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La Chona, LLC v. Aberra

Supreme Court of Georgia

March 6, 2017

ABERRA et al.

          HINES, Chief Justice.

         Appellant La Chona, LLC, ("La Chona") brought this quiet title action in the Superior Court of DeKalb County, asserting that it was the owner of property located in the City of Decatur, because it had purchased the property at a tax sale and had barred the right of other interested persons, including appellee Haddis Aberra ("Aberra"), [1] to redeem the property pursuant to barment notices that it had sent those parties under OCGA § 48-4-45. The trial court ruled in favor of Aberra, concluding that, when La Chona sent the barment notices, it did not hold a record interest in the property, was therefore not authorized by law to send the notices, and, accordingly, had not barred Aberra's right to redeem the property. The trial court also ruled that, even if La Chona had been authorized to send the barment notices, La Chona had waived the requirement of tender as to Aberra. For the reasons that follow, we affirm the trial court's ruling that La Chona did not have the right to send the barment notice to Aberra, and because of that ruling, we need not decide the tender issue.

         1. Background.

         Our evaluation of this case requires a detailed review of what the record shows regarding the tax sale, the events relating to the property after that sale, and a review of the law that governs those events.

         In 2007, the property was owned by Josephine Hose in fee simple. She died later that year, leaving the property to her two sons, Willie and Wesley Hose, in undivided equal shares. Willie was appointed executor of his mother's estate, but he died in 2009 without executing a deed of assent to convey title to himself and Wesley. In 2010, Aberra bought the interests in the property that Wesley Hose and two of Willie Hose's heirs held by virtue of the bequests from Josephine Hose, so that, in total, Aberra gained a seven-ninths interest in the property. Aberra petitioned the probate court to appoint an administrator to execute deeds of assent conveying the property from the estate of Josephine Hose to Wesley Hose and the heirs of Willie Hose. As of August 2010, that had not occurred.

          In August 2010, with the estate of Josephine Hose still holding title to the property, the City of Decatur sold the property for the nonpayment of 2009 property taxes. La Chona was the highest bidder, purchasing the property for $40, 000. The tax deed was filed on September 8, 2010, and lists the defendant in fi. fa. as the estate of Josephine Hose. La Chona, as the tax sale purchaser, did not obtain absolute title to the property, but rather obtained a defeasible fee interest subject to the statutory rights of other interested persons to redeem the property. See Land USA, LLC v. Ga. Power Co., 297 Ga. 237, 239 (773 S.E.2d 236) (2015); OCGA § 48-4-40 (providing that "the defendant in fi. fa. or any person having any right, title, or interest in or lien upon such property may redeem" the property); OCGA § 48-4-41 (providing that a "creditor of the defendant in fi. fa. who has no lien" may redeem the property).

         At some point before the tax deed was recorded, Forum IRA, LLC, ("Forum"), paid La Chona $48, 000 to redeem the property. See OCGA § 48-4-42 (providing that the amount that must be paid to redeem property includes, among other things, "the amount paid for the property at the tax sale" and the amount of "[a]ny taxes paid on the property by the purchaser after the sale"). On the same day that the tax deed was recorded, La Chona executed a quitclaim deed of redemption. The redemption deed says that Forum was a creditor of Josephine Hose, "the defendant in fi. fa., " and it conveyed the property to Josephine.[2] Forum obtained a lien on the property as a redeeming creditor. "[T]he amount paid by the redeeming creditor becomes a first lien on the property. The redeeming creditor then has first priority to repayment -- a 'super-lien' for the redemption price - and may proceed to foreclose against the property based upon that lien." National Tax Funding, L.P. v. Harpagon Co., 277 Ga. 41, 42-43 (586 S.E.2d 235) (2003). See OCGA § 48-4-43 ("the amount expended by the creditor [to redeem the property] . . . shall constitute a first lien on the property and, if the quitclaim deed provided for in Code Section 48-4-44 is recorded as required by law, shall be repaid prior to any other claims upon the property").

         Based on its "super-lien, " Forum filed an action on December 3, 2010, against Aberra and others who might have had an interest in the property. It sought a judgment in the amount of its lien plus interest and sought to foreclose on the property to satisfy the lien.

