U.S. v. 0.13 Acre, More or Less, Sit. in Kanawha, CIV.A. 2:99-1060.
| Decision Date | 24 May 2004 |
| Docket Number | No. CIV.A. 2:99-1060.,CIV.A. 2:99-1060. |
| Citation | 318 F.Supp.2d 351 |
| Court | U.S. District Court — Southern District of West Virginia |
| Parties | UNITED STATES of America, Plaintiff, v. 0.13 ACRE, MORE OR LESS, SITUATE IN KANAWHA COUNTY, STATE OF WEST VIRGINIA, ET AL., Defendants. |
Benjamin L. Bailey, Bailey & Glasser, Charleston, WV, Guardian ad litem for Condemnees, Winifred Martin, mother of Robert Charles Martin and Jouce Ann Martin.
O. Gay Elmore, Jr., Elmore & Elmore, Charleston, WV, for Defendant Douglas Q. Gale.
Michael L. Keller, Kasey Warner, United States Attorney's Office, Charleston, WV, for Plaintiff the United States of America.
Pending is defendant Douglas Q. Gale's motion for summary judgment [Docket 47]. The court GRANTS Gale's motion for summary judgment insofar as Gale seeks compensation for the value of the tax lien on the date of condemnation plus any interest accrued on the value of the tax lien since that date and DENIES the motion insofar as it seeks any additional compensation.
On November 22, 1999, the Sheriff of Kanawha County sold a tax lien for delinquent ad valorem taxes on real estate listed in the name of Winifred Martin.1 The lien was purchased for $973.87 by Destiny 98TD (Destiny), a Delaware Trust. Seven days later, on November 29, 1999, the United States took the property pursuant to 40 U.S.C. § 258a. Prior to the taking, the United States was informed by the Sheriff that there were no outstanding taxes due on the property. The United States instituted this action with a "Complaint in Condemnation" and deposited just compensation for the property taken. The "Complaint in Condemnation" included a list of persons that "have or claim an interest in the property ..." [Docket 1]. Destiny was not identified as an interested party on this list.
Ultimately, Destiny's tax lien was not redeemed within the statutory period. On April 25, 2001, the Clerk of the Kanawha County Commission purported to convey the property to Destiny by tax deed pursuant to West Virginia's statutory scheme for tax sales. On August 13, 2001, Destiny conveyed the property to Gale via quitclaim deed.
On June 11, 2002, Judge Haden entered an Order staying and removing the case from the active docket. The only issue remaining at that time was a final payout of registry funds to Winifred Martin and her two incompetent children. Judge Haden previously appointed a guardian ad litem to represent the Martins. The appointment was designed to facilitate the appointment of a guardian in South Carolina, where the Martins reside, and to overcome further legal obstacles hindering final payout.
On August 22, 2003, Gale moved to be joined as a party. Judge Haden granted the request. On September 30, 2003, Gale filed a "Complaint for Declaratory Judgment" (the Second Complaint).2 The guardian ad litem answered the Second Complaint and the United States responded. The final deadline for briefing lapsed April 6, 2004. Although the guardian ad litem was not explicitly permitted an opportunity to participate in the briefing, he was served with the parties' joint motion for entry of a scheduling order, along with the parties' briefing. Accordingly, the court concludes the guardian ad litem would adopt the United States' response to Gale's motion for summary judgment.
Relying upon various provisions of the West Virginia Code, Gale asserts he was a bona fide purchaser for value without notice of the condemnation proceeding. He seeks reimbursement for all monies expended in connection with the property, including the amount paid at the tax sale, interest, notice fees, certified letter fees, publication fees, clerk fees, taxes for the year 2000, and legal fees to date. The amount sought totals approximately $8,000.00. The United States opposes the request, asserting Gale is entitled only to the value of the tax lien and accumulated interest.
