Court Opinion

ID: 2818715
Source: CourtListenerOpinion
Date Created: 2015-07-21 15:14:05.66518+00
Date Added: 2024-06-11T12:24:04.154088
License: Public Domain

Jul 21 2015, 10:24 am

      ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
      Megan L. Craig                                             Patrick A. Schuster
      John R. Craig                                              David E. Braatz
      Craig, Craig & Marco, LLC,                                 Patrick A. Shuster & Associates
      Crown Point, Indiana                                       Crown Point, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      The First Bank of Whiting, as                              July 21, 2015
      Trustee of Trust dated 12/30/86                            Court of Appeals Case No.
      a/k/a Trust No. 1865,                                      45A04-1410-MI-476
                                                                 Appeal from the Lake Circuit Court
      Appellant,
                                                                 Cause No. 45C01-1207-MI-118
              v.
                                                                 The Honorable George Paras, Judge
      524, LLC,                                                  The Honorable Robert C. Vann,
                                                                 Magistrate
      Appellee

      Friedlander, Judge.

[1]   On August 27, 2012, 524 LLC (524) purchased two parcels of real property (the

      Parcels) in Lake County, Indiana at a tax sale. After the time for redemption

      expired on August 27, 2013, 524 filed a Petition for Issuance of Deed. The First

      Bank of Whiting (the Trustee), as Trustee of Trust Dated 12/30/86 a/k/a Trust

      No. 1865 (the Trust), filed an objection to 524’s petition. The Trust appeals the
      Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015                       Page 1 of 13
      granting of 524’s petition and the entry of 7/17/2015 Order Directing the

      Auditor of Lake County, Indiana to issue Tax Deed with respect to the Parcels.

      The following issues are presented for review:

              1.       Did the tax sale notices substantially comply with the
                       requirements of Ind. Code Ann. § 6-1.1-24-4,1 I.C. § 6-1.1-25-
                       4.5,2 and I.C. § 6-1.1-25-4.6?3

              2.       Was the trial court’s order to issue tax deeds untimely?

[2]   We affirm.

[3]   The facts are that in 1987, ownership of the Parcels was transferred to the First

      Bank of Whiting as trustee of the Trust, which owned the Parcels in favor of

      Susan Farruggio, who was the designated beneficiary of the Trust. It appears

      that the Trust was created by Farruggio’s father, John Baber. On July 3, 1990,

      an address change for the Trust was entered in the Lake County Auditor’s

      Property Records. The new address was: “First Bank of Whiting as Trustee of

      Trust 1865, C/O SSAY Corp. 2135 Westchester, Westchester, IL 60154”.

      1
         (West, Westlaw current with all 2015 First Regular Session of the 119th General Assembly legislation
      effective through June 28, 2015).
      2
        (West, Westlaw current with all 2015 First Regular Session of the 119th General Assembly legislation
      effective through June 28, 2015).
      3
        (West, Westlaw current with all 2015 First Regular Session of the 119th General Assembly legislation
      effective through June 28, 2015).

      Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015                          Page 2 of 13
      Transcript at 183. 2135 Westchester Boulevard, Westchester, IL 60154 was

      John Baber’s home address.

[4]   The Parcels were scheduled to be sold at a tax sale on August 27, 2012. The

      auditor’s pre-sale notices pursuant to I.C. § 6-1.1-24-4 (Section 4 notice) were

      mailed via certified mail to the First Bank of Whiting as Trustee at 2135

      Westchester Blvd., Westchester, IL 60154. A signed receipt reflects that the

      notices were received at 1:15 p.m. on July 9, 2012 by Mike Othman at that

      address. The Parcels were sold on August 27 to 524, which was the high bidder

      for both Parcels. At the time of sale, as had been the case since 1987, the Trust

      was the owner of record of both Parcels, and the address of record in the Lake

      County Auditor’s Office for the Trust was: “The First Bk of Whiting TR TR

      1865[,] 2135 Westchester C/O SSAY CORP[,] WESTCHESTER, IL 60154”.

