In re Brown, Bankruptcy No. 94-05201-BGC-13
| Decision Date | 08 May 1998 |
| Docket Number | Bankruptcy No. 94-05201-BGC-13,Adversary No. 97-00311. |
| Citation | 221 BR 849 |
| Parties | In re Karen R. BROWN, Debtor. Karen R. BROWN, Plaintiff, v. MINOR HEIGHTS FIRE DISTRICT and Tom D. Kimbrel, Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Alabama |
Ronald Thompson, Birmingham, AL, for Debtor.
John Daugherty, Birmingham, AL, for Defendants.
Alan Levine, Birmingham, AL, for Mortgagee.
At approximately 10:30 a.m. on September 2, 1994, the defendant Minor Heights Fire District sold the debtor's home to the defendant Tom D. Kimbrel, and his mother. The sale was conducted by the District to satisfy a statutory lien that arose due to the debtor's failure to pay the District's fire dues assessment. At approximately 1:30 p.m. on the same day, the debtor filed her Chapter 13 case. On June 30, 1997 the debtor filed the pending proceeding in which she contends that the sale was, and remains, void. The principle matters before the Court are the debtor's complaint and the parties' cross-motions for summary judgment regarding that complaint.
The 14 specific matters before the Court are:
A trial on the complaint was scheduled for December 2, 1997 but was not held.3 At the final pretrial conference on December 1, 1997 the parties agreed that there were no disputes as to any material facts and that the Court could consider, based on the parties' submissions, the competing motions for summary judgment and all other matters.4
The facts are not in dispute. The defendant Minor Heights Fire District is a public corporation created under Act No. 79, Ala. Acts 1966, Special Session 1966, to provide fire protection to residents of a certain area.5 In turn, the residents of that area, of which the debtor is one, are required to make periodic payments for that protection. The amount of each payment, or service charge, is determined by an assessment of each piece of property.6 If a resident does not pay the required service charge, the District is awarded, pursuant to Section 12 of its enabling act, a lien on the property for the amount of the assessment. The District may, according to its enabling act, enforce that lien by way of a sale of the property, "in the same manner in which the foreclosure of a municipal assessment for public improvements is authorized." Act No. 79, 1966 Ala. Acts, Spec. Session, as amended. (Emphasis added).7
The parties agree that the District's assessment of the debtor's property was correct and that the debtor did not make all of her required payments and that the debtor's failure resulted in the statutory lien. The parties also agree that the District was then in a posture to sell the property, if certain conditions were met, in order to satisfy that lien.
The parties also agree that the District conducted a sale of the debtor's property on September 2, 1994 and that the sale was completed before 11:00 o'clock on that day. According to the Fire District Service Fees Sale Deed issued to the purchasers, the sale was conducted, "within the legal hours of sale," at The Fire Hall, 1135 Broad Street, Birmingham, Alabama, beginning at 10:00 a.m., and was conducted by Mr. Artis D. Coggins, president of the trustees of the Minor Heights Fire District. The District's co-defendant Tom Kimbrel, and his mother, purchased the property. Mr. Kimbrel has since paid all delinquent fees as well as fees accruing during the pendency of this case. The debtor has occupied the home since the sale.
The debtor's mortgagee, United Companies Lending Corporation, also contests the sale.8
This controversy arises because the general procedures applicable to fire district sales do not contain a "legal hours of sale" standard, although for a sale of this type to be valid, the sale must occur within those hours. What that standard is, is the basis of these parties' disagreement.
The defendants contend generally that the sale was conducted within legal hours of sale, that the sale was valid, that the debtor's rights of redemption have expired and that even if the debtor has any remaining rights of redemption, that she may not, under the Court of Appeals for the Eleventh Circuit opinion in Commercial Federal Mortgage Corp. v. Smith (In re Smith), 85 F.3d 1555 (11th Cir.1996), exercise those in this case.
The defendants also argue that the District's enabling statute allows sales of property to enforce statutory liens for fire district dues. The defendants argue that the procedures for such sales are contained in two Code of Alabama sections. First, section 11-48-49 they contend, contains the general procedures for conducting such sales. That section reads:
Proceedings for sale of land upon failure of owner to pay assessment, installment or interest — Notice.
If the property owner who has not elected to pay installments fails to pay his assessments within 30 days or, having elected to pay in installments, fails to pay the first installment in 30 days from the date of the assessment or makes default in the payment of any annual installment or the interest thereon, the whole of such assessment shall immediately become due and payable, and the officer designated by the municipality to collect such assessments shall proceed to sell the property against which the assessment is made to the highest bidder for cash, but he shall first give notice by publication once a week for three consecutive weeks in some newspaper published in the city or town or of general circulation therein of the date and time of such sale and the purpose for which the same is made, together with a description of the property to be sold. If said officer shall fail to advertise and sell any property on which said payments or installments are past due, any taxpayer of the issuing municipality or any holder of bonds of the series affected by said failure, whether of bonds heretofore issued or to be hereafter issued, shall have the right to apply for a writ of mandamus requiring said official to take such action to any court of competent jurisdiction, and said court shall, on proof, issue and enforce such writ.
Second, because section 11-48-49 does not designate what "legal hours of sale" apply to such sales, the defendants contend (based on a theory that assessment sales and tax sales should be conducted in the same manner), that the time provision contained in tax sale section 40-10-15, provides the specific "legal hours of sale" standard that applies to any sale conducted under section 11-48-49.9
Section 40-10-15 reads:
How sale made; duties of judge of probate.
Such sales sales of real estate for the payment of taxes shall be made in front of the door of the courthouse of the county at public outcry, to the highest bidder for cash, between the hours of 10:00 A.M. and 4:00 P.M., and shall continue from day to day until all the real estate embraced in the decree has been sold. The judge of probate must attend such sales and make a record thereof in a book to be kept by him in his office for that purpose, in which he shall describe each parcel of real estate sold and state to whom sold, the price paid by the purchaser, the date of sale and, if no sale was effected, stating that fact, and the reason thereof, and also in separate columns the amounts, as taken from the book or docket in which the decrees are entered, of each kind of tax penalties and of the fees and costs in each case, and he must also enter in such docket, in each case, the land sold under the decree in that case, the purchaser thereof and the amount at which it was sold.
Code of Ala.1975, § 40-10-15 (parenthetical added) (emphasis added).
The defendants conclude that the 10:00 a.m. to 4:00 p.m. time in section 40-10-15 is a specific statutory provision that controls the general procedures for public sales conducted pursuant to section 11-48-49 to foreclose municipal assessments for public improvements.10 And although section 40-10-15 relates by its own terms to tax sales, the defendants argue that the special assessments of the District should be considered like taxes for purposes of collection and thus should be collected in the same manner as taxes, that is in accordance with section 40-10-15.
The debtor and the mortgagee disagree and contend generally that the sale was not valid, but that if it were, the debtor did not receive notice sufficient to erode her rights of redemption. Specifically the debtor and the mortgagee agree that the District's enabling statute allows sales of property to enforce attached liens and they agree with the District that the general procedure for conducting those sales is contained in section 11-48-49; however, the debtor and the mortgagee disagree that special assessments by fire...
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