116 So. 3d 899
La. Ct. App.2013Background
- The case comes on remand from the Louisiana Supreme Court to reconsider an earlier Brookewood decision in light of Smitko.
- Brookewood held the tax sale is an absolute nullity and the tax purchaser’s recourse for reimbursement runs only against the tax debtor, not the City.
- Smitko addressed due-process notice issues but did not directly speak to who must reimburse the tax purchaser when a sale is annulled for lack of notice.
- Louisiana Westwego and Lindner courts held that the tax sale purchaser’s remedy is against the tax debtor and not the City when a sale is annulled.
- The court held that La. R.S. 47:2153C(1) (2012) creates a substantive change shifting reimbursement responsibility to the tax collector, thus applying prospectively only.
- Applying the law as it stood at the time of the sale and at the time of annulment, Brookewood’s reimbursement right remained against Sixty-Three, not the City.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who bears reimbursement after annulment due to lack of notice? | Brookewood against Sixty-Three only. | City is not responsible; Sixty-Three is. | Brookewood’s reimbursement is against the tax debtor, not the City. |
| Does La. Acts 2012, No. 886 §1 (RS 47:2153C(1)) apply retroactively? | Argument that statute shifts responsibility to City retroactively. | Statute is a substantive change, prospective only. | Statute is substantive and applies prospectively; Brookewood remains against the tax debtor. |
| Do Westwego and Lindner control the reimbursement outcome here? | Brookewood relies on City-based reimbursement contrary to those cases. | Westwego and Lindner require reimbursement from the debtor, not the City. | Westwego and Lindner control; reimbursement lies with the tax debtor, not the City. |
Key Cases Cited
- Brookewood Investments Co., L.L.C. v. Sixty-Three Twenty-Four Chef Menteur Highway, L.L.C., 108 So.3d 329 (La. App. 4th Cir. 2013) (reaffirms that reimbursement is against the tax debtor, not the City)
- Smitko v. Gulf South Shrimp, Inc., 94 So.3d 750 (La. 2012) (due-process failures can render a tax sale void; limits on retroactive application discussed)
- Westwego Canal & Terminal Co., Inc. v. Pitre, 1 So.2d 550 (La. 1941) (tax sale annulled: record owner reimburses purchaser; City does not warrant title)
- Lindner v. City of New Orleans, 40 So. 736 (La. 1906) (purchaser’s remedy against the property owner, not the City)
- Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (U.S. Supreme Court, 1983) (due process requires notice to mortgagees; tax sale invalid without proper notice)
- Sutter v. Dane Investments, Inc., 985 So.2d 1263 (La. App. 4th Cir. 2008) (relevance to prior Brookewood analysis on reimbursement)
- Jamie Land Co., Inc. v. Atwood, 965 So.2d 873 (La. App. 1st Cir. 2007) (reimbursement context in tax sale cases)
- Cressionnie v. Intrepid, Inc., 879 So.2d 736 (La. App. 1st Cir. 2004) (precedent cited in reimbursement discussions)