Judicial Update: Recent Decisions from the GA Court of Appeals and the GA Supreme Court

Bridges v. Collins-Hooten, et al.  

  • Court of Appeals, November 1, 2016
  • 2001 tax sale, followed by 2002 creditor redemption and a 2014 interpleader action re excess funds
  • Creditor’s security deed had been satisfied in the interim, thus while it would have been entitled to the excess back in 2002, it was no longer entitled to it
  • County tax director entitled to recover attorneys fees out of the excess, despite being a claimant

Harvest Assets, LLC v. Northlake Manor Condo. Assoc.

  • Court of Appeals; Feb. 16, 2017
  • Redemption premium dispute relating to a non-judicial tax deed and whether a tax deed holder can recoup HOA assessment fees it paid after the tax sale under O.C.G.A. § 48-4-42
  • HOA attempted to redeem and disputed the redemption calculation
  • Court agreed that HOA assessments can be included in redemption payoff, but only so much as principal
  • NOTE: O.C.G.A. § 48-4-42 has since been revised. This only applies under tax deeds falling under the former version of the statute

Canady v. Cumberland Harbor Property Owners Assoc., Inc.

  • Court of Appeals, March 1, 2017
  • Purchaser of non-judicial tax sale deed liable for homeowner association assessments accruing after the tax sale
    • Barment does not extinguish those liens
    • Argument that he couldn’t have included them in the redemption premium not found persuasive

LaChona, LLC v. Aberra, et al.

  • Supreme Court; March 6, 2017
  • Originated in a superlien foreclosure action, where tax deed holder and redeeming creditor concluded that the redemption was improper because redeeming creditor actually had no right to redeem.
  • Sought to reverse the redemption by filing an affidavit to dissolve the redemption and reinstate the tax deed.
  • Tax deed holder then proceeded with barment but whose barment was challenged by an interested party.
  • Court found this unlawful as an affidavit cannot effectuate a conveyance to revive a tax deed or transfer interest in real property.

Postell v. Trinitec Portfolio Services, LLC

  • Court of Appeals; April 20, 2017
  • Superlien case arising from a January 2015 non-judicial tax sale where superlien holder claimed creditor status by virtue of an assignment of a HOA lien
  • Superlien holder received the excess funds and sought foreclosure of the property
  • Postell intervened and argued Trinitec’s superlien was invalid because the defendant in fifa’s names were misspelled on the assignment
    • The Court agreed and made Trinitec return the excess funds because of DLT List v. M7ven
    • This continues the trend of courts treating superliens with hostility

Strong et al. v. JWM Holdings, LLC

  • Court of Appeals; April 28, 2017
  • 2013 non-judicial tax sale of Fulton County property; no barment.
  • Estate of defendant in fifa sued to compel tax deed holder to permit redemption
    • Denied because estate failed to make a pre-litigation tender under O.C.G.A. § 48-4-47
    • Requires actual offer of tender, not just an expression of desire or willingness to redeem
  • Tax deed holder counterclaimed asking for declaratory judgment that the estates be barred from ever filing suit in the future to assert rights to redeemed
    • Denied because such an order would be an impermissible advisory opinion
    • They could make a valid redemption in the future unless or until redemption rights are foreclosed.

Supreme Court Declares Superlien Holders Not Entitled to Collect Tax Sale Excess Funds

Brad Hutchins and Allie Jett give a brief discussion on the Georgia Supreme Court's May 15, 2017 decision in the case of DLT List, LLC v. M7ven Supportive Housing & Development Group. In this case, the Court held that excess funds from a tax sale are personal property whereas superliens only attach to real property. As such, a superlien holder cannot make out a claim against excess funds. 

GATO NAMES BRAD HUTCHINS AND ALLIE JETT GENERAL COUNSEL

The Georgia Association of Tax Officials (GATO) has named Weissman PC attorneys Brad Hutchins and Allie Jett GATO’s first General Counsel.

The General Counsel role was created to provide legal guidance on the impacts of legislation and court decisions, property tax matters and other legal issues important to GATO and its membership.  This role also serves as a strategic legal adviser to the leadership team.

“Brad and Allie are well-versed in tax practices,” notes GATO President Cindy Cannon. “Their in-depth knowledge of tax practices on local and state levels provides GATO with an expertise to help strengthen our organization.”

Brad and Allie, both partners at Weissman PC, bring over three decades of experience representing clients with tax liens and tax deeds, representing County Tax Commissioners, and handling suits in property tax related cases.  In addition, they each maintain a real estate litigation practice.

“Allie and I look forward to working with GATO. It is a natural fit for our practice, as we work with tax commissioners from across the state on a variety of issues,” says Brad Hutchins. “GATO not only provides strategic guidance to commissioners, but advances the legislative agenda of tax officials and we look forward to working with GATO leadership and its members,” adds Allie Jett.

Weissman PC is a real estate, business and litigation law firm headquartered in Buckhead with more than 50 attorneys in 13 offices across the metro Atlanta area.  For more information visit www.weissman.law.

Supreme Court holds superlien holders not entitled to surplus funds

The M7ven v. DLT List saga has in all likelihood ended. For me at least it ended in an unexpectedly dramatic fashion. This afternoon, standing at the podium for oral argument before the Fulton County Superior Court, I was explaining to the Court that certain aspects of the case were not ripe for ruling pending the results in this case. Moments later we find out from the judge’s staff attorney that the Supreme Court has at last ruled earlier today and everyone scrambled to figure out what the Court said and how it would impact the issues we were arguing.

In short, the Supreme Court has agreed with the result of the Court of Appeals (i.e., that super lien holders are not entitled to claim the surplus funds generated by a non-judicial tax sale), but disagreed on the reasons why they reached that conclusion. To review the Court's full analysis, you may access a copy of the opinion here.

