Court Opinion

ID: 4216498
Source: CourtListenerOpinion
Date Created: 2017-10-31 17:08:39.906108+00
Date Added: 2024-06-11T14:15:19.737720
License: Public Domain

MEMORANDUM DECISION

Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not
be regarded as precedent or cited before                                         FILED
any court except for the purpose of
                                                                            Oct 31 2017, 11:22 am
establishing the defense of res judicata,
collateral estoppel, or the law of the                                           CLERK
                                                                             Indiana Supreme Court
                                                                                Court of Appeals
case.                                                                             and Tax Court

ATTORNEYS FOR APPELLANT                                  ATTORNEYS FOR APPELLEE,
                                                         BLN INVESTMENTS, LLC
William A. Ramsey
Joshua C. Neal                                           Robert W. Eherenman
Barrett McNagny, LLP                                     Andrew L. Teel
Fort Wayne, Indiana                                      Haller & Colvin, P.C.
                                                         Fort Wayne, Indiana

                                                         ATTORNEYS FOR APPELLEES,
                                                         WILLIAM ROYCE, ALLEN COUNTY
                                                         TREASURER AND NICHOLAS D.
                                                         JORDAN, ALLEN COUNTY AUDITOR
                                                         Thomas A. Hardin
                                                         Shine & Hardin, LLP
                                                         Fort Wayne, Indiana

                                           IN THE
                      COURT OF APPEALS OF INDIANA

JLP,                                                     October 31, 2017
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         02A05-1703-MI-460
        v.
                                                         Appeal from the Allen Circuit
                                                         Court
William Royce, Allen County
Treasurer, Nicholas D. Jordan,                           The Honorable Thomas J. Felts,
                                                         Judge

Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017            Page 1 of 15
      Allen County Auditor, and BLN                            Trial Court Cause No.
      Investments, LLC,                                        02C01-1606-PL-270
      Appellees-Plaintiffs,                                    02C01-1408-MI-646

      Barnes, Judge.

                                             Case Summary
[1]   JLP appeals the denial of its motion to set aside a tax deed and the grant of

      summary judgment in favor of BLN Investments, LLC (“BLN”), regarding

      BLN’s action to quiet title. We affirm.

                                                     Issue
[2]   The sole issue before us is whether the trial court erred by finding that JLP

      received adequate notice of tax sale proceedings.

                                                     Facts
[3]   JLP, a general partnership, owned a parcel of real estate (the “parcel”) located

      at 15415 Washington Street in Huntertown. JLP provided a business address of

      521 Ley Road, Fort Wayne (“Ley address”), to the Allen County Auditor

      (“Auditor”) as its business address of record. JLP eventually sold the property

      located at the Ley address and began to use P.O. Box 219, Pleasant Lake, as its

      new address. JLP failed to provide an updated business address to the Auditor,
      Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 2 of 15
      who continued to mail JLP’s tax-related documents concerning the parcel to

      the Ley address.

[4]   In November 2013, the Allen County zoning administrator filed suit against

      JLP regarding an unrelated matter. The zoning administrator successfully

      served process upon JLP at the Pleasant Lake P.O. box address.

[5]   Due to unpaid property taxes, the parcel was included in Allen County’s 2014

      tax sale. On July 11, 2014, a “notice of tax sale” was sent to JLP by certified

      mail, return receipt requested, at the Ley address. The notice was returned to

      the Auditor bearing “RETURN[ED] TO SENDER,” “UNCLAIMED,” and

      “UNABLE TO FORWARD” markings. App. p. 86, 97. The Auditor then

      sent the notice by regular first class mail to JLP at the Ley address on August 7,

      2014. The post office did not return the second notice. JLP did not receive the

      notice.

[6]   On September 10, 2014, the parcel was sold at a tax sale to Robert F. Jones.

      On March 10, 2015, a “notice to owner of record at the time of sale with a

      substantial property interest of public record” was sent by certified mail, return

      receipt requested, to JLP at the Ley address. The notice, intended to alert the

      owner of record of its right to redeem the property, was returned to the Auditor

      bearing “RETURN[ED] TO SENDER,” “UNCLAIMED,” and “UNABLE

      TO FORWARD” markings. Id. at 87, 97. The Auditor then sent the notice by

      regular mail to JLP at the Ley address on April 8, 2015. The post office did not

      return the second notice to owner. JLP did not receive the notice.

      Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 3 of 15
[7]   On September 16, 2015, a “notice of petition for a tax deed” was sent to JLP at

      the Ley address. The notice was returned to the Auditor bearing

      “RETURN[ED] TO SENDER,” “UNCLAIMED,” and “UNABLE TO

      FORWARD” markings. Id. at 87, 98. The Auditor then sent the notice by

      regular first class mail to JLP at the Ley address on October 8, 2015; the post

      office did not return it. JLP did not receive the notice. The Auditor also

      published notice of the tax sale of the parcel in a newspaper1 and “researched

      the records of the Allen County Auditor’s Office,” to no avail, in an effort to

      identify an alternate address for JLP. See Appellant’s App. Vol. II, p. 87.

[8]   The Allen County Circuit Court entered an order directing issuance of a tax

      deed for the parcel on October 19, 2015. The Auditor issued a tax title deed to

      Jones on October 26, 2015. On May 25, 2016, Jones conveyed the parcel to

      BLN. On December 20, 2016, JLP filed a motion to set aside the judgment and

      the tax deed. On February 1, 2017, the trial court conducted a hearing on the

      motion to set aside the tax deed and denied the motion.

[9]   In a separate action, BLN filed a complaint to quiet title on June 8, 2016. BLN

      named as defendants all persons believed to have a claim or interest in the

      parcel. On October 21, 2016, BLN filed a motion for summary judgment. JLP

      filed a response and cross-motion for summary judgment on November 21,

      2016. On February 2, 2017, the trial court conducted a hearing on the

      1
          The date of publication is unclear from the record; however, the fact of publication is not in dispute.

      Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017                 Page 4 of 15
       summary judgment motions and, finding that (1) JLP failed to designate any

       evidence that the Auditor failed to provide all of the notices required by law for

       the tax sale; (2) the Auditor issued the notices in the manner prescribed by

       statute; and (3) the Auditor took reasonable and practicable steps to inform JLP

       of the tax sale, the trial court found that JLP was not deprived of due process

       regarding the tax sale and that the tax sale was valid. The trial court further

       decreed that BLN was the fee simple owner of the parcel and granted summary

       judgment in its favor.

[10]   On March 1, 2017, the trial court consolidated the tax deed and quiet title

       actions. JLP now appeals from the denial of its motion to set aside the tax deed

       and the grant of summary judgment in favor of BLN.

                                                   Analysis
[11]   JLP argues that the tax deed at issue here is void because the Auditor failed to

       provide constitutionally adequate notice of the tax sale. “[T]he proper

       procedure for appealing the issuance of a tax deed is found in Ind[iana]Trial

       Rule 60[.]” Kessen v. Graft, 694 N.E.2d 317, 320 (Ind. Ct. App. 1998), trans.

       denied. Rule 60(B)(6) provides that a trial court may relieve a party from the

       entry of judgment if the judgment is void. “Failure to comply substantially with

       statutes governing tax sales renders void subsequent tax deeds which deprive

       owners of their property.” Lindsey v. Neher, 988 N.E.2d 1207, 1210 (Ind. Ct.

       App. 2003) (quoting Kessen, 694 N.E.2d at 320). As a general matter, a trial

       court’s ruling on a Rule 60(B) motion is reviewed for an abuse of discretion.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 5 of 15
Rice v. Comm’r, Ind. Dep’t of Envtl. Mgmt., 782 N.E.2d 1000, 1003 (Ind. Ct. App.

       2003). A ruling under Rule 60(B)(6), however, “requires no discretion on the

       part of the trial court because either the judgment is void or it is valid.” Id. at

       1003 (quoting Hotmix & Bituminous Equip. Inc. v. Hardrock Equip. Corp., 719
N.E.2d 824, 826 (Ind. Ct. App. 1999)).

[12]   Our standard of review upon appeal from a trial court’s ruling at summary

       judgment is well settled. A grant of summary judgment is reviewed de novo on

       appeal. N. Ind. Pub. Serv. Co. v. U.S. Steel Corp., 907 N.E.2d 1012, 1018 (Ind.

       2009). Summary judgment is appropriate only where there is no genuine issue

       of material fact and the moving party is entitled to judgment as a matter of law.

