Hamilton v. Guardian Tax AL, LLC

Decision Date28 May 2021
Docket Number1200048
Parties Shamblin Lane HAMILTON v. GUARDIAN TAX AL, LLC, and Carol Denise Hamilton
CourtAlabama Supreme Court

Enefaa Fenny of Fenny & Fenny, LLC, Center Point, for appellant.

John W. Gray II of Amari & Gray, Birmingham, for appellees.

MENDHEIM, Justice.

Shamblin Lane Hamilton appeals from a Jefferson Circuit Court judgment concluding that he had no interest in real property located on Brookmont Drive in Birmingham ("the property") and ejecting him from the property. We reverse the circuit court's judgment and remand the cause.

I. Facts

On May 4, 1992, Rodney J. Stanfa and Beverly M. Stanfa conveyed the property to Shamblin and Carol Denise Hamilton by general warranty deed. The Hamiltons owned the property in fee simple subject to a mortgage to Compass Bank recorded on November 8, 2003.

On August 31, 2004, Shamblin and Carol were divorced, and by order of the court Shamblin was awarded sole ownership of the property. The divorce judgment provided, in part: "[T]he Agreement of the parties filed in this cause, attached hereto, is hereby ratified and approved and made a part of this decree the same as if fully set out herein and the parties to this cause are ordered to comply herewith." The "Agreement in Contemplation of Divorce" attached to the divorce judgment provided, relevant in part:

"3. [Shamblin] shall become the sole owner of the house and property located [on] Brookmont Drive, ... subject to the mortgage thereon, which [Shamblin] assumes and shall make all future payments thereon. [Shamblin] agrees to indemnify and hold [Carol] harmless from paying said indebtedness.
"....
"19. Each party will execute and deliver to the other any documents which may be reasonably required to implement and accomplish the purpose and intent of this agreement, and shall do any and all other things necessary to that end. If either party shall fail to comply with the provision of this paragraph, this agreement shall constitute an actual grant, assignment and conveyance of the property and rights in such matter, and with such force and effect as shall be necessary to effectuate the terms of this agreement.
"20. Except as herein provided, both [Shamblin] and [Carol] do hereby forever waive, release and quit claim to the other all rights ... in and to, or against the property of the other party, or his or her estate, whether now owned or hereinafter acquired by such other party. ..."

On February 19, 2009, the divorce judgment was modified by an agreement of the parties, and an order of the court adopting that agreement declared that Shamblin had assumed sole responsibility of a home-equity line of credit that Shamblin and Carol had jointly executed with Compass Bank. In his filings in the circuit court in this case, Shamblin asserted that he was still making payments on the home-equity line of credit as the litigation ensued. Shamblin also alleged that he had paid off the mortgage on the property in 2010, that he had tried to get Carol to give him a quitclaim deed verifying that he was the sole owner of the property, but that she had "failed, refused or neglected" to do so.

The Hamiltons failed to pay the ad valorem real-property taxes on the property, and on May 20, 2014, the State sold the property at auction to Mercury Funding, LLC ("Mercury"), for $20,699. The Jefferson Probate Court issued a tax deed for the property to Mercury on January 2, 2018.

On January 5, 2018, Mercury conveyed its interest in the property to Guardian Tax AL, LLC ("Guardian"), by quitclaim deed. On April 24, 2018, Guardian filed a complaint for ejectment and to quiet title to the property against the Hamiltons and Compass Bank. In its complaint, Guardian asserted that after the tax sale it "has paid the taxes on the Property, purchased insurance for the Property, commenced/completed preservation improvements on the Property, and/or incurred attorneys’ fees in relation to the Property." Guardian indicated in the complaint that Shamblin "may still wrongly claim an interest in the Property and/or be in possession of the Property despite [Guardian's] attempts to gain possession and quiet title."

On March 11, 2019, Shamblin filed an answer and a counterclaim in response to Guardian's complaint. Specifically, Shamblin denied not paying the ad valorem property taxes on the property, and he asserted that he had "never received or been served any notice of delinquency for ad valorem real property taxes" even though he had retained physical ownership of the property from May 4, 1992, to the present. In his counterclaim, Shamblin asserted a claim for judicial redemption of the property pursuant to § 40-10-83, Ala. Code 1975.1 On the same date, March 11, 2019, Shamblin filed a "Motion for Judicial Redemption of Property Sold for Taxes" in which he reiterated his arguments regarding why he had a right to judicially redeem the property pursuant to § 40-10-83.

