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State ex rel. Southland Properties, LLC v. Janes

Supreme Court of West Virginia

March 9, 2018

STATE OF WEST VIRGINIA ex rel. SOUTHLAND PROPERTIES, LLC, Petitioner
v.
HONORABLE DAVID R. JANES, Judge of the Circuit Court of Marion County; KENNETH G. JONES, JR.; and G. RUSSELL ROLLYSON, JR., Deputy Commissioner of Delinquent and Nonentered Lands for Marion County, West Virginia, Respondents

          Submitted: February 6, 2018

         Petition for Writ of Prohibition

          Jason E. Wingfield, Esq. Gianola, Barnum, Bechtel and Jecklin, L.C. Morgantown, West Virginia Counsel for the Petitioner

          David A. Glance, Esq. David A. Glance, Attorney at Law Fairmont, West Virginia Counsel for the Respondent Kenneth G. Jones, Jr.

          Lisa A. Hopkins, Esq. Vincent J. Smith, Esq. West Virginia State Auditor's Office Charleston, West Virginia Counsel for the Respondent G. Russell Rollyson, Jr., Deputy Commissioner of Delinquent and Nonentered Lands

          OPINION

          WALKER JUSTICE .

         SYLLABUS BY THE COURT

         1. "A writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers[.]" Syllabus Point 2, State ex rel Peacher v. Sencindiver, 160 W.Va. 314');">160 W.Va. 314, 233 S.E.2d 425 (1977).

         2. "In determining whether to entertain and issue the writ of prohibition for cases not involving an absence of jurisdiction but only where it is claimed that the lower tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression. These factors are general guidelines that serve as a useful starting point for determining whether a discretionary writ of prohibition should issue. Although all five factors need not be satisfied, it is clear that the third factor, the existence of clear error as a matter of law, should be given substantial weight." Syllabus Point 4, State ex rel. Hoover v. Berger, 199 W.Va. 12');">199 W.Va. 12, 483 S.E.2d 12 (1996).

         3. "'Rule 19(a) of the West Virginia Rules of Civil Procedure requires two general inquiries for joinder of a person who is subject to service of process. First, is his presence necessary to give complete relief to those already parties? Second, does he have a claim that, if he is not joined, will be impaired or will his nonjoinder result in subjecting the existing parties to a substantial risk of multiple or inconsistent obligations? If the absent person meets the foregoing test, his joinder is required.' Syllabus, in part, Wachter v. Dostert, 172 W.Va. 93, 303 S.E.2d 731 (1983)." Syllabus Point 1, State ex rel. One-Gateway v. Johnson, 208 W.Va. 731');">208 W.Va. 731, 542 S.E.2d 894 (2000).

         4. "When a court proceeding directly affects or determines the scope of rights or interests in real property, any persons who claim an interest in the real property at issue are indispensable parties to the proceeding. Any order or decree issued in the absence of those parties is null and void." Syllabus Point 2, O'Daniels v. City of Charleston, 200 W.Va. 711');">200 W.Va. 711, 490 S.E.2d 800 (1997).

         5. "Generally, all persons who are materially interested in the subject-matter involved in a suit, and who will be affected by the result of the proceedings, should be made parties thereto, and when the attention of the court is called to the absence of any of such interested persons, it should see that they are made parties before entering a decree affecting their interest." Syllabus, Manufacturers' Light & Heat Co. v. Lemasters, 91 W.Va. 1');">91 W.Va. 1, 112 S.E. 201 (1922).

         6. West Virginia Code § 11A-3-60 does not contemplate notice to or participation of a delinquent taxpayer in an action to compel issuance of a deed for property sold at a tax sale.

         Kenneth G. Jones, Jr. purchased two tracts of land in Marion County at a tax sale in 2016. The properties were owned by Southland Properties, LLC (Southland), which had failed to pay property taxes for several years. Shortly after the tax sale, Southland filed bankruptcy, which precluded the Deputy Commissioner of Delinquent and Nonentered Lands of Marion County (Deputy Commissioner) from delivering the deeds to Southland's tax-delinquent properties to Mr. Jones. After the bankruptcy was dismissed several months later, the Deputy Commissioner declined to issue the deeds to Mr. Jones because the thirty-day time frame set by West Virginia Code § 11A-5-39 for issuance of the deeds following the tax sale had passed - through no fault of Mr. Jones. Mr. Jones instituted an action under West Virginia Code § 11A-3-60 (Section 60 Proceeding) to compel the Deputy Commissioner to issue the deeds. Southland moved to intervene in the Section 60 Proceeding on the grounds that it was an indispensable party, which was denied. Southland invokes this Court's original jurisdiction and seeks a writ of prohibition against the circuit court for denying its alleged right to intervene.

