Jon Loy, Inc. v. Terrie L. Allen

• Court: Louisiana Court of Appeal
• Decided: April 18, 2024
• Docket: 2023-CA-0645
• Status: Published

Opinion

JON LOY, INC. * NO. 2023-CA-0645

VERSUS * COURT OF APPEAL TERRIE L. ALLEN * FOURTH CIRCUIT * STATE OF LOUISIANA *******

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2022-00098, DIVISION “M” Honorable Paulette R. Irons, Judge ****** Judge Nakisha Ervin-Knott ****** (Court composed of Judge Daniel L. Dysart, Judge Tiffany Gautier Chase, Judge Nakisha Ervin-Knott)

James E. Uschold Mark J. Boudreau Paul W. Pritchett JAMES E. USCHOLD, PLC 700 Camp Street, Suite 317 New Orleans, LA 70130

COUNSEL FOR PLAINTIFF/APPELLEE

Irl R. Silverstein THE SILVERSTEIN LAW FIRM, APLC 3324 N. Causeway Blvd., Suite 200 Metairie, LA 70002

COUNSEL FOR DEFENDANT/APPELLANT

REVERSED AND REMANDED April 18, 2024 NEK DLD

TGC

Appellant, Terrie L. Allen (“Allen”), appeals the trial court’s July 13, 2023

judgment denying her Motion for New Trial and confirming a May 17, 2023

judgment granting the Motion for Summary Judgment filed by Appellee, Jon Loy,

Inc. (“Jon Loy”). For the following reasons, we reverse the trial court’s judgments.

RELEVANT FACTUAL AND PROCEDURAL HISTORY

Allen acquired the property located at 4525 Plum Orchard Ave., New

Orleans, LA 70126 via a cash sale deed in 2009. The City of New Orleans (the

“City”) sold the property at a tax sale in 2018 for outstanding 2017 property taxes.

Jon Loy bought a tax sale interest over the property for $859.27 and filed its tax

sale certificate into the conveyance records on June 6, 2018.

Thereafter, on January 5, 2022, Jon Loy filed a Petition to Confirm and

Quiet Tax Sale Title. In the petition, Jon Loy alleged that Allen was not a resident

of this state and requested that a curator ad hoc be appointed. For reasons unclear

from the record before us, the appointed curator was never served with the petition.

On April 20, 2022, counsel for Jon Loy drafted a Notice of Tax Sale and addressed

it to Allen at a New York address. The notice informed Allen that her property had

1 been sold and that she had six months from the date of the notice to file a nullity

action. It further informed her that a quiet title suit had been filed against her. Jon

Loy sent the notice via certified mail and received a confirmation that someone had

signed for the mail at the New York residence on April 23, 2022.

On June 16, 2022, Allen, appearing pro se, answered the petition, denying

all allegations therein. Jon Loy moved for summary judgment on March 21, 2023,

and Allen, through counsel, opposed the motion. After a hearing on the matter, the

trial court granted summary judgment. Allen filed a motion for new trial, which the

trial court denied. Allen timely appealed the trial court’s judgments.

ASSIGNMENTS OF ERROR

Allen asserts two assignments of errors—(1) the trial court erred in granting

Jon Loy’s Motion for Summary Judgment, and (2) the trial court erred in denying

her Motion for New Trial. For the reasons below, we find that the trial court erred

in granting the motion for summary judgment. Therefore, we pretermit any

discussion on the Motion for New Trial.

DISCUSSION

Tax Sales and Tax Sale Procedures in Louisiana

Our decision in this case requires a detailed analysis of this State’s laws on

tax sales.

The Louisiana Constitution provides that a tax collector may sell a property

at a tax sale due to an owner’s failure to pay the required taxes on the property

after only one year has passed from the date the taxes are due. See La. Const. art.

VII, § 25(A)(1). The section provides that the tax collector may sell the property

after providing notice to the delinquent tax payer “in the manner provided by law .

. . .” Id. This process is referred to as pre-sale notice. This process requires the tax

collector, the City of New Orleans in this specific case, to “send a written notice by

certified mail, return receipt requested” to each tax debtor prior to the tax sale

2 taking place. La. R.S. 47:2153(A)(1)(a). This requirement is consistent with federal

constitutional due process requirements to notify an owner prior to the taking of his

or her property.1

At the conclusion of the sale, the tax collector shall give the tax sale

purchaser a tax sale deed, which is prima facie evidence that the tax sale is valid.

