HBI, L.L.C., APPELLEE, V. WALTER D. BARNETTE, APPELLANT
No. S-19-147
Supreme Court of Nebraska
April 10, 2020
305 Neb. 457
305 NEBRASKA REPORTS
HBI, L.L.C. v. BARNETTE
Cite as 305 Neb. 457
HBI, L.L.C., APPELLEE, V. WALTER D. BARNETTE, APPELLANT.
___ N.W.2d ___
Filed April 10, 2020. No. S-19-147.
- Constitutional Law: Statutes. The constitutionality of statutes and statutory interpretation present questions of law.
- Tax Sale: Time. Tax sale proceedings are governed by the law in effect at the time the tax sale certificate was sold.
- Tax Sale: Time: Liens. Under
Neb. Rev. Stat. § 77-1801 (Reissue 2009) , properties with delinquent real estate taxes on or before the first Monday of March may be sold at a tax sale. The tax sale purchaser acquires a lien on the property, which is represented by a tax certificate. - Tax Sale. A property owner may redeem a property after a tax certificate has been issued with payment of the amount noted on the tax certificate, other taxes subsequently paid, and interest.
- Tax Sale: Time: Deeds: Foreclosure. If, after 3 years of the issuance of a tax certificate, a property has not been redeemed, there are two methods by which the holder of the tax certificate may acquire a deed to the property: the tax deed method and judicial foreclosure.
- Tax Sale: Deeds: Notice. A tax deed acts to convey the property and may be issued by the county treasurer after proper notice is provided.
- Tax Sale: Foreclosure: Liens. Judicial foreclosure requires the holder of a tax certificate to foreclose on the lien for taxes in the district court of the county where the property is located.
- Dismissal and Nonsuit. Under
Neb. Rev. Stat. §§ 25-601 and25-602 (Reissue 2016) , a plaintiff has the right to dismiss an action without prejudice any time before final submission of the case, so long as no counterclaim or setoff has been filed by an opposing party. - Tax Sale: Deeds: Dismissal and Nonsuit. The language used to distinguish between the two methods of converting a tax certificate into a deed in Neun v. Ewing, 290 Neb. 963, 863 N.W.2d 187 (2015), did not
abrogate the tax certificate holder‘s right to voluntary dismissal under Neb. Rev. Stat. §§ 25-601 and25-602 (Reissue 2012) . - Tax Sale: Notice. If a titled owner cannot be found upon diligent inquiry,
Neb. Rev. Stat. § 77-1834 (Reissue 2009) permits the purchaser or his or her assignee to publish the notice in some newspaper published in the county and having a general circulation in the county or, if no newspaper is printed in the county, then in a newspaper published in Nebraska nearest to the county in which the real property is situated. - Tax Sale: Notice: Proof: Words and Phrases. The word “found” in
Neb. Rev. Stat. § 77-1834 (Reissue 2009) means able to be served, and the statute authorizes the holder of a tax certificate to provide notice by publication if the record owner was unable to be served by certified mail at the address where the property tax statement was mailed, upon proof of compliance withNeb. Rev. Stat. § 77-1832 (Reissue 2009) , if the owner in fact lived at such address. - Tax Sale: Statutes. Even the misidentification of the purchaser on an actual tax deed does not render it void. If a tax deed is in compliance with the statutory requirements, the misidentification would, at most, necessitate reformation of the tax deed.
- Tax Sale: Deeds. There is no language in
Neb. Rev. Stat. § 77-1831 (Reissue 2009) requiring that the party applying for the tax deed be included. - Constitutional Law: Statutes: Presumptions: Proof. A statute is presumed to be constitutional, and all reasonable doubts are resolved in favor of its constitutionality. The burden of establishing the unconstitutionality of a statute is on the one attacking its validity.
- Constitutional Law: Statutes: Proof. The unconstitutionality of a statute must be clearly established before it will be declared void.
- Tax Sale: Notice.
Neb. Rev. Stat. § 77-1832 (Reissue 2009) requires service at the address where the property tax statement was mailed, and thus, it is reasonably calculated to provide notice to the property owner. - ____: ____. Notice by publication under
Neb. Rev. Stat. § 77-1834 (Reissue 2009) is limited to circumstances where the record owner resides at the address where the property tax statement was mailed, but he or she is unable to be served there.
Appeal from the District Court for Sarpy County: STEFANIE A. MARTINEZ, Judge. Affirmed.
Edward F. Noethe, of McGinn, Springer & Noethe, P.L.C., for appellant.
HEAVICAN, C.J., MILLER-LERMAN, CASSEL, STACY, FUNKE, PAPIK, and FREUDENBERG, JJ.
HEAVICAN, C.J.
I. INTRODUCTION
This is an appeal from an action to quiet title after issuance of a tax deed. Appellant, Walter D. Barnette, argues that a notice of application for a treasurer‘s deed was defective and that the statutory scheme relating to notice requirements for obtaining a tax deed is unconstitutional on due process grounds. We affirm.
