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Knox County v. Delinquent Taxpayers

Court of Appeals of Tennessee, Knoxville

June 13, 2017

KNOX COUNTY, TENNESSEE ET AL.
v.
DELINQUENT TAXPAYERS ET AL.

          Session Date: January 26, 2017

         Appeal from the Chancery Court for Knox County No. 187088-1 John F. Weaver, Chancellor

         This case involves an attempt by Omer G. Kennedy and Angela Helms (landowners) to exercise their right of redemption with respect to their property sold at a delinquent tax sale. Jon Johnson (tax sale purchaser) bought the property on January 13, 2015. Within the one-year redemption period, landowners paid $37, 892.81, the amount they thought was required to redeem the property. Tax sale purchaser filed a motion for additional funds, consisting of payments he had made for insurance on the property and interest, under Tenn. Code Ann. § 67-5-2701 (Supp. 2016). The trial court granted the motion in an order entered January 11, 2016. The order gave landowners 30 days to pay the additional amount. Because notice of the order was not sent to their last known address, landowners did not receive the notice until after the 30 days had passed. They paid the additional amount of $5, 869.43 on February 18, 2016. Tax sale purchaser moved the court to deny the redemption, arguing that the payment was not timely. The trial court denied the motion, holding that its order of January 11, 2016, was void because it was not effectively entered under Tenn. R. Civ. P. 58. and not effectively served under Tenn. R. Civ. P. 5. Alternatively, the trial court ruled that landowners were entitled to relief for excusable neglect under Tenn. R. Civ. P. 60. Tax sale purchaser appeals. We affirm.

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

          Sheila B. Stevenson, Nashville, Tennessee, for appellant, Jon Johnson.

          Albert J. Harb, Knoxville, Tennessee, for appellees, Omer G. Kennedy and Angela Helms.

          Charles D. Susano, Jr., J., delivered the opinion of the court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

          OPINION

          CHARLES D. SUSANO, JR., JUDGE

         I.

         The property is a three-acre tract located at 2720 Thorngrove Pike, in an industrial area of East Knoxville. Landowners use the property to run their business, Metro Trailer Repair. Their daughter and business manager, Melissa Kennedy, testified that, although there is a mailbox at the property, they use a P.O. Box exclusively for their business operations, and had done so for at least 21 years. She said that the mailbox at 2720 Thorngrove Pike had been frequently vandalized and that the only mail that arrived there consisted of advertisements and other junk mail.

         This case was initiated on March 10, 2014, when Knox County filed a complaint for collection of delinquent property taxes. The property was among those listed as subject to a tax lien for delinquent payment of taxes. Attached to the complaint was an exhibit, which contained, among other things, a description of the property. There are two mailing addresses of record listed: P.O. Box 6702 in Knoxville, and 3835 Admiralty Lane, also in Knoxville. The record reflects that Knox County sent tax notices regarding the property to P.O. Box 6702.

         The tax sale took place on January 13, 2015. The trial court entered an order on February 13, 2015 confirming the sale and vesting the property in the tax sale purchaser, subject to the one-year right of redemption. On November 2, 2015, landowners filed a motion to redeem the property. They paid into court the purchase price of the tax sale plus interest, an amount totaling $37, 892.81. Tax sale purchaser filed a motion for additional funds, pursuant to Tenn. Code Ann. § 67-5-2701, which at that time had been recently amended[1] to provide, in pertinent part, as follows:

(d) The purchaser may within thirty (30) days after the mailing of the notice of redemption, file a response seeking additional funds to be paid by the proposed redeemer to compensate the purchaser for amounts expended by the purchaser for the purposes set out in subsection (e). . . . If no response is timely filed, the court shall determine whether the redemption has been properly made, and if so, shall cause an order to be entered requiring the proposed redeemer to pay additional interest at the rate set forth in subsection (b), accruing from the date the motion to redeem was filed until the date of such payment.
(e) Additional sums to be paid by the proposed redeemer at the demand of the purchaser, shall include the following:
***
(2) Reasonable payments made by the purchaser for insurance on the parcel and any ...

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