State ex rel. Klineline v. Blackhurst

Decision Date16 February 1988
Docket NumberNos. 16973,17062,s. 16973
PartiesSTATE of New Mexico, ex rel. Paul KLINELINE, Petitioner, v. Hon. H.R. BLACKHURST, District Judge, Respondent. Henry DEATON and Jane Deaton, Plaintiffs-Appellees, v. Paul KLINELINE and Juanita Klineline, Defendants-Appellants.
CourtNew Mexico Supreme Court
OPINION

APODACA, Judge.

Defendants Paul and Juanita Klineline, husband and wife (the Klinelines), filed a motion for rehearing, which we granted. The unpublished decision filed on October 28, 1987 is withdrawn, and the following opinion is substituted in its place.

The Klinelines appeal the trial court's judgment in favor of plaintiffs Henry and Jane Deaton, husband and wife (the Deatons). After having purchased certain residential property (residence) from the Property Tax Division of the Taxation and Revenue Department (the Division) at a tax sale, the Deatons filed suit against the Klinelines to eject them from the residence. The trial court, concluding that the sale requirements of the Property Tax Code, NMSA 1978, Sections 7-35-1 to 7-38-93 (Repl.Pamp.1986 and Supp.1987) (the Code), had been complied with, held that the tax sale was valid and that the Deatons were thus the lawful owners.

We disagree with the trial court's holding and reverse its judgment.

After filing this appeal, the Klinelines petitioned this Court for an alternative writ of prohibition or of superintending control. We granted the petition and ordered a stay of proceedings, reserving decision on the question of whether a permanent writ should issue until this appeal was decided. We consolidated the appeal, Cause No. 17,062, with the permanent writ hearing in Cause No. 16,973.

FACTS

The Klinelines have been married for forty-one years. For most of the marriage, Mrs. Klineline has been mentally ill, having been diagnosed as a chronic paranoid schizophrenic. She was institutionalized intermittently throughout the 1960s but since then has not been hospitalized, despite her continuing bizzare behavior. One of the manifestations of Mrs. Klineline's illness was her belief that her husband was dead and that Klineline was an imposter posing as her deceased husband.

In 1978, the Klinelines paid off a real estate mortgage against the residence. The property taxes on the residence were included in the monthly mortgage payments, and the mortgage company had been paying the taxes annually. Having paid off the mortgage, the Klinelines became directly responsible for making the tax payments, which they failed to do. The taxes became delinquent for the years 1978 through 1981 inclusive.

The Division, as required by the Code, mailed a certified letter, return receipt requested, to the Klinelines at the residence. The residence was located at the address shown on the most recent tax schedule. The letter notified them of the delinquency and of an imminent sale of the residence. Mrs. Klineline apparently did not answer the front door when the postal carrier attempted delivery of the letter. Presumably, she destroyed the notice or slip left in the mailbox, which informed the Klinelines of the attempted delivery, without telling Klineline, "the imposter." The Division later received the return receipt form and the certified letter marked "unclaimed." In addition to mailing the certified letter to the Klinelines, the Division posted a "red-tag" notice of delinquency at the residence, pursuant to its own administrative procedures. This "red-tag" did not give the property owner notice of the actual sale, but only of the delinquency. Finally, as required by statute, notice of the sale, together with the description of the property, was published in a daily newspaper. See Sec. 7-38-67(B).

ISSUE

Whether the sale of the residence by the Division was valid under the provisions of the Code, thus conveying title to the purchasers at the tax sale.

Based on our discussion below, we answer this question negatively and conclude that the Division failed to comply with the notice requirements of the Code, thus invalidating the sale.

DISCUSSION

We need not reach the due process arguments of the parties. See Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983) and Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), in which the United States Supreme Court held that a state must provide notice reasonably calculated to apprise interested parties of a pending sale and to afford them an opportunity to present their objections, under the due process clause of the fourteenth amendment. 339 U.S. at 314, 70 S.Ct. at 657. Instead, we address the narrower issue stated above.

Because this issue alone controls the disposition of this appeal, it is not relevant to our determination that the Division, in addition to attempting delivery of the certified letter, "red-tagged" the residence and published notice of the sale in a newspaper. Neither of these actions constituted a proper substitution for the notice requirements of Section 7-38-66(C), for our interpretation of the statute does not permit for alternative methods of notice. Instead substantial compliance with the express terms of the statute is required for the sale to be valid.

