author: Opinion by Chief Justice MORRISS. Justice CARTER,

text:
    Gary COOKS, Appellant, v. The STATE of Texas, Appellee.
    No. 06-04-00079-CR.
    Court of Appeals of Texas, Texarkana.
    Submitted March 23, 2005.
    Decided June 2, 2005.

      Troy A. Hornsby, Miller, James, Miller & Hornsby, Texarkana, for appellant.
    Nicole Habersang, Asst. Dist. Atty., Texarkana, for appellee.
    Before MORRISS, C.J., ROSS and CARTER, JJ.
   OPINION

Opinion by Chief Justice MORRISS.

After kidnapping his former girlfriend, Delana Atkins, at gunpoint as she left work, Gary Cooks forced Atkins to drive her car away from her workplace. Atkins’ panicked, erratic driving — resulting from Cooks abducting Atkins, threatening her life, and shooting his gun in the car— prompted Cooks to take over the wheel. Atkins’ subsequent, unsuccessful attempt to escape the car succeeded only in seriously injuring her. Seeking “witnesses” that he did not push Atkins from the car, Cooks took Atkins, first, to an anesthesiologist friend of Cooks and, then, to a former Cooks attorney, each of whom pleaded with Cooks to take Atkins to the hospital for treatment. Two hours after the initial abduction, Cooks drove Atkins to a hospital emergency room.

A central question in this appeal is whether, by taking Atkins to the hospital or by his actions once there, Cooks voluntarily released her in a safe place, thus reducing aggravated kidnapping from a first- to a second-degree felony and reducing the permissible range of sentence. The jury convicted Cooks of aggravated kidnapping and found he did not voluntarily release Atkins in a safe place. In accordance with the jury’s sentencing recommendation, the trial court ordered that Cooks serve a life sentence.

Cooks appeals, asserting that he was eligible for a lesser sentence because the evidence established that he released Atkins in a safe place and that, by refusing to appoint another attorney for him, the trial court forced him to represent himself in violation of the Sixth and Fourteenth Amendments. We affirm because we hold (1) sufficient evidence shows Cooks did not voluntarily release Atkins in a safe place, and (2) Cooks made an informed decision to represent himself.

(1) Sufficient Evidence Shows Cooks Did Not Voluntarily Release Atkins in a Safe Place

Aggravated kidnapping is generally punished as a first-degree felony, carrying a sentence of five to ninety-nine years or life. Tex. Pen.Code Ann. §§ 12.32(a), 20.04(c) (Vernon 2003). At the punishment stage of a trial, an individual convicted of aggravated kidnapping is eligible for a lesser sentence if he or she can show by a preponderance of the evidence that he or she “voluntarily released the victim in a safe place.” Tex. Pen.Code Ann. § 20.04(d) (Vernon 2003). If the defendant successfully shows this mitigating factor, the offense becomes punishable as a second-degree felony rather than a first-degree felony, and supports a shorter sentence. See Brown v. State, 98 S.W.3d 180, 181-82 (Tex.Crim.App.2003).

Here, the jury considered and rejected Cooks’ claim of voluntary release. Cooks argues that the evidence conclusively established he voluntarily released Atkins in a safe place. To address this point, we (A) address the appropriate standard by which we review evidentiary sufficiency, (B) review caselaw interpretations of the statutory concept of voluntary release in a safe place, and (C) assess the evidence against those interpretations, in light of that standard.

(A) Standard of Review

(i) Legal Sufficiency Review

We recognize some disagreement among the intermediate courts of appeals in Texas as to whether we have jurisdiction to consider the legal sufficiency of the evidence on an issue where the defendant has the burden of proof by a preponderance of the evidence. We agree with the majority view as expressed by the Fort Worth Court of Appeals that the Sterner standard is the proper legal standard of review for a criminal defendant’s legal sufficiency challenge to the trier of fact’s rejection of his or her assertion of the sentence reduction in Section 20.04(d). See Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989); Howard v. State, 145 S.W.3d 327, 332 (Tex.App.-Fort Worth 2004, no pet.).

Under the Sterner standard of review, an appellant challenging the legal sufficiency of the evidence to support an adverse answer on which he or she had the burden of proof must satisfy two inquiries. Sterner, 767 S.W.2d at 690. First, the reviewing court must examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Second, if there is no evidence to support the finding, then the reviewing court must examine the entire record to see if the contrary proposition is established as a matter of law. Id.

(ii) Factual Sufficiency Review

The proper standard for reviewing factual sufficiency where the law dictates that the defendant has the burden of proof by a preponderance of the evidence is whether, after considering all the evidence relevant to the issue at hand, the judgment is so against the great weight and preponderance of the evidence so as to be manifestly unjust. Meraz v. State, 785 S.W.2d 146, 154-55 (Tex.Crim.App.1990).

(B) Voluntary Release in a Safe Place

The cases determining when a kidnapper voluntarily releases the victim in a safe place require the kidnapper to release the victim without any element of rescue or escape.

In Brown, the appellant stabbed his victim in the neck with a knife and kidnapped her. Brown, 98 S.W.3d at 182. The seriously injured victim later persuaded Brown to release her at a hospital by promising him that she would “tell them [that she] did it.” After a jury convicted Brown of aggravated kidnapping, he requested that the jury sentence him as a second-degree felon because he voluntarily released his victim in a safe place. The trial court, agreeing with the State, concluded Brown had not voluntarily released his victim because he had been tricked or manipulated into bringing her to the hospital. Id. The Tyler Court of Appeals agreed, holding that, in order for the action to qualify as a voluntary release, the action must be the spontaneous product of the actor’s free will, uninfluenced by another’s persuasion, coercion, or solicitation. Id.

The Texas Court of Criminal Appeals disagreed with the Tyler court, rejecting a broad definition and, instead, applying a narrow definition of “voluntary” when determining the application of Section 20.04(d). Id. at 188. In order for the action to be voluntary, there must be no elements of escape by the victim or rescue by the police or by others. Id. (citing to Comments to Model Penal Code, Section 212.1, at pages 233-34). The court concluded such a definition was consistent with the legislative purpose of Section 20.04(d) to encourage kidnappers to release their victims. Id. Therefore, the Tyler court erroneously applied a broad definition. Id.

On remand, the Tyler court concluded that, based on the narrow definition of “voluntary release,” Brown should have been subject to the lesser sentence under Section 20.04(d), although he may have been tricked into bringing his victim to the hospital. The Tyler court reversed and remanded the case for a new punishment hearing. Brown v. State, 109 S.W.3d 550, 551 (Tex.App.-Tyler 2003, no pet.).

Although decided before Brown, this Court’s rationale in Carreon v. State, 63 S.W.3d 37, 39 (Tex.App.-Texarkana 2001, pet. refd), remains largely sound in light of Brown. Holding that the evidence did not support a Section 20.04(d) instruction, this Court held that application of Section 20.04(d) should focus on the accused’s conduct, not the victim’s physical condition or ability to escape. Id. (citing Wiley v. State, 820 S.W.2d 401, 411 (Tex.App.-Beaumont 1991, no pet.)). To qualify for the mitigating effect of Section 20.04(b), an accused “must have performed some overt and affirmative act that brings home to the victim that [he or she] has been fully released from captivity.” Carreon, 63 S.W.3d at 39-40; Harrell v. State, 65 S.W.3d 768, 772 (Tex.App.-Houston [14th Dist.] 2001, pet. ref'd). Such analysis is consistent with Brown’s holding that “voluntary release” does not include any element of rescue or escape.

(C) Cooks Did Not Voluntarily Release Atkins

The record reveals that Cooks did not voluntarily release Atkins, but was separated from her by hospital personnel, in essence rescuing her from Cooks.

Cooks carried the gun into the hospital in his pocket and quickly took over the conversation with medical personnel, not letting Atkins say anything. He would not let her call her parents, but called them for her. Finally, she testified, he gave her the keys and left.

Sudie Boyd, a triage nurse at Christus St. Michael Hospital, first assessed Atkins on her arrival. She provided relevant details regarding Cooks’ departure and confirmed Atkins’ statement that Cooks “spoke for her completely.” Atkins was not allowed to speak to Boyd, which Boyd described as “very unusual” in that situation. Cooks even answered for Atkins when Boyd asked her the level of pain she was experiencing. Boyd testified that Cooks stayed near Atkins and the nurse, and that Atkins seemed withdrawn and would not make eye contact with Boyd during the conversation. Boyd took her observations to her senior nurse and asked her to treat Atkins. Eventually, Atkins was taken to a private room for treatment, and Cooks “was escorted by [Boyd] to a family counseling room” in the waiting room. Once separated from Cooks, Atkins finally told the senior nurse that Cooks had kidnapped her and that she sustained her injuries by jumping out of the car in an attempt to escape.

While we have somewhat similar facts as those before the Brown court, there are critical distinctions. Here, the evidence shows that the still-armed Cooks accompanied Atkins into the hospital and continued to exert control over her, so much so that the hospital staff felt compelled to intervene by separating the two. Atkins testified that Cooks would not let her speak to the hospital staff. Boyd confirmed this version of events and explained that she became so concerned she sought the aid of her senior nurse to treat Atkins and then escorted Cooks away from Atkins into another part of the facility.

