Opinion
NO. 2018-CA-000606-MR
05-31-2019
PLEASANT UNIONS, LLC APPELLANT v. KENTUCKY TAX COMPANY, LLC and U.S. BANK AS CUSTODIAN FOR SASS MUNI V DTR APPELLEES
BRIEF FOR APPELLANT: Robert C. Bishop Brandenburg, Kentucky BRIEF FOR APPELLEE: Joshua M. Bilz David A. Schulenberg Cold Spring, Kentucky
NOT TO BE PUBLISHED APPEAL FROM TAYLOR CIRCUIT COURT
HONORABLE ALLAN RAY BERTRAM, JUDGE
ACTION NO. 16-CI-00337 OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, DIXON, AND GOODWINE, JUDGES. GOODWINE, JUDGE: Appellant, Pleasant Unions, LLC ("Pleasant Unions"), appeals a Taylor Circuit Court order granting summary judgment and an order of sale in favor of Kentucky Tax Company, LLC. ("KTC"). Following an unsuccessful CR 59.05 motion, Pleasant Unions filed this appeal arguing that KTC failed to provide it with the required statutory notices. After careful review of the record, in conjunction with all applicable legal authority, we affirm.
Kentucky Rules of Civil Procedure.
Pleasant Unions' notice of appeal designated two orders for appeal: (1) the trial court's March 27, 2018, order granting summary judgment and order of sale to KTC; and (2) the trial court's April 17, 2018, order denying Pleasant Unions' CR 59.05 motion to vacate. Only the first order is subject to appellate review. "Orders denying CR 59.05 relief 'are interlocutory, ie. non-final and non-appealable and cannot be made so by including the finality recitations.'" Hoffman v. Hoffman, 500 S.W.3d 234, 236 (Ky. App. 2016) (quoting Tax Ease Lien Invests. 1, LLC v. Brown, 340 S.W.3d 99, 103 (Ky. App. 2011)); see also Mingey v. Cline Leasing Serv., Inc., 707 S.W.2d 794, 796 (Ky. App. 1986) ("Unlike a ruling denying a motion for relief under CR 60.02, a ruling on a CR 59.05 motion is not a final or an appealable order. There is no authority in the rules to ask for reconsideration of a mere order which rules on a motion to reconsider a judgment.") (internal citation omitted).
BACKGROUND
Pleasant Unions is a limited liability company that owns real estate in Taylor County, Kentucky. In 2009, Pleasant Unions failed to pay real estate taxes. KTC, a company that purchases delinquent taxes, purchased the 2009 certificate of delinquency on August 25, 2010. KTC then filed a foreclosure complaint on November 4, 2016, against Pleasant Unions as the holder and owner of the 2009 certificate of delinquency associated with Pleasant Unions' real estate.
John Humphress organized Pleasant Unions on May 16, 2003, and is the sole shareholder of the corporation. R. at 93.
After KTC filed the complaint, the trial court appointed a warning order attorney to effectuate service of process on Pleasant Unions. On May 24, 2017, the warning order attorney filed its report, bringing Pleasant Unions properly before the trial court. After more than twenty days, KTC filed default and summary judgment motions. In support of its motions, KTC filed: (1) a memorandum of law with exhibits; (2) a certificate of delinquency; (3) an affidavit of status of account; (4) an itemization of litigation costs; (5) an attorney fee affidavit; (6) a military affidavit; and (7) a proposed judgment and order of sale.
Thereafter, the parties entered an agreed order allowing Pleasant Unions leave to file a late answer, which it did on December 14, 2017.
The memorandum of law submitted and signed by Joshua M. Bilz, counsel for KTC, contained numerous exhibits of notices sent to Pleasant Unions. "Exhibit A" contained the original certificate of delinquency. R. at 54. Said certificate notified Pleasant Unions that KTC held a lien against the property, having an effective date of September 29, 2010. Id. Counsel for KTC stated that it mailed an initial notice to Pleasant Unions' address on October 11, 2010, thereby satisfying the fifty-day timeframe mandated by KRS 134.490(1). KTC further stated:
The notice was addressed to Pleasant Unions' address of record with the Taylor County Property Valuation Administrator: 116 Kensington Way, Campbellsville, Kentucky 42718.
Kentucky Revised Statutes.
