Thursday, May 23, 2013

Indiana Woman Who Had Home Sold Out From Under Her In Tax Foreclosure Sale Fights To Get It Back; Currently Awaits State High Court Ruling In Seperate Case Addressing Constitutional Sufficiency Of Pre-Sale Notices Under 14th Amendment's Due Process Clause

In Mishawaka, Indiana, the South Bend Tribune reports:

  • A series of setbacks led to a Mishawaka woman's home being sold at a county tax sale, and a St. Joseph County judge is weighing whether she was adequately warned that her house was in jeopardy.

    Meanwhile, attorneys and judges around the state are waiting for the Indiana Supreme Court to rule on a case they heard earlier this year, which could determine how constitutional the state's tax sale process is.
  • The Indiana Supreme Court decided to take on the issue of due process and tax sale notifications, hearing oral arguments on Feb. 14. [...] In that case, M&M Investment Group v. Ahlemeyer Farms, the property was sold without notifying the bank that owned the mortgage, which had $700,000 outstanding.

    Indiana's law on tax sales require mortgage holders, even after the mortgage is initially recorded in public records, to send an auditor a certified letter every year asking for notification of any possible tax sales. In the Bartholomew County case, that did not happen.

    But a trial judge ruled in the bank's favor, and the Indiana Appeals Court agreed, saying, in part, "We therefore conclude that the Indiana pre-sale notice violates the Due Process Clause of the Fourteenth Amendment because it does not require the government to provide sufficient notice prior to the tax sale."

    The appeals court noted several earlier cases, quoting extensively from a 1983 Indiana case, Mennonite Board of Mission v. Adams, in which the U.S. Supreme Court ruled that the auditor did not go far enough in determining whether a mortgage was involved.

    The most recent appeals court ruling quoted from the Mennonite case: "A party's ability to take steps to safeguard its interests does not relieve the State of its Constitutional obligation. It is true that particularly extensive efforts to provide notice may often be required when the state is aware of a party's inexperience or incompetence."

    In a 2006 U.S. Supreme Court decision, Jones v. Flowers, the court addressed similar due process issues relating to an Arkansas property owner whose notices had been returned unclaimed.
For the story, see Woman fights to keep house (Judge reviews tax sale case -- as state court tackles the larger issue).

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