Can a tax commissioner apply excess funds to post-tax sale property taxes?

Iglesia Del Dios Vivo Columna Y Apoyo De La Verdad La Luz Del Mundo, Inc. v. Downing, 321 Ga. App. 778 (2013) addressed this issue, and the answer, quite simply, is NO. (Bonus points for being able to say the plaintiff’s name in that case three times fast.)

The guiding statute is O.C.G.A. § 48-4-5, which provides that any excess funds existing “after paying taxes, costs, and all expenses of a sale made by the tax commissioner” shall be distributed “to the owner or owners as their interests appear in the order of priority in which their interests exist.”

So, while a tax commissioner is authorized to apply excess funds to satisfy outstanding property taxes owed by the delinquent taxpayer that accrued before the tax sale, it can’t do so after the tax sale. This reasoning for this is that the tax deed purchaser, not the delinquent taxpayer, is liable for post-tax sale property taxes.

What about a situation in which post-tax sale property taxes accrue before the tax deed purchaser has barred the right of redemption? In this situation, the delinquent taxpayer still has possession and the tax deed purchaser doesn’t have full title. Is the delinquent taxpayer jointly liable with the tax deed purchaser? According to the Downing case, the answer is no.  Only the tax deed purchaser is liable for post-tax sale property taxes; this is regardless of whether the right to redeem has been barred.

Discovery From Third-Parties

Once a lawsuit is filed, there is a period of discovery in which the parties exchange evidence and take depositions. In almost every case, there is tension in regard to what must be disclosed to the other side. Georgia law says that parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery. It is not grounds for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

What does this mean? Well, it means that most anything that is or may become an issue in the litigation must be disclosed. The same rationale applies to discovery to a third-party (i.e., a party that is not named in the lawsuit). The way this is applied, as a practical matter, is that the court will look at issue in dispute and decide whether the information or documents sought are relevant or likely to lead to the discovery of admissible evidence. This is a liberal standard but there must be some connection between the evidence sought and a dispute in the lawsuit.

Food Poisoning in Georgia

In a big victory for parties injured by contaminated or defective food, the Georgia Supreme Court made it significantly easier for food poisoning victims to recover for their injuries. See Patterson v. Kevon, No. S17G1957. Up until this recent decision, a food poisoning victim was required to submit direct evidence of the defectiveness of the food and was only allowed to submit circumstantial evidence if every other reasonable hypothesis as to the cause of the illness was excluded by the evidence.

What this meant in plain English is that, in most instances, an injured party could make a recovery only if they had the actual food item and if the food item was tested in a lab. This was an unrealistic standard because food poisoning symptoms typically appear several hours after consuming the food. And many times, several days pass before symptoms are connected with the defective food. By that time, the food item is long gone.

The facts of the case were, several days after eating BBQ at a wedding, the victim and another guest were diagnosed with salmonella. In addition, 17 other guests had become ill with similar symptoms. Prior to the current ruling, the BBQ caterer would have been able to successfully argue that because the injured party didn’t have the food item to present as evidence (direct evidence), the injured party would lose. This is because the salmonella, in theory, could have been ingested during another meal.

The new decision says that circumstantial evidence, by itself, is enough. Thus, although the victim couldn’t produce a food item that tested positive for salmonella, he had testimony from 19 people attending the wedding, all who suffered salmonella symptoms in the days following the wedding. Even though this was only circumstantial evidence of his injury, it was enough for the injured party to present his case to a jury.

Slip and Fall in a Parking Lot

Who is responsible when you’re injured in a shopping center parking lot. Is it the store you were shopping in? Is it the owner of the shopping center? Or, is it both? These were the issues decided in a recent Georgia appellate case. See Boyd v. Big Lots Stores, Inc., 18A1140 (July 31, 2018).

In what is likely one of his last opinions, Judge Andrews, writing for the court, predictably sides against the injury party. Judge Andrews is retiring from the bench, and for attorneys who represent injured parties, it can’t come soon enough. While Judge Andrews authors intelligent, articulate opinions, he typically sides with businesses and insurance companies.

With regard to parking lot injuries, the general rule is that a business must keep its premises and approaches safe for its customers. This includes protecting its customers from known dangerous conditions in the parking lot. In the Big Lots case, the customer was injured 45-feet away way from the store entrance. The Court of Appeals explained that an “approach” to a premises refers to property that is within the last few steps taken by the customer, as opposed to mere pedestrians. More specifically, an approach “is that property directly contiguous, adjacent to, and touching those entryways to [the] premises under the control of an owner or occupier of land, through which the owner or occupier, by express or implied invitation, has induced or led others to come upon his premises for any lawful purpose, and through which such owner or occupier could foresee a reasonable invitee would find it necessary or convenient to traverse while entering or exiting in the course of the business for which the invitation was extended.”

