Aeon Financial, LLC v. District of Columbia , 84 A.3d 522 ( 2014 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 12-CV-695, 12-CV-696, 12-CV-1013,
12-CV-1241, 12-CV-1278, & 12-CV-1348
AEON FINANCIAL, LLC, APPELLANT/CROSS-APPELLEE,
V.
DISTRICT OF COLUMBIA, APPELLEE/CROSS-APPELLANT.
Appeals from the Superior Court
of the District of Columbia
(CA-1472-09, CA-1487-09, & CA-3938-10)
(Hon. Joseph E. Beshouri, Magistrate Judge)
(Hon. Melvin R. Wright, Reviewing Judge)
(Argued January 31, 2013 Decided February 6, 2014)
Malik J. Tuma for appellant/cross-appellee.
James C. McKay, Jr., Senior Assistant Attorney General, with whom Irvin
B. Nathan, Attorney General for the District of Columbia, Todd S. Kim, Solicitor
General, and Donna M. Murasky, Deputy Solicitor General, were on the brief, for
appellee/cross-appellant.
Vanessa A. Buchko filed a brief on behalf of Legal Counsel for the Elderly
as amicus curiae in support of appellee.
Before BLACKBURNE-RIGSBY and MCLEESE, Associate Judges, and
STEADMAN, Senior Judge.
2
MCLEESE, Associate Judge: If an owner of real property in the District of
Columbia fails to pay property taxes, the District may sell the property, in order to
satisfy the unpaid tax obligation. In some cases, the purchaser at the tax sale
ultimately obtains title to the property. In other cases, the delinquent property
owner redeems the property, by paying delinquent taxes, interest, and certain
expenses incurred by the tax-sale purchaser. The interest owed by the delinquent
taxpayer continues to accrue until the date of redemption, at a rate of 1.5% per
month. If a property is redeemed, the District thereafter must make a refund in the
appropriate amount to the tax-sale purchaser.
In these cases, Aeon Financial LLC purchased the properties at issue at tax
sales. The delinquent tax sale purchasers subsequently made payments in order to
redeem the properties, and the District determined that each of the properties had
in fact been redeemed as of particular dates. Aeon contended, however, that the
delinquent property owners had not made payments in the amount necessary to
redeem the properties, and that the properties therefore had not yet been redeemed.
Thus, according to Aeon, delinquent taxpayers would have to pay additional
amounts of interest in order to redeem the properties, which in turn would increase
the amount of the refund to which Aeon would be entitled if the properties
ultimately were properly redeemed.
3
Aeon appeals from several trial-court orders that (a) concluded that the
properties at issue had been properly redeemed by the delinquent property owners
and (b) calculated the amounts of the redemption refunds due to Aeon. Aeon
reiterates its position that the properties have not yet been properly redeemed and
that the trial court thus incorrectly calculated the refund amounts. The District
cross-appeals, arguing that the Superior Court erred in ordering the District to pay
refunds to Aeon before Aeon dismissed its actions to foreclose redemption.
We first address a number of threshold issues, including whether we have
jurisdiction over the appeals. On the merits, we ultimately conclude that a property
is redeemed when, at the same time: (a) the District concludes in good faith,
whether correctly or incorrectly, that all amounts levied by it have been paid; and
(b) the tax-sale purchasers’ reimbursable expenses have been paid. Because it is
not clear that the trial court utilized this approach in determining the dates of
redemption and refund amounts in these cases, we remand for further proceedings.
In the cross-appeals, we hold that the District is not required to pay Aeon refunds
until Aeon dismisses its actions to foreclose redemption.
4
I.
A.
Before addressing the parties’ claims, we describe the pertinent statutes and
regulations governing tax sales in the District of Columbia.
When an owner of real property in the District is delinquent in making
property-tax payments, the District may sell the property at a public auction called
a tax sale. D.C. Code § 47-1330 et seq. (2012 Repl.). Properties offered at a tax
sale are generally sold for no less than the amount of unpaid taxes due (including
penalties, interest, and costs), and bidders may add “surplus” amounts to their bid
to purchase a property. D.C. Code §§ 47-1346 (c), -1330. Upon full payment of
the bid amount, the District issues a certificate of sale to the tax-sale purchaser,
documenting the sale of the property. D.C. Code §§ 47-1347, -1348.
The delinquent property owner may seek to redeem the property at any time
until the right of redemption is foreclosed. D.C. Code § 47-1360. In order to
redeem a property, the delinquent property owner must pay certain amounts,
including the amount paid by the tax-sale purchaser at the tax sale (exclusive of
5
any surplus), subsequent taxes due, interest, and certain expenses of the tax-sale
purchaser. D.C. Code §§ 47-1361 (a), -1377. See also D.C. Code
§§ 47-1334, -1348 (b). The delinquent property owner generally must make that
payment to the District, although certain expenses may be paid directly to the
tax-sale purchaser if the tax-sale purchaser provides a release acknowledging
payment of the expenses owed. D.C. Code § 47-1361 (a)(6). After the amounts
specified by D.C. Code § 47-1361 (a) have been paid, the District notifies the
tax-sale purchaser that the property has been redeemed. D.C. Code § 47-1361 (d).
Once the District gives this notice, the tax-sale purchaser “shall surrender the
certificate of sale and shall receive from [the District] the amount to which the
[tax-sale] purchaser is entitled.” Id.
If a delinquent property owner has not redeemed the property within six
months of the tax sale, the tax-sale purchaser may file an action seeking to
foreclose the right of redemption. D.C. Code § 47-1370 (a). The delinquent
property owner can redeem the property while such an action is pending. D.C.
Code § 47-1370 (d). If a dispute arises about the proper redemption amount, the
Superior Court can determine the proper amount. D.C. Code § 47-1362 (a). Once
a dispute regarding redemption arises, the District may not accept a redemption
payment unless the Superior Court issues an order setting a redemption amount
6
and that order is filed with the Mayor. D.C. Code § 47-1362 (c); see also 9 DCMR
§ 316.5 (f) (2013).
When finally resolving a suit to foreclose the right of redemption, the trial
court may (1) bar the right of redemption; (2) vest title in fee simple in the tax-sale
purchaser; or (3) set aside the sale and determine the redemption amount. D.C.
Code § 47-1370 (b). In the absence of fraud by the tax-sale purchaser, the trial
court may set aside a tax sale only if the property is redeemed. D.C. Code
§ 47-1380 (b). If the court sets aside the sale on grounds other than fraud by the
tax-sale purchaser, the District is required to pay the tax-sale purchaser the
redemption amount. D.C. Code § 47-1380 (a), (c). The District has the authority
to cancel a tax sale, but if it exercises that authority, it must pay the tax-sale
purchaser the redemption amount. D.C. Code § 47-1366.
