Kipnis v. County of Maricopa

Citations: 10 Ariz. App. 174; 457 P.2d 714; 1969 Ariz. App. LEXIS 549Docket: No. 1 CA-CIV 724

Court: Court of Appeals of Arizona; August 11, 1969; Arizona; State Appellate Court

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The legal issue at hand is whether unpaid assessments from an irrigation district on land leased by the State remain a lien after the appellant purchased the property. The land, encompassing 80 acres within the Buckeye Water Conservation Drainage District, was owned by the State of Arizona until its sale to the appellant in 1959. During the period of State ownership, various assessments totaling $620.62 were levied by the irrigation district while the land was leased to others, excluding the appellant. Initially, the appellee county claimed these assessments were based on a statute pertaining to drainage districts, later amending this to assert they were for irrigation district maintenance. The appellant’s purchase included a provision stating responsibility for future taxes and assessments, with "future" being a typewritten addition. Following the purchase, the county treasurer billed the appellant for past assessments plus interest, amounting to $2,269.92, which the appellant paid under protest while seeking recovery from the county. The county subsequently involved the irrigation district, which counterclaimed for unpaid taxes. The court ruled in favor of the county against the appellant without any findings of fact or conclusions of law, and the irrigation district participated in defending against the appellant's claim. The county has not disputed its role as the appropriate party for the appellant's lawsuit.

The county argues that the appellant's failure to file a written demand with the board of supervisors before initiating a lawsuit is detrimental to his claim, referencing A.R.S. 11-622. However, this argument has previously been rejected in Arizona Eastern R.R. Co. v. Graham County. The appellant acknowledges that leasehold interests in state-owned land are taxable, as established in Maricopa County v. Fox Riverside Theatre Corp., and concedes the validity of assessments against prior lessees, despite the district's failure to file certain required maps and assessment lists. The appellant does not claim that the assessments or liens have become stale over time. The primary issue revolves around statutory interpretation, particularly regarding whether the appellant, as a purchaser from the State, has acquired an interest in land exempt from the assessment liens due to statutory provisions. A.R.S. 45-1671 states that state lands within an irrigation district are subject to state laws governing such districts, similar to privately owned lands. A.R.S. 45-1672 mandates that certified lists of state lands within irrigation districts and their assessments be submitted to the state land department. It establishes that these assessments become liens on the lands, which can be enforced. Specifically, if state lands are held under a certificate of purchase, the holder must provide proof of no unpaid assessments when paying principal and interest. Failure to pay delinquent assessments for a year results in a breach that can lead to certificate forfeiture. Citizens who pay these assessments after they become delinquent may file actions to forfeit the holder's interest, gaining subrogation rights to the original certificate.

If the state initiates legal action and secures a judgment against a defendant, any state citizen can obtain a certificate of purchase for state land by presenting proof of no unpaid charges or assessments and reimbursing the state for prosecution costs, along with any delinquent payments related to the original certificate. Lessees of state lands must provide a certificate verifying no unpaid district charges when making rental payments. Failure to do so within a year of notice results in lease forfeiture, allowing the state to lease or sell the land. All legally imposed charges on state lands, not under a certificate or lease, remain a continuing lien, preventing sale or lease until a certificate confirming payment of delinquent charges is presented. Additionally, state lands are not liable for debts incurred by irrigation districts, and district taxes become a lien on the real estate until paid, assessed uniformly per acre. State tax laws apply to district tax assessments, but state land titles are exempt from liens for district taxes unless levied against lessees' or purchasers' interests. District tax and assessment liabilities are prioritized as first liens against district lands, except as otherwise specified for state or federal lands.

The controversy centers on the interpretation of subsection 3 of 45-1672, which appellees argue requires the appellant to obtain a certificate from the county treasurer confirming no unpaid district charges exist on the land before purchase. They assert that unpaid assessments create a continuing lien on the property. However, the language in subsection 3 specifies that it applies only to state lands not held under a certificate of purchase or lease, contradicting appellees' claims. Subsections 1 and 2 address liens on lands under certificate of purchase and lease, respectively, while subsection 3 applies to lands not involved in these transactions. Although all three subsections establish that irrigation district charges create a lien on state lands, the enforcement modes differ based on the land's status. The lien in subsection 3 remains dormant until the land is sold or leased, aligning with the limitations set forth in 45-1676 and 45-1719, which declare that such liens do not affect the State's title or interest in the land. Consequently, the statutes suggest that the liens are enforceable only against the interests of purchasers and lessees. In this case, since the land was leased during the assessments, the implications of a purchaser's failure to comply with subsection 3 are not applicable. Ambiguities in the lien provisions must be resolved in favor of the taxpayer, affirming that the State's title is not subject to the contested liens, thus concluding that the appellant's purchase must be valid for any claims to exist.

Liens could not be enforced against the State's title and interest or against the appellant, leading to the conclusion that the assessments paid under protest lack collectibility. The judgment is reversed and remanded, instructing entry of judgment for the appellant against Maricopa County, and further proceedings regarding the third-party complaint and counterclaim. The judges, Hathaway and Krucker, concurred. The case involves an irrigation and drainage district, where assessments to cover current expenses are referred to as "taxes" under Article 8, while Article 9 describes "district assessments." Both types of assessments create similar liens against state-owned land. Evidence indicates the assessments were intended for current expenses, but the specific type may be academic since the lien's nature is consistent across both. Statutes A.R.S. 42-386 and A.R.S. 45-1719, B suggest restrictions and implications regarding the foreclosure of liens and the sale of land for delinquent taxes. The phrase "by the irrigation district" is interpreted to qualify the opening language of A.R.S. 45-1672, affecting the applicability of assessments on state lands leased, indicating that liens apply only to the lessee's interest.