Davidson Pabts, LLC v. Lucien Worsham ( 2015 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
February 25, 2015 Session
DAVIDSON PABTS, LLC V. LUCIEN WORSHAM
Appeal from the Chancery Court for Davidson County
No. 13-1487-IV Russell T. Perkins, Chancellor
No. M2014-01061-COA-R3-CV – Filed May 18, 2015
This appeal arises from an action to quiet title to property that was acquired by Plaintiff at
a tax sale in 2008. The former owner of the property opposed the petition contending he
did not receive proper notice of the tax sale and, therefore, the sale was void. Following
discovery, Plaintiff filed a motion for summary judgment contending there were no
material facts in dispute and it was entitled to judgment as a matter of law. The trial court
granted the motion and entered judgment quieting title in favor of Plaintiff. Defendant
appeals contending the court erred in granting summary judgment because genuine issues
of material facts exist concerning whether the county provided proper notice of the tax
sale. He also contends the trial court failed to state the legal grounds upon which it
granted the motion as required by Tenn. R. Civ. P. 56.04. We have concluded that
Plaintiff filed a properly supported motion for summary judgment demonstrating that it
acquired title through an order confirming the tax sale, which shifted the burden of
production to Defendant to establish that a genuine dispute of material fact exists that
precludes summary judgment. However, Defendant failed to carry that burden. As for
Rule 56.04, the trial court failed to state the legal grounds upon which the motion was
granted; however, we are able to discern from the record the grounds for granting the
motion; therefore, this omission constitutes harmless error. There being no dispute of
material fact concerning whether the county provided constitutionally sufficient notice of
the tax sale, Plaintiff was entitled to judgment as a matter of law. Therefore, we affirm
the trial court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which ANDY
D. BENNETT and W. NEAL MCBRAYER, JJ., joined.
Lucien C. Worsham, Nashville, Tennessee, Pro Se.
Robert J. Notestine, III, Nashville, Tennessee, for the appellee, Davidson Pabts, LLC.
OPINION
Lucien C. Worsham acquired real estate located at 1000 West Cahal Avenue in
Nashville, Davidson County, Tennessee on April 21, 2006. The 2006 Warranty Deed
provided the following information regarding the name and address of the new owner:
“Lucien Worsham, 1000 West Cahal Avenue, Nashville, TN 37206.” The deed also
stated: “Send Tax Bills To: SAME AS NEW OWNER.”
It is undisputed that Defendant never paid property taxes on the property located at
1000 Cahal Avenue (hereinafter “the property”). For his part, Mr. Worsham insists that
he never received any tax notices because the property was unoccupied and that he
resided at a different address at all times material to this action.
To satisfy delinquent taxes on the property owed to the Metropolitan Government
of Nashville and Davidson County (“Metro”), the property was sold by order of the
Chancery Court of Davidson County, Tennessee, at a delinquent tax sale on December
10, 2008.1 The high bidder for the property was Davidson Pabst, LLC (“Plaintiff”), and a
Final Decree Confirming Sale to Plaintiff was entered on March 13, 2009 and duly
recorded in the Register‟s Office for Davidson County, Tennessee, on April 9, 2009.
In October 2013, more than four years after acquiring the property at the tax sale,
Plaintiff commenced this action to quiet title to the property. Mr. Worsham (hereinafter
“Defendant”) is the only defendant. In his answer he admitted that he had purchased the
property in 2006, failed to pay any property taxes on it, and that Plaintiff obtained title to
the property through the 2009 decree confirming the tax sale; however, he challenged the
validity of the tax sale on due process grounds, claiming the sale was void because he
never received notice of it. Importantly, Defendant does not contend that Metro never
attempted to notify him of the tax sale. Instead, Defendant contends that Metro knew his
home address and should have taken the additional step of attempting to notify him there.
As Defendant stated in his Answer:
Defendant acknowledges that the mailing address on the [2006] deed to the
property was incorrect. The “new owner” and the “send tax bills to”
addresses were erroneously listed by the title company as the address of the
aforementioned property which is a vacant lot with an unfinished garage.
Accordingly, defendant never received any tax bills or notices. Defendant
acknowledges fault in failing to correct the address on the deed and in
1
The underlying action was The Metropolitan Government of Nashville and Davidson County in
its own Capacity and for the Use and Benefit of the State of Tennessee v. Delinquent Taxpayers as Shown
on the 2006 Real Property Tax Records of the Metropolitan Government of Nashville and Davidson
County, Tennessee, Case No. 08-572-I in the Chancery Court for Davidson County, Tennessee.
