Case Title: GARCIA v. TED PARKS, L.L.C.

Citation: 

Docket Number: 105176

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2008-10-07T00:00:00Z

Document:
GARCIA v. TED PARKS, L.L.C.  GARCIA v. TED PARKS, L.L.C. 2008 OK 90 195 P.3d 1269 Case Number: 105176 Decided: 10/07/2008 THE SUPREME COURT OF THE STATE OF OKLAHOMA DOLLA GARCIA, Plaintiff/Appellant, v. TED PARKS, L.L.C., FOREST "BUTCH" FREEMAN, the TREASURER OF OKLAHOMA COUNTY; and the BOARD OF COUNTY COMMISSIONERS OF OKLAHOMA, Defendants/Appellees. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION I Honorable Bryan C. Dixon, Trial Judge ¶0 The appellant landowner, Dolla Garcia, neglected to pay the 2002 property taxes on her home. The appellee, Ted Parks, Inc., purchased the property at a tax sale and applied for a certificate of tax deed. The landowner petitioned to set aside the tax deed asserting that: 1) the tax deed was void because she was not given sufficient notice of the application for tax deed; and 2) she was entitled to redemption. Parks filed a motion for summary judgment which the trial court granted. The landowner filed a motion for new trial insisting that a guardian had been appointed for her because of her mental condition and that the Social Security Administration had determined her to be disabled since March 5, 2002. The trial court denied the motion for a new trial, the landowner appealed, and the Court of Civil Appeals affirmed. We hold that: 1) due process requires that the landowner be given actual notice of the sale, otherwise the sale is void; 2) the notice requirements for issuing the tax deed were not met, which voided the tax deed; and 3) because the landowner is legally disabled, she is entitled to redeem the property. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT REVERSED AND CAUSE REMANDED. Jennifer Jones, James Patrick Kelley, Oklahoma City, Oklahoma for Plaintiff/Appellant. Jeffery S. Ludlam, Oklahoma City, Oklahoma for Defendant/Appellee Ted Parks, L.L.C. KAUGER, J. ¶1 This cause concerns a dispute over title to a home owned since March 12, 1981, by the appellant, Dolla Garcia, also known as Dolla Moore (landowner). The appellee, Ted Parks, Inc. (Parks) asserts an interest in the property by virtue of his Certificate of Tax Deed. The legitimacy of Park's interest in the property is contingent on: 1) whether the Oklahoma County Treasurer's October 6, 2003, tax sale and the issuance of the September 6, 2007, Certificate of Tax Deed complied with the constitutional and statutory procedures authorizing the sale of real property for delinquent taxes; and 2) whether, under the facts of this cause, the landowner should have been allowed either exemption or redemption. ¶2 We hold that: 1) due process requires that the landowner be given actual notice of the sale, otherwise the sale is void; 2) the notice requirements for issuing the tax deed were not met, and the tax deed is void; and 3) because the landowner is legally disabled, she is entitled to redeem the property. FACTS ¶3 In 2002, the landowner neglected to pay the ad valorem taxes on her home located in southeast Oklahoma City, Oklahoma. On October 6, 2003, the county treasurer placed the property for bid at public auction, and it was purchased by Heartwood 88, Inc. That same day, Heartwood assigned its interest to Parks after Parks paid the delinquent taxes for 2002, totaling $509.28. ¶4 In March of 2002, the landowner sought, but was denied, disability insurance benefits from the Social Security Administration. The record indicates that the onset of her disability began in 2001, and it initially consisted of degenerative back impairments of the cervical and lumbar discs, affective mood disorder, and a tear of her rotator cuff. The nature of the landowner's physical and mental condition continued to decline over the next several years, and it grew to include chronic neck and back pain, anger problems, emotional disorders including anxiety and depression, neck surgery, pain and muscle spasms, memory and concentration problems, knee problems including knee surgery, and shoulder and arm problems. She has undergone many different medical treatments, several surgeries, psychotherapy, and several hospitalizations. In addition to her physical decline, she became depressed, suicidal, and socially withdrawn. ¶5 On May 10, 2006, Parks filed an Application for a Tax Deed to the landowner's home. Finally, on May 26, 2006, after another hearing from the Social Security Administration, an administrative law judge determined that the landowner had in fact been disabled under the Social Security Act since March of 2002 and that she qualified for benefits. The record is unclear as to when, but at some point after she was determined totally disabled by the Social Security Administration, she started receiving a monthly check of $1,226.00. ¶6 The landowner was again admitted to the hospital on June 28, 2006. A few days later, on July 4, 2006, Johnny Moore, the landowner's son (son) who lived in Tulsa, Oklahoma, was in town to visit his mother. While he was dropping off his belongings at his mother's house for an overnight stay, a process server