Wilson v. Louisiana Tax Commission et al
Filing
79
ORDER & REASONS granting Assessor's 48 Motion for Summary Judgment; denying pla's 50 Motion for Summary Judgment; FURTHER ORDERED that pla's claims against Assessor are DISMISSED WITH PREJUDICE, each party to bear its own costs. Signed by Judge Nannette Jolivette Brown on 7/11/2012. (rll, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PATRICK WILSON
CIVIL ACTION
VERSUS
CASE NO. 10-3338
STATE OF LOUISIANA, ex rel, LOUISIANA TAX
COMMISSION; WHITNEY JOSEPH, JR.,
ASSESSOR FOR PARISH OF ST. JOHN THE
BAPTIST; AND ESPARROS PROPERTIES
AIRLINE, L.L.C.
SECTION: “G”(3)
ORDER
Currently before the Court is a Motion for Summary Judgment1 filed by Defendant, Whitney
Joseph, Jr., Assessor for the Parish of St. John the Baptist, wherein he argues that he is entitled to
judgment as a matter of law for the claims asserted against him on the basis of qualified immunity,
arguing that Plaintiff, Patrick Wilson, was not deprived of a property right and that Assessor
Whitney Joseph, Jr. acted reasonably. The Assessor’s motion was joined and supported by
Defendant, Esparros Properties Airline, LLC.2 Also before the Court is a Motion for Summary
Judgment filed by Patrick Wilson, wherein Patrick Wilson argues that he is entitled to judgment as
a matter of law against all defendants on the basis that all defendants violated his procedural due
process rights by their actions concerning the cancellation of a tax assessment on improvements that
he claims to have purchased at a tax sale, which Wilson argues led to the cancellation of the tax sale
itself. Wilson further argues that these actions prevented him from possession of and from quieting
1
Rec. Doc. 48.
2
Rec. Doc. 54 at p. 2. Defendants Louisiana Tax Commissioners did not join in the Assessor’s Motion for
Summary Judgment.
1
title to the improvements and therefore he was deprived of property rights.3 After considering the
motions, oppositions, Patrick Wilson’s reply, the record, and the applicable law, the Court will grant
Defendant Assessor Whitney Joseph, Jr.’s Motion for Summary Judgment and will deny Patrick
Wilson’s Motion for Summary Judgment.
I. Background
On June 28, 2007, Plaintiff Patrick Wilson (“Wilson”) purchased improvements on real
property located in St. John the Baptist Parish, Louisiana, for nonpayment of 2006 ad valorem real
estate taxes.4 The purchased improvement is a metal structure (a dance floor), which is attached
to another building owned by Defendant Esparros Properties Airline, LLC (“Esparros”).5 The
structure was erected by a former tenant of Esparros, RJ’s Lounge, Inc. (“RJ’s Lounge”), during a
time when RJ’s Lounge leased the main property from Esparros.6
There is no evidence that Esparros ever purchased the improvements or demanded that RJ’s
Lounge remove the improvements after RJ’s Lounge’s lease expired and RJ’s Lounge vacated the
premises. RJ’s Lounge subsequently sold the improvements to another entity, Country Club
Restaurant & Lounge, Inc.7 Wilson alleges that this is the same entity that leased the premises from
Esparros after RJ’s Lounge’s lease expired; however, that lease lists “Country Club Restaurant and
3
Rec. Doc. 50.
4
Rec. Doc. 50-5 at p. 12.
5
Id.
6
Rec. Doc. 50-6 at p. 5.
7
Id. at pp. 6-8.
