Opinion ID: 1852300
Heading Depth: 1
Heading Rank: 3

Heading: Statutory Indemnification.

Text: The county treasurer in each county in Iowa is authorized to conduct a tax sale in June of each year for all real estate in the county on which taxes are delinquent. See Iowa Code § 446.7. The county auditor annually provides a list of the taxes due on each parcel in the county to the county treasurer, which is used to collect the taxes and determine any delinquency for any parcel. See id. §§ 443.2, 443.4, 445.10. The sale of property at the tax sale can result in the transfer of ownership of the property to the purchaser or the assignee of the purchaser if the parcel is not subsequently redeemed by payment of the delinquent taxes, fees, costs, and interest. [4] See id. §§ 447.1, 448.1. The law further details the procedures that must be followed for the sale, redemption, and issuance of a deed. See generally id. chs. 446 (tax sales), 447 (tax redemption), 448 (tax deeds). One statutory procedure governing tax sales requires the county treasurer to give public notice of the sale. This notice must contain a description of the parcel to be sold that is clear, concise, and sufficient to distinguish the parcel to be sold from all other parcels. Id. § 446.9(2). The parcels may be described using letters and figures ... to denote townships, ranges, [and] sections.... Id. § 446.13. The county treasurer is also required to record each sale in the county system by describing each parcel ... as they are described in the copy of the notice.... Id. § 446.24. The county system is defined as that method of data storage and retrieval as approved by the auditor of state, and includes tax lists. Id. § 445.1(3). The county treasurer is also required to deliver a certificate of purchase to the purchaser of each parcel describing the parcel ... as shown in the county system identifying the parcel.... Id. § 446.29. If the parcel is not subsequently redeemed following the tax sale, the purchaser or assignee can receive a deed to the property by returning the certificate of purchase to the county treasurer. Id. § 448.1. Chapter 448 sets out the procedure for the issuance of a deed. See id. It also describes the effect of the deed and the requirements and consequences of any challenge to that deed. See id. §§ 448.3,.6-.12. Foremost, the deed vests title of the property in the purchaser. Id. § 448.3. The deed also constitutes presumptive evidence in any action that may arise regarding the rights of the purchaser to the parcel conveyed by the county treasurer that specific procedures were properly followed, and further constitutes conclusive evidence of other matters. Id. §§ 448.4,.5. The Code then sets out the limited facts and circumstances that must be proven for a person claiming title adverse to the title conveyed by the county treasurer to defeat the deed. See id. §§ 448.6-.12. These circumstances generally involve mistakes in the tax sale so the parcel sold was not subject to taxes or was properly redeemed, or the taxes were paid prior to the sale or never properly assessed or levied. See id. § 448.6. The Code then describes the legal consequences. In the event the tax sale took place due to a mistake in an entry made in the county system, so that the taxes and other amounts due on the parcel had been paid prior to the sale, the deed issued by the county treasurer is deemed not to convey title. Id. § 448.8. Similarly, the sale and title are void if the owner of the parcel sold defeats the title by proving fraud by the officer selling the parcel or by the purchaser. Id. § 448.9. Iowa Code section 448.10 then provides a remedy for the purchaser. It states: If, by mistake or wrongful act of the county treasurer, a parcel has been sold on which no tax was due at the time, or when a parcel is sold in consequence of error in describing it within the county system, the county shall hold the purchaser harmless by paying the purchaser the amount due to which the purchaser would have been entitled had the parcel been rightfully sold, and the treasurer and the treasurer's surety shall be liable to the county to the amount of the treasurer's official bond; or the purchaser, or the purchaser's assignee, may recover the amount directly from the treasurer and the treasurer's surety. This statute is entitled Wrongful salespurchaser indemnified, and contains two alternative conditions. Schaer relies only on the second condition for his claim of relief. The first condition involves a sale of a parcel where, due to mistake or wrongful act, no tax was due. Id. The second condition pertains to the sale of a parcel in consequence of error in describing it within the county system. Id. Under either condition, the purchaser is given a remedy against either the county or the county treasurer and the treasurer's surety. First, the statute requires the county to hold the purchaser harmless. The statute defines this remedy as requiring the county to pay the purchaser the amount due to which the purchaser would have been entitled had the parcel been rightfully sold. Id. In turn, the treasurer and treasurer's surety are made liable to the county. Id. Alternatively, the purchaser, or assignee, may seek recovery directly from the treasurer [or] the treasurer's surety. Id. Schaer claims he is entitled to void the sale under the statute and receive damages because the description used by the County to describe the parcel he purchased overstated its size and wrongfully included an area that was not subject to tax sale. Schaer does not claim he purchased the wrongfully included land, but asserts the description used by the County to describe the parcel he purchased was misleading and insufficient to convey title. Thus, we must determine if the remedy provided under section 448.10 was intended to apply to the type of error asserted by Schaer. Section 448.10 was enacted by our legislature in 1851, see id. § 509 (1851), and has essentially maintained its present language since 1860. See id. § 785 (1860). It was amended in 1991 to insert the present phrase within the county system in place of the former phrase in the tax receipt. See 1991 Iowa Acts ch. 