301 Ga. 131 FINAL COPY
S16G0646. DLT LIST, LLC et al. v. M7VEN SUPPORTIVE HOUSING & DEVELOPMENT GROUP.
HUNSTEIN, Justice.
In Wester v. United Capital Financial of Atlanta, LLC, 282 Ga. App. 392
(638 SE2d 779) (2006), and again in United Capital Financial of Atlanta v.
American Investment Assoc., 302 Ga. App. 400 (691 SE2d 272) (2010), the
Court of Appeals held that a creditor who redeems property following a tax sale
has first priority to excess funds resulting from that tax sale. The Court of
Appeals overruled those decisions in DLT List, LLC v. M7VEN Supportive
Housing & Dev. Group, 335 Ga. App. 318 (779 SE2d 436) (2015), concluding
that a redeeming creditor has no such priority; we granted certiorari to consider
whether a redeeming creditor after a tax sale has a first priority claim on excess
tax sale funds. Though we disagree with the rationale employed by the Court
of Appeals below, we nevertheless affirm its decision.
The facts are not in dispute. Appellee M7VEN Supportive Housing &
Development Group (“M7”) failed to pay taxes on two properties (“the properties”) located in Carroll County, and, consequently, Vickie Bearden, Tax
Commissioner of Carroll County, conducted a tax sale. The properties were
purchased by Appellant DLT List, LLC (“DLT”), for a total of $110,000, and
the tax sale resulted in excess funds of approximately $105,000. On June 6,
2014, Bearden notified M7, DLT, and others of excess funds, and, on July 14,
2014, M7 filed a certificate of authorization seeking to receive the excess funds;
though there were no other claims made on the funds, Bearden did not release
the funds.
In September 2014, Appellee Design Acquisition, LLC (“Design
Acquisition”) as a lienholder against M7,1 redeemed the properties from DLT
for a total of $132,000, and DLT issued quitclaim deeds of redemption to M7.
In October 2014, Design Acquisition filed a declaratory judgment action
claiming entitlement to the excess funds, and, in November 2014, Bearden filed
1 M7 had also failed to pay property taxes on separate property in Fulton County, resulting in the issuance of writs of fieri facias against both M7 and its Fulton County property; those fi. fas., however, were not recorded in Carroll County. See OCGA § 48-2-56 (a) (“liens for all taxes due the state or any county or municipality in the state shall arise as of the time the taxes become due and unpaid and all tax liens shall cover all property in which the taxpayer has any interest from the date the lien arises until such taxes are paid”). In September 2014, Design Acquisition purchased the fi. fas. for $1,395.55. 2 an equitable interpleader action for the purpose of distributing the excess funds,
see OCGA § 48-4-5 (b); the two actions were consolidated. The trial court
determined that, because M7 was the only entity to have made a claim for the
excess funds or to have had a recorded interest in the properties at the time of
the tax sale, Bearden should have timely released the excess funds to M7. DLT
and Design Acquisition appealed, arguing that, pursuant to Wester and United
Capital, Design Acquisition had first priority to the excess funds as the
redeeming creditor. The Court of Appeals, however, overruled United Capital
and Wester, concluding that those decisions were an improper expansion of our
decision in National Tax Funding v. Harpagon Co., 277 Ga. 41 (586 SE2d 235)
(2003); the appellate court applied OCGA § 48-4-5 (a)2 to the question of excess
2 OCGA § 48-4-5 (a) provides as follows: If there are any excess funds after paying taxes, costs, and all expenses of a sale made by the tax commissioner, tax collector, or sheriff, or other officer holding excess funds, the officer selling the property shall give written notice of such excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale. The notice shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess 3 funds and determined that Design Acquisition had no claim to the excess funds
because it was not a lienholder at the time of the tax sale. DLT List, 335 Ga.
App. at 322.
1. In National Tax Funding, this Court construed various statutes
governing tax sales to address the interest acquired by a party obtaining a tax-
sale deed to a property, the status of competing tax liens in existence at the time
of the tax sale, and the options available to the holder of a competing tax lien.
277 Ga. at 42-45. Regarding the options available to the holder of a competing
tax lien following a tax sale, this Court explained that such a lienholder
may either file a claim to collect against any proceeds from the sale, or it may assert its rights following the tax sale via a statutory claim for redemption, in which case it obtains a first priority lien on the property, which it may then enforce by levy and sale.
