Gates v. N.M. Taxation & Revenue Dept.
| Decision Date | 17 December 2007 |
| Docket Number | No. 26,726.,26,726. |
| Citation | 176 P.3d 1178,2008 NMCA 023 |
| Parties | Ollie W. GATES, Plaintiff-Appellee, v. State of NEW MEXICO, TAXATION AND REVENUE DEPARTMENT, Property Tax Division, Torrance County, a New Mexico County, Robert Rubin, Freddie Chavez, and Ray and Joyce Halderman, Defendants-Appellants, and Ray and Joyce Halderman, Counterclaimants-Appellants. |
| Court | Court of Appeals of New Mexico |
Miller Stratvert P.A., Deron B. Knoner, Albuquerque, NM for Appellee.
Gary K. King, Attorney General, David A. Stevens, Special Assistant Attorney General, Santa Fe, NM, for Appellant NM Taxation and Revenue Department.
Modrall, Sperling, Roehl, Harris & Sisk, P.A., Timothy R. Van Valen, Alex C. Walker, Albuquerque, NM, for Appellants Ray and Joyce Halderman.
{1} In this case, involving the New Mexico Taxation and Revenue Department's (TRD) tax sale of a private landowner's real property in response to his failure to pay property taxes for several years, two distinct issues have arisen. First, we must decide whether Rule 1-041(A)(1)(b) NMRA permits litigants to stipulate to dismiss undecided claims remaining after a partial summary judgment in order to have a final order for appeal. Second, we consider the lengths to which TRD must go in order to comply with the requirements of constitutional due process when attempting to provide notice to deficient taxpayers before initiating public sales of their real property. We conclude that (1) although Rule 1-041(A) only allows for the voluntary dismissal of entire actions, the stipulated dismissal of two of four individual claims in this case was permissible under Rule 1-015(A) NMRA and (2) the State was not reasonably diligent in attempting to locate the reasonably ascertainable contact information of the deficient taxpayer before selling his real property at auction. We affirm.
{2} Plaintiff Ollie Gates is a long-time resident of Kansas City, Missouri, who owns dozens of pieces of property in the Kansas City metropolitan area, including a chain of barbeque restaurants. In 1977, Plaintiff purchased a parcel of rural land (the Property) located in Torrance County, New Mexico. After purchasing the Property, Plaintiff remained a Missouri resident and never relocated to New Mexico. In 1996, Plaintiff began to lease the Property to Joe and Mary Jane Chavez for the purpose of livestock grazing. They did not record the lease. After entering into the lease agreement, the Chavezes contacted the Torrance County Electric Cooperative and set up electrical service on the Property. The Chavezes' lease agreement with Plaintiff was in effect until Defendants Ray and Joyce Halderman purchased the Property from TRD in the August 2002 tax sale at issue in this case.
{3} In May 1997, Plaintiffs primary mailing address in Missouri changed, but he failed to effectively relay his new contact information to Torrance County officials. Each year from 1998 to 2002 the Torrance County Treasurer mailed property tax bills to Plaintiffs pre-May 1997 mailing address, and each year the bills were marked as "forwarding order expired" and returned by the postal service. During that period of time, Plaintiff failed to pay any taxes owed on the Property because he did not realize that any money was due.
{4} In July 2001, officials in Torrance County forwarded to TRD a list of delinquent property tax accounts, which included Plaintiffs account. In early 2002, a TRD employee was assigned the task of locating Plaintiff in order to collect the back taxes. The TRD employee's first attempt failed when he was unable to find Plaintiffs contact information in the Torrance County property records. Next, he attempted to physically access the Property in order to either personally notify Plaintiff or to provide him with notice by placing a "red tag" warning of the tax deficiency in a conspicuous place. During that attempt, he encountered a locked gate that denied access to the Property and, because he was unsure if the gate belonged to Plaintiff, opted not to affix the "red tag." Shortly after, the TRD employee learned that Defendants owned a home on the land adjacent to the Property. He eventually contacted Defendant Ray Halderman by telephone and asked if he knew Plaintiff. Mr. Halderman indicated that he had never met Plaintiff and did not know his contact information. Next, the TRD employee called telephone operators in New Mexico and Missouri. The operators in New Mexico had no record of Plaintiff, but the operators in Missouri informed him that there were unpublished Missouri telephone numbers under Plaintiffs name. The TRD employee's final effort in attempting to locate Plaintiff was to enter Plaintiffs name into two Internet databases that provide published telephone and address listings of people living in the United States. The two databases did not provide him with any useful information. The TRD employee had previously used a free Internet search engine to locate deficient taxpayers when it was absolutely necessary, but he did not know whether he conducted such a search in this case.
