Mason v. Smith

• Decision Date: 10 June 2014
• Docket Number: No. 13–0957.,13–0957.
• Citation: 760 S.E.2d 487,233 W.Va. 673
• Court: West Virginia Supreme Court
• Parties: Don MASON and Brenda Mason, Petitioners v. Raymond Richard SMITH; Maria Catalano; Jeremy D. Casto; Jerad D. Casto; Robert M. Fletcher; The Poca Valley Bank, Inc.; Sunrise Atlantic, LLC; and Harpagon MO, LLC, Respondents.

233 W.Va. 673

760 S.E.2d 487

Don MASON and Brenda Mason, Petitioners

v.Raymond Richard SMITH; Maria Catalano; Jeremy D. Casto; Jerad D. Casto; Robert M. Fletcher; The Poca Valley Bank, Inc.; Sunrise Atlantic, LLC; and Harpagon MO, LLC, Respondents.

No. 13–0957.

Supreme Court of Appeals of West Virginia.

Submitted May 6, 2014.

Decided June 10, 2014.

Syllabus by the Court

1. “Appellate review of a partial summary judgment order is the same as that of a summary judgment order, which is de novo.” Syl. pt. 1, West Virginia Department of Transportation v. Robertson, 217 W.Va. 497, 618 S.E.2d 506 (2005).

2. “Under W.Va.Code, 11A–3–19(a), a tax sale purchaser is required to provide notice to parties who are of record at any time after the thirty-first day of October of the year following the sheriff's sale, and on or before the thirty-first day of December of the same year.” Syl. pt. 1, in part, Wells Fargo Bank v. UP Ventures II, 223 W.Va. 407, 675 S.E.2d 883 (2009).

3. “There are certain constitutional due process requirements for notice of a tax sale of real property. Where a party having an interest in the property can reasonably be identified from public records or otherwise, due process requires that such party be provided notice by mail or other means as certain to ensure actual notice.” Syl. pt. 1, Lilly v. Duke, 180 W.Va. 228, 376 S.E.2d 122 (1988).

4. “Generally whatever is sufficient on the face of the record of title to land to direct a purchaser's attention to the prior rights and equities of third persons will put him upon an inquiry and will amount to notice to him. He is bound to take notice of everything disclosed by the record.” Syl. pt. 4, Simmons v. Simmons, 85 W.Va. 25, 100 S.E. 743 (1919).

Charles M. Love, IV, Esq., The Love Law Firm, PLLC, Marvin W. Masters, Esq., The Masters Law Firm, lc, Charleston, WV, for Petitioners Don Mason and Brenda Mason.

Stephen L. Thompson, Esq., Barth & Thompson, Charleston, WV, for Respondents Maria Catalano, Jeremy D. Casto and Jerad D. Casto.

Sprague W. Hazard, Esq., The Bell Law Firm, PLLC, Charleston, WV, for Respondent Robert M. Fletcher.

Michael T. Chaney, Esq., Kay Casto & Chaney PLLC, Charleston, WV, for Respondent The Poca Valley Bank, Inc.

PER CURIAM:

In this tax sale matter, petitioners Don Mason and Brenda Mason (“Masons”) challenge the July 23, 2013, order of the Circuit Court of Kanawha County invalidating their deed to a parcel of real estate in Elk District, Kanawha County. Also invalidated were the deeds of the Masons' predecessors in title, respondent Sunrise Atlantic, LLC (“Sunrise”) and respondent Harpagon MO, LLC (“Harpagon”). The deeds were invalidated because Sunrise, the tax lien purchaser, failed to serve the record owners of the property, Maria Catalano, Jeremy D. Casto and Jerad D. Casto (“Catalanos”), with the statutorily required notice to redeem the property before the issuance of the tax deed. The order of the circuit court, restoring title to the Catalanos was made subject to the Catalanos paying the amounts required by statute to redeem the property.

The July 23, 2013, order, in the form of a partial summary judgment in favor of the Catalanos, arose from consolidated actions described below concerning the Elk District property. Accordingly, the circuit court approved the order for appeal to this Court pursuant to Rule 54(b) of the West Virginia Rules of Civil Procedure.¹

The Masons ask this Court to reverse the order and remand their claim of ownership of the property for trial. The Masons contend that questions of material fact exist concerning whether the Catalanos, in fact, received notice of the tax sale and notice to redeem. Moreover, the Masons contend that, as bona fide purchasers of the property, their deed should not have been invalidated.

Upon review, this Court finds the Masons' contentions to be without merit. Consequently, we affirm the July 23, 2013, order granting partial summary judgment in favor of the Catalanos.

I. Factual Background

In June 2001, the Catalanos purchased a parcel of real property located at 5024 Elk River Road South, Elk District, for $65,000.00. The Catalanos recorded the deed in the office of the Clerk of the County Commission of Kanawha County. In April 2006, the Catalanos sold the property to Raymond Richard Smith (“Smith”) for $68,000.00. The deed to Smith, containing a general warranty, was never recorded. Consequently, the Catalanos remained the owners of record. Moreover, at the time of the Catalanos' conveyance to Smith, the 2005 real property taxes were delinquent and were listed in the names of Maria Catalano, Jeremy D. Casto and Jerad D. Casto.

