Kluender v. Plum Grove Invs., Inc.
| Docket Number | 21-1437 |
| Decision Date | 03 February 2023 |
| Citation | 985 N.W.2d 466 |
| Parties | Gary KLUENDER, Jr., Appellant, v. PLUM GROVE INVESTMENTS, INC., Appellee. |
| Court | Iowa Supreme Court |
Todd P. Prichard (argued) of Walk, Prichard, Baresel & Murphy, PC, Charles City, for appellant.
James E. Nervig (argued) of Brick Gentry P.C., West Des Moines, for appellee.
Gary Kluender claims that Iowa's tax-sale statute violates due process because it doesn't require personal service (which is to say, actual delivery1 ) of a written notice that the taxpayer will lose their land if they don't pay their tax debt within ninety days. We disagree. "Due process does not require that a property owner receive actual notice before the government may take his property." Jones v. Flowers , 547 U.S. 220, 226, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006) (emphasis added). Rather, due process only requires a method of service that is reasonably calculated to provide timely notice. See id. Service by mail usually fulfills this requirement. And Iowa's tax-sale statute requires service of ninety-day notices by both regular mail and certified mail. Iowa Code § 447.9 (2017).
Like the district court, we find no due process violation. We affirm.
A. General Background. Tax sales are governed by Iowa Code chapters 446–448. The Code requires that on the third Monday in June the county treasurer must "offer at public sale" all parcels of land "on which taxes are delinquent." Iowa Code § 446.7(1). Over a month before the sale occurs ("May 1"), the treasurer must give delinquent taxpayers notice of the planned sale "by regular first class mail" to their "last known address." Id. § 446.9(1).
At the tax sale, each parcel must be sold "for the total amount of taxes, interest, fees, and costs due." Id. § 446.7(1). In return for this payment, a purchaser receives a "certificate of purchase" from the county treasurer. Id. § 446.29. Then the treasurer must notify the delinquent taxpayer "by regular mail" that their "parcel was sold at tax sale." Id. § 446.2; see also id. ().
Note, though, that the "certificate of purchase" does not actually transfer ownership of the parcel. Rather, the certificate amounts to "an inchoate right or lien." Dohrn v. Mooring Tax Asset Grp., L.L.C. , 743 N.W.2d 857, 860 (Iowa 2008) ; see Iowa Code § 446.29. Even after the tax sale is done and a certificate of purchase has been issued, the property owner still "has two years to redeem the property by paying the county treasurer the amount for which the property was sold as well as the amount of any taxes the certificate holder may have paid for subsequent years plus two percent per month interest." Dohrn , 743 N.W.2d at 860 (citing Iowa Code § 447.1). But if the property is not redeemed within this period, the certificate holder may be entitled to a tax deed. Id. (citing Iowa Code § 448.1 ).
Iowa Code § 447.9(1) (emphasis added).
Section 447.9 goes on to specify that this ninety-day "notice shall be served by both regular mail and certified mail to the person's last known address and such service is deemed completed when the notice is deposited in the mail and postmarked for delivery." Id.
Once service is complete, the final ninety-day period for redemption begins. Id. § 447.12. When those ninety days have passed, the county treasurer must issue a tax deed upon the return of the certificate of purchase. Id. § 448.1. When that deed is properly recorded, it "vest[s] in the purchaser all the right, title, interest, and claim of the state and county to the parcel," as well as "all the right, title, interest, and estate of the former owner." Id. § 448.3(1).
B. Kluender and Plum Grove. We turn now to the facts of this case. In January 2004, Gary Kluender obtained a parcel of farm land in Floyd County (the parcel). Kluender was responsible for paying the property taxes. He received bills in September and then paid them in the spring.
But then Kluender went through a time of financial difficulty. His house was damaged by fire but he could not rebuild it. He had "a hard time paying things." He stopped paying the property taxes on the parcel. He admits receiving "a few notices of tax delinquency."
On June 19, 2017, the parcel was sold at tax sale. Plum Grove paid Kluender's overdue taxes plus interest and costs. In return, Plum Grove received a certificate of purchase.
Time went by. Kluender did not redeem the parcel.
