Court Opinion

ID: 9396243
Source: CourtListenerOpinion
Date Created: 2023-05-19 21:03:04.504366+00
Date Added: 2024-06-11T17:19:15.375013
License: Public Domain

Rel: May 19, 2023

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

         SUPREME COURT OF ALABAMA
                             OCTOBER TERM, 2022-2023

                                _________________________

                                      SC-2022-0653
                                _________________________

                                  Ex parte J.C. King III

                    PETITION FOR WRIT OF CERTIORARI
                     TO THE COURT OF CIVIL APPEALS

                      (In re: Anderson Realty Group, LLC

                                                  v.

                                         J.C. King III)

                    (Jefferson Circuit Court: CV-20-903660;
                        Court of Civil Appeals: 2201014)
SC-2022-0653

STEWART, Justice.

     This case concerns the redemption of residential real property sold

at a tax sale, and, in particular, it concerns the definition of the term

"preservation improvements" as used in the applicable redemption

statute, § 40-10-122, Ala. Code 1975.        The property at issue ("the

property") had served as a rental home located in a residential

neighborhood.    The property owner, J.C. King III, stopped paying

property taxes in 2015 after a fire extensively damaged the property and

rendered it uninhabitable. The State of Alabama purchased the property

at a 2016 tax sale, and in 2019 the property was ultimately sold in its

uninhabitable state to Anderson Realty Group, LLC ("ARG").

     ARG spent $88,812 to extensively renovate and restore the property

to a habitable condition,1 and in 2020 it filed a complaint in the Jefferson

Circuit Court seeking to quiet title to the property.         King filed a

counterclaim to redeem the property and disputed whether the extensive

renovations to the property could be considered "preservation

improvements" due to be included in the redemption amount pursuant to

     1ARG    installed new framing, roofing, wiring, plumbing, air
conditioning, windows, doors, siding, and gutters.

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§ 40-10-122(c).    The trial court agreed with King, holding that

"preservation improvements" included only those amounts expended by

ARG to keep the property from further deterioration, 2 the value of which

it concluded was $10,000, and it entered a judgment setting the

redemption amount accordingly. ARG appealed, and the Court of Civil

Appeals reversed that judgment, holding that the trial court had erred in

limiting the "preservation improvements" to the cost of repairs

undertaken to keep the property in the same condition it was in at the

time of the tax sale. Anderson Realty Grp., LLC v. King, [Ms. 2201014,

June 10, 2022] __ So. 3d __, __ (Ala. Civ. App. 2022). We granted King's

petition for the writ of certiorari to consider, as a matter of first

impression, the meaning of the phrase "preservation improvements" as

defined in § 40-10-122(d).

                             Standard of Review

     " 'On certiorari review, this Court accords no presumption of

correctness to the legal conclusions of the intermediate appellate court.

     2There  was testimony that ARG did $10,000 to $12,000 worth of
work that could be characterized as merely maintaining the property, i.e.,
general clean-up work, securing tarps over the roof, landscaping, and
lawn maintenance.
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Therefore, we must apply de novo the standard or review that was

applicable in the Court of Civil Appeals.' " Ex parte Patel, 988 So. 2d 957,

959 (Ala. 2007) (quoting Ex parte Toyota Motor Corp., 684 So. 2d 132,

135 (Ala. 1996)).   Here, the question whether the trial court properly

interpreted the phrase "preservation improvements" is a question of law

subject to de novo review.   See McKinney v. Nationwide Mut. Ins. Co.,

33 So. 3d 1203, 1206 (Ala. 2009) (noting that a trial court's interpretation

of a statute is a question of law reviewed de novo).

                                 Analysis

     When property is sold at a tax sale to a party other than the state,

a process for the redemption of that property is provided by § 40-10-122.

Generally, to redeem property under that section, the party seeking

redemption must pay an amount of money equal to the amount for which

the property was sold (including any funds paid in excess of the

minimum-bid amount), plus any subsequent taxes paid by the purchaser

at the tax sale, with interest -- currently, payable at the rate of 8% per

annum from the date of the sale -- as well as other costs and fees. § 40-

10-122(a).   Moreover, the requirements for statutory redemption of

property sold at a tax sale had generally remained the same since the

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earliest enactment of the statute, regardless of the character or location

of the property at issue.   See, e.g., § 608, Ala. Code 1886; § 3111, Ala.

Code 1923; and Title 51, § 305, Ala. Code 1940.

     In 2002, however, the legislature passed Act No. 2002-426, Ala.

