Indiana Land Trust Company, f/k/a Lake County Trust Company TR 4340 v. XL Investment Properties, LLC and LaPorte County Auditor ( 2020 )

IN THE
Indiana Supreme Court FILED
Oct 27 2020, 11:23 am
CLERK
Supreme Court Case No. 20S-MI-62 Indiana Supreme Court
Court of Appeals
and Tax Court
Indiana Land Trust Company, f/k/a Lake County
Trust Company TR #4340,
Appellant-Movant,
–v–
XL Investment Properties, LLC, and LaPorte County
Auditor,
Appellees-Respondents.
Argued: June 11, 2020 | Decided: October 27, 2020
Appeal from the LaPorte Superior Court
No. 46D02-1509-MI-1642
The Honorable Richard R. Stalbrink, Jr., Judge
On Petition to Transfer from the Indiana Court of Appeals
No. 18A-MI-2150
Opinion by Justice David
Chief Justice Rush and Justices Massa, Slaughter, and Goff concur.
David, Justice.
Before the State sells a delinquent property, the Due Process Clause of
the Fourteenth Amendment requires that the owner of the property be
given adequate notice reasonably calculated to inform him or her of the
impending tax sale. While actual notice is not required, the government
must attempt notice in a way desirous of actually informing the property
owner that a tax sale is looming. If the government becomes aware that its
notice attempt was unsuccessful—such as through the return of certified
mail—it must take additional reasonable steps to notify the owner of the
property if practical to do so.
In this case, property taxes went unpaid on a vacant property from 2009
to 2015 resulting in over $230,000 in outstanding tax liability. The county
auditor—through a third-party service—sent simultaneous notice of an
impending tax sale via certified letter and first-class mail to the tax sale
notice address listed on the deed for the property. The owner of the
property, however, had moved from its original address several times and
never updated its tax address for the property with the county auditor.
The certified letter came back as undeliverable, but the first-class mail was
never returned. After a skip-trace search was performed for a better
address and notice was published in the local newspaper, the property
eventually sold and a tax deed was issued to the purchaser. The original
owner was ultimately notified of the sale when the purchaser filed a quiet
title action and searched for a registered agent. The original owner then
moved to set aside the tax deed due to insufficient notice.
The central question before our Court today is whether the LaPorte
County Auditor gave adequate notice reasonably calculated to inform
Indiana Land Trust Company of the impending tax sale of the property.
As a corollary question, we also confront whether the Auditor was
required under the circumstances of this case to search its own records for
a better tax sale notice address when the notice sent via certified mail was
returned as undeliverable. We find the Auditor provided adequate notice
and was not required to search its internal records. We therefore affirm
the trial court’s denial of Indiana Land Trust’s motion to set aside the tax
deed.
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Facts and Procedural History
Peter Dellaportas is a real estate developer and the president of
Midwest Investment, Inc. At some point in the early 1990’s, Dellaportas
purchased 140 acres of property on the former site of a municipal airport
in Michigan City in LaPorte County, Indiana. Dellaportas began dividing
the property and developing the parcels for various commercial tenants.
Relevant to the current dispute, Lot 2 was a nearly 30-acre undeveloped
plat contained within the greater development. 1
In 1993, Dellaportas transferred the property to Indiana Land Trust
#4340 (hereinafter “Trust 4340” or “the Trust”). On the deed
memorializing the transaction, a written notation directed that tax bills be
sent to:
Midwest Investment, Inc.
415 North LaSalle Dr., Suite 700
Chicago, Illinois 60610
Attn: Mark Youngman, President.
App. Vol. 2 p. 8. Though Dellaportas testified that this address was
accurate in 1993, Midwest Investment, Inc. moved from the tax notice
address in the mid-1990s and several times after that. As of 2016, Midwest
Investment moved to its presumably-still-current address at Clark Street
in Chicago, Illinois.
Property taxes were paid on Lot 2 from 1993 through 2008, but no
payments were made from 2009 through 2015. As of July 31, 2015, the
property had accrued an outstanding tax liability of $230,017.26. An
adjacent property—also placed in Trust 4340—underwent a tax sale and
1Although the tax notice address is the center of the present dispute, at all relevant times, the
property address for Lot 2 was “Unit 2, Lot 2 in Michigan City Town Centre Subdivision, as
per plat thereof recorded May 30, 2003 as Instrument No. 2003-14174, In Plat Book 24, page 54,
In the Office of the Recorder of La Porte County, Indiana” and was more commonly referred
to as, “Vacant Land, Cleveland Avenue, Michigan City, IN 46360. Parcel ID No.: 46-05-09-300-
039.000-009.” Ex. Vol. I p. 59. See also App. Vol. 2 p. 54; Tr. p. 95.
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was ultimately redeemed by the Trust after it received notice of the sale
from the purchaser’s attorney.2 Although Midwest Investment updated its
tax notice address for Trust 4340 with the LaPorte County Auditor with
respect to the adjacent property, the records for Lot 2 were apparently
never updated within the Auditor’s system.
