IN THE COURT OF APPEALS OF IOWA
No. 21-0752 Filed April 13, 2022
LUANA SAVINGS BANK, Plaintiff-Appellant,
vs.
JOHN EVELAND, ET AL., Defendant-Appellee. ________________________________________________________________
Appeal from the Iowa District Court for Clayton County, Alan Heavens,
Judge.
Luana Savings Bank appeals the district court’s order granting judgment in
favor of John Eveland. AFFIRMED.
John E. Lande and William M. Reasoner of Dickinson, Mackaman, Tyler &
Hagen, P.C., Des Moines, for appellant.
Charles P. Augustine of Klatt, Augustine & Rastede, P.C., Waterloo, for
appellee.
Considered by Bower, C.J., and Vaitheswaran and Chicchelly, JJ. 2
VAITHESWARAN, Judge.
This appeal involves a tax sale under Iowa Code chapter 446 (2019), the
right of redemption under chapter 447, and issuance of a tax deed under chapter
448.
A county treasurer is to offer property subject to delinquent taxes for public
sale. See Iowa Code § 446.7. The purchaser will receive a tax sale certificate
from the county. Id. § 446.29. The property owner, or an interested party such as
a mortgagee, has two years to redeem the property from the certificate holder. Id.
§§ 447.1, .5. After one year and nine months, the tax sale certificate holder may
serve a notice, stating in part, “the right of redemption will expire and a deed for
the parcel be made unless redemption is made within ninety days from the
completed service of notice.” Id. § 447.9. “The notice shall be served by both
regular mail and certified mail to the person’s last known address and such service
is deemed completed when the notice is deposited in the mail and postmarked for
delivery.” Id. § 447.9(1). The right of redemption period “begins as provided in
section 447.12.” Id. Under that section, “[s]ervice is complete only after an affidavit
has been filed with the county treasurer.” Id. § 447.12. Once the ninety-day
deadline expires, the county treasurer must issue the tax certificate holder a tax
deed. Id. § 448.1. “Where service is incomplete, the right of redemption is not cut
off and no valid tax deed can issue.” Nelson v. Forbes, 545 N.W.2d 576, 582 (Iowa
Ct. App. 1996). “[T]he statutory provisions as to notice found in chapter 447 must
be strictly complied with before parties are deprived of their property.” Id.; see
Rehr v. Guardian Tax Partners, Inc., No. 16-1962, 2017 WL 1401569, at *3–5
(Iowa Ct. App. Apr. 19, 2017) (affirming the district court’s finding that the affidavit 3
of service did not comply with section 447.12 where it failed to specify the individual
who served the notice).
Luana Savings Bank (LSB) held a mortgage on real estate located in
Clayton County, Iowa. When the owner failed to keep up with property tax
payments, the county put the property up for sale. John Eveland paid the
delinquent taxes and received a tax sale certificate. In time, Eveland’s attorney
served LSB and others with a notice of expiration of the right of redemption.
Eveland’s attorney used metered mail rather than a United States Postal Service
postmark on the notice sent to LSB. He followed up by filing an affidavit of service
with the Clayton County Treasurer. The property was not redeemed during the
ensuing ninety-day redemption period, and the county treasurer conveyed a tax
deed to Eveland.
LSB sued Eveland and others alleging “defects in the [a]ffidavit of
[c]ompleted [s]ervice.” LSB asked the district court to set aside the tax sale
because “it did not receive notice of its right of redemption as required by Iowa
Code [chapter] 447.” Eveland filed a motion for summary judgment, which the
district court denied. Following trial, the court filed a comprehensive order
addressing each aspect of the notice, service, and affidavit requirements. The
court concluded LSB did not show “that Eveland failed to comply with any statutory
requirements necessary to receive a tax deed.” In a second equally
comprehensive order, the court denied LSB’s motion for enlarged findings and
conclusions.
