Hansen Trust v. Ward, 2015 MT 131 (May 19, 2015) (McGrath, C.J.) (5-0, aff’d)
Issue: (1) Whether the district court properly granted summary judgment and declared the tax deed void; (2) whether the district court properly directed payment of Hansen Trust’s tax lien; and (3) whether the district court properly denied Hansen Trust’s post-judgment motions.
Short Answer: (1) Yes; (2) yes; and (3) yes.
Facts: Dale Tarbet sold two lots in Anaconda to Michael Ward in 2007. Ward executed a promissory note to Tarbet and secured the transaction with a Montana Trust Indenture, which was recorded in April 2007. Under the Trust Indenture, Ward was the owner and taxpayer, Tarbet was the beneficiary, and Montana Abstract & Title was the trustee. An addendum substituted Tarbet Schrier, LLC for Tarbet as beneficiary.
Ward did not pay property taxes in 2008, 2009 and 2010. The county placed a tax lien on the property, and on Sept. 24, 2011, the county treasurer assigned the tax lien to the Catherine E.W. Hansen Trust. On Nov. 30, 2012, the county treasurer issued a tax deed to Hansen Trust, which was recorded the same day.
In February 2013, Hansen Trust filed a complaint to quiet title to the tax deed. Tarbets answered, asserting the Trust had failed to provide the required notice under Montana law. Tarbets moved for summary judgment, arguing the tax deed was void due to Hansen Trust’s failure to provide written notice of the issuance of the tax deed to the trustee. The district court denied the motion, concluding it was unclear whether a title guarantee existed and whether it listed Montana Title and Abstract.
In August 2013, the trust moved for Tarbets to deposit $20,859.24 with the court to cover taxes, interest and penalties, and costs and fees. The district court held that the trust was entitled to money to cover taxes, interest, penalties, and costs, but not filing fees, publication, insurance, trust expenses or attorney fees. The court ordered Tarbets to deposit $6,783.91 with the court, which they did.
Hansen Trust moved for summary judgment in November 2013, and Tarbets filed a cross-motion, requesting the court declare the tax deed void. By this point, it was undisputed that the trust did not obtain a property title guarantee, and did not notify the trustee of the tax lien. After a hearing, the district court granted Tarbets’ motion and declared the tax lien void as a matter of law.
In April 2014, Tarbets moved for an order directing payment of the tax lien and entry of final judgment, and asked that Hansen Trust receive the money deposited with the court along with accrued interest, plus any additional taxes paid by the trust since the deposit was made. The district court granted the motion and Tarbets mailed a check to the trust, which received a total of $8,726.54.
Procedural Posture & Holding: The district court entered final judgment declaring the tax deed void, establishing the amount to redeem the lien, and directing a certificate of redemption be recorded upon the trust’s receipt of the amount. Hansen Trust filed three post-judgment motions, which the district court denied. The trust filed a notice of appeal, then filed another post-judgment motion in which it argued the court could resume jurisdiction for the purpose of considering the trust’s constitutional challenge to § 15-18-212, MCA. The district court denied the motion, stating it would not address argument raised for the first time post judgment. Hansen Trust appeals, and the Supreme Court affirms.
Reasoning: Hansen Trust argues that the 2009 amendment to § 15-18-212, MCA, is unconstitutional. It did not raise this issue until after judgment was entered. This Court will not usually address issues raised for the first time on appeal. Under the same principle, it will not review a new legal theory not properly raised before the trial court.
(1) Because tax deed statutes implicate a property owner’s fundamental rights, the Court demands exacting compliance with the procedures outlined in the statutes. Under § 15-18-111, MCA, a property owner or interested party may redeem the tax lien on his or her property. However, he or she must first now of the tax lien. Notice is of the utmost importance in these proceedings, and the failure to provide notice in compliance with the statute renders a tax deed void.
(2) Hansen Trust argued it was entitled to an award of all costs and expenses incurred with collection, administration and litigation, including attorney fees and trust administration costs as well as property insurance costs. The Court agrees that additional expenses such as property insurance could be considered reasonable, but they are not required by law and the district court did not err in refusing to award them to Hansen Trust.
(3) The only post-judgment motion properly preserved for appellate review is the trust’s first motion made pursuant to Rules 60(a) and 54(c). The district court correctly denied the 60(a) motion, as it correctly ordered interest to be calculated from the day the court ordered Tarbets to deposit the money with the court.