Wednesday, September 16, 2009

Tax Sales: What Happens to the Excess Proceeds?

In the odd world of tax sales, clients (and lawyers) continue to pose the question to us “What happens to the excess in a tax sale?”

If $5,000 back taxes are owed on property and the property sells at tax sale for $5,000, there are no excess proceeds. In that case, the County gets it $5,000 in back taxes. The purchaser gets a “tax deed,” and they both go off into redemption land.
However, what happens if $5,000 in back taxes goes at tax sale action for $85,000 dollars? [The property is bid up to $85,000.] In that case, the County pays itself $5,000 and gives the purchaser a “tax deed.” What happens to the additional $80,000 [the excess proceeds] that the County received at the sale?

Many years ago, the outcome seemed different from county to county in Georgia. After the General Assembly’s 2006 revision of OCGA § 48-4-5, the payment of the excess proceeds is more defined.

Under the 2006 statute, the County gives Notice (that it is holding $80,000 in excess proceeds) to the owner and all secured lenders (and others) on the property. The excess is then made available to the “owner or owners as their interests appear in the order of priority.” If a dispute erupts concerning the payment of excess, the County interpleads the excess into Court and allows the Superior Court to sort the payment out.

Here is the controlling statute.

OCGA § 48-4-5. Payment Of Excess.
(a) If there are any excess funds after paying taxes, costs, and all expenses of a sale made by the tax commissioner, tax collector, or sheriff, or other officer holding excess funds, the officer selling the property shall give written notice of such 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. The notice 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.


(b) The tax commissioner, tax collector, sheriff, or other officer may file, when deemed necessary, an interpleader action in superior court for the payment of the amount of such excess funds. Such excess funds shall be 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. The cost of litigation such an interpleader action, including reasonable attorney´s fees, shall be paid from the excess funds upon order of the court.

(c) After five years have elapsed from the tax sale date, the tax commissioner, tax collector, sheriff, or other officer holding excess funds shall pay over to the department any excess unclaimed funds and for which no action or proceeding is pending in a claim for payment. Once excess funds are placed in the possession of the department, 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.
History. Amended by 2006 Ga. Laws 759, §5, eff. 7/1/2006.
Amended by 2002 Ga. Laws 993, §3, eff. 5/21/2002.

Hugh Wood
Atlanta, GA

& & &


655 S.E.2d 586 (Ga. 2008)
282 Ga. 903
DRST HOLDINGS, LTD.
v.
AGIO CORPORATION.
No. S07A1648.
Supreme Court of Georgia.
January 8, 2008
Page 587
C. Terry Blanton , Amelia Terry Phillips , Perrie, Bone & Burr, LLC, Atlanta, for appellant.
Adam C. Caskey , Bradley A. Hutchins , Christopher Michael Porterfield, Proctor Hutchins, Atlanta, for appellee.
CARLEY , Justice.
In May of 2004, the property located at 1096 Hillcrest Drive in DeKalb County was sold to Appellee Agio Corporation at a tax sale conducted by the sheriff of that county. The sale was held for the purpose of satisfying some, but not all, of the tax fi. fas. that had been issued against the property for unpaid state and county taxes. However, the proceeds from this sale were sufficient to satisfy all of the outstanding fi. fas. held by DeKalb County.
In December of 2004, another tax sale of the property was held in connection with the satisfaction of the remaining fi. fas. held by DeKalb County. The purchaser at this sale was Lihua Xiao. Mr. Xiao subsequently transferred his interest in the property to Appellant [282 Ga. 904] DRST Holdings, Ltd. Thereafter, except as against each other, Appellee and Appellant completed statutory proceedings to bar the right to redeem the property.
Appellee then initiated this quiet title action, asserting that the deed from Mr. Xiao to Appellant was a cloud on its title. Appellant answered and counterclaimed, contending that it held good title pursuant to the conveyance from Mr. Xiao. In accordance with OCGA § 23-3-63 , the case was submitted to a special master who, upon concluding that the sale of the property to Mr. Xiao was void, recommended issuance of a decree which vested fee simple title in Appellee. The trial court approved and adopted the special master's report, and entered a decree vesting title in Appellee. Appellant appeals from that order.
The question presented for resolution is whether, after the initial tax sale conducted in May of 2004 for the purpose of satisfying only some of the fi. fas., it was permissible for DeKalb County to attempt to sell the property yet again in December of 2004 in ostensible satisfaction of the additional fi. fas. In National Tax Funding v. Harpagon Co., 277 Ga. 41, 44(3), 586 S.E.2d 235 (2003) , we held that,
following a tax sale, the holder of a competing tax lien has two options-it may either file a claim to collect against any proceeds from the sale, or it may assert its rights following the tax sale via a statutory claim for redemption, in which case it obtains a first priority lien on the property, which it may then enforce by levy and sale. With these two options, the legislature has ensured that holders of competing tax liens can take adequate steps to protect their interest in property sold at a tax sale to another lienholder. What a competing tax lienholder may not do after a tax sale, however, is decline to pursue either of these statutory options....
Prior to the initial sale in May of 2004, DeKalb County was not a competing tax lienholder, since it held all of the fi. fas. However, once DeKalb County chose to sell the property to Appellee for the purpose of satisfying only some of the fi. fas. that it held, it did become a competing tax lienholder as to the remaining unsatisfied fi. fas.
Accordingly, at that point, the two options recognized by Harpagon Co. were available to DeKalb County. Those options do not include the right to conduct another sale for the purpose of satisfying the additional fi. fas. DeKalb County could have redeemed the property from Appellee and then conducted a tax sale in an attempt to satisfy all of its tax fi. fas. In the alternative,
Page 588
OCGA § 48-5-28 (a) establishes that a tax lien has priority over virtually all other claims, so that, after the [282 Ga. 905] first sale, DeKalb County could have used the excess proceeds to satisfy the remaining fi. fas. that it held. See OCGA § 48-4-5 (a).
Appellant correctly urges that there is a presumption that the sheriff properly conducted the second sale in December of 2004. See Livingston v. Hudson, 85 Ga. 835, 838, 12 S.E. 17 (1890) . However, the decisive factor is not the manner in which the sheriff conducted the sale, but rather the underlying validity of the subsequent sale itself. A tax sale is subject to being set aside whenever it is "infected with ... irregularity, or error to the injury of either party...." OCGA § 9-13-172 . Because, under Harpagon Co., conducting the December 2004 sale was not an authorized option for DeKalb County as a competing lienholder, it was an irregularity or error which injured Appellee by creating a cloud on its title in the form of the tax deed to Mr. Xiao.
As Appellant also correctly notes, at the time of the second tax sale, the right of redemption had not yet been foreclosed and, therefore, Appellee held only a defeasible title which was subject to the remaining unsatisfied fi. fas. held by DeKalb County. The right of redemption had not yet been foreclosed in December of 2004, because Appellee could not exercise its foreclosure option until May of 2005. OCGA § 48-4-40 (1). However, the fact that the equity of redemption had not yet been foreclosed is entirely consistent with the recognition in Harpagon Co. that one of the only two options available to the holder of a competing tax lien is assertion of the right to redeem the property from the purchaser at a prior tax sale. That redemption option would be only possible so long as the right to redeem had not yet been foreclosed.
Thus, at the initial tax sale in May of 2004, Appellee acquired a defeasible fee interest in the property, which "title was subject to encumbrance for at least one year after purchase due to the other interested parties' statutory rights of redemption." National Tax Funding v. Harpagon Co., supra at 43(1), 586 S.E.2d 235. However, Appellee's fee interest was not subject to defeasance by virtue of DeKalb County's holding of a second, unauthorized sale of the property before that year had expired. After the May 2004 tax sale, DeKalb County could not "decline to pursue either of [its] statutory options...." National Tax Funding v. Harpagon Co., supra at 44(3), 586 S.E.2d 235.
Were we to conclude otherwise, we would permit tax liens, once they attach to a particular piece of property, to survive in perpetuity until the tax obligations are paid in full. If that were true, and if the taxes remained unpaid, the same piece of property could be sold at numerous sheriff's sales by a long succession of tax lienholders, and none of the purchasers could obtain good title unless, in addition to the tax sale [282 Ga. 906] purchase price, the purchaser also paid off all existing tax liens (including liens for income taxes, sales taxes, municipal taxes, excise taxes, etc.).... While our government obviously has a strong interest in seeing that tax liens are paid, it also has a compelling interest in ensuring that there is a mechanism by which tax deeds may mature into unencumbered and marketable fee simple titles.... [U]nder our statutory scheme, where property is encumbered by competing tax liens and one lienholder levies upon the property and obtains a tax deed to it, holders of competing tax liens may either seek to collect from the tax sale proceeds or may assert their rights to redeem the property from the tax sale purchaser.
National Tax Funding v. Harpagon Co., supra at 45(3), 586 S.E.2d 235.
After the unauthorized tax sale, Mr. Xiao and, subsequently, Appellant stood in the same position as to Appellee's defeasible title that was occupied by their predecessor in interest, DeKalb County. Mr. Xiao, and then Appellant, became holders of competing lienholders as to the property. Where
the tax sale purchaser gives valid notice under the barment statutes and the competing tax lienholder allows the redemption period to mature and pass without taking any action, its lien is divested from the property and no longer encumbers the tax sale purchaser's title interest.
Page 589
National Tax Funding v. Harpagon, supra at 45(3), 586 S.E.2d 235. Here, Appellant did not take any action to redeem the property after Appellee initiated proceedings to foreclose the right of redemption. Instead, Appellant relied on the tax deed acquired at the void sale held in December of 2004. Under these circumstances, Appellant may be entitled to a refund of the purchase price. However, the only issue in this case is that of title and, as to that issue, the trial court did not err in adopting the special master's report, and correctly entered a decree vesting fee simple title in Appellee.
Judgment affirmed.
All the Justices concur.


