City of Elkhart v. SFS, LLC

• Decision Date: 01 June 2012
• Docket Number: No. 20A04–1104–MI–213.,20A04–1104–MI–213.
• Citation: 968 N.E.2d 812
• Parties: CITY OF ELKHART, Indiana, Appellant–Petitioner, v. SFS, LLC and Jefferson Group, LLC, Appellees–Respondents.
• Court: Indiana Appellate Court

968 N.E.2d 812

CITY OF ELKHART, Indiana, Appellant–Petitioner,

v.SFS, LLC and Jefferson Group, LLC, Appellees–Respondents.

No. 20A04–1104–MI–213.

Court of Appeals of Indiana.

June 1, 2012.

Amber J. Bressler, City of Elkhart, Indiana, Elkhart, IN, Attorney for Appellant.

Richard Wayne Greeson, Connersville, IN, Attorney for Appellees.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

The City of Elkhart (“the City”) appeals the trial court's grant of a motion to correct error jointly filed by SFS, LLC (“SFS”) and Jefferson Group, LLC (“Jefferson”). The City raises the following three issues for our review:

1. Whether SFS and Jefferson lack standing to challenge the trial court's order for issuance of a tax deed to certain real property to the City.

2. Whether the trial court abused its discretion in considering SFS and Jefferson's designation of evidence.

3. Whether the trial court abused its discretion when it concluded that the City did not comply with Indiana law when it failed to provide SFS with notice of tax sale proceedings.

We affirm.

FACTS AND PROCEDURAL HISTORY

In 2007, real property in Elkhart located at 1701 Kilbourn Street (“the property”) was placed in a tax sale. SFS, a limited liability company based in Birmingham, Alabama, purchased the tax sale certificate for the property on October 29, 2007. The prior owner, Gary Kratzer, did not redeem the property within one year.

Accordingly, on November 17, 2008, SFS, by local counsel, petitioned the trial court for the issuance of a tax deed. The court granted SFS' petition on January 23, 2009, and ordered the county auditor to execute and deliver a tax deed to SFS for the property.

However, before SFS had recorded its tax deed, the property was again placed in a tax sale based on SFS' failure to timely pay property taxes. The second tax sale was held on November 30, 2009, and the property went unsold, which resulted in the Elkhart County Commissioners acquiring a lien against the property on December 1 by operation of law. SeeInd.Code § 6–1.1–24–6(a). According to the second tax sale certificate, the property was still held in Kratzer's name.

Just four days after the second tax sale, on December 4, 2009, SFS recorded its tax deed from the first tax sale. The recorded deed identifies SFS by name and states its address as 17 20th Street North, Suite 310, Birmingham, Alabama, 35203. See Appellant's App. at 237. The deed also contains the county auditor's stamp, noting that it had been “Duly Entered for Taxation.” Id.

On January 19, 2010, the City obtained a title report and title insurance commitment on the property. The purpose of the title report was “to ascertain the names of all persons entitled to receive notice” before the issuance of a second tax deed. Id. at 209. The City instructed a paralegal to review the title work. The title report disclosed that SFS had recorded its tax deed on December 4, 2009, and, thus, informed the City that SFS held title to the property. The paralegal sought SFS' legal address but, rather than simply using the address that appears on the December 2009 tax deed, she instead “searched the records of the Indiana Secretary of State,” which listed the address of a “Domestic Limited Liability Company” named “SFS, LLC[,] as PO Box 6272, Fishers, Indiana 46038.” Id. at 279, 287.

On February 22, 2010, the Elkhart County Commissioners assigned their certificate of sale for the property to the City. See id. at 221. On February 26, the City mailed notice to Kratzer and attempted notice by mail to SFS at the Fishers address informing them of the expiration of the redemption period on March 31. Id. In March, the City published notice in the Elkhart Truth. After the expiration of the redemption period, on April 15, 2010, the City filed a petition for issuance of a tax deed. That same day, the City mailed notice of its petition to Kratzer and again attempted notice by mail to SFS at the Fishers address. See id. at 228.

Meanwhile, SFS had issued a quitclaim deed for the property to Jefferson. Id. at 238. Jefferson recorded its deed on May 11, 2010. On June 11, 2010, the trial court granted the City's petition for the issuance of a tax deed.