      Exhibit Volume, Exhibit 4.

[5]   Following the sale, notices of the right of redemption pursuant to I.C. § 6-1.1-

      25-4.5 (Section 4.5 notice) were mailed via certified mail to the following

      addresses:

              The First Bank of Whiting as Trustee of
              Trust dtd 12/30/86 a/k/a Trust No. 1865
              Attn: Highest Ranking Officer
              2135 Westchester
              Westchester, IL 60154

              The First Bank of Whiting as Trustee of
              Trust dtd 12/30/86 a/k/a Trust No. 1865

      Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015   Page 3 of 13
               n/k/a Centier Bank
               Attn: Highest Ranking Officer
               PO Box 550
               Whiting, IN 46394-1110

               The First Bank of Whiting as Trustee of
               Trust dtd 12/30/86 a/k/a Trust No. 1865
               c/o Michael E. Schrage, R.A.
               600 E. 84th Avenue
               Merrillville, IN 46410

               The First Bank of Whiting as Trustee of
               Trust dtd 12/30/86 a/k/a Trust No. 1865
               Attn: Highest Ranking Officer
               1500 119th Street
               Whiting, IN 46394

      Exhibit Volume, Exhibit 5. The Section 4.5 notice sent by certified mail to 2135

      Westchester was returned as unclaimed,4 as was the notice sent to the E. 84th St.

      address. The other two, however, were received and signed for by the Trustee.

      A Section 4.5 notice sent to 2135 Westchester by regular first class mail was not

      returned to the sender. In addition, the Section 4.5 notice was published in the

      local newspaper, the Lowell Tribune.

[6]   After the expiration of the redemption period, 524 sent notices for application

      for deed via certified mail pursuant to I.C. § 6-1.1-25-4.6 (Section 4.6 notice) to

      4
          The record reveals that John Baber died on September 9, 2012.

      Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015    Page 4 of 13
      the same four addresses. The Trust received and signed for the mailing at three

      of the four addresses, with the lone exception being the mail sent to 2135

      Westchester. That certified mail was returned. A Section 4.6 notice sent to the

      same address by regular first class mail, however, was not returned to the

      sender. The Section 4.6 notice was also published in the Lowell Tribune.

[7]   On August 30, 2013, after the redemption period had expired, 524 filed a

      Verified Petition for Issuance of Deed. On October 4, 2013, the Trust filed an

      Objection to the Tax Sale of Property and Issuance of Deed. On April 22,

      2014, a bench trial was conducted upon 524’s petition and the Trust’s objection

      with respect to both Parcels. Concluding that all notices required by law were

      given and, in fact, the property owner actually received those notices, on July

      17, 2014, the trial court entered an order in favor of 524, directing that tax

      deeds should be issued to 524 with respect to both Parcels.

                                                     1.
[8]   The Trust contends that 524 did not comply with the requirements of I.C. § 6-

      1.1-24-4, I.C. § 6-1.1-25-4.5, and I.C. § 6-1.1-25-4.6 in that it did not serve

      notice to the property owner and to all persons and entities with a substantial

      interest of public record pursuant to those provisions. More specifically, the

      Trust contends that the failure of the Lake County Auditor and 524 to include

      “c/o SSAY Corp” in the Sections 4.5 and 4.6 notices mailed to 2135

      Westchester rendered all efforts to provide notice defective. The Trust contends

      that the failure to receive proper notice violated its due process rights, and

      therefore the issuance of tax deeds to the Parcels must be reversed.

      Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015      Page 5 of 13
[9]    Property may be subject to sale in settlement of delinquent taxes if the

       property’s owner fails to pay the applicable property taxes. 2011 Marion Cnty.