In Brown, it is unclear whether Brown accompanied his victim into the hospital. From our reading of the facts, it does not appear he did. This distinction becomes critical to our analysis here because our facts show rescue rather than release. And, under the definition of voluntary release set forth in Brown, rescue or escape will not afford the criminal defendant the mitigating effect of Section 20.04(d). Here, the evidence shows Cooks was separated from Atkins as a result of the observations and actions of healthcare personnel.

Granted, after having been persuaded by his anesthesiologist friend and his former attorney, Cooks brought Atkins to receive medical treatment for her injuries. We are not convinced, however, that the act of taking Atkins to the hospital qualifies as a voluntary release under Section 20.04(d). First, Cooks carried the gun in his pocket as the two entered the emergency room. He continued to stay with Atkins and did not allow her to talk to the staff. He went so far as to answer questions asked for the purpose of diagnosis, such as the level of pain Atkins was experiencing. Such acts are not consistent with release. It was not until the perceptive Boyd detected some troubling aspect of the pair’s demeanor that Cooks was artfully separated from Atkins so that she felt “fully released from captivity.” It was only then, when she was free from Cooks’ control, that she explained what Cooks had done to her. While we understand the objective of Section 20.04(d) is to provide an incentive to kidnappers to release their victims and recognize the wisdom in bringing Atkins to receive medical treatment, we are not prepared to conclude these facts constitute a “voluntary release” under Brown when, by all appearances, Cooks retained significant control over Atkins until the intervention by medical personnel.

There is legally sufficient evidence to support the jury’s failure to find that Cooks voluntarily released Atkins. Also, we conclude the jury’s finding was not against the great weight and preponderance of the evidence. We overrule Cooks’ first point of error.

(2) Cooks Effectively Asserted His Right To Represent Himself

The trial court twice appointed counsel for Cooks. Cooks was dissatisfied with both attorneys and, although he was given more time than requested to try to retain counsel of his choice, he elected to represent himself at trial. Cooks now complains that the trial court’s refusal to appoint a third attorney effectively forced Cooks to represent himself. Citing Renfro v. State, 586 S.W.2d 496 (Tex.Crim.App.1979), Cooks contends the record does not show he knowingly and voluntarily waived his right to counsel. We hold that such a showing is not necessary where, as here, Cooks successfully asserted his right to self-representation. The record is replete with evidence that Cooks effectively asserted such a right and, thus, the trial court was bound to honor that right.

The Sixth Amendment implies the right to self-representation, and the right to assistance of counsel is intended only to supplement that right. Faretta v. California, 422 U.S. 806, 807, 829-30, 95 S.Ct. 2525, 45 L.Ed.2d 562 (1975). Although courts sometimes consider the right of self-representation in conjunction with the issue of waiver of counsel, the right of self-representation is an independent constitutional right. Id.; Martin v. State, 630 S.W.2d 952, 953 (Tex.Crim.App.1982). It does not arise from the defendant’s power to waive the assistance of counsel. Lambrecht v. State, 681 S.W.2d 614, 615 n. 2 (Tex.Crim.App.1984); Martin, 680 S.W.2d at 953. Therefore, exercising the right of self-representation does not require the defendant to first knowingly and intelligently waive the right to the assistance of counsel. See Saunders v. State, 721 S.W.2d 359, 362 (Tex.App.-Tyler 1985, pet. ref'd). The defendant’s demand for self-representation cannot be denied due to the record’s failure to reflect effective waiver of right to counsel. Id. The validity of the defendant’s assertion of the right to self-representation depends on whether the defendant was aware of the dangers and disadvantages of self-representation, rather than the traditional analysis for waiver of counsel. Johnson v. State, 760 S.W.2d 277, 278 (Tex.Crim.App.1988) (plurality op.). That is, the issue here is whether Cooks effectively asserted his right to represent himself, rather than whether he effectively waived his right to counsel. See id.

A trial court need not follow a “formulaic questioning” or particular “script” to assure itself that an accused who has asserted his or her right to self-representation does so with “eyes open.” Burgess v. State, 816 S.W.2d 424, 428 (Tex.Crim.App.1991). The record must be sufficient for the reviewing court to make an assessment that the defendant was made aware of the dangers and disadvantages of the self-representation. Faretta, 422 U.S. at 835, 95 S.Ct. 2525; Goffney v. State, 843 S.W.2d 583, 585 (Tex.Crim.App.1992); Johnson, 760 S.W.2d at 279.

The Sixth and Fourteenth Amendments to the United States Constitution guarantee the right of an accused to conduct his or her own defense. Faretta, 422 U.S. at 807, 95 S.Ct. 2525. Thus, the defendant decides whether to accept assistance of counsel or to conduct his or her own defense, and the United States Supreme Court in Faretta mandated that “his choice must be honored” when the benefits of the assistance of counsel are knowingly relinquished with an informed awareness of danger and disadvantages of self-representation. Id. at 834, 95 S.Ct. 2525; Burton v. State, 634 S.W.2d 692, 694 (Tex.Crim.App.1982).

Reviewing the several pretrial hearings in this case, we see that the trial court made certain that Cooks wanted to proceed pro se and gave him every opportunity to hire counsel or use appointed counsel. The trial court made great efforts, during both the lengthy set of pretrial hearings and the trial, to ensure that Cooks’ rights were protected.

The trial court first appointed counsel June 6, 2001. Cooks expressed extreme dissatisfaction with his court-appointed attorney, filing several grievances against him and refusing to speak to him. That attorney moved to withdraw, and the trial court granted the motion. The trial court then appointed Cooks a second attorney, with whom Cooks also became extremely dissatisfied.

On June 19, 2003, Cooks filed a “Waiver of an Attorney” in which he expressed his desire to represent himself and stated that he “fully understands the dangers and disadvantages of proceeding to trial without the assistance of counsel.” Cooks also filed a motion to substitute his second appointed counsel with himself. Second counsel moved to withdraw based on the inability to effectively communicate, the fact that Cooks had filed several grievances against him, and Cooks’ desire to proceed pro se.

On January 16, 2004, the trial court held a hearing on Cooks’ motion to substitute counsel. At this hearing, the trial court warned Cooks he would be held to the same standards as a lawyer. Cooks requested that he have two to three weeks to see if he could obtain enough money to retain his own counsel. The trial court went beyond Cooks’ request and granted him a month. The trial court then asked Cooks if that would be sufficient time, and Cooks responded affirmatively. The State requested that the trial court set the case for trial on February 17, 2004, with the understanding that trial would proceed with either retained counsel or Cooks himself. The trial court asked Cooks if he understood that request, and Cooks responded that he did. The trial court then reminded appointed counsel that he still maintained his position until further notice.

The trial court entered its order allowing defendant to proceed pro se on February 5, 2004. The trial court ordered that second appointed counsel remain in the case in an advisory role. Personnel changes in the trial court caused the case to be continued until March 1, 2004. Cooks then sought another continuance, and the case was set for April 26, 2004.

On March 26, 2004, the trial court held another pretrial hearing in which it confirmed Cooks’ wishes regarding representation. The trial court asked Cooks whether he “had indicated ... that [he] wanted to represent [himself].” The trial court then asked whether Cooks intended to continue to represent himself in the case or whether he intended to try to hire counsel. Cooks replied he was going to go ahead and continue to represent himself until further notice. The trial court then expressed concern and asked Cooks to give a more definite statement as to his wishes. The trial court cautioned Cooks and stated the court would prefer that Cooks have an attorney so his rights would be fully protected. The court acknowledged that Cooks had the right to proceed pro se and asked whether the previous trial judge went over that right with Cooks. Cooks confirmed that the previous trial judge did go over in great detail the right to self-representation.

Following yet another warning that having an attorney would better protect his rights, Cooks then asked about how much more time he could have to try to hire another attorney. The State protested the prospect of further delay since Cooks had been incarcerated for three years on the matter. The trial court expressed its concern about how long the case had been pending and did not allow additional time for Cooks to obtain another lawyer.

Cooks went on to reject his stand-by counsel, stating he did not want stand-by counsel “anywhere near [his] situation.” The trial court stated to Cooks, “You’ve indicated right now that you want to represent yourself, and the Court is going to allow you that opportunity to represent yourself.” After addressing several of Cooks’ complaints regarding his access to the law library, the trial court again asked whether Cooks was going to continue to represent himself. Cooks responded that it was his intention to represent himself “until further notice, sir, because I don’t— I just don’t really trust anyone with my life here.”

On April 23, during another pretrial hearing, Cooks confirmed he was representing himself, but again voiced his complaints about access to the jail’s law library. The trial court loaned him copies of relevant codes and insisted that Cooks be ready for trial. After the trial court again insisted that the matter go to trial the next week, Cooks protested:

[F]or the record, too, I’d like to acknowledge that I have not been represented fairly. I’ve been here three years. That’s a long sentence to me. Anybody that do [sic] the time would see what I’m saying. But I’ve been here without correct due process or anything. I’ve been in this place three years without any benefit of due process whatsoever, and I’ve been totally ignored, and now I’m going to jury trial, and I’ve already served basically a sentence already.

The trial court noted that Cooks had been appointed counsel twice and affirmatively chose not to use either. The trial court also pointed out that Cooks had indicated he wanted to represent himself or hire his own counsel, to which Cooks replied, “Yes, I truly do. But see, with all due respect, once again, sir, I am not ready due to the fact that I have not had the right material, and three or four days is not enough time for me to get in those books like that.”

