Court Opinion

ID: 4448753
Source: CourtListenerOpinion
Date Created: 2019-10-22 15:03:54.520811+00
Date Added: 2024-06-11T14:45:31.080760
License: Public Domain

FILED
                                                                      Oct 22 2019, 8:33 am

                                                                          CLERK
                                                                      Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court

APPELLANT PRO SE                                           ATTORNEY FOR APPELLEE
Andrew Patrick                                             Glen E. Koch II
Anderson, Indiana                                          Martinsville, Indiana

                                             IN THE
    COURT OF APPEALS OF INDIANA

Andrew Patrick,                                            October 22, 2019
Appellant-Defendant,                                       Court of Appeals Case No.
                                                           19A-SC-936
        v.                                                 Appeal from the Morgan Superior
                                                           Court
Painted Hills Association, Inc.,                           The Honorable Terry E. Iacoli,
Appellee-Plaintiff                                         Magistrate
                                                           Trial Court Cause Nos.
                                                           55D03-1712-SC-1304
                                                           55D03-1811-SC-1183

Bailey, Judge.

Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019                           Page 1 of 7
                                                Case Summary
[1]   In 2016, Andrew Patrick (“Patrick”) obtained tax deeds to three unimproved

      lots in Morgan County (the “Property”). A neighborhood association—Painted

      Hills Association, Inc. (the “Association”)—later filed two small-claims actions

      against Patrick. The Association sought to collect unpaid dues for 2017 and

      2018, attempting to enforce restrictive covenants that were recorded prior to the

      tax sale. The trial court held a consolidated hearing on the claims, and

      ultimately entered judgment in favor of the Association. Patrick filed a motion

      to correct error, which the trial court denied. Patrick now brings a pro se appeal.

      The dispositive issue is whether the restrictive covenants survived the tax sale.1

[2]   We affirm.

                                           Standard of Review
[3]   “We generally review a trial court’s ruling on a motion to correct error for an

      abuse of discretion.” Santelli v. Rahmatullah, 993 N.E.2d 167, 173 (Ind. 2013).

      An abuse of discretion occurs if a ruling is clearly against the logic and effect of

      the facts and circumstances or if the trial court erred on a matter of law. Id. at

      175. Here, the motion to correct error related to the judgment in favor of the

      Association. In support of that judgment, the court entered sua sponte findings

      and conclusions, which control the issues they cover—with a general-judgment

      1
          As this issue is dispositive, we do not address arguments directed toward other aspects of the court’s ruling.

      Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019                                    Page 2 of 7
      standard applicable to any other issue. See Ind. Trial Rule 52. We “shall not

      set aside the findings or judgment unless clearly erroneous,” and must give “due

      regard . . . to the opportunity of the trial court to judge the credibility of the

      witnesses.” T.R. 52(A). In conducting our review, we look to whether the

      evidence supports the findings and the findings support the judgment. See State

      v. Int’l Bus. Machs. Corp., 51 N.E.3d 150, 158 (Ind. 2016). Moreover, although

      we defer to findings of fact, we “do not defer to conclusions of law.” Id.

[4]   “The meaning of a statute is a question of law [that] is subject to de novo

      review.” ESPN, Inc. v. Univ. of Notre Dame Police Dep’t, 62 N.E.3d 1192, 1195

      (Ind. 2016). “If a statute is unambiguous, we may not interpret it, but must give

      the statute its clear and plain meaning. If a statute is ambiguous, however, we

      must ascertain the legislature’s intent and interpret the statute so as to effectuate

      that intent.” Elmer Buchta Trucking, Inc. v. Stanley, 744 N.E.2d 939, 942 (Ind.

      2001) (cleaned up). “[A] statute is ambiguous when it allows more than one

      reasonable interpretation.” Day v. State, 57 N.E.3d 809, 813 (Ind. 2016).

                                   Discussion and Decision
[5]   Patrick does not dispute that, prior to the tax sale, the Property was subject to

      recorded restrictive covenants that the Association could enforce.2 The dispute

      2
        “Restrictive covenants are used to maintain or enhance the value of land by reciprocal undertakings that
      restrain or regulate groups of properties.” Villas W. II of Willowridge Homeowners Ass’n, Inc. v. McGlothin, 885
      N.E.2d 1274, 1278 (Ind. 2008). Restrictive covenants “are common in condominium or other ‘common-
      interest’ housing subdivisions. . . . Property owners who purchase their properties subject to such restrictions

      Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019                                  Page 3 of 7
      is about the effect of the tax sale. As to the instant tax deeds, the parties agree

      that the following statute applies—but they proffer competing readings:

              A tax deed executed under this chapter vests in the grantee an
              estate in fee simple absolute, free and clear of all liens and
              encumbrances created or suffered before or after the tax sale
              except those liens granted priority under federal law and the lien
              of the state or a political subdivision for taxes and special
              assessments which accrue subsequent to the sale and which are
              not removed under subsection (e). However, subject to
              subsection (g), the estate is subject to:

              (1) all easements, covenants, declarations, and other deed
              restrictions shown by public records;

              (2) laws, ordinances, and regulations concerning governmental
              police powers, including zoning, building, land use,
              improvements on the land, land division, and environmental
              protection; and

              (3) liens and encumbrances created or suffered by the grantee.