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unintentionally failing to pay the taxes. Defendant received no notification
of, and had no knowledge of, the default and the impending sale of the
property.
Defendant alleges that proper notification of the tax auction was not
given . . . including, taking “additional steps to notify owner before sale
could proceed”. [sic] Furthermore, the defendant alleges that the court was
in possession of defendant‟s actual home address and phone number . . .
more than a month prior to the sale . . . . No effort was made to notify
defendant at that address before or, especially, after the sale.
With his Answer, Defendant attached records from a tax lien inquiry indicating
that a real estate loan services company had searched public records, discovered his home
address, and provided it to Metro prior to the 2008 sale.
Subsequently, in his response to interrogatories Defendant stated that he learned of
the tax sale on February 4, 2010. Tenn. Code Ann. § 67-5-2701(a) provides that previous
owners may redeem real property “within one (1) year from the entry of the order
confirming the sale.” The order confirming this sale was entered on March 13, 2009;
thus, Defendant had six weeks to redeem the property without litigation. Although time
remained to redeem the property, Defendant stated in discovery that he did not do so
because an employee at the Clerk and Master‟s office told him that the redemption period
had already expired.
Following discovery, Plaintiff filed a motion for summary judgment based on the
Order Confirming the Tax Sale and Defendant‟s admissions in the Answer and his
interrogatory responses. Defendant opposed the motion, also relying on his interrogatory
responses and asserting that he had provided evidence that “the Court had Defendant‟s
correct address prior to the sale and, yet, made no attempt to give notice of the tax sale or
redemption period.” Following a hearing, the trial court granted Plaintiff‟s motion upon
the finding that there were no genuine issues of material fact in dispute and that Plaintiff
was entitled to judgment as a matter of law. Defendant appealed.
STANDARD OF REVIEW
Summary judgments do not enjoy a presumption of correctness on appeal. Scott v.
Ashland Healthcare Ctr., Inc., 49 S.W.3d 281, 285 (Tenn. 2001). Accordingly, we must
make a fresh determination that the requirements of Tenn. R. Civ. P. 56 have been
satisfied. Staples v. CBL & Associates, Inc., 15 S.W.3d 83, 88 (Tenn. 2000); Hunter v.
Brown, 955 S.W.2d 49, 50 (Tenn. 1997).
Rule 56.04 of the Tennessee Rules of Civil Procedure provides that summary
judgment is appropriate when there is no genuine issue of material fact and the moving
party is entitled to a judgment as a matter of law. Staples, 15 S.W.3d at 88. The moving
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party bears the burden of proving that its motion has satisfied these requirements. See id.
When the party seeking summary judgment makes a properly supported motion, the
burden shifts to the nonmoving party to “set forth specific facts establishing the existence
of disputed, material facts which must be resolved by the trier of fact.” Id. (citing Byrd v.
Hall, 847 S.W.2d 208, 215 (Tenn. 1993)). Plaintiffs who seek summary judgment make a
properly supported motion by alleging undisputed facts that show the existence of one or
more elements of their claim and entitle them to a judgment as a matter of law. See
Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 9 n.6 (Tenn. 2008).2
The nonmoving party cannot rely on the allegations or denials of its pleadings to
carry its burden. Byrd, 847 S.W.2d at 215; see Tenn. R. Civ. P. 56.06. Instead, the
nonmoving party must use “affidavits or the discovery materials” listed in Rule 56 to
establish that a dispute of material fact exists. See Byrd, 847 S.W.2d at 215. We have
cautioned that “opponents to a motion for summary judgment should not take their
predicament lightly and will be required to come forward with some „specific factual
information,‟ other than mere pleadings, in support of their position if they wish to avoid
a quick, unfavorable decision.” Price v. Mercury Supply Co., 682 S.W.2d 924, 929
(Tenn. Ct. App. 1984) (footnote omitted).
When assessing the evidence in the summary judgment context, we must consider
it in the light most favorable to the nonmoving party and draw all reasonable inferences
in that party‟s favor. Doe v. HCA Health Servs., Inc., 46 S.W.3d 191, 196 (Tenn. 2001);
Memphis Hous. Auth. v. Thompson, 38 S.W.3d 504, 507 (Tenn. 2001).
ANALYSIS
Defendant contends that the trial court‟s order failed to comply with Tenn. R. Civ.