appeared at the house. Even though he told the process server that he did not reside at the home, the process server handed him a "Notice of Application for Tax Deed." According to the process server, the son stated that he did reside at the home. Regardless, the son, without reading the paperwork, left it on the kitchen table for his mother to find. ¶7 The landowner was released from the hospital on July 9, 2006, and allegedly she did not discover the "Notice" until late July. On July 28, 2006, the landowner signed an application for exemption from tax sale stating that: 1) she was the record owner of the disputed property; 2) she was 65 years old or older or is totally disabled; 3) the fair market value of the property does not exceed $125,000.00; and 4) her gross household income had been $300.00 monthly or approximately $4,300.00 annually (she does not mention whether she was also receiving the additional social security benefits at this time). On September 7, 2006, the Oklahoma County Treasurer issued a Certificate of Tax Deed for the disputed property to Parks. The deed was recorded on September 8, 2006. ¶8 On December 11, 2006, the landowner filed a Petition to Set Aside Tax Deed and to Quiet Title. She sought to clear her title of the cloud the tax deed presented on her property. She alleged that: 1) the purported tax deed was void because she was not given sufficient notice of the Application for Tax Deed; and 2) she was entitled to redemption of any alleged past-due tax assessments. The landowner tendered $2,210.78, the amount of taxes, penalties, costs and interest which she believed to be due as of March 6, 2006, to the county. ¶9 The trial court ignored the existence of disputed fact issues regarding whether the son lived with his mother, as the process server claimed, or whether he lived in Tulsa, as he and the landowner claimed. It granted summary judgment in favor of Parks and against the landowner on June 22, 2007. ¶10 Because the landowner suffered from a mental condition which severely limited her ability to manage her financial affairs, Wilmer Louis Garcia, her ex-husband, was appointed her limited guardian on July 31, 2007. She filed a Motion for New Trial/Reconsideration on August 20, 2007, arguing that: 1) notice of the tax deed application was improperly served and inadequate; and 2) new evidence had come to light regarding the July 31, 2007, guardianship appointment over her because of a mental condition and a determination of disability by the Social Security Administration in May of 2006, that declared her disabled since March 5, 2002. The trial court denied the motion for new trial, and the landowner appealed. The Court of Civil Appeals affirmed, and we granted certiorari on June 16, 2008. I ¶12 It is unclear from the record whether the initial tax sale was valid. Delinquent taxes owed on real property are considered a lien upon the property for seven years from the date they are due and payable. ¶13 This Court has long recognized that the statutory notice provisions for a tax sale are mandatory, and the absence of such notice nullifies the sale of the property. It is a fundamental tenet of constitutional law that one may not be deprived of a valuable property interest without first giving notice 'reasonably calculated under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. . . . It would be idle to pretend that publication alone. . .is a reliable means of acquainting interested parties of the fact that their rights are before the courts.' Mullane v. Central Hanover Trust Co., ¶14 In Wells Fargo Credit Corp. v. Ziegler, ¶15 Clearly, to the extent that the statute implies that the failure to give actual notice to a record owner who was living on the property and whose whereabouts were known does not affect the validity of the tax sale, it conflicts with constitutionally protected due process notice requirements. II. ¶16 THE NOTICE REQUIREMENTS FOR ISSUING THE TAX DEED WERE CLEARLY NOT MET. CONSEQUENTLY, THE TAX DEED IS ALSO VOID. ¶17 When a tax sale is held by the county treasurer, the first person to pay the delinquent taxes in full with accompanying costs is issued a certificate of tax sale. ¶19 In Shamblin v. Beasley, ¶20 The factors we considered in Shamblin to conclude that service on the husband was effective were such things as: 1) existence of spousal status; 2) joint ownership of the property in question; 3) the legal impact of the proceedings for tax resale of their owners' interests; 4) the fact of cohabitation and maintaining a joint residence in a common dwelling; and 5) the homestead status of the property. Our holding in Shamblin was expressly "not to be enlarged by reading into it the principle that the wife would be bound by service delivered to the husband in a context other than the circumstances presented by this case." ¶21 Obviously, Shamblin is not controlling. Here, service was made on the son who merely stopped by his mother's property on the way to visit her in the hospital. Even if applied in the context of a mother/son relationship rather than a spousal relationship, not one Shamblin factor exists. Nor does applying the "totality