City of Horn Lake, Mississippi v. Sass Muni-V, LLC

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2016-CA-00823-SCT
CONSOLIDATED WITH
NO. 2013-CA-01490-SCT
CITY OF HORN LAKE, MISSISSIPPI, JOEY
TREADWAY, TAX COLLECTOR OF DeSOTO
COUNTY; PARKER PICKLE, TAX ASSESSOR OF
DeSOTO COUNTY; W.E. DAVIS, DeSOTO
COUNTY CHANCERY CLERK; AND DeSOTO
COUNTY, MISSISSIPPI
v.
SASS MUNI-V, LLC
DATE OF JUDGMENT: 05/02/2016
TRIAL JUDGE: HON. MITCHELL M. LUNDY, JR.
TRIAL COURT ATTORNEYS: JOSEPH DAVID NEYMAN, JR.
RAYMOND SPENCER CLIFT, III
SHANNON LORENE WILEY
COURT FROM WHICH APPEALED: DeSOTO COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS: BILLY C. CAMPBELL, JR.
ROBERT E. QUIMBY
ATTORNEY FOR APPELLEE: LEWIE G. “SKIP” NEGROTTO, IV
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: AFFIRMED - 06/07/2018
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE KITCHENS, P.J., KING AND COLEMAN, JJ.
COLEMAN, JUSTICE, FOR THE COURT:
¶1. The City of Horn Lake and DeSoto County filed the present appeal after the DeSoto
County Chancery Court granted Sass Muni-V, LLC’s (Sass Muni’s) motion for summary
judgment. The result of the chancery court’s decision voided a 2008 tax sale at which Sass
Muni purchased some property in DeSoto County and also refunded Sass Muni the purchase
price of $530,508. Due to the clear and unambiguous language of Mississippi Code Section
27-43-3, the chancery clerk’s failure to give proper notice of the tax sale renders the sale
void. Therefore, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2. For the year 2007, the City and County levied taxes on a piece of property located in
DeSoto County in the amount of $520,508. When the property owners did not pay the taxes,
the property was offered for a tax sale by public auction on August 25, 2008. Sass Muni was
the successful bidder for the property with a bid of $530,508. The two-year redemption
period expired without the prior owners redeeming the property. However, a year after the
redemption period expired, Sass Muni filed its complaint in the DeSoto County Chancery
Court, asking for the tax sale to be declared void and for the purchase price to be refunded.
¶3. The City and the County filed motions to dismiss, and the chancery court granted the
motions because Sass Muni lacked standing to challenge the tax sale and on the principle of
caveat emptor. Sass Muni appealed the chancery court’s judgment; we subsequently issued
a unanimous opinion reversing the chancery court’s judgment. SASS Muni-V, LLC v.
DeSoto Cty., 170 So. 3d 441, 449 (¶ 24) (Miss. 2015). The Court wrote that “[t]his Court
has never addressed whether a party who is not entitled to notice– SASS, in this case–may
nevertheless challenge the validity of the tax sale based on lack of notice to another party.”
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Id. at 446 (¶ 15). The Court went on to say that “SASS simply challenges the chancery
clerk’s actual compliance with the notice procedure required by law. The chancery clerk’s
failure to comply with the notice requirements renders the sale void, not simply voidable by
the property owner, and the commencement of a cause of action is not even necessary to set
aside the sale.” Id. at 448 (¶ 18). The Court held that Sass Muni did have standing because
“SASS’s interest in the validity of its title to the property gives it standing to challenge the
chancery clerk’s compliance with the notice statutes.” Id. at 449 (¶ 21). Finally, the Court
held:
SASS, as the purchaser of the property in question at a tax sale, has standing
to bring a suit to set aside the sale due to the chancery clerk’s failure to comply
with the tax-sale notice statutes. In addition, the doctrine of caveat emptor
does not bar SASS’s suit, as the tax-sale statutes specifically provide for the
remedy SASS seeks.
Id. at 449 (¶ 24).
¶4. On remand, the parties filed dueling motions for summary judgment, and the chancery
court heard oral arguments on the motions. In its written opinion, the chancery court quoted
our opinion, in which we stated that “[t]he chancery clerk’s failure to comply with those
requirements renders the sale void, not simply voidable by the property owner, and the
commencement of a cause of action is not even necessary to set aside the sale.” Sass Muni-
V, LLC v. DeSoto Cty., 170 So. 3d at 448 (¶ 18). The chancery court explained that Sass
Muni was entitled to receive the same strict construction of the statutes related to tax-sale
notice requirements that landowners and lienholders receive, which requires the sale to be
void upon “[a]ny deviation” from the statutes. The chancery court held:
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Therefore, because the attempted notice by mail is void for failure of the Clerk
to properly notate the tax book, the record is void of any personal or
publication service even if MIC-Rocky, LLC is the proper owners to when
[sic] service was to be made, and/or the Clerk failed to provide notice of the
end of the redemption period and the tax sale in question is void.
