Citifinancial Mortg. Co., Inc. v. Matthews

Decision Date17 January 2008
Docket NumberNo. 07-431.,07-431.
Citation372 Ark. 167,271 S.W.3d 501
PartiesCITIFINANCIAL MORTGAGE CO., INC., Appellant, v. Kenneth MATTHEWS, Desonia Pope Matthews, Jack D. McClain, Sue N. McClain, and The Arkansas Commissioner of State Lands, Appellees.
CourtArkansas Supreme Court

Wilson & Associates, PLLC, by H. Keith Morrison, Fayettteville, for appellant.

William C. Ayers, Jr., West Memphis, for appellees.

PAUL E. DANIELSON, Justice.

Appellant Citifinancial Mortgage Co., Inc., appeals from the order of the circuit court granting the motion for summary judgment filed by appellees Jack and Sue McClain. Citifinancial argues on appeal that the circuit court erred in granting summary judgment in favor of the McClains because the failure of the Arkansas Commissioner of State Lands to provide proper notice of the public tax sale in the instant case rendered the private sale void and, furthermore, that failure violated its due process rights. We find no error and affirm.

The underlying facts in the instant case are undisputed by the parties. The real property at issue is located in Crittenden County and was previously owned by Kenneth and Desonia Pope Matthews. However, the property was certified to the Commissioner for failure to pay taxes on the property for the tax years 1998 and 1999. On October 11, 2001, the Commissioner first notified the Matthews of the delinquent status of their property. The notice was sent by certified mail and informed the Matthews that the property would be subject to a public sale scheduled for October 15, 2003. In addition, notice of the public sale was published in the local newspaper, The Evening Times. The Matthews had a mortgage on the property through Associates Home Equity Services, Inc. The notice listed the mortgagor as a lienholder on the property.

The property was offered for sale on October 15, 2003, at a public auction, but no bids were made and the property was not sold. Therefore, the property became available for a privately negotiated sale through the Commissioner's office. On February 1, 2004, the McClains made an offer to purchase the property. Prior to the private sale to the McClains, the Commissioner sent notice of the sale to the Matthews, the current resident, Housing and Urban Development, and Associates currently known as Citifinancial.1

The taxes were not paid, and the property was not redeemed; therefore, a deed conveying the property to the McClains was executed on May 27, 2004. Citifinancial commenced this action on January 3, 2005, seeking to set aside the negotiated sale because it had not been provided notice by certified mail of the public sale and alleging that the Matthews had defaulted on their loan, thereby entitling Citifinancial to foreclosure on the mortgage it held on the property. The Commissioner and the McClains filed timely answers.

On August 22, 2005, Citifinancial filed a motion for summary judgment arguing that the Commissioner had not complied with Ark.Code Ann. § 26-37-301(a)(2) (Repl.1997 & Supp.2007) because it did not send Citifinancial notice of the public sale by certified mail. The circuit court denied that motion on September 13, 2006. Citifinancial filed a second motion for summary judgment on July 31, 2006, citing a decision of the United States Supreme Court, Jones v. Flowers, 547 U.S. 220, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006), and arguing that it applied to the instant case. The McClains filed their motion for summary judgment on August 23, 2006, relying on the circuit court's previous order that found Citifinancial had received proper notice. The circuit court denied Citifinancial's second motion for summary judgment on January 3, 2007. In the same order, the circuit court granted the McClains's motion for summary judgment.

Citifinancial filed a timely notice of appeal on February 2, 2007. The court of appeals certified the case to this court on November 28, 2007, and we accepted certification on November 30, 2007.

Citifinancial contends that the failure of the Commissioner to provide it notice by certified mail of the public tax sale that was scheduled for October 15, 2003, was a violation of Ark.Code Ann. § 26-37-301 (Repl.1997 & Supp.2007) and rendered the subsequent privately negotiated sale invalid. It argues that because notice before a tax sale is a requirement that calls for strict compliance, it should have received the same notice of the first sale that was afforded to the property owners.

The McClains respond by first arguing that the notice provided to Citifinancial before the property was sold sufficiently complied with section 26-37-301. While the McClains concede that the Commissioner failed to send notice of the first-scheduled sale by mail to Citifinancial, they contend that proper notice of the only sale that actually occurred, the private sale to the McClains, was sent to and received by Citifinancial, which met the statutory requirement. Furthermore, the McClains aver that Citifinancial requests a tortuous construction of the statute when the crux of its argument is that it did not receive notice of a sale that never took place.

Summary judgment is to be granted by a circuit court only when it is clear that there are no genuine issues of material fact to be litigated and the moving party is entitled to judgment as a matter of law. See Benton County v. Overland Dev. Co., Inc., 371 Ark. 559, 268 S.W.3d 885 (2007). Once a moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and demonstrate the existence of a material issue of fact. See id. On appeal, we determine if summary judgment was appropriate based on whether the evidentiary items presented by the moving party in support of its motion leave a material fact unanswered. See id. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. See id. Our review is not limited to the pleadings, as we also focus on the affidavits and other documents filed by the parties. See id. After reviewing undisputed facts, summary judgment should be denied if, under the evidence, reasonable men might reach different conclusions from those undisputed facts. See id.

In cases involving redemption of tax-delinquent lands, strict compliance with the requirement of notice of the tax sales themselves is required before an owner can be deprived of his or her property. See Tsann Kuen Enters. Co. v. Campbell, 355 Ark. 110, 129 S.W.3d 822 (2003); Jones v. Double "D" Props., Inc., 352 Ark. 39, 98 S.W.3d 405 (2003); Pyle v. Robertson, 313 Ark. 692, 858 S.W.2d 662 (1993). Section 26-37-301 (Supp.2007)2 provides the following regarding notice:

(a)(1) Subsequent to receiving tax-delinquent land, the Commissioner of State Lands shall notify the owner, at the owner's last known address as certified by the county, by certified mail, of the owner's right to redeem by paying all taxes, penalties, interest, and costs, including the cost of the notice.

(2) All interested parties shall receive notice of the sale from the Commissioner of State Lands in the same manner.

(3) If the notice by certified mail is returned unclaimed, the Commissioner of State Lands shall mail the notice to the owner or interested party by regular mail.

(4) If the notice by certified mail is returned undelivered for any other reason, the Commissioner of State Lands shall send a second notice to the owner or interested party at any additional address reasonably identifiable through the examination of the real property records properly filed and recorded in the office of the circuit clerk in the county wherein the property is located as follows:

(A) The address shown on the deed to owner;

((B) The address shown on the deed, mortgage, assignment, or other filed and recorded document to the interested party; or

((C) Any other corrected or forwarding address on file with the county tax collector or county tax assessor.

(b)(1) The notice to the owner or interested party shall also indicate that the tax-delinquent land will be sold if not redeemed prior to the date of sale.

(2) The notice shall also indicate the sale date, and that date shall be no earlier than one (1) year after the land is certified to the Commissioner of State Lands.

(c) As used in this section, "owner" and "interested party" means any person, firm, corporation, or partnership holding title to or an interest in the property by virtue of a bona fide recorded instrument at the time of certification to the Commissioner of State Lands.

(d) The Commissioner of State Lands shall not be required to notify, by certified mail or by any other means, any person, firm, corporation, or partnership whose title to or interest in the property is obtained subsequent to certification to the Commissioner of State Lands (e)(1) If the Commissioner of State Lands fails to receive proof that the notice sent by certified mail under this section was received by the owner of a homestead, then the Commissioner of State Lands or his or her designee shall provide actual notice to the owner of a homestead by...

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