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COA affirms judgment in property-tax dispute

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The Indiana Court of Appeals released an opinion today dealing with a topic that gives many homeowners headaches - property taxes. The appellate court held as a matter of law regardless of when the assessment of the real property was actually completed and the tax statements issued, the March 1 statutory assessment date controls the operation and effect of a tax provision in a real-estate purchase agreement.

In Van Prooyen Builders Inc. v. Earl L. Lambert Jr. and Mildred Lambert, No. 45A04-0811-CV-662, Van Prooyen Builders appealed the trial court's monetary judgment in favor of the Lamberts for real-property taxes owed under their real-estate purchase agreement, in which the Lamberts closed on their home July 6, 2006. The tax provision of the agreement specified who would be responsible for what taxes and stated all real-estate taxes assessed against the property after closing shall be paid by the buyer, regardless of any reassessment.

The parties disputed whether, because of the "late" assessment of real property in Lake County, their agreement required the proration of 2006 taxes payable in 2007. At the time of the closing, the county hadn't assessed the property for 2006 taxes, and the Lamberts didn't receive credit for any part of those taxes.

They sought more than $1,500 from Van Prooyen or the property's tax liability prorated from Jan. 1 to July 5, 2006. The trial judge ruled in favor of the Lamberts, finding the tax provision in the agreement was contrary to public policy and void.

The Court of Appeals noted that many counties have experienced delays in the implementation of the new trending assessment system, which has caused uncertainty and inconveniences in the payment of their real estate taxes. Based on Indiana statute, March 1 of each year the state acquires a lien against taxable real property, even if the tax amount is unknown, wrote Judge Edward Najam.

But the fact the lien amount is unknown on the date of closing doesn't abrogate the statute and doesn't preclude the parties from contracting to allocate responsibility for the unknown tax liability between the buyer and seller, he wrote.

Even though Van Prooyen was personally liable for the 2006 taxes payable in 2007, the statute also allows for agreement to other terms in a contract, which is what the parties attempted to do within the tax provision.

The first two sentences of the tax provision are unambiguous; however, the last portion dealing with all real-estate taxes assessed after closing shall be paid by the buyer disregards the statutory definition of "assessment date" and conflicts with the two previous statements in the provision, wrote the judge. Because the parties didn't define "assessment date" in the agreement to mean the actual assessment date, the only date of relevance is the date provided in statute.

The tax provision's last sentence means the Lamberts would be responsible for satisfying any tax liens against the property that attached after they acquired the title, Judge Najam wrote in affirming the trial court judgment.

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  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  4. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  5. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

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