Because the redemption amount includes interest, the redemption amount
will necessarily depend on the date of redemption. See D.C. Code § 47-1361 (a);
9 DCMR § 316.6 (d) (statutory interest runs until date of redemption). The D.C.
Code does not specifically define the date of redemption, although as previously
indicated, it does list certain payments as prerequisites to redemption. See, e.g.,
D.C. Code § 47-1361 (a), (d). The regulations define the date of redemption as the
7
“earlier of the date payment of all taxes, assessments, penalties, interest, fees and
costs has been posted to the applicable billing system, or the date owner provides
[the Office of Tax and Revenue] with copies of the certified check and paid bank,
or applicable agency, receipts confirming payment in full of all taxes, assessments,
fees and costs.” 9 DCMR § 316.12 (g). The regulations further provide that, once
an action to foreclose redemption has been filed, a property will qualify for
redemption only if the delinquent property owner “pay[s] in full . . . [a]ll taxes,
assessments, fees, costs and expenses levied by a Taxing Agency,” as well as
certain other expenses of the tax-sale purchaser. 9 DCMR § 316.5 (a). In addition,
if a dispute about the redemption amount arises after an action to foreclose
redemption has been filed, the “property shall not be redeemed until the amount
appearing on an order of the court is satisfied in full.” 9 DCMR § 316.5 (f).
If a delinquent property owner redeems the property, the District is required
to notify the tax-sale purchaser. D.C. Code § 47-1361 (d). The tax-sale purchaser
must surrender the certificate of sale, and the District then must pay the tax-sale
purchaser the “amount to which the purchaser is entitled.” Id. This required
payment is called a redemption refund, and its amount is specified by statute and
regulation. D.C. Code § 47-1380 (c); 9 DCMR §§ 316.3, 316.6 (c). The
redemption refund includes the amount paid at the tax sale, including any surplus;
8
interest on the amount of the tax delinquency; and certain other expenses of the
tax-sale purchaser. Id. The interest on the delinquent taxes accrues at the rate of
1.5% per month and continues to accrue until the date of redemption but not
thereafter. 9 DCMR § 316.6 (c), (d). If a tax-sale purchaser seeks a redemption
refund after filing an action to foreclose redemption, the tax-sale purchaser must
provide the District with a copy of the “praecipe that dismisses the foreclosure
action and/or [a] copy of the Certificate of Cancellation that cancels the Certificate
of Sale.” 9 DCMR § 316.6 (a)(2). This requirement is a “prerequisite[]” for
collecting a redemption refund. 9 DCMR § 316.6.
B.
In 2008 and 2009, Aeon purchased the “Broadwater,” “Wasef,” and
“Culbertson” properties, in addition to hundreds of other properties, at the
District’s real-property tax sales. After the expiration of the required six-month
waiting period, Aeon filed complaints to foreclose the right of redemption for
many of the unredeemed properties, including the Broadwater, Wasef, and
Culbertson properties. In many of the cases, Aeon and the District disputed both
whether the properties had been redeemed and how to calculate the redemption
refunds.
9
The Superior Court organized the cases into several groups, each with a
representative “lead” case. Aeon Financial v. Broadwater (CA-1487-09) was the
lead case for a group of 20 cases, Aeon Financial v. Wasef (CA-1472-09) was the
lead case for a group of 134 cases, and Aeon Financial v. Culbertson
(CA-3938-10) was the lead case for a group of 35 cases. All of the cases were
assigned to a magistrate judge.
While Broadwater, Wasef, and Culbertson were pending, the Superior Court
resolved several general questions critical to the determination of redemption dates
and the calculation of redemption refunds, in Aeon Financial v. Haynes, et al.
(CA-1920-10). A magistrate judge made the initial ruling in Haynes, and a
reviewing Superior Court judge later affirmed that ruling. See generally D.C.
Code § 11-1732 (k) (2012 Repl.) (providing that certain magistrate-judge orders
are subject to review by Superior Court judge). The reviewing court in Haynes
concluded that the District had been committing three errors in determining the
amount of interest for purposes of calculating redemption amounts. First, the
District should have been charging delinquent property owners interest for the
month in which the tax sale occurred. Second, the District should have been
calculating interest each month based on the tax-sale purchase price (less any
10
surplus), not on the amount of unpaid tax in a given month. Third, the District
should have been treating interest as continuing to accrue until all payments
essential to redemption had been made, whereas the District had been stopping the
accrual of interest before certain expenses were paid.1
The reviewing court then addressed the implications of these errors for
whether, and if so when, the District should have treated the properties as
redeemed. On that point, the reviewing court concluded that Aeon could not “undo
redemption” based on errors that the District made in calculating and collecting
taxes. Moreover, although Aeon was entitled to a refund in the proper amount, the
reviewing court concluded that the District could permissibly make a refund
payment that was greater than the redemption payment that the delinquent property
owner made.
The reviewing court also stated a test for determining the date of
redemption: a property is redeemed on the date that (a) taxes, as assessed by the
District, reached a zero balance; and (b) all other payments required for redemption
1
We do not understand the District to dispute for purposes of these appeals
that its procedures for assessing interest were erroneous in the three respects
identified by the reviewing court. We therefore see no need for further discussion
of the reviewing court’s rather complex analysis of those issues.
11
have been made. Finally, the reviewing court directed the magistrate judge to
determine the proper refund amount on a case-by-case basis.
The magistrate judge subsequently applied the framework adopted in
Haynes to the Broadwater, Wasef, and Culbertson properties, setting dates of
redemption and calculating the refunds due to Aeon. In each case, the magistrate
judge: (1) ordered the District to pay Aeon the refund within thirty days; (2)
ordered Aeon to file a praecipe with the court acknowledging receipt of this
payment; and (3) stated that the court would dismiss the foreclosure action when
Aeon filed this praecipe. Both parties sought review in the Superior Court.
The District challenged the requirement that it pay refunds to Aeon before
Aeon dismissed its actions to foreclose redemption, and Aeon challenged the
determination that the properties had been redeemed (thus terminating the accrual
of additional interest in Aeon’s favor) and the resulting calculation of the amounts
to be refunded to Aeon. The reviewing court affirmed the magistrate judge’s
orders in each case, except that the reviewing court dismissed as untimely Aeon’s
motion for review in Wasef. These consolidated appeals and cross-appeals
followed.
12
II.
We begin by addressing five threshold issues. First, we conclude that we
have jurisdiction over the appeals. Second, we affirm the reviewing court’s order
dismissing as untimely Aeon’s motion for review in Wasef. Third, we hold that
Aeon has standing to raise all but one of its arguments. Fourth, we hold that the
doctrine of caveat emptor does not preclude Aeon from asserting its rights to
obtain a refund in the amount required by statute. Fifth, we decide that the
resolution of these cases will not draw into question the title of the delinquent
property owners to the properties at issue and will not impose additional monetary
liabilities on the delinquent property owners.
A.
We turn first to the question whether we have jurisdiction over these
appeals. The orders at issue present a question of finality because they did not
terminate the proceedings in the trial court. Rather, the orders provide that the
cases would be dismissed only after the parties each took an action: the District
was to pay Aeon the specified refund within thirty days, after which Aeon was
required to file a praecipe with the court acknowledging receipt of that payment.
13
The District refused to make the ordered payments by the specified date, instead
taking the position that it could not be required to make such payments until Aeon
dismissed its actions to foreclose redemption. This court subsequently stayed the
order requiring that the District pay refunds by a date certain. The trial court
therefore did not dismiss the cases, which are still pending.
