Real Estate Recovery, LLC v. Branson Hills Facility Infrastructure Cmty. Improvement Dist.

• Decision Date: 14 October 2020
• Docket Number: No. SD 36349,SD 36349
• Parties: REAL ESTATE RECOVERY, LLC, Appellant, v. BRANSON HILLS FACILITY INFRASTRUCTURE COMMUNITY IMPROVEMENT DISTRICT, Respondent.
• Court: Missouri Court of Appeals

614 S.W.3d 541

REAL ESTATE RECOVERY, LLC, Appellant,

v.BRANSON HILLS FACILITY INFRASTRUCTURE COMMUNITY IMPROVEMENT DISTRICT,¹ Respondent.

No. SD 36349

Missouri Court of Appeals, Southern District, Division One.

Filed: October 14, 2020

Motion for Rehearing and/or Application for Transfer to Supreme Court Denied November 6, 2020

Application for Transfer Denied January 26, 2021

Appellant's Attorney: Jonathan Sternberg, of Kansas City, Missouri.

Respondent's Attorneys: Mary Jo Shaney and Kevin Mason, of Kansas City, Missouri.

Amici Curiae Attorneys: Mark A. Spykerman, of St. Louis, Missouri and B. Allen Garner, of Independence, Missouri.

WILLIAM W. FRANCIS, JR., J.

Real Estate Recovery, LLC ("RER") appeals² from the trial court's summary judgment in favor of Branson Hills Facility Infrastructure Community Improvement District ("the District"). In one point relied on, RER argues that the trial court erred in entering summary judgment in favor of the District, in that the District's assessments did not survive the post-third-offering sale at which RER purchased the four parcels of real estate ("the Parcels") at issue. Finding no merit to RER's point, we deny the same and affirm the judgment of the trial court.

Facts and Procedural History

We recite those matters properly injected (pursuant to Rule 74.04's orderly procedure)³ from the summary judgment record below, and about which there is no genuine dispute as demonstrated by the record.⁴ See Doe Run Resources Corporation v. American Guarantee & Liability Insurance , 531 S.W.3d 508, 511 (Mo. banc 2017). We recite such other material as necessary for context to our instant disposition.

This case derives from the Taney County Collector's ("the Collector") post-third offering for delinquent community improvement district ("CID") assessments levied by the District against the Parcels, which RER purchased at the offering. RER subsequently filed a petition to quiet title. Thereafter, RER and the District both filed motions for summary judgment. RER argued (in relevant part) that, pursuant to the Community Improvement District Act (the "CID Act")⁵ and the Jones-Munger Act,⁶ RER's Collector's Deeds terminated all District special assessments as to the Parcels.⁷ The District—also relying on the Jones-Munger Act and the CID Act—argued (in relevant part) that the sale did not impair the District's power or authority to impose and levy "future ... special assessments" within the boundaries of the District, and that either RER's Collector's Deeds were invalid or RER owed the delinquent 2015 assessment amount, as RER was required (and failed) to pay that sum before receiving its Collector's Deeds. The trial court entered summary judgment in favor of the District, and against RER.

In the instant appeal, the sole and narrow issue before us is whether—in light of the controlling provisions of the CID Act and the Jones-Munger Act—assessments levied or imposed by the District against the Parcels after the post–third-offering sale survive, such as to impose a continuing lien on the Parcels (and a corresponding obligation on RER to remit payment for such subsequently levied or imposed assessments).

A discussion of the governing Acts at issue (i.e. , the CID Act and the Jones-Munger Act) is necessary to frame the procedural and substantive import of the more particular facts and litigation history attending this matter (set out more fully infra ), and we therefore provide an overview of each Act in turn.

Governing Statutory Framework

The Community Improvement District Act

In 1998, our legislature adopted the CID Act for the purpose of the establishment, proper governance, and operation of CIDs. The CID Act directs the manner by which real property owners within a specified area may form a CID as either a not-for-profit corporation or a political subdivision. § 67.1411. Once formed, these entities are granted powers enabling them to carry out numerous fiscal initiatives, primarily facilitated by the ability of those entities to raise funds⁸ through special assessments and taxes for the provision of public infrastructure. § 67.1461(8). CIDs may be used to fund, among other things, the installation of public infrastructure improvements (such as roadways, sidewalks and sewers), the creation of parks, the operation of buses and other modes of transportation, the provision of security personnel, the promotion of tourism and cultural events, and the remediation of blighted conditions on private property. Id.