638 S.E.2d 779 (Ga.App. 2006)
282 Ga.App. 392
WESTER
v.
UNITED CAPITAL FINANCIAL OF ATLANTA, L.L.C.
No. A06A2413.
Court of Appeals of Georgia.
November 2, 2006
Reconsideration Denied Nov. 15, 2006.
Certiorari Denied Feb. 26, 2007.
Thomas C. Sanders, for appellant.
Page 780
Mason B. Rountree , William T. Cable, Jr. , Willie C. Carouthers, Vinson, Talley, Richardson & Cable, for appellee.
BLACKBURN , Presiding Judge.
In this interpleader action to distribute excess funds ($73,275.15) received by the county from a tax sale of certain real property, Thomas A. Wester as a judgment lienholder on the property appeals summary judgment granted to a fellow lienholder (United Capital Financial of Atlanta, LLC), who for $97,200 had redeemed the property from the tax sale. Wester argues that because his judgment lien on the property was prior in time to the judgment lien of United Capital, he should be entitled to the excess funds before any are distributed to United Capital. We hold that as the redeemer of the property, United Capital is entitled to the excess funds to the extent of its redemption payment before any other entity or interest. Accordingly, we affirm summary judgment in favor of United Capital.
Summary judgment is only proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.[1] A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp. [2]
The undisputed facts show that in February 2000 in Paulding County Superior Court, Wester obtained a judgment against a Paulding County real property owner and had a writ of fi. fa. in the amount of $59,508.95 entered on the county general execution docket. Another creditor of the property owner obtained a judgment in May 2000 (a subsequent term of court) and had a writ of fi. fa. in the amount of $5,135.53 entered on the county general execution docket at that time. This later judgment and fi. fa. were subsequently assigned to United Capital.
To collect past due taxes, the Paulding County tax commissioner sold the real property at a tax sale in February 2005 for $81,000 to a tax sale purchaser. United Capital paid $97,200 to the tax sale purchaser to redeem the property, resulting in the tax sale purchaser conveying the property back to the property owner in a properly recorded quitclaim deed. After satisfying the tax debt, the tax commissioner had $73,275.15 left over from the tax sale, which the tax commissioner interpleaded into Paulding County Superior Court, [282 Ga.App. 393] naming the property owner, Wester, and United Capital as defendants. Wester and United Capital both moved for summary judgment.[3] Denying Wester's motion, the court granted United Capital summary judgment and ordered that the funds in the court registry be paid to United Capital, giving rise to this appeal.
OCGA § 48-4-5 governs the distribution of excess funds from a tax sale. Subsection (b) provides that the tax commissioner may file an interpleader action in superior court for the payment of the amount of such excess funds and instructs that "[s]uch excess funds shall be 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." If the only interests of Wester and United Capital were as judgment lienholders, then the timing of the obtaining and recording of those liens would be dispositive in determining their relative rights to the funds. Cf. NationsBank, N.A. v. Gibbons [4] ("the relative position of judgment liens is determined by seniority; an older Georgia judgment has priority over a newer judgment" ).
But United Capital's primary interest in this matter is its status as the redeemer of the property. OCGA § 48-4-43 provides:
When property has been redeemed, the effect of the redemption shall be to put the
Page 781
title conveyed by the tax sale back into the defendant in fi. fa., subject to all liens existing at the time of the tax sale. If the redemption has been made by any creditor of the defendant or by any person having any interest in the property, the amount expended by the creditor or person interested shall constitute a first lien on the property and, if the quitclaim deed provided for in Code Section 48-4-44 is recorded as required by law, shall be repaid prior to any other claims upon the property.
Thus, in its status as redeemer of the property, United Capital has a first lien on the property in the amount of the $97,200 it paid to redeem the property (which lien is in addition to its more subordinate judgment lien for $5,135.53), which first lien "shall be repaid prior to any other claims upon the property." Id. As stated by the Supreme Court of Georgia in Nat. Tax Funding v. Harpagon Co., [5] "[i]f a creditor of the original taxpayer redeems the property, the amount paid by the [282 Ga.App. 394] redeeming creditor becomes a first lien on the property. The redeeming creditor then has first priority to repayment-a 'super-lien' for the redemption price." Wester's assertion that United Capital is only entitled to priority on the real property per se and not on the excess funds is without foundation. United Capital's right to repayment, whether from the excess tax sale funds or from any foreclosure it may pursue on the property, takes priority over any other claims on the property.
Accordingly, the trial court properly held that United Capital's interest as the redeeming creditor took priority over Wester's and the property owner's interests and that therefore United Capital should be granted summary judgment. Because the amount of United Capital's interest exceeded the amount held in the registry of the court, the trial court correctly ordered that the entire amount be paid to United Capital.
Judgment affirmed.
MIKELL and ADAMS , JJ., concur.
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Notes:
[1] OCGA § 9-11-56(c) .
[2] Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997) .
[3] Due to a bankruptcy consent order with the property owner arising out of the property owner's bankruptcy, Wester asked that the first $21,200 be paid to the property owner as an exempt asset and that Wester receive the remainder.
[4] NationsBank, N.A. v. Gibbons, 226 Ga.App. 610, 611, 487 S.E.2d 417 (1997) .
[5] Nat. Tax Funding v. Harpagon Co., 277 Ga. 41, 42(1), 586 S.E.2d 235 (2003) .