When Cooks moved the trial court to acknowledge the fact “that [his] Sixth Amendment has been violated severely,” the trial court and the State responded that Cooks repeatedly sought to represent himself. Then Cooks went in another direction, complaining again about access to the law library. When the trial court refused to continue the case again and encouraged Cooks to utilize stand-by counsel for any questions, Cooks replied he was going to go ahead as planned. He noted again that he thought his rights were severely violated and “hope[d] everybody in here hear (sic) me.” On the scheduled trial date, based on Cooks’ several and insistent complaints that he was not ready and had no access to the law library, the trial court reluctantly agreed to continue the case to June 1, 2004, so Cooks would have enough time to use the library and subpoena witnesses. The trial court also asked whether Cooks still wished to proceed pro se:

The Court: You have chosen to represent yourself in this case, and the Court is going to allow you that opportunity. And I believe that is how you want to proceed, is that correct?
Mr. Cooks: (Nods affirmatively.)
The Court: You’re nodding your head, and that means yes.
Mr. Cooks: Yes, sir.

The trial court then fielded general questions from Cooks about how the case would progress. Finally, the trial court held three more pretrial hearings in which it ruled on Cooks’ pro se motions and took steps to remedy his complaints regarding law library access.

In the extensive pretrial period, Cooks complained about his appointed attorneys, complained about access to the law library, and often cited due process violations. But he did not request a third appointed attorney. In fact, he stated he did not trust an attorney to handle such a serious matter. And he affirmatively rejected the idea of getting another court-appointed attorney. The trial court gave him ample time to seek retained counsel, but Cooks never provided the trial court with any indication that he was actively pursuing such a route. Rather, it would appear from the record that Cooks used the prospect of retaining counsel as a tactic to delay the trial further.

In his ‘Waiver of an Attorney,” Cooks expressed his desire to represent himself and affirmatively stated that he “fully understands the dangers and disadvantages of proceeding to trial without the assistance of counsel.” He also represented to the trial court that the previous trial judge had gone over in great detail the right of self-representation. Additionally, the record contains several warnings by the trial court that Cooks would be held to the same rules as would a lawyer and that his rights would likely be better protected by trained counsel. Despite these ample warnings regarding the dangers and disadvantages of self-representation, Cooks knowingly chose to exercise his constitutionally guaranteed right to represent himself. We overrule Cooks’ second and final point of error.

Having overruled both of Cooks’ points of error, we affirm the trial court’s judgment.

Justice CARTER,

Concurring.

I concur in the majority opinion, but I believe there is another reason to hold the trial court did not err on the issue of self-representation.

Even though Cooks had rejected the attorneys appointed to represent him and manage his case and insisted on self-representation, the trial court provided him with standby counsel throughout the entire course of the proceedings. Is it error to fail to admonish a defendant of the dangers and disadvantages of self-representation when he is provided standby counsel? The Fourteenth Court of Appeals addressed this issue in Robertson v. State, 934 S.W.2d 861 (Tex.App.-Houston [14th Dist.] 1996, no pet.). There the defendant rejected his court appointed counsel and invoked his right of self-representation, but the trial court required the attorney to remain in the case in the event the defendant wanted to utilize his services. The defendant conducted the trial himself, and the attorney did not participate. On appeal, the defendant complained that his waiver of counsel was not knowingly made because the court failed to admonish him of the dangers and disadvantages of self-representation. In analyzing this issue, the Fourteenth court explained the differences in full representation by counsel, pro se representation, hybrid representation, and stand-by counsel. Before the Robertson opinion, the Texas Court of Criminal Appeals held that a defendant electing hybrid representation was not entitled to the admonishments concerning the dangers of self-representation since counsel was available to the defendant and participated in the trial to some degree. Maddox v. State, 613 S.W.2d 275, 286 (Tex.Crim.App. [Panel Op.] 1980) (op. on reh’g). In Robertson, the court held that, although it was preferable to admonish a defendant when standby counsel is appointed, it is not required. Waiver of counsel and the need to admonish arise only where a defendant waives counsel in the sense of having none available; in other words, when the situation neither involves a hybrid representation or standby counsel. 934 S.W.2d at 865. Because both hybrid representation and standby counsel involve the defendant’s assuming control over important tactical considerations and deciding the extent to which the assistance of counsel will actually be invoked, no basis exists on which to treat standby counsel differently for purposes of admonishment. Id. Therefore, the court held that the failure to admonish Robertson of the dangers and disadvantages of self-representation was not error since he was provided standby counsel. Id. at 866.

The holding in Robertson has been followed by the Houston First Court of Appeals in Walker v. State, 962 S.W.2d 124 (Tex.App.-Houston [1st Dist.] 1997, pet. ref'd). Walker conducted his own trial, but did have standby counsel available, and the court held that the failure to admonish him concerning the Faretta factors was not error. Id. at 127. Unpublished cases have adopted the reasoning of the Robertson ease. Young v. State, No. 05-98-00036-CR, 2000 WL 2676, 2000 Tex.App. LEXIS 15 (Tex.App.-Dallas Jan.4, 2000, no pet.) (not designated for publication); Ivory v. State, No. 14-97-00421-CR, 1999 WL 548234, 1999 Tex.App. LEXIS 5590 (Tex.App.-Houston [14th Dist.] July-29, 1999, pet. ref'd) (not designated for publication). For this additional reason, I concur in the Court’s opinion.

      . See Ballard v. State, 161 S.W.3d 269, 272, 2005 Tex.App. LEXIS 2706, at *4-*7 (Tex.App.-Texarkana 2005, no pet. h.).

      . We recently questioned Carreon’s reliance on the language from Oestrick v. State, 939 S.W.2d 232 (Tex.App.-Austin 1997, pet. ref'd), however. Brown's rejection of a broad definition under Section 20.04(d) called into question the language that the action must be free from compulsion. See Ballard, 161 S.W.3d 269, 274, 2005 Tex.App. LEXIS 2706, at *12 n. 5.

      . We note that these elements of persuasion do not factor into our inquiry as to whether Cooks voluntarily released Atkins. See Brown, 98 S.W.3d at 187. As in Brown, had Cooks released Atkins at the hospital, the fact that he was persuaded to do so would not disqualify him from receiving the mitigating effect of Section 20.04(d). Here, however, the intervention by third parties, separating the two after they arrived at the hospital, militates against a finding of voluntary release.

      . While Cooks continually sought continuances in the trial, he had also filed in this Court a petition for a writ of mandamus to compel the trial court to rule on the several motions he had prepared and filed pro se. The trial court was aware of this petition and expressly attempted to give Cooks the relief requested. In re Cooks, No. 06-04-00053-CV, 2004 WL 905958 (Tex.Appp.-Texarkana 2004).


source: Caselaw Access Project

author: DAVID PURYEAR, Justice.

license: Public Domain

text:
    FIRST AMERICAN TITLE INSURANCE COMPANY and Old Republic National Title Insurance Company, Appellants v. Carole Keeton STRAYHORN, Comptroller of Public Accounts of the State of Texas and Gregg Abbott, Attorney General of the State of Texas, Appellees.
    No. 03-04-00342-CV.
    Court of Appeals of Texas, Austin.
    June 3, 2005.

      Ron K. Eudy and Patricia Otto, Sneed, Vine & Perry, PC, Austin, Matthew J. Zinn and Steven Reed, Steptoe & Johnson, LLP, Washington, DC, for Appellants.
    Christine Monzingo, Asst. Atty. Gen., Austin, for Appellees.
    Before Justices B.A. SMITH, PURYEAR and PEMBERTON.
   OPINION

DAVID PURYEAR, Justice.

First American Title Insurance Company and Old Republic National Title Insurance Company sell title insurance in Texas but are incorporated in other states. They are seeking to recover taxes they argue were unlawfully imposed upon them. Texas imposes a tax on the amount of premium collected from title insurance policies. In addition, foreign title insurance companies, like First American and Old Republic, are required to pay an additional tax if their states of origin impose financial burdens on Texas insurance companies selling title insurance in the foreign states that are higher than the financial burdens Texas imposes upon foreign insurance companies selling title insurance here. This additional tax is called a retaliatory tax.

Previously title insurance companies have been allowed to include 100% of the total premium tax paid as part of their imposed financial burden for the purpose of determining whether a retaliatory tax needs to be paid. However, the Comptroller changed this previous interpretation and concluded that, because insurance companies pay only 15% of the premium tax, insurance companies should include only 15% of the premium tax as part of their total imposed financial burden. Under this new interpretation, foreign title insurance companies will be required to pay significantly more in retaliatory taxes.

First American and Old Republic contend that the Comptroller’s new interpretation is wrong and seek to recover taxes they claim were unlawfully assessed under the Comptroller’s new interpretation. The district court granted summary judgment in favor of the Comptroller, and we will affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

First American is a California-based title insurance company, and Old Republic is a Minnesota-based title insurance company. Title insurance companies (“insurers”) are responsible for issuing title insurance policies, for insuring title risks, and for paying claims and providing defenses to claims if necessary. Both First American and Old Republic engage in title insurance business within the State of Texas.

First American issues title policies through title agents and through direct operations. Old Republic issues title policies through title agents alone. Title agents are legal entities, such as corporations, that are separate from insurers and that are licensed to close real estate title insurance transactions on behalf of one or more insurers. Title agents may be affiliated with an insurer or may be completely independent. If an insurer becomes licensed as a direct operator, then it may close insurance transactions on its own without an agent.