Meanwhile, LaPorte County had entered into an agreement with SRI,
Incorporated (“SRI”) to complete a variety of services, including
preparing lists of properties eligible for tax sales, preparing notices,
publications, and postings for those lots eligible for tax sale, and
conducting tax sales. As part of the arrangement, SRI agreed to mail tax
sale notices via certified mail and first-class mail to the property owners. If
those notices were returned or not successfully delivered, SRI was
required to perform a “skip trace” search to locate a different address for
the owner; the LaPorte County Auditor’s office also agreed to search its
own records for a better address.
On July 31, 2015, SRI generated a report that indicated Lot 2 was
delinquent on its property taxes. The same day, SRI sent two identical
notices of tax sale—one via certified mail and one via first-class mail—to
Trust 4340 at the LaSalle Drive address. While the first-class mailing was
not returned to SRI or the Auditor, the certified mail was returned with a
postal service NIXIE label reading “NOT DELIVERABLE AS
ADDRESSED UNABLE TO FORWARD” and a handwritten notation
“REFUSED” on the outside of the envelope. Ex. Vol. I p. 218. Notice was
also published in a LaPorte County newspaper on three separate
occasions.
SRI testified that after the certified mail was returned as undeliverable,
it performed an unsuccessful skip trace search to see if it could find the
owner of the property. Apart from SRI’s efforts, the LaPorte County
Auditor’s office did not search its internal records for any additional
addresses for Lot 2’s owner because it believed it had no obligation to do
2We note that Mr. Dellaportas still received this notice even though it was sent to the LaSalle
Drive address—albeit at a different suite number.
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so after the first-class mail was not returned. Based on these actions,
neither SRI nor the Auditor identified a different tax notice address for the
parcel.
Lot 2 proceeded to a tax sale in October 2015 but did not sell. A
certificate was issued to the county commissioners and Lot 2 was
eventually sold via a “Commissioners Sale” to XL Investment Properties,
LLC (“XL Investment”). Notice of the Commissioners Sale was published
in a local newspaper on December 14, 21, and 28, 2015, and the sale
occurred on February 19, 2016.
Once XL Investment received a tax sale certificate for Lot 2, a title
search was conducted. On March 28, 2016, a Notice of Redemption from
the tax sale was sent by XL Investment via certified mail to Trust 4340 at
the LaSalle Drive address but was returned labeled “ATTEMPTED – NOT
KNOWN UNABLE TO FORWARD.” Ex. Vol. I p. 52. A notice of
redemption for the property was also published on March 30, 2016. A
notice of filing of the petition for tax deed was sent on July 21, 2016—also
to the LaSalle Drive address—but was returned with a NIXIE label that
read “REFUSED UNABLE TO FORWARD” and the notation “REFUSED”
written on the envelope. Ex. Vol. II p. 94.
XL Investment received an order issuing the tax deed for Lot 2 on
August 30, 2016. XL Investment then filed a quiet title action and, after
searching for the registered agent of Indiana Land Trust Company in the
Secretary of State’s files, successfully notified Indiana Land Trust of the
sale. 3
On March 9, 2017, Trust 4340 filed a motion to set aside the tax deed
issued to XL Investment. Among other things, the trial court determined
3It appears from the record that when Indiana Land Trust attempted to notify Midwest
Investment of the quiet title action, it sent the mail to a Clark Street address with an old suite
number. That envelope was returned with the scratched out notation “NO LONGER HERE.”
Ex. Vol. I p. 62. Mr. Dellaportas testified that as of December 2016, Trust 4340 did not have an
accurate address for Midwest Investments, Inc.
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SRI and the Auditor substantially complied with the tax sale notice
statute, XL Investments met all statutory requirements to be entitled to the
tax deed of the property, the Auditor’s mailings satisfied constitutional
due process, and Trust 4340’s motion was untimely. Accordingly, the trial
court denied Trust 4340’s motion on August 9, 2018, and Trust 4340
appealed.
In a unanimous opinion, the Court of Appeals reversed on two separate
grounds. Indiana Land Trust Co. v. XL Investment Properties, LLC, 130
N.E.3d 630, 638 (Ind. Ct. App. 2019). First, the Court of Appeals held the
trial court erred by finding Trust 4340’s motion to set aside the tax deed
was untimely filed. Id. at 636. Second, the court found “the Auditor was
required to search its records for a better address for Trust 4340 after the
certified mail notice was returned as not deliverable.” Id. at 638. Therefore,
the court found the Auditor failed to satisfy due process and the trial court
erred by denying Trust 4340’s motion. Id. at 637, 638. On rehearing, the
Court of Appeals, among other things, declined to vacate its opinion to
allow the Attorney General to intervene. Indiana Land Trust, Co. v. XL
Investment Properties, LLC, 134 N.E.3d 439, 441 (Ind. Ct. App. 2019), on
reh’g.
