ATTORNEYS FOR APPELLANTS ATTORNEY FOR APPELLEE
Nick J. Cirignano Scott Richards
Jean M. Blanton Indianapolis, Indiana
Evansville, Indiana
______________________________________________________________________________
In the
Indiana Supreme Court
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No. 82S01-0701-CV-2
IN RE:
PARCELS SOLD FOR DELINQUENT TAXES
VANDERBURGH COUNTY AUDITOR, ET AL.,
Appellants,
v.
MICHIANA CAMPGROUNDS, LLC,
Appellee.
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Appeal from the Vanderburgh Superior Court, No. 82D03-0408-MI-3590
The Honorable Robert J. Pigman, Judge
_________________________________
On Petition to Transfer from the Indiana Court of Appeals, No. 82A01-0601-CV-13
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September 27, 2007
Boehm, J.
We hold that a purchaser at a tax sale who does not seek an order to issue a deed is not
entitled to the partial refund of the purchase price provided in Indiana Code section 6-1.1-25-
4.6(d).
Factual and Procedural Background
This case turns on the interpretation of several provisions in the statutes governing the
sale of property for delinquent taxes. The Tax Sale chapter, Indiana Code section 6-1.1-25, pro-
vides that a tax sale purchaser acquires a deed to property only after meeting a number of re-
quirements. These include the requirement in section 4.5(a) that the purchaser give notice to all
persons with substantial interest in the properties of the right to redeem the property and a variety
of other matters. Ind. Code § 6-1.1-25-4.5 (2004). After the redemption period expires, section
4.6 requires a petition for an order to issue a deed to be filed and a second notice to be sent in-
forming the same persons of the petition and of the time to object to the deed. I.C. § 6-1.1-25-
4.6.
If no deed is ultimately issued, several other provisions govern the purchaser’s right to a
full or partial refund. Section 4.6(d) provides:
Except as provided in subsections (e) and (f), if the court refuses to enter an order
directing the county auditor to execute and deliver the tax deed because of the
failure of the petitioner under subsection (a) to fulfill the requirements of this sec-
tion, the court shall order the return of the purchase price minus a penalty of
twenty-five percent (25%) of the amount of the purchase price. Penalties paid
under this subsection shall be deposited in the county general fund.
At the time relevant to this case, 1 section 4.6(e) provided for a full refund plus six percent inter-
est to the purchaser where, despite a “bona fide effort,” the purchaser fails to comply with the
statutory requirements for the issuance of a tax deed and as a result the court “refuses” to issue
the deed. Section 4.6(f) provides that no refund is available if the purchaser fails to provide the
first notice under section 4.5. Section 4.5(j) 2 provides that the certificate of sale reverts to the
county if the purchaser does not petition for a deed within the time established by section 4.6(a).
Michiana Campgrounds, LLC purchased several properties in a 2004 tax sale in Vander-
burgh County, Indiana. Michiana filed petitions for the issuance of tax deeds to other parcels it
had purchased at the 2004 sale, but before the redemption period expired, Michiana filed motions
for refunds of the purchase prices of the three parcels at issue minus a twenty-five percent pen-
alty. The motion stated that Michiana “has not nor will not be asking for a tax deed” to those
1
This section has since been amended to reduce the amount receivable by a party making a good faith
effort, but retaining the requirement that the court “refuse” the deed. See P.L. 89-2007, § 10 (eff. July 1,
2007).
2
This subsection was found at I.C. 6-1.1-25-4.5(k) at the time this case was briefed. See I.C. 6-1.1-25-
4.5(k)(2004); P.L. 169-2006, § 29 (eff. Jan. 1, 2007). It and other subsections have been renumbered on
more than one occasion. All citations in this opinion designate subsections by their location as found in
the Indiana Code effective July 1, 2007.
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properties. After some preliminary skirmishing, the trial court held hearings on the three parcels
and ordered the County to refund the purchase prices minus a twenty-five percent penalty. The
Court of Appeals consolidated the County’s appeals and affirmed the trial court. Vanderburgh
Co. Auditor, et al. v. Michiana Campgrounds, LLC, 853 N.E.2d 175, 179 (Ind. Ct. App. 2006).
We granted transfer. Vanderburgh Co. Auditor, et al. v. Michiana Campgrounds, LLC, 869
N.E.2d 445 (Ind. 2007). Because the issue is a pure question of law, we review it de novo.