      Ind. Code § 6-1.1-25-4(f) (emphasis added).

[6]   Patrick focuses on the first bolded portion of the statute. He contends that

      restrictive covenants are encumbrances, and that he received the Property “free

      and clear of all liens and encumbrances created or suffered before or after the

      tax sale.” Id. The parties argue about whether a covenant should be considered

      give up a certain degree of individual freedom in exchange for the protections from living in a community of
      reciprocal undertakings.” Id. at 1278-79.

      Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019                               Page 4 of 7
      an “encumbrance.” Regardless, there is an exception to the general rule that a

      tax deed confers free and clear interest—i.e., “subject to subsection (g), the

      estate is subject to . . . all easements, covenants, declarations, and other deed

      restrictions shown by public records.” Id. (emphasis added). The Association

      argues this exception preserves the recorded restrictive covenants.

[7]   Patrick counters that this exception is itself “subject to subsection (g).” Id. That

      subsection provides as follows:

              A tax deed executed under this chapter for real property sold in a
              tax sale:

                       (1) does not operate to extinguish an easement recorded
                       before the date of the tax sale in the office of the recorder
                       of the county in which the real property is located,
                       regardless of whether the easement was taxed under this
                       article separately from the real property; and

                       (2) conveys title subject to all easements recorded before
                       the date of the tax sale in the office of the recorder of the
                       county in which the real property is located.

      I.C. § 6-1.1-25-4(g). Patrick essentially argues that subsection (g) focuses only

      on easements, and, because restrictive covenants are not easements, this

      subsection limits the application of subsection (f) to only easements—despite

      subsection (f) specifically listing more than just easements. Arguing subsection

      Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019              Page 5 of 7
      (f) does not apply, Patrick ultimately contends the Association was obligated to

      follow redemption procedures to retain enforceable restrictive covenants.3

[8]   Patrick misreads the subordinating language “subject to” that refers to

      subsection (g). “A dependent phrase that begins with subject to indicates that the

      main clause it introduces or follows does not derogate from the provision to

      which it refers.” Antonin Scalia & Bryan A. Garner, Reading Law: The

      Interpretation of Legal Texts 126 (2012). In other words, this subordinating

      language “merely shows which provision prevails in the event of a clash—but

      does not necessarily denote a clash of provisions.” Id. Thus, subsection (f) does

      not contradict any easement-related language in subsection (g), and subsection

      (g) does not limit the application of subsection (f) to easements.

[9]   Moreover, the Indiana General Assembly also provided for the survival of

      restrictive covenants in a separate section of the Indiana Code:

               A tax deed executed under this section vests in the grantee an
               estate in fee simple absolute, free and clear of all liens and
               encumbrances created or suffered before or after the tax sale
               except those liens granted priority under federal law, and the lien
               of the state or a political subdivision for taxes and special

      3
        Redemption is a procedure through which any person may obtain title to tax-delinquent property. See Ind.
      Code § 6-1.1-25-1. Before a tax deed is issued, however, a person with “substantial property interest of public
      record” is entitled to notice. I.C. § 6-1.1-25-4.5. A person has substantial property interest of public record if
      the person possesses “title to or interest in a tract that is within the tract’s chain of record title” and—“not
      later than the hour and date a sale is scheduled to commence under IC 6-1.1-24”—the interest is either
      “recorded in the office of the county recorder for the county in which the tract is located” or “available for
      public inspection and properly indexed in the office of the circuit court clerk in the county in which the tract
      is located.” I.C. § 6-1.1-23.9-3(a) (formerly codified at I.C. § 6-1.1-24-1.9).

      Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019                                   Page 6 of 7
               assessments that accrue subsequent to the sale. However, the
               estate is subject to all easements, covenants, declarations, and
               other deed restrictions and laws governing land use, including
               all zoning restrictions and liens and encumbrances created or
               suffered by the purchaser at the tax sale.

       I.C. § 6-1.1-25-4.6(k) (emphasis added). Statutes, such as those at issue here,

       that relate to the same subject matter are in pari materia and “should be

       construed together to produce a harmonious statutory scheme.” Campbell

       Hausfeld/Scott Fetzer Co. v. Johnson, 109 N.E.3d 953, 958 (Ind. 2018) (quotation

       marks omitted). Rather than produce a harmonious statutory scheme, Patrick’s

       argument on appeal would obviate Indiana Code Section 6-1.1-25-4.6(k).

[10]   Still, Patrick cites several cases that concern tax sales and redemption

       procedures. He also cites cases about restrictive covenants. However, none of

       the cited authorities involves statutory analysis concerning the survival of

       covenants.

[11]   The statutes are unambiguous. In light of the statutory exception for restrictive

       covenants, we conclude that the instant covenants survived the tax sale. In

       short, a dominant estate holder is not required to redeem its interest following a

       tax sale. The trial court did not err by ruling in favor of the Association, and we

       affirm its denial of Patrick’s motion to correct error.

[12]   Affirmed.

       Najam, J., and May, J., concur.

       Court of Appeals of Indiana | Opinion 19A-SC-936 | October 22, 2019         Page 7 of 7