Unity Non-Denominational Church v. Vincennes Corporation (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Mar 13 2018, 8:53 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Douglas M. Grimes Michael D. Kvachkoff
Douglas M. Grimes, PC Crown Point, Indiana
Gary, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Unity Non-Denominational March 13, 2018
Church, Court of Appeals Case No.
Appellant-Petitioner, 45A05-1708-MI-1834
Appeal from the Lake Circuit
v. Court
The Honorable Marissa J.
Vincennes Corporation, McDermott, Judge
Appellee-Respondent. The Honorable Stephen E.
Scheele, Magistrate
Trial Court Cause No.
45C01-1207-MI-118
Bailey, Judge.
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Case Summary
[1] Unity Non-Denominational Church (“Unity”) appeals an order granting
Vincennes Corporation’s (“Vincennes”) motion for relief from a judgment
pursuant to Indiana Trial Rule 60(B). We affirm.
Issues
[2] Unity presents two issues for review:
I. Whether the trial court abused its discretion in finding that
the motion was filed within a reasonable time as required
by Trial Rule 60(B); and
II. Whether the trial court properly set aside Unity’s tax deed
due to insufficient notice.
Facts and Procedural History
[3] Vincennes owned multiple properties in Gary, Indiana, including a parcel
commonly known as 637 E. Ridge Road (“the Property”). Vincennes became
delinquent in the payment of its taxes for the Property and the Lake County
Auditor obtained a judgment against Vincennes. The lien was sold to the Lake
County Commissioner and the Property was offered at a subsequent tax sale.
On April 25, 2013, Unity paid $800.00 to purchase a tax sale certificate for the
Property.
[4] The pastor of Unity, the Reverend Randy Lewis Barry, Sr. (“Reverend Barry”),
took sole responsibility for handling the transaction on behalf of his church. He
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did not seek legal advice and he did not conduct a title search; however, he was
aware that he needed to provide notice to the owner of the Property.
[5] Approximately one month after the sale of the tax certificate, on May 24, 2013,
an error was made in the Lake County - Calumet Township Auditor’s Office
(“Auditor’s Office”), assigning an incorrect address to the Property.1 This
address, on Kildare Avenue in Skokie, Illinois, was made available to Reverend
Barry on a Lake County tax bill record pertaining to the Property.
[6] On June 14, 2013, using the address erroneously assigned by the Auditor’s
Office, Reverend Barry mailed a notice addressed to Vincennes at the Kildare
address. The owner of the Kildare property was a tax sale purchaser of other
properties who was completely unaffiliated with Vincennes. He signed a
receipt for the mail delivered to the Kildare property and the receipt was
returned to Unity. The redemption period expired on August 23, 2013.
[7] According to Reverend Barry, on September 23, 2013, he mailed a Notice of
Filing of Petition for Tax Deed to Vincennes at a post office box in Skokie,
Illinois. The post office box was known to Reverend Barry because Unity had
rented a different property from Vincennes for three years and had mailed rent
1
The tax sale supervisor explained as follows: “when they transferred [another buyer’s] address to this 8833
Kildare Avenue he, it aut, [sic] the system automatically changes all of those properties that are familiar with
that, with the key number. It gives us as, [sic] would you like to transfer all these properties and gives you a
list of properties. And at the time in 2013 it gives us the date when it was transferred in, by whom it was
transferred. [Employee] transferred it and clicked yes and this happened to be one of the key numbers that
were involved in all of the group of key numbers by [another buyer]. So, it automatically transferred [another
buyer]’s information to the address, the mailing address to this particular property.” (Tr., Vol. I, pg. 111.)
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payments there. Vincennes’ vice president, Swedelana Dass (“Dass”), signed a
certified mailing receipt corresponding to that date. However, she claimed that
no statutory notice of the petition for a tax deed was inside and that she had
never received notice of a hearing date.
[8] On October 8, 2013, Unity filed a Petition for Order of Tax Deed for the
Property. The petition was granted on January 10, 2014, and a tax deed was
issued to Unity.
[9] On March 16, 2016, Unity recorded its tax deed.2 On August 5, 2016,
Vincennes filed its Motion to Set Aside an Order to Issue a Tax Deed, claiming
that it first had notice of the tax sale when the tax deed for the Property was
recorded.
[10] On June 13 and July 6, 2017, the trial court conducted a hearing on the motion
to set aside. Gina Scheidt (“Scheidt”), a tax sale supervisor for the Lake
County Auditor’s Office, Dass, and Reverend Barry each testified. After the
hearing, the trial court took the matter under advisement.
