Davis v. LEMCI, LLC

144 So. 3d 1234, 13 La.App. 3 Cir. 1267, 2014 WL 3338846, 2014 La. App. LEXIS 1725
CourtLouisiana Court of Appeal
DecidedJuly 9, 2014
DocketNo. 13-1276
StatusPublished

This text of 144 So. 3d 1234 (Davis v. LEMCI, LLC) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. LEMCI, LLC, 144 So. 3d 1234, 13 La.App. 3 Cir. 1267, 2014 WL 3338846, 2014 La. App. LEXIS 1725 (La. Ct. App. 2014).

Opinions

SAUNDERS, Judge.

| ,This appeal arises from the trial court’s finding that the initial owners of a rent house in Breaux Bridge, subsequently sold at a June 12, 2002 tax sale, were never properly served with notice of that tax sale. This finding nullified a line of conveyances stemming from that tax sale that ended with a sale to the current possessors of the rent house. Also at issue in this appeal is the trial court’s finding that the initial owners of the rent house had to reimburse the possessors of the rent house for expenses the possessors incurred to restore the rent house back into a condition fit for commerce.

FACTS

This dispute over a rental property in Breaux Bridge involves the initial owners, Sandra Jackson Davis and her former husband, Melvin Davis; the tax sale purchaser, LEMCI, Inc. (LEMCI); and the possessors, Stefan and Kathryn Koch (the Kochs). Melvin purchased the home in his name only on July 12, 2001. Melvin and Sandra never paid taxes on the property. During the short period they owned the property before divorcing, Melvin was in charge of the property. Sandra visited the property no more than a handful of occasions, most recently seven years before [1236]*1236trial. She never lived, worked on, or maintained it. She initialized these proceedings soon after the property’s restoration by the current occupants was completed. Melvin was served with notice of the current proceedings by order of the trial court, but never appeared and was never subpoenaed.

The tax sale purchaser, LEMCI, acquired its claim toward the property via tax sale recorded on June 13, 2002. That entity’s principal owner, Gary Massicot, testified that this property was one of about one thousand properties LEMCI acquired by tax sale over a ten-year period. On February 4, 2010, eight years later, |2for the purpose of quieting title and reducing LEMCI’s liability exposure, Massi-cot conveyed the property to a single asset entity, Zimmerman Street, LLC, for $1,500.00 before selling it to the Kochs for $26,000.00.

The Kochs were shown the property by Mr. Massicot in April 2010. The Kochs thought they and their children could renovate the house on weekends and eventually rent it out to supplement their earnings. They apparently settled on a $66,000.00 price for the property the very first time it was shown. Notwithstanding its long-abandoned condition, the Kochs took on the family project and resurrected the home.

For reasons left unanswered by the record, the Kochs did not actually purchase the property until August 2, 2010, by which time their restoration of the home was virtually complete. Three days later, on August 5, 2010, Sandra filed a petition for declaratory judgment seeking to be proclaimed owner of the property for lack of notice of the 2002 Tax Sale.

Action of the Trial Court

After a brief hearing, the trial court determined that Sandra and Melvin Davis had never been properly served with the 2002 Tax Notice. Therefore, it ruled in Sandra’s favor with respect to ownership. However, the trial court also determined that the Kochs were due the $23,000.00 they put forth in performing the restoration, and until reimbursed that amount, the Kochs could continue to possess the property. The trial court also found that LEMCI and/or the Kochs were owed almost $3,500.00 for property taxes and interest they and their predecessors had paid for property taxes since Sandra and Melvin Davis abandoned it. The trial court’s judgment was silent as to whether the Kochs were entitled to a return of the $26,000.00 purchase price they paid to LEMCI for the property, and as to who was |sentitled to any rent collected from the property should the Kochs continue to possess the property while awaiting reimbursement from Sandra.

Issues Presented on Appeal

This appeal was perfected by LEMCI and the Kochs, represented by same counsel. Both maintain the following issues presented on appeal:

1. Whether Sandra carried her burden of proving that neither she nor Melvin received constitutional notice of the pending June 12, 2002 Tax Sale.
2. Whether ownership acquired by the Kochs through an instrument valid on its face is protected by the “Innocent Third Party Purchaser Doctrine,” notwithstanding any alleged defects in a previous instrument from which their title emanates.
3. Whether granting a motion for involuntary dismissal is appropriate when a plaintiff who has been made a party to a lawsuit fails to answer the suit or appear at trial.
4. Whether necessary and useful expenses include the value of the sweat equity, representing the time and labor [1237]*1237a good faith possessor has expended improving the subject immovable property.
5. Whether the Kochs are entitled to the enhanced value of the subject property as a result of renovations performed by them under the equitable principles of enrichment without cause.

Sandra answered the appeal. She suggests that the trial court erred in finding the Kochs had established that they had spent $23,000.00 out of pocket and in awarding LEMCI and/or the Kochs reimbursement for 2003-2012 property taxes, interest, and penalties. Finally, Sandra argues that the trial court erred by failing to award her the rental proceeds that the Kochs received since restoring the property-

ISSUE PRESENTED ON APPEAL NUMBER ONE:

| ¿Both LEMCI and the Kochs contend that the trial court erred in finding that Sandra carried her burden of proving that neither she nor Melvin received constitutional notice of the pending June 12, 2002 Tax Sale. We find no merit to this contention.

A factual finding by a court regarding whether a party received sufficient notice of an impending tax sale of their property that met the due process requirements established by Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), is subject to the manifest error clearly wrong standard of review. Cititax Group, L.L.C. v. Gibert, 12-633, 12-634 (La.App. 4 Cir. 12/19/12), 108 So.3d 229. As such, we will review the trial court’s finding that Sandra and Melvin carried their burden of proof on this matter under this standard.

Sandra testified that she never received notice of the tax sale. Further, it is clear from the record that the April 2002 Notice was sent to United Companies Lending Corporation after the property had already been conveyed to EMC Mortgage Corporation and then conveyed once again to Melvin while he was married to Sandra in July 2001. Finally, when attempting to quiet title after having purchased the property at the tax sale, LEMCI served United Companies Lending Corporation with its petition for judgment declaring it to be the owner of the property.

This evidence renders the finding by the trial court that Sandra and Melvin did not receive notice of the tax sale reasonable. Therefore, we find no manifest error by the trial court in making its finding that Sandra carried her burden to prove that she never received notice of the June 12, 2002 tax sale.

However, the nullity of the June 12, 2002 tax sale does not necessitate that Sandra is entitled to a judgment declaring her owner of the property.

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Related

Mennonite Board of Missions v. Adams
462 U.S. 791 (Supreme Court, 1983)
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Pure Oil Company v. Skinner
294 So. 2d 797 (Supreme Court of Louisiana, 1974)
Cititax Group, L.L.C. v. Gibert
108 So. 3d 229 (Louisiana Court of Appeal, 2012)
Joffrion v. Scioneaux
506 So. 2d 512 (Louisiana Court of Appeal, 1986)
Mt. Everett African Methodist Episcopal Church v. Carter
705 So. 2d 1179 (Louisiana Court of Appeal, 1997)
Griffin v. Daigle
769 So. 2d 720 (Louisiana Court of Appeal, 2000)

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Bluebook (online)
144 So. 3d 1234, 13 La.App. 3 Cir. 1267, 2014 WL 3338846, 2014 La. App. LEXIS 1725, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-lemci-llc-lactapp-2014.