Murray Cnty. ex rel. Murray Cnty. v. Homesales, Inc.

• Decision Date: 24 June 2014
• Docket Number: No. 111,663.,111,663.
• Citation: 330 P.3d 519
• Parties: MURRAY COUNTY, Oklahoma, County Commissioners ex rel. Murray County, Oklahoma and Johnston County, Oklahoma, County Commissioners ex rel. Johnston County, Oklahoma, Plaintiffs/Respondents, v. HOMESALES, INC., JP Morgan Chase Bank, N.A. (for itself and as successor by merger to Chase Home Finance, LLC), and EMC Mortgage, LLC f/k/a EMC Mortgage Corporation, Defendants/Petitioners, and Wells Fargo Bank, N.A., Mortgage Electronic Registration Systems (MERS), Household Finance Corp, III, U.S. Bank National Association, Flagstar Bank, FSB, Wachovia Bank, N.A., Aurora Loan Services, LLC, Homecomings Financial Network, LLC, Belvedere Trust Finance, Deutsche Bank National Trust Company, and Millennium State Bank of Texas, Defendants.
• Court: Oklahoma Supreme Court

330 P.3d 519

MURRAY COUNTY, Oklahoma, County Commissioners ex rel. Murray County, Oklahoma and Johnston County, Oklahoma, County Commissioners ex rel. Johnston County, Oklahoma, Plaintiffs/Respondents,

v. HOMESALES, INC., JP Morgan Chase Bank, N.A. (for itself and as successor by merger to Chase Home Finance, LLC), and EMC Mortgage, LLC f/k/a EMC Mortgage Corporation, Defendants/Petitioners,andWells Fargo Bank, N.A., Mortgage Electronic Registration Systems (MERS), Household Finance Corp, III, U.S. Bank National Association, Flagstar Bank, FSB, Wachovia Bank, N.A., Aurora Loan Services, LLC, Homecomings Financial Network, LLC, Belvedere Trust Finance, Deutsche Bank National Trust Company, and Millennium State Bank of Texas, Defendants.

No. 111,663.

Supreme Court of Oklahoma.

June 24, 2014.

ON WRIT OF CERTIORARI OF CERTIFIED INTERLOCUTORY ORDER FROM THE DISTRICT COURT OF MURRY COUNTY; HONORABLE AARON DUCK, TRIAL JUDGE.

¶ 0 Defendants Homesales, Inc., (Homesales), JPMorgan Chase Bank, N.A. (Chase) and EMC Mortgage, LLC, f/k/a EMC Mortgage Corporation ¹ appeal a certified interlocutory order granting partial summary judgment in favor of Plaintiffs Murray County, Oklahoma, County Commissioners ex rel. Murray County, Oklahoma and Johnston County, Oklahoma, County Commissioners ex rel. Johnston County, Oklahoma (the Counties). This case concerns the Documentary Stamp Tax Act (DSTA), Title 68 O.S.2011 §§ 3201 through 3206, and its applicability to conveyances in four mortgage foreclosure actions prosecuted by Chase. The grantees claimed that the conveyances were exempt from documentary taxes. The Counties disagreed and sued to collect the taxes they claimed were due. The district court granted partial summary judgment to the Counties finding that the conveyances were not exempt from the DSTA, and that the Counties could sue to enforce the provisions of the DSTA and collect the documentary taxes that were not paid on these transactions. We hold that the Counties are not authorized to prosecute violations of the DSTA. However, the Counties do have standing to challenge the exemptions from the documentary tax claimed for these conveyances. Nonetheless, based on the record provided to the district court in the summary judgment proceeding, the Counties have not established that the challenged transfers are subject to documentary taxes. We reverse the order granting partial summary judgment and remand for further proceedings consistent with this Opinion.

CERTIORARI PREVIOUSLY GRANTED; CERTIFIED INTERLOCUTORY ORDER OF THE DISTRICT COURT REVERSED AND CASE REMANDED FOR FURTHER PROCEEDINGS.

Clyde A. Muchmore, Crowe & Dunlevy, P.C., Oklahoma City, Oklahoma, for Defendants/Petitioners.

Kenneth M. Kliebard, Morgan, Lewis & Bockius, LLP, Chicago, Illinois, for Defendant/Petitioners.

Darryl F. Roberts and Jason D. May, P.O. Box 1568, Ardmore, Oklahoma, for Plaintiffs/Respondents.

FISCHER, S.J.:

¶ 1 In this appeal, we must determine whether a transfer of real property between affiliated business entities constitutes a “sale” for purposes of the Documentary Stamp Tax Act. We hold that the transfer of real property between affiliated corporations or transfers on behalf of the beneficial owner of real property are not taxable if any consideration paid does not exceed $100.

FACTS

¶ 2 This case involves the conveyance of title to real property as a result of four real estate foreclosure proceedings. Chase filed each foreclosure case and was the successful bidder at each sheriff's sale. Therefore, Chase was entitled to a sheriff's deed to each of the properties. However, Chase did not take title. Instead, sheriff's deeds were granted to Chase's affiliated entities. The deeds were recorded with the respective county clerks. The grantees noted on the conveyances that the deeds were exempt from documentary taxes. And, no documentary taxes were paid.

