City of Jackson v. Rebuild America, Inc.


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Docket Number: 2008-CA-02121-COA
Linked Case(s): 2008-CA-02121-COA2008-CT-02121-SCT

Court of Appeals: Opinion Link
Opinion Date: 04-05-2011
Opinion Author: Barnes, J.
Holding: Reversed and rendered.

Additional Case Information: Topic: Real property - Tax sale - Section 27-43-1 - Notice to record owner - Right of redemption - Section 27-43-3 - Standing - Section 21-17-1(3)(a) - Possibility of reverter - Service of process - M.R.C.P. 4(d)(4) - Section 27-43-5
Judge(s) Concurring: Lee, C.J., Irving and Griffis, P.JJ., Myers, Ishee, Roberts, Carlton and Maxwell, JJ.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - REAL PROPERTY

Trial Court: Date of Trial Judgment: 11-17-2008
Appealed from: Hinds County Chancery Court
Judge: William H. Singletary
Disposition: Summary Judgment Granted in Favor of Rebuild America, Inc.
Case Number: G2007-2242 W/4

  Party Name: Attorney Name:  
Appellant: City of Jackson, Mississippi




PIETER JOHN TEEUWISSEN, LARA E. GILL, KIMBERLY CELESTE BANKS



 

Appellee: Rebuild America, Inc. KIMBERLY PINE TURNER  

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Topic: Real property - Tax sale - Section 27-43-1 - Notice to record owner - Right of redemption - Section 27-43-3 - Standing - Section 21-17-1(3)(a) - Possibility of reverter - Service of process - M.R.C.P. 4(d)(4) - Section 27-43-5

Summary of the Facts: The City of Jackson conveyed the property at issue in this case to Greater Mount Calvary Community Development Corporation on June 24, 2003. In accordance with section 21-17-1(3)(a), the deed contained a reverter clause. When GMCCDC failed to pay property taxes, the property was sold by tax sale to Wachovia Bank and subsequently conveyed to Rebuild America, Inc. After filing a complaint to quiet title, Rebuild America filed a motion for summary judgment. The City filed a cross-motion for summary judgment, asserting that the property reverted to it by operation of law and that the tax sale was void. The chancery court awarded summary judgment to Rebuild America, and the City of Jackson appeals.

Summary of Opinion Analysis: Section 27-43-1 states that in a tax sale, the clerk of the chancery court shall, within one hundred eighty days and not less than sixty days prior to the expiration of the time of redemption with respect to land sold, either to individuals or to the state, be required to issue notice to the record owner of the land sold as of 180 days prior to the expiration of the time of redemption. Per section 27-43-3, notice must be given to the “reputed owner” by certified mail, personal service delivered by the sheriff, and publication in the appropriate newspaper. All three notice requirements must be satisfied for the redemption notice to be in compliance with the statute. The City argues that GMCCDC failed to receive proper notice of the right of redemption; therefore, the tax sale is void. Rebuild America argues that the City lacked standing to assert this claim since the City failed to make an entry to assert its rights to the property. Parties have standing to sue when they assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant, or as otherwise provided by law. The City has standing to argue the issue of GMCCDC’s notice. Neither party has contested that the conditions set forth in the quitclaim deed were not met by GMCCDC and that a breach of the conditions occurred. Rather, the issue between the parties is the nature of the City’s conditional future interest: whether it is a right of entry, as argued by Rebuild America, or a possibility of reverter, as claimed by the City of Jackson. Section 21-17-1(3)(a) distinctly states that “title” might be held “only so long as” the lands were used for certain purposes. Certain language used in the deed – “provided” and “shall revert” – are typical of a condition subsequent with right of entry. However, the deed expressly disclaims the necessity for re-entry and labels the right a “possibility of reverter” in the title of the deed. Further, section 21-17-1(3)(a) states that “title” from the municipality might be held “only so long as” the land is used for certain purposes. This language reflects a limitation which leaves the grantor with a possibility of reverter. Regardless of whether a possibility of reverter grants automatic title or a right of entry in Mississippi, either is sufficient to confer standing on the City to challenge the sufficiency of notice to GMCCDC. Rebuild America is correct that the issue of whether notice to GMCCDC was proper was not included in the City of Jackson’s pleadings filed with the chancery court. Rather, the issue of insufficient notice was first asserted by the City at the hearing on the motions for summary judgment. The record shows that the sheriff failed to serve GMCCDC personally. Instead, the sheriff posted the notice of the tax sale on the door of GMCCDC’s place of business on July 4, 2007, which is insufficient under the requirements of section 27-43-3. GMCCDC is a domestic corporation; therefore, under M.R.C.P. 4(d)(4), the proper method of service is to deliver a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process. Thus, the chancellor’s finding that GMCCDC received proper notice is not supported by the record. However, Rebuild America asserted that it was not given the opportunity to refute this claim made by the City, since the City had failed to assert this claim until the hearing before the chancellor. Notice is important in summary judgment proceedings, and parties to a summary judgment motion must be given an opportunity to submit materials in response to the motion. If the only issue before the Court was whether notice to GMCCDC was properly given, the case would be reversed and remanded for further proceedings. However, the issue of whether the City of Jackson was entitled to separate, statutory notice is dispositive of this appeal. Section 27-43-5 states that a chancery clerk has an affirmative duty to examine the record of deeds, mortgages and deeds of trust in his office to ascertain the names and addresses of all mortgagees, beneficiaries and holders of vendors liens of all lands sold for taxes and provide notice to all such “lienors.” The only beneficiaries entitled to notice are beneficiaries that are also lienors. The City of Jackson retained no lien on the property; therefore, it is not entitled to notice as a “lienor” under this statute. The City argues that it should have received notice as the record owner since the subject property automatically reverted to the City by operation of law. Rebuild America’s primary argument is that the City merely had a right of re-entry, not a legal possessory interest in the property. As the statute requires notice to the “record owner of the land sold,” the City was not record owner of the land by virtue of the breach by GMCCDC; any reversion of the property was not a matter of record. The question is whether, on its face, the deed’s reversionary language conferred on the City of Jackson the right to receive statutory notice of the right of redemption. Section 27-43-3 contemplates that each owner shall receive the notice required by the statute. The quitclaim deed conveyed all of the City’s rights, title and interest in the property and provided that, unless certain conditions were met, the interest conveyed by the deed would revert to the City. It would be a violation of due process to construe section 27-43-1 in such a way as to allow the City’s reversionary interest to be extinguished without notice. The reverter language was on the face of the quitclaim deed to GMCCDC, and the deed was entitled in bold, capitalized letters, “QUITCLAIM DEED WITH POSSIBILITY OF REVERTER.” The City of Jackson’s reversionary interest in the property was, thus, reasonably ascertainable. It did not obligate the chancery clerk to search any further than the most recent conveyance of record. Under the circumstances of this case, the City of Jackson was entitled to receive statutory notice of the expiration of the redemption period. Thus, summary judgment is rendered in favor of the City of Jackson.


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