M&M Inv. Grp., LLC v. Ahlemeyer Farms, Inc., 03S04–1211–CC–645.

Docket NºNo. 03S04–1211–CC–645.
Citation994 N.E.2d 1108
Case DateSeptember 26, 2013
CourtSupreme Court of Indiana

994 N.E.2d 1108

M & M INVESTMENT GROUP, LLC, Appellant (Petitioner below),
AHLEMEYER FARMS, INC. and Monroe Bank, Appellees (Respondents below).

No. 03S04–1211–CC–645.

Supreme Court of Indiana.

Sept. 26, 2013.

[994 N.E.2d 1110]

Jon L. Orlosky, Muncie, IN, Attorney for Appellant.

Gregory F. Zoeller, Attorney General of Indiana, Thomas M. Fisher, Solicitor General of Indiana, Heather H. McVeigh, Tamara L. Weaver, Deputy Attorneys General, Indianapolis, IN, Attorneys for Amicus Curiae the State of Indiana.

Andrew Berger, Indianapolis, IN, Attorney for Amicus Curiae Association of Indiana Counties.

Matthew T. Albaugh, Brent A. Auberry, Benjamin A. Blair, Indianapolis, IN, Attorneys for Amicus Curiae SRI, Incorporated.

Michelle L. Baldwin, Fishers, IN, Attorney for Amicus Curiae Indiana County Auditors' Association, Inc.

Robert Delano Jones, E. Paige Freitag, Bloomington, IN, Attorneys for Appellees.

[994 N.E.2d 1111]

Thomas W. Dinwiddie, Maureen E. Ward, Indianapolis, IN, Attorneys for Amicus Curiae Indiana Bankers Association.

On Petition to Transfer from the Indiana Court of Appeals, No. 03A04–1112–CC–639

DAVID, Justice.

Before a parcel of real property can be sold at a tax sale, the Indiana Code requires the county auditor to mail notice of the pending sale to any mortgagee holding a mortgage on the property—provided, however, that the mortgagee has first affirmatively requested such notice by submitting a form to the auditor. Is such a procedure permissible under the Due Process Clause of the Fourteenth Amendment? The answer, we said over two decades ago, is “Yes.”

But in this case a bank failed to submit the required form to the Bartholomew County auditor and therefore was not notified that one of its mortgaged properties was tax-delinquent until after the property had been sold and the buyer requested a tax deed. The bank objected, challenging the constitutionality of this statutory scheme in light of a more recent case from the U.S. Supreme Court. The trial court below agreed with the bank and refused to issue the tax deed, but we remain firm that the answer to the constitutional question is still “Yes,” and therefore reverse.

Facts and Procedural History

The essential facts of this case are not in dispute. In September 2010, M & M Investment Group, LLC purchased a parcel of real property in Bartholomew County at a tax sale. The prior owner of the property was Ahlemeyer Farms, Inc. At the time of the sale, Monroe Bank was a mortgagee with respect to the property, holding two mortgages properly recorded in Bartholomew County.

Indiana's statutory scheme for tax sales of real property requires the auditor of the county in which the sale is conducted to send notice of the sale, by certified mail, to any mortgagee who annually requests such notice. Ind.Code § 6–1.1–24–3 (2010). Monroe Bank did not fulfill this requirement. Therefore it did not receive pre-sale notice of the property becoming available at a tax sale. In accordance with the Indiana Code, though, M & M timely notified Monroe Bank of the executed sale and its intent to seek a tax deed for the property. SeeInd.Code §§ 6–1.1–25–4.5,—4.6 (2010).

M & M filed a petition to direct the Bartholomew County auditor to issue a tax deed for the property and Monroe Bank filed a response challenging the tax sale notice statutes as unconstitutional under the Fourteenth Amendment to the U.S. Constitution. The trial court did not certify the challenge to the constitutionality of a state statute to the Attorney General of Indiana, but issued an order holding that Indiana Code § 6–1.1–24–3(b) was unconstitutional and denying M & M's petition.

M & M appealed, arguing that the trial court's failure to certify the constitutional challenge to the Attorney General was reversible error, and also that the pre-tax notice requirement is constitutional. The State filed a brief as amicus curiae, asserting its interest in the case and likewise arguing that the notice statute satisfies the requirements of the Due Process Clause of the Fourteenth Amendment.1 The Court

[994 N.E.2d 1112]

of Appeals affirmed. 2M & M Investment Group, LLC v. Ahlemeyer Farms, Inc., 972 N.E.2d 889 (Ind.Ct.App.2012).

We granted transfer, M & M Investment Group, LLC v. Ahlemeyer Farms, Inc., 978 N.E.2d 752 (Ind.2012) (table),3 thereby vacating the Court of Appeals opinion, Ind. Appellate Rule 58(A).

