Court: Louisiana Court of Appeal; December 21, 2016; Louisiana; State Appellate Court
The appeal concerns the dismissal of a petition to confirm tax title for a property located at 1006 Main Street, Baker, Louisiana. T. L Grocery, LLC acquired Lot 3 of the Stringer Subdivision in 2000 but failed to pay property taxes for the 2001 tax year, leading to a tax sale on June 12, 2002, to Munitax Fund, LLC. Marquee Acquisitions, LLC acquired the property through quitclaim deeds and filed suit on January 9, 2013, to confirm title based on the lack of redemption of the tax sale within five years, as stipulated by Louisiana law.
At trial, T. L Grocery contested the validity of the 2002 tax sale, claiming insufficient notice regarding the tax delinquency and sale. T. L Grocery also asserted that its registered agent, Herbert L. Breaux, redeemed the property on July 12, 2012, after the property was adjudicated to the state due to unpaid taxes from 2007 to 2011.
During the October 6, 2015 bench trial, Marquee Acquisitions presented the 2002 tax sale deed as prima facie evidence of validity and highlighted its chain of title through quitclaim deeds. Conversely, T. L Grocery provided documentation supporting its claim of ownership and Breaux's redemption actions. Notably, evidence of notification regarding the 2002 tax sale was disputed, with Marquee Acquisitions submitting a return receipt purportedly signed by Breaux's wife, which lacked clear connection to Breaux or specific dates. Breaux testified that he had not received any notification and denied his wife's authority to accept such notices.
The trial court concluded that T. L Grocery was not adequately notified of the 2002 tax sale, determining that notice should have been directed to Mr. Breaux, the managing member. On December 1, 2015, a judgment was issued denying Marquee Acquisition's petition to confirm the tax title and dismissing the case with prejudice. The court specified that proper notification for a limited liability company’s delinquent taxes, as required under Louisiana law, necessitates sending notice to the managing member or legal representative, which was neglected in this situation.
Marquee Acquisition's appeal is based on established legal principles that dictate property rights affected by tax sales must adhere to the Due Process Clause of the Fourteenth Amendment and Article I, Section 2 of the Louisiana Constitution. Notice must be "reasonably calculated" to inform interested parties of actions against their property, ensuring an opportunity to respond. The Louisiana Constitution mandates that the tax collector provides notice of tax delinquency to all owners of record.
At the time of the 2002 tax sale, former La. R.S. 47:2180 outlined the required process for notifying taxpayers of delinquent property taxes, stipulating that notice must be sent via certified mail or provided through personal service, with a return receipt requested. If notice is undeliverable, alternative measures, such as public advertising, are permitted. The law emphasized that taxpayers must receive written notice that failure to pay taxes within twenty days would lead to property sale.
T. L Grocery was the record owner of the property during the 2002 tax sale, but there is no evidence that it received proper notice via certified mail or personal service at the registered agent's address. The return receipt for any notice is illegible and lacks a year, and no valid proces verbal is present in the record to confirm compliance with notice requirements under former La. R.S. 47:2180. Jurisprudence establishes that lack of notice is fatal to a tax sale, as notice is a constitutional requirement. While a tax deed is typically prima facie evidence of a valid sale, the record owner can challenge this presumption by demonstrating that proper notice was not given. Testimony from Mr. Breaux confirmed that T. L Grocery did not receive notice, shifting the burden to Marquee Acquisition to prove compliance with notice requirements. However, Marquee Acquisition failed to present evidence establishing that notice was conveyed, leading to the proper dismissal of their petition to confirm tax title. The trial court's commentary on what proper notice should have been sent was unnecessary and does not affect the dismissal, as there was no evidence of written notice provided to T. L Grocery. Ultimately, the failure to give sufficient written notice renders the tax sale an absolute nullity, prompting an amendment to the judgment to formally declare the 2002 tax sale null due to lack of required notice.
No judgment annulling a tax sale in Louisiana is effective until the tax purchaser is reimbursed for the price, taxes, costs, and accrued interest at ten percent per annum from the date of payment. A declaration of absolute nullity of a tax sale does not grant the delinquent taxpayer immediate cancellation of the tax sale deed; rather, the tax sale purchaser must be returned to their pre-sale position. The case lacks evidence on the reimbursement amount necessary for T. L Grocery to cancel the 2002 tax sale, prompting a remand to the trial court for a hearing to establish this amount. The appellate court amended the trial court’s judgment to declare the 2002 tax sale an absolute nullity due to lack of required notice, affirmed the dismissal of Marquee Acquisitions’ petition to confirm tax title, and remanded for further proceedings. The appeal only involves the ownership interests of Marquee Acquisitions and T. L Grocery. Additionally, issues regarding the delivery date on evidence and the repeal of Louisiana Revised Statute 47:2180, replaced by La. R.S. 47:2153 with modifications, are noted. All costs of the appeal are assigned to Marquee Acquisitions.