II. BACKGROUND
On March 5, 2013, Pontian Land Holdings LLC (Pontian) purchased a certificate of tax sale for real property after Barnette failed to pay real estate taxes on the property. The property was located at “Lot 2, Swaney‘s Addition Replat I, an Addition to the City of Bellevue, as surveyed, platted and recorded, Sarpy County, Nebraska.” After waiting the statutorily required 3 years, Pontian initially filed a judicial foreclosure action on the property, but later dismissed the action and filed an application for a treasurer‘s tax deed.
As required by
On August 29, 2016, the Sarpy County treasurer issued a treasurer‘s tax deed in Pontian‘s name. Pontian filed a complaint, seeking to quiet title on the property. Barnette filed a counterclaim to quiet title in his name. Pontian later transferred the property to HBI, L.L.C., and HBI was substituted as plaintiff in the case. On October 31, 2017, Barnette filed a motion for summary judgment that was later withdrawn. On January 30, 2018, HBI filed a motion for summary judgment. On February 14, Barnette filed a second motion for summary judgment. Both motions were denied by the district court as being premature.
On October 12, 2018, HBI filed a second motion for summary judgment. On October 22, Barnette filed a third motion for summary judgment. Barnette later amended his counterclaim with leave from the district court. The counterclaim alleged Pontian‘s notice was defective and challenged the constitutionality of the notice requirements set forth in
On January 15, 2019, the district court granted HBI‘s amended second motion for summary judgment and denied Barnette‘s third motion for summary judgment. The district court quieted title in favor of HBI after finding that Barnette was given sufficient notice in compliance with Nebraska law and that the notice did not violate the due process requirements of the U.S. Constitution or the Nebraska Constitution.
Barnette now appeals the district court‘s order granting summary judgment in favor of HBI and denying Barnette‘s third motion for summary judgment.
Barnette assigns that the district court erred in (1) not finding that Pontian‘s original election of foreclosure barred the tax deed process, (2) finding the notice provided complied with Nebraska statutes, (3) not finding the Nebraska tax sale statutory scheme violated the U.S. Constitution and the Nebraska Constitution, (4) finding Barnette‘s due process rights under the U.S. Constitution and the Nebraska Constitution were not violated, and (5) not quieting title to Barnette.
IV. STANDARD OF REVIEW
[1] The constitutionality of statutes and statutory interpretation present questions of law.1
V. ANALYSIS
1. ORIGINAL ELECTION OF JUDICIAL FORECLOSURE
In his first assignment of error, Barnette argues Pontian‘s claim for a tax deed was barred by its original election to proceed to judicial foreclosure.
[2-7] The Legislature‘s recent amendments to tax sale statutes notwithstanding, the proceedings at issue in this case are governed by the law in effect on December 31, 2009.2 Under
Barnette relies on language in Neun v. Ewing8 to support his argument that Pontian‘s application for a tax deed was barred by its initial filing of a foreclosure action. In Neun, property owners attempted to redeem their property after a foreclosure action had been filed using the procedure set forth in
once the holder has elected to proceed under chapter 77, article 19, the provisions of such article govern the rights of the parties in relation to the tax sale certificate. In other words, after the election to proceed by judicial foreclosure has been made, both the holder and the property owner are bound by that election.10
[8] Barnette argues that this language precluded Pontian from applying for a tax deed because it initially filed a foreclosure action. Neun is distinguishable. The issue in Neun was the manner of redemption permitted once the holder of a tax sale certificate had elected to proceed with judicial forfeiture. Moreover, Barnette‘s interpretation of Neun is inconsistent with a plaintiff‘s statutory right to voluntary dismissal. Under
[9] Here, Pontian‘s foreclosure action was dismissed prior to a summons being issued, and no complaint was served on Barnette in that action. Thus, Pontian had a statutory right to voluntarily dismiss its initial filing without prejudice. We hold that Pontian‘s election to initially file and dismiss the judicial foreclosure action did not preclude his application for a tax deed. In addition, we clarify that the language used to distinguish between the two methods of converting a tax certificate into a deed in Neun did not abrogate the tax certificate holder‘s right to voluntary dismissal under
§ 77-1831
(a) Publication in Sarpy County
In his second assignment of error, Barnette first argues that publication in Sarpy County was insufficient notice because Pontian knew Barnette lived in Pottawattamie County, Iowa.
