voluntary payment rule in Texas

2023In its application, the voluntary-payment rule requires a finding that a person voluntarily acted with “full knowledge of all the facts.” Id. at 772 .

2015The voluntary-payment rule operates as a defense to a claim seeking restitution, and can be stated as follows: “ ‘Money voluntarily paid on a claim of right, with full knowledge of all the facts, in the absence of fraud, deception, duress, or compulsion, cannot be recovered back merely because the party at the time of payment was ignorant of or mistook the law as to his liability.’” BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 768 (Tex. 2005) (citing Pennell v. United Ins.

2016However, the common law principle of the voluntary payment rule provides that “money voluntarily paid on a claim of right, with full knowledge of all the facts, in the absence of fraud, duress, or compulsion, cannot be recovered back merely because the party at the time of payment was ignorant of or mistook the law as to his liability.” Id. at 103 .

2016“When, as here, payment on a judgment is coupled with an express intent to appeal when appellate relief is attainable, the voluntary payment rule will not preclude restitution if the judgment is later reversed.” Id. at 105 (internal citation omitted). –10– We decline to hold that for a party to be entitled to restitution after reversal—that is, to avoid the effect of the voluntary payment rule––that the payment must be made after a judgment is rendered.

2005See Pennell, 243 S.W.2d at 575-76 (voluntary payment cannot be recovered “merely because the [payor] ... was ignorant of or mistook the law as to his liability”); Gilliam, 6 S.W. at 759 (“Money paid under a mistake of law ... cannot be recovered.”); Putnam, 649 N.W.2d at 635 (observing that a mistake of law “does not represent the type of wrongful action that should be excepted from the voluntary payment doctrine”); but see City of Taylor v. Hodges, 143 Tex. 441 , 186 S.W.2d 61, 63 (1945) (refusing to apply the rule that “relief cannot be had from a payment made under a mistake of law” to situ

2005See Pennell, 243 S.W.2d at 575-76 ; Gilliam, 6 S.W. at 759 ; Ladd, 53 Tex. at 192-94 . 7 The distinction between public and private entities should not alter the voluntary-payment rule’s application.

2024The voluntary payment rule “is not, and never has been, simply that any payment” toward satisfaction of a judgment, even voluntary payments, “moots the controversy and waives the right to appeal that judgment.” Id.

2015Furthermore, the purpose of the voluntary payment rule is that a “party should not be allowed to mislead his opponent into believing that the Appellant’s Brief – Page 20 1217914 controversy is over and then contest the payment and seek recovery.” Highland Church of Christ v. Powell, 640 S.W.2d 235, 236 (Tex. 1982).

2025“Under the modern view of the voluntary-payment rule, payment of a judgment does not bar prosecution of appeal unless the judgment debtor clearly misled the opposing party regarding the judgment debtor’s intent to pursue an appeal.” Id. at 228 ; see Miga v. Jensen, 96 S.W.3d 207, 212 (Tex. 2002) (“[P]ayment on a judgment will not moot an appeal of that judgment if the judgment debtor clearly expresses an intent that he intends to exercise his right of appeal and appellate relief is not futile.”).

2015In Miga v. Jensen, the Supreme Court held unambiguously: When, as here, payment on a judgment is coupled with an expressed intent to appeal when appellate relief is attainable, see Miga I, 96 S.W.3d at 212 , the voluntary payment rule will not preclude restitution if the judgment is later reversed. 299 S.W.3d 98, 102, 105 (Tex. 2009) (“Miga II”).

2016It has long been the rule in Texas that “a tax voluntarily paid cannot be recovered, though it had not the semblance of legality.” City of Houston v. Feizer, 76 Tex. 365 , 13 S.W. 266, 267 (1890).

2005In both Corsicana Cotton Mills v. Sheppard, 123 Tex. 352 , 71 S.W.2d 247, 248 (1934) and Houston v. Feizer, 76 Tex. 365 , 13 S.W. 266, 268 (1890), the taxpayers simply volunteered to pay fees they mistakenly thought they owed, without any assessment or demand from the government.

