Court Opinion

ID: 1039032
Source: CourtListenerOpinion
Date Created: 2013-08-28 22:26:44.636927+00
Date Added: 2024-06-11T12:47:38.261218
License: Public Domain

Supreme Court

                                                          No. 2012-163-Appeal.
                                                          (PM 11-5464)

       Rachel Rafaelian                :

               v.                      :

Perfecto Iron Works, Inc., et al.      :

         NOTICE: This opinion is subject to formal revision before
         publication in the Rhode Island Reporter. Readers are requested to
         notify the Opinion Analyst, Supreme Court of Rhode Island,
         250 Benefit Street, Providence, Rhode Island 02903, at Telephone
         222-3258 of any typographical or other formal errors in order that
         corrections may be made before the opinion is published.
                                                                   Supreme Court

                                                                   No. 2012-163-Appeal.
                                                                   (PM 11-5464)

             Rachel Rafaelian                  :

                     v.                        :

      Perfecto Iron Works, Inc., et al.        :

              Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

                                           OPINION

       Justice Goldberg, for the Court. This case came before the Supreme Court on April 9,

2013, pursuant to an order directing the parties to appear and show cause why the issues raised in

this appeal should not summarily be decided. The petitioner, Rachel Rafaelian (Rafaelian or

petitioner), appeals from an order of the Superior Court granting the respondent‟s, Perfecto Iron

Works, Inc. (Perfecto or respondent), motion to vacate a default judgment and final decree.

Rafaelian argues that the trial justice ignored both Rule 81(a)(2) of the Superior Court Rules of

Civil Procedure and G.L. 1956 § 44-9-24, which precludes the Superior Court from vacating a

final decree foreclosing the right of redemption after a tax sale. In response, Perfecto argues that

the trial justice did not err in vacating the decree, which Perfecto asserts was entered

erroneously; Perfecto claims that the decree is void because Perfecto timely answered the

petition seeking to foreclose its right of redemption.

       The trial justice, having found that a timely answer had been filed, held that the decree

erroneously was entered and granted Perfecto‟s motion to vacate. After hearing the arguments of

counsel and carefully examining the memoranda filed by the parties, we are of the opinion that

                                                -1-
cause has not been shown; we proceed to decide the appeal at this time. For the reasons set forth

below, we affirm the judgment of the Superior Court.

                                        Facts and Travel

        On September 22, 2011, Rafaelian filed, in the Superior Court, a petition to foreclose the

right of redemption arising from a tax sale of property located at 1107 Westminster Street,

Providence, Rhode Island, and designated by the tax assessor as lot 50, plat 32 (the property).

That petition indicated that Rafaelian had obtained tax title to the property on June 25, 2010, at a

sale conducted by the Providence Water Supply Board for nonpayment of user fees. The

propriety of the sale has not been challenged. The petition also stated that “more than one year

from the date of said sale has elapsed and no redemption has been made; the proceedings

aforesaid have been conducted according to law[.]” Furthermore, the petition indicated that the

named respondents—Perfecto, the Rhode Island Division of Taxation, and the Internal Revenue

Service—held an interest in the property, and that each of these respondents was provided notice

of the petition via certified mail.1

        It is undisputed that Perfecto filed an answer on October 14, 2011, and that this filing was

noted on the court‟s docket sheet. Apparently, neither Rafaelian nor her attorney received a copy

of the answer. On October 18, 2011, believing that no responsive pleading had been filed,

Rafaelian filed a motion for entry of default and final decree. By affidavit of her attorney,

Rafaelian alleged that respondents had failed to plead or otherwise defend as to petitioner‟s

petition. The default motion was set for hearing on October 28, 2011; however, it is not clear

whether any of the respondent parties were provided notice of this hearing. Ultimately, on

October 28, 2011, a final decree was entered declaring “[t]hat all rights of redemption [in and to

1
 The record reflects that neither the Rhode Island Division of Taxation nor the Internal Revenue
Service entered appearances at any stage of these proceedings.
                                                -2-
the property] are forever foreclosed and barred” and vesting “[t]he legal and equitable title to the

property * * * in [Rafaelian].”

       On November 3, 2011, Perfecto filed a motion to vacate the default and the final decree.

On November 14, 2011, Rafaelian objected to Perfecto‟s motion. At the hearing on the motion

to vacate, Perfecto argued that both the default and the final decree were void.              Perfecto

established that its answer was filed on October 14, 2011, that it did not receive notice of the

hearing on Rafaelian‟s motion for default, and that the relief it sought did not turn on whether a

decree foreclosing the right of redemption could be vacated pursuant to the Superior Court Rules

of Civil Procedure. Perfecto argued that because the name and address of petitioner‟s attorney

were not set forth in the motion seeking foreclosure, the answer was mailed to Rafaelian at the

address listed on her petition.2 Further, Perfecto stated that, after the petition was filed, there had

been some communication with Rafaelian‟s counsel about the redemption costs but that Perfecto

was not aware of the impending hearing on Rafaelian‟s motion for entry of default.