Article 9.59 of the insurance code (“the premium tax statute”) requires title insurers to remit to the state a tax on insurance premiums collected while engaged in business in Texas. See Tex.Ins.Code Ann. art. 9.59 (West Supp.2004-05), repealed by Act of April 30, 2003, 78th Leg., R.S., ch. 1274, § 26(b)(4), 2003 Tex. Gen. Laws 3611, 4139 (effective April 1, 2005). In addition, article 21.46 of the insurance code (“the retaliatory tax statute”) requires the imposition of an additional tax on foreign insurers doing business within Texas if the foreign state imposes financial burdens on Texas-based insurers doing business in the foreign state that are higher than the financial burdens Texas places on the foreign state’s insurers doing business here. See Tex. Ins.Code Ann. art. 21.46 (West Supp.2004-05), repealed by Act of April 30, 2003, 78th Leg., R.S., ch. 1274, § 26(b)(4), 2003 Tex. Gen. Laws 3611, 4139 (effective April 1, 2005). The principal purpose of a retaliatory tax law is to facilitate the ability of insurers to conduct business across state lines by deterring states from enacting discriminatory or excessive taxes against foreign insurers. See Western & S. Life Ins. Co. v. State Bd. of Equalization of Cal., 451 U.S. 648, 668, 101 S.Ct. 2070, 68 L.Ed.2d 514 (1981).

In the late 1990s, the Comptroller took the position that the premium tax statute required title insurance agents to pay a portion of the premium taxes due and that the payment of title insurance premium taxes is not solely the obligation of insurers. Previously, insurers had been allowed to include 100% of the premium tax paid as the insurers’ tax burden for the purposes of determining whether a retaliatory tax would be imposed on an insurer. Under the new calculation method, an insurer may only count 15% of the premium tax as its financial burden when determining the amount of retaliatory taxes due, if any.

After auditing First American’s 1998-2001 insurance tax reports, the Comptroller assessed a fee of $175,383.77 in retaliatory taxes and interest against First American for the 2001 tax year, which First American paid in March 2003 under protest. In addition, First American paid, under protest, $1,257,196.99 in retaliatory taxes for 2002. Similarly, after an audit, the Comptroller assessed retaliatory taxes against Old Republic. Old Republic paid, under protest, $219,626.40 as retaliatory taxes for 2002.

PROCEDURAL HISTORY

Appellants filed separate lawsuits against the Comptroller and the Attorney General of Texas (cumulatively the “Comptroller”) to recover what they claim were unlawfully assessed retaliatory taxes that were paid under protest. The appellants and the Comptroller both filed cross-motions for summary judgment in the separate cases, which the trial court heard simultaneously. The trial court granted summary judgment in favor of the Comptroller in both cases. Both appellants appealed the decision of the trial court, and the two cases were consolidated into this appeal.

STANDARD OF REVIEW

The standards for review of a traditional summary judgment are well established: the movant must show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; in deciding whether there is a disputed material fact issue precluding summary judgment, the court must take evidence favorable to the nonmovant as true, and the court must indulge every reasonable inference in favor of the nonmovant and resolve any doubts in the nonmovant’s favor. Sergeant Enters., Inc. v. Strayhorn, 112 S.W.3d 241, 245 (Tex.App.-Austin 2003, no pet.) (citing Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985)). We review the trial court’s decision to grant summary judgment de novo. Id. (citing Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex.1994)).

Generally, a party cannot appeal the denial of a motion for summary judgment because it is an interlocutory order and, thus, not appealable. Id. (citing Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex.1996)). However, when both parties move for summary judgment and the district court grants one motion and denies the other, the unsuccessful party may appeal both the grant of the prevailing party’s motion and the denial of its own. Id. (citing Holmes v. Morales, 924 S.W.2d 920, 922 (Tex.1996)). In such a case, we will review the summary judgment evidence offered by both sides, determine all questions presented, and render the judgment the trial court should have rendered. Id. (citing FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000); Commissioners Court v. Agan, 940 S.W.2d 77, 81 (Tex.1997)). Because the district court did not state the basis for granting summary judgment, the appellants must negate all grounds that support the judgment. Id. (citing State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex.1993)). However, if the appellants fail to negate each ground on which the judgment may have been rendered, we must uphold the summary judgment. Id. (citing Carr, 776 S.W.2d at 569).

This case involves interpreting the title insurance premium tax statute and the retaliatory tax statute, and, therefore, we apply a de novo standard. Lopez v. Texas Workers’ Comp. Ins. Fund, 11 S.W.3d 490, 494 (Tex.App.-Austin 2000, pet. denied) (citing Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989)). When construing a statute, the court must construe the statute as written and must, if possible, determine the legislature’s intention from the language that was used in the statute. Del Indus., Inc. v. Texas Workers’ Comp. Ins. Fund, 973 S.W.2d 743, 745 (Tex.App.-Austin 1998), aff'd, 35 S.W.3d 591 (Tex.2000). When determining legislative intent, the entire act, not isolated portions of the act, must be considered. Jones v. Fowler, 969 S.W.2d 429, 432 (Tex.1998). Courts should first look to the plain meaning of the words in the statute and, if the meaning is unambiguous, interpret the statute so that it comports with the plain meaning expressed. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex.2003). Every word, phrase, and expression used in a statute should be read as if it were deliberately used. See Gables Realty Ltd. P’ship v. Travis Cent. Appraisal Dist., 81 S.W.3d 869, 873 (Tex.App.-Austin 2002, pet. denied). If two statutes are in pari materia or address the same subject, then an effort should be made to harmonize and give effect to both statutes. Breeding v. State, 762 S.W.2d 737, 739 (Tex.App.-Amarillo 1988, pet. ref'd) (citing Cheney v. State, 755 S.W.2d 123 (Tex.Crim.App.1988)).

When enacting a statute, the legislature is presumed to have intended to comply with both the state and the federal constitutions. Brady v. Fourteenth Court of Appeals, 795 S.W.2d 712, 715 (Tex.1990). Therefore, when construing a statute, courts should interpret a statute so that the statute’s meaning is consistent with all constitutional requirements if possible. Id. In addition, when an administrative agency is charged with a statute’s enforcement and also construes the statute, the agency’s construction of the statute is entitled to serious consideration as long as the construction is reasonable and does not contradict the plain meaning of the statute. Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex.1993).

STATUTORY FRAMEWORK

Before addressing the merits of the appellants’ claims, it will be helpful to describe the statutory scheme in question in this case and the Comptroller’s current interpretation of it. In 1907, the legislature first imposed a title insurance premium tax upon insurers. See Act of May 16, 1907, 30th Leg., 1st C.S., ch. 18, § 8, 1907 Tex. Gen. Laws 479, 482. In 1987, the insurance premium tax statutes were amended. Act of June 17,1987, 70th Leg., R.S., 1987 Tex. Gen. Laws 3610, 3638-40 (codified as Tex. Ins.Code Ann. art. 9.59). As part of the amendment, a provision calling for the division of premium between insurers and title agents and a provision requiring insurers to obtain an agent’s portion of the premium tax and to remit it to the state were added. Id. The relevant portions of the premium tax statute read as follows:

Sec. 1. Each title insurance company receiving premiums ... shall pay to the Comptroller a tax on those premiums ....
Sec. 2. In this article premium means the total amount of premiums received for the taxable year on title insurance written on property located in this state....
Sec. 4. There is imposed on all premium on title insurance an annual tax equal to 1.35 percent.
Sec. 5. Each title insurance company that is liable under this article to remit tax on premium shall file a tax return annually....
Sec. 8(a) Title insurance companies and title insurance agents subject to the tax levied by this article may not be required to pay any additional tax in proportion to their gross premium receipts levied by this state or any county or municipality except as otherwise provided by this code and the Labor Code....
(b) The premium tax is levied on all amounts defined to be premium in this Chapter, whether paid to the title insurance company or retained by the title insurance agent, such tax being in lieu of the tax on the premium retained by the agent. The State of Texas facilitates the collection of the premium tax on the premium retained by the agent by setting the division of the premium between insurer and agent so that the insurer receives the premium tax due on the agent’s portion of the premium and remits it to the State.

Tex. Ins.Code Ann. art. 9.59 (West Supp. 2004-05) (emphasis added).

The premium tax statute exempts title agents, which are subject to taxation under the statute, from paying an additional tax based on gross premium receipts. Id. § 8(a). In addition to the section 8(a) exemption, section 171.052 of the Texas Tax Code exempts agents and insurers from franchise taxes because both are required to pay a tax based on gross premium receipts. Tex. Tax Code Ann. § 171.052 (West Supp.2004-05). Specifically, section 171.052 provides as follows:

An insurance organization, title insurance company, or title insurance agent authorized to engage in insurance business in this state now required to pay an annual tax under Chapter 4 or 9, Insurance Code, measured by its gross premium receipts is exempted from the franchise tax....

Id.

