Isern v. Summerfield

97-402

No. 97-402

IN THE SUPREME COURT OF THE STATE OF MONTANA

1998 MT 45

EDWARD ISERN, a/k/a
EDWARD H. ISERN, III,

Plaintiff and Appellant,

v.

KAREN SUMMERFIELD, a/k/a
K. SUMMERFIELD, DACE HAWKINSON,
B & D PROPERTIES, DANIEL SUMMERFIELD
and TRACY SUMMERFIELD,

Defendants and Respondents.

APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
Honorable Ed McLean, Judge Presiding.

COUNSEL OF RECORD:

For Appellant:

W. Carl Mendenhall, Worden, Thane & Haines, Missoula,
Montana

For Respondents:

James A. Bowditch, Milodragovich, Dale, Steinbrenner &
Binney,
Missoula, Montana

Submitted on Briefs: January 15, 1998

Decided: March 4, 1998

Filed:

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (1 of 11)4/20/2007 2:51:24 PM
 97-402

__________________________________________
Clerk

Chief Justice J. A. Turnage delivered the Opinion of the
Court.

¶1 In this case, we reverse a decision of the Fourth
Judicial District Court, Missoula County, which upheld
the validity of a tax deed to real property.

¶2 The issue is whether defects in and omissions from
the statutory tax deed process as followed by Missoula
County and the Defendants and Respondents deprived
Missoula County of jurisdiction to issue the subject tax
deed and render the deed void.

¶3 In 1990, Edward Isern purchased a residence at 4217
Timberlane in Missoula, Montana. The full legal
description of the property is:
Lot 9 in Block 6 of LINCOLNWOOD ADDITION NO.
5, a platted subdivision in Missoula County,
Montana, according to the official recorded
plat thereof.

Isern failed to timely pay $787.38 in second half taxes
on the property for 1991.

¶4 Missoula County held a tax sale of the property in
July 1992. There were no bidders. Missoula County
continued to assess taxes against the property for the
years 1992, 1993, 1994, and 1995. On November 20, 1995,
upon payment to the county of $9,460.51 representing
delinquent taxes, penalties, interest, and costs, the
county assigned a tax sale certificate on the property to
"Dace Hawkinson-K Summerfield." On February 2, 1996, the
county issued a tax deed to "Dace Hawkinson & Karen
Summerfield."

¶5 Isern subsequently attempted to redeem the property
by tendering a check for the delinquent taxes, penalties,
and interest then due, but Missoula County refused to
accept his check. Isern filed this action in March 1996,
seeking to set aside the tax deed and to quiet title to
the property in himself based upon statutory defects,
omissions, and deficiencies in the tax deed process used.
In addition to Hawkinson and Summerfield, Isern named as
defendants other persons or entities which he believed
might claim some right or title to the property.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (2 of 11)4/20/2007 2:51:24 PM
 97-402

¶6 Following discovery, the parties filed cross-motions
for summary judgment. The District Court denied Isern's
motion, and granted the Defendants summary judgment.
Isern appeals.
Discussion

¶7 Do defects in and omissions from the statutory tax
deed process as followed by Missoula County and the
Defendants and Respondents deprive the county of
jurisdiction to issue the subject tax deed and render the
deed void?

¶8 This Court's standard of review of a summary
judgment is the same as that initially employed by the
District Court--whether there exist genuine issues of
material fact, and, if not, whether the moving party is
entitled to judgment as a matter of law. See Rule 56(c),
M.R.Civ.P., and Estate of Strever v. Cline (1996), 278
Mont. 165, 170, 924 P.2d 666, 669. In this case, the
parties agree there are no issues of material fact.

¶9 Both Montana's Constitution and the Constitution of
the United States provide that no person shall be
deprived of property without due process of law. U.S.
Const. Amend. XIV, 1; Art. II, Sec. 17, Mont. Const.
In a tax deed case, a citizen's right to own property is
challenged by the government and the assignee of a tax
sale certificate, almost always for a payment by the
assignee to the government of far less than the
property's full value.