         While we acknowledge that Southland owned the properties and retained the right to pay the delinquent taxes and redeem at any time prior to delivery of the deeds to Mr. Jones, we conclude that Southland was not an indispensable party to the Section 60 Proceedings because Southland made no attempt to redeem and its ownership interest as a delinquent taxpayer is predicated on redemption. In the absence of an attempt to redeem the properties, the limited scope of the Section 60 Proceeding did not affect Southland's property interests, but rather only compelled the Deputy Commissioner to deliver deeds - the right to which Mr. Jones has long since accrued. Therefore, we deny the writ of prohibition.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Southland owned two tracts of land in Marion County, West Virginia. Southland did not pay property taxes on those parcels for the tax years 2012, 2013, 2014, or 2015 and, as a result, owed Marion County over $90, 000. On June 29, 2016, Mr. Jones purchased the two tracts of land at a delinquent properties tax sale conducted by G. Russell Rollyson, Jr., in his capacity as Deputy Commissioner of Delinquent and Nonentered Lands for Marion County. Mr. Jones paid $60, 000 for the two properties. After the sale, Mr. Rollyson provided Mr. Jones with a list of the necessary steps to secure the deed, which included that Mr. Jones provide to Mr. Rollyson a list of all interested parties to be served with notice of opportunity to redeem and a requirement that Mr. Jones tender payment of $60, 000 on or before August 29, 2016. Mr. Jones complied with all necessary steps. Mr. Rollyson duly served Southland with notices to redeem both properties by regular mail, certified mail, and publication. The notices provided that Southland could redeem its properties by paying the outstanding taxes at any time before October 17, 2016, for one property, and October 24, 2016 for the other.

          Southland did not redeem either property. Rather, on October 17, 2016 - the last day to redeem one of the properties - Southland filed Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of West Virginia. Because the two delinquent properties were part of Southland's bankruptcy estate, their sale to Mr. Jones was subject to the automatic stay provisions of 11 U.S.C. § 362. Accordingly, Mr. Rollyson issued refund checks to Mr. Jones. On December 29, 2016, Mr. Jones filed a Motion for Relief from the Automatic Stay, but during the pendency of that motion, the bankruptcy court dismissed Southland's bankruptcy petition.[1] The dismissal order, dated March 3, 2017, lifted the automatic stay, and at that time Mr. Jones corresponded with Mr. Rollyson in an attempt to secure deeds to the two delinquent properties. Mr. Rollyson responded that he was unable to issue the deeds pursuant to West Virginia Code § 11A-3-59, because he interpreted the statute as forbidding him to issue the deeds once thirty days had passed from the date Mr. Jones's right to the deeds accrued.[2] Mr. Rollyson and Mr. Jones both agreed that Mr. Jones's right to the deeds accrued on October 17, 2016, and October 24, 2016, respectively, but due to the interruption of the bankruptcy proceedings, more than thirty days had passed since that time. Based on the plain language of the statute, Mr. Rollyson believed he did not have the authority to issue the deeds without a court order requiring him to do so.

         Accordingly, Mr. Jones sought a court order to compel delivery of the deeds pursuant to West Virginia Code § 11A-3-60. Prior to filing the action in circuit court, Mr. Jones provided notice to Mr. Rollyson, but not to Southland. Mr. Rollyson moved to dismiss the action, and a hearing was held on July 11, 2017. Mr. Rollyson argued that West Virginia Code § 11A-3-59 did not authorize him to issue the deed after the thirty-day period, and that he declined to read into the statute a tolling of the thirty-day time limitation due to bankruptcy proceedings. Mr. Rollyson additionally argued that the most appropriate course of action was to have Mr. Jones re-bid on the properties. Mr. Jones argued that West Virginia Code §11A-3-59 does not provide a thirty-day "drop dead date" from which a tax-sale purchaser has no remedy or recourse. Instead, Mr. Jones reasoned that the Legislature had contemplated a six-month period to compel issuance of the deed under West Virginia Code § 11A-3-60 for instances in which outstanding circumstances, due to no fault of the tax-sale purchaser, had prevented delivery of the deed within the thirty-day time frame. The circuit court converted the motion to dismiss into a motion for summary judgment and granted summary judgment in favor of Mr. Jones during the hearing.[3]However, the circuit court did not issue its final order compelling Mr. Rollyson to deliver the deeds until August 10, 2017.

