Sam Robinson Vs. Fremont County, Iowa ( 2008 )

IN THE SUPREME COURT OF IOWA
No. 153 / 06-1121
Filed January 25, 2008
SAM ROBINSON,
Appellant,
vs.
FREMONT COUNTY, IOWA,
Appellee.
Appeal from the Iowa District Court for Fremont County, J.C. Irvin,
Judge.
Holder of tax sale certificates appeals a ruling that the county is
only required to reimburse him the amount he paid for the certificates
and pay him a ratable part of the interest and costs. REVERSED AND
CASE REMANDED.
A. W. Tauke of Porter, Tauke & Ebke, Council Bluffs, for appellant.
Richard D. Crowl of Stuart Tinley Law Firm LLP, Council Bluffs, for
appellee.
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WIGGINS, Justice.
In this appeal, we must determine whether the district court erred
in ruling the county was only required to reimburse the holder of three
tax certificates the amount he paid for the certificates and pay him a
ratable part of the interest and costs. Because the district court erred
when it held the county could compromise the taxpayers’ liability after it
assigned the certificates, and a genuine issue of material fact exists as to
whether the payment made by the taxpayers redeemed the parcels, we
reverse the judgment of the district court and remand the case for
further proceedings consistent with this opinion.
I. Background Facts and Proceedings.
Based upon the summary judgment record, we find the undisputed
facts as follows. In June of 1989 the property tax on three parcels of
land owned by Jeffrey and Suzanne Barrett became delinquent. Fremont
County, Iowa conducted a public bidder sale pursuant to Iowa Code
section 446.18 (1989). There were no bids, so the county became the
default owner of the tax sale certificates pursuant to section 446.19. The
county never served a notice of redemption on the Barretts. Fourteen
years after the county became the default owner, it notified the Barretts
of its intention to assign the certificates if they did not pay the back
taxes. The Barretts did not respond.
In 2004 the county approached Sam Robinson and asked him to
purchase the three tax certificates so the county could put the parcels
back on the tax roll. As of March 31, 2004, the total unpaid taxes plus
interest and costs on the parcels was $13,362.78. On April 13 Robinson
offered to pay $1500 for the three tax certificates. On May 11 the
county’s board of supervisors adopted a resolution assigning the
certificates to Robinson. The resolution stated the reason for assigning
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the certificates was the county’s desire to avoid the expenses of the tax
redemption procedure and the expenses of abating any nuisances on the
parcels.
On June 29 Robinson served the Barretts a notice informing them
that their right to redeem the parcels would expire in ninety days. On
August 26, a few days prior to the expiration of the redemption period,
the county’s board of supervisors adopted a resolution directing the
county treasurer to accept $11,000 from the Barretts as full redemption
for the three parcels. The resolution also directed the treasurer to pay
Robinson “all amounts due him under Chapters 446 and 447 and to
thereafter issue a certificate of redemption in compliance with the
resolution and section 447.5 of the Code of Iowa.” The county offered to
pay Robinson $500 for each certificate plus interest from the time of the
sale to the time of redemption upon his surrender of the certificates
pursuant to section 447.4.1
Robinson filed a petition for declaratory judgment that asked the
district court to declare the county “wholly without right or justification
to assert any rights under certificates of purchase in which it had
absolutely no interest . . . .” Robinson also asked the district court for
“supplemental relief to remedy the unlawful actions taken by the
defendant and to award him damages” including attorney fees and costs.
1Iowa Code section 447.4 (1989) provides:
In case a redemption is made of any real estate sold for a less sum than
the taxes, penalty, interest, and costs, the purchaser shall receive only
the amount paid and a ratable part of such penalty, interest, and costs.
In determining the interest and penalties to be paid upon redemption
from such sale, the sum due on any parcel sold shall be taken to be the
full amount of taxes, interest, and costs due thereon at the time of such
sale, and the amount paid for any such parcel at such sale shall be
apportioned ratably among the several funds to which it belongs. Real
estate so sold shall be redeemable in the same manner and with the
same penalties as that sold for the taxes of the preceding year.
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The county answered the petition and requested Robinson’s
petition be dismissed. The county also claimed it was only required to
pay Robinson “a ratable part of the interest and costs under a
compromised certificate in accordance with Iowa Code section 447.4.”
Both parties moved for summary judgment. Robinson claimed he
was entitled to the relief requested in his petition as a matter of law. The
county claimed it was “entitled to summary judgment even if all the facts
alleged by the plaintiff in his petition were true.”
The district court denied Robinson’s motion for summary judgment
and granted the county’s. The court found the county acted within its
power to compromise the back taxes with the Barretts even after it
assigned the tax certificates to Robinson. The court further determined
that Robinson was entitled to receive only the amount paid and a ratable
portion of the penalty, interest, and costs for his tax certificates under
section 447.4. Therefore, the court dismissed Robinson’s petition with
prejudice.
Robinson appeals.
II. Issues.
Robinson raises two dispositive issues. First, he claims the county
had no right to compromise the taxes after it assigned the tax
certificates. Second, he claims the amount the Barretts paid to the
county did not constitute a valid redemption of the parcels.
III. Standard of Review.
Our review of an order granting summary judgment is for
correction of errors at law. Green v. Racing Ass’n of Cent. Iowa, 713
N.W.2d 234, 238 (Iowa 2006). The district court correctly enters a
summary judgment when there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Iowa R. Civ.