¶10 Notwithstanding the requirements of due process,
Defendants and Respondents cite Cullen v. Western
Mortgage & Warranty Title Co. (1913), 47 Mont. 513, 525,
134 P. 302, 305, for the proposition that it is not
necessary that tax deed proceedings "be criticised with
microscopic nicety" or that tax deeds be rejected for
"every insignificant departure from verbal precision."
However, in more recent cases than Cullen, this Court has
firmly maintained the position that procedural
requirements set forth in tax deed statutes must be
strictly observed. See, e.g., Lowery v. Garfield County
(1949), 122 Mont. 571, 579, 208 P.2d 478, 483
("[a]pplication for a tax deed is a statutory proceeding
and every requirement of the statute must be fully
complied with"); Hudson v. McDonald (1987), 229 Mont.
426, 431, 747 P.2d 221, 224 ("[l]et the tax deed
applicant be aware of [the tax deed statutes], and let
him adhere to the letter thereof, particularly as to
description of the property, the content of the

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (3 of 11)4/20/2007 2:51:24 PM
 97-402

affidavits and notices, and the need for the
determination of occupancy"); Spain-Morrow Ranch, Inc. v.
West (1994), 264 Mont. 441, 447, 872 P.2d 330, 334 ("[i]n
recent decisions, we have required that the procedural
steps set forth in tax deed statutes be strictly
followed"). Even typographical errors in a document may
be sufficient grounds to set aside a resulting tax deed.
Tax Lien Services v. Hall (1996), 277 Mont. 126, 133, 919
P.2d 396, 400. We here reaffirm our position that
because a property owner's fundamental interests are at
stake in tax deed proceedings, such proceedings demand
punctilious compliance with all statutory and procedural
requirements.

¶11 The first step in the tax deed process under
Montana's statutory scheme occurs on the third Monday of
December and the third Monday of June of each year, when
the county treasurer reports to the county clerk and
recorder a list of all persons and property then owing
taxes. Section 15-16-301, MCA. In Missoula County, the
elected offices of county treasurer and county clerk and
recorder have been combined into one office. No
delinquent list is made in Missoula County as is required
under § 15-16-301, MCA. Defendants and Respondents argue
that preparing reports as between the treasurer and the
clerk and recorder would be redundant and cost
prohibitive, where, as here, those offices have been
combined. However, failing to follow the statutes cannot
be justified by consolidation of elective offices.
Notwithstanding consolidation of the offices, there still
remain two distinct office functions, separate from each
other, although administered by one elected county
official.

¶12 Continuing with the statutory tax deed process,
after the county clerk and recorder confirms the validity
of the delinquent tax list pursuant to § 15-16-305, MCA,
the county treasurer must publish or post a notice of
pending tax sale. The notice must comply with the
requirements set forth at § 15-17-122, MCA, and a copy
thereof must be filed with the county clerk pursuant to
§ 15-17-123, MCA.

¶13 The method of conducting a tax sale is prescribed at
§ 15-17-211, MCA. Following the sale, and upon receipt
from the buyer of all delinquent taxes, penalties,
interest, and costs, the county treasurer is to prepare
a tax sale certificate containing the information listed
at § 15-17-212, MCA. The Missoula County clerk and
recorder/treasurer testified by deposition that she does
not prepare tax sale certificates for tax sales when
Missoula County is the buyer of the property. She did

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (4 of 11)4/20/2007 2:51:24 PM
 97-402

not prepare a tax sale certificate in this case. Nor did
Missoula County follow the alternative procedure
established at § 15-17-214, MCA, for county purchases of
tax deeds. That alternative procedure involves
production of a list of all property remaining unsold at
the tax deed sale. The Missoula County clerk and
recorder/treasurer did not produce such a list.
Defendants and Respondents argue that "wasteful and
time-consuming paper copies" were "not necessary"
because the offices of clerk and recorder and treasurer are
combined in Missoula County. Again, this argument does not
justify violation of statutory requirements.

¶14 The form for an assignment of a tax sale certificate
by the county to a payor of the amount of the delinquent
taxes, including penalties, interest, and costs, is
provided at § 15-17-323, MCA. The procedure for then
issuing a tax deed is set forth at Title 15, Chapter 18,
Part 2, MCA. The clerk and recorder must give notice of
the pending issuance of a tax deed, by certified mail,
return receipt requested, to each interested party at
"the address disclosed by the records in the office of
the county clerk." Section 15-18-212(4), MCA. In
applying a predecessor statute to § 15-18-212, MCA, this
Court has ruled that a county clerk and recorder must
seek addresses "easily ascertainable" in county records.
Yellowstone Inv. and Dev. Co. v. Yellowstone County
(1982), 201 Mont. 290, 297, 654 P.2d 508, 512.

¶15 In this case, the correct address of property owner
Isern was easily ascertainable from the records of
Missoula County. The county assessor's office had
received notice of Spokane, Washington addresses for
Isern in November 1994 and July 1995. The clerk and re-
corder/treasurer testified by deposition that the county
assessor's office should have provided the new addresses
to her office. She admitted that the most current
address was available to her by simply going across the
hall to the county assessor's office. Yet the clerk and
recorder/treasurer's office sent the notice of pending
issuance of a tax deed to Isern at his former Missoula,
Montana address on September 15, 1995, months after the
newer addresses were in the county's records.

