Central Props. v. Fairway Gardenhomes, LLC

• Decision Date: 16 September 2016
• Docket Number: NO. 2016 CA 0113,NO. 2016 CA 0112,NO. 2016 CA 0111,2016 CA 0111,2016 CA 0112,2016 CA 0113
• Citation: 204 So.3d 240
• Parties: Central Properties v. Fairway Gardenhomes, LLC, et al Husker Partners /US Bank d/b/a Husker Partners v. Fairway Gardenhomes, LLC, et al Husker Partners /US Bank d/b/a Husker Partners v. Fairway Gardenhomes, LLC, et al
• Court: Court of Appeal of Louisiana — District of US

204 So.3d 240

Central Properties

v.Fairway Gardenhomes, LLC, et al

Husker Partners /US Bank d/b/a Husker Partners

v.Fairway Gardenhomes, LLC, et al

Husker Partners /US Bank d/b/a Husker Partners

v.Fairway Gardenhomes, LLC, et al

NO. 2016 CA 0111

NO. 2016 CA 0112

NO. 2016 CA 0113

Court of Appeal of Louisiana, First Circuit.

September 16, 2016

Melissa T. Castille, Vy Van Ky, Baton Rouge, LA, Thomas M. Flanagan, Andy Dupre, Camille E. Gauthier, New Orleans, LA, Attorneys for Plaintiffs-Appellants, Central Properties and Husker Partners

E. B. Dittmer, II, Mandeville, LA, Attorney for Defendant-Appellee-2nd Appellant, Resource Bank

BEFORE: HIGGINBOTHAM, THERIOT, AND CHUTZ, JJ.

HIGGINBOTHAM, J.

These consolidated matters arose out of three actions to quiet title on property. The actions were brought by tax sale purchasers holding tax sale certificates acquired during the 2010 St. Tammany Parish tax sale. The district court ultimately ruled that insufficient notice had been given to a mortgagee, and dismissed the actions to quiet title. This appeal concerns what tax sale notice is constitutionally required to be given a mortgagee pursuant to the 2008 comprehensively revised law that relates to the payment and collection of property taxes, tax sales, and redemptions.

FACTS AND PROCEDURAL HISTORY

The subject properties include three separate condominiums, units 13, 14, and 15, owned by Fairway Gardenhomes, LLC (Fairway), and located in Covington, Louisiana. In January 2009, the mortgagee, Resource Bank, granted a loan to Laporte Family Properties, LLC (Laporte), which was secured by a multiple indebtedness mortgage covering the subject properties. The mortgage was recorded in the St. Tammany Parish public records on January 9, 2009.

In 2009, Fairway failed to pay the ad valorem taxes that were due on the subject properties. As a result of the tax delinquency, a tax sale was conducted by the Sheriff and Ex-Officio Tax Collector for St. Tammany Parish (the tax collector) on June 23, 2010. The subject properties were sold to tax sale purchasers, Central Properties (Central) and Husker Partners/U.S. Bank, d/b/a Husker Partners (Husker), for the amount of taxes, interest, and costs due on each condominium unit.¹ Individual tax sale certificates were issued to Central for unit 14, and Husker for units 13 and 15.

The tax sale certificates were each recorded in the St. Tammany Parish public records on July 8, 2010, explicitly stating that the owner, Fairway, had three years from the date of recordation, or until July 8, 2013, to redeem the subject properties. The tax sale certificates were silent, however, as to the mortgagee's, Resource Bank's, interests in the subject properties. The tax collector apparently mailed pre-sale and post-sale notices to Fairway, but those notices were returned unclaimed.² Conversely, the record reflects that the tax collector did not actually send any pre-sale or post-sale notices to Resource Bank.

A little over two years after the tax sales, on October 25, 2012, through certified and regular First Class mail, the tax sale purchasers, Central and Husker, mailed multiple notices of the right to redeem the tax sales of the subject properties to Fairway, Laporte, and Resource Bank.³ These are the key post-sale notices relied on by Central and Husker that they insist cured any pre-sale notice problems. It is undisputed that Fairway and Laporte each received Central and Husker's certified mail notices of the right to redeem through their registered agent for service of process, Leroy J. Laporte, Jr., on October 29, 2012. However, even though return receipts for Resource Bank's right to redeem notices were signed by someone with the initials "JL" on October 27, 2012, and the notices were mailed to Resource Bank's main office address as noted on the recorded mortgage documents, Resource Bank disputes receipt of the notices. Resource Bank also denies that there was any employee working at Resource Bank in 2012 who had the initials of JL.

