Green Hills Development Company, LLC v. UMB Bank, N.A.

275 So. 3d 1077
CourtMississippi Supreme Court
DecidedJuly 18, 2019
DocketNO. 2018-CA-00182-SCT
StatusPublished
Cited by6 cases

This text of 275 So. 3d 1077 (Green Hills Development Company, LLC v. UMB Bank, N.A.) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Green Hills Development Company, LLC v. UMB Bank, N.A., 275 So. 3d 1077 (Mich. 2019).

Opinion

MAXWELL, JUSTICE, FOR THE COURT:

¶1. Green Hills Development Company, LLC, forfeited property to the State for failure to pay taxes. Five years later, the State sold the property, following the statutory procedure under which the Secretary of State accepts written applications to purchase and, if an application is approved, issues a land patent. After learning of the sale, Green Hills sued the Secretary of State and the purchasers to have the land patents set aside.

¶2. Green Hills argued it had been entitled to notice-which was never given-of the purchasers' pending applications. Had it been properly notified, Green Hills asserts it would have filed its own application. And its application would have received priority based on Green Hills' status as former owner. Green Hills also sued one of the purchasers for interfering with its rights as developer to enforce protective covenants and maintain common areas within the development.

¶3. The Defendants successfully moved for summary judgment on Green Hills' notice-based claims. 1 The trial court ruled that the notice provision on which Green Hills relied was no longer in effect when the purchasers submitted their applications. And under the current administrative rules, Green Hills undisputedly received all required notice. The court further ruled the priority status for former owners' applications was contingent on Green Hills' filing an application, which Green Hills never did. After review, we affirm this part of the trial court's judgment. The record confirms the material facts are not in dispute-Green Hills received all required notice and never filed an application to purchase, despite multiple opportunities. So the Defendants are entitled to a judgment as a matter of law on Green Hills' notice-based claims.

¶4. But the trial court's ruling went beyond dismissing the notice-based claims. The court also ruled that Green Hills lacked standing to challenge the validity of the land patents and that the land patents were "in all respects ... valid and proper." We reverse these two rulings.

¶5. Still pending before the trial court are Green Hills' claims based on the development's protective covenants and common areas. As developer, Green Hills has colorable interest in whether the purchasers hold valid land patents. Green Hills has also suffered an adverse effect from the purchasers' countersuit to declare the protective covenants unenforceable and to divest Green Hills of its interest in the common areas. Thus, Green Hills has standing to challenge the land patents' validity.

¶6. Part of that challenge is Green Hills' assertion that one of the purchasers was statutorily prohibited from owning the tax-forfeited property, rendering its land patents void. 2 In response to the Defendants' motion for summary judgment, Green Hills moved for a continuance to conduct discovery on this issue. Given the lack of record evidence and the potential impact of this issue on the remaining claims, the trial court's summary-judgment ruling that the land patents are "in all respects ... valid and proper" was premature.

¶7. Thus, we reverse the parts of the judgment finding that Green Hills lacked standing and that the land patents are categorically valid. We remand the issue of whether the land patents are void by operation of statute to the trial court to be considered with the remaining claims.

Background Facts and Procedural History

I. Loss of Subject Property

¶8. Green Hills' loss of ownership of its property to the State is not in dispute in this case.

¶9. Green Hills was the developer and significant owner of a multi-use development in Rankin County called Stonebridge. To finance the development, the Stonebridge Public Improvement District (SPID) was formed in 2007. 3 The SPID board issued bonds through a trust indenture in September 2007. The board then levied special assessments on the property within the SPID to repay the bonds. These assessments were certified to the Rankin County Tax Assessor and Tax Collector to be collected and enforced "in the same manner and at the same time as ad valorem taxes." Miss. Code Ann. § 19-31-33 (3) (Rev. 2012).

¶10. Undisputably, Green Hills did not pay the special assessments levied on 106 parcels in Stonebridge (the Subject Property). Although Green Hills had two years to pay the back taxes and redeem the Subject Property, it did not. On November 1, 2011, the Secretary of State sent Green Hills a letter informing it that some of the parcels now belonged to the State. The Secretary of State's letter included an application to purchase the Subject Property and a notification that it "may have an applicant who is interested in purchasing the property." So if the Secretary of State did not hear from Green Hills within fifteen days, it would assume Green Hills was no longer interested. On October 24, 2013, the Secretary of State sent identically worded notice letters concerning the remaining parcels, which had also become property of the State.

II. Purchase of Subject Property

¶11. Green Hills' counsel timely called the Secretary of State's office to express his client's continued interest in the Subject Property. But counsel also expressed concern that his client would have to repurchase all 106 parcels and pay all the levied special assessments, including penalties and interest. This phone call was the first of a four-year, back-and-forth conversation between Green Hills and the Secretary of State's office about purchasing the property. Importantly, Green Hills never submitted an application to purchase the property, despite the Secretary of State's written reminders that it had "yet to receive applications to purchase from Green Hills" but was "continuing to accept applications on the property until a suitable purchaser is found." 4

¶12. Instead, in January 2015, the Secretary of State received Kenneth Bradley's applications to purchase two parcels. Three months later, three limited liability companies-Stonebridge Holdings I, LLC; Stonebridge Holdings II, LLC; and Stonebridge Holdings III, LLC (collectively, the Stonebridge Companies)-submitted applications to purchase the remaining parcels. The sole member of the Stonebridge Companies is UMB Bank, N.A., an out-of-state banking corporation, which is the successor trustee for the SPID bondholders.

¶13. In June 2016, the Secretary of State issued land patents to Bradley for two of the parcels. That same month, the Secretary of State issued land patents to the Stonebridge Companies for the remaining parcels. A month before issuing the Stonebridge Companies' land patents, the Secretary of State-along with the Stonebridge Companies, UMB Bank, the Rankin County Tax Assessor, and the Rankin County Tax Collector-entered a forbearance agreement.

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Bluebook (online)
275 So. 3d 1077, Counsel Stack Legal Research, https://law.counselstack.com/opinion/green-hills-development-company-llc-v-umb-bank-na-miss-2019.