La. R.S. 47:2155(A)-(B). After the tax sale deed has been recorded, the tax debtor

will typically have three years to reclaim the property during a time that is referred

to as the redemptive period. La. Const. art. VII, § 25(B)(1); La. R.S. 47:2122(11).

A tax debtor may redeem the property by paying the tax collector the required

costs under La. R.S. 47:2243 and 47:2244. If the applicable redemptive period has

ended without a redemption, the tax sale purchaser may institute suit against any

tax debtors with an ownership interest in the property in order to terminate their

interest. La. R.S. 47:2266(A)(1).

Within thirty days of the filing of the tax sale certificate, the tax collector is

required to send notice to the tax debtor that his or her property had been sold at a

tax sale. La. R.S. 47:2156(B)(1)(a). Within ninety days prior to the expiration of

the redemptive period, the tax collector is required to send notice to the tax debtor

that the property had been sold and cannot not be redeemed after the redemptive

period has ended. Id. at (B)(1)(b); La. R.S. 47:2153(A)(1)(a). The tax sale

purchaser may also send written notice that the property had been sold and that the

failure to redeem the property within the applicable redemptive period will result

1 E.g. Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 800 103 S. Ct. 2706,

2712, 77 L.Ed.2d 180 (1983) (finding that notice by mail is a “minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interest” of a person); Jones v. Flowers, 547 U.S. 220, 223, 126 S. Ct. 1708, 1712, 164 L.Ed.2d 415 (2006)(finding that the government must provide an owner notice and an opportunity for hearing prior to taking his or her property and selling it for unpaid taxes); Cent. Properties v. Fairway Gardenhomes, LLC, 2016- 1855, p. 8 (La. 6/27/17), 225 So. 3d 441, 447 (“It is well-settled that, under the Fourteenth Amendment to the United States Constitution and La. Const. art. I, § 2, deprivation of property by adjudication must be preceded by notice and opportunity to be heard appropriate to the nature of the case.”). 3 in the loss of the property. La. R.S. 47:2156(A). All of these notices are referred to

as post-sale notice.

Once the redemptive period has ended, the tax sale purchaser may elect to

send notice to the tax debtor that the purchaser will terminate the debtor’s interest

in the property unless the debtor challenges the tax sale within a certain time. La.

R.S. 47:2157(A)(1). This statute creates a “catch-all” provision by providing that

the notice sent pursuant to its terms will constitute notice of sale in compliance

with the Louisiana Constitution and “shall be sufficient without regard to whether

the notice of the tax sale or any other notice has been given.” Id. at (A)(2). Once

the redemptive period has expired, the tax sale purchaser may institute a suit

against all tax debtors with an interest in the property to have their interests

terminated. La. R.S. 47:2266(A)(1).

Whether the trial court erred in granting the motion for summary judgment

i. Motions for Summary Judgment

Appellate courts review a trial court’s ruling on a motion for summary

judgment de novo. Precept Credit Opportunities Fund, L.P. v. Elmore, 2021-0502,

p. 3 (La. App. 4 Cir. 4/20/22), 338 So. 3d 87, 89-90. Under a de novo review, the

appellate court will use the same standards applied by the trial court in deciding the

motion but without giving deference to the trial court’s judgment or reasons for

judgment. Id. Similar to the trial court, the appellate court is required to examine

the admissible evidence under La. C.C.P. art. 966 to determine if that evidence

shows that no genuine issue of material fact exists and that the mover is entitled to

judgment as a matter of law. Klein v. Henderson, 2021-0317, p. 15 (La. App. 4 Cir.

11/17/21), 332 So. 3d 764, 774-75 (citations omitted). A material issue of fact is

one whose existence or non-existence will determine the outcome of a legal

dispute. Smith v. Our Lady of the Lake Hosp., Inc., 1993-2512, p. 27 (La. 7/05/94),

639 So. 2d 730, 751 (citations omitted). 4 The mover initially bears the burden of proof on a summary judgment

motion. La. C.C.P. art. 966(D)(1); Fugar v. Dillard Univ., 2022-0618, p. 4 (La.