None of the subject properties were timely redeemed by the July 8, 2013 deadline for redemption. Consequently, on December 18, 2013, Central and Husker filed three separate petitions to quiet their tax titles on the subject properties. In each of the three lawsuits, which were later consolidated for trial. Central and Husker alleged that Fairway, Laporte, and Resource Bank were all duly notified of their statutory rights to redeem the subject properties more than six months prior to the expiration of the three-year redemptive period. Resource Bank timely answered the petitions and filed reconventional demands against Central and Husker, seeking to invalidate the tax sale certificates as absolute ities due to the undisputed lack of pre-sale notices, as well as insufficient/unreasonable post-sale notices of its right to redeem. Resource Bank further alleged that, to the extent the 2008 revision to the law governing tax sale notices may have limited its right to annul the sales for lack of pre-sale notice, the law was unconstitutional.

A bench trial was held on July 1, 2015, at which time all evidence was admitted without objection and the parties entered certain stipulations, including that: (1) the subject properties had not been timely redeemed, (2) Resource Bank made no formal statutory request for notice, and (3) no pre-sale notice of either the tax delinquencies or tax sales was given to Resource Bank. After taking the matter under advisement, the district court issued written reasons concluding that Central and Husker's post-sale notices of the right to redeem mailed to Resource Bank were insufficient. The district court seemingly focused on the credibility of Resource Bank's vice president's testimony that there was no record of the notices ever being received by Resource Bank. The district court made no ruling as to the constitutionality of the 2008 revision as it related to the lack of pre-sale notification to Resource Bank. Consequently, in a judgment signed on August 17, 2015, the district court simply denied Central and Husker's petitions to quiet tax title, and allowed Resource Bank thirty days to redeem the subject properties.

Central and Husker suspensively appealed, maintaining that the district court legally erred when it focused on whether Resource Bank actually received the post-sale notices of the right to redeem. Resource Bank answered the appeal, challenging the district court's failure to grant its reconventional demands seeking to annul the tax sales, since it was undisputed that Resource Bank was not given any pre-sale notice. Further, Resource Bank argues that Central and Husker's efforts to provide post-sale notice of Resource Bank's right to redeem were unreasonable/insufficient. Central and Husker insist, however, that under the 2008 statutory revision, which became effective January 1, 2009, all problems with pre-sale notice requirements are cured by the sending of post-sale redemption notices. Resource Bank counters that if the 2008 revision is interpreted to have basically eliminated pre-sale notice requirements for mortgagees, the revision violates due process of law. Resource Bank further argues that post-sale notice of the right to redeem does not cure the lack of pre-sale notice.

Upon receipt of the record, this court, ex proprio motu , issued a rule to show cause why the appeal should not be dismissed, because the district court's judgment appeared to lack appropriate decretal language and the judgment further appeared to be conditional in that it was unclear whether any party had been dismissed. The matter was remanded to the district court for the limited purpose of allowing the district court to sign an amended judgment and supplement the appellate record with the amended judgment. Pursuant to this court's order and by consent, the parties jointly submitted a proposed judgment that addressed the deficiencies outlined by this court. The district court signed an amended judgment on March 9, 2016, designated it as a partial final judgment with no just reason for delaying the appeal, vacated the previous August 17, 2015 judgment, and ordered that the record on appeal be supplemented with the amended judgment.

After supplementation of the appellate record, another panel of this court maintained the appeal, but reserved a final determination to this panel, which was assigned to hear the merits of the appeal. Accordingly, we have reviewed the amended judgment and considered whether the district court's designation of "no just reason" to delay the appeal was proper according to the factors listed in R.J. Messinger, Inc. v. Rosenblum , 2004–1664 (La. 3/2/05), 894 So.2d 1113, 1122–23. We have determined that the amended judgment contains the appropriate decretal language to be considered a partial final judgment, since all of the claims of Central and Husker against Resource Bank were dismissed, and Resource Bank's reconventional demands against Central and Husker were dismissed as moot. Further, because the judgment affects interests in real property, we find it is in the interest of all the parties to have the issues decided promptly even though Central and Husker's claims against Fairway and Laporte have not yet been dismissed. Appeals are favored in the law, and doubts should be resolved in favor of maintaining appeals. Thus, we will maintain this appeal, and now consider the merits of these consolidated actions to quiet tax title.

LAW AND ANALYSIS

By means of 2008 La. Acts, No. 819, effective January 1, 2009, the Louisiana Legislature comprehensively amended, restated, and organized the law governing the payment and collection of property taxes, tax sales, and adjudicated property. Act 819 re-enacted Chapter 5 of Subtitle III of Title 47 of the Louisiana Revised Statutes. Some of the stated purposes of Act 819, also known as the 2008 revision, were to encourage the payment and efficient collection of property taxes, satisfy the requirements of due...