Austill v. Prescott, 1170709

• Decision Date: 12 July 2019
• Docket Number: 1170730,1170709
• Parties: Jere AUSTILL III v. Tyler Montana Jul PRESCOTT Tyler Montana Jul Prescott v. Jere Austill III
• Court: Alabama Supreme Court

293 So.3d 333

Jere AUSTILL III

v.Tyler Montana Jul PRESCOTT

Tyler Montana Jul Prescott

v.Jere Austill III

1170709

1170730

Supreme Court of Alabama.

July 12, 2019

Henry J. Walker, Jr., of Walker Law Firm, Birmingham, for appellant/cross-appellee Jere Austill III.

Grant Blackburn of Blackburn & Conner, P.C., Bay Minette, for appellee/cross-appellant Tyler Montana Jul Prescott.

BRYAN, Justice.¹

In case no. 1170709, Jere Austill III appeals from a judgment of the Baldwin Circuit Court ("the trial court") permitting Tyler Montana Jul Prescott to redeem certain real property under §§ 40-10-82 and 40-10-83, Ala. Code 1975. Specifically, Austill argues that, through adverse possession, he had "cut off" Prescott's right to redeem the property. Because we conclude that, by virtue of an adverse judgment in an earlier quiet-title action, Austill is precluded by the doctrine of res judicata from claiming an interest in the property through the extinguishment of Prescott's right of redemption, we affirm the portion of the trial court's judgment that is challenged in Austill's appeal.

In case no. 1170730, Prescott cross-appeals from the trial court's denial of his motion for an award of attorney fees under the Alabama Litigation Accountability Act ("the ALAA"), § 12–19–270 et seq., Ala. Code 1975, arguing that Austill asserted his argument that he cut off Prescott's right of judicial redemption without substantial justification. We conclude that the trial court did not exceed its discretion in denying Prescott's motion, and we affirm that portion of the trial court's judgment.

Background

As noted above, this case involves Prescott's request to redeem certain real property located in Baldwin County ("the property") under §§ 40-10-82 and 40-10-83 and whether his right to redeem the property had been cut off. In First Properties, L.L.C. v. Bennett, 959 So. 2d 653, 654 (Ala. Civ. App. 2006), the Court of Civil Appeals summarized Alabama's redemption law:

"Under Alabama law, after a parcel of property has been sold because of its owner's failure to pay ad valorem taxes assessed against that property (see § 40–10–1 et seq., Ala. Code 1975 ), the owner has two methods of redeeming the property from that sale: ‘statutory redemption’ (also known as ‘administrative redemption’), which requires the payment of specified sums of money to the probate judge of the county in which the parcel is located (see § 40–10–120 et seq., Ala. Code 1975),^{[2 ]} and ‘judicial redemption’ under §§ 40–10–82 and 40–10–83, Ala. Code 1975, which involves the filing of an original civil action against a tax-sale purchaser (or the filing of a counterclaim in an ejectment action brought by that purchaser) and the payment of specified sums into the court in which that action or counterclaim is pending. See generally William R. Justice, ‘Redemption of Real Property Following Tax Sales in Alabama,’ 11 Cumb. L. Rev. 331 (1980–81)."

In 2007, JSW Properties, LLC ("JSW"), owned the property. JSW did not pay the ad valorem taxes associated with the property, and, in 2008, the property was sold at a tax sale to Plymouth Park Tax Services, LLC ("Plymouth Park"). Plymouth Park later transferred its interest in the property to Propel Financial 1, LLC ("Propel"). Neither Plymouth Park nor Propel paid the required ad valorem taxes associated with the property for 2011, and in 2012 Austill purchased the property at a tax sale and obtained a certificate of purchase. See § 40-10-19(a), Ala. Code 1975 ("As soon after the confirmation of sale is made as may be practicable, the tax collector must make out and deliver to each purchaser ... a certificate of purchase ...."). Later that month, Austill visited the property and installed a no-trespassing sign and four stakes with survey flags at the four corners of the property. See § 40-10-74, Ala. Code 1975 ("Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector ....").

In June 2015, the Baldwin County Probate Judge delivered a tax deed for the property to Austill. See § 40-10-29, Ala. Code 1975 ("After the expiration of three years from the date of the sale of any real estate for taxes, the judge of probate then in office must execute and deliver to the purchaser ... a deed to each lot or parcel of real estate sold to the purchaser ...."). Propel later transferred its interest in the property to Prescott. Although JSW had been dissolved, its "successor in interest" also later conveyed to Prescott JSW's interest in the property via quitclaim deed. By letter dated December 19, 2015, Prescott informed Austill of his intent to redeem the property.

