GARRETT GROSS AND RONNIE BINGHAM v. DAVID LOGAN; CONSTANCE LOGAN; WILLIAM F. NORMAN; AND HAZEL NORMAN
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RENDERED:
JUNE 30, 2006; 2:00 P.M.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-001934-MR
GARRETT GROSS
AND RONNIE BINGHAM
APPELLANTS
APPEAL FROM HARLAN CIRCUIT COURT
HONORABLE D. JEFF CHOATE, SPECIAL JUDGE
CIVIL ACTION NO. 03-CI-00403
v.
DAVID LOGAN;
CONSTANCE LOGAN;
WILLIAM F. NORMAN;
AND HAZEL NORMAN
APPELLEES
OPINION
VACATING AND REMANDING
** ** ** ** **
BEFORE: COMBS, CHIEF JUDGE; MINTON, JUDGE; AND HUDDLESTON,
SENIOR JUDGE.1
MINTON, JUDGE:
Garrett Gross and Ronnie Bingham appeal the
summary judgment granted in favor of David Logan, Constance
Logan, William F. Norman, and Hazel Norman in a quiet title
action.
1
Because we believe that a genuine issue of material
Senior Judge Joseph R. Huddleston sitting as Special Judge by
assignment of the Chief Justice pursuant to Section 110(5)(b) of the
Kentucky Constitution and Kentucky Revised Statutes (KRS) 21.580.
fact exists as to whether the Logans and the Normans properly
exercised the right to redeem the property in question, we
vacate and remand.
At a master commissioner’s sale on February 11, 2002,
Gross and Bingham became the successful bidders on a tract of
land located in the Wallins Creek community of Harlan County,
Kentucky.
The land was sold under a judgment of foreclosure
issued by the circuit court in a tax lien foreclosure instituted
by the county attorney on behalf of the state and county against
William F. and Hazel Norman, who owned the land.
for $100.00.
The land sold
And since the sale price represented less than
two-thirds of the appraised value of the Norman’s land, the
master commissioner’s deed, dated March 1, 2002, passed less
than full ownership to Gross and Bingham.
Specifically, the
master commissioner’s deed contained language retaining a lien
in favor of the Normans preserving their right to redeem the
property within a year from the date of the sale.
The former
owner’s statutory right of redemption appears in KRS 426.530.
That statute provides:
(1)
If real property sold in pursuance of a
judgment or order of a court, other
than an execution, does not bring twothirds (2/3) of its appraised value,
the defendant and his representatives
may redeem it within a year from the
day of sale, by paying the original
purchase money and ten percent (10%)
per annum interest thereon.
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(2)
The defendant shall pay the redemption
money to the clerk of the court in
which the judgment was rendered or the
order of sale was made. Upon payment
by the defendant, the master
commissioner shall convey the real
property to the defendant.
(3)
When the right of redemption exists,
the purchaser shall receive an
immediate writ of possession and a deed
containing a lien in favor of the
defendant, reflecting the defendant's
right to redeem during the statutory
period.
The master commissioner’s deed accurately tracked the statutory
language by stating that the Normans could redeem the property
“by paying to the Clerk of the Harlan Circuit Court the amount
of the original purchase money as set forth [in the deed], plus
ten percent (10%) per annum interest thereupon from date of the
sale until paid.”
The master commissioner’s deed was not
recorded with the county clerk until December 30, 2002.
Before the one-year redemption period expired, the
Normans deeded the same land to the Logans for a stated
consideration of $4,000.00.
This deed, which was dated
September 28, 2002, does not mention the earlier master
commissioner’s deed, nor does it mention the Normans’ redemption
right.
According to the Logans, when they took the deed to
record with the county clerk on December 27, 2002, they asked
about back taxes owed on the property.
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Someone in the county
clerk’s office alerted the Logans to delinquent tax bills
affecting the property and sent the Logans to talk to the county
tax commissioner.
The tax commissioner sent the Logans back to
the county clerk, who then sent them to the Harlan County
Attorney.
Assistant Harlan County Attorney Anthony Saragas, who
was counsel of record for the state and county in the tax lien
foreclosure action against the Normans, met with the Logans on
December 27, 2002.
Following that meeting, Saragas prepared a
written agreement, which provided that the Logans would pay
“back taxes due and owing” on this property as follows:
$300.00
to the Harlan County Attorney by January 3, 2003, and
$200.00 per month thereafter until the outstanding taxes were
paid.
The Logans paid $300.00 to the Harlan County Attorney on
January 6, 2003, and an additional $100.00 on March 28, 2003.
In May 2003, Gross and Bingham filed a quiet title
action against the Normans and the Logans.
The Logans and the
Normans counterclaimed, alleging that Gross and Bingham are not
the true owners of the property because the Logans and the
Normans paid a portion of the outstanding back taxes to the
Harlan County Attorney’s office under the agreement prepared by
Attorney Saragas.2
2
Both sides filed motions for summary
It is unclear from the counterclaim whether the Normans, the Logans,
or all of them, claim to be the owners.
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judgment, and the trial court granted summary judgment to the
Normans and the Logans finding that the Logans had properly
exercised their right of redemption when the Logans made two
payments toward the delinquent taxes to the Harlan County
Attorney’s office.
Gross and Bingham appealed the summary
judgment.
In assessing the propriety of the grant of summary
judgment, we are mindful that summary judgment was appropriate
only if the Normans and the Logans showed that Gross and Bingham
“could not prevail under any circumstances.”3
In ruling on a
motion for summary judgment, we must view the evidence in the
light most favorable to the party opposing the motion⎯in this
instance, Gross and Bingham.4
When we review a trial court’s
decision to grant summary judgment, we must determine whether
the trial court correctly found that there were no genuine
issues of material fact.5
And although the circuit court’s
summary judgment order inappropriately makes “[f]indings of
[f]act” in its order, there are no material facts at issue on
3
Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476,
480 (Ky. 1991) (citing Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255
(Ky. 1985)).
