality of appraisal rolls. In two
additional issues not raised below, the taxing authorities contend the
trial court did not have subject matter jurisdiction to consider
Southwest's claim for tax year 2003 because it did not fall within the
preceding five years or the claim for tax year 2006 because the parties
previously came to an agreement regarding that tax year. We address only
the first issue because it is dispositive of the appeal. Therefore, we
decide only whether Southwest's application of the formula on a
fleetwide basis, instead of to each individual aircraft, was a clerical
error as understood in the statute. The summary judgment rule
provides a method of summarily ending a case that involves only a
question of law and no fact issues. Tex. R. Civ. P. 166a(c); Nixon v.
Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). When, as
here, both sides move for summary judgment, and the trial court grants
one motion and denies the other, we review the summary judgment
presented by both sides and determine all questions presented.
Commissioners Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997). We review
the summary judgment de novo to determine whether a party's right to
 
prevail is established as a matter of law. Howard v. INA County Mut.
Ins. Co., 933 S.W.2d 212, 216 (Tex. App.-Dallas 1996, writ denied.) If
we conclude the trial court committed reversible error, we render the
judgment the trial court should have rendered. Id.
The basic facts in this case are not in dispute and the only
issue for our review is the proper construction of section 25.25(c) of
the tax code and its application to the undisputed facts. When
construing a statute, we begin with the plain and common meaning of the
statute's words. Tex. Gov't Code Ann. § 311.011(a) (West 2005)
(requiring words and phrases that have not acquired specialized meaning
to be interpreted “according to the rules of grammar and common usage”).
We read every word, phrase, and expression in a statute as if it were
deliberately chosen. Cordillera Ranch, Ltd. v. Kendall County Appraisal
Dist., 136 S.W.3d 249, 254 (Tex. App.-San Antonio 2004, no pet.). If the
meaning of statutory language is unambiguous, we adopt the
interpretation supported by the plain meaning of the provision's words
and terms. Fitzgerald v. Advanced Spine Fixation Sys. Inc., 996 S.W.2d
864, 865 (Tex. 1999).
Under section 25.25(c), the appraisal review board, on motion of
the chief appraiser or of a property owner, may direct changes in the
appraisal roll for any of the five preceding years to correct “clerical
errors that affect a property owner's liability for a tax imposed in
that tax year[.]” Tex. Tax Code Ann. § 25.25(c) (West 2008). The tax
code further defines clerical error: (18) “Clerical error” means
 
an error:
(A) that is or results from a mistake or failure in writing,
copying, transcribing, entering or retrieving computer data, computing,
or calculating; or
(B) that prevents an appraisal roll or a tax roll from
accurately reflecting a finding or determination made by the chief
appraiser, the appraisal review board, or the assessor; however,
“clerical error” does not include an error that is or results from a
mistake in judgment or reasoning in the making of the finding or
determination.
Tex. Tax Code Ann. § 1.04(18) (West 2008).
Southwest relies only upon subsection (A)'s definition of
clerical error and argues here, as it did below, that it made a
“clerical error” in “computing” or “calculating” its renditions as those
terms are used in the definition of clerical error. Specifically,
Southwest argues the tax code mandates the allocation formula be applied
to each aircraft individually, but it calculated the allocation on a
fleetwide basis and the failure to use the proper allocation formula was
a mistake or failure in calculating or computing the allocated value.
The taxing authorities argue Southwest made no error in the
mathematical calculation; consequently, there is no clerical error.
After considering the plain language of the statute, we agree with the
taxing authorities.
“Calculating” and “computing” are not defined in the statute. To
properly construe an undefined statutory term, we begin with the plain
meaning of the words in the statute. There is nothing ambiguous about
either word. In common parlance, compute means “to determine or
 
ascertain esp. by mathematical means: arrive at an answer to or sum
for.” Webster's 3rd New Int'l Dictionary 468 (1981). Similarly,
calculate means “to ascertain or determine by mathematical processes
esp. of some intricacy.” Id. at 315.
Here, Southwest made no error in determining by mathematical
process the value of its aircraft. Southwest did not transpose any of
the numbers; it used precisely the figures it intended to use and then
correctly computed or calculated those figures within the formula it
intended to use. Southwest made no mathematical errors in the process;
it correctly added, subtracted, multiplied, and divided the figures.
Although Southwest argues its mistake is “functionally no different”
than if it had used the wrong numbers and that its ignorance of the
correct approach is the equivalent of a failure to calculate, we cannot
agree. In short, what Southwest wants is to revise the methodology it
used to calculate the renditions. Applying one methodology when another
is either called for or would produce better results is simply not a
clerical error as that term is contemplated by the statute. We sustain
the first issue. See Footnote 1
Because we conclude Southwest's asserted error is not a clerical
error, we further conclude the trial court erred in granting Southwest's
motion for summary judgment and denying the taxing authorities' motion
for summary judgment. Our resolution of this issue makes it unnecessary
to address the tax authorities' remaining issues. Tex. R. App. P. 47.1.
We reverse the trial court's judgment in favor of Southwest and
 
render judgment that Southwest take nothing on its claim.
 
MOLLY FRANCIS
JUSTICE
100682F.P05
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Footnote 1
We note the trial court also granted summary judgment on the ground
that section 21.05 required the allocation formula to be applied on an
aircraft-by-aircraft basis, instead of fleetwide. We need not address
this ground because it is not dispositive of the issue of whether
Southwest made a clerical error - that is, regardless of whether the
statute required Southwest to use a particular formula, the fact remains
that the failure to use that formula would not be a calculation or
computation error as understood in the statute.
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