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Lamasco Redevelopment, LLC v. Henry County

Court of Appeals of Indiana

July 25, 2017

Lamasco Redevelopment, LLC, Appellant,
v.
Henry County, Indiana, Auditor and Henry County, Indiana, Treasurer. Appellees.

         Appeal from the Henry Circuit Court. The Honorable Bob A. Witham, Judge. Trial Court Cause No. 33C01-1509-MI-116

          Attorney for Appellant Adam D. Decker

          Attorney for Appellees J. Alex Bruggenschmidt Buchanan & Bruggenschmidt, P.C.

          Sharpnack, Senior Judge

         Statement of the Case

         [¶1] Lamasco Redevelopment, LLC, appeals the trial court's order granting the Henry County Auditor and Henry County Treasurer's request to invalidate Lamasco's purchase of two properties at a 2015 tax sale and to vacate the court's orders directing that tax deeds be issued to Lamasco for those properties. We reverse and remand.

         Issue

         [¶2] Lamasco raises two issues, which we consolidate and restate as: whether the court erred in invalidating the tax sale and vacating its orders directing the issuance of tax deeds.

         Facts and Procedural History

         [¶3] This case concerns two parcels of land in Henry County. The first, identified as Tax Sale Certificate Number 331500413 ("413"), was owned by Tax Ease Florida REO, LLC, a Texas company. The second, identified as Tax Sale Certificate Number 331500091 ("91"), was owned by Unique Real Estate Solutions, Inc., an Indiana company.

         [¶4] Tax Ease and Unique Real Estate were delinquent in paying property taxes for their parcels. On September 4, 2015, the Auditor and the Treasurer began this case by petitioning the trial court for permission to sell the parcels, along with others, at a tax sale. The trial court granted the petition on September 18, 2015.

         [¶5] The tax sale was held on September 24, 2015, and Lamasco was the successful bidder for parcels 413 and 91. The Auditor issued tax sale certificates to Lamasco for the parcels. The certificates stated Lamasco would be entitled to tax deeds for the parcels unless the owners paid the property taxes on or before September 26, 2016. Next, on November 3, 2015, Lamasco sent notices to Tax Ease and Unique Real Estate explaining their properties had been sold at a tax sale and advising them of the September 26, 2016 redemption deadline. Neither landowner appeared in the tax sale case or paid the back taxes.

         [¶6] On October 4, 2016, Lamasco sent Tax Ease and Unique Real Estate notices stating the redemption period had expired and Lamasco would petition the trial court to issue tax deeds. On November 15, 2016, Lamasco filed with the trial court petitions for the issuance of tax deeds for parcels 413 and 91, claiming it had complied with all statutory obligations and the owners had not redeemed the parcels. On December 7, 2016, the court granted both petitions and directed the Auditor to issue tax deeds to Lamasco for parcels 413 and 91.

         [¶7] The Auditor subsequently discovered it had endorsed deeds purporting to transfer Tax Ease and Unique Real Estate's interests in their parcels to other persons. On September 15, 2016, Unique Real Estate executed a warranty deed for parcel 91 to Justin D. Kolodziej for ten dollars. The deed was recorded in Henry County on September 20, 2016, within the redemption period. On December 5, 2016, Tax Ease executed a quitclaim deed to Ovation REO 1, LLC, for parcel 413 for $4, 182.39. The deed was recorded in Henry County on December 27, 2016, after the redemption period had expired. No one paid the back taxes for the parcels.

         [¶8] On January 20, 2017, the Auditor and the Treasurer filed a motion to invalidate the tax sale as to parcels 413 and 91 and to vacate the orders for tax deeds to be issued to Lamasco. They served the motion on Ovation REO and Kolodziej, along with Lamasco. In the motion, the Auditor and the Treasurer claimed that Indiana Code section 32-21-8-7 (2016), which took effect on July 1, 2016, bars auditors from endorsing the conveyance of properties that are subject to tax liens unless the property has been redeemed. The Auditor and the Treasurer further stated the Auditor was unaware of the statute and inadvertently violated it by endorsing Unique Real Estate's warranty deed and Tax Ease's quitclaim deed even though the purchasers had not paid the delinquent property taxes. They concluded the breach of Indiana Code section 32-21-8-7 "compromised the legal integrity of the tax sale" and that Kolodziej and Ovation REO's property rights were "materially undermined." Appellant's App. p. 50.

         [¶9] The trial court granted the motion without a hearing. The court invalidated the tax sale as to parcels 413 and 91, vacated the orders directing the Auditor to issue tax deeds, ordered the Auditor to refund to Lamasco all monies due by statute, and directed Lamasco to restore the ownership interests of the prior owners of record. Neither Ovation REO nor Kolodziej appeared in the case. Lamasco filed a motion to correct error, to which the Auditor and Treasurer objected. The court denied Lamasco's motion, and this appeal followed.

         Discussion and Decision

          [¶10] Lamasco argues the trial court erred in invalidating the tax sales and vacating its prior orders to issue tax deeds for parcels 413 and 91 because the sales fully complied with governing statutes and Lamasco had fulfilled its responsibilities as a tax sale purchaser. The Auditor and the Treasurer state the trial court acted appropriately because the Auditor's violation of ...


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