       T.R. 56(C); Shi v. Yi, 921 N.E.2d 31, 39 (Ind. Ct. App. 2010). Our review of an

       order upon a motion for summary judgment is limited to the materials

       designated to the trial court. Shi, 921 N.E.2d at 39. We draw all facts and

       reasonable inferences therefrom in favor of the nonmovant, and we review

       summary judgment decisions carefully to ensure a party was not improperly

       denied its day in court. Id.

[13]   If a real estate owner fails to pay property taxes, the property may be sold to

       satisfy the tax obligation. Schaefer v. Kumar, 804 N.E.2d 184, 191 (Ind. Ct. App.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 6 of 15
2004), trans. denied. Indiana statutes make clear the process required for tax

sales of real property with delinquent taxes.2

         A tax sale is purely a statutory creation, and material compliance
         with each step of the statute is required. While a tax deed creates
         a presumption that a tax sale and all of the steps leading to the
         issuance of the tax deed are proper, the presumption may be
         rebutted by affirmative evidence to the contrary. An order to
         issue a tax deed will be given if the court finds that the notices
         have been provided pursuant to the statutes. However, title
         conveyed by a tax deed may be defeated if the notices were not in
         substantial compliance with the manner prescribed by the
         pertinent statutes.

Iemma v. JP Morgan Chase Bank, N.A., 992 N.E.2d 732, 738 (Ind. Ct. App. 2013)

(internal quotations and citations omitted). “A tax deed is void if the former

owner was not given constitutionally adequate notice of the tax sale

proceedings.” Schaefer, 804 N.E.2d at 192; see Ind. Code § 6-1.1-25-16(7).

         Before the government may sell property due to unpaid property
         taxes, the Due Process Clause of the Fourteenth Amendment to
         the United States Constitution requires the government to
         provide the owner with “notice and opportunity for hearing
         appropriate to the nature of the case.” Marion Cnty. Auditor v.
         Sawmill Creek, 964 N.E.2d 213, 217 (Ind. 2012) (quoting Jones v.
         Flowers, 547 U.S. 220, 223, 126 S. Ct. 1708 (2006)). Due process
         does not require that a property owner receive actual notice
         before the government may take his property. Jones, 547 U.S. at

2
  The statutes governing tax sales and tax deeds have been amended since the events in this case occurred.
Unless otherwise noted, citations to these statutes are to the edition of the Indiana Code in effect at the time
of the 2014 tax sale.

Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017                Page 7 of 15
               226, 126 S. Ct. 1708. Rather, the government must provide
               notice reasonably calculated, under all the circumstances, to
               apprise interested parties of the pendency of the action and afford
               them an opportunity to present their objections. Id.

       Prince v. Marion County Auditor, 992 N.E.2d 214, 219 (Ind. Ct. App. 2013).

[14]   A person may defeat a tax deed only by proving one of the seven defects set

       forth in Indiana Code Section 6-1.1-25-16. Swami, Inc. v. Lee, 841 N.E.2d 1173,

       1177 (Ind. Ct. App. 2006), trans. denied. One such defect exists if the three

       notices required by Indiana Code Sections 6-1.1-24-4 (notice of tax sale), 6-1.1-

       25-4.5 (notice of the right of redemption), and 6-1.1-25-4.6 (notice of petition

       for tax deed) were not in substantial compliance with the requirements

       prescribed in those Sections. I.C. § 6-1.1-25-16(7); Schaefer, 804 N.E.2d at 191.

[15]   The notice of tax sale is governed by Indiana Code Section 6-1.1-24-4,3 which at

       the time of these events required the county auditor to send notice of the tax

       sale (1) by certified mail, return receipt requested, to the owner(s) of the real

       property “at the last address of the owner for the property as indicated in the

       records of the county auditor”; and (2) by regular first class mail to the owners

       from whom the certified mail return receipt was not signed and returned.” The

       statute at the time further provided,

       3
        The version of Indiana Code section 6-1.1-24-4 was effective from March 14, 2012 to December 31, 2014.
       The statute was subsequently amended by P.L. 247-2015, sec. 13, which became effective on January 1,
       2015.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017        Page 8 of 15
               If both notices are returned due to incorrect or insufficient
               addresses, the county auditor shall research the county auditor
               records to determine a more complete or accurate address. If a
               more complete or accurate address is found, the county auditor
               shall resend the notices to the address that is found in accordance
               with this section. Failure to obtain a more complete or accurate
               address does not invalidate an otherwise valid sale.