       In response, Rafaelian argued that the Superior Court Rules of Civil Procedure do not

provide a procedural vehicle to vacate the default and the final decree foreclosing the right of

redemption and that, therefore, Perfecto‟s motion “is completely defective and not allowed.”

According to Rafaelian, Perfecto was notified by letter, sent by facsimile, “that this matter is set

down for foreclosure on October the 28th, 2011.”              Counsel averred that this facsimile

communication was sent before the hearing date and in response to Perfecto‟s verbal request for

redemption costs. In an ensuing exchange between Rafaelian and the trial justice, the question

arose as to who bears the responsibility of searching the court file to see if an answer had been

filed before the court enters a default. The trial justice declared that it was not the court‟s

2
 Apparently, this address was counsel‟s office; but, because the answer was addressed to
Rafaelian, rather than counsel, he did not receive it.
                                                 -3-
obligation to determine that there was no answer in the file before entering a default. Counsel

also argued that, although he had not received a copy of Perfecto‟s answer, it was a common

practice for delinquent respondents to request redemption costs and then elect not to answer the

petition, thus allowing the default to enter.

        The trial justice concluded that the default erroneously was entered in this case because

Perfecto‟s answer was timely filed.           The trial justice based her decision on Perfecto‟s

“meritorious defense” and the general policy of the courts to favor redemptions. The trial justice

stated that she arrived at her conclusion by employing the principles of equity and by relying on

“the Zeus case,”3 and not the Superior Court Rules of Civil Procedure.4

        An order was entered on November 15, 2011, granting Perfecto‟s motion and vacating

the entry of default and the final decree.         The order enjoined petitioner “from alienating,

transferring, encumbering, concealing, selling, or otherwise disposing of” the property until

further order of the court. The petitioner‟s timely notice of appeal from the November 15, 2011

order was filed on November 28, 2011. Before this Court, the parties raise arguments that are

identical to those posited to the trial justice.

                                                Discussion

        We begin our analysis by noting that “[a] tax sale foreclosure proceeding „is a unique

procedure created by statute for a limited purpose[:] to provide a forum for the exercise of the
3
  The trial justice likely was referring to Zeus Realty Co. v. Jaral Realty, Inc., 653 A.2d 70, 70
(R.I. 1995), where a plaintiff in an unsuccessful appeal sought to overturn a Superior Court order
vacating an entry of default based upon the finding “that the plaintiff‟s notice to the defendants
was premature since it was sent prior to the setting of a return day and prior to the presentation of
a title examiner‟s report to the Superior Court.” On appeal, Rafaelian argues that Zeus is
inapplicable to her case. Because we uphold the trial justice‟s decision vacating the default, we
need not reach this issue.
4
 The parties then informed the trial justice that, after the default entered, the property in question
was transferred from Rafaelian to an LLC. The trial justice directed the entry of a restraining
order enjoining further transfer of the property.
                                                   -4-
right to redeem the subject land.‟” ABAR Associates v. Luna, 870 A.2d 990, 994 (R.I. 2005)

(quoting Pratt v. Woolley, 117 R.I. 154, 157, 365 A.2d 424, 426 (1976)). “Because it is a

statutory proceeding and not an ordinary civil action, the jurisdiction of the Superior Court is

sharply circumscribed.” Id. (citing Pratt, 117 R.I. at 157, 365 A.2d at 426); see also Finnegan v.

Bing, 772 A.2d 1070, 1072 (R.I. 2001). Importantly, “[t]ax sale foreclosure proceedings are also

specifically exempted from the operation of the Rules of Civil Procedure by Rule 81(a)(2)

* * *.”5 Abar Associates, 870 A.2d at 944. Also, as the travel of this case indicates, foreclosure

proceedings move at lightning speed.

