Wenatchee Reclamation Dist. v. Mustell

• Decision Date: 14 June 1984
• Docket Number: No. 50045-2,50045-2
• Citation: 102 Wn.2d 721,684 P.2d 1275
• Parties: WENATCHEE RECLAMATION DISTRICT, Petitioner, v. Kenneth A. MUSTELL and Jane Doe Mustell, husband and wife, Respondents, Douglas County, a municipal corporation; Farmers Telephone and Telegraph, and its successor in interest General Telephone of the Northwest, Defendants.
• Court: Washington Supreme Court

Page 721

102 Wn.2d 721

684 P.2d 1275

WENATCHEE RECLAMATION DISTRICT, Petitioner, v. Kenneth A. MUSTELL and Jane Doe Mustell, husband and wife, Respondents Douglas County, a municipal corporation; Farmers Telephone and Telegraph, and its successor in interest General Telephone of the Northwest, Defendants.

No. 50045-2.

Supreme Court of Washington En Banc.

June 14, 1984.

As changed Oct. 9, 1984.

Jeffers, Danielson, Sonn & Aylward, David Sonn, Wenatchee, for petitioner.

William M. Hamilton, Daniel Ford, Wenatchee, for respondents.

Westland, Liebler, Ivey & Alden, John Westland, Kennewick, Dellwo, Rudolf & Schroeder, Kermit Rudolf, Walter Peterson, Spokane, amicus curiae for petitioner.

PEARSON, Justice.

This case presents the issue of whether former RCW 87.03.310, which describes the procedures for foreclosing on delinquent irrigation assessments, fails to provide the notice and opportunity for a hearing required by due process. We hold that former RCW 87.03.310 is constitutionally defective. We further hold that former RCW 87.03.365, a statute of limitations, does not prevent respondents in this case from challenging the validity of a tax deed obtained pursuant to the defective foreclosure proceedings.

I

Tax 59, the subject of this action, is a small piece of property located in the heart of a 10-acre parcel of land in Douglas County. In 1961, William Hamilton, the owner of the 10-acre parcel (and respondents' predecessor in interest), failed to pay the yearly irrigation assessments for Tax 59 and for another parcel, Tax 49. Hamilton was made aware of the delinquencies in 1961. By letter dated September 12, 1963, petitioner Wenatchee Reclamation District again informed Hamilton that the assessments were delinquent. The letter warned that if Hamilton did not pay the assessments (which amounted to $9.33), plus 10 percent interest, at the Douglas County Treasurer's office, the District would call for the deeds from the county treasurer. The assessments were not paid. On September 29, 1964, the District forwarded another letter to Hamilton, advising him that the District Board of Directors had called for a treasurer's deed to Tax 59 and Tax 49. Still the delinquent assessments went unpaid. On November 18, 1964, a tax deed was issued to the District for the subject property. Hamilton did not redeem the property within the 1-year period of redemption provided by statute.

The District has carried Tax 59 on its rolls since receiving the tax deed. Because the property is on the District's rolls, it is tax exempt and there have been no taxes or further irrigation assessments upon the property.

The procedures to be followed by the District in foreclosing on the delinquent irrigation assessments were set out in former RCW 87.03.310-.370. It appears from the record that these procedures were complied with in the instant case. Former RCW 87.03.310 provided that the county treasurer was to publish or post a list of delinquent assessments each year. The list was to include the names of persons to whom property was assessed, a description of the property delinquent, and the amount assessed. If the list was posted, the treasurer was to publish a list of the places where posted. Whether published or posted, the delinquency list was to be accompanied by a 20-day notice of sale indicating where and when the property would be sold if the assessments were not paid. The statute contained no requirement that notice be mailed to delinquent property owners, or that such persons be personally served. ¹ Nor did the statute require a hearing in connection with the sale.

In May 1978, Hamilton deeded the 10-acre parcel to his nephew, Ken Mustell. In 1981 the District discovered the deed from Hamilton to Mustell. In October 1981 the District commenced this action to quiet title to Tax 59. Thereafter, Mustell filed his answer to the quiet title complaint, requesting that the tax deed be set aside. The District moved for summary judgment. Based upon the pleadings and the affidavits filed in support of and in opposition to the motion, the court found that the District, after notifying Hamilton of the delinquency, had properly acquired the tax deed to Tax 59. The court determined that Mustell could not challenge the validity of the tax deed because the 3-year statute of limitations, former RCW 87.03.365, had expired on November 18, 1967. The court granted the motion for summary judgment, quieting title to Tax 59 in the District and awarding the District costs against Mustell.