I. The Quiet-Title Action ³

On December 29, 2015, Austill filed a verified complaint initiating a quiet-title action "to establish the right and title of [Austill] to [the property] and to clear up all doubts or disputes concerning the same ...." ("the quiet-title action"). Among others, Austill named Prescott as a defendant in the action. Austill sought a judgment declaring that he possessed "the entire and undivided fee simple interest in the [property] with no restrictions thereon."

Among other things, Austill alleged that, since the 2012 tax sale, he had been in adverse possession of the property. Austill stated: "This matter is brought pursuant to ... § 40-10-82." Section 40-10-82 provides:

"No action for the recovery of real estate sold for the payment of taxes shall lie unless the same is brought within three years from the date when the purchaser became entitled to demand a deed therefor; but if the owner of such real estate was, at the time of such sale, under the age of 19 years or insane, he or she, his or her heirs, or legal representatives shall be allowed one year after such disability is removed to bring an action for the recovery thereof; but this section shall not apply to any action brought by the state, to cases in which the owner of the real estate sold had paid the taxes, for the payment of which such real estate was sold prior to such sale, or to cases in which the real estate sold was not, at the time of the assessment or of the sale, subject to taxation. There shall be no time limit for recovery of real estate by an owner of land who has retained possession. If the owner of land seeking to redeem has retained possession, character of possession need not be actual and peaceful, but may be constructive and scrambling and, where there is no real occupancy of land, constructive possession follows title of the original owner and may only be cut off by adverse possession of the tax purchaser for three years after the purchaser is entitled to possession."

(Emphasis added.)

Acting pro se, Prescott answered Austill's complaint, quoting from the first sentence of § 40-10-82 and arguing that Austill had filed his complaint "prematurely" because he had not adversely possessed the property for three years after becoming entitled to demand a tax deed. Prescott also filed a motion to dismiss Austill's complaint, which elaborated on his answer, citing as support Southside Community Development Corp. v. White, 10 So. 3d 990 (Ala. 2008), and McGuire v. Rogers, 794 So. 2d 1131 (Ala. Civ. App. 2000). In McGuire, 794 So. 2d at 1136, the Court of Civil Appeals quoted from its decision in Ervin v. Amerigas Propane, Inc., 674 So. 2d 543, 544 (Ala. Civ. App. 1995), which, in turn, quoted from this Court's decision in Gulf Land Co. v. Buzzelli, 501 So. 2d 1211, 1213 (Ala. 1987).

In Buzzelli, this Court stated:

"We have stated many times that the purpose of § 40–10–83^{[4 ]} is to preserve the right of redemption without a time limit, if the owner of the land seeking to redeem has retained possession. This possession may be constructive or scrambling, and, where there is no real occupancy of the land, constructive possession follows the title of the original owner and can only be cut off by the adverse possession of the tax purchaser. Stallworth v. First Nat. Bank of Mobile, 432 So. 2d 1222 (Ala. 1983) ; Hand v. Stanard, 392 So. 2d 1157 (Ala. 1980) ; O'Connor v. Rabren, 373 So. 2d 302 (Ala. 1979).

" Code 1975, § 40–10–82, does establish a ‘short statute of limitations’ for tax deed cases. This section states that the redemption action must be filed within three years from the date when the purchaser became entitled to demand a deed for the property. We have held that this statute does not begin to run until the purchaser is in adverse possession of the land and has become entitled to demand a deed to the land. Williams v. Mobil Oil Exploration, 457 So. 2d 962 (Ala. 1984). In order for the short period of § 40–10–82 to bar redemption under § 40–10–83, the tax purchaser must prove continuous adverse possession for three years after he is entitled to demand a tax deed. Stallworth, 432 So. 2d at 1224."

501 So. 2d at 1213 (emphasis added). Austill filed a response to Prescott's motion to dismiss, challenging, among other things, the legal basis for Prescott's motion to dismiss and citing in support of his argument, in addition to other cases, Southside; Reese v. Robinson, 523 So. 2d 398 (Ala. 1988) ; Buzzelli; O'Connor v. Rabren, 373 So. 2d 302 (Ala. 1979) ; and McGuire. The trial court denied Prescott's motion to dismiss.

With the assistance of counsel, Prescott later filed a "renewed motion to dismiss," pursuant to Rule 12(b)(6), Ala. R. Civ. P., and an accompanying "brief," arguing, among other things:

"In order to quiet title to real property under a tax deed, [Austill] must show that no party has the right to redeem the property from the tax sale. In order to foreclose all redemptive rights, the holder of a tax deed must prove that it adversely possessed the property for a period of three years after becoming entitled to demand a tax deed.... Buzzelli, 501 So. 2d [at] 1213 .... [Austill] has been in possession for four years, but only one of those years came after [

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