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620 S.E.2d 447 (Ga.App. 2005)
275 Ga.App. 196
SCOTT
v.
VESTA HOLDINGS I, LLC et al.
Vesta Holdings I, LLC
v.
Scott.
Nos. A05A1226, A05A1227.
Court of Appeals of Georgia
August 23, 2005
Page 448
William J. Linkous, IIII, Chief Asst. County Atty., Atlanta, Sam L. Brannen, Sr. Asst. County Atty., Statesboro, for appellant.
Proctor, Chambers & Hutchins, Robert J. Proctor, Bradley A. Hutchins, Adam C. Caseky, Atlanta, for appellees.
Barnes, Judge.
In Appeal No. A05A1226, Tom Scott, the Tax Commissioner of DeKalb County ("the Commissioner"), appeals the trial court's judgment granting the money rule petition of Vesta Holdings I, LLC [275 Ga.App. 197] ("Vesta Holdings"). [1] The Commissioner contends the trial court erred because Georgia law requires that tax fieri facias, or fi. fa. [2] ("tax executions"), be satisfied by levy and sale and requires tax commissioners to hold excess proceeds from the sales as a fiduciary of the property owners of record at the time of the sale. He also contends that a money rule is not a proper remedy for collection of tax executions from him. We disagree and affirm the grant of the money rule to Vesta Holdings.
In its cross-appeal, Appeal No. A05A1227, Vesta Holdings contends the trial court erred by denying its petition for the 20 percent interest authorized by OCGA § 15-13-3 and the interest on its tax executions authorized by OCGA § §48-3-20 and 48-2-40. Because the trial court's order does not find that good cause was shown by the Commissioner sufficient to deny Vesta Holdings's request for 20 percent interest, we must vacate that part of the judgment and remand the case to the trial court for further proceedings.
The record shows that Vesta Holdings filed a Petition for a Money Rule requiring the Commissioner [3] to remit the sums Vesta Holdings previously demanded on its tax executions plus 20 percent per annum interest. The petition alleged that Vesta Holdings was the nominee of Heartwood 11, LLC ("Heartwood"), that Heartwood is regularly engaged in purchasing and collecting on tax executions, and that, as Heartwood's nominee, Vesta Holdings held certain tax executions.
Page 449
The petition further alleged that the Commissioner had conducted a number of tax sales of properties subject to the tax executions held by Vesta Holdings that produced proceeds in excess of the amounts necessary to satisfy the tax executions for which the sales were held, and that the Commissioner was holding those excess amounts in his registry account.
According to the petition, Vesta Holdings made demand on the Commissioner to satisfy Vesta Holdings's tax executions on those properties from these excess proceeds, but the Commissioner refused the demand. As a result, Vesta Holdings sought a money rule under OCGA § 15-13-1, [4] twenty percent interest under OCGA § 15-13-3, [5] costs, and issuance of a writ of [275 Ga.App. 198] mandamus absolute or a permanent injunction prohibiting the Commissioner from proceeding with levies and sales for delinquent tax executions when prior tax sales proceeds could be applied.
The Commissioner answered denying liability and subsequently filed an amended answer adding a counterclaim and cross-claim for interpleader and declaratory relief. The petition for declaratory judgment sought a ruling on whether the Commissioner was "required and entitled to hold excess tax sale proceeds as a fiduciary for the record property owners . . . or whether those funds may properly be paid to a tax execution transferee." [6] The interpleader sought permission to pay into the registry of the court the excess tax sale proceeds on all of the properties involved in the case. The defendants in interpleader were the 18 individuals or entities who were property owners of record when the properties were sold by the Commissioner in the tax sales.
Subsequently, the Commissioner filed a brief contending that Vesta Holdings purchased the tax executions from him under OCGA § 48-3-19 [7] and then held them until the Commissioner conducted tax sales on the property covered by Vesta Holdings's tax executions for tax liabilities for years after those covered by Vesta Holdings's tax executions. He further alleged that Vesta Holdings's plan was to purchase a tax execution, to sit on its rights to levy and sell the property to collect the tax execution, to allow interest to accrue at the statutory rate of twelve (12) percent per year, and then to demand the excess proceeds when the property was sold at a later tax sale. He also contended that Georgia law prohibited him from satisfying Vesta Holdings's tax executions in that manner and that Vesta Holdings's remedy was to levy and sell the property to which its tax executions related.
Relying on National Tax Funding, LP v. Harpagon Co., LLC, 277 Ga. 41 (586 S.E.2d 235) (2003), the trial court granted Vesta Holdings's petition for the money rule. This ruling authorized Vesta Holdings to satisfy its tax executions from the excess proceeds the Commissioner collected from subsequent tax sales on the same parcels of property.
Case No. A05A1226
1. As the trial court found, this case is controlled by our Supreme Court's decision in National Tax Funding :
All owners of non-exempt real and tangible personal property are subject to taxation
Page 450
on the property's fair market value as of January first of each year. [OCGA §§ 48-5-1; 48-5-3; 48-5-9; 48-5-10.] In order to secure payment of these taxes when they fall delinquent, the law creates a lien which extends not only to the property giving rise to the tax obligation, but also to all other property owned by the taxpayer. [OCGA § 48-2-56 (a).] Generally, a lien for delinquent ad valorem taxes arises at the time the taxes become due and unpaid, and "covers all property in which the taxpayer has any interest from the date the lien arises until such taxes are paid." [Id.] When taxes are not paid, the Tax Commissioner is authorized to issue a writ of fieri facias (or tax execution), which is a directive to the appropriate officer (often the sheriff) to levy upon the property, sell it and collect the unpaid taxes. [OCGA §§ 48-3-3; 48-5-127 (a)(6); 48-5-161.] Following a tax sale, after the payment of taxes, costs, and other expenses, any excess proceeds may be claimed by the parties entitled to receive them, including those who hold other liens against the property. [OCGA § 48-4-5. If the tax sale proceeds are insufficient to fully pay an outstanding tax lien, the tax lienholder may levy upon and collect from the taxpayer's other property. See OCGA § 48-2-56 (a).]
(Punctuation omitted, and emphasis supplied.) Id. at 42 (1). See Annual Survey of Georgia Law, 56 Mercer L. Rev. 395 (2004), at 411. The Supreme Court reiterated its interpretation of OCGA § 48-4-5 later in the opinion:
[F]ollowing a tax sale, the holder of a competing tax lien has two options -- it may either file a claim to collect against any proceeds from the sale, or it may assert its rights following the tax sale via a statutory claim for redemption, in which case it obtains a first priority lien on the property, which it [275 Ga.App. 200] may then enforce by levy and sale. With these two options, the legislature has ensured that holders of competing tax liens can take adequate steps to protect their interest in property sold at a tax sale to another lienholder.
National Tax Funding, supra, 277 Ga. at 44 (3), 586 S.E.2d 235.
The rationale for this interpretation flows from former OCGA § 48-3-19 (a) (1) and OCGA § 48-4-5 and OCGA § 48-2-56. Before it was repealed, OCGA § 48-3-19 (a) (1) provided:
Whenever any person other than the person against whom an execution has been issued pays an execution issued for state, county, or municipal taxes . . ., the officer whose duty it is to enforce the execution, upon the request of the party paying the execution, shall transfer the execution to the party so paying. The person to whom the execution is transferred shall have the same rights as to enforcing the execution and priority of payment as might have been exercised or claimed before the transfer.
Therefore, "Vesta [Holdings] stood in the same shoes as [a county seeking funds from an excess tax sale]. Alexander Investment Group, Inc. v. Jarvis, [supra, 263 Ga. at 490 n. 3]." Vesta Holdings I, LLC v. Tax Commissioner of Fulton County, 259 Ga.App. 717, 718 (1) (578 S.E.2d 293) (2003). The significance of this footing is that Vesta Holdings's tax executions had higher priority than any other claims or liens except those for State taxes and for county taxes, if any, which were older than those held by Vesta Holdings. Id. at 718-720 (2).
With a few exceptions, not relevant here, OCGA § 48-2-56 (a) and (b) allow holders of unpaid liens for State, county or municipal taxes to recover from all property in which the delinquent taxpayer had any interest until the taxes are paid, and give the holder of the tax liens the right to be paid "before any other debt, lien, or claim of any kind." See also OCGA § 48-5-28 (a) ("taxes shall be paid before any other debt, lien, or claim of any kinds.") The version of OCGA § 48-4-5 [8] relevant to this appeal provided that "[i]f there is any excess after paying taxes, costs, and all expenses of a shall, it shall be immediately
Page 451
paid to the person authorized to receive the excess." [9]
[275 Ga.App. 201] In this appeal, Vesta Holdings, as the transferee of the tax executions, stood "in the shoes of the State, county, or city by whose authority the tax fi. fa. was issued. [It had] the same rights and priorities that the State, county, or city would have had. Taxes, under our law, are the highest lien." Ferris v. Van Ingen & Co., 110 Ga. 102, 119 (35 S.E.2d 347) (1900). Therefore, Vesta Holdings was entitled to recover from the Commissioner the amounts necessary to pay its tax executions from the excess proceeds of the tax sales before any payments to the owners of record at the time of the tax sale.
The Commissioner's position in this litigation has consistently overlooked or rejected the fact that Vesta Holdings was entitled to collect from all property in which the delinquent taxpayer had any interest, that these excess sale proceeds were such a property interest, and that, as the holder of the tax liens, Vesta Holdings had the right to be paid "before any other debt, lien, or claim of any kind" may be claimed by the parties entitled to receive them, including those who hold other liens against the property. OCGA § 48-2-56 (a) and (b); Vesta Holdings I, LLC v. Tax Commissioner of Fulton County, supra, 259 Ga.App. at 720 (2) (b).
Further, the Commissioner's reliance on Alexander Investment Group v. Jarvis, supra, 263 Ga. 489, 435 S.E.2d 609, is misplaced. That case merely held that the holder of a tax execution was only entitled to recover the amount of tax debt evidenced by the execution. Once that debt was paid, it had no further entitlement to collect from the excess proceeds. Id. at 491(2), n. 4, 435 S.E.2d 609. The case does not stand for the proposition that a tax execution may only be satisfied by levy and sale.
2. The Commissioner's allegation that a money rule petition is not authorized in cases of this nature is without merit. Pretermitting whether the Commissioner would be subject to a money rule on any other basis, the Commission is subject to a money rule as an ex-officio sheriff under OCGA § 48-5-137. OCGA § 15-13-2 (4) [10] ; Barrett v. Marathon Investment Corp., 268 Ga.App. 196, 199 (4) (601 S.E.2d 516) (2004).
Case No. A05A1227
3. The trial court's order on interest, attorney fees, and costs merely states that Vesta Holdings is entitled to recover "legal interest from the date of this order only. The court denies plaintiff's request for attorney's fees and costs." Collection of interest in money rule cases [275 Ga.App. 202] is controlled by OCGA § 15-13-3 (a), which states that for neglecting or refusing to pay what is owed "the officer shall be compelled to pay interest at the rate of 20 percent per annum upon the sum he has in his hands from the date of the demand, unless good cause is shown to the contrary." As the trial court made no finding that good cause was shown for the Tax Commissioner's refusal to honor Vesta Holdings's demands, we must vacate this part of the trial court's judgment and remand the case for further proceedings to determine whether the 20 percent interest required by OCGA § 15-13-3 (a) must be made part of the trial court's judgment. See MacDougald v. Phillips, 262 Ga. 778 (425 S.E.2d 652) (1993); Bill Parker & Assoc. v. Rahr, 216 Ga.App. 838, 842 (5) (456 S.E.2d 221) (1995).
Further, the trial court's final order requiring the Tax Commissioner "to remit the sums previously demanded by plaintiff for its tax executions" does not explicitly grant or deny Vesta Holdings the interest of one percent per month authorized by OCGA § § 48-3-20 and 48-2-40 which Vesta Holdings included in its previous demands. Therefore, the trial
Page 452
court should clarify this part of its order when it considers whether good cause was shown by the Commissioner sufficient to justify the denial of interest under OCGA § 15-13-3 (a).
Judgment affirmed in part, vacated in part, and remanded with direction.
Ruffin, C. J., and Johnson, P. J., concur.
---------------
Notes
[1] Although Scott filed this appeal in the Supreme Court of Georgia, the appeal and cross-appeal were transferred to this court because money rule cases are not within the jurisdiction of the Supreme Court even when mandamus is sought.
[2] "The terms tax execution and tax fieri facias or tax fi. fa. have over the years been used interchangeably and refer to one and the same type of writ." Alexander Investment Group v. Jarvis, 263 Ga. 489, n1 (435 S.E.2d 609) (1993).
[3] The Commissioner is an ex-officio sheriff. See OCGA § 48-5-137.
[4] "All sheriffs, deputy sheriffs, coroners, jailers, constables, and other officers of court shall be liable to all actions and disabilities which they incur in respect of any matter or thing relating to or concerning their respective offices."
[5] "(a) If any sheriff, coroner, magistrate, constable, clerk of the superior court, or attorney at law fails, upon application, to pay to the proper person or his attorney any money he may have in his hands which he may have collected by virtue of his office, the party entitled thereto or his attorney may serve such officer with a written demand for the same. If not then paid, for such neglect or refusal the officer shall be compelled to pay interest at the rate of 20 percent per annum upon the sum he has in his hands from the date of the demand, unless good cause is shown to the contrary.
(b) A copy of the demand produced in court, verified by affidavit stating when and where the original was served upon the officer, shall be prima-facie evidence of the date and service thereof."
[6] We note that the Commissioner's petition for a declaratory judgment came over a year after Vesta Holdings's earliest demand for payment and after he had paid the full amount of the excess proceeds from some sales to other claimants.
[7] This code section was by repealed by Ga. L. 2002, p. 1481, § 1, effective May 21, 2002.
[8] The Commissioner agrees that the now repealed OCGA § 48-3-19 (a) and the prior version of OCGA § 48-4-5 apply in this appeal.
[9] The current OCGA § 48-4-5 authorizes the Commissioner to distribute any excess tax sale proceeds, after payment of taxes, costs, and expenses, "to intended parties, including the owner as their interest appears and in the order of priority in which their interest exists" through an interpleader action in superior court.
[10] "Any sheriff shall be liable to an action for damages or an attachment for contempt of court, at the option of the party, whenever it appears that the sheriff has injured the party by: . . . (4) Neglecting to pay over to the plaintiff or his attorney any moneys collected by the sheriff by virtue of any fi. fa. or other legal process."
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601 S.E.2d 516 (Ga.App. 2004)
268 Ga.App. 196
BARRETT
v.
MARATHON INVESTMENT CORPORATION.
No. A04A0120.
Court of Appeals of Georgia.
June 29, 2004
Overtis Brantley, Vernitia Shannon, Office of the County Attorney, John Ayoub, Atlanta, for Appellant.
C. Blanton, C. Terry Blanton Associates, Decatur, for Appellee.
Page 517
[268 Ga.App. 196] PHIPPS, Judge.
Jacquelyn H. Barrett, as sheriff of Fulton County, appeals an order requiring her to pay to Marathon Investment Corporation certain funds, interest thereon, attorney fees, and costs. [1] She contends that the trial court erred by ruling that Marathon was entitled to the funds and in awarding interest and attorney fees. Because Barrett has failed to demonstrate error, we affirm.
Marathon filed a money rule [2] petition against the sheriff in the superior court, seeking to recover excess funds she had collected and [268 Ga.App. 197] retained as a result of a March 2, 1999 sale of certain real property pursuant to a levy for unpaid taxes. Marathon alleged that it had been the highest bidder at that sale, that the sheriff subsequently issued a tax sale deed to it, that it had later obtained "all the right, title and interest of the Defendant in tax fi. fa., as shown on the tax sale deed, through a quit-claim deed ... dated December 15, 2000," that on June 28, 2001, "as the successor in right, title and interest to the owner-defendant in fi. fa.," it had demanded from the sheriff the excess funds, and that she had refused to comply with its demand. In addition to the excess proceeds and interest thereon, Marathon sought attorney fees and costs, claiming that the sheriff's holding of the funds was without any legal basis, was wilfully and stubbornly litigious, was in bad faith, and was causing unnecessary delay and expense. Among other defenses, the sheriff answered that Marathon's claim for the excess funds was barred by the doctrine of sovereign immunity and that Marathon had failed to establish entitlement to the excess funds.
After a hearing where all parties and counsel were present, the court found that Marathon had "obtained all the right, title and interest of the Defendant in tax fi. fa., as shown on the tax sale deed, through a quit-claim deed as dated December 15, 2000," that "[Marathon], as the successor in right, title and interest to the owner-defendant in fi. fa., provided all documentation to [the sheriff]," that the sheriff's refusal to disburse the demanded funds to Marathon was without legal basis, was wilful and stubbornly litigious, was in bad faith, and had caused Marathon unnecessary delay and expense. The court therefore ordered the sheriff to pay to Marathon the excess funds plus interest calculated "at the rate of 20% per annum from the date of [Marathon's] initial application, June 28, 2001, there being no good cause for the Sheriff's failure to pay out such excess funds." Further, the court awarded Marathon attorney fees.
1. Barrett contends that the court erred as a matter of law in ruling that Marathon was entitled to the funds. OCGA § 48-4-5, which directly addresses the disposition of excess proceeds from a tax sale of returned property, provides, "If there is any excess after paying taxes, costs, and all expenses of a sale, it shall be immediately paid to the person authorized to receive the excess." [3]
In the absence of an express definition of "the person authorized to receive the excess," [4] Barrett argues that Marathon could not have been entitled to the funds because, as sheriff, she retains the excess funds for "the party owning the property and his lien holders as of the [268 Ga.App. 198] date of the tax sale," and it is undisputed that Marathon was neither. Marathon claims that, while it was not entitled to receive the excess funds on the date of the tax sale, it later became entitled to the funds through a quitclaim deed.
The policy of the law is to encourage free alienability of property, and attempts to remove either land or chattel from circulation in trade are discouraged. [5] Accordingly, we decline to hold that a defendant in fi. fa. may not effect a transfer of an interest in excess funds generated by a sale of real property
Page 518
pursuant to a tax execution. [6] The trial court did not err, as a matter of law, in recognizing a transfer of such an interest in this case.
2. Barrett contends that the trial court's conclusion that Marathon was entitled to the excess funds lacks evidentiary support. She asserts that Marathon failed to introduce any evidence of a quitclaim deed at the hearing. Alternatively, she asserts that the quitclaim deed cited by the trial court could not have transferred an interest in the excess funds because the deed did not "even mention the words 'excess funds' or 'proceeds from tax sale' or in any way refer to the transfer of an interest in excess funds." Barrett argues, "a party may not transfer [its] interest in excess funds via a quitclaim deed of the underlying property sold at [a] tax sale after the tax sale when such quitclaim deed fails to transfer an interest in the excess funds." [7]
Consideration of whether there was evidence supporting the trial court's finding that the defendant in fi. fa. conveyed his right to receive excess funds requires a review of the evidence presented at the hearing. But Barrett reports that "[t]here was no transcript kept of the hearing," and the appellate record contains no stipulation of evidence in lieu of a transcript. [8] Consequently, in accordance with the presumption of the regularity of court proceedings, we must assume that, in the absence of a transcript, the trial court's findings were supported by sufficient competent evidence. [9]
3. Barrett contends that the trial court erred in awarding interest and determining that interest accrued from June 28, 2001.
OCGA § 15-13-3(a) provides,
If any sheriff ... fails, upon application, to pay to the proper person or his attorney any money he may have in his hands which he may have collected by virtue of his office, the party entitled thereto or his attorney may serve such officer with a [268 Ga.App. 199] written demand for the same. If not then paid, for such neglect or refusal the officer shall be compelled to pay interest at the rate of 20 percent per annum upon the sum he has in his hands from the date of the demand, unless good cause is shown to the contrary.
Barrett asserts that there was no evidence that Marathon was entitled to the funds or that she was neglectful in refusing to disburse the funds to Marathon. She also asserts that there was no evidence to support the court's determination that the interest accrued from June 28, 2001. She claims, "the record clearly shows that [Marathon] filed its application on March 11, 2002."
These challenges to the interest award require review of the evidence presented at the hearing. As Barrett has failed to provide this court with a transcript of the hearing, we must assume that the trial court's findings were supported by sufficient competent evidence. [10] Barrett's reliance on Morrison v. Slaton [11] is unavailing.
4. Barrett contends that the trial court erred by failing to rule that Marathon's claim to recover the excess funds was barred by the defense of sovereign immunity. But the General Assembly waived such immunity in OCGA § 15-13-2(4), which provides that "[a]ny sheriff shall be liable to an action for damages ... whenever it appears that the sheriff has injured the party by ... [n]eglecting to pay over to the plaintiff or his attorney any moneys collected by the sheriff by virtue of any fi. fa. or other legal process." As Marathon's claim was premised upon the sheriff's failure to disburse to it such money, sovereign immunity did not bar the claim. Barrett's reliance on Seay v. Cleveland [12] is misplaced.
Page 519
5. Barrett contends that the trial court abused its discretion in awarding attorney fees, asserting that she had not been overly litigious but had merely performed her duty as a fiduciary to disburse excess funds generated from a tax sale only to the correct entity. Without a transcript, we must assume the trial court was authorized to award the fees. [13]
Judgment affirmed.
SMITH, C.J., and JOHNSON, P.J., concur.
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Notes:
[1] The Supreme Court of Georgia transferred Barrett's case to this court.
[2] See OCGA §§ 15-13-3; 15-13-4.
[3] See Alexander Investment Group v. Jarvis, 263 Ga. 489, 490(1), 435 S.E.2d 609 (1993).
[4] OCGA § 48-4-5.
[5] See Dyer v. Dyer, 275 Ga. 339, 341(1), 566 S.E.2d 665 (2002).
[6] See id.
[7] (Emphasis in original.)
[8] See OCGA § 5-6-41(i).
[9] See Kirkendall v. Decker, 271 Ga. 189, 191, 516 S.E.2d 73 (1999).
[10] See id.
[11] 148 Ga. 294, 96 S.E. 422 (1918) (no interest was chargeable to the sheriff until the party entitled to the funds could be identified).
[12] 270 Ga. 64, 65-66(1), 508 S.E.2d 159 (1998) (sheriff sued in official capacity and asserting defense of sovereign immunity could not be held liable on claims of negligence where immunity had not been waived by law or by the county).
[13] See Kirkendall, supra.