On July 19, 2010, SFS and Jefferson filed a joint motion to set aside the tax deed due to lack of notice. The parties subsequently filed cross motions for summary judgment, and, on January 5, 2011, the trial court entered summary judgment for the City. On February 1, 2011, SFS and Jefferson filed a joint motion to correct error, and, after the City responded, the court held a hearing on the motion on March 11, 2011. On April 4, the court granted the motion to correct error and vacated its June 11, 2010, order for the issuance of a tax deed to the City. This appeal ensued.

DISCUSSION AND DECISION

Standard of Review

The City appeals the trial court's grant of SFS and Jefferson's motion to correct error. A trial court has discretion to grant or deny a motion to correct error and we reverse its decision only for an abuse of that discretion. Hawkins v. Cannon, 826 N.E.2d 658, 661 (Ind.Ct.App.2005), trans. denied. An abuse of discretion occurs when the trial court's decision is against the logic and effect of the facts and circumstances before the court or if the court has misinterpreted the law. Id.

When the trial court granted the motion to correct error, it also vacated its summary judgment for the City, finding that genuine issues of material fact exist with regard to the issuance of the tax deed. Our standard of review for summary judgment appeals is well established:

When reviewing a grant of summary judgment, our standard of review is the same as that of the trial court. Considering only those facts that the parties designated to the trial court, we must determine whether there is a “genuine issue as to any material fact” and whether “the moving party is entitled to a judgment a matter of law.” In answering these questions, the reviewing court construes all factual inferences in the non-moving party's favor and resolves all doubts as to the existence of a material issue against the moving party. The moving party bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law; and once the movant satisfies the burden, the burden then shifts to the non-moving party to designate and produce evidence of facts showing the existence of a genuine issue of material fact.

Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269–70 (Ind.2009) (citations omitted). The party appealing a summary judgment decision has the burden of persuading this court that the grant or denial of summary judgment was erroneous. Knoebel v. Clark County Superior Court No. 1. 901 N.E.2d 529, 531–32 (Ind.Ct.App.2009). Where the facts are undisputed and the issue presented is a pure question of law, we review the matter de novo. Crum v. City of Terre Haute ex rel. Dep't of Redev., 812 N.E.2d 164, 166 (Ind.Ct.App.2004).

Issue One: Standing

The City first contends that SFS and Jefferson ¹ lack standing to challenge the issuance of the tax deed to the City. “[S]tanding requires that an actual, injured party participate in this case.” Simon v. Simon, 957 N.E.2d 980, 988 (Ind.Ct.App.2011). SFS and Jefferson allege that the City used the November 30, 2009, tax sale (conducted while SFS was the fee simple title holder) and the June 11, 2010, issuance of the tax deed (issued while Jefferson was the fee simple title holder) to deprive them of their interests in the real property without the notice required by law.

The City asserts that SFS and Jefferson lack standing because neither party was an owner of record entitled to notice at the time of the 2009 tax sale. As the trial court correctly found, “to qualify as an owner of record [ ] a party must record his or her deed prior to the time of the tax sale.” Appellant's App. at 205. But, in this case, that rule alone does not resolve the question of standing. Here, the trial court also correctly found that SFS had recorded its tax deed before the City acquired the lien on the property from the County Commissioners, that the tax deed contained an accurate address on its face, and that SFS had “obviously” demonstrated a substantial property interest of record. Id. Accordingly, on these facts, both SFS and Jefferson, as SFS' successor in interest, have demonstrated they have a substantial interest at stake and, therefore, have standing to challenge the City's right to a tax deed.

Issue Two: Untimely Designation of Evidence

The City next alleges that the trial court “appears” to have considered SFS and Jefferson's (hereinafter collectively referred to as “SFS”) designation of evidence in response to the City's summary judgment motion, even though that designation was filed thirty-six days after SFS filed its response to the City's motion. See Appellant's Br. at 8. It is well settled that a trial court may not consider the untimely designation of evidence. See Seufert v. RWB Med. Income Props. I Ltd. P'ship, 649 N.E.2d 1070, 1072–73 (Ind.Ct.App.1995).

Here, however, the evidence designated by SFS was largely superfluous to the evidence already designated by the City. The only new evidence designated by SFS was proof that it is an Alabama-based corporation. Even assuming without deciding that the trial court erroneously considered that evidence, we are not persuaded that the evidence mattered. The City's own evidence made it obvious that SFS had an Alabama mailing address, and the trial court's order on the motion to correct error relies only on the City's designated evidence. Thus, even if the trial court relied on materials that were not timely designated, any such error would be harmless.

Likewise, the City baldly asserts that the trial court relied on the arguments of SFS' attorney as if they were evidence. See id. at 12. This argument is without cogent reasoning and is waived. S...