2016This voluntary payment rule “secures taxing authorities in the orderly conduct of their financial affairs,” serves the “government’s exceedingly strong interest in financial stability,” and “supports the age-old policies of discouraging litigation with the government.” Bolton, 185 S.W.3d at 876-77 (citations omitted).

2015College Dist. v. Bolton, 185 S.W.3d 868, 870 (Tex. 2005), the issue was not the existence of a judgment, but the absence of any protest by the complaining students at having to pay a “technology fee.” The voluntary payment rule was applied, because the students “had the option … to seek an exemption from all or part of the fee from the District,” id. at 880 , but the court went out of its way to observe that, “if there were evidence that students sought waivers and were denied them, or that the students made any protest at all at the time of payment, the Court’s analysis might be different.” I

2016See Salvaggio v. Houston ISD, 709 S.W.2d 306, 308 (Tex. App.—Houston [14th Dist.] 1986, writ dism’d) (holding trial court did not abuse its discretion in refusing to certify a class based on voluntary payment rule’s application where taxpayers were seeking recovery of attorney-fee charges paid in connection with penalty and interest charges for delinquent taxes).

1988Regarding the contention that the trial court had erred in denying certification to the Salvaggio class, the court noted that “[t]he major issue raised is whether the voluntary payment rule should apply to attorney fees provided by § 33.07.” 709 S.W.2d at 307 .

2024Miga II, 299 S.W.3d at 103 (holding voluntary payment rule is “defense to a restitution claim”); see also generally Lowenberg v. City of Dall., 261 S.W.3d 54, 59 (Tex. 2008) (holding voluntary payment rule barred claims for recovery of registration fees paid to city under ordinance); Dall.

2024Id. at 59 .

2015See Highland Church, 640 S.W.2d at 236 (“Voluntary payment ends the controversy.”); see also RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 18 cmt. c (“a payment by way of compromise and settlement, where the purpose of the agreement is to effect a final resolution between the parties irrespective of the validity or correctness of any prior decrees, is not subject 26 to recovery in restitution unless the agreement of compromise may itself be avoided …”). 11 Conversely, the Supreme Court has held that “‘implicit in reserving a right to appeal is the right to a refund of the money in t

2009The court of appeals held that the voluntary payment rule did not apply because “Jensen signed the Agreed Order under economic duress.” 214 S.W.3d at 92 (noting that “interest on the judgment was accruing at a rate of ten percent, compounded annually”).

2008See Spring Branch Bank v. Mengden, 628 S.W.2d 130, 135-37 (Tex.App.-Houston [14th Dist.] 1981, writ ref'd n.r.e.); Am.

2008See Spring Branch Bank v. Mengden, 628 S.W.2d 130, 135-37 (Tex. App.-Houston [14th Dist.] 1981, writ ref'd n.r.e.); Am.

2008Gaither, 83 S.W. at 226 (“If, however, appellant in any way represented himself to be a practicing physician, when he was not authorized to practice medicine, and appellee was thereby induced to employ and pay him for professional services, he could recover back the money so paid.”).

2008Gaither , 83 S.W. at 226 ("If, however, appellant in any way represented himself to be a practicing physician, when he was not authorized to practice medicine, and appellee was thereby induced to employ and pay him for professional services, he could recover back the money so paid.").

2005Of course, for the voluntary-payment rule to apply, a person must pay "with full knowledge of all the facts." See, e.g., Ladd, 53 Tex. at 192 ; Tyler v. Tyler, 742 S.W.2d 740, 743 (Houston [14th Dist.] 1987, writ denied).

2005Of course, for the voluntary-payment rule to apply, a person must pay “with full knowledge of all the facts.” See, e.g., Ladd, 53 Tex. at 192 ; Tyler v. Tyler, 742 S.W.2d 740, 743 (Houston [14th Dist.] 1987, writ denied).