¶16 Defendants and Respondents contend that under Moran
v. Robbin (1993), 261 Mont. 478, 863 P.2d 395, the
alleged defects attributable to Missoula County are not
relevant to the propriety of the issuance of a tax deed
to Hawkinson and Summerfield. Defendants and Respondents
claim that Missoula County's application for a tax deed
was abandoned and superseded by their actions in

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (5 of 11)4/20/2007 2:51:24 PM
 97-402

preparing and issuing the notice, proof of notice, and
application for tax deed. We disagree. In Moran, we
held that because the redemption dates provided in the
first notice and the second notice of pending tax deed
issuance differed, the second notice controlled and the
first notice was deemed abandoned. Moran, 261 Mont. at
483-84, 863 P.2d at 399. That holding does not translate
into a blanket removal of the requirement for strict
compliance with all tax deed statutes; it relates only to
multiple notices with different redemption dates. The
interpretation of Moran proposed by Defendants and
Respondents would wrongly allow counties and tax deed
applicants to totally ignore all prior statutory
requirements as long as the final notice was correct.

¶17 The form of a tax deed must be "in
substance" as set forth at § 15-18-213, MCA. The
form there providedincludes a statement that "the
property tax lien has notbeen redeemed by .......... (name of
former owner) or anyother person entitled to redeem it."
Section 15-18-211(1), MCA, also requires that a tax deed must contain
"a statement that the property tax lien was not redeemed
during the redemption period provided in 15-18-111." The
tax deed issued in this case contains no language
whatsoever addressing this twice-repeated statutory
requirement.

¶18 Section 15-18-211(1), MCA, also requires that a tax
deed must contain the full legal description of the
property. The full legal description of the subject
property in this case is set forth above at paragraph 3.
An abbreviated description of the property ("SUID #
1862006 Lincolnwood #5-Lot 9 Blk 6") was used in the tax
deed issued to Hawkinson and Summerfield. The tax deed
issued by Missoula County in this case did not contain
the full legal description as required under § 15-18-211(1), MCA.

¶19 In Hudson, this Court set aside a notice of
application for a tax deed that included an improperly
abbreviated legal description and no identification of
the county where the property was located. We reasoned
that by failing to comply with statutory requirements the
published description was fatally defective. Hudson, 229
Mont. at 431, 747 P.2d at 223-24. The same reasoning
applies to a tax deed, particularly since § 15-18-211(1),
MCA, specifically requires the "full legal description"
in the tax deed.

¶20 The District Court found, without detailed analysis,
that the procedural defects in this case were either
"minor clerical errors and/or non-substantive deviations

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (6 of 11)4/20/2007 2:51:24 PM
 97-402

of specific statutory language," or "internal operating
procedures and documentation of the County as a result of
the County's present computerized system of record
keeping." The court effectively concluded that none of
the defects affected Isern's due process rights. We
disagree. Our case law has established that tax deed
statutes must be strictly followed. Where, as here,
failure to follow statutory requirements has been clearly
established, we must conclude that due process rights
have been abridged. The argument that advances in
computerized record keeping justify deviation from the
procedures currently prescribed by statute is a matter
properly addressed not to this Court, but to the
Legislature, with proposals for statutory amendment.

¶21 Given the requirement of strict compliance with
statutory procedures for issuing a tax deed, and without
passing judgment on the significance of other errors and
omissions cited by Isern but not discussed herein, we
hold that the errors and omissions discussed above void
the subject tax deed issued by Missoula County to Dace
Hawkinson and Karen Summerfield. We therefore reverse
the summary judgment entered by the District Court. This
case is remanded for further proceedings consistent with
this Opinion.

/S/ J. A. TURNAGE

We concur:

/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ JIM REGNIER
/S/ WILLIAM E. HUNT, SR.

Justice W. William Leaphart, dissenting.

¶22 Isern appeals to this Court asserting that Montana law requires strict
compliance with statutory requirements of the code in issuing tax deeds. This Court
has reasoned that
[s]trict compliance with the statutes is required because the owner
risks losing his or her real property for the failure to pay the property
taxes. Often, very valuable property is lost for a mere pittance. . . .
"The proceedings are to a large extent ex parte, the owner is an
unwilling party, is seldom, if ever, present at the sale, is generally
ignorant of it, and the tax almost always bears a very small proportion
to the value of the property sold. Upon these considerations it has
generally been held that proceedings on tax sales should strictly
comply with the statute."

