Christiana Trust as Custodian GSRAN-Z LLC Deposit Account v. Megan A. Ciota

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2018-CA-00906-COA

CHRISTIANA TRUST AS CUSTODIAN GSRAN- APPELLANT

Z LLC DEPOSIT ACCOUNT

v.

MEGAN A. CIOTA APPELLEE

DATE OF JUDGMENT: 05/24/2018

TRIAL JUDGE: HON. JENNIFER T. SCHLOEGEL

COURT FROM WHICH APPEALED: HARRISON COUNTY CHANCERY COURT,

FIRST JUDICIAL DISTRICT

ATTORNEYS FOR APPELLANT: WILLIAM ALEX BRADY II

MICHELLE ELIZABETH LUBER

ATTORNEY FOR APPELLEE: LEWIE G. “SKIP” NEGROTTO IV

NATURE OF THE CASE: CIVIL - REAL PROPERTY

DISPOSITION: AFFIRMED IN PART AND REMANDED IN

PART - 11/05/2019

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

BEFORE CARLTON, P.J., GREENLEE AND TINDELL, JJ.

CARLTON, P.J., FOR THE COURT:

¶1. Christiana Trust1 as Custodian GSRAN-Z LLC Deposit Account (Christiana Trust)

appeals the Harrison County Chancery Court’s order voiding its tax-sale purchase of real

property. On appeal, Christiana Trust argues that the chancery clerk’s notice by publication

met the statutory requirements of Mississippi Code Annotated section 27-43-3 (Rev. 2017).

Christiana Trust asserts that the chancellor therefore erred in voiding the tax sale and setting

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There is very little information in the record regarding Christiana Trust or GSRAN-

Z LLC, but it is clear that Christiana Trust is a business entity.

aside the chancery clerk’s conveyance to Christiana Trust.

¶2. After our review, we find that the chancery clerk’s notice by publication failed to

strictly comply with the statutory requirements of section 27-43-3. We therefore affirm the

chancellor’s judgment voiding the tax sale and setting aside the chancery clerk’s conveyance

to Christiana Trust, and we remand the issue of statutory damages for further proceedings

consistent with this opinion.

FACTS

¶3. DDD Properties LLC executed a warranty deed conveying the real property located

at 116 Poplar Point, Pass Christian, Mississippi, to Christopher B. Schultz and his wife,

Megan A. Ciota.2 The warranty deed lists Schultz and Ciota as “Christopher B. Schultz and

wife, Megan A. Ciota.” However, the Real Property Tax Rolls for Harrison County lists

Schultz and Ciota as “Schultz Christopher B & Megan A C.”

¶4. Schultz and Ciota failed to pay ad valorem taxes on the property for the 2013 tax year.

As a result, Christiana Trust acquired the property at a tax sale held on August 25, 2014.

After a landowner’s property is sold at a tax sale, section 27-43-3 requires the chancery clerk

to notify the landowner that her property will be forfeited unless redeemed. Section 27-43-3

sets forth that such redemption notice must be provided by the following methods: (1)

personal service, (2) certified or registered mail, and (3) appropriate newspaper publication.

Campbell Props. Inc. v. Cook, 258 So. 3d 273, 277 (¶11) (Miss. 2018).

¶5. The record reflects that Ciota is a Louisiana resident. On March 31, 2016, the

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Schultz and Ciota are now divorced, and Schultz is not a party to this appeal.

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chancery clerk sent Ciota a notice of forfeiture via certified mail to her New Orleans

address.3 The notice was addressed to “Schultz Megan A C.” The record shows that Ciota

received and signed for this notice on April 2, 2016. The chancery clerk also published

notice of forfeiture in the Sun Herald newspaper in the name of “Schultz Christopher B &

Megan A C.” Per the requirements set forth in section 27-43-3, the notice mailed to Ciota

and the notice by publication contained a legal description of the land.

¶6. Ciota failed to redeem the property within the statutory period. See Miss. Code Ann.

§ 27-45-3 (Rev. 2017) (owner may redeem land sold for taxes at any time within two years

after the day of sale by paying the chancery clerk the amount of the taxes for which the land

was sold). On October 21, 2016, after the redemption period expired, the chancery clerk

executed an instrument conveying the subject property to Christiana Trust.

