Pendergast v. Davenport, 84-796

• Decision Date: 16 October 1985
• Docket Number: No. 84-796,84-796
• Parties: Agnes PENDERGAST, Individually, and Agnes Pendergast, as Executor of the Estate of Edward F. Pendergast, Appellees, v. David DAVENPORT and Lori J. Davenport, Appellants. David DAVENPORT, Cross-Petitioner, v. CITY OF SIOUX CITY, Iowa, A Municipal Corporation, et al., Defendants to Cross-Petition.
• Court: Iowa Supreme Court

Page 684

375 N.W.2d 684

Agnes PENDERGAST, Individually, and Agnes Pendergast, as Executor of the Estate of Edward F. Pendergast, Appellees, v. David DAVENPORT and Lori J. Davenport, Appellants.

David DAVENPORT, Cross-Petitioner, v. CITY OF SIOUX CITY, Iowa, A Municipal Corporation, et al., Defendants to Cross-Petition.

No. 84-796.

Supreme Court of Iowa.

Oct. 16, 1985.

Larry A. Storm of Bikakis, Heubaum, Vohs & Storm, Sioux City, for appellants.

Joe Cosgrove and Frank Cosgrove of Yaneff & Cosgrove, Sioux City, for appellees.

Considered by REYNOLDSON, C.J., and UHLENHOPP, McCORMICK, McGIVERIN, and SCHULTZ, JJ.

SCHULTZ, Justice.

This is an appeal from a trial court ruling that set aside and declared void a tax deed issued by the Woodbury County treasurer to David Davenport. Agnes Pendergast (Agnes), individually and as executor of the estate of her deceased husband, Edward Pendergast, commenced this action in equity against David Davenport to nullify the tax deed. Later, Agnes amended her petition to include Davenport's wife, Lori. David Davenport filed a counterclaim requesting that his title to the premises be quieted and additionally filed a cross-petition against the City of Sioux City, Iowa, requesting the same relief. The trial court decision resulted in a judgment and decree in favor of Agnes and a dismissal of the Davenports' quiet title action. Following this appeal by the Davenports, Agnes filed a cross-appeal but she has sought no affirmative relief in her brief. The city has neither appeared nor participated in this appeal.

In our de novo review we observe that most of the facts were stipulated at trial. The real estate which is the subject of this controversy, three adjoining city lots, was owned by Edward Pendergast at the time of his death in 1974. Edward Pendergast's will was admitted to probate in December 1974, and Agnes was appointed executrix of the estate. She was named the sole beneficiary under Edward's will and at the time of this trial the estate was still pending.

The property had been in the Pendergast family for many years and Edward lived there with his mother and two sisters until he married Agnes. The house on the property was demolished after a flood in 1955 or 1956. In 1958 Edward Pendergast leased the property to a third party for a term of 20 years and the tenants erected a building on the property to house a restaurant. After the lease terminated in 1978 the building was no longer occupied. Thereafter, the city notified Agnes that the building was a nuisance and she had it removed. In 1980 the city cleaned up debris and weeds on the property that remained after removal and assessed her $465 as its costs. Later, Agnes listed the property for sale with a real estate broker, who in 1981 placed a "For Sale" sign on the premises which remained on the property until October 21, 1982. On September 21, 1982, the broker sent Agnes a proposed purchase agreement subject to certain contingencies, but the parties could not reach an agreement. In 1978 Agnes orally gave the telephone company permission to continue to have a pay telephone on the premises; the telephone had been on the property for a number of years. Agnes received monthly payments from the telephone company through December of 1983.

Taxes on the property for the taxable periods ending in 1978, 1979, and 1980 were not paid. On June 15, 1981, the property was sold to Woodbury County at a scavenger's tax sale for nonpayment of taxes under the provisions of Iowa Code section 446.18. A certificate of purchase was issued to the county. On May 21, 1982, notice of expiration for the time of redemption was served on Agnes and the City of Sioux City. The notice was "To Edward F. Pendergast Estate, Agnes Pendergast, heir, party to whom taxed; no party in possession; City of Sioux City, Iowa." It indicated that a treasurer's tax deed for the property would be issued "unless redemption from such sale be made within ninety days from the date of completed service of this notice." Each of these transactions treated the combined lots as a unit rather than individually.

