Schaer v. Webster County
| Decision Date | 08 May 2002 |
| Docket Number | No. 00-1678.,00-1678. |
| Parties | James F. SCHAER, Appellant, v. WEBSTER COUNTY, Iowa, and Webster County Treasurer, Appellees. |
| Court | Iowa Supreme Court |
James E. Nervig of Petosa, Petosa, Boecker & Nervig, L.L.P., Clive, for appellant.
Stephen J. Lickiss, Assistant County Attorney, for appellees.
In this action by the assignee of a certificate of purchase of real estate against a county and county treasurer, we must decide if Iowa Code section 448.10 (1995) authorizes a claim for damages when the description of the parcel used by the county treasurer to sell the real estate and assign the certificate of purchase failed to exclude a platted subdivision located within the parcel. On review, we conclude the assignee has no cause of action, and affirm the decision of the district court.
James F. Schaer is a resident of the city of Des Moines. He is a commercial real estate broker and a self-described "lender," based on his practice of purchasing assignments of certificates of purchase of real estate from county treasurers following tax sales. Schaer considers the assignments to be a loan of the amount of the delinquent taxes on the property until the taxpayer redeems the property. Schaer also considers the certificate of purchase to be a security device that entitles him to acquire title to the property in the event the taxpayer fails to redeem the property. Schaer has engaged in this practice for nearly thirty years.
On June 19, 1995, the Webster County Treasurer, Janice F. Horton, conducted the annual Webster County tax sale. She offered at public sale all parcels of real estate in the county on which taxes were delinquent, including a parcel of real estate described within the county data storage and retrieval system as:
31-89-28 FTD AG LAND-W PT OF NE NE (EX 756.31' X 155') (EX N1003.69' OF E311' OF NE NE).
The parcel was known as the Donald Grell property. It is located within the city limits of Fort Dodge, near the southern border, in the southwest part of the city. The description identified a portion of a forty-acre unplatted parcel within an original unplatted section.
After the County Treasurer failed to receive a bid for the Grell property at the public sale, Webster County submitted a bid for the parcel in the amount of $20,198, which equaled the amount of the delinquency.1 The County Treasurer then issued a certificate of purchase. The certificate included the same description of the parcel as contained in the notice of sale.
On August 30, 1995, the County assigned the certificate of purchase of the Grell property to Schaer, along with certificates of purchase of numerous other parcels of real estate in Webster County purchased by the County at the tax sale. Schaer paid the County Treasurer $21,430 as consideration for the assignment of the Grell property. Schaer received a certificate of purchase for the real estate. The following provision was added to the bottom of the certificate:
ASSIGNMENT: FOR THE PAYMENT OF $21,430.00, AS PER AGREEMENT, I HEREBY ASSIGN ALL RIGHTS, TITLE, AND INTEREST IN THE CERTIFICATE TO:James F. Schaer ....
The provision also contained Schaer's address and social security number. It was dated August 30, 1995, and signed by Janice F. Horton, as assignor.
Prior to purchasing the assignment, Schaer checked with the office of the county assessor and learned the parcel contained 21.95 acres. He believed the "AG" in the description meant the land was zoned agricultural, but did not verify the zoning classification with city officials. He also observed the real estate by driving by the land in his vehicle.
In October 1998, after Schaer served notice of the expiration of the right of redemption on the possessor of the Grell property, he discovered the description of the parcel contained in the certificate of purchase did not match the tracing of the parcel made from the original plat book of Webster County. First, the certificate description failed to exclude a platted housing subdivision located in the upper northwest corner of the original forty-acre parcel. This subdivision was 651.2 feet on its east line and 363.2 feet on its south line. Second, the first exception noted in the certificate description failed to identify its location. Finally, the certificate description purportedly identified the parcel as agricultural land. It was actually zoned for heavy industrial use. As a result, the description of the parcel used by the County Treasurer described an area which was larger than the actual size of the parcel, and was inadequate, without reference to the plat books, to determine its boundaries.