Standard of Review

A party challenging a statute as unconstitutional must clearly overcome a presumption of constitutionality by a contrary showing. Sims v. U.S. Fidelity & Guar. Co., 782 N.E.2d 345, 349 (Ind.2003). All doubts are resolved in favor of constitutionality and against the challenging party. Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind.1996). We presume that the General Assembly did not intentionally violate the constitution and will not interpret a statute otherwise unless that interpretation is required by the unambiguous language of the statute. Id. Therefore, when a trial court has found a statute unconstitutional our standard of review gives even less deference than de novo review. Horseman v. Keller, 841 N.E.2d 164, 170 (Ind.2006). If there are any grounds for reversal we will do so. Id.


M & M's first issue on appeal is that the trial court failed to certify Monroe Bank's constitutional challenge, and this failure mandates reversal. In short summary, M & M is correct that the Indiana Code requires trial courts to certify constitutional challenges to state statutes to the Attorney General. Ind.Code § 34–33.1–1–1(a) (Supp.2012). It was error for the trial court not to do so here, and that error prevented the State from intervening and presenting its arguments as to the constitutionality of the tax sale statute. The State, however, has since asserted its interests by way of a well-written amicus brief and we see no need to remand (nor does the State request it) in order that we take longer to get to the same place as we are now. The constitutional challenge is a question of law that this Court can resolve without further proceedings before the trial court.

The crux of this case, rather, is the trial court's finding that the Indiana Code provisions governing pre-sale notice “do not provide constitutionally protected due process to Monroe Bank as mortgagee.” (Appellant's Br. at 12.) It appears to have based this conclusion on an interpretation of a 1983 U.S. Supreme Court case, Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), which the trial court said “held that notification of a mortgagee by publication is insufficient notice.” (Appellant's Br. at 12.) Before we delve into whether that proposition is correct, some background is in order.

I. Indiana's Tax Sale Statutes

Indiana's tax sale statutes have long required the county auditor to post notice in the county courthouse and publish notice in a newspaper of the properties being brought up for a tax sale. See, e.g., Ind.Code § 64–2202 (1951). And for over fifty years, the auditor has also been required to provide the owner of the property with

[994 N.E.2d 1113]

notice by mail to the owner's last known address. Ind.Code § 64–2202 (1961). Prior to a 1980 amendment, however, the statutes did not require the auditor to provide any form of pre-sale notice by mail or service to the mortgagee of one of those properties.

Purchase of a property at a tax sale does not automatically entitle the purchaser to possession. Instead the auditor would issue the purchaser a certificate of sale, whereupon “the purchaser acquires a lien against the real property for the entire amount paid. The lien of the purchaser is superior to all liens against the real property which exist at the time the certificate is issued.” Ind.Code § 6–1.1–24–9(b) (2010). To obtain the deed to the property, the purchaser must then follow the procedures allowing for redemption by an owner or mortgagee, and then seek to quiet title. See generally Ind.Code 6–1.1–25.

In broad strokes, this was the statutory scheme the U.S. Supreme Court faced in Mennonite, 462 U.S. at 792–94, 103 S.Ct. 2706,4 in which a property owner failed to pay property taxes and the property—located in Indiana and subject to a validly recorded mortgage—was sold at a tax sale. In accordance with the existing tax sale statutes, notice of the sale was posted in the county courthouse, published in a newspaper, and mailed to the property owner. Neither the owner nor the mortgagee appeared or responded to the notices. The mortgagee did not learn the property had been sold until the expiration of the redemption period, when the purchaser sought to quiet title.

The mortgagee argued that it had not received constitutionally adequate notice of the pending sale or opportunity to redeem and the U.S. Supreme Court agreed, concluding that “the manner of notice provided to [the mortgagee] did not meet the requirements of the Due Process Clause of the Fourteenth Amendment.” Id. at 800, 103 S.Ct. 2706. It specifically noted that publication and posting in the courthouse are designed to attract buyers to a tax sale, not the property owners or mortgagees. Id. at 799, 103 S.Ct. 2706. Owners and mortgagees have an interest in the property but “do not make special efforts to keep abreast of such notices.” Id.

It therefore found those forms of notice unreasonable when “an inexpensive and efficient mechanism such as mail service is available.” Id. (quoting Greene v. Lindsey, 456 U.S. 444, 455, 102 S.Ct. 1874, 72 L.Ed.2d 249 (1982)). “Notice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party” when “its name and address are reasonably ascertainable.” Id. Consequently, the Court held that when a mortgagee is identified in a publicly recorded mortgage, notice by publication “must be supplemented by notice mailed to the mortgagee's last known available...

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    ...request-notice provision], the constitutionality of the amendment is not before us."). 26. See, e.g., M & M Inv. Grp., LLC v. Ahlemeyer Farms, Inc., 994 N.E.2d 1108, 1125 (Ind. 2013); Elizondo v. Read, 588 N.E.2d 501, 504 (Ind. 1992); Barca v. Reed, 635 So. 2d 771, 773 (La. App. 1994) (upho......
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