Klingsheim v. Cordell

• Citation: 2016 CO 18,379 P.3d 270
• Decision Date: 04 April 2016
• Docket Number: Supreme Court Case No. 14SC931
• Parties: Bradley KLINGSHEIM, Petitioner, v. Carl A. CORDELL and Wanda M. Cordell, Respondents.
• Court: Supreme Court of Colorado

379 P.3d 270

2016 CO 18

Bradley KLINGSHEIM, Petitioner,

v.Carl A. CORDELL and Wanda M. Cordell, Respondents.

Supreme Court Case No. 14SC931

Supreme Court of Colorado.

April 4, 2016

Attorneys for Petitioner: The Baty Law Firm P.C., Michael W. Baty, Durango, Colorado.

Attorneys for Respondents: Jon Lewis Kelly PC, Jon L. Kelly, Dolores, Colorado.

En Banc

JUSTICE GABRIEL

delivered the Opinion of the Court.

¶ 1 This case principally requires us to determine the scope of a county treasurer's duty of diligent inquiry, pursuant to section 39–11–128(1), C.R.S. (2015)

, in attempting to notify a taxpayer that his or her land may be sold to satisfy a tax lien. The petitioner, Bradley Klingsheim, ultimately acquired tax liens and later requested and received deeds to properties that the respondents, Carl A. and Wanda M. Cordell, had owned but on which they had failed to pay taxes. The Cordells contend that the deeds were void because the La Plata County Treasurer's Office (the “Treasurer”) had not fulfilled its statutory duty of diligent inquiry in attempting to notify the Cordells that it would be issuing a tax deed for the Cordells' properties.

¶ 2 Construing section 39–11–128(1)(a)

, we conclude that a county treasurer has an initial duty to serve notice of a pending tax sale on every person in actual possession or occupancy of the property at issue, as well as on the person in whose name the property was taxed or specially assessed, if upon diligent inquiry, such persons can be found in the county or if their residences outside the county are known. In addition, we hold that a treasurer owes a duty of further diligent inquiry after an initial notice has been sent only when the facts known to the treasurer show that the taxpayer could not have received the notice of the pending tax sale.

¶ 3 Applying this standard here, we conclude that the Treasurer satisfied its duty of diligent inquiry. In addition, we conclude that the notice that the Treasurer provided in this case satisfied due process requirements. Accordingly, we reverse the judgment of the court of appeals and remand this case for further proceedings consistent with this opinion.

I. Facts and Procedural History

¶ 4 The Cordells were the record owners of a tract of land in La Plata County (Tract 1), and Mr. Cordell was also the record owner of an adjoining tract that had been deeded to him by his grandmother (Tract 2). After the Cordells failed to pay the taxes owed on these properties for three successive years, Brenda Heller purchased tax liens for each tract and later assigned these liens to Klingsheim. Thereafter, Klingsheim requested deeds for the properties from the Treasurer.

¶ 5 Pursuant to section 39–11–128(1)(b)

, the Treasurer published, for each property, notice of the tax sale and of Klingsheim's application for the issuance of treasurer's deeds. Additionally, pursuant to section 39–11–128(1)(a), the Treasurer sent, by certified mail, return receipt requested, copies of the notice for Tract 1 to the Cordells and a copy of the notice for Tract 2 to Mr. Cordell. The notices were addressed to the Cordells and to Mr. Cordell, respectively, at “705 N. Vine, Farmington, NM 87401,” which was the address listed for the Cordells on the La Plata County assessor's tax roll.

¶ 6 After the notices were sent, the Treasurer received return receipts for both of the certified mailings. The receipts indicated that “Cleo Cordell,” who turned out to be Mr. Cordell's mother, had signed for the notices at 703 North Vine.¹

¶ 7 After receiving the receipts signed by Cleo Cordell, the Treasurer did not re-check its records for other addresses, re-send the notices, or make any other efforts to notify the Cordells of the tax deeds or their redemption rights. After the statutory period had passed, the Treasurer issued the requested deeds to Klingsheim.

¶ 8 Subsequently, Mr. Cordell received a notice that no tax was owed on the properties at issue. Knowing that he had not paid the taxes on those properties, he “started looking” and found the above-described notices at his mother's home. By that time, however, his time to redeem the properties had run.

¶ 9 The Cordells then filed the present action, seeking, as pertinent here, a declaratory judgment that the deeds were void and that the Cordells were the owners of Tract 1 and Mr. Cordell was the owner of Tract 2. After a bench trial, the trial court found that the Treasurer had failed to comply with the statutory requirements for issuing the deeds because, among other things, the Treasurer had not undertaken a diligent inquiry to determine the Cordells' residences. Thus, the court declared the treasurer's deeds void and set them aside.