Moran v. Robbin (1993), 261 Mont. 478, 482-83, 863 P.2d 395 (quoting Rush v.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (7 of 11)4/20/2007 2:51:24 PM
 97-402

Lewis and Clark County (1908), 36 Mont. 566, 569, 93 P. 943, 944). However, this
policy must be considered in light of the State's interest in the effective
collection of
property taxes.

¶23 As Respondents assert, Montana relies heavily on revenue received from real
property tax assessments. This revenue funds public schools, transportation, and
other expenditures necessary for effective operation of the county. To invalidate
tax
deed proceedings on the purely technical grounds asserted by Isern eviscerates the
tax
deed process and frustrates a county's ability to obtain necessary operational
revenue.

¶24 The statutory procedure drafted by the legislature and set forth in Title 15
seeks to embody the protections of the United States and Montana Constitutions
which provide that no person shall be deprived of property without due process of
law. U.S. Const. amend. XIV, § 1; Mont. Const. Art. II, Sec. 17. Due Process in the
broad sense requires that "one deprived of his property must be given notice and an
opportunity to defend." Ball v. Gee (1990), 243 Mont. 406, 413, 795 P.2d 82, 86.
Title 15 sets forth a standard procedure that is designed to assure that a tax deed
will
not issue unless the property owner has first been afforded due process of law.

¶25 The Court holds that "[w]here . . . failure to follow statutory requirements has
been clearly established, we must conclude that due process rights have been
abridged." However, I agree with Respondents that, in determining the validity of a
tax deed, the ultimate question to be resolved is whether the property owner (Isern)
was deprived of his property without due process of law. In other words, did the
slight deviations from the Title 15 procedure necessarily deprive Isern of his
property
without due process of law? In blindly requiring strict compliance, the majority
ignores the fact that, despite technical discrepancies, Isern received due process,
that
is, both notice and an opportunity to defend (to redeem).

¶26 Realizing that the strict compliance rule essentially made the issuance of tax
titles impossible thereby hampering the state's ability to collect taxes, the Supreme
Court of Florida responded by characterizing some statutory tax deed provisions as
directory and some as obligatory depending on their due process ramifications. See
Dawson v. Saada (Fla. 1992), 608 So.2d 806. Likewise, Indiana requires strict
compliance with essential procedures, but allows substantial compliance with
procedures that do not effect due process rights. See Ind. Code § 6-1.1-25-16
(1997); see also Anton v. Davis (Ind. App. 1995), 656 N.E.2d 1180. This Court,
however, has strayed from its holding that "[e]very essential and material step
required by the tax deed statutes must be strictly followed," Moran, 863 P.2d at 398
(emphasis added) (citing Stanford v. Rosebud County (1991), 251 Mont. 128, 134,
822 P.2d 1074, 1077-78), in favor of a rule requiring strict compliance with all
steps
of the statutory process.

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (8 of 11)4/20/2007 2:51:24 PM
 97-402

¶27 The Court, in support of its rule of absolute strict compliance, characterizes
Tax Lien v. Hall as standing for the proposition that even typographical errors in a
document may be sufficient grounds to set aside a resulting tax deed. In Hall, the
typographical error was in the description of the property in a published notice. In
invoking Hall, the Court fails to acknowledge that Hall was denied notice and thus,
due process, because the typographical error made it impossible to identify the
property. This is a stark contrast to the present case in which Isern has not
alleged
prejudice or denial of his right to due process resulting from the "errors" in the
tax
deed process. He alleges only that Respondents and the county failed to comply with
all the technicalities of the tax deed process irrespective of whether they affected
his
rights to due process.

¶28 This Court has held that a critical element in the process of applying for a tax
deed is the giving of notice by the tax deed applicant to the owner of the real
property. We have held that " '[t]he giving of notice is jurisdictional; if the
legal
requirements with respect to notice are not complied with, a county treasurer may not
legally issue a tax deed.' " Tax Lien v. Hall (1996), 277 Mont. 126, 133, 919 P.2d
396, 400 (quoting Moran, 863 P.2d at 398). Indeed, when this Court has determined
that failure to strictly comply with statutory procedures denies a county of
jurisdiction
to issue a tax deed, the noncompliance has almost exclusively related to the failure
to
provide the property owner with proper notice of her rights.

