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Casenotes

Indiana

Deeds; Taxation

In re 2007 Tax Sale in Lake County, 926 NE2d 524 (Ind Ct App 2010).

Facts:James and Jeremy LaFevre (the LaFevres) owned three connected parcels of land, referred to here as parcels 006, 007 and 008. Parcels 007 and 008 held a residence while 006 and 007 contained an outbuilding. The mailing address on record with the Auditor of Lake County (the Auditor) for parcels 007 and 008 was 2102 Fairview Street, Lake Station, Indiana, which was the address for the residence. However, the address on record for parcel 006 was 73 700 West Street, Valparaiso, Indiana.

After several years passed when no property taxes were paid for parcels 007 and 008, the Auditor sent notice to the Fairview Street address to notify the LaFevres that the property would be put up for a tax sale. The notice came back as undeliverable. Subsequently, the Auditor held the sale and the property was purchased by Ralph Hullett and CJR Homes (collectively "Hullett) on July 10, 2007. Hullett sent notice to the Fairview address stating the LaFevre's right to redeem, and when this was returned as undeliverable, he sent them notice of his petition for tax deeds. That notice was also returned.

After filing his petition on May 30, 2008, but before tax deeds issued, Hullett began rehabilitating the residence. At that time the LaFevres discovered Hullett's activities. On July 22, 2008, the trial court granted Hullett's petition. On July 31, 2008, the LaFevres filed a motion to side aside the order to issue the tax deed. Following a hearing, the trial court granted the LaFevres' motion which Hullett appealed

Holding:Affirmed. The court of appeals upheld the trial court's finding that the Auditor failed to give the LaFevres constitutionally adequate notice during the tax sale process. An owner of property that is put to a tax sale is entitled to three notices: (1) notice of the tax sale; (2) notice of the owner's right to redeem following the sale; and (3) notice that a petition for issuance of a tax deed was filed. The Auditor is responsible for issuing the first notice and the purchaser is responsible for the second and third.

In this case, the Auditor sent the first notice to the address of record and it was returned as undeliverable. When notice is returned, "both federal constitutional and state law" require the serving party to attempt further action to properly notify the interested party. If the Auditor had searched its own records, it would have discovered that the LaFevres also owned parcel 006 which had the same street address as parcels 007 and 008, but a different mailing address, which was changed in 2002. Because there was sufficient record evidence for the Auditor to obtain this alternate address, but it nevertheless failed to provide adequate notice, the trial court was within its discretion to grant the LaFevres' request for relief.

Hullett unsuccessfully argued that the LaFevres insufficiently supported their original motion for relief because they did not demonstrate that they lacked actual notice. The court stated that the LaFevres had no burden to demonstrate lack of actual notice. Instead, a demonstrable lack of formal notice, as presented here, is sufficient to reverse the issuance of a tax deed.

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[Last update: 1-20-11]