In re Foreclosure of Liens for Delinquent Land Taxes v. Parcels of Land Encumbered with Delinquent Tax Liens (Slip Opinion)

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In
re Foreclosure of Liens for Delinquent Land Taxes v. Parcels of Land Encumbered with
Delinquent Tax Liens, Slip Opinion No. 2014-Ohio-3656.]
NOTICE
This slip opinion is subject to formal revision before it is published in
an advance sheet of the Ohio Official Reports. Readers are requested
to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
65 South Front Street, Columbus, Ohio 43215, of any typographical or
other formal errors in the opinion, in order that corrections may be
made before the opinion is published.
SLIP OPINION NO. 2014-OHIO-3656
IN RE FORECLOSURE OF LIENS FOR DELINQUENT LAND TAXES BY ACTION IN
REM; DONAKER, TREASURER, ET AL., APPELLEES, v. PARCELS OF LAND
ENCUMBERED WITH DELINQUENT TAX LIENS;
VANDERBILT MORTGAGE & FINANCE, INC., APPELLANT.
[Until this opinion appears in the Ohio Official Reports advance sheets,
it may be cited as In re Foreclosure of Liens for Delinquent Land Taxes v.
Parcels of Land Encumbered with Delinquent Tax Liens,
Slip Opinion No. 2014-Ohio-3656.]
R.C. 5721.25 permits a mortgage holder to redeem the mortgaged property when
it is the subject of a tax foreclosure proceeding.
(No. 2013-0713—Submitted April 29, 2014—Decided September 2, 2014.)
APPEAL from the Court of Appeals for Coshocton County,
No. 2012CA0001, 2013-Ohio-1400.
____________________
O’CONNOR, C.J.
{¶ 1} In this appeal, we address whether R.C. 5721.25 permits a
mortgage holder to redeem the mortgaged property when it is the subject of a tax
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foreclosure proceeding. We hold that it does. Accordingly, we reverse the
decision of the court of appeals.
RELEVANT BACKGROUND
{¶ 2} On June 14, 2003, Brandi L. Wagner and Troy Wagner financed
the purchase of a manufactured home (“mobile home”) by executing a “Retail
Installment Contract—Security Agreement.” That agreement was assigned to
appellant, Vanderbilt Mortgage and Finance, Inc. (“Vanderbilt”), and gave
Vanderbilt a security interest in the mobile home and real property located in
Coshocton County. The same day, the Wagners executed a promissory note in
favor of Vanderbilt in the amount of $85,271.49 plus interest and executed a
mortgage as security for payment of the promissory note, recorded in Coshocton
County. Vanderbilt is the holder of both the promissory note and the mortgage.
{¶ 3} As a result of the Wagners’ failure to pay taxes on the property, the
treasurer of Coshocton County initiated a tax foreclosure proceeding for
delinquent taxes in the amount of $825.84. The complaint named the last known
owners of the property as Brandi and Troy Wagner and also named Vanderbilt as
a “lienholder or other person with an interest in the parcel.” Pursuant to R.C.
5721.18, the clerk of court for Coshocton County sent Vanderbilt by certified mail
the required statutory notice advising Vanderbilt of the tax foreclosure action.
{¶ 4} No responsive pleadings were filed, and the trial court granted the
treasurer’s motion for default judgment. Pursuant to the treasurer’s request, the
court ordered the sheriff to sell the property. Although not clear in the record, the
court of appeals found, and the parties do not dispute, that the sheriff held two
sales in October 2011; one at which Vanderbilt purchased the mobile home. At
the other sale, James M. Matchett purchased the parcel of real property for the
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winning bid of $15,100. Matchett then deeded the property to Alan and Janette
Donaker.1
{¶ 5} Before the sale of the real property was confirmed, however,
Vanderbilt filed a notice of redemption. In that notice, Vanderbilt advised the
court that in accordance with the redemption procedure in R.C. 5721.25, it had
deposited $6,000 with the clerk of court to cover the delinquent taxes,
assessments, penalties, interest, and charges on the real property purchased by
Matchett at the sheriff’s sale and to cover the costs incurred in the foreclosure
action. The notice included an attorney’s affidavit stating that the property was in
compliance with all applicable zoning regulations, land-use restrictions, and
building, health, and safety codes. The same day, Vanderbilt moved the trial
court to stay confirmation of the sale and vacate the sale and entry of foreclosure
upon a finding that the property was redeemed pursuant to R.C. 5721.25.