¶7. On November 18, 2016, Christiana Trust filed a complaint to quiet and confirm title

to the property. Ciota was served with process by certified mail at her residence in Louisiana

on December 12, 2016. After Ciota failed to file a timely answer or appear, Christiana Trust

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The chancellor’s May 24, 2018 order also reflects the following facts:

On March 31, 2016, the [chancery clerk] mailed Defendant Ciota’s notice of

forfeiture to her at [an address in] Pass Christian, MS . . . . That mail was

returned to the [chancery clerk] stamped “Return to Sender. Unclaimed.

Unable to forward.” Also, on March 31, 2016, another notice was mailed by

the [chancery clerk] via certified mail return receipt to [an address in] New

Orleans, LA . . . which was received by Ciota. A subsequent certified mailing

was sent to Defendant Ciota at the [New Orleans] address but was returned to

the [chancery clerk] stamped “Return to Sender. Unable to Forward.”

However, the record before us only contains the verification from the United States Postal

Service showing that on April 2, 2016, Ciota signed for the notice mailed to her New

Orleans address.

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obtained a clerk’s entry of default against Ciota pursuant to Mississippi Rule of Civil

Procedure 55(a). On January 16, 2017, Christiana Trust filed a motion for a default judgment

against Ciota.

¶8. On April 21, 2017, Ciota filed her answer and counterclaim seeking to set aside the

tax sale. Christiana Trust moved to strike Ciota’s responsive pleadings as untimely. Ciota

then filed a motion to set aside the clerk’s entry of default.

¶9. In her motion to set aside the entry of default, Ciota asserted that on June 9, 2016, she

mailed a check in the amount of $10,400 to the Harrison County Tax Collector in an attempt

to redeem her 2013 and 2014 taxes. Ciota stated that the tax collector returned her check

rather than forwarding it to the chancery clerk. Ciota attached to her motion the check for

$10,400 and a letter from the tax collector explaining that he was returning her check because

she owed money for her 2013 taxes. The letter stated that the tax collector could not accept

payment for the 2014 taxes until Ciota paid her 2013 taxes in the chancery clerk’s office.

The letter also directed Ciota to contact the chancery clerk’s office.

¶10. On July 11, 2017, Ciota filed a motion for a declaratory judgment and a motion for

summary judgment. In her motion for a declaratory judgment, Ciota sought a declaration

from the chancery court stating that no statutory interest would accrue after June 9, 2016 (the

date that Ciota mailed a check to the tax collector “to redeem her property”). Alternatively,

Ciota sought a declaration that no statutory interest would accrue after June 12, 2017 (the

date that Ciota’s attorney “sent a letter to [Christiana Trust’s] counsel providing payment in

an amount sufficient to pay for statutory interest accrued as of June 2017”). In her motion

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for summary judgment, Ciota argued that the chancery clerk failed to provide her with proper

statutory notice and that Ciota made a good faith effort to redeem her property prior to the

end of the redemption period.

¶11. On October 16, 2017, the chancellor entered an order granting Ciota’s motion to set

aside the entry of default and denying Ciota’s motion for summary judgment. The chancellor

acknowledged that “there is no Mississippi case law directly on point, [therefore] this Court

also considered United States Supreme Court precedent regarding sufficiency of summons

where the name incorporated into [a] summons varies from a party’s actual name and

persuasive authority from other jurisdictions . . . .” The chancellor ultimately ruled that the

published and mailed notices at issue were valid, explaining as follows:

[T]he [c]ourt finds that the manner of identifying [Ciota] in notice mailed to

her via certified mail satisfies the statutory requirements, and this conclusion

is supported by case law cited by [Christiana Trust] and relied upon to find

identification of reputed owners in published notice to be sufficient as well.

The rule of strict compliance with statutes governing tax sales does not

preclude this result.

¶12. On October 25, 2017, Ciota filed a motion to alter or amend the judgment. In her

motion, Ciota argued that the chancery clerk failed to properly publish Ciota’s name as

required by section 27-43-3; therefore, she maintained that the tax sale is void ab initio. Prior

to the expiration of the time of redemption, the chancery clerk is required to issue notice to

the record owner and reputed owner. Ciota asserted that her name “is not Schultz

Christopher B & Megan A C[,] as incorrectly listed by the tax assessor and improperly

repeated by the [chancery clerk],” and she reasoned the chancery clerk failed to strictly

comply with the requirements of section 27-43-3.

