726 S.E.2d 396
W. Va.2012Background
- Davises purchased two parcels at 51 Woodbridge Drive in 2003; they incurred a tax delinquency leading to a tax lien and sale proceedings.
- Bank financing (Huntington Bank) secured by a line of credit and a deed of trust was used to build a home on the property.
- Davises filed for Chapter 7 bankruptcy in July 2006; after notification, a tax lien was sold at public auction in November 2006.
- Post-sale, the Clerk delivered a tax deed to the tax lien purchaser in April 2008; Davises reportedly did not receive proper notices.
- Davises and Huntington Bank subsequently sought to set aside the tax deed in June 2008; circuit court granted relief, citing bankruptcy and notice failures, leading to appeal by Rebuild/REO.
- On appeal, the court reversed and remanded for proper procedures, including potential preliminary findings and consideration of bankruptcy effects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timely hearing notice for the June 24 session | Rebuild/REO alleging improper Rule 7 notice | Huntington Bank contends notice was adequate | Fair hearing required; notice deficient; error reversed |
| Proper legal standard to set aside a tax deed under 11A-4-4 | Post-sale redemption notice governs analysis | Pre-sale notices control; tax deed validity hinges on service | Post-sale notice to redeem is the relevant inquiry; pre-sale notices alone insufficient |
| Effect of Davises' bankruptcy on the tax lien sale | Bankruptcy stayed or voided sale | Automatic stay not clearly shown to bar sale; record lacking | Remand for evidence on bankruptcy impact; no final ruling on stay effect |
| Procedural proper steps to set aside tax deed under 11A-4-4 | Trial court must issue a preliminary finding and consider tendered redemption costs | Court failed to make preliminary finding; required by statute | Preliminary finding required; remand to properly apply procedure and consider payments |
Key Cases Cited
- Koontz v. Ball, 96 W. Va. 117, 122 S.E. 461 (1924) (1924) (burden to prove notice; strict compliance required)
- Dickerson v. Flanagan, 103 W. Va. 233, 136 S.E. 854 (1927) (1927) (burden on tax deed grantee to prove validity of notice)
- Gates v. Morris, 123 W. Va. 6, 11, 13 S.E.2d 473 (1941) (1941) (jurisdictional def ect of lack of notice; cannot be cured by statute)
- Nestor v. Bruce Hardwood Flooring, L.P., 206 W. Va. 453, 525 S.E.2d 334 (1999) (1999) (reversible error for lack of findings of fact and conclusions of law)
- Ayersman v. West Virginia Division of Environmental Protection, 208 W. Va. 544, 542 S.E.2d 58 (2000) (2000) (reversible error for missing findings of fact and conclusions of law)