Valenzuela v. Snyder

• Decision Date: 01 May 2014
• Docket Number: No. 32,680.,32,680.
• Citation: 326 P.3d 1120
• Parties: Francisco VALENZUELA and Rachel Valenzuela, Plaintiffs–Appellees, v. Allan D. SNYDER and Sherry L. Snyder, Defendants–Appellants, and State of New Mexico, Taxation and Revenue Department, Property Tax Division, Defendant.
• Court: Court of Appeals of New Mexico

326 P.3d 1120

Francisco VALENZUELA and Rachel Valenzuela, Plaintiffs–Appellees,

v. Allan D. SNYDER and Sherry L. Snyder, Defendants–Appellants,andState of New Mexico, Taxation and Revenue Department, Property Tax Division, Defendant.

No. 32,680.

Court of Appeals of New Mexico.

March 31, 2014.

Certiorari Granted, May 1, 2014, No. 34,644.

Eric D. Dixon, Portales, NM, for Appellees.

Allan and Sherry Snyder, Greeley, CO, Pro Se Appellants.

OPINION

FRY, Judge.

{1} Plaintiffs Francisco and Rachel Valenzuela owed delinquent taxes on property in Portales, New Mexico, which the New Mexico Taxation and Revenue Department (the Department) sold at auction to Defendants Allan and Sherry Snyder. It is undisputed that the minimum bid at the sale was established by the Department as $215, and the Snyders, who were the only bidders at the auction, paid that amount. The Department's Property Tax Division (the Division) issued deeds on the property to the Snyders, which the Snyders recorded.

{2} The Valenzuelas filed suit seeking an order setting aside the tax sale. They alleged that because the purchase price was so grossly disproportionate to the property's fair market value—alleged to be at least $25,000—it would be inequitable and unconscionable to let the tax sale stand. The district court granted them summary judgment on the ground that the Snyders failed to respond to the motion for summary judgment and were deemed to have admitted the facts alleged by the Valenzuelas. Because our statutes and case law establish that an inadequate purchase price at a tax sale is not a basis for voiding the sale, we reverse.

BACKGROUND

{3} The Valenzuelas initially sued only the Department seeking an order setting aside the tax sale. They later amended their complaint to add the Snyders as Defendants, and the case proceeded against only the Snyders.

{4} The Valenzuelas filed a motion for summary judgment in which they alleged several material facts regarding the value of the property and the disproportionality of the purchase price. They also alleged, as material facts, the legal conclusion that it would be unconscionable and inequitable to let the tax sale stand under the circumstances.

{5} The Snyders, acting pro se, did not directly respond to the motion for summary judgment. Instead, they filed a motion to stay the proceedings against them until the case against the Department was resolved. In this motion, the Snyders stated that they “den[ied] the whole” of the Valenzuelas' motion for summary judgment. They did not comply with the provisions of Rule 1–056 NMRA that require a memorandum opposing a motion for summary judgment to specifically note all disputed facts with supporting citations to the record. SeeRule 1–056(D)(2).

{6} Due to the Snyders' failure to properly respond to the motion for summary judgment, the district court deemed admitted all of the material facts alleged in the Valenzuelas' motion, including:

• The property's fair market value was at least $25,000.

• The Snyders purchased the property at a tax sale for $215.

• The price the Snyders paid was “grossly disproportionate to [the property's] fair market value.”

• “It is unconscionable to allow the tax sale in which [the Snyders] purchased the property to stand.”

The court concluded that “[t]he tax sale in which [the Snyders] purchased the property is hereby deemed null and void.” This appeal followed.

DISCUSSION

{7} When this Court calendared this case, we instructed the parties to brief, in addition to any other issues they were inclined to raise, the following questions: (1) whether a claim seeking to invalidate a tax sale due to inadequacy of price must be directed at the governmental entity that sold the property, or whether it may be directed solely at the third-party purchasers of the property; and (2) whether New Mexico law supports the invalidation of a tax sale due to inadequacy of price. Because these questions were briefed at our direction, we decline to address the Valenzuelas' arguments that the Snyders failed to preserve these questions in the district court. Indeed, the second question is the legal issue on which the district court's summary judgment stands or falls. We address each question in turn.