2
Reverend Barry explained that the delay in recording the deed was attributable to the need for the church to
raise approximately $10,000 in taxes due after the purchase of the tax certificate. Reverend Barry had some
awareness of the possibility of petitioning for a tax exemption, but Unity had not applied for and obtained
any tax exemption. By the time that the $10,000 in delinquent taxes were paid, the Property was being
offered at a subsequent tax sale. Apparently, by the time of the hearing upon Vincennes’ petition for relief,
the Property was once again in jeopardy of sale for delinquent taxes.
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[11] On July 11, 2017, the trial court issued its “Order Granting Respondent’s
Motion to Set Aside an Order to Issue a Tax Deed and Denying Petition for
Tax Deed.” (Appealed Order at 1.) Unity now appeals.
Discussion and Decision
Standard of Review
[12] Indiana Code Section 6-1.1-25-16 sets forth the proof required to defeat a tax
title. In relevant part, it provides:
A person may, upon appeal, defeat the title conveyed by a tax
deed executed under [Indiana Code Section 6-1.1-25-4] only if:
…
(7) the notices required by [Indiana Code] 6-1.1-24-2, 6-1.1-24-4,
and sections 4.5 and 4.6 of this chapter were not in substantial
compliance with the manner prescribed by those sections.
[13] A tax deed can be appealed by either an independent action or by a motion
pursuant to Trial Rule 60(B). Groome v. Donlin Corp., 908 N.E.2d 330, 334 (Ind.
Ct. App. 2009). Vincennes’ motion did not expressly identify a trial rule
provision upon which relief was sought; however, Vincennes argued that the
tax deed granted to Unity should be set aside pursuant to Trial Rule 60(B)(8),
which provides in pertinent part:
On motion and upon such terms as are just the court may relieve
a party … from an entry of default, final order or final judgment,
including a judgment by default for the following reasons: …
any reason justifying relief from the operation of the judgment,
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other than those reasons set forth in sub-paragraphs (1), (2), (3),
and (4).
Trial Rule 60(B) requires that a motion filed under subsection (8) be filed within
a reasonable time and that the movant must allege a meritorious claim or
defense.3
[14] A motion for relief from judgment is addressed to the equitable discretion of the
trial court, circumscribed by the eight categories of Trial Rule 60(B). Lee v.
Pugh, 811 N.E.2d 881, 887 (Ind. Ct. App. 2004). In general, the decision of
whether to grant or deny a Trial Rule 60(B) motion for relief from judgment is
within the sound, equitable discretion of the trial court. Stonger v. Sorrell, 776
N.E.2d 353, 358 (Ind. 2002). However, if it is necessary to interpret a statute to
determine compliance with the statutory tax sale scheme, a question of law is
raised, to be reviewed de novo. Badawi v. Orth, 955 N.E.2d 849, 852 (Ind. Ct.
App. 2011).
3
A panel of this Court has previously stated that the proper procedure for appealing the issuance of a tax
deed is found in Trial Rule 60(B)(6), which provides for setting aside a judgment that is void. Kessen v. Graft,
694 N.E.2d 317, 320 (Ind. Ct. App. 1998). In his dissent, however, Judge Garrard raised concern about an
interchangeable use of “void” and “voidable” to refer to judgments. See id. at 321. He observed in relevant
part that, “If an instrument or judgment is void, it is of no effect whatever and is subject to collateral attack at
any time. On the other hand, if an instrument or judgment is merely voidable, its deficiencies may be waived
and it is subject only to direct, and not collateral, attack.” Id. Judge Garrard suggested a construction of
Trial Rule 60(B)(6) such as to apply it to either void or voidable judgments. To date, subsection (B)(6)
includes only the language: “the judgment is void.”
In Standard Lumber Co. of St. John v. Josevski, 706 N.E.2d 1092, 1095 (Ind. Ct. App. 1999), we acknowledged,
“To succeed under T.R. 60(B)(6), the petitioner must show that the judgment is void not merely voidable.”
We then observed “[n]evertheless, a voidable judgment would still qualify under T.R. 60(B)(8) even if it did
not fall under T.R. 60(B)(6).” Id. at 1096.
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Analysis
Reasonableness
[15] Unity observes that Vincennes did not appeal within sixty days of the tax deed
issuance, as prescribed by Indiana Code Section 6-1.1-25-4.6(l):
A tax deed issued under this section is incontestable except by
appeal from the order of the court directing the county auditor to
issue the tax deed filed not later than sixty (60) days after the date
of the court’s order.