The county treasurer filed the affidavit of service on June 25, 1982, and entered it on the sale book. See Iowa Code §§ 447.12, .13. On September 23, 1982, David Davenport purchased by assignment the certificate of purchase from Woodbury County for $2,860, the amount of the consolidated tax plus interest and costs. A treasurer's tax deed was issued to Davenport on September 27, 1982. Davenport indicated that at that time the property had a fair market value of between $65,000 and $75,000.

David Davenport was familiar with the property, as he had sublet the property and a building thereon for some period of time before the lease expired in 1978. Thereafter, Davenport contacted Agnes and her attorney to discuss leasing the premises but an agreement could not be reached. After 1978 Davenport paid some of the taxes on the property which were his obligation under the sublease. He was aware of the broker's sign on the property before he obtained the tax deed.

In her petition filed October 8, 1982, Agnes alleged the invalidity of the assignment and of the treasurer's deed granted to Davenport. Additionally, Agnes asserted she had tendered to Davenport the amount he paid for the certificate of purchase plus the additional taxes, penalties, accrued interest and reasonable costs of improvements he paid on the property since that time. After the trial court analyzed several issues Agnes presented, it determined that the notice served on Agnes was insufficient notice to her as a party in possession. On appeal Davenports (appellants) assert that the notice was sufficient and the trial court should have entered a judgment to quiet their title to the real estate. Although Agnes asserts on appeal that the trial court did not err in its decision, she sets out six alternative grounds for voiding the tax deed.

We disagree with the district court's determination that the notice served on Agnes was insufficient notice to her. We do, however, affirm the district court's judgment in setting aside and voiding the tax deed, but do so on a different ground. We find that notice was not served on one of the parties in possession. We need not discuss the other grounds advanced by Agnes.

I. Notice. The trial court determined that the notice of the expiration of right of redemption (hereinafter referred to as "notice" or "notice of redemption") served on behalf of the county treasurer was insufficient. It concluded that until service was proper, Agnes' redemption period did not expire and therefore the tax deed was void. The basis for the district court's conclusion was that Agnes was a "party in possession of the premises," she was never identified in the notice as the party to be served, and nowhere in the notice was she identified as the "party in possession."

The requirements for notice of redemption from a scavenger sale are outlined in Iowa Code section 447.9. The holder of the certificate of purchase is to serve a notice of redemption that states certain details of the scavenger sale, not in dispute in this case, and states "that the right of redemption will expire and a deed for the land be made unless redemption is made within ninety days from the completed service of the notice." § 447.9. The notice is to be served upon "the person in possession of the real estate, and also upon the person in whose name the real estate is taxed, if the person resides in the county where the land is situated." Id.

Appellants assert that the notice served on Agnes was sufficient. They maintain that the court erred when it added two requirements not contained in section 447.9: 1) the notice must identify the capacity in which the party is to be served; and 2) the notice must be served on such party in such capacity.

As we will elaborate in the next division, the notice requirements of section 447.9 are to be strictly construed in favor of the taxpayer. If the affidavit of service required by Iowa Code section 447.12 is incomplete or insufficient, the right of redemption is not cut off and no valid tax deed can be issued. The issue we need to decide here is whether an irregularity in the salutation portion of the notice of redemption which incorrectly designated a party's capacity is subject to this rule of strict construction. Under the facts of this case, we hold it does not.

The language of the statute clearly indicates that the purpose of the notice is to provide information to the proper parties concerning the facts of the sale, the description of the property, the name of the purchaser, and that the right of redemption will expire without further action. See Iowa Code § 447.9. While the statute designates who should be served with notice of expiration, it does not specifically require that the recipient's capacity be stated in the notice. See id.

The law contemplates that the notice of redemption should be addressed to the person intended to be served. Steele v. Murry, 80 Iowa 336, 338, 45 N.W. 1030, 1031 (1890). The general rule is that the notice must be addressed and framed to unequivocably disclose the party for whom it is intended and who is to be affected by the proceeding. In re Lounsberry, 208 Iowa 596, 601, 226 N.W. 140, 143 (1929). The requirement that the notice be addressed to the party is to ensure that due process considerations are met in that a person served is notified that the notice is intended for him or her.

In the instant case it is urged that the notice of redemption was insufficient because Agnes' capacity was misstated in the notice. We believe this irregularity does not invalidate the notice. Immaterial variances or defects in inscribing the recipient's name in the salutation segment of the notice of redemption do not vitiate the notice if it substantially complies with the requirements of the statute so that all parties entitled to the notice are actually...