       Tax Sale v. Marion Cnty. Auditor, 14 N.E.3d 883 (Ind. Ct. App. 2014). Before the

       government may do so, however, the Due Process Clause of the Fourteenth

       Amendment to the United States Constitution requires it to provide the owner

       with “notice and opportunity for hearing appropriate to the nature of the case.”

       Id. at 890 (quoting Jones v. Flowers, 547 U.S. 220, 223 (2006)). This court has

       summarized the applicable notice requirements as follows:

               In Indiana, title conveyed by a tax deed may be defeated if three
               required notices, specifically the notice of tax sale, the notice of the
               right of redemption, and the notice of petition for the tax deed, are not
               in substantial compliance with statutory requirements. The notice of
               tax sale is governed by Indiana Code section 6–1.1–24–4 (2007), which
               requires the county auditor to send notice of the tax sale by certified
               mail to the owner or owners of the real property at their last known
               address.
               Next, Indiana Code section 6–1.1–25–4.5 (2007) governs notices of the
               right of redemption. According to that statute, a person who purchases
               property at a tax sale must send the owner of the property a notice of
               the sale and of the right of redemption via certified mail at the last
               address for the owner as indicated in the county auditor’s records.
               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. Ind. Code § 6–1.1–25–4.6 (2007). The
               purchaser must provide notice of the petition to the owner of record in
               the same manner set forth in Indiana Code section 6–1.1–25–4.5. Ind.
               Code § 6–1.1–25–4.6.
[10]   Prince v. Marion Cnty. Auditor, 992 N.E.2d 214, 219-220 (Ind. Ct. App. 2013),

       trans. denied.

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015          Page 6 of 13
[11]   The Trust contends that the notices sent to the address listed as that of the

       owner of the Parcels on the real estate assessment transfer cards in the auditor’s

       office were defective in that they did not include the complete mailing address

       (i.e., did not include “c/o SSAY Corp”). As a result, the Trust contends, the

       taxpayer – in this case the Trust – did not receive proper notice. 524 responds

       that it substantially complied with the statutory requirements and therefore the

       notices were sufficient.

[12]   In addressing these arguments, we are mindful that “the determination of

       whether a notice ‘substantially complied’ with the statutory requirements ‘is a

       determination based on the facts and circumstances of the case and is a question of

       fact.’” First Am. Title Ins. Co. v. Calhoun, 13 N.E.3d 423, 433 (Ind. Ct. App. 2014)

       (quoting In re Sale of Real Prop. with Delinquent Taxes or Special Assessments, 822

       N.E.2d 1063, 1074 (Ind. Ct. App. 2005), trans. denied) (emphasis in original).

       The notices in question must be reasonably calculated, under all the

       circumstances, to apprise any interested parties of the pendency of the action

       and must afford them an opportunity to present objections. 2011 Marion Cnty.

       Tax Sale v. Marion Cnty. Auditor, 14 N.E.3d 883. “But if with due regard for the

       practicalities and peculiarities of the case these [notice] conditions are

       reasonably met, the constitutional requirements are satisfied.” Id. at 890

       (quoting Marion Cnty. Auditor v. Sawmill Creek, 964 N.E.2d 213, 219 (Ind.

       2012)); see also Anton v. Davis, 656 N.E.2d 1180, 1183 (Ind. Ct. App. 1995)

       (“while all ‘essential acts’ concerning [a] tax sale must be properly performed,

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015           Page 7 of 13
       substantial compliance with the statutory procedures will satisfy the due process

       requirements”) (internal citation to authority omitted)).