{¶ 6} Also on November 2, 2011, the trial court granted Vanderbilt’s
motion, thereby staying the confirmation of the sheriff’s sale and vacating and
setting aside the sale and entry of foreclosure. But two days later, the treasurer
filed a memorandum opposing Vanderbilt’s motion, and the trial court entered an
order vacating its November 2 order, for the first time finding that a question of
law existed as to whether Vanderbilt had the right to redeem.
{¶ 7} On December 5, 2011, the trial court found that Vanderbilt was a
“person entitled to redeem” under R.C. 5721.25. The court granted Vanderbilt’s
motion to stay the confirmation of sale and to vacate and set aside the sheriff’s
sale, dismissed with prejudice the tax foreclosure proceeding, and ordered the
1
The parties agree that appellee Alan Donaker is the father of Brandi Wagner and appellee Janette
Donaker is both Brandi Wagner’s stepmother and the treasurer of Coshocton County who initiated
this tax foreclosure proceeding. Those facts are not relevant to our analysis and disposition.
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clerk of court to pay the treasurer, from the funds deposited by Vanderbilt, the
amounts due and payable on the property and to pay the court costs.
{¶ 8} Alan Donaker and the Coshocton County treasurer appealed. The
sole issue presented to the court of appeals was whether Vanderbilt had the right
to redeem the property under R.C. 5721.25. The Fifth District Court of Appeals
held that Vanderbilt was not entitled to redeem the property, reversed the
judgment of the trial court, and remanded the cause with instructions to confirm
the sheriff’s sale.
{¶ 9} We accepted Vanderbilt’s appeal from the court of appeals’
judgment. 136 Ohio St. 3d 1472, 2013-Ohio-3790, 993 N.E.2d 777. The issue
before us is whether Vanderbilt, as a mortgage holder, qualifies as “any person
entitled to redeem the land” under R.C. 5721.25.
ANALYSIS
{¶ 10} Our analysis begins with the relevant statutory language, which is
found in the second paragraph of R.C. 5721.25:
After a foreclosure proceeding has been instituted under
Chapter 323. or this chapter of the Revised Code with respect to
delinquent land, but before the filing of an entry of confirmation of
sale pursuant to the proceeding or before the expiration of the
alternative redemption period as may apply under section 323.78
of the Revised Code, any person entitled to redeem the land may
do so by tendering to the county treasurer an amount sufficient, as
determined by the court, to pay the taxes, assessments, penalties,
interest, and charges then due and unpaid, and the costs incurred in
any proceeding instituted against such land under Chapter 323. or
this chapter of the Revised Code, and by demonstrating that the
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property is in compliance with all applicable zoning regulations,
land use restrictions, and building, health, and safety codes.
(Emphasis added.)
{¶ 11} Appellee Alan Donaker contends that the only reasonable
interpretation of the statute is one precluding anyone but the property owner from
being a “person entitled to redeem” under R.C. 5721.25 and that broadly
interpreting the phrase “any person” would undermine sheriff’s sales by
permitting mortgage holders to “sit on their hands” until after the sheriff’s sale.
Vanderbilt contends that when read in conjunction with other provisions on tax
foreclosure proceedings—namely, R.C. 5721.181, which provides the form of
notice required—the phrase “any person entitled to redeem the land” under R.C.
5721.25 includes “any owner, or lienholder of, or other person with an interest in”
the property.2 Vanderbilt also contends that as a mortgage holder, it had vested
legal title to the real property because the loan was in default, and that it redeemed
the property by advancing tax payments on behalf of the property owner.
Because the appeal can be resolved as a matter of statutory construction, we need
not address these arguments.
{¶ 12} Our role in cases of statutory construction is to determine
legislative intent by looking to the language of the statute and the purpose to be
accomplished by the statute. Boley v. Goodyear Tire & Rubber Co., 125 Ohio
St.3d 510, 2010-Ohio-2550, 929 N.E.2d 448, ¶ 20. Where the statute’s meaning
2
As an initial matter, Alan Donaker contends that Vanderbilt waived this argument by failing to
specifically raise below that the statute should be read in pari materia with R.C. 5721.18 and
5721.181. But he concedes that Vanderbilt argued below that it was a “person entitled to redeem”
under the statute. Based on our review of the record, it is evident that Alan Donaker presented to
the court of appeals the issue whether Vanderbilt was a “person entitled to redeem” under the
statute and that Vanderbilt contended that applying the rules of statutory construction, the phrase
“any person entitled to redeem” in R.C. 5721.25 does not refer only to the property owner. We
decline to put form over substance to find that Vanderbilt waived such an argument here.