                                                      *****

               Failure by an owner to receive or accept the notice required by
               this section does not affect the validity of the judgment and order.
               The owner of real property shall notify the county auditor of the
               owner’s correct address. The notice required under this section is
               considered sufficient if the notice is mailed to the address or
               addresses required by this section.

[16]   Next, Indiana Code Section 6-1.1-25-4.5 governs notices of the right of

       redemption. The version in effect at the time of these events,4 provided in part

       that a person who purchases property at a tax sale must send notice of the sale

       and of the right of redemption “by certified mail” to “the owner of record . . . at

       the last address of the owner for the property, as indicated in the records of the

       county auditor”; and “any person with a substantial property interest of public

       record at the address for the person included in the public record that indicates

       the interest.” Indiana Code Section 6-1.1-25-4.5(d) provided that a notice that

       4
        The version of Indiana Code section 6-1.1-25-4.5 was effective from July 1, 2014 to December 31, 2015.
       The statute was subsequently amended by P.L. 236-2015, which became effective on January 1, 2016.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017          Page 9 of 15
       was mailed to “the last address of the owner for the property, as indicated in the

       records of the county auditor” is “considered sufficient.”

[17]   Finally, if the owner of record does not redeem the property from the tax sale

       within the required period, the purchaser may petition the trial court for

       issuance of a tax deed. I.C. § 6-1.1-25-4.6.5 The version in effect during the

       relevant period required that tax sale purchaser to provide “[n]otice of his filing

       of this petition . . . to the same parties and in the same manner as provided in

       section 4.5 of this chapter[.]” See I.C. § § 6-1.1-25-4.5, 6-1.1-25-4.6. Thus,

       Indiana Code Section 6-1.1-25-4.6 required that the notice of tax deed petition

       be sent by certified mail to “the last address of the owner for the property, as

       indicated in the records of the county auditor.” Notice sent in such a manner

       was “considered sufficient.” I.C. § 6-1.1-25-4.6(a).

[18]   Here, the record reveals that the three statutory notices were initially sent by

       certified mail; however, each was returned bearing “RETURNED TO

       SENDER,” “UNCLAIMED,” and “UNABLE TO FORWARD” markings.

       App. p. 87, 97, 98. The Auditor then sent the notices by regular first class mail,

       as required by the relevant statutes. See I.C. § 6-1.1-24-4(a) (In addition [to

       sending notice of tax sale to the owner via certified mail, “the county auditor

       5
         The version of Indiana Code section 6-1.1-25-4.6 was effective from July 1, 2014 to June 30, 2015. The
       statute was subsequently amended by P.L. 251-2015, sec. 22, which became effective on July 1, 2015.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017          Page 10 of 15
       shall mail a duplicate notice to the owner of record . . . by first class mail to the

       owners from whom the certified mail return receipt was not signed and

       returned”); see Flowers, 547 U.S. at 234-35 (holding that following up with

       regular mail after failed delivery of certified mail is an additional reasonable

       step that might increase chances of actual notice to the property owner.). It is

       undisputed that the Auditor also published the notice of tax sale in a

       newspaper.

[19]   The second set of notices, sent by regular first class mail, was not returned to

       the Auditor. Had both sets of notices been returned, the Auditor’s duty to

       search for a more complete or accurate address would have been triggered. See

       I.C. 6-1.1-24-4 (“If both notices are returned are returned due to incorrect or

       insufficient addresses, the county auditor shall research the county auditor

       records to determine a more complete or accurate address.”). Nevertheless, the

       Auditor researched the records of the Allen County Auditor’s Office to

       determine if a more complete or accurate address existed for JLP. See

       Appellant’s App. Vol. II p. 87. That the search ultimately proved fruitless

       because JLP failed to supply an updated address is not a failing of the Auditor.6

       6
        To be clear, a property owner’s failure to provide an auditor with an updated address does not relieve the
       auditor of his or her statutory duties. See Farmer’s Mut. Ins. Co. of Grant and Blackford Counties v. M Jewell, LLC,
       992 N.E.2d 751, 759 (Ind. Ct. App. 2013) (“[W]e cannot conclude that a landowner’s failure to provide the
       auditor’s office with a correct mailing address excuses the auditor’s failure to carry out his [or her] duties
       under [Indiana Code Section] 6-1.1-24-4.”).

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017                 Page 11 of 15
       See I.C. § 6-1.1-24-4(a) (owner of the real property at issue “shall notify the

       county auditor of the owner’s correct address”).