2015Texas South Rentals, Inc. v. Gomez, 267 S.W.3d 228 (Tex. App Corpus Christi-Edinburg 2008) Mr. Lopez did not allege the voluntary payment rule as an affirmative defense in his answer.

2015Texas South Rentals, Inc. v. Gomez, 267 S.W.3d 228 (Tex. App Corpus Christi-Edinburg 2008) Mr. Lopez did not allege the voluntary payment rule as an affirmative defense in his answer.

2011Both Bolton, 185 S.W.3d at 877 , and Austin National Bank *681 of Austin v. Sheppard, 123 Tex. 272 , 71 S.W.2d 242, 246 (1934), discuss duress as a defense to the taxing authority’s assertion of the voluntary-payment rule.

2011Both Bolton , 185 S.W.3d at 877 , and Austin National Bank of Austin v. Sheppard , 71 S.W.2d 242, 246 (Tex. 1934), discuss duress as a defense to the taxing authority’s assertion of the voluntary-payment rule.

2005See Hassen v. Mediaone of Greater Fla., Inc., 751 So.2d 1289, 1290 (Fla.Dist.Ct.App.2000); Telescripps Cable Co. v. Welsh, 542 S.E.2d 640, 642 (Ga.App.2000); Smith v. Prime Cable of Chicago, 276 Ill.App.3d 843 , 213 Ill.Dec. 304 , 658 N.E.2d 1325, 1329-30 (1995); Time Warner Entm't Co. v. Whiteman, 802 N.E.2d 886, 891-92 (Ind.2004); Horne v. Time Warner Operations, Inc., 119 F.Supp.2d624, 628 (S.D.Miss.1999); McWethy v. Telecomms., Inc., 988 P.2d 356, 358 (Okla.Civ.App.1999); Putnam v. Time Warner Cable of Southeastern Wis., Ltd.

2005See Hassen v. Mediaone of Greater Fla., Inc., 751 So.2d 1289, 1290 (Fla.Dist.Ct.App.2000); Telescripps Cable Co. v. Welsh, 542 S.E.2d 640, 642 (Ga.App.2000); Smith v. Prime Cable of Chicago, 276 Ill.App.3d 843 , 213 Ill.Dec. 304 , 658 N.E.2d 1325, 1329-30 (1995); Time Warner Entm’t Co. v. Whiteman, 802 N.E.2d 886, 891-92 (Ind.2004); Home v. Time Warner Operations, Inc., 119 F.Supp.2d 624, 628 (S.D.Miss.1999); McWethy v. Telecomms., Inc., 988 P.2d 356, 358 (Okla.Civ.App.1999); Putnam v. Time Warner Cable of Southeastern Wis., Ltd.

1991Hunt County Tax Appraisal Dist. v. Rubbermaid, Inc., 719 S.W.2d 215, 218 (Tex.App.—Dallas 1986, writ ref’d n.r.e.).

1988In Hunt County Tax Appraisal District v. Rubbermaid, Inc., 719 S.W.2d 215, 218 (Tex.App. — Dallas 1986, writ ref’d n.r.e.) it was held that full payment of taxes assessed under the Code rendered moot all questions as to their validity.

2003We recognize TCI Cablevision was decided before Bernal, supra, but Bernal did not address employing the voluntary payment doctrine to decertify a class; thus it does not control our decision in this matter.

2003We recognize TCI Cablevision was decided before Bernal, supra , but Bernal did not address employing the voluntary payment doctrine to decertify a class; thus it does not control our decision in this matter.

2004The voluntary payment rule "gives stability to a taxing authority in the conduct of its affairs." Tex. Nat'l Bank of Baytown , 765 S.W.2d at 825 .

2004The voluntary payment rule “gives stability to a taxing authorityin the conduct of its affairs.” Tex. Nat’1 Bank of Baytow, 765 S.W.2d at 825 .

