ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES:
EDWARD R. HALL MATTHEW S. LOVE
Merrillville, Indiana BRYAN K. REDMOND
COURT OF APPEALS OF INDIANA
BOB PORTER, )
vs. ) No. 21A05-0108-CV-346
BANKERS TRUST CO. OF )
CALIFORNIA, N.A., and )
GREENWICH CAPITAL FINANCIAL )
PRODUCTS, INC., )
APPEAL FROM THE FAYETTE CIRCUIT COURT
The Honorable Daniel Lee Pflum, Judge
Cause No. 21C01-9910-MI-330
August 26, 2002
OPINION - FOR PUBLICATION
STATEMENT OF THE CASE
Bob Porter appeals from the trial courts ruling setting aside two tax deeds
issued to Porter in November 2000. He raises several issues on appeal
which we consolidate and restate as whether the trial court erred when it
set aside the tax deeds because of Porters failure to provide notice to
mortgage holders pursuant to Indiana Code Section 6-1.1-25-4.6.
FACTS AND PROCEDURAL HISTORY
In April 1997, Johnny and Rita Holcomb executed a mortgage to The Provident
Bank in the amount of $83,300, and the mortgage was recorded in Fayette
County. In July 1999, The Provident Bank assigned the mortgage to Bankers
Trust Company of California, N.A. (Bankers Trust), and that assignment was also recorded.
The mortgage Bankers Trust held was for property located at 604 West
8th Street in Connersville (Holcomb property).
In May 1998, Hargis Oliver executed a mortgage to Cityscape Mortgage Corporation (Cityscape)
in the amount of $43,500. The mortgage was recorded in Fayette County.
Also in May 1998, Cityscape assigned the mortgage to Greenwich Capital Financial
Products, Inc. (Greenwich). However, the assignment from Cityscape to Greenwich was not
recorded. The mortgage Greenwich held as assignee was for property located at
2026 Virginia Avenue in Connersville (Oliver property).
In October 1999, Bob Porter purchased both the Holcomb and Oliver properties at
a tax sale. In July 2000, Porter sent notice of his purchases
by certified mail, pursuant to Indiana Code Section 6-1.1-25-4.5,
See footnote both to Cityscape and
Bankers Trust. With regard to Bankers Trust, Porter mailed the notice to
Attorney Susan Woolley.
On November 8, 2000, Porter filed a Verified Petition for Order of Tax
Deed seeking a tax deed to both the Holcomb and Oliver properties.
The following day, the trial court issued the Order of Tax Deed for
both properties, and the Fayette County Auditor issued the tax deeds to Porter.
Thereafter, in January 2001, both Bankers Trust and Greenwich filed motions to intervene
in Porters tax sale cause of action.See footnote After the trial court granted
permission to intervene, Greenwich and Bankers Trust filed motions to set aside and
vacate the trial courts order of tax deed on both the Holcomb and
Oliver properties. In their respective motions, Greenwich and Bankers Trust alleged that
Porter failed to provide notice required by Indiana Code Sections 6-1.1-25-4.5 and 4.6.
The trial court conducted a consolidated hearing on the interveners motions, and
on April 23, 2001, set aside its previous order of tax deeds.
The trial courts order provides in relevant part: The Court, having heard
evidence [and] argument of counsel, and being duly advised, now sets aside the
order of tax deeds entered on November 9, 2000, as Bob Porter only
gave one of the 2 notices required.
In May 2001, Porter filed a motion to correct error, along with twenty-nine
exhibits, asking the trial court to affirm the validity of the tax deeds.
After Greenwich and Bankers Trust filed responses, the trial court denied the
motion to correct error. This appeal ensued.
DISCUSSION AND DECISION
Standard of Review
Neither party requested special findings, and the trial court did not enter any.
When the trial court enters a general judgment without special findings and
conclusions, we may not reweigh evidence or consider witness credibility but must affirm
if sustainable on any legal theory. Perdue Farms, Inc. v. Pryor, 683
N.E.2d 239, 240 (Ind. 1997). In reviewing a general judgment, we must
presume that the trial court followed the law. Id.