Acts 2002 ("the 2002 amendment"), which amended § 40-10-122 to

require that additional amounts be paid to redeem property sold at a tax

sale under two distinct circumstances. First, if the property in question

is located within an "urban renewal or urban redevelopment project area

designated pursuant to Chapters 2 or 3 of Title 24 [of the Alabama

Code]," the redemptioner must pay the cost of certain insurance

premiums associated with the property paid by the purchaser and must

also pay for the value of all "permanent improvements" made on the

property by the purchaser. § 40-10-122(b). "Permanent improvements"

are broadly defined by § 40-10-122(d) to include "all repairs,

improvements, and equipment attached to the property as fixtures."

Second, if the property contains a residential structure, the redemptioner

must pay certain insurance premiums associated with the property paid

by the purchaser and must also pay for the value of all "preservation

improvements" made on the property by the purchaser. § 40-10-122(c).

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"Preservation improvements" are defined as "improvements made to

preserve the property by properly keeping it in repair for its proper and

reasonable use, having due regard for the kind and character of the

property at the time of sale." § 40-10-122(d).

     The parties agree that this case is governed by § 40-10-122(c). They

disagree, however, as to the meaning of the term "preservation

improvements." When construing statutory language, the following

principles are applicable:

                       " ' " '[I]t is this Court's
                       responsibility in a case
                       involving             statutory
                       construction to give effect to
                       the legislature's intent in
                       enacting a statute when
                       that intent is manifested in
                       the wording of the statute
                       …. " ' " '[I]f the language of
                       the statute is unambiguous,
                       then there is no room for
                       judicial construction and
                       the clearly expressed intent
                       of the legislature must be
                       given effect.' " ' "    …    In
                       determining the intent of
                       the legislature, we must
                       examine the statute as a
                       whole and, if possible, give
                       effect to each section.'

                                     6
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               " ' " Ex parte Exxon Mobil Corp., 926 So.
               2d 303, 309 (Ala. 2005). Further,

                     " ' " 'when      determining
                     legislative intent from the
                     language used in a statute,
                     a court may explain the
                     language, but it may not
                     detract from or add to the
                     statute….        When the
                     language is clear, there is
                     no      room   for    judicial
                     construction….'

               " ' "Water Works & Sewer Bd. of Selma
               v. Randolph, 833 So. 2d 604, 607 (Ala.
               2002)." '

    "[Archer v. Estate of Archer, 45 So. 3d 1259, 1263 (Ala. 2010)]
    ([q]uoting Ex parte Birmingham Bd. of Educ., 45 So. 3d 764,
    767 (Ala. 2009)[).] Similarly, in Lambert v. Wilcox County
    Commission, 623 So. 2d 727, 729 (Ala. 1993), the Court stated:

                     " ' "The fundamental rule of
               statutory construction is that this
               Court is to ascertain and effectuate the
               legislative intent as expressed in the
               statute…. In this ascertainment, we
               must look to the entire Act instead of
               isolated phrases or clauses … and
               words are given their plain and usual
               meaning…. Moreover, just as statutes
               dealing with the same subject are in
               pari materia and should be construed
               together, … parts of the same statute
               are in pari materia and each part is
               entitled to equal weight." '

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        "(Quoting Darks Dairy, Inc. v. Alabama Dairy Comm'n, 367
        So. 2d 1378, 1380-81 (Ala. 1979).)"

First Union Nat'l Bank of Florida v. Lee Cnty. Comm'n, 75 So. 3d 105,

111-12 (Ala. 2011).

        The legislative intent of the 2002 amendment is evident from its

express reference to "urban renewal" and "urban redevelopment" project

areas authorized pursuant to Chapters 2 and 3 of Title 24, Ala. Code

1975.     Those chapters are aimed at reducing urban blight, which,

according to legislative findings, "impair economic values and tax

revenues, cause an increase in and spread of disease and crime and

constitute a menace to the health, safety, morals, and welfare of residents

of the state." § 24-2-1(a)(2), Ala. Code 1975; see also § 24-3-1(a)(1), Ala.

Code 1975. For example, the stated purpose of an urban-renewal project

is to create a workable program for

        "dealing with the problem of slums and blighted, deteriorated,
        or deteriorating areas within the community and for the
        establishment and preservation of a well-planned community
        with well organized residential neighborhoods of decent
        homes and suitable living environment for adequate family
        life[] … [and] to eliminate and prevent the development or
        spread of slums and blight and deterioration [and] to
        encourage needed rehabilitation …."

§ 24-3-6, Ala. Code 1975.