The parties agree that the orders are final and appealable. We nevertheless
must ensure that we have jurisdiction. See Murphy v. McCloud, 650 A.2d 202, 203
n.4 (D.C. 1994). We conclude that the orders in this case are properly viewed as
final and appealable. 2
Generally, an order is final “when it terminates the litigation between the
parties on the merits of the case, and leaves nothing to be done but to enforce by
execution what has been determined.” District of Columbia v. Tschudin, 390 A.2d
986, 988 (D.C. 1978) (quoting St. Louis Iron Mountain & S. Ry. v. Southern
Express, 108 U.S. 24, 28-29 (1883)). “[I]f nothing more than a ministerial act
2
Because we conclude that the orders at issue are final, we need not
consider whether they would in any event be appealable either as orders granting
an injunction or as orders affecting the possession of property. D.C. Code
§ 11-721 (a)(2)(A), (C) (2012 Repl.).
14
remains to be done, . . . the decree is regarded as concluding the case and is
immediately reviewable.” Id. (internal quotation marks omitted). The orders at
issue in this case fully determined the legal rights and obligations of the parties,
leaving to be done only ministerial acts relating to the execution of the orders.
Although the parties did not complete those acts, at least in part because this court
entered a stay, we nevertheless view the orders as final and appealable. Cf., e.g.,
Giove v. Stanko, 977 F.2d 413, 415 (8th Cir. 1992) (treating as final and appealable
order setting aside conveyance of property but retaining jurisdiction to permit
plaintiff to proceed against property through writ of execution); Taper v. City of
Long Beach, 181 Cal. Rptr. 169, 177-78 (Ct. App. 1982) (treating as final and
appealable order dismissing action upon payment of sums due pursuant to separate
judgment).
B.
Second, we address an issue specific to Wasef. The magistrate judge entered
an initial order setting a refund amount in Wasef on March 2, 2012. On April 24,
2012, Aeon filed a motion for review of that order in the Superior Court. The
reviewing court denied that motion as untimely. In its initial brief in this court,
Aeon did not address the reviewing court’s timeliness ruling. The District argued
15
in response that Aeon had abandoned any challenge in this court to the reviewing
court’s timeliness ruling, by failing to address that issue in its opening brief. In
reply, Aeon argued that this court should overlook its failure to address the
timeliness issue in its opening brief, that its motion for review was timely, and that
the correctness of the underlying refund order is properly before this court even if
the motion for review was untimely. We conclude that Aeon failed to properly
preserve a challenge to the reviewing court’s dismissal of Aeon’s motion for
review as untimely. We therefore affirm the reviewing court’s dismissal of Aeon’s
challenge to the refund order in Wasef.
“[I]t is the longstanding policy of this court not to consider arguments raised
for the first time in a reply brief.” Marshall v. United States, 15 A.3d 699, 711 n.2
(D.C. 2011) (internal quotation marks omitted). For three principal reasons, we
adhere to that policy in this case. First, Aeon does not identify a specific reason
for this court to deviate from that policy. Second, the arguments that Aeon
belatedly attempts to raise are not clearly articulated or fully developed. Third,
some of Aeon’s arguments do not appear persuasive at first blush and others would
require the court to delve into complex and seemingly difficult procedural and
16
jurisdictional issues.3 We therefore decline to address Aeon’s belated challenge to
the Superior Court’s dismissal of its motion for review in Wasef.
C.
Third, we address the District’s claim that Aeon lacks prudential standing to
raise the arguments it advances on appeal. This court has “generally . . . applied
prudential limitations on the exercise of [its] jurisdiction.” Grayson v. AT&T
Corp., 15 A.3d 219, 233-34 (D.C. 2011) (en banc). Under prudential standing
requirements, a plaintiff “may not attempt to litigate generalized grievances, and
may assert only interests that fall within the zone of interests to be protected or
regulated by the statute or constitutional guarantee in question.” Community
Credit Union Servs. v. Federal Express Servs. Corp., 534 A.2d 331, 333 (D.C.
1987) (internal quotation marks omitted). In addition, a plaintiff must generally
3
For example, Aeon suggests that the time within which it was required to
seek review in the Superior Court began to run not on March 2, 2012, the date the
magistrate judge entered a single order setting refund amounts in a number of cases
including Wasef, but rather on April 19, 2012, when the magistrate judge entered a
separate order in Wasef alone, specifying the same refund amount, “for the
convenience of the District of Columbia in processing a refund to [Aeon].” Aeon
also appears to suggest in a footnote that any failure on its part to seek timely
Superior Court review in Wasef is not an impediment to a ruling by this court on
the merits in Wasef. But Aeon’s reasoning in support of that suggestion is unclear.
See generally Gorbey v. United States, 54 A.3d 668, 699 n.52 (D.C. 2012)
(declining to consider argument “outlined, but not developed,” in footnote).
17
“assert only its own legal rights.” Id.
Aeon claims that the trial court erred in three interrelated respects: in ruling
that the properties at issue had been redeemed, in determining the date on which
the properties had been redeemed, and in calculating redemption amounts. We
conclude that Aeon has prudential standing to make all but one of its arguments.
Aeon’s challenge to the proper interpretation of the tax-sale statutes and
regulations is not a generalized grievance, but rather reflects a claim that is specific
to tax-sale purchasers involved in the redemption process. See generally, e.g.,
Padou v. District of Columbia Alcoholic Beverage Control Bd., 70 A.3d 208, 212
(D.C. 2013) (“Alleged harms shared in substantially equal measure by all or a large
class of citizens are called generalized grievances and do not warrant exercise of
jurisdiction.”) (internal quotation marks omitted). We reach the opposite
conclusion, however, with respect to Aeon’s claim that it would be unlawful under
D.C. Code § 47-104 (2012 Repl.) or other general principles of law for the District
to use tax proceeds or other public funds to make payments on behalf of delinquent
18
property owners.4 Such complaints about the legality of public expenditures,
which could equally be brought by any taxpayer, are prototypical generalized
grievances. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 573-75 (1992).
We therefore do not address Aeon’s general challenge to the legality of the
District’s use of public funds to make refund payments that exceed the redemption
payments made by delinquent property owners.5
Aeon’s remaining claims are “arguably within the zone of interests to be
protected or regulated by the statute . . . in question.” Lee v. District of Columbia
Bd. of Appeals & Review, 423 A.2d 210, 216 (D.C. 1980). The provisions of the
tax-sale statutes and regulations that Aeon relies upon are directed at determining
4
Section 47-104 provides:
It shall not be lawful for the District authorities, or any person
charged with the disbursements of money in the District, to divert
from its legitimate object any money levied or collected as taxes from
the people of the District. Any person who shall violate the
provisions of this section shall be deemed guilty of a misdemeanor in
office, and shall be dismissed therefore.
5
We note, however, that the District is expressly authorized not only to
make redemption-refund payments to tax-sale purchasers, D.C. Code
§ 47-1361 (d), but also to use public funds to protect the interests of delinquent
property owners in the redemption process, D.C. Code § 47-1366 (District may
cancel tax sale, to prevent injustice to delinquent property owner, but must pay
redemption amount to tax-sale purchaser).
19
whether a property has been redeemed and, if so, when it was redeemed. Those
provisions directly implicate Aeon’s rights and interests, because they determine
(a) whether Aeon still has an interest in properties that it purchased at tax sales and
(b) what the amount of Aeon’s redemption refunds should be. This close
connection between Aeon’s interests and the provisions that it relies upon is more
than sufficient to meet the zone-of-interest requirement. See generally, e.g., D.C.
