Trade Antiques, LLC v. Canady

Filing 51

ORDER denying 36 Plaintiffs' Motion for Summary Judgment. Signed by Chief Judge Lisa G. Wood on 2/27/2013. (csr)

3Sn the Vniteb AtattO Motrict Court
for the boutbiern Atotrtrt of 4eorgta
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TRADE ANTIQUES, LLC,
Plaintiff,
VS.

EDWARD R. CANADY,
Defendant.

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CV 211-183

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Presently before the Court is a Motion for Summary Judgment
filed by Plaintiff Trade Antiques LLC. See Dkt. No. 36. For
the reasons stated below, Plaintiff's Motion is DENIED.
BACKGROUND

Back in 2003, Trade Antiques bought a piece of property
located in St. Marys, Georgia ("the Property") . Dkt. No. 36,
Ex. 16. The Warranty Deed mistakenly listed Trade Antiques as a
Georgia limited liability company, when, in actuality, Trade
Antiques was organized in Florida, not Georgia. Dkt. No. 36,
Ex. 2. 1

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On August 17, 2011, Trade Antiques' counsel corrected the error in
the deed by submitting a Scrivener's Affidavit. See Dkt. No. 1.
This correction occurred well after the events giving rise to the
suit occurred.

Six years later, Andrew Christie, the managing member of
Trade Antiques, had to leave the United States to move to
Scotland to attend to family matters. Dkt. No. 36, Ex. 16 ¶ 4.
When he left, Christie knew there were unpaid taxes on the
Property. Dkt. No. 38, Ex. B 19:3, 37:3-9. Christie left Craig
Rosian in charge of looking after the Property in Christie's
absence. Dkt. No. 38, Ex. B 19:10-14. Rosian was tasked with
"looking after the property, keeping the grass cut, keeping the
bills down, and informing [Christie] of any mail that c[a]me
through the letter box," and essentially keeping Christie
"posted" on anything that occurred. Dkt. No. 38, Ex. B 19:1014. At some point, Rosian asked if his daughter could live at
the Property, and Christie agreed. Dkt. No. 38, Ex. B, 24:7-9.
Rosian seemingly failed in his duties because, on October
6, 2009, the Property was sold in a tax sale to Defendant Edward
R. Canady for $7,5000. Dkt. No. 36, Ex. 16 ¶ 5. For a year
after the tax sale, Canady did not take possession of the
property in an effort to comply with Georgia's tax sale law.
Dkt. No. 36, Ex. E 77:7-14. After the year had passed, Canady
sought to take possession of the property and foreclose Trade
Antique's right to redeem the property under O.CG.A. § 48-4-45.
Section 48-4-45 proscribes the steps a tax sale purchaser must
take to foreclose the previous owner's right of redemption.

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Prior to sending the required notices, Canady took the
following steps to find out information about Trade Antiques.
He went to the courthouse to determine if there were any liens
on the Property and to view the deeds. Dkt. No. 26, Ex. E,
64:8-16. Canady also asked the City, the police department, the
power company, and the post office about any information on the
Property's previous owner. Dkt. No. 38, Ex. J., 64:8-15, 56:811. The City informed him that Christie was associated with
Trade Antiques and he also owned a small parcel nearby. Dkt.
No. 26, Ex. E, 64:8-16. Neither the City, nor the County, nor
the Police Department knew Christie's current address. Dkt. No.
26, Ex. E, 64:8-16. City employees, however, did inform Canady
that they thought Christie lived "somewhere in Scotland" and
that the last thing they had heard was that Christie was in
jail. Dkt. No. 36, Ex. E, 65:19-24. Canady also talked with
one of the neighboring landowners about the Property's previous
owner. However the neighbor did not have any more information.
Dkt. No. 38, Ex. J., 120:9-25, 121:17-25, 122:1-13.
To provide notice of his desire to foreclose Trade
Antiques's right to redeem, Canady (1) had the Sheriff tack a
notice on the front door of the Property, (2) published a notice
in the applicable newspaper, (3) had the Sheriff send a notice
to the only address for Trade Antiques he had, which was the
address of the Property, and (4) sent a notice of his own to the
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Property's address. Dkt. No. 36, Ex. 16 ¶ 12. The notice
provided by Canady asserted that the right to redeem would
terminate on November 25, 2010. Dkt. No. 36, Ex. G.
In February 2011, Christie, for the first time, was
informed by Rosian of the tax sale and Canady's interest in the
property. Dkt. No. 38, Ex. B, 32:19-22. Upset by the news,
Christie and his parents arranged for Paul McCourt to fly to
America to investigate the situation and see what could be done.
Dkt. No. 38, Exhibit J, 32:19-22. Christie, along with his
parents, gave McCourt power of attorney to deal with their
rights in the Property. Dkt. No. 38, Ex. N. The Power of
Attorney Agreement stated that "Andrew Christie presently of
Trade Antiques" appointed McCourt as his representative. Dkt.
No. 38, Exhibit N. McCourt negotiated with Canady to settle the
rights between Christie and Christie's parents as to the
Property. Dkt. No. 36, Ex. K. Canady transferred to Christie
and his parents another parcel of land worth $40,000 to settle
any dispute as to ownership. Dkt. No. 38, Ex. I.
On August 19, 2011, counsel for Trade Antiques sent a
letter and a check to Canady attempting to exercise its right of
redemption by paying the statutory fee. See Dkt. No. 36, Ex. H.
Canady refused the check, stating that Trade Antiques right to
redeem the property had been properly foreclosed.

