First Union Natl. Bank v. Lee Cty. Comm., 1090804 (Ala. 6-30-2011)
2011 Ala. LEXIS 101
| Ala. | 2011Background
- First Union sued for declaration of entitlement to excess tax-sale funds under Alabama Code §40-10-28.
- Property at issue is Summers's real estate, designated parcel 43-02-05-15-0-000-001.017, Shady Grove Farms Lot 8 area in Lee County, Alabama.
- Summers executed a mortgage and non-negotiable promissory note in 1994 to secure debt; JWH built a house on the property.
- Property taxes for 2004 were assessed to Summers, not First Union, and taxes remained unpaid until the tax sale.
- Property sold at tax sale on May 4, 2005 to Plymouth Park Tax Services for $9,600; Lee County kept excess proceeds ($9,153) after satisfying tax lien and costs.
- Trial court granted summary judgment to Summers and Lee County, holding Summers as owner and First Union not entitled to excess funds; First Union appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who is the owner for §40-10-28 excess funds? | First Union: mortgagee owns property; owner includes mortgagee. | Commission: owner is party assessed taxes (Summers); mortgagee not owner. | Owner means the person or entity assessed the taxes; mortgagee not the owner. |
| Can a mortgagee be considered Summers's legal representative to receive excess funds? | First Union argues it can be Summers's legal representative via ownership/agency. | No written instrument showing agency; no agency relationship. | Absent a written power of attorney or similar instrument, mortgagee cannot receive excess funds as legal representative. |
| Do other provisions (e.g., §40-10-120) support including mortgagees as owners for excess funds? | Higher court should treat mortgagees similarly to owners for redemption. | §40-10-120's broader redemption rights do not expand §40-10-28's narrow owner/agent scope. | Broader redemption rights do not enlarge §40-10-28’s owner definition to include mortgagees. |
| Should policy concerns favor treating mortgagees as owners to avoid hardship? | Broadening owner definition prevents undue hardship on mortgagees. | Broad definition would burden counties and create uncertainty; remedies exist (e.g., escrow). | Court favors narrow owner definition to avoid administrative burden and uncertainty. |
Key Cases Cited
- Loventhal v. Home Insurance Co., 112 Ala. 108 (1896) (distinguishes legal vs. equitable title; equitable title is ownership under insurance context)
- Alabama Home Mortgage Co. v. Harris, 582 So. 2d 1080 (1991) (equitable title vs. legal title; mortgagor retains equitable title until merger)
- Barclay v. State, 156 Ala. 163 (1908) (owner defined as titleholder; primary meaning of 'owner')
- Ex parte Exxon Mobil Corp., 926 So.2d 303 (Ala. 2005) (statutory interpretation requires giving effect to legislative intent when language is unambiguous)
- Lambert v. Wilcox County Commission, 623 So.2d 727 (1993) (look to entire statute and pari materia when interpreting terms)
- Eubanks v. Hale, 752 So.2d 1113 (Ala. 1999) (weigh evidence de novo when trial has no live testimony)
- Archer v. Estate of Archer, So.3d _ (Ala. 2010) (statutory interpretation—ascertain legislative intent from whole act)