2
Club, Inc.” as the tenant of Esparros’s premises. At all relevant times, the improvements were
assessed separately from the remainder of the property.8 In 2006, Country Club Restaurant &
Lounge, Inc. (or Club, as stated in the lease) vacated the premises and thereafter did not pay the ad
valorem taxes on the improvements.9
The following year, in 2007, Wilson purchased the metal structure at a tax sale held by the
Sheriff of St. John the Baptist Parish due to the unpaid taxes of Country Club Restaurant & Lounge,
Inc.10 After purchasing the improvements, Wilson did not pay the taxes that he owed on the
improvements. As a result of this nonpayment, Wilson’s interest in the improvements was
adjudicated to St. John the Baptist Parish (the “Parish”) on June 26, 2008.11
Nevertheless, on July 26, 2010, following the expiration of the three (3) year redemptive
period from Wilson’s purchase at the tax sale in 2007, Wilson filed a state court proceeding to quiet
his tax title to the improvements.12 Concurrently, he contacted representatives of the underlying
property owner, Esparros, to advise them of the tax sale. He was told by an Esparros representative
that the tax sale was a mistake and would be cancelled.13 An Esparros representative then sent
correspondence to the tax assessor, Whitney Joseph, Jr. (the “Assessor”), which indicated that the
property had been damaged by a fire and that the improvements were the property of Esparros,
having been turned over to Esparros at the time that Country Club Restaurant & Lounge, Inc.
8
Id. at pp. 10-15.
9
Rec. Doc. 50-5 at p. 12.
10
Id.
11
Rec. Doc. 53-5.
12
Rec. Doc. 1-4 at pp. 1-4.
13
Rec. Doc. 50-11 at p. 2.
3
vacated the premises in 2006.14 It is undisputed that the underlying property and the improvements
had been assessed separately,15 and therefore, Esparros did not receive notice of any tax assessments
in the improvements or notice of delinquency in payment of those taxes. Accordingly, Esparros
requested the Assessor to unwind the tax sale and refund the purchaser’s money, place all property
in the name of Esparros, and bill Esparros for any back taxes owed.16
Having been advised that Esparros would seek to cancel the sale, Wilson’s counsel sent
notices to both the Assessor and the Sheriff for St. John the Baptist Parish, requesting an opportunity
to be heard and to present evidence on the validity of the tax sale prior to any action being taken to
terminate Wilson’s alleged property interest.17
Despite the notification and the request to be heard, without providing Wilson with the
opportunity to be heard, the Assessor’s Office submitted an online change order request to the
Louisiana Tax Commission, seeking retroactive cancellation of the assessment upon which Wilson’s
tax title rested.18 In this electronic request, the Assessor stated that the reason for the cancellation
was that the building was destroyed by a fire and that Esparros was the correct owner of the
building.19 However, Esparros’s representative has since testified in his deposition that the
14
Rec. Doc. 50-6 at pp. 1-2. Although, as discussed later, Esparros claims that it leased its premises to
Country Club Restaurant & Club, Inc., the correspondence sent from the Esparros representative to the Assessor
specifically states that the previous tenant was Country Club Restaurant & Lounge, Inc.
15
Rec. Doc. 48-3 at p. 1. Wilson contends that it was the “ownership interest in the improvements which
was separately assessed.” Rec. Doc. 55-1 at p. 2. Regardless of whether it was the “ownership interest in the
improvements” or the improvements themselves that had been separately assessed, it is undisputed that the property
and the improvements were not assessed together.
16
Id.
17
Id. at 3.
18
Rec. Doc. 50-8 at p. 6.
19
Id.
4
improvements purchased by Wilson did not suffer any damage from a fire.20 Nonetheless, on July
28, 2010, the Louisiana Tax Commission granted the change order request and cancelled the
underlying assessment and the resulting tax sale of the metal structure.21
On October 1, 2010, Wilson filed this suit against Esparros, the Assessor, and the Louisiana
Tax Commission for their alleged violations of his procedural due process rights pursuant to 42
U.S.C. § 1983 as a result of these events.22 Later, Wilson dismissed the Tax Commission and
amended his complaint to name the individual members of the Tax Commission as defendants (the
“Tax Commissioners”).23 Wilson alleges that the Tax Commissioners promulgated a policy that
permitted the cancellation of tax sales, and in turn the deprivation of property, without providing
prior notice to, or an opportunity to be heard by, the individual whose property interest derived from
the tax sale. Wilson alleges that Esparros and the Assessor used this system to deprive Wilson of
his rights without providing him with due process of law.
