Tuesday, June 18, 2013

Court of Appeals Rules IC 6-1.1-7-10 Which Requires Real Property Owner to Pay Personal Property Taxes on Another's Mobile Home Prior to Removal Was Not an Unconstitutional Taking

Lake Shore Estates MHC, LLC (“Lake Shore”), rents lots in its Mishawaka mobile home park to tenants who own their own mobile homes. A trio of tenants failed to pay rent, failed to pay personal property taxes on their mobile home, and then abandoned the home on Lake Shore’s property. Lake Shore sued the tenants for eviction and back rent. In the past, Lake Shore had paid delinquent property taxes on abandoned mobile homes to the St. Joseph County Treasurer (“the Treasurer”), who then issued Lake Shore a statutory permit to remove the homes from its property. In this case, however, the tax arrearage amounted to several thousand dollars, which was more than Lake Shore was willing to pay. Consequently, Lake Shore also sued the Treasurer, the Treasurer’s collection agent, and various other local government entities, alleging constitutional takings clause and civil rights violations as well as slander of title. The government defendants and the collection agent filed motions for summary judgment, which the trial court granted. Lake Shore now appeals, and we affirm.

Lake Shore raises six issues, the first of which is stated as follows:

Does a statute [Indiana Code Section 6-1.1-7-10] which requires a real property owner to pay the personal property taxes on someone else’s mobile home in order to secure a permit to remove the mobile home from the real property constitute an exaction which violates the takings clause of the Fifth Amendment?

Appellant’s Br. at 1.  Quite simply, Indiana Code Section 6-1.1-7-10 does not require a real property owner to pay the personal property taxes on someone else’s mobile home in order to remove it. Several options were (and perhaps still are) available to Lake Shore to facilitate the removal of the Lanes’ mobile home from Lot 53 without Lake Shore having to pay the delinquent personal property taxes. For example, Lake Shore could have filed an interpleader action pursuant to Indiana Trial Rule 22.  Alternatively, Lake Shore could have sold, auctioned, or salvaged the abandoned mobile home pursuant to the procedures outlined in Indiana Code Chapter 9-22-1.5. Finally, we note that Indiana Code Section 6-1.1-7-9 provides,

If a semi-annual installment of taxes imposed for a year upon a mobile home is not paid on or before the due date prescribed under section 7 of this chapter, the same penalties apply that are imposed under IC 1971, 6-1.1-37-10 for the late payment of property taxes. In addition, the mobile home and the personal property of a delinquent taxpayer shall be levied upon and sold [by the county treasurer] in the same manner that a taxpayer’s personal property is levied upon and sold under IC 1971, 6-1.1-23 for the non-payment of personal property taxes.

(Emphasis added.) Thus, Lake Shore could have initiated a mandate action pursuant to Indiana Code Section 34-27-3-1 to require the Treasurer to fulfill his statutory obligation to levy upon and sell the mobile home. In sum, we find no constitutional crisis here.  

Lake Shore’s second issue is this: “Did the County Treasurer’s transfer of the mobile home owner’s personal property tax payment obligation to the landowner of the real estate constitute a violation of the plaintiff’s due process rights?” Appellant’s Br. at 1. No such obligation was transferred, and thus no due process violation occurred.

Third, Lake Shore asks, “Did the County Treasurer’s transfer of the mobile home owner’s personal property tax payment judgment to the landowner of the real estate constitute a violation of the plaintiff’s due process rights including the right to be heard?” Id. No such judgment was transferred, and thus no due process violation occurred.

In framing its fourth and fifth issues, Lake Shore contends that the Treasurer and his agent, American Financial, violated the Fair Debt Collection Practices Act. Lake Shore made no such allegations in its amended complaint, and, in any event, neither entity attempted to collect any debts from Lake Shore. It is undisputed that the debts belonged solely to the Lanes and that the Treasurer merely informed Lake Shore of the amount of those debts at Lake Shore’s request. Lake Shore was not obligated to pay those debts, though it had voluntarily paid similar (and smaller) debts in the past. As mentioned earlier, Lake Shore had other means at its disposal to remove the Lanes’ mobile home from its property, but it failed to use them.

Finally, Lake Shore asks whether the Treasurer’s “wrongful transfer of the personal property tax payment obligation and persona[l] property judgment constitute[s] slander of the landowner’s title?” Appellant’s Br. at 2. Again, no tax obligations or judgments were transferred to Lake Shore. Moreover, Lake Shore cites no authority for the proposition that a judgment against personal property may slander a title to real property. Having disposed of all six issues in favor of the appellees, we affirm the trial court’s summary judgment rulings in their favor.