Library Renaissance Project/West End Library Advisory Grp. v. District of
Columbia Zoning Comm’n, 73 A.3d 107, 115 (D.C. 2013) (“The zone-of-interests
requirement is not especially demanding, . . . . [T]he benefit of any doubt goes to
the plaintiff.”) (internal quotation marks and citations omitted).
Finally, Aeon is asserting its own rights: to retain its interest in properties
unless they have properly been redeemed and to collect a refund that is properly
calculated. We therefore hold that, with the one exception previously noted, Aeon
has standing to raise its claims.
D.
Fourth, the District argues that the doctrine of caveat emptor bars Aeon from
challenging redemption based on errors in the District’s tax-assessment and
20
tax-collection practices. We disagree.
Under the doctrine of caveat emptor, a tax-sale purchaser “assumes the risks
involved” with purchasing a tax-sale property, and has “no remedy against the
taxing authorities” beyond the remedies provided by the tax-sale statutes.
McCulloch v. District of Columbia, 685 A.2d 399, 402 (D.C. 1996) (internal
quotation marks omitted). That doctrine poses no obstacle to Aeon’s claims. Aeon
raises two main issues: whether the properties in these cases have been redeemed
and if so on what date redemption occurred. The resolution of those issues, in turn,
directly affects the amount of the refunds owed to Aeon because those refund
amounts include interest through the date of redemption but not thereafter. D.C.
Code §§ 47-1361 (d), -1380 (c)(1); 9 DCMR § 316.6 (d). Thus, the arguments
Aeon raises go directly to a specific entitlement under the tax-sale statutes:
payment of a redemption refund in the correct amount. We therefore conclude that
Aeon’s arguments are not barred by the doctrine of caveat emptor. Cf. Rupsha
2007, LLC v. Kellum, 32 A.3d 402, 411 n.16 (D.C. 2011) (doctrine of caveat
emptor did not bar tax-sale purchaser’s claim that District was required to cancel
tax sale of property that had been sold in error, and to reimburse tax-sale purchaser
accordingly; tax purchaser was “seeking what it is entitled to under the [tax-sale]
21
statute”).6
E.
Fifth, we address a question that helps to determine the scope of our inquiry:
whether the current dispute involves only the interests of Aeon and the District, or
whether instead the interests of the delinquent property owners remain at issue.
We conclude that the interests of the delinquent property owners are no longer at
issue in these cases.
Aeon originally named the delinquent property owners as defendants in the
actions to foreclose redemption, but the reviewing court subsequently granted
Aeon’s unopposed motion to dismiss the delinquent property owners from the
actions. In its prayer for relief on appeal, Aeon asks this court to reverse and
remand, for the tax sales to be cancelled or set aside, and for the District to pay
6
More generally, the caveat-emptor cases cited by the District were decided
under an older version of the tax-sale statutes. Rupsha, 32 A.3d at 411 n.16. We
stated in Rupsha that “[t]he current statutory provisions preclude applying the
common law rule of caveat emptor.” Id. See also D.C. Code § 47-1384
(“Notwithstanding any other law, the provisions of this chapter shall be liberally
construed as remedial legislation to encourage the foreclosure of the right of
redemption by suits in Superior Court and for the decreeing of marketable titles to
real property sold by the Mayor.”).
22
Aeon “all amounts due for redemption through the date of cancellation.” For its
part, the District acknowledges that if the judgments are reversed, the issue on
remand will involve a determination of the amount of additional interest owed to
Aeon, which the District must pay. We thus treat the parties as having agreed that
further proceedings in this case will not imperil the delinquent property owners’
title to the underlying properties or impose further financial burdens on the
delinquent property owners. We view the parties’ agreement as appropriate in the
circumstances of this case. See D.C. Code § 47-1371 (b)(3) (if plaintiff in action to
foreclose right of redemption does not name property owner, rights of property
owner “shall not be affected by the action”); cf. Rupsha, 32 A.3d at 411-13 (where
District’s administrative error caused property to be sold at tax sale in error,
District was required to cancel tax sale and make appropriate payment to tax-sale
purchaser, to prevent injustice). In particular, we give weight to the substantial
authority supporting the principle that, in the absence of bad faith, an error by the
taxing authority does not prevent the redemption of property. See generally, e.g.,
C.S. Petrinelis, Annotation, Effect of Certificate, Statement (or Refusal Thereof),
or Error by Tax Collector or Other Public Officer Regarding Unpaid Taxes or
Assessments Against Specific Property, 21 A.L.R. 2d 1273, 1280 (1952) (noting
“almost universal rule” that “the good faith effort of a property owner to pay taxes,
frustrated by . . . error . . . of the public officer required to accept payment and give
23
information as to the status of delinquent taxes[] is equivalent to payment, at least
to the extent that it will discharge tax liens subsequently declared against the land[]
and effectually bar sales for nonpayment of taxes”) (citing cases); 85 C.J.S.
Taxation § 1460, at 392 (2010) (“A redemptioner, who in good faith does all that is
required by a public officer, is entitled in equity to the full benefit of a redemption
even if the taxing authority made a mistake informing the redemptioner of the
requirements.”); 16 Eugene McQuillin, Municipal Corporations § 44-218, at 957
(3d rev. ed. 2013) (“In some circumstances, the right of redemption is not defeated
where there has been a bona fide attempt to redeem which is defective through
mistake of the tax officers.”).7
III.
We now turn to the merits of Aeon’s appeals. Aeon argues that under the
7
At one point in its opening brief, Aeon states in passing that “all parties to
the foreclosure cases . . . should be reinstated as defendants and Aeon permitted to
seek foreclosure on the properties.” That statement is inconsistent with Aeon’s
prayer for relief, which seeks only cancellation or set aside of the tax sales. Nor
does Aeon attempt to explain why reinstatement of previously dismissed parties
would be appropriate even though Aeon moved to dismiss those parties and did not
subsequently move to reinstate them during the extensive proceedings in the trial
court. We therefore conclude that reinstatement of the previously dismissed
parties would not be appropriate. Cf., e.g., Northeast Drilling, Inc. v. Inner Space
Servs., Inc., 243 F.3d 25, 36-37 (1st Cir. 2001) (upholding trial court’s denial of
belated motion to add party).
24
tax-sale statutes and regulations a property is not redeemed unless the
delinquent-property owner itself makes the payment required to redeem the
property, in an amount that is correct at the time of payment, and that the District
cannot waive that requirement. Aeon further contends that the required payments
have not yet been made, the properties at issue have not yet redeemed, and
statutory interest is still accruing. For its part, the District argues that it can waive
interest and penalties owed by delinquent property owners; that the properties at
issue were properly redeemed; and that the trial court ordered redemption refunds
to Aeon in the proper amounts. We hold that remand is necessary to determine the
proper dates of redemption.
A.
“The proper construction of a statute raises a question of law.” Washington
v. District of Columbia Dep’t of Pub. Works, 954 A.2d 945, 948 (D.C. 2008).
Although this court generally resolves legal questions de novo, see Providence
Hosp. v. District of Columbia Dep’t of Emp’t Servs., 855 A.2d 1108, 1111 (D.C.