A tax sale purchaser is not entitled to a tax deed unless he or she provides sufficient notice to the property owner at least 3 months prior to the application for the tax deed.13 A tax deed is presumptive evidence that notice has been served or published as statutorily required.14
[10] Although the Legislature has since amended
In Wisner v. Vandelay Investments,15 this court addressed whether the applicable language in
[11] We further held that the word “found” in
Here, Pontian sent notice of its application for a tax deed by certified mail, return receipt requested, to the address where the property tax statement was mailed—Barnette‘s residence in Pottawattamie County, Iowa. Barnette had continuously resided at this address for 4 years and had received notices of taxes due on the property at this address. However, Pontian‘s notice was returned as “unclaimed.” Pontian then published the notice in Sarpy County as required by
(b) Misidentification of Guardian
In his second assignment of error, Barnette further argues that the notice was defective because it showed Guardian, rather than Pontian, as the party who would apply for the deed. HBI maintains that the error in listing Guardian was immaterial and did not negate the sufficiency of the notice.
Section
No purchaser at any sale for taxes or his or her assignees shall be entitled to a deed from the treasurer for the real property so purchased unless such purchaser or assignee, at least three months before applying for the deed, serves or causes to be served a notice stating when such purchaser purchased the real property, the description thereof, in whose name assessed, for what year taxed or specially assessed, and that after the expiration of three months from the date of service of such notice the deed will be applied for.
[12] Pontian‘s notice included the information required and correctly listed Pontian as the party who had purchased the property. Further, this court has held that even the misidentification of the purchaser on the actual tax deed does not render it void. In Ottaco Acceptance, Inc. v. Larkin,22 the purchaser of a tax certificate had later assigned the tax certificate to another entity. The assignee requested, and was issued, a tax deed for the property, but the tax deed incorrectly identified the assignee as the original purchaser of the property.23 This court held that the tax deed was in compliance with the statutory requirements and that the misidentification would, at most, necessitate reformation of the tax deed.24
As previously stated, Barnette‘s second assignment of error is without merit.
3. CONSTITUTIONALITY OF NEBRASKA‘S TAX SALE NOTICE REQUIREMENTS AND BARNETTE‘S DUE PROCESS RIGHTS
In his third and fourth assignments of error, Barnette argues Nebraska‘s statutory scheme for tax sales is unconstitutional on due process grounds. Specifically, Barnette asserts that his due process rights were violated when Pontian published its notice in Sarpy County pursuant to
(a) Presumption of Constitutionality
[14,15] A statute is presumed to be constitutional, and all reasonable doubts are resolved in favor of its constitutionality.26 The burden of establishing the unconstitutionality of a statute is on the one attacking its validity.27 The unconstitutionality of a statute must be clearly established before it will be declared void.28
(b) Notice Requirement
Before the government may deprive a person of their property, the government must provide “notice reasonably
(c) Jones v. Flowers
In his brief, Barnette cites Jones v. Flowers32 in support of his argument that Nebraska‘s tax deed notice requirements are unconstitutional. In that case, the U.S. Supreme Court held that the government‘s attempt at providing notice of a tax sale was insufficient to satisfy due process when the notice was returned as unclaimed and that the government failed to take additional reasonable steps to provide notice to the property owner before the property was sold.33
In Jones, the property owner had moved from his home in Little Rock, Arkansas, into an apartment in Little Rock after he and his wife were separated. The mortgage company had been paying the property taxes until the mortgage was paid off, and then the taxes became delinquent. Three years later, the Commissioner of State Lands (Commissioner) sent the owner, by certified mail, notice of the tax delinquency and information about his right to redeem the property. The certified letter was sent to the address of the property where the owner‘s wife still lived and was returned as “““unclaimed.““”34
The owner in Jones filed a lawsuit against the Commissioner and the purchaser, alleging that the Commissioner‘s failure to provide notice of the tax sale and the right to redeem constituted a taking of his property without due process. The trial court granted summary judgment in favor of the Commissioner and the purchaser, and the Arkansas Supreme Court affirmed, holding that the Commissioner‘s attempt to provide notice by certified mail satisfied due process. The U.S. Supreme Court reversed, holding 5 to 3 that under the circumstances presented, “[t]he Commissioner‘s effort to provide notice to [the owner] of an impending tax sale of his house was insufficient to satisfy due process . . . .”36
The Court in Jones recognized that Arkansas’ statutory scheme for providing notice of a tax sale likely satisfied the requirements for due process because sending certified mail to an address that the owner was required by law to keep updated is reasonably calculated to reach the property owner. However, in examining the ““practicalities and peculiarities of the case,“”37 the Court compared the Commissioner‘s knowledge of ineffective service to sending notice with actual knowledge that the notice was unlikely to reach the recipient because he was imprisoned or incompetent. Because the letter concerned the “important and irreversible” prospect
(d) Constitutionality of §§ 77-1832 and 77-1834
In the present case, Barnette has failed to meet his burden of establishing Nebraska‘s statutory notice requirements are unconstitutional. Section
[16,17] Because
(e) Barnette‘s Right to Due Process
