In Andre Dubus III's chilling book, House of Sand and Fog, Col. Massoud Behrani buys a house at a San Mateo County tax foreclosure sale. When the deputy sheriffs come to tell owner Kathy Nicolo the house is being auctioned and that she surely had ample notice of this fact, she vaguely recalls all the unopened "county tax mail" she'd thrown away.
She hires a Legal Aid lawyer to challenge the sale. It all ends very, very badly.
Chief Justice John Roberts to the rescue! In a 5-3 decision authored by Roberts, the U.S. Supreme Court decided in April that, if a certified letter notice of a tax sale is returned unclaimed, a state must do more before it can sell the property. Obviously, this does not really apply to the fictional Kathy Nicolo. But it did help Gary Jones of Arkansas.
Jones bought a house in Little Rock, Ark. in 1967. He and his wife lived there until they separated in 1993.
Jones moved out. His wife continued to live there. Jones continued to pay the mortgage on the property until 1997, when it was paid off.
But the property taxes went unpaid, and the property was certified as delinquent. The state Commissioner of Lands sent notice of the delinquency and right of redemption to Jones at the address of the house he no longer lived in. The letter also advised him that, unless he redeemed the property, it would be sold at public auction. No one was home to sign for the letter, and no one came to the post office to retrieve it. So it went back to the commissioner as "unclaimed." Common enough scenario?
A few weeks before the public sale, the commissioner published notice of the public sale in the local newspaper. No bids were submitted, which allowed for a private sale. One Linda Flowers submitted a bid on the house. The commissioner sent another certified letter to the same address as the first one, advising Jones the house would be sold unless he paid the taxes. It was also returned "unclaimed."
Flowers bought the house. Finally, when served with an unlawful-detainer notice, Jones's daughter, who still lived in the house, contacted Jones and told him about the tax sale.
Jones filed suit against Flowers and the commissioner. He argued that the notice given him was inadequate and that his property was unconstitutionally taken without due process. The 14th amendment to the U.S. Constitution, which applies to the states, holds, "No person shall be ... deprived of life, liberty or property without due process of law."
In 1950, the U.S. Supreme Court held that, before a state can take property and sell it for unclaimed taxes, the state must provide the owner "notice and the opportunity for hearing appropriate to the nature of the case." This doesn't mean actual notice. That is established law. So what constitutes adequate notice? That was the issue before the court in the Jones case.
The commissioner argued that the two certified letters were good enough to satisfy Jones' due process rights. By Arkansas law, a property owner is obligated to keep his address updated with the state taxing authority, and the notice was sent to the address that Jones had provided.
In addition, once Jones failed to receive a property tax bill and pay property taxes, he should have been on inquiry notice that his property was subject to government taking. Finally, Jones should have made sure those living in the house would let him know of any problem that would put the house in jeopardy.
The high court majority rejected all three arguments. Roberts wrote, "We do not think that a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed." The majority held that "when mailed notice of a tax sale is returned unclaimed, the state must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so."
The court went on to find there were additional reasonable steps available to the state, such as notice by regular mail, posting notice on the door of the property and sending the letter by regular mail to "occupant."
Justice Clarence Thomas dissented, as usual, joined by justices Antonin Scalia and Anthony Kennedy. It is Thomas' position that the certified letters to Jones were constitutionally sufficient, particularly given the Arkansas requirement that a property owner must keep his address updated and the letter went to the address Jones himself had provided. He reminded the majority that unclaimed mail does not necessarily mean the address is incorrect. It can also mean the addressee refuses or fails to pick it up.
Thomas found the court's additional proposed notice methods of regular mail, posting and sending a letter to occupant constitutionally unnecessary, burdensome, impractical and unreliable.
"The meaning of the Constitution should not turn on the antics of tax evaders and scofflaws," he wrote. "Nor is the self-created conundrum in which petitioner finds himself a legitimate ground for imposing additional constitutional obligations on the state."
Marianna Brown Bettman, a former Ohio appeals court judge, teaches at the University of Cincinnati College of Law.