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Several months later, on November 2, 2011, Trade Antiques
filed suit against Canady seeking a declaratory judgment that it
was in fact the proper owner of the Property. See Dkt. No. 1.
Canady answered the Complaint and also asserted a counterclaim
for unjust enrichment. See Dkt. No. 27. Canady alleged that he
had spent a considerable amount of time and money improving the
property after he took ownership, and should Trade Antiques be
able to redeem the property, it would be unjustly enriched by
Canady's efforts. See Dkt. No. 27.
LEGAL STh1WPBD

Under Federal Rule of Civil Procedure 56(a), summary
judgment is appropriate "if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." The court must view
the evidence and draw all inferences in the light most favorable
to the nonmovant. Adickes v. S.H. Kress & Co., 398 U.S. 144,
157-59 (1970). The party seeking summary judgment must first
identify grounds that show the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-24
(1986). To discharge this burden, the movant must show the
court that there is an absence of evidence to support the
nonmoving party's case. Id. at 325. The burden then shifts to
the nonmovant to go beyond the pleadings and present affirmative

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evidence to show that a genuine issue of fact does exist.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
DISCUSSION

Summary judgment is inappropriate because Trade Antiques
did not meet its burden of establishing that there are no issues
of material fact.
Before foreclosing a previous owners' right to redeem, a
tax sale purchaser must provide adequate notice. See
Funderburke v. Kellet, 364 S.E.2d 845, 847 (Ga. 1988). Notice
must satisfy the requirements of both constitutional due process
and Georgia's statutes concerning the right to redeem.
Mennonite Bd. of Missions v. Adams, 461 U.S. 791, 798-99 (1983).
Merely satisfying the Georgia code provisions dealing with the
right to redeem may not be enough because constitutional due
process may require more additional steps. Hamilton v. Renewed
Hope, 589 S.E.2d 81 (Ga. 2003) ("Hamilton I").
However, in this particular case, both constitutional due
process and O.C.G.A. § 48-4-45 require essentially the same
actions by a tax sale purchaser. Due process requires that the
means employed to provide notice are what someone "desirous of
actually informing the absentee might reasonably adopt to
accomplish [that task]." Jones v. Flowers, 547 U.S. 220, 229
(2006). When a party becomes aware that the method used to
provide notice has failed, due process requires "reasonable
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followup measures." Id. at 222. However, "extraordinary
efforts to discover" the absentee party's whereabouts are not
required. Mennonite, 462 U.S. at 798 n.4.
Like the due process inquiry, Georgia's statutory scheme
also focuses on reasonableness. O.C.G.A. § 48-4-45 requires
that, for persons residing outside the county where the property
is located, the tax sale purchaser send notice by registered or
certified mail or statutory overnight delivery "if the address
of that person is reasonably ascertainable."