Barnette has also failed to establish that issuance of the tax deed was in violation of his due process rights. In Dusenbery v. United States,42 the U.S. Supreme Court recognized that the use of the postal service to send certified mail is “a method our cases have recognized as adequate for known addresses.”43
The test in Jones for the constitutional sufficiency of notice is case specific and analyzes whether the action was something that someone ““desirous of actually informing” the homeowner would do.47 Because additional reasonable steps were available to the State, given the circumstances, the Commissioner‘s effort to provide notice to the owner was insufficient to satisfy due process. What is “reasonable in response to new information depends upon what the new information reveals.”48
The dissent, and the authority it cites, interprets Jones as establishing a new rule requiring the government to make additional attempts at providing notice each time notice is returned as unclaimed. However, the Jones Court explicitly stated: “[W]e disclaim any ‘new rule’ that is ‘contrary to Dusenbery and a significant departure from Mullane.‘”49
(i) Sufficient Notice Under Dusenbery and Mullane
The test in Dusenbery for the constitutional sufficiency of notice is whether the chosen method is ““reasonably calculated’ to apprise a party of the pendency of the action.”50 As discussed above, both Dusenbery and Mullane recognized that
Under the circumstances presented here, Pontian‘s attempt to provide Barnette with notice of its intent to apply for a tax deed failed; however, under both Dusenbery and Mullane, the attempted notice was adequate. Pontian had actual knowledge of Barnette‘s address in Iowa and sent notice to that address. This knowledge is one of the ““practicalities and peculiarities of the case“”52 and must be taken into account when assessing the adequacy of notice. Because Pontian had actual knowledge of Barnette‘s address, the method of service was reasonably calculated to apprise Barnette of Pontian‘s intent to apply for a tax deed. Accordingly, we hold that the notice was constitutionally sufficient.
The dissent contends that the focus of Jones was on the fact that the certified mail went unclaimed. We disagree. In Jones, the Court was clearly focused on two ““practicalities and peculiarities of the case“”53 that may vary the notice required:54 the government‘s knowledge and the fact that the property interest at stake was the owner‘s home.
(ii) “New Wrinkle” in Jones
The “new wrinkle” presented in Jones was whether the government‘s knowledge that notice has failed vitiates the reasonableness of the method used under the circumstances presented. This is demonstrated by the Court‘s extensive reliance on two of its prior holdings: Robinson v. Hanrahan55 and Covey v. Town of Somers.56
Jones did not create a formulaic test for deciding when additional attempts at notice are required. The Court determined the return of the owner‘s letter as unclaimed constituted “new information” revealed to the government.58 That information must then be taken into account as one of the ““practicalities and peculiarities of the case“” when determining whether the attempt at notice was adequate.59 If the attempt was not adequate, there is an obligation to take additional steps that are reasonable under the circumstances, “if practicable to do so.”60
The new information presented in Jones was that the owner had either (1) moved from the address or (2) failed to retrieve the certified letter from the post office. Based on this conclusion, the Court provided examples of reasonable steps that could have been implemented after the letter‘s return. In doing so, the Court advised: “What steps are reasonable in response to new information depends upon what the new information reveals.”61
““[D]ue process is flexible and calls for such procedural protections as the particular situation demands.‘”62 In Mathews v. Eldridge,63 the U.S. Supreme Court instructed that in determining whether the procedures used in providing notice are constitutionally sufficient, the governmental and private interests are analyzed using three distinct factors. These factors include:
First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government‘s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.64
In Jones, the Court reaffirmed that the reasonableness of notice requires “[b]alancing a State‘s interest in efficiently managing its administrative system and an individual‘s interest in adequate notice . . . .”65 When concluding that notice to the owner was inadequate, the Court gave special importance to the fact that the property owner was “in danger of losing his house.”66 The Court stated:
In this case, the State is exerting extraordinary power against a property owner—taking and selling a house he owns. It is not too much to insist that the State do a bit more to attempt to let him know about it when the notice letter addressed to him is returned unclaimed.67
While the property at issue is one factor to be considered, we do not, as the dissent suggests, limit Jones to cases involving houses. The fact that Jones involved an occupied house was information that must be considered when determining whether the notice was adequate. “[A]ssessing the adequacy of a particular form of notice requires balancing the ‘interest of the State’ against ‘the individual interest sought to be protected by the Fourteenth Amendment.‘”70
In Jones, the Court was balancing the government‘s interest against the owner‘s interest in an occupied home, and evidence was presented to show that Arkansas’ statutes already required a homeowner to be served by personal service if certified mail is returned. Here, Barnette is attacking the constitutionality of the tax deed issued to Pontian. There is a presumption of constitutionality, and Barnette has the burden of establishing that his due process rights were violated.71
(iv) Reasonable Steps
Based on the specific facts presented in Jones, the Court suggested sending a letter by regular mail so that a signature was not required, posting notice on the front door of the property, or addressing mail to “occupant” would be reasonable. These additional steps were deemed reasonable because Arkansas’ statutes already required a homeowner to be served by personal service if certified mail is returned. And, the property at issue was an occupied home.
