Morgan County v. Ferguson

• Decision Date: 09 June 1999
• Docket Number: No. 55A05-9804-CV-227.,55A05-9804-CV-227.
• Citation: 712 N.E.2d 1038
• Parties: MORGAN COUNTY, The Morgan County Auditor and Morgan County Treasurer, Appellants-Defendants, v. Yale FERGUSON and Nola Ferguson, husband and wife Robert Van Buskirk and Wanda J. Van Buskirk, husband and wife, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

712 N.E.2d 1038

MORGAN COUNTY, The Morgan County Auditor and Morgan County Treasurer, Appellants-Defendants, v. Yale FERGUSON and Nola Ferguson, husband and wife Robert Van Buskirk and Wanda J. Van Buskirk, husband and wife, Appellees-Plaintiffs.

No. 55A05-9804-CV-227.

Court of Appeals of Indiana.

June 9, 1999.

Phillip R. Smith, Smith & Gettelfinger, P.C., Martinsville, Indiana, Attorney for Appellant.

R. Stephen Donovan, Mooresville, Indiana, Attorney for Appellee Van Buskirk.

Mark Peden, Foley, Foley & Peden, Martinsville, Indiana, Attorney for Appellees Ferguson.

OPINION

ROBERTSON, Senior Judge

STATEMENT OF THE CASE

Defendants-Appellants Morgan County, the Morgan County Auditor, and Morgan County Treasurer (collectively, "Morgan County") appeal the trial court's award of attorney fees and deposition costs to Yale Ferguson and Nola Ferguson, husband and wife (collectively, "Ferguson"), and to Robert Van Buskirk and Wanda J. Van Buskirk, husband and wife (collectively, "Van Buskirk"). Van Buskirk, as a cross-appellant, appeals the trial court's judgment in favor of Ferguson.

With regard to the appeal from the award of attorney fees and deposition costs, we reverse the trial court's judgment. With regard to the cross-appeal, we affirm.

ISSUES

The following issues raised by Morgan County are dispositive:

I. Whether the trial court erred in awarding attorney fees to Van Buskirk pursuant to Ind.Code § 6-1.1-25-2(d).

II. Whether the trial court erred in awarding attorney fees to both Van Buskirk and Ferguson pursuant to the private attorney general exception.

The following issue consolidating two issues raised by Van Buskirk on cross-appeal is dispositive:

III. Whether the trial court erred in granting Ferguson's Ind.Trial Rule 60(B)(3) motion.

FACTS AND PROCEDURAL HISTORY

On February 5, 1958, Thomas and Betty June Harless conveyed by warranty deed certain real property consisting of three parcels to Glen A. and Ruth I. St. John, husband and wife (collectively, "St.John"). The deed described the three parcels in the following manner: (1) the SE ¼ SW ¼ of Section 27, totaling forty acres (hereinafter, "Tract 1"); (2) the N.E. ¼, NW ¼ of Section 34, totaling thirty-nine acres (hereinafter, "Tract 2"); and (3) the SW ¼, SW¼ of Section 27, totaling six acres (hereinafter, "Tract 3"). The deed was entered under St. John's name in the Morgan County Auditor's ("Auditor") 1956 Transfer Book, and the above-mentioned line descriptions were noted.¹

On December 12, 1961, St. John conveyed 33.2 acres of Tract 1 to Clarence E. Kemp ("Kemp"). The Auditor's 1956 Transfer Book showed ownership of 33.2 acres of Tract 1 by Kemp, but it did not list the 6.8 acres which remained in St. John's name.

On April 8, 1963, St. John conveyed the remaining property to Ferguson. The legal description of the deed included the remaining 6.8 acres of Tract 1 and the thirty-nine acres of Tract 2, but it omitted the six acres of Tract 3. Before his death on March 19, 1996, however, St. John executed a corrective quit claim deed which conveyed Tract 3.

The Auditor's 1962 Transfer Book reflected the April 8, 1963 conveyance by making a line entry which included the thirty-nine acres of Tract 2 and the six acres of Tract 3. The Transfer Book did not list the 6.8 acres of Tract 1. Ferguson paid all taxes on the parcels listed in the Transfer Book which were assessed to him from the date of purchase until the 1989 (payable 1990) tax duplicate.

In 1989, the Auditor's office made a reassessment of all Morgan County property and all line entries in Transfer Books were verified against deeds conveying the property. Corrections were made to the Transfer Books upon these verifications. The line entries in the 1986 Transfer Book were changed by the Auditor's office because of the reassessment to reflect the legal description of the 1963 deed from St. John to Ferguson. As a result, Tract 3 was removed from Ferguson's entry and Tract 1 (6.8 acres) was added. The 1986 Transfer Book was changed to reflect St. John as the owner of Tract 3 (six acres). The Transfer Book noted St. John's 1962 Indianapolis address. New tax duplicates for 1989 (payable 1990) were generated reflecting the changes made in the Transfer Book. No notice or explanation of the changes was given to St. John or Ferguson. Ferguson paid all property taxes thereafter assessed to him; however, no taxes were paid by St. John on Tract 3. The taxes on Tract 3 remained unpaid from the 1989 assessment until the tax sale in 1994.