Refund of Tax Sale Purchase Price
The trial court and the Court of Appeals agreed with Michiana that it was entitled to the
refund under section 4.6(d). The County responds that Michiana is not entitled to the refunds
because section 4.6(d) allows a refund only where a petition for a tax deed is filed and the trial
court refuses issuance of the deed. The County argues that because Michiana issued the first no-
tice under section 4.5 but never attempted to issue the second notice required by section 4.6, Mi-
chiana was not “refused” a deed. Rather it chose to fail to fulfill the requirements for issuance of
a deed. The County also contends that section 4.5(j), discussed below, addresses situations
where, as the County puts it, a “tax sale purchaser simply elects not to file a petition for a tax
deed.” Michiana does not address section 4.5(j).
Michiana relies on Board of Commissioners v. Mundy, 783 N.E.2d 742 (Ind. Ct. App.
2003). Mundy purchased an Evansville property at a tax sale and sent the initial notice of his
purchase. Id. at 743. Slightly more than two months after the sale, the City of Evansville issued
an order requiring the property to remain vacant and secure and requiring that the house on the
property be razed and the lot cleared and leveled. Id. Mundy responded by filing a motion for
refund under section 4.6(d), which the trial court granted. Id. On appeal, the Board argued that
section 4.6(d) “does not allow for tax sale purchasers who get buyer’s remorse.” Id. Specifi-
cally, the Board argued that the use of “refuses” in section 4.6(d) dictated that the purchaser must
petition for issuance of a deed and be rejected by the court before a refund is available. Id. at
744. The Court of Appeals rejected that contention:
Under the facts and circumstances before us, where the Board wishes to
foster the purchase and rehabilitation of distressed real estate but then notifies the
purchaser slightly more than two months after purchase that he will also have the
privilege of paying to raze the property, we disagree.
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Id. at 743.
The Mundy court noted that section 4.6(e) provided that where a purchaser “has made a
bona fide attempt to comply with the statutory requirements . . . for the issuance of the tax deed
but has failed to comply with these requirements” and the trial court “refuses” to order a deed,
the purchaser is entitled to a full refund plus interest. Id. at 744–45. The Mundy court con-
cluded that subsection (e) deals with situations where the purchaser attempts to meet the statute’s
requirements but fails. Id. at 745. Because subsection (e) addresses failed attempts, subsection
(d) must be available to purchasers who do not make a bona fide attempt to obtain a deed. Id.
We agree that subsection (d) applies to purchasers who do not make a bona fide attempt to obtain
a deed, but the issue remains whether those purchasers must be “refused” before they can obtain
the lesser refund available under that subsection.
Lake County Auditor v. Bank Calumet, 785 N.E.2d 279 (Ind. Ct. App. 2003), decided
one month after Mundy, concluded that an attempt must be made and refused to qualify under
section 4.5(d). In that case, a tax sale purchaser sought a refund before the expiration of the one-
year redemption period when it discovered the structure on the property had been demolished by
an unidentified party. Id. at 280. The Court of Appeals reversed the trial court’s grant of rescis-
sion. Id. Observing that the doctrine of caveat emptor had long been applied to tax sales, the
Court of Appeals concluded that
The trigger for the refunds specified under subsections (d) and (e) is the
trial court’s refusal to enter an order directing the auditor to issue the tax deed be-
cause of the purchaser’s failure to comply with the requirements of the statute.
That a trial court must refuse to enter an order presupposes that the purchaser has
requested an order by filing a petition under I.C. § 6-1.1-25-4.6(a).
Id. at 281. Because the purchaser had not filed a petition to issue a tax deed and the redemption
period had not yet expired, the trial court had not “refused” to order the issuance of a deed and
both subsections (d) and (e) were therefore inapplicable. Id. at 281–82. The Bank Calumet court
expressly declined to follow Mundy. Id. at 282 n.2. We granted transfer to resolve the conflict
between these two decisions of the Court of Appeals.