[13]   In Porter v. Bankers Trust Co. of Cal., 773 N.E.2d 901 (Ind. Ct. App. 2002), Porter

       asked this court to reverse the trial court’s decision to set aside tax deeds

       following an objection to the deeds by the delinquent owners of those properties

       on grounds that they had not received notice under Section 4.6 of the request

       for the issuance of a tax deed. Porter responded that he had substantially

       complied with the notice statutes, including Section 4.6, and therefore that the

       notice was valid. It was undisputed that Porter sent Section 4 notices of the tax

       sale to the delinquent owners, as well as notice of the right to redeem pursuant

       to Section 4.5, but it was also undisputed that he failed to send notice for the

       request for an order to issue a tax deed under Section 4.6. Porter claimed that

       because the delinquent owners had actual notice of the tax sale, the failure to

       send Section 4.6 notice of the application for deed was not fatal to his deed. In

       rejecting that argument, we discussed the concept of substantial compliance in

       this context. We noted that actual notice of the sale (under Section 4.5) does

       not obviate the need for notice under Section 4.6 because, without notice under

       Section 4.6, the deficient owners did not have the opportunity to intervene and

       oppose the issuance of the tax deeds. But, citing Anton v. Davis, 656 N.E.2d

       1180, we determined in Porter that a purchaser, or the auditor’s office,

       substantially complies with the statutes so long as the purchaser, or auditor’s

       office, attempted in good faith to send the requisite notice and the delinquent

       property owner was not harmed by the alleged deficiencies in that notice.        In

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015     Page 8 of 13
       other words, a delinquent owner’s due process rights are not violated where,

       despite deficiencies in the notice sent, the delinquent owner has notice of the

       sale, notice of the redemption period, and notice of a petition for a tax deed

       following the redemption period.

[14]   It is undisputed that the Trust had long owned the Parcels at the time of the tax

       sale. It is also undisputed that, notwithstanding the failure to include “c/o

       SSAY Corp” in the address label on the various notices, most notably the one

       sent to 2135 Westchester, the Trustee actually received pre-sale notices of the

       tax sale, received Section 4.5 notice of the right to redeem, and received Section

       4.6 notice of the hearing on the issuance of tax deeds. It is also undisputed that

       those notices were sufficient to enable the Trust to timely file an objection to the

       issuance of tax deeds and appear with counsel at the hearing on the issuance of

       those deeds. For purposes of substantial compliance, it is of no moment that

       less than all four copies of the notices that were sent out during the course of

       these proceedings reached the intended recipient. The presale notices mailed to

       the Trustee at 2135 Westchester Blvd., Westchester, IL 60154 were received

       and signed for at that address. Copies of the Section 4.5 notice of right of

       redemption were sent to four different addresses and two of those four were

       received and signed for via certified mail on behalf of the Trustee. The Section

       4.5 notice was also published in the Lowell Tribune. Finally, copies of the

       Section 4.6 notice of application for issuance of deeds were sent to four different

       addresses, and the representative of the Trustee received and signed for the

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015    Page 9 of 13
       certified mailing at three of those four addresses. The Section 4.6 notice was

       also published in the Lowell Tribune.

[15]   On April 22, 2014, a bench trial was conducted on the Trust’s objection to the

       issuance of a tax deed. We understand that the Trust contends that the

       mailings should have been sent to the Westchester address “c/o SSAY Corp”

       because that was the owner’s listed address in the auditor’s office. In this

       context, however, “SSAY Corp” was merely a conduit by which the required

       notices were to be delivered to the owner, the Trust. SSAY Corp. simply did

       not have an ownership or beneficial interest in the property. Thus, it did not

       matter whether SSAY Corp., as a conduit, received notice. It mattered only

       that the Trust did. Moreover, the beneficiary and the Trust, by the Trustee,

       appeared by counsel at the hearing to contest 524’s request. Under these

       circumstances, we conclude that the various notices substantially complied with

       the applicable rules and therefore that the Trust’s due process rights were not

       violated.

                                                      2.
[16]   The Trust contends the trial court’s order for deed was untimely. Pursuant to

       the Trust’s interpretation of I.C. § 6-1.1-25-4.6(b), the trial court was required to

       enter an order directing the County auditor to issue tax deeds no later than

       sixty-one days after the Petition for Issuance of Tax Deed was filed. As the

       Trust notes, the order was filed on July 17, 2014, which was almost a year after

       524 filed a motion asking the court to order the auditor to issue tax deeds for

       the Parcels.

