St. George Antiochian Orthodox Christian Church v. Aggarwal

CATHELL, Judge. The primary issue presented in this case is the constitutionality of Maryland’s current statutes concerning notice to a property owner in an action to foreclose the right of ⁶⁰¹ redemption resulting from a tax sale. 1 Appellant also attacks the adequacy of notice actually made in the case at bar. The current statute pertaining to notice of an action to foreclose a right of redemption, codified at Md. Tax-Prop. Code Ann. § 14-839(a)(l) (1986, 1989 Cum.Supp.), states that the plaintiff shall show, in the title of the complaint, the last known address of the defendant as obtained from: (i) any records examined as part of the title examination; (ii) the tax rolls of the collector who made the sale, as to the property described in the complaint; and (iii) any other address that is known to the plaintiff or the attorney filing the complaint.

Section 14-839(a)(2) of the current code then expressly limits any necessity for further search, stating, “[paragraph (1) of this subsection does not require the plaintiff or the attorney for the plaintiff to make any investigations or to search any other records or sources of information other than those stated.” Section 14-839(b) then declares: The provisions of this section as to notice ... coupled with the order of publication and the other publicity and notices as ordinarily accompanies the sale ... as well as the knowledge of the taxes and the consequences for nonpayment of the taxes is declared: (1) to be reasonable and sufficient ... and necessary in light of the compelling need for the prompt collection of taxes; and (2) to supersede any other requirement in other cases or civil causes generally. Section 14-832 provides: The provisions of §§ 14-832.1 through 14-854 of this subtitle shall be liberally construed as remedial legislation ⁶⁰² to encourage the foreclosure of rights of redemption by suits in the circuit courts and for the decreeing of marketable titles to property sold by the collector. Facts On July 31, 1982, appellant, St. George Antiochian Orthodox Christian Church (which we will sometimes refer to hereafter as “the Church,”) received, as a donation from Helen and George Hageage, a parcel of land described in a deed recorded among the Land Records of Prince George’s County at Liber 5576, folio 72. Settlement on the property was performed by Commonwealth Title.

Its name and address appears in printed form on the binder of the deed. That binder page was recorded because it also contained a portion of the notary clause. Neither transfer nor recordation taxes were assessed since the transfer was a gift to the Church. The Church is located in Washington, D.C., and its officials did not believe that it was required to pay property taxes.

They believed that it had tax exempt status with regard to the property, 2 and they had no knowledge of the taxes charged on the property by Prince George’s County or by the State of Maryland. The County tax bills were sent to the address of the property at issue. This was the only address known to the collector of taxes. No one, including the Church, ever furnished any other address.

On May 14, 1984, appellees purchased the property at a tax sale. On June 28, 1987, they obtained an order foreclosing the Church’s right to redeem the property. 3 The Church never received actual notice of the sale or of the foreclosure proceedings. Appellant filed, on March 10, ⁶⁰³ 1989, pursuant to Md.Tax-Prop.Code Ann. § 14-845, a motion to set aside the tax sale, which was denied. On appeal, the Church poses three questions: I. Does constructive notice alone satisfy due process requirements in a tax foreclosure proceeding?

II

Is Md.Tax-Prop.Code Ann. Sec. 14-839 violative of due process and, therefore, unconstitutional?

III

Did the Purchaser fail to comply with the letter of Sec. 14-839, the Maryland Rules, and the spirit of the due process of law? I and II We shall address appellant’s first two questions together. Appellant, arguing in its brief that constructive notice does not satisfy due process requirements, relies primarily on Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 , 70 S.Ct. 652 , 94 L.Ed. 865 (1950), and Mennonite Bd. of Missions v. Adams, 462 U.S. 791 , 103 S.Ct. 2706 , 77 L.Ed.2d 180 (1983). It asserts that Mullane held “unless the interested party is not reasonably identifiable, constructive notice alone does not satisfy the mandate of the due process clause____” The holding in Mullane was not as appellant alleges.