XL Investment and the LaPorte County Auditor sought transfer, which
we granted, thereby vacating the Court of Appeals opinion. Ind. Appellate
Rule 58. The State of Indiana has filed an amicus brief to defend the
constitutionality of the State’s tax sale notice statute. The Association of
Indiana Counties, Indiana Auditors’ Association, Indiana County
Treasurers’ Association, and SRI have also filed a joint brief of amici
curiae in support of the Auditor’s petition to transfer.
Standard of Review
Where, as here, a trial court enters special findings and conclusions
according to Indiana Trial Rule 52(A), we apply a two-tiered standard of
review. Marion Cnty. Auditor v. Sawmill Creek, LLC, 964 N.E.2d 213, 216
(Ind. 2012). First, we determine whether the evidence supports the
findings and if so, we next determine whether the findings support the
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judgment. Id. We neither reweigh evidence nor reassess witness
credibility; we give deference to the trial court’s factual findings as long as
they are supported by evidence and any legitimate inferences therefrom.
Id. at 216-17. We will only set aside the findings or judgment of the trial
court if they are clearly erroneous. Id. at 216.
Discussion and Decision
The basic issue presented in this case is not whether Indiana’s tax sale
notice statute is constitutional. As we discuss below, it is not our duty to
prescribe the form of service the government should follow when certified
mail is returned as undeliverable. Rather, we must ensure the basic
requirements of due process are met in a particular case. Whether a
county auditor could or should search its own records for a better tax sale
notice address depends on the information revealed to him or her when
mail is returned. Necessarily, it follows that these determinations depend
on the facts and circumstances of each case.
Here, the parties have understandably challenged the constitutional
fortitude of Indiana’s tax sale notice statute. XL Investment and the
Auditor argue that the current notice statute complies with constitutional
due process requirements and, because the Auditor followed the statute,
Trust 4340 was placed on proper notice of the tax sale and cannot now set
aside the tax deed. Trust 4340, meanwhile, argues that it received
insufficient notice and the General Assembly may not legislate away a due
process requirement that an auditor must search its internal records when
mail is returned.
It is wholly unclear whether the Court of Appeals opinion below
actually declared the tax sale notice statute unconstitutional or if the
Auditor’s actions in this case simply failed to meet constitutional muster.
See Indiana Land Trust, Co., 130 N.E.3d at 637, trans. granted, opinion vacated
(noting “regardless of the language of Indiana Code section 6-1.1-24-4, the
Auditor is charged with knowledge of the contents of its records and is
constitutionally obligated to search those records” but observing “[t]he
General Assembly does not have the authority to codify away
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constitutional protections” which included an auditor’s search of its own
records); Indiana Land Trust, Co. v. XL Investment Properties, LLC, 134
N.E.3d 439, 441 (Ind. Ct. App. 2019), on reh’g, vacated (finding the auditor’s
office, as an agency of the state, could adequately represent the State’s
position in defending the constitutionality of the statute). Observing the
“longstanding principle of constitutional avoidance” that weighs against
deciding constitutional questions not absolutely necessary to a merits
disposition, we find a narrower path to resolution of this case.
CitiMortgage, Inc. v. Barabas, 975 N.E.2d 805, 818 (Ind. 2012) (citing Snyder
v. King, 958 N.E.2d 764, 768 (Ind. 2011)).
Rather than weigh in on the constitutionality of the underlying statute,
we will instead focus on whether the Auditor’s actions complied with
minimal due process standards. Below, we explore what the Due Process
Clause of the Fourteenth Amendment requires, the structure of Indiana’s
tax sale notice statute, and the extent to which the Auditor met minimal
notice requirements. Finding that the Auditor complied with due process
standards, we affirm the trial court’s denial of Trust 4340’s motion to set
aside the tax deed for Lot 2. 4
I. The Due Process Clause of the Fourteenth
Amendment sets minimum notice standards for
tax sales of delinquent properties.
It is an “elementary and fundamental requirement” of the Due Process
Clause of the Fourteenth Amendment that before it institutes an action to
sell a delinquent property, “a State must provide ‘notice reasonably
calculated, under all circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their
objections.’” Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 795, 103 S.Ct.
4 The Court of Appeals below found Trust 4340’s motion to set aside the tax deed was timely
filed. Indiana Land Trust Co., 130 N.E.3d at 636. Assuming arguendo that this conclusion is
correct, we need not reach this issue because of our determination that the Auditor complied
with due process requirements.
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2706, 2709, 77 L.Ed. 180 (1983) (quoting Mullane v. Central Hanover Bank &
Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950)). Put
differently, a party that has a legally protected property interest in a
particular parcel is “entitled to notice reasonably calculated to apprise him
of a pending tax sale.” Id. at 798.
Both the Supreme Court of the United States and our own Court have
weighed in on what these standards entail. We will review the relevant
cases from each court below.
A. The Supreme Court of the United States has held that
while actual notice is not required, notice must be given
in a manner desirous of actually informing the owner.