P. 56.04; he also contends there are genuine disputes of material fact regarding the
validity of Plaintiff‟s title that renders summary judgment inappropriate.
TENN. R. CIV. P. 56.04
On July 1, 2007, Tenn. R. Civ. P. 56.04 was amended to state “[t]he trial court
shall state the legal grounds upon which the court denies or grants the motion [for
summary judgment], which shall be included in the order reflecting the court‟s ruling.”
See Tenn. R. Civ. P. 56.04 (emphasis added); Smith v. UHS of Lakeside, Inc., 439 S.W.3d
303, 313 (Tenn. 2014). The Tennessee Supreme Court has made it clear that this
requirement is not a matter of form over substance; it is to assist the appellate courts to
glean from the record the basis for the trial court‟s decision. See id. at 313-14. It is also to
2
In 2011, the General Assembly passed Tenn. Code Ann. § 20-16-101, which abrogated much of
the decision in Hannan. See 2011 Tenn. Pub. Acts. 498. However, this statute expressly applies only to
“the moving party who does not bear the burden of proof at trial.” Tenn. Code Ann. § 20-16-101. Because
Plaintiff is the moving party and does bear the burden of proof at trial, this statute is not applicable.
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assure that the decision is the product of the trial court‟s independent judgment. Id. at
314. Orders granting or denying summary judgment that do not comply with Rule 56.04
may be vacated and remanded. See id.
Despite the mandatory language of Rule 56.04, this court has been hesitant to
vacate summary judgment orders when we can discern the reasons for the trial court‟s
decision. See White v. Pulaski Elec. Sys., No. M2007-01835-COA-R3-CV, 2008 WL
3850525, at *3 (Tenn. Ct. App. Aug. 18, 2008); Burgess v. Kone, Inc., No. M2007-
02529-COA-R3-CV, 2008 WL 2796409, at *2 (Tenn. Ct. App. July 18, 2008). The
Supreme Court has looked favorably on this practice, noting that, where the absence of
stated grounds does not “significantly hamper” review of a trial court‟s decision, judicial
economy supports this approach to enforcing Rule 56.04. See Smith, 439 S.W.3d at 314.
The pertinent part of the trial court‟s order states:
this court finds that there are no genuine issues of material fact in dispute in
this case, that judgment is proper as a matter of law as to the claims of the
Plaintiff against the Defendant . . . and Summary Judgment should be
granted in favor of the Plaintiff, Davidson Pabts, LLC.
This language fails to comply with the Rule 56.04 mandate because it does not
reveal the basis for the trial court‟s decision. However, due to the narrow issue presented
in the motion for summary judgment, it does not substantially hamper our review of the
trial court‟s decision because we can readily discern the trial court‟s reasoning from the
record. See White, 2008 WL 3850525, at *3. Accordingly, the failure to comply with
Rule 56.04 is harmless error, and we will proceed to review the other issues raised by
Defendant.
DISPUTE OF MATERIAL FACT
Defendant contends that Plaintiff‟s motion for summary judgment was not
properly supported and, therefore, the burden of production never shifted to Defendant.
Alternatively, he insists the court erred in granting summary judgment because material
facts were disputed.
In an action to quiet title, a plaintiff must aver and prove title in itself. See Hoyal v.
Bryson, 53 Tenn. 139, 141 (1871); Grand Hotel, LP v. Cardin, No. M2004-00996-COA-
R3-CV, 2005 WL 2012778, at *4 (Tenn. Ct. App. Aug. 11, 2005). Tax deeds and orders
confirming tax sales are “assurance of perfect title to the purchaser” of land sold at a tax
sale. See Tenn. Code Ann. § 67-5-2504.
It is undisputed that Defendant‟s property was sold at a tax sale, that Plaintiff
purchased the property at that sale, and that a decree confirming the sale was entered in
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March 2009. The record also includes the Final Decree Confirming Sale to Plaintiff,
which was entered on March 13, 2009 and duly recorded in the Register‟s Office for
Davidson County, Tennessee, on April 9, 2009. Thus, Plaintiff‟s motion was properly
supported by undisputed documents and facts sufficient to establish the elements of
Plaintiff‟s action to quiet title and entitle Plaintiff to a judgment as a matter of law. See
Hannan, 270 S.W.3d at 9 n.6. Consequently, the burden shifted to Defendant to “set forth
specific facts, not legal conclusions, by using affidavits or the discovery materials listed
in [Rule 56], establishing that there are indeed disputed, material facts creating a genuine
issue that needs to be resolved by the trier of fact and that a trial is therefore necessary.”
