Opinion ID: 2132794
Heading Depth: 1
Heading Rank: 5

Heading: The Ownership Issue.

Text: As mentioned, the treasurer could seek personal judgment for taxes accruing after April 1, 1992. The district court concluded that the county's record of the property ownership is unreliable and too weak to support personal judgment, leading the court to further conclude there was a failure of proof as to the defendants' ownership on or after April 1, 1992. For reasons that follow, we agree. A. The Van Sickels. The district court correctly interpreted the Van Sickels' interest arising from the assignment from Gertrude and E.F.'s estate as merely a right to receive contract payments. The buy-sell agreement also required Wilson to provide the financing statements and security agreements necessary to establish a security interest in favor of the seller. See Iowa Code § 554.2401(1) (Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest.). The district court found that after the assignment, the Van Sickels never took any affirmative action to exercise any of their collection options  such as repossession  when Wilson failed to make payments. The court further found that the Van Sickels did not want the business back and wanted to avoid environmental liabilities that might arise from a defunct fertilizer facility. Substantial evidence supports these findings. Given the nature of the buy-sell agreement and a lack of action by the Van Sickels to enforce their collection options, we agree with the district court that [a] preponderance of the evidence fails to demonstrate that the Van Sickels were the owners of the property. Apparently, the treasurer now agrees with this conclusion for she did not assert in her appellate briefs that the Van Sickels were owners who were liable for the taxes. Rather, she now asserts that Wilson should be responsible. We also note that in oral argument, the treasurer conceded the Van Sickels have no liability for the taxes. B. Wilson. As to the treasurer's claim that Wilson was the owner of the property and therefore responsible for payment of the delinquent taxes, the district court made the following findings rejecting that claim. Wilson quit making payments under the buy-sell agreement in 1985, abandoned the property in early 1987, and filed bankruptcy in 1988. Sometime during this period, a liquidation company ended up with ownership of the two grain bins and sold them to James Wilson, Greg Wilson's father. In 1990, the county assessor visited the site, saw a pit filled with water, and recognized the hazard posed some possible liability. The local board of health had been alerted to the condition of the property. At this time the assessor confirmed the property had been abandoned for some time, it was in a dilapidated condition, and it was not worth what it had been appraised for in 1984. The assessor never entered any of this information on the property card. Nor did the assessor try to determine ownership even though the property had obviously been abandoned. Record keeping regarding ownership of property on leased land in the assessor's office is informal, leading to inaccuracies. The record keeping is premised on officials in various offices noticing a transfer, taking the initiative to pass the word along to other county officials, making factually and legally accurate notations, and keeping the data reasonably current with available information. The assessor also relies on information from the public. Once the assessor notes on the property card a change in title gleaned from transfer documents forwarded by the recorder, or through other information received, removing names from the card is far more rigorous. Unless a removal is noncontroversial, all names stay on. Someone at some time had crossed Wilson's name off the assessor's property card, leaving a current reference to only the contract sellers. At some point, the assessor updated the property card to show the assignment of the seller's interest in the buy-sell agreement to the Van Sickels. Robert Van Sickel was listed as the Van Sickels' local representative. County action commonly undertaken to monitor taxable property was conspicuously absent from 1984, when the State appraised the property, until 2000, when new ownership was documented. During that time the county assessor never inspected the property for the official purpose of monitoring what was there, determining who owned it, or seeking to re-value it in recognition of its obvious deterioration and obsolescence. Over the years, none of the county's tax records were adjusted to reflect various recorded railroad deeds that came through the recorder's office. For example, a reconveyance deed from Soo Line Railroad and CMC Real Estate Corporation was recorded July 24, 1989, but was never noted on the assessor's property card. This deed purported to convey railroad land underlying the fertilizer business and transferred all structures, fixtures and improvements located thereon. (The original lease between E.F. Van Sickel and the railroad provided that the railroad could consider a failure to remove property following a termination of the lease an abandonment of the property to the railroad.) In addition, the assessor failed to notice that a quitclaim deed between CMC Real Estate Corporation and the Chicago Milwaukee Corporation was recorded February 26, 1992, deeding the real estate together with all the appurtenances, fixtures, tracks, signals, equipment and personal property, if any, owned ... and used in connection therewith.... On the same day, the Chicago Milwaukee Corporation made the same transfers to CMC Heartland Partners, which transfers also went unheeded. The record reflects that CMC Heartland Partners conveyed the land in question to Carol M. and Raymond D. Johnson on May 26, 1998. This deed was recorded. On June 26, 2000, the district court entered a decree quieting title in the Johnsons against the Van Sickels, Wilson, and the county. The decree quieted title not only to the land, but also to all buildings, structures and fixtures located on the land. The confusion regarding ownership was finally cleared up and the assessor's records were adjusted to reflect ownership of the property in the Johnsons. In 1998, when the Johnsons first inquired about the delinquent taxes, the assessor's records did not reflect that Wilson had put the grain bins on the land after the buy-sell agreement was executed. Additionally, the records failed to disclose that Wilson's father had bought the bins in 1988. The January 1, 2000 assessment reflected those facts for the first time. Without the bins the property was valued at $10,000, rather than the $45,400 valuation after the 1984 appraisal. Substantial evidence supports all of these findings. Based on those findings the district court reached the following correct conclusions: A preponderance of the evidence does not demonstrate that Wilson was a lawful owner of the taxed property either. He was the last owner that the county took note of, but he abandoned the property in 1988, and there were broad railroad transfers in the meantime, which may well have enveloped all of the deserted property on the site. The fact that the county did not react to the railroad transfers cannot serve as proof of Wilson's ownership. It is the treasurer's burden to prove that Wilson owes taxes accruing after April 1, 1992. She has failed to do that under the preponderance-of-the-evidence standard. The sum of taxes the treasurer seeks to collect for past assessments on the grain bins cannot properly be collected from either the Van Sickels or Wilson. A preponderance of the evidence reveals that James Wilson has owned those improvements since about 1988, and he has not been made a party to this action.