Vanderburgh County Auditor, et al v Michiana Campgrounds, LLC (IN)

Tax Deeds

Vanderburgh County Auditor, et al v Michiana Campgrounds, LLC, 873 NE2d 1051 (Ind 2007).

Facts: Michiana Campgrounds, LLC (Michiana) purchased several properties in a 2004 tax sale in Vanderburgh County. The company then filed petitions for the issuance of tax deeds to other parcels it had purchased at the 2004 sale, but before the redemption period expired, Michiana filed motions for refunds of the purchase prices of the three parcels at issue minus a 25% penalty. The motion stated that Michiana "has not nor will not be asking for a tax deed" to those properties.

Indiana Code section 6-1.1-25, the Tax Sale chapter, provides that a tax sale purchaser acquires a deed to property only after meeting a number of requirements, including the requirement that the purchaser give notice to all persons with substantial interest in the properties of the right to redeem the property and a variety of other matters. After the redemption period expires, section 4.6 requires a petition for an order to issue a deed to be filed and a second notice to be sent informing the same persons of the petition and of the time to object to the deed. If the court refuses to enter an order directing the county auditor to execute and deliver the tax deed because of the failure of the petitioner to fulfill the requirements, the court shall order the return of the purchase price minus a penalty of 25% of the amount of the purchase price.

Section 4.6(e) provides for a full refund plus 6% interest to the purchaser where, despite a "bona fide effort," the purchaser fails to comply with the statutory requirements for the issuance of a tax deed and as a result, the court "refuses" to issue the deed. Section 4.6(f) provides that no refund is available if the purchaser fails to provide the first notice under section 4.5 and section 4.5(j) provides that the certificate of sale reverts to the county if the purchaser does not petition for a deed within the time established by section 4.6(a).

The trial court ordered the county to refund the purchase prices minus the 25% penalty and the Court of Appeals affirmed. The county then appealed.

Holding: Reversed. On appeal, the county contended that Michiana was not entitled to the refund under 4.6(d), because this section allows a refund only where a petition for a tax deed is filed and the trial court refuses issuance of the deed. Because Michiana issued the first notice under section 4.5, but never attempted to issue the second notice required by section 4.6, the county argued that Michiana was not refused a deed, but merely failed to fulfill the requirements for issuance of a deed.

The court found that the statutory reference to "refusal" purposefully limits refunds to purchasers who go to the time and expense of seeking a deed and that buyer's remorse is not a basis for a refund. Additionally, although Michiana argued that there is no point in requiring the purchaser to jump through the hoop of a failed petition in order to qualify for the partial refund when the purchaser can cause the petition to fail by failing to meet the statutory requirements, the court believed that this procedure could serve as a deterrent to speculative collection of certificates of sale with little forethought to whether deeds would ultimately be sought. Therefore, because Michiana did not seek an order to issue a deed, it was not entitled to the refund for the purchase price minus the 25% penalty.

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By: ATG Underwriting Department | Posted on: Thu, 07/03/2008 - 3:19pm