The Valenzuelas Could Properly Sue the Snyders for the Relief Requested

{8} We readily dispose of the first question. The Valenzuelas correctly note that NMSA 1978, Section 44–6–4 (1975) of our Declaratory Judgment Act (the Act), NMSA 1978, §§ 44–6–1 to –15 (1975), provides that “[a]ny person interested under a deed ... or whose rights ... are affected by a statute ... may have determined any question of construction or validity arising under the instrument [or] statute ... and obtain a declaration of rights, status[,] or other legal relations thereunder.” Section 44–6–4. The Valenzuelas seek in this case to have their rights under the Property Tax Code declared, so they appropriately asserted their claim under Section 44–6–4. As for the proper defendant(s) in their suit, Section 44–6–12 of the Act provides that “[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration.” As purchasers of the property previously owned by the Valenzuelas, the Snyders clearly fall within this category and, therefore, the suit against them was permissible.

Inadequacy of the Purchase Price is Not a Valid Basis for Voiding a Tax Sale

{9} With respect to the second question—whether New Mexico law permits setting aside a tax sale due to the inadequacy of the purchase price—we review an order granting summary judgment de novo. Self v. United Parcel Serv., Inc., 1998–NMSC–046, ¶ 6, 126 N.M. 396, 970 P.2d 582. “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Id.

{10} While the Snyders' response to the Valenzuelas' motion for summary judgment did not comply with the requirements of Rule 1–056, this did not automatically entitle the Valenzuelas to summary judgment. See Junge v. John D. Morgan Constr. Co., 1994–NMCA–106, ¶ 12, 118 N.M. 457, 882 P.2d 48 (explaining that a movant is “not automatically entitled to summary judgment on the basis of an allegedly improper response”). The Valenzuelas had the burden “to show an absence of a genuine issue of fact, and that [they were] entitled as a matter of law to judgment in [their] favor.” Brown v. Taylor, 1995–NMSC–050, ¶ 8, 120 N.M. 302, 901 P.2d 720.

{11} Given the Snyders' non-compliant response to the Valenzuelas' motion for summary judgment, it was appropriate under Rule 1–056(E) for the district court to deem admitted the allegations of fact stated in the motion. See id. (“[A]n adverse party may not rest upon the mere allegations or denials of his [or her] pleading, but his [or her] response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he [or she] does not so respond, summary judgment, if appropriate, shall be entered against him [or her].”). However, the same does not hold true for conclusions of law that are presented as allegations of fact. See Vives v. Verzino, 2009–NMCA–083, ¶ 10, 146 N.M. 673, 213 P.3d 823 (explaining that conclusions of law are not deemed admitted by the opponent's failure to respond). Of the material “facts” alleged in the Valenzuelas' motion and adopted by the district court, one is clearly a conclusion of law—the statement that “[i]t is unconscionable to allow the tax sale in which [the Snyders] purchased the property to stand.” This is the legal question we must answer in light of the facts that were deemed admitted: that the Snyders purchased property worth at least $25,000 for $215 at the tax sale and that this purchase price was “grossly disproportionate”to the property's fair market value.¹

{12} We conclude that inadequacy of the purchase price or gross disproportionality between the purchase price and the property's value are not grounds for setting aside a tax sale. New Mexico's Property Tax Code (the Code) and our case law make this clear.

{13} We begin with the Code. NMSA 1978, Section 7–38–48 (2003) provides that, with certain exceptions not applicable to this case, “taxes on real property are a lien against the real property from January 1 of the tax year for which the taxes are imposed.... The lien continues until the taxes and any penalty and interest are paid.” In this case, it appears that at the time of the tax sale, the Valenzuelas owed delinquent taxes for the years 2008, 2009, 2010, and possibly 2011. They do not claim in this appeal that they did not receive notice that these taxes were due and delinquent or that they were not provided notice of the tax sale.

{14} The Code states, “If a lien exists ..., the [D]epartment may collect delinquent taxes on real property by selling the real property on which the taxes have become delinquent.” NMSA 1978, § 7–38–65(A) (2003, amended 2013). The Code requires the sale to be at public auction, with a minimum purchase price determined by the Department. NMSA 1978, § 7–38–67(C), (E) (2005). “In determining the minimum price, the [D]epartment shall consider the value of the property owner's interest in the real property, the amount of all delinquent taxes, penalties and interest for which it is being sold and the costs. The minimum price shall not be less than the total of all delinquent taxes, penalties, interest[,] and costs.” Section 7–38–67(E). Of note here is the direction to the Department to “consider the value of the property owner's interest in the real property,” a phrase that has been interpreted by our case law, as we discuss below. Id.

{15} Once a tax sale has taken place, if the sale was “substantially in accordance with the ... Code ..., the deed conveys all of the former property owner's interest in the real property as of the date the state's lien for...