FLATROCK FOREST GROUP v. SMITH, 699 N.W.2d 685 (Iowa App. 2005)

No. 5-315 / 04-0523Court of Appeals of Iowa.
Filed May 25, 2005

Appeal from the Iowa District Court for Dubuque County, Alan L. Pearson, Judge.

Flatrock Forest Group, Inc. appeals from an adverse summary judgment ruling in a quiet title action. AFFIRMED.

Werner Hellmer of Day, Hellmer, Straka, P.C., Dubuque, for appellant.

Roger J. Kurt of Kurt Law Office, Dubuque, for appellee Alfred Smith.

Fred H. McCaw, Dubuque County Attorney, for appellee County.

Heard by Mahan, P.J., Zimmer, J., and Hendrickson, S.J.[*]

MAHAN, P.J.

Flatrock Forest Group, Inc. (hereinafter “Flatrock Forest”) appeals from the district court’s grant of summary judgment in favor of Alfred Smith and the Dubuque County Treasurer in a quiet title action. We affirm.

I. Background Facts Proceedings.

This case involves 19.75 acres of real estate located in rural Dubuque County. Frank Engler owned the parcel of property at issue until his death in 1927. Upon his death, his wife, Martha, held a life estate in the parcel. Their eight children, including Emerence Smith, jointly held the remainder interest, subject to Martha’s life estate. Emerence died in 1936 leaving behind eight children, including the defendant, Alfred. However, following the probate of Frank Engler’s estate, the final report listed the property as “worthless” and indicated it could not be sold for that reason. No change of title was issued and no real estate taxes were paid on the property.

The property was eventually sold at a tax sale to Flatrock Forest on November 23, 1999. On June 27, 2002, Flatrock Forest published a notice of expiration of right of redemption. Smith noticed the publication of the notice and traveled to the property with his neighbor sometime in July or August of 2002. In September 2002 Smith returned to the property. He affixed a “No Trespassing” sign to the property and spray painted a tree after observing the location of the surveyor’s stakes. He also placed the property on his liability insurance and requested to have the property tax bill sent to him by the Dubuque County Treasurer. Upon receipt of the bill, Smith attempted to redeem the property. However, the treasurer deemed the redemption ineffective and returned the $366.03 paid by Smith in the form of a check on October 21, 2002.[1] Smith then executed and recorded an “Affidavit of Heirship” on October 28, 2002. He sent the affidavit and $370.03 to the Dubuque County Treasurer. This time the treasurer allowed Smith to redeem the property and issued a certificate of redemption from tax sale. On October 31, 2002, Smith recorded an affidavit of possession at the county recorder’s office.

On April 16, 2003, Flatrock Forest filed an action for declaratory relief, asking the court to find Smith’s interest in the land inferior to its own. Both parties filed cross motions for summary judgment. Initially, although the court determined Smith had a right to redeem the property, the court granted summary adjudication in favor of Flatrock Forest on the grounds that Smith’s redemption of the property was untimely. On January 20, 2004, Smith and the county treasurer filed a joint motion to reconsider asserting Smith’s redemption was timely pursuant to the requirements set forth in Iowa Code section 447.12
(2003).[2] Flatrock Forest filed a motion to amend and enlarge pursuant to Iowa Rule of Civil Procedure 1.904(2) asserting Smith was not a proper party with a right of redemption. Both parties resisted the other’s motion. On March 2, 2004, the district court issued an order granting summary judgment in favor of Smith. The court acknowledged it had incorrectly noted the date that the ninety-day redemption period began to run as the date Flatrock Forest published the notice of expiration of right of redemption. Consequently, the court concluded Smith was entitled to redeem the property and that he had done so within the ninety-day statutory redemption period. Flatrock Forest appeals.