Although the version of KRS 134.490 in effect at the time of purchase did not require annual notices,[] KTC did in fact send additional notices to the taxpayer. On May 12, 2011, KTC sent a second notice to the same address as the initial notice.[] In response to a request for information received from the taxpayer, KTC sent a third notice and fourth notice to the taxpayer on April 3, 2012,[] and April 9, 2012,[] respectively. KTC sent a fifth notice to the taxpayer on December 15, 2015.[]
On March 24, 2016, KTC sent a sixth and final notice to the taxpayer at the same address.[] The final notice was sent pursuant to KRS 134.490(2) requiring the passage of one year from the date of purchase.R. at 54-55 (internal footnotes omitted). All notices were attached as separate exhibits in the record.
Pleasant Unions filed a response stating that summary judgment was premature because KTC did not meet the notice requirements of KRS 134.490, which requires the third-party purchaser to send notice to the property owner "by first-class mail with proof of mailing[.]" Specifically, Pleasant Unions argued that providing copies of the notices was insufficient proof of mailing. Rather, Pleasant Unions maintained, the letter must be "sworn to or certified in some manner." R. at 146. Pleasant Unions acknowledged receiving two letters from KTC, dated May 12, 2011, and April 3, 2012. However, Pleasant Unions stated it did not receive the other notices and argued KTC failed to follow the statutory notice requirements.
KTC filed a reply with an accompanying affidavit by Jay McShurley. He affirmed he was "counsel of record for [KTC] at all relevant times between October 11, 2010 and March 24, 2016." R. at 168. He further acknowledged that for each notice, "...[he] caused a letter to be sent by first class mail with proof of mailing to Pleasant Unions, LLC, at 116 Kensington Way, Campbellsville, Kentucky 42718, a true and correct copy of which is attached hereto as Exhibit A." Id. The affidavit identified and attached the same five exhibits previously provided of record by KTC.
On March 27, 2018, the Taylor Circuit Court entered an order granting KTC's motion for summary judgment. That same day, it entered a judgment and order of sale with findings of fact and conclusions of law in favor of KTC.
Pleasant Unions filed a timely motion to vacate pursuant to CR 59.05, stating that KTC "...failed to provide any sworn testimony or certified copies of proof of mailing." R. at 214. As to the affidavit provided by McShurley, Pleasant Unions highlighted McShurley only "caused the letters to be mailed but had not explained who had actually mailed them." Id. Pleasant Unions further objected that there was no notice from the United States Postal Service or an affidavit from McShurley's office as to who mailed the letters. Id. KTC opposed the motion to vacate on grounds that the same argument could not be raised again and that the trial court previously ruled correctly on the notice issue. The trial court overruled Pleasant Unions' motion to vacate on April 17, 2018. This appeal followed.
STANDARD OF REVIEW
Under Kentucky law, a trial court shall grant summary judgment when the entirety of the record shows "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56.03; see Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky. 1991). The facts are undisputed. At issue is whether the trial court correctly applied the law to said facts. Thus, our review is de novo. Grange Mut. Ins. v. Trude, 151 S.W.3d 803, 810 (Ky. 2004).
ANALYSIS
We must address the question of what constitutes proper notice to a property holder before a summary judgment and order of sale can be entered. The notice statute in effect at the time KTC purchased the delinquent tax certificate provides:
(1) Within fifty (50) days after the delivery of a certificate of delinquency by the clerk to a third-party purchaser, the third-party purchaser shall send to the delinquent taxpayer by first-class mail with proof of mailing, a notice informing the delinquent taxpayer that the certificate of delinquency has been purchased by the third-party purchaser. The notice shall include the information required by subsection (3) of this section.KRS 134.490 (Effective dates April 7, 2010 - April 22, 2012). KTC mailed a notice on October 11, 2010, fifty days after purchasing the 2009 ad valorem taxes, satisfying KRS 134.490(1). KTC then mailed a letter on March 24, 2016, which is long after the one-year tolling period provided in KRS 134.490(2). Seemingly, both notice provisions were accomplished. However, once Pleasant Unions asserted that the statutory language "proof of mailing" required an affidavit or sworn proof, KTC provided such an affidavit with accompanying proof. KRS 134.490.
