HBI, L.L.C. v. Barnette
305 Neb. 457
| Neb. | 2020Background
- In March 2013 Pontian Land Holdings LLC purchased a tax-sale certificate for a Sarpy County parcel after Walter Barnette failed to pay taxes. Pontian later assigned the certificate to HBI, L.L.C.
- Pontian initially filed a judicial foreclosure action, dismissed it before service/summons, and then sought a county treasurer’s tax deed after the 3-year statutory waiting period.
- Pontian mailed the statutorily required certified-mail notice to the address where the property tax statement was mailed (Barnette’s residence in Council Bluffs, IA); the certified mail was returned “unclaimed” after three delivery attempts.
- Pontian then published notice in a Sarpy County newspaper for three consecutive weeks and the treasurer issued a tax deed on August 29, 2016.
- Barnette counterclaimed to quiet title, arguing (1) Pontian’s prior election of judicial foreclosure barred the tax-deed route, (2) the notices were defective (including misidentification of Guardian), and (3) Nebraska’s notice scheme (and the actual notice given) violated due process under Jones v. Flowers; the district court granted summary judgment to HBI and quieted title.
Issues
| Issue | Plaintiff's Argument (Barnette) | Defendant's Argument (HBI/Pontian) | Held |
|---|---|---|---|
| Whether Pontian’s initial filing of judicial foreclosure barred later pursuit of a treasurer’s tax deed | Neun v. Ewing means once judicial foreclosure is elected the certificate-holder is bound to that route and cannot later obtain a treasurer’s deed | Pontian voluntarily dismissed the foreclosure before service; dismissal under §§25-601–25-602 restored the right to pursue a tax deed | Court: Dismissal before service preserved Pontian’s right to seek a treasurer’s deed; Neun didn’t abrogate voluntary dismissal rights |
| Whether publication in Sarpy County satisfied §77-1834 when owner lived in Pottawattamie County, IA and certified mail to owner’s address was returned unclaimed | Publication in Sarpy County was insufficient because Pontian knew Barnette lived elsewhere and therefore publication there did not provide meaningful notice | Statutes require certified mail to the tax-statement address and, if owner cannot be served there, publication in the county where property sits is authorized and was followed | Court: Statutory requirements were met; publication in Sarpy was proper and the statutory presumption of adequate notice was not rebutted |
| Whether misidentifying Guardian (instead of Pontian) as the applicant rendered the notice/ tax deed defective | Misidentification of applicant on the notice made it fatally defective and voided the deed | The notice contained the statutory information and correctly identified the purchaser; misidentification of applicant is immaterial under §77-1831 and any error would be reformation, not voidance | Court: Misidentification was immaterial; notice complied with statutory content requirements and did not invalidate the deed |
| Whether Nebraska’s notice scheme (and the notice actually given) violated Due Process under Jones v. Flowers when certified mail was returned unclaimed | Jones requires additional reasonable steps when mailed notice is returned unclaimed; Pontian’s only follow-up was publication, so due process was violated | Under Mullane/Dusenbery the method (certified mail to known address) was reasonably calculated to give notice; Jones is fact-specific and does not mandate additional steps here because mail was sent to Barnette’s actual residence and publication plus certified mail complied with the statutes | Court: Statutory methods (certified mail to tax-statement address and county publication) were reasonably calculated to give notice; under the circumstances notice was constitutionally sufficient and Jones did not render the statutory scheme unconstitutional |
Key Cases Cited
- Jones v. Flowers, 547 U.S. 220 (2006) (when mailed notice is returned unclaimed, additional reasonable steps may be required if practicable)
- Mullane v. Central Hanover Tr. Co., 339 U.S. 306 (1950) (due process requires notice reasonably calculated to apprise interested parties)
- Dusenbery v. United States, 534 U.S. 161 (2002) (analysis focuses on the method of notice rather than the result)
- Neun v. Ewing, 290 Neb. 963 (2015) (judicial foreclosure and treasurer’s deed are distinct conversion methods; election to proceed under one governs rights)
- Wisner v. Vandelay Investments, 300 Neb. 825 (2018) (holding service by publication authorized after certified mail to tax-statement address is returned unclaimed if owner lived at that address)
- Ottaco Acceptance, Inc. v. Larkin, 273 Neb. 765 (2007) (misidentification on a tax deed does not render deed void; reformation may be appropriate)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (balancing test for procedural due process)