Wells Fargo Bank, N.A. v. Up Ventures II
| Decision Date | 27 March 2009 |
| Docket Number | No. 34265.,34265. |
| Citation | 675 S.E.2d 883 |
| Court | West Virginia Supreme Court |
| Parties | WELLS FARGO BANK, N.A. Assignee and Successor in Interest to Fleet National Bank, Plaintiffs Below, Appellants, v. UP VENTURES II, LLC, Ironwood Acceptance Company, Palo Verde Trading Company, LLC, Jeffrey E. Hall and Annette L. Hall, Defendants Below, Appellees. |
Syllabus by the Court
1. Under W.Va.Code, 11A-3-19(a), a tax sale purchaser is required to provide notice to parties who are of record at any time after the thirty-first day of October of the year following the sheriff's sale, and on or before the thirty-first day of December of the same year. W.Va.Code, 11A-3-19(a)(1) does not require a tax sale purchaser to supplement this list going forward to discover parties who became of record after the thirty-first day of December of the year following the sheriff's sale, or to provide additional redemption notice before the tax deed is delivered.
2. The three-year statute of limitation found in W.Va.Code, 11A-4-4(a) [1994] relating to the institution of a civil action to set aside a tax deed does not violate the Due Process Clause of the West Virginia and United States Constitutions.
Stephen L. Thompson, Esq., Charleston, WV, for Appellant.
Ronald J. Flora, Esq., Milton, WV, for Appellee.
In this appeal from the Circuit Court of Cabell County, we are asked to reverse an order granting summary judgment in favor of the purchaser of a parcel of residential property at a tax sale. The circuit court held that a suit against the purchaser seeking to set aside the tax deed, which was filed more than three years after delivery of the tax deed to the purchaser, is barred by the statute of limitation set forth in W.Va.Code, 11A-4-4(a) [1992].
After carefully reviewing the briefs, the record designated for appellate consideration, and the oral arguments of counsel, we affirm the lower court's decision.
Jeffrey and Annette Hall ("the Halls") bought a tract of residential real property in 1995.2 After the Halls became delinquent for their 1998 property taxes, the property was sold at a sheriff's tax sale on November 9, 1999. Defendant Ironwood Acceptance Company ("the tax sale purchaser") bought the property at the tax sale for the sum of $1,565.81.
W.Va.Code, 11A-3-19(a) [1998] requires a tax sale purchaser to give the county clerk a list of persons who can redeem the property, and to request that the clerk serve these persons with a notice of their right to redeem the property. The statute states, in relevant part:
At any time after the thirty-first day of October of the year following the sheriff's sale, and on or before the thirty-first day of December of the same year, the purchaser, his or her heirs or assigns, in order to secure a deed for the real estate subject to the tax lien or liens purchased, shall: (1) Prepare a list of those to be served with notice to redeem and request the clerk to prepare and serve the notice as provided in sections twenty-one [11A-3-21] and twenty-two [11A-3-22] of this article ...
The tax sale purchaser complied with this statute. On November 16, 2000, the tax sale purchaser provided the county clerk with a list of those persons and entities who were entitled to receive a notice of their right to redeem the Hall's property. The clerk prepared and mailed these notices on or about January 17, 2001, and Annette Hall received and signed for the Hall's notice to redeem on January 22, 2001. In accordance with W.Va. Code, 11A-3-22 [1995], the county clerk also published the notice to redeem in two local newspapers on three separate days.
Although the Halls received notice of their right to redeem, they took no action to redeem the property. Instead, after Annette Hall received and signed for the notice to redeem, she and her husband entered into a loan agreement with Fleet National Bank to borrow $84,500.00, secured by a first lien on the property. Plaintiff Wells Fargo Bank ("bank") is the successor in interest to Fleet. The loan was closed and a deed of trust was signed and entered into on February 21, 2001. The deed of trust was recorded with the county clerk on March 8, 2001. The delinquent taxes were not paid and the property was not redeemed when this loan was closed. When making the loan, the parties agree that the bank was unaware of the delinquent real estate taxes and unaware of the November 1999 sheriff's tax sale. The title abstract the bank had performed prior to the closing of the loan did not reveal the delinquency or the previous sale of the property at the sheriff's tax sale.