Balancing the State‘s interest in efficiency against the owner‘s property interest in his home, the Court in Jones rejected as unreasonable the suggestion that the government should conduct a search for the owner‘s new address in the local phonebook and government records. The Court determined the government was not required to go that far because such a requirement would impose too great a burden. The Court also noted that ““[i]t is not [the Court‘s] responsibility to prescribe the form of service that the [government] should adopt.‘”73
(v) Desirous of Actually Informing
In Jones, the Court explained that ““when notice is a person‘s due . . . [t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.‘”74 Thus, if the return of the notice
In the present case, Pontian‘s knowledge that the certified letter had been returned as unclaimed did not indicate that its method of service was not desirous of actually informing Barnette. Pontian sent notice to Barnette by certified mail, return receipt requested, to the address where the property tax statement was mailed, as required by
(vi) Practicalities and Peculiarities of Case
Jones does not preclude the conclusion we reach today. This case involves substantially different facts and circumstances from those presented in Jones. Other states have rejected the argument that additional steps are required after notice sent to a property owner‘s last known and actual address was returned as unclaimed or where property owners have failed to present evidence that they were either not home or not available to claim the notice.
The North Carolina Court of Appeals rejected a property owner‘s argument that Jones required additional steps after a notice was returned as unclaimed and held that the notice sent to the property owner‘s last known and actual address complied with due process requirements.76 The Supreme Court of New York, Appellate Division, recognized that when mailings had been sent to the property owners’ current and correct addresses but returned as unclaimed, the lack of evidence indicating
Addressing the sufficiency of notice in a breach of contract action, the Pennsylvania Court of Common Pleas has also held that “[w]hen a letter is returned as ‘refused’ or ‘unclaimed,’ the notice is sufficient if it is apparent that the address was valid and could be located by the postal office.”78 In Mikhaylov v. U.S.,79 the U.S. District Court for the Eastern District of New York similarly recognized that in the context of asset forfeiture, “[a] written notice sent, via certified mail, to any known addresses, combined with published notices, ordinarily satisfies the Mullane standard.” The court stated:
The only arguable exceptions are: where the government knows or should know that the written notice will not reach the intended recipient (e.g., the written notice is returned as undeliverable), and it can obtain the recipient‘s correct address internally (e.g., the recipient is already in the government‘s custody). . . . Or, where the government knows or should know that the intended recipient will not understand the written notice (e.g., the recipient lacks the mental capacity).80
Here, Barnette‘s actual address was known and the notice was correctly sent to that address. In contrast to Jones,81 the property at issue in this case was not Barnette‘s home.
The dissent cites two cases in support of its position. However, there is a distinct difference between the factual circumstances in those cases and the one before us today. In each case, the property owner had denied having actual notice of the pending proceedings. Moreover, in Schlereth v. Hardy,82 the court found that the property owner “was not offered a certified letter by the postal worker that she refused to accept—she simply failed to retrieve a letter, the substance of which was unknown to her.”
Again, it is Barnette‘s burden to establish issuance of the tax deed was unconstitutional.83 However, he has not offered any evidence to show that the notice was not reasonably calculated to apprise him of Pontian‘s intent to apply for a tax deed. During oral argument, Barnette‘s counsel admitted there was no evidence in the record regarding why Barnette had not accepted the letter. Barnette has not alleged that he was unaware of the attempts at service or that he was unavailable to claim the letter. Barnette has also not alleged a lack of actual knowledge of Pontian‘s intent to apply for a tax deed. This differs from the property owner in Jones who had demonstrated that he had only learned of the pendency of the proceedings after his home had already been sold.84
Sending notice to Barnette at his actual residence demonstrates Pontian was desirous of actually informing Barnette of its intention to apply for a tax deed. Accordingly, we hold that
The dissent correctly asserts that sending Barnette notice by regular mail would have imposed little burden on Pontian. However, regardless of the level of burden imposed, Pontian was not obligated to do so. The Court of Appeals of New York rejected a similar argument when holding that the government was not required to take additional steps under Jones after tax bills and a notice of foreclosure proceeding were sent by regular mail, but returned as undeliverable because the owners had not shown that there were any steps that would have yielded the owners’ new address.85 Here, the burden lies on Barnette, and he has presented no evidence to show that there were additional reasonable steps and that these additional steps would be practicable.
Even assuming the dissent‘s interpretation of Jones is correct, and the return of notice as unclaimed independently triggers an obligation to take additional reasonable steps when notice is sent to the property owner‘s actual residence, these steps are still not constitutionally required unless it is “practicable to do so.”86 The Oxford English Dictionary defines “practicable” as “[a]ble to be done or put into practice successfully; feasible; able to be used; useful, practical, effective.”87
The U.S. Court of Appeals for the Seventh Circuit has recognized: “The Constitution does not require that an effort to give notice succeed. . . . If it did, then people could evade knowledge, and avoid responsibility for their conduct, by burning notices on receipt—or just leaving them unopened . . . .”88
To the extent the dissent discusses
Under the totality of circumstances presented, Pontian‘s attempt at notice was “desirous of actually informing” Barnette of its intent to apply for a tax deed.89 Pontian complied with
There is no merit to Barnette‘s third and fourth assignments of error.