On October 21, 1994, Van Buskirk purchased listings of three tax sale properties. Tract 3 was listed on the tax sale listings as belonging to St. John. Van Buskirk recognized St. John as being formerly married to his aunt. Accordingly, Van Buskirk obtained St. John's Hendricks County phone number, but not St. John's current Hendricks County address, from his aunt. Van Buskirk telephoned St. John at the Hendricks County phone number regarding his ownership of Tract 3.

On approximately October 22, 1994, Van Buskirk physically visited Tract 3. He ascertained that the tract was plowed and that there were signs that the land was currently being farmed. Van Buskirk did not attempt to contact neighbors or any other person regarding ownership, occupation, or the boundaries of the property.

Van Buskirk made a successful $5,100.00 bid for Tract 3 at a tax sale. He then mailed two required certified mail notices of his purchase to St. John's incorrect Indianapolis address, both of which were returned as having an insufficient address. Van Buskirk did not mail any notice to St. John at his Hendricks County address or to Ferguson at his address. Van Buskirk prepared and filed a verified petition for tax title deed which recited that certified mail notices were sent to all property owners and those with a substantial interest in Tract 3. Van Buskirk did not disclose his contact with St. John at the subsequent tax title court hearing. Van Buskirk received a tax title deed dated December 11, 1995, which he recorded on January 9, 1996.

In the middle of February, Van Buskirk telephoned Ferguson and offered to sell Tract 3 to Ferguson for $14,000.00. Van Buskirk also signed a real estate listing agreement offering Tract 3 for sale for $25,000.00. Van Buskirk subsequently reached an agreement with a third party to sell Tract 3 for $24,000.00.

On April 8, 1996, Van Buskirk filed a quiet title action. Ferguson answered and asserted the affirmative defenses of estoppel, fraud, illegality, and adverse possession. Ferguson also filed a counter-claim asserting slander of title, quiet title, and trespass against Van Buskirk. Additionally, Ferguson filed a cross-claim alleging that Van Buskirk's tax title deed was invalid and illegal and naming Van Buskirk and Morgan County as cross-defendants. Ferguson's claim included a Ind.Trial Rule 60(B)(3) motion to set aside the tax deed. After a hearing on the various pleadings, the trial court denied Van Buskirk's request to quiet title in his name and entered a judgment quieting title in Ferguson's name. In so doing, the trial court granted Ferguson's T.R. 60(B)(3) motion on the basis that Van Buskirk obtained the tax deed by fraud. The trial court also determined that Ferguson was entitled to "reasonable attorney fees and the costs incurred by [him] in prosecuting this action based on the fraud of [Van Buskirk]. . . ." (R. 211). The trial court ordered that a hearing be held "to determine reasonable attorney fees as the Court may deem [Van Buskirk] or Morgan County shall be liable for herein." Id. After the additional hearing, the trial court ordered that Morgan County pay Van Buskirk's and Ferguson's attorney fees and costs.

DISCUSSION AND DECISION

I. PROPRIETY OF FEE AWARD PURSUANT TO STATUTE

As stated in the previous section of this opinion, the trial court ordered that Morgan County pay Van Buskirk's attorney fees.² The trial court based its attorney fee award on the following reasoning:

The Court now reiterates its finding that Morgan County is the cause of the error in this matter by the actions as set out in the findings and order of November 21, 1997. Pursuant to that ruling the Court finds that Morgan County should be subject to costs and fees incurred by the parties pursuant to [Ind.Code §] 6-1.1-25-2(d). * * * * * * * * * * * The issue is whether or not Morgan County or anyone else should be liable to [Van Buskirk] for these charges. The Court in reviewing [Ind.Code § ] 6-1.1-25-2 finds that in paragraph (d) the legislature contemplated that any person who purchased at a tax sale and then had the tax deed redeemed was to be reimbursed for their costs. [quotation of statute omitted].

The legislature did not specifically include attorney fees with the redemption statute, but, did include the phrase "The total amount required for redemption." The Court interprets that statute to mean under the facts of this case that attorney fees as required for the attempted redemption are appropriate to be assessed. In this case there is no actual redemption but a clarification of who actually owns the property pursuant to the error made by Morgan County.

The theory of [Ind.Code § ] 6-1.1-25-2 is that the purchaser, who ends up not retaining the property as originally purchased at the tax sale, should be made whole once again at someone else's expense. It is the intent of the Court to follow the obvious direction of the legislature to make [Van Buskirk] whole again at the expense of the errant party, which is Morgan County.

(R. 224-25) (emphasis in original).

The general rule in Indiana and other states is that each party to litigation must pay his own attorney fees. Umbreit v. Chester B. Stem, Inc., 176 Ind.App. 53, 373 N.E.2d 1116, 1119 (1978). However, an award of attorney fees may be authorized by contract, rule, statute, or agreement. Ira v. Brock, 615 N.E.2d 447, 449 (Ind.Ct.App. 1993). In the present case, the propriety...