Marion County Auditor v Sawmill Creek, LLC (IN)

Summary:  When a mailed notice of a pending tax sale is returned unclaimed, the state must take additional reasonable steps to attempt to provide notice before issuing a tax deed the buyer. What additional steps are constitutionally sufficient will depend on the facts of the individual case.

Marion County Auditor v Sawmill Creek, LLC, 964 NE2d 213, 215 (Ind. 2012).

Facts:  E.J. “Bill” Simpson managed an entity known as Sawmill Creek, LLC (“Sawmill Creek”). In 2001, on behalf of Sawmill Creek, Simpson purchased a four-acre tract of unimproved land in Marion County, Indiana. An error occurred on the closing statement, general warranty deed, and title insurance policy; each named “Saw Creek Investments, LLC” as purchaser instead of “Sawmill Creek, LLC.” Unnoticed by Simpson, the documents referenced the incorrect owner name, and as a result, the property was recorded under the wrong name. The property tax bills were sent to Simpson’s business address but by 2003 Simpson relocated his operation. Simpson sent the Marion County Clerk a notice of the address change, but it referenced “Sawmill Creek” so the mailing address for the property at issue went unchanged and Simpson stopped receiving the tax bills for the property in question.

Simpson did not notice the discontinuation of tax bills, and the property taxes became delinquent. In 2005, the Marion County Auditor set the property for tax sale. Notice was mailed to the original billing address, and subsequently returned as “NOT DELIVERABLE AS ADDRESSED, UNABLE TO FORWARD.” In October, 2005, McCord Investments, LLC purchased the property at the tax sale, beginning a one-year redemption period. During the redemption period the auditor took the following steps: (1) mailed post-sale notice letters to the address on record (which were again returned); (2) conducted title searches on the property and searched the Indiana Secretary of State and “business listings” but failed to reveal “Saw Creek Investments” (because it did not exist); (3) published a notice in the newspaper, on the auditor’s website, and on a bulletin board outside the Clerk’s office. The tax deed was then issued to McCord who placed the property for sale with a realtor. An acquaintance of Simpson noticed for sale signs on the property, which led to Simpson’s discovery of the tax sale. Through Sawmill Creek, Simpson filed a motion to set aside the tax deed.

The trial court granted Sawmill Creek’s motion and set aside the tax deed, finding the sale to be constitutionally deficient and that issuing a tax deed to McCord violated due process. The purchaser of the property at the tax sale and the county auditor appealed the trial court decision. The court of appeals affirmed, and transfer to the Indiana Supreme court was granted.

Holding:  Reversed. The Supreme Court of Indiana disagreed with the trial court’s finding that issuing the tax deed to McCord violated due process. The additional steps that the auditor took to attempt to provide notice to Sawmill Creek were reasonable, and therefore met constitutional requirements. In prior cases of a similar nature, and as stated in the trial court, “notice must be reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”

The government need not conduct an “open-ended search for a new address in the phonebook and other government records” to suffice due process, but additional steps are required beyond a merely publishing notice in the newspaper. Under the circumstances of this case, the Supreme Court deemed the conditions reasonably met with due regard for the practicalities and peculiarities of this case. The means to be employed are not specific, but must be “desirous of actually informing the absentee” depending on the circumstances of the case.

Opinion Year: 
By: ATG Underwriting Department | Posted on: Mon, 07/23/2012 - 1:51pm