O.C.G.A. § 48-4-

45(a)(2) (emphasis added). Georgia courts have stated that the
laws "governing the right to redeem are to be construed
liberally and most favorably to persons allowed by the statute
to redeem." H&C Dev., Inc. v. Bershader, 546 S.E.2d 907, 908
(Ga. Ct. App. 2001).
Summary judgment at this stage in the litigation is not
appropriate because the reasonableness of Canady's actions is a
question of fact. See Hamilton I, 589 S.E.2d at 85-86 (fact
issue as to whether taxpayer's address was reasonably
ascertainable precluded summary judgment); H&C Dev., Inc., 546
S.E.2d at 910 (genuine issue of material fact regarding whether
landowner's new address was "reasonably ascertainable" for
purposes of sending landowner notice of purchaser's intention to
foreclose right to redeem). Here, Canady's actions to determine
an appropriate address cannot be said to be unreasonable as a
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matter of law. Even though neither party has requested a jury
trial, questions of fact are best resolved at trial. See Matter
of Placid Oil Co., 932 F.2d 394, 397 (5th Cir. 1991) (While
district courts are not forbidden from drawing factual
inferences on a summary judgment motion where the court will be
the ultimate finder of fact, "assessments of credibility come
into sharper focus once live witnesses are heard.")
Canady attempted to provide notice to Trade Antiques by:
(1) having the Sheriff tack a notice on the front door of the
Property, (2) publishing a notice in the applicable newspaper,
(3) having the Sheriff send a notice to the only address for
Trade Antiques he had, which was the address of the Property,
and (4) sending a notice of his own to the address of the
Property. Dkt. No. 36, Ex. 16 ¶ 12. Trade Antiques contends
this was insufficient because Canady knew Trade Antiques was not
occupying the Property and therefore knew that the notices
tacked to the front door and sent to that address would not
actually inform Trade Antiques of the foreclosure. Dkt. No. 36,
Ex. 15.
It cannot be said at this point that Canady knew that the
notices were ineffective. Canady testified that he "assumed"
that no one was at the house, but that he had seen people
"c[o]me back and forth," who presumably could have seen the
notices tacked to the door or mailed to the Property. Dkt. No.
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56, Ex. E, 115:13-25, 146:1-15. Furthermore, when Canady
eventually took possession of the property and forcefully
entered, he found the notices as well as other mail on a table
inside the building. Dkt. No. 36, Ex. E, 191:16-25, 191:12-15.
Someone with access to the Property came into contact with the
notices.
Trade Antiques argues that Canady "made no efforts
whatsoever to ascertain any contact information for anyone
qualified to accept service on behalf of Trade Antiques." See
Dkt. No. 36, Ex. 15 at 12 (emphasis in original) . However,
Canady, in fact, made several efforts to locate a proper address
for Trade Antiques prior to purchasing the property, which was
prior to sending notice. Canady went to the courthouse to
determine if there were any liens on the Property and to view
the deeds. Dkt. No. 26, Ex. E, 64:8-16. He also asked several
governmental bodies and the power company for information about
Trade Antiques. Dkt. No. 38, Ex. J., 64:8-15, 56:8-11. The
only information those efforts revealed was that Christie might
live "somewhere in Scotland" and that he was rumored to be in
jail. Dkt. No. 36, Ex. E, 65:19-24. Canady also spoke with one
of the neighboring landowners, which also proved fruitless.
Dkt. No. 38, Ex. J.,

120:9-25, 121:17-25, 122:1-13.

Trade Antiques places much emphasis on actions that Canady
could have taken prior to sending the notices. After Trade
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Antiques filed suit, Canady searched extensively for more
information on Trade Antiques. Canady, post-suit, searched
online for information about Trade Antiques on Google and other
websites that provide information about companies, such as
PowerProfiles, Cotera.com , and Dun & Bradstreet. Dkt. No. 36,
Ex. E, 194:25, 195:9. In his deposition, Canady testified that
research on these websites was "real simple." Dkt. No. 36, Ex.
E, 190:11-13. Canady, after learning that Trade Antiques was a
Florida LLC, researched Florida records. Dkt. No. 36, Ex. E,
98:21-25. Canady also searched for Trade Antiques under
Georgia's Secretary of State database. However, because Trade
Antiques, was never registered in Georgia, the database
contained no information.
Trade Antiques also relies on measures that Canady never
took (even after the lawsuit was filed), but that he could have
taken. Trade Antiques asserts that Canady could have attempted
to locate Christie in Scotland, 2 he could have contacted the
closing attorney on the deed, he could have attempted to locate
Keith T. Oulson, another member of Trade Antiques that appeared
on the Deed, he could have spoken with all of the neighboring
landowners about Trade Antique's whereabouts, and he could have