To obtain summary judgment, the moving party must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court will not "weigh the evidence and determine the truth of the matter." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Instead, the court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Title 40 U.S.C. § 258a governed the taking in this case. The statute provides:
In any proceeding in any court of the United States outside of the District of Columbia which has been or may be instituted by and in the name of and under the authority of the United States for the acquisition of any land or easement or right of way in land for the public use, the petitioner may file in the cause, with the petition or at any time before judgment, a declaration of taking signed by the authority empowered by law to acquire the lands described in the petition, declaring that said lands are thereby taken for the use of the United States. Said declaration of taking shall contain or have annexed thereto —
(1) A statement of the authority under which and the public use for which said lands are taken.
(2) A description of the lands taken sufficient for the identification thereof.
(3) A statement of the estate or interest in said lands taken for said public use.
(4) A plan showing the lands taken.
(5) A statement of the sum of money estimated by said acquiring authority to be just compensation for the land taken.
Upon the filing said declaration of taking and of the deposit in the court, to the use of the persons entitled thereto, of the amount of the estimated compensation stated in said declaration, title to the said lands in fee simple absolute, or such less estate or interest therein as is specified in said declaration, shall vest in the United States of America, and said lands shall be deemed to be condemned and taken for the use of the United States, and the right to just compensation for the same shall vest in the persons entitled thereto; and said compensation shall be ascertained and awarded in said proceeding and established by judgment therein, and the said judgment shall include, as part of the just compensation awarded, interest in accordance with section 6 of this Act on the amount finally awarded as the value of the property as of the date of taking, from said date to the date of payment; but interest shall not be allowed on so much thereof as shall have been paid into the court. No sum so paid into the court shall be charged with commissions or poundage.
Upon the application of the parties in interest, the court may order that the money deposited in the court, or any part thereof, be paid forthwith for or on account of the just compensation to be awarded in said proceeding. If the compensation finally awarded in respect of said lands, or any parcel thereof, shall exceed the amount of the money so received by any person entitled, the court shall enter judgment against the United States for the amount of the deficiency. Upon the filing of a declaration of taking, the court shall have power to fix the time within which and the terms upon which the parties in possession shall be required to surrender possession to the petitioner. The court shall have power to make such orders in respect of encumbrances, liens, rents, taxes, assessments, insurance, and other charges, if any, as shall be just and equitable.3
The parties' dispute presents two very narrow issues, not answered directly by § 258a. First, the court must determine who is entitled to the monies deposited by the United States as just compensation, the original property owners (the Martins) or the tax lien holder (Mr. Gale), given that the tax lien existed at the time of the taking, the state statutory redemption period passed after the taking, and the lienholder received the tax deed prior to final distribution of the United States' deposit. Second, if the court awards the bulk of the monies deposited to the Martins, the court must consider the value of the claim arising from Gale's tax lien.
The parties have not cited any cases in support of their respective positions on the issue of who is entitled to the monies deposited with the court as compensation for the condemnation. Likewise, the court's independent research has revealed only a small number of helpful cases. The outcome depends upon which fork of authority the court follows from an as-yet unresolved circuit split emanating from the 1940s.
The first line of authority is represented by Weber v. Wells, 154 F.2d 1004 (9th Cir.1946). In Weber, a parcel was sold in 1937 to the State of California for delinquent taxes. The United States took the property in April 1942. On July 14, 1942, the San Francisco tax collector purported to sell the parcel to an individual who claimed title. Based upon that "sale," the individual claimed entitlement to the monies deposited with the court by the United States. The court's analysis is worth quoting at length:
At the time of the purported tax sale on July 14, 1942, did the State of California have any interest in said land to sell? We think not. From the time of the sale to the State of California on the 25th day of June, 1937, the owners had five years to redeem. The legal title remained in the appellees as taxpayers subject to a lien in favor of the State. In effect `it' was `not a sale but * * * merely a book transaction to facilitate the adjustment of accounts between the tax collector and the auditor.' Ducey v. Dambacher, 27 Cal.App.2d 658, 661, 81 P.2d 597. On April 22, 1942, the date of the judgment awarding immediate possession and delivery of the land to the...
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