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015    Page 10 of 13
[17]   I.C. § 6-1.1-25-4.6(b)5 states:

               (b) Not later than sixty-one (61) days after the petition is filed under
               subsection (a), the court shall enter an order directing the county
               auditor (on the production of the certificate of sale and a copy of the
               order) to issue to the petitioner a tax deed if the court finds that the
               following conditions exist:
                        (1) The time of redemption has expired.
                        (2) The tract or real property has not been redeemed from the
                        sale before the expiration of the period of redemption specified
                        in section 4 of this chapter.
                        (3) Except with respect to a petition for the issuance of a tax
                        deed under a sale of the certificate of sale on the property under
                        IC 6-1.1-24-6.1 or IC 6-1.1-24-6.8, or with respect to penalties
                        described in section 4(k) of this chapter, all taxes and special
                        assessments, penalties, and costs have been paid.
                        (4) The notices required by this section and section 4.5 of this
                        chapter have been given.
                        (5) The petitioner has complied with all the provisions of law
                        entitling the petitioner to a deed.

               The county auditor shall execute deeds issued under this subsection in
               the name of the state under the county auditor’s name. If a certificate
               of sale is lost before the execution of a deed, the county auditor shall
               issue a replacement certificate if the county auditor is satisfied that the
               original certificate existed.
       Pursuant to the terms of the statute, the trial court must enter an order directing

       the county auditor to issue a tax deed within sixty-one days of the time of the

       filing of the petition for tax deed, but only after certain enumerated conditions

       5
         Section 4 has been significantly amended by 2015 Ind. Legis. Serv. P.L. 236-2015 (S.E.A.), but the
       amendments do not take effect until January 1, 2016.

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015                         Page 11 of 13
       are met. The fifth condition is that the petitioner has complied with all

       requirements that entitle the petitioner to the requested deed. The language of

       subsection (b)(1)-(5) focuses upon affirmative steps that a petitioner must

       undertake and accomplish in order to be entitled to a tax deed. It would seem

       in this case that 524 accomplished all of those steps upon the August 28, 2013

       filing of its motion asking the court to order the auditor to issue a tax deed for

       the Parcels. We note, however, that the Trust objected to that request and the

       matter was set for hearing on April 22, 2014. Were we to adopt the Trust’s

       interpretation of this statute, the trial court would have been required to enter

       its order directing the auditor to issue a tax deed for the Parcels almost six

       months before it conducted the hearing to determine whether 524’s petition

       should be granted over the Trust’s challenge in the first place. This surely

       cannot be what the Legislature intended.

[18]   Rather, we conclude that there is implicit in the statute a sixth condition, which

       is that the petitioner is legally entitled to a tax deed after completing all of the

       requisite steps. In cases, such as here, where the petition for an order directing

       a county auditor to issue a tax deed has been challenged, such entitlement is not

       established until the court rules on the validity of the challenge, and

       concomitantly the validity of the request for an order directing the auditor to

       issue the tax deed. In other words, under such circumstances, pursuant to I.C.

       § 6-1.1-25-4.6(b), a trial court has sixty-one days, after resolving a challenge to a

       petitioner’s request for a tax deed in favor of the petitioner, to enter an order directing

       the auditor to issue the deed.

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015           Page 12 of 13
[19]   In the present case, the trial court’s rejection of the Trust’s challenge was

       simultaneous with its order directing the auditor of Lake County to issue the tax

       deed for the Parcels. Therefore, we conclude the order was timely pursuant to

       I.C. § 6-1.1-25-4.6(b).

[20]   Judgment affirmed.

       Baker, J., and Najam, J., concur.

       Court of Appeals of Indiana | Opinion 45A04-1410-MI-476 |July 21, 2015    Page 13 of 13