Dlt List, LLC v. M7ven Supportive Housing & Development Group
335 Ga. App. 318
| Ga. Ct. App. | 2015Background
- M7 owned two Carroll County properties and failed to pay taxes; county Tax Commissioner Vickie Bearden sold the properties at tax sale on June 3, 2014, producing $105,188.91 in excess proceeds.
- Bearden notified recorded owners and lienholders of the excess within 30 days; M7 submitted a certificate authorizing receipt of the excess funds and held title at the time of the sale; no other party timely claimed the funds.
- DLT List purchased the properties at the tax sale; Design Acquisition later redeemed the properties from DLT List by paying the statutory redemption amounts and received quitclaim redemptions back to M7.
- Design (as redeemer) later sued in declaratory judgment asserting priority to the excess funds based on its post-sale redemption; Bearden filed an equitable interpleader seeking court distribution of the excess proceeds.
- The trial court awarded the entire excess to M7, finding M7 was the sole interest holder at the time of the tax sale and should have received the funds; Design appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a post-sale redeemer has priority to excess tax-sale funds | Design: redemption creates a first-priority lien entitling it to excess proceeds for the redemption amount | M7: excess funds belong to those who held interests at time of sale (owner or pre-sale lienholders); post-sale purchasers/redeemers have no claim to excess | Court: Redeemer has no priority to excess funds; excess belong to owner/pre-sale lienholders. Overruled contrary holdings in Wester/United Capital |
| Whether Design received due process (notice/hearing) | Design: court process deprived it of notice/hearing on distribution | Bearden/M7: Design participated in telephonic conference and was allowed to brief the issues | Court: Design had opportunity to be heard; no due process violation shown |
| Whether Bearden was authorized to file interpleader or abused discretion | Design: implied challenge to Bearden’s authority/timing to interplead | Bearden: statute permits filing and court distribution; factual contention that she should have paid M7 earlier | Court: No ruling that Bearden lacked authority; court found interpleader unnecessary earlier but filing was permissible; argument fails |
| Whether precedent (Wester/United Capital) controls entitlement of redeemer to excess funds | Design: relies on those cases to claim redeemer priority | M7/Bearden: argue those cases misread Nat. Tax Funding and were wrongly decided | Court: Disapproved Wester and United Capital to the extent they grant redeemers priority to excess funds |
Key Cases Cited
- Nat. Tax Funding, LP v. Harpagon Co., 277 Ga. 41 (explains post-tax-sale options: claim proceeds or redeem to obtain a priority lien)
- Wester v. United Capital Finance of Atlanta, LLC, 282 Ga. App. 392 (overruled insofar as it gave redeemers priority to excess funds)
- United Capital Finance of Atlanta v. American Investment Assoc., 302 Ga. App. 400 (overruled insofar as it gave redeemers priority to excess funds)
- Barrett v. Marathon Investment Corp., 268 Ga. App. 196 (excess proceeds belong to owner or pre-sale lienholders; purchaser has no post-sale claim)
- Scott v. Vesta Holdings I, LLC, 275 Ga. App. 196 (example of claiming proceeds against sale funds)