Eb Dorev Holdings, Inc. v. W. Va. Dep't of Admin.
| Decision Date | 16 June 2014 |
| Docket Number | No. 13–0886.,13–0886. |
| Citation | 760 S.E.2d 875 |
| Court | West Virginia Supreme Court |
| Parties | EB DOREV HOLDINGS, INC., Defendant Below, Petitioner v. WEST VIRGINIA DEPARTMENT OF ADMINISTRATION, REAL ESTATE DIVISION, Plaintiff Below, Respondent. |
OPINION TEXT STARTS HERE
Syllabus by the Court
1. “A circuit court's entry of summary judgment is reviewed de novo.” Syllabus point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).
2. “A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syllabus Point 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).
3. “Where a greater and less estate unite in the same person, without an intermediate estate, the less at once merges into the greater.” Syllabus Point 4, Turk v. Skiles, 45 W.Va. 82, 30 S.E. 234 (1898).
Michael W. Carey, Esq., David R. Pogue, Esq., Carey, Scott, Douglas & Kessler, PLLC, Charleston, WV, for Petitioner.
John L. MacCorkle, Esq., MacCorkle Lavender, PLLC, Charleston, WV, for Respondent.
The instant action is before the Court upon the appeal of the Petitioner, EB Dorev Holdings, Inc. (“EB Dorev”) from a July 11, 2013, order of the Circuit Court of Kanawha County which granted the Respondent, West Virginia Department of Administration, Real Estate Division's (“WVDOA”), motion for summary judgment voiding the sale of certain tax liens purchased by EB Dorev. In this appeal, EB Dorev alleges that 1) the circuit court erred in ruling that the real properties, which were owned by private entities on July 1, 2008, were rendered exempt from 2009 real estate taxes upon the subsequent purchase of the properties by the WVDOA in August and September of 2008; 2) the circuit court erred in concluding that the tax liens at issue were extinguished through the doctrine of merger; and 3) the circuit court erred in concluding that the tax liens at issue were inchoate and never matured into liens suitable for sale. Conversely, the WVDOA asserts that while the circuit court may have erred in finding that the properties at issue were rendered exempt from the 2009 taxes upon their purchase by the WVDOA in 2008, that ruling is irrelevant to the circuit court's proper finding that the tax liens were extinguished by the doctrine of merger or were inchoate. Upon examination of the petition, the response, the submitted appendix, and the arguments of counsel, this Court concludes that, for the reasons set forth below, the circuit court's order should be affirmed.
On July 1, 2008, the real properties at issue in this appeal were owned by CRW Real Estate, LLC, So Park, LLC, and Knollwood Investments, LLC.1 In August and September 2008, after the assessment date for the 2009 real estate taxes on the properties,2 the subject properties were sold to the WVDOA. The 2009 real estate taxes on the properties were not timely paid, and on November 16, 2010, the Kanawha County Sheriff sold the tax liens on the properties to the Petitioner.3
After the tax lien sale, the Kanawha County Clerk, at the application and request of the Petitioner, sent a notice to redeem to the law firm Johnson & Lopez, PLLC, the closing attorneys for the sale of the properties at issue 4, informing the closing attorneys that if the delinquent real estate taxes were not paid in full by April 1, 2012, the Clerk would issue tax deeds for the properties to the Petitioner. The notice to redeem was not served on the former owner in whose name the real estate tax went delinquent and was not served on the new record owner, WVDOA, as provided in West Virginia tax sale statutes. The properties were not redeemed by the April 1, 2012, redemption date. However, on March 30, 2012, the WVDOA filed a Complaint against EB Dorev and the Kanawha County Clerk, Kanawha County Sheriff, and Kanawha County Assessor and a Petition for Writ of Mandamus seeking to prevent the issuance of the tax deeds to EB Dorev.5 Petitioner responded and asserted counterclaims and cross-claims seeking, inter alia, to compel the issuance of the tax deeds, to recover its attorney's fees and costs, and to recover the price they paid for the tax liens if the tax deeds were not issued. 6
On November 16, 2012, the WVDOA filed a motion for summary judgment. Thereafter, EB Dorev filed a cross-motion for summary judgment.7 Following a hearing on the matter, the circuit court granted summary judgment in favor of the WVDOA. The circuit court found that (1) because State properties were tax exempt, the properties were rendered exempt from the 2009 real estate taxes when they were purchased by the WVDOA; and (2) the tax liens were extinguished through the doctrine of merger or, alternatively, were inchoate and thus never matured into saleable liens. The circuit court then voided the sale of the tax liens to petitioner and permanently enjoined the Clerk from transferring the properties to petitioner. Subsequently, EB Dorev timely filed the instant appeal.