You may recall that the Court of Appeals offered a rather straightforward basis for finding that a super lien holder is not entitled to surplus funds: that surplus funds can only be disbursed to pay off liens that existed at the time of the tax sale. Thus, because a super lien necessarily arises after the sale, it was ineligible. Today, the Supreme Court disagreed with that rationale. Rather, the Supremes found that the authority for the creation of the super lien was limited to a lien against real property. Surplus funds, however, have for many years been considered personal property. Therefore, the super lien, regardless of the time it arises, can only be a lien against the real property. 

We should note that a losing party before the supreme court can file a motion for reconsideration, although those are rarely granted. Therefore, in all likelihood, this will put an end to the uncertainty many have faced in the year and a half since the Court of Appeal's decision in November of 2015. 

As always, please feel free to reach out to either me or Brad with any questions. 

- Allie Jett

Super Lien Decision Expected May 15, 2017

The Georgia Supreme Court is expected to issue a decision in the DLT List, LLC v. M7ven Supportive Housing & Development Group case on Monday, May 15, 2017.  With this ruling, we should finally have clarity on super liens, their creation and whether or not a super lien holder is entitled to claim the excess funds resulting from a tax sale.  Stay tuned!  I will update everyone as soon as the decision comes down!

Brad

February 8 - Meeting of the Minds

Brad and I are delighted to accept an invitation to this year's Meeting of the Minds talk at the Tift County Courthouse on February 8th. For those of you in central and south Georgia who are able to attend, we look forward to seeing you then.

- Allie.

Supreme Court hears oral arguments on superliens

Last week the Georgia Supreme Court heard oral argument in the case of DLT List, LLC et al. v. M7VEN Supportive Housing & Development Group. The Justices showed a great deal of interest in the matter, but did not tip their hat as to how they may rule. If you are interested in viewing the arguments made by the attorneys in that case, you may find it at the second video listed HERE.

We will update you once the Court issues its ruling.

GA Supreme Court: tax deed holder's rejection of redemption tender struck down

On November 7, 2016, the Georgia Supreme Court issued an opinion in the matter of Nix v. 230 Kirkwood Homes, LLC. This is the third time Ms. Nix has made her way to the State's highest court on this matter - the prior occasions being against Community Renewal and Redemption, LLC in 2005 and 2011.

In this instance, the Court, in an opinion authored by Justice Melton, made several rulings which will impact non-judicial tax sales for years to come.

Read More

Supreme Court Invalidates Tax Deed Purchaser's Barment

On October 31, 2016 the Georgia Supreme Court issued an opinion in the case of Reliance Equities v. Lanier 5, et al. In that case, a purchaser at a non-judicial tax sale waited the statutory year following the tax sale to conduct the foreclosure of the right of redemption (i.e., the barment). The tax deed holder sent the barment notice to the former owner as required by statute. The former owner did not redeem the tax deed prior to the deadline provided for in that notice. Later the tax deed holder ran the required notice of publication in the county newspaper. The former owner attempted to redeem before the deadline listed in the published ad. The tax deed holder refused the redemption tender as being untimely.

The Court held that under a 'plain language' reading of O.C.G.A. Sec. 48-4-45, the former owner retained the right to redeem the tax deed up through the time the tax deed holder completed both the mailed notice and published notice of the barment.

Supreme Court to hear superlien case - excess proceeds distribution rules to change again?

You may recall that previously Brad Hutchins and I prepared a video to let you know about the Court of Appeals decision in the DLT List, LLC v. M7ven Supportive Housing & Development Group case reversing the previously established rule that a creditor who redeems a non-judicial tax deed not only obtains a first priority lien against the property, but also has a perfected claim against all surplus funds generated by the tax sale. As a result of the Court of Appeals decision, the redeeming creditor still retains that first priority lien against the property, but no longer has a claim against the surplus funds for the amount expended in the redemption.

The redeeming creditor sought leave to further appeal the Court of Appeals decision to the Georgia Supreme Court back in December of last year. Finally last week the Georgia Supreme Court granted the application to hear the appeal. The Court’s full order can be found here. While the current state of the law remains that a redeeming creditor does not have a first priority claim to the surplus funds generated by a non-judicial tax sale, the Court of Appeals will hear argument from the parties as to whether that should continue to be the case in their January 2017 calendar. We will of course keep you apprised of any rulings which come out of the Supreme Court following those oral arguments.

Judicial and Legislative Update – New Developments In Ad Valorem Taxation

If approved by the Governor, two bills passed by the General Assembly in 2016 will cause significant changes to ad valorem taxation. Before collecting taxes for 2016, and possibly for prior years, Tax Commissioners and Tax Collectors should be aware of and consider these important changes. Further, the Court of Appeals has recently provided clarity on the extent of sovereign immunity enjoyed by Tax Commissioners and Tax Collectors. This video analyzes these significant new developments.

Investing in Atlanta

Atlanta City Council Member, Mary Norwood, Invest Atlanta, The Atlanta Beltline, the GA Trust for Historic Preservation & Weissman attorneys, Brad Hutchins & Allie Jett joined together to provide an overview of the intown housing market to real estate agents as part of a continuing education course held at the Yaarab Shrine. Attendees gained an understanding of programs and incentives available for intown homebuyers which could help open the doors of home ownership to traditionally marganlized groups. 

Super Liens Suffer A Crushing Blow

On November 10, 2105, the Georgia Court of Appeals dealt a crushing blow to super liens by overruling two prior decisions of the Court and holding for the first time that a super lien holder is not entitled to excess funds.  This video provides an analysis of this recent case and recommendations for Tax Commissioners, Tax Collectors and Sheriffs across the State of Georgia.