Fennelly v. A-1 Machine & Tool Co.

• Decision Date: 06 October 2006
• Docket Number: No. 04-1232.,04-1232.
• Citation: 728 N.W.2d 163
• Parties: Bill FENNELLY, Scott County Treasurer, Appellant, v. A-1 MACHINE & TOOL CO., Appellee.
• Court: Iowa Supreme Court

728 N.W.2d 163

Bill FENNELLY, Scott County Treasurer, Appellant, v. A-1 MACHINE & TOOL CO., Appellee.

No. 04-1232.

Supreme Court of Iowa.

October 6, 2006.

Rehearing Denied February 22, 2007.

Thomas C. Fritzsche, Assistant County Attorney, for appellant.

John T. Flynn of Brubaker, Flynn & Darland, P.C., Davenport, for appellee.

CADY, Justice.

In this appeal, we must primarily decide if an action by a county treasurer to collect delinquent property taxes is subject to the statute of limitations, and if a tax sale certificate is a condition precedent to such an action when the parcels for which taxes are delinquent consist of machinery and equipment. The district court granted summary judgment to the taxpayer, and the treasurer appealed. Upon our review, we conclude the action is not barred by the statute of limitations, and a tax sale certificate was not a condition precedent to bringing this action. We affirm the district court in part, reverse in part, and remand for further proceedings.

I. Background Facts and Proceedings

A-1 Machine & Tool Co. ("A-1") is an Iowa corporation. It owned or leased certain industrial metalworking machinery, which was treated as a taxable real property parcel by the Scott County Assessor from 1989 to 2001. The Scott County Auditor levied taxes on the parcel each of those years. A-1 never paid the taxes. Its president, Alvin Roggenkamp, claimed the corporation never received any tax bills or notices that taxes were owed. The taxes were deemed delinquent by the Scott County Treasurer, Bill Fennelly (the "Treasurer"). He eventually obtained a tax sale certificate for the taxes from 1989 to 1996, but did not obtain a certificate for the taxes from 1997 to 2001.

The Treasurer did not file an action to collect the delinquent taxes until July 18, 2003. At that time, he filed a petition in district court to recover a personal judgment against A-1 under Iowa Code section 445.3 (2003).

A-1 answered the petition and alleged a variety of defenses to the claim. These defenses included: (1) the property composing the taxed parcel was personal property, not real property, and thus the Treasurer could not collect taxes on the parcel;¹ (2) a personal judgment could not be entered for delinquent taxes levied prior to 1992 because the statute authorizing a personal judgment for delinquent property taxes did not go into effect until that year; (3) all the Treasurer's claims were barred by laches and estoppel; (4) claims for taxes that became delinquent prior to 1997 were barred by the statute of limitations; and (5) the claims for the 1997-2001 taxes were barred because the Treasurer did not first obtain a tax sale certificate.

Both parties filed motions for summary judgment. A-1 sought to have the petition dismissed based on the strength of its defenses. The Treasurer also sought to adjudicate the viability of the defenses so that the action could proceed to judgment on its claim.

The district court granted summary judgment for A-1. It held the claims by the Treasurer for taxes levied prior to 1997 were barred by the five-year statute of limitations. It further held that the claims for taxes after 1997 were required to be dismissed because the Treasurer failed to obtain a tax sale certificate prior to instituting the action. Although these holdings disposed of all of the tax claims, the district court further held that the defense of laches was not available to A-1, and that the estoppel defense asserted by A-1 relied upon disputed facts that made it improper for adjudication by summary judgment. The district court subsequently dismissed the petition.

The Treasurer appeals from the decision by the district court. First, he claims a treasurer is immune from the statute of limitations when bringing an action on behalf of a county to collect delinquent real property taxes. Second, he claims a tax sale certificate is not a condition precedent to an action for a personal judgment for delinquent property taxes. Finally, he claims the district court erred by failing to adjudicate the other defenses asserted by A-1 as requested in his motion for summary judgment. A-1 requests the case be remanded to the district court for consideration of common law attorney fees for defending the action in district court and on appeal. Alternatively, A-1 requests an award for appellate attorney fees.

II. Standard of Review

Our review in summary-judgment appeals is for correction of errors at law. Stewart v. Sisson, 711 N.W.2d 713, 715 (Iowa 2006) (citing Otterberg v. Farm Bureau Mut. Ins. Co., 696 N.W.2d 24, 27 (Iowa 2005)).