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¶13. After a hearing, the chancellor determined that the publication notice to Ciota failed

to meet the statutory requirements of section 27-43-3. On May 24, 2018, the chancellor

entered an order granting Ciota’s motion to alter and amend the judgment. In her order, the

chancellor found that Schultz and Ciota were the record owners/reputed owners of the

subject property, as evidenced by the deed vesting title. However, the chancery clerk

published notice to Ciota as “Megan A C,” instead of “Megan A. Ciota,” the name listed in

the deed vesting title. The chancellor cited section 27-43-3 and explained that in addition to

the requirement of the chancery clerk to issue notice to the record owner of the land sold,

[t]he clerk shall also be required to publish the name and address of the

reputed owner of the property and the legal description of the property in a

public newspaper of the county in which the land is located, or if no newspaper

is published as such, then in a newspaper having a general circulation in the

county.

The chancellor recognized that “Mississippi has consistently held that the statutory

requirements for notice to owners according to [section] 27-43-3 must be strictly construed

in favor of landowners. . . . Any deviation from the statutorily mandated procedure renders

the sale void.”

¶14. The chancellor further held that “[i]t was error for the [c]hancery [c]lerk to publish

for [Ciota] by relying on records from the Harrison County Tax Assessor and not searching

his own land records to determine the record owner as required by authority cited

hereinabove.” The chancellor accordingly granted Ciota’s motion for summary judgment,

voided the August 25, 2014 tax sale, and set aside the chancery clerk’s conveyance.

¶15. Christiana Trust now appeals the following judgments entered by the chancellor: the

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October 16, 2017 order granting Ciota’s motion to set aside the chancery clerk’s entry of

default; the October 16, 2017 order denying Christiana Trust’s motion to strike and its

motion for a default judgment; and the May 24, 2018 order granting Ciota’s motion to alter

or amend the judgment and granting Ciota’s motion for summary judgment.

STANDARD OF REVIEW

¶16. We apply a de novo standard when reviewing a trial court’s grant or denial of a

motion for summary judgment. In so doing, we examine all evidence “in the light most

favorable to the party against whom the motion was made.” Cleveland v. Deutche Bank Nat.

Tr. Co., 207 So. 3d 710, 714 (¶16) (Miss. Ct. App. 2016). “[I]f the pleadings, depositions,

answers to interrogatories and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that the moving party is entitled to

a judgment as a matter of law[,]” then the trial court shall grant summary judgment. City of

Horn Lake v. Sass Muni-V LLC, 268 So. 3d 514, 517 (¶9) (Miss. 2018) (quoting M.R.C.P.

56(c)).

¶17. We review a trial court’s grant of a Mississippi Rule of Civil Procedure 59 motion to

alter or amend for an abuse of discretion. Freeman v. CLC of Biloxi LLC, 119 So. 3d 1164,

1167 (¶10) (Miss. Ct. App. 2013). This Court will not reverse a trial court’s grant of a Rule

59 motion “absent an abuse of discretion or if allowing the judgment to stand would result

in a miscarriage of justice.” Id.

¶18. On appeal, “we maintain a limited review of a chancellor’s findings of fact.”

Cleveland, 207 So. 3d at 714 (¶17) (internal quotation mark omitted). “We will not reverse

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the factual findings of the chancellor when supported by substantial evidence unless the

Court can say that the findings are manifestly wrong, clearly erroneous, or amount to an

abuse of discretion.” Id.

DISCUSSION

¶19. Christiana Trust argues that chancery clerk strictly complied with the statutory notice

requirements pertaining to tax sales and redemption periods.4 Christiana Trust maintains that

the alleged error in Ciota’s name is not a deviation from the statutorily mandated procedures.

Christiana Trust therefore asserts that the chancellor erred in granting Ciota’s motion for

summary judgment and in voiding the tax sale.

¶20. Christiana Trust submits that according to the Real Property Tax Rolls for the years

2011 through 2016, the reputed owners of the subject property were listed as “Schultz

Christopher B & Megan A C”; therefore, the chancery clerk properly mailed notice to Ciota

via certified mail addressed to “Schultz Megan A C.” The record reflects that on April 2,

2016, Ciota received and signed for the notice provided by certified mail.

¶21. Christiana Trust further maintains that Ciota was sufficiently noticed by publication

in the Sun Herald newspaper. The publication by notice listed the landowners as “Schultz

Christopher B & Megan A C” and set forth a description of the property at issue.

