Citifinancial Mortgage Company, Inc. v. Kenneth Matthews, Desonia Pope Matthews, Jack D. McClain, Sue N. McClain, and the Arkansas Commissioner of State Lands

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SUPREME COURT OF ARKANSAS  No.  07­431  CITIFINANCIAL MORTGAGE CO., INC.,  APPELLANT,  VS.  KENNETH MATTHEWS, DESONIA POPE  MATTHEWS,  JACK  D.  MCCLAIN,  SUE  N.  MCCLAIN,  AND  THE  ARKANSAS  COMMISSIONER OF STATE LANDS,  APPELLEES,  Opinion Delivered  January 17, 2008  APPEAL  FROM  THE  CRITTENDEN  COUNTY CIRCUIT COURT,  NO. CV­2005­04,  HON.  JOHN  NELSON  FOGLEMAN,  JUDGE,  AFFIRMED.  PAUL E. DANIELSON, Associate Justice  Appellant Citifinancial Mortgage Co., Inc., appeals from the order of the circuit court  granting  the  motion  for  summary  judgment  filed  by  appellees  Jack  and  Sue  McClain.  Citifinancial argues on appeal that the circuit court erred in granting summary judgment in  favor of the McClains because the failure of the Arkansas Commissioner of State Lands to  provide proper notice of the public tax sale in the instant case rendered the private sale void  and, furthermore, that failure violated its due process rights.  We find no error and affirm.  The underlying facts in the instant case are undisputed by the parties.  The real  property at issue is located in Crittenden County and was previously owned by Kenneth and  Desonia  Pope  Matthews.    However,  the  property  was  certified  to  the  Commissioner  for  failure to pay taxes on the property for the tax years 1998 and 1999.  On October 11, 2001, the Commissioner first notified the Matthews of the delinquent status of their property.  The  notice was sent by certified mail and informed the Matthews that the property would be  subject to a public sale scheduled for October 15, 2003.  In addition, notice of the public sale  was published in the local newspaper, The Evening Times.  The Matthews had a mortgage  on  the  property  through  Associates  Home  Equity  Services,  Inc.  The  notice  listed  the  mortgagor as a lienholder on the property.  The property was offered for sale on October 15, 2003, at a public auction, but no  bids were made and the property was not sold.  Therefore, the property became available  for a privately negotiated sale through the Commissioner’s office.  On February 1, 2004, the  McClains made an offer to purchase the property.  Prior to the private sale to the McClains,  the Commissioner sent notice of the sale to the Matthews, the current resident, Housing and  1  Urban Development, and Associates, currently known as Citifinancial.  The  taxes  were  not  paid,  and  the  property  was  not  redeemed;  therefore,  a  deed  conveying  the  property  to  the  McClains  was  executed  on  May  27,  2004.    Citifinancial  commenced this action on January 3, 2005, seeking to set aside the negotiated sale because  it had not been provided notice by certified mail of the public sale and alleging that the  Matthews had defaulted on their loan, thereby entitling Citifinancial to foreclosure on the  mortgage it held on the property.  The Commissioner and the McClains filed timely answers.  On August 22, 2005, Citifinancial filed a motion for summary judgment arguing that 1  Associates became Citifinancial on January 2, 1998.  ­2­  07­431  the Commissioner had not complied with Ark. Code Ann. § 26­37­301(a)(2) (Repl. 1997 &  Supp. 2007) because it did not send Citifinancial  notice of the public sale by certified mail.  The circuit court denied that motion on September 13, 2006.  Citifinancial filed a second  motion  for  summary  judgment  on  July  31,  2006,  citing  a  decision  of  the  United  States  Supreme Court, Jones v. Flowers, 547 U.S. 220 (2007), and arguing that it applied to the  instant case.  The McClains filed their motion for summary judgment on August 23, 2006,  relying on the circuit court’s previous order that found Citifinancial had received proper  notice.  The circuit court denied Citifinancial’s second motion for summary judgment on  January 3, 2007.  In the same order, the circuit court granted the McClains’s motion for  summary judgment.  Citifinancial filed a timely notice of appeal on February 2, 2007. The court of appeals  certified the case to this court on  November  28, 2007, and we accepted certification on  November 30, 2007.  Citifinancial contends that the failure of the Commissioner to provide it notice by  certified mail of the public tax sale that was scheduled for October 15, 2003, was a violation  of Ark. Code Ann. § 26­37­301 (Repl. 1997 & Supp. 2007) and rendered the subsequent  privately  negotiated  sale  invalid.  It  argues  that  because  notice  before  a  tax  sale  is  a  requirement that calls for strict compliance, it should have received the same notice of the  first sale that was afforded to the property owners.  The McClains respond by first arguing that the notice provided to Citifinancial before ­3­  07­431  the property was sold sufficiently complied with section 26­37­301.  While the McClains  concede that the Commissioner failed to send notice of the first­scheduled sale by mail to  Citifinancial, they contend that proper notice of the only sale that actually occurred, the  private  sale  to  the  McClains,  was  sent  to  and  received  by  Citifinancial,  which  met  the  statutory requirement.  