Bill's Printing, Inc. v. Carder

Ray Thornton, Justice,

concurring. I concur in the stice, this case be reversed, but I would not base that reversal on the majority’s bona ^de-purchaser analysis.

In this case, the Land Commissioner acted pursuant to his interpretation of the applicable statutes, Ark. Code Ann. § 22-6-102(a) (Repl. 1996), Ark. Code Ann. § 26-37-204(b) (Repl. 1997), and Ark. Code Ann. § 26-37-301(b) (Repl. 1997), to set aside the limited-warranty deed that he had executed in favor of the Carders after the statutory period for redemption had passed. Even after the execution of a limited-warranty deed to the purchaser of property at a .tax sale, our statutes provide for a two-year window during which the previous owners may contest the sale in a court of law. Ark. Code Ann. § 26-37-203 (Repl. 1997). In my view, the Scholeses were deprived of their statutory right to contest the Land Commissioner’s limited-warranty deed to the Carders in court because the Land Commissioner, convinced that the Scholeses were correct, exercised his assumed statutory authority to set aside and cancel his deed to the Carders. Even if this action by the Land Commissioner exceeded his authority, as argued by the appellees, it is clear to me that his action was sufficient to make further efforts by the Scholeses superfluous.

I believe this result amounts to a deprivation of statutory and property rights of the Scholeses in violation of due process oflaw. Due process is based in the Fifth Amendment to the United States Constitution made applicable to the States through the 14th Amendment to the United States Constitution, as well as Article 2, § 8 and § 21 of the Arkansas Constitution. Due process protects rights that are created from sources such as state law. Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985). When the legislature defines a right by positively enacting it into law, it may not be deprived without constitutionally adequate procedures. Id. Due process of laws is grounded in the concept of fundamental fairness. We have previously stated that when a statutory right is at issue in a due-process challenge, the question becomes whether the situations of a particular case indicate fundamental fairness requires the protection of such a right. Bearden v. Arkansas Dept. of Human Servs., 344 Ark. 317, 42 S.W.3d 397 (2001).

Procedural due process requires notice and a reasonable opportunity to be heard. Tsann Kuen Enterprises Company v. Campbell, 355 Ark. 110, 129 S.W.3d 822 (2003) (quoting State of Washington v. Thompson, 339 Ark. 417, 6 S.W.3d 82 (1999). Due process is fundamentally about having a meaningful opportunity to be heard in a meaningful time frame. I do not believe that due process is a formulaic or mechanical determination, but rather a flexible procedure relating to the time, place, and circumstance of the purported violation. A violation of due process requires state action to deprive someone of a right protected by law. Id. In Landers v. Jameson, Ark., S.W.3d (2003), we affirmed our reliance on the standards articulated in Lugar v. Edmonson Oil Co., 457 U.S. 922 (1982), in determining whether state action exists under a due-process analysis. The requirements for state action are that the deprivation be caused by the exercise of some right or privilege attributable to the state, such as as exercise of a supposed statutory authority, and that the deprivation be carried out by a state actor, such as the Land Commissioner cancelling a tax deed. Landers, supra.

In analyzing potential due-process violations, a three-prong analysis should be made. Landers, supra. First, a determination of what private interest is at stake and to balance that interest against the State’s interest in the matter is to be considered. Second, a determination of the risk of erroneous deprivation of that right under the process to be afforded. Finally, the court should look to what interest the government has in the situation including the potential burden of additional administrative or procedural requirements. Id.

First, the private interest at stake here is the right of redemption satisfying the first prong of the three-prong analysis. The legislature created a comprehensive and detailed statutory scheme for guaranteeing the right of redemption to landowners who failed to pay their taxes. The procedures, as required under the Arkansas Code, include a period of two years between certification of tax-delinquency and a tax-sale, the right of the owner at any time before the sale to pay all the taxes and fees outstanding to resume ownership, the right to have the sale set aside within thirty days by petitioning the Land Commissioner, and, additionally, the right to contest the sale in court for up to two years after the sale. See Ark. Code Ann. § 22-6-102(a), Ark. Code Ann. § 26-37-204(b), and Ark. Code Ann. § 26-37-301 (b). The State has an interest in seeing the delinquent taxes paid, but it is not sufficient to outweigh the private interest in redemption. The tax-sale procedure and the redemption right of the tax-delinquent owners ensures that the State will be compensated no matter who owns the property.

The second prong requires an analysis of what protections are afforded the right in question. In this case, the procedural protections are significant. The procedural scheme enacted by the legislature affords the original owners several chances to redeem the land forfeited. The final protection afforded is the two-year window to challenge a tax sale in a court oflaw. These procedural protections should be viewed in their entirety and not individually. Here, the consequence of the Land Commissioner’s actions, if deemed invalid, has the effect of depriving the Scholeses of the right to challenge the sale of their property in court. Had the full panoply of protections enacted by the legislature been afforded the Schloses, then there would have been adequate process oflaw.

The third prong asks what the additional burden on the mechanisms of the State in affording the process requested would be. There would be no additional burden on the State because Ark. Code Ann. § 26-37-203 establishes the right of the original land owner to challenge the tax sale in court. It is the court’s function to hear such cases. Because they were deprived of their statutory right to challenge the tax sale in court, the Scholeses have been denied due process oflaw in this case.

Our holding in Aldridge, supra, where we held that a land owner may not be thwarted in an attempt to redeem tax delinquent land by the misfeasance or malfeasance of an agent of the State, is relevant to this case. While the failure to follow an informal office policy may not rise to the level contemplated in Aldridge, the Land Commissioner acting beyond his statutory authority certainly does. By acting ultra vires, the Land Commissioner has created the current situation where the Scholeses had no recourse and were thwarted in their attempt to redeem the tax-delinquent property. Bills Printing, as the successors in interest to the Scholeses, should prevail because the Scholeses were deprived of their right of redemption without due process of law. The violation of this right occurred through their reliance on the Land Commissioner’s office.

Arkansas has a long legislative and jurisprudential history of protecting rights to real property. The public policy may fairly be stated that the State of Arkansas holds the right to own and use real property to be of the highest regard. Ark. Const. Art. 2 § 22. This is evidenced by the cases cited preventing the loss of tax-delinquent land by reason of malfeasance or misfeasance of a public officer and by the comprehensive statutory protections the legislature extended to real property owners in redeeming tax-delinquent land. See e.g. Aldridge v. Tryell, 301 Ark. 116, 782 S.W.2d 562 (1990). Here, the legislature created a statutory right to bring a suit challenging a tax sale. Ark. Code Ann. § 26-37-203. When the Land Commissioner took action to cancel the sale to the Carders, he negated any right to further relief for the Scholeses because he had granted them the relief they sought. If the Land Commissioner acted contrary to law by cancelling the sale to the Carders, there is no way for the Scholeses to enforce their right to a trial court’s determination of ownership because more than two years have passed since the date that the Land Commissioner took action to set aside the tax sale.

For the foregoing reasons, I concur in the judgment of the court, but believe this case should be decided on the basis that the Scholses were deprived of their statutory rights without due-process of law to challenge the validity of the conveyance to the Carders.