Durrant Inc. and Bennett Hills Inc. v. Lee County, Mississippi, Lee County Chancery Clerk, Lee County Tax Assessor, Lee County Tax Collector, State of Mississippi, Raptor Hotel LLC, and Comerica Inc.

• Court: Court of Appeals of Mississippi
• Decided: December 14, 2021
• Docket: 2019-CA-01826-COA
• Status: Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2019-CA-01826-COA

DURRANT INC. AND BENNETT HILLS INC. APPELLANTS

v.

LEE COUNTY, MISSISSIPPI, LEE COUNTY APPELLEES CHANCERY CLERK, LEE COUNTY TAX ASSESSOR, LEE COUNTY TAX COLLECTOR, STATE OF MISSISSIPPI, RAPTOR HOTEL LLC, AND COMERICA INC.

DATE OF JUDGMENT: 11/08/2019 TRIAL JUDGE: HON. JACQUELINE ESTES MASK COURT FROM WHICH APPEALED: LEE COUNTY CHANCERY COURT ATTORNEY FOR APPELLANTS: JOHN ANDREW HAMMOND ATTORNEYS FOR APPELLEES: NANCY MORSE PARKES MARGARET SAMS GRATZ GARY L. CARNATHAN JOSEPH AARON SPEARMAN NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED IN PART; REVERSED AND REMANDED IN PART - 12/14/2021 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE WILSON, P.J., GREENLEE AND LAWRENCE, JJ.

LAWRENCE, J., FOR THE COURT:

¶1. In this case, Durrant Inc. and Bennett Hills Inc. bought the same property at tax sales

in 2016 and 2017, respectively, and later sued to set aside their purchases and obtain refunds

of the amounts that they paid. The Lee County Chancery Court dismissed the complaint after

finding that both companies lacked standing to assert their claims. More precisely, the

chancellor found that Bennett Hills’ claim was not ripe, and Durrant’s claim was retroactively precluded by a statutory amendment that became effective on July 1, 2019. We

agree that Bennett Hills’ claim was premature and not yet ripe, but Durrant’s claim was not

precluded by the statutory amendment. Accordingly, we affirm the chancery court’s

judgment in part, and we reverse and remand in part for further proceedings.

FACTS AND PROCEDURAL HISTORY

¶2. This litigation centers on a 2.42-acre property in Lee County, Mississippi. Raptor

Hotel LLC operated a hotel on the property until the hotel permanently closed in 2011. After

Raptor Hotel failed to pay its property taxes, Durrant paid $57,899.15 to buy the property at

Lee County’s August 2016 public tax auction. Bennett Hills paid $59,427.39 to buy the

same piece of property at Lee County’s August 2017 public tax auction.

¶3. In May 2019, Durrant and Bennett Hills filed a joint complaint to set aside the 2016

and 2017 tax sales and refund the amounts that they paid.1 They alleged that both tax sales

were void because the Lee County Tax Assessor incorrectly calculated the property’s true

value. They also claimed that the 2016 tax sale was void because the chancery clerk did not

send Raptor Hotel the requisite notice before the end of the two-year redemption period.

¶4. Comerica Inc. and the State filed answers denying any liability or interest in the case.

Lee County, the Lee County Chancery Clerk, the Lee County Tax Assessor, and the Lee

County Tax Collector (collectively “the County”) also filed an answer denying that Durrant

and Bennett Hills were entitled to relief. The County then filed a motion to dismiss the

1 Durrant and Bennett Hills listed seven defendants in their complaint: (1) Lee County, Mississippi, (2) the Lee County Chancery Clerk, (3) the Lee County Tax Assessor, (4) the Lee County Tax Collector, (5) the State of Mississippi, (6) Raptor Hotel LLC, and (7) Comerica Inc.

2 complaint for failing to state a relievable claim. According to the County, Durrant and

Bennett Hills lacked standing to challenge the tax sales. The County further argued that

Bennett Hills’ claim was not ripe because the two-year redemption period for the 2017 tax

sale had not expired.