Furthermore, the McClains aver that Citifinancial requests a tortuous  construction of the statute when the crux of its argument is that it did not receive notice of  a sale that never took place.  Summary judgment is to be granted by a circuit court only when it is clear that there  are no genuine issues of material fact  to  be  litigated and the moving party is entitled to  judgment as a matter of law.  See Benton County v. Overland Dev. Co., Inc., ___ Ark. ___,  ___  S.W.3d  ___  (Nov.  29,  2007).    Once  a  moving  party  has  established  a  prima  facie  entitlement  to  summary  judgment,  the  opposing  party  must  meet  proof  with  proof  and  demonstrate the existence of a material issue of fact.  See id.  On appeal, we determine if  summary judgment was appropriate based on whether the evidentiary items presented by the  moving party in support of its motion leave a material fact unanswered.  See id.  This court  views the evidence in a light most favorable to the party against whom the motion was filed,  resolving all doubts and inferences against the moving party.  See id.  Our review is not  limited to the pleadings, as we also focus on the affidavits and other documents filed by the  parties.  See id.  After reviewing undisputed facts, summary judgment should be denied if,  under the evidence, reasonable men might reach different conclusions from those undisputed ­4­  07­431  facts.  See id.  In  cases  involving redemption  of  tax­delinquent  lands,  strict  compliance  with  the  requirement of notice of the tax sales themselves is required before an owner can be deprived  of his or her property.  See Tsann Kuen Enters. Co. v. Campbell, 355 Ark. 110, 129 S.W.3d  822 (2003); Jones v. Double “D” Props., Inc., 352 Ark. 39, 98 S.W.3d 405 (2003); Pyle v.  2  Robertson,  313  Ark.  692,  858  S.W.2d  662  (1993).    Section  26­37­301  (Supp.  2007)  provides the following regarding notice:  (a)(1) Subsequent to receiving tax­delinquent land, the Commissioner of  State  Lands  shall  notify  the  owner,  at  the  owner's  last  known  address  as  certified by the county, by certified mail, of the owner's right to redeem by  paying all taxes, penalties, interest, and costs, including the cost of the notice.  (2)  All  interested  parties  shall  receive  notice  of  the  sale  from  the  Commissioner of State Lands in the same manner.  (3) If the notice by certified mail is returned unclaimed, the Commissioner  of State Lands shall mail the notice to the owner or interested party by regular  mail. (4)  If  the  notice  by  certified  mail  is  returned  undelivered  for  any  other  reason, the Commissioner of State Lands shall send  a second notice to the  owner  or  interested  party  at  any  additional  address  reasonably  identifiable  through  the  examination  of  the  real  property  records  properly  filed  and  recorded in the office of the circuit clerk in the county wherein the property  is located as follows:  (A) The address shown on the deed to owner;  (B) The address shown on the deed, mortgage, assignment, or other filed  and recorded document to the interested party; or  (C) Any other corrected or forwarding address on file with the county tax  collector or county tax assessor.  (b)(1) The notice to the owner or interested party shall also indicate that the  tax­delinquent land will be sold if not redeemed prior to the date of sale. 2  While this statute was amended in 2007, the language relevant to the instant case  was not changed by that amendment.  ­5­  07­431  (2) The notice shall also indicate the sale date, and that date shall be no  earlier than one (1) year after the land is certified to the Commissioner of State  Lands.  (c) As used in this section, "owner" and "interested party" means any person,  firm, corporation, or partnership holding title to or an interest in the property  by virtue of a bona fide recorded instrument at the time of certification to the  Commissioner of State Lands.  (d) The Commissioner of State Lands shall not be required to notify, by  certified  mail  or  by  any  other  means,  any  person,  firm,  corporation,  or  partnership whose title to or interest in the property is obtained subsequent to  certification to the Commissioner of State Lands.  (e)(1) If the Commissioner of State Lands fails to  receive proof that the  notice sent by certified mail under this section was received by the owner of  a homestead, then the Commissioner of State Lands or his or her designee  shall provide actual notice to the owner of a homestead by personal service of  process at least sixty (60) days before the date of sale.  (2) As used in this subsection:  (A) "Homestead" means the same as defined in § 26­26­1122; and  (B) "Owner of a homestead" means:  (i) Every owner if the homestead is owned by joint tenants; and  (ii) Either the husband or the wife if the homestead is owned by tenants by  the entirety  (3) The owner of a homestead shall pay for the additional cost of the notice  by personal service of process under this subsection.  Ark. Code Ann. § 26­37­301 (Supp. 2007).  The basic rule of statutory construction is to give effect to the intent of the legislature.  