The owner of land where Anderson’s Mounds Mall once stood cannot order the owner of one parcel to agree to a prior lease, the Indiana Court of Appeals ruled Monday.
Holliday LLC came into possession of the parcel that was once home to Mounds Mall in 2019 via the transfer of a tax sale certificate. The parcel sits on 30 acres of real property owned by Elda Corp.
Before 2019, Elda had granted a ground lease for the parcel, the interest in which was later transferred to Anderson Mounds Theater LLC. The parcel was sold at a tax sale after Anderson Mounds failed to pay property tax.
After the transfer of the tax sale certificate, Holliday received a tax deed to the parcel in October 2019 with the purchase listed as for “Improvements ONLY.” A subsequent order from the Madison Circuit Court held that the deed “is an estate in fee simple, free and clear of all liens and encumbrances created or suffered before or after the tax sale … .”
However, Elda in November 2019 accused Holliday of unlawfully possessing the land and ordered that Holliday either agree to the previous ground lease or vacate the premises. The dispute proceeded to litigation, and the trial court ultimately entered partial summary judgment for Holliday. Holliday’s parcel was taxed separately from Elda’s 30 acres of land, the trial court held, noting that Elda had not challenged the tax sale of the parcel.
Elda appealed, but the Indiana Court of Appeals affirmed Monday in Elda Corporation and Anderson Mounds Theater, LLC v. Holliday, LLC, 20A-PL-2316.
Writing for a unanimous appellate panel, Judge Robert Altice first rejected Holliday’s argument that the Court of Appeals lacked jurisdiction over its appeal. Turning then to the merits, Altice agreed with Holliday that summary judgment in its favor was proper.
“Here, the designated evidence established that the fee simple interest to the Improvements Parcel has been severed from the Land and has always been identified by a separate tax number,” Altice wrote. “… Elda took no action in response to the tax sale, such as challenging the sale’s validity. Thus, Elda has no title or interest in the Improvements Property, and Holliday applied for and received a tax deed for the property, which is prima face evidence of valid title in fee simple.”
The panel also ruled that because the trial court ordered the parcel to be “an estate in fee simple absolute, free and clear of all liens and encumbrances,” the ground lease was eliminated from Holliday’s title. The panel then rejected Elda’s argument that “Holliday’s rightful possession of the Improvements Parcel necessarily amounts to wrongful possession of the (30 acres of) Land.”
“Here, title to the Land is vested in Elda, and title to the Improvements Parcel is vested in Holliday. In the context of this case, the Improvements Parcel constitutes real property in the same legal sense as the Land. Thus, the real estate interests can co-exist and Holliday can exercise its rights on the Improvements Parcel without being found to have trespassed on the Land that Elda owns,” Altice wrote.
“… Although Elda could have prevented such a result at various times before and after the tax sale, it did not,” he concluded. “Therefore, because Holliday is neither a trespasser nor a lesser, Elda is not entitled to ejectment, rent, or damages.
“For these reasons, the trial court properly granted partial summary judgment in Holliday’s favor.”