4. ACTION TO QUIET TITLE
In his fifth assignment of error, Barnette reasserts his claims of defective notice and service and argues the statutory time period for obtaining a deed to the property has expired. As set forth above, Pontian‘s notice of its intent to apply for a tax deed was not defective. This argument is meritless.
VI. CONCLUSION
Pontian complied with the statutory notice requirements for obtaining a tax deed. Because the requirements are reasonably calculated to apprise a property owner of a tax certificate holder‘s intent to apply for a tax deed, they are constitutionally
AFFIRMED.
CASSEL, J., concurring.
I agree with the court that HBI correctly followed
But I write separately to suggest that the Legislature may wish to follow the example of
PAPIK, J., dissenting.
“Before a State may take property and sell it for unpaid taxes, the Due Process Clause of the Fourteenth Amendment requires the government to provide the owner ‘notice and opportunity for hearing appropriate to the nature of the case.‘” Jones v. Flowers, 547 U.S. 220, 223, 126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006), quoting Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 70 S. Ct. 652, 94 L. Ed. 865 (1950). I believe that under the U.S. Supreme Court‘s opinion in Jones, Pontian provided constitutionally inadequate notice of its intent to apply for a treasurer‘s deed for Barnette‘s property. While the majority finds this case distinguishable from Jones, I do not.
In this dissent, I will first explain how I read Jones and how I understand it to apply here. I will then address the majority‘s position that my reading of Jones is incorrect.
As the majority explains, Jones involved a fact pattern similar to the one before us. After the longtime owner of a house separated from his wife and moved out, taxes on the house were not paid. A government official later sent notice of the delinquency and information about how to redeem the property by certified mail to the address where the owner no longer lived. It was returned unclaimed. Two years later, the government official published a notice of public sale of the house in a local newspaper. When a purchase offer was received for the home, the government official sent another certified letter, warning that the house would be sold if the delinquent taxes were not paid. Once again, the certified mail was returned unclaimed. The owner did not learn of the sale until the purchaser had an unlawful detainer notice sent to the property, which was served on the owner‘s daughter.
The owner‘s lawsuit alleging that his house was being taken without due process eventually reached the U.S. Supreme Court. In an opinion authored by Chief Justice Roberts, the Court first acknowledged that due process does not require actual notice before the government may take property and that in prior cases, it had deemed notice constitutionally adequate if it was reasonably calculated to reach the intended recipient when sent. The Court also noted its precedent, including Dusenbery v. United States, 534 U.S. 161, 122 S. Ct. 694, 151 L. Ed. 2d 597 (2002), and Mullane, supra, generally permitting service by mail.
The Court explained, however, that Jones presented a “new wrinkle“: whether due process requires additional steps “when the government becomes aware prior to the taking that its attempt at notice has failed.” 547 U.S. at 227. The Court concluded that reasonable followup measures are required in such circumstances, reasoning that no one who “actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified
The Court went on to conclude that there were reasonable, additional steps the government official could have taken, including resending the notice by regular mail or posting notice on the front door. The Court explained that such steps would increase the likelihood of a property owner receiving actual notice. Finally, the Court concluded that following up by publication was constitutionally inadequate.
I agree with Barnette that under Jones, the notice here was constitutionally inadequate. The notice sent by certified mail was returned unclaimed. I read Jones to tell us rather plainly that in that circumstance, the State must take additional, reasonable steps to provide notice if it is practicable to do so. 547 U.S. at 225 (“[w]e hold that when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so“).
Because I believe this case is controlled by Jones, I would go on to consider, as the Court did in Jones, whether Pontian took additional, reasonable measures to notify Barnette after the certified mail went unclaimed. It quickly becomes clear to me it did not.
As noted above, Jones concluded there were other, reasonable steps that could have been taken after the attempt to provide notice by certified mail failed. The Court mentioned resending the notice by regular mail or posting notice on the front door. The Court explained that such steps would increase the likelihood of the property owner receiving actual notice whether the property owner had moved or had simply not retrieved the certified mail.
I see no reason why those reasonable, additional steps could not have been taken here. Pontian, for example, could have followed the normal practice in Nebraska of sending the published notice to those with an interest in a proceeding by
Because Pontian did not, after the certified mail was returned unclaimed, take reasonable, additional steps to attempt to notify Barnette when it was practicable to do so, I do not believe it provided constitutionally adequate notice. The majority, however, finds the notice was adequate based on a different reading of Jones. I explain why I disagree with that reading below.
Majority‘s Understanding of Jones.
The majority concludes that the notice sent by certified mail that was returned unclaimed was sufficient to satisfy due process notwithstanding Jones. As I understand the majority opinion, it concludes that Jones does not apply in this circumstance because it is not clear that the piece of property being taken and sold by the government includes a house, because the certified mail that went unclaimed was addressed to the place where Barnette lived, and because it finds that the additional steps discussed in Jones likely would have failed.