Validity of Tax Deeds
Our supreme court succinctly set forth the statutory framework applicable to this case
in Tax Certificate Invs., Inc. v. Smethers, 714 N.E.2d 131, 133 (Ind. 1999):
A purchaser of Indiana real property that is sold for delinquent taxes initially
receives a certificate of sale. A one-year redemption period ensues. If
the owners fail to redeem the property during that year, a purchaser who
has complied with the statutory requirements is entitled to a tax deed.
The property owner and any person with a substantial property interest of public
record must each be given two notices.
The first notice announces the fact of the sale, the date the redemption
period will expire, and the date on or after which a tax deed
petition will be filed. The second notice announces that the purchaser has
petitioned for a tax deed.
Here, it is undisputed that Porter purchased two properties at a tax sale,
and following the one-year redemption period, he sent notices to Cityscape and Bankers
Trust pursuant to Indiana Code Section 6-1.1-25-4.5. Then, Porter filed a verified
petition seeking an order of tax deed from the trial court. However,
he did not send out the second notice required under Indiana Code Section
6-1.1-25-4.6. The trial court set aside the order of tax deeds on
On appeal, Porter raises several arguments attacking the trial courts order. Initially,
he claims that Greenwich lacks standing to challenge the validity of the tax
deed. Porter further asserts that he substantially complied with the statutory notice
requirements and that both Greenwich, as assignee, and Bankers Trust had actual notice
of the tax sale. Finally, he argues that equity requires that his
tax deeds be reinstated. We address these arguments in turn.
Porter first asserts that Greenwich lacks standing to challenge the validity of the
tax deed issued on the Oliver property. In particular, Porter contends that
because the assignment from Cityscape to Greenwich was not recorded, Greenwich did not
possess a substantial property interest of record and, thus, was not entitled to
receive notice of the tax sale.
See footnote In response, Greenwich points out that
it has never asserted a right to receive notice under the tax sale
statutes, but that Greenwich, as Cityscapes assignee, has the right to assert that
Cityscape did not receive proper notice. According to Greenwich, Porter confuses standing
with the right to receive notice under the tax sale statutes. We
agree with Greenwich.
As this court explained in
Hosler ex rel. Hosler v. Caterpillar,
Inc., 710 N.E.2d 193, 197 (Ind. Ct. App. 1999), trans. denied,:
The judicial doctrine of standing focuses on whether the complaining party is the
proper person to invoke the courts power. Standing is similar to, though
not identical with, the real party in interest requirement of Indiana Trial Rule
17. Both are threshold requirements intended to insure that the party before
the court has the substantive right to enforce the claim being asserted.
Under the traditional private standing doctrine, a party must demonstrate both a personal
stake in the outcome of the lawsuit and, at a minimum, that he
is in immediate danger of sustaining some direct injury as a result of
the conduct at issue.
(Citations and quotations omitted). B. Substantial Compliance
In this case, Greenwich clearly has standing to move to set aside the
tax deed issued to Porter. Porter does not dispute that Cityscape assigned
its interest in the mortgage to Greenwich. And it is well established
that an assignee of a contract takes the assignors rights and becomes subject
to the same obligations. Lake County Trust Co. v. Household Merchandising, Inc.,
511 N.E.2d 512, 514 (Ind. Ct. App. 1987) (citing 3 I.L.E. § 44,
p. 188). Stated differently, the assignee stands in the shoes of the
assignor. Pettit v. Pettit, 626 N.E.2d 444, 447 (Ind. 1993). Even
though the assignment of the mortgage from Cityscape to Greenwich was not recorded,
and Greenwich is not entitled to notice under the tax sale statutes, Greenwich
nevertheless has standing to assert any and all rights of Cityscape as the
assignee. Cf. National City Bank v. Morris, 717 N.E.2d 934, 936 (Ind.
Ct. App. 1999) (holding assignees assertion that assignor lacked standing to challenge garnishment
lacked merit because assignor expressly retained certain rights), trans. denied.
Still, in support of his argument that Greenwich lacks standing, Porter cites to
Avco Financial Servs. v. Metro Holding Co., 563 N.E.2d 1323 (Ind. Ct. App.
1990). But that case addresses whether a party is entitled to receive
notice under the tax sale statutes, not whether a party has standing.
As we have stated, Greenwich does not claim that it is entitled to
notice, only that it has standing to assert any and all rights Cityscape
had under the mortgage.