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586 S.E.2d 235 (Ga. 2003)
277 Ga. 41
NATIONAL TAX FUNDING, L.P.
v.
HARPAGON COMPANY, LLC., et al. (four cases).
Nos. S03A0617, S03A0823, S03A0802, S03A0803.
Supreme Court of Georgia
September 15, 2003.
Page 236
[Copyrighted Material Omitted]
Page 237
[277 Ga. 46] Miller & Martin, Geoffrey H. Cederholm, Donna J. Nance, Kerry A. Lunz, Atlanta, for appellant.
Proctor & Chambers, Robert J. Proctor, Bradley A. Hutchins, Janet S. Todd, Thurbert E. Baker, Atty. Gen., Daniel M. Formby, Deputy Atty. Gen., Vernitia A. Shannon, Jo Avery, Atlanta, for appellees.
[277 Ga. 41] SEARS, Presiding Justice.
Appellant National Tax Funding, L.P., ("NTF") appeals the trial court's ruling that as transferee of the purchaser of real property at a sale for delinquent ad valorem taxes, appellee the Harpagon Company, LLC, ("Harpagon") holds fee simple title to the property unencumbered by any competing tax liens, including those of NTF. We conclude that NTF's interest in the subject property was terminated when it failed to exercise its right of redemption following the tax sale, despite having received notice under statute that its redemption rights would soon end. Therefore, applying the "right for any reason rule," we affirm.
Along with other entities, both NTF and third-party Heartwood 11, Inc., held tax liens against certain property located in Fulton County. [1] Heartwood 11 obtained writs of fieri facias from the Tax Commissioner, levied upon its liens and acquired tax deeds to the property. Heartwood 11 then quitclaimed the property to Harpagon. Thereafter, Harpagon served notice on the delinquent taxpayer and all others claiming an interest in the property, including NTF, asserting the statutory bar to the right of redemption. Harpagon then filed a petition to quiet title, and sought a declaration that it holds title to the property free and clear of NTF's tax liens. NTF [277 Ga. 42] responded and argued that its tax liens had never been paid and therefore remained valid.
A hearing was held before the special master, who concluded that a tax sale divests all liens except the one levied upon from the property sold, so as to give the tax sale purchaser marketable title. Accordingly, the special master found that by virtue of its transferor's tax sale purchase of the subject property, Harpagon held title to the property free and clear of NTF's tax liens. The trial court adopted the special master's findings and conclusions, entered judgment in Harpagon's favor, and these appeals follow.
1. All owners of non-exempt real and tangible personal property are subject to taxation on the property's fair market value as of January first of each year. [2] In order to secure payment of these taxes when they fall delinquent, the law creates a lien which extends not only to the property giving rise to the tax obligation, but also to all other property owned by the taxpayer. [3] Generally, a lien for delinquent ad valorem taxes arises at the time the taxes become due and unpaid, and "cover[s] all property in which the taxpayer has any interest from the date the lien arises until such taxes are paid." [4] When taxes are not paid, the Tax Commissioner is authorized to issue a writ of fieri facias (or tax execution), which is a directive to the appropriate officer (often the sheriff) to levy upon the property, sell it and collect the unpaid taxes. [5] Following a tax sale, after the payment of taxes, costs, and other expenses, any excess proceeds may be claimed by the parties entitled to receive them, including
Page 238
those who hold other liens against the property. [6]
After the tax sale, the delinquent taxpayer or any other party holding an interest in or lien on the property may redeem the property by paying to the tax sale purchaser the purchase price plus any taxes paid and interest. [7] If the property is redeemed, the tax sale is essentially rescinded and a quitclaim deed is executed by the tax sale purchaser back to the owner of the property at the time of levy and sale. [8] If a creditor of the original taxpayer redeems the property, the amount paid by the redeeming creditor becomes a first lien on the property. The redeeming creditor then has first priority to repayment--a "super-lien" for the redemption price--and may proceed to foreclose [277 Ga. 43] against the property based upon that lien. [9] This right of redemption, however, may be terminated by the tax sale purchaser anytime after one year following the tax sale. After that year has run, the tax sale purchaser may "terminate, foreclose, divest, and forever bar" all rights to redeem the property by giving notice under OCGA § 48-4-40, et seq., ("the barment statutes") to all parties with redemption rights. [10] The barment statutes apply to "all persons having ... any right, title or interest in, or lien upon" the subject property. [11] However, until such time as the barment statutes are invoked once the one year redemption period has run, the tax sale purchaser's interest in the property is not exclusive, as the taxpayer and other lienholders retain their rights of redemption. A tax deed vests the purchaser with a defeasible (and, incidentally, taxable) fee interest in the property, but it does not entitle a purchaser to exclusive possession until the right of redemption is terminated. [12] the trial court erred by concluding that the tax sale of the property held to satisfy Harpagon's predecessor's tax lien divested NTF's tax lien interest from the property sold. By obtaining a tax sale deed to the property, Harpagon may have obtained a defeasible fee interest in the property, but its title was subject to encumbrance for at least one year after purchase due to the other interested parties' statutory rights of redemption.
2. The nature of Harpagon's title changed, however, once it gave notice under the barment statutes to all interested parties that their rights of redemption would expire and be barred as of one year after the tax sale purchase of the property, and all interested parties elected not to redeem the property within the redemption period. "The effect of expiration [of the redemption period] and bar of the right of redemption is to vest the purchaser with an absolute and unconditional title to the land, provided such title was owned by the [original owner], and the tax sale was valid." [13] Hence, after expiration of the redemption period, Harpagon held indefeasible fee simple title to the property.
3. The question remains, however, whether Harpagon's title to the property remained encumbered by NTF's tax lien after NTF's failure to redeem the property during the redemption period even though it received notice under the barment statutes. NTF argues [277 Ga. 44] that its tax lien remains in place and is enforceable until the tax obligation is paid. In making this argument, NTF relies upon OCGA § 48-2-56(a), which states that except as otherwise provided, liens for all taxes arise at the time the taxes become due, and "shall cover all property in which the
Page 239
taxpayer has an interest from the date the lien arises until such taxes are paid." What NTF overlooks, however, is that after the barment statutes were invoked and the redemption period expired, the taxpayer no longer had any interest in the subject property. As explained above, the delinquent taxpayer, as well as all lienholders, could redeem the property from Harpagon until it gave notice under the barment statutes and the redemption period expired. Harpagon's valid notice and invocation of the barment statutes, however, "terminated, foreclosed, divested, and forever barred" all parties from redeeming the property. At that point, the taxpayer no longer had an interest in the property. [14] Because NTF's tax lien covers only "property in which the taxpayer has [an] interest," [15] once the taxpayer's right of redemption terminated, NTF's lien was divested from and could no longer be enforced against the property. [16]
As explained above, following a tax sale, the holder of a competing tax lien has two options--it may either file a claim to collect against any proceeds from the sale, or it may assert its rights following the tax sale via a statutory claim for redemption, in which case it obtains a first priority lien on the property, which it may then enforce by levy and sale. With these two options, the legislature has ensured that holders of competing tax liens can take adequate steps to protect their interest in property sold at a tax sale to another lienholder. What a competing tax lienholder may not do after a tax sale, however, is decline to pursue either of these statutory options, receive notice under the barment statutes that its rights of redemption will soon terminate, allow the redemption period to mature and pass, and then continue to assert its lien against the property. When read as a whole, our statutory scheme simply does not provide for such a course of action.
While Code section 48-2-56(a) does state (in part) that tax liens cover property in which the taxpayer has an interest from the time [277 Ga. 45] the lien arises until the taxes are paid, [17] it does not state that tax liens are immune from divestment under the barment statutes. By their terms, the statutes divest the redemption rights of "all persons having ... any right, title, or interest in, or lien upon" property. [18] When such divestment occurs, the tax lienholder's interest in the property is foreclosed and it can no longer seek to redeem or levy against that property in order to collect the taxes owed.
Were we to conclude otherwise, we would permit tax liens, once they attach to a particular piece of property, to survive in perpetuity until the tax obligations are paid in full. If that were true, and if the taxes remained unpaid, the same piece of property could be sold at numerous sheriff's sales by a long succession of tax lienholders, and none of the purchasers could obtain good title unless, in addition to the tax sale purchase price, the purchaser also paid off all existing tax liens (including liens for income taxes, sales taxes, municipal taxes, excise taxes, etc.). Furthermore, if all tax liens survive in perpetuity until paid, and if the total amount of such liens exceeds the property's fair market value, then the property would become essentially unmarketable. While our government obviously has a strong interest in seeing that tax liens are paid, it also has a compelling interest in ensuring that there is a mechanism by which tax deeds may mature
Page 240
into unencumbered and marketable fee simple titles. Accordingly, in addition to the statutory analysis discussed above, there are compelling public policy considerations that support our decision as well.
In summation, under our statutory scheme, where property is encumbered by competing tax liens and one lienholder levies upon the property and obtains a tax deed to it, holders of competing tax liens may either seek to collect from the tax sale proceeds or may assert their rights to redeem the property from the tax sale purchaser. If, however, the tax sale purchaser gives valid notice under the barment statutes and the competing tax lienholder allows the redemption period to mature and pass without taking any action, its lien is divested from the property and no longer encumbers the tax sale purchaser's title interest.
4. This Court may affirm the judgment of a lower court so long as it is right for any reason, even if it is based on erroneous reasoning. [19] As explained in Division 2 above, the trial court erred by accepting the special master's conclusion that the tax sale, standing alone, divested NTF's lien from the property. As explained in Division 3 above, the special master's analysis was incomplete--it was the tax sale combined with the giving of notice under the barment statutes and the running of the redemption period that divested NTF's lien. However, even though the trial court's ruling was based upon an insufficient analysis, it was nonetheless correct and is hereby affirmed under the "right for any reason" rule.
Judgment affirmed.
All the Justices concur.
---------
Notes:
[1] Both Heartwood and NTF acquired their tax liens from the Fulton County Tax Commissioner.
[2] OCGA §§ 48-5-1; 48-5-3; 48-5-9; 48-5-10.
[3] OCGA § 48-2-56(a).
[4] Id.
[5] OCGA §§ 48-3-3; 48-5-127(a)(6); 48-5-161.
[6] OCGA § 48-4-5. If the tax sale proceeds are insufficient to fully pay an outstanding tax lien, the tax lienholder may levy upon and collect from the taxpayer's other property. See OCGA § 48-2-56(a).
[7] OCGA § 48-4-42.
[8] OCGA § 48-4-44.
[9] OCGA § 48-4-43.
[10] OCGA § 48-4-45.
[11] OCGA § 48-4-45(a)(1)(C).
[12] Hinkel, Pindar's Georgia Real Estate Law, § 4-49 (5th ed.); McDonald v. Wimpy, 206 Ga. 270, 273, 56 S.E.2d 524 (1949). See OCGA§ 48-2-57 (a sale of property under legal process shall not divest the state of its tax liens).
[13] Pindar's Georgia Real Estate Law, § 4-51; see Forrester v. Lowe, 192 Ga. 469, 476, 15 S.E.2d 719 (1941).
[14] See Hill v. Mayor &c. of Savannah, 233 Ga.App. 742, 743, 505 S.E.2d 35 (1998).
[15] OCGA § 48-2-56(a).
[16] Forrester v. Lowe, 192 Ga. at 476, 15 S.E.2d 719 (after expiration of the redemption period and proper notice under the barment statutes "the [original] owner and all other parties authorized by law to redeem [the property] lost their redemption rights and ceased to have any interest in the land.") As noted above, though, tax liens extend not only to the property giving rise to the tax obligation, but also to all other property owned by the taxpayer. OCGA § 48-2-56(a). Hence, NTF may seek to recover by levying upon the delinquent taxpayer's other property. (We note that our ruling today concerning the divestment of tax liens does not apply to situations where there has been no tax sale of the property at issue.)
[17] See notes 14-16, supra, and accompanying text.
[18] OCGA § 48-4-45(a)(1)(C) (emphasis supplied).
[19] Shadix v. Carroll County, 274 Ga. 560, 565, 554 S.E.2d 465 (2001). City of Gainesville v. Dodd, 275 Ga. 834, 573 S.E.2d 369 (2002), is inapplicable to this appeal as, this being an equity case, the trial court sat as the trier of fact. Id., 275 Ga. at 838, n. 3, 573 S.E.2d 369.

