108 So. 3d 329
La. Ct. App.2013Background
- Brookewood Investments Co., L.L.C. purchased the property at 6324 Chef Menteur Highway after a City tax sale for delinquent taxes and paid the taxes plus costs.
- The property had been assessed in the name of V.A. Morreale, and Sixty-Three Twenty-Four Chef Menteur Highway, L.L.C. acquired the property by an Act of Capital Contribution dated September 30, 1994, though no recordation occurred.
- The City issued a tax deed memorializing the sale, recorded April 20, 2004, after Brookewood paid $591,343.03 in taxes for 1999–2002 and related costs.
- Sixty-Three and Morreale filed a reconventional demand alleging the tax sale should be annulled because notice to the proper owner of record was not provided, given the ownership records showed Morreale for decades.
- Brookewood argued that, under La. C.C. art. 2033, if the tax sale is declared an absolute nullity the proper reimbursement should restore the pre-sale status, with the City potentially liable for the funds misapplied.
- The trial court held the City failed to comply with notice requirements, annulled the tax sale, and later ordered Sixty-Three to reimburse Brookewood; Brookewood appealed seeking an absolute nullity and a different reimbursement framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the tax sale is an absolute nullity due to lack of notice | Brookewood argues notice failure voids sale absolutely. | Sixty-Three/Morreale contend the proceedings compatible with law or limited remedy, City not liable. | Yes; the tax sale is an absolute nullity. |
| Who bears reimbursement after annulment: City or tax debtor | Brookewood seeks City liability under constitutional reimbursement, or City as payer. | Sixty-Three argues reimbursement should come from the tax debtor/record owner. | Reimbursement rests with the tax debtor/record owner (Sixty-Three), not the City. |
Key Cases Cited
- Lindner v. City of New Orleans, 40 So. 736 (La. 1906) (purchaser must be reimbursed by owner; no recovery against city absent special legislation)
- Westwego Canal & Terminal Co., Inc. v. Pitre, 1 So.2d 550 (La. 1941) (reimbursement if tax sale annulled; owner may repay purchaser)
- C & C Energy, L.L.C. v. Cody Investments, L.L.C., 41 So.3d 1134 (La. 2010) (due process notice requirements; absolute nullity considerations)
- Padilla v. Schwartz, 11 So.3d 6 (La.App. 4 Cir. 2009) (notice and nullity implications on tax sales)
- Sutter v. Dane Investments, Inc., 985 So.2d 1263 (La.App. 4 Cir. 2008) (relevance to absolute nullity and reimbursement framework)