191, § 109 (codified at Iowa Code § 448.10 (1992)). We have not had an opportunity to construe this statute for over a century. In 1898, we held the remedy under the statute was limited to mistakes by the county treasurer. Lonsdale v. Carroll County, 105 Iowa 452, 457, 75 N.W. 332, 333 (1898). We reasoned that our legislature would not have specifically made the county treasurer and the treasurer's surety ultimately liable under the statute if it had intended the remedy to apply to the mistakes or errors by other county officials who supply information to the county treasurer. See id. The district court relied on Lonsdale in dismissing Schaer's petition. Earlier, we held that the remedy under the statute was inapplicable to a claim by a purchaser of a parcel of land that the description of the property in the certificate of purchase was too vague to convey title. See Lindsey v. Boone County, 92 Iowa 86, 89-90, 60 N.W. 173, 174-75 (1894). We observed that the doctrine of caveat emptor applied to tax sales, and the purchaser at a tax sale must beware and fully investigate the description of the premises. Id. at 88, 91, 60 N.W. at 174-75. We emphasized each description was open to inspection, and a purchaser at a tax sale buys only what the county offered to sell. Id. at 90, 60 N.W. at 175. Schaer maintains these holdings are no longer applicable in light of the 1991 amendment to the statute. He claims the amendment inserting the phrase within the county system expanded liability under the statute to include mistakes or errors by other county offices who are part of the county system, including the county assessor and county auditor. We disagree. The 1991 amendment merely reflects the adoption of the modern system of data storage and retrieval utilized by a county. See Iowa Code § 445.1(3) (1995) ( 'County system' means a method of data storage and retrieval as approved by the auditor of state....). The county system is a collective term that includes records, tax lists, and other matters kept by the county auditor, assessor, and treasurer. Id. § 443.23. For purposes of section 448.10, it still refers to the description of the property utilized by the county for the purpose of taxation. Moreover, as in the past, the language of the statute continues to make the county treasurer and treasurer's surety ultimately liable for mistakes and errors. This limitation on liability continues to imply that the remedy under the statute is confined to the mistakes and errors of the county treasurer, not other county offices. See id. § 448.10. However, at the time we decided Lonsdale and Lindsey, the county treasurer was required to use the description of the property from the tax list prepared by the county auditor in giving notice of sale. See Lonsdale, 105 Iowa at 456, 75 N.W. at 333; Lindsey, 92 Iowa at 89, 60 N.W. at 174. Furthermore, this same description was required to be used by the county treasurer in recording the sale and issuing the certificate of purchase. See Lindsey, 92 Iowa at 89, 60 N.W. at 174. These statutory mandates clearly influenced our holdings in Lonsdale and Lindsey. Any error or mistake in the description was not the responsibility of the county treasurer. See id. In 1986, section 446.9 was amended to require the county treasurer to serve the notice of tax sale containing a description of the parcel to be sold which is clear, concise, and sufficient to distinguish the parcel to be sold from all other parcels. 1986 Iowa Acts ch. 1139, § 4 (codified at Iowa Code § 446.9 (1986)) (striking the requirement that description of tract in notice of tax sale be taken from tax list). Under this statute, the county treasurer has a duty to describe property sold at a tax sale in the manner set forth in section 446.9. Additionally, the description used by the county treasurer in the notice of sale is required to be recorded in the county system at the time of the tax sale, and is used in issuing the certificate of purchase. See id. §§ 446.24 (record of sales), .29 (certificate of purchase). Thus, in this case, Schaer argues the County Treasurer was responsible for the description, and is liable to him under the statute. We agree the county treasurer is responsible under section 446.9 to describe property in a certain manner in offering it for a tax sale. Thus, an error in a description is a mistake of the county treasurer. Yet, this does not mean the remedy under section 448.10 is available to Schaer. We must consider whether the type of description error claimed by Schaer was intended to fall within the remedy provided by section 448.10. We begin by emphasizing that the remedy established by section 448.10 arises within this comprehensive statutory scheme authorizing the county to sell a parcel of land in order to pay delinquent taxes owed on the land by the owner of the parcel. This perspective helps explain the necessity and nature of the remedy provided under section 448.10. The statutory scheme ultimately empowers the county to transfer ownership of a parcel of land by delivering a deed to the purchaser. This deed terminates the rights of the person who had owned the parcel subject to the delinquency. Under such a scheme, the need for a remedy arises in the event the county is unable to deliver a deed to the buyer for the parcel purchased, or cannot deliver a deed that could not be defeated by the owner, because the parcel was wrongfully subject to tax sale by the county. In this case, the rights of the owner prevail over those of the purchaser, and a remedy is necessary to compensate the purchaser. Thus, the remedy rests on the wrongful sale of a parcel by the county, together with the superior rights of the owner of the parcel over any purchaser. The two conditions that give rise to the remedy under section 448.10 reflect this backdrop. They involve tax sales that should not have occurred because the owner's rights were never implicated by the delinquent tax provisions. Under the first condition, the rights of the owner were never implicated because no tax was due at the time the parcel was sold. Id. § 448.10. Under the second condition, the rights of the owner were never subject to delinquency