Accordingly, we conclude that the issue is properly before us on appeal.
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is clear and unambiguous, we apply the statute as written. Id. This court must
give effect to the words used, refraining from inserting or deleting words.
Cleveland Elec. Illum. Co. v. Cleveland, 37 Ohio St. 3d 50, 53-54, 524 N.E.2d 441
(1988). “ ‘No part should be treated as superfluous unless that is manifestly
required, and the court should avoid that construction which renders a provision
meaningless or inoperative.’ ” Boley, ¶ 21, quoting State ex rel. Myers v. Spencer
Twp. Rural School Dist. Bd. of Edn., 95 Ohio St. 367, 373, 116 N.E. 516 (1917).
In the absence of a definition of a word or phrase used in a statute, the words are
to be given their common, ordinary, and accepted meaning. Wachendorf v.
Shaver, 149 Ohio St. 231, 78 N.E.2d 370 (1948), paragraph five of the syllabus.
{¶ 13} Alan Donaker relies on the interpretations of the statute by the
court of appeals below and by the First District Court of Appeals in Wilke v. Secy.
of Hous. & Urban Dev., 1st Dist. Hamilton No. C-840077, 1984 WL 7141 (Dec.
26, 1984), a case in which a stranger to title attempted to redeem the land in a tax
foreclosure proceeding. According to the court of appeals, Wilke held that “the
clear meaning and intent of the [relevant] paragraph of R.C. 5721.25 is that only
the former owner has the right of redemption.” (Emphasis added.) 2013-Ohio-
1400, ¶ 10. We disagree with the assertion that Wilke should be read so broadly.
Applying such a reading in this case would lead to the absurd result that even the
Wagners would not be entitled to redeem their property because they are the
current, not the former, owners until a confirmation of sale is approved.
Nonetheless, relying on Wilke, the court of appeals held that “the intent of the
statute is to provide the owner with an opportunity to redeem the property if they
so desire.” 2013-Ohio-1400, ¶ 11. We conclude that neither reading of R.C.
5721.25 gives effect to the words used in the statute.
{¶ 14} The plain language of the statute permits “any person” entitled to
redeem the land to do so. R.C. 5721.25. The phrase “any person” is not defined
in the statute. However, previously we have pointed out that the ordinary
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meaning of “any” is “every” or “all.” State v. Gardner, 118 Ohio St. 3d 420,
2008-Ohio-2787, 889 N.E.2d 995, ¶ 33 (lead opinion). The meaning of “any” is
flexible and must be interpreted in light of its context. Wachendorf at 239.
Although the meaning of “any” is flexible, it is not so pliable that we can simply
ignore it. Giving effect to the plain meaning of the phrase “any person” in the
context in which it is used, we cannot delete the words “any person” and
substitute the word “owner” as appellee would have us do. We find the absence
of such specificity or other limiting language indicative of the legislative intent.
{¶ 15} In R.C. Chapter 2329, which governs judicial foreclosure
proceedings such as mortgage foreclosure, the General Assembly specifically
limited the right of redemption to “the debtor.” R.C. 2329.33. But in R.C.
5721.25, the legislature instead utilized broader language by granting the right of
redemption in a tax foreclosure proceeding to “any person entitled to redeem.”
Given the General Assembly’s use of the phrase “any person” in R.C. 5721.25,
we hold that it did not intend to restrict the right of redemption in a tax
foreclosure proceeding to only the property owner as it did for mortgage
foreclosure proceedings. Therefore, the only reasonable interpretation of R.C.
5721.25 is one that gives a purpose to the use of the word “any” in the phrase
“any person entitled to redeem the land.”