See McMickle v. Griffin, 369 Ark. 318, ___ S.W.3d ___ (2007).  Where the language of a  statute is plain and unambiguous, we determine legislative intent from the ordinary meaning  of the language used.  See id.  In considering the meaning of a statute, we construe it just as  it reads, giving the words their ordinary and usually accepted meaning in common language.  See id.  We construe the statute so that no word is left void, superfluous or insignificant, and ­6­  07­431  we give meaning and effect to every word in the statute, if possible.  See id.  Citifinancial argues that it was an “interested party” by virtue of its mortgage on the  real  property  that  is  the  subject  of  this  case.    The  plain  language  of  this  statute  simply  instructs  that  owners  and  interested  parties  must  be  notified  of  “the  sale”  sometime  subsequent to the time the Commissioner received the tax­delinquent property.  While the  sale date must be no earlier than one year after the land is certified to the Commissioner, see  3  Ark. Code Ann. § 26­37­301(b)(2) (Supp. 2007),  the statute does not make a distinction  between a sale by a public bid and a negotiated sale.  In addition, the statutes on the sale or  forfeiture of real property do not make the sale a two­step process requiring two separate  notices.  Arkansas  Code  Annotated  §  26­37­202(b)  (Repl.  1997  &  Supp.  2007)  simply  instructs that if there are no bids for the property at its assessed value, the Commissioner may  negotiate a sale.  On  March  23,  2004,  proper  notice  was  sent  to  Citifinancial  informing  it  that  the  property was scheduled for a negotiated sale.  The notice specifically stated “[i]f you have  an interest in the property, in order to avoid its sale and additional costs, you should contact  the  Records  Department  of  this  office  immediately  for  a  petition  to  redeem  .  .  .  .”  Citifinancial took no action, and sixty­five days later, the McClains bought the property.  The sale made to the McClains was the only sale that actually took place in this case. 3  The time period provided by the statute applicable at the time of the instant case  would have been two years after the land was certified to the Commissioner.  ­7­  07­431  Citifinancial does not argue that the Commissioner failed to send it proper notice of that sale.  Indeed, we have held that we will not interpret a statute to yield an absurd result that defies  common sense.  See National Home Centers, Inc. v. First Arkansas Valley Bank, 366 Ark.  522, 237 S.W.3d 60 (2006).  Were we to hold the sale of the property to the McClains void  in this case, we would hold that Citifinancial had a right to receive notice of a previously  scheduled sale that did not occur, although it had received actual notice of the very sale held  void and chose not to take any action after receiving that notice.  We cannot say that such  was the intent of the General Assembly.  Citifinancial next argues that it was deprived its due process of law because it was not  afforded an opportunity to protect its property interest or to raise any objections it had to the  public sale.  Citing Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), it  contends that it was deprived of due process of law when it was not given “notice reasonably  calculated, under all the circumstances, to apprise [it] of the pendency of the action and  afford  [it]  an  opportunity  to  present  [its]  objections.”    339  U.S.  at  314.    In  addition,  Citifinancial cites Jones v. Flowers, 547 U.S. 220 (2007), for the proposition that notice  requirements are subject to a due­process analysis.  First, because a public sale never took place, no property interest was lost and no  objections to such a sale were necessary.  The actual notice received by Citifinancial was  given before any sale was completed.  Secondly, the cases cited by Citifinancial are not  analogous or applicable to the instant case.  In those cases, the appellants did not receive ­8­  07­431  actual notice before they were deprived of their property interest.  See Jones v. Flowers,  supra; Walker v. City of Hutchinson, 352 U.S.112 (1956); Mullane v. Central Hanover Bank  & Trust, 339 U.S. 306 (1950); Tsann Kuen Enters. Co. v. Campbell, 355 Ark. 110, 129  S.W.3d 822 (2003).  Citifinancial further avers that the lack of notice of the public sale gave them a smaller  amount of time to act as opposed to the two years it alleges it would have had if it had been  given proper notice of the public sale.  It does not cite to any authority indicating that due  process somehow entitles it to two years’ notice.  As previously noted, section 26­37­301  only provides a time line for the sale date, not the notice requirement.  The statute does not  guarantee two years’ notice, and even the landowner himself is only guaranteed actual notice  sixty  days  before  the  date  of  the  sale.  See  Ark.  Code  Ann.  §  26­37­301(e)(1).    Here,  Citifinancial had actual notice of the only sale that took place, the purchase by the McClains.  We decline to hold that the notice statute was violated simply because Citifinancial chose  not to act upon the timely notice it received.  Affirmed. ­9­  07­431 

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