Mayor of Balt. v. Thornton Mellon, LLC
| Decision Date | 28 April 2022 |
| Docket Number | 6-2021 |
| Parties | MAYOR AND CITY COUNCIL OF BALTIMORE v. THORNTON MELLON, LLC, et al. |
| Court | Maryland Court of Appeals |
Getty, C.J. [*] McDonald, Watts, Hotten, Booth, Biran, Battaglia, Lynne A. (Senior Judge, Specially Assigned) JJ.
In this case, we must determine the moment when fee simple legal title vests in real property that has been sold at a tax sale under the provisions of the Maryland tax sale statute, which is set forth in Title 14, Subtitle 8, of the Tax-Property Article of the Maryland Code ("TP") . The issue arises in the context of the Baltimore City Director of Finance's ("Director") refusal to issue a tax sale deed to Ty Webb, LLC ("Ty Webb"), the assignee of the tax sale purchaser, Thornton Mellon, LLC ("Thornton Mellon") following the entry of a judgment foreclosing the right of redemption ("judgment") in connection with a tax sale proceeding pending in the Circuit Court for Baltimore City. On July 11, 2019-one day after the circuit court entered the judgment- Thornton Mellon executed an assignment purporting to assign to Ty Webb its interest in the tax sale certificate and the judgment. Thornton Mellon prepared a tax deed, and presented the deed, and the assignment to the Director, and requested that the deed be executed to Ty Webb, as the assignee. The Director refused, asserting that the assignment was invalid because it was executed after the entry of the judgment.
After the Director refused to execute the deed, Thornton Mellon filed a notice of substitution of parties in the circuit court proceeding, substituting its interest in the action as plaintiff for its assignee, Ty Webb. As the substitute plaintiff, Ty Webb filed a motion requesting an order directing the City to issue a tax sale deed to Ty Webb. The Mayor and City Council of Baltimore (the "City") objected to Ty Webb's motion. The City argued, among other things, that under TP § 14-844(b), the circuit court's entry of a judgment foreclosing the right of redemption in a tax sale proceeding vests fee simple title in the certificate holder, thereby extinguishing the certificate of sale. The City asserted that the only way for Thornton Mellon to convey its interest in the property to Ty Webb was for Thornton Mellon to first take legal title by deed, and then convey its interest by a second deed to Ty Webb. The circuit court rejected the City's argument, determining that there was nothing in the tax sale statute to indicate that the Legislature intended to limit the assignment of a certificate of sale to the period prior to the entry of judgment. The circuit court concluded that the certificate of sale and the judgment were assignable and granted Ty Webb's motion by directing the City to execute the tax deed in favor of Ty Webb as assignee.
After the City noted an appeal, the Court of Special Appeals affirmed the judgment of the circuit court. Mayor and City of Baltimore v. Thornton Mellon, LLC, 249 Md.App. 231 (2021) ("Thornton Mellon"). The City petitioned this Court for a writ of certiorari, which we granted to consider the following question, which we have consolidated and rephrased as follows:[1]
Did the circuit court err in ordering the City of Baltimore to issue a tax sale deed to the tax sale certificate holder's assignee when the certificate holder executed the assignment one day after the entry of the court's order foreclosing the right of redemption?
For the reasons set forth below, we answer the question in the negative and affirm the judgment of the circuit court.
On May 15, 2017, Thornton Mellon was the successful bidder at a tax sale involving certain property located at 812 Wedgewood Road in Baltimore ("the property"). On that same day the Director issued Thornton Mellon a tax sale certificate ("certificate"), which contained the following information pertaining to the sale in question. First, the certificate reflected that the total purchase price for the property was $90, 309. Of the total price, the amount due at the time of the issuance of the certificate was $5, 775.28, which was the "total amount of taxes and other municipal liens due on the property at the time of the sale, together with interest and penalties thereon, and expenses incurred in making the sale." The certificate noted that the property was "subject to redemption," and described the statutory amount that would be refunded to the certificate holder if the property was redeemed by the owner. The certificate stated that the "balance due on account of the purchase price and all taxes, and other municipal liens, together with interest and penalties on them accruing subsequent to the date of sale, must be paid to the Collector before a deed can be delivered to the purchaser." The certificate specified that the holder could bring a proceeding to foreclose the owner's right of redemption after the expiration of the owner's statutory period for redeeming the property. Finally, the certificate reflected that it would be void unless a proceeding was brought to foreclose the owner's right of redemption within two years of the date of the certificate.