¶5. After Durrant and Bennett Hills filed their joint response in opposition and the County

filed a rebuttal, the chancellor conducted a hearing on the County’s motion. Ultimately, the

chancellor entered a detailed order granting the County’s motion to dismiss. The chancellor

found that Bennett Hills’ challenge of the 2017 tax sale was not ripe when Durrant and

Bennett Hills filed the complaint in May 2017 because the two-year redemption period had

not yet expired. The chancellor also found that Durrant lacked standing to challenge the

2016 tax sale because Durrant’s claim was retroactively precluded by the July 1, 2019

amendment to Mississippi Code Annotated section 27-45-27 (Supp. 2019) to provide that

“[n]o purchaser of land at any tax sale . . . shall have any right of action to challenge the

validity of the tax sale.” Durrant and Bennett Hills appeal.

STANDARD OF REVIEW

¶6. “A motion to dismiss for failure to state a claim under Rule 12(b)(6) [of the

Mississippi Rules of Civil Procedure] raises an issue of law [that] we review de novo.”

Singing River Health Sys. v. Vermilyea, 242 So. 3d 74, 77 (¶6) (Miss. 2018). “A Rule

12(b)(6) motion tests the legal sufficiency of the complaint, and review is limited to the

content of the complaint.” Id. “On a motion to dismiss, the allegations in the complaint must

be taken as true, and the motion should not be granted unless it appears beyond doubt that

3 the plaintiff will be unable to prove any set of facts in support of his claim.” Id. (internal

quotation marks omitted).

ANALYSIS

I. The chancery court’s order was a final judgment.

¶7. Along with Lee County, the chancery clerk, the tax assessor, and the tax collector,

Durrant and Bennett Hills listed Raptor Hotel, Comerica, and the State as defendants.

Comerica and the State both filed answers asserting that Durrant and Bennett Hills did not

seek any relief against them. Raptor Hotel did not file an answer. The chancery court’s

motion to dismiss only addressed Durrant’s and Bennett Hills’ claims against the County.

¶8. Because the chancery court’s dismissal order lacks language certifying that its order

is a final judgment as set forth in Rule 54(b) of the Mississippi Rules of Civil Procedure, this

Court ordered the parties to file supplemental briefs addressing whether we have jurisdiction

over this appeal. See Rogers v. Pavlou (In re Est. of Pavlou), 308 So. 3d 1284, 1287 (¶9)

(Miss. 2021) (An appellate court must inquire into its jurisdiction regardless of whether the

parties raise the issue.). “Generally, parties may only appeal from a final judgment.”

Taborian Urgent Care Ctr. Inc. v. BDT Hous. Servs. Enter., 271 So. 3d 556, 559 (¶14) (Miss.

Ct. App. 2018). “A final, appealable judgment adjudicates the merits of the controversy and

settles all issues as to all the parties, and requires no further action by the ruling court.” Id.

If the order is not a final, appealable judgment, this Court lacks jurisdiction. Id. at 560 (¶17).

¶9. In the supplemental brief filed by Durrant and Bennett Hills, they concede that they

did not seek any affirmative relief against Raptor Hotel, Comerica, or the State. They assert

4 that they named those three defendants because Mississippi Code Annotated section 11-17-1

(Rev. 2019) requires certain nominal defendants to be included in suits to set aside tax sales.

They also assert that Mississippi appellate courts have routinely heard appeals to set aside

tax sales despite that they stem from judgments that do not address those nominal defendants.

In the State’s brief, which the County joins, the State agrees that it had no interest in the

property at issue at the time Durrant and Bennett Hills filed their joint complaint. The State

also agrees that Durrant and Bennett Hills did not request any specific relief from the State.

Nevertheless, the State argues that the chancery court’s judgment was not final because the

chancery court did not specifically “adjudicate that there were no claims against the State or

the other defendants.”