(2) Anytime after the expiration of the one (1) year tolling period established by KRS 134.546, the third-party purchaser may institute an action to collect the amount due on a certificate of delinquency. At least forty-five (45) days before instituting a legal action, the third-party purchaser shall send to the taxpayer by first-class mail with proof of mailing, a notice informing the taxpayer that enforcement action will be taken. This notice shall also include the information required by subsection (3) of this section . . . .
KRS 134.490 has since been amended to include annual notices sent to the delinquent taxpayer.
KTC stated it mailed other notices, two of which Pleasant Union acknowledges receipt. There is no statutory requirement to prove receipt of the notice.
Pleasant Unions relies upon an unpublished opinion this Court rendered, involving Pleasant Unions' sole shareholder. Humphress v. US Bank, 2013-CA-001708-MR, 2015 WL 3429398 (Ky. App. May 29, 2015). In that case, we reversed and remanded, requiring the third-party tax purchaser to "produce its records establishing that it sent Humphress the requisite notices mandated by KRS 134.490." Id. at *3. The affidavit provided was "unaccompanied by any sworn or certified copies of the purported notices it references" in accordance with CR 56.05. Id.
Pleasant Unions' reliance upon Humphress is misplaced. The facts are distinguishable. In Humphress, there were no copies of the notices provided in the record. Furthermore, there was no affidavit affirming that attached notices were mailed. In fact, the only indication that the notices may have been sent was a fee affidavit by the pre-litigation attorney, requesting fees for a "50-day notice letter" and six "demand letters." Id. Here, McShurley provided a sworn statement that he caused the attached notices to be mailed by first class mail. Both the affidavit affirming the mailings took place and the individual notices were contained in the record.
These facts must be applied to the statutory requirements. We must give careful attention to the language the General Assembly utilized by requiring "proof of mailing." KRS 134.490. There is no requirement to use registered mail, certified mail, or obtain a certificate of mailing issued by the United States Postal Service. "Proof of mailing" is not a term of art specific to the shipping industry.
"A Certificate of Mailing provides evidence that you sent an item when you say you did. This official record only shows the date your mail was accepted. It does not provide record of delivery, proof of mailing, or insure items against loss." Certificate of Mailing-The Basics, USPS, (October 29, 2018), https://faq.usps.com/s/article/Certificate-of-Mailing-The-Basics. --------
Therefore, we review each word for its plain meaning. Black's Law Dictionary defines proof as "an attested document that constitutes legal evidence." Proof, Black's Law Dictionary (10th ed. 2014). Mail is defined as "one or more items that have been properly addressed, stamped with postage, and deposited for delivery in the postal system." Mail, Black's Law Dictionary (10th ed. 2014). Applying these definitions, McShurley's affidavit stating he caused the notices to be mailed by first class mail, coupled with the true and correct copies of notices, provides proof of mailing.
"As with any case involving statutory interpretation, our duty is to ascertain and give effect to the intent of the General Assembly. We are not at liberty to add or subtract from the legislative enactment nor discover meaning not reasonably ascertainable from the language used." Department of Corrections v. Courier-Journal and Louisville Times, 914 S.W.2d 349, 352 (Ky. App. 1996) (internal citations omitted). The trial court accepted a sworn statement, in the form of an affidavit, attesting that the attached notices were mailed from the attorney representing KTC. It is not our duty to require a heightened burden that the statute does not impose. The statutory language does not require each staff person who may have encountered the notice sign additional affidavits. Thus, we conclude that the attested notices constitute proof of mailing in satisfaction of KRS 134.490. Therefore, we affirm the judgement and order of sale of the Taylor Circuit Court.
Additionally, Pleasant Unions argues that attorney's fees and costs are improper because they did not begin accruing until notice was given to the taxpayer. Based on our finding regarding the notices, this argument is moot. Finally, Pleasant Unions argues that KTC attorney's fees are questionable, insufficiently documented, and the trial court's award of same was an abuse of discretion. Pleasant Unions fails to articulate any specific error or explain how the trial court abused its discretion. See CR 76.12(c)(v). Consequently, we refuse to consider this argument.
CONCLUSION
Based on the foregoing analysis, we affirm Taylor Circuit Court's judgment and order of sale.
ALL CONCUR. BRIEF FOR APPELLANT: Robert C. Bishop
Brandenburg, Kentucky BRIEF FOR APPELLEE: Joshua M. Bilz
David A. Schulenberg
Cold Spring, Kentucky