The Supreme Court has addressed the contours of due process in
several opinions over the years. For example, in Mennonite Bd. of Missions,
a case with Hoosier origins, the Court considered a tax sale in which
Elkhart County posted and published notice of a tax delinquency but
failed to mail any notice to the mortgagee. The Court determined, inter
alia, that publication and posting alone were unlikely to reach those with
interest in the property. Id. at 799. The Court’s opinion concluded that
personal service or mailed notice was required for a creditor with a legal
interest in a property. Id. The Court wrote, “Notice by mail or other means
as certain to ensure actual notice is a minimum constitutional
precondition to a proceeding which will adversely affect the liberty or
property interests of any party, whether unlettered or well versed in
commercial practice, if its name and address are reasonably
ascertainable.” Id. at 800 (emphasis in original). In Mennonite Bd. of
Missions, then, a single letter of notice would have discharged the county’s
constitutional obligation to give notice to the party with a legal interest in
the property. Id.
More recently in Jones v. Flowers, 547 U.S. 220, 126 S.Ct. 1708, 164
L.Ed.2d 415 (2006), the Supreme Court confronted an issue not unlike the
one our Court faces today. There, a property owner became delinquent on
property taxes after he got divorced and moved out of his marital home.
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The government sent a certified letter to his property to notify the owner
of an impending tax sale, but the letter was returned unclaimed. The
government made no additional attempts to notify the owner other than
publishing notice of the sale in a local newspaper. The property was
eventually sold, and the owner was only notified when the purchaser
delivered an unlawful detainer notice to the owner’s daughter at the
property. Id. at 223-24, 126 S.Ct. at 1712-13.
The owner filed suit alleging the government failed to give him
sufficient notice of the tax sale in violation of the Due Process Clause of
the Fourteenth Amendment. The issue presented to the Supreme Court
was framed as “whether, when notice of a tax sale is mailed to the owner
and returned undelivered, the government must take additional
reasonable steps to provide notice before taking the owner’s property.” Id.
at 223, 126 S.Ct. at 1712. Under the circumstances presented in Jones, the
Supreme Court answered this question in the affirmative, finding
“someone who actually wanted to alert [the property owner] that he was
in danger of losing his house would do more when the attempted notice
letter was returned unclaimed, and there was more that reasonably could
be done.” Id. at 238, 126 S.Ct. at 1721.
The Jones Court made several foundational observations to reach its
result. First, the Due Process Clause of the Fourteenth Amendment
requires the government to provide “notice and opportunity for hearing
appropriate to the nature of the case.” Id. at 223, 126 S.Ct. at 1712 (quoting
Mullane, 339 U.S. at 313, 70 S.Ct. at 652).
Second, “actual notice” is not required by due process. Id. at 225, 126
S.Ct. at 1713. Rather, due process requires the government to provide
“notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and to afford them an
opportunity to present their objections.” Id., 126 S.Ct. at 1713-14 (quoting
Mullane, 339 U.S. at 314, 70 S.Ct. at 652).
Third, to assess the adequacy of a particular form of notice, a Court
must balance the interest of the State against the individual interest sought
to be protected by the Fourteenth Amendment. Id. at 229, 126 S.Ct. at 1715(quotations omitted). So “when notice is a person’s due … [t]he means
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employed must be such as one desirous of actually informing the absentee
might reasonably adopt to accomplish it.” Id. (quoting Mullane, 339 U.S. at
315, 70 S.Ct. at 652).
Applying the facts of Jones to this framework, the Court wrote that
someone desirous of actually informing a property owner that his house
was subject to a tax sale would surely take “additional reasonable steps”
to give notice if a mailing were returned. Id., 126 S.Ct. at 1716. Because the
government in Jones did nothing when the certified letter was returned as
unclaimed, the Supreme Court observed that the government “should
have taken additional reasonable steps to notify [the landowner], if
practicable to do so.” Id. at 234, 126 S.Ct. at 1718. The Jones Court stopped
short, however, of prescribing any particular type or form of service. Id.(citing Greene v. Lindsey, 456 U.S. 444, 455, n.9, 102 S.Ct. 1874, 72 L.Ed.2d
249 (1982)). It followed, then, that “if there were no reasonable additional
steps the government could have taken upon return of the unclaimed
notice letter, it cannot be faulted for doing nothing.” Id.Perhaps stated differently, the Supreme Court concluded the
“reasonable additional steps” that must be taken when a certified letter is
returned “depends upon what the new information reveals.” Id. In the
case of a certified letter returned as unclaimed, the Court posited that one
viable option would have been for the government to send another letter
via regular mail. Id., 126 S.Ct. at 1718-19. Another practical option would
have been for the government to post notice on the door of the property.