It was fact-based and substantially inapposite to the situation presented in this case. The facts in Mullane involved the application of the notice provisions of a trust law in the state of New York. The United States Supreme Court ruled that notice limited to newspaper publication, which did not publish the names of known beneficiaries, was insufficient, and thus did not satisfy the requirements of due process. The Court stated: As to known present beneficiaries of known place of residence, however, notice by publication stands on a different footing.

Exceptions in the name of necessity do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. Where the names and post office addresses of those affected by a proceeding are at ⁶⁰⁴ hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency. The trustee has on its books the names and addresses of the income beneficiaries represented by appellant, and we find no tenable ground for dispensing with a serious effort to inform them personally ... at least by ordinary mail to the record addresses____ Mullane 339 U.S. at 318 , 70 S.Ct. at 659 (emphasis added). The Court further stated: A construction of the Due Process Clause which would place impossible or impractical obstacles in the way could not be justified.

Mullane at 313-14, 70 S.Ct. at 656-57 . The Court then held: The statutory notice ... is inadequate, not because in fact it fails to reach everyone, but because under the circumstances it is not reasonably calculated to reach those who could easily be informed by other means at hand. Mullane at 319, 70 S.Ct. at 659 (emphasis added). Likewise, the holding in Mennonite, supra, 462 U.S. 791 , 103 S.Ct. 2706 , is not nearly so broad as appellant asserts to this Court.

We address, to the extent necessary, the underlying factual basis of Mennonite which gave rise to the ultimate decision in that case. We first note that the challenge in Mennonite was made by a mortgagee, not an owner. The Indiana statute at issue in Mennonite required notice as follows: 1. The county auditor was required to post notice in the courthouse for sale of the property. 2.

The auditor was required to publish the impending sale for three weeks. 3. Notice of the sale by certified mail had to be given to the owner. There was no Indiana requirement that a mortgagee need be notified and, in fact, Mennonite was not notified. We contrast that statutory omission with the requirement of ⁶⁰⁵ Maryland law in respect to mortgagees.

Md. Tax-Prop. Law Code Ann. § 14-836(b)(l) (1986, 1989 Cum.Supp.) provides that the defendants 4 shall be: (i) The record title holder of the property as disclosed by a search ... of the land records ..., of the records of the register of wills ..., and of the records of the circuit court ...; (iii) any mortgagee ... named as such in any unreleased mortgage recorded in the land records ...; (v) the county ...; (vi) if appropriate, the State. Section 14-839(a) provides for notice to defendants. It states that the title of the complaint must indicate the last known address of each defendant obtained from: title records examined, tax rolls, and any other address known to complainant.

Section 14-839(b) provides that the plaintiff is not required to investigate any other records or sources. Section 14-839(b) then requires the plaintiff to mail notice to each defendant. This includes mortgagees. The plaintiff then must certify to the mailing.

Finally, the legislature has expressly declared that the notice required by the statute is reasonable and sufficient in light of the compelling need for prompt collection of taxes and has also declared that these notice sections supersede the notice requirements of other cases or civil causes. The mortgagee in Mennonite asserted, as to the underlying tax sale, that it had not received constitutionally adequate notice of the sale or of the opportunity to redeem the property. Our reading of the case indicates that the mortgagee, in fact, received neither constructive nor actual ⁶⁰⁶ notice, since it was not named as a party and would not, therefore, have had even notice by publication. 5 We conclude, therefore, that the Indiana notice provisions at issue in Mennonite were lacking, as they related to that appellant, by complete absence of any notice provisions. In contrast, the Maryland statute affords to all parties the statutorily required notice.

The Mennonite Court held: When the mortgagee is identified in a mortgage that is publicly recorded, constructive notice by publication must be supplemented by notice mailed to the mortgagee’s last known available address, or by personal service. Mennonite, 462 U.S. at 799 , 103 S.Ct. at 2711 (emphasis added). The requirements of the Maryland statute are exactly those set out by the Supreme Court in Mennonite . The Maryland statute then required, and still requires, that which the Supreme Court suggests in Mennonite , is necessary, i.e., notice to the mortgagee.