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Hugh Wood, Esq.
Wood & Meredith, LLP
3756 LaVista Road
Suite 250
Atlanta (Tucker), GA 30084

www.woodandmeredith.com
hwood@woodandmeredith.com
www.hughwood.blogspot.com
Phone: 404-633-4100
Fax: 404-633-0068

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Sunday, September 13, 2009

Redemption: Federal Tax Sales

Normally I write on Georgia tax sales. However, I continue to encounter questions concerning how a property sold by the federal government is redeemed.

The federal scheme is somewhat different than the Georgia tax sales scheme. Assuming at the outset that a taxpayer owns a piece of real property and has significant unpaid federal taxes which have matured to a federal tax lien recorded against the property, the federal government may sell the property for the unpaid federal taxes. One seized, the land may proceeds to sale. It is unclear (and probably a matter of custom from office to office) concerning how long federal government allows a federal tax lien to molder on the property records before it proceeds to sale. However, once federal government levies it proceeds to sale according to 28 U.S.C. § 6335. [1]

Under 28 U.S.C. § 6335, Notice is required to be given to the owner in writing by actual service; or, if the owner cannot be located, by certified mail. The Notice must specify the amount of tax due, the amount of charges that are necessary to redeem the property from the potential sale and a description of the property to be sold.

With regard to Notice, the IRS must publish in the legal organ (though it has some liberality to publish in another newspaper) prior to the sale. It must post notice of the sale in the post office closest to the property to be sold and it must post in two other public places near the property (not specified).

The sale must occur not less than 10 and not more than 40 days from the date of the posting. And all sales should occur in the county where the property is located.

On the date of the sale, the IRS posts a minimum price below which the sale will not occur and provides the criteria for sale to the highest bidder above the minimum price. There are many other conditions that the Secretary may place on the sale but they go beyond the scope of this article.

REDEMPTION AFTER THE SALE.

Once the sale occurs the former owner of the property, his heirs, etc., are permitted to redeem within 180 days after the sale pursuant to 26 U.S.C. § 6337. [2] The former owner must pay the price of the sale, plus all fees levied by the Secretary and 20 percent per annum to the purchaser for redemption.

Pursuant to 26 U.S.C. § 6338, [3] a purchaser at a federal tax sale is initially only provided with a Certificate of sale. Once the 180 days have expired, the purchaser may apply for a formal deed to the real property. As with many of the problems associated with the purchase of tax sale property, the Certificate does not ripen on its own, but the purchaser must pursue the federal government to actually obtain the deed and then record that deed on the local land records.

Hugh Wood,
Atlanta, GA


[1]

TITLE 26 - INTERNAL REVENUE CODE
Subtitle F - Procedure and Administration
CHAPTER 64 - COLLECTION
Subchapter D - Seizure of Property for Collection of Taxes
PART II - LEVY
26 USC § 6335. Sale of seized property

(a) Notice of seizure
As soon as practicable after seizure of property, notice in writing shall be given by the Secretary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description with reasonable certainty of the property seized.
(b) Notice of sale
The Secretary shall as soon as practicable after the seizure of the property give notice to the owner, in the manner prescribed in subsection (a), and shall cause a notification to be published in some newspaper published or generally circulated within the county wherein such seizure is made, or if there be no newspaper published or generally circulated in such county, shall post such notice at the post office nearest the place where the seizure is made, and in not less than two other public places. Such notice shall specify the property to be sold, and the time, place, manner, and conditions of the sale thereof. Whenever levy is made without regard to the 10-day period provided in section 6331 (a), public notice of sale of the property seized shall not be made within such 10-day period unless section 6336 (relating to sale of perishable goods) is applicable.
(c) Sale of indivisible property
If any property liable to levy is not divisible, so as to enable the Secretary by sale of a part thereof to raise the whole amount of the tax and expenses, the whole of such property shall be sold.
(d) Time and place of sale
The time of sale shall not be less than 10 days nor more than 40 days from the time of giving public notice under subsection (b). The place of sale shall be within the county in which the property is seized, except by special order of the Secretary.
(e) Manner and conditions of sale
(1) In general
(A) Determinations relating to minimum price
Before the sale of property seized by levy, the Secretary shall determine-
(i) a minimum price below which such property shall not be sold (taking into account the expense of making the levy and conducting the sale), and
(ii) whether, on the basis of criteria prescribed by the Secretary, the purchase of such property by the United States at such minimum price would be in the best interest of the United States.
(B) Sale to highest bidder at or above minimum price
If, at the sale, one or more persons offer to purchase such property for not less than the amount of the minimum price, the property shall be declared sold to the highest bidder.
(C) Property deemed sold to United States at minimum price in certain cases
If no person offers the amount of the minimum price for such property at the sale and the Secretary has determined that the purchase of such property by the United States would be in the best interest of the United States, the property shall be declared to be sold to the United States at such minimum price.
(D) Release to owner in other cases
If, at the sale, the property is not declared sold under subparagraph (B) or (C), the property shall be released to the owner thereof and the expense of the levy and sale shall be added to the amount of tax for the collection of which the levy was made. Any property released under this subparagraph shall remain subject to any lien imposed by subchapter C.
(2) Additional rules applicable to sale
The Secretary shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. If one or more alternative methods or conditions are permitted by regulations, the Secretary shall select the alternatives applicable to the sale. Such regulations shall provide:
(A) That the sale shall not be conducted in any manner other than-
(i) by public auction, or
(ii) by public sale under sealed bids.
(B) In the case of the seizure of several items of property, whether such items shall be offered separately, in groups, or in the aggregate; and whether such property shall be offered both separately (or in groups) and in the aggregate, and sold under whichever method produces the highest aggregate amount.
(C) Whether the announcement of the minimum price determined by the Secretary may be delayed until the receipt of the highest bid.
(D) Whether payment in full shall be required at the time of acceptance of a bid, or whether a part of such payment may be deferred for such period (not to exceed 1 month) as may be determined by the Secretary to be appropriate.
(E) The extent to which methods (including advertising) in addition to those prescribed in subsection (b) may be used in giving notice of the sale.
(F) Under what circumstances the Secretary may adjourn the sale from time to time (but such adjournments shall not be for a period to exceed in all 1 month).
(3) Payment of amount bid
If payment in full is required at the time of acceptance of a bid and is not then and there paid, the Secretary shall forthwith proceed to again sell the property in the manner provided in this subsection. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the purchaser for the purchase price or such part thereof as has not been paid, together with interest at the rate of 6 percent per annum from the date of the sale; or, in the discretion of the Secretary, the sale may be declared by the Secretary to be null and void for failure to make full payment of the purchase price and the property may again be advertised and sold as provided in subsections (b) and (c) and this subsection. In the event of such readvertisement and sale any new purchaser shall receive such property or rights to property, free and clear of any claim or right of the former defaulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited.
(4) Cross reference
For provision providing for civil damages for violation of paragraph (1)(A)(i), see section 7433.
(f) Right to request sale of seized property within 60 days
The owner of any property seized by levy may request that the Secretary sell such property within 60 days after such request (or within such longer period as may be specified by the owner). The Secretary shall comply with such request unless the Secretary determines (and notifies the owner within such period) that such compliance would not be in the best interests of the United States.
(g) Stay of sale of seized property pending Tax Court decision
For restrictions on sale of seized property pending Tax Court decision, see section 6863 (b)(3).

[2]

26 USC § 6337. Redemption of property

(a) Before sale
Any person whose property has been levied upon shall have the right to pay the amount due, together with the expenses of the proceeding, if any, to the Secretary at any time prior to the sale thereof, and upon such payment the Secretary shall restore such property to him, and all further proceedings in connection with the levy on such property shall cease from the time of such payment.
(b) Redemption of real estate after sale
(1) Period
The owners of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.
(2) Price
Such property or tract of property shall be permitted to be redeemed upon payment to the purchaser, or in case he cannot be found in the county in which the property to be redeemed is situated, then to the Secretary, for the use of the purchaser, his heirs, or assigns, the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum.
(c) Record
When any lands sold are redeemed as provided in this section, the Secretary shall cause entry of the fact to be made upon the record mentioned in section 6340, and such entry shall be evidence of such redemption.

[3]

26 USC § 6338. Certificate of sale; deed of real property
How Current is This?
(a) Certificate of sale
In the case of property sold as provided in section 6335, the Secretary shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, such certificate shall set forth the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor.
(b) Deed to real property
In the case of any real property sold as provided in section 6335 and not redeemed in the manner and within the time provided in section 6337, the Secretary shall execute (in accordance with the laws of the State in which such real property is situated pertaining to sales of real property under execution) to the purchaser of such real property at such sale, upon his surrender of the certificate of sale, a deed of the real property so purchased by him, reciting the facts set forth in the certificate.
(c) Real property purchased by United States
If real property is declared purchased by the United States at a sale pursuant to section 6335, the Secretary shall at the proper time execute a deed therefor; and without delay cause such deed to be duly recorded in the proper registry of deeds.
Title 26 of the US Code as currently published by the US Government reflects the laws passed by Congress as of Jan. 8, 2008, and it is this version that is published here.