App. 4 Cir. 2/13/23), 358 So. 3d 168, 171. The burden does not shift unless the

mover has presented a prima facie case that no genuine issues of material fact

exists. Singleton v. Dillard Univ., 2023-0295, p. 7 (La. App. 4 Cir. 10/27/23), 376

So. 3d 997, 1001. If the mover fails to establish a prima facie case, then he is not

entitled summary judgment. Id. at pp. 6-7, 376 So. 3d at 1001. Only if the mover

establishes a prima facie case does the burden shift to the adverse party. La. C.C.P.

art. 966(D)(1); Fugar, 2022-0618, p. 4, 358 So. 3d at 171.

ii. Did Jon Loy meet its burden?

To support its motion for summary judgment, Jon Loy introduced the

following into evidence— (1) the act of cash sale for 4525 Plum Orchard Ave.

conveying ownership to Allen; (2) the tax sale certificate evidencing Jon Loy’s tax

interest in the property; (3) the notice of tax sale Jon Loy sent to Allen in New

York; (4) a returned certified mail receipt evidencing that someone had signed for

the notice in New York; (5) an affidavit from Jon Loy’s counsel detailing the effort

he made to locate Allen and certifying the attached documents; and (6) Allen’s

answer to the petition.

a. The tax sale certificate

As discussed earlier, a tax sale certificate is considered to be prima facie

evidence regarding the validity of the tax sale. However, the tax sale certificate

presented in this case states that the property had been sold for “delinquent

property taxes with interest and costs for the year(s) 2015, 2016 and 2017 . . . .”

(Emphasis added). The certificate then contradicts itself by only listing the tax

costs for 2017.2 Although the tax sale certificate normally constitutes prima facie

evidence, if the tax sale certificate contradicts itself then the assertions made

2 Jon Loy also alleges that it bought the property for delinquent 2017 taxes.

5 therein regarding the tax collector’s compliance with all legal requirements for the

sale cannot be taken at face value. There is a genuine and material question as to

whether all legal formalities were met prior to the tax sale taking place in this case.

Therefore, in our de novo review of this matter, we find that the tax sale certificate

does not constitute prima facie evidence under the circumstances of this case.

As the tax sale certificate did not constitute prima facie evidence regarding

the validity of the sale, Jon Loy did not meet its burden by the mere presentation of

the certificate. As such, it was required to produce evidence showing that Allen

had been duly notified of her rights to redeem or, alternatively, nullify the sale.

However, Jon Loy failed to do so this.

b. Other evidence presented

The remaining record further propounds the issue with the tax sale certificate

and raises many issues regarding whether proper procedure had been followed in

this case. The record before us is devoid of any evidence showing the City

attempted to provide Allen with either pre- or post-tax sale notice. As such, Jon

Loy needed to prove that it had corrected any lack of notice under the catch-all

provision provided by law. Jon Loy failed to meet this burden.

Jon Loy argues that it duly notified Allen by sending notice under La. R.S.

47:2157 to the New York address. In its affidavit, Jon Loy asserts that it searched

two internet databases to locate the New York address. We find that this was not

sufficient to meet due notification requirements.

La. R.S. 47:2122(4) defines “duly notified” as “an effort meeting the

requirements of due process of law [] made to identify and to provide [a] person

with [] notice . . . .” La. R.S. 47:2153 outlines what actions constitute a reasonable

and diligent effort that comport with due process requirements. This includes

sending the notice by first class mail to the last known address of the tax debtor

along with any of the three following steps:

6 (1) Performing a computer search of the digitized records and databases of the clerk of court or sheriff's office for addresses of other properties that may be owned by the debtor; (2) Contacting the tax assessor of the parish in which the property is located for the addresses of other properties that may be owned by the debtor; (3) Examining the mortgage or conveyance records of the parish where the property is located to determine whether there are any other transactions pertaining to the property; (4) Attempting personal or domiciliary service of the notice; (5) Posting the notice of tax sale at the property.

La. R.S. 47:2153(A)(1)(c)(i). Although this specific statute relates to the duties of

the tax collector in sending notice, if the tax purchaser decides to use the catch-all

provision under La. R.S. 47:2157 to cure any prior noticing deficiencies, then the

tax sale purchaser should also comply with these due process efforts. To hold

otherwise would risk people losing their properties without notice and in violation

of their due process rights.