¶ 10 Klingsheim appealed, contending that the trial court had misinterpreted pertinent case law to require an extended duty of inquiry when a return receipt is signed by someone other than the taxpayer and at what appeared to be a “next-door address.” Klingsheim asserted that the Treasurer “should not be burdened with another responsibility of inquiry after [meeting the] statutory obligations of correct mailing.”

¶ 11 In a split, published decision, a majority of a division of the court of appeals concluded that the Treasurer's inaction after receiving the return receipts did not satisfy the duty of diligent inquiry required by section 39–11–128(1)

. Cordell v. Klingsheim, 2014 COA 133, ¶ 13, ––– P.3d ––––. Specifically, the majority concluded that because the receipts informed the Treasurer that the notices were not actually delivered to either the intended recipients or their agents, the Treasurer was required to re-examine the county records for any alternative addresses. Id. Accordingly, the division affirmed the trial court's judgment setting aside the treasurer's deeds as void. Id. at ¶¶ 20–21.

¶ 12 Judge Jones dissented. In his view, the notices were received by Mr. Cordell's agent for receiving mail, and thus, as a matter of law, he was served with the notices. Id. at ¶ 22

(Jones, J., dissenting). In addition, Judge Jones concluded that the Treasurer was not required to do anything more to give notice because any reasonable additional efforts would have been futile. Id.

¶ 13 We subsequently granted Klingsheim's petition for certiorari.²

II. Analysis

¶ 14 We first address the Treasurer's duty of diligent inquiry under section 39–11–128(1)

. Statutory interpretation is a question of law that we review de novo. Shaw v. 17 W. Mill St., LLC , 2013 CO 37, ¶ 13, 307 P.3d 1046, 1049. We then address the Cordells' argument that the notices that the Treasurer provided in this case violated the Cordells' rights to due process. This argument also presents a question of law that we review de novo. See Quintano v. People , 105 P.3d 585, 592 (Colo.2005)

(reviewing de novo whether a criminal defendant was denied due process because it presented a question of law); cf.

Dickinson v. Lincoln Bldg. Corp. , 2015 COA 170M, ¶ 7, 378 P.3d 797 (“[W]hether a defaulting party's due process right was violated by lack of notice presents a question of law that we review de novo.”).

A. Duty of Diligent Inquiry

¶ 15 Klingsheim argues that the division misinterpreted pertinent case law to conclude that an additional duty of diligent inquiry arises under sections 39–11–128(1)(a)

and –128(1)(b) when a certified mail receipt is returned bearing a third party's signature for an address different from the taxpayer's. Although our analysis differs somewhat from Klingsheim's, we agree that the Treasurer fulfilled its duty of diligent inquiry in this case.

¶ 16 Section 39–11–128

provides, in pertinent part:

(1) Before any purchaser, or assignee of such purchaser, of a tax lien on any land ... sold for taxes or special assessments due either to the state or any county ... at any sale of tax liens for delinquent taxes levied or assessments authorized by law is entitled to a deed for the land ... so purchased, he shall make request upon the treasurer, who shall then comply with the following:

(a) The treasurer shall serve or cause to be served, by personal service or by either registered or certified mail, a notice of such purchase on every person in actual possession or occupancy of such land ..., and also on the person in whose name the same was taxed or specially assessed if, upon diligent inquiry, such person can be found in the county or if his residence outside the county is known....

(b) In all cases or instances where the valuation for assessment of the property is five hundred dollars or more, the treasurer shall publish such notice [at designated times] ..., and he shall send by registered or certified mail a copy of such notice to each person not found to be served whose address is known or can be determined upon diligent inquiry.

(Emphasis added.)

¶ 17 This statute thus places a duty on a treasurer before a notice is sent. Specifically, the statute requires a treasurer “to make diligent inquiry to learn the address of the record owner and serve notice upon him at that address if it can be learned.” Bald Eagle Mining & Ref. Co. v. Brunton, 165 Colo. 28, 437 P.2d 59, 61 (1968)

.

¶ 18 In addition to this initial duty of diligent inquiry, divisions of our court of appeals have recognized that the treasurer may have a duty to make further diligent inquiry after the notice has been sent. For example, in Schmidt v. Langel, 874 P.2d 447, 451 (Colo.App.1993)

, the division stated that “should the notice be returned as undeliverable, [the treasurer] is required to re-examine the county records for any alternative addresses.” Similarly, in Parkison v. Burley, 667 P.2d 780, 782 (Colo.App.1983), the division concluded that after the notices were returned to the treasurer as undeliverable, “diligent inquiry required, at a minimum, a simple examination or reexamination of the assessor's records.”

¶ 19 This court, however, has not previously addressed whether and under what circumstances a county treasurer has a duty to make a further diligent inquiry after a...