The primary issue LSB raises on appeal is whether the notice Eveland
mailed to LSB was properly “postmarked for delivery” within the meaning of Iowa 4
Code section 447.9(1), in light of the attorney’s use of a postage meter.1 The Iowa
Supreme Court addressed the question in Severs v. Abrahamson, 124 N.W.2d
150, 153 (Iowa 1963). There, the court was asked to decide whether a postage
meter satisfied a statutory postmark requirement contained in what is now Iowa
Code section 452A.61.2 Severs, 124 N.W.2d at 151–53. The court began with the
“known fact that postage meters had been in common business use long before”
the time the statute was enacted. Id. at 151. Indeed, “the postmaster general . . .
promulgated rules and regulations bearing on the use and handling of the postage
meters and the mail run through them.” Id. After taking “judicial notice of such
rules and regulations,” the court cited several regulations equating meter stamps
with postmarks. Id. at 153. Applying a common definition of “postmark” which
included “both the meter stamp affixed by the sender and the postmark affixed by
a post office employee,” the court concluded
the General Assembly intended to include in the term “postmarked” as used in [now section 452A.61] both the affixing by the sender of a meter stamp by use of a postage meter to an envelope deposited in the mail and the affixing of a postmark by a post office employee.
1 LSB also takes issue with Eveland’s claimed failure to “send the expiration notice by certified mail.” Eveland counters that LSB did not raise that claim at trial and it is not preserved. In fact, the claim was raised and addressed. The district court stated, “Paragraph 3 of Eveland’s affidavit (Exhibit B) states the notices were sent by certified mail and there are certified mail return receipts in evidence (Exhibit C). Eveland clearly sent the expiration notice to LSB via certified mail.” On our de novo review, we discern support for the court’s finding. See Strong v. Jarvis, 524 N.W.2d 675, 677 (Iowa Ct. App. 1994) (setting forth standard of review). 2 The court construed Iowa Code section 324.60 (1958), which stated: “The reports
and remittances required under this chapter shall be deemed filed within the required time if postpaid, properly addressed and postmarked on or before midnight of the day on which due and payable.” Severs, 124 N.W.2d at 151. That provision has not materially changed. 5
Id. at 153.3 The court reasoned, “Both [postmarked mail and metered mail] serve
the same purpose and have the same safeguards. If the legislature had intended
otherwise it would have so stated. Where more safeguards are desired it has so
stated.” Id.
LSB contends “Severs is no longer controlling” because the opinion “relied
on postal regulations and definitions that were in effect in 1963.” True. But
the substance of those postal regulations and definitions has not changed. The
regulations quoted by the court on the “[u]se of [m]eter stamps,” logistical details
of usage, the benefits of meter stamps, and safeguards for ensuring a correct date
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IN THE COURT OF APPEALS OF IOWA
No. 21-0752 Filed April 13, 2022
LUANA SAVINGS BANK, Plaintiff-Appellant,
vs.
JOHN EVELAND, ET AL., Defendant-Appellee. ________________________________________________________________
Appeal from the Iowa District Court for Clayton County, Alan Heavens,
Judge.
Luana Savings Bank appeals the district court’s order granting judgment in
favor of John Eveland. AFFIRMED.
John E. Lande and William M. Reasoner of Dickinson, Mackaman, Tyler &
Hagen, P.C., Des Moines, for appellant.
Charles P. Augustine of Klatt, Augustine & Rastede, P.C., Waterloo, for
appellee.
Considered by Bower, C.J., and Vaitheswaran and Chicchelly, JJ. 2
VAITHESWARAN, Judge.
This appeal involves a tax sale under Iowa Code chapter 446 (2019), the
right of redemption under chapter 447, and issuance of a tax deed under chapter
448.
A county treasurer is to offer property subject to delinquent taxes for public
sale. See Iowa Code § 446.7. The purchaser will receive a tax sale certificate
from the county. Id. § 446.29. The property owner, or an interested party such as
a mortgagee, has two years to redeem the property from the certificate holder. Id.