¶ 3 The Counties contend the conveyances involved in this case are not exempt and filed this suit to collect the applicable documentary taxes. On November 28, 2011, the Counties filed their First Motion for Partial Summary Judgment. In its response, Chase argued that the Counties did not have standing to enforce the provisions of the DSTA and that the deeds at issue were exempt from documentary taxes. The district court granted the Counties' motion for partial summary judgment on February 11, 2013, and then certified “that an immediate appeal would materially advance the ultimate termination of this litigation.” SeeOkla. Sup.Ct. R. 1.50, 12 O.S.2011, ch. 15, app. 1. We granted the Defendants' petition for certiorari to review the district court's interlocutory order.²

STANDARD OF REVIEW

¶ 4 The Defendants argue in this appeal that the order granting partial summary judgment should be reversed for two reasons: (1) the Counties lack standing to enforce the provisions of the DSTA; and (2) the post-foreclosure conveyances are exempt from documentary taxes. The district court's order granting summary judgment is reviewed de novo. Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053. That review requires examination of the pleadings and evidentiary materials submitted by the parties to determine whether there exists a genuine issue of material fact. Id. This Court bears “an affirmative duty to test all evidentiary material tendered in summary process for its legal sufficiency to support the relief sought by the movant.” Copeland v. The Lodge Enters., Inc., 2000 OK 36, ¶ 8, 4 P.3d 695, 699.

¶ 5 Legal questions involving the district court's statutory interpretation of the DSTA are also subject to de novo review. Fulsom v. Fulsom, 2003 OK 96, ¶ 2, 81 P.3d 652, 654. The primary goal of statutory construction is to ascertain and apply the intent of the Legislature that enacted the statute. Samman v. Multiple Injury Trust Fund, 2001 OK 71, ¶ 13, 33 P.3d 302, 307.

ANALYSIS

¶ 6 The Documentary Stamp Tax Act imposes a tax on certain transfers of real property:

A tax is hereby imposed on each deed, instrument or writing by which any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser ... when the consideration or value of the interest or property conveyed ... exceeds One Hundred Dollars ($100.00).

68 O.S.2011 § 3201(A). “ ‘Sold’ means a transfer of an interest for a valuable consideration, which may involve money or anything of value.” 68 O.S.2011 § 3201(C)(1). “Consideration” is defined as “the actual pecuniary value exchanged or paid ... for the transfer or conveyance of an interest of realty....” 68 O.S.2011 § 3201(C)(3). When a sale of real property occurs, a documentary tax is levied on “the privilege of executing a ‘deed, instrument or writing’ that effects transfers of ‘land, tenements and other realty.’ ” Johnston v. Oklahoma Tax Comm'n, 1972 OK 88, ¶ 9, 497 P.2d 1295, 1297. The tax is collected through the sale of documentary stamps provided by the Oklahoma Tax Commission (OTC) and sold by the county clerks. 68 O.S.2011 §§ 3203 and 3204. The county clerk is authorized to retain and deposit in the county general fund five percent of the first $0.55 of every $0.75 collected and the remaining $0.20 of each $0.75 collected. 68 O.S.2011 § 3204(B)(1) and (C). The balance is forwarded to the OTC. 68 O.S.2011 § 3204. However, certain transfers of real property are exempt from the documentary tax. See68 O.S.2011 § 3202; Okla. Admin. Code § 710:30–1–9.

¶ 7 The facts dispositive of this appeal are established from two sources, the judgments in the foreclosure cases and the summary judgment record. The judgments in the foreclosure proceedings are now final and are not subject to collateral attack in this case “in the absence of fraud, mistake or collusion,” none of which have been asserted with respect to the those judgments.³Chandler v. Denton, 1987 OK 109, ¶ 10, 747 P.2d 938, 941. Further, those judgments are presumed to include a finding of every fact required to support the judgment. Gage v. Estep, 1966 OK 52, 422 P.2d 449. The facts and the inferences drawn from the summary judgment record “must be taken in favor of the party opposing the motion.” Hargrave v. Canadian Valley Elec. Co-op., Inc., 1990 OK 43, ¶ 14, 792 P.2d 50, 56. So viewed, the record establishes that at the time each of the four foreclosure actions was filed, Chase was the holder of a promissory note and mortgage securing repayment of the note on the real property being foreclosed or that it was the party entitled to enforce those instruments. After the borrowers defaulted, Chase successfully sued to collect the unpaid balance of the notes and foreclose its mortgages. Each case resulted in a judgment in favor of Chase for the note balance. The judgments also foreclosed Chase's mortgages and directed the sheriff to sell the property secured by the mortgages. Chase was the successful bidder at the sheriff's sale in each case and subsequently filed a motion to confirm the sales.

¶ 8 The district court orders confirming the sales recite that the properties were sold to Chase, that the sales were made in conformity with the statutes of Oklahoma and that at the hearing on the motions to confirm the sales Chase assigned all of its right, title and interest in the properties. In three of the proceedings, Chase assigned its interest to Homesales. Homesales is a wholly owned subsidiary of Chase. In the fourth foreclosure action involving property previously owned by Linda Gentry, Chase assigned its interest to the Federal National Mortgage Association (FNMA). FNMA was the beneficial owner of the Gentry property and Chase was acting as FNMA's agent in that foreclosure. At the direction of the district court and Chase, the sheriff executed deeds to Homesales and FNMA. The deeds state that they are exempt from documentary stamp tax pursuant to section 3202(13): “Any deed executed pursuant to a foreclosure proceeding in which the grantee is the holder of a...