Opinion ID: 1293107
Heading Depth: 1
Heading Rank: 1

Heading: Title by Quitclaim Tax Deeds

Text: Plaintiffs claim to have title to the real property by virtue of quitclaim tax deeds pursuant to Utah Code Ann. § 78-12-5.1 (1987), which states: [W]ith respect to actions or defenses brought or interposed for the recovery or possession of or to quiet title or determine the ownership of real property against the holder of a tax title to such property, no such action or defense shall be commenced or interposed more than four years after the date of the tax deed, conveyance, or transfer creating such tax title... . Plaintiffs are seeking to apply the four-year statute of limitation for tax deeds against any defense or claim made by Park City or any other entity because plaintiffs' last tax deed was in 1963 and no action was brought within four years of that tax purchase. While plaintiffs are correct in asserting that title to property can be obtained by and through a tax deed, their claim based on the statute of limitation protection afforded in section 78-12-5.1 is defeated in two ways. First, the scope of plaintiffs' claim is governed by what was transferred by the tax deeds to plaintiffs' predecessors. Second, plaintiffs' claim is defeated by our decision in Dillman v. Foster, [3] where we held that a party cannot strengthen a weak title claim by failing to pay his own assessed taxes, purchasing at a tax sale, and then relying on the protections of section 78-12-5.1. The nature and character of the property transferred in the tax sales of 1914, 1917, and 1963 is governed by the clear and unambiguous language of the deeds. Plaintiffs' first quitclaim tax deed was issued in 1914 and described the property as improvements East U.C. Tracks, Park City, Utah. Plaintiffs' second quitclaim tax deed was issued in 1917 and described the property as that certain frame dwelling house by Lumber Yard in Park City, Summit County, Utah, assessed to William Rolfe in the year 1912. The last deed was a tax deed issued in 1963 that described the property as House in Lumberyard, stating, This conveyance is made in consideration of payment by the Grantee of the sum of $12.53 delinquent taxes, penalties, interest and costs constituting a charge against said real estate for the year 1958 in the sum of $7.81. While we do not voice approval of the practice, the uncontroverted evidence in the trial court revealed that early in this century, it was the practice of Summit County to tax the real property to one party, generally a mining company who claimed title to the real property, and to tax the improvements and personal property to the employee of the mining company who occupied the real property. [4] The trial court found, and the Utah Court of Appeals correctly held, that the language of the 1914 and 1917 deeds clearly demonstrates that the tax assessments to plaintiffs' predecessors were for improvements and the dwelling house only and not for the underlying real property. The language of the 1963 tax deed indicates that the charge at the tax sale was against real estate. While the 1963 deed may appear, at first blush, to make a broad grant of property, including the underlying real property, the undisputed facts at trial indicate that taxes on the underlying real property were assessed to and paid by Silver King Coalition Mines Company from 1931 to 1953 and by United Park City Mines Company from 1953 to 1969. Nothing in the record indicates that the 1963 tax deed was for anything but the improvements on the land. Plaintiffs claim that they are afforded the protections of section 78-12-5.1. Plaintiffs particularly base their claim upon subsection 78-12-5.3(1), which states: The term tax title as used in § 78-12-5.2 and § 59-2-1364, and the related amended §§ 78-12-5, 78-12-7, and 78-12-12, means any title to real property, whether valid or not, which has been derived through or is dependent upon any sale, conveyance, or transfer of property in the course of a statutory proceeding for the liquidation of any tax levied against the property whereby the property is relieved from a tax lien. (Emphasis added.) In addressing this issue, the Utah Court of Appeals held, [O]ne who has a tax deed but does not hold title to the property cannot assert the special statute of limitations contained in Utah Code Ann. § 78-12-5.1 (1987). [5] This Court also addressed the application of section 78-12-5.1 to tax deeds in Frederiksen v. LaFleur. [6] In LaFleur, the defendant received a tax deed to real property, but because the tax sale was conducted by an employee of the Salt Lake County Auditor's office who had failed to take any oath of office, the trial court held that the tax deed was invalid. We reversed the trial court and held, [T]ax purchasers may avail themselves of the special statute of limitation regardless of either the invalidity of their tax title or their inability to establish an affirmative claim to title apart from their tax title. [7] If the Court of Appeals' holding stands for more or less than this proposition, they err. The instant case is to be distinguished from LaFleur in that the tax deed in LaFleur was a tax deed for real property, whereas the tax deed here is only for improvements located on the real property. The validity of plaintiffs' claim to ownership of the improvements on the real property is not at issue here. We hold that plaintiffs' tax deeds do not purport to convey an interest in real property, and therefore, our holding in LaFleur is inapposite. Plaintiffs' claim of vested title is also defeated by our decision in Dillman. In Dillman, the plaintiffs held title to a parcel of property and failed to pay the real property taxes assessed by Duchesne County in 1964. In 1967, after a series of conveyances and reconveyances, the plaintiffs were again titleholders and conveyed the property to National Title Insurance Company, who immediately conveyed to the defendant's predecessors. Because taxes had not been paid in 1964, a final auditor's sale was eventually held in 1969, and the plaintiffs appeared and repurchased the property. We held, [O]ne who fails to pay his lawfully assessed taxes and then conveys away the property, ought [not] later to be afforded the protection of the tax title statutes when he finally meets his tax obligation at a tax sale and then attempts to raise that tax deed against the successor to his own grantee. [8] In the instant case, plaintiffs sought to expand their title to the improvements on the land to include the underlying real property. Even assuming that these plaintiffs received tax deeds to the underlying real property, our holding in Dillman would prevent plaintiffs from using a tax sale to strengthen their title by asserting the protections of Utah Code Ann. § 78-12-5.1 (1987).