2024E.g., City of Taylor v. Hodges, 186 S.W.2d 61, 63 (Tex. 1945) (city could recover from county voluntary payments made by city that should have been made by county); Cameron Cnty. v. Fox, 2 S.W.2d 433, 436 (Tex. Comm’n App. 1928, judgm’t adopted) (county could –8– maintain a suit to recover a voluntary payment on a claim by the tax collector for a bond premium that was later determined to have been unlawfully paid); Nunn- Warren Pub.

2005See Pennell, 243 S.W.2d at 575-76 (voluntary payment cannot be recovered “merely because the [payor] ... was ignorant of or mistook the law as to his liability”); Gilliam, 6 S.W. at 759 (“Money paid under a mistake of law ... cannot be recovered.”); Putnam, 649 N.W.2d at 635 (observing that a mistake of law “does not represent the type of wrongful action that should be excepted from the voluntary payment doctrine”); but see City of Taylor v. Hodges, 143 Tex. 441 , 186 S.W.2d 61, 63 (1945) (refusing to apply the rule that “relief cannot be had from a payment made under a mistake of law” to situ

2005In the taxation context, the voluntary-payment rule is intended to "prevent the taxing entity from using funds paid by taxpayers in a given budget year and subsequently being required to refund these amounts." City of Laredo v. S. Tex. Nat'l Bank, 775 S.W.2d 729, 731 (Tex.App.-San Antonio 1989, writ denied); see also Salvaggio v. Houston Indep.

2005In the taxation context, the voluntary-payment rule is intended to “prevent the taxing entity from using funds paid by taxpayers in a given budget year and subsequently being required to refund these amounts.” City of Laredo v. S. Tex. Nat’l Bank, 775 S.W.2d 729, 731 (Tex.App.-San Antonio 1989, writ denied); see also Salvaggio v. Houston Indep.

2002Salvaggio v. Houston Independent School District, 752 S.W.2d 189, 193 (Tex.Civ.App [14th Dist.] 1988); Frost v. Fowlerton Consolidated School District #1, 111 S.W.2d 754, 756-757 (Tex.Civ.App.-Beaumont 1937); National Biscuit Co. v. State, [ 134 Tex. 293 ] 135 S.W.2d 687, 694-695 (Tex.Sup.1940). 10.

2002Salvaggio v. Houston Independent School District, 752 S.W.2d 189, 193 (Tex.Civ.App [14th Dist.] 1988); Frost v. Fowlerton Consolidated School District #1, 111 S.W.2d 754, 756-757 (Tex.Civ.App.-Beaumont 1937); National Biscuit Co. v. State, [ 134 Tex. 293 ] 135 S.W.2d 687, 694-695 (Tex.Sup.1940). 10.

1990State v. Connecticut General Life Insurance Co., 382 S.W.2d 745, 746-47 (Tex.1964).

1990State v. Connecticut General Life Insurance Co., 382 S.W.2d 745, 746-47 (Tex.1964).

1990See Amplifone Corp. v. Cameron County, 577 S.W.2d 567 (Tex.Civ.App.—Corpus Christi 1979, no writ).

1988Amplifone Corp. v. Cameron County, 577 S.W.2d 567 (Tex.Civ.App. — Corpus Christi 1979, no writ).

2025“A settlement agreement must comply with Rule 11 to be enforceable.” Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995).

2025He also maintains that Nutt should have instead proved a 5 Though the parties frame this issue in terms of the acceptance-of-benefits doctrine, the result is the same under the voluntary-payment rule, another equitable doctrine that “represents the other side of the acceptance coin.” Kramer v. Kastleman, 508 S.W.3d 211, 227 (Tex. 2017).

2025“Under the modern view of the voluntary-payment rule, payment of a judgment does not bar prosecution of appeal unless the judgment debtor clearly misled the opposing party regarding the judgment debtor’s intent to pursue an appeal.” Id. at 228 ; see Miga v. Jensen, 96 S.W.3d 207, 212 (Tex. 2002) (“[P]ayment on a judgment will not moot an appeal of that judgment if the judgment debtor clearly expresses an intent that he intends to exercise his right of appeal and appellate relief is not futile.”).