On November 14, 2006, the Sheriff of Kanawha County sold the tax lien on the property for the delinquent 2005 taxes. The tax lien, in the name of the Catalanos, was purchased by Sunrise for $1,900.00. Subsequently, by tax deed made April 9, 2008, the Clerk of the County Commission conveyed the property to Sunrise. The deed to Sunrise was recorded.

A number of documents, including the following, were recorded with the tax deed from the County Clerk to Sunrise:

1. A certificate of sale signed by the Sheriff stating that the tax lien, sold in the name of the Catalanos, was purchased by Sunrise for $1,900.00. See W.Va.Code, 11A–3–14(a) [1998] (Upon payment of “at least the amount of taxes, interest and charges for which the tax lien on any real estate is offered for sale,” the sheriff shall issue to the purchaser a certificate of sale for the purchase money.).²

2. A notice to redeem dated January 26, 2008, signed by the Clerk of the County Commission showing the amount of payment necessary to redeem the property to avoid the issuance of a tax deed to the tax lien purchaser. The notice to redeem states that the tax lien was delinquent in the name of the Catalanos.

3. The November 1, 2007, application of Sunrise to the Clerk of the County Commission for a tax deed. The application stated that, based on a title examination, the following were to be served with notice to redeem: (1) The Poca Valley Bank, Inc., (2) Maria Catalano, (3) Jeremy D. Casto and (4) Jerad D. Casto. Smith, who had purchased the property from the Catalanos, was not listed.³

4. A certified mail return card showing that on January 29, 2008, The Poca Valley Bank, Inc. (the Catalanos' lender and holder of a deed of trust on the property), received the notice to redeem.

5. Certified mail envelopes from the Clerk of the County Commission sent to the Catalanos, individually, in January 2008 showing “return to sender—not deliverable as addressed—unable to forward” or “return to sender—unclaimed—unable to forward.” None of the envelopes were marked “refused.” The envelopes contained notices of the right to redeem the property and, thus, showed that the Catalanos did not receive the notices.

By quitclaim deed made May 16, 2008, Sunrise, the tax lien purchaser, conveyed the property to Harpagon. The deed, stating that the transfer was “between related entities without consideration,” was recorded. Soon after, by special warranty deed made June 13, 2008, Harpagon conveyed the Elk District property to Don Mason. Brenda Mason is the wife of Don Mason. The Masons paid $32,000.00 for the property and recorded the deed.

II. Procedural Background

In February 2009, Raymond Richard Smith, who purchased the property from the Catalanos for $68,000.00, filed an action in the Circuit Court of Kanawha County, styled Smith v. Catalano, et al., no. 09–C–203. Smith alleged that the Catalanos breached the general warranty in the deed he received from them because the delinquent 2005 taxes resulted in the Sheriff's sale of the property to Sunrise. In addition, Smith sought damages from the Poca Valley Bank and Robert M. Fletcher, the attorney Smith believed closed the sale concerning his purchase. Smith's action was consolidated with the current matter and is not directly involved in the partial summary judgment from which the Masons now appeal.

On April 7, 2011, the Catalanos filed a complaint in the Circuit Court of Kanawha County against Sunrise, Harpagon and the Masons, styled Catalano, et al., v. Sunrise Atlantic, LLC, et al., no. 11–C–565. The Catalanos asserted that, as the owners of record, they were entitled to notice of the right to redeem the property from the tax sale, particularly to protect the interest of their grantee, Raymond Richard Smith, whose deed had never been recorded. The Catalanos asserted that they were never provided with the required notice to redeem the property before the tax deed was delivered to Sunrise. The complaint alleged:

The [Catalanos] did not have actual knowledge of the tax sale until 2008 and were unable to redeem the Property, or advise Smith to redeem the Property which he now owned from sale, all to the [Catalanos'] detriment, because they were not provided with notice from Sunrise Atlantic of the right to redeem the Property from sale.

The Catalanos asked the circuit court to set aside the tax deed to Sunrise and the subsequent conveyances to Harpagon and the Masons.⁴

During the ensuing litigation, the Masons filed a cross-claim against Sunrise seeking recovery upon any failure by Sunrise, as the tax lien purchaser, to provide notice to redeem the property in a reasonable and prudent manner. The Masons also filed a cross-claim against Harpagon alleging that, if it is determined that the Catalanos may redeem the property, the Masons can recover from Harpagon for breach of warranty.

In February 2012, the Catalanos moved for partial summary judgment. In their supporting memorandum, the Catalanos asserted:

Here, the Catalanos continued to be “the owner” “of record” as of the time of both the tax sale as well as of the time of the giving of the notice of the right to redeem. As such, they clearly were, and are, entitled to effective notice of the right to redeem the property from sale.... Because the deed to Smith was not recorded, one searching the...