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