### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE July 7, 2003 Session
THE STATE OF TEN NESSEE IN ITS OWN BE HALF AND F OR THE USE AND BENEFIT OF

THE METROPOLITAN GOVERNMENT O F NASHVILLE AND DAVIDSON COUNTY, TENNESSEE v. DEL INQUENT TAXPAYERS AS SHOWN ON THE 199 8 REAL PROPERTY TAX RECORDS OF T HE METROPOLITAN GOVERNMENT O F NASHVILLE AND DAVIDSON COUNTY, TENNESSEE, MTN OUTPARCEL, INC.

Appeal from the Chancery Court for Davidson County No. 00-781-III Ellen Hobbs Lyle, Chancellor

No. M2002-01656-COA-R3-CV - Filed July 29, 2003

In this cau se, a purchaser at tax sale appealsthe orde

r of the tr ial cour t voiding its prior d

efault ju dgmen tagainst the delinquent taxpay er, and voiding the convey ance of that property to the purchaser. The delinquent tax notices, as well as th e notice of sale, were iss ued to an unintelligible address , despite the presence of the taxpay er’s proper

address on the special warranty deed retained in the Metropolitan Government’s Assessor’s Office. Upon the government’s motion, notice was then attempted by publication. After the trial court had entered the decree of sale and judgment affirming sale, and after expiration of the period for

the exercise of the equitable right of rede mption had otherwise lap sed, the delinquent taxpa ye r attempt ed to red eem the p

roperty . The tax sa

le purchaser, James Bro wn, conte sted the r edemptio n. The tri al court , conside ring the ta xp ayer’ s Motion to Void Ta

x Sale as a Rule

60.02 Motion to Set Aside a Default Judgment, voided the sale. For the reasons and under the authority cited herein we affirm. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded

W IL LI AM B. C AIN , J., delivered the opinion of the court, in which W IL LI AM C. K OCH , J R ., J., and P ATRIC IA J. C OTT RELL , J., joined.
James E. Brown, Madison, Tennessee, Pro Se.

Karl F. Dean and Cristi E. Scott, Nashville, Tennessee, for the appe llee, Metropolitan Government of Na sh vi ll e a nd Da vi ds on Co un ty. Alix Coulter Cross, Nashville, Tennessee, for the appellee, MTN Outparcel, I nc.1 Court of Appeals Rule 10(b): Th is Co urt, with the concur rence of al l ju dges pa rti cipat ing in t he cas e, may aff

irm, reve rse or mod ify the action s of the trial c ourt b y memora ndum opinion when a formal opinion would have no precedenti al val ue. When a case is deci de d by memora ndum opinion i t shal l be desi gnated “MEMORANDU M OP INI ON ,” shall no t be p ublishe d, and shall no t be cite d or relie d on for any
reaso n in a sub sequ ent unre lated c ase. -2-

MEMORAN

DUM OP

INION 1

On March10, 2000, the State of Tennessee on its own behalf and for the use a nd benefit of the Metropolitan Government of Nashv ille and D avidson County filed a su it agai nst MTN Out

parcel , Inc., (MTN) and

other delinquent taxpayers f or delinquent property

taxes. Inc luded in the proper ty subject to the suit was a tract of land, map 51, parcel 155, located on the corner of Gallatin Pike and Briley Parkway in the City

of Nashville. This particular tract of lan d was purchased by MTN Outparc el, Inc. by

special warranty

deed dated November 7, 1997, effective November 10 , 1997. The purc haser’ s addres s appear s in the special war ranty deed, bo ok 10681, p ages 4 24 to 426: MTN Outparcel, Inc

. c/o George F. May

nard Burr & Forema n, LL P 600 West Pea

chtree St. Atlanta, GA 30308. Notwithstanding the pres ence of this ad dress in the government’s records, the summons attache d to the Comp laint wasforwar ded to the following

address : MTN Outparcel, Inc

. %M/B/&F,L

LP 600 West Peachtree St. Atlanta, Ga 30308.

On May 10, 2000, M etro’s a

ttorney Cristi Scott

filed an affida vit with the trial court

in which she av erred t he fol lowi ng:
3. In accord ance with Tenn. Code Ann. §§ 21-1-203(a)(1), 21-1-203(a)(3) and 21-1-203(a)(5), Affiant states that the residence of Defe ndants named on attached Exhibit A are unknown and cannot be ascert ained upo n dilige

nt inquiry ; Defend ants are non-residents of this State; or Sheriff’s returns, upon attempted service of proce ss of the Defendants, are that the Defe ndants are not to be found.