& & &

545 U.S. 308 (2005)
125 S.Ct. 2363, 162 L.Ed.2d 257, 73 USLW 4501
Grable & Sons Metal Products, Inc.
v.
Darue Engineering & Manufacturing
No. 04-603
United States Supreme Court
June 13, 2005
Argued April 18, 2005.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Syllabus
The Internal Revenue Service seized real property owned by petitioner (hereinafter Grable) to satisfy a federal tax delinquency, and gave Grable notice by certified mail before selling the property to respondent (hereinafter Darue). Grable subsequently brought a quiet title action in state court, claiming that Darue's title was invalid because 26 U.S.C. §6335 required the IRS to give Grable notice of the sale by personal service, not certified mail. Darue removed the case to Federal District Court as presenting a federal question because the title claim depended on an interpretation of federal tax law. The District Court declined to remand the case, finding that it posed a significant federal-law question, and it granted Darue summary judgment on the merits. The Sixth Circuit affirmed, and this Court granted certiorari on the jurisdictional question.
Held:
The national interest in providing a federal forum for federal tax litigation is sufficiently substantial to support the exercise of federal-question jurisdiction over the disputed issue on removal. Pp. 312-320.
(a) Darue was entitled to remove the quiet title action if Grable could have brought it in federal court originally, as a civil action "arising under the . . . laws . . . of the United States," 28 U.S.C. §1331. Federal-question jurisdiction is usually invoked by plaintiffs pleading a cause of action created by federal law, but this Court has also long recognized that such jurisdiction will lie over some state-law claims that implicate significant federal issues, see, e.g., Smith v. Kansas City Title & Trust Co., 255 U.S. 180. Such federal jurisdiction demands not only a contested federal issue, but a substantial one. And the jurisdiction must be consistent with congressional judgment about the sound division of labor between state and federal courts governing §1331's application. These considerations have kept the Court from adopting a single test for jurisdiction over federal issues embedded in state-law claims between nondiverse parties. Instead, the question is whether the state-law claim necessarily stated a federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing a congressionally approved balance of federal and state judicial responsibilities. Pp. 312-314.
Page 309
(b) This case warrants federal jurisdiction. Grable premised its superior title claim on the IRS's failure to give adequate notice, as defined by federal law. Whether Grable received notice is an essential element of its quiet title claim, and the federal statute's meaning is actually disputed. The meaning of a federal tax provision is an important federal-law issue that belongs in federal court. The Government has a strong interest in promptly collecting delinquent taxes, and the IRS's ability to satisfy its claims from delinquents' property requires clear terms of notice to assure buyers like Darue that the IRS has good title. Finally, because it will be the rare state title case that raises a federal-law issue, federal jurisdiction to resolve genuine disagreement over federal tax title provisions will portend only a microscopic effect on the federal-state division of labor. This conclusion puts the Court in venerable company, quiet title actions having been the subject of some of the earliest exercises of federal-question jurisdiction over state-law claims. E.g., Hopkins v. Walker, 244 U.S. 486, 490-491. Pp. 314-316.
(c) Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, is not to the contrary. There, in finding federal jurisdiction unavailable for a state tort claim resting in part on an allegation that the defendant drug company had violated a federal branding law, the Court noted that Congress had not provided a private federal cause of action for such violations. Merrell Dow cannot be read to make a federal cause of action a necessary condition for federal-question jurisdiction. It disclaimed the adoption of any bright-line rule and expressly approved the exercise of jurisdiction in Smith, where there was no federal cause of action. Accordingly, Merrell Dow should be read in its entirety as treating the absence of such cause as evidence relevant to, but not dispositive of, the "sensitive judgments about congressional intent," required by §1331. Id., at 810. In Merrell Dow, the principal significance of this absence was its bearing on the consequences to the federal system. If the federal labeling standard without a cause of action could get a state claim into federal court, so could any other federal standards without causes of action. And that would mean an enormous number of cases. A comparable analysis yields a different jurisdictional conclusion here, because state quiet title actions rarely involve contested federal-law issues. Pp. 316-320.
377 F.3d 592, affirmed.
SOUTER, J., delivered the opinion for a unanimous Court. THOMAS, J., filed a concurring opinion, post, p. 320.
Eric H. Zagrans argued the cause for petitioner. On the briefs was Charles E. McFarland.
Page 310
Michael C. Walton argued the cause for respondent. With him on the brief were John M. Lichtenberg, Gregory G. Timmer, and Mary L. Tabin.
Irving L. Gornstein argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Acting Solicitor General Clement, Assistant Attorney General O'Connor, Deputy Solicitor General Hungar, and Gilbert S. Rothenberg[*]
OPINION
SOUTER, JUSTICE
The question is whether want of a federal cause of action to try claims of title to land obtained at a federal tax sale precludes removal to federal court of a state action with non-diverse parties raising a disputed issue of federal title law. We answer no, and hold that the national interest in providing a federal forum for federal tax litigation is sufficiently substantial to support the exercise of federal question jurisdiction over the disputed issue on removal, which would not distort any division of labor between the state and federal courts, provided or assumed by Congress.
I
In 1994, the Internal Revenue Service seized Michigan real property belonging to petitioner Grable & Sons Metal Products, Inc., to satisfy Grable's federal tax delinquency. Title 26 U.S.C. §6335 required the IRS to give notice of the seizure, and there is no dispute that Grable received actual notice by certified mail before the IRS sold the property to respondent Darue Engineering & Manufacturing. Although Grable also received notice of the sale itself, it did not exercise its statutory right to redeem the property within 180 days of the sale, §6337(b)(1), and after that period
Page 311
had passed, the Government gave Darue a quitclaim deed. §6339.
Five years later, Grable brought a quiet title action in state court, claiming that Darue's record title was invalid because the IRS had failed to notify Grable of its seizure of the property in the exact manner required by §6335(a), which provides that written notice must be "given by the Secretary to the owner of the property [or] left at his usual place of abode or business." Grable said that the statute required personal service, not service by certified mail.
Darue removed the case to Federal District Court as presenting a federal question, because the claim of title depended on the interpretation of the notice statute in the federal tax law. The District Court declined to remand the case at Grable's behest after finding that the "claim does pose a significant question of federal law," Tr. 17 (Apr. 2, 2001), and ruling that Grable's lack of a federal right of action to enforce its claim against Darue did not bar the exercise of federal jurisdiction. On the merits, the court granted summary judgment to Darue, holding that although §6335 by its terms required personal service, substantial compliance with the statute was enough. 207 F.Supp.2d 694 (WD Mich. 2002).
The Court of Appeals for the Sixth Circuit affirmed. 377 F.3d 592 (2004). On the jurisdictional question, the panel thought it sufficed that the title claim raised an issue of federal law that had to be resolved, and implicated a substantial federal interest (in construing federal tax law). The court went on to affirm the District Court's judgment on the merits. We granted certiorari on the jurisdictional question alone,[1] 543 U.S. 1042 (2005) to resolve a split within the Courts of Appeals on whether Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), always requires
Page 312
a federal cause of action as a condition for exercising federal-question jurisdiction.[2] We now affirm.
II
Darue was entitled to remove the quiet title action if Grable could have brought it in federal district court originally, 28 U.S.C. §1441(a), as a civil action "arising under the Constitution, laws, or treaties of the United States," §1331. This provision for federal-question jurisdiction is invoked by and large by plaintiffs pleading a cause of action created by federal law (e.g., claims under 42 U.S.C. §1983). There is, however, another longstanding, if less frequently encountered, variety of federal "arising under" jurisdiction, this Court having recognized for nearly 100 years that in certain cases federal question jurisdiction will lie over state-law claims that implicate significant federal issues. E.g., Hopkins v. Walker, 244 U.S. 486, 490-491 (1917). The doctrine captures the commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues, see ALI, Study of the Division of Jurisdiction Between State and Federal Courts 164-166 (1968).
The classic example is Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921), a suit by a shareholder claiming that the defendant corporation could not lawfully buy certain bonds of the National Government because their issuance was unconstitutional. Although Missouri law provided the cause of action, the Court recognized federal-question jurisdiction because the principal issue in the case was the federal constitutionality of the bond issue. Smith thus held, in a
Page 313
somewhat generous statement of the scope of the doctrine, that a state-law claim could give rise to federal-question jurisdiction so long as it "appears from the [complaint] that the right to relief depends upon the construction or application of [federal law]." Id., at 199.
The Smith statement has been subject to some trimming to fit earlier and later cases recognizing the vitality of the basic doctrine, but shying away from the expansive view that mere need to apply federal law in a state-law claim will suffice to open the "arising under" door. As early as 1912, this Court had confined federal-question jurisdiction over state-law claims to those that "really and substantially involv[e] a dispute or controversy respecting the validity, construction or effect of [federal] law." Shulthis v. McDougal, 225 U.S. 561, 569 (1912). This limitation was the ancestor of Justice Cardozo's later explanation that a request to exercise federal-question jurisdiction over a state action calls for a "common-sense accommodation of judgment to [the] kaleidoscopic situations" that present a federal issue, in "a selective process which picks the substantial causes out of the web and lays the other ones aside." Gully v. First Nat. Bank in Meridian, 299 U.S. 109, 117-118 (1936). It has in fact become a constant refrain in such cases that federal jurisdiction demands not only a contested federal issue, but a substantial one, indicating a serious federal interest in claiming the advantages thought to be inherent in a federal forum. E.g., Chicago v. International College of Surgeons, 522 U.S. 156, 164 (1997); Merrell Dow, supra, at 814, and n. 12; Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 28 (1983).
But even when the state action discloses a contested and substantial federal question, the exercise of federal jurisdiction is subject to a possible veto. For the federal issue will ultimately qualify for a federal forum only if federal jurisdiction is consistent with congressional judgment about the sound division of labor between state and federal courts governing
Page 314
the application of §1331. Thus, Franchise Tax Bd. explained that the appropriateness of a federal forum to hear an embedded issue could be evaluated only after considering the "welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system." Id., at 8. Because arising-under jurisdiction to hear a state-law claim always raises the possibility of upsetting the state-federal line drawn (or at least assumed) by Congress, the presence of a disputed federal issue and the ostensible importance of a federal forum are never necessarily dispositive; there must always be an assessment of any disruptive portent in exercising federal jurisdiction. See also Merrell Dow, supra, at 810.
These considerations have kept us from stating a "single, precise, all-embracing" test for jurisdiction over federal issues embedded in state-law claims between non-diverse parties. Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 821 (1988) (STEVENS, J., concurring). We have not kept them out simply because they appeared in state raiment, as Justice Holmes would have done, see Smith, supra, at 214 (dissenting opinion), but neither have we treated "federal issue" as a password opening federal courts to any state action embracing a point of federal law. Instead, the question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.
III
A
This case warrants federal jurisdiction. Grable's state complaint must specify "the facts establishing the superiority of [its] claim," Mich. Ct. Rule 3.411(B)(2)(c) (West 2005), and Grable has premised its superior title claim on a failure by the IRS to give it adequate notice, as defined by federal
Page 315