In Big Lots, the customer exited the store, walked across a sidewalk, and continued away from the store into the parking lot. The Court decided she was no longer within the store’s “approach” when she slipped and fell because the area was not adjacent to or touching the entry/exit of the store.

Although Big Lots got out of the case, all was not lost for the injured party as she still has a claim against the owner of the shopping center for her injuries.

Venue In An Uninsured Motorist Lawsuit

The Georgia Supreme Court has ruled that an uninsured motorist lawsuit against a known defendant and an unknown defendant can be brought in the county where the accident occurred. Carpenter v. McMann et al., S17G1894 (8/2/18).

The Georgia Constitution says, generally, that lawsuits must be filed in the county in which the responsible party resides. But, it also says that if there are two or more responsible parties who reside in different counties, the lawsuit can be filed in either of the defendants’ “home” counties.

In Carpenter, one of the (alleged) responsible parties left the scene of the collision and was therefore unknown. Lawyers and the courts label these unknown parties as “John or Jane Does.” Under Georgia uninsured motorist law, a lawsuit against a John or Jane Doe can be brought in the county where the collision occurred. What is a little unusual in Carpenter is there was one known defendant and one unknown defendant.

The question before the Georgia Supreme Court was whether the lawsuit should have been filed in the county where the known defendant resided instead of where the collision occurred. Reading the Georgia constitution and relevant statutory provisions together, the Court found that the plain language of drafted by the Georgia legislature permitted the injured party to choose the county where the collision occurred (via the unknown driver) and not the county where the known driver resided.

Who Gets Excess Tax Sale Funds in Georgia?

Revisiting a previous post, under Georgia law, a tax commissioner holds excess funds generated by a tax sale in a fiduciary capacity, and the disbursement of those funds is governed by OCGA § 48-4-5. But, after a tax sale, if there are excess funds after paying taxes, costs, and all expenses of a sale, who gets these funds? The answer, generally, is distribution of excess tax funds is based on the right to the funds at the time of the tax sale.

When there are excess tax funds, the officer selling the property shall give written notice of the excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale, and shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist.

If there is a dispute regarding who is entitled to the excess tax funds, an interpleader is filed and the excess funds are distributed by the superior court to the intended parties, including the owner, as their interests appear and in the order of priority in which their interests exist.

Some issues that come up in regard to distribution of excess tax funds is whether a “super-lien” obtained via a redemption gives the redeeming party a right to claim the excess funds. The answer is no because a super-lien places a lien on the real property but not on the excess tax sale funds.

Another issue is when additional taxes come due after the tax sale—is the tax commissioner allowed to use the excess funds for taxes due after the tax sale? The answer is no because the tax deed purchaser is the party responsible for paying property taxes after the tax sale. The remedy for the tax purchaser is to add taxes paid to the redemption price.

And, finally, what happens if the owner of the property sells the property after the tax sale? Is the new owner entitled to the excess tax sale funds? The answer is no. Georgia law considers excess tax sale funds to be personal property; thus, these funds do not attach to the real estate. One exception is if the sales agreement contains language assigning the excess tax sale funds, then the person who sold the property loses their right to the excess funds.  Georgia Lien Services, Inc. v. Barrett, 272 Ga. App. 656 (2005).

Service by Publication in a Quiet Title or Tax Deed Barment

In both a tax deed barment and the subsequent quiet title, a critical part of the procedure is serving all parties with an interest in the subject property. This includes lien holders, heirs, and anyone else with a claim against the property.

Often in these situations, especially when the property is distressed or abandoned, parties connected with the property may be hard to find. The best example is the delinquent taxpayer. That party has not paid taxes for one or more years, and, many times, has abandoned possession. If the delinquent taxpayer is gone and hasn’t left a forwarding address, that party may be anywhere.

What must be done in these situations? A reasonable and diligent search must be conducted to find and serve each party that has an interest. In a barment, this requires personal service for parties residing in the county of the tax sale or certified mail for parties residing outside the county. In a quiet title, personal service is required.

What if personal service or certified mail is unsuccessful? For example, you get back the certified letter stating it is undeliverable. In those situations, you’re entitled to serve by publication. This usually means advertising notice of the barment or lawsuit in the official county newspaper for four consecutive weeks.

Sound simple . . . usually it is  straightforward, but there are times when things don’t work out as expected. In a recent case, Dukes v. Munoz et al., A18A0572 (decided June 15, 2018), a tax deed holder, unable to serve the delinquent taxpayer, hired an investigator. The investigator came back saying the delinquent taxpayer could not be found after reasonable search. Relying on the investigator’s testimony, the tax deed holder barred the taxpayer’s right of redemption and filed a successful quiet title action.

Happy tax deed holder and end of story . . . not so much. Turns out that the delinquent taxpayer was a Georgia state legislator, who found out about the barment and quiet title. The Georgia Court of Appeals ruled that because a Google search would have provided the address for the delinquent taxpayer, the tax deed holder had not exercised proper diligence in locating the delinquent taxpayer. Therefore, service by publication was improper and the barment and quiet title were voided; the tax deed holder was forced to incur the expense of the barment and quiet title.