¶22. Ciota argues, however, that Mississippi public policy strives to protect the landowners

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Christiana Trust also submits that the chancery clerk provided notice to Ciota within

the statutory time period. Neither party has raised the issue of the timeliness of the

redemption-period notice; the only issue before us is whether publishing notice and sending

notice by certified mail to “Megan A. C.” rather than Megan A. Ciota complied with the

requirements of section 27-43-3.

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and not those who are simply assessed taxes on property. Ciota therefore maintains that,

based on public policy, Mississippi Code Annotated sections 27-43-1 (Rev. 2017) and 27-43-

3 require that notice be provided to the property owner—not to the person to whom the taxes

are assessed or whose name is listed on the tax rolls.

¶23. Sections 27-43-1 and 27-43-3 set forth the guidelines for providing notice to property

owners of the impending expiration of the redemption period for real property that has been

sold for delinquent taxes. Section 27-43-1 states that the chancery court clerk

shall, within one hundred eighty (180) days and not less than sixty (60) days

prior to the expiration of the time of redemption with respect to land sold . . .

be required to issue notice to the record owner of the land sold as of one

hundred eighty (180) days prior to the expiration of the time of redemption.

(Emphasis added). Summarizing the portion of section 27-43-3 relevant to this appeal, the

statute requires the chancery clerk to issue redemption notice of the tax sale to the reputed

owner of the real property by the following methods: “(1) by personal notice as summons

issued from the courts are served, (2) by mail at his usual street address, and (3) by

publication in a public newspaper of the county in which the land is located.”5 Rebuild Am.

Inc. v. Norris, 64 So. 3d 480, 481 (¶3) (Miss. 2011) (internal quotation marks omitted)

(emphasis added). “If personal service is not obtained and certified mail is returned

undelivered, the clerk must then make a diligent ‘search and inquiry’ to locate the record

landowner.” Campbell Props., 258 So. 3d at 277 (¶11). Regarding the notice by publication

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As stated, the record reflects that Ciota is a resident of Lousiana. Section 27-43-3

provides that “[i]f the reputed owner is a nonresident of the State of Mississippi, then the

clerk shall mail a copy of the notice to the reputed owner in the same manner as set out in

this section for notice to a resident of the State of Mississippi, except that notice served by

the sheriff shall not be required.”

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requirement, section 27-43-3 specifies that the chancery clerk must publish the name and

address of the reputed owner of the property and the legal description of the property in a

public newspaper having a general circulation in the county in which the land is located.

Section 27-43-3 further provides that “[s]hould the clerk inadvertently fail to send notice as

prescribed in this section, then the sale shall be void and the clerk shall not be liable to the

purchaser or owner upon refund of all purchase money paid.”

¶24. The Mississippi Supreme Court has set forth that “Mississippi’s public policy is to

protect landowners from losing property in tax sales.” Campbell Props., 258 So. 3d at 277

(¶12). The supreme court accordingly clarified that “statutes dealing with land forfeitures

for delinquent taxes should be strictly construed in favor of the landowners.” Id. Our

appellate courts “have interpreted [s]ection 27-43-3 to mean that failure to comply strictly

with the notice requirements renders the purchaser’s tax deed void, with no legal effect, and

not simply voidable.” City of Horn Lake, 268 So. 3d at 518 (¶13). Stated otherwise, “a tax

sale that does not meet the requirements of [s]ection 27-43-3 is void ab initio.” Id.; see also

Campbell Props., 258 So. 3d at 277 (¶12) (“Any deviation from the statutorily mandated

procedure renders the sale void.”). However, we also recognize that “[i]t is incumbent upon

a landowner to be knowledgeable about the assessment on his property and to be diligent to

make sure that his taxes are paid.” Rains v. Teague, 377 So. 2d 924, 927 (Miss. 1979).

¶25. In support of its argument that the tax sale herein was valid and that notice was

proper, Christiana Trust cites Wilkinson v. Steele, 207 Miss. 701, 705, 43 So. 2d 110, 111

(1949). In Wilkinson, the appellant contended that a tax sale was void because the incorrect

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name of the land owner appeared in the advertisement of sale. Id. The supreme court agreed

that the tax sale advertisement erroneously gave the appellant’s initials; however, the Court

found that the language of the Mississippi Code at that time provided that “it shall not be

necessary to the validity of an assessment or sale of land for taxes that it be assessed to the

true owner. And if there be a legal description it may be assessed to an unknown owner or

to any person not the owner.” Id. Christiana Trust asserts that under Mississippi Code

Annotated section 27-35-1(1) and Rains, 377 So. 2d at 926, “when property that is properly

described, as here, it may be assessed to an unknown person, or to any person though not the

owner, and the assessment will nevertheless be legal.” In Rains, the supreme court explained

that “[t]he assessment of ad valorem taxes is an in rem proceeding rather than an in personam

proceeding.” Id.

