City of Muscatine v. NORTHBROOK, 98-1070.

• Decision Date: 16 November 2000
• Docket Number: No. 98-1070.,98-1070.
• Citation: 619 N.W.2d 362
• Parties: CITY OF MUSCATINE, Appellee, v. NORTHBROOK PARTNERSHIP CO., Northbrook Partners Co., and Gregory A. Johnston d/b/a Northbrook Partners Co., Appellants.
• Court: Iowa Supreme Court

619 N.W.2d 362

CITY OF MUSCATINE, Appellee, v. NORTHBROOK PARTNERSHIP CO., Northbrook Partners Co., and Gregory A. Johnston d/b/a Northbrook Partners Co., Appellants.

No. 98-1070.

Supreme Court of Iowa.

November 16, 2000.

Harvey G. Allbee, Jr. and R. Craig Oppel of Allbee, Barclay, Allison, Denning & Person, P.C., Muscatine, for appellee.

Gregory A. Johnston, Muscatine, and Patrick W. O'Bryan of O'Bryan Law Firm, Des Moines, for appellants.

Considered en banc.

McGIVERIN, Senior Judge.¹

The question here is whether a city has authority under Iowa statutory law to pursue a personal judgment action against a property owner to recover demolition costs incurred by the city in abating a nuisance on the owner's property.

The district court concluded that a city has such authority under Iowa statutory law and entered judgment for the city. Our court of appeals reversed. Upon further review, we vacate the court of appeals decision and affirm the district court judgment.

I. Background facts and proceedings.

Defendants Northbrook Partnership Co., and Gregory A. Johnston, d/b/a Northbrook Partners Co., (hereinafter referred to as defendants) were owners of real estate located at 211 Pine Street in Muscatine, Iowa. A residence was located on the property.

Defendants failed to pay real estate taxes on the property for the years 1986, 1987, and 1988. Consequently, the property located at 211 Pine Street was purchased by Muscatine County at a tax sale in June 1990 for unpaid real estate taxes in the amount of $4,413. See Iowa Code § 446.7 (1989) (stating procedure for annual tax sale). Although a certificate of purchase at tax sale for the property was issued to Muscatine County, see Iowa Code § 446.29, no tax deed was ever issued to the county.

On February 11, 1994, defendants received notice through certified mail from the Muscatine County treasurer that defendants' right of redemption from the tax sale would expire ninety days from the date of service of the notice. See Iowa Code § 447.9 (explaining procedure concerning notice of expiration of right of redemption). Defendants made no attempt to redeem the property before the period of redemption expired on May 10, 1994.

On May 24, 1996, the City of Muscatine sent notice to defendants, stating that the residence at the 211 Pine Street address constituted a nuisance under the language of Muscatine City Code, title 9, chapter 4, section 1(a). The notice ordered defendants to abate the nuisance, through repair or demolition, within ten days of receipt of the notice, or the city would take "additional action" as provided in the city code. Defendants took no action concerning the building.

In early June 1996, the city sent a letter to defendants stating that the city council on June 6, 1996, planned to consider a resolution granting authority to abate the nuisance on defendants' property by causing the dilapidated structure on the property to be demolished. The letter also stated, "[i]f you have an interest in this property, you may wish to attend and comment at this meeting." The letter did not advise defendants that the city would seek reimbursement from defendants for the cost of demolition. Neither Johnston nor anyone else for defendants appeared at the city council meeting. Consequently, pursuant to a city council resolution, the building at the 211 Pine Street address was subsequently demolished at a cost to the city of $20,043.

Thereafter, the city notified defendants of the demolition of the structure and requested reimbursement for costs incurred. Receiving no response from defendants, plaintiff City of Muscatine filed a petition in district court against defendants on January 20, 1998, seeking judgment in the amount of $20,043, plus interest, as reimbursement for the cost of demolition of the residence formerly located at 211 Pine Street. The city contended that Iowa Code section 364.12 (1995) authorized the action. Defendants filed an answer, denying "that timely notice of the nuisance was received."

The matter was tried to the court on stipulated facts and exhibits. At the time of trial, although a tax certificate had been issued to Muscatine County after the tax sale in 1990, no tax deed was ever issued and legal title to the property was still held in the names of defendants.