¶29 The agreed facts in this case indicate that on September 15, 1995, the county,
in compliance with 15-18-212, MCA, sent notice of pending tax deed issuance to
Isern via certified mail and also published the notice in the Missoulian. This
notice
stated that Isern's 36-month period of redemption had expired, notified Isern that
his
60-day period of redemption would expire on November 14, 1995 and explained that
if Isern failed to redeem the property during that time a tax deed would issue.
Isern
did not respond to the county's notice. Isern asserts that this notice was deficient
because the county did not send the notice to Isern's Spokane address. The Court
agrees, holding that the county had a duty to go across the hall to the to the county
assessor's office to obtain the Spokane address. However, as set forth below,
Isern's
argument should fail as he was not denied notice or due process.

¶30 Summerfield purchased the county's tax lien on November 20, 1995 (5 days
after Isern's redemption period under the county's notice expired), and on November
28th Summerfield mailed a new notice of pending tax deed issuance to Isern pursuant
to § 15-18-212, MCA. This second notice indicated that Isern had yet another 60
days, until January 30, 1996, to redeem the property. This notice was sent via
certified mail addressed to Isern and "occupant" at the address of the subject
property
in Missoula, to Isern at another listed Missoula address and to Isern's address in

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (9 of 11)4/20/2007 2:51:24 PM
 97-402

Spokane, Washington. Delivery was attempted three times (December 1, 6, and 16).
The letter remained unclaimed and was returned to Summerfield on December 22nd.
Isern's wife, however, acknowledged that she and Isern received post office
notification of certified letters at their Spokane residence, but refused to claim
them.

¶31 As a result of Isern's failure to acknowledge service at any address of record,
Summerfield also elected to notify Isern of the pending tax deed issuance by
publication pursuant to § 15-18-212(5), MCA. On December 1st and 8th she
published a further Notice to Interested Parties of Pending Tax Deed Issuance in the
Missoulian and filed the additional notice with the clerk on December 29th. As a
result of Respondents' notices of issuance of tax deed (via certified mail and
publication), Isern received the benefit of an additional 60-day redemption period.
Again, he did not choose to redeem the property. Accordingly, on January 31, 1996,
Summerfield submitted her application for tax deed to the county. The treasurer
issued a tax deed to Summerfield on February 2, 1996. Respondents and the county
followed the essential and material steps in applying for and issuing the tax deed.

¶32 The Respondents argue that the second notice was, in effect, an
"abandonment" of the county's notice and should control in accord with this Court's
decision in Moran. In Moran, the purchaser of a tax deed sent notice via certified
mail notifying the owner of the pending tax deed issuance. The purchaser elected
also
to publish the notice. The second, published notice stated a later redemption date
than the first notice. This Court determined that the first, certified mail notice
was
abandoned and the second, published notice and date of redemption controlled.
Moran, 863 P.2d at 399. In the present case, the Court rejects Respondents' reliance
on Moran, stating: "That holding [Moran] does not translate into a blanket removal
of the requirement for strict compliance with all tax deed statutes; it relates only
to
multiple notices with different redemption dates." I agree with Respondents that,
under Moran, the notice providing the more generous redemption date supersedes all
prior notices. However, even without Moran, Isern has failed to assert any damage,
prejudice or violation of due process as a result of the county's notice. Even
assuming
that the county's notice was deficient, Respondents' subsequent notice gave Isern an
additional 60-day redemption period beyond that provided by the county's notice.
Therefore, I would hold that the Respondents' notice, sent to three addresses of
record and published in the Missoulian, satisfied the requirements of § 15-18-212,
MCA, and gave sufficient notice to Isern of his right to redeem the property. Isern
has not alleged errors that deprived him of due process of law. He does not contest
the fact that Respondents sent him notice of the pending tax deed at his Spokane
address and that he had more time than allotted by the county's notice to redeem the
property. He asserts only clerical errors that were not of a jurisdictional nature
and
did not deny him of notice or an opportunity to defend or redeem.

¶33 The Court has taken the strict compliance analysis to a new level by voiding
a tax deed absent any showing of the slightest prejudice or denial of due process of
law. The result is that a property owner who shirks his tax obligations and thwarts
notice by actively avoiding his certified mail may later reclaim the property by

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (10 of 11)4/20/2007 2:51:24 PM
 97-402

finding
any insignificant typographical or clerical error.

¶34 I would affirm the District Court's holding that the numerous errors cited by
Isern were nothing more than insignificant clerical errors and slight procedural
deviations which did not deny Isern due process of law.

/S/ W. WILLIAM LEAPHART

Justice Terry N. Trieweiler joins in the foregoing dissenting opinion of Justice W.
William Leaphart.

/S/ TERRY N. TRIEWEILER

file:///C|/Documents%20and%20Settings/cu1046/Desktop/opinions/97-402%20Opinion.htm (11 of 11)4/20/2007 2:51:24 PM