The chancery court entered a judgment granting Sass Muni’s motion for summary judgment
and ordered that the sale be voided.
¶5. The City and County timely filed their notices of appeal in June 2016. The chancery
clerk filed an amended notice of completion of the record on June 20, 2016, and transmitted
the record to the Court on June 30, 2016. Displeased with the lack of time given for it to
review the record, Sass Muni filed a motion for time to review the appeal record and to stay
the transmission of the record to the Court and for the Court to stay the briefing schedule.
Neither the City nor the County opposed the motion. The Court granted the motion and
ordered that the record be returned to DeSoto County Chancery Court with Sass Muni having
until August 9, 2016, to examine the record and until August 22, 2016, to file any motions
under Mississippi Rule of Appellate Procedure 11(f).
¶6. Sass Muni filed nothing until September 2016, when it filed a motion to correct the
judgment, claiming clerical errors were made in the chancery court’s judgment pursuant to
Mississippi Rule of Appellate Procedure 10(e). Sass Muni’s attorney was responsible for
drafting the judgment initially and now claimed that, in drafting the judgment, he failed to
include that the notice by mail was void for the clerk’s failure to make a notation in the tax
book. Importantly, the judgment did not include a statement that Sass Muni should be
refunded the purchase price. The City and County both objected to the changes, citing the
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untimeliness of the motion and the chancery court’s lack of jurisdiction.
¶7. The chancery court granted Sass Muni’s motion to correct the judgment and
supplement the record with the amended judgment and the transcript of the summary
judgment hearing, which also was part of Sass Muni’s motion. The appeal then proceeded
in typical course.
¶8. In their joint brief, the City and the County raise two issues for review:
I. Whether Sass Muni-V, LLC’s cause of action to set aside its own tax
sale purchase on grounds that the Chancery Clerk failed to provide
notice of the expiration of the two-year redemption period to the
landowner is rendered moot when the landowner waives notice of the
expiration of the two-year redemption period.
II. Whether the Chancery Court had jurisdiction to amend the Judgment.
STANDARD OF REVIEW
¶9. Mississippi Rule of Civil Procedure 56(c) states that the trial court shall grant
summary judgment “if the pleadings, depositions, answers to interrogatories and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of law.” The
Court reviews a trial court’s decision to grant summary judgment using the de novo standard.
Carter v. Miss. Dep’t of Corrections, 860 So. 2d 1187, 1190 (¶ 10) (Miss. 2003).
ANALYSIS
I. WAIVER
¶10. According to Mississippi Code Section 27-43-1, a chancery court clerk “shall, within
one hundred eighty (180) days and not less than sixty (60) days prior to the expiration of the
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time of redemption with respect to land sold . . . be required to issue notice to the record
owner of the land sold . . . .” Miss. Code Ann. § 27-43-1 (Rev. 2017). Then, “Section 27-
43-3 requires redemption notice to be given by personal service, by mail, and by publication
in an appropriate newspaper.” DeWeese Nelson Realty, Inc. v. Equity Servs. Co., 502 So.
2d 310, 312 (Miss. 1986). Section 27-43-3 also provides: “Should the clerk inadvertently fail
to send notice as prescribed in this section, then such sale shall be void and the clerk shall
not be liable to the purchaser or owner upon refund of all purchase money paid.”
¶11. The City and County conceded that the chancery clerk’s notice contained a defect.
The crux of the City and County’s appeal is that MIC-Rocky, LLC, waived any defects in the
notice, so any issue with the chancery clerk’s failure to satisfy the notice requirements is
immaterial. According to the brief:
The entirety of Sass Muni’s case turns on allegations that the Chancery Clerk
failed to provide the statutorily-required notice of the expiration of the
redemption period to the landowner/lienor. However, throughout the case, the
landowner/lienor have repeatedly stated they are making “no claims of
improper notice . . .” and “do not contest notice.” To avoid all doubt, the
landowner/lienor filed a Notice of Waiver, indicated they “have waived any
and all notices of expiration of the redemption period provide[d] by Miss.
Code Ann. [section] 27-43-1 et seq.”
The City and County primarily rely upon the 1909 case of McClendon v. Whitten, 95 Miss.
124, 48 So. 964, 965 (1909). In McClendon, the property owner was listed as Mitchell &
McClendon, a mercantile firm, and Mitchell received verbal notice that a tax sale of the
property was going to occur, but he never received any notice as required by the statute. Id.
