ColFin Bulls Funding A, LLC v. GRTN, LLC (mem. dec.) ( 2020 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any FILED
court except for the purpose of establishing Apr 01 2020, 9:44 am
the defense of res judicata, collateral CLERK
estoppel, or the law of the case. Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Jill A. Sidorowicz Jon L. Orlosky
Noonan & Lieberman, Ltd. Muncie, Indiana
Chicago, Illinois
IN THE
COURT OF APPEALS OF INDIANA
ColFin Bulls Funding A, LLC, April 1, 2020
Appellant-Respondent, Court of Appeals Case No.
19A-TP-2007
v. Appeal from the Porter Circuit
Court
GRTN, LLC, The Honorable Mary R. Harper,
Appellee-Petitioner. Judge
Trial Court Cause No.
64C01-1710-TP-9802
Friedlander, Senior Judge.
Court of Appeals of Indiana | Memorandum Decision 19A-TP-2007| April 1, 2020 Page 1 of 6
[1] In November of 2011, MB Financial Bank assigned its mortgage and interest in
a property located at 5463 U.S. Highway 6, Portage, Indiana (the “Property”)
to ColFin Bulls Funding A, LLC (“ColFin”). On November 11, 2011, an
assignment of that mortgage was recorded in the Porter County Record of
Deeds listing ColFin’s principal place of business at “c/o Colony Capital
Acquisitions, LLC, 2450 Broadway 6th Floor, Santa Monica, California 90404”
(the “Colony Capital Address”). Appellant’s App. Vol. II, p. 62.
[2] On October 14, 2016, GRTN, LLC purchased the tax sale certificate to the
Property. In April of 2017, GRTN attempted to provide ColFin with notice of
the sale prior to filing its petition for a tax deed as required by Indiana Code
section 6-1.1-25-4.5 (2016) by sending a notice via certified and first-class mail
to the Colony Capital Address. Both notices were returned to GRTN labeled
“RETURN TO SENDER ATTEMPTED – NOT KNOWN UNABLE TO
FORWARD” and “RETURN TO SENDER NOT DELIVERABLE AS
ADDRESSED UNABLE TO FORWARD[,]” respectively. Appellant’s App.
Vol. II, p. 113.
[3] In October of 2017, GRTN petitioned for a tax deed for the Property. GRTN
attempted to provide ColFin with notice of its petition as required by Indiana
Code section 6-1.1-25-4.6 (2016) by sending two notices via certified and first-
1
class mail to the Colony Capital Address. Both notices were again returned to
1
Neither notice was required to be sent via first-class mail under Indiana Code sections 6-1.1-25-4.5 or 6-1.1-
25-4.6.
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GRTN labeled “RETURN TO SENDER ATTEMPTED – NOT KNOWN
UNABLE TO FORWARD[.]” Appellant’s App. Vol. II, p. 17. On December
7, 2017, the trial court ordered the Porter County Auditor to issue a tax deed to
GRTN for the Property. In December 2018, ColFin moved to vacate the tax
deed after becoming aware of it from a title report that it had obtained. On
April 1, 2019, the trial court held a hearing on the matter and ultimately denied
ColFin’s motion on June 18, 2019. This appeal followed.
[4] ColFin contends that although GRTN provided notice as required under
2
Indiana law via certified mail, it failed, upon learning that said notice was
2
Indiana Code section 6-1.1-25-4.5 provides, in relevant parts, that
(a) Except as provided in subsection (d), a purchaser or the purchaser’s assignee is
entitled to a tax deed to the property that was sold only if:
[…]
(3) not later than six (6) months after the date of the sale:
(A) the purchaser or the purchaser’s assignee
[…]
gives notice of the sale to the owner of record at the time of the sale and any
person with a substantial property interest of public record in the tract or item of
real property.
[…]
(d) The person required to give the notice under subsection (a), (b), or (c) shall give the
notice by sending a copy of the notice by certified mail, return receipt requested, to:
[…]
(2) any person with a substantial property interest of public record at the address
for the person included in the public record that indicates the interest.
Indiana Code section 6-1.1-25-4.6 provides, in relevant parts, that
(a) After the expiration of the redemption period specified in section 4 of this chapter but
not later than three (3) months after the expiration of the period of redemption:
(1) the purchaser, the purchaser’s assignee, the county executive, the county
executive’s assignee, or the purchaser of the certificate of sale under IC 6-1.1-24-
6.1 may
[…]
file a verified petition in accordance with subsection (b) in the same court in which the
judgment of sale was entered asking the court to direct the county auditor to issue a tax
Court of Appeals of Indiana | Memorandum Decision 19A-TP-2007| April 1, 2020 Page 3 of 6
undeliverable and/or unclaimed, to take additional reasonable steps to
effectuate notice as required under the Due Process Clause. “Before a State
may take property and sell it for unpaid taxes, the Due Process Clause of the
Fourteenth Amendment requires the government to provide the owner notice
and opportunity for hearing appropriate to the nature of the case.” Jones v.