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     Furthermore, abandoned, tax-delinquent properties are associated

with blight and the deterioration of neighborhoods. See, e.g., § 24-2-

2(c)(8), Ala. Code 1975 (defining "blighted property" to include "property

that has tax delinquencies exceeding the value of the property"); § 24-9-

2, Ala. Code 1975 (stating that a purpose of the creation of the Alabama

Land Bank Authority is acquire tax-delinquent properties in order to

rehabilitate the properties and remove blight).             However, as

commentators have recognized, the redevelopment and rehabilitation of

tax-delinquent properties can be problematic.      See Andrew S. Olds,

Comment, Saving Alabama's Urban Neighborhoods: Revisions to

Alabama's Property Tax Sale Laws, 44 Cumb. L. Rev. 497, 501-02 (2013-

2014).     For example, a tax-sale purchaser will be understandably

reluctant to invest funds to restore a property when the previous owner

retains the right of redemption.3 The 2002 amendment, therefore, was

     3As   one commentator has explained:

     "Under Alabama's tax sale redemption laws, a private
     developer who buys a tax certificate at the tax sale generally
     must wait for a minimum of six years before he can cut off the
     right of redemption and bring a successful quiet title action.
     As a result of these obstructions, properties that are otherwise
     good candidates for redevelopment are out of the investor's
     reach. [Such properties] often sit vacant until they develop
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designed to alleviate risks inherent in a tax-sale purchaser's

improvement of a property located in an urban-renewal or urban-

redevelopment project area or of a property containing a residential

structure.   For instance, a redemptioner of a property in an urban-

renewal project area would be required to reimburse the tax-sale

purchaser for at least the value of "all repairs, improvements, and

equipment attached to the property as fixtures." § 40-10-122(d) (defining

"permanent improvements").

     Likewise, § 40-10-122(c), which was enacted as part of the 2002

amendment, must also be understood as an anti-blight measure intended

to stem the deterioration of residential-housing stock. To that end, the

2002 amendment encourages tax-sale purchasers to preserve residential

properties by requiring redemptioners to reimburse a tax-sale purchaser

for the value of "preservation improvements" made to keep such

     catastrophic roof leaks or transient interlopers set fire to the
     properties."

Andrew S. Olds, Comment, Saving Alabama's Urban Neighborhoods:
Revisions to Alabama's Property Tax Sale Laws, 44 Cumb. L. Rev. 497,
502 (2013-2014) (footnotes omitted).
                                  10
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residential property "in repair for its proper and reasonable use." § 40-

10-122(d) (defining "preservation improvements").

     Notably, in defining "preservation improvements," the legislature

turned to language from long-standing decisional law concerning

foreclosure redemptions.    Section 40-10-122(d) defines "preservation

improvements" as "improvements made to preserve the property by

properly keeping it in repair for its proper and reasonable use, having

due regard for the kind and character of the property at the time of sale."

This definition is drawn directly from the definition of "permanent

improvements," as that term is used in the context of foreclosure

redemptions, and, thus, provides us with an idea as to what the

legislature intended by the language used to define "preservation

improvements" in § 40-10-122(d).

     The redemption of property that has been foreclosed upon is

governed by § 6-5-253, Ala. Code 1975.          That section requires a

redemptioner to pay "lawful charges," which include the value of

"[p]ermanent improvements." § 6-5-253(a)(1).           The definition of

"permanent improvements" as used in foreclosure-redemption cases was

established by this Court in Rodgers v. Dixon, 239 Ala. 72, 74, 193 So.

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741, 743 (1940), and was most recently restated by this Court in E.B.

Investments, L.L.C. v. Pavilion Development, L.L.C., 212 So. 3d 149, 167

(Ala. 2016):

                      " ' "We have indicated that
                necessary permanent improvements
                have a well defined meaning in this
                jurisdiction, which is to preserve the
                property by properly keeping it in
                repair for its proper and reasonable
                use, having due regard for the
                necessities of each subject as to its kind
                and character. This includes not only
                ordinary repairs to restore the property
                after injury, decay, storm, flood, or fire,
                etc., but also valuable and useful
                additions and improvements to the
                property suited to its reasonable
                necessities, character and use. … As
                to this each case is ruled by its facts."

           " '[Rodgers v. Dixon], 239 Ala. [72,] 74, 193 So.
           [741,] 743 [(1940)]. In Smith v. Sulzby, 205 Ala.
           301, [303,] 87 So. 823[, 824] (1921), this Court
           stated: "An improvement, generally speaking, is
           anything that enhances the value of the land." '

     "Moore v. Horton, 491 So. 2d 921, 923 (Ala. 1986)."

