Dahn v. Trownsell

• Decision Date: 18 February 1998
• Docket Number: 20190,Nos. 20185,s. 20185
• Citation: 576 N.W.2d 535,1998 SD 36
• Parties: Kenneth E. DAHN, Plaintiff and Appellee, v. Michael V. TROWNSELL, Defendant and Appellant, and J.M. Butler, Trustee, J.M. Butler, John Nickels, ada Nickels, Henry Nickels, Belmont V. Trownsell, Harold Trownsell, Pennington County, a political subdivision of the State of South Dakota, the Department of Revenue of the State of South Dakota, the State of South Dakota, the unknown heirs-at-law, the devisees, legatees, executors, administrators, or creditors of any or either of them, of the foregoing named persons who are deceased, along with all persons unknown who have or claim to have any interest or estate in, or lien or encumbrance upon the premises described in the Complaint herein, or any part thereof, Defendants. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 535

576 N.W.2d 535

1998 SD 36

Kenneth E. DAHN, Plaintiff and Appellee, v. Michael V. TROWNSELL, Defendant and Appellant and J.M. Butler, Trustee, J.M. Butler, John Nickels, ada Nickels, Henry Nickels, Belmont V. Trownsell, Harold Trownsell, Pennington County, a political subdivision of the State of South Dakota, the Department of Revenue of the State of South Dakota, the State of South Dakota, the unknown heirs-at-law, the devisees, legatees, executors administrators, or creditors of any or either of them, of the foregoing named persons who are deceased, along with all persons unknown who have or claim to have any interest or estate in, or lien or encumbrance upon the premises described in the Complaint herein, or any part thereof, Defendants.

Nos. 20185, 20190.

Supreme Court of South Dakota.

Considered on Briefs Feb. 18, 1998.

Decided April 8, 1998.

Linden R. Evans of Truhe, Beardsley, Jensen, Helmere & Von Wald, Rapid City, for Plaintiff and Appellee.

Joseph M. Butler of Bangs, McCullen, Butler, Foye and Simmons, Rapid City, for Defendant and Appellant.

GILBERTSON, Justice.

¶1 Michael Trownsell (Trownsell) appeals from the grant of summary judgment in favor of Kenneth Dahn (Dahn) after the trial court concluded that Dahn had properly served notice of his intention to take a tax deed (NITTD) upon Trownsell in a quiet title action. Dahn has filed a notice of review claiming the trial court should have excluded, as hearsay, certain statements in an affidavit submitted by Trownsell. We affirm.

FACTS AND PROCEDURE

¶2 This action was brought by Dahn against Trownsell, and others, to quiet title to a section of land in Pennington County South Dakota. Trownsell appeals the grant of summary judgment in favor of Dahn and claims he was not provided adequate service of Dahn's NITTD, which was issued by Pennington County (County) on June 27, 1995.

¶3 We briefly summarize South Dakota's statutory scheme governing tax deed sales of realty to assist comprehension of the relevant facts. Each county treasurer is required to "send a written tax bill to each taxpayer against whom a property tax has been assessed." SDCL 10-21-1.1. If the taxes are not paid, the treasurer must give notice by publication or posting and then mail "to any owner of the real property at his last known address " a notice that the property will be sold at the annual tax sale on the third Monday of December. SDCL 10-23-2, 10-23-2.1, and 10-23-7 (emphasis added). When property tax payments have been delinquent for a period of one year or more, the treasurer shall hold a sale of the property and issue a tax certificate to the successful bidder. SDCL 10-23-7. The holder of the tax certificate may initiate proceedings to obtain a tax deed three years after the tax sale of property located within "the limits of any municipality" or four years after the tax sale of property located outside the "limits of any municipality." SDCL 10-25-1. Prior to obtaining a tax deed, the owner of record, and certain other interested parties, must be notified of the intention to take a tax deed. SDCL 10-25-3. SDCL 10-25-5 provides for service upon nonresident property owners, such as Trownsell, of the NITTD by publication and mailing a copy of the notice to the nonresidents' "last known address."

¶4 After completing the requirements of SDCL 10-25-5, the party wishing to obtain a tax deed submits an affidavit of completed service to the county treasurer. SDCL 10-25-8. The right to redeem the tax certificate "shall not expire" until "sixty days after the filing" of this affidavit. Id. If the owner, or certain other interested persons, fails to redeem the tax certificate within the sixty days, the holder of the tax certificate receives an "absolute estate in fee simple" subject to certain "taxes, liens and encumbrances." SDCL 10-25-12. After obtaining the tax deed, the purchaser may bring an action to quiet title to the property. The former owner has 180 days from the recording date of the tax deed to contest or avoid the tax deed. SDCL 10-25-44.

¶5 Trownsell was the sole owner of the Star Lode from 1960 until Dahn initiated this quiet title action in 1996. Trownsell had a history of delinquent taxes on this and another property within County. The Star Lode was previously auctioned by County five times for failure to pay property taxes during his period of ownership. This appeal concerns the sixth auction held in December, 1990, where Dahn, the successful bidder, paid the amount of taxes Trownsell owed and was issued a certificate of tax sale.