§§ 447.1, .5. After one year and nine months, the tax sale certificate holder may
serve a notice, stating in part, “the right of redemption will expire and a deed for
the parcel be made unless redemption is made within ninety days from the
completed service of notice.” Id. § 447.9. “The notice shall be served by both
regular mail and certified mail to the person’s last known address and such service
is deemed completed when the notice is deposited in the mail and postmarked for
delivery.” Id. § 447.9(1). The right of redemption period “begins as provided in
section 447.12.” Id. Under that section, “[s]ervice is complete only after an affidavit
has been filed with the county treasurer.” Id. § 447.12. Once the ninety-day
deadline expires, the county treasurer must issue the tax certificate holder a tax
deed. Id. § 448.1. “Where service is incomplete, the right of redemption is not cut
off and no valid tax deed can issue.” Nelson v. Forbes, 545 N.W.2d 576, 582 (Iowa
Ct. App. 1996). “[T]he statutory provisions as to notice found in chapter 447 must
be strictly complied with before parties are deprived of their property.” Id.; see
Rehr v. Guardian Tax Partners, Inc., No. 16-1962, 2017 WL 1401569, at *3–5
(Iowa Ct. App. Apr. 19, 2017) (affirming the district court’s finding that the affidavit 3
of service did not comply with section 447.12 where it failed to specify the individual
who served the notice).
Luana Savings Bank (LSB) held a mortgage on real estate located in
Clayton County, Iowa. When the owner failed to keep up with property tax
payments, the county put the property up for sale. John Eveland paid the
delinquent taxes and received a tax sale certificate. In time, Eveland’s attorney
served LSB and others with a notice of expiration of the right of redemption.
Eveland’s attorney used metered mail rather than a United States Postal Service
postmark on the notice sent to LSB. He followed up by filing an affidavit of service
with the Clayton County Treasurer. The property was not redeemed during the
ensuing ninety-day redemption period, and the county treasurer conveyed a tax
deed to Eveland.
LSB sued Eveland and others alleging “defects in the [a]ffidavit of
[c]ompleted [s]ervice.” LSB asked the district court to set aside the tax sale
because “it did not receive notice of its right of redemption as required by Iowa
Code [chapter] 447.” Eveland filed a motion for summary judgment, which the
district court denied. Following trial, the court filed a comprehensive order
addressing each aspect of the notice, service, and affidavit requirements. The
court concluded LSB did not show “that Eveland failed to comply with any statutory
requirements necessary to receive a tax deed.” In a second equally
comprehensive order, the court denied LSB’s motion for enlarged findings and
conclusions.
The primary issue LSB raises on appeal is whether the notice Eveland
mailed to LSB was properly “postmarked for delivery” within the meaning of Iowa 4
Code section 447.9(1), in light of the attorney’s use of a postage meter.1 The Iowa
Supreme Court addressed the question in Severs v. Abrahamson, 124 N.W.2d
150, 153 (Iowa 1963). There, the court was asked to decide whether a postage
meter satisfied a statutory postmark requirement contained in what is now Iowa
Code section 452A.61.2 Severs, 124 N.W.2d at 151–53. The court began with the
“known fact that postage meters had been in common business use long before”
the time the statute was enacted. Id. at 151. Indeed, “the postmaster general . . .
promulgated rules and regulations bearing on the use and handling of the postage
meters and the mail run through them.” Id. After taking “judicial notice of such
rules and regulations,” the court cited several regulations equating meter stamps
with postmarks. Id. at 153. Applying a common definition of “postmark” which
included “both the meter stamp affixed by the sender and the postmark affixed by
a post office employee,” the court concluded
the General Assembly intended to include in the term “postmarked” as used in [now section 452A.61] both the affixing by the sender of a meter stamp by use of a postage meter to an envelope deposited in the mail and the affixing of a postmark by a post office employee.
