First American Bank and Trust Co. of Purcell v. Oklahoma Indus. Finance Authority, 87070

• Decision Date: 23 December 1997
• Docket Number: No. 87070,87070
• Citation: 951 P.2d 625,1997 OK 155
• Parties: FIRST AMERICAN BANK AND TRUST COMPANY OF PURCELL, Oklahoma, a banking corporation, Plaintiff, v. OKLAHOMA INDUSTRIAL FINANCE AUTHORITY, Appellee/Defendant, and County Treasurer of Oklahoma County and Board of County Commissioners of Oklahoma County, Appellants/Defendants, and B & B Wholesale Meat Company, Inc., an Oklahoma corporation; United States of America; Chrysler Capital Corporation, f/k/a E.F. Hutton Credit Corporation; Cash Flow Management, Inc., Defendants. The OKLAHOMA INDUSTRIAL FINANCE AUTHORITY, Third Party Plaintiff, v. Larry BEASLER, an individual; and Louise Beasler, an individual, Third Party Defendants.
• Court: Oklahoma Supreme Court

Page 625

951 P.2d 625

1997 OK 155

FIRST AMERICAN BANK AND TRUST COMPANY OF PURCELL, Oklahoma, a banking corporation, Plaintiff, v. OKLAHOMA INDUSTRIAL FINANCE AUTHORITY, Appellee/Defendant, and County Treasurer of Oklahoma County and Board of County

Commissioners of Oklahoma County, Appellants/Defendants,

and

B & B Wholesale Meat Company, Inc., an Oklahoma corporation;

United States of America; Chrysler Capital

Corporation, f/k/a E.F. Hutton Credit

Corporation; Cash Flow

Management, Inc.,

Defendants.

The OKLAHOMA INDUSTRIAL FINANCE AUTHORITY, Third Party Plaintiff, v. Larry BEASLER, an individual; and Louise Beasler, an

individual, Third Party Defendants.

No. 87070.

Supreme Court of Oklahoma.

Dec. 23, 1997.

As Corrected April 3, 1998.

W.A. Drew Edmondson, Attorney General, and John Crittenden, Assistant Attorney General, Oklahoma City, for Appellee.

Gretchen Crawford, Assistant District Attorney, Oklahoma City, for Appellants.

LAVENDER, Justice.

¶1 We hold the tax exemption afforded State-owned property found in OKLA. CONST. art. 10, § 6 did not have the effect of extinguishing all Oklahoma County ad valorem real estate taxes assessed and owing against certain property when appellee, Oklahoma Industrial Finance Authority (OIFA), a State agency, acquired the property. In place of a sale of the property, the Legislature intended 68 O.S.1991, § 2940 to act as the mechanism to insure that all valid ad valorem real estate taxes previously assessed or that would become due prior to OIFA's acquisition of the property are paid. Normally, § 2940 provides such taxes should be paid by deducting them from the purchase price paid to the private seller for remittance to the County--which was not done in this case. In that taxes required to be paid to County under § 2940 when OIFA purchased the property have not been paid and the Legislature intended § 2940 to be the substitute remedy to sale of the property for collection of the taxes, the appellants, Oklahoma County Treasurer and Board of Commissioners (County) may sue OIFA in a civil action to recover the taxes if they are not paid.

PART I. STANDARD OF REVIEW.

¶2 The trial court granted summary judgment in favor of OIFA and against County. Thus, the standard for appellate review is that applied to a trial court's grant of summary judgment which was set out in Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051, as follows:

Although a trial court in making a decision on whether summary judgment is appropriate considers factual matters, the ultimate decision turns on purely legal determinations, i.e. whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions. Therefore, as the decision involves purely legal determinations, the appellate standard of review of a trial court's grant of summary judgment is de novo. [This Court], like the trial court, will examine the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Further, all inferences and conclusions to be drawn from the evidentiary materials must be viewed in the light most favorable to the non-moving party. (citations omitted)

Id. at 1053.

PART II. FACTS AND PROCEDURAL BACKGROUND.

¶3 OIFA has authority to make loans and secure them by mortgages. The authorization emanates from OKLA. CONST. art. 10, § 33A and is vitalized through the Oklahoma Industrial Finance Authority Act, 74 O.S.1991, § 851 et seq., as amended. OIFA's purpose is to aid and assist Oklahoma's industrial development and provide additional employment and payrolls in the State. 74 O.S.1991, § 852. OIFA is authorized to take title by foreclosure to any industrial development project where the acquisition is necessary to protect a loan made by it and may sell, transfer and convey any such project to a responsible buyer. 74 O.S.1991, § 855(o). Further, to minimize financial losses and sustain employment, if sale, transfer or conveyance cannot be accomplished with reasonable promptness, OIFA may lease a project acquired through foreclosure to a responsible tenant or tenants. Id.