Id. at 235, 126 S.Ct. at 1719. In the Court’s view, either of these options
would increase the likelihood the owner would be notified of the
impending tax sale on his property. Id.Particularly relevant to today’s decision, the Supreme Court addressed
the landowner’s argument that the government should have searched
either the phone book or “other government records” to reveal his new
address. Id. at 235-36, 126 S.Ct. at 1719. But the Supreme Court did “not
believe the government was required to go this far.” Id. at 236, 126 S.Ct. at
1719. “An open-ended search for a new address—especially when the
State obligates the taxpayer to keep his address updated with the tax
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collector[ ]—imposes burdens on the State significantly greater than the
several relatively easy options” discussed above. Id.B. Our Court’s decisions echo the findings of the Supreme
Court and evaluate the adequacy of notice based on the
facts and circumstances of each case.
Our own Court has had the opportunity to review Jones under factually
similar circumstances in Sawmill Creek, 964 N.E.2d at 213. In that case, the
property owner’s business name was incorrectly listed as “Saw Creek”
instead of “Sawmill Creek” on several documents filed with the
government. Id. at 214. When the property owner moved operations,
addresses were updated for Sawmill Creek in the auditor’s system, but
not for the “Saw Creek” entity used on the property documents. Id. at 215.
The property became delinquent. Id.
The county auditor sent a pre-sale notice via certified mail to the
address on file for “Saw Creek,” but the notice was returned as ”NOT
DELIVERABLE AS ADDRESSED, UNABLE TO FORWARD.” Id. The
auditor published notice in the newspaper, on its website, and on a list
posted outside of the county clerk’s office. Id. After the property was sold,
the auditor employed a title company to conduct additional research on
the property, but the title company could not locate a “Saw Creek”
business entity. Id. Two post-sale notices—one via certified mail and one
via first-class mail—were again sent to the address on file, but both
mailings were returned as undeliverable. Id. Only when the new property
owner’s “for sale” signs appeared on the property did the original owner
become aware of the sale and sued to set aside the tax deed. Id. at 216.
Applying the analytical framework of Jones referenced above, our Court
found the county auditor satisfied due process requirements because,
under the circumstances of that case, “the [a]uditor’s actions were
reasonably calculated to provide notice to [the landowner].” Id. at 221.
Observing “every fact relevant to whether the [a]uditor acted or failed to
act ‘as one desirous of actually informing’ [the owner] of the pending tax
sale must be considered,” id. at 219, we found that after the certified letter
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was returned as undeliverable, it would have been unreasonable for the
auditor to re-send the same notice via first-class mail. Id. at 220. We also
observed that posting notice on bare, unimproved land was not practical.
Id. at 221. Ultimately, we were satisfied that the auditor took the required
“additional reasonable steps” by engaging a title search company to
search government records and the phonebook for additional addresses.
Id.
Our Court again examined Jones in the case M&M Inv. Group, LLC v.
Ahlemeyer Farms, Inc., 994 N.E.2d 1108 (Ind. 2013). Though the facts and
procedure of that case are not particularly relevant to today’s decision, our
Court’s opinion carefully reviewed the structure and history of Indiana’s
tax sale statutes and the decisional law interpreting them. Id. at 1112-17.
Focusing on our prior decision in Elizondo v. Read, 588 N.E.2d 501 (Ind.
1992), our Court discussed whether auditors are required to search
internal records for a better address when notice to the delinquent
property owner is returned. We recounted that in Elizondo, “due process
required the auditor to search his or her own records for alternate
addresses for the owner of the property.” Id. at 1116 (citing Elizondo, 588
N.E.2d at 505). See also Griffin v. Munco Assoc., 589 N.E.2d 220 (Ind. 1992);
Miller Reeder Co. v. Farmers State Bank of Wyatt, 588 N.E.2d 506 (Ind. 1992).
After a review of Jones v. Flowers and then-existing statutes, however, we
called Elizondo’s viability—at least with respect to property owners—into
question. Id. at 1117.
We determined that “the portion of Elizondo dealing with a property
owner has been abrogated [by Jones v. Flowers] to the extent it implies an
auditor may receive a notice back ‘unclaimed’ and then effectively sit on
his or her hands and do nothing more…” Id. While “Jones would compel
the additional steps of at least mailing the notice by first class mail,
posting it on the front door, and/or addressing it to ‘occupant’” if notice to
a property owner was returned to a county auditor, our opinion deferred
to the legislature’s additional guidance codified at the time the opinion
was handed down. Id.
In M&M Investment Group, we further observed that notice
requirements are different depending on the class of interest at stake.
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Whether notice was sent to a property owner or a mortgagee proved to be
a consequential distinction. We observed that “[w]hile those cases relate
to, inform, and persuade each other, it would be erroneous to presume
that they control issues and parties beyond their own scope. Each class of
interest merits its own analysis.” Id. at 1118. Unlike M&M Investment
Group and the remaining viable portion of Elizondo, the present “class of
interest” is that of a property owner, not a mortgagee. As we discuss
below, this distinction places Elizondo’s internal records search
requirement outside the present facts.
