Opinion ID: 1506760
Heading Depth: 1
Heading Rank: 3

Heading: constitutionality of the manufactured homes act

Text: The Act allows a landowner to obtain title to an abandoned manufactured home under section 700.525, which defines abandoned as the homeowner's physical absence from the property, and either: (a) Failure by a renter of real property to pay any required rent for fifteen consecutive days, along with the discontinuation of utility service to the rented property for such period; or (b) Indication of or notice of abandonment of real property rented from a landlord; (emphasis added). Plaintiffs argue that section 700.525's definition of abandoned is so vague and ambiguous as to be unconstitutional because it is not susceptible to any reasonable or practical construction. The definition of abandoned in paragraph (a), it notes, would permit a home to be found to be abandoned if the homeowner failed to pay rent before taking a two-week vacation during which the utilities were turned off. The definition in paragraph (b) would allow a landlord to use its own imagination to come up with indications of abandonment. They argue that one can foresee that if homeowners failed to live in a home for a period because of storm or flood damage or due to illness or otherwise, the homeowners could return to find their home belonged to another. DOR argues that the Wrens and Conseco have no standing to bring a vagueness challenge because, while the Act's definition may be open-ended, neither claims they could not understand the Act nor that they did not understand that it applied to the Wrens. This Court agrees. Vagueness, as a due process violation, takes two forms. State v. Young, 695 S.W.2d 882, 884 (Mo. banc 1985). One is the lack of notice given a potential offender because the statute is so unclear that '[persons] of common intelligence must necessarily guess at its meaning.' Id., quoting, Connally v. Gen. Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926). The second is that the vagueness doctrine assures that guidance, through explicit standards, will be afforded to those who must apply the statute, avoiding possible arbitrary and discriminatory application. Young, 695 S.W.2d at 884, citing, Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). While the amorphous and open-ended nature of the definition of abandoned, particularly as to section 700.525(b), renders it vulnerable to a vagueness challenge by persons alleging the statute did not give them adequate notice that their conduct would constitute abandonment, a vagueness challenge will not be sustained on hypothetical facts. State v. Self, 155 S.W.3d 756, 760-61 (Mo. banc 2005). The record is silent as to whether Lakehurst relied on paragraph (a) or paragraph (b), and neither the Wrens nor Conseco allege they were confused or misled by the statute's definition of abandoned, or that the Wrens did not, in fact, abandon the home. Accordingly, plaintiffs have no standing to raise this issue. [5]
Conseco and the Wrens alternatively argue that the notice was constitutionally deficient in that it was not reasonably calculated to give actual notice to either the Wrens or Conseco. Both the Missouri and United States constitutions prohibit states from depriving persons of property without due process. U.S. Const. amend. 14; Mo. Const. art. I, sec. 10. For more than a century the central meaning of procedural due process has been clear: Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified. Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (internal quotations omitted). This due process right to notice applies to those with security interests as well as those who are in possession of the property. See e.g., Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798-99, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983) (mortgagee had right to notice before deprivation of security interest by tax sale); Sams v. City of Milwaukee, Wis., 117 F.3d 991, 993-94 (7th Cir.1997) (notice given to entity with security interest in automobiles); Ford Motor Credit Co. v. N.Y. City Police Department, 394 F.Supp 2d 600, 615, 617-19 (S.D.N.Y.2005) (lender who did not receive notice of sale and so could not protect interest in proceeds had action against buyer for proceeds). DOR does not contest that the Wrens and Conseco both had a constitutional right to adequate notice before being deprived of their property rights, nor that the Wrens' property rights in the manufactured home would be defeated if the landlord were successful in claiming abandonment and obtaining title to it. Neither does it contest that Conseco had a property interest in the manufactured home that DOR did not reflect on the abandoned manufactured home title DOR issued to Lakehurst. Moreover, it is indisputable that section 700.531 makes it the specific obligation of DOR to notify both the homeowner and the lienholder of the alleged abandonment of the home and the landlord's application for title. Both parties clearly were entitled to adequate notice. Respondents contend that the notice provided by DOR was inadequate. To give meaning to the concept of notice, due process requires notice reasonably calculated, under all the circumstances to reach the person whose rights are affected. Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950). While what constitutes sufficient notice may vary, if feasible, notice must be reasonably calculated to inform parties of proceedings which may directly and adversely affect their legally protected interests. Walker v. City of Hutchinson, Kan., 352 U.S. 112, 115, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956). DOR sent the notice to the Wrens' manufactured home address. It acknowledges that, inasmuch as the reason it sent the notice was that it had been informed by the landlord that the Wrens had abandoned that home, it was sending the notice to an address where it had been told the Wrens no longer lived. Further, it does not claim it thought Conseco maintained offices in the Wrens' allegedly abandoned manufactured home and acknowledges it did not send a separate notice of abandonment to Conseco in this case (although it alleges it does send a separate notice to the lienholder if the homeowner has listed the lienholder's address on the title). An affidavit filed below also indicates that in some cases DOR sends notice by certified mail, although in this instance it is not claimed that certified mail delivery was attempted. DOR argues that because it mailed the notice to the address the Wrens had listed on the title, the notice automatically should be held to be reasonably calculated to reach the Wrens and Conseco and so satisfy due process. The United States Supreme Court has repeatedly rejected arguments similar to those made by DOR. In Robinson v. Hanrahan, 409 U.S. 38, 93 S.Ct. 30, 34 L.Ed.2d 47 (1972), appellant was arrested and taken into custody. As the state held him in custody, it necessarily was aware he was not living at his home. It nonetheless initiated forfeiture proceedings against his automobile and mailed notice of the proceedings to his home. He did not receive the notice and the automobile was forfeited. He later contested the forfeiture. Robinson held that because the State knew that appellant was not at the address to which the notice was mailed, the mailed notice did not constitute an effort to provide notice reasonably calculated to reach the affected party, even though appellant failed to comply with a legal obligation to provide an updated address. Id. at 38-40. Robinson was reaffirmed and extended earlier this year in Jones v. Flowers, ___ U.S. ___, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006). In Jones , the state sent notice of a tax sale of petitioner's property by certified mail to the address in question. The notice was returned unclaimed. The state made no further attempt to provide notice to Jones either by regular mail or by seeking out another address or means of notice. Jones did not learn of the tax sale until the state had sold the property and Jones' daughter, who was living in the home, received an unlawful detainer notice delivered to the property. Jones filed suit to set aside the sale. The lower courts found that notice by certified mail was sufficient. The United States Supreme Court reversed. In an opinion by Chief Justice Roberts, it said that the obligation to give notice reasonably calculated to reach the affected parties does not end with sending a letter if the sender learns the letter was not received. The constitution requires notice reasonably calculated to reach the party, and, [u]nder Robinson . . . the government's knowledge that notice pursuant to the normal procedure was ineffective triggered an obligation on the government's part to take additional steps to effect notice. Jones, 126 S.Ct. at 1716. Further, Jones reaffirmed the commonsense teaching in Mullane that,  when notice is a person's due . . . [t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it. Jones, 126 S.Ct. at 1721, quoting, Mullane, 339 U.S. at 315, 70 S.Ct. 652 (emphasis added). Applying that reasoning to the case before it, Jones stated: We do not think that a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed. . . . In Robinson v. Hanrahan , we held that notice of forfeiture proceedings sent to a vehicle owner's home address was inadequate when the State knew that the property owner was in prison. Id., 126 S.Ct. at 1716. Jones concluded that the government's knowledge that notice was ineffective triggered an obligation to take additional steps, if practicable, to effect notice. Applying these standards here, to paraphrase Jones , we do not think that a person who actually desired to inform a homeowner or lienholder of an impending finding of abandonment and issuance of an abandoned home title not reflecting the lienholder's interest would send a single notice by regular mail to an address believed was abandoned. The notice here did not meet DOR's notice obligation as to the Wrens and Conseco under section 700.531 or its constitutional obligation to provide adequate notice to the Wrens before depriving them of their property interest in the manufactured home. [6] DOR argues it had no address for the Wrens other than the one listed on the title. As Jones also reaffirmed: [I]t is not our responsibility to prescribe the form of service that the [government] should adopt . . . we have not attempted to redraft the State's notice statute. [citations omitted]. The State can determine how to proceed in response to our conclusion that notice was inadequate here . . . It suffices for present purposes that we are confident that additional reasonable steps were available for Arkansas to employ before taking Jones' property. Jones, 126 S.Ct. at 1721 (internal quotations and citations omitted). Accord, Greene v. Lindsey, 456 U.S. 444, 455 n. 9, 102 S.Ct. 1874, 72 L.Ed.2d 249 (1982). It suffices to note that there were several steps DOR could have taken that would have been more reasonably calculated to actually reach the Wrens [7] and Conseco. [8] While what alternatives are sufficient necessarily will vary, what will not vary is that under Robinson , Jones , and similar cases, the State must use efforts reasonably calculated to reach the affected parties. DOR's single attempt to send a letter to an address it believed abandoned did not meet this standard.
