Christiana Trust as Custodian GSRAN-Z LLC Deposit Account v. Megan A. Ciota

Citation: Not availableDocket: NO. 2018-CA-00906-COA

Court: Court of Appeals of Mississippi; November 5, 2019; Mississippi; State Appellate Court

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Christiana Trust, as Custodian for GSRAN-Z LLC Deposit Account, appeals the Harrison County Chancery Court's order voiding its tax-sale purchase of real property due to inadequate notice to the landowner, Megan A. Ciota. The court found that the chancery clerk's notice by publication did not meet the statutory requirements outlined in Mississippi Code Annotated section 27-43-3. Although Christiana Trust argued that the notice complied with the statute, the appellate court affirmed the chancellor's decision to void the tax sale and set aside the conveyance to Christiana Trust. The case is remanded to address the issue of statutory damages.

The property in question, located at 116 Poplar Point, was originally conveyed to Christopher B. Schultz and Megan A. Ciota, who subsequently failed to pay ad valorem taxes for the 2013 tax year. Following the tax sale on August 25, 2014, the chancery clerk attempted to notify Ciota of the property’s forfeiture via certified mail and newspaper publication. However, the notices were addressed incorrectly, leading to the court's conclusion that the notification did not adhere to the requirements of section 27-43-3. Ciota, a Louisiana resident, received the certified notice but did not redeem the property within the statutory timeframe.

On October 21, 2016, following the expiration of the redemption period, the chancery clerk transferred the property to Christiana Trust. Christiana Trust filed a complaint on November 18, 2016, to confirm title, and Ciota was served by certified mail on December 12, 2016. Ciota did not respond in a timely manner, leading to a clerk's entry of default against her on January 16, 2017, when Christiana Trust sought a default judgment. Ciota eventually filed her answer and counterclaim on April 21, 2017, contesting the tax sale's validity. She claimed that she had attempted to redeem her 2013 and 2014 taxes by mailing a check, which was returned by the tax collector due to outstanding 2013 taxes, and attached evidence to her motion. Ciota also filed for a declaratory judgment and summary judgment on July 11, 2017, seeking to establish that no statutory interest would accrue after her check was sent or after her attorney's payment offer. The chancellor granted her motion to set aside the entry of default on October 16, 2017, but denied her motion for summary judgment, determining that the chancery clerk had properly notified her.

The chancellor noted the absence of direct Mississippi case law on the matter and referenced U.S. Supreme Court precedent regarding summons sufficiency when a name differs from a party's actual name, along with persuasive authority from other jurisdictions. The chancellor ruled the notices mailed to Ciota were valid, affirming that the identification in the notice met statutory requirements, supported by relevant case law. The court clarified that strict compliance with tax sale statutes does not negate this finding.

On October 25, 2017, Ciota filed a motion to alter or amend the judgment, claiming the chancery clerk failed to properly publish her name under section 27-43-3, rendering the tax sale void ab initio. Ciota argued her name was incorrectly listed by the tax assessor and repeated by the clerk, asserting a failure to comply with statutory requirements. After a hearing, the chancellor found the published notice inadequate under section 27-43-3 and granted Ciota’s motion on May 24, 2018, recognizing that both Ciota and Schultz were the record owners of the property. The chancellor identified the error in the clerk's notice, which listed Ciota's name incorrectly.

The chancellor emphasized that Mississippi law requires strict adherence to notice provisions for landowners, and any deviation voids the sale. The ruling noted the clerk's error in relying on the tax assessor's records instead of verifying ownership through land records. Consequently, the chancellor voided the August 25, 2014 tax sale and set aside the clerk’s conveyance. Christiana Trust subsequently appealed several judgments, including orders related to Ciota's motions to set aside the clerk’s default entry and to amend the judgment.

A de novo standard is applied when reviewing a trial court's decision on a motion for summary judgment, assessing all evidence in favor of the non-moving party. Summary judgment is granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The review of a trial court’s decision on a Mississippi Rule of Civil Procedure 59 motion is for abuse of discretion, and such a decision will not be reversed unless it leads to a miscarriage of justice. Limited review applies to a chancellor's factual findings, which are upheld if supported by substantial evidence unless found manifestly wrong or erroneous.

Christiana Trust contends that the chancery clerk adhered to statutory notice requirements concerning tax sales and redemption periods, arguing that an error in the name "Ciota" does not violate mandated procedures. They assert that notice was properly mailed to "Schultz Megan A. C," and that Ciota received this notice via certified mail on April 2, 2016. Additionally, Christiana Trust claims that publication in the Sun Herald newspaper sufficiently notified Ciota, listing the landowners as “Schultz Christopher B. Megan A. C” and providing a property description.

Conversely, Ciota argues that Mississippi public policy prioritizes the protection of landowners, asserting that notice must be directed to the property owner rather than individuals merely assessed for taxes. Ciota insists that the statutory requirements of sections 27-43-1 and 27-43-3 necessitate notice be given to property owners regarding the expiration of the redemption period, which is the core issue under review.

Section 27-43-1 mandates that the chancery court clerk must issue notice to the record owner of land sold within 180 days, and at least 60 days prior to the expiration of the redemption period. Section 27-43-3 outlines the methods for issuing redemption notices to the reputed owner, which include: 1) personal service similar to court summons, 2) mailing to the owner’s usual street address, and 3) publication in a local newspaper. If personal service is unsuccessful and certified mail is undelivered, the clerk must conduct a diligent search for the record owner. For nonresident owners, the notice must still be mailed as specified, but sheriff service is not required. The clerk must publish the owner's name, address, and property legal description in a newspaper with general circulation in the county.

Failure to provide notice as required renders the tax sale void, with the clerk not liable for refunds to purchasers or owners. The Mississippi Supreme Court emphasizes public policy aimed at protecting landowners from losing property due to tax sales, requiring strict compliance with notice statutes. Noncompliance results in the tax deed being void ab initio rather than voidable. Although the law mandates this strict adherence, landowners are also expected to be diligent regarding their property tax assessments. In a cited case, the court maintained that even if an advertisement contained incorrect information, it didn't invalidate the tax sale under previous statutory language.

A legal description of property may be assessed to an unknown owner or any person not actually owning it, as supported by Mississippi Code Annotated section 27-35-1(1) and the precedent set in Rains, which clarified that ad valorem tax assessments are in rem rather than in personam. In this case, Ciota received notice sent to the incorrect name, “Schultz Megan A C,” at her address, which led to a determination that the chancery clerk did not adhere strictly to the statutory notice requirements under section 27-43-3. The Mississippi Supreme Court previously ruled in Campbell Properties that failure to follow these requirements voids the tax sale, even if the owner received notice. The court found that the clerk's failure to use the correct name in the notice constituted a lack of diligence. Consequently, the tax sale from August 25, 2014, was declared void, and Ciota's motion for summary judgment was granted. Furthermore, Christiana Trust is entitled to statutory damages under Mississippi Code section 27-45-3, which outlines the process for redeeming property sold at tax sale, including the payment of taxes, costs, and interest. The issue of damages was remanded to the chancellor for calculation based on statutory requirements, affirming part of the lower court’s decision while also ordering the chancellor to determine the damages owed. The ruling was affirmed in part and remanded in part, with all justices concurring.