Marathon Asset Mgmt., LLC v. Otto
| Docket Number: | 2006-CA-01386-COA | |
| Oral Argument: | 10-23-2007 | |
* This video is best viewed in the most current version of Google Chrome, Internet Explorer with Windows Media Player plug-in, or Safari (Mac Users). |
||
| Court of Appeals: |
Opinion Link Opinion Date: 03-25-2008 Opinion Author: ISHEE, J. Holding: Affirmed |
|
| Additional Case Information: |
Topic: Real property - Tax sale - Extension of redemption period - Predecessor in interest - Necessary party - M.R.C.P. 19 - M.R.C.P. 12(h)(2) Judge(s) Concurring: KING, C.J., LEE AND MYERS, P.JJ., IRVING AND CHANDLER, JJ. Non Participating Judge(s): CARLTON, J. Dissenting Author : ROBERTS, J., with separate written opinion. Dissent Joined By : GRIFFIS AND BARNES, JJ. Procedural History: Bench Trial Nature of the Case: CIVIL - REAL PROPERTY |
|
| Trial Court: |
Date of Trial Judgment: 07-21-2006 Appealed from: Hinds County Chancery Court Judge: William H. Singletary Disposition: CHANCELLOR ENTERED A JUDGMENT IN WHICH HE REFUSED TO CONFIRM TITLE Case Number: G-2004-196 S/2 |
|
| Party Name: | Attorney Name: | |||
| Appellant: | MARATHON ASSET MANAGEMENT, LLC |
HUNTER FARISS CRISLER |
||
| Appellee: | ALICIA OTTO AND JONATHAN OTTO | PAUL E. ROGERS |
|
|
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
|
| Topic: | Real property - Tax sale - Extension of redemption period - Predecessor in interest - Necessary party - M.R.C.P. 19 - M.R.C.P. 12(h)(2) |
| Summary of the Facts: | Ironwood Acceptance Corporation purchased a parcel of land located in Hinds County at a tax sale by paying a sum in the amount of the 1999 ad valorem taxes owed. The two-year tax redemption period for the property was set to expire on August 28, 2002. Subsequently, Ironwood obtained a deed for the property that was recorded in the office of the Chancery Clerk of Hinds County. Ironwood thereafter transferred title to Marathon Asset Management, LLC by way of a quitclaim deed that was also recorded with the Hinds County Chancery Clerk. On February 11, 2002, a special commissioner was appointed by the chancery court for the purpose of selling the through a foreclosure sale. The sale was intended to foreclose a deed of trust on the property held by AmSouth Bank. On June 4, 2002, the commissioner conducted the foreclosure sale on the property whereby Alisha Otto and Jonathan Otto were the highest bidders. However, the Ottos were delayed in obtaining title to the property by separate court proceedings involving the property. Therefore, the deed to the property was not conveyed to the Ottos until September 9, 2002. Subsequently, the deed was recorded in the land records of the office of the Hinds County Chancery Clerk. The conveyance occurred twelve days after the tax redemption period for the previous tax sale had expired. On November 1, 2002, AmSouth Bank filed a motion to amend the final judgment on behalf of the Ottos with the chancery court, asking the court to extend the tax redemption period in order to allow the Ottos to redeem the property. The chancellor, finding that the Ottos were delayed in receiving the property due to the dilatory actions of the property’s former owners, granted the motion to amend and approved a provision extending the tax redemption period. By letter dated December 3, 2002, the Hinds County Chancery Clerk notified the Ottos that they were granted an additional sixty days in order to redeem the property from the tax sale. On January 3, 2003, within the court-ordered redemption period, the Ottos redeemed the property by paying the 1999, 2000, and 2001 taxes plus interest and fees totaling $8,292.65. Subsequent to purchasing the property, the Ottos also expended the sum of approximately $60,000 in order to improve and renovate the property. Marathon filed a complaint seeking to have the court confirm the title to the property in Marathon. The chancellor found the Ottos to be the fee simple owners of the land. Marathon appeals. |
| Summary of Opinion Analysis: | Issue 1: Extension of redemption period Marathon argues that the chancellor acted outside of his statutory authority by extending the tax redemption period by sixty days to allow the Ottos to redeem the property. Marathon is correct in its assertion that the statutory redemption period is generally two years from the date of the tax sale. However, Marathon’s argument fails in assuming that the two-year redemption period is absolute. The statutory redemption period was extended by a chancellor’s order due to the dilatory actions of a third party. Given the facts of this case and keeping in mind that the redemption statute is to be liberally construed, extending the redemption period by an additional sixty days was reasonable under the circumstances. Marathon, as Ironwood’s successor in interest, knew or should have known that it was purchasing an unconfirmed interest in the subject property at the time it was purchased. At the time Ironwood purchased the subject property at the tax sale, it knowingly accepted the risk that its title would be defeated by redemption, and this risk was transferred to Marathon. Further, Marathon has suffered no personal or pecuniary loss as a result of the chancellor’s decision to extend the redemption period. Marathon, which obtained the property by paying off the outstanding property taxes, has been reimbursed for that amount by the Ottos. Given that there is no statute that explicitly prohibits the extension of the redemption period and the supreme court has directed that the redemption statute be construed liberally in favor of redemption, there is no error in the chancellor’s decision to extend the tax redemption period. Issue 2: Necessary party Marathon argues that Ironwood was a necessary and indispensable party to the civil action and that because Ironwood was not made a party to the action, the contents and provisions of that order, even if valid, are not applicable to Ironwood or its successors. Even assuming that Ironwood, as Marathon’s predecessor in interest, was a necessary and indispensable party to the original civil action, Marathon is procedurally barred from bringing its M.R.C.P. 19 objection on appeal. M.R.C.P. 12(h)(2) requires a party to raise the issue of failure to join a necessary and indispensable party in their pleadings under M.R.C.P. 7(a) or by motion for judgment on the pleadings or at the trial on the merits. Generally, failure to raise an objection based on non-joinder at trial procedurally bars the objecting party from raising the issue on appeal. An exception exists allowing an appellate court to consider the issue sua sponte when the interests of an absent person are prejudiced by virtue of not being made a party to the original action. It is true that Ironwood was not made a party to the original action where the chancellor extended the tax redemption period. However, Marathon was given the opportunity to raise the issue of failure to join Ironwood as a necessary and indispensable party as a defense in its suit to confirm title and failed to do so. Any prejudice to Marathon has been brought upon it by its own failure to object to non-joinder in the chancery court. Marathon’s claim under Rule 19(a) is barred by Rule 12(h)(2). |
Home | Terms of Use | About the JDP | Feedback | Using JDP | MC Law Library | Mississippi Supreme Court