¶10. Durrant and Bennett Hills did not seek any relief from Raptor Hotel, Comerica, or the

State, and those entities were named in the suit only as nominal defendants. By adjudicating

Durrant’s and Bennett Hills’ claims against the County, the chancery court fully and finally

resolved the merits of the controversy and settled all issues to all parties. Taborian Urgent

Care Ctr. Inc., 271 So. 3d at 559 (¶14). Moreover, no further action was required by the

chancery court. Id. Accordingly, we conclude that the chancery court’s judgment was final

and that this Court has appellate jurisdiction.

II. Bennett Hills’ challenge of the 2017 tax sale was premature.

¶11. According to the chancery court’s order, “Bennett Hills alleges, in general terms, that

(1) the Tax Assessor violated the statutory guidelines for assessment of ad valorem taxes, and

(2) the Chancery Clerk failed to comply with the statutory ‘right of redemption’ notice

5 requirements regarding the 2017 sale.” Regarding the first claim, the chancellor found that

the proper method to challenge a property-tax assessment was either through Mississippi

Code Annotated section 27-35-119(2) (Rev. 2017) or Mississippi Code Annotated section

11-51-77(1) (Rev. 2019). The chancellor found that the time to challenge an assessment

under either statute had expired.

¶12. As for Bennett Hills’ second claim—that the chancery clerk failed to send the

requisite notice in advance of the redemption-period deadline—the chancellor found that

Bennett Hills’ claim was not ripe because Durrant and Bennett Hills filed their joint

complaint in May 2019, and the 2017 tax sale redemption period as to Bennett Hills did not

expire until August 2019. Bennett Hills claims that both of the chancellor’s conclusions

were incorrect.

A. Tax Assessment

¶13. Mississippi Code Annotated section 27-35-49 (Rev. 2017) obligates a “tax assessor

to assess all the lands in his county[,]” appraise it “according to its true value[,]” and assess

it “in proportion thereto, taking into consideration the improvements thereon.” A county

board of supervisors must then hold a meeting “on the first Monday of August, to hear

objections to the assessment.” Miss. Code Ann. § 27-35-89(1) (Rev. 2017). “All persons

who fail to file objections shall be . . . precluded from questioning its validity after its final

approval by the board of supervisors or by operation of law, except minors and persons non

compos mentis.” Miss. Code Ann. § 27-35-93 (Rev. 2017). “Any taxpayer who feels

aggrieved at the action of the board of supervisors in equalizing his assessments shall have

6 the right of appeal to the circuit court in the manner provided by law, within twenty . . . days

after the date” that the board’s clerk mails notice that the board has finally approved the

contested assessment. Miss. Code Ann. § 27-35-119(2) (Rev. 2017).

¶14. Bennett Hills concedes that it did not attempt to challenge the 2016 assessment

through sections 27-35-93 or 27-35-119(2). That is understandable, considering that Bennett

Hills was not the record landowner when the statutory deadlines to challenge the assessment

lapsed approximately one year before the 2017 tax sale. Bennett Hills cites several cases to

support its argument “that a valid assessment is crucial to any tax[-]sale purchaser attempting

to confirm its title and that invalid assessments have long been grounds to set aside tax

sales.” The cases that Bennett Hills cites all involve procedural failures or irregularities that

rendered the assessments invalid and void.2 Essentially, Bennett Hills merely argued that the

assessment was too high. We agree with the chancellor that such a challenge to a tax

assessment may be pursued only by filing objections before the board of supervisors and then

by filing a timely appeal in the circuit court. Accordingly, Bennett Hills’ challenge to the

2016 tax assessment fails to state a claim upon which relief can be granted.

B. Redemption Period

¶15. The chancellor found that Bennett Hills’ remaining assertion was not ripe. That is,

the chancellor found that Bennett Hills prematurely filed a complaint as to the 2017 tax sale

2 Wilson v. Eckles, 232 Miss. 577, 581-82, 99 So. 2d 846, 847-48 (1958); City of Ellisville v. Smith, 221 Miss. 234, 237-40, 72 So. 2d 451, 452-53 (1954); Richton Tie & Timber Co. v. McWilliams, 218 Miss. 355, 360-63, 67 So. 2d 374, 376-78 (1953); Walker v. Polk, 208 Miss. 389, 396-99, 44 So. 2d 477, 478-81 (1950); Tatum v. Smith, 158 Miss. 511, 130 So. 683, 683-84 (1930).