We first summarize the various principles of statutory construction that are pertinent to our inquiry. In construing a particular statute, a reviewing court's central concern is to determine and give effect to the intent of the legislature. Smith Mach. Corp. v. Hesston, Inc., 102 N.M. 245, 694 P.2d 501 (1985). In determining this intent, we look primarily to the language used, yet may also consider the history and background of the subject statute. First Nat'l Bank v. Southwest Yacht & Marine Supply Corp., 101 N.M. 431, 684 P.2d 517 (1984). This court must give the words used in the statute their ordinary meaning unless the legislature indicates a different intent. State v. Rodriguez, 101 N.M. 192, 679 P.2d 1290 (Ct.App.), cert. denied, 101 N.M. 189, 679 P.2d 1287 (1984). Although we cannot add a requirement that is not provided for in the statute, Amerada Hess Corp. v. Adee, 106 N.M. 422, 744 P.2d 550 (Ct.App.), cert. denied, 106 N.M. 405, 744 P.2d 180 (1987), and cannot read into it language that is not there, we do read the act in its entirety and construe each part in connection with every other part to produce a harmonious whole. General Motors Acceptance Corp. v. Anaya, 103 N.M. 72, 703 P.2d 169 (1985). All parts of an act must thus be read together. New Mexico Hosp. Ass'n v. A.T. & S.F. Memorial Hosps., Inc., 105 N.M. 508, 734 P.2d 748 (1987).

Finally, we must consider the established law on forfeiture, since the statute in question is in substance a forfeiture statute, barring an owner's claim to his property. Forfeitures are not favored by the courts in New Mexico. State v. Sunset Ditch Co., 48 N.M. 17, 145 P.2d 219 (1944). A corollary of the above principle is that statutes are construed strictly against forfeiture. See State v. Ozarek, 91 N.M. 275, 573 P.2d 209 (1978). We previously applied this principle in Hargrove v. Lucas, 56 N.M. 323, 243 P.2d 623 (1952) (in a quiet title action brought by plaintiff under a tax deed acquired from the state, plaintiff did not lose title by failing to record deed within one year from date) (citing 37 C.J.S. Forfeitures Sec. 4 (1943)).

The New Mexico Legislature in 1973 eliminated the former property owner's right of redemption, that is, the right to repurchase. See 1973 N.M. Laws, ch. 258 Section 156, repealing former Act, codified in part at NMSA 1953, Repl.Vol. 10 (1961), Sections 72-8-1 to -52.

Section 7-38-66 specifies the Division's duties in connection with the sale of property to satisfy delinquent property taxes. Specifically, Section 7-38-66(A) requires that the Division notify the property owner of the impending sale at least twenty days before the tax sale, by certified mail, return receipt requested, at the address shown on the most recent tax schedule. Section 7-38-66(C), which contains the critical language at issue here, provides as follows:

Failure of the division to mail the notice by certified mail, return receipt requested, or failure of the division to receive the return receipt shall invalidate the sale; provided, however, that the receipt by the division of a return receipt indicating that the taxpayer does not reside at the address shown on the most recent property tax schedule shall be deemed adequate notice and shall not invalidate the sale. (Emphasis added.)

The statutory language under the new law makes the sale final, subject only to the challenges found in Section 7-38-70(D), which strictly limit the grounds upon which a successful attack on a tax deed issued by the state may be made. One of the grounds is a showing by the taxpayer that the Division failed to mail the notice or to receive the return receipt, as required under Section 7-38-66(C). Section 7-38-70(D), then, is said to represent the "curative feature" under the new law. See Cano v. Lovato, 105 N.M. 522, 734 P.2d 762 (Ct.App.1986), cert. quashed, 105 N.M. 438, 733 P.2d 1321 (1987). The section further provides that when the property is sold for delinquent taxes, a deed from the Division to the purchaser shall convey all of the former owner's interest if the real property was sold substantially in accordance with the Code, of which Section 7-38-66(C) is a part.

Our task, then, is to construe Section 7-38-66(C) to give effect to the legislative intent. The above summary of Sections 7-38-66(C) and 7-38-70(D),...

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