Johnson v. Wayne S. Hansen Trust, 2016 MT 46 (March 1, 2016), amended and superseded on rehearing (May 3, 2016) (Rice, J.) (5-0, aff’d)
Issue: (1) Whether the district court erred by granting summary judgment to Johnson and declaring the tax deeds void; and (2) whether the district court erred in determining the final amount due to the Trust as purchaser of the tax liens.
Short Answer: (1) No, and (2) no.
Facts: Johnson owned three parcels of real property in Powell County, valued collectively for tax purposes at $260,478. After Johnson failed to pay the property taxes over several years, the Trust purchased tax deeds to the properties in December 2012. The Trust filed quiet title actions for the three properties in March 2013, and Johnson responded by filing his own quiet title actions, alleging the tax deeds issued to the Trust violated statutory procedures and should be set aside.
In April 2013, upon the Trust’s motion, Johnson deposited $20,000 with the court pursuant to § 15-18-411, MCA. The district court consolidated the quiet title actions and dismissed Powell County and Powell County Treasurer Smith as defendants. On motion from the Trust, the district court directed Johnson to deposit an additional $17,497 with the court, which he did.
Johnson moved for summary judgment in December 2013, arguing the County and the Trust had failed to comply with several statutes, and that the tax deeds were therefore void. The district court granted Johnson’s motion in May 2014, and in the same order denied a request from the Trust to require Johnson to deposit additional bond funds. On June 30, 2014, the district court entered judgment, ordering Johnson’s deposit to be remitted to the Trust and a certificate of redemption issued to Johnson for each of the three properties.
On July 15, 2014, the Trust filed objections, a request for relief from the judgment under Rules 54(c) and 58(e), and a motion to alter or amend under Rule 59, arguing the district court erred in granting summary judgment and in failing to properly calculate the final amount owed to the Trust. In November 2014, the district court partially granted and partially denied the motions, acknowledging that the judgment failed to take into account any taxes paid during the pendency of the proceeding.
Procedural Posture & Holding: After briefing, the district court issued an order in February 2015, holding that because the Trust did not provide any documentation as to how it calculated interest, or proof of payments it had made, no additional redemption amount was due the Trust. The Trust appeals, and the Supreme Court affirms.
Reasoning: (1) The Trust argues that summary judgment was improper because disputed issues of fact remained. The Court requires strict compliance with statutes governing tax deeds. Johnson submitted a memo from the Powell County Treasurer admitting she had failed to provide the County Clerk and Recorder a report of all persons and property owing taxes, as well as 13 other examples of failure to comply with the tax deed statutes, by relying on records provided by the County. The district court correctly granted summary judgment to Johnson.
(2) The two parties and the district court all used different equations to calculate the final amount due to the Trust after the tax deeds were declared void. The redemption amount is the sum of unpaid taxes, interest that accumulates at the statutory rate, and costs and penalties. If the tax purchaser has paid property taxes after the issuance of the tax deed, the true owner must reimburse that cost. Even if costs such a property insurance, administrative expenses, and attorney fees are reasonable, they are not required by law and are not reimbursable. The district court may award additional interest, but is not required to do so.