Magnolia Creek PID 1 Refund Process FAQs

Please note that none of the following information should be construed as legal advice from the City of League City. This information is provided in an effort to explain a complicated process.

What is happening?

The City is asking a judge to declare who is entitled to refunds as a result of overpayments to Magnolia Creek Public Improvement District No. 1. This “interpleader” action is authorized by state law. While the City awaits a judge’s ruling on the matter, funds related to competing claims are being deposited with the Galveston County District Clerk for safekeeping. As part of this process, parties with accounts that saw competing claims are to receive a packet of information by certified mail that provides additional information on next steps in the process.

Why is it happening?

Because multiple persons or entities have filed claims for the same refunds on the same properties (of 316 accounts, 259 saw competing claims, and only 57 did not). The interpleader action asks for a judge’s ruling on who should be paid in cases where competing claims have been filed.

I am the only party to file a refund claim on my account. Why can’t I get paid now?

While the purpose of the interpleader action is to resolve competing claims, the action also impacts the City’s delivery of refunds for accounts that saw no competing claims. The reason for this is because the judge’s decision will affect the status of all refunds, not just those of claimants who are named in the action. Paying any claims prior to the judge’s decision could create unwanted liability for the City and claimants.

Why is this taking so long?

Given the number of claims received (more than 500), the requirement to evaluate each individual claim, and the potential liability for the City and claimants, we are committed to working through this methodically and carefully. We understand that the time required can be frustrating, and are working to move the process forward as quickly as possible while still protecting the interests of all involved.

Is the refund money being spent on these proceedings?

No. The City is depositing refunds with the court in order to minimize further expenses and preserve refund balances. Court costs are not to be deducted from the refund amounts, and any interest earned on the funds is to be included with refunds.

Am I being sued for claiming a refund?

As part of the interpleader action, the City has been compelled to include all refund claimants as parties to a lawsuit. If you are named in this action, please know that the City is not seeking any money from you and is not pursuing any claim against you; the City’s only intent is to resolve your claim as quickly as possible and make sure that all refund claims are addressed fairly and equitably. The only judgment sought by the City is a declaration of who is entitled to receive refunds.

What do I have to do?

As in any legal proceeding, you have the right to consult with an attorney. However, please remember that in this proceeding, the City is not seeking any money from you and is not pursuing any claim against you. You may also file a written response with the clerk reaffirming your claim.

What if I don’t do anything in response?

Because of legal requirements, the citation for this proceeding must contain language stating that failure to respond could result in a judgment being awarded against you. However, please remember that in this proceeding, the City is not seeking any money from you and is not pursuing any claim against you. You may wish to consider the possibility that if a competing claimant does file a written response and you do not, this could influence the Court’s eventual ruling as to who is entitled to refunds.

What if I don’t pick up the packet of information you sent me?

As the refunds are now in the Court’s custody. It is essential that all claimants receive service regarding this interpleader action. The City intends to make every effort to ensure that you have an opportunity to receive the funds you have claimed; thus, claimants who do not pick up their packets may receive service in person to ensure that they are aware of the proceedings and retain the opportunity to benefit from the Court’s decision. Those not served risk the possibility of forfeiting their claim and/or not benefitting from the Court’s decision.

When will it all be over (and I get my money)?

As this case involves a narrow legal question with and no facts appear to be in dispute, the City anticipates the judge will render a decision no more than 90 days after all parties to this matter receive service. As indicated earlier, we intend to make every effort to make this happen quickly; you can help move the process forward by picking up the certified packet of information you have been sent.