The premium tax statute also states that premiums collected are divided between insurers and agents in such a way that insurers receive the agents’ shares of the premium tax in the amount collected from the agents. Tex. Ins.Code Ann. art. 9.59 § 8(b). How the premium is divided between insurers and agents and what premium rates are charged are both questions decided by the Texas Department of Insurance (the “Department”). See Tex. Ins. Code Ann. arts. 9.07(b), (c) and 9.30(B)(1) (West Supp.2004-05). In determining reasonable premium rates, the Department is required to consider all relevant income and expenses of title agents and insurers. Id. art. 9.07(b), (c). Between 2001 and 2002, the time period in issue in this ease, the Department allowed title agents to keep 85% of the premiums collected from policyholders and required title agents to remit 15% of the premiums to title insurers. 28 Tex. Admin. Code § 9.1 (2004) (adopting Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in Texas) (available at www. tdi.state.tx.us /company/titlem4d. html# P-23).

In addition to paying premium taxes, insurers from a foreign state doing business in Texas may be required to pay a retaliatory tax. The retaliatory tax statute imposes an additional tax upon a foreign insurer doing business in the state of Texas if the foreign state imposes financial burdens on Texas-based insurers doing business in the foreign state that are higher than the financial burdens Texas places on the foreign state’s insurers doing business in Texas. The relevant portion of the retaliatory tax statute reads as follows:

Whether by the laws of any state or territory of the United States any taxes, including maintenance or similar regulatory fees, income and corporate franchise, licenses, fees, fines, penalties, deposit requirements or other obligations, prohibitions or restrictions are imposed upon any insurance company that is organized in this State and licensed and is doing business or that may do business in such other state or territory which, in the aggregate are in excess of the aggregate of the taxes, including maintenance or similar regulatory fees, income and corporate franchise, licenses, fees, fines, penalties, deposit requirements or other obligations, prohibitions or restrictions directly imposed upon a similar insurance company of such other state or territory doing business in this State, the comptroller shall impose upon and collect from any similar company of such state or territory in the same manner and for the same purpose, the same taxes, licenses, fees, fines, penalties, deposit requirements or other obligations, prohibitions or restrictions; provided, however, the aggregate of taxes, licenses, fees, fines, penalties or other obligations imposed by this State pursuant to this Article on an insurance company of another state or territory shall not exceed the aggregate of such charges imposed by such other state or territory on a similar insurance company of this State that may be licensed and doing business.

Tex. Ins.Code Ann. art. 21.46 § 1(a).

Under the terms of the retaliatory tax statute, foreign insurers are required to file a report for the purpose of determining whether a retaliatory tax needs to be assessed against the insurers. Id. § (l)(d). Instructions for the Texas Title Agent Statistical Report, which is issued by the Department and is filed with the Commissioner of Insurance, require insurers to list premiums collected and various expenses imposed upon them. Although insurers had previously been allowed to include 100% of the premium tax in the retaliatory tax calculation, the Comptroller changed the previous interpretation of the retaliatory tax scheme, which she may do as long as the new interpretation does not contradict either statutory language or a formally promulgated rule. See Moore, 845 S.W.2d at 823 (agency’s construction of statute entitled to deference as long as does not contradict statutory language); Grocers Supply Co., Inc. v. Sharp, 978 S.W.2d 638, 642 (Tex.App.-Austin 1998, pet. denied) (Comptroller’s informal change in policy of how rule enforced did not “informally contravene the express terms of a formally promulgated rule.”). Under the new interpretation, insurers are allowed to include only 15% of the premium tax for the purpose of determining the amount of retaliatory taxes, if any, to be paid.

When developing the new interpretation of the retaliatory tax scheme in which agents share responsibility for paying premium taxes, the Comptroller relied upon the fact that agents are exempt from paying franchise taxes or “additional” premium taxes. See Gables Realty Ltd. P’ship, 81 S.W.3d at 873 (statutes should be construed to give meaning to every word). Further, the Comptroller reasoned that because section 8(b) of the premium tax statute specifies that insurers receive the agents’ portion of the premium tax due when the premium is divided among the agent and the insurer and because the Department has specified that title agents are to transfer 15% of the premium collected to the insurers, then only 15% of the premium tax is directly imposed on the insurer. Therefore, the insurer should only be allowed to include 15% of the premium tax for the purposes of calculating a retaliatory tax. See Tex. Ins.Code Ann. art. 9.59 § 8(b).

After adopting this new interpretation, the Comptroller, in 1996, instituted a policy that makes title agents responsible to the Comptroller for any portion of premium tax that is not remitted to insurers. See Tex. Ins.Code Ann. art. 9.59 § 3(c) (allowing Comptroller to create rules, limitations, minimum standards, and regulations that are fair, reasonable, and appropriate). This policy limited the insurers’ obligation to remit premium tax actually collected if an insurer can prove that the title agent did not remit the portion of the premium the agent is required to give to the insurer. In 2000, the policy was published on the Internet based State Tax Automated Research System. See Texas Comptroller of Public Accounts, Star System No. 200009751L available at http:// aixtcp.cpa. state.tx.us/star.

In addition, in 2001, the Comptroller amended rule 3.831, describing agents’ and insurers’ responsibilities for paying premium taxes. Under the amended rule, insurers are instructed to collect the premium tax due on the agents’ portion of the premium and remit to the Comptroller both the agents’ and the insurers’ portions of the premium tax. See 34 Tex. Admin. Code § 3.831(4)(B), (D) (2004) (Insurance Tax: Gross Premiums Definitions ... and Clarification of the Taxation on the Distribution of Title Premiums). Further, section 3.831(4)(C) holds agents and insurers separately liable for their share of the premium tax. Id. § 3.831(4)(C). Specifically, section 3.831(4)(C) reads as follows:

Title insurers and title agents are both subject to the premium and maintenance tax on their proportional share of the premiums and are separately liable if the insurer fails to remit the tax due on the agent’s portion.

Id.

DISCUSSION

On appeal, the appellants make the following three claims: (1) foreign-based insurers are entitled to include 100% of the premium taxes paid to the state of Texas in its calculation of the amount of retaliatory taxes owed; (2) agents do not, in fact, bear legal responsibility to pay 85% of the premium tax; and (3) the Comptroller’s new interpretation of the retaliatory tax scheme is unconstitutional. For ease of reading, we will combine appellants’ first two points.

The Comptroller’s Interpretation is Reasonable

Appellants contend that the Comptroller’s interpretation of the retaliatory tax scheme is incorrect. First, appellants assert that insurers are solely responsible for paying 100% of the premium tax and, similarly, assert that the obligation to pay premium taxes is not imposed on agents. In support of their assertions, appellants point to section 111.016(a) and (b) of the tax code for the proposition that insurers will still have to pay 100% of the premium tax if agents do not transfer 15% of the premium to insurers. See Tex. Tax Code Ann. § 111.016(a), (b) (West 2001). Section 111.016(a) states, in relevant part, that “any person who receives or collects a tax or any money represented to be a tax from another person holds the amount so collected in trust for the benefit of the state and is liable for the full amount collected plus any accrued penalties and interest on the amount collected.” See Tex. Tax Code Ann. § 111.016(a). Section 111.016(b) states, in relevant part, that “an individual who controls or supervises the collection of tax or money from another person ... and who willfully fails to pay or cause to be paid the tax or money is liable as a responsible individual for an amount equal to the tax or money not paid or caused to be paid.” See Tex. Tax Code Ann. § 111.016(b).

However, neither of these sections state that an insurer would be liable for the full amount of premium tax if agents do not turn over their share of the premium tax. Further, subsection (a) states that the person has to receive the tax in question in order to be held liable for the amount in question, and subsection (b) states that the responsible party must have willfully refused to pay the tax collected on behalf of another. Neither of these scenarios address the situation of agents refusing to turn over their portion of the premium tax to insurers.

As further support for the assertion that there is no premium tax imposed on agents, appellants point to the first sentence of section 8(b) of the premium tax statute, which states that “[t]he premium tax is levied on all amounts defined to be premium ... whether paid to the title insurance company or retained by the ... agent, such tax being in lieu of the tax on the premium retained by the agent....” Tex. Ins.Code Ann. art. 9.59 § 8(b). However, this sentence must also be read along with the last sentence of section 8(b), which states that the insurer receives the agent’s portion of the premium tax due when the premium is divided between the agent and the insurer. See id. When read together, the “in lieu of’ provision means that one comprehensive tax is formulated based on the total amount of premium with insurers collecting that portion of the premium that includes the agent’s portion of the premium tax. See Jones, 969 S.W.2d at 432 (entire act, not isolated parts, must be considered). Although the statute requires title insurers to remit all of the premium tax to the Comptroller, the statute does not place all of the financial burden on the insurer.

Appellants also argue that the Comptroller’s erroneous interpretation of the retaliatory tax scheme in which agents are responsible for paying 85% of the premium tax is based, in part, on an incorrect and isolated reading of section 8 of the premium tax statute, which contains the following language: “Title insurance companies and title insurance agents subject to the tax levied by this article.... ” Tex. Ins. Code Ann. art. 9.59 § 8(a) (emphasis added). Appellants claim that agents can be “subject to” paying a tax without actually having to pay a tax. Further, appellants urge that, rather than meaning a tax must be paid, the phrase “subject to” in section 8(a) means to bring under dominion, control, or authority. See Rylander v. Fisher Controls Int’l, Inc., 45 S.W.3d 291, 298-99 (Tex.App.-Austin 2001, no pet.) (court construed statute to mean taxpayer “subject to” taxation if there was possibility that state might impose taxation, not if individual actually required to pay tax). From this assertion, appellants contend that agents are subject to taxation because a tax could be legally imposed on agents but is not, and appellants insist that section 8 is only an exclusionary provision exempting insurers and agents from other taxes but does not impose taxes on anyone. However, the premium tax statute contradicts appellants’ assertion that agents are not responsible for paying any portion of the premium tax by stating that taxes on agents’ portions of the premium collected are included within the portions transferred from agents to insurers after the premium has been divided. Tex. Ins.Code Ann. art. 9.59 § 8(b); see also City of San Antonio, 111 S.W.3d at 25 (if meaning unambiguous, statute should be interpreted to comport with that meaning).