“A circuit court's entry of summary judgment is reviewed de novo.” Syllabus point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). When reviewing a lower court's decision regarding summary judgment, we apply the same standard required of the circuit court. See Cottrill v. Ranson, 200 W.Va. 691, 695, 490 S.E.2d 778, 782 (1997) () ( citing Williams v. Precision Coil, Inc., 194 W.Va. 52, 58, 459 S.E.2d 329, 335 (1995)). In this regard, we have long held that “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syl. Pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). Having established the proper standard for our review, we proceed with our consideration of this case.
In its first assignment of error, EB Dorev alleges that the circuit court erred in ruling that the properties were rendered exempt from the 2009 real estate taxes upon the WVDOA's purchase of the properties in August and September of 2008. Specifically, EB Dorev contends that the taxes at issue in this appeal are the 2009 property taxes which were assessed on July 1, 2008, when the properties were owned by the former property owners, who, as private entities, are not entitled to tax exemption. EB Dorev asserts that the former owners were responsible for payment of the 2009 taxes on the subject properties pursuant to West Virginia Code § 11–3–1(c) (2010).8 In response, the WVDOA concedes that the circuit court erred in finding that the properties were exempt from taxation on the date of the July 1, 2008, assessment. We agree. To the extent that the subject properties were not owned by the WVDOA, a State agency, on the assessment date, we conclude that the circuit court's first finding, that “the property at issue was rendered exempt from the 2009 taxes upon the purchase by [the WVDOA] in 2008[,]” is contrary to law.
The exemption issue aside, the circuit court concluded that there were alternative reasons the tax lien sale should be voided. We will next address EB Dorev's assignment of error alleging that circuit court erred in concluding that the tax liens at issue were extinguished through the doctrine of merger.
The circuit court found that when the WVDOA acquired the properties in August and September of 2008, the WVDOA's lesser right as the holder of the tax liens that attached on July 1, 2008, was merged with its greater right as the owner of the properties and, as such, the liens were extinguished. In support of this merger theory, the circuit court relied on Armstrong Products Corp. v. Martin, 119 W.Va. 50, 192 S.E. 125 (1937), in which this Court found that where the WVDOA purchases land at a tax sale, the tax lien on the land is merged in its purchased title.
EB Dorev contends that Armstrong is inapplicable to the instant case because it addressedthe State's purchase of land at a sheriff's sale. The circuit court also relied on a State v. Locke, 29 N.M. 148, 219 P. 790 (1923), in which New Mexico's Supreme Court ruled that
when property is acquired by the State in its sovereign capacity, it thereupon becomes absolved, freed, and relieved from any further liability for taxes previously assessed against it, and which are unpaid at the time it becomes so acquired that from the moment of its acquisition the power to enforce the lien is arrested or abated. The claim of the State for such taxes becomes merged in its ownership of the fee. To consider it further burdened with such lien, and to permit it to be subsequently sold for the payment thereof, results in the State selling its own property to pay itself.
219 P. at 792. EB Dorev contends that although this Court cited to Locke in the Armstrong case, it did not expressly adopt Locke's doctrine of merger. Although this language in Locke was not a direct holding or a syllabus point in Armstrong, we believe it is good law and supported by our holdings in other West Virginia cases.
In Locke, New Mexico's Supreme Court reasoned that it is nonsensical to sell property owned by the State for delinquent taxes. 219 P. at 792. EB Dorev contends, however, that raising state funds is not the issue in the case at bar. Instead, EB Dorev argues that the issue is raising funds for local government entities, such as the Kanawha County Board of Education, by taxing private property owners. SeeW.Va.Code § 11–8–4 (1933) ()....
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