Byrd, 847 S.W.2d at 215.
Defendant contends his response to the motion created a genuine dispute of fact
concerning whether he received proper notice of the 2008 tax sale, which fact is material
to whether Plaintiff‟s title is void or valid. For the reasons explained below, we have
concluded that his response failed to raise a dispute of a material fact.
County and municipal governments are authorized to levy taxes on real property.
Tenn. Code Ann. §§ 67-5-101 to -103; see Charter of the Metropolitan Government of
Nashville and Davidson County, Tennessee, Art. 2, § 2.01 (preserving the power to levy
and collect property taxes). These taxes are due and payable on the first Monday in
October of each year. See Tenn. Code Ann. § 67-1-701.
Property owners in Tennessee are charged with the knowledge both that their
property is subject to taxation and that property taxes are due each year. Marlowe v.
Kingdom Hall of Jehovah’s Witnesses, 541 S.W.2d 121, 124 (Tenn. 1976).3 If a property
owner has failed to pay taxes, the government will file suit to collect them, see Tenn.
Code Ann. § 67-5-2405, and if taxes remain unpaid, the court has the authority to sell the
property. See Tenn. Code Ann. §§ 67-5-2005, 2501.
The procedure for notifying parties when their property is sold by court decree is
stated in Tenn. Code Ann. § 67-5-2502 (2008).4 In the event of a sale under a decree of
the court, notice of the sale “is governed by the Tennessee Rules of Civil Procedure, and
may be forwarded to the address of an owner of the property that is on record in the
3
Subsequent cases have held that the knowledge that taxes are due or delinquent is not the same
as notice that a tax sale is pending for purposes of due process. See Jones v. Flowers, 547 U.S. 220, 232-
33 (2006) (quoting Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 800 (1983)). Marlowe has been
overruled to the extent it held that publication notice alone is constitutionally adequate in the context of a
proceeding to enforce a tax lien. See Wilson v. Blount County, 207 S.W.3d 741, 747 (Tenn. 2006);
Sunburst Bank v. Patterson, 971 S.W.2d 1, 4-5 (Tenn. Ct. App. 1997). However, Marlowe was correct
that taxpayers cannot avoid paying taxes simply because they did not receive notice that taxes were owed.
To his credit, Defendant has not argued that lack of notice eliminated his responsibility to pay taxes.
4
We cite to the 2008 version of the statute because the tax sale in this case occurred in 2008.
While the statute has been amended since 2008, the quoted portions have remained the same.
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office of the assessor of property.” Tenn. Code Ann. § 67-5-2502(a)(3) (2008). As the
statute makes clear, “[i]t is the responsibility of the property owner to register the
property owner‟s name and address with the assessor of property of the county in which
the land lies.” Tenn. Code Ann. § 67-5-2502(b) (2008). Registration of the property
owner‟s name and address with the assessor of property is generally done by including
such information in the deed by which the person acquires the property.
The foregoing notwithstanding, before taking an action that will affect an interest
in property protected by the Due Process Clause of the Fourteenth Amendment, a state
must attempt to provide notice to the parties involved. See Mennonite Bd. of Missions v.
Adams, 462 U.S. 791, 795 (1983) (quoting Mullane v. Cent. Hanover Bank & Trust Co.,
339 U.S. 306, 314 (1950)). In a tax sale, the government must provide notice by mail “or
other means as certain to ensure actual notice . . . if [the party‟s] name and address are
reasonably ascertainable.” Id. at 800; see Wilson v. Blount County, 207 S.W.3d 741, 750
(Tenn. 2006). However, “[d]ue process does not require that a property owner receive
actual notice before the government may take his property.” Jones v. Flowers, 547 U.S.
220, 226 (2006) (citing Dusenbery v. U.S., 534 U.S. 161, 170 (2002)). Instead, due
process requires “notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action . . . .” Id. (quoting Mullane, 339 U.S. at
314); see Wilson, 207 S.W.3d at 749-50 (“To be clear, due process does not require that a
party receive actual notice; it requires only that the government choose a method of
notification that is reasonably calculated to provide notice.”) (emphasis in original).
“[T]he proper inquiry is whether the government took such actions to notify the party as
are „reasonably calculated to apprise him‟ of the proceeding.” Wilson, 207 S.W.3d at 750
(quoting Mullane, 339 U.S. at 314).