A motion for summary judgment should only be granted if, viewing the evidence in the light most favorable to the non-moving party, "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

Otterberg, 696 N.W.2d at 27 (quoting Iowa R. Civ. P. 1.981(3); citing Wernimont v. Wernimont, 686 N.W.2d 186, 189 (Iowa 2004)).

We normally review the district court's decision to award or not to award attorney fees for an abuse of discretion. In re Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006). However, "[t]he standard of review for an award of common-law attorney fees is de novo." Wolf v. Wolf, 690 N.W.2d 887, 896 (Iowa 2005) (citing Hockenberg Equip. Co. v. Hockenberg's Equip. & Supply Co. of Des Moines, Inc., 510 N.W.2d 153, 158 (Iowa 1993)).

III. Statute of Limitations

Limitations on the time to bring an action in Iowa are generally governed by chapter 614 of the Code. This chapter provides a number of special limitation periods for various types of actions, and includes section 614.1(4), which provides:

Actions may be brought within the times herein limited, respectively, after their causes accrue, and not afterwards, except when otherwise specially declared:

. . . .

4. Unwritten contracts—injuries to property—fraud—other actions. Those founded on unwritten contracts, those brought for injuries to property, or for relief on the ground of fraud in cases heretofore solely cognizable in a court of chancery, and all other actions not otherwise provided for in this respect, within five years, except as provided by subsections 8 and 10.

Iowa Code § 614.1(4).² None of the special limitations provisions in chapter 614 applies to a claim to collect delinquent taxes. See id. (stating the limitations period, "except when otherwise specifically declared" for "all other actions not provided for in this respect"). See generally id. ch. 614. Additionally, the parties agreed that the chapter of the Code governing tax collection does not contain a special limitations period. See id. § 445.3 (stating an action by the county treasurer for the collection of delinquent taxes "shall be in all respects commenced, tried, and prosecuted to final judgment the same as provided for ordinary actions"). See generally id. ch. 445. Without a special limitation period provided by a statute, the "default" five-year statute of limitations found in section 614.1(4) normally applies. See id. § 614.1(4) (stating "all other actions not otherwise provided for" shall be brought within five years). A-1 claims this statute precludes the Treasurer from bringing claims for delinquent taxes levied prior to 1997.

The Treasurer asserts the statute of limitations does not apply to this action under the doctrine of nullum tempus occurrit regi. The literal translation of this ancient maxim is "no time runs against the King." Black's Law Dictionary 1669 (7th ed.1999). The doctrine originated in the English common law as a declaration that the statute of limitations could not be applied against the Crown. See United States v. Thompson, 98 U.S. 486, 489, 25 L.Ed. 194 (1878) ("The rule of nullum tempus occurrit regi has existed as an element of the English law from a very early period. . . . The common law fixed no time as to the bringing of actions. Limitations derive their authority from statutes. The king was held never to be included, unless expressly named. No laches was imputable to him. These exemptions were founded upon considerations of public policy. It was deemed important that, while the sovereign was engrossed by the cares and duties of his office, the public should not suffer by the negligence of his servants."). The rationale for the doctrine was that public rights should not be lost by the oversight or neglect of governmental representatives to whom the rights have been entrusted. Id. The idea was to make the sovereign immune from the statute of limitations in order to preserve public rights. 51 Am.Jur.2d Limitation of Actions § 78, at 500-01 (2000).

The doctrine was promptly imparted to our American justice system as one of the incidents of sovereignty, see Thompson, 98 U.S. at 489-90 ("When the colonies achieved their independence, each one took these prerogatives, which had belonged to the crown; and when the national Constitution was adopted, they were imparted to the new government as incidents of the sovereignty thus created."), and has been a fixture in our jurisprudence in Iowa for over 130 years, see Des Moines County v. Harker, 34 Iowa 84, 85 (1872) ("[W]e do not understand counsel upon either side to controvert the propositions that a statute of limitations will not apply to the State unless expressly so stated in it, following the common-law maxim, `nullum tempus occurrit regi.'"). Thus, in Iowa, it is well recognized that a statute of limitations does not run against the state unless specifically provided by statute.³ See, e.g., In re Peers' Estate, 234 Iowa 403, 411, 12 N.W.2d 894, 898 (1944) ("[A] general statute of limitations does not apply to the State of Iowa." (citing Des Moines County, 34 Iowa 84; Kellogg v. Decatur County, 38 Iowa 524 (1874); Manatt v. Starr, 72 Iowa 677, 34 N.W. 784 (1887))); ...