2004), the court ordinarily accords deference to an agency’s interpretation of a
statute that the agency administers, unless the interpretation is “unreasonable or is
inconsistent with the statutory language or purpose.” District of Columbia Dep’t of
25
Env’t v. East Capitol Exxon, 64 A.3d 878, 880-81 (D.C. 2013) (internal quotation
marks omitted). Moreover, this “court generally defers to an agency’s
interpretation of its own regulations unless that interpretation is plainly erroneous
or inconsistent with the regulations.” District of Columbia Office of Tax &
Revenue v. BAE Sys. Enter. Sys., 56 A.3d 477, 481 (D.C. 2012) (internal quotation
marks omitted).
B.
We first address the question whether the District is permitted to waive
interest and penalties owed by a delinquent property owner. We hold that such
waivers are permissible.
D.C. Code § 47-811.04 (1) (2012 Repl.) permits the District to waive
“interest or penalties[] on unpaid taxes levied under this chapter.” “[T]his chapter”
refers to Chapter 8 of Title 47, which deals with real-property taxes. See D.C.
Code §§ 47-801 to -895.35 (2012 Repl.). By its terms, § 47-811.04 seems
applicable to the interest and penalties on the unpaid real-property taxes of
delinquent property owners whose properties have been subject to tax sale, because
the unpaid property taxes at issue are levied under Chapter 8 of Title 47. Aeon
26
argues, however, that the provision does not apply to interest that accrues after a
tax sale has occurred, because such interest accrues under the tax-sale provisions of
Chapter 13A of Title 47.8 We disagree with Aeon’s reading of the waiver
provision, because that provision requires that the unpaid taxes be levied under
Chapter 8, not that the waived interest and penalties accrue under Chapter 8.9
Aeon also argues that the waiver provision does not permit the District to
reduce the amounts owed by the delinquent property owners in these cases. In
support of that argument, Aeon points out that a delinquent property owner’s
payments must be applied in the following order: first costs; then penalties; then
interest; and finally the original amount of unpaid taxes on the property. D.C.
Code § 47-1331 (c). It follows, according to Aeon, that the unpaid portion of the
delinquent property owner’s outstanding liability must consist of unpaid taxes,
8
As previously discussed, see supra at pp. 4-8, Chapter 13A of Title 47
governs the tax-sale process in the District of Columbia. The interest and penalties
that accrue during that process are specified in D.C. Code
§§ 47-1334, -1348 (b), -1361 (a), and -1377.
9
In these cases, the District has not contended that a waiver of interest
granted after a tax sale can directly decrease the amount of the tax-sale purchaser’s
redemption refund. We thus have no occasion to consider that issue.
27
rather than interest.10 Because the waiver provision does not authorize the waiver
of taxes, Aeon concludes, the waiver provision cannot serve as a basis for reducing
the obligations of the delinquent property owners in these cases. We are not
persuaded by this argument. We see no reason (and Aeon has suggested no
reason) why the District could not waive interest that has already been paid and
then apply the prior payment to the delinquent property owner’s outstanding tax
liability.11
10
This step in Aeon’s reasoning is flawed. For example, consider a case in
which a delinquent property owner had paid all of the taxes, interest, and penalties
owed to the District in connection with a tax sale, but had not yet paid the tax-sale
purchaser the expenses required under D.C. Code § 47-1377. During the interval
before payment of the expenses, additional interest would accrue. D.C Code
§ 47-1361 (a)(6); 9 DCMR § 316.6 (d) (interest runs until date of redemption). In
such a case, the unpaid portion of the delinquent property owner’s liability would
not consist of unpaid taxes.
11
In its brief on appeal, Aeon argues that the tax-sale statute requires that
only the delinquent property owner or “other person who has an interest in the real
property” may make payments to redeem a property. D.C. Code § 47-1360. At
oral argument, Aeon appeared to retreat from that argument, at least to some
degree, by conceding that third parties could make payments towards redemption
on behalf of delinquent property owners. In any event, the reviewing court and the
magistrate judge did not analyze these cases as involving payments by the District
on behalf of delinquent property owners, and the District did not rely on such a
theory in its briefs in this court. We therefore need not and do not address the
question whether the District can cause properties to redeem by making payments
to itself on behalf of delinquent property owners. See generally, e.g., 16 Eugene
McQuillin, Municipal Corporations § 44-214, at 944-46 (3d rev. ed. 2013)
(discussing question of who may make redemption payments).
28
Aeon also suggests that waiver of interest and penalties is impermissible
because the tax-sale statute provides only one solution if the District mistakenly
treats a property as redeemed: cancellation of the tax sale under D.C. Code
§ 47-1366, with appropriate compensation to the tax-sale purchaser as required
under that provision. We disagree. Although cancellation of the tax sale is
certainly one option open to the District in such circumstances, nothing in the
tax-sale statutes suggests that the option of cancellation is intended to be the sole
remedy, to the exclusion of options authorized by other provisions of law. Cf.
Fawncrest Assocs., Inc. v. District of Columbia, 727 A.2d 892, 893-94 (D.C. 1999)
(rejecting argument that provision under prior tax-sale statute permitting District to
retain its lien on delinquent property was “the exclusive way by which the District
may acquire property subject to a tax lien”).
C.
We now turn to the central issues in these appeals: whether and, if so, when
the properties at issue in this case were redeemed. Although we adopt a
framework for resolving those issues, a remand is necessary to apply that
framework to the cases before us.
29
The D.C. Code states the prerequisites for redemption:
(a) To redeem the real property, the person redeeming
shall pay to the [District] . . . the following: (1) . . . [T]he
amount paid by the purchaser for the real property
exclusive of surplus, with interest thereon; . . . (4) All
other taxes, interest, and penalties paid by a purchaser on
behalf of the real property, with the interest that would
have been owing if the purchaser had not paid the
taxes . . .; (5) All other taxes to bring the real property
current; and (6) . . . [Unless a release is obtained from the
tax-sale purchaser,] all [legal expenses and attorneys’
fees] for which the purchaser is entitled to reimbursement
under § 47-1377; . . . .
D.C. Code § 47-1361 (a).
The tax-sale regulations further provide that, once a tax-sale purchaser files
an action to foreclose redemption, a property will qualify for redemption only if
the delinquent property owner has “pa[id] in full . . . [a]ll taxes, assessments, fees,
costs and expenses levied by a Taxing Agency,” as well as certain other expenses
of the tax-sale purchaser. 9 DCMR § 316.5 (a).12 See also 9 DCMR § 316.12 (g)
(defining date of redemption as “earlier of the date payment of all taxes,
12
Different regulations apply when no action to foreclose redemption has
been filed. See 9 DCMR § 316.3. In each of the cases before us, redemption
occurred after Aeon filed an action to foreclose redemption. Our holding is
therefore limited to cases where the tax-sale purchaser files an action to foreclose
redemption.
30
assessments, penalties, interest, fees and costs has been posted to the applicable
billing system, or the date owner provides [the Office of Tax and Revenue] with
copies of the certified check and paid bank, or applicable agency, receipts
confirming payment in full of all taxes, assessments, fees and costs”).
