Opinion ID: 1862285
Heading Depth: 1
Heading Rank: 8

Heading: Ownership Interest

Text: The State first claims that the trial court erred by failing to recognize that the State owned and held title to the insured property. The State claims that Midplains did not own the property and that therefore, the tax liens could not attach to the insurance proceeds resulting from the destruction of the property. To support its contention that the State held title to the property, the State relies on a letter from DEQ with a date stamp of August 7, 1995, and the terms of the 1995 trust grant agreement. The State focuses on language in the DEQ letter stating that DEQ will relinquish interest in the equipment once the expected service life expiration date is reached. However, this does not establish that the State owned or held title to the property. The only interest the State had in the property under the DEQ grant was the right to inspect the property or redistribute the property if Midplains no longer used the equipment for the purposes intended under the grant. With respect to the grant from the Trust, Mary Harding, executive director of the Trust, testified that the Trust's grant agreement did not specify that the State held title to the equipment purchased with the grant. The Trust grant agreement gave the State a right to cancel the funding and/or demand repayment of funds already disbursed if Midplains violated the terms of the trust agreement. In the event that the Trust did not approve a proposed transfer or sale, Midplains had the option to repay the value of the grant to the Trust and to be released from all further obligations. The trust grant agreement does not establish that the State held title to the property. The terms of both grants are simply restrictions on Midplains' use of the property and do not show that the State itself owned or held title to the property. The terms of the grants gave the State only the right to recover the property if it was no longer used for the purposes of the grant, or the option of requiring Midplains to repay the grant if Midplains desired to sell the equipment without the State's permission. Midplains used the equipment for grant purposes and did not sell the equipment. Instead, the equipment was destroyed by the fire. The terms of the grants have no provisions regarding accidental destruction of the property, and the State did not require Midplains to insure the property. The State's contention that it owned the property is not supported by the record.