law. Whether Grable was given notice within the meaning of the federal statute is thus an essential element of its quiet title claim, and the meaning of the federal statute is actually in dispute; it appears to be the only legal or factual issue contested in the case. The meaning of the federal tax provision is an important issue of federal law that sensibly belongs in a federal court. The Government has a strong interest in the "prompt and certain collection of delinquent taxes," United States v. Rodgers, 461 U.S. 677, 709 (1983), and the ability of the IRS to satisfy its claims from the property of delinquents requires clear terms of notice to allow buyers like Darue to satisfy themselves that the Service has touched the bases necessary for good title. The Government thus has a direct interest in the availability of a federal forum to vindicate its own administrative action, and buyers (as well as tax delinquents) may find it valuable to come before judges used to federal tax matters. Finally, because it will be the rare state title case that raises a contested matter of federal law, federal jurisdiction to resolve genuine disagreement over federal tax title provisions will portend only a microscopic effect on the federal-state division of labor. See n. 3, infra.
This conclusion puts us in venerable company, quiet title actions having been the subject of some of the earliest exercises of federal-question jurisdiction over state-law claims. In Hopkins, 244 U. S., at 490-491, the question was federal jurisdiction over a quiet title action based on the plaintiffs' allegation that federal mining law gave them the superior claim. Just as in this case, "the facts showing the plaintiffs' title and the existence and invalidity of the instrument or record sought to be eliminated as a cloud upon the title are essential parts of the plaintiffs' cause of action."[3] Id., at 490.
Page 316
As in this case again, "it is plain that a controversy respecting the construction and effect of the [federal] laws is involved and is sufficiently real and substantial." Id., at 489. This Court therefore upheld federal jurisdiction in Hopkins, as well as in the similar quiet title matters of Northern Pacific R. Co. v. Soderberg, 188 U.S. 526, 528 (1903), and Wilson Cypress Co. v. Del Pozo y Marcos, 236 U.S. 635, 643-644 (1915). Consistent with those cases, the recognition of federal jurisdiction is in order here.
B
Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), on which Grable rests its position, is not to the contrary. Merrell Dow considered a state tort claim resting in part on the allegation that the defendant drug company had violated a federal misbranding prohibition, and was thus presumptively negligent under Ohio law. Id., at 806. The Court assumed that federal law would have to be applied to resolve the claim, but after closely examining the strength of the federal interest at stake and the implications of opening the federal forum, held federal jurisdiction unavailable. Congress had not provided a private federal cause of action for violation of the federal branding requirement, and the Court found "it would . . . flout, or at least undermine, congressional intent to conclude that federal courts might nevertheless exercise federal-question jurisdiction and provide remedies for violations of that federal statute solely because the violation . . . is said to be a . . . 'proximate cause' under state law." Id., at 812.
Page 317
Because federal law provides for no quiet title action that could be brought against Darue,[4] Grable argues that there can be no federal jurisdiction here, stressing some broad language in Merrell Dow (including the passage just quoted) that on its face supports Grable's position, see Note, Mr. Smith Goes to Federal Court: Federal Question Jurisdiction over State Law Claims Post-Merrell Dow, 115 Harv. L. Rev. 2272, 2280-2282 (2002) (discussing split in Circuit Courts over private right of action requirement after Merrell Dow). But an opinion is to be read as a whole, and Merrell Dow cannot be read whole as overturning decades of precedent, as it would have done by effectively adopting the Holmes dissent in Smith, see supra, at 314, and converting a federal cause of action from a sufficient condition for federal-question jurisdiction[5] into a necessary one.
In the first place, Merrell Dow disclaimed the adoption of any bright-line rule, as when the Court reiterated that "in exploring the outer reaches of §1331, determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system." 478 U. S., at 810. The opinion included a lengthy footnote explaining that questions of jurisdiction over state-law claims require "careful judgments," id., at 814, about the "nature of the federal interest at stake," id., at 814, n. 12 (emphasis deleted). And as a final indication that it did not mean to make a federal right of action mandatory, it expressly approved the exercise of jurisdiction sustained in Smith, despite the want of any federal cause of action available to Smith's shareholder plaintiff. 478 U. S., at 814, n. 12.
Page 318
Merrell Dow then, did not toss out, but specifically retained the contextual enquiry that had been Smith's hallmark for over 60 years. At the end of Merrell Dow, Justice Holmes was still dissenting.
Accordingly, Merrell Dow should be read in its entirety as treating the absence of a federal private right of action as evidence relevant to, but not dispositive of, the "sensitive judgments about congressional intent" that §1331 requires. The absence of any federal cause of action affected Merrell Dow's result two ways. The Court saw the fact as worth some consideration in the assessment of substantiality. But its primary importance emerged when the Court treated the combination of no federal cause of action and no preemption of state remedies for misbranding as an important clue to Congress's conception of the scope of jurisdiction to be exercised under §1331. The Court saw the missing cause of action not as a missing federal door key, always required, but as a missing welcome mat, required in the circumstances, when exercising federal jurisdiction over a state misbranding action would have attracted a horde of original filings and removal cases raising other state claims with embedded federal issues. For if the federal labeling standard without a federal cause of action could get a state claim into federal court, so could any other federal standard without a federal cause of action. And that would have meant a tremendous number of cases.
One only needed to consider the treatment of federal violations generally in garden variety state tort law. "The violation of federal statutes and regulations is commonly given negligence per se effect in state tort proceedings."[6]
Page 319
Restatement (Third) of Torts (proposed final draft) §14, Comment a. See also W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on Torts, §36, p. 221, n. 9 (5th ed. 1984) ("[T]he breach of a federal statute may support a negligence per se claim as a matter of state law" (collecting authority)). A general rule of exercising federal jurisdiction over state claims resting on federal mislabeling and other statutory violations would thus have heralded a potentially enormous shift of traditionally state cases into federal courts. Expressing concern over the "increased volume of federal litigation," and noting the importance of adhering to "legislative intent," Merrell Dow thought it improbable that the Congress, having made no provision for a federal cause of action, would have meant to welcome any state-law tort case implicating federal law "solely because the violation of the federal statute is said to [create] a rebuttable presumption [of negligence] . . . under state law." 478 U. S., at 811-812 (internal quotation marks omitted). In this situation, no welcome mat meant keep out. Merrell Dow's analysis thus fits within the framework of examining the importance of having a federal forum for the issue, and the consistency of such a forum with Congress's intended division of labor between state and federal courts.
As already indicated, however, a comparable analysis yields a different jurisdictional conclusion in this case. Although Congress also indicated ambivalence in this case by providing no private right of action to Grable, it is the rare state quiet title action that involves contested issues of federal law, see n. 3, supra. Consequently, jurisdiction over actions like Grable's would not materially affect, or threaten to affect, the normal currents of litigation. Given the absence of threatening structural consequences and the clear interest the Government, its buyers, and its delinquents have in the availability of a federal forum, there is no good reason to
Page 320
shirk from federal jurisdiction over the dispositive and contested federal issue at the heart of the state-law title claim.[7]
IV
The judgment of the Court of Appeals, upholding federal jurisdiction over Grable's quiet title action, is affirmed.
It is so ordered.
Thomas, J., concurring
The Court faithfully applies our precedents interpreting 28 U.S.C. §1331 to authorize federal-court jurisdiction over some cases in which state law creates the cause of action but requires determination of an issue of federal law, e.g., Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921); Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986). In this case, no one has asked us to overrule those precedents and adopt the rule Justice Holmes set forth in American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (1916), limiting §1331 jurisdiction to cases in which federal law creates the cause of action pleaded on the face of the plaintiff's complaint. Id., at 260. In an appropriate case, and perhaps with the benefit of better evidence as to the original meaning of §1331's text, I would be willing to consider that course.[*]
Page 321
Jurisdictional rules should be clear. Whatever the virtues of the Smith standard, it is anything but clear. Ante, at 313 (the standard "calls for a 'common-sense accommodation of judgment to [the] kaleidoscopic situations' that present a federal issue, in 'a selective process which picks the substantial causes out of the web and lays the other ones aside' " (quoting Gully v. First Nat. Bank in Meridian, 299 U.S. 109, 117-118 (1936))); ante, at 314 ("[T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities"); ante, at 317, 318 (" '[D]eterminations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system' "; "the absence of a federal private right of action [is] evidence relevant to, but not dispositive of, the 'sensitive judgments about congressional intent' that §1331 requires" (quoting Merrell Dow, supra, at 810)).
Whatever the vices of the American Well Works rule, it is clear. Moreover, it accounts for the "'vast majority' " of cases that come within §1331 under our current case law, Merrell Dow, supra, at 808 (quoting Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 9 (1983)) - further indication that trying to sort out which cases fall within the smaller Smith category may not be worth the effort it entails. See R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler's The Federal
Page 322
Courts and the Federal System 885-886 (5th ed. 2003). Accordingly, I would be willing in appropriate circumstances to reconsider our interpretation of §1331.
---------------
Notes:
[*] Mr. Zagrans filed a brief for Jerome R. Mikulski et ux. as amid curiae urging reversal.
[1] Accordingly, we have no occasion to pass upon the proper interpretation of the federal tax provision at issue here.
[2] Compare Seinfeld v. Austen, 39 F.3d 761, 764 (CA7 1994) (finding that federal-question jurisdiction over a state-law claim requires a parallel federal private right of action), with Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (CA4 1996) (finding that a federal private action is not required).
[3] The quiet title cases also show the limiting effect of the requirement that the federal issue in a state-law claim must actually be in dispute to justify federal-question jurisdiction. In Shulthis v. McDougal, 225 U.S. 561 (1912), this Court found that there was no federal question jurisdiction to hear a plaintiff's quiet title claim in part because the federal statutes on which title depended were not subject to "any controversy respecting their validity, construction, or effect." Id., at 570. As the Court put it, the requirement of an actual dispute about federal law was "especially" important in "suit[s] involving rights to land acquired under a law of the United States," because otherwise "every suit to establish title to land in the central and western states would so arise [under federal law], as all titles in those States are traceable back to those laws." Id., at 569-570.
[4] Federal law does provide a quiet title cause of action against the Federal Government. 28 U.S.C. §2410. That right of action is not relevant here, however, because the federal government no longer has any interest in the property, having transferred its interest to Darue through the quitclaim deed.
[5] For an extremely rare exception to the sufficiency of a federal right of action, see Shoshone Mining Co. v. Rutter, 177 U.S. 505, 507 (1900).
[6] Other jurisdictions treat a violation of a federal statute as evidence of negligence or, like Ohio itself in Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), as creating a rebuttable presumption of negligence. Restatement (Third) of Torts (proposed final draft) §14, Reporters' Note, Comment c, at 196. Either approach could still implicate issues of federal law.
[7] At oral argument Grable's counsel espoused the position that after Merrell Dow, federal-question jurisdiction over state-law claims absent a federal right of action, could be recognized only where a constitutional issue was at stake. There is, however, no reason in text or otherwise to draw such a rough line. As Merrell Dow itself suggested, constitutional questions may be the more likely ones to reach the level of substantiality that can justify federal jurisdiction. 478 U. S., at 814, n. 12. But a flat ban on statutory questions would mechanically exclude significant questions of federal law like the one this case presents.
[*] This Court has long construed the scope of the statutory grant of federal-question jurisdiction more narrowly than the scope of the constitutional grant of such jurisdiction. See Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 807-808 (1986). I assume for present purposes that this distinction is proper - that is, that the language of 28 U.S.C. §1331, "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States" (emphasis added), is narrower than the language of Art. III, §2, cl. 1, of the Constitution, "[t]he judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority . . . " (emphases added).