Relying on these provisions, Aeon argues that a property cannot be treated
as redeemed until all of the required payments have been made, in the proper
amount. According to Aeon, the reviewing court overlooked this principle, by
treating properties as redeemed even though, because of errors by the District in
calculating the redemption amount, the proper redemption amount had not been
paid. Moreover, Aeon’s argument continues, because interest continues to accrue
until the date that all required payments have been made, the reviewing court’s
erroneous determinations of the dates of redemption led to corresponding errors in
calculating redemption amounts and thus the refund amounts owed to Aeon. Our
analysis differs from Aeon’s in significant respects.
It is true that D.C. Code § 47-1361 (a) could reasonably be read to make
payment in the correct amount a prerequisite to a proper determination that a
property has been redeemed. That provision, however, does not explicitly address
what should happen if the District erroneously calculates the amount due, accepts
31
payment from the delinquent property owner, and declares a property redeemed.
As we have previously noted, there is substantial authority that in such
circumstances the property is properly viewed as having been redeemed. See
supra at pp. 22-23. With respect to most of the payments a delinquent property
owner is required to make, the regulation specifying the requirements for
redemption is consistent with such an approach. Specifically, the regulation ties
redemption to payment in the amount “levied by a Taxing Agency,” not to
payment in the correct amount. 9 DCMR § 316.5 (a). The regulation defining
“[d]ate of [r]edemption” is not quite as clear on the point, but does focus on the
status of the District’s billing system, as opposed to whether the amount paid was
equal to the amount that the District in fact ought to have billed under the tax-sale
statute. 9 DCMR § 316.12 (g). In light of the deference owed to the District with
respect to the interpretation of the pertinent statutes and regulations, these
considerations support a conclusion that, with respect to amounts that are “levied
by the Taxing Agency,” a property can be redeemed if the District determines,
even in error, that such amounts have been paid in full.
The analysis might be somewhat different, however, with respect to the
reimbursable expenses of the tax-sale purchaser. Those expenses, which are
specified in D.C. Code § 47-1377 (a), can include both (a) a $300 fee relating to
32
expenses incurred before the filing of an action to foreclose redemption and (b) a
variety of expenses, including reasonable attorney’s fees, incurred after the filing
of an action to foreclose redemption. Those expenses are not levied by the District
and need not be paid to the District. D.C. Code § 47-1361 (a)(6) (delinquent
taxpayer can pay these expenses either directly to tax-sale purchaser or to District).
With respect to these expenses, moreover, the regulations relating to redemption do
not explicitly focus on the District’s understanding of the amounts due, as opposed
to the amounts actually due. The present cases, however, do not involve errors as
to the amount of reimbursable expenses under D.C. Code § 47-1377. We therefore
need not decide how such errors might affect whether and if so when a property
should be viewed as having been redeemed. Rather, for current purposes we
assume that payment of the reimbursable expenses in the correct amount is a
prerequisite to redemption.
Under the foregoing analysis the properties in these cases were redeemed if
and when (a) the District concluded, whether correctly or incorrectly, that all
amounts levied by it had been paid; and (b) the tax-sale purchasers’ reimbursable
expenses had been paid. We emphasize, however, that for a property to have been
redeemed, both of these conditions must be met at the same time. For example, if
the District erroneously concludes in March that all amounts levied with respect to
33
a given property have been paid, but reimbursable expenses have not been paid, the
property has not redeemed. And if the reimbursable expenses are later paid in
October, but the District by then is aware that amounts levied by it have not been
paid, the property still has not redeemed in October. Rather, the property would
redeem only if and when, at the same time, (a) the District concluded that all
amounts levied had been paid and (b) the reimbursable expenses in fact had been
paid.
We also emphasize a second point that follows from the first: the power of
the District to waive payment does not retroactively redeem property. For
example, consider a case in which a delinquent property owner in January pays all
but $50 of the amount levied on a property, and the District in May decides to
waive the remaining $50. On a proper understanding, the property does not
retroactively become redeemed in January. Moreover, in that scenario, statutory
interest continues to run after January. Thus, the District’s decision in May to
waive the remaining $50 would not by itself suffice to properly redeem the
property because an additional payment (or waiver) would be needed to satisfy the
34
additional interest that accrued between January and May.13
D.
Although we have already addressed a number of the arguments raised by
the parties, we have not yet addressed several arguments that, if accepted, might
call for an analysis different from that just described. We do not find those
arguments persuasive.
1.
The District at one point states that the tax-sale statutes and regulations
should be read to permit the District to treat a property as redeemed on the date
that monies owed to the District (taxes, interest, penalties, and fees) have been
paid, even if the tax-sale purchaser’s reimbursable expenses have not yet been
paid.14 We disagree.
13
If the District made a good-faith error in calculating the amount due in
order to redeem the property, the property might properly be treated as having been
redeemed despite that error. See supra at pp. 31-32.
14
Although the District at one point states that a property is redeemed once
the owner pays the District, the District also now acknowledges that the tax-sale
purchaser is entitled to the interest that accrues during any delay between such
payment to the District and the payment of reimbursable expenses to the tax-sale
(continued . . .)
35
The plain language of D.C. Code § 47-1361 (a)(6) forecloses the District’s
contention. That provision requires, as a condition of redemption, that the tax-sale
purchaser’s reimbursable expenses under D.C. Code § 47-1377 have been paid.
Thus, if those expenses have not yet been paid on a given date, the property cannot
properly be viewed as having been redeemed on that date.15
The tax-sale regulations largely point in the same direction. First, for
redemptions that occur before the filing of an action to foreclose redemption, the
regulations explicitly state that redemption does not occur until reimbursable
expenses have been paid. See 9 DCMR § 316.2 (a)(5) (“Redemption does not
(. . . continued)
purchaser. These two positions are not logically compatible, because if a property
were redeemed on the date the District was paid, then interest would not accrue
during the period from the date of redemption to the date the reimbursable
expenses were paid. See D.C. Code § 47-1361 (a); 9 DCMR § 316.6 (d) (statutory
interest runs until date of redemption). For the reasons stated in text, we conclude
that a property is not properly viewed as redeemed until the reimbursable expenses
have been paid. Moreover, as we have already explained, see supra at pp. 28-34, a
property does not necessarily redeem on the date of the payment of reimbursable
expenses, but rather only redeems if and when, in addition, all of the interest
accruing up to the date of redemption is either paid or waived. Like the trial court,
see infra at pp. 40-41, the District does not appear to have taken account of this
principle.
15
We leave open the question whether the situation would be different if
there were a good-faith error by the taxing authority with respect to the payment of
the tax-sale purchaser’s expenses. See supra at pp. 31-32.
36
occur until all taxes, assessments, penalties, interest, fees, and other costs have
been made current, and the reimbursable Pre-Complaint Legal Expenses have been
satisfied in full.”). Second, for redemptions that occur after the filing of an action
to foreclose redemption, the regulations do not state that redemption does not occur
until payment of reimbursable expenses. But the regulations do make payment of
reimbursable expenses a prerequisite to redemption. See 9 DCMR
§ 316.5 (a)(2), (a)(4). Third, the general definition of “Redeem” indicates that
redeeming a property requires payment of the reimbursable expenses. See
9 DCMR § 316.12 (p). These regulatory provisions provide further support for the
conclusion that a property is not redeemed until payment of the reimbursable
expenses.16
The District argues, however, that it would be “unreasonable” and “absurd”
to require payment of the reimbursable expenses before the date of redemption.
We are not persuaded by the District’s argument.
