68 A.3d 57
R.I.2013Background
- Rafaelian filed a petition to foreclose the right of redemption after a tax sale of 1107 Westminster Street, Providence; tax title was obtained June 25, 2010 from a Providence Water Supply Board sale for nonpayment of user fees.
- The petition identified Perfecto Iron Works, Inc., the Rhode Island Division of Taxation, and the IRS as respondents and provided notice by certified mail.
- Perfecto answered on October 14, 2011, but Rafaelian and counsel did not receive the answer; Rafaelian moved for entry of default and final decree on October 18, 2011.
- On October 28, 2011, a final decree foreclosing the right of redemption was entered based on a claimed lack of response.
- Perfecto moved to vacate the default and the final decree on November 3, 2011; Rafaelian objected on November 14, 2011.
- The Superior Court later vacated the default and final decree, citing an erroneous entry of default despite Perfecto’s timely answer and relying on equity rather than Rule 81(a)(2) procedures.]
- The Supreme Court affirmed, holding that the decree was voidable due to erroneous entry and that §44-9-24 does not bar vacating a decree entered in error; remanded for further proceedings consistent with equity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 44-9-24 bars vacating the decree | Rafaelian argues § 44-9-24 prohibits vacating the decree | Perfecto contends the decree was void and vacating is permitted | Yes, not applicable to voidable decree; decree vacated on equitable grounds |
| Whether Perfecto’s answer timely filed affects default | Rafaelian relied on entry of default due to no answer | Perfecto’s answer was timely; default was erroneous | Yes, timely answer voided the default and supports vacatur |
| Relation of Rule 81(a)(2) to foreclosure proceedings’ vacatur | Rule 81(a)(2) exclusions foreclose this as a normal action | Proceedings are unique; equity governs vacatur | Rule 81(a)(2) does not preclude equitable vacatur of an erroneous decree |
Key Cases Cited
- ABAR Assocs. v. Luna, 870 A.2d 990 (R.I. 2005) (tax sale foreclosures are limited, statutory proceedings)
- Pratt v. Woolley, 117 R.I. 154 (R.I. 1976) (jurisdiction and procedures in tax sale foreclosures)
- Finnegan v. Bing, 772 A.2d 1070 (R.I. 2001) (statutory constraints on foreclosure proceedings)
- Zeus Realty Co. v. Jaral Realty, Inc., 653 A.2d 70 (R.I. 1995) (notice and default issues in foreclosure context)
- Sycamore Props., LLC v. Tabriz Realty, LLC, 870 A.2d 424 (R.I. 2005) (§ 44-9-24 safety valve for invalid tax sales; triggers for independent action)
- Mortgage E-registration Sys., Inc. v. DePina, 63 A.3d 871 (R.I. 2013) (post-amendment narrowing of § 44-9-24 safety valve)