{5} On July 31, 2002, after the TRD employee had given up his efforts to locate Plaintiff, TRD mailed a certified letter to the address that it had on record for Plaintiff, warning him that his property would be sold at a public auction in order to pay his tax debts. The letter was returned to TRD by the postal service marked with the words "forwarding order expired." TRD then advertised the sale of the Property in a regional newspaper in a final attempt to notify Plaintiff of the impending public auction. After the publication, Defendants learned that the Property was on the market. The auction took place on August 28, 2002, and Defendants made the winning bid of $22,000. Plaintiff did not receive actual notice of the sale of the Property until his tenant, Mary Jane Chavez, informed him that Defendants had purchased it at the tax sale.
{6} Plaintiff filed a civil complaint against Defendants on September 20, 2002, alleging four claims: (I) "avoid conveyance and void sale," (II) quiet title, (III) unjust enrichment, and (IV) prima facie tort. Each claim stems from the assertion that the Property was wrongfully conveyed to Defendants. In January 2004, Plaintiff and Defendants filed cross-motions for summary judgment in the district court, which were both denied. On May 24, 2004, Plaintiff and Defendants filed a joint motion to reconsider their respective cross-motions for summary judgment. The motion included a list of stipulated facts and asked the district court to make a definitive ruling only with respect to Claims I and II, which alleged that Plaintiff was not afforded adequate notice before the Property was sold at auction. In response, the district court issued a memorandum decision granting partial summary judgment in favor of Plaintiff and declaring him to be the "lawful owner of the Property" because "the State's efforts to notify [him] were constitutionally inadequate." The memorandum decision settled the first two claims of the complaint in Plaintiffs favor but left his unjust enrichment and prima facie tort claims undecided.
{7} Unhappy with the district court's decision, Defendants submitted an application for leave to file an interlocutory appeal to this Court, which was denied on September 9, 2004. Plaintiff and Defendants then continued preparing for trial on Claims III and IV. On March 31, 2006, Plaintiff and Defendants filed a "stipulation of dismissal without prejudice" under Rule 1-041(A)(1)(b), which indicated that the parties had reached an agreement to dismiss the remaining two claims. Defendants filed their notice of appeal with the district court on April 27, 2006.
{8} Generally, a civil action may only be appealed to this Court if a "final order" or a "final judgment" has been entered by the district court. NMSA 1978, § 39-3-2 (1966); see also Rule 12-201(A) NMRA. In certain circumstances, this Court may also grant an interlocutory appeal after the district court enters an order that "practically disposes of the merits of the action." Section 39-3-2; see also Rule 12-203 NMRA. As such, partial summary judgment orders are not appealable final orders when other claims are left unresolved but, rather, can only be heard by this Court in an interlocutory appeal. See Govich v. N. Am. Sys., Inc., 112 N.M. 226, 229, 814 P.2d 94, 97 (1991) () (footnote omitted). In this case, Defendants argue, and Plaintiff agrees, that the district court's partial summary judgment order became a "final order," and therefore appealable to this Court, the moment they filed the stipulation of dismissal without prejudice regarding the remaining undecided claims under Rule 1-041(A)(1)(b). We disagree with Plaintiffs and Defendants' interpretation of Rule 1-041(A)(1)(b) but agree that their written agreement to dismiss Claims III and IV finalized the district court's order of partial summary judgment and that we have jurisdiction to decide the merits of this case.
{9} Although neither party in this case advanced the issue of finality, we are able to raise jurisdictional issues sua sponte. Masterman v. State Taxation & Revenue Dep't, 1998-NMCA-126, ¶ 9, 125 N.M. 705, 964 P.2d 869. The resolution of the jurisdictional issue in this case requires us to interpret our rules of civil procedure. We do so under de novo review. Becenti v. Becenti, 2004-NMCA-091, ¶ 6, 136 N.M. 124, 94 P.3d 867.
{10} In interpreting a Supreme Court rule of procedure, we look first to the rule's plain language. In re Michael L., 2002-NMCA-076, ¶ 9, 132 N.M. 479, 50 P.3d 574. "If the rule is unambiguous, we give effect to its language and refrain from further...
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