In addition, appellants insist that the Comptroller’s interpretation of the retaliatory tax scheme, under which both agents and insurers are liable for premium taxes, leads to absurd conclusions and unjust discrimination against foreign insurers, and, therefore, the previous interpretation should be reimplemented. See Cramer v. Sheppard, 140 Tex. 271, 167 S.W.2d 147, 155 (Tex.1942) (statutory provisions will not be interpreted in way that leads to “absurd conclusions, great public inconvenience, or unjust discrimination” if another interpretation can reasonably be made). Appellants assert that, because insurers bear the responsibility to remit 100% of the premium tax to the state, the premium tax is a tax “directly imposed upon” insurers as described in the retaliatory tax statute. See Tex. Ins.Code Ann. art. 21.46 (requiring, for purposes of calculating retaliatory taxes, comparison of obligations imposed on foreign insurers doing business in Texas with obligations imposed on Texas insurers doing business in foreign state). Appellants contend that there is no statute or formal rule that would excuse a title insurer from having to pay the full premium tax if an agent does not remit 15% of the total premiums collected to the insurer and contend that the Comptroller has no statutory authority to collect premium from agents in the event that an agent fails to transfer the premium to an insurer; therefore, appellants insist insurers will be held hable for the full amount of premium taxes regardless of whether agents transfer the premium or not. Further, appellants assert that if insurers do not pay 100% of the premium tax due because an agent has not transferred the premium, they will be subject to a collection proceeding for the amount not paid, and the Department may revoke its license to transact business in Texas. See Tex. Ins.Code Ann. arts. 9.59 § 9 (“A title insurance company fading to pay ah taxes imposed by this article is subject to Article 4.05 of this code.”); 4.05 (West Supp.2004-05) (authorizing collection proceeding to collect taxes due on unreported gross premium receipts), repealed by Act of April 30, 2003, 78th Leg., R.S., ch. 1274, § 26@(b)(4), 2003 Tex. Gen. Laws 3611, 4139 (effective April 1, 2005); 9.28 (West 1981) (authorizing revocation of certifícate of authority to transact business if insurer does not comply with provisions of insurance code), repealed by Act of April 30, 2003, 78th Leg., R.S., ch. 1274, § 26(b)(4), 2003 Tex. Gen. Laws 3611, 4139 (effective April 1, 2005). Appellants assert that allowing insurers to include only 15% of the premium tax in the retaliatory tax calculation even though the insurers will be responsible for the full amount and may be subjected to the sanctions hsted above is discriminatory and absurd.

However, as mentioned, the Comptroller amended rule 3.831 to codify the new interpretation that agents are proportionally hable for premium taxes. 34 Tex. Admin. Code § 3.831(4)(C). In addition, the Comptroller published a policy providing insurers a defense to being held responsible for all premium taxes if an agent does not remit its share of the premium tax due. The Comptroller’s interpretation, the amended rule 3.831, and the Comptroller’s pubhshed policy protect insurers from being responsible for the full amount of premium taxes if the agent does not remit its portion of the premium tax. The Comptroller’s interpretation, policy, and rule do not lead to absurd conclusions or unjust discrimination; on the contrary, they protect insurers from being unfairly held ha-ble for taxes they do not pay or owe.

Alternatively, appehants argue that, even if agents are responsible for 85% of the tax, then the duty to remit 100% of the premium tax to the state qualifies as an “other obhgation ... directly imposed” on insurers under article 21.46, and, therefore, 100% of the premium tax should be included in the retaliatory tax calculation. See Tex. Ins.Code Ann. art. 21.46. Appellants assert that the phrase “other obligations” as hsted in article 21.46 focuses on obligations that are directly imposed on an insurer, not on who bears the monetary burden, and extends beyond the legal hability for the tax and includes the obhgation to remit the tax to the state. See Tex. Tax Code Ann. § 101.003(11) (West 2001) (obhgation is “the duty of a person to pay a tax, fee, assessment, or other amount”).

However, administrative duties to remit taxes collected from another entity without financial implications that can be quantified are not the type of “other obligations” that need to be included when performing the retaliatory calculation to determine what retaliatory taxes, if any, should be assessed. On the contrary, because all the other obligations listed before the phrase “other obligations” refer to financial obligations, the rule of ejusdem generis implies that the phrase “other obligations” also refers to obligations that have financial, not ministerial, implications. See Hilco Elec. Coop. v. Midlothian Butane Gas Co., Inc., 111 S.W.3d 75, 81 (Tex.2003) (rule of ejusdem generis “provides that when words of a general nature are used in connection with the designation of particular objects or classes of persons or things, the meaning of the general words will be restricted to the particular designation”).

Contrary to the appellants’ assertions, the Comptroller’s new interpretation and rule 3.831 do not impose additional restrictions, conditions, or burdens that are inconsistent with either the retaliatory tax statute or the premium tax statute. See Hollywood Calling v. Public Util. Comm’n of Tex., 805 S.W.2d 618, 620 (Tex.App.-Austin 1991, no writ) (rule “may not impose additional burdens, conditions, or restrictions beyond or inconsistent with the statutory provisions.”). Rule 3.831(4)(C) does not directly contradict any statutory language because the premium tax statute states that an agent’s portion of the premium tax is included within the division of premium transferred to the insurer, here 15%. In addition, the retaliatory tax statute only requires inclusion of financial obligations “directly imposed” on an insurer. Further, the new interpretation and the rule do not run counter to the general objectives of the retaliatory tax statute or impose any burdens that are in excess of or inconsistent with the statute. The retaliatory tax statute is designed to equalize burdens imposed on Texas-based insurers by foreign states and the burdens imposed by Texas on foreign-based insurers. The rule and the Comptroller’s new interpretation make insurers responsible for the portion of premium taxes they actually pay. Including what the insurers are actually responsible for in the retaliatory tax equation does not contravene the objectives of the statute; on the contrary, it actually enforces the objectives. The fact that insurers may have to pay more as retaliatory taxes than was required before as a result of including only the amount insurers actually pay in premium taxes does not impose an additional tax in excess of statutory objectives. Rather, the new interpretation and rule impose the burden contemplated by the retaliatory tax statutory scheme. Enacting this rule and adopting the Comptroller’s new reasonable interpretation of the retaliatory tax scheme, which facilitate the purpose of the retaliatory tax scheme, were not, as suggested by the appellants, abuses of discretion. See Buddy Gregg Motor Homes, Inc. v. Motor Vehicle Bd. of the Tex. Dep’t of Transp., 156 S.W.3d 91, 102 (Tex.App.-Austin 2004, pet. filed) (when determining whether agency abuses its discretion, court must ascertain whether agency “based its decision on legally irrelevant factors or failed to consider legally relevant factors.”).

The Comptroller’s interpretation, policy, and rule stating that insurers are not responsible for the full 100% of the tax because agents give insurers their share of the tax when they give an insurer 15% of the premium collected are reasonable and do not conflict with the plain meaning of either the retaliatory or premium tax statutes. On the contrary, they specify exactly what section 8(b) of the premium tax statute requires: the insurer receiving “the premium tax due on the agent’s portion” through the division of premium between agents and insurers. Accordingly, we overrule appellants’ first two issues on appeal.

Comptroller’s Application of Retaliatory Tax Statute is Constitutional

In addition to arguing that the Comptroller’s new interpretation is incorrect, appellants also assert that the Comptroller’s application of the retaliatory tax is unconstitutional because it violates the equal protection clause. Specifically, appellants insist that the retaliatory taxes imposed under the Comptroller’s new interpretation unlawfully raise revenue for the state at the expense of foreign insurers, exceed the “relatively modest” amount of revenue raised under the California retaliatory tax scheme found constitutional in Western and Southern Life Insurance, and do not serve the purpose of promoting the interstate business of domestic insurers by deterring other states from enacting discriminatory taxes. See Western & S. Life Ins. Co., 451 U.S. at 668-72, 101 S.Ct. 2070; see also Metropolitan Life Ins. Co. v. Ward, 470 U.S. 869, 882 n. 10, 105 S.Ct. 1676, 84 L.Ed.2d 751 (1985) (state may not impose “discriminatorily higher taxes on nonresident corporations solely because they are nonresidents.”). Appellants urge the court to interpret Article 21.46 as requiring insurers to include 100% of the premium tax paid in the retaliatory tax calculation in order to avoid the alleged constitutional infirmities. See Brady, 795 S.W.2d at 715; Tex. Gov’t Code Ann. § 311.021(1) (West 2005); Ex parte Elliott, 973 S.W.2d 737, 742 (Tex.App.-Austin 1998, pet. ref'd).

Alternatively, if the court determines that the Comptroller’s interpretation is the only permissible interpretation, appellants contend the court should declare the entire retaliatory tax statute unconstitutional because it imposes retaliatory taxes on foreign-title insurers that exceed the aggregate tax burden that would be imposed on a comparable Texas insurer doing business in the foreign state.

