Klein v. Oakland/Red Oak Hold.Annotate this Case
Jeremy and Kimberly Klein, and Robert and Elaine Lynch, (collectively, appellees) purchased a trust deed at a trustee’s sale for certain real estate. Prior to the trustee’s sale, treasurer’s tax deeds for the same real estate had been issued to a third party. By operation of law, a treasurer’s tax deed passed title free and clear of all previous liens and encumbrances, and therefore, the treasurer’s tax deeds had divested the trust deed of title. The treasurer’s tax deeds were recorded prior to the trustee’s sale, but appellees failed to examine the record prior to the trustee’s sale. Appellees brought this action in equity against appellant Oakland/Red Oak Holdings, LLC (Oakland), which was the beneficiary of the trust deeds, seeking to set aside the sale and to be reimbursed the purchase price of $40,001. The district court determined that the trustee’s sale was void and ordered that Oakland return the purchase price to the appellees. Oakland appealed. The Supreme Court determined that the district court erred in its determination, reversed, and remanded.