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COA upholds decision to deny Edinburgh tax deed

December 22, 2015

A trial court did not err when it entered an order denying the town of Edinburgh’s request for the issuance of a tax deed and granting the landowner equitable relief, the Indiana Court of Appeals held Tuesday.

Patrick Black owned a parcel of land in Johnson County that was listed at a Sept. 12, 2014, tax sale, but not sold. The county auditor then issued a tax sale certificate to the Johnson County Board of Commissioners, who then assigned the sale certificate to the town of Edinburgh on Oct. 28, 2014. Black had until Feb. 25, 2015, to redeem the property.

He went to the auditor’s office the day before the redemption period expired and was told by an employee, who had contacted SRI Inc., the tax sale vendor, that Black needed to pay $26,557.85 to redeem the property. On Feb. 26, the town filed a petition for the issuance of the tax deed. It later claimed that more than $1,500 in taxes or penalties were due and unpaid on the Black property. But Black was given the opportunity to pay that amount, and did so in March. On March 27, the town claimed the property was not redeemed from the sale before the expiration of the redemption period was required by statute and sought the tax deed.

The judge ruled in favor of Black, noting he was only able to determine $210.56 in unpaid penalties, not $1,575.56 as was previously determined and paid by Black. The judge also noted that statute requires a court to make a finding that the parcel hadn’t been redeemed before expiration of the period of redemption, and that the filing of a timely objection is not a statutory prerequisite to the findings required by the court prior to the issuance of an order to the auditor to issue a tax deed.

“In this case, the trial court found that Black paid the Auditor $26,557.85 on February 24, 2015, that neither SRI nor the Auditor realized that the figure did not include penalties accruing after the tax sale, and that Black did not have unclean hands as would preclude equitable relief. The court further found that Black relied upon the information provided by the Auditor as to the amount owed for redemption, that the Auditor represented to all parties that the property had been redeemed, and that the loss to Black of property assessed at $91,000 for failure to pay penalties of $210.56 is a situation in which equity may act to pierce rigid statutory rules to prevent injustice,” Judge Elaine Brown wrote in In re the 2014 Johnson Co. Tax Sale, Town of Edinburgh v. Patrick Black, Johnson Co. Auditor, and Johnson Co. Treasurer
41A01-1505-MI-445.

“The facts favorable to the judgment and the reasonable inferences to be drawn therefrom support the trial court’s judgment. We also note that neither the Commission nor the Town paid any amount at the tax sale toward the purchase of Black’s property.”

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