16
The general definition of “Date of Redemption” arguably points in the
other direction, because it indicates that redemption occurs upon payment of
“taxes, assessments, penalties, interest, fees and costs” or “taxes, assessments, fees
and costs,” and makes no specific reference to reimbursable expenses. 9 DCMR
§ 316.12 (g). Because this provision is contrary to both plain statutory text and the
language of other regulations, we cannot give it weight on this issue.
37
It is true that requiring payment of reimbursable expenses before the date of
redemption adds some complexity to the redemption process. That added
complexity, however, does not rise anywhere near the level of an absurdity that
would trump plain statutory and regulatory language. Properly applied, the
tax-sale statutes provide the District and delinquent property owners with
numerous ways to cope with the added complexity. First, as long as the District
makes the process clear, delinquent taxpayers will understand that a property will
not be redeemed, and interest will continue to accrue on the full amount of the
tax-sale purchase price (less any surplus), until the reimbursable expenses have
been paid. Second, a delinquent property owner who wishes to avoid uncertainty
can seek a certificate from the tax-sale purchaser indicating payment of the
reimbursable expenses.17 See D.C. Code § 47-1361 (a)(6). Third, if a dispute
arises about the redemption amount after an action to foreclose redemption has
been filed, the court will resolve the matter. See D.C. Code § 47-1362 (a). Finally,
the District has the authority to waive interest and penalties, see supra at pp. 25-28.
As the District acknowledges, exercise of that authority can in some
17
In theory, a tax-sale purchaser could inflate the amount of interest owed
by unreasonably or in bad faith refusing to provide such a certificate to a
delinquent taxpayer who had in fact proffered full payment of the reasonable
reimbursable expenses. We have no occasion to address the question whether, if
such a showing were made, the date of redemption should be measured as against
the date on which adequate payment was proffered, rather than on the date the trial
court resolves the dispute as to the proper amount of the reimbursable expenses.
38
circumstances eliminate the need to delay redemption until the District can
collect additional interest amounts from the delinquent property owner.
2.
For its part, Aeon objects to the idea that a property can be treated as
redeemed when, due to an error by the District, the District fails to collect the
amount required by law as a condition precedent to redemption. According to
Aeon, such an approach means that a property is redeemed whenever the District
says that it is redeemed. It is an exaggeration to say that giving legal effect to
good-faith errors is equivalent to permitting the District to arbitrarily and
unilaterally determine whether and when a property has redeemed. Aeon has not
argued in these appeals that either the District or the delinquent property owners
acted in bad faith. We therefore do not address the issues that would be raised in a
case in which it was alleged and demonstrated that either the District or the
delinquent property owners acted in bad faith. See supra at pp. 22-23 (citing
authorities holding that, where delinquent property owner acted in good faith,
property is treated as redeemed even if prerequisites to redemption were not met
39
due to error by taxing authority).18
Further, Aeon’s preferred approach presents serious problems of its own.
On Aeon’s view, any error, no matter how small, in determining or collecting the
proper amount required for redemption of a property would prevent the property
from being redeemed, apparently for however long it took for the error to be
discovered and rectified. During that period, the statutory rate of interest of 1.5% a
month would continue to accrue. D.C. Code § 47-1334. As Aeon emphasizes,
moreover, that interest would be calculated based on the full amount of the original
tax liability, not on the amount of tax liability that remained unpaid at any given
time. D.C. Code § 47-1361 (a)(1). Even small errors could thus create large
interest liabilities for delinquent property owners or the District.
In sum, we conclude that the properties in these cases were redeemed if and
when both of the following were true at the same time: (a) the District concluded,
18
Once there is a dispute regarding redemption, the District may not accept
a payment for redemption unless the court has fixed the amount necessary for
redemption and that order has been filed with the Mayor. D.C. Code
§ 47-1362 (c). It is unclear whether this provision was followed in these cases, but
Aeon has not raised a claim that the provision was violated, and we therefore do
not address that issue. We do note that this provision would seem to decrease the
risk that properties will be redeemed by the District’s acceptance of payment in an
incorrect amount.
40
whether correctly or incorrectly, that all amounts levied by it had been paid; and
(b) the tax-sale purchasers’ reimbursable expenses had been paid.
E.
The trial court adopted a seemingly similar test for determining when
properties have been redeemed, stating that redemption occurs “whenever there is
a zero tax balance (or a credit) and all other payments required for redemption
under [D.C. Code §] 47-1361 (a) have occurred.” The trial court held, however,
that Aeon generally lacked the right to challenge the calculation of the date of
redemption if that challenge rested on complaints about the District’s
tax-assessment and tax-collection practices, such as the District’s decision to treat
properties as redeemed before payment of the tax-sale purchasers’ expenses. As
we have explained, however, see supra at pp. 16-19, we conclude that Aeon does
have standing to challenge the calculation of the redemption date, because such a
challenge could affect the amount of the refunds to which Aeon is statutorily
entitled. Moreover, perhaps because of its standing ruling, the trial court does not
appear to have focused in the cases before us on the requirement that both
conditions for redemption be met at the same time.
41
Based on the record currently before us, it is not clear what the proper
redemption dates, and thus the proper redemption amounts, should be in the
Broadwater and Culbertson cases. We therefore remand to the trial court to
determine the applicable redemption date and redemption amount in each case.19
IV.
In its cross-appeals, the District argues that the Superior Court erred by
ordering the District to pay redemption refunds before dismissal of the actions to
foreclose redemption. We agree.
By regulation, if an action to foreclose redemption has been filed, tax-sale
purchasers seeking refunds must provide the District with a “[c]opy of the praecipe
that dismisses the foreclosure action and/or [a] copy of the Certificate of
Cancellation that cancels the Certificate of Sale.” 9 DCMR § 316.6 (a)(2). This
requirement is identified as a “prerequisite[]” for collecting a refund, and the
regulation further notes that submission of the required documentation is necessary
19
We note several other provisions that are potentially relevant to
determining dates of redemption and redemption amounts. See D.C. Code
§ 47-1362 (a) (trial court can issue order fixing amount necessary for redemption);
9 DCMR § 316.5 (f) (where trial court issues order fixing redemption amount,
property is redeemed when amount appearing on order is satisfied in full).
42
to “begin the processing of a Redemption Refund.” 9 DCMR § 316.6 (a). Unless
it is invalid or inapplicable, this regulation appears to condition the District’s
obligation to pay a refund on the dismissal of the corresponding action to foreclose
redemption. Aeon raises two principal arguments in support of the contrary
conclusion, but we do not find those arguments persuasive.
A.
First, Aeon contends that the regulation at issue does not expressly require
dismissal of the action to foreclose redemption, but rather simply requires the
tax-sale purchaser to file “a copy of [the praecipe] it would file” if and when it
receives its redemption refund. As we have previously noted, however, this court
“generally defers to an agency’s interpretation of its own regulations unless that
interpretation is plainly erroneous or inconsistent with the regulations.” District of
Columbia Office of Tax & Revenue, 56 A.3d at 481 (internal quotation marks
omitted). We uphold the District’s interpretation of its regulation.
