SID No. 424 v. Tristar Mgmt.
288 Neb. 425
| Neb. | 2014Background
- SID No. 424 levied special assessments on five lots in Stone Park in 1999; assessments remained unpaid.
- SID became record titleholder in 2011 via a Special Warranty Deed; its Form 521 designated its attorney Mark LaPuzza as the address for tax statements.
- Tristar acquired the 2009 tax certificates by assignment, followed statutory notice (certified mail to address on record and publication), and obtained treasurer’s tax deeds under Neb. Rev. Stat. ch. 77, art. 18 (§§ 77-1801 et seq.).
- SID sued in district court seeking quiet title and foreclosure of its special assessment liens, arguing the treasurer’s deeds did not extinguish those liens and that notice to SID was defective.
- District court applied § 77-1902 (chapter 77, article 19, judicial-foreclosure provision) and held the SID’s special assessment liens survived issuance of the treasurer’s deeds; it granted SID summary judgment and denied Tristar’s motion.
- Nebraska Supreme Court reversed: held treasurer’s tax deeds issued in compliance with chapter 77, article 18 convey title free and clear of prior liens and encumbrances (including SID special assessments), and that the judicial-foreclosure exception in § 77-1902 does not apply to the tax-deed procedure.
Issues
| Issue | Plaintiff's Argument (SID) | Defendant's Argument (Tristar) | Held |
|---|---|---|---|
| Do treasurer’s tax deeds under chapter 77, article 18 extinguish SID special-assessment liens? | Tax deeds do not extinguish SID liens; § 77-1902 preserves SID assessments. | Tax deeds under § 77-1837 pass title free and clear of prior liens, including SID assessments. | Treasurers’ tax deeds under article 18 do extinguish prior liens; § 77-1902 (article 19) does not apply. |
| Was notice to the SID sufficient for the tax-deed process? | Notice was inadequate; as a political subdivision service should be on officers/board per general service statutes. | Notice complied with the specific tax-deed statutes: certified mail to address on Form 521 and publication. | Notice was sufficient: specific tax-deed statutes control and Tristar sent notice to the address of record. |
| Could the district court apply § 77-1902 (judicial-foreclosure statute) to the tax-deed proceeding? | § 77-1902’s preservation of SID liens should be applied to protect assessments regardless of method. | § 77-1902 is part of article 19 (judicial foreclosure) and does not govern article 18 (tax-deed) proceedings. | § 77-1902 is limited to the judicial-foreclosure statutory scheme and cannot be imported into the tax-deed process. |
| Did merger or standing issues prevent SID relief (i.e., had liens merged into SID’s title)? | SID retained lien interest and standing to seek foreclosure. | If SID’s liens merged into its title when it became owner, SID lacked a lienholder interest to protect. | Court assumed for analysis that liens did not merge; regardless, SID failed to show an enforceable interest superior to Tristar after tax deeds were issued. |
Key Cases Cited
- Obermiller v. Baasch, 284 Neb. 542 (discussing de novo review in equity appeals)
- Knosp v. Shafer Properties, 19 Neb. App. 809 (Neb. Ct. App.) (treasurer’s tax deed passes title free and clear of prior liens when issued in compliance with article 18)
- INA Group v. Young, 271 Neb. 956 (describing the two methods—tax-deed and judicial foreclosure—under chapter 77)
- Ottaco Acceptance, Inc. v. Huntzinger, 268 Neb. 258 (tax-deed/statutory notice principles)
- Brown v. Glebe, 213 Neb. 318 (articles 18 and 19 are distinct and not interchangeable)
- Polenz v. City of Ravenna, 145 Neb. 845 (title passing free and clear under judicial-foreclosure scheme)
- Sanford v. Scott, 105 Neb. 479 (treasurer’s tax deed conveyed title free from prior mortgage lien)
- Franksen v. Crossroads Joint Venture, 245 Neb. 863 (doctrine of merger discussed)