Porter also directs us to Calhoun v. Jennings, 512 N.E.2d 178 (Ind. 1987)
and Gossett v. Auburn Natl Bank, 514 N.E.2d 309 (Ind. Ct. App. 1987),
cert. denied, 488 U.S. 927 (1988). However, those cases are inapposite.
Calhoun involves a mortgage holder, First National, which initiated foreclosure proceedings at the
same time the county initiated tax sale proceedings. Id. at 179.
The county did not provide notice of the tax sale to First National
under the tax sale notice statute in effect at that time because First
National was not the owner of record and, as a result, the purchaser
of the property at the foreclosure sale, Rushville National, also lacked notice of
the tax sale. Id. Rushville National eventually filed suit and argued,
among other things, that the tax sale notice statutes violated the due process
rights of First National. The court determined Rushville National lacked standing to
raise the constitutional challenge because it could not show injury by operation of
the tax sale notice statute. Id. at 182. Similarly, in Gossett,
this court followed the decision in Calhoun and held that a post-tax sale
mortgagee lacked standing to challenge the constitutionality of the tax sale notice statute
where the post-tax sale mortgagee argued that the statute allegedly violated the due
process rights of the pre-tax sale mortgagee. Gossett, 514 N.E.2d at 313.
Neither Calhoun nor Gossett involve the assignment of mortgage interests and, thus, are
distinguishable. Here, as we have stated, Cityscape assigned its rights under the
properly recorded mortgage to Greenwich. As Cityscapes assignee, Greenwich has standing to
challenge whether Porter provided adequate notice to Cityscape, the mortgage holder of record.
We conclude that Greenwich has standing to challenge the tax deed issued
Next, Porter argues that the trial court erred in setting aside the tax
deeds because both Greenwich and Bankers Trust received actual notice of the tax
sale. A tax sale is purely a statutory creation, and material compliance
with each step of the statute is required. Maudlin v. Hall, 700
N.E.2d 469, 471 (Ind. Ct. App. 1998). While a tax deed creates
a presumption that a tax sale and all of the steps leading to
the issuance of the tax deed are proper, this presumption may be rebutted
by affirmative evidence to the contrary. Id. Additionally, title conveyed by
a tax deed may be defeated if the notices were not in substantial
compliance with the manner prescribed in accordance with our notice statutes, Indiana Code
Sections 6-1.1-25-4.5 and 4.6. Id. (citing Ind. Code § 6-1.1-25-16).
At all times relevant to these proceedings, Indiana Code Section 6-1.1-25-4.5 provided in
relevant part that [a] purchaser . . . is entitled to a tax
deed to the property that was sold only if . . . the
purchaser . . . gives notice of the sale and the date of
expiration of the period of redemption to the owner and any person with
a substantial property interest of public record in the tract or real property.
In addition, Indiana Code Section 6-1.1-25-4.6 provided that, following the redemption period,
the purchaser may file a verified petition asking the court to issue a
tax deed and that:
[n]otice of the filing of this petition and the date on or after
which the petitioner intends to make application for an order on the petition
shall be given to the owner and any person with a substantial interest
of public record . . . in the same manner as provided in
section 4.5 of this chapter, except that only one (1) publication is required.
As we have discussed, our supreme court explained the two separate notices required
under the tax sale statutes in Smethers, 714 N.E.2d at 133. The
purchaser of property at a tax sale must first provide notice pursuant to
section 4.5, which announces the fact of the sale, the date the redemption
period will expire, and the date on or after which a tax deed
petition will be filed. Id. Next, the purchaser must provide notice
under section 4.6, which announces that the purchaser has, in fact, petitioned for
the tax deed. Id. Under Smethers, it is clear that both
notices must be sent to the property owner and any person with a
substantial property interest of public record. Id. (citations omitted).
Here, it is undisputed that Porter sent notices to Bankers Trust and Cityscape
pursuant to section 4.5. Porter then filed his verified petition seeking an
order of tax deed pursuant to section 4.6 but did not provide the
notice required under section 4.6. Based on these undisputed facts, Greenwich and
Bankers Trust presented affirmative evidence sufficient to rebut the presumption that the issuance
of the tax deeds to Porter was proper.
