June 19, 2018

by Jerry Morgan
Wilson & Associates, PLLC – USFN Member (Arkansas, Mississippi, Tennessee)

The Tennessee Court of Appeals has held that a person attempting to redeem property after a tax sale must have been an “interested party” at both the time of the tax sale and at the time the motion to redeem is filed. Madison County, Tenn. v. Delinquent Taxpayers for 2012, No. W2016-02526-COA-R3-CV (Tenn. Ct. App. Apr. 26, 2018).

Background
Eric and Regina Sills owned a home in Jackson, Tennessee. The real property was sold at a tax sale on March 10, 2016. The tax sale was confirmed by decree on March 31, 2016. On April 22, 2016, the Sills contracted to sell all of their interest in the property to Thomas Hyde, specifically including the right to redeem.

After the transaction, Mr. Hyde filed a motion to redeem the property and tendered all of the necessary funds (taxes, interest, and other sums due the tax sale purchaser) into the court. Mr. Hyde asserted that he was entitled to redeem the property, as he had purchased the right of redemption after the tax sale.

The trial court disagreed and denied his motion to redeem. The trial court looked to Tennessee Code Annotated § 67-5-2701(a)(3)(C), which states:

“Person entitled to redeem” means, with respect to a parcel, any interested person, as defined in this chapter, as of the date of the sale and the date the motion to redeem is filed[.]

The trial court found that Mr. Hyde was not an “interested person” on both the date of the tax sale and the date he filed his motion to redeem. The trial court looked to the plain language of the statute, and concluded that Mr. Hyde did not possess an interest in the property on the date of the tax sale and, thus, did not qualify as a person entitled to redeem the property.

Appellate Analysis
The Court of Appeals affirmed, finding that Mr. Hyde was not entitled to redeem. First, the court set out the general principles to which it must adhere in interpreting statutes. It reiterated well-established standards of determining and giving effect to the legislature’s intent “without broadening or restricting the statute beyond its intended scope.” The court provided a reminder that it must “always begin with the words the General Assembly has used.” Its first task is “to discern legislative intent purely from the ‘natural and ordinary meaning of the language used, without forced or subtle construction that would limit or extend the meaning of the language.’” Finally, the Court noted that “‘[w]hen the language of the statute is clear and unambiguous, courts look no farther to ascertain its meaning.’”

With the rules of construction set out, the court looked to Mr. Hyde’s claims that he was entitled to redeem the property. Mr. Hyde noted that under previous versions of the tax redemption statute, Tennessee courts had held that the right of redemption was freely transferable by delinquent taxpayers to third parties. Hence, Mr. Hyde took the position that the legislature had no intention of altering that practice when it amended and rewrote the redemption statute. He stated “that the current version of the statute uses ‘somewhat awkward and imprecise language’ to define a person entitled to redeem.” Finally, Mr. Hyde asserted “that the legislature ‘did not understand its prior revisions to effectuate such a radical change in the alienability of the equity of redemption.’”

Notwithstanding those contentions, the appellate court affirmed the trial court, agreeing that Mr. Hyde was not a person entitled to redeem within the statute. In fact, the court did not find it necessary to “delve into” the arguments and citations made by Mr. Hyde, “because we find the statutory language clear and unambiguous.” As support for this holding, the court looked to State ex rel. Comm’r of Transp. v. Med. Bird Black Bear White Eagle, 63 S.W.3d 734, 754 (Tenn. Ct. App. 2001) for the proposition: “Judicial construction of a statute will more likely hew to the General Assembly’s expressed intent if the court approaches the statutory text believing that the General Assembly chose its words deliberately, and that the General Assembly meant what it said.”

Here, although Mr. Hyde maintained that a person entitled to redeem includes one who is an interested person at the time the motion to redeem is filed, the court found such a construction completely at odds with the statute, which used the word “and.” Mr. Hyde’s argument would naturally have replaced the word “and” with “or,” which “would require that we ignore the ordinary and natural meaning of these terms.”

Conclusion
In the end, the Court of Appeals concluded that the legislature said what it meant and meant what it said. Accordingly, a person entitled to redeem property after a tax sale in Tennessee must be an interested party at the time of the tax sale AND at the time the motion to redeem is filed.

© Copyright 2018 USFN. All rights reserved.
June e-Update

Note for consideration of the USFN Award of Excellence: This article is not a "Feature."