***
There are several key lessons we can learn from these decisions as we
turn our focus to the present set of facts and circumstances. First, we know
that the Due Process Clause of the Fourteenth Amendment “requires the
government to provide notice reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action
and afford them an opportunity to present their objections.” Jones, 547 U.S.
at 226, 126 S.Ct. 1708 (quotation omitted). Second, while actual notice is
not required, id. (citation omitted), the government must take additional
reasonable steps if practical when notice via certified mail is returned. Id.
at 234, 126 S.Ct. at 1718. Third, to assess the constitutional adequacy of the
means of notice employed, “the interest of the State” must be balanced
against “the individual interest sought to be protected by the Fourteenth
Amendment.” Id. at 229, 126 S.Ct. at 1715 (quotation omitted). This
balancing of interests depends on the class of interest at stake. M&M Inv.
Group, 994 N.E.2d at 1118.
It follows, then, that we must evaluate the adequacy of notice afforded
to Trust 4340 before the county sought to extinguish its interest in the
property. As the issue is framed for our review, we must examine every
fact relevant to whether the Auditor acted or failed to act “as one desirous
of actually informing” Trust 4340 of the impending tax sale. See Sawmill
Creek, 964 N.E.2d at 219.
In light of the foregoing observations, we will next evaluate the tax sale
notice statutes as they currently stand and apply the present facts to this
context.
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II. The notice given by the Auditor met minimal
due process requirements.
Trust 4340 has launched a two-pronged attack on the tax sale deed,
arguing first that the Auditor was required—or at minimum should have—
searched its own records for a better tax sale notice address, and second,
that the contents of the notice were insufficient for failing to include a
common description of the property. Based on our understanding of the
relevant statutes and decisional caselaw, we decline to adopt Trust 4340’s
arguments and find the Auditor gave adequate notice.
We will address each of Trust 4340’s arguments in turn.
A. The manner in which notice was provided was
constitutionally sufficient.
Because the underlying statutes provide context and structure for each
party’s actions, we will start by reviewing the applicable laws for tax sales
in Indiana. The General Assembly has codified the procedures and
requirements to conduct a tax sale when an owner of real property
becomes delinquent on property taxes. See Ind. Code § 6-1.1-24 et seq.
Under the present statutory scheme, there are certain notice requirements
that must be met before the property is sold. I.C. § 6-1.1-24-4. If notice is
given and no property owner objects or steps forward to contest the sale,
the property is subject to sale at a public auction. I.C. §§ 6-1.1-24-4.7, -5.
After the tax sale, there is a redemption period during which a person
may redeem the property for a certain sum of money. See I.C. § 6-1.1-25 et
seq. If the property is not redeemed, the purchasing party may file a
petition for the tax deed to the real property. I.C. § 6-1.1-25-4.6.
More specifically, Indiana Code section 6-1.1-24-4(b) (2015) currently
provides, in relevant part:
Not less than twenty-one (21) days before the earliest date on
which the application for judgment and order for sale of real
property eligible for sale may be made, the county auditor shall
send a notice of the sale by certified mail, return receipt
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 15 of 22
requested, and by first class mail to:
(1) the owner of record of real property with a single owner; or
(2) at least one (1) of the owners, as of the date of certification,
of real property with multiple owners;
at the last address of the owner for the property as indicated in
the transfer book records of the county auditor under IC 6-1.1-
5-4 on the date that the tax sale list is certified. If both notices
are returned, the county auditor shall take an additional
reasonable step to notify the property owner, if the county
auditor determines that an additional reasonable step to notify
the property owner is practical… The notice must set forth the
key number, if any, of the real property and a street address, if
any, or other common description of the property other than a
legal description… The county auditor must present proof of
this mailing to the court along with the application for
judgment and order for sale. Failure by an owner to receive or
accept the notice required by this section does not affect the
validity of the judgment and order. The owner of real property
shall notify the county auditor of the owner's correct address.
The notice required under this section is considered sufficient if
the notice is mailed to the address or addresses required by this
section.
We can glean from this statute that (1) two notices must be sent, one by
certified mail and one by first-class mail; (2) these notices must be sent to
the last address on record at the date the tax sale list is certified; and (3)
only if both notices are returned must the auditor take an additional
reasonable step if practical. These are the circumstances that happened in
this case.
Prior to 2015, however, this same section required: “If both notices are
returned due to incorrect or insufficient addresses, the county auditor
shall research the county auditor records to determine a more complete or
accurate address.” Ind. Code § 6-1.1-24-4 (2014) (repealed by P.L. 251-
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 16 of 22
2015); see also City of Elkhart v. SFS, LLC, 968 N.E.2d 812, 817 (Ind. Ct. App.
2012) (finding due process “requires the county auditor to search the
records that it maintains”); Hullett v. LaFevre, 926 N.E.2d 524, 528 (Ind. Ct.
App. 2010) (same); Edwards v. Neace, 898 N.E.2d 343, 349 (Ind. Ct. App.