         Over three years later, on January 16, 2014, while the Forum lawsuit was still pending, La Chona served notices of foreclosure of the right to redeem, in large part, on the same individuals and entities, including Aberra, that Forum named as defendants in its 2010 action. La Chona based its right to bar redemption rights on the ground that it was the purchaser at the tax sale in August 2010 and held the tax deed. Under OCGA § 48-4-45 (a), "[a]fter 12 months from the date of a tax sale, the purchaser at the sale or his heirs, successors, or assigns may . . . forever bar the right to redeem the property from the sale by causing a notice or notices of the foreclosure" to be served upon certain specified persons. La Chona's barment notices said nothing about the redemption by Forum, its successor under the deed records, and said that the right to redeem the property would be barred on the latter of March, 3, 2014, or thirty days after the receipt of the notice.

         Then, on January 17, 2014, an affidavit of title was executed by La Chona and Forum. It stated that "the owner of the Property at the time of the tax sale was the Estate of Josephine Hose, " and, contrary to the redemption deed, which said that Forum was a creditor of Josephine Hose, the affidavit of title said that Forum paid the redemption price because it thought that it was a creditor of an heir (unnamed in the affidavit) of the estate of Josephine Hose. The affidavit also said that the heir did not have an interest in the property; that Forum therefore had no right to redeem the property; that Forum and La Chona had made a mutual mistake in allowing Forum's redemption; and that the "purported redemption is and always has been void." The affidavit concluded by saying that La Chona's tax deed "remains in full force and effect." The affidavit of title was not filed and recorded until February 10, 2014.

         On January 23, 2014, in response to La Chona's barment notice, Aberra, in an effort to redeem the property as provided in OCGA § 48-4-40, sent La Chona a letter that stated: "The purpose of this letter is to make a complete, unconditional tender of the amount legally due for redemption of this property. Please provide me with that amount so that we may deliver the payment in a timely manner."[3] Aberra included no check or cash with that letter. The letter was copied by email to Bradley Hutchins, an attorney, and Aberra's counsel called Hutchins about 9:30 a.m. on January 24, 2014, but was not able to reach him. Hutchins represented Forum in its litigation regarding the property, and at the motion for summary judgment hearing in this case, Aberra's attorney stated that he thought that Hutchins also had represented La Chona. La Chona's counsel denied that Hutchins had represented La Chona, and there is nothing in the record to indicate conclusively that Hutchins did so (the only evidence linking Hutchins and La Chona is the affidavit of title, which was executed by Forum and La Chona and which says that, after it is recorded, it should be returned to Hutchins). Hutchins was never called as a witness regarding the matter. Aberra never heard from La Chona regarding the amount due for redemption.

         On March 25, 2014, La Chona filed a petition to quiet title under OCGA § 23-3-40 et seq., alleging that it had barred the defendants' rights of redemption in the property by virtue of the barment notices it served on the defendants in January 2014 and that it therefore was the fee simple owner of the property under the tax deed. In its answer and counterclaim, Aberra contended that he had made a complete, unconditional tender to La Chona for the redemption of the property, that La Chona could not bar Aberra's right to redeem the property, and that Aberra was entitled to be declared the fee simple owner of the property upon his payment of the redemption price. Aberra later claimed that La Chona had waived its right to tender by not accepting or responding to his January 23, 2014, letter.

         In the meantime, Forum moved the trial court to dismiss its action regarding the property. In April 2014, about a month after La Chona filed its action, the trial court granted Forum's motion to dismiss. The order, which was entered by the same trial judge that entered the orders that are the subject of this appeal, said:

After considering [Forum's] Motion and all responses filed thereto and after considering arguments of counsel, the Court hereby GRANTS [Forum's] Motion, without prejudice. [Forum] reserves its right to contend that the August 2010 tax deed at issue in this case is valid and enforceable and that the quitclaim deed of redemption previously filed of record with the Clerk of Court indicating that the tax deed had been redeemed by Forum IRA, LLC, was executed and filed in error and is therefore stricken. Plaintiff also contends that the tax deed has not been redeemed by any person and continues to be held by La Chona, LLC.
. . . [Forum] or Aberra plan to file an action to quiet title as to the subject property, ...

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