1 LSB also takes issue with Eveland’s claimed failure to “send the expiration notice by certified mail.” Eveland counters that LSB did not raise that claim at trial and it is not preserved. In fact, the claim was raised and addressed. The district court stated, “Paragraph 3 of Eveland’s affidavit (Exhibit B) states the notices were sent by certified mail and there are certified mail return receipts in evidence (Exhibit C). Eveland clearly sent the expiration notice to LSB via certified mail.” On our de novo review, we discern support for the court’s finding. See Strong v. Jarvis, 524 N.W.2d 675, 677 (Iowa Ct. App. 1994) (setting forth standard of review). 2 The court construed Iowa Code section 324.60 (1958), which stated: “The reports
and remittances required under this chapter shall be deemed filed within the required time if postpaid, properly addressed and postmarked on or before midnight of the day on which due and payable.” Severs, 124 N.W.2d at 151. That provision has not materially changed. 5
Id. at 153.3 The court reasoned, “Both [postmarked mail and metered mail] serve
the same purpose and have the same safeguards. If the legislature had intended
otherwise it would have so stated. Where more safeguards are desired it has so
stated.” Id.
LSB contends “Severs is no longer controlling” because the opinion “relied
on postal regulations and definitions that were in effect in 1963.” True. But
the substance of those postal regulations and definitions has not changed. The
regulations quoted by the court on the “[u]se of [m]eter stamps,” logistical details
of usage, the benefits of meter stamps, and safeguards for ensuring a correct date
of mailing have been incorporated into the United States Postal Service’s Domestic
Mail Manual, which in turn has been incorporated into the Federal Register,
thereby becoming an official rule of the agency. 39 C.F.R. § 111.1 (2022); see
U.S. Postal Serv., Domestic Mail Manual: 604 Postage Payment Methods and
Refunds §§ 4.1.1, 4.1.2(a), 4.1.5, 4.2.1, 4.6.3, https://pe.usps.com/text/dmm300/
604.htm#ep1080496 (last visited Apr. 5, 2022) (defining postage meters as
“postage evidencing systems” that “allow download, storage, and accounting of
postage in the device”; stating “[m]ailers may use postage evidencing systems, as
provided by standard, to affix or apply indicia on any class of mail except
[p]eriodicals and [b]ound [p]rinted [m]atter”; authorizing deposit of metered mail “at
any Postal Service facility”; and stating a customer who enters into an agreement
authorizing the use of postage evidencing systems “accepts responsibility for
3 LSB cites the Black’s Law Dictionary definition of “postmark.” But the court stated “[i]t is not necessary to consider it as a technical word.” Severs, 124 N.W.2d at 152. 6
control and use of the system and agrees to abide by all rules and regulations
governing its use”).4 As the court underscored almost half a century ago,
No one dealing with mail, or providing for use of the postal system, can be heard to say he did not intend the use to be in accord with post office department rules and regulations and the acts of Congress. Only Congress regulates the mails in this country. U.S. Const., art. I, § 8. We think the General Assembly is charged with such knowledge in enacting section 324.60.
Severs, 124 N.W.2d at 151–52. Severs is controlling. In the district court’s words:
The case for distinguishing Severs out of existence due to subsequent events since 1963 is not well supported. To the contrary, LSB’s position is severely undermined by the many states who followed the lead of the Iowa Supreme Court and found that private meter marks are “postmarks” under statutes which are required to be strictly construed. Severs has all the appearances of a fine wine getting better with age as opposed to the stale beer LSB thinks it is.
On our de novo review, we fully concur in the court’s findings, analysis, and
conclusion. Eveland satisfied the requirements of sections 447.9 and .12 and was
entited to a tax deed.
AFFIRMED.
4 LSB points to a Postal Service handbook containing a definition of postmark. See U.S. Postal Serv., About § 1-1.3, https://about.usps.com/handbooks/po408/ ch1_003.htm (last visited Apr. 5, 2022). While the handbook defines a postmark as “an official Postal Service imprint applied in black ink on the address side of a stamped mailpiece,” it also states, “[p]ostmarks are not required for mailings bearing a permit, meter, or precanceled stamp for postage, nor to pieces with an indicia applied by various postage evidencing systems.” Id.