In certain circumstances, governments are required to take “additional reasonable
steps” to contact a party after the government has already attempted to provide notice.
See Jones, 547 U.S. at 225-26. Depending on the situation, these steps may include
resending notice by regular mail; posting notice on the intended recipient‟s front door; or
addressing otherwise undeliverable mail to “occupant.”5 See id. at 234-35. However,
these steps are only required if the government receives new information indicating its
initial attempt at notice has failed. See id. at 226, 229-30. In all other situations, when the
government has attempted to provide notice and “heard nothing back indicating that
anything had gone awry,” the notice is constitutionally sufficient if it was “reasonably
calculated to reach the intended recipient when sent.” See id. at 226. Therefore, parties
5
Notably, even Jones does not consider open-ended searches of public records to be a reasonable
step for attempting to notify a party. See Jones, 547 U.S. at 235-36. While the current version of Tenn.
Code Ann. § 67-5-2502(c) requires “a reasonable search of the public records in the offices of the
assessor of property, trustee, the register of deeds and the local office where wills are recorded” – and
there is some indication that such a search was conducted here – it is not clear that due process requires
the government to search through public records even when it knows that its first mailed notice has
returned “unclaimed.” See Jones, 547 U.S. at 235-36.
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cannot claim that the government was required to take additional steps to notify them
without also showing that the government knew those steps were necessary.
In his response, Defendant produced evidence that he did not know that the 2008
tax sale had occurred until February 2010; however, significantly, he has not argued that
Metro made no attempt to notify him at 1000 Cahal Avenue, and he has failed to produce
any evidence that Metro was required to take the additional step of notifying him at
another address.
While Defendant‟s pleadings and arguments are replete with references to due
process violations and the failure to provide notice, these references are not sufficient to
raise a genuine dispute of material fact. A party opposing a motion for summary
judgment cannot rely on statements in its pleadings to raise a genuine dispute of material
fact. See Tenn. R. Civ. P. 56.03; Byrd, 847 S.W.2d at 214-15; Price, 682 S.W.2d at 929.
Thus, any assertions or denials found only in Defendant‟s Answer are not sufficient to
demonstrate the existence of a dispute of material fact.
The foregoing notwithstanding, Defendant properly relies on discovery responses
in his effort to create a dispute of a material fact; however, viewing these facts in the light
most favorable to Defendant, they demonstrate only that Defendant did not learn of the
2008 sale until after it occurred. They do not demonstrate that Metro received
information that an attempt to notify Defendant at the 1000 Cahal Avenue address failed.
See Jones, 547 U.S. at 226, 229-30. As a result, these facts do not establish that Metro
was required to take the additional step of attempting to notify Defendant of the sale at
another address. See id.
We acknowledge that Defendant filed records from a tax lien inquiry indicating
that a real estate loan services company had searched public records, discovered his home
address, and provided it to Metro prior to the 2008 sale; however, this merely provided
Metro with knowledge that Defendant owned property with a different address from the
one that specified in the 2006 Warranty Deed, which instructed that tax notices be sent to
Defendant at “1000 West Cahal Avenue.” Metro‟s knowledge that Defendant owned
other property does not establish that Metro was required to notify Defendant at that
address unless Defendant can also establish that Metro knew it failed to notify Defendant
at the address he specified was for tax notices.
Defendant never argued that Metro did not attempt to send him notice at 1000
Cahal Avenue. Instead, he argued that his due process rights were violated when Metro
failed to send notice of the tax sale to his home address. We are not persuaded by this
argument because sending notice of a tax sale to the address the property owner has
designated is “reasonably calculated” to apprise the property owner of the pending tax
sale. See Wilson, 207 S.W.3d at 750. Contrary to Defendant‟s contention, Metro was not
required to take additional steps to notify Defendant unless it learned that an otherwise
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reasonably calculated attempt to notify Defendant had failed. See Jones, 547 U.S. at 226.
Defendant has not demonstrated that an attempt to notify him at 1000 Cahal Avenue
failed. Therefore, Defendant has failed to raise a genuine dispute of material fact
regarding the notice at issue, and the trial court properly granted Plaintiff‟s motion for
summary judgment in this case.
IN CONCLUSION
The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against Defendant, Lucien C. Worsham.
______________________________
FRANK G. CLEMENT, JR., JUDGE
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