(Emphasis supplied.) 277 Ga. at 44. Thereafter, in Wester and United Capital,
the Court of Appeals reasoned that the first priority lien, as quoted above,
applies to excess funds arising out of the tax sale. However, in its decision
funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist. 4 below, the Court of Appeals discounted that reasoning and concluded that
National Tax Funding does not permit a redeeming creditor to “both redeem the
property and receive excess funds from the tax sale to pay for the priority lien
created by the redemption.” DLT List, 335 Ga. App. at 323 (emphasis
supplied). This is a misinterpretation of our decision in National Tax Funding.
As an initial matter, National Tax Funding does not control the specific
issue presented in this case nor did it control in Wester or United Capital.
Instead, National Tax Funding addresses the status of liens following a tax sale
and the options of competing lienholders; the opinion makes only a fleeting
reference to excess tax sale funds. See id. at 42. Likewise, the options available
to competing lienholders following a tax sale as they were discussed in National
Tax Funding — i.e., redeeming the property or claiming a portion of the tax
sale proceeds — does not control the question of the distribution of excess tax
sale funds, and the contrary conclusion reached by the Court of Appeals below
was error.
2. The question we must now address is whether a redeeming creditor
has a first priority claim on excess tax sale funds. To answer that question, we
must delve into the statutory authority governing tax sales and liens.
5 Under our well established rules of statutory construction, we
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301 Ga. 131 FINAL COPY
S16G0646. DLT LIST, LLC et al. v. M7VEN SUPPORTIVE HOUSING & DEVELOPMENT GROUP.
HUNSTEIN, Justice.
In Wester v. United Capital Financial of Atlanta, LLC, 282 Ga. App. 392
(638 SE2d 779) (2006), and again in United Capital Financial of Atlanta v.
American Investment Assoc., 302 Ga. App. 400 (691 SE2d 272) (2010), the
Court of Appeals held that a creditor who redeems property following a tax sale
has first priority to excess funds resulting from that tax sale. The Court of
Appeals overruled those decisions in DLT List, LLC v. M7VEN Supportive
Housing & Dev. Group, 335 Ga. App. 318 (779 SE2d 436) (2015), concluding
that a redeeming creditor has no such priority; we granted certiorari to consider
whether a redeeming creditor after a tax sale has a first priority claim on excess
tax sale funds. Though we disagree with the rationale employed by the Court
of Appeals below, we nevertheless affirm its decision.
The facts are not in dispute. Appellee M7VEN Supportive Housing &
Development Group (“M7”) failed to pay taxes on two properties (“the properties”) located in Carroll County, and, consequently, Vickie Bearden, Tax
Commissioner of Carroll County, conducted a tax sale. The properties were
purchased by Appellant DLT List, LLC (“DLT”), for a total of $110,000, and
the tax sale resulted in excess funds of approximately $105,000. On June 6,
2014, Bearden notified M7, DLT, and others of excess funds, and, on July 14,
2014, M7 filed a certificate of authorization seeking to receive the excess funds;
though there were no other claims made on the funds, Bearden did not release
the funds.
In September 2014, Appellee Design Acquisition, LLC (“Design
Acquisition”) as a lienholder against M7,1 redeemed the properties from DLT
for a total of $132,000, and DLT issued quitclaim deeds of redemption to M7.
In October 2014, Design Acquisition filed a declaratory judgment action
claiming entitlement to the excess funds, and, in November 2014, Bearden filed
1 M7 had also failed to pay property taxes on separate property in Fulton County, resulting in the issuance of writs of fieri facias against both M7 and its Fulton County property; those fi. fas., however, were not recorded in Carroll County. See OCGA § 48-2-56 (a) (“liens for all taxes due the state or any county or municipality in the state shall arise as of the time the taxes become due and unpaid and all tax liens shall cover all property in which the taxpayer has any interest from the date the lien arises until such taxes are paid”). In September 2014, Design Acquisition purchased the fi. fas. for $1,395.55. 2 an equitable interpleader action for the purpose of distributing the excess funds,
see OCGA § 48-4-5 (b); the two actions were consolidated. The trial court
determined that, because M7 was the only entity to have made a claim for the
excess funds or to have had a recorded interest in the properties at the time of
the tax sale, Bearden should have timely released the excess funds to M7. DLT
and Design Acquisition appealed, arguing that, pursuant to Wester and United
Capital, Design Acquisition had first priority to the excess funds as the
redeeming creditor. The Court of Appeals, however, overruled United Capital
and Wester, concluding that those decisions were an improper expansion of our
decision in National Tax Funding v. Harpagon Co., 277 Ga. 41 (586 SE2d 235)
(2003); the appellate court applied OCGA § 48-4-5 (a)2 to the question of excess
2 OCGA § 48-4-5 (a) provides as follows: If there are any excess funds after paying taxes, costs, and all expenses of a sale made by the tax commissioner, tax collector, or sheriff, or other officer holding excess funds, the officer selling the property shall give written notice of such excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale. The notice shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess 3 funds and determined that Design Acquisition had no claim to the excess funds
because it was not a lienholder at the time of the tax sale. DLT List, 335 Ga.
