Panola Cnty. Tax Assessor v. Oak Inv. Co.

• Decision Date: 02 June 2020
• Docket Number: NO. 2018-CA-01642-COA,2018-CA-01642-COA
• Citation: 297 So.3d 1122
• Parties: PANOLA COUNTY TAX ASSESSOR, Panola County Tax Collector, Panola County Chancery Clerk, and Panola County, Mississippi, Appellants v. OAK INVESTMENT CO., GJ Tax Sale Properties LLC, and TD Holdings LLC, Appellees
• Court: Mississippi Court of Appeals

297 So.3d 1122

PANOLA COUNTY TAX ASSESSOR, Panola County Tax Collector, Panola County Chancery Clerk, and Panola County, Mississippi, Appellants

v.OAK INVESTMENT CO., GJ Tax Sale Properties LLC, and TD Holdings LLC, Appellees

NO. 2018-CA-01642-COA

Court of Appeals of Mississippi.

June 2, 2020

ATTORNEY FOR APPELLANTS: DARRIN JAY WESTFAUL

ATTORNEY FOR APPELLEES: JOHN ANDREW HAMMOND

BEFORE CARLTON, P.J., GREENLEE AND McCARTY, JJ.

CARLTON, P.J., FOR THE COURT:

¶1. This case involves property in Panola County, Mississippi (the property) owned by Rolando Curtis Foods MS Inc. (Rolando Foods). The property was purchased by Oak Investment Co. (Oak), GJ Tax Sale Properties LLC (GJ), and Leslie Johnson at 2012-2015 tax sales. Johnson subsequently deeded to TD Holdings LLC (TD) the interest he acquired in the 2014 and 2015 tax sales. Oak, GJ, and TD are companies that regularly purchase properties at tax sales.

¶2. These entities subsequently filed complaints against Rolando Foods, Panola County, the Panola County Tax Collector, the Panola County Tax Assessor, and the Panola County Chancery Clerk (collectively Panola County) to set aside the 2012-2015 tax sales. After a bench trial, the Panola County Chancery Court found that the tax sales were void based upon the chancery clerk's failure to provide proper notice. On October 18, 2018, the chancery court entered a judgment providing that Panola's County failure to provide notice made each of the 2012-2015 tax sales void and ordering Panola County to refund the tax sale purchase amounts to Oak, GJ, and TD, which will be collectively referred to as the plaintiffs unless otherwise indicated. Panola County filed its notice of appeal on November 5, 2018.

¶3. Effective July 1, 2019, Mississippi Code Annotated section 27-45-27 was amended to include subsection 27-45-27(2). The amendment provides that a tax-sale purchaser has no right to contest the validity of a tax sale. On appeal, Panola County asserts that the chancery court's judgment must be reversed and rendered because section 27-45-27(2) applies in this matter and, therefore, the plaintiffs have no authority to continue the instant case. Alternatively, Panola County asserts that it provided proper notice in each of the tax sales and, therefore, the tax sales were not void.

¶4. For the reasons discussed below, we address the chancery court's judgment on the merits. Finding no error, we affirm. We deny the plaintiffs’ request for damages under Rule 38 of the Mississippi Rules of Appellate Procedure, finding no basis for a determination that Panola County's appeal was frivolous.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

¶5. The subject property is comprised of 4.2 acres located in the First Judicial District of Panola County, Mississippi. The property was owned by Rolando Foods, a Mississippi corporation, under a quitclaim deed recorded in Panola County.

¶6. The following table sets forth certain information contained in the record relating to the subject 2012-2015 tax sales. The "Tax Sale Date" is the date when the Panola County Tax Collector sold the property in a tax sale due to delinquent county taxes for the prior year. The "Purchase Amount" for each sale consists of the delinquent county taxes, plus applicable interest, penalties, and costs. With respect to the "Redemption Expiration Date," a landowner whose land is sold for taxes may redeem the property by paying the delinquent taxes, plus statutory interest and damages, "at any time within two ... years after the day of sale[.]"

Miss. Code Ann. § 27-45-3 (Rev. 2010).¹

Tax Sale Date	Purchaser	Purchase Amt.	Redemption Expiration Date
August 27, 2012	GJ	$17,161.89	August 27, 2014
August 26, 2013	Oak	$16,768.16	August 26, 2015
August 25, 2014	Leslie Johnson	$14,434. 90	August 25, 2016
August 31, 2015	Leslie Johnson	$13,870.82	August 31, 2017

¶7. On October 29, 2016, Leslie Johnson executed a quitclaim deed in favor of TD and quitclaimed his interest in the property acquired at the 2014 tax sale. On November 28, 2017, Johnson executed a quitclaim deed in favor of TD and quitclaimed his interest in the property acquired at the 2015 tax sale.

