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Breakey v. Sequatchie County

Court of Appeals of Tennessee, Nashville

June 12, 2017

MICHAEL G. BREAKEY, ET AL.
v.
SEQUATCHIE COUNTY, TENNESSEE, ET AL.

          Assigned on Briefs April 3, 2017

         Appeal from the Chancery Court for Sequatchie County No. 2414 Jeffrey F. Stewart, Judge.

         Appellees /taxpayers filed suit against Sequatchie County, seeking to set aside the tax sale of their property. As grounds, Appellees alleged that they were not afforded due process and were never notified of the delinquent tax action. The trial court ruled in favor of the taxpayers and set aside the tax sale due to lack of notice sufficient to provide due process. Sequatchie County appealed. Discerning no error, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Affirmed and Remanded.

          Howard L. Upchurch, Pikeville, Tennessee, for the appellant, Sequatchie County, Tennessee.

          Alexander K. McVeagh and Logan C. Threadgill, Chattanooga, Tennessee, for the appellees Michael G. Breakey and Angela L. Breakey.

          M. Keith Davis, Dunlap, Tennessee, for the appellees, Rayburn D. Layne and Rhonda L. Layne.

          Kenny Armstrong, J., delivered the opinion of the court, in which Charles D. Susano, Jr. and W. Neal McBrayer, JJ., joined.

          OPINION

          KENNY ARMSTRONG, JUDGE

         I. Background

         In 2003, Michael G. Breakey and Angela L. Breakey (together "Appellees") purchased approximately 10.8 acres of unimproved land in Sequatchie County, Tennessee ("Appellant"). As an officer of the United States Air Force ("USAF"), Mr. Breakey was stationed in various locations, both within the United States and abroad. As the Breakeys relocated to various locations, they would notify the Sequatchie County Trustee's Office of their new address. The Appellees timely paid their taxes from 2004 through 2007. In August 2007, when Mr. Breakey retired from the USAF, the Breakeys moved from Shalimar, Florida to Chattanooga, Tennessee.

         When Sequatchie County mailed its tax notices in October 2007, the mail was forwarded to the Breakeys in Chattanooga. Mr. Breakey testified that he promptly paid his 2007 property taxes and that he enclosed a change of address with his tax payment. Although Sequatchie County disputed that Mr. Breakey included a change of address notification with his 2007 payment, the County sent a receipt for the payment to Mr. Breakey at his Chattanooga address. Additionally, the County trustee, Mr. Larry Lockhart (Trustee) testified that his office kept a copy of the Breakeys' check, which listed their Chattanooga address, in the County's files for two years after the check was received. The evidence showed that, from 2008 through 2012, Sequatchie County continued to mail notices of the tax bill to the Breakeys at their former address in Shalimar, Florida. The Breakeys never received these notices. Instead, the notices were returned to the Sequatchie County trustee's office marked "Return to Sender - Not Deliverable as Addressed- Unable to Forward." Because the Breakeys had not paid the assessed taxes for the years 2008, 2009, and 2010, Sequatchie County initiated delinquent tax proceedings.

         The Sequatchie County trustee referred the delinquent taxes to the Clerk & Master to enforce the tax lien and to collect the unpaid taxes in accordance with standard procedures. The Clerk & Master filed suit on behalf of Sequatchie County and issued process through the Secretary of State to the Breakeys' Shalimar, Florida address. Each notice and process was returned by the Secretary of State as "not deliverable as addressed" or "attempted not known." After process was returned, the Clerk & Master obtained orders of publication and published notice for four consecutive weeks in the Dunlap Tribune, which is the local newspaper in Sequatchie County. Default judgment was entered against Mr. and Mrs. Breakey in the delinquent tax actions, and a tax sale was held on January 24, 2013. The Clerk and Master sent a letter via registered mail to the Breakeys at the Shalimar, Florida address, notifying them of the sale scheduled for January 24, 2013. This letter was also returned as undeliverable.

         In February 2012, Mr. Breakey found a website, which was maintained by the State of Tennessee; the website permitted users to pay 2011 property taxes by credit card. Mr. Breakey testified that once he made his payment, the webpage receipt showed zero dollars due and owing (the receipt was specifically for the tax year 2011). Unbeknownst to Mr. Breakey, there were delinquent tax actions pending for tax years 2008 and 2009 at the time he paid his 2011 taxes. It is unclear whether the website would allow Mr. Breakey to access taxes that were due and owing from previous years. Sequatchie County provided the tax payment report received from the statewide website. The report contains all of the payments made for property taxes in Sequatchie County from January 1, 2012 through March 1, 2012, including Mr. Breakey's payment of property taxes for 2011. The report does not contain ...


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