Also, McClendon never received any notice of the tax sale at all. Id. The Court explained:
“It is not pretended that the clerk attempted any sort of compliance with the requirements of
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this [notice] statute.” Id. Further, the notice statute was “designed to bring positive and
direct notice to a defaulting taxpayer, within a short time before the maturing of the tax title,
that it is outstanding and will soon mature into a perfect title, so as to enable him to redeem.
The statute is a most wholesome one, and should be strictly observed.” Id. Important to the
City and County’s argument is the following statement: “Liability under this statute for actual
damages can be escaped only by a compliance with the statute, by giving written notice as
required, unless the defaulting taxpayer waives the notice.” Id. (emphasis added).
¶12. On the other hand, Sass Muni argues that waiver has no relevance in the present case
because “though Mic-Rocky may have waived its right to notice, only Sass [Muni] can
knowingly and voluntarily waive its right to challenge the chancery clerk’s action regarding
the 2008 tax sale.” Sass Muni also argues that the Court’s prior opinion is the law of the
case and relies upon the Court’s language in paragraph 18 to support the position that
summary judgment was appropriate. In paragraph 18, the Court stated: “The chancery
clerk’s failure to comply with those requirements renders the sale void, not simply voidable
by the property owner, and the commencement of a cause of action is not even necessary to
set aside the sale.” Sass Muni, 170 So. 3d at 448 (¶ 18). However, we find no merit in the
argument because the Court specifically stated that “[w]hether the tax sale was actually void
under those same statutes is not an issue before this Court.” Therefore, the law-of-the-case
doctrine cannot apply because the Court did not address whether the tax sale was void, only
whether Sass Muni had standing to challenge the sale.
¶13. While our prior opinion did not address whether the tax sale was void, the issue is now
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before us, and we hold that the tax sale was void ab initio due to the chancery clerk’s failure
to comply fully with the statutory notice requirements. Section 24-43-3 provides: “Should
the clerk inadvertently fail to send notice as prescribed in this section, then sale shall be void
and the clerk shall not be liable to the purchaser or owner upon refund of all purchase money
paid.” (Emphasis added.) Both we and the Mississippi Court of Appeals have interpreted
Section 27-43-3 to mean that failure to comply strictly with the notice requirements renders
the purchaser’s tax deed void, with no legal effect, and not simply voidable. See Hart v.
Catoe, 390 So. 2d 1001, 1003 (Miss. 1980) (“Essential mandates of the statute were not
followed and the failure so to do renders the tax deed to appellant void.”); C.F.P. Props.,
Inc. v. Roleh, Inc., 56 So. 3d 575, 577 (Miss. Ct. App. 2010) (“It is undisputed that there is
no affidavit regarding the act of diligent search and inquiry . . . . This omission renders the
tax deed void.”); Lawrence v. Rankin, 870 So. 2d 673, 676 (Miss. 2004) (“The failure of the
supporting affidavit renders the tax deed to Lawrence void.”). As the Court of Appeals has
put it, a tax sale that does not meet the requirements of Section 27-43-3 is void ab initio.
Cleveland v. Deutche Bank Nat’l Trust Co., 207 So. 3d 710, 718 (Miss. Ct. App. 2016)
(“We find no error in the chancellor’s determination that the tax sale was void ab initio based
on the failure to provide proper statutory notice to Lewis . . . .).
¶14. We do not find the City and County’s waiver argument and reliance on McClendon
to be persuasive. McClendon is inapplicable to the case sub judice, because the statute at
issue in McClendon specifically provided that failure to provide notice to the property owner
did not affect the validity of the tax sale. See Miss. Code § 4333 (1906). (“[N]or shall a
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failure to give the notice required by this act affect or render the title void.”). Here, on the
other hand, Section 27-43-3 unambiguously states that failure to provide the requisite notice
to the property owner renders the sale void. Further, Section 27-43-3 gives the property
owner a right to notice of the expiration of the redemption period prior to the tax sale.
Without the notice, a valid sale cannot occur. To modify the existing rights, the property
owner must relinquish the right to notice before the property is sold. Otherwise, the plain
language of Section 27-43-3 controls, and the chancery clerk’s failure to provide the requisite
notice renders the tax sale void. In the instant case, the record indicates that the property
owner attempted to waive the requirements of Section 27-43-3 only after Sass Muni brought
suit to void the tax sale and obtain a refund. The property owner’s belated attempt to disclaim
its interest in the property cannot cure the fact that Sass Muni’s tax deed has been void since
the time of the tax sale.