2008) (same); Reeder Assocs. II v. Chicago Belle, Ltd., 778 N.E.2d 828, 834
(Ind. Ct. App. 2002) (same). On this point, Trust 4340 argues the Supreme
Court’s decision in Jones did nothing to abrogate Indiana caselaw
requiring an auditor to search its records for a better address. In support,
Trust 4340 points to decisions that predate the current statutory scheme
and would have us enshrine this “internal records search” requirement
into the threshold of constitutional due process. See, e.g., Elizondo, 588
N.E.2d at 504; M&M Inv. Group, 994 N.E.2d at 1122; City of Elkhart, 968
N.E.2d at 817.
We decline to hold as much today. It is true that prior opinions of our
Court of Appeals, including decisions handed down after Jones, have held
“the auditor is deemed to be aware of the contents of the records
maintained in its office, and due process requires the county auditor to
search the records that it maintains.” City of Elkhart, 968 N.E.2d at 817
(citation omitted). This observation tracks back to our decision in Elizondo
where, as discussed above, we found it was “reasonable to require the
auditor to search the records of his own office for other possible addresses
upon the receipt of an undelivered notice.” 588 N.E.2d at 505.
Recall, however, that the viable portion of Elizondo dealt with notice to
mortgagees and we have subsequently declined to extend this analysis to
different classes of interest. See M&M Inv. Group, 994 N.E.2d at 1118. In
M&M Investment Group, we observed “analysis of the sufficiency of notice
in a property deprivation matter under the Due Process clause of the
Fourteenth Amendment turns on the ‘practicalities and peculiarities of the
case,’ and ‘will vary with circumstances and conditions.’” Id. (quoting
Elizondo, 588 N.E.2d at 503). These cases have historically been assessed
independently based on the class of interest at stake, see id., and we see no
reason to depart from that approach today.
That is not to say a county auditor is never required to search his or her
internal records. Rather, an auditor’s responsibility lies in what is learned
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 17 of 22
after notice is given in a particular case. Jones, 547 U.S. at 234, 126 S.Ct. at
1718. In addition to striking this internal-search requirement, the 2015
amendments to the tax sale notice statute also added the requirement that
the auditor “take an additional reasonable step to notify the property
owner, if the county auditor determines that an additional reasonable step
to notify the property owner is practical.” Ind. Code § 6-1.1-24-4 (2015);
P.L. 251-2015.
As was the case in Jones, this “additional reasonable step” is based on
what new information is revealed to the government. 547 U.S. at 234, 126
S.Ct. at 1718. A court will not “prescribe the form of service that the
government should adopt,” but rather assess whether there were
additional reasonable steps that could be taken if practicable. Id. (cleaned
up, citation omitted).
Here, the Auditor, through SRI, sent contemporaneous notice via
certified and first-class mail. While the certified mail was returned to SRI,
there is no evidence the first-class mail was ever returned to its sender.
This meant either the mail was received by its intended recipient or
simply lost to time. Nevertheless, the Supreme Court in Jones observed
that sending notice via regular mail likely increases the chances of actual
notice. Id. at 236, 126 S.Ct. at 1719. Given actual notice is not required, we
do not think the Auditor should be left to speculate whether the first-class
mail was truly delivered, especially when it was not returned to its
sender.
Regardless, Trust 4340 argues the distinction between “Unclaimed”
mail and mail returned as “Not Deliverable as Addressed—Unable to
Forward” made notice by first-class mail unreasonable. See Sawmill Creek,
964 N.E.2d at 219 n.6. The first-class mail in this case, however, was sent
contemporaneously with the certified letter. This is unlike the facts in
Sawmill Creek where we made particular note that following up with first-
class mail after a certified letter was returned as undeliverable would be
unreasonable based on the auditor’s new knowledge that the certified
letter was not deliverable at the listed address. See id. at 219-20. One could
reasonably assume the unreturned first-class mail in this case indicated to
the Auditor that the mail was received by the intended recipient. We do
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 18 of 22
not think that under these circumstances, the Auditor was required to
speculate any further.
Perhaps the circumstances would be different if both the certified letter
and first-class mail were returned to SRI and the Auditor. This
knowledge—that the tax notice address was more than likely incorrect—
would certainly require additional reasonable steps to notify Trust 4340 if
practical to do so. See Jones, 547 U.S. at 234, 126 S.Ct. at 1718. And perhaps
under those facts, an auditor would satisfy due process by searching its
internal records. But those circumstances are simply not present here. In
addition to the first-class mail, the Auditor—through SRI—performed a
skip trace search for a better address and published notice in the
newspaper. These combined actions, at least under the circumstances
present in this case, satisfy the minimal due process requirements
discussed in Jones and subsequent caselaw in Indiana.
While the Auditor certainly could have done more, the Constitution
does not require more than the actions taken in this case. The power to
require more than the threshold requirements of due process rests
squarely with the General Assembly and we decline to enter that arena
today. See id. at 238, 126 S.Ct. at 1721.