Not only is that, in my view, a more natural reading, in many other places in Jones, the U.S. Supreme Court frames its analysis in terms of the taking of property in general. The Court stated that it granted certiorari “to determine whether, when notice of a tax sale is mailed to the owner and returned undelivered, the government must take additional reasonable steps to provide notice before taking the owner‘s property.” Jones, 547 U.S. at 223 (emphasis supplied). It further explained that it took the case “to resolve a conflict among the Circuits and State Supreme Courts concerning whether the Due Process Clause requires the government to take additional reasonable steps to notify a property owner when notice of a tax sale is returned undelivered.” Id., 547 U.S. at 225 (emphasis supplied). And in stating its holding, the Court said, “We hold that when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so.” Jones v. Flowers, 547 U.S. 220, 225, 126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006) (emphasis supplied).
I would also note that I find the conclusions the majority draws from a house being at issue in Jones difficult to square
Neither am I persuaded by the majority‘s conclusion that Jones does not apply when, as here, the unclaimed certified mail was sent to the address at which the property owner lives. I concede that, at least at first blush, this distinction identified by the majority seems meaningful. A compelling argument can certainly be made that a person like the homeowner in Jones who never has the opportunity to accept certified mail is more deserving of additional attempts at notice than Barnette who, for reasons that are not clear, did not sign for certified mail sent to the home where he resides. One might add to that argument that a finding that Barnette was provided with inadequate notice could create an incentive for delinquent taxpayers to evade certified mail. See Jones, 547 U.S. at 248 (Thomas, J., dissenting) (“[t]he meaning of the Constitution should not turn on the antics of tax evaders and scofflaws“). But as compelling as I might find the policy arguments for the majority‘s position, I do not believe that Jones can fairly be read to allow for it.
In holding that knowledge that notice has been returned unclaimed requires the State to consider additional action, Jones does not focus on the reason that the certified mail went unclaimed. Its focus is instead on the fact that the certified mail went unclaimed. The Court concluded that because the certified mail went unclaimed, the government official knew the attempt to actually notify the homeowner had failed and
But not only does Jones not focus on the owner‘s living somewhere other than the address where the certified mail was sent, it explicitly discusses the possibility that certified mail might go unclaimed by a person residing at the address where the certified mail is sent. 547 U.S. at 234 (“[t]he return of the certified letter marked ‘unclaimed’ meant either that [the owner] still lived at [the address where the certified mail was sent], but was not home when the postman called and did not retrieve the letter at the post office, or that [the owner] no longer resided at that address“) (emphasis supplied). The opinion does not, however, conclude that a person who does not retrieve certified mail sent to his or her residence has received constitutionally adequate notice. To the contrary, it discusses how the required additional attempts at providing notice such as resending the notice by regular mail or posting notice on the front door would address both the possibility that the homeowner no longer lived at the address but also that he “had simply not retrieved the certified letter.” Jones v. Flowers, 547 U.S. 220, 235, 126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006). For better or for worse, Jones treats alike property owners who do not claim certified mail because they have moved and property owners who simply fail to retrieve certified mail—neither receive notice when certified mail goes unclaimed and the additional steps are aimed at providing notice to both types of parties.
For this reason, I cannot agree with the majority that Pontian‘s attempt at notice was “desirous of actually informing” Barnette of its intent to apply for a tax deed. The majority focuses exclusively on whether Pontian‘s attempt to notify Barnette of an impending tax sale was “desirous of actually informing” when the certified mail was sent. Under Jones,
I also do not believe the majority is correct to conclude that even if Jones applies, Pontian was not required to take additional steps after the certified mail went unclaimed. The majority concludes Pontian was not required to do so because, it says, any additional steps would not likely have succeeded because there is nothing in the record that indicates why the certified mail went unclaimed in the first place. I do not believe that is relevant. When Jones concluded that additional steps such as sending the notice by regular mail or posting the notice on the front door were reasonable and available, it did not do so by considering whether those steps would have provided notice to the property owner in the case before it. It concluded that such steps were “practicable” because they would “increase the chances of actual notice” whether the property owner had moved or had simply not retrieved the certified mail sent to his home. Id., 547 U.S. at 234, 235. I do not believe we can second-guess that determination here.
Other Authority.
The majority also relies on a number of cases in support of its more limited understanding of Jones. Just as I disagree with the majority‘s understanding of Jones, I am not persuaded by its reliance on other cases.