{¶ 16} Looking at R.C. Chapter 5721 as a whole, we find additional
insight into the legislature’s intent. R.C. 5721.181(B), which prescribes the
language to be used in giving notice of tax foreclosure proceedings, states:
The forms of caption, notice of foreclosure, and notice to
property owners, lienholders, and other interested persons to be
utilized in a foreclosure proceeding instituted pursuant to division
(B) of section 5721.18 of the Revised Code shall be in substance as
follows:
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***
(B) Form of notice of foreclosure:
***
At any time prior to the filing of any entry of confirmation
of sale, any owner or lienholder of, or other person with an
interest in, a parcel listed in the complaint may redeem the parcel
by tendering to the treasurer the amount of the taxes, assessments,
charges, penalties, and interest due and unpaid on the parcel,
together with all costs incurred in the proceeding instituted against
the parcel under section 5721.18 of the Revised Code.
(Emphasis added.) This required notice language describes that to which R.C.
5721.25 gives effect. To limit “any person” described in R.C. 5721.25 to the
property owner, current or former, renders meaningless the notice language in
R.C. 5721.181 that “any owner or lienholder of, or other person with an interest in
[the property] may redeem [it].” It would be illogical for the legislature to require
that a party be notified under R.C. 5721.181 that it is entitled to redeem the land
but then deny the party that right by the language in R.C. 5721.25. Such an
interpretation would cause the language and meaning of the notice provision to be
superfluous, thereby offending the well-established rules of statutory construction.
In contrast, our interpretation gives meaning to the plain language of the statute
and the chapter as a whole.
{¶ 17} Our holding is not at odds with the appellate court’s conclusion
that “the intent of the statute is to provide the owner with an opportunity to
redeem the property if they so desire,” 2013-Ohio-1400, ¶ 11. Nor does it
undermine the integrity of sheriff’s sales. The statutory provisions demonstrate
that the legislature recognized multiple competing interests at a sheriff’s sale,
including those of the owner. The purchaser at a sheriff’s sale is on notice that
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the sale is not final until confirmation. Before confirmation, the owner can
redeem the property just as a lienholder or other person with an interest in the
property can, even if the owners—or lienholders—“sit on their hands” until after
the sheriff’s sale. Any perceived inequity caused by our holding to purchasers or
property owners like the Wagners must be balanced against the rights of others
with competing interests, including those of a mortgagee, or lienholder, to protect
its interest in the property where a mortgagor, or property owner, has fallen
delinquent in tax payments. This tension presents a public-policy concern that is
the purview of the legislature. Our role is to apply the language of the statute that
is the legislature’s expression of public policy.
{¶ 18} Accordingly, we hold that “any person entitled to redeem the land”
under R.C. 5721.25 includes “any owner or lienholder of, or other person with an
interest in” the subject property as set forth in R.C. 5721.181. Therefore, the
statute permits a mortgage holder to redeem the land.
{¶ 19} Under our construction of the statute, Vanderbilt, as mortgage
holder, was entitled to redeem the land. We must next determine whether
Vanderbilt complied with the remaining requirements of R.C. 5721.25, i.e.,
whether it tendered to the treasurer an amount sufficient to cover the delinquency
and demonstrated that the property was in compliance with all applicable codes
and regulations.
{¶ 20} Although the record reflects that Vanderbilt deposited funds with
the clerk of court and submitted an attorney’s affidavit regarding the compliance
of the property, it is unclear from the record that the court made a determination
whether the amount was sufficient to satisfy the redemption and whether the
treasurer was paid. Accordingly, we remand this cause to the trial court to make
that determination and order the clerk to pay the treasurer, if payment has not
already been made.
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CONCLUSION
{¶ 21} We hold that “any person entitled to redeem the land” under R.C.
5721.25 includes “any owner or lienholder of, or other person with an interest in”
the property as set forth in R.C. 5721.181. Thus, Vanderbilt, as a lienholder, was
entitled to redeem the land. We therefore reverse the judgment of the court of
appeals and remand the cause to the Court of Common Pleas of Coshocton
County to determine Vanderbilt’s compliance with the remaining requirements of
the statute.
Judgment reversed,
and cause remanded.
PFEIFER, O’DONNELL, LANZINGER, KENNEDY, FRENCH, and O’NEILL, JJ.,
concur.
____________________
Samuel H. Shamansky Co., L.P.A., and Samuel H. Shamansky, Donald L.
Regensburger, Colin E. Peters, and Krystin N. Martin; and James R. Skelton, for
appellee Alan Donaker.
Carlisle, McNellis, Rini, Kramer & Ulrich Co., L.P.A., and Eric T.
Deighton, for appellant.
_________________________
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