B. The contents of the notice substantially complied with
relevant statutory requirements.
On appeal, Trust 4340 also challenges the adequacy of the notice itself.
Indiana Code section § 6-1.1-24-4(b) provides, in relevant part, “The notice
must set forth the key number, if any, of the real property and a street
address, if any, or other common description of the property other than a
legal description.” In addition to the requirement that “[t]he owner of real
property shall notify the county auditor of the owner’s correct address,”
this provision provides, “The notice required under this section is
considered sufficient if the notice is mailed to the address or addresses
required by this section.” Ind. Code § 6-1.1-24-4(b).
“The issuance of a tax deed by the trial court creates a presumption that
a tax sale and all of the statutory steps leading to the issuance of the tax
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 19 of 22
deed were proper.” First Am. Title Ins. Co. v. Calhoun, 134 N.E.3d 423, 431
(Ind. Ct. App. 2014) (citation omitted). “[T]his presumption may be
rebutted by affirmative evidence showing the contrary.” Id. (quotation
omitted). As challenged here, a tax deed may be set aside if a party
demonstrates that “the notices required by … IC 6-1.1-24-4 … were not in
substantial compliance with the manner prescribed in those sections.” Ind.
Code § 6-1.1-25-16(7); see generally Porter v. Bankers Trust Co. of California,
N.A., 773 N.E.2d 901, 906 (Ind. Ct. App. 2002) (discussing substantial
compliance with tax sale notice statutes); Reeder Assocs. II, 778 N.E.2d at
832-35 (same). Whether notice “substantially complied” with statutory
requirements, though a “fact-sensitive determination,” is a question of
law. Collier v. Prater, 544 N.E.2d 497, 499 (Ind. 1989).
The notice sent in this case contained a property identification number
and a “so-called” brief legal description but did not contain a location and
street address or a common description of the property. The trial court
concluded that “although the Tax Sale notice did not include the property
address or other description of the property, the Auditor and SRI still
substantially complied with Indiana Code §6-1.1-24-4 [sic] by providing
the pin number and legal description and could not provide any address
or other description because the property was vacant.” App. Vol. 2 at 26.
The evidence indicates the parcel was an undeveloped, 29 acre tract of
land. The Auditor testified that vacant parcels are not assigned property
addresses until improvements are made upon the land. While nothing
identified as a common description or street address was listed on the
notice, it read, “13-05-09-300-039 MICH CITY TOWN CENTRE SD UNIT 2
LT 2 29.827 AC.” Ex. Vol. I p. 220. This description—which included the
name of the development, the unit and lot number, and the exact
acreage—substantially complies with the purpose of a “common
description” by allowing a lay person to identify the property.
As such, this description would have alerted the owner that his
property was in danger of being sold at a tax sale. This supports the trial
court’s conclusion that the notice substantially complied with the statute’s
requirements.
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 20 of 22
In light of these circumstances, the trial court’s holding is supported by
the evidence.
Conclusion
We find that under the facts of this case, the LaPorte County Auditor
provided notice reasonably calculated, under all circumstances, to apprise
Trust 4340 of the pendency of the action and afforded them an
opportunity to present their objections.
We affirm the trial court’s denial of Indiana Land Trust Company’s
motion to set aside the tax deed.
Rush, C.J., and Massa, Slaughter, and Goff, JJ., concur.
ATTORNEYS FOR APPELLANT
Greg A. Bouwer
Jeff Carroll
Koransky Bouwer & Poracky, P.C.
Dyer, Indiana
ATTORNEY FOR APPELLEE XL INVESTMENT PROPERTIES, LLC
Matthew J. Hagenow
Anthony G. Novak
Newby, Lewis, Kaminski & Jones, LLP
LaPorte, Indiana
ATTORNEY FOR APPELLEE LAPORTE COUNTY AUDITOR
J. Alex Bruggenschmidt
Thomas C. Buchanan
Buchanan & Bruggenschmidt, P.C.
Zionsville, Indiana
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 21 of 22
ATTORNEYS FOR AMICUS CURIAE STATE OF INDIANA
Curtis T. Hill, Jr.
Attorney General of Indiana
Thomas M. Fisher
Solicitor General of Indiana
Julia C. Payne
Deputy Attorney General
Indianapolis, Indiana
Kian Hudson
Deputy Solicitor General
Indianapolis, Indiana
ATTORNEYS FOR AMICI CURIAE THE ASSOCIATION OF
INDIANA COUNTIES, INDIANA AUDITORS’ ASSOCIATION,
INDIANA COUNTY TREASURERS’ ASSOCIATION, AND SRI,
INCORPORATED
Matthew T. Albaugh
Emily A. Kile-Maxwell
Faegre Drinker Biddle & Reath LLP
Indianapolis, Indiana
Indiana Supreme Court | Case No. 20S-MI-62 | October 27, 2020 Page 22 of 22