On February 26, 2018, after the property owner failed to redeem the property within the statutory redemption period, Thornton Mellon filed a complaint to foreclose the right of redemption. On July 10, 2019, the circuit court entered the judgment, titled "Judgment Foreclosing Right of Redemption." The judgment contained the language required under the applicable provisions of the tax sale statute necessary to foreclose the right of redemption. See TP §§ 14-844, 14-847(a). First, the judgment recited the circuit court's finding that "all [d]efendants were personally served or were notified in accordance with" the applicable provisions of the Tax-Property Article, that the applicable notice of publication had been issued, and that no redemption had been made by the property owner. Second-and apropos of its title-the document entered judgment in favor of Thornton Mellon foreclosing the right of redemption in the property. Third, the judgment:
ORDERED that Plaintiff is vested with an absolute and indefeasible fee simple title, free and clear of all alienations and descents of the property occurring before the date of the judgment and encumbrances on the property, except taxes and municipal liens that have accrued after the date of the sale and easements of record and any other easement to which the property is subject that may be observed by an inspection of the property[.]
Fourth, the judgment included the following directives to the Director and the Supervisor of Assessments as required by TP § 14-847(a):
On July 11, 2019-the day after the judgment was entered-Thornton Mellon executed a one-page assignment that purported to assign the certificate and judgment to Ty Webb. The assignment, titled "Assignment of Certificate of Tax Sale & Order Foreclosing Right of Redemption" stated as follows:
In consideration of the sum of $1.00 dollars, I, for Thornton Mellon LLC do hereby sell, assign, transfer and set over to Ty Webb LLC, and their heirs, executors, administrators and assigns, the written Certificate of Tax Sale with respect to the property at 812 WEDGEWOOD ROAD, BALTIMORE, MD 21229-1224, Parcel ID 28-05-7993B-028, attached hereto and the Judgment Foreclosing Right of Redemption issued with respect to the Property and all my right, title and interest in or to the real estate described therein, to have and to hold the same to myself, his heirs, executors, administrators and assigns, to his and their sole use, benefit, and behoof forever. The Tax Sale Deed with respect to the Property should be issued in the name of Ty Webb LLC.
In accordance with the requirements of TP §14-847(b), Thornton Mellon prepared and submitted to the Director a tax sale deed for the property. The tax sale deed reflected that the property was being conveyed from the Director to Ty Webb, as assignee of Thornton Mellon, and included standard recitals typical in tax sale deeds-describing the tax sale proceeding, including the parties' names and case number, the property description, and the tax account number for the property-as well as a recital reflecting Thornton Mellon's assignment of its interest in the property to Ty Webb.
At this point, the dispute arose between the parties. The City refused to execute the tax sale deed because it reflected Thornton Mellon's assignment of its interest to Ty Webb which the City contended was invalid. Specifically, although the City acknowledges that tax sale certificates are generally assignable, the City's position is that the particular assignment to Ty Webb was invalid because it was executed one day after the entry of the judgment foreclosing the right of redemption. Upon the entry of the judgment, the City's view is that the only way that Thornton Mellon can effectuate a transfer of its interest in the property to Ty Webb is by a two-deed transaction: first, by taking title to the property in a tax sale deed as the grantee; and second, by a deed of conveyance from Thornton Mellon, as the grantor, to Ty Webb as the grantee.[2] In other words, because Thornton Mellon had not completed the assignment to Ty Webb, and...
To continue reading
Request your trial