See Maudlin, 700 N.E.2d
Still, Porter argues that he substantially complied with the notice statutes, and cites
to Smith v. Breeding, 586 N.E.2d 932 (Ind. Ct. App. 1992), and Anton
v. Davis, 656 N.E.2d 1180 (Ind. Ct. App. 1995), trans. denied. In
Smith, 586 N.E.2d at 937, we determined that a tax deed was valid
even though the auditor had not entered the delinquent owners address in the
transfer book nor on the face of the deed as required by statute,
which resulted in the delinquent owner not receiving notice of the tax sale
or expiration of the redemption period. In holding that the tax deed
was valid despite the lack of notice, we reasoned that the delinquent property
owner, who had been paying property taxes for years, should have informed the
auditor of his change in address. In fact, the owner had received
tax statements at his new address that were improperly addressed to his former
residence but took no action to correct the error. Id. at 936.
Similarly, in Anton, 656 N.E.2d at 1183, we addressed whether a variety
of deficiencies in notices sent by the county auditor to the delinquent property
owner were sufficient to void the tax sale. The notices contained errors
like incorrect mailing addresses and incorrect dates of sale. Id. at 1182.
We concluded that the property owner was not harmed by the deficiencies
and that they were not fatal as a matter of law to the
tax deed. Id. at 1185.
Porters reliance on Smith and Anton is misplaced. Neither Smith nor Anton
involve a county auditors or purchasers total failure to adhere to the requirement
that notice be sent when the petition seeking a tax deed is filed.
Rather, the auditor in those cases attempted to comply with all statutory
notice requirements. Here, however, Porter wholly failed to send one of the
two notices required. Porters actions do not constitute substantial compliance with the
Additionally, while Porter claims that Bankers Trust and Cityscape had actual notice of
the tax sale, it does not follow that they had actual knowledge that
he had petitioned for a tax deed. Had Bankers Trust and Cityscape
been provided such notice, they would have had an opportunity to contest the
petition at that time. Without notice under section 4.6, Bankers Trust and
Greenwich were required to intervene after the tax deeds were issued and seek
to have the deeds set aside. Not only did Porters failure to
comply with section 4.6 harm Bankers Trust and Greenwich, but it has also
required the trial court to address issues which otherwise could have been resolved
when Porter petitioned for the tax deeds.
Porters arguments amount to a request that we hold that notice under section
4.6 is unnecessary as long as the property owner or person with a
substantial property interest of public record had knowledge that the tax sale occurred.
Our legislature has determined that a purchaser must provide notice to the
property owner and any person with a substantial property interest of record not
only pursuant to section 4.5, but also when the purchaser files a petition
for tax deed. I.C. § 6-1.1-25-4.6. It is not this courts
role to second-guess that procedure. See e.g., Lewis v. Bd. of School
Trustees, 657 N.E.2d 180, 184 (Ind. Ct. App. 1995) (deciding not this courts
role to second-guess legislative policy decisions regarding public school teacher termination procedures), trans.
denied. Because Porter failed to provide notice that he had filed a
petition seeking tax deeds on the Oliver and Holcomb properties, we conclude that
the evidence supports the trial courts order to set aside the tax deeds
issued to Porter.
Finally, Porter asserts that equity and justice demand that his tax deeds be
reinstated because he purchased the properties in good faith, performed all necessary elements
required by the tax sale statutes, and helped the county by eliminating the
properties from the delinquency list.
As a general proposition, a trial court has full discretion to fashion equitable
remedies that are complete and fair to all parties involved. G&N Aircraft,
Inc. v. Boehm, 743 N.E.2d 227, 243 (Ind. 2001). However, our courts
generally will not exercise equitable powers when an adequate remedy at law exists.
State ex rel. Hahn v. Howard Circuit Court, 571 N.E.2d 540, 541
(Ind. 1991). Equity has power, where necessary, to pierce rigid statutory rules
to prevent injustice. Metro. School Dist. of Southwest Park v. Vaught, 249
Ind. 412, 417, 233 N.E.2d 155, 158 (1968). But where substantial justice
can be accomplished by following the law, and the parties actions are clearly
governed by rules of law, equity follows the law. Id.