App. at 322.
1. In National Tax Funding, this Court construed various statutes
governing tax sales to address the interest acquired by a party obtaining a tax-
sale deed to a property, the status of competing tax liens in existence at the time
of the tax sale, and the options available to the holder of a competing tax lien.
277 Ga. at 42-45. Regarding the options available to the holder of a competing
tax lien following a tax sale, this Court explained that such a lienholder
may either file a claim to collect against any proceeds from the sale, or it may assert its rights following the tax sale via a statutory claim for redemption, in which case it obtains a first priority lien on the property, which it may then enforce by levy and sale.
(Emphasis supplied.) 277 Ga. at 44. Thereafter, in Wester and United Capital,
the Court of Appeals reasoned that the first priority lien, as quoted above,
applies to excess funds arising out of the tax sale. However, in its decision
funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist. 4 below, the Court of Appeals discounted that reasoning and concluded that
National Tax Funding does not permit a redeeming creditor to “both redeem the
property and receive excess funds from the tax sale to pay for the priority lien
created by the redemption.” DLT List, 335 Ga. App. at 323 (emphasis
supplied). This is a misinterpretation of our decision in National Tax Funding.
As an initial matter, National Tax Funding does not control the specific
issue presented in this case nor did it control in Wester or United Capital.
Instead, National Tax Funding addresses the status of liens following a tax sale
and the options of competing lienholders; the opinion makes only a fleeting
reference to excess tax sale funds. See id. at 42. Likewise, the options available
to competing lienholders following a tax sale as they were discussed in National
Tax Funding — i.e., redeeming the property or claiming a portion of the tax
sale proceeds — does not control the question of the distribution of excess tax
sale funds, and the contrary conclusion reached by the Court of Appeals below
was error.
2. The question we must now address is whether a redeeming creditor
has a first priority claim on excess tax sale funds. To answer that question, we
must delve into the statutory authority governing tax sales and liens.
5 Under our well established rules of statutory construction, we
presume that the General Assembly meant what it said and said what it meant. To that end, we must afford the statutory text its “plain and ordinary meaning,” we must view the statutory text in the context in which it appears, and we must read the statutory text in its most natural and reasonable way, as an ordinary speaker of the English language would.
(Citations and punctuation omitted.) Deal v. Coleman, 294 Ga. 170, 172-173
(751 SE2d 337) (2013). We “look to the text of the provision in question and
its context within the larger legal framework to discern the intent of the
legislature in enacting it.” Scott v. State, 299 Ga. 568, 571 (788 SE2d 468)
(2016). See also OCGA § 1-3-1 (a), (b). Where the statutory text is “clear and
unambiguous,” we attribute to the statute its plain meaning, and our search for
statutory meaning ends. See Deal, 294 Ga. at 173.
Real property sold under an execution issued for the collection of taxes
may be redeemed by the payment of the statutorily prescribed redemption price
by a defendant in fi. fa. or any person having any right, title, or interest in or lien
upon such property. See OCGA § 48-4-40. Redemption places title to the real
property back into the hands of the defendant in fi. fa., and “the amount
expended by the [redeemer] shall constitute a first lien on the property and . . .
6 shall be repaid prior to any other claims upon the property.” (Emphasis
supplied.) OCGA § 48-4-43. Thus, when read together, OCGA §§ 48-4-40 and
§ 48-4-43 grant a redeeming creditor a first lien on the subject real property in
the amount expended to redeem the property that, once recorded, takes priority
over any other claims upon the property. Design Acquisition urges us to
conclude, as the Court of Appeals did in Wester and United Capital, that the
super lien awarded to the redeemer of a tax sale property also gives the redeemer
first priority to excess tax sale funds. See OCGA § 48-4-5 (a) (explaining that
excess funds are distributed “to the owner or owners as their interests appear in
the order of priority in which their interests exist”). We do not find the lien to
be so broad.