On April 14, 2020, Plum Grove complied with section 447.9 by sending the required ninety-day notice to Kluender. More specifically, Plum Grove sent the notice by regular mail and certified mail both to the parcel itself and to Kluender's last known address, his house in Ionia. Although the Ionia house had been damaged by fire, Kluender admits that he was still receiving mail there. But Kluender did not pick up the certified letter that Plum Grove sent there. It was returned as undeliverable. It appears undisputed, though, that Plum Grove's regular mail letters were not returned as undeliverable.
In the ninety days that followed, Kluender took no action to redeem the parcel. So, on August 11, 2020, the county treasurer issued a tax sale deed to Plum Grove. Through this deed, Plum Grove received all of Kluender's interest in the parcel. See Iowa Code § 448.3(1).
Also in August, Plum Grove sent Kluender a written demand to vacate the parcel. It was sent to the Ionia house. Kluender admits that he received this demand.
In November, Kluender commenced this action. Kluender claimed that he did not receive actual notice of the tax-sale proceedings until August 2020, when Plum Grove sent him a written demand to vacate the parcel. Kluender also claimed that "Iowa Code [section] 447 violates the Federal and State Constitution [guarantees] of due process in that it does not require effective notice."
Kluender and Plum Grove filed cross-motions for summary judgment. The sole issue before the court was whether Iowa Code section 447.9 is unconstitutional because it does not require personal service. The court answered that question in the negative, denied Kluender's motion, and granted Plum Grove's motion. Kluender appeals.
On appeal, Kluender again argues that Iowa Code section 447.9 "violates the due process clause of the US and Iowa Constitutions" because it does not require personal service of the ninety-day notice. We review his challenge de novo. PSFS 3 Corp. v. Michael P. Seidman, D.D.S., P.C. , 962 N.W.2d 810, 832 (Iowa 2021).
The Fourteenth Amendment to the United States Constitution prohibits "any State" from "depriv[ing] any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. Similarly, article I, section 9 of the Iowa Constitution states that "no person shall be deprived of life, liberty, or property, without due process of law."2
Iowa Const. art. I, § 9. It is certainly true, then, that Kluender's property rights in the parcel were constitutionally protected. They could not be extinguished "without due process of law." Our task is to decide what process was due.
We begin by recognizing that there are two distinct kinds of due process claims: facial and as-applied.3 Bonilla v. Iowa Bd. of Parole , 930 N.W.2d 751, 764 (Iowa 2019). In an as-applied challenge, the challenger claims that a statute is unconstitutional "as applied to a particular set of facts." Id. (quoting Honomichl v. Valley View Swine, LLC , 914 N.W.2d 223, 231 (Iowa 2018), overruled by Garrison v. New Fashion Pork LLP , 977 N.W.2d 67 (Iowa 2022) ). Conversely, in a facial challenge, the challenger must prove that a statute is ’ " Id. at 766 (quoting Santi v. Santi , 633 N.W.2d 312, 316 (Iowa 2001) ). A facial challenge is the "most difficult" to " ‘ "mount successfully" because it requires the challenger to show [that] the statute under scrutiny is unconstitutional in all its applications. ’ " Id. (quoting Honomichl , 914 N.W.2d at 231 ). "Facial challenges are disfavored for several reasons." Wash. State Grange v. Wash. State Republican Party , 552 U.S. 442, 450, 128 S.Ct. 1184, 170 L.Ed.2d 151 (2008).
Claims of facial invalidity often rest on speculation.... Facial challenges also run contrary to the fundamental principle of judicial restraint that courts should neither "anticipate a question of constitutional law in advance of the necessity of deciding it" nor "formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied."
Id. (quoting Ashwander v. Tenn. Valley Auth. , 297 U.S. 288, 346–47, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring)).
In this case, Kluender asserts a facial challenge.4 He claims that section 447.9 is "unconstitutional on its face" because "personal notice ... informing a delinquent taxpayer of their right to redeem a tax certificate" is "never required." The statute's mailing requirements are "so ineffective in protecting" property rights, Kluender contends, "that there is no factual situation in which they are...
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