In challenging the District’s interpretation, Aeon focuses on the use of the
present tense in the word “dismisses.” According to Aeon, if the regulation had
been intended to require the actual dismissal of the action to foreclose redemption,
43
the past tense -- “dismissed” -- would have been used. We do not agree. Under
the Superior Court Rules of Civil Procedure, a “praecipe” of dismissal, filed with
the consent of all parties, operates to dismiss an action without further order of the
court. Super. Ct. Civ. R. 12-I (a), 41 (a)(1)(ii) (2013).20 It therefore is quite
natural to refer to a “praecipe that dismisses” an action. In contrast, Aeon’s
proposed reading of the regulation is linguistically untenable. When an action to
foreclose redemption is still pending, and the tax-sale purchaser has not moved to
voluntarily dismiss that action, the party cannot reasonably be said to have filed a
“praecipe that dismisses the foreclosure action.” That is so even if the tax-sale
purchaser has submitted to the District an unfiled pleading that the tax-sale
purchaser says that it would file if the District paid the refund.
Aeon’s proposed interpretation of the regulation has another serious flaw: it
is difficult to understand what meaningful purpose the regulation would serve if it
20
Aeon accurately observes that in some circumstances dismissal cannot be
obtained by means of a praecipe. That observation might raise interesting issues in
a case where an action to foreclose redemption had been dismissed by means other
than a praecipe and the District relied on that fact to refuse to pay a refund. This
case does not involve such circumstances, however. Nor does this case present the
issues that might arise if the District refused to pay a redemption refund to a
tax-sale purchaser who (a) had surrendered the tax-sale certificate and
unsuccessfully sought dismissal of the action to foreclose redemption, or (b)
sought a refund after an action to foreclose redemption resulted in a final order, no
longer subject to review on appeal, setting aside or cancelling the tax sale pursuant
to D.C. Code §§ 47-1366, -1380.
44
required only the submission of a copy of a pleading that might or might not be
filed in court at some later time. In contrast, although one could reasonably debate
the advantages and disadvantages of delaying the District’s obligation to pay a
redemption refund until the underlying action to foreclose redemption has been
resolved, the District’s reading at least gives the regulation an understandable
function.
Aeon suggests that the District’s interpretation is not entitled to deference
because the District had not previously insisted that tax-sale purchasers dismiss
their actions to foreclose redemption before the District would pay refunds. The
District does not dispute on appeal that it has not generally been requiring
dismissal before paying refunds, but the District does claim that enforcement of
that requirement against Aeon in particular was justified because Aeon’s litigation
strategy differed from the approach taken by other tax-sale purchasers. We need
not resolve these issues, however, because we would uphold the District’s
interpretation of its regulation even if that interpretation is not entitled to
deference.21
21
Relatedly, Aeon argues that the “refund protocol” followed by the District
in 2008 did not require dismissal before refund. The “refund protocol,” which
appears to be a checklist contained in an e-mail from a District official to Aeon,
does not have the force of law and does not bind the District. See, e.g.,
(continued . . .)
45
B.
Second, Aeon argues that the regulation contradicts D.C. Code
§ 47-1361 (d), which does not refer to praecipes of dismissal but rather provides
that the tax-sale purchaser must “surrender the certificate of sale” before obtaining
a refund. In response, the District contends that surrendering the certificate of sale
is the practical equivalent of dismissing the action to foreclose redemption,
because surrender of the certificate of sale precludes the tax-sale purchaser from
going forward with an action to foreclose redemption. See D.C. Code
§§ 47-1370 (c)(1)(A), (c)(3) (requiring that complaint in action to foreclose
redemption state date of issuance of certificate of sale and that certificate or copy
thereof be attached to complaint). To the extent the regulation runs beyond the
express terms of the statutory requirement, the District relies on its authority to
“promulgate regulations to carry out the purposes” of the tax-sale provisions. D.C.
(. . . continued)
Bio-Medical Applications of D.C. v. District of Columbia Bd. of Appeals &
Review, 829 A.2d 208, 215 (D.C. 2003). Finally, Aeon suggests in passing that it
was “unconstitutional” for the District to single Aeon out for enforcement of the
requirement that dismissal precede refund. Aeon’s passing reference to a possible
constitutional argument does not suffice to present that argument for our resolution
on appeal. See, e.g., Bardoff v. United States, 628 A.2d 86, 90 n.8 (D.C. 1993)
(treating claim as abandoned, where appellant mentioned claim but did not provide
supporting argument).
46
Code § 47-1335.
Aeon does not suggest a plausible alternative reading of the pertinent
provisions, and we therefore accept the District’s contention that a tax-sale
purchaser who surrenders the certificate of sale can no longer go forward with an
action to foreclose redemption. See Schwartz v. City of Chicago, 315 N.E.2d 215,
223 (Ill. App. Ct. 1974) (surrender of tax certificate would constitute abandonment
of statutory and common-law rights as tax-sale purchaser); cf. Robinson v. Bailey,
198 N.E. 217, 219 (Ill. 1935) (tax-sale purchaser may not both accept redemption
refund and “still lay claim to the real estate redeemed from such judgment”); Petak
v. City of Paterson, 677 A.2d 244, 246-49 (N.J. Super. Ct. App. Div. 1996) (city
erred by paying redemption refund to tax-sale purchaser without requiring
surrender of original tax-sale certificates).
So understood, the pertinent provisions provide tax-sale purchasers in
Aeon’s situation with a choice. If tax-sale purchasers decide to accept the trial
court’s determination that a property has been redeemed and its calculation of the
redemption amount, they may forego further litigation of those issues and obtain a
refund in the amount previously determined by the court. Alternatively, if they
believe that the property has not been redeemed or that the trial court erroneously
47
calculated the redemption amount, they may continue to litigate, wait for a final
determination of those issues, and then seek a refund. Aeon argues, however, that
it is unfair to require tax-sale purchasers to elect between their right to prompt
payment of a refund and their right to challenge in court the determination that a
property has been properly redeemed. We do not find that argument persuasive.
In the absence of a plausible alternative interpretation of the provisions at
issue, it is not clear how much weight Aeon’s claim of unfairness could bear. Cf.
James Parreco & Son v. District of Columbia Rental Hous. Comm’n, 567 A.2d 43,
49-50 (D.C. 1989) (adopting interpretation of statute despite acknowledgement that
result might not be “fairest of them all”); Jones v. State, 119 S.W.3d 766, 784
(Tex. Crim. App. 2003) (en banc) (“Parties are often faced with difficult choices,
but facing a tough dilemma does not create a claim . . . .”). In any event, other
jurisdictions appear to give tax-sale purchasers the same choice. See cases cited
supra at 46; see also, e.g., Heartwood 88, Inc. v. Montgomery Cnty., 846 A.2d
1096, 1104 (Md. Ct. Spec. App. 2004) (redemption refunds “are paid by the tax
collector to the tax sale purchaser in exchange for the surrender of the certificate of
sale”) (internal quotation marks omitted). We see no basis to conclude that the
redemption process established by the Council is so unfairly one-sided that we are
required to reject the District’s interpretation of the pertinent provisions.
48
In sum, Aeon does not appear to have surrendered its certificates of sale and
did not seek dismissal of its actions to foreclose redemption. Under the
circumstances, the trial court erred in ordering the District to pay refunds to Aeon.
V.
For the foregoing reasons, we affirm the dismissal of the motions for review
in Wasef. In Broadwater and Culbertson, we reverse and remand to the Superior
Court for further proceedings.
So ordered.