Flowers, 547 U.S. 220, 223, 126 S. Ct. 1708, 1712, 164 L. Ed. 2d 415 (2006)
(internal quotations omitted). Due process, however, does not entitle the
property owner to receive actual notice before the State may take his property.
Id. Rather, due process requires that the State 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.” Id. at 226, 126 S. Ct. at 1713-14. A mortgagee possesses a
substantial property interest that is significantly affected by a tax sale.
Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S. Ct. 2706, 77 L. Ed. 2d
180 (1983). “Since a mortgagee clearly has a legally protected property interest,
he is entitled to notice reasonably calculated to apprise him of a pending tax
sale.” Id. at 798, 103 S. Ct. at 2711. The United States Supreme Court has
concluded that when a mortgagee is identified in the publicly recorded
deed if the real property is not redeemed from the sale. Notice of the filing of this petition
shall be given to the same parties as provided in section 4.5 of this chapter, except that, if
notice is given by publication, only one (1) publication is required. The notice required
by this section is considered sufficient if the notice is sent to the address required by
section 4.5(d) of this chapter. Any person owning or having an interest in the tract or
item of real property may file a written objection to the petition with the court not later
than thirty (30) days after the date the petition was filed. If a written objection is timely
filed, the court shall conduct a hearing on the objection. If there is not a written objection
that is timely filed, the court may consider the petition without conducting a hearing.
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mortgage, constructive notice by publication is not adequate notice but, rather,
“must be supplemented by notice that is either mailed to the mortgagee’s last
known address, or by personal service.” Id. at 798, 103 S. Ct. at 2711.
[5] ColFin directs our attention to Jones, 547 U.S. 220, 126 S. Ct. 1708. In that
case, the Court held that “when mailed notice of a tax sale is returned
unclaimed, the State must take additional reasonable steps to attempt to provide
notice to the property owner before selling his property, if it is practicable to do
so.” Id. at 225, 126 S. Ct. at 1713. Under the circumstances in that case, the
Court found additional reasonable steps that were practicable for the State to
take, namely, sending notice via regular mail, posting notice on the front door,
or addressing otherwise undeliverable mail to “occupant.” Id. at 234-35, 126 S.
Ct. at 1719. The Court, however, did not require the State to search for Jones’s
new address in the phonebook or in other government records such as income
tax rolls as Jones suggested, concluding that that imposed a significant burden
on the State compared to the other options it had outlined. Id. It is not the
courts’ function to specify the form of service that the government should
adopt, but “if there were no reasonable additional steps the government could
have taken upon the unclaimed notice letter, it cannot be faulted for doing
nothing.” Id. at 234, 126 S. Ct. at 1718.
[6] While we believe that Jones provides guidance, its circumstances differ from
those in this matter. Here, GRTN provided notice via certified mail, satisfying
the notice requirements under Indiana law. GRTN also provided additional
notice via first-class mail. The fact that GRTN sent the first-class mail notice at
Court of Appeals of Indiana | Memorandum Decision 19A-TP-2007| April 1, 2020 Page 5 of 6
the same time it sent the certified mail notice rather than waiting until the
certified mail was returned unclaimed is a distinction without a difference, as it
would have been returned undeliverable either way. Moreover, it is undisputed
that the Property does not contain a habitable structure, which makes posting
notice on a door impracticable, to say the least.
[7] Last, ColFin believes that GRTN should have been required to have “easily,
and without undue effort or expense, searched the Delaware Secretary of State’s
website for ColFin’s address. That search would have provided it with a valid
registered agent address in which to send notice to ColFin . . . .” Appellant’s
Br. p. 13. We disagree, finding that process to be similar to searching the phone
book or government records, which the United States Supreme Court did not
require in Jones. By attempting to send ColFin notices via certified and first-
class mail, we conclude that GRTN used the practicable and reasonable steps
available under these circumstances to effectuate notice and therefore cannot be
faulted for doing nothing more. ColFin has failed to establish that it was denied
due process.
[8] Judgment affirmed.
Baker, J., and Crone, J., concur.
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