of the circumstances" test result in a "reasonable probability" that the landowner would have received actual notice by serving the son while his mother was hospitalized. Service was clearly ineffective and contrary to III. ¶23 THE LANDOWNER IS LEGALLY DISABLED AND IS ENTITLED TO REDEEM THE PROPERTY. ¶24 There are cumulative reasons which require vacation of the tax deed. Not only was notice defective, the landowner qualified for a redeemption. The version of 1) the property was a single-family dwelling; 2) the individual residing on the property was 65 or older; 3) the real property is not being used as rental property; 4) the income of the individual living on the property does not exceed poverty guidelines; and 5) the fair market value of the property does not exceed $125,000. C. As used in this section, a person who is 'totally disabled' means a person who is unable to engage in any substantial gainful activity by reason of a medically determined physical or mental impairment which can be expected to last for a continuous period of twelve (12) months or more. Proof of disability may be established by certification by an agency of state government, an insurance company, or as may be required by the county treasurer. Eligibility to receive disability benefits pursuant to a total disability under the Federal Social Security Act shall constitute proof of disability for purposes of this section. By the time this version of the statute became effective, the landowner could have qualified as a disabled person under the statute, but the tax sale had already occurred. Here, we do not apply the after-enacted statute because it was not in effect at the time of the sale. Consequently, the question then becomes whether she is entitled to redeem the property. ¶26 Oklahoma law favors redemption. In Sherrill v. Deisenroth, . . .The taking of a taxpayer's property for taxes is an involuntary exaction by the state, and the tax-gathering authorities must stay strictly within the provisions of the law authorizing the collection of such taxes or taking of such property. Nothing is to be indulged in their favor, or in favor of grantees of property sold for taxes and undertaken to be conveyed by the tax-gathering authorities. This Court has recognized that statutory provisions relating to redemption from tax sale must be construed liberally in favor of redemption. . . We conclude that the removal of a citizen from his land by reason of tax delinquency is repugnant and offends the innate sense of justice in each citizen. The Legislature, recognizing this, established clear unequivocable guidelines in the disenfranchising process with liberal redemption rights allowed to the landowner. . . . Public policy favors redemption by payment of all delinquent taxes prior to the execution of a deed by the county treasurer. In other words, every opportunity is to be afforded persons entitled to redeem real estate from a lien resulting from a tax sale prior to the execution of a tax deed by the country treasurer. Until a tax deed, valid on its face, has been issued and delivered, the landowner has the right to redeem from the tax sale or resale. ¶27 Here, the landowner attempted to file an exemption from sale nearly three years after the sale had occurred, and she attempted to redeem the property when she filed her petition in district court. Although it might appear that the landowner's initial attempt at redemption was untimely, ¶28 In Shamblin v. Beasley, ¶29 In Ray v. Williams, ¶30 Here, by May 26, 2006, the Social Security Administration had determined that the landowner had been disabled under the Federal Social Security Act since March 5, 2002. CONCLUSION ¶31 The purpose of the statutory procedure for collecting delinquent taxes is twofold. It serves to provide an opportunity for the county treasurer to collect taxes which are due. It also serves to protect property owners and provide every opportunity possible for them to redeem their property before it is taken. Additional measures are in place for landowners who are incapacitated or under a disability because the statutory procedures were not intended as a way to manipulate elderly or disabled people out of their homes. Under the facts of this cause, a mentally and physically disabled landowner is ready, willing, and able to redeem her property and pay the delinquent taxes, but the "process" has been sidestepped so that she can be removed from her property. The cause is remanded to the trial court for further proceedings consistent with our pronouncement. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT REVERSED AND CAUSE REMANDED. EDMONDSON, V.C.J., OPALA, KAUGER, WATT, TAYLOR, COLBERT, JJ., concur. WINCHESTER, C.J., HARGRAVE, J., dissent. REIF, J., concurs in result: I concur to grant certiorari. I do so on the narrow ground that there is a controversy over the service of the application for tax deed. If the trier of fact resolves this controversy in favor of the Owner, the tax deed fails for invalid notice. If the trier of fact resolves this issue in favor of the Applicant I believe there is no other ground upon which to set aside the tax deed. FOOT