Unity then argues that, if the sixty-day limit is inapplicable, Vincennes did not
file its motion within a reasonable time, pursuant to Trial Rule 60(B).
[16] “Since an appeal to a tax deed can be filed through either an independent action
or a motion pursuant to T.R. 60(B), both remedies are subject to the same sixty-
day time frame[.]” B P Amoco Corp. v. Szymanski, 808 N.E.2d 683, 690 (Ind. Ct.
App. 2004), trans. denied. However, “[a]n exception exists where a motion for
relief from judgment alleges a tax deed is void due to constitutionally
inadequate notice, in which case an appeal must be brought within a reasonable
time rather than within sixty days.” Diversified Investments, LLC v. U.S. Bank,
NA, 838 N.E.2d 536, 545 (Ind. Ct. App. 2005), trans. denied.
[17] The determination of what constitutes a reasonable time varies according to the
circumstances of each case. Neace v. Gupta (In re Tax Sale No. 24006-001-0022-
01), 898 N.E.2d 349, 354 (Ind. Ct. App. 2008). Prejudice to the party opposing
the motion and the reasons for the moving party’s delay are relevant to the
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question of timeliness. Id. “We have previously found that a delay of over four
months to challenge the tax deed after it was issued was a reasonable time to
bring the challenge.” Id. (citing Diversified Invs., 838 N.E.2d at 545)). We have
also found that “[a] reasonable time within which to file a Trial Rule 60(B)
motion can even exceed one year.” Id. (citing Standard Lumber Co. of St. John,
Inc. v. Josevski, 706 N.E.2d 1092, 1096 (Ind. Ct. App. 1999)).
[18] There was evidence before the trial court that Vincennes had no knowledge of
the tax sale before the tax sale deed was recorded on March 16, 2016. Less
than five months later, Vincennes filed its motion to set aside. Unity did not
identify prejudice suffered as a result of that five-month delay. The trial court
acted within its discretion to find that the motion to set aside was filed within a
reasonable time. See, e.g., Kessen v. Graft, 694 N.E.2d 317, 321 (Ind. Ct. App.
1998) (appeal of order issuing a tax deed was filed within a reasonable time
where a party filed its action within six months of discovering the existence of
the tax sale deed).
Set Aside for Lack of Notice
[19] Unity asserts that it provided notices that comported with due process and
materially complied with statutory requirements and thus, the trial court erred
in setting aside the tax deed.
[20] A tax sale proceeding must satisfy the due process requirements of the United
States Constitution; accordingly, notice must be given before one is deprived of
a property interest. Lindsey, 988 N.E.2d at 1209. “The United States Supreme
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Court has held that a state must provide ‘notice reasonably calculated, under all
the circumstances, to apprise interested parties of the pendency of the action’
prior to taking steps which will affect a protected interest in life, liberty, or
property.” Smith v. Breeding, 586 N.E.2d 932, 936 (Ind. Ct. App. 1992) (quoting
Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983)). Notice is
constitutionally adequate when “the practicalities and peculiarities of the case
… are reasonably met.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S.
306, 314 (1950).
[21] A tax sale is purely a statutory creation. Swami, Inc. v. Lee, 841 N.E.2d 1173,
1178 (Ind. Ct. App. 2006), trans. denied. As such, material compliance with
each step of the statute is required. Id.
[22] The Indiana Supreme Court summarized the procedures for obtaining a tax
deed in Tax Certificate Investments, Inc. v. Smethers:
A purchaser of Indiana real property that is sold for delinquent
taxes initially receives a certificate of sale. A one-year
redemption period ensues. If the owners fail to redeem the
property during that year, a purchaser who has complied with the
statutory requirements is entitled to a tax deed. The property
owner and any person with a “substantial property interest of
public record” must each be given two notices.
The first notice announces the fact of the sale, the date the
redemption period will expire, and the date on or after which a
tax deed will be filed (i.e., redemption notice). The second notice
announces that the purchaser has petitioned for a tax deed (i.e.,
notice of petition for tax deed).
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714 N.E.2d 131, 133 (Ind. 1999) (internal citations omitted).