¶4 In 1988 B & B Wholesale Meat Company, Inc. (B & B) was loaned $525,000.00 from OIFA and $75,000.00 from First American Bank and Trust Company of Purcell (bank). Partly securing the loans was a parity real estate mortgage in which OIFA had an interest of 87.5% and bank, 12.5%. ¹ B & B defaulted on the loans and bank brought a foreclosure suit, in which OIFA and County were made defendants. OIFA cross-claimed against B & B seeking foreclosure and against County, claiming the superiority of its lien. By a counter/cross-claim, County asserted a superior lien on the property by virtue of delinquent ad valorem real estate taxes for the years 1985 through 1990, as well as liens which might attach during the pendency of the foreclosure suit. ² In reply to County's counterclaim, bank admitted County's ad valorem real estate tax liens were superior to its mortgage lien.

¶5 OIFA and bank moved for summary judgment. In August 1991 the trial court entered a partial judgment deciding B & B had defaulted on the loans, the amounts owed to OIFA and bank by B & B were determined, and the property was ordered sold. ³ The judgment reserved for future consideration County's claim for taxes. A sheriff's sale was held, which was confirmed by the trial court in February 1992. The purchasers at the sheriff's sale were OIFA and bank who bought the property for $35,000.00. A sheriff's deed was issued to OIFA and bank as tenants in common in their parity mortgage percentages--i.e. undivided interests of 87.5% and 12.5%, respectively. The sheriff's sale proceeds were insufficient to satisfy OIFA's mortgage lien against the property. A $35,000.00 credit was given against OIFA's and bank's earlier judgment.

¶6 Before the trial court finally decided all issues concerning County's tax lien(s) or claim for past-due taxes, in August 1995 bank sold its interest to OIFA by quitclaim deed reflecting OIFA paid bank $1,000.00. OIFA then moved for summary judgment in rem, essentially asserting that upon its acquisition, the property became tax exempt and any County ad valorem real estate tax lien existing against the property was extinguished. Although recognizing it could not sell State-owned property to recover past-due real estate taxes arising while the property was previously privately owned, County cross-moved for summary judgment asserting § 2940 gave it an in personam cause of action against OIFA for a money judgment for all delinquent real estate taxes through August 1995. At the time of filing its cross-motion for summary judgment County submitted an affidavit from a Deputy Treasurer for Oklahoma County that $12,613.57 in delinquent taxes, penalties and interest was due and owing for ad valorem real estate taxes. The affidavit also reflects that despite the tax delinquency, the property was never sold in a tax certificate sale or a tax resale.

¶7 The trial judge granted judgment in rem to OIFA. He held the property became tax exempt when OIFA acquired it and all County ad valorem real estate taxes assessed and owing against the property while privately owned were extinguished. He also found § 2940 was inapplicable and prohibited County from attempting to collect the taxes from OIFA, its successors or assigns.

¶8 County appealed and the Court of Civil Appeals (COCA), disagreeing with part of the trial judge's decision, reversed and remanded for further proceedings. County sought certiorari which we previously granted. We now vacate the COCA memorandum opinion, reverse the trial court judgment and remand for further proceedings consistent with this opinion.

PART III. OKLA. CONST. ART. 10, § 6 DID NOT EXTINGUISH VALID OKLAHOMA COUNTY AD VALOREM REAL ESTATE TAXES EITHER PREVIOUSLY ASSESSED OR THAT WOULD HAVE BECOME DUE FOR THE PERIOD THE PROPERTY WAS PRIVATELY OWNED PRIOR TO OIFA'S ACQUISITION.

¶9 We first note it is unnecessary to decide in this case whether OKLA. CONST. art. 10, § 6 would in all situations preclude sale of State-owned property as a collection mechanism for the recovery of ad valorem real estate taxes delinquent at the time of State acquisition. Nor must we decide the current status of County's claimed lien(s) on the real property involved in this case. Two reasons counsel against the necessity for decisions on these matters. One, County essentially concedes it may not sell the involved property as a method to recover the taxes claimed to be due. Two, as we will set out in Part IV, infra, it is our view, the Legislature intended 68 O.S.1991, § 2940 to act as the substitute remedy--to sale of the property--for collection of validly owing ad valorem real estate taxes arising while the property is in private ownership, but remain unpaid at the time of State acquisition. With these matters understood, we turn to our review of the trial court's judgment.

¶10 In interpreting an Oklahoma constitutional provision our goal is to give effect to the intent of its framers and the people adopting it. Draper v. State, 1980 OK 117, 621 P.2d 1142, 1145. To determine this intent we look to the instrument itself and when the text of a constitutional provision is unambiguous, the courts, in construing it, are not at liberty to search for meaning beyond the instrument. Id. at 1145-1146. The tax exemption for State-owned property found in OKLA. CONST. art. 10, § 6 provides in pertinent part as follows: "[A]ll property of this state, and of counties and of municipalities of this state ... shall be exempt from taxation...." ⁴

¶11 The unambiguous language of § 6 concerns itself only with granting a tax exemption to property of the State once the property is acquired by the State--i.e. the provision is plainly prospective in nature and does not purport to reach the issue of how to handle previously assessed taxes or those that may be due for the period of time the property...