In my view, many of the cases cited by the majority do not even speak to the issues at hand. For example, the majority notes that in St. Regis of Onslow County v. Johnson, 191 N.C. App. 516, 663 S.E.2d 908 (2008), the North Carolina Court of Appeals rejected a property owner‘s argument that Jones required additional steps after a notice was returned unclaimed. That is true enough, but the court did not do so for any of the reasons the majority relies on here. The court concluded that
The majority also cites language from a Pennsylvania trial court decision to the effect that even if letters are returned unclaimed, the notice is sufficient if sent to a valid address. See Masergy Communications, Inc. v. Atris, Inc., No. 06-24948, 2007 WL 5479856 (Pa. Com. Pl. Oct. 4, 2007). In support of that proposition, however, the court cited cases that predated Jones. The court only mentioned Jones in a footnote, also distinguishing it on grounds not relied on by the majority here.
I also cannot agree that Mikhaylov v. U.S., 29 F. Supp. 3d 260 (E.D.N.Y. 2014), supports the majority‘s position. At issue in that case was whether the government provided notice consistent with due process before seizing property in a drug forfeiture case. The government sent notice of the forfeiture to the property owner‘s last known address by certified mail. The property owner had moved away, but someone else signed for it. The property owner argued that he was entitled to actual notice, and the court disagreed. Because the notice was not returned unclaimed, the court‘s opinion, unsurprisingly, does not discuss Jones.
Despite the absence of any mention of Jones in Mikhaylov, the majority splices together two quotes from the opinion and appears to suggest those quotes support its position. The first quote is a recitation of a principle of blackletter law with which neither I nor anyone else could quibble: “A written notice sent, via certified mail, to any known addresses, combined with published notices, ordinarily satisfies the Mullane standard.” Mikhaylov, 29 F. Supp. 3d at 267 (emphasis supplied). In the next sentence of the majority opinion, the majority quotes from language appearing two paragraphs later in Mikhaylov discussing “[t]he only arguable exceptions.” Id. To the extent the majority intends to suggest that Mikhaylov
The majority does cite two cases, Temple Bnai Shalom of Great Neck v. Village of Great Neck Estates, 32 A.D.3d 391, 820 N.Y.S.2d 104 (2006), and Mac Naughton v. Warren County, 20 N.Y.3d 252, 982 N.E.2d 1237, 959 N.Y.S.2d 104 (2012), that appear to align with the majority‘s understanding of Jones to some degree. But Temple Bnai Shalom of Great Neck declined to apply Jones based, in part, upon the reason certified mail went unclaimed and Mac Naughton declined to do so based upon a determination that additional efforts would not have resulted in notifying the owners in the case before it. As I have already explained, I do not believe either approach is consistent with Jones.
While on the subject of authority, I note that others have read Jones as I do. In Schlereth v. Hardy, 280 S.W.3d 47 (Mo. 2009), the Missouri Supreme Court confronted a case like ours. In that case, certified mail was sent to the delinquent taxpayer‘s residence; the taxpayer received notifications of the attempt to deliver, but she failed to pick it up; and it was returned unclaimed. The person seeking to buy the delinquent taxpayer‘s home did not provide additional forms of notice. The Missouri Supreme Court unanimously held that, under Jones, the notice did not comply with due process. It concluded that after the certified mail was returned unclaimed, the sender was required to take reasonable, additional measures as articulated in Jones. With respect to the fact that the delinquent taxpayer received notification of the certified mail and failed to retrieve it, the court stated: ”Jones did not concern itself with why the addressee failed to claim the certified letter. In
Similarly, in VanHorn v. Florida, 677 F. Supp. 2d 1288 (M.D. Fla. 2009), a federal district court concluded that, under Jones, the government was required to attempt additional reasonable steps at service, if practicable, even though the certified mail that went unclaimed was sent to the address where the property owner resided. The court pointed to the language in Jones discussed above that the government was required to “account not only for the possibility that (as in [Jones]) an unclaimed letter was delivered to an address at which the property owner did not reside but also ‘that he had simply not retrieved the certified letter.‘” VanHorn, 677 F. Supp. 2d at 1297, quoting Jones v. Flowers, 547 U.S. 220, 126 S. Ct. 1708, 164 L. Ed. 2d 415 (2006).
Conclusion.
In closing, I respond to the majority‘s assertion that I read Jones to create a new rule when the Jones Court disavowed doing so. In fact, Jones did not altogether disavow the creation of a new rule; the Court said it was not creating a rule that “is contrary to Dusenbery and a significant departure from Mullane.” 547 U.S. at 238. The dissent in Jones felt that this was not an accurate account of the opinion. Id., 547 U.S. at 244 (Thomas, J., dissenting) (“[t]he majority‘s new rule is contrary to Dusenbery and a significant departure from Mullane“). And, as a matter of description, perhaps that is debatable.
But regardless of how Jones characterized its holding, we are bound to follow it. See, e.g., State v. Thieszen, 295 Neb. 293, 297, 887 N.W.2d 871, 875 (2016) (“[u]pon questions involving the interpretation of the U.S. Constitution, the decision of the U.S. Supreme Court is the supreme law, by which state courts are bound“). Respectfully, I do not believe the majority opinion does. For that reason, I dissent.