Here, Porter invokes principles of equity in the context of a challenge to
the issuance of a tax deed. As we have stated, a tax
sale is purely a statutory creation and, therefore, parties must strictly comply with
each step set forth in the statutes. See Maudlin, 700 N.E.2d at
471. In this case, the parties actions are clearly governed by the
tax sale statutes, and no injustice will result from following the statute.
Thus, in this case equity must follow the law. See Vaught, 249
Ind. at 417, 233 N.E.2d at 158.
In sum, we conclude that Greenwich, as Cityscapes assignee, has standing to challenge
the tax deed issued to Porter. In addition, we conclude that the
evidence supports the trial courts decision to set aside and vacate the tax
deeds previously issued.
BAILEY, J., and ROBB, J., concur.
We deny Appellants Motion for Oral Argument.
Footnote: As Appellees note in their Briefs, the Indiana tax sale statutes
were revised in July 2001, but all relevant events in this case occurred
prior to those revisions. As a result, we cite to the former
versions of the relevant statutes.
Footnote: Porter filed his petitions for order of tax deeds on the
two properties under one cause number.
Footnote: We first address a procedural issue raised by Greenwich and
Bankers Trust. As discussed, Porter filed his motion to correct error, along
with twenty-nine attached exhibits. Appellees filed briefs opposing Porters motion and complained
that the exhibits attached to his motion were improper as newly presented evidence.
The trial court entered a general denial of Porters motion. On
appeal, Greenwich and Bankers Trust re-assert their objection to Porters presentation of any
facts not submitted at trial. Porter responds that the information contained in
his twenty-nine exhibits is essentially the same information found in Greenwichs and Bankers
Trusts motions to set aside tax deeds. It is well established that
we may not consider evidence or arguments not properly presented to the trial
GKC Ind. Theatres, Inc. v. Elk Retail Investors, LLC., 764 N.E.2d
647, 651 (Ind. Ct. App. 2002). While a party may file a
motion to correct error based on evidence outside the record under Indiana Trial
Rule 59(H), the motion must be supported by affidavits showing the truth set
out in the motion and the affidavits shall be served with the motion.
Porters motion does not state that it is based on Trial Rule
59(H). Although some of the exhibits Porter attached are affidavits, a majority
of the exhibits are not. [A]ffidavits concerning matters which occur during proceedings
before the court but which are not reflected in the record may be
filed in support of a motion under Trial Rule 59(H). Alberts v.
Mack Trucks, Inc., 540 N.E.2d 1268, 1270 (Ind. Ct. App. 1989), trans. denied.
Porter, who obtained new counsel after trial, attempts to submit evidence after
the fact which otherwise could have been presented at trial. Thus, we
agree with Appellees that the only evidence available for our review is that
which the parties presented during the trial.
Indiana Code Sections 6-1.1-25-4.5 and 4.6 require that notice be
sent to any person with a substantial property interest of public record, which
is defined as title to or interest in a tract possessed by a
person and recorded in the office of a county recorder or available for
public inspection . . . . Ind. Code § 6-1.1-24-1.9.
Smethers, 714 N.E.2d at 132, like in this case,
the purchaser, not the county auditor, filed a petition for a tax deed.
That fact is critical because the language of section 4.6 makes the
filing of a verified petition mandatory for the county but only permissive for
a purchaser or the purchasers assignee. Compare I.C. § 6-1.1-25-4.6(a)(1) (the purchaser
or the purchasers assignee may file a verified petition), with I.C. § 6-1.1-25-4.6(a)(2)
(in a county having a consolidated city . . ., the county auditor
shall file a verified petition). Although neither party discusses the case, our
court previously determined that the filing of a verified petition seeking an order
of tax deed is permissive not only for the purchaser or his assignee
but also for the county. Northern Industries v. Bd. of Commissioners of
Delaware County, 627 N.E.2d 1319, 1321, n. 1 (Ind. Ct. App. 1994).
To the extent that our previous statement in Northern Industries conflicts with the
plain wording of the statute in effect at that time, we find that
There is also a dispute whether the notice Porter sent to
Bankers Trust pursuant to Indiana Code Section 6-1.1-25-4.5 complied with the statute because
it was sent to Bankers Trusts attorney. However, we need not address
that issue because we have determined that Porters failure to provide notice under
section 4.6 supports the trial courts decision to set aside the tax deeds.