MTN was one of the non-residents listed in Exhi bit A. Bas ed on that information, the trial court allowednotice by

publicat ion in the N ashville R

ecord f or four c onsecuti ve week s. On August 4, 2000, Metro moved for default judgment on the tax lien and for a decree of sale f

or the propert

y, s aid Motion bearing the same unintelligible address f or MTN. On August 18, 2000, the Chancery Court-3-

for Davidson County gra

nted the Motion for Default and decreed that Parc el 155 be sol d to the highest bidder subject to the equitable right of redemption. On October 18, 2000, Appellant was that highest bidder. Curiously enoug h, the record before us contains title search doc uments bearing the Clerk & Master’s stamp dated October 11, 2000, in which the followi ng addr ess for the current
owner a ppeare d: MTN Outparcel, Inc

. 600 West Peachtree St., Ste. 1200 Atlanta, GA 30308.

On November 28, 2000, the chancery court entered its final decree confirming sale

of Parcel 155 to Appellant. On November 26, 2001, Fre d Zohouri, the sole shareholder of MTN tender ed funds to the metro tax assessor’s office in an attempt to redeem the property sold to Mr. B rown. On December

14 of that year , Mr. Brownfiled his m otion to de

ny t he rede mption atte

mpt. The chancery court granted Mr. Brown’s motion on January 14, 2002. O n April 2 of

that y ear, MTN filed, in i ts own name, a “ Complaint to Void Tax Sal e,” to which Metro and Brown filed motions to dismiss for failure to state a

claim. On May 8, 2002, MTN filed a Rule 60.02 Motion seeking the same relief. On May 20, 2002, afte

r hearing argument on the motions to dismiss, the chancery court denied the motions and allowedthe case to continue “on MTN’s Rule 60.02 Motion.” Then, on June 24, 2002, the chancery

court granted the Rule 60.02 motion, finding Metro’s notice by publication insufficient and violative of MTN’s due process rights based upon the author ity of this Court’s de cision in Sunburst Bank v. Patterson , 971 S.W.2d 1 (Tenn.Ct.App.1997).

Brownappeals the denial of the motions to dismiss and the order vacating the prior default judgmen t, arguing that the statutory requirements for notice had be e n met, and that the trial court erred in allowing MTN to redeem the property after the statutory

period hadexpired. Unfortun ately for Mr. Bro wn, this ca se hinge s upon the v alidity of the default judg

ment. The

trial c ou rt was presented with a Moti on to set a side this ju dgment inasmuch a s t he publi c notice attempt was vio lative of due pr

ocess ri ghts of t

he 14th Am

endment t

o the United States Con stitutio n. Tha t consider atio n, accord

ing to we

ll settled case la w within thi s jurisdic tion, is a ma tter prop erly addressed to the trial court’s discretion. See, e. g., Gambi ll v. W aters , 197 Tenn. 470, 274 S.W.2d 3 (1954); Nelson v. Simpson , 826 S.W.2 d 48 3, 485 (Te nn.Ct.App .1991); State ex rel. Jones v. Looper , 86 S.W.3d 189, 193 (Te nn.Ct.App.2 000); see also Tennessee Dept. of Human Servs. v. Barbee , 689 S.W.2d 863, 866 ( Tenn.198 5). Courtsare adv ised to co nstrue the requir ements of Rule 60.02 liberally, “examine [ing] the moving par ty’s pro of to determine whether the default was willful and to assess the extent to which th e defaulting party ’s conduct has prejudiced the non-defaulting party.” Nelson , 826 S .W.2 d at 48 5 (cit ing Barbee , 689 S.W.2d at 866). The record before this Court shows no willful

behavior on the par

t of the de faulting party MTN Outpa

rcel. I t is likewise

devoid of any showing of preju dice to Me

tro or Mr. Brown. It bears noting th at Mr. Br own is enti

tled to
a refund of the monies paid for the purchase of the property a

t auction as though the equitable right of redemption had been exercised.-4-

Desp ite th e foregoing standards, Mr. B rown argues that the United States Supreme Court de cision , Dusenberry v. United States , 122 S.Ct. 694, 151 L.Ed.2d 597 (2000); and this state’s supreme court decision of Marlowe v. Kingdom Hall of Jehovah’s Witnesses , 541 S.W.2d 121 (Tenn.1976), are dispositive of the question of whether the gover nment’s attempt

to notify MTN in this case satisfied due process requirements. To the co ntrary , the tria l court fo und, cons istent with the United States Supreme Court decision in Mennonite Board of Missions v. Adams , 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 1 80 (1983), that inasmuch as the government’s records c ontained the proper address, Metro’s attempt to obtain service by publication was ineffective.