         Rafaelian argues to this Court that Perfecto‟s motion to vacate was filed in contravention

of § 44-9-24, which provides, in pertinent part, that “no decree [foreclosing the right of

redemption] shall be vacated except in a separate action instituted within one year following

entry of the decree and in no event for any reason, later than one year following the entry of

decree[,]” and only on very limited grounds.6 Clearly, with respect to any validly entered decree,

5
   Specifically, Rule 81(a)(2) of the Superior Court Rules of Civil Procedure provides, in
pertinent part, that “[t]hese rules do not apply to the following proceedings: * * * Petitions for
foreclosure of redemption of interests in land sold for nonpayment of taxes * * *.”
6
    In its entirety, G.L. 1956 § 44-9-24 provides:

                 “The title conveyed by a tax collector‟s deed shall be absolute after
         foreclosure of the right of redemption by decree of the superior court as provided
         in this chapter. Notwithstanding the rules of civil procedure or the provisions of
         chapter 21 of title 9, no decree shall be vacated except in a separate action
         instituted within one year following entry of the decree and in no event for any
         reason, later than one year following the entry of decree. Furthermore, the action
         to vacate shall only be instituted for inadequacy of notice of the petition
         amounting to a denial of due process or for the invalidity of the tax sale because
         the taxes for which the property was sold had been paid or were not due and
         owing because the property was exempt from the payment of such taxes. The
         superior court shall have exclusive jurisdiction of the foreclosure of all rights of
         redemption from titles conveyed by a tax collector‟s deed, and the foreclosure
                                                 -5-
§ 44-9-24 is controlling; “[t]he right to institute an independent action under § 44-9-24 is

triggered by the entry of a foreclosure decree * * *.” Sycamore Properties, LLC v. Tabriz

Realty, LLC, 870 A.2d 424, 427 n.7 (R.I. 2005).7 Critically, an action pursuant to § 44-9-24 lies

only

               “for inadequacy of notice of the petition amounting to a denial of
               due process or for the invalidity of the tax sale because the taxes
               for which the property was sold had been paid or were not due and
               owing because the property was exempt from the payment of such
               taxes.”

None of these circumstances is present in this case. We are confronted, however, with a

situation in which the decree of the Superior Court was entered in error. The decree is therefore

voidable and its erroneous entry falls outside the safeguards of § 44-9-24.

       In this case, the default decree was entered based on the representation to the court that

Perfecto had not filed an answer to the petition. In fact, Perfecto had answered the petition and

had done so in a timely manner. Accordingly, because the court mistakenly ordered the entry of

default—as evidenced by the filing of the answer, which filing plainly appears in the electronic

docket sheet—the trial justice properly vacated the decree. Because the judgment in this case

       proceedings shall follow the course of equity in a proceeding provided for in
       §§ 44-9-25―44-9-33.”
7
  In Sycamore Properties, LLC v. Tabriz Realty, LLC, 870 A.2d 424, 426 (R.I. 2005), we
determined that “§ 44-9-24 operates as a „safety valve‟ for taxpayers who have lost their right of
redemption because of an invalid tax sale * * *.” We therefore held that, because of the
inadequate notice of the initial tax sale, the property owner was not barred from challenging the
final decree. Id. at 428. We are mindful that the post-Sycamore amendment may have
“narrowed the notice-based „safety valve‟ of § 44-9-24,” Mortgage Electronic Registration
Systems, Inc. v. DePina, 63 A.3d 871, 878 (R.I. 2013) (discussing the amendment to § 44-9-24,
which amendment changed the phrase “inadequacy of notice amounting to a denial of due
process”—the operative and critical phrase for purposes of DePina—to read “inadequacy of
notice of the petition amounting to a denial of due process”), but the fact remains that “[t]he right
to institute an independent action under § 44-9-24 is triggered by the entry of a foreclosure
decree * * *.” Sycamore Properties, 870 A.2d at 427 n.7.
                                                -6-
was not a valid judgment, it necessarily and properly was vacated. We need extend our analysis

no further.

       In the circumstances of this case, we are satisfied that the trial justice did not err in

granting Perfecto‟s motion to vacate the final decree.

                                           Conclusion

       For the foregoing reasons, the judgment of the Superior Court is affirmed. The record

shall be remanded to the Superior Court.

                                               -7-
                            RHODE ISLAND SUPREME COURT CLERK’S OFFICE

                                  Clerk’s Office Order/Opinion Cover Sheet

TITLE OF CASE:        Rachel Rafaelian v. Perfecto Iron Works, Inc., et al.

CASE NO:              No. 2012-163-Appeal.
                      (PM 11-5464)

COURT:                Supreme Court

DATE OPINION FILED: June 18, 2013

JUSTICES:             Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

WRITTEN BY:           Associate Justice Maureen McKenna Goldberg

SOURCE OF APPEAL:     Providence County Superior Court

JUDGE FROM LOWER COURT:

                      Associate Justice Sarah Taft-Carter

ATTORNEYS ON APPEAL:

                      For Plaintiff:   Patrick T. Conley, Esq.

                      For Defendant: J. David Freel, Esq.