COA reverses setting aside of tax deed, finds ‘constitutionally adequate’ notice

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The failure of two property owners to receive any of the multiple notices sent to them regarding the tax sale of their property did not create an “exceptional” case warranting the setting aside of the tax deed, the Court of Appeals of Indiana has ruled in a partial reversal.

Marty Fiascone and his father are the principals of Fiascone Family LP, which in March 2019 acquired a condo that was used for “personal purposes” when the father and son were in the Chicago area. Marty lives in Florida, and Fiascone Family’s mailing address with the Lake County auditor was a Florida address.

When Fiascone Family failed to pay property taxes on the condo, the Lake County treasurer initiated tax-sale proceedings. The result was Marion Assets 2020 LLC purchasing the tax sale certificate at an ensuing public auction.

In February 2021, Marion Assets mailed notice of the Fiascone Family’s redemption rights to both the Florida address and the condo’s address pursuant to Indiana Code § 6-1.1-25-4.5(d) (2020) via certified mail. It also mailed the notice via first-class mail, but both the first-class and certified letters that had been sent to the Florida address were returned as “vacant” and “unable to forward.” The certified letter that was sent to the condo was returned as “insufficient address,” but the first-class letter was never returned.

Marion Assets then had a process server post the notice at the condo. It also sent the notice via first-class mail again to both addresses, which were both returned for the same reasons as before.

The redemption period expired in October 2021, so Marion Assets sent notices of the filing of its petition to issue a tax deed pursuant to I.C. 6-1.1-25-4.6. The certified mail sent to the Florida address was returned as “unclaimed” while the mail sent to the condo was again returned as “insufficient address.” Neither of the first-class mailings were returned.

The Lake Superior Court granted Marion Assets’ petition for the issuance of a tax deed in February 2022. Marion Assets then attempted to change the locks at the condo, and its management company contacted Marty.

Marty obtained counsel and filed a Trial Rule 60(B) motion to set aside the tax deed, arguing that Marion Assets had not served them with adequate notice and that the tax deed had been issued in violation of their due process rights.

In response, the trial court held a hearing on the motion and concluded Marion Assets had provided Fiascone Family with constitutionally adequate notice of the redemption.

But it also concluded that Fiascone Family’s failure to receive any of the notices created an “exceptional” case that justified equitable relief. The court thus set aside the tax deed, reopened the redemption period and directed Fiascone Family to pay the redemption amount it would have had paid if the redemption period hadn’t expired.

The instant appeal then ensued, with both parties raising issues to the appellate court.

First, Fiascone Family appealed the determination that Marion Assets’ attempts at notice were constitutionally adequate.

The COA looked to Marion County Auditor v. Sawmill Creek, LLC, 964 N.E.2d 213 (Ind. 2012), Ind. Land Trust Co. v. XL Invest. Props., LLC, 155 N.E.3d 1177 (Ind. 2020), and Jones v. Flowers, 547 U.S. 220 (2006), to affirm.

“Following that authority, we conclude that Marion Assets’ attempts to provide notice to Fiascone Family were constitutionally adequate,” Judge Paul Mathias wrote. “… Based on those letters not being returned, we cannot say that Marion Assets’ reliance on the ‘commonly known’ address was unreasonable.”

The second issue was whether the trial court abused its discretion when it set aside the tax deed, notwithstanding its finding that Marion Assets had provided Fiascone Family with constitutionally adequate notice.

On that issue, the COA reversed.

“We conclude that there is nothing in this record to support the trial court’s assessment that this is an exceptional case,” Mathias wrote. “… Further, Fiascone Family has not alleged a material misrepresentation in the course of the tax sale proceedings, and, thus, the trial court’s invocation of equitable relief here is inconsistent with our precedent. Equity here should follow the law, and (I.C. 6-1.1-25-4.6(f)) entitled Marion Assets to the tax deed.”

The appellate court thus remanded to the trial court with instructions to deny Fiascone Family’s motion to set aside the tax deed.

The case is Marion Assets 2020, LLC v. Fiascone Family LP, 22A-TP-1681.

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