Two months later, on May 8, 2001, the county clerk delivered a tax deed conveying the property to defendant Ironwood, who recorded the deed on the same day. On August 13, 2001, Ironwood conveyed the property to defendant Palo Verde Trading Company, LLC. On September 9, 2003, Palo Verde conveyed the property to defendant UP Ventures II, LLC (hereafter collectively referred to as the "tax sale purchasers").
The bank paid the real estate taxes due on the property beginning in the second half of 2001 and continuing through the second half of 2006. The bank somehow learned about the 1999 tax sale sometime in the late fall or early winter of 2006, and on January 11, 2007 filed suit to set aside the tax deed—almost six years after the tax deed was delivered to the initial tax sale purchaser and recorded by the county clerk. The bank argued that due process required that it should have been given notice of the right to redeem, even though it was not a lienholder of record when the notice to redeem was required to be served under W.Va.Code, 11A-3-19(a).
The tax sale purchasers responded by arguing that they had complied with the notice requirements of W.Va.Code, 11A-3-19(a). Because the bank was not a lienholder of record during the redemption period, the tax sale purchasers asserted that the bank was not entitled to be notified under the terms of the statute. Furthermore, the tax sale purchasers argued that this suit was time barred because of the three-year statute of limitation set forth in W.Va.Code, 11A-4-4(a), which allows those parties, entitled to notification of the right to redeem property following a tax sale, who did not receive notification, to bring a suit to set aside a tax deed within three years after delivery of the deed to the tax purchaser.
The bank countered with the contention that because it was not given notice of the right to redeem, it was entitled to have the tax deed set aside even after the three-year statute of limitation period barring suits to set aside tax deeds had passed. The bank argued that to hold otherwise would violate the bank's due process rights under the United States Constitution.
The circuit court agreed with the tax sale purchasers and granted summary judgment in their favor. In an order dated October 10, 2007, the circuit court found that the three-year statute of limitation period barred the action and did not constitute a violation of the bank's due process rights.
The bank now appeals the circuit court's summary judgment order.
"A circuit court's entry of summary judgment is reviewed de novo." Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). We apply the same review process as the circuit court, which is: "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Williams v. Precision Coil, Inc., 194 W.Va. 52, 59, 459 S.E.2d 329, 336 (1995). Furthermore, "questions of law and statutory interpretation are subject to de novo review." Syllabus Point 1, Burnside v. Burnside, 194 W.Va. 263, 460 S.E.2d 264 (1995).
There are two main issues raised in this appeal. The first is whether the tax sale purchaser complied with the notice provisions as set forth in W.Va.Code, 11A-3-19(a), and whether these notice provisions comport with due process. The second issue is whether the three-year statute of limitations period as set forth in W.Va.Code, 11A-4-4(a), was properly applied by the circuit court when it found that the bank's claim was time barred.
The first issue is whether the tax sale purchaser properly complied with the redemption notice provisions as set forth in W.Va.Code, 11A-3-19(a)(1), which states that a tax sale purchaser must:
Prepare a list of those to be served with notice to redeem and request the clerk to prepare and serve the notice as provided in sections twenty-one [11A-3-21] and twenty-two [11A-3-22] of this article[.]
This Court has defined who "those to be served with notice to redeem" are in Rollyson v. Jordan, 205 W.Va. 368, 518 S.E.2d 372 (1999), stating at Syllabus Point 4:
The persons entitled to notice to redeem in conjunction with a purchaser's application for a tax deed, pursuant to W.Va.Code, 11A-3-19(a)(1) (1994) (Repl.Vol.1995), are those persons who are permitted to redeem the real property subject to a tax lien or liens, as contemplated by W.Va. Code, 11A-3-23(a) (1995) (Repl.Vol.1995), which persons include "the owner" of such property and "any other person who was entitled to pay the taxes" thereon.
The initial tax sale purchaser prepared a list of persons who were entitled to pay taxes on the property and these people were properly served by the county clerk in January 2001. The tax sale purchaser could not have provided the bank with notice to redeem in January 2001, because the bank did not close its loan with the Halls until February 21, 2001 and did not record its deed of trust to the property until March 8, 2001.
The initial tax sale purchaser complied with the express language contained in W.Va. Code, 11A-3-19(a)(1). It provided a list of all of those entitled to notice in the time period...
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