The equal protection clause of the United States Constitution forbids states from denying to any person located within the jurisdiction of the states equal protection of the law. See id. at 656-57, 101 S.Ct. 2070. Similarly, the Texas Constitution also guarantees equal rights to all persons. Tex. Const. art. I, § 3. When determining whether a tax is unconstitutional, courts must look to the substance of the tax and not the form of the tax. See Hanover Fire Ins. Co. v. Harding, 272 U.S. 494, 509-10, 47 S.Ct. 179, 71 L.Ed. 372 (1926) (court must regard substance not form for determining whether tax constitutional, and test is “in the operation and effect of the law as applied and enforced by the state” (quoting St. Louis Southwestern Railway Co. v. State of Arkansas ex rel. Norwood, 235 U.S. 350, 362, 35 S.Ct. 99, 59 L.Ed. 265 (1914))). Based on this premise, appellants insist that, regardless of whether the insurer or the agent is technically liable for the 85% of the premium tax, the Comptroller’s interpretation imposes financial burdens on foreign insurers doing business in Texas that greatly exceed the financial burdens imposed on Texas insurers in the foreign state. Specifically, appellants contend that, because insurers will be allowed to include only 15% of the premium tax in the retaliatory tax calculation, foreign insurers will have to pay the difference between 15% of the premium tax imposed by Texas and the total premium tax the foreign state imposes, which would lead to foreign insurers paying significantly larger taxes than a comparable Texas insurer engaged in business in the foreign state.

However, we do not agree with the appellants’ characterization of the Comptroller’s interpretation. Because the Texas retaliatory statute applies only to foreign insurers, the equal taxation test applicable to retaliatory taxes requires a determination of whether the distinction between foreign and domestic insurers is rationally related to a legitimate government purpose. Western & S. Life Ins. Co., 451 U.S. at 657, 101 S.Ct. 2070. Generally speaking, retaliatory taxes are constitutional and raise minimum amounts of revenue. Id. at 669-70, 101 S.Ct. 2070. Retaliatory taxes are applied to foreign insurers for the purpose of deterring other states from imposing excessive taxes against domestic insurers, or alternatively, to compensate for higher out-of-state tax obligations imposed on Texas insurers, which serves a legitimate governmental purpose. Id. at 668-72, 101 S.Ct. 2070.

Under the Comptroller’s interpretation of the retaliatory tax scheme, title agents remit 85% of the premium tax to title insurers. Appellants assert that by allowing foreign insurers to include only 15% of the premium tax in the retaliatory tax calculation, the Comptroller is imposing retaliatory taxes on foreign-title insurers that exceed the aggregate financial burden imposed on comparable Texas insurers doing business in the foreign state. The Comptroller’s interpretation allows foreign insurers selling title insurance in Texas to include only the portion of the premium tax they actually pay in the retaliatory tax calculation. It compares a foreign title insurer’s aggregate financial obligations in Texas to a Texas insurer’s aggregate financial obligations in a foreign state; it then requires a retaliatory tax from a foreign-based insurer only if its Texas counterpart pays more in the foreign state, and requires, as payment in retaliatory taxes, the amount that would equalize the financial burdens on foreign insurers doing business in Texas and Texas insurers doing business in the foreign state. Accordingly, the Comptroller’s interpretation serves the legitimate state purpose of deterring other states from imposing excessive taxes against Texas insurers. Therefore, both the retaliatory tax statute and the Comptroller’s application of the retaliatory tax scheme are constitutional. Compare Western & S. Life Ins. Co., 451 U.S. at 674, 101 S.Ct. 2070 (California retaliatory tax statute constitutional), with Ward, 470 U.S. at 878, 882, 105 S.Ct. 1676 (statute unconstitutional that gave domestic companies preferential treatment and burdened all foreign corporations regardless of what foreign states did).

Appellants further insist that because the Comptroller’s current interpretation of article 9.59 has not been consistently and uniformly applied by the Comptroller, then the Comptroller’s current interpretation is not entitled to judicial deference, and the Comptroller should be required to return to the previous interpretation. See Texas Citrus Exch. v. Sharp, 955 S.W.2d 164, 170 (Tex.App.-Austin 1997, no pet.) (courts do not defer to administrative construction that deviates from clear and express provisions of statutory scheme, and courts give greater deference to agency interpretation that is long-standing and applied uniformly). However, just because the Comptroller uniformly enforced a statute until a certain date and then uniformly enforced the statute in a different manner does not mean there is a constitutional violation, especially where, as the Comptroller asserts, all the taxpayers have been treated equally since the new interpretation was adopted. See generally Grocers Supply Co., Inc. v. Sharp, 978 S.W.2d 638 (Tex.App.-Austin 1998, pet. denied). In the Comptroller’s summary judgment evidence, she demonstrated that the new instructions have been consistently applied to audits conducted since 2000, which includes report years since 1996.

Further, taxpayers do not acquire a right to pay less in taxes because they have been charged lower taxes in the past or because a tax policy was incorrectly implemented. See id. (Comptroller changed previous interpretation of tax statute, and grocery store applied for refund of sales taxes previously paid; however, Comptroller changed interpretation of tax statute back to previous interpretation, and court held grocery store not entitled to refund). Past omissions by the Comptroller will not serve as a bar to the Comptroller enforcing the statute and from imposing the correct financial obligation on title insurers. See Sharp v. House of Lloyd, Inc., 815 S.W.2d 245, 249 (Tex.1991) (Comptroller did not enforce part of franchise tax statute for thirteen years, but supreme court held prior non-enforcement could not prevent Comptroller from properly collecting taxes due as required by statute).

Title insurers are financially obligated to pay 15% of the tax due on premiums. This requirement is mandated by the premium and retaliatory tax statutes and by the Comptroller’s interpretation of these statutes. Requiring insurers to include only the 15% of the premium tax they actually pay does not render the retaliatory tax scheme unconstitutional. Because we conclude that the retaliatory tax statutory scheme and the Comptroller’s application of it are constitutional, we overrule appellants’ third issue on appeal.

CONCLUSION

The Comptroller’s interpretation of the premium tax and retaliatory tax scheme is reasonable and does not contradict the plain meaning of either the retaliatory tax or the premium tax statutes. Further, the Comptroller’s application of the two statutes is constitutional. Accordingly, the district court did not err in granting the Comptroller’s motion for summary judgment and in denying appellants’ motion for summary judgment. Therefore, we overrule appellants’ three claims and affirm the judgment of the district court.

      . Both First American and Old Republic filed suits seeking to recover taxes they had paid. After the district court granted summary judgment in favor of the Comptroller, both cases were consolidated into this appeal.

      . The tax years of 1998-2000 are not at issue in this case.

      . In this appeal, we are not faced with and do not address whether the specific division of premium between agents (85%) and insurers (15%) is reasonable.

      . Because the Department is required to consider insurers’ relevant expenses for the purposes of setting premium rates, we will presume that the Department accounted for the obligation of remitting agents' portions of the premium tax.

      . Additionally, appellants insist that the Comptroller’s interpretation would cause other states to retaliate against Texas-based insurers, which would be detrimental to both foreign and domestic insurers. However, it is not within the purview of this court to consider what other states may or may not do as a result of the Comptroller adopting this new interpretation. It is for the legislature, not the courts, to consider the possibility of other states’ reactions when enacting legislation.

      . Contrary to appellants' assertions, the test of the constitutionality of a retaliatory tax is not whether a retaliatory tax has increased or decreased over time, nor is the test whether the tax raises revenue. All taxes raise revenue, including the previous retaliatory tax statute.


text:
    Patrick AFFATATO, Appellant, v. The STATE of Texas, Appellee.
    No. 03-04-00720-CR.
    Court of Appeals of Texas, Austin.
    June 3, 2005.

      Dain P. Whitworth, Austin, for Appellant.
    Jade M. Meeker, Asst. Dist. Atty., Austin, for State.
    Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
   OPINION

DAVID PURYEAR, Justice.

Appellant entered a plea of guilty to the offense of possession of a controlled substance and was sentenced to eight years’ probation. At a pre-trial hearing, the trial court denied appellant’s motion to suppress evidence obtained from his rented garage unit. In his sole point of error, appellant contends that the trial court erred in admitting the evidence because it was gathered in an illegal search outside the scope of the search warrant. We overrule this point and affirm the conviction.

BACKGROUND

On September 3, 2003, police officers were dispatched to appellant’s apartment to investigate reports of a disturbance between a man and a woman. Upon arrival, Austin police officer J. Castleberry was informed of appellant’s drug activity by his live-in girlfriend and obtained a warrant to search the premises. The girlfriend stated that the appellant “goes to his garage #P3 located in the parking area of the apartment complex” and brings back to his apartment a glass bowl containing methamphetamine. The warrant incorporated by reference Officer Castleberry’s affidavit, which included this statement. The warrant itself authorized a search of appellant’s “apartment at 2811 La Frontera Blvd. # 2337, Austin, Travis County, Texas, as well as all outbuildings, motor vehicles and curtilage thereof.”

The warrant specifically described the apartment itself, indicating its number, floor, and orientation. Although it referred to “outbuildings” and “curtilage,” the warrant did not specifically describe appellant’s garage. Officer Castleberry executed the warrant and searched appellant’s apartment and garage unit labeled # P3, located on the premises of the apartment complex and leased to appellant along with his residence. The evidence found in the garage led to appellant’s arrest and indictment for possession of a controlled substance.