Specifically, Wilson alleges that the Assessor submitted to the Tax Commission a request
to cancel the assessment and Wilson’s tax sale purchase, knowing that the cancellation would result
in the loss of property without first providing Wilson with notice or an opportunity to be heard.
Wilson alleges that the Assessor took this action only because an Esparros representative contacted
the Assessor and told the Assessor that the property was destroyed by a fire and that Esparros was
the true owner of the structure purchased by Wilson at the tax sale. Wilson alleges that the Assessor
20
Rec. Doc. 50-8 at p. 7. No party has submitted any evidence establishing that the improvements were
damaged by the fire.
21
Id.
22
Rec. Doc. 1.
23
Rec. Doc. 24.
5
acted without confirming this information.
Initially, this case was assigned to Judge A.J. McNamara, Section “D” of the Eastern District
of Louisiana.24 On January 25, 2011, the Assessor filed a motion to dismiss for failure to state a
claim upon which relief could be granted, wherein the Assessor argued that Wilson’s claims against
the Assessor should be dismissed because the Assessor is entitled to qualified immunity.25 On
March 11, 2011, Judge McNamara denied the Assessor’s motion, finding that Wilson’s complaint
alleged that the Assessor’s actions denied Wilson of the property right acquired in the tax sale
without due process; that Wilson’s right was clearly established at the time of the Assessor’s alleged
conduct; and that the Assessor’s actions were objectively unreasonable.26 On June 2, 2011, this case
was transferred to Judge Lance M. Africk, Section “I” of this court.27 On September 29, 2011, the
Assessor filed a Motion for Summary Judgment.28 On October 2, 2011, Wilson filed a Motion for
Summary Judgment.29 Thereafter, on October 11, 2011, this case was transferred to this Section,
Section “G” of this court.30
II. The Pending Motions
A. The Assessor’s Motion
24
Rec. Doc. 2.
25
Rec. Doc. 12.
26
Rec. Doc. 19.
27
Rec. Doc. 35.
28
Rec. Doc. 48.
29
Rec. Doc. 50.
30
Rec. Doc. 52.
6
On September 29, 2011, the Assessor filed a Motion for Summary Judgment,31 seeking
summary judgment against Wilson on the grounds that Wilson took no action to appeal the decision
of the Louisiana State Tax Commission or to contest its decision in state court. The Assessor argues
that Wilson could have petitioned for a declaratory judgment in state court but that he elected not
to do so.32 Additionally, the Assessor argues that, at the time of the cancellation, the improvements
had been adjudicated to the Parish because Wilson had failed to pay taxes on the improvements in
2007 and therefore his ownership interest in the improvements is placed into question.33 Further,
the Assessor argues that summary judgment in the Assessor’s favor is warranted on the basis of
qualified immunity.34 Specifically, the Assessor argues that it is the Tax Commission that makes
the final decision as to whether to delete or to change an assessment and, as such, that the Assessor
cannot be held liable for the cancellation of the assessment.35 The Assessor argues that he violated
no clearly established constitutional right in requesting the change order without first providing
Wilson with notice or an opportunity to be heard because state law authorizing change orders
contains no such requirements.
Wilson filed his opposition on October 11, 2011.36 Therein, Wilson argues that there is no
requirement that he first pursue a state remedy and that this Court has previously rejected the
Assessor’s arguments regarding qualified immunity. First, Wilson attacks the underlying premises
31
Rec. Doc. 48.
32
Rec. Doc. 48-4 at p. 7.
33
Id. at p. 6.
34
Id. at p. 5.
35
Id. at pp. 5-6.
36
Rec. Doc. 55.
7
of the Assessor’s argument, stating that it is based on facts that are not true because the Assessor did
not “correct” the 2006 assessment because the 2006 assessment was not in error37 and that it was
Wilson who owned the metal structure.38 Thus, Wilson argues, “More accurate would be the
statement that the Assessor cancelled the long-standing assessment without making any factual
determinations whatsoever, without giving notice to plaintiff who was the presumed owner of the
property, in violation of the specific requirements of Louisiana Law in