The super lien created by OCGA § 48-4-43, which is granted specifically
to the redeemer of a tax sale property, is in derogation of the common law, see
United States ex rel. IRS v. McDermott, 507 U. S. 447 (II) (113 SCt 1526, 123
LE2d 128) (1993) (recognizing the common-law lien principle of “first in time
is the first in right” (citation and punctuation omitted), and must be strictly
construed, see White v. Aiken, 197 Ga. 29, 33 (28 SE2d 263) (1943) (“Lien
laws are to be strictly construed, and one who claims a lien must bring himself
7 clearly within the law.”). See also OCGA § 44-14-320 (a) (establishing tax
liens, along with tradesmen and mortgage liens). The plain language of OCGA
§ 48-4-40 permits the redemption of real property, and OCGA § 48-4-43 awards
a priority lien to a redeeming creditor that is specific to the real property at
issue; we are constrained by this language. See OCGA § 48-4-40 (establishing
the right to redeem real property); OCGA § 48-4-43 (granting redeemer of real
property “first lien on the property” to be paid “prior to any other claims upon
the property” (emphasis supplied)). On the other hand, as the parties both
recognize, excess funds from a tax sale are personal property that is separate and
distinct from the real property itself. See Ga. Lien Svcs. v. Barrett, 272 Ga.
App. 656 (1) (613 SE2d 180) (2005) (recognizing a distinction between the
interest in real property associated with a tax sale and the resulting excess
funds); Barrett v. Marathon Inv. Corp., 268 Ga. App. 196 (1) (601 SE2d 516)
(2004) (same). Cf. OCGA § 48-1-2 (13) and (19) (recognizing that, as used in
Title 48, the definition of “personal property” includes “money”). Thus, the
priority lien acquired by a redeeming creditor is exclusive to real property, and
the priority lien does not apply to the excess funds.
Amicus curiae contends that the Court of Appeals decision below, and by
8 extension our decision today, will disrupt the law and prove problematic to
those who have relied on Wester and United Capital. Wester, which extended
the lien priority in OCGA § 48-4-43 to the distribution of excess tax sale funds,
was decided only ten years ago and with very little analysis. Moreover, the
Wester decision has proven unworkable because of the year-long redemption
window in OCGA § 48-4-40. In Brina Bay Holdings, LLC v. Echols, 314 Ga.
App. 242 (723 SE2d 533) (2012), Brina Bay Holdings, LLC, obtained an
interest in real property after it had been sold at a tax sale and subsequently
redeemed the property; thus, under Wester, Brina Bay had first priority on any
excess sale funds. Brina Bay, however, was unable to recover the excess tax
sale funds to which it had priority under Wester because, at the time it redeemed
the property — which was well within the one-year time frame – the funds had
already been distributed to the defendant in fi. fa. in accordance with OCGA §
48-4-5 (a). Brina Bay, 314 Ga. App. at 242.
This case presents another scenario in which the rule in Wester proves
unworkable. Here, as the trial court found, M7 was the single claimant to the
9 excess tax sale funds, and there were no other recorded liens3 on the property;
however, for reasons that are not entirely clear, the tax commissioner did not
disburse the funds. It was only months later, after Design Acquisition redeemed
the property and filed a declaratory judgment action seeking the funds, that the
tax commissioner sought to distribute the funds. The rule as announced in
Wester, combined with the year-long redemption period, results in tax officials
holding excess funds for at least a year in anticipation that the property might
be redeemed or, in the event that the funds are paid out in a timely manner,
potentially depriving a later-in-time redeeming creditor of a priority lien on
excess funds. The bright-line rule announced here avoids such scenarios and is
consistent with the plain language of the statutes.
Accordingly, though we disapprove of the rationale of the decision below,
we affirm the judgment of the Court of Appeals that a redeeming creditor of a
tax sale property does not have a priority lien against excess funds arising from
that sale.
Judgment affirmed. Hines, C. J., Melton, P. J., Benham, Nahmias,
3 We do not speak to the status of the then-existing fi. fas. issued by Fulton County. See OCGA § 48-2-56 (a).
10 Blackwell, Peterson, and Grant, JJ., and Judge Eric W. Norris, concur. Boggs,
J., disqualified.
Decided May 15, 2017.
Certiorari to the Court of Appeals of Georgia — 335 Ga. App. 318.
Clark Law Group, John C. Clark, for appellants.
Smith & Liss, Donald L. Cook, Jr.; Mark A. Thompson, for appellee.
Ayoub & Mansour, John A. B. Ayoub; Giacoma, Schleicher Roberts &
Daughdrill, Brian E. Daughdrill; Flower Hein Cheatwood & Williams, Robert
P. Hein, amici curiae.