& & &

462 F.3d 1228 (10th Cir. 2006)
WESTLAND HOLDINGS, INC., a Wyoming corporation, Plaintiff-Appellee,
v.
Ross LAY, Defendant-Appellant,
and
Wyoming Department of Employment; Georg Jensen, Defendants.
No. 05-8083.
United States Court of Appeals, Tenth Circuit.
Aug. 15, 2006
Submitted on the briefs: [*] Mitchell E. Osborn, Cheyenne, WY, for Appellant.
John C. Patton, Wendy Curtis Palen, Cheyenne, WY, for Appellee.
Before HARTZ, ANDERSON, and TYMKOVICH, Circuit Judges.
TYMKOVICH, Circuit Judge.
In this dispute involving the redemption of real property after a tax sale, defendant-appellant Ross Lay appeals from the district court's grant of summary judgment
Page 1229
to plaintiff Westland Holdings, Inc. (Westland). "We review the grant of summary judgment de novo and affirm only if the record, considered in the light most favorable to the plaintiff, establishes no genuine issue of material fact," Bastible v. Weyerhaeuser Co., 437 F.3d 999, 1004 (10th Cir.2006) (quotation omitted), and the defendant is entitled to a judgment as a matter of law, Fed.R.Civ.P. 56(c). Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.
Redemption of real property after a tax sale is governed by 26 U.S.C. § 6337(b)(1), which provides:
The owners of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.
(emphasis added).
Mr. Lay purchased defendant Georg Jensen's real property at a tax sale held by the Internal Revenue Service on November 14, 2003. On May 12, 2004, Mr. Jensen executed a mortgage in favor of Westland for the express purpose of providing Westland with a redeemable interest in the property. That same day, Westland tendered the sufficient redemption amount to the IRS. The IRS, however, rejected the tender because it maintained that the redemption attempt was not within the statutory time period and was thus untimely. The IRS came to this conclusion by including the date of the sale as the first day of the redemption period.
The parties stipulated that Westland was a person with an interest in the property pursuant to this statute and was thus eligible to redeem. [1] See Aplt.App. at 68. Thus, the purely legal issue before the district court was whether the day of the sale should be counted when calculating the redemption period. If it should be counted, Westland's attempted redemption came one day late.
After a thorough review of the applicable law, the district court concluded that the day of sale should not be included in the redemption-period calculation. Westland Holdings, Inc. v. Lay, 392 F.Supp.2d 1283, 1287 (D.Wyo.2005). The court therefore granted Westland's motion for summary judgment, holding that Westland "tendered the redemption amount within the 180-day statutory redemption period, which ended on May 12, 2004." Id.
As part of its analysis, the district court considered Guthrie v. Curnutt, 417 F.2d 764 (10th Cir.1969), where this court found that the then one-year redemption deadline for property sold on August 22, 1966, expired on August 22, 1967, and that a cash tender on that date was timely. Id. at 765-66. The district court found Guthrie unclear as to whether this court counted the day of the sale as the first day of the redemption period. Westland, 392 F.Supp.2d at 1285. In order to dispel any confusion, we now clarify that we did not count the day of sale as the first day of the one-year redemption period in Guthrie. Had this court included August 22, 1966, as the first day of the then 365-day redemption period, the period would have expired at the end of the day on August 21, 1967, not on August 22. Thus, this court started the redemption clock in
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Guthrie on August 23, 1966, the day after the sale.
With this clarification, we agree with the well-reasoned opinion of the district court and, as we have on other appropriate occasions, we formally adopt the decision, attached as an appendix hereto, as our own. See, e.g., Hollytex Carpet Mills, Inc. v. Okla. Employment Sec. Comm'n (In re Hollytex Carpet Mills, Inc.), 73 F.3d 1516, 1518 (10th Cir.1996).
The judgment of the district court is AFFIRMED.
Appendix
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF WYOMING
WESTLAND HOLDINGS, INC., a Wyoming corporation, Plaintiff(s),
vs.
ROSS LAY, INTERNAL REVENUE SERVICE, DEPARTMENT OF EMPLOYMENT, and GEORG JENSEN, Defendant(s).
Case No. 04-CV-265-D
ORDER GRANTING SUMMARY JUDGMENT TO PLAINTIFF WESTLAND HOLDINGS, INC.
This matter comes before the Court on the Motion for Summary Judgment filed by Plaintiff Westland Holdings, Inc. on January 7, 2005. Though this motion was initially denied because the facts of the case were unclear absent further discovery, the parties have since resolved all disputed issues of fact and the matter is now appropriately before the Court on the Motion for Summary Judgment. The Court, having reviewed the materials submitted in support and opposition, and being otherwise fully advised in the premises, FINDS and ORDERS as follows:
BACKGROUND
The facts remaining in this action, as stipulated by the parties Westland Holdings, Inc. and Ross Lay, are as follows:
1. Defendant Georg Jensen was the record owner of certain real property located at 1613 Evans Avenue, Cheyenne, Laramie County, Wyoming, at the time of a sale held by the Internal Revenue Service on November 14, 2003.
2. Said property was subject to several liens of record against Georg Jensen in the Laramie County, Wyoming real estate records, including several state tax liens and two federal tax liens.
3. The Internal Revenue Service ("IRS"), an agency of the United States of America, levied upon the property and caused notice of the sale of the property to be given pursuant to Section 6331 of the Internal Revenue Code.
4. The sale was held November 14, 2003. No objection to notice or the procedural aspects of the sale itself have been entered by any party.
5. Defendant Ross Lay was the successful bidder at the public auction sale and was issued a Certificate of Sale of Seized property from the IRS.
6. On May 12, 2004, Georg Jensen executed a mortgage in favor of Plaintiff Westland Holdings, Inc. The Parties agree the mortgage was given specifically for the purpose of providing Westland Holdings, Inc. with an interest in the property sufficient to redeem the property pursuant to the federal law.
7. The Plaintiff is a person with an interest in the property pursuant to 26 U.S.C. § 6337(b)(1) and therefore entitled to redeem the property "within 180 days of the sale."
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8. Plaintiff tendered to the IRS $60,500 on May 12, 2004. The parties agree that this amount was sufficient to redeem the property, if the redemption is determined to be timely.
9. No other party with an interest in the property attempted to redeem the property.
10. The IRS rejected the redemption of the Plaintiff, stating that the redemption was not within the 180-day time period required by statute and that the date of the sale is included in calculating the 180-day period. The parties stipulate that the timeliness of the redemption is the only remaining issue before the Court.
11. A Quitclaim Deed was executed by the IRS transferring the property to Defendant Lay on May 21, 2004 and recorded with the Laramie County Clerk on June 18, 2004 as reception number 390434, book 1820, page 357.
12. The parties stipulate that the only issue remaining is an issue of law: Whether the redemption by Plaintiff on May 12 was within the 180-day period, as argued by the Plaintiff, or whether the redemption was one day late because the IRS counts the day of the sale when calculating the redemption period, as argued by the Defendant.
STANDARD OF REVIEW
Summary Judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. PRO. 56(c). In considering a party's motion for summary judgment, the court must examine all evidence in the light most favorable to the non-moving party. Barber v. General Elec. Co., 648 F.2d 1272, 1276 n. 1 (10th Cir.1981). As the parties have stipulated to all material issues of fact and the only issue remaining is one of law, the Court may appropriately decide this matter on summary judgment.
DISCUSSION
The only issue remaining in this case is whether the Plaintiff Westland Holdings, Inc. redeemed the subject property within the 180-day statutory redemption period. United States statute provides,
Redemption of real estate after sale.--
Period.--The owners of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.
26 U.S.C. § 6337(b)(1)(2004)(emphasis added). Whether the Plaintiff in this case redeemed the property within the statutory period is dependent upon whether the day of the sale is counted as part of the 180 days, or whether the clock starts running the day after the sale. Defendant argues that the day of the sale is included in the count, and therefore, the Plaintiff's tender was 181 days after the sale. Plaintiff contends the day of sale is not included and the tender was within 180 days after the sale.
To resolve this issue the Court must first look to the statutory language. "The first step is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. The inquiry ceases if the statutory language is unambiguous and the statutory scheme is coherent and consistent." Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002) (citations and quotations omitted). The language in question here is the phrase "at any time within 180 days after the sale." Plaintiff argues that
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the plain meaning of the phrase is unambiguous. The word "after" clearly indicates that the first day counted in the 180 days is the day "after" the sale. The Court agrees that the language of the statute is a strong indication that the day of the sale should not be included when counting the 180-day redemption period. Nevertheless, as the statute does not explicitly state as much, the Court believes it is prudent to look beyond the statutory language to other authority that might resolve the issue.
Several cases have applied the statutory redemption period found in 26 U.S.C. § 6337(b). Plaintiff cites those cases which it claims counted the statutory period in § 6337(b) starting the day after the sale. Defendant, on the other hand, points to cases he claims counted the day of sale. The only case this Court discovered that squarely addresses the issue is Howard v. Adle, 538 F.Supp. 504 (E.D.Mich.1982). The United States District Court for the Eastern District of Michigan in Howard stated, basing its opinion on two cases that purportedly led the court to conclude as it did, "The expiration date of the redemption period is calculated by including the date of sale." Id. at 509. The two cases relied upon by the court were Ballard v. United States, 20 A.F.T.R.2d 5476 (D.Colo.1967) and Guthrie v. Curnutt, 417 F.2d 764 (10th Cir.1969).
The application of § 6337(b) in Ballard and Guthrie does not support the holding in Howard. A careful examination of Ballard demonstrates that the United States District Court for the District of Colorado did not count the day of the sale in calculating the redemption period, which was 120 days at the time the case was decided. In Ballard, the day of the sale was November 4, 1966 and the court held that March 6 and March 21, 1967 were 122 and 137 days after the sale, respectively, falling outside the 120 day redemption period in § 6337(b). Ballard, 20 A.F.T.R.2d at *2-3. In Guthrie, a case on which Defendant relies, it is not clear that the Tenth Circuit Court of Appeals counted the day of the sale. At that time, the redemption statute required that redemption be "within 1 year after the sale." The sale occurred on August 22, 1966. Guthrie, 417 F.2d at 765. The Tenth Circuit held that the deadline expired on August 22, 1967. Id. Defendant claims that Guthrie demonstrates that the date of the sale is included in the calculation. Guthrie, however, could just as easily be interpreted as not having included the day of the sale in counting the redemption period and it unclear whether the Tenth Circuit even considered whether to count the day of the sale when it decided Guthrie.
In a more recent unpublished Tenth Circuit case, Silver Bell Industries v. United States, the Tenth Circuit, again applying § 6337(b), did not count the date of sale in calculating the length of the redemption period. 38 A.F.T.R.2d 5171, 1976 WL 3799 (10th Cir.1976)(unpublished). The date of sale was January 12, 1972. Id. at *4. The Tenth Circuit noted that the day of tender, May 12, 1972, was 121 days after the day of the sale. Id. at *5. In order to come to this conclusion the court did not include the day of the sale in calculating the redemption period.
In addition to the case law, the Plaintiff suggests that the Court apply Federal Rule of Civil Procedure 6(a), which states, "In computing any period of time prescribed or allowed by these rules, by the local rules of any district court, by order of court, or by any applicable statute, the day of the act, event, or default from which the designated period of time begins to run shall not be included." FED. R. CIV. PRO. 6(a) (emphasis added).
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Some courts have held that when a statute does not expressly dictate whether the day of the event should be included in the time limitation, Federal Rule of Civil Procedure 6(a) should control. Flanagan v. Johnson, 154 F.3d 196, 201-202 (5th Cir.1998) ("Given the lack of any express direction in the statute itself, we are compelled to adhere to our Circuit's well established rule that Rule 6(a) governs the computation of federal statutory time periods of limitation.... By extension, when computing the one year time period applicable to petitions raising claims that would otherwise be time-barred as of the April 24, 1996, that date must be excluded from the computation and petitions filed on or before April 24, 1997 are timely."); Krajci v. Provident Consumer Discount Co., 525 F.Supp. 145, 150 (E.D.Penn.1981) ("Where no contrary policy is expressed in a statute, considerations of liberality and leniency militate on favor of Rule 6(a)'s application.") See also Union Nat. Bank of Wichita, Kan. v. Lamb, 337 U.S. 38, 40-41, 69 S.Ct. 911, 93 L.Ed. 1190 (1949). Section 6337(b) does not explicitly set forth whether the day of the sale should be included. As such, the Court finds it prudent to follow the generally accepted rule for counting time in Federal Rule of Civil Procedure 6(a).
Finally, if the Court is not convinced by the plain language, case law, or general rule in favor of applying Federal Rule of Civil Procedure 6(a), Plaintiff argues that the statute should be liberally construed in favor of the redeeming party. Plaintiff points out that "[c]ourts have traditionally looked with favor upon redemption and have given liberal construction to redemption statutes." Seay v. U.S., 1998 WL 718187, *4 (W.D.Tex.1998) (citations and quotations omitted). As the court observed in Babb v. Frank, 947 F.Supp. 405 (W.D.Wisc.1996), a case cited favorably by the Tenth Circuit in Gaechter Outdoor Advertising, 221 F.3d 1353, ---- (10th Cir.2000) (unpublished),
An owner's right to redeem property seized by the United Stated for failure to pay taxes was well-established long before the passage of 26 U.S.C. § 6337. See Corbett v. Nutt, 77 U.S. (10 Wall.) 464, 19 L.Ed. 976 (1870); Bennett v. Hunter, 76 U.S. (9 Wall.) 326, 19 L.Ed. 672 (1869). Leniency to the owner in the exercise of this right has always been the rule of thumb. See Corbett, 77 U.S. at 474-75 ("It is the general rule of courts to give to statutes authorizing redemption from tax sales a construction favorable to owners....").
Babb, 947 F.Supp. at 406. If leniency is applied in favor of the owner in the instant cause, the date of the sale should not be included in calculating the redemption period. The fact that it is the owner's mortgagee that is attempting to obtain the more lenient deadline is of no consequence. One rule cannot be established for the benefit of the owner and another for other parties with the right to redeem, as the result would be unworkable.
CONCLUSION
The Court finds that the language of § 6337(b) and the case law interpreting the statute indicate that the date of the sale should not be counted in determining the statutory redemption period. This decision also comports with the general rule expressed in Federal Rule of Civil Procedure 6(a) and the policy of leniency to the owner in the exercise of the right of redemption. Finding that the day of the sale should not be counted in the redemption period, the Court concludes that the Plaintiff Westland Holdings, Inc. tendered the redemption amount within the 180-day statutory redemption period, which ended on May 12, 2004. Plaintiff is entitled to
Page 1234
judgment as a matter of law. THEREFORE, it is hereby
ORDERED that Plaintiff's Motion for Summary Judgment is GRANTED and that the Plaintiff shall be permitted to redeem the property.
DATED this 2nd day of August, 2005.
William F. Downes, United States District Judge
---------
Notes:
[*] After examining the briefs and appellate record, this panel has determined unanimously to grant the parties' request for a decision on the briefs without oral argument. See Fed. R.App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.
[1] This stipulation forecloses Mr. Lay's argument on appeal that Westland did not possess redemption rights.


Hugh Wood, Esq.
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