As relevant here, the CID Act designates the nature and import of CID assessments, their imposition and delinquency, and the collection thereof:

•The county collector "shall collect the real property taxes and special assessments made upon all real property within that county and district, in the same manner as other real property taxes are collected. § 67.1541.1.

•"[T]he county collector may, upon certification by the district for collection, add each special assessment to the annual real estate tax bill for the property and collect the assessment in the same manner the collector uses for real estate taxes. Any special assessment remaining unpaid on the first day of January annually is delinquent and enforcement of collection of the delinquent bill by the county collector shall be governed by the laws concerning delinquent and back taxes. The lien may be foreclosed in the same manner as a tax upon real property by land tax sale under chapter 140 [the Jones-Munger Act] or, if applicable to that county, chapter 141." § 67.1521.5.⁹

•"Each special assessment which is due and owing shall constitute a perpetual lien against each tract, lot or parcel of property from which it is derived." § 67.1521.5.

(Emphasis added).

The CID Act designates the specific requirements and procedures for the removal of real property from a CID in sections 67.1441 and 67.1442. Neither section—nor any other provision of the CID Act—provides that collection (or partial collection) of delinquent assessments via the procedures set out in the Jones-Munger Act¹⁰ removes the subject property from a CID, or removes from a CID the power or authority to impose or levy future assessments on that property. See §§ 67.1401-1571.

The Jones-Munger Act

Since 1935, the Jones-Munger Act, currently codified in chapter 140, has governed tax sales in Missouri. Generally, the provisions of the Jones-Munger Act direct the manner and effect of certain (potentially) successive tax sale offerings, whereby the collector attempts to sell "[a]ll lands ... on which taxes or special assessments are delinquent and unpaid[.]" § 140.150.1. Among other requirements, the Act provides that the collector "publish[ ] for three consecutive weeks" a list of the delinquent properties subject to the collector's offering of sale, including "in the aggregate[,] the amount of taxes, penalty, interest and cost due thereon, each year separately stated." § 140.170.1&.2, RSMo Cum.Supp. (2015). For the first three of these successive offerings, the collector may not sell the subject property unless in receipt of a bid "equal to the delinquent taxes thereon[,]" along with the associated "interest, penalty and costs[.]"¹¹

Thereafter—and as occurred in the instant matter—the collector may at its discretion, attempt to sell the property at one or more post-third offerings. As long as the collector performs such offering at least once every five years, the statute of limitations will not bar enforcement of the lien attendant to the subject property, and the collector may continue offering the property. § 140.250.3&.4. There is "no period of redemption from such post-third[-]year [offering] sales[.]" § 140.250.4. In a post-third offering, the collector may—subject to certain exceptions not applicable here¹² —offer and sell the subject property "at any time and for any amount." § 140.260.8. Notably, however,

before any purchaser at [a post-third-offering] sale to which this section is applicable shall be entitled to a collector's deed it shall be the duty of the collector to demand, and the purchaser to pay, in addition to his bid, all taxes due and unpaid on such lands or lots that have become due and payable on such lands or lots subsequent to the date of the taxes included in such advertisement and sale.

§ 140.250.4.¹³

Litigation History

Formation of the District and Imposition of Assessments

On July 7, 2006, property owners petitioned the City of Branson ("City") to create a CID, as a political subdivision of the state of Missouri, and with the power to levy special assessments. The City approved Ordinance No. 2006-108 on July 24, 2006, establishing the District as a political subdivision of Missouri with the powers authorized by the CID Act.¹⁴ An amended petition was filed and in response, the City adopted Ordinance No. 2007-034¹⁵ on March 26, 2007, adding certain real property to the District. The Parcels were at that time (and are still) located within the District.

To finance certain improvements, the District adopted Resolution No. 2007-03 ("the 03 Resolution") on May 3, 2007, which authorized the issuance of the District's Special Assessment Revenue Bonds, Series 2007A (the "Bonds") in the principal amount of $18,405,000. The 03 Resolution stated the Bonds were "obligations of the District payable from the proceeds of the Special Assessments[.]"

That day, the District also adopted Resolution No. 2007-04 ("the 04 Resolution") which, beginning in 2008, authorized the District to levy annual special assessments against real property within the District to pay debt service on the Bonds, make any required trust indenture payments, and pay the District's administrative costs. Specifically, the 04 Resolution authorized and directed the District to, on a yearly basis, determine the amounts to be assessed against each lot, unit, tract, or parcel of real estate in the District, levy those amounts by special assessment, and notify the Collector of the amounts levied for collection, pursuant...