II. AMENDED JUDGMENT
¶15. In the City and County’s second issue, the argument is that the chancery court lacked
the jurisdiction to amend the judgment, drafted originally by Sass Muni’s own attorney,
which left out several points that were included in the chancery court’s written opinion,
importantly that Sass Muni be refunded the purchase price. According to the City and
County, the chancery court entered its judgment on May 4, 2016, and the City and County
filed notices of appeal in early June 2016. Then, it was not until September 2016 that Sass
Muni filed a Motion to Correct and Include Hearing Transcript in Appeal Record and
Supporting Authority. The City and County submit that the only avenue for chancery court
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to review the motion was Mississippi Rule of Civil Procedure 60, and in Marter v. Marter,
95 So. 3d 733, 740 (Miss. Ct. App. 2012), the Court of Appeals held that the chancery court
lacks jurisdiction to grant Rule 60 relief when the Rule 60 motion is filed more than ten days
after entry of the judgment and a notice of appeal has been filed.
¶16. However, Sass Muni did not file its motion under Rule 60. Instead, in its motion, it
argued that, pursuant to Mississippi Rule of Appellate Procedure 10(e), the judgment should
be corrected to reflect the portion of the chancery court’s opinion that inadvertently had been
left out of the judgment by its attorney. Rule 10(e) provides
If any difference arises as to whether the record truly discloses what occurred
in the trial court, the difference shall be submitted to and settled by that court
and the record made to conform to the truth. If anything material to either party
is omitted from the record by error or accident or is misstated in the record, the
parties by stipulation, or the trial court, either before or after the record is
transmitted to the Supreme Court or the Court of Appeals, or either appellate
court on proper motion or of its own initiative, may order that the omission or
misstatement be corrected, and, if necessary, that a supplemental record be
filed. Such order shall state the date by which the correction or supplemental
record must be filed and shall designate the party or parties who shall pay the
cost thereof. Any document submitted to either appellate court for inclusion
in the record must be certified by the clerk of the trial court. All other
questions as to the form and content of the record shall be presented to the
appropriate appellate court.
We have no caselaw on a party using Rule 10(e) to correct a single document; however,
consistent with the language of the rule, it appears that the record, specifically the judgment,
did not accurately reflect what happened in the trial court, and Sass Muni sought relief to
have the trial court correct the judgment to reflect the opinion. Therefore, the chancery
court’s correction of the judgment under Rule 10(e) was permissible. As such, the fact that
the record already had been transmitted to the Court is of no moment because Rule 10(e)
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specifically allows the trial court to correct the error “before or after the record is
transmitted” to the appellate courts.
¶17. Alternatively, Mississippi Rule of Civil Procedure 59(e) allows a party to file a motion
to alter or amend a judgment, but the motion must be filed “not later than ten days after entry
of the judgment.” Thus, Rule 59 was not available, as Sass Muni did not file to amend the
judgment until September 2016, which was well past the ten-day period on the judgment
entered in May 2016. Perhaps the best and most appropriate avenue available would be
through Mississippi Rule of Civil Procedure 60, specifically subsection (a).
¶18. Rule 60(a) provides:
Clerical mistakes in judgments . . . and errors therein arising from oversight of
omission may be corrected by the court at any time on its own initiative or on
the motion of any party and after such notice, if any, as the court orders up
until the time the record is transmitted by the clerk of the trial court to the
appellate court and the action remains pending therein. Thereafter, such
mistakes may be so corrected only with leave of the appellate court.
The error in the judgment is a clerical error subject to correction under Rule 60(a). In
Whitney National Bank of New Orleans v. Smith, 613 So. 2d 312, 315 (Miss. 1993), the
Court explained that Rule 60(a) “can be utilized only to make the judgment or other
document speak the truth; it cannot be used to make it say something other than was
originally pronounced.” Sass Muni’s requested changes do reflect what the chancery court
included in its written opinion, so the amendment does nothing more than reflect what the
chancery court “originally pronounced.” It also is important to note that, though the record
had been transmitted to the Court, the Court then ordered, on Sass Muni’s motion, that the
record be sent back to the chancery court for Sass Muni to have an opportunity to review the
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record due to the chancery clerk’s error in failing to give Sass Muni sufficient time for
review under Mississippi Rule of Appellate Procedure 10(b)(5). Therefore, the record was
back with the chancery court for review and potential correction when Sass Muni filed its
motion.
CONCLUSION
¶19. Due to the chancery clerk’s failure to give the required statutory notice, the tax sale
was void, regardless of MIC-Rocky’s subsequent waiver of the notice requirements. We
hold that the chancery court did not err in voiding the tax sale and refunding the purchase
price to Sass Muni.
¶20. AFFIRMED.
WALLER, C.J., RANDOLPH AND KITCHENS, P.JJ., KING, MAXWELL,
BEAM AND ISHEE, JJ., CONCUR. CHAMBERLIN, J., NOT PARTICIPATING.
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