         After the summary judgment hearing but before the circuit court entered its final order granting summary judgment to Mr. Jones, Southland moved to intervene in the proceedings on July 27, 2017. The circuit court took up Southland's motion on September 11, 2017, after Mr. Rollyson had already delivered the deeds to Mr. Jones pursuant to the August 10, 2017 order. Southland argued that it should have been given notice of the action and permitted to intervene because Southland was an indispensable party as it owned the property until the deeds were delivered to Mr. Jones. Southland contended that West Virginia Code § 11A-3-56 grants a tax-delinquent property owner the right to redeem at any time before a tax deed is issued.[4] Thus, Southland argued, the failure to notify it of the hearing and to join it in the proceeding was a violation of its due process rights. Mr. Jones argued that the issue was moot because the deeds had already been delivered in response to the circuit court's August 10, 2017 order and Southland no longer had an interest in the property. Mr. Jones drew the circuit court's attention to the fact that Southland had never paid its taxes to redeem the property and suggested that Southland's bankruptcy filing and motion to intervene were simply a means to extend the redemption period. Finally, Mr. Jones argued that West Virginia Code § 11A-3-60 requires notice be given only to the Deputy Commissioner, not the delinquent taxpayer. Therefore, the Legislature intended that a proceeding to compel issuance of the tax deeds brought under that section would involve only the Deputy Commissioner and the tax-sale purchaser. Mr. Rollyson took no position on the motion to intervene, but did stipulate that Mr. Jones had complied with all statutory requirements for issuance of the deeds.

         The circuit court denied Southland's motion to intervene, agreeing that West Virginia Code § 11A-3-60 did not contemplate notice to or participation of the delinquent taxpayer (Southland) in an action to compel issuance of deeds for property sold at a tax sale. The circuit court further concluded that Southland had forfeited ownership of the two properties when it failed to redeem within the time frames specified by Mr. Rollyson. Finally, the circuit court explained that Southland had available remedies under West Virginia Code §§ 11A-4-1 to -7 which enabled it to bring a cause of action to set aside the sale or deed. Southland now seeks a writ of prohibition from this Court, contending that the circuit court exceeded its legitimate powers in denying its motion to intervene.

          II. STANDARD OF REVIEW

         In ascertaining the necessity of issuing a writ of prohibition, we are mindful that "[a]s an extraordinary remedy, this Court reserves the granting of such relief to 'really extraordinary causes.'"[5] We have explained that "[a] writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers[.]"[6] In light of the posture of Southland's requested writ, our review is guided the following factors:

In determining whether to entertain and issue the writ of prohibition for cases not involving an absence of jurisdiction but only where it is claimed that the lower tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression. These factors are general guidelines that serve as a useful starting point for determining whether a discretionary writ of prohibition should issue. Although all five factors need not be satisfied, it is clear that the third factor, the existence of clear error as a matter of law, should be given substantial weight.[7]

         Southland's argument in support of prohibition focuses almost exclusively on the third factor-that the circuit court's denial of its motion to intervene was clearly erroneous as a matter of law. With this standard in mind, we turn to the parties' arguments.

         III. ANALYSIS

         Southland argues that the Rules of Civil Procedure and this Court's precedent regarding the liberal inclusion of parties where real property interests are concerned require its participation in Mr. Jones's Section 60 Proceeding. Rule 19 of the West Virginia Rules of Civil Procedure addresses joinder of appropriate parties:

Persons to be joined if feasible. - A person who is subject to service of process shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest, or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.

         Applying this rule, we have held that joinder is required by Rule 19 under certain circumstances:

"Rule 19(a) of the West Virginia Rules of Civil Procedure requires two general inquiries for joinder of a person who is subject to service of process. First, is his presence necessary to give complete relief to those already parties? Second, does he have a claim that, if he is not joined, will be impaired or will his nonjoinder result in subjecting the existing parties to a substantial risk of multiple or inconsistent obligations? If the absent person meets the foregoing test, his joinder is required." Syllabus, in part, Wachter v. Dostert, 172 W.Va. 93, 303 S.E.2d 731 (1983).[8]

         In favor of prohibition, Southland relies on the liberal application of joinder as requiring its inclusion in the Section 60 Proceeding:

Generally, all persons who are materially interested in the subject-matter involved in a suit, and who will be affected by the result of the proceedings, should be made parties thereto, and when the attention of the court is called to the absence of any of such interested persons, it should see that they are made parties before entering a decree affecting their interest.[9]

         Southland also points to Rule 24 of the West Virginia Rules of Civil Procedure addressing intervention of right, which provides

Intervention of right. - Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of this State confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to ...

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