Stiff v. Equivest Fin.

• Decision Date: 25 February 2022
• Docket Number: 1200264
• Parties: Mark A. Stiff v. Equivest Financial, LLC
• Court: Alabama Supreme Court

Mark A. Stiff
v.
Equivest Financial, LLC

No. 1200264

Supreme Court of Alabama

February 25, 2022

Appeal from Jefferson Circuit Court (CV-18-900776.80)

MITCHELL, Justice.

Equivest Financial, LLC, bought property owned by Mark A. Stiff and Jim Stiff at a tax sale. This Court later declared that sale void. See

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Stiff v. Equivest Fin., LLC, [Ms. 1181051, June 26, 2020] __So. 3D __, __ (Ala. 2020). After we remanded the case for further proceedings, including consideration of Equivest's alternative claim for relief, the trial court entered judgment in Equivest's favor in the amount of $66, 181.56, plus court costs. Mark appeals from that judgment, arguing that the trial court erred: (1) by awarding Equivest interest on the amount it bid in excess of the delinquent taxes and (2) by awarding Equivest interest that accrued, and by failing to award him costs that he incurred, after he tendered an offer of judgment. We reject these arguments and affirm the trial court's judgment.

Facts and Procedural History

In January 2013, Doris Stiff died, leaving her house in Hoover to her two sons, Mark and Jim. The Stiff brothers were unable to pay the ad valorem taxes due on the property. In May 2013, Equivest bought the property at a tax-sale auction for $41, 545.55 -- an amount of money that included the $3, 545.55 necessary to pay off the Stiffs' delinquent taxes and

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a $38, 000 "excess bid."^[1]

After the tax sale, the Stiffs continued to possess the property and rented it out to tenants, while Equivest paid the property taxes year after year. In March 2017, Equivest received a tax deed to the property, as provided by § 40-10-29, Ala. Code 1975.

Equivest eventually filed a complaint in the Jefferson Circuit Court to eject the Stiffs, cut off redemption rights, and quiet title to the property. The Stiffs counterclaimed, seeking judicial redemption of the property and a judgment declaring the tax sale void. Before trial, the Stiffs made a timely offer of judgment under Rule 68, Ala. R. Civ. P., in the amount of $28, 500, which Equivest did not accept.

After a bench trial, the trial court upheld the tax sale and ruled that the Stiffs could redeem the property only by paying into the court

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$87, 419.84. Mark appealed that judgment. We reversed, holding that the tax sale was void, and remanded the case for the trial court to consider Equivest's alternative claim that it was entitled to reimbursement for certain expenses, with interest, under § 40-10-76, Ala. Code 1975. See Stiff, __ So.3d at __.

On remand, the trial court reached several conclusions. First, it held that Equivest was entitled to reimbursement for the amount it had paid to purchase the property, for the taxes it had paid after purchase, and for interest on both amounts at a 12% annual rate -- a total of $104, 181.56. Second, the court deducted Equivest's $38, 000 excess bid from the judgment against the Stiffs, because Jefferson County had already remitted the excess bid to Equivest's counsel. Finally, the trial court held that the Stiffs were not entitled to offsets based on their previous extension of an offer of judgment. The trial court thus entered judgment in favor of Equivest in the amount of $66, 181.56, plus court costs. Mark appealed.

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Standard of Review

Because this case involves the application of law to undisputed facts, the standard of review is de novo. See Ex parte Soleyn, 33 So.3d 584, 587 (Ala. 2009).

Analysis

Mark makes two arguments on appeal. First, he contends that Equivest is not entitled to interest on its excess bid. Second, he argues that Equivest is not entitled to additional interest -- and that he is entitled to court costs -- because Equivest did not accept the offer of judgment he made before trial. Both arguments are unavailing.

A. Whether Equivest is Entitled to Interest on Its Excess Bid

Mark's first argument raises a question of first impression for this Court: When a tax sale has been set aside (for any reason other than that taxes were not due), is the tax-sale purchaser entitled to recover interest on the amount of the excess bid it paid at the sale? The trial court said yes, awarding Equivest interest on its excess bid of $38, 000. Mark asks us to reverse that aspect of the award. He argues that, as a matter of

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common sense, ^[2] he is not obligated to pay interest on an excess bid "where there is no valid sale." Mark's brief at 12. Mark's argument has some intuitive appeal, but the scope of a delinquent taxpayer's^[3] statutory payment obligations is ultimately determined by the text of the relevant statute. Bare appeals to intuition, unmoored from statutory language, are insufficient.

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The applicable version of § 40-10-76 provides that, when a tax-sale purchaser sues to recover a property and its "recovery is defeated on the ground that [the tax] sale was invalid for any reason other than that the taxes were not due, "^[4] the tax-sale purchaser may move the court to

"ascertain the amount of taxes for which the lands were liable at the time of the sale and for the payment of which they were sold, with interest thereon from the date of sale, and the amount of such taxes on the lands, if any, as the [tax-sale purchaser] … has, since such sale, lawfully paid …, with interest thereon from the date of such payment, the interest on both amounts to be computed at the rate of 12 percent per annum, subject to the limitations set forth in Section 40-10-122(a)."

(Emphases added.) The statute further provides that the trial court must then enter "judgment against the defendant[s]" -- that is, the delinquent taxpayers -- "in favor of the [tax-sale purchaser] for the amount ascertained and the costs of the action."^[5] The question facing this Court

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is whether the first "amount" ascertained under § 40-10-76, on which the delinquent taxpayer must pay interest, includes the excess bid.

Mark and Equivest press competing interpretations of the statute. Mark argues that he is not responsible for paying interest on the excess bid under § 40-10-76 because the tax sale was invalidated and "[t]he statute does not indicate that the court is to make any determination as to an overbid or include interest on any overbid." Mark's reply brief at 5. In other words, Mark says that the word "amount" means only the amount of the delinquent ad valorem taxes.

Equivest urges a different interpretation -- that a distinction exists between "the amount of taxes" and "the payment of which they were sold." Equivest's brief at 13-14. Equivest essentially argues that the statute requires payment of "the amount [1] of taxes for which the lands were liable at the time of the sale and [2] for the payment of which they were sold, with interest." See § 40-10-76. On this reading, the statute requires

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the delinquent taxpayer to reimburse the tax-sale purchaser for the amount of delinquent taxes due at the time the property was sold and for the "payment," including any excess, made by the tax-sale purchaser at the tax sale.

Both Mark's and Equivest's interpretations are plausible when the statutory text is viewed in isolation. As a result, we are faced with an ambiguity. See Deutsche Bank Nat'l Tr. Co. v. Walker Cnty., 292 So.3d 317, 326 (Ala. 2019) (explaining that "[i]f the language of a statute is not 'plain, '" it is ambiguous); S&S Distrib. Co. v. Town of New Hope, 334 So.2d 905, 907 (Ala. 1976) (explaining that" '[a] statute or...