Sass Muni-V, LLC v. DeSoto County, Mississippi, 170 So. 3d 441

Background

Property in DeSoto County was foreclosed and conveyed to MIC-Rocky, LLC; county and city levied delinquent ad valorem taxes for 2007, which went unpaid and were offered at tax sale on Aug. 25, 2008. SASS Muni-V, LLC successfully bid $530,508.
No owner or lienholder redeemed within the two-year statutory redemption period; SASS filed suit Aug. 30, 2011 (about one year after the redemption period expired) seeking to void the tax sale and recover its purchase price.
SASS alleged three theories: (1) sale void because the chancery clerk failed to provide statutorily required notice of expiration of the redemption period to the owner and lienholders; (2) alternatively, the purported owner (MIC-Rocky) lacked legal existence and DeSoto Development was entitled to notice; (3) assessments were grossly disproportionate (constitutional claim).
Defendants (county, city, corporate actors) moved to dismiss under Rule 12(b)(6), arguing SASS lacked standing, caveat emptor bars relief, and statute of limitations; chancery court dismissed the complaint for lack of standing and caveat emptor.
Mississippi Supreme Court reversed, holding that a tax-sale purchaser has standing to challenge a sale as void for statutory lack of notice and that caveat emptor does not bar a purchaser’s statutorily-prescribed remedy (refund).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to challenge tax sale for clerk's failure to give statutorily required notice of redemption-period expiration	SASS: as purchaser with an interest in title (and a statutory lien if sale void), SASS has a colorable interest and may sue to void sale and obtain refund	Defendants: statutes protect owners/lienholders, not purchasers; purchaser lacks standing to assert others’ rights	Held: Purchaser has standing under Mississippi's liberal standing rules because it holds an actionable interest and an adverse effect distinct from the general public
Applicability of caveat emptor to bar purchaser's refund claim	SASS: caveat emptor is inapplicable where statute provides a remedy (refund) when sale is void for lack of notice	Defendants: purchaser assumed the risk at tax sale and cannot “back out” under caveat emptor	Held: Caveat emptor does not bar SASS because the tax-sale statutes expressly provide refund remedy when sale is void for lack of notice
Whether purchaser may initiate litigation to obtain refund (vs. only owner/lienholder)	SASS: statutes and prior authorities support an “interested party” or purchaser initiating suit to void sale and obtain refund	Defendants: statutes were not meant to permit purchaser-initiated challenges	Held: Statutes and precedent permit an interested purchaser to seek judicial declaration and refund when sale is void for lack of required notice
Whether statute-of-limitations or procedural joinder defects warranted dismissal	SASS: did not concede; sought remand for merits	Defendants: raised limitations and challenged corporate defendants’ joinder in motions to dismiss	Held: Trial court did not rule on limitations; Supreme Court declined to address it on appeal and found joinder/related arguments procedurally barred or moot given reversal

Key Cases Cited

Kirk v. Pope, 973 So. 2d 981 (Miss. 2007) (standing is aspect of subject-matter jurisdiction; review de novo)
Moore v. Marathon Asset Mgmt., LLC, 973 So. 2d 1017 (Miss. Ct. App. 2008) (purchaser had standing to contest tax sale void for lack of notice where purchaser obtained an actionable interest before redemption period expired)
Parsons v. Marshall, 139 So. 2d 833 (Miss. 1962) (purchaser at tax sale is subject to caveat emptor absent statutory remedy)
Rebuild America v. Johnson, 99 So. 3d 1154 (Miss. Ct. App. 2010) (Court of Appeals barred purchaser’s damages claim against clerk/sheriff for alleged failure to follow notice statutes where no statutory remedy existed)
Brown v. Riley, 580 So. 2d 1234 (Miss. 1991) (tax forfeiture statutes strictly construed in favor of landowners)