864 N.W.2d 695
Neb. Ct. App.2015Background
- Echo Financial purchased tax sale certificate No. 10281 for Lot 62, Villas at Creekside (taxes for 2008) on March 3, 2010, and held subsequent tax liens for 2009, 2010, and 1st half 2011.
- Echo sued in June 2013 to foreclose its tax certificate; Sanitary & Improvement District (SID) No. 268 and Sarpy County (asserting weed and later general tax liens) were named defendants; only Sarpy County appeared and answered.
- Sarpy County admitted weed liens and asserted it levied general taxes for 2nd half 2011 and 2012 that, under Neb. Rev. Stat. § 77-203, are first liens superior to other liens.
- Echo moved for summary judgment and the district court granted it, issuing a decree finding Echo held a valid first lien, Sarpy County’s weed liens were junior, and the property was to be sold subject to Sarpy County’s unpaid 2nd half 2011 and 2012 general taxes.
- Sarpy County appealed, arguing (1) summary judgment was improper, (2) weed liens are not junior to Echo and SID No. 268, and (3) the district court erred in treating the 2011/2012 general tax liens as merely liens on the property (to be left on the property) rather than liens to be satisfied from the sheriff’s sale proceeds.
Issues
| Issue | Plaintiff's Argument (Echo) | Defendant's Argument (Sarpy County) | Held |
|---|---|---|---|
| Whether summary judgment for Echo was proper | Echo produced presumptive evidence (tax certificate) entitling it to foreclosure | Sarpy said factual issues remain about lien priorities | Court: Summary judgment proper; tax certificate is presumptive evidence entitling Echo to judgment as matter of law |
| Priority of county weed liens vs. Echo’s tax certificate | Echo: General tax lien (via certificate) is superior; special assessments (weed liens) are secondary | Sarpy: §77-209 makes special assessments junior only to first lien of general taxes (argues different treatment) | Court: Weed liens are special assessments and are junior to Echo’s general lien and to SID interests |
| Whether SID special assessments are extinguished by foreclosure | Echo: Foreclosure excludes SID special assessments from being wiped out; they remain except when previously offered for sale | Sarpy: Argued limitations on that exclusion | Held: Statutory exception excludes SID special assessments from the free-and-clear effect; SID’s liens are not extinguished by Echo’s foreclosure |
| Treatment and priority of general taxes levied after sale but before foreclosure (2nd half 2011 & 2012) | Echo: Claimed those statutes for county foreclosures applied to bar enforcement here | Sarpy: Asserted these general taxes are first liens and should be left on title (sold subject to them) | Held: Taxes levied after the tax certificate sale but before foreclosure are included in the foreclosure decree, must be paid from sheriff’s sale proceeds, and such subsequent tax liens have priority over the certificate (i.e., later taxes are "first") |
Key Cases Cited
- INA Group v. Young, 271 Neb. 956, 716 N.W.2d 733 (2006) (special assessments are secondary to the general lien represented by a tax certificate; subsequent taxes between sale and foreclosure are included in foreclosure decree)
- Polenz v. City of Ravenna, 145 Neb. 845, 18 N.W.2d 510 (1945) (tax sale conveys a new sovereign grant of title free from prior encumbrances)
- Coffin v. Old Line Life Ins. Co., 138 Neb. 857, 295 N.W. 884 (1941) (tax liens take priority in reverse chronological order; later levies prevail over earlier tax certificates)
- Schuyler Building & Loan Ass’n v. Fulmer, 61 Neb. 68, 84 N.W. 609 (1900) (a decree of foreclosure is a final appealable order)
- Medland v. Van Etten, 75 Neb. 794, 106 N.W. 1022 (1906) (taxes levied after issuance of a tax certificate are superior to the certificate)