¶8. Oak, GJ, and TD subsequently filed complaints, naming Rolando Foods and Panola County as defendants, seeking to set aside the respective tax sales.² The plaintiffs alleged that Panola County failed to strictly comply with the governing tax-sale statutes regarding proper notice to the property owner, Rolando Foods, and, therefore, the tax sales were void and Panola County was obligated to refund each entity their purchase price amounts. No affirmative relief was sought against Rolando Foods. Rolando Foods did not file an answer or appear at the subsequent bench trial.³ Panola County answered, denying that it failed to abide by the notice requirements under the Mississippi tax-sale statutes.

¶9. A bench trial was held on May 17, 2018.⁴ One witness testified: Panola County Deputy Chancery Clerk, Judy Tutor. With respect to the 2012 tax sale, Tutor testified that the maturity date for that sale was August 27, 2014, and the contact the chancery clerk's office had for Rolando Foods, the property owner, was Roland Butler. The Secretary of State's corporate information for Rolando Foods was entered into evidence as Exhibit 8. This document indicated that Rolando Foods is a Mississippi corporation, and Butler was listed as the President and a Director of Rolando Foods.

¶10. Tutor testified that the chancery clerk's office located Rolando Butler in Maryland, spoke with him on a number of occasions, and corresponded with him via email in June 2014 concerning his payment of the delinquent 2011 taxes. She also testified that the chancery clerk's office sent a redemption notice to Butler in Maryland by certified mail in June 2014, but the "green card" was not returned by the post office and she really "had no idea" what happened to the certified mail notice because "we never got the letter back [either] stating that it was unclaimed." Tutor confirmed that there was no second attempt to notify Butler by certified mail.

¶11. When shown the Secretary of State information for Rolando Foods (Exhibit 8), Tutor confirmed that Rolando Foods was a Mississippi corporation. The Secretary of State corporate information for Rolando Foods indicated that its registered agent was a person by the name of Louise Butler living at 7 Edgewood Drive, 10 Batesville, Mississippi. Tutor confirmed that no certified mailings were sent to Louise Butler, testifying that "[w]e [the chancery clerk's office] didn't even know about Louise Butler," and no certified mailings were made to any other officer or director of Rolando Foods.

¶12. Tutor also confirmed that the chancery clerk's office did not issue notice to the Panola County Sheriff to attempt personal service on Rolando Foods in Mississippi. Tutor testified that personal service was not required "because Mr. [Roland] Butler lived out of state."

¶13. With respect to the 2013-2015 tax sales, Tutor testified that no redemption notifications at all were sent to Rolando Foods. Tutor testified that after the tax sales "matured" in the tax purchasers, redemption notices were sent to them.

¶14. On October 9, 2018, the chancery court issued its opinion setting forth its findings of fact and conclusions of law. The chancery court found that the 2012 tax sale to GJ was void because the chancery clerk failed to "strictly comply with the [redemption notice] requirements mandated by statute" when it did not issue notice to the Panola County Sheriff "so that the sheriff could have made an attempt to personally serve one of the officers or [the] registered agent of Rolando [Foods]."

¶15. Regarding the 2013 tax sale to Oak, the chancery court found that because the 2012 tax sale to GJ was void, Rolando Foods's rights "to the subject property were not extinguished at the end of the two-year redemption period in 2014." As such, "[d]uring the period in which the [chancery clerk] was to give notice to the reputed owner in 2015, the property was still owned by Rolando [Foods]." The chancery court found that the 2013 tax sale was therefore void because the chancery clerk did not provide notice to Rolando Foods in strict compliance with the redemption-notice requirements.

¶16. Under the same reasoning, the chancery court found that the 2014 and 2015 tax sales were void because the chancery clerk did not provide notice to Rolando Foods in strict compliance with the redemption-notice requirements.

¶17. On October 18, 2018, the chancery court entered a judgment providing that the 2012-2015 tax sales were void due to the chancery clerk's failure to provide the statutorily-required redemption notification with respect to each sale and ordering Panola County to refund the stipulated tax-sale purchase amounts to Oak, GJ, and TD. Panola County appealed.

¶18. During the pendency of this appeal, the legislature enacted section 27-45-27(2), effective July 1, 2019, which provides that a tax-sale purchaser has no right to contest the validity of a tax sale.

STANDARD OF REVIEW

¶19. "This Court maintains a limited review of a chancellor's findings of fact." Rebuild Am. Inc. v. Norris , 64 So. 3d 499, 500 (¶7) (Miss. Ct. App. 2010). "We will not reverse the factual findings of the chancellor when supported by substantial evidence unless the Court can say that the findings are manifestly wrong, clearly erroneous, or amount to an abuse of discretion." Cleveland v. Deutche Bank Nat. Tr. Co. , 207 So. 3d 710, 714 (¶17) (Miss. Ct. App. 2016). "In matters that are questions of law, this Court employs a de novo standard of review and will only reverse for an erroneous interpretation or application of the law." Rebuild Am. , 64 So. 3d at 501 (¶7).

DISCUSSION

I. Application of Section 27-45-27(2)

¶20. In Sass Muni-V LLC v. DeSoto County , 170 So. 3d 441 (Miss. 2015), the Mississippi Supreme Court held that a tax-sale purchaser has standing to challenge the validity of a tax sale. Id. at 447-48 (¶¶17-18)....