Opinion ID: 1584163
Heading Depth: 2
Heading Rank: 2

Heading: Prospective Application of Personal-Judgment Remedy

Text: Prior to 1992, a claim for delinquent taxes in Iowa was only in rem. Hiskey v. Maloney, 580 N.W.2d 797, 799 (Iowa 1998). Such claims could not become a personal obligation of any person. Id. In 1992, our legislature amended sections 445.3 and 446.20 to create an action for personal judgments. 1991 Iowa Acts ch. 191, § 28. The statutes became effective on April 1, 1992. Id. A-1 argues this statutory amendment only applies prospectively, and taxes levied prior to April 1, 1992, the effective date of the statute, cannot be converted to a personal judgment against A-1. In Hiskey v. Maloney , we held that sections 445.3 and 446.20(1) do not apply to delinquent taxes included in tax sale certificates acquired by a county prior to April 1, 1992. Hiskey, 580 N.W.2d at 799. We reasoned that because section 445.3 created a new personal liability, it could not be applied retroactively. Id. (citing Iowa Code § 4.5 (A statute is presumed to be prospective in its operation unless expressly made retrospective.)). The Hiskey holding is not directly apposite to this case. In Hiskey, the dispute concerned taxes that were both levied, and for which a tax sale certificate was issued, before the effective date of the statutes. Id. at 797. In contrast, in this case, the tax sale certificate was acquired after the effective date of the statutes, but the 1989-1992 taxes were levied before the effective date of the statutes. A-1 urges us to answer the question we left open in Hiskey: whether the statutes are inapplicable to all delinquent real estate taxes levied before their effective date (April 1, 1992). Id. at 799. Although we determined the personal judgment statutes applied prospectively in Hiskey, we did not decide which event was relevant in the prospective application of the statute. A-1 claims the relevant event is the date the delinquent taxes were levied, while the Treasurer claims the personal judgment statutes apply to delinquent taxes levied prior to 1992 as long as the tax sales certificate was issued after 1992. We left the question open in Hiskey, because it was not necessary to the decision, given that both events occurred before 1992 in that case. In deciding this question, we turn to the underlying rationale that led us in Hiskey to declare that the statute operates prospectively. Statutes that create new rights or obligations, such as personal liability for property taxes, are applied prospectively as a matter of fairness, so that people have opportunities to know what the law is and to conform their conduct accordingly. 2 Norman J. Singer, Statutes and Statutory Construction § 41:4, at 396-97 (6th ed.2001 rev.); see also id. § 41:2, at 375-76 (It is a fundamental principle of jurisprudence that retroactive application of new laws is usually unfair. There is general consensus that notice or warning of the rule should be given in advance of the actions whose effects are to be judged. The hackneyed maxim that everyone is held to know the law, itself a principle of dubious wisdom, nevertheless presupposes that the law is at least susceptible of being known. But this is not possible concerning law that has yet to exist.). Prior to 1992, property owners in Iowa felt secure in the law that delinquent property taxes levied on real estate could not be converted into a personal judgment against the person. When the law was changed in 1992, this security was lost. From that point in time, a delinquency in taxes levied on real estate could result in a personal judgment. Yet, having found in Hiskey that the personal judgment statute must only be applied prospectively, it is clear that the purpose of the prospective application could only be served by using the time when the tax was levied as the commencement date of the statute for the purposes of applying it prospectively. It would be unfair to apply the statute prospectively, but then allow it to reach back in time to collect delinquent taxes levied prior to the effective date of the statute by obtaining a tax sale certificate after the effective date of the statute. The important event is when the tax becomes an obligation. When this occurs, a property owner deserves to know whether or not the obligation can result in a personal judgment. This is the important event that prospective application of the statute was intended to protect. It would be contrary to the rationale supporting prospective application of this statute to permit a county treasurer to circumvent the prospective operation of this statute and make ancient taxes the basis of a personal judgment after the effective date of the statute by merely obtaining a tax sale certificate after the effective date of the statute. The operative action of the taxpayernonpayment of taxesoccurred prior to the effective date of the statute. Thus, today we take the next logical step from Hiskey and hold that a county treasurer may not obtain personal judgments against defendants for taxes levied before the effective date of the personal judgment statute, April 1, 1992. Thus, we affirm the court's summary judgment for A-1 on the claims for taxes from 1989 to 1992. [5]