Appellate court provides reprieve to homeowners not notified of tax sale

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IL file photo

Citing the requirements of equity and due process, the Court of Appeals of Indiana has reversed a tax sale, finding the homeowners did not receive any notice that their Madison County property was being sold.

James and Phyllis Lynn Crowe filed a motion for relief from judgment pursuant to Indiana Trial Rule 60(B) after they received a phone call on Feb. 1, 2022, informing them that the 82 acres they had lived on since 1998 had been sold at a tax sale.

Previously, the property, valued at $2.1 million, had been sold at a tax sale in 2019. The couple received notices of that sale and their right to redeem the property, gathered the money, and were able to keep their house and land.

However, for the October 2020 tax sale in which their property sold for $394,994, the Crowes told the Madison Circuit Court they did not receive any notification by certified mail. They pointed out that neither of their signatures appeared on the certified mail receipts submitted to the court by the purchaser, Savvy IN LLC.

At a hearing, the Crowes testified their mailbox had been vandalized on multiple occasions and they had trouble receiving their mail in the past. They also told the court a mail carrier had not come to their house to deliver the tax sale notice and obtain a signature.

The trial court denied the Crowes’ motion, but the Court of Appeals reversed in In Re the 2020 Madison County Tax Sale; James A. Crowe and Phyllis Lynn Crowe v. Savvy IN, LLC, 22A-TP-1113.

On appeal, the Crowes argued that even though the U.S. Postal Service altered its signature requirement for certified mail, requesting just a first initial and last name, the mail carrier did not follow the procedure. Also, once they redeemed the property in 2019, they believed all outstanding taxes had been paid.

They asserted “equity must prevent the injustice of losing their home.”

Savvy countered the notices “were signed for” and said the postal service’s altered signature procedure did not deprive the Crowes of due process.

The appellate panel pointed to Indiana Code § 6-1.1-25-4.5, which holds that a purchaser is entitled to a tax deed only if a notice is sent by certified mail with return receipt requested to the property owner’s last address. Also, I.C. 6-1.1-25-4.6 requires the purchaser to file a petition to direct the county auditor to issue a tax deed if the property was not redeemed from the sale. Notice of the petition must be sent through certified mail to the owner, as well.

“Here, the Crowes presented testimony that they did not receive notice regarding their right to redeem the property following the 2020 tax sale or Savvy’s request for tax deeds and that their signatures did not appear on the certified mail receipts,” Judge Elaine Brown wrote for the appellate court. “They further testified that no mail carrier knocked on their door in 2020 or 2021 or identified them as recipients of the return receipt requested mail.

“We note that the return receipts do not contain the first initial and last name of Dr. Crowe or Lynn and that there was no notation whatsoever relating that a specific individual received the notices,” Brown continued. “Thus, it appears that USPS protocol, requiring that the postal carrier ask the addressee’s first initial and last name to confirm receipt by the proper recipient, was not followed.”

The Court of Appeals remanded to provide the Crowes with 30 days to redeem their property.

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