because an error [made] in describing [the parcel] within the county system caused the wrong parcel to be sold by the county. Id. Schaer attempts to broaden the second condition to include description errors not implicating the rights of the owner, but which only create confusion and uncertainty for the purchaser regarding the size and nature of the parcel sold. Yet, the language of the statute precludes such a broad interpretation. By using the language a parcel is sold in consequence of error in describing it within the county system, our legislature targeted the reason the county sold the parcel, not the reason the buyer purchased the parcel. This is also consistent with our approach over the past century that an error in the certificate of purchase of property at a tax sale cannot be the consequence of the sale. Lindsey, 92 Iowa at 89, 60 N.W. at 174. The relevant inquiry is not whether the description error caused the buyer to purchase the parcel. Instead, the description error must exist within the county system that caused the county to erroneously sell the parcel. Indeed, that is what the legislature meant by the phrase a parcel is sold in consequence of error in describing it within the county system. The remaining portions of the statute support this interpretation. See McCracken v. Iowa Dep't of Human Servs., 595 N.W.2d 779, 784 (Iowa 1999) (we construe all parts of a statute together). We observe the remedy under section 448.10 requires the county to hold the purchaser harmless by paying the purchaser the amount due to which the purchaser would have been entitled had the parcel been rightfully sold.... Iowa Code § 448.10. The requirement to hold a purchaser harmless typically refers to indemnification, which is a form of restitution that places final responsibility between two obligated persons where equity would lay the ultimate burden. Iowa Elec. Light & Power Co. v. Gen. Elec. Co., 352 N.W.2d 231, 236 (Iowa 1984). This language supports the concept that the county is responsible to the buyer of a parcel at a tax sale in the event a deed cannot be ultimately delivered under those specific circumstances set forth in the statute when the rights of the buyer can be defeated by the rights of the owner. We do not believe our legislature would have articulated the remedy using the hold harmless language if it intended a buyer to void a sale based on descriptions that merely generated confusion over the size or location of a parcel, and when the buyer's rights to the parcel could not be defeated by the owner's. It would have simply provided for a refund, as in section 448.11. [5] See Greenwood Manor v. Iowa Dep't of Pub. Health, 641 N.W.2d 823, 835 (Iowa 2002) (if legislature wanted to provide for a certain thing, it could have so provided, as it did in other statutes). The nature of the remedy under the statute also supports our interpretation. The statute requires the county to pay the purchaser the amount due to which the purchaser would have been entitled had the parcel been rightfully sold.... Iowa Code § 448.10. When a parcel has been rightfully sold at a tax sale, the purchaser or assignee becomes entitled to the return of the amounts paid to the county only in the event the parcel is redeemed so that the county is unable to deliver the deed following the sale. Thus, the remedy for wrongful sales follows the same approach. The amount due in the event of a wrongful sale relates to the amount to which the purchaser would have been entitled had the county rightfully sold the parcel and, as with a rightful sale, is subsequently unable to deliver the deed. Thus, whether the sale was right or wrong, the remedy under the statute hinges upon the inability of the county to deliver a proper deed. On the other hand, description errors do not necessarily prevent the delivery of a deed or make a sale wrongful. This interpretation of the statute is also consistent with our longstanding principle that the doctrine of caveat emptor applies to tax sales, which requires a purchaser to fully investigate the description of the parcel. Lindsey, 92 Iowa at 91, 60 N.W. at 175. The interpretation sought by Schaer is contrary to this principle. We will not interpret a statute to be inconsistent with our common law principles absent a clear intent. State v. Carter, 618 N.W.2d 374, 377 (Iowa 2000); State v. Pace, 602 N.W.2d 764, 771 (Iowa 1999). We are convinced the statute exists to give a purchaser of a parcel at a tax sale a remedy against the county in the event the county wrongfully sold the parcel due to one of the two circumstances described in section 448.10. When a parcel is erroneously sold, the county cannot transfer ownership to the purchaser and, consequently, the purchaser may recover the amount to which the purchaser would have been entitled had the county rightfully sold the parcel but was subsequently unable to deliver the deed. See Iowa Code § 448.10. There is nothing within the statute to indicate the legislature intended the remedy to extend to claims based on erroneous descriptions that did not implicate the interest of the owner of the parcel at the time of the tax sale. Our examination of the claim urged by Schaer in this case reveals he does not claim the County sold him a parcel that was not subject to tax sale and is now unable to deliver the deed. Instead, he claims the description was defective, principally because it overstated the size and character of the parcel. Yet, he acknowledges the subdivision contained within the area described was not subject to the tax sale and was not purchased by him. His only complaint is that he did not discover this discrepancy until after he purchased the parcel. We believe this type of claim falls precisely within our holding in Lindsey, and outside the parameters of section 448.10. Schaer had a duty to investigate the description prior to purchasing the parcel and should not have waited to conduct his investigation until after the sale. See Lindsey, 92 Iowa at 91, 60 N.W. at 175. If he had conducted his investigation prior to the sale, he would have discovered exactly what he discovered in the investigation he performed after the sale.