Ind. Land Trust Co. v. XL Investment Properties, LLC, No. 20S-MI-62, __ N.E.3d __ (Ind., Oct. 27, 2020).

David, J.

Before the State sells a delinquent property, the Due Process Clause of the Fourteenth Amendment requires that the owner of the property be given adequate notice reasonably calculated to inform him or her of the impending tax sale. While actual notice is not required, the government must attempt notice in a way desirous of actually informing the property owner that a tax sale is looming. If the government becomes aware that its notice attempt was unsuccessful—such as through the return of certified mail—it must take additional reasonable steps to notify the owner of the property if practical to do so.

In this case, property taxes went unpaid on a vacant property from 2009 to 2015 resulting in over $230,000 in outstanding tax liability. The county auditor—through a third-party service—sent simultaneous notice of an impending tax sale via certified letter and first-class mail to the tax sale notice address listed on the deed for the property. The owner of the property, however, had moved from its original address several times and never updated its tax address for the property with the county auditor. The certified letter came back as undeliverable, but the first-class mail was never returned. After a skip-trace search was performed for a better address and notice was published in the local newspaper, the property eventually sold and a tax deed was issued to the purchaser. The original owner was ultimately notified of the sale when the purchaser filed a quiet title action and searched for a registered agent. The original owner then moved to set aside the tax deed due to insufficient notice.

The central question before our Court today is whether the LaPorte County Auditor gave adequate notice reasonably calculated to inform Indiana Land Trust Company of the impending tax sale of the property. As a corollary question, we also confront whether the Auditor was required under the circumstances of this case to search its own records for a better tax sale notice address when the notice sent via certified mail was returned as undeliverable. We find the Auditor provided adequate notice and was not required to search its internal records. We therefore affirm the trial court’s denial of Indiana Land Trust’s motion to set aside the tax deed.

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The basic issue presented in this case is not whether Indiana’s tax sale notice statute is constitutional. As we discuss below, it is not our duty to prescribe the form of service the government should follow when certified mail is returned as undeliverable. Rather, we must ensure the basic requirements of due process are met in a particular case. Whether a county auditor could or should search its own records for a better tax sale notice address depends on the information revealed to him or her when mail is returned. Necessarily, it follows that these determinations depend on the facts and circumstances of each case.

Here, the parties have understandably challenged the constitutional fortitude of Indiana’s tax sale notice statute. XL Investment and the Auditor argue that the current notice statute complies with constitutional due process requirements and, because the Auditor followed the statute, Trust 4340 was placed on proper notice of the tax sale and cannot now set aside the tax deed. Trust 4340, meanwhile, argues that it received insufficient notice and the General Assembly may not legislate away a due process requirement that an auditor must search its internal records when mail is returned.

It is wholly unclear whether the Court of Appeals opinion below actually declared the tax sale notice statute unconstitutional or if the Auditor’s actions in this case simply failed to meet constitutional muster. See Indiana Land Trust, Co., 130 N.E.3d at 637, trans. granted, opinion vacated (noting “regardless of the language of Indiana Code section 6-1.1-24-4, the Auditor is charged with knowledge of the contents of its records and is constitutionally obligated to search those records” but observing “[t]he General Assembly does not have the authority to codify away constitutional protections” which included an auditor’s search of its own records); Indiana Land Trust, Co. v. XL Investment Properties, LLC, 134 N.E.3d 439, 441 (Ind. Ct. App. 2019), on reh’g, vacated (finding the auditor’s office, as an agency of the state, could adequately represent the State’s position in defending the constitutionality of the statute). Observing the “longstanding principle of constitutional avoidance” that weighs against deciding constitutional questions not absolutely necessary to a merits disposition, we find a narrower path to resolution of this case. CitiMortgage, Inc. v. Barabas, 975 N.E.2d 805, 818 (Ind. 2012) (citing Snyder v. King, 958 N.E.2d 764, 768 (Ind. 2011)).

Rather than weigh in on the constitutionality of the underlying statute, we will instead focus on whether the Auditor’s actions complied with minimal due process standards. Below, we explore what the Due Process Clause of the Fourteenth Amendment requires, the structure of Indiana’s tax sale notice statute, and the extent to which the Auditor met minimal notice requirements. Finding that the Auditor complied with due process standards, we affirm the trial court’s denial of Trust 4340’s motion to set aside the tax deed for Lot 2. [Footnote omitted.]

I. The Due Process Clause of the Fourteenth Amendment sets minimum notice standards for tax sales of delinquent properties.

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A. The Supreme Court of the United States has held that while actual notice is not required, notice must be given in a manner desirous of actually informing the owner.

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B. Our Court’s decisions echo the findings of the Supreme Court and evaluate the adequacy of notice based on the facts and circumstances of each case.

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II.The notice given by the Auditor met minimal due process requirements.

Trust 4340 has launched a two-pronged attack on the tax sale deed, arguing first that the Auditor was required—or at minimum should have— searched its own records for a better tax sale notice address, and second, that the contents of the notice were insufficient for failing to include a common description of the property. Based on our understanding of the relevant statutes and decisional caselaw, we decline to adopt Trust 4340’s arguments and find the Auditor gave adequate notice. We will address each of Trust 4340’s arguments in turn.

A. The manner in which notice was provided was constitutionally sufficient.

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B. The contents of the notice substantially complied with relevant statutory requirements.

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Conclusion

We find that under the facts of this case, the LaPorte County Auditor provided notice reasonably calculated, under all circumstances, to apprise Trust 4340 of the pendency of the action and afforded them an opportunity to present their objections. We affirm the trial court’s denial of Indiana Land Trust Company’s motion to set aside the tax deed.

Rush, C.J., and Massa, Slaughter, and Goff, JJ., concur.

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