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P. 1.981. On review, we examine the record before the district court and
determine whether there was a material fact in dispute and if not,
whether the district court correctly applied the law. Gen. Car & Truck
Leasing Sys., Inc. v. Lane & Waterman, 557 N.W.2d 274, 276 (Iowa
1996).
IV. Analysis.
In 1989 when the tax sale occurred, the Code provided:
When property is offered at a tax sale under the provisions of
section 446.18, and no bid is received, or if the bid received
is less than the total amount of the delinquent general and
special taxes, interest, penalties and costs, the county in
which the real estate is located, through its board of
supervisors, shall bid for the real estate a sum equal to the
total amount of all delinquent general taxes, special
assessments, interest, penalties and costs charged against
real estate. No money shall be paid by the county or other
tax-levying and tax-certifying body for the purchase, but
each of the tax-levying and tax-certifying bodies having any
interest in the general and special taxes for which the real
estate is sold shall be charged with the full amount of all the
delinquent general and special taxes due the levying and tax-
certifying bodies, as its just share of the purchase price.
This section does not prohibit a governmental agency or
political subdivision from bidding at the sale for property to
protect its interests.
Iowa Code § 446.19. Under this statute, the county became the default
holder of the tax certificates to the three parcels owned by the Barretts
because there were no bids. Id. The county is credited with purchasing
the parcels for a sum equal to the total amount of the delinquent general
and special taxes, interest, penalties and costs. Id.
In 2004 the county wanted to get the parcels back on the tax roll
and recoup the back taxes. The county was also afraid it would be
responsible for abating any nuisances on the parcels while it held the tax
certificates. At that time, the legislature had codified various options
that allowed a county to divest itself of a tax certificate.
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One option available was to assign the certificate to a person other
than the person entitled to redeem the parcel. Iowa Code § 446.31
(2003).2 Under the plain language of section 446.31 the county could
have assigned “the certificate[s] for the total amount due as of the date of
assignment or compromise the total amount due and assign the
certificate.” Id. Once the county made a valid assignment, the assignee
had to comply with the time limits established by the Code to avoid the
cancellation of the sale. Id.
Another option given to the county was “to compromise by written
agreement, or abate by resolution, the tax, interest, fees, or costs.” Iowa
Code § 445.16. The plain language of section 445.16 allowed the county
to compromise or abate if it “holds the tax sale certificate of purchase.”
In the present case the county divested itself of the tax certificates
by proper assignment under section 446.31. After making the
assignment the county attempted to compromise the back taxes under
section 445.16. Because the county was not the holder of the certificates
at the time it compromised the back taxes, it did not have the authority
under section 445.16 to do so.
Robinson also argues section 447.4 does not apply to him because
the $11,000 paid by the Barretts did not constitute a full redemption.
Therefore, Robinson claims the district court should have granted his
motion for summary judgment and awarded him more than the $500 he
paid for each certificate, and more than a ratable portion of the penalty,
interest, and costs allowed under section 447.4.
To determine if a valid redemption took place, we must examine
the redemption statutes. The law in effect at the time of the tax sale
2Unless otherwise indicated, all references to the Iowa Code from this point
forward are to the 2003 Code of Iowa.
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applies to redemption. Iowa Code § 447.14. Therefore, we must look to
the 1989 Iowa Code to determine if the Barretts redeemed the parcels
when they paid the county $11,000.
Section 447.1 governs redemption. The 1989 Code provided in
relevant part:
Real estate sold under this chapter and chapter 446 may be
redeemed at any time before the right of redemption is cut
off, by the payment to the treasurer, to be held by the
treasurer subject to the order of the purchaser, of the
amount for which the real estate was sold and four percent of
the amount added as a penalty, with three-quarters percent
interest per month on the sale price plus the penalty from the
date of sale, and the amount of all taxes, interest, and costs
paid by the purchaser or the purchaser’s assignee for any
subsequent year, with a similar penalty added as before on
the amount of the payment for each subsequent year, and
three-quarters percent per month on the whole amount from
the date of payment.
Iowa Code § 447.1 (1989) (emphasis added).
After the sale of a tax certificate, the purchaser of the certificate
can pay the taxes due in the subsequent years. Id. § 446.32 (1989). The
record does not indicate whom, if anyone, paid the taxes between the
date of the tax sale and the date the county accepted the $11,000 from
the Barretts. Robinson does not cite any authority stating the county
should be credited with paying the taxes in the years after it became the
default owner of the certificates. See Iowa Code § 446.19 (stating that a
county becomes the default owner of a tax sale certificate if there are no
bids, and the county is credited for paying the purchase price).
Accordingly, this record does not indicate if the payment of $11,000 by
the Barretts equaled the amount required to redeem the parcels under
section 447.1 (1989). Therefore, we cannot say as a matter of law the
Barretts redeemed the parcels within the terms of the statute.
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V. Conclusion and Disposition.
The county was not authorized to compromise the back taxes
under section 445.16 because it divested itself of the tax certificates prior
to the compromise. Moreover, under this record we cannot determine
whether the $11,000 paid by the Barretts to the county redeemed the
parcels under section 447.1 (1989). Accordingly, we must reverse the
judgment of the district court dismissing Robinson’s petition and remand
the case for further proceedings consistent with this opinion.
REVERSED AND CASE REMANDED.