7 because the chancery clerk’s time to send the requisite notice prior to the two-year

redemption period would expire in August 2019. See Miss. Code Ann. § 27-45-3 (Rev.

2017) (“The owner, . . . or any person interested in the land sold for taxes, may redeem the

same . . . within two . . . years after the day of sale . . . .”); Miss. Code Ann. § 27-43-1 (Rev.

2017) (“The [chancery] clerk . . . shall, within one hundred eighty . . . days and not less than

sixty . . . days prior to the expiration of the time of redemption with respect to the land

sold, . . . be required to issue notice to the record owner of the land sold . . . .”). The

chancellor correctly noted that Durrant and Bennett Hills filed their joint complaint on May

24, 2019, and the chancery clerk had until June 29, 2019, to send the notice required by

section 27-43-1. Since the redemption-notice period had not yet expired, the chancellor

reasoned that Bennett Hills’ claim was not yet ripe. Bennett Hills argues that the chancellor

erred.

¶16. “A cause of action must exist and be complete before an action can be commenced,

and, when a suit is begun before the cause of action arises, it will generally be dismissed if

proper objection is taken.” State ex rel. Holmes v. Griffin, 667 So. 2d 1319, 1325 (Miss.

1995). “The mere passage of time without refiling is not sufficient.” Id. After finding that

the appellant’s claim was not ripe, the Supreme Court went on to say, “[U]nder the principles

of judicial economy and fairness, . . . and in the interest of the public policy involved with

the merits of the issues raised today, we will not dismiss this case for a procedural defect.”

Id. Although the Supreme Court went on to discuss the remaining merits of the case, the

Supreme Court reiterated in its closing language that the plaintiff lacked standing, and the

8 premature action was not cured by the passage of time. Id. at 1327.

¶17. We agree with the chancellor that as of the filing of Durrant and Bennett Hills’ joint

complaint, any claim that the 2017 tax sale should be set aside for lack of notice of the

impending lapse of the redemption period was not ripe because there was still time for the

chancery clerk to provide the notice. Although “[a] tax-sale purchaser undeniably holds an

interest in the property, both prior to and after expiration of the redemption period, regardless

of the validity of the sale[,]” a tax-sale purchaser does not obtain “an actionable interest in

the property [until] the expiration of the redemption period[.]” SASS Muni-V LLC v. DeSoto

County, 170 So. 3d 441, 449 (¶21) (Miss. 2015) (emphasis added). Consequently, the

chancery court correctly found that Bennett Hills’ claim was not yet ripe and must be

dismissed. That portion of the chancery court’s ruling is affirmed.

III. Section 27-45-27(2) does not retroactively bar Durrant’s claim to set aside the 2016 tax sale.

¶18. According to Durrant, the chancellor erred when she retroactively applied section 27-

45-27(2) (Supp. 2019) and thus found that Durrant lacked standing to challenge the 2016 tax

sale. The Mississippi Supreme Court has explained that “[s]tanding is an aspect of

subject-matter jurisdiction.” SASS Muni-V, 170 So. 3d at 445 (¶12). “The existence of

subject-matter jurisdiction turns on the well pleaded allegations of the complaint which are

taken as true.” Id. An appellate “[c]ourt reviews questions of standing de novo.” Id.

¶19. The Supreme Court has held “that a tax-sale purchaser has standing to challenge the

validity of the sale under the notice provisions of the tax-sale statutes.” Id. at 449 (¶21).

Effective July 1, 2019, the Legislature abrogated the SASS Muni-V standing rule by amending

9 section 27-45-27 (Rev. 2017), which now provides: “No purchaser of land at any tax sale,

nor holder of the legal title under him by descent or distribution, shall have any right to

challenge the validity of [a] tax sale.” Miss. Code Ann. § 27-45-27(2) (Supp. 2019).