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Trade Antiques does not specify how Canady could have determined
Christie's precise address when all he knew was that he was
"somewhere in Scotland."
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spoken to Rosian, the caretaker, prior to taking possession of
the property. Dkt. No. 36, Ex. 15.
Whether Canady acted unreasonably by not taking those
actions prior to sending the notice is a question of fact not
suited for resolution on summary judgment. If anything, the
applicable case law suggests that Canady did all that was
required of him prior to sending notice. Many of the
constitutional due process cases cited by Trade Antiques
concerned when mere notice by publication, such as a newspaper,
was insufficient and other methods, such as mailed notices, were
required. See Mennonite, 462 U.S. at 798-99; Mullane v. Cent.
Hanover Bank & Trust Co., 339 U.S. 306 (1950); Funderburke, 364
S.E.2d at 846-48. It is undisputed that Canady did far more
than merely publishing a notice in the newspaper.
Additionally, the cases that have required a party to take
additional steps for service have not required very extensive
measures. For example, in Jones, the state government became
aware that its attempt at service through sending certified mail
had failed when the mail was returned as undeliverable. 547
U.S. at 223-24. The Court listed resending the notice via
regular mail, posting a notice on the front door, and addressing
the notice to "occupant" rather than a specific person as
reasonable follow-up measures. Id. at 234-235. The Court
specifically stated that the state government was "not required
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to go [as] far" as searching the phonebook or tax income rolls.
Id. at 235-36. In Hamilton v. Renewed Hope, Inc. ("Hamilton
II"), the Georgia Supreme Court affirmed the grant of summary
judgment to a tax sale purchaser and concluded that talking to
the uncooperative tenant, leaving letters under the condominium
door, speaking with the mortgage company and the condominium
complex's management company, and searching the current
phonebook constituted "reasonably diligent" efforts to locate
the prior owner. 637 S.E.2d 412, 413-14 (Ga. 2006). According
to the court, measures such as searching the county's state
court docket or searching outdated phonebooks were not required
and would be an "unreasonable burden" on the tax sale purchaser.
Id. at 414-15. Canady's actions in this case are on par with
what was required under Jones and Hamilton II.
Significantly, the Supreme Court has stated the means
employed to provide notice must be what someone "desirous of
actually informing the absentee might reasonably adopt to
accomplish [that task]." Jones, 547 U.S. at 229. While a tax
sale purchaser attempting to foreclose the former owner's right
to redeem might have a conflict of interest, no such conflict of
interest exists when a tax sale purchaser is researching the
property to determine whether to purchase it. Here, before
purchasing the Property at the tax sale, Canady researched the
property to decide whether to buy it. Indeed, Canady's efforts
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to locate someone associated with Trade Antiques occurred before
the tax sale. At this point in time, Canady's own self interest
motivated him to locate any information on Trade Antiques and
its members. Dkt. No. 36, Ex. 5, 45:1-25, 63::1-12. The former
owner's status and location would have significantly impacted
Canady's potential return on his investment and, as a result,
his decision to purchase the Property. Thus, the fact that, at
one point in time, Canady had every motivation to locate someone
associated with Trade Antiques, but was unable to do so, weighs
heavily in his favor.
Another reason that Trade Antiques' Motion should be denied
is because there is no evidence that, had Canady taken the steps
Trade Antiques suggests, he would have uncovered any additional
information. Trade Antiques argues that it does not need to
present such evidence and that such information is irrelevant.
See Dkt. No. 42. To support this argument, Trade Antiques
relies on language from Jones stating that whether a particular
procedure is constitutionally adequate "is assessed ex ante,
rather than post hoc."

See Dkt. No. 42 (citing Jones, 547 U.S.

at 231) . That statement from Jones, however, deals with a
different issue entirely. The United States Supreme Court's
point was that, just because a particular method of notice
failed at providing actual notice, does not mean the method was
constitutionally inadequate. Id. ("[T]he failure of notice in a
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specific case does not establish the inadequacy of the attempted
notice.")
Indeed whether or not it is relevant to due process,
Georgia's statutory language suggests that the tax sale
purchaser must have actually been able to find the party's
address. O.C.G.A. 48-4-45(d) states that notice must be sent to
persons living outside the county where the property is located
"if the address of that person is reasonably ascertainable."
That language puts the focus on whether the address could be
ascertained, not whether the tax sale purchaser could have done
more, regardless of what those efforts would have yielded.
Additionally, Georgia courts have evaluated whether additional
efforts would have proved successful. See Hamilton I, 589
S.E.2d at 85 (noting that it was "by no means clear that [the
tax sale purchaser] could have obtained that address through
[the] channel of information" suggested by the former owner);
cf. Linn Farms & Timber P'ship v. Union Fac. R.R. Co., 661 F.3d
354, 360-61 (8th Cir. 2011) (concluding that Jones does not
suggest that "an additional step is reasonable only if it will
necessarily result in information that will lead to actual
notice being provided").
Some of Trade Antique's suggested measures, such as
speaking with Rosian, probably would have revealed additional
information. However, there is evidence that several other
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measures suggested by Trade Antiques would not. Canady
testified that none of the websites he visited after the lawsuit
was filed contained an address for Trade Antiques other than the
Property's address. Dkt. No. 36, Ex. E, 190:3-10.
CONCLUSION

For the reasons stated above, Plaintiffs' Motion for
Summary Judgment, Dkt. No. 36, is DENIED.

SO ORDERED, this 27th day of February, 2013.

ISA GODBEY WOOD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

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