Mustell appealed. The Court of Appeals reversed and remanded for entry of judgment quieting title in Mustell. Wenatchee Reclamation Dist. v. Mustell, 35 Wash.App. 113, 665 P.2d 909 (1983). The appellate court held that the statutory procedure for irrigation assessment foreclosure, former RCW 87.03, as it existed in 1964, was unconstitutional because it failed to provide notice and an opportunity for a hearing. Therefore, the court held the tax deed void. We affirm.

II

The first issue we address is whether notice by publication or posting is sufficient, under the due process clause of the Fourteenth Amendment, to inform a property owner of an upcoming special assessment foreclosure. We hold that it is not.

In Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950), the Supreme Court held that prior to an action which will have a direct and adverse effect on an interest in life, liberty, or property protected by the due process clause, a state must provide "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Applying this "elementary and fundamental requirement of due process", 339 U.S. at 314, 70 S.Ct. at 657, the Court held that published notice of an action to settle the accounts of a common trust fund was not sufficient to inform beneficiaries of the trust whose names and addresses were known.

Prior to Mullane, due process rights tended to vary depending on whether an action was in rem or in personam. Personal service was considered essential when a state court based its jurisdiction upon its authority over a defendant's person; constructive notice to nonresidents satisfied the requirements of due process when jurisdiction was based upon the court's authority over property within its territory. See generally Shaffer v. Heitner, 433 U.S. 186, 196-205, 97 S.Ct. 2569, 2755-2580, 53 L.Ed.2d 683 (1977). The Mullane court, however, rejected this distinction between in rem and in personam actions for purposes of determining the sufficiency of notice, stating "we think that the requirements of the Fourteenth Amendment ... do not depend upon a classification for which the standards are so elusive ..." 339 U.S. at 312, 70 S.Ct. at 656.

In subsequent cases, the Supreme Court has adhered to the principle announced in Mullane. In Schroeder v. New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962), for example, the Court concluded that publication in a newspaper and posted notices were inadequate to inform a property owner of condemnation proceedings when his name and address were readily ascertainable from deed records and tax rolls. Recently, in Mennonite Board of Missions v. Adams, --- U.S. ----, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), the Court held that notice by publication and posting does not provide a mortgagee of real property adequate notice of a proceeding to sell the mortgaged property for nonpayment of property taxes. The Court reasoned that, since a mortgagee clearly has a legally protected property interest, he is entitled to notice reasonably calculated to apprise him of a pending tax sale. Constructive notice to a mortgagee who is identified in the public record does not satisfy Mullane. Personal service or mailed notice is required. Mennonite, 103 S.Ct. at 2711-12.

The case at bench is controlled by the analysis in Mullane and Mennonite. A property owner obviously has a legally protected property interest. He is entitled to notice by means "such as one desirous of actually informing the [property owner] might reasonably adopt to [inform him of the impending foreclosure]." Mullane, 339 U.S. at 315, 70 S.Ct. at 657. Notice by publication and posting is constitutionally inadequate where the name and address of the owner are known or can be discovered by the governmental entity with minimal effort; personal service or mailed notice is required. Mennonite, 103 S.Ct. at 2712. See also Montville v. Block 69, Lot 10, 74 N.J. 1, 376 A.2d 909 (1977); Dow v. State, 396 Mich. 192, 240 N.W.2d 450 (1976); Laz v. Southwestern Land Co., 97 Ariz. 69, 397 P.2d 52 (1964). As former RCW 87.03.310 did not require that an owner of property which was subject to an irrigation assessment foreclosure be notified of the foreclosure proceedings by personal service or mail, that statute failed to provide for the notice required by due process.

III

The District argues that, even if the notice provisions of former RCW 87.03.310 are found to have been violative of due process, respondents lack standing to attack those provisions. The District points to the prevailing rule that one who challenges the constitutionality of a governmental action must show that he was prejudiced by the action complained of. See MacLean v. First Northwest Indus., 96 Wash.2d 338, 347, 635 P.2d 683 (1981). The District asserts that respondents were not prejudiced by the constitutional deficiencies in the notice provisions of RCW 87.03.310 because Hamilton (respondents' predecessor) did in fact receive notice in the mail that the assessment on Tax 59 was delinquent and that Tax 59 would be sold. Respondents argue, however, that they were prejudiced because: (1) the notice received by Hamilton failed to describe the subject property with sufficient specificity, and (2) the content of the notice actually received did not...