[23] At the time of the tax sale here at issue, Indiana Code Section 6-1.1-25-4-5(c)
provided for 90 days notice to the owner of record and any person with a
substantial property interest of public record:
A purchaser of a certificate of sale … is entitled to a tax deed to
the property for which the certificate was sold only if: … not later
than ninety days after the date of the sale … the purchaser gives
notice of the sale to:
(A) the owner of record at the time of the sale; and
(B) any person with substantial property interest of public record
in the tract or real property.
This statute entitles a purchaser to a tax deed only where proper notice is given.
Diversified, 838 N.E.2d at 540.
[24] If a minimum bid is not forthcoming within the statutorily prescribed period,
the county acquires a lien on the property in the amount of the minimum sale
price. Ind. Code § 6-1.1-24-6(a). A tax certificate is issued, and the redemption
period begins to run. I.C. § 6-1.1-25-4. If proper notice has been given and the
relevant period expires without redemption, the tax sale certificate is exchanged
for a tax deed. I.C. § 6-1.1-25-4.5(a). However, the title conveyed by a tax deed
may be defeated if the notices were not in substantial compliance with the
manner prescribed by applicable statutes. IEMMA v. JP Morgan Chase Bank,
N.A., 992 N.E.2d 732, 738 (Ind. Ct. App. 2013).
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[25] Vincennes argued that Unity’s tax sale deed should be set aside because
Vincennes was provided no notice before the recording of the tax deed. Unity
contends that Vincennes should not have prevailed upon this argument in the
trial court, and points to evidence suggesting that Reverend Barry, on behalf of
Unity, mailed a notice of petition for tax deed to a viable post office box.
[26] Our tax sale statutes do not specifically require that notices must, in fact, be
received. Gupta v. Busan, 5 N.E.3d 413, 416 (Ind. Ct. App. 2014). Unity
submitted into evidence a post office return receipt for an item of certified mail
sent to Vincennes by Unity. Dass identified as her own the signature on the
receipt. At the same time, Dass testified that Vincennes received no notice
prior to the end of the redemption period. The parties alluded to or argued
three possible explanations: the corresponding envelope was empty, the
envelope contained correspondence pertaining to an unrelated rental property
occupied by Unity, or the envelope contained a statutory notice related to the
Property. At bottom, however, the testimony pertaining to the envelope
contents was Reverend Barry’s assertion that it contained a statutory notice and
Dass’s assertion that it did not contain a statutory notice, raising an inference
that one was never sent. The trial court credited Dass’s testimony on this
matter. We are not in a position to reweigh the evidence or judge witness
credibility. Gates v. Houston, 897 N.E.2d 532, 535 (Ind. Ct. App. 2008).
[27] Moreover, even had the trial court found that one notice was properly provided,
it could have found a lack of material compliance as a whole. Unity made
some attempt, partially in reliance upon mistaken information from the
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Auditor’s office, to notify Vincennes of the tax sale proceedings. The first
notice was sent based upon an address added to the Auditor database one
month after sale. Had Unity provided notice at the time of the sale, the correct
address would have been available. Moreover, at all relevant times, Unity had
a current address for Vincennes because of the pre-existing landlord-tenant
relationship.4 Reverend Barry first chose to use that address in connection with
the Property after the redemption period expired. Even so, there is evidence
that Vincennes did not receive a statutory notice on or near the claimed mailing
date and, indeed, learned nothing of the tax sale before the tax deed was
recorded.
[28] Our Indiana Supreme Court has observed that notice attempts must be
“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]” in order to be constitutionally sufficient. Marion Cty. Auditor v.
Sawmill Creek, LLC, 964 N.E.2d 213, 219 (Ind. 2012) (emphasis in original)
(citing Mullane, 339 U.S. at 314). Here, one circumstance peculiar to the parties
is the three-year landlord-tenant relationship. The notice provided by Unity fell
short of adequate notice to Vincennes to reasonably meet “the practicalities and
peculiarities of the case.” Mullane, 339 U.S. at 314-15. The trial court properly
determined a lack of compliance with statutory and due process requirements.
4
It is unclear when the landlord-tenant relationship ended. Dass testified that Vincennes and Unity had been
involved in eviction proceedings regarding two properties other than the Property.
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Conclusion
[29] The trial court did not abuse its discretion in treating the motion for relief as
timely filed. The tax deed was obtained without providing notice that was
constitutionally sufficient for the circumstances. Accordingly, the trial court
properly granted Trial Rule 60(B) relief to Vincennes and set aside Unity’s tax
deed.
[30] Affirmed.
Kirsch, J., and Pyle, J., concur.
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