Mooring Tax Asset Group v. James
Annotate this CaseThis case stemmed from the tax sale of residential property located at 7047 Lake Willow Drive in New Orleans. In 1997, Charles and Connie Brown purchased this property pursuant to a “Cash Sale of Property.” The sale was recorded in the Orleans Parish Conveyance Records. After the Browns became delinquent on their property taxes, the property was sold at a tax sale in 2004, to Mooring Tax Asset Group. The tax collector executed a tax deed that purportedly conveyed the property to Mooring. This deed was recorded in the Orleans Parish conveyance records a year later. Presumably unaware of the tax sale, the Browns sold the property to NARA, L.L.C. pursuant to a “Cash Sale” in 2007. The sale was recorded in the Orleans Parish Conveyance Records shortly thereafter. NARA subsequently sold the property to defendant Roderick James in 2008. This sale was recorded in the Orleans Parish Conveyance Records shortly thereafter. In 2010, Mooring filed a “Petition to Quiet Title,” seeking to terminate James’ interest in the property for failure to redeem the property from the 2004 tax deed recorded in April of 2005. In June 2010, James filed exceptions and an answer to the petition, as well as a reconventional demand against the City of New Orleans, asserting that the tax sale should be nullified on several bases, including insufficient pre-sale notice and advertisement. James then filed a motion for summary judgment asserting these two bases for nullity. The trial court granted James’ motion, finding the 2004 tax sale and the 2004 tax deed were absolute nullities due to lack of sufficient pre-sale notice and for lack of sufficient pre-sale advertisement. Following the ruling, Mooring contended the declaration of nullity should be preliminary, rather than a final judgment, until it was paid costs allowed pursuant to La. R.S. 47:2291. James argued this statute could not be applied retroactively to this case, and was only applicable to tax sales that occurred after January 1, 2009. However, because Louisiana Constitution article VII, section 25(C) allowed for the delay of the effects of a tax sale nullification until certain costs are paid to the tax sale purchaser, the trial court issued a judgment allowing Mooring to submit proof of costs and James to contest costs. Mooring filed an “Affidavit of Proof of Costs Pursuant to La. R.S. 47:2221(B)(3).” James then submitted a “Motion to Contest Costs,” contending Mooring had not made a true claim for costs, and even if it had, taxes, interest, costs and penalties are not recoverable by a tax sale purchaser when the tax sale is an absolute nullity. Alternatively, James argued that if these taxes, costs and penalties are recoverable, they are not recoverable from a third-party purchaser who had no interest in the property at the time of the tax sale. After its review of the parties' arguments on appeal, the Supreme Court held that the tax sale purchaser was entitled to reimbursement of its costs prior to cancellation of the tax sale deed. Furthermore, the Court held that it was the current owner of the property who was responsible for payment of these costs. The Court reversed the rulings of the lower courts and remanded the matter to the trial court for further proceedings.
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