The first step in providing due notice is sending notice to the tax debtor at

the tax sale property. See La. R.S. 47:2153 (A)(1)(a) and (c)(i). If that fails, then

the next mandated step is to send notice to the last known address of the tax

debtor. La. R.S. 47:2153(A)(1)(c)(i) (emphasis added). Jon Loy failed to do this.

The act of cash sale submitted by Jon Loy to support its summary judgment motion

lists Allen’s address to be in Lexington, Kentucky. The tax sale certificate lists that

same address. Jon Loy alleges in its petition that Allen is a resident of Kentucky.

Yet, despite Allen’s last known address being in Kentucky, Jon Loy did not send

its notice to that address. Jon Loy also did not submit evidence showing that it

attempted to perform the other steps listed by statute in order to make a diligent

effort to locate Allen. Rather, Jon Loy’s counsel asserts in his affidavit that he

“conducted a diligent search for the last known address of Terri L. Allen including

making a google search and using . . . a subscription people finder service.” This

assertion falls flat in the face of the evidence Jon Loy submitted and its own

allegation that Allen was a resident of Kentucky. The only notice Jon Loy sent was

7 to the New York address. At the very least, this creates a genuine issue of material

fact as to whether Jon Loy made a diligent effort to provide Allen curative post-

sale notice. 3

In light of the above, we find that Jon Loy failed to meet its burden in

showing that no genuine issue of material fact existed. Rather, the evidence

submitted in support of the motion contradicted itself and showed many issues

surrounding whether Allen had been duly notified under the law. Therefore, Jon

Loy was not entitled to summary judgment based on the showing made.

iii. Did Allen show that genuine issues existed?

Even assuming for sake of argument that Jon Loy established a prima facie

case and met its burden of proof, we find that Allen also met her burden in

showing that genuine issues of material fact remained. To support her opposition,

Allen introduced the following into evidence—(1) an affidavit attesting to her

address and what she knew about the tax sale; (2) a letter from the City of New

Orleans, Code Enforcement and Hearings Bureau that is dated November 11, 2021,

and lists her New Orleans address; (3) her Louisiana driver’s license that lists her

New Orleans address; and (4) an email from the appointed curator in this matter

confirming that he had never been served with the petition in this case.

In her affidavit, Allen asserts that she lived at the New York address until

2008 when she moved to Kentucky. Thereafter, she moved back to New Orleans in

2017 and has resided with her mother since then. Allen states that she never

received the post-sale notice sent to the New York address and that the

confirmation for the notice had been signed by a child who lives at the residence.

3 As recognized by the United States Supreme Court, “[a]n elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Cent. Properties, 2016-1855, p. 9, 225 So. 3d at 447 (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L.Ed. 865 (1950)) (emphasis added). 8 She further asserts that her current New Orleans address is in the public domain

and discoverable as evidenced by her Louisiana driver’s license and the letter she

received from the City’s Code Enforcement and Hearings Bureau. Lastly, Allen

attests that she attempted to redeem the property at one point in time but was

prevented from doing so.

We find that the above evidence created genuine issues of material fact that

precluded summary judgment in this matter. Namely, genuine questions remain

regarding whether the City or Jon Loy made diligent and reasonable efforts that

comported with due process of law to duly notify Allen of her rights prior to taking

her property. Allen’s last address was the Kentucky address, not the New York

address used by Jon Loy. Additionally, her current, New Orleans address was

known by the City and appears to have been in the public domain. Thus, there is a

question as to whether an effort meeting due process requirements was made to

provide Allen with notice considering that her prior and current addresses were

reasonably ascertainable.4

DECREE

For the foregoing reasons, we reverse the district court’s judgments granting

Jon Loy’s Motion for Summary Judgment and denying Allen’s Motion for New

Trial, and we remand this matter for further proceedings.

REVERSED AND REMANDED

4 “If the name and address of the interested party is reasonably ascertainable, notice

by mail is a constitutional precondition to a matter affecting the property interest of a party.” Community Associates, Inc. v. Taylor, 2019-0242, pp. 6-7 (La. App. 4 Cir. 7/31/19), 364 So. 3d 1, 5 (citing Mennonite Bd. Of Missions, 462 U.S. at 800, 103 S. Ct. at 2712). 9