On March 20, 2019, Shamblin filed a "Motion to Show Cause" regarding why he should be permitted to redeem the property. In that motion, Shamblin alleged, among other things:

"On March 11, 2019[, Guardian] requested a continuance of the Status Conference scheduled for 11:00 am next day ... to pursue settlement amongst the Parties. [Guardian's] Attorney was himself blind-sided by [Carol's] claim the next day that the matter had been settled with [Guardian's] out-of-State Attorneys in Georgia and that [Carol] had redeemed the Property, without recourse to [Shamblin]."

Shamblin then argued that he, not Carol, had a right to redeem the property because he was the owner of, and in possession of, the property.

On September 12, 2019, Guardian and Carol filed a "Joint Stipulation of Dismissal" in which they requested dismissal of Guardian from this action because a settlement agreement purportedly had been reached between Guardian and Carol. The joint stipulation explained:

"As a part of that agreement, Guardian assigned and transferred all of its interest in this cause of action and in the property that is the subject of this lawsuit to Carol D. Hamilton. Likewise, Carol D. Hamilton has agreed to accept the liability for any claims raised in the suit, agreeing to indemnify and defend Guardian against those claims. Therefore, Guardian and Carol D. Hamilton stipulate to the dismissal of Guardian and any claims against Guardian -- including the claims or counterclaims that were raised, or could have been raised -- with prejudice under Ala. R. Civ. P. 41(a). This stipulation is not intended to end the action, but is intended to dismiss Guardian as a party to the action."

Guardian and Carol did not submit along with their joint stipulation any documentation regarding their settlement agreement or the quitclaim deed transferring Guardian's interest in the property to Carol.

On September 23, 2019, Shamblin filed an objection to the joint stipulation of dismissal that raised several arguments regarding why Shamblin believed the dismissal of Guardian as a party was not appropriate, including the fact that no evidence of the terms of the settlement agreement or of the transfer of interest in the property had been submitted to the circuit court.

On December 30, 2019, the circuit court entered an order concerning Shamblin's motion for judicial redemption of the property. The opening paragraph of that order provided:

"This Cause came before this Court on November 13, 2019, for hearing on a Motion For Judicial Redemption For Property Sold For Taxes filed by Defendant Shamblin Lane Hamilton. Appearing for [Guardian] was the Honorable Jeff Chapman, and appearing for [Shamblin] was the Honorable Enefaa Fenny. All parties having had the opportunity to present testimony and evidence, and the Court having considered the same, it is hereby ORDERED, ADJUDGED and DECREED as follows:"

(Capitalization in original; emphasis added.) In that order, the circuit court declared that "[Shamblin] has been in actual physical possession of the Property at all times relevant to this case and is still in undisturbed possession at the filing of this Motion." Based on that finding, the circuit court concluded that, under § 40-10-83, Shamblin "is entitled to judicially redeem the Property." Accordingly, the circuit court ordered Guardian to submit a statement of lawful charges within 14 days of the entry of the order and for Shamblin to submit a response within 14 days thereafter and to pay into the court charges that were undisputed.

The following day, December 31, 2019, the circuit court entered an order declaring that the joint stipulation of dismissal was moot. The same day, the circuit court also entered another order declaring that Shamblin's motion to show cause why he should be permitted to redeem the property also was moot.

On January 9, 2020, Guardian filed a motion seeking a 14-day extension for complying with the circuit court's December 30, 2019, order "in order to be able to present a statement of charges to the court." On January 10, 2020, the circuit court granted Guardian's request for a 14-day extension, meaning that it had until January 27, 2020, to file its statement of lawful charges. However, on February 11, 2020, Carol, with Guardian's consent, filed a "Motion to Alter, Amend or Vacate and Renewed Motion to Substitute and Dismiss" in which she requested that the circuit court vacate its orders of December 30 and December 31, 2019, on the basis that those orders failed to account for the fact that Guardian had transferred its interest in the property by quitclaim deed to Carol as part of their settlement. Accordingly, Carol requested that she be realigned as the plaintiff and then be given ample time to submit a statement of lawful charges. Carol also requested that Guardian be dismissed with prejudice from the action.

On February 11, 2020, Shamblin filed an objection to Carol's motion, arguing, among other things, that her motion was untimely under Rule 59(e), Ala. R. Civ. P. The following day, Shamblin filed a motion to show...

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