¶26. The record reflects that Ciota received and signed for the notice sent via certified mail

to “Schultz Megan A C” at Ciota’s New Orleans address. However, our supreme court has

held that if section 27-43-3 is not strictly followed—even where a property owner does

receive notice of the redemption period—the tax sale is void. Campbell Props., 258 So. 3d

at 278 (¶15). In Campbell Properties, the property owner failed to timely pay his property

taxes or redeem them within two years of the tax sale. Id. at 274 (¶2). The property owner

argued that the chancery clerk failed to provide him with statutorily required notice of the

redemption period pursuant to section 27-43-3. Id. The supreme court found that the

chancery clerk sent notice to the property owner, but the notice was returned and marked “not

deliverable as addressed.” Id. at 275 (¶5). Nevertheless, the chancery clerk continued to

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mail subsequent notice to that same address. Id.

¶27. Upon review, the supreme court found that the county land records contained a deed

of trust with the property owner’s correct address, which “was easily discoverable.” Id. at

277 (¶14). The supreme court therefore determined that the chancery clerk “was not diligent

in the search and inquiry” as required by section 27-43-3. Id. Furthermore, the supreme

court determined that although “a deputy chancery clerk personally handed [the property

owner] a certified notice that had been returned to the clerk’s office, and the record shows

that [the property owner] did sign the return receipt, . . . the fact remains that the statute does

not allow service in this manner.” Id. at 278 (¶15). The supreme court acknowledged that

it was applying “a hard-line approach” and reiterated that “the redemption-notice statute must

be followed strictly.” Id. The supreme court accordingly reversed and rendered the

chancellor’s judgment affirming the tax sale. Id.

¶28. As stated, in the present case, the chancery clerk published notice to Ciota as “Schultz

Megan A C” instead of “Megan A. Ciota,” the name listed in the deed vesting title. Sections

27-43-1 and 27-43-3 require the chancery court clerk to provide notice to the record and

reputed owner of the land. Upon our review, and in applying precedent, we find that the

redemption-notice statute was not strictly followed. As a result, the tax sale in the present

case was void. We therefore affirm the chancellor’s judgment granting Ciota’s motion for

summary judgment voiding the August 25, 2014 tax sale and setting aside the chancery

clerk’s conveyance issued to Christiana Trust.

¶29. We further find that Christiana Trust is entitled to damages under Mississippi Code

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Annotated section 27-45-3 (Rev. 2017), which provides that the landowner/redeemer

may redeem . . . by paying to the chancery clerk, regardless of the amount of

the purchaser’s bid at the tax sale, the amount of all taxes for which the land

was sold, with all costs incident to the sale, and five percent (5%) damages on

the amount of taxes for which the land was sold, and interest on all such taxes

and costs at the rate of one and one-half percent . . . per month, or any

fractional part thereof, from the date of such sale, and all costs that have

accrued on the land since the sale, with interest thereon from the date such

costs shall have accrued, at the rate of one and one-half percent . . . per month,

or any fractional part thereof . . . .

¶30. In Lawrence v. Rankin, 870 So. 2d 673, 676-77 (¶¶19-22) (Miss. Ct. App. 2004), this

Court reversed the chancellor’s award of damages to a tax-sale purchaser after finding that

the award failed to conform to the amount of taxes, interest, and damages owed under section

27-45-3. On remand, this Court instructed the chancellor to calculate the amount of taxes

due, plus interest and damages, and to order the landowner/redeemer to pay that sum to the

tax-sale purchaser. Id. at 677 (¶21). We therefore remand the issue of damages and instruct

the chancellor to (1) calculate the amount of statutory damages and (2) order Ciota to pay that

amount to Christiana Trust.

¶31. AFFIRMED IN PART AND REMANDED IN PART.

BARNES, C.J., GREENLEE, WESTBROOKS, TINDELL, McDONALD,

LAWRENCE, McCARTY AND C. WILSON, JJ., CONCUR. J. WILSON, P.J.,

CONCURS IN PART AND IN THE RESULT WITHOUT SEPARATE WRITTEN

OPINION.

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