Conseco Finance Servicing Corp. v. Missouri Department of Revenue

195 S.W.3d 410, 2006 Mo. LEXIS 74, 2006 WL 1605014
CourtSupreme Court of Missouri
DecidedJune 13, 2006
DocketSC 87061
StatusPublished
Cited by19 cases

This text of 195 S.W.3d 410 (Conseco Finance Servicing Corp. v. Missouri Department of Revenue) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conseco Finance Servicing Corp. v. Missouri Department of Revenue, 195 S.W.3d 410, 2006 Mo. LEXIS 74, 2006 WL 1605014 (Mo. 2006).

Opinion

LAURA DENVIR STITH, Judge.

The issue before this Court is whether sections 700.525 to 700.541, RSMo 2000, 1 which are entitled “Abandoned Manufactured Home — Title Disposition” (the Act) and which govern issuance of titles to abandoned manufactured homes, are unconstitutional in whole or in part. Respon *412 dents allege the Act is unconstitutional because its provisions are unduly vague as to what constitutes abandonment, because they provide inadequate notice or hearing prior to deprivation of the property interest of owners of manufactured homes and lienholders, and because they arbitrarily impair a lienholder’s perfected security interest in a manufactured home. The trial court found these provisions invalid for the reasons asserted and enjoined Appellant, the Missouri Department of Revenue (DOR), from issuing abandoned manufactured home titles pursuant to the Act.

This Court affirms. The notice sent to Respondents was deficient because it was not reasonably calculated to reach them and was insufficient to inform them of their due process rights. Further, on its face the Act unconstitutionally fails to provide a pre-deprivation hearing to owners of manufactured homes. Having failed of its essential purpose, the Act is invalid in its entirety, and DOR is permanently enjoined from issuing certificates of title to abandoned manufactured homes pursuant to it.

1. FACTUAL AND PROCEDURAL HISTORY

Respondents John Wren Jr. and Shannon Wren (the Wrens or homeowners) purchased a manufactured home financed by Respondent Conseco Finance Servicing Corporation (lienholder). They placed the home on land rented from Lakehurst Investments (landlord). 2 Lakehurst applied to DOR for an abandoned home title in its name, alleging the Wrens’ home was abandoned pursuant to the Act.

In May 2000, DOR sent notice of Lake-hurst’s application for title to the Wrens at the address of the manufactured home listed on the home’s title — an address that DOR had just been informed had been abandoned. Although DOR gives examples of cases in which it also has sent a copy of the notice to the lienholder, here it did not separately notify Conseco at any address or try to do so. Instead, DOR argues the following letter addressed to the Wrens at their abandoned home served as adequate notice to both:

The Motor Vehicle Bureau was notified that on October 30, 1999, the manufactured home listed above was abandoned on property owned by Lakehurst Investments Inc. at 4450 Burnau Dr Lot 90 House Springs MO. Accordingly, the Department of Revenue is required to notify the last titled owner and the lien-holder(s) of record listed below of the landowner’s right to obtain a title on the manufactured home, if the manufactured home is not redeemed as outlined herein.
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THE OWNER OR LIENHOLDER MUST REDEEM THE MANUFACTURED HOME WITHIN 30 DAYS OF THIS NOTICE TO PROTECT THEIR [sic] INTEREST.
The owner may redeem the manufactured home by presenting proof of ownership and paying all rent owed to the landowner.
The lienholder may redeem the manufactured home, if titled in Missouri, by presenting a valid security agreement to the landowner and paying all rent owed to the landowner.
*413 The owner or lienholder must notify this department within BO days of this notice that the manufactured home was redeemed and submit a receipt issued by the landowner showing that all rent was paid.
Failure to redeem the manufactured home and notify this department will cause the Director to issue title in the name of the landowner.

Neither the Wrens nor Conseco redeemed the title within the 30-day period, and Conseco did not learn of the claimed abandonment until after DOR issued an abandoned home title to Lakehurst. The abandoned home title did not list any security interest of Conseco or any other party in the manufactured home, although DOR concedes that Conseco’s security interest was perfected prior to DOR’s issuance of the abandoned home title and had been listed on the Wrens’ title.

The relevant statutes and DOR regulations provide no procedure for contesting issuance of an abandoned home title or for objecting to failure to list a lienholder’s security interest on that title. Conseco, therefore, sought injunctive relief to prevent DOR from issuing abandoned home titles under the Act, arguing its provisions violate Respondents’ due process rights and are unconstitutionally vague.

The Wrens, although the owners of the manufactured home before it was deemed abandoned, initially were not parties to the suit. The trial court granted Conseco leave to add the Wrens as plaintiffs and that same day entered summary judgment in favor of Conseco, finding the Act to be unconstitutional because it is confiscatory and in violation of the Due Process Clause of the United States Constitution. It further found that the Act did not provide proper notice and did not give homeowners an opportunity to be heard, which deprived both homeowners and secured parties of their property interests in the manufactured homes without due process of law, and that the statutory scheme was unconstitutionally vague.

In its opinion on DOR’s appeal of this decision, this Court held that DOR should have been permitted to show cause why a permanent injunction should not issue, to file an answer to the amended petition once the Wrens were added, and to conduct discovery or present evidence on the issues raised in the second amended petition, before the trial court ruled. Conseco I, 98 S.W.3d at 544. 3

Upon remand, Respondents jointly argued that section 700.525’s definition of “abandoned” is unconstitutionally vague and arbitrary in that it permits a finding of abandonment when the homeowner owes even a small amount of rent if the landlord asserts the home shows “indications of abandonment.” They also argued that section 700.525 allows new title to issue without a pre-deprivation hearing to contest what rents are owing or whether indications of abandonment exist and that no provision is made even for a post-deprivation hearing, again violating the procedural due process rights of the homeowner in the manufactured home.

*414 In addition, Conseco argued the Act is unconstitutional because to the extent the Act can be read to permit issuance of an abandoned home title to the landlord that is not subject to the lienholder’s interest, it deprives the lienholder of a security interest in the manufactured home without adequate notice. Even if the landlord takes the home subject to the lienholder’s interest, DOR does not reflect that interest nor does the statute require it to be reflected on the abandoned home title issued by DOR.

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Cite This Page — Counsel Stack

Bluebook (online)
195 S.W.3d 410, 2006 Mo. LEXIS 74, 2006 WL 1605014, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conseco-finance-servicing-corp-v-missouri-department-of-revenue-mo-2006.