Although Durrant and Bennett Hills filed their complaint in May 2019, the chancellor found

that the amended version of section 27-45-27(2) applies retroactively because it precludes

a tax-sale purchaser’s ability to raise a cause of action, rather than a vested contractual or

property right.

¶20. On appeal, Durrant notes that this Court has twice found that the amended version of

section 27-45-27(2) does not apply retroactively. Bennett Tax Co. Inc. v. Newton County,

298 So. 3d 440, 445 (¶¶10-11) (Miss. Ct. App. 2020); Panola Cnty. Tax Assessor v. Oak Inv.

Co., 297 So. 3d 1122, 1130 (¶29) (Miss. Ct. App. 2020). The County argues that these two

cases are distinguishable because in both cases the final judgments were entered before the

amended version of section 27-45-27(2) became effective. Bennett Tax, 298 So. 3d at 442

(¶3); Panola County, 297 So. 3d at 1127 (¶20). Here, the chancellor’s final judgment was

entered in November 2019, several months after the amendment became effective in July

2019.

¶21. In Cellular South Inc. v. BellSouth Telecommunications LLC, 214 So. 3d 208, 214

(¶16) (Miss. 2017), the supreme court explained:

[E]very right or remedy created solely by the repealed or modified statute disappears or falls with the repealed or modified statute, unless carried to final judgment before the repeal or modification, save that no such repeal or modification shall be permitted to impair the obligation of a contract or to abrogate a vested right.

10 (Emphasis added). Here, the chancellor’s November 2019 order granting the County’s

motion to dismiss clearly postdates the amendment’s July 1, 2019 effective date. Thus, the

amendment must be applied unless it impairs the obligation of a contract or abrogates

Durrant’s vested right.

¶22. “In order to become vested, the right must be a contract right, a property right, or a

right arising from a transaction in the nature of a contract which has become perfected to the

degree that it is not dependent on the continued existence of the statute.” State ex rel.

Pittman v. Ladner, 512 So. 2d 1271, 1275-76 (Miss. 1987). The United States Supreme

Court has held “that any substantial alteration by subsequent legislation of the rights of a

purchaser at tax sale, accruing to him under laws in force at the time of his purchase, is void

as impairing the obligation of contract.” Wood v. Lovett, 313 U.S. 362, 369 (1941). The

County asserts that this case is different than the United States Supreme Court case in Wood

or the Mississippi case it cited: Price v. Harley, 142 Miss. 584, 107 So. 673 (1926). In Price,

107 So. at 674, the Mississippi Supreme Court held that “[t]he validity of [a tax-sale

purchaser’s] deed must be determined by the law in force at the time the sale was made.”

Further, this court has already held that retroactively applying section 27-45-27(2) “would

impair the obligations of contract and retroactively apply a statute [that] does not meet the

statutory retroactivity test[.]” Bennett Tax, 298 So. 3d at 445 (¶10) (citing Cellular South,

214 So. 3d at 213 (¶10)). Therefore, we conclude that Durrant had standing to challenge the

2016 tax sale. We reverse the chancellor’s judgment as to Durrant and remand the case for

further proceedings consistent with this opinion.

11 CONCLUSION

¶23. The chancellor correctly found that Bennett Hills did not state a viable claim to set

aside the 2017 tax sale due to the tax assessor’s allegedly inaccurate tax valuation of the

property at issue. Further, the chancellor was also correct that Bennett Hills’ claim that the

2017 tax sale should be set aside because the chancery clerk had not yet sent the requisite

notice before the expiration of the two-year redemption period was not yet ripe. We affirm

those aspects of the chancellor’s judgment. However, the chancellor incorrectly found that

section 27-45-27(2) retroactively precluded Durrant’s claim that the 2016 tax sale should be

set aside. Accordingly, that aspect of the chancellor’s judgment is reversed, and this case is

remanded for further proceedings consistent with this opinion.

¶24. AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

CARLTON AND WILSON, P.JJ., GREENLEE, WESTBROOKS, McCARTY, SMITH AND EMFINGER, JJ., CONCUR. McDONALD, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE WRITTEN OPINION. BARNES, C.J., NOT PARTICIPATING.