The court entered judgment against defendants and in favor of plaintiff city in the amount of $20,043, plus interest, concluding that the notices sent by the city were adequate to apprise defendants of their rights and obligations to avoid liability for the demolition costs incurred by the city. The court also concluded that the city had authority to abate the nuisance and proceed to collect abatement costs from defendants. Additionally, the court concluded that Iowa Code section 446.20(2) did not apply to this case because the county, not the city, was the holder of the tax certificate.

Defendants appealed. Upon our transfer of the case, our court of appeals reversed the judgment of the district court, concluding that neither section 446.20(2) nor section 364.12(4) gave the city authority to pursue a civil action against defendants to recover costs of abatement. We granted the city's application for further review.

Our standard of review is for correction of errors at law. Iowa R.App.P. 4.

II. Statutory provisions concerning a city's remedy against property owners for nuisance abatement costs.

Section 364.12(3)(a) gives a city authority to abate a nuisance, public or private, in any reasonable manner.

The city contends that it had authority under Iowa Code section 364.12(4) to pursue a civil action against defendants to recover costs the city incurred in abating the nuisance on defendants' property. Section 364.12(4) provides in part:

In addition to any other remedy provided by law, a city may also seek reimbursement for costs incurred in performing any act authorized by this section by a civil action for damages against a property owner.... For the purposes of this subsection, a county acquiring property for delinquent taxes shall not be considered a property owner.

(Emphasis added.)

In district court, defendants contended, however, that section 446.20(2) was the city's only remedy for pursuing reimbursement for abatement costs. That section provides in part:

If the [county] board [of supervisors] or [city] council determines that any property located on a parcel purchased by the county or city pursuant to section 446.19 requires removal, dismantling, or demolition, the board or council shall, at the same time and in the same manner that the notice of expiration of right of redemption is served, cause to be served on the person in possession of the parcel and also upon the person in whose name the parcel is taxed a separate notice stating that if the parcel is not redeemed within the time period specified in the notice of expiration of right of redemption, the property described in the notice shall be removed, dismantled, or demolished. The notice shall further state that the costs of removal, dismantling, or demolition shall be assessed against the person in whose name the parcel is taxed and a lien for the costs shall be placed against any other parcel taxed in that person's name within the county.

Iowa Code § 446.20(2) (emphasis added). Defendants argued that the city's action against them to recover abatement costs was barred because the city failed to give them the proper notice required by section 446.20(2).

III. Application of law to facts.

In this case, we must decide under what authority, if any, a city may pursue a civil action and obtain a personal judgment against a property owner for costs incurred by the city in abating a nuisance on the owner's property.

A. Legal ownership of the property.

Defendants' first contention is that the county, as purchaser of the property at tax sale and holder of the tax certificate, and not defendants, was the legal owner of the property at the time the city took action to abate the nuisance. Defendants therefore argue that they cannot be held liable for costs associated with abatement of the nuisance.

This contention has no merit. This is because the law is well settled in Iowa "that the purchaser at a tax sale, including the county when the sale is under the scavenger statute, obtains no title or right of possession to the property before the deed issues." Currington v. Black Hawk County, 184 N.W.2d 675, 676 (Iowa 1971). Thus, until a deed was issued by the county treasurer to the county, the county acquired no legal interest in the property. Id. Consequently, defendants, not the county, continued to be the legal owner of the property, with right of possession, even though the county held a certificate of purchase at tax sale concerning the property. The city was therefore correct in pursuing an action against defendants, as legal owners of the property, to recover costs it incurred in abating the nuisance on defendants' property.

We also point out that defendants present no authority suggesting that the county had a duty to obtain the tax deed. In fact, other authorities support the contrary. See Iowa Code § 446.37 (stating that county treasurer's duty to cancel tax sale certificate if no action is taken by holder to obtain a tax deed within three years following tax sale does not apply to certificates of purchase at tax sale held by a county); Iowa Code § 448.1 (unnum. para. 1, added by 1997 Iowa Acts ch. 121, § 24) (county treasurer's duty to issue deed after period of redemption has expired does not apply to certificates held by a county); see also 1990 Op. Iowa Att'y Gen. 80 (concluding that a county has no statutory requirement to obtain a tax deed to property upon which it holds a certificate of purchase acquired from a scavenger tax sale).

Moreover, even if a tax deed had been issued to the county, making the county the legal owner, Iowa Code section 364.12(4) states that "a county acquiring...