II. Standard of Review.

We review a district court’s ruling on a motion for summary judgment for correction of errors of law. Smith v. Shagnasty’s Inc., 688 N.W.2d 67, 71 (Iowa 2004). Pursuant to Iowa Rule of Civil Procedure 1.981, summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law Wernimont v. Wernimont, 686 N.W.2d 186, 189 (Iowa 2004). We examine the record in the light most favorable to the nonmoving party. Kolbe v. State, 661 N.W.2d 142, 145 (Iowa 2003). The nonmoving party is entitled to every legitimate inference that can be reasonably deduced from the evidence. McIlravy v. North River Ins. Co., 653 N.W.2d 323, 328 (Iowa 2002). “An inference is legitimate if it is `rational, reasonable, and otherwise permissible under the governing substantive law.'” Id. (quotin Butler v. Hoover Nature Trail, Inc., 530 N.W.2d 85, 88 (Iowa Ct. App. 1994)). Contrarily, an inference based upon speculation or conjecture is insufficient to generate a factual dispute to defeat summary adjudication. Butler, 530 N.W.2d at 88. “If reasonable minds may differ on the resolution of an issue, a genuine issue of material fact exists.” McIlravy, 653 N.W.2d at 328.

III. The Merits.

The right to redeem from a tax sale is governed by Iowa Code chapter 447 and “extends to anyone who has a legal or equitable interest in the property sold.” Nelson v. Forbes, 545 N.W.2d 576, 582 (Iowa Ct.App. 1996). We construe statues relating to the redemption of property from taxes liberally in favor of the owner. Galleger v. Duhigg, 218 Iowa 521, 527, 255 N.W. 867, 870
(Iowa 1934). Iowa Code section 447.1 permits redemption to occur at any time before the expiration of such right by payment to the tax sale certificate holder, ex parte and through the county treasurer, of the amount for which the property was sold at the tax sale. Upon application of a party to redeem, the county treasurer is required to accept the application only if it is clear the party seeking redemption is in fact among the class of individuals entitled to redeem. Iowa Code § 447.5. The right to redeem is purely statutory and set forth in Iowa Code section 447.9. Pursuant to this section, only individuals who are required to be served notice of the expiration of the right to redeem[3] or persons “who have acquired an interest in or possession of the parcel subsequent to the filing of the notice of expiration of the right of redemption” are statutorily entitled to redeem property sold at a tax sale. Iowa Code §447.9(2). Thus, based on the plain language of the statute, it is clear that persons who acquire an interest in or take possession of the parcel after the publication of the notice of expiration of the right to redeem have been contemplated by our legislature and are entitled to redeem. See id.

In this case at hand, it is undisputed that Smith was not entitled to notice under section 447.9. Thus, the issue is whether or not Smith was entitled to redeem the parcel as a person who came into possession or acquired an interest in the parcel subsequent to the completion of service required. We conclude he was so entitled. Pursuant to Iowa Land Title Standard 9.8, marketable title is established when an affidavit affirmatively demonstrates the following:

(1) the decedent died intestate at least five years prior;
(2) the estate of the decedent had not been administered upon;
(3) the decedent was survived by the persons named in the affidavit, specifying their relationship to the decedent;
(4) a showing of nonliability for Iowa estate and inheritance taxes; and

(5) a showing of nonliability for federal estate tax.

Iowa State Bar Ass’n, Comm. on Title Standards, Iowa Land Title Standards ch. 9, standard 9.8 (7th ed. 1993 Supp. 2000). Smith complied with this standard by filing an affidavit of heirship on October 28, 2002. Although we are not bound by the Iowa Land Title Standards, we do give them serious consideration. Nelson, 545 N.W.2d at 583. Accordingly, we conclude Smith’s filed affidavit was sufficient to affirmatively establish his record interest in the parcel. Although his interest did not become of record until after Flatrock Forest published the notice of expiration of the right to redeem, section 447.9(2) clearly encompasses this type of situation and expressly enables such an individual to redeem the parcel. Consequently, because no genuine issue of material fact exists, we affirm the district court’s grant of summary adjudication in favor of Smith.

AFFIRMED.