Appellant, in the case sub judice, fails to perceive that the Mennonite Court declared the Indiana statute unconstitutional because mortgagees were not afforded the same notice as owners. The Maryland statute requires that identical notice be given to owners and mortgagees. When the Mennonite Court stated that constructive notice alone was insufficient, it was interpreting a factual situation where no notice, by mail or otherwise, was attempted or made prior to the order of publication, It did not hold that a notice procedure, such as Maryland’s, was unconstitutional. It held (without referring to Maryland’s statute), that Indiana’s notice statute was unconstitutional because it ⁶⁰⁷ lacked, for mortgagees, that which is contained in Maryland’s notice statute. 6 The Mennonite Court also stated: We do not suggest, however, that a governmental body is required to undertake extraordinary efforts to discover the identity and whereabouts of a mortgagee whose identity is not in the public record.

Id. at 799, n. 4 , 103 S.Ct. at 2711, n. 4 (emphasis added). Aggarwal, the appellee in the case at bar, searched the title to the property; he searched the telephone books of the jurisdiction wherein the land lies; he contacted the Maryland Department of Assessments and Taxation for addresses; he mailed copies of the bill and summons to the address contained in the tax records which were directed to appellant; he mailed a notice to the address contained in the tax records directed to “occupant”; and he wrote the postmaster for an address. Aggarwal then proceeded with the process of publication and had the sheriff attempt service at the address in the tax records. While actual personal service was not obtained, appellee made diligent efforts in an attempt to effectuate such service and only proceeded with constructive service after those efforts were fruitless.

Neither Mullane nor Mennonite requires more of a tax sale purchaser during a redemption foreclosure. Those cases do not require more of statutory notice provisions than are contained in the Maryland statute as they now read, or as they then read. The Church also states that two other cases support their claims that neither the notice nor the statute in the case sub judice passes constitutional due process muster. The cases are Schroeder v. City of New York, 371 U.S. 208 , 83 S.Ct. 279 , 9 L.Ed.2d 255 (1962) and Michigan v. Dow, 396 Mich. 192 , 240 N.W.2d 450 (1976). ⁶⁰⁸ Schroeder involved an order of publication in two newspapers as to the impending diversion of river water from Schroeder’s property.

Under New York law as it then existed, this action amounted to a condemnation. The city had Schroeder’s address which was geographically distant from the diversion area. No notification, either personal or by mail, was attempted, however. While the subject property was not posted, notices were posted on nearby properties.

The notice by posting and publication complied with the New York statute. The newspaper advertisement did not contain Schroeder’s name or address. The Court, quoting from earlier cases, said: “An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Schroeder, 371 U.S. at 211 , 83 S.Ct. at 281 (citations omitted). The Court rejected, as unconstitutional for due process reasons, notice “less likely than the mails to apprise them of its pendency.” Id. at 213 , 83 S.Ct. at 282 (citation omitted).

The present case contains ample facts indicating an attempt at service by mail. The Maryland statute contains such provisions. The constitutional objections extant in Schroeder simply do not exist in this case, nor do they exist in the Maryland statutes. The same situation exists upon comparison of the facts in Dow, supra, to those of the case at bar.

The Supreme Court of Michigan, in Dow , held that the Michigan statute was unconstitutional as applied in that case in that no notice was actually mailed and the Michigan statute specifically provided that no consequences could attach to that mailing failure. On this basis, Dow is clearly distinguishable from the instant case. The Maryland statute requires that a copy of the order of publication be mailed by the complainant by first class or certified mail to each defendant at the defendant’s address, as that address is determined under ⁶⁰⁹ the provisions of the statute, i.e., title examination records, tax rolls, other known addresses. The Maryland notice by publication must identify the owner by name, as well as furnish the other pertinent information.