(Emphasis added.) Since 1940, Alabama courts have applied the above

language on numerous occasions. For example, in Moore v. Horton, 491

So. 2d 921 (Ala. 1986), the Court, relying on Rodgers, addressed and

rejected an argument -- like that made by King in this case -- that
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"permanent improvements" should not include improvements made to

the property beyond what was necessary to keep it from further

deterioration during the redemption period. 491 So. 2d at 923.

     On direct appeal of this case to the Court of Civil Appeals, that court

recognized that, because the definition of "preservation improvements" is

taken from essentially the same definition of "permanent improvements,"

as used and applied for more than 80 years in Alabama decisional law

regarding foreclosure redemption, "the legislature must have intended

that 'preservation improvements' have the same meaning as ascribed by

the Rodgers Court to the term 'permanent improvements' under the

foreclosure-redemption statute, § 6-5-253." Anderson, __ So. 3d at ___.

The majority explained:

           "It is … a rule of statutory construction that statutes
     should be construed in reference to the principles of the
     common law. Dennis v. State, 40 Ala. App. 182, 185, 111 So.
     2d 21, 24 (1959); see also Weaver v. Hollis, 247 Ala. 57, 60, 22
     So. 2d 525, 528 (1945) (noting that statutes must be read 'in
     the light of the common law'); Standard Oil Co. v. City of
     Birmingham, 202 Ala. 97, 98, 79 So. 489, 490 (1918)
     ('[C]ommon-law words [are to be construed] according to their
     common-law meaning.'); Cook v. Meyer Bros., 73 Ala. 580, 583
     (1883) ('[T]he common law prevails, save so far as it is
     expressly or by necessary implication changed by the
     statute.'); Antonin Scalia & Bryan A. Garner, Reading Law:
     The Interpretation of Legal Texts 320 (2012) ('The age-old
     principle is that words undefined in a statute are to be
                                    13
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     interpreted and applied according to their common-law
     meanings.'); cf. Ex parte Christopher, 145 So. 3d 60, 65 (Ala.
     2013). …

           "Applying these principles, we conclude that, because
     the definition of 'preservation improvements' as codified in §
     40-10-122(d) is the same definition of 'permanent
     improvements' set forth in Rodgers and applied for more than
     eighty years, the legislature must have intended that
     'preservation improvements' have the same meaning as
     ascribed by the Rodgers Court to the term 'permanent
     improvements' under the foreclosure-redemption statute, § 6-
     5-253.

            "Here, the tax-sale purchaser obtained its interest in the
     house after a 'massive' fire. ARG, the tax-sale purchaser's
     successor in interest, then spent a considerable amount of
     money toward restoring the house and surrounding property
     to its previous condition for its 'proper and reasonable use,'
     i.e., a sound, habitable, single-family dwelling. § 40-10-
     122(d). Alabama courts have consistently required one
     seeking to redeem property that has been foreclosed upon to
     pay not only the costs for ordinary repairs to restore the
     property after, among other things, a fire 'but also [to pay for]
     valuable and useful additions and improvements to the
     property suited to its reasonable necessities, character and
     use.' Rodgers, 239 Ala. at 74, 193 So. at 743. Therefore, we
     conclude that the trial court erred in limiting ARG to the
     recovery of the cost of repairs undertaken to keep the property
     in the same condition it was in at the time of the tax sale."

Anderson, __ So. 3d at __.

     We agree with the above analysis. Consistent with the purpose of

the 2002 amendment of reducing residential blight, the legislature

required redemptioners of property containing a residential structure to
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pay the value of "preservation improvements," a term it defined by

adopting language that this Court has previously interpreted to mean

"valuable and useful additions and improvements to the property,"

Rodgers, 239 Ala. at 74, 193 So. at 743, including improvements beyond

those necessary to merely prevent further deterioration. Moore, 491 So.

2d at 923. Here, ARG engaged in the precise conduct that the 2002

amendment was intended to encourage -- it invested substantial funds to

restore an uninhabitable, abandoned house located in a residential

neighborhood to its "proper and reasonable use" as a sound and habitable

single-family dwelling. § 40-10-122(d). Accordingly, we agree that the

trial court erred in limiting ARG to the recovery of the cost of repairs to

keep the property in the same condition it was in at the time of the tax

sale. 4

                                  Conclusion

          For the above reasons, the judgment of the Court of Civil Appeals

is affirmed.

          AFFIRMED.

          4We
          make no judgment as to the precise amount due to redeem the
property or as to the value of the "preservation improvements."
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     Parker, C.J., and Shaw, Wise, Bryan, Sellers, Mendheim, Mitchell,

and Cook, JJ., concur.

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