City of Chattanooga v. Tax Year 2011 City Delinquent Real Estate Taxpayers
E2016-00025-COA-R3-CV
Tenn. Ct. App.Feb 10, 2017Background
- Jerry C. Wilkinson (Owner) owned a condominium sold at a delinquent tax sale; Thomas Hyde (Buyer) purchased the parcel at the sale and paid $61,000 into court; the decree confirming sale was entered June 24, 2015.
- On June 25, 2015 Owner conveyed the property to Jeffrey and Stacey Barton (Bartons); the deed appears recorded around a month after the decree confirming sale.
- Pioneer Title Agency (Pioneer), which handled and insured the closing to Bartons, filed a Statement of Person Redeeming Property and paid $6,270.79 to the Clerk & Master on July 23, 2015 stating it acted for the delinquent taxpayer; Bartons and Owner later each filed redeeming statements.
- Buyer moved to deny redemption and for reimbursement, arguing the statute required the redeemer (or the original debtor) to tender the funds and that Pioneer was not entitled to redeem or to pay on behalf of Bartons/Owner.
- Trial court held the redemption valid, set aside the tax sale as to the Property, vested title in Owner (and was later directed on appeal to vest title in Bartons), and awarded Buyer only $50 in expenses; Buyer appealed.
Issues
| Issue | Hyde's Argument | Bartons/Owner/Pioneer Argument | Held |
|---|---|---|---|
| Validity of redemption (who may redeem) | Hyde: Only the debtor or a proper redeemer who actually pays may redeem; Owner sold his redeeming right before motion so cannot redeem. | Bartons/Owner/Pioneer: Statute allows any "interested person" (including assignee/purchaser of redeeming right) to redeem; Bartons acquired the right and filed timely motion. | Court: Redemption valid; Bartons were entitled to redeem (right of redemption is transferable). |
| Source/ownership of funds used to redeem | Hyde: Statute requires the movant to pay the clerk; Pioneer paid, but Pioneer was not a proper redeemer and Bartons/Owner did not themselves tender funds. | Bartons/Owner/Pioneer: No statutory requirement about source/owner of funds; timely payment to clerk suffices. | Court: Source/owner of funds irrelevant; deposit by Pioneer effectuated redemption for Bartons/Owner. |
| Joint filing/joinder of motions to redeem | Hyde: Joinder by Pioneer/Owner/Bartons improper and undermines redemption. | Bartons/Owner/Pioneer: They filed separate statements and a joint motion as precaution; court may accept consolidated filings. | Court: No error; court did not treat the parties as jointly redeeming but accepted separate standing. |
| Reimbursement to purchaser for expenses & frivolous appeal | Hyde: Entitled to reimbursement beyond $50 (claimed travel/mileage/etc.); appeal sought relief. | Bartons/Owner: Trial award of $50 was within discretion; evidence for higher reimbursement was insufficient. | Court: $50 award affirmed as within discretion; appeal not frivolous, so no appellate sanctions. |
Key Cases Cited
- Fite v. Jennings, 246 S.W.2d 1 (Tenn. 1952) (statutory right of redemption may be sold or transferred)
- Herndon v. Pickard, 73 Tenn. 702 (Tenn. 1880) (right to redeem treated as an estate or interest that can be sold)
- Plemons v. Gale, 396 F.3d 569 (4th Cir. 2005) (statutory right of redemption is a valuable right and construed liberally in favor of the redeemer)
- Toledo Trust Co. v. Yakumithis Enterprises, Inc., 519 N.E.2d 425 (Ohio Ct. App.) (source of funds used to redeem does not itself constitute redemption by the funder)