Unlike Dow , the facts of the case at bar indicate that the provisions of the notice statute were substantially met. Unlike the Michigan statute in Dow , Maryland’s statutory scheme contains remedies for significant failures to comply with the notice requirement. See Md. Tax-Prop. Code Ann. § 14-845.

The Michigan Supreme Court in Dow , after determining that the Michigan statute was unconstitutional on due process grounds stated: Personal service is not required. Notice by mail is adequate. Mailed notice must be directed to an address reasonably calculated to reach the person entitled to notice---- If the state exerts reasonable efforts, then failure to effectuate actual notice would not preclude foreclosure of the statutory lien ____ [I]t would satisfy constitutional requirements if the state were to adopt a procedure providing for (i) ordinary mail notice before sale to the person to whom tax bills have been sent and to “occupant”____ Dow, 240 N.W.2d at 459-60 (footnotes omitted). It is clear that under the analysis utilized by the Michigan court, the statute and notice at issue in this case would meet and surpass the due process requirements espoused by the court in Dow . 7 The Maryland Legislature has expressed by statute that it is the policy of Maryland that the notice provisions of the statute, so long as they are substantially complied with, are sufficient and reasonable.

Additionally, section 14-832 states that these provisions will be construed liberally as remedial legislation to encourage the foreclosure of rights ⁶¹⁰ of redemption and for the “decreeing” of marketable title. Mullane, Mennonite, Dow and Schroeder are not authority to the contrary. The fact that the Maryland Legislature, post-Mennonite, may have made the notice requirement less stringent does not, in and of itself, make those requirements unconstitutional. The Court of Appeals in Golden Sands Club v. Waller, 313 Md. 484 , 545 A.2d 1332 (1988), a post-Mennonite notice case, reversed a trial court’s finding that the Contract Lien Act was unconstitutional due to the inadequacy of hearing opportunities.

Judge Adkins, writing for the Court, also addressed the constitutionality of the Act’s notice requirements: Like the concept of a due process hearing, however, the concept of “ ‘notice reasonably calculated, under all the circumstances, to apprise interested parties of the pend-ency of the action’ ” is not a static principle, yielding but a single uniformly applicable rule. Rather, a court considering the constitutionality of notice in a particular case must balance the interests of the state or the giver of notice against the individual interest sought to be protected by the fourteenth amendment. The focus is on the reasonableness of the balance; whether a method of giving notice is reasonable in a given case depends on the specific circumstances of that case. See Tulsa Professional Collection Serv. [v. Pope ], 485 U.S. [478] at 484, 108 S.Ct. [1340] at 1344, 99 L.Ed.2d [565] at 574-575 [(1988)]; Mullane, 339 U.S. at 314 , 70 S.Ct. at 657 , 94 L.Ed. at 873; Goodyear Tire v. Ruby, 312 Md. 413, 420 , 540 A.2d 482, 485 (1988); [Department of Transportation, Motor Vehicle Administration, Department of Health & Mental Hygiene v.] Armacost, 299 Md. [392] at 416, 474 A.2d [191] at 203 [(1984)]....

Id. 313 Md. at 496 , 545 A.2d 1332 . We are dealing here with the notice requirements of procedural due process. In that context, actual receipt of notice is not the test. For example, a creditor whose existence and name and address are not reasonably ascer ⁶¹¹ tainable may be deprived of a property interest, it seems, after receiving only constructive notice (publication), just as a mortgagee whose existence is not apparent may be similarly treated.

These are the implications, at least, of Tulsa Professional Collection Serv., supra, and Mennonite Bd. of Missions, supra, [emphasis added] Id. 313 Md. at 500 , 545 A.2d 1332 . The Court of Appeals, in Golden Sands, then interpreted the Supreme Court’s decision in Tulsa Professional Collection Serv., 485 U.S. 495 , 108 S.Ct. 1340 , 99 L.Ed.2d 565 (1988), saying: The Supreme Court agreed, relying on Mennonite Bd. of Missions for the proposition that provision for (not receipt of) actual notice (as opposed to constructive notice) “ ‘is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of