DISCUSSION

Appellant argues that the garage was not properly within the scope of the warrant because the garage could not be considered within the curtilage of the apartment. Detached garages are generally within the curtilage of a residence. Comeaux v. State, 118 Tex.Crim. 223, 42 S.W.2d 255, 257 (1931) (right to enter and search home includes right to search less private and protected outbuildings such as garage or chicken coop.); see Long v. State, 132 S.W.3d 443, 448 (Tex.Crim.App.2004) (explaining Comeaux’s general rule: “The right to enter an search a person’s home — his bedroom, his bathroom, his kitchen, all of his most intimate preserves — must surely carry with it the right to search those areas less private and less protected that are nonetheless part and parcel of his residence, areas such as a garage, tool shed, or chicken coop.”); Seale v. State, 118 Tex.Crim. 324, 39 S.W.2d 58, 59 (1931) (description of filling station included garage located twenty-five feet away); Davila v. State, 871 S.W.2d 806, 814 (Tex.App.-Corpus Christi, 1994, pet. ref'd) (detached garage separated from house by wooden fence was inside curti-lage of house); United States v. Moore, 743 F.2d 254, 256 (5th Cir.1984) (citing Comeaux to hold that under Texas law, detached garage located forty or fifty feet away was within curtilage of house though description of dwelling did not mention either garage or automobile).

Appellant argues that this general rule does not apply in his case because the parking lot and sidewalk separating the apartment and the garage are public spaces and would not themselves be considered part of the curtilage of the apartment. See Evans v. State, 995 S.W.2d 284, 285 (Tex.App.-Houston [14th Dist.] 1999, pet. ref'd) (parking lots and sidewalks of apartment complexes are public spaces where residents have no reasonable expectation of privacy); Cuero v. State, 845 S.W.2d 387, 391 (Tex.App.-Houston [1st Dist.] 1992, pet. ref'd) (“public place” is any place where substantial group of public has access, including common areas of apartment houses). However, the nature of the space between the garage and the apartment is irrelevant to the question before us, as is the question of curtilage in general. We need only decide if the warrant was sufficiently specific to apprise the officers of where they were to conduct the searches. Palmer v. State, 614 S.W.2d 831, 833 (Tex.Crim.App.1981); Haynes v. State, 475 S.W.2d 739, 740 (Tex.Crim.App.1971) (where warrant describes location in multi-unit dwelling, description must contain sufficient guidelines to apprise officers of particular unit to be searched).

A trial court’s application of the law of search and seizure is reviewed de novo when considering that court’s ruling on a motion to suppress evidence. Walter v. State, 28 S.W.3d 538, 540 (Tex.Crim.App.2000). If a trial court’s decision is correct on any theory of law applicable to the case, the decision will be sustained. State v. Ross, 32 S.W.3d 853, 855-56 (Tex.Crim.App.2000).

The Fourth Amendment commands that no warrant shall issue except one “particularly describing the place to be searched.” U.S. Const. amend. IV. A search made under the authority of a search warrant may extend to the entire area covered by the warrant’s description. Long, 132 S.W.3d at 448 (citing Wayne R. Lafave, Search and Seizure, § 4.10(a), at 654 (3d ed.1996)). However, when a search exceeds the scope of the warrant, evidence obtained must be excluded. See Tex.Code Crim. Proc. Ann. art. 38.23 (West 2004). When courts examine the description of the place to be searched to determine the warrant’s scope, they follow a common sense and practical approach, not an overly technical one. Id. (citing United States v. Ventresca, 380 U.S. 102, 108, 85 S.Ct. 741, 13 L.Ed.2d 684 (1965); Ker v. California, 374 U.S. 23, 33, 83 S.Ct. 1623, 10 L.Ed.2d 726 (1963)).

When an affidavit is attached to the warrant, the documents should be considered together as defining the place to be searched. Long, 132 S.W.3d at 447 n. 11; Green v. State, 799 S.W.2d 756, 760 (Tex.Crim.App.1990). Where, as here, a warrant incorporates an affidavit by reference, that affidavit becomes part of the search warrant. Green, 799 S.W.2d at 760. Descriptions in the affidavit control over the language in the warrant itself. Long, 132 S.W.3d at 447 n. 11; see Green, 799 S.W.2d at 760 (affidavit given to secure search warrant controls over search warrant with respect to location to be searched); Riojas v. State, 530 S.W.2d 298, 303 (Tex.Crim.App.1975) (description of place to be searched in affidavit controls description of place in search warrant).

Where a warrant contains accurate directions concerning the location of the place to be searched and a showing is made that the place searched was the place described, the warrant meets the requirements of specificity. Haynes, 475 S.W.2d at 741. The affidavit controls because it is the actual instrument upon which validity of the search must succeed or fail, and thus is usually more specific and precise in reciting the information known to an affiant than is the warrant which follows. See, e.g., Long, 132 S.W.3d at 447 n. 11. The affidavit is intended to inform and persuade; the warrant simply executes the determination of probable cause made by the magistrate. Green, 799 S.W.2d 756, 760.

The affidavit attached to the warrant clearly gives appellant’s street address, apartment number and garage number. Appellant confirmed that garage # P3 was his garage at the pre-trial hearing. Officers were able to, and actually did, locate appellant’s garage with specificity and did not engage in the type of general search and seizures that our forefathers feared. See Haynes, 475 S.W.2d at 740; see also Long, 132 S.W.3d at 448 (citing United States v. Heldt, 668 F.2d 1238, 1257 (D.C.Cir.1981) for proposition that particularity requirement for warrants serves constitutional function of preventing general searches and seizures).

Although the garage was not physically proximate to the apartment in an exclusive manner, nor tied to the apartment by number, the police were adequately able to distinguish it from other garages in the community. Etchieson v. State, 574 S.W.2d 753, 759 (Tex.Crim.App.1978) (to be sufficiently definite warrant need only enable officer to locate property and distinguish it from other places in community). There is no evidence in the record to show that garage # P3 was known by any other description, or that the identifier “#P3” could have applied to any other place within the apartment complex. Palmer, 614 S.W.2d at 834 (appellant’s assertion of error overruled when there was no evidence that address was sufficient to locate correct place or was transferable to another location); see also Johnson v. State, 469 S.W.2d 581, 586 (Tex.Crim.App.1971) (where appellant did not show that there were two streets named Bettina in Houston, assertion of error from warrant’s use of “Bettina Street,” when apartment searched was actually on “Bettina Court,” was overruled).

The underlying constitutional objectives of the particularity requirement are (1) ensuring that the officer searches the right place; (2) confirming that probable cause is, in fact, established for the place described in the warrant; (3) limiting the officer’s discretion and narrowing the scope of his search; (4) minimizing the danger of mistakenly searching the person or property of an innocent bystander or property owner; and (5) informing the owner of the officer’s authority to search that specific location. Long, 132 S.W.3d at 447. Because the description in the affidavit was sufficient to direct officers in their search with specificity, and because that search was in fact specific, none of the underlying interests were harmed. See Haynes, 475 S.W.2d at 740. Therefore, we overrule appellant’s point of error and affirm the decision of the trial court denying the motion to suppress evidence.

CONCLUSION

Because the affidavit clearly and specifically described both the apartment and the garage as places to be searched, the search was permissible under the authority of the warrant. The trial court did not err in refusing to exclude the evidence. We overrule appellant’s point of error and affirm the decision of the trial court.


author: TOM GRAY, Chief Justice.

text:
    In the Interest of N.L.A., a Child.
    No. 10-03-00202-CV.
    Court of Appeals of Texas, Waco.
    June 8, 2005.
    John B. Worley, Asst. Atty. General, Austin, for appellant.
    Ernest Smith, Franklin, pro se.
    Laverne Anderson, Bremond, pro se.
   DISSENTING OPINION TO BRIEFING ORDER

TOM GRAY, Chief Justice.

The briefing requested by the majority may provide some interesting information, but it is unlikely to provide anything that will help me analyze the issues we should be considering to resolve this appeal. The result regarding what the collateral effect of a proper ruling on the issue presented may be a proper consideration in some cases, but I fail to see that as relevant to the legal issue presented in this appeal. The request unduly delves into the legislative arena and appears more relevant to a legislative determination to obtain a result than what an intermediate appellate court should consider in resolving this appeal. Thus, I believe the request to be improper, and for this reason I dissent from the order.

For the parties to assist me in the resolution of this appeal there is, however, additional briefing that I would order. I would order the parties to more fully brief the question regarding whether the 20th or 82nd District Courts obtained, maintained, and lost jurisdiction as it relates to each of the various orders rendered by those courts which are at issue in this appeal. One question which specifically needs to be addressed is whether the type jurisdiction in issue is jurisdiction of a person and, if so, which person, jurisdiction of the subject matter of the suit and, if so, what is that subject matter, or jurisdiction of geography and, if so, what geography. Further, if the court rendering the order would ordinarily lack the jurisdiction necessary to render the order, can the limitation on the court’s jurisdiction that each party contends would otherwise control the disposition of this appeal be waived and, if so, how can it be waived, and further, based upon the facts of this case, was it waived?

These are the issues on which I would order the parties to provide additional briefing, and because the majority does not so order the parties to provide this additional briefing, I also dissent.