Continental Resources v. Fair
311 Neb. 184
| Neb. | 2022Background
- Kevin and Terry Fair owned a home in Scotts Bluff County and failed to pay 2014 property taxes.
- County published delinquent-properties list in Feb 2015; a tax certificate for the Fair property was sold to Continental on March 11, 2015 for $588.21.
- Continental paid subsequent taxes; county ceased sending tax bills to the Fairs.
- Continental served a certified "Notice of Expiration of Right of Redemption" in April 2018 (3 months to redeem; redemption amount $5,268); Fairs did not redeem.
- Continental applied for and received a tax deed in July 2018; county assessed the property at $59,759. Continental obtained quiet title; district court granted summary judgment for Continental.
- Fair appealed, arguing the tax-certificate statutes violate procedural due process, the Takings Clauses (federal and state), the Excessive Fines Clause, article I §25 of the Nebraska Constitution, and article III §18; Nebraska Attorney General defended the statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural due process | Fair: constitutionally required actual notice when tax certificate sold (Mar 2015) | Statutory publication + later certified-mail notice before deed were reasonably calculated to provide notice | Court: No violation; reasonable notice was given (3 months before deed); no constitutional right to notice at sale time |
| Takings Clause (public/private and surplus equity) | Fair: sale and deed effect a taking for private use; entitled to surplus equity (value minus tax debt) | Taxation and tax collection are not takings; Nebraska law does not create a vested right to surplus equity | Court: No taking; tax collection process not subject to Takings analysis here; Fair had no vested state-law property right to surplus equity |
| Excessive Fines Clause | Fair: forfeiture of property worth >> tax debt is an excessive punitive fine | Transfer is remedial tax-collection, not a government-imposed fine payable to the state | Court: No excessive-fines violation; process lacks attributes of an Eighth Amendment fine |
| State constitutional claims (art I §25; art III §18) | Fair: statutes discriminate re property rights / create special class | Challenges largely rehash federal claims or were not preserved | Court: No violation of art I §25; art III §18 claim not addressed (not raised below) |
Key Cases Cited
- Jones v. Flowers, 547 U.S. 220 (2006) (due-process notice must be reasonably calculated to apprise interested parties)
- Mullane v. Central Hanover Trust Co., 339 U.S. 306 (1950) (establishes the reasonable-notice standard)
- Nelson v. New York City, 352 U.S. 103 (1956) (upheld municipal retention of surplus sale proceeds under facts before Court)
- Balthazar v. Mari Ltd., 396 U.S. 114 (1969) (summary affirmance of lower-court rejection of tax-sale challenge)
- Koontz v. St. Johns River Water Management Dist., 570 U.S. 595 (2013) (taxes and user fees are not takings)
- Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) (property interests protected by Takings Clause are defined by state law)
- United States v. Bajakajian, 524 U.S. 321 (1998) (disproportionality between forfeiture and offense does not alone show punitive character)
- Browning-Ferris Indus. v. Kelco Disposal, 492 U.S. 257 (1989) (Excessive Fines Clause reaches fines payable to government)
- HBI, L.L.C. v. Barnette, 305 Neb. 457 (2020) (Nebraska law on tax-certificate purchaser's lien and notice issues)
- Wisner v. Vandelay Investments, 300 Neb. 825 (Neb.) (standing/tender rules in tax-deed challenges)
- Heiden v. Norris, 300 Neb. 171 (Neb.) (standing focuses on the party, not the claim)
- Big John’s Billiards v. State, 288 Neb. 938 (Neb.) (Takings Clause protects vested property rights)
- Rafaeli, LLC v. Oakland County, 505 Mich. 429 (2020) (Michigan case recognizing former owner's right to surplus proceeds under state law)
- Tyler v. Hennepin County, 505 F. Supp. 3d 879 (D. Minn. 2020) (declining to find a state-law right to surplus proceeds; analogous federal challenge)