Respondents also argue that, even had they timely received notice, the Act is unconstitutional on its face because it fails to provide for a pre-deprivation hearing and fails to require sufficient information in the notice to allow the Wrens to protect their property interests. The Act's notice requirements are very limited: the director of revenue must notify the homeowner and lienholder of the manufactured home's status of abandonment, the name and business address of the landlord seeking possession of the manufactured home, and the right of the landlord to seek title to the manufactured home, sec. 700.531, unless the homeowner or lienholder [fails] to respond to the notice required by section 700.531 within thirty days of the mailing or delivery of such notice by the director of revenue. Sec. 700.535. To prevent issuance of an abandoned home title, the homeowner or lienholder must offer proof of ownership and payment of all reasonable rents due the landlord. Sec. 700.533, 700.535. But, the statutes do not require the homeowner or lienholder to be informed as to what rents are alleged to be due, much less do they provide any means for the homeowner to obtain a pre-deprivation, or indeed even a post-deprivation, hearing to contest the rents alleged to be due or even the basic allegations of abandonment. If DOR receives no response to its notice within 30 days, the home is automatically deemed abandoned, and an abandoned home title will issue to the landlord. Further, even could it do so absent a statutory requirement of notice and hearing, DOR never attempted to rectify the due process inadequacies in the statute by issuing regulations requiring adequate notice or a pre-deprivation hearing for the homeowner, although section 700.541 provides that the director of revenue may promulgate rules to effectuate the provisions of the Act. And, the letter sent to the Wrens here did not provide such notice. In relevant part, it stated only that: THE OWNER OR LIENHOLDER MUST REDEEM THE MANUFACTURED HOME WITHIN 30 DAYS OF THIS NOTICE TO PROTECT THEIR [sic] INTEREST. The owner may redeem the manufactured home by presenting proof of ownership and paying all rent owed to the landowner. The lienholder may redeem the manufactured home, if titled in Missouri, by presenting a valid security agreement to the landowner and paying all rent owed to the landowner. The owner or lienholder must notify this department within 30 days of this notice that the manufactured home was redeemed and submit a receipt issued by the landowner showing that all rent was paid. Failure to redeem the manufactured home and notify this department will cause the Director to issue title in the name of the landowner. DOR claims that, even if the Act does not expressly state that a party can seek a hearing to prevent loss of the home or to contest abandonment or rents due, those affected are presumed to know that they can seek injunctive relief under section 536.150 to prevent property loss, as occurred here once the parties finally learned the home had been deemed abandoned and an abandoned home title issued to Lakehurst. Section 536.150 is not a substitute for a pre-deprivation hearing. On its face it does not provide for a hearing prior to deprivation nor does it provide notice to homeowners of how to protect their rights. It merely provides that a party may seek review of administrative action taken without a hearing and for which no other means of review is provided if the person alleges the action was unconstitutional, unlawful, unreasonable, arbitrary, or capricious, stating: When any administrative officer or body. . . shall have rendered a decision which is not subject to administrative review, determining the legal rights . . . of any person, . . . and there is no other provision for judicial inquiry into or review of such decision, such decision may be reviewed by suit for injunction, certiorari, mandamus, prohibition or other appropriate action . . . Sec. 536.150. In citing section 536.150, DOR in effect is arguing that because Missouri statutes provide the homeowner with a mechanism for seeking post-deprivation equitable relief, no other process is due. But, no administrative deprivation could ever violate due process if such an argument were accepted, for by definition section 536.150 always applies when no other means of review is given. In any event, it long has been recognized that the mere right to seek a post-deprivation hearing or to obtain damages after the fact for a wrongful deprivation of property does not satisfy due process: If the right to notice and a hearing is to serve its full purpose, then, it is clear that it must be granted at a time when the deprivation can still be prevented. At a later hearing, [possessions can be returned] if they were unfairly or mistakenly taken in the first place. Damages may even be awarded . . . for the wrongful deprivation. But no later hearing and no damage award can undo the fact that the arbitrary taking that was subject to the right of procedural due process has already occurred. This Court has not . . . embraced the general proposition that a wrong may be done if it can be undone. Fuentes, 407 U.S. at 81-82, 92 S.Ct. 1983 (quotations omitted). Indeed, the United States Supreme Court has noted that the type of injunctive relief suggested by DOR is improper because: Equitable remedies are particularly unsuited to the resolution of factual disputes typically involving sums of money too small to justify engaging counsel or bringing a lawsuit. An action in equity to halt [improper action], because it is less likely to be pursued and less likely to be effective, even if pursued, will not provide the same assurance of accurate decisionmaking as would an adequate administrative procedure. In these circumstances, an informal administrative remedy . . . constitutes the process that is due. Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 21-22, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978). [9] For these reasons, an individual [must] be given an opportunity for a hearing before [he or she] is deprived of any significant property interest, except for extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event. Fuentes, 407 U.S. at 82, 92 S.Ct. 1983 (internal quotations omitted, emphasis added). [10] The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner. Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (internal quotations omitted). The Wrens were entitled to a hearing before their property interests were disturbed. Without a pre-deprivation hearing, they were not given an opportunity to be heard at a meaningful time and in a meaningful manner.