4
Id.
5
Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App. 1996).
-5-
appeal so the trial court’s decision is entitled to no
deference.6
In order to exercise the right of redemption under
KRS 426.530, one must:
(1) pay the original purchase price,
plus interest; 2) to the clerk of the court that ordered the
sale; (3) within one year from the date of the sale.
So in the
case at hand, the Normans or the Logans were required to pay
$100.00, plus approximately $10.00 in interest, to the Harlan
Circuit Clerk by March 1, 2003, to redeem the property.
We will
examine each element separately to see if the record supports
the trial court’s conclusion that the Logans properly exercised
the statutory right of redemption.
We recognize that the law
favors the former owners’ redemption right and resolves any
ambiguities in the law so as to uphold redemption.7
Before we address whether the Logans or the Normans
satisfied the statutory requirements, however, we note that it
is immaterial that the Logans, not the Normans, allegedly
redeemed the property.
Under our settled jurisprudence, the
right of redemption can be transferred.8
So although the deed
from the Normans to the Logans omits reference to the transfer
6
Id.
7
Crittenden v. Rogers, 278 Ky. 481, 128 S.W.2d 942, 945 (1939)
overruled on other grounds by Lockhard v. Brown, 536 S.W.2d 318 (Ky.
1976).
8
Town Branch Storage, Inc. v. Commonwealth, 995 S.W.2d 398 (Ky.App.
1999).
-6-
of the right of redemption, it is clear that the deed intended
to transfer to the Logans all of the Normans’ right, title, and
interest to the tract of land in Wallins Creek.
Because the
statutory right of redemption was the only equity the Normans
had left in the property after the foreclosure judgment and the
master commissioner’s sale, then the deed must necessarily have
transferred that right.
We are satisfied that the deed was
sufficient to allow the Logans to stand in the shoes of the
Normans for the purpose of exercising the right of redemption.
We first analyze whether the Logans made adequate
payment to redeem the property:
percent per annum interest.
the sale price, plus ten
It is undisputed that they gave the
Harlan County Attorney’s office more than the approximately
$110.00 required to fund the redemption.
But their payment was
ostensibly for back taxes on the property, not to repay the
purchaser at the judicial sale the amount of the purchase price
with interest.
KRS 426.530 does not mention the payment of
delinquent taxes.
So the right of redemption is not exercised
by paying back taxes, nor is payment of back taxes a condition
of exercising the right of redemption.
This means that the
trial court erred when it ruled that the payment of taxes was a
proper way to exercise the right of redemption.
But, as will be
discussed more fully below, it is still possible that the Logans
could have satisfied the payment requirement, depending on what
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the Harlan County Attorney did with the money he received from
the Normans.
The second element requires one exercising the right
of redemption to pay the clerk of the court that ordered the
sale.
In the case at hand, the Harlan Circuit Court ordered the
sale.
So the redemption payment should have been made to the
Harlan Circuit Clerk, not the Harlan County Clerk as the Logans
and the Normans mistakenly argue in their brief.
And there is
no indication that anyone paid the Harlan Circuit Clerk any
money to redeem the property.
But, as will be discussed below,
it is possible that the Harlan County Attorney did timely
deposit sufficient funds with the Harlan Circuit Clerk.
KRS 426.530 explicitly requires that the right of
redemption is conditioned on the payment of the proper funds to
the circuit clerk.
The master commissioner’s deed, although
still unrecorded when the Logans recorded theirs on December 27,
2002, also expressly so provides.
No one should have labored
under a misapprehension about where the redemption funds should
have been paid.
Finally, KRS 426.530 requires the funds to be paid
within one year of the sale.
The circuit court approved the
sale on March 1, 2002, meaning that the redemption period
expired on or about March 1, 2003.
-8-
Since that date has long
since passed, the redemption has either already occurred or the
right of redemption has been finally and completely lost.
Despite the Logans’ seeming noncompliance with the
statutory requirements for redemption, a possibility exists that
they did, in fact, substantially comply with the statutory
redemption process.
Whether the Logans exercised their right of
redemption is entirely dependent upon what the Harlan County
Attorney did with the funds received by the Logans and when he
did it.
Unfortunately, the record is silent on this crucial
issue.
So we must vacate the trial court’s grant of summary
judgment.
Additional proof is needed to determine what Saragas
did with the money he received from the Logans.
If, for
example, the proof shows that Saragas timely turned over the
Harlan Circuit Clerk the money tendered by the Logans for the
purpose of furthering the Logans’ attempt to exercise their
right of redemption, then the Logans have exercised their right
of redemption.
If, on the other hand, the evidence on remand
shows that the Harlan County Attorney did not timely remit the
funds to the Harlan Circuit Clerk’s office to further the right
of redemption, then the Logans have failed to meet the statutory
requirements for redemption.
In short, a genuine issue of
material fact exists as to whether the Harlan County Attorney
took timely, appropriate action in furtherance of the Logans’
attempted exercise of their right of redemption.
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Thus, the
trial court erred when it granted summary judgment to the Logans
and the Normans.
For the foregoing reasons, the order of the Harlan
Circuit Court granting summary judgment to the Normans and the
Logans is vacated and remanded for further proceedings
consistent with this opinion.
ALL CONCUR.
BRIEFS FOR APPELLANTS:
BRIEF FOR APPELLEES:
Russell D. Alred
Harlan, Kentucky
Susan Turner Landis
Harlan, Kentucky
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