SKL Inv., Inc. v. Am. Gen. Fin., Inc.


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Docket Number: 2008-CA-01575-COA

Court of Appeals: Opinion Link
Opinion Date: 12-01-2009
Opinion Author: ROBERTS, J.
Holding: AFFIRMED

Additional Case Information: Topic: Real property - Notice of tax sale - Section 27-43-9 - Lien - Section 27-43-11 - Damages
Judge(s) Concurring: KING, C.J., GRIFFIS, BARNES, ISHEE, CARLTON AND MAXWELL, JJ.
Dissenting Author : LEE, P.J., with separate written opinion.
Dissent Joined By : MYERS, P.J. and joined in part by Irving, J.
Procedural History: Bench Trial
Nature of the Case: CIVIL - REAL PROPERTY

Trial Court: Date of Trial Judgment: 08-26-2008
Appealed from: PRENTISS COUNTY CHANCERY COURT
Judge: Michael Malski
Disposition: TAX SALE CONFIRMED SUBJECT TO APPELLEE’S LIEN
Case Number: 2006-321(59)S

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: SKL INVESTMENTS, INC.




PARKER HAYS STILL, MARK THOMPSON SEGARS



 
  • Appellant #1 Brief
  • Appellant #1 Reply Brief

  • Appellee: AMERICAN GENERAL FINANCE, INC. DOUGLAS L. TYNES  

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    Topic: Real property - Notice of tax sale - Section 27-43-9 - Lien - Section 27-43-11 - Damages

    Summary of the Facts: A one-acre tract of land located in Booneville, that was owned by Genise Roland was sold to SKL Investments, Inc., for unpaid county taxes for the 2001 fiscal year. At some point prior to the two-year redemption period, the Prentiss County Chancery Clerk sent notice of the tax sale to all proper parties, including American General Finance, Inc., a lienholder. After the two-year redemption period had expired, the chancery clerk executed a tax deed to SKL. SKL filed a complaint to quiet title to the property. American General answered and asserted that the tax sale was void because it did not receive notice. The chancellor found that American General did not receive notice of the tax sale; thus, the tax sale was void as to American General. However, the chancellor confirmed SKL’s tax sale purchase of the property, subject to American General’s lien. SKL appeals.

    Summary of Opinion Analysis: Issue 1: Notice SKL argues that the chancellor erred in finding that American General failed to receive notice of the tax sale. Sometime in June 2004, American General received, by certified mail, an instrument entitled “2001 Delinquent Tax Notices.” The document did not contain the name of the property owner, a description of the land, the book and page number of the deed of trust, or the purchaser of the property at the tax sale. During the subsequent hearing, the chancery clerk testified that it was customary to send a cover page to lienholders with the list of properties attached and the property identified by a “PPIN” number. However, a copy of the notice sent to American General was not retained in the chancery clerk’s files. Furthermore, the chancery clerk failed to follow the requirements of section 27-43-9. Thus, the chancellor correctly found that the tax sale was void as to American General. Issue 2: Lien SKL argues that the chancellor erred in holding that the property at issue was subject to American General’s lien, because a valid tax sale extinguishes any existing lien of deed of trust. It is clear that the failure to give proper notice to a lienholder renders that tax sale void as to that lienholder. Section 27-43-11 provides that the “failure to give the required notice to such lienors shall render the tax title void as to such lienors, and as to them only.” That provision means that the tax sale is confirmed as to all others except those lienholders who failed to receive the statutorilyrequired notice. Section 27-43-11 provides an election of remedies. In the event that a tax sale is rendered void for improper notice to one lienholder, but not others, the purchaser is faced with two options. The purchaser may opt to retain the property subject to the lien of the improperly-noticed lienholder. Alternatively, the purchaser may opt to file a claim for a refund, thereby relinquishing all rights to the property. Thus, the chancellor did not err when he confirmed the tax sale subject to American General’s lien. Issue 3: Damages SKL argues that the chancellor erred in failing to award it damages and interest. Pursuant to section 27-43-11, SKL is entitled to a refund of all the taxes paid, but only after filing a claim therefor as provided by law. The record does not reflect that SKL has filed a claim for a refund of the taxes it paid.


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