We find Bank Calumet more persuasive. Subsection (e) permits a refund to a purchaser
who makes a “bona fide” attempt to comply with subsection (b) but fails to meet all of the re-
quirements. Under the statute in effect at the time, by seeking a refund less twenty-five percent,
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Michiana implicitly conceded it had not made the “bona fide attempt” required for a refund un-
der subsection (e). Michiana nonetheless claims subsection (d) provides for a refund less a
twenty-five percent penalty. The critical language in subsection (d) permits the seventy-five per-
cent refund “except as provided in subsection (e) and (f), if the court refuses” to order a tax deed
“because of the failure of the petitioner . . . to fulfill the requirements of this section.” The “re-
quirements of this section” (i.e., section 4.6) include the requirements in subsections 4.6(b)(4)
and (5) that the notices required by section 4.5 have been given and the petitioner has complied
with “all the provisions of law entitling the petitioner to a deed.” As Bank Calumet pointed out,
both subsections (d) and (e) provide for a refund if the trial court “refuses” to enter the order di-
recting the auditor to issue the tax deed. 785 N.E.2d at 281. The County argues that neither sec-
tion provides for a refund if the purchaser simply decides not to seek a deed, as Michiana did
here. The County argues that providing a refund to purchasers like Michiana allows purchasers
to “assume very little risk” if they can submit minimum bids at tax sales, then “pick and choose”
which properties they think will be profitable and obtain a substantial refund on the others.
We think that the statutory reference to “refusal” purposefully limits refunds to purchas-
ers who go to the time and expense of seeking a deed. Buyer’s remorse is not a basis for a re-
fund. As Bank Calumet pointed out, “as far back as [1887], Indiana appellate courts have recog-
nized that the doctrine of caveat emptor applies to tax sales in its fullest force, that is, a purchaser
at a tax sale buys at his own risk.” 785 N.E.2d at 281 (citing State ex rel. Mackenzie v. Casteel,
110 Ind. 174, 179, 11 N.E. 219, 222 (1887)). The Court of Appeals in this case reasoned that
subsection (d) was spurious if subsection (e) provided for a full refund. But subsection (e) re-
quires “bona fide” effort to comply with the requirements, and subsection (d) permits only a sev-
enty-five percent refund if the court refuses without a determination that bona fide effort was
made. This applies in a somewhat different scenario, and neither is spurious. Michiana also
makes the plausible contention that there is no point in requiring the purchaser to jump through
the hoop of a failed petition in order to qualify for the partial refund when the purchaser can
cause the petition to fail by failing to meet statutory requirements. But the effect of an aban-
doned pursuit of a deed is to leave ownership of the property in limbo, which can have adverse
effects on nearby properties and the economic health of the area. The legislature could have
concluded that adding that expense to the process could serve as a deterrent to speculative collec-
tion of certificates of sale with little forethought to whether deeds would ultimately be sought.
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This is, of course, a matter for the legislature to resolve, and if we have incorrectly interpreted
this rather prolix set of provisions, the General Assembly can correct us.
Finally, the County argues that section 4.5(j) addresses situations where the purchaser
voluntarily elects not to file a petition for a tax deed. That section was added to the statute in
2003, P.L. 170-2003, § 11 (eff. July 1, 2003), and was not addressed in either Mundy or Bank
Calumet or the opinion of the Court of Appeals in this case. Section 4.5(j) provides in pertinent
part that “[i]f the purchaser fails . . . to petition for the issuance of a tax deed within the time
permitted under section 4.6(a) of this chapter[,] the certificate of sale reverts to the county execu-
tive and may be retained by the county executive or sold.” We observe that the result we reach
today is consistent with the County’s view of section 4.5(j). Because we conclude that section
4(d) requires “refusal” by the court, not merely a failure by the purchaser to qualify for a deed,
we do not need to address the County’s contention that section 4.5(j) is the only provision appli-
cable to a voluntary abandonment of pursuit of a deed. We acknowledge that if section 4.5(j)
means what the County urges, it seems slightly misplaced. Sections 4.5(a) through (i) set out the
notice requirements and statutory prerequisites for obtaining a tax deed. Thus, subsection (j) is
the only provision in section 4.5 addressing the consequences of failure to meet requirements. It
therefore seems more appropriately located in conjunction with the three refund provisions found
in section 4.6. Placement of section 4.5(j) in the Indiana Code is of little persuasive force in in-
terpreting the section, however, as section 11 also contains a refund provision. See 6-1.1-25-
11(a) (2004).
Conclusion
The trial court’s grant of Michiana’s motion for refund of the purchase price minus a
twenty-five percent penalty is reversed.
Shepard, C.J., and Dickson, Sullivan, and Rucker, JJ., concur.
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