The takeaway is that it’s not sufficient to use the last known address of party if that address appears invalid. The best approach, in our opinion, is to spend a little extra money to make sure parties with an interest are served and given a proper opportunity to object.

Holding a government employee responsible for injuries in Georgia: Ante litem notices

 

If you’re hurt by a police officer involved in a high-speed pursuit or county employee negligently driving a government truck, you must follow a complicated set of procedures to recover for your injuries. This is because the government and/or its employees are protected under the doctrine of sovereign immunity. Not closely following these procedures will cause you to quickly lose your claim on a technicality.

The blog deals with the very first requirement, which is sending an ante litem notice. An ante litem notice is a letter sent to the government entity that describes the details of the incident, explains why the government entity is responsible, and states the injuries sustained. In theory, an ante litem notice is required to give the government entity an opportunity to timely investigate the allegations. With few exceptions, failure to timely send an ante litem notice to the correct entity ends a claim for injuries.

Generally, claims vary by the type of government entity: for example, counties, cities/municipalities, state entities, or federal entities. Below is a quick overview of some basic aspects of ante litem notice requirements.

With respect to a county entity (for example, a county sheriff’s office), an ante litem notice must be presented within 12 months of the injury. Each county is set up a little differently, but generally notice should go to the county attorney and county board of commissioners. With respect to a city or municipality, an ante litem notice must be presented within six months of the injury. Notice is normally sent to the mayor and the city attorney. Ante litem notices to the State of Georgia must be presented within twelve months after the injury. The notice must be delivered to the Risk Management Division of the Department of Administrative Services as well as the government office that is the basis for the claim. Finally, claims against the Federal Government and/or its employees requires submitting a Form 95 administrative claim to the responsible federal agency within two years of the injury.

Even though in our 20 plus years of practicing law we’ve personally never known a government agency take any action in response to an ante litem notice, Georgia courts strictly apply these rules and they must be carefully followed.

Excess Tax Sale Funds in Georgia

Following up on a previous blog regarding whether redeeming parties get priority to claim excess tax sale funds (they don’t), this blog discusses the process of disbursing excess funds following a tax sale.

Under Georgia law, a tax commissioner holds excess funds generated by a tax sale in a fiduciary capacity. Alexander Investment Group v. Jarvis, 263 Ga. 489, 491-492 (1993). Georgia statutory law, in O.C.G.A. § 48-4-5, describes the process of disbursing excess tax sale funds.

If there are any excess funds after paying taxes, costs, and all expenses, within 30 days of the tax sale, written notice is sent by first-class U.S. Mail to the following parties: (1) the owner of the property (delinquent taxpayer), (2) security deed holder, and (3) parties with a properly recorded interest in the property.

The notice of excess tax funds shall describe the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess funds. The notice shall also state that the excess funds are available for distribution to the owner or interest holders in the order of priority in which their interests exist on the public record.

If excess funds are unclaimed or a dispute arises regarding who’s entitled to the excess funds, the tax commissioner or sheriff is entitled to deposit the funds into the registry of the superior court so that the superior court can disburse the funds.

If the excess funds remain unclaimed for five years, the funds may be retained. After this time, only a court order from an interpleader action filed in the county where the tax sale occurred, by the claimant for the funds, shall serve as justification for release of the funds.

 

Langley: Important New Personal Injury Case

Langley v. MP Spring Lake, LLC, A18A0193 (May 1, 2018), just issued by the Georgia Court of Appeals, may have a big impact on many future Georgia personal injury cases. Langley involves a residential landlord-tenant relationship in which a tenant sued her landlord for injuries more than a year after the injuries occurred. Normally, in Georgia, an injured party has two years to file a personal injury lawsuit. However, in this case, the landlord moved to dismiss the case because the lease provided only one year to sue the landlord.  This is the exact language in the lease:

Limitation on Actions. To the extent allowed by law, Resident also agrees and understands that any legal action against Management or Owner must be instituted within one year of the date any claim or cause of action arises and that any action filed after one year from such date shall be time barred as a matter of law.

Focusing on the word any, the Court of Appeals ruled that any legal action included not only breach of contract claims but also personal injury claims. Thus, the lease trumped Georgia’s statute of limitations. The Court reasoned that parties should be free to enter into contracts without interference from the courts.

At Gomez & Golomb, we practice personal injury and real estate litigation. Thus, for us, Langley cuts both ways. It’s bad for our personal injury clients, but good for our real estate and corporate clients. From now on, in personal injury cases, we will be looking even more closely at applicable contracts for language that may limit injury claims. For our real estate and corporate clients, we will be advising them that Langley opens the door to include terms in their contracts that limit liability.