After discovering the inconsistencies, Schaer refused to return the certificate of purchase to the County Treasurer and remit the appropriate fees to acquire the deed for the property. Instead, he filed a petition with the district court asking the certificate and assignment be declared void and that he be awarded damages for the amount of money he paid in connection with the assignment, plus interest. Schaer claimed that the failure to include the subdivision as an exception in the description resulted in a misleading overstatement of the boundaries of the parcel, and that the rights in the parcel he received from the assignment were significantly less than the description led him to believe. He claimed he would not have purchased the assignment if he had known the true boundaries.
The case was submitted to the district court for trial on stipulated facts and other evidence. The evidence revealed the description contained in the certificate of purchase was developed by the county auditor and was the description of the property as maintained by the county system of legal descriptions. This system contains descriptions for each parcel of real estate in the county. Additionally, the deputy county auditor, Alan Wooters, testified the description of the Grell property properly identified the property as it appeared in the plat books, and he was able to use the description to trace the correct boundaries of the parcel from the plat books. Without looking at the plat books, however, the description contained in the certificate of purchase did not reveal the existence of the subdivision in the tract. Under the system used by the county auditor to describe parcels in the county system, an unplatted parcel is described by governmental survey.2 The description does not specifically exclude any platted subdivisions created within the parcel because subdivisions are maintained in different plat books and are described differently.3 The subdivision within the original forty-acre tract in this case was separately described as "Auditor's Subdivision of Part of NE¼ of the NE¼ of Section 31, Township 89 North, Range 28 West, Webster County, Iowa." It contained eighteen lots, numbered one through eighteen.
The district court determined Schaer had no statutory right to damages based on any deficiency in the description of the property because the County Treasurer was not responsible for creating the description, but merely used the description utilized by the county system. The district court also rejected Schaer's claim that the assignment was void.
Schaer appeals. He claims the County is liable for his expenditures, with interest, under the statutory provision providing for indemnification from the county when a parcel of land is sold at tax sale "in consequence of error in describing it." See Iowa Code § 448.10. He also claims the assignment is void because the endorsement on the certificate of purchase does not constitute a written agreement as required by section 446.31. He further claims the assignment is void because the deficiencies in the description prevented the parties from acquiring a mutual intent to enter into the assignment.
We review a district court's interpretation of a statute for the correction of errors at law. T & K Roofing Co. v. Iowa Dep't of Educ., 593 N.W.2d 159, 161 (Iowa 1999). Likewise, we review the interpretation of a contract for errors. Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999).
The county treasurer in each county in Iowa is authorized to conduct a tax sale in June of each year for all real estate in the county on which taxes are delinquent. See Iowa Code § 446.7. The county auditor annually provides a list of the taxes due on each parcel in the county to the county treasurer, which is used to collect the taxes and determine any delinquency for any parcel. See id. §§ 443.2, 443.4, 445.10. The sale of property at the tax sale can result in the transfer of ownership of the property to the purchaser or the assignee of the purchaser if the parcel is not subsequently redeemed by payment of the delinquent taxes, fees, costs, and interest.4 See id. §§ 447.1, 448.1. The law further details the procedures that must be followed for the sale, redemption, and issuance of a deed. See generally id. chs. 446 (tax sales), 447 (tax redemption), 448 (tax deeds).
One statutory procedure governing tax sales requires the county treasurer to give public notice of the sale. This notice must contain "a description of the parcel to be sold that is clear, concise, and sufficient to distinguish the parcel to be sold from all other parcels." Id. § 446.9(2). The parcels may be described using "letters and figures ... to denote townships, ranges, [and] sections...." Id. § 446.13. The county treasurer is also required to record each sale "in the county system" by "describing each parcel ... as they are described in the copy of the notice...." Id. § 446.24. The county system is defined as that "method of data storage and retrieval as approved by the auditor of state," and includes tax lists. Id. § 445.1(3). The county treasurer is also required to deliver a certificate of purchase to the purchaser of each parcel "describing the parcel ... as...
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