In determining whether the trial court properly removed the
petitioners’ property from the tax sale, we initially set forth the provisions
of Indiana Code section 13-26-14-4, which provide that
rates, fees, or charges made, assessed, or established by
the district are a lien, in the same manner established under IC 36-9-23 for
municipal sewage works, on a lot, parcel of land, or building that is connected
with or uses the works of the district. Liens under this chapter:
(1) attach;
(2) are recorded;
(3) are subject to the same penalties, interest, and
reasonable attorney’s fees on recovery; and
(4) shall be collected and enforced;
in substantially the same manner as provided in IC
36-9-23-31 through IC 36-9-23-34. A lien under this chapter that is the only
lien on a property may not be foreclosed.
(Emphasis added).
In construing this statute, we note that “foreclosure” has
been defined as a legal proceeding “to terminate a mortgagor’s interest in
property, instituted by the lender (the mortgagee) either to gain title or to
force a sale in order to satisfy the unpaid debt secured by the property.
Black’s Law Dictionary (7th ed.1999). Also, a specific subsection of the
definition of foreclosure in Black’s Law Dictionary defines “tax foreclosure”
as “[a]public authority’s seizure and sale of property for nonpayment of
taxes.” Id.
In this case, notwithstanding TLRSD’s claims, it is apparent
that the trial court examined the plain language of Indiana Code section
13-26-14-4 and determined that the type of lien here may not be enforced as
provided in Indiana Code section 36-9-23-31 through Indiana Code section
36-9-23-34, namely by selling the property at a tax sale if the unpaid sewer
bill lien is the only lien that exists on the property.
To illustrate the remedies, procedures, and enforceability
that may be available to a sewer district for unpaid bills, we note that
Indiana Code section 36-9-23-31 provides that
If fees assessed against real property under this chapter .
. . are not paid within the time fixed by the municipal legislative body, they
are delinquent. A penalty of ten percent (10%) of the amount of the fees
attaches to the delinquent fees. The amount of the fee, the penalty, and a
reasonable attorney’s fee may be recovered by the board in a civil action in
the name of the municipality.
(Emphasis added). In brief, Indiana Code section 36-9-23-32
sets forth the timing of the recording of various liens, lists the superiority
of the liens in most instances, and states that notice of delinquency must be
provided, when payment must be received, and how notice must be sent. Another
section, Indiana Code section 36-9-23-33, provides for the deferral of the
collection of unpaid fees and penalties in some instances. And the officer in
charge of collecting the fees should prepare a list of the delinquent fees
along with the penalty, record that list with the county recorder, and mail
notice to the owner that a lien has been recorded as a result of delinquent
fees. The liens should then be released once they have been fully paid. If
delinquent fees and penalties, for example, are not paid, they are to be
collected by the county treasurer in the same manner that delinquent property
taxes are collected.
Finally, Indiana Code section 36-9-23-34 provides for a
municipality’s foreclosure of a lien to collect fees and penalties. The
municipality or board is entitled to recover the amount of the fees and penalties
and a reasonable attorney’s fee. Also, the trial court should order the sale
without relief from valuation or appraisement laws.
In construing these provisions, it is apparent that although
TLRSD could not foreclose its liens against the petitioners’ properties, TLRSD
may file a civil action to recover its fees in accordance with Indiana Code
section 36-9-23-31. Indeed, as discussed above, once a judgment is obtained,
nothing in the statutes prevents TLRSD from executing, garnishing, and pursuing
proceedings supplemental similar to other civil judgments. That said, we cannot
say that the trial court abused its discretion in removing the parcels from the
tax sale when construing the provisions of Indiana Code section 13-26-14-4.3