The outcome o f this cas e is controlled by Baggett v . Baggett, 541 S.W.2d 407 (Tenn.1976) and its progeny . Particularly instructive is the opinion of this Court in Sunbrust Bank v. Patterson , 971 S.W.2d 1 (Tenn.Ct.App.1997) wherein it is said:

However, the res ultin the case at bar must be controlled by the decision of the United Sta

tes Supre me Court in Mennonite Board of Missions v. Adams , 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983). I n Mennonit

e , decided several y

ears after Marlowe , the Court considered “the question whether notice by publication and posting provides a mortgagee of re al property with adequate notice of a proceeding to sell the mortgaged proper ty for n onpayment of taxes.” Id. at 792, 103 S.Ct. at 2708. Citi ng Mullane v. Central Hanover Bank &Trust Co. , 339 U.S. 306, 7 0 S.Ct. 652, 94 L.Ed. 865 (1950), t h e Court fi

rst noted that “a mo

rtgag ee posse sses a substantial propert

y in terest th at is significantly a ffected by a tax sale.” Mennonit

e , 462 U.S. at 798 , 103 S.Ct. a t 2711. Giv en this interest , the Cour t reasoned that a mortgagee

is entitled to receive notice that is re asonably calcula ted to info

rm him of an impending tax sale. The Court stated: When the mortg agee

is i d entified

in a mortg age tha

t is publicl

y recorded, con structive notice by publica tion must be supplemented b y notice mailed to

the mortgagee’s last known ava ilable address, or by personal serv i ce. But

unless the

mortga gee is n ot reaso nably identifiable, constructive notice alone does not satisfy the manda

te of Mullane

. Id. The Court

found that personal service or mailed notice is req uired even t hough sophisticated credito

rs have t he ability to di scover for themselves whether or not taxes have been

paid on the property

. Id . at 799, 103 S.Ct. at 2712. The Court noted that “a party’s ability

to take steps to safeguard its interests does not relie ve the Sta te of its constitutional obligation.” Id. Findi ng that a stat e canno t forgo “the relatively modest administrative burden of providing notice by mail,” the Court concluded: Notice by mail or other

means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding whic h will adverse ly affec t the liber

ty o r proper ty in terests of any party, whethe r unletteredor well versed in commercial practice, if its name and addressare reasonably

ascertainable. F urthermore, a mortgagee’s-5- knowledge of delinquency in the pay

ment of ta

xes is not equivalent to no tice t hat a t ax sa le is p endin g. Id. at 799-800, 103 S.Ct. at 2712. This Court has applied Mennonit e to c ases involving the tax sale of realty. See Freeman v. City of Ki

ngsport , 926 S.W.2d 247, 249-50 (Tenn.App.1996) (“actua l notice is required if the interested party ’s name and addressare re asonably

ascert ainable ”); Morrow v. Bobbitt , 943 S .W. 2d 3 84 (Tenn.App.1996).
Sunburst Bank v. Patterson , 971 S.W.2d 1, 4-5 (Tenn.Ct.App.1997). Department s o f gove

rnment c annot divi de themse lves into c omponent p arts and success fully assert th at th e r ig ht ha nd is no t b ou nd by t he knowledge of the left hand. T he corr ect addr ess is stated on the fa

ce of the record ed speci al warr

anty deed in Deed Book 10681, pages 424 to 426, and it is the government itself which is responsible for the wrong address be i ng used . The def ault judgment resultedfrom constructive notice by publication. Such constructive notice is not a sound basis for default judgment when the very existence of

the public ation is fl awed by the due pr

ocess and considerations of Sunburst Bank v. Patterson , 971 S.W.2d 1 (Tenn.Ct.App.1997).

Much like Mennonite Board of Missions , the proper addres s of the o wner wa s readily available in the government’s recor ds. As a result, the default judgment was vulnerable under the provisions of Tennessee Rule of Civil Procedure 6 0.02. The trial cou rt prope rly exercise d its discretion in vacat

ing the j udgmen

t. The tri al court is affir med in all r

espectsand the c ause is remanded for fur ther pro ceeding s as may

be nece ssary

in the trial court. Costs on appeal are taxed against the appellant, Brown.

___________________________________ WILL IAM B. CAI

N, JUDGE