[20]   We reject JLP’s suggestion that the fact of the Allen County zoning

       administrator having JLP’s updated Pleasant Lake P.O. Box address indicates

       that the Auditor was derelict in failing to search all Allen County records to

       determine JLP’s new address. JLP has presented no evidence to explain how

       the zoning administrator found its address or how the Auditor could have

       similarly located the updated address information. We cannot impute to the

       Auditor a duty to conduct a county-wide, inter-agency electronic records

       search, when no such obligation exists under Indiana’s existing tax sale

       statutory scheme. See Flowers, 547 U.S. at 236 (“An open-ended search for a

       new address—especially when the State obligates the taxpayer to keep his

       address updated with the tax collector . . . imposes burdens on the State . . . .”).

       If the Legislature intends for the Auditor to undertake such a duty and to

       assume the attendant risks, it certainly knows how to do so.7

[21]   Nor can we, as JLP urges, apply either of the readily distinguishable federal

       cases upon which JLP relies. In Kelber, LLC, v. WVT, LLC, et al., 213 F. Supp.
7
        A decision to undertake an open-ended search not only imposes burdens upon the State, but is also
       potentially fraught with risk. Here, for instance, an open-ended search for an entity known only as “JLP”
       could steer an auditor’s office far afield.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017          Page 12 of 15
       3d 789, 791-92 (N.D. W.Va. Sept. 30, 2016), Kelber’s real property was sold at

       a tax sale. The purchaser requested that the state auditor send the certified

       notices of the tax sale proceedings to the purchaser’s list of persons entitled to

       redeem the property. The purchaser also asked that the notices be sent via

       regular first class mail and published. When the certified notices were returned

       as undeliverable, the purchaser took no further steps to provide notice to

       Kelber. Kelber is distinguishable because the purchaser’s duty to take additional

       reasonable steps to provide notice to Kelber was triggered and went unheeded.

       See Kelber, 213 F. Supp. 3d at 797 ([“Purchaser] not only failed to take further

       steps after the unsuccessful delivery, it also demonstrated no desire whatsoever

       to ascertain the results of its notification efforts. Essentially, it closed its eyes

       and hoped for the best.”). Such is not the case here, as we have discussed.

[22]   Also distinguishable is Caplash v. Johnson, 230 F. Supp. 3d 128 (W.D. N.Y. Jan,

       18, 2017), which involved federal immigration officials’ failure to pursue

       additional reasonable steps to notify a plaintiff of an outstanding USCIS request

       for evidence before denying his immigration petition. The Caplash court found

       that the immigration officials were specifically aware that Caplash would not

       receive the notice, but still failed to take additional steps to provide him with

       reasonable notice before denying his immigration petition. This distinction

       renders Caplash factually inapposite for purposes of analyzing JLP’s claims.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 13 of 15
[23]   Here, the Auditor substantially complied with the statutes that govern the

       notices, and the manner of service that the Auditor chose was reasonably

       calculated, under the circumstances, to apprise JLP of the pending tax sale

       proceedings and to afford JLP an opportunity to object. See Prince, 992 N.E.2d

       at 220; see also Sawmill Creek, 964 N.E.2d at 220 (determining that county

       auditor’s manner of service satisfied due process requirements, despite the

       property owner’s failure to receive actual notice, because Auditor published

       notices in multiple ways, mailed notices to all known addresses, and obtained a

       title search in an attempt to find additional addresses for the owner).

[24]   Based on the foregoing, we conclude that JLP was not denied due process, and

       the tax deed is valid; thus, the trial court properly denied JLP’s motion to set

       aside the tax deed. Additionally, no genuine issue of material fact exists

       regarding the superiority of BLN’s interest and title to the parcel, BLN’s status

       as fee simple owner of the parcel, and as to whether BLN is entitled to

       judgment as a matter of law. Accordingly, the trial court properly granted

       summary judgment in BLN’s favor in its action to quiet title.

                                                   Conclusion

[25]   We conclude that the trial court properly denied JLP’s motion to set aside the

       tax deed. The trial court did not err in granting summary judgment in BLN’s

       favor regarding BLN’s quiet title action. We affirm.

[26]   Affirmed.

       Court of Appeals of Indiana | Memorandum Decision 02A05-1703-MI-460| October 31, 2017   Page 14 of 15
May, J., and Bradford, J., concur.

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