¶6 Just prior to the 1990 sale, the County treasurer mailed a NITTD to Trownsell's last known address in Redondo Beach, California. SDCL 10-23-2.1. This was the only address on file with County. Trownsell has not denied receiving the 1990 NITTD but does deny receiving the subsequent 1995 NITTD. Trownsell resided at the Redondo Beach address until September 1994, when he moved to Mojave, California. He then moved to Tehachapi, California, in June of 1995. Each time he moved he left forwarding addresses with the local post offices. However, he did not notify the County treasurer of his changed address and did not pay any of the property taxes on the Star Lode during these years. Dahn subsequently paid Trownsell's property taxes for the years 1990 through 1996, when he began quiet title proceedings. SDCL 10-25-10.

¶7 On March 31, 1995, Dahn mailed the NITTD to Trownsell at the Redondo Beach address. It was the only address Dahn was aware of, as it was the only address on file with County. The NITTD did not reach Trownsell and was returned to Dahn's counsel on April 25, 1995, with the stamped notation "Returned to Sender, Forwarding Order Expired" and a handwritten notation of "moved." The returned letter did not have a forwarding address.

¶8 Dahn attempted to locate Trownsell's current address by searching the records of the County register of deeds, director of equalization, and treasurer. Dahn could not find any address for Trownsell other than the Redondo Beach address. County had been sending annual tax assessments and notices to Trownsell's "last known address" at Redondo Beach for the tax years 1990 through 1995. Trownsell had not utilized the detachable change of address forms contained in the annual tax notices sent by County. Dahn also called directory assistance in California and was informed that Trownsell did not have a telephone number, listed or unlisted, within the state. Dahn then published the NITTD in three local Pennington County newspapers, once per week for two weeks. SDCL 10-25-5. Dahn received no response and on April 27, 1995, filed an affidavit of completed service with County. SDCL 10-25-8. Trownsell failed to redeem the property within the statutory sixty-day period and Dahn was issued a tax deed for the Star Lode. SDCL 10-25-8.1.

¶9 Dahn recorded the tax deed and on February 13, 1996, Dahn brought a quiet title action. Dahn mailed the summons and complaint to Trownsell at the Redondo Beach address. The summons and complaint were "returned to sender" just as the previous NITTD had been. This time, however, the returned letter was stamped with Trownsell's Mojave, California, address. The summons and complaint was then sent to the Mojave address and the Mojave post office forwarded it to Trownsell in Tehachapi. At the time of mailing, neither Dahn nor County was aware that Trownsell had moved to Tehachapi.

¶10 Dahn was only able to later obtain Trownsell's Tehachapi address in March, 1996, through a fortuitous chain of events, nearly one year after he initially mailed the notice. Dahn had originally named and mailed a summons and complaint to all prior record holders of the Star Lode. One of these prior owners was Belmont Trownsell, Trownsell's mother, who had obtained title to the property in 1957. Upon receiving the summons and complaint, Belmont contacted Trownsell's brother Robert about the matter. Robert then called Dahn's counsel's office and sent Trownsell's current Tehachapi address. Dahn then mailed a copy of the summons and complaint to Trownsell's Tehachapi address. Trownsell refused to admit service by mail and was personally served on May 14, 1996.

¶11 On November 1, 1996, Dahn's motion for summary judgment was denied by the circuit court after it concluded that, since Dahn mailed the summons and complaint to the Redondo Beach address with the knowledge that it was not current, his attempt at notification was not reasonably calculated to apprise Trownsell of the proceedings. The circuit court believed that, upon receipt of the returned notice, Dahn should have contacted the Redondo Beach post office to determine Trownsell's current address.

¶12 On March 27, 1997, Dahn renewed his motion for summary judgment and provided additional facts for the circuit court's consideration. Dahn alleged, among other things, that Trownsell's history of delinquent property tax payments established that he purposely avoided service of the notice and that the circuit court should focus on the attempted service of the NITTD rather than the initial summons and complaint. The circuit court agreed and granted Dahn's motion for summary judgment. Trownsell appeals raising the following issue for our review:

Whether notice by mail sent to property owner's "last known address" provides adequate notice of a proceeding to sell property for nonpayment of taxes.

STANDARD OF REVIEW

¶13 Our standard of review for summary judgment in this context is well settled. This appeal requires us to examine the statutes governing the method of serving notice upon property owners before their rights may be extinguished through a tax sale. Questions of statutory interpretation require de novo review. Farm Credit Serv. of Mid. v. First State Bank, 1998 SD 13, p 6, 575 N.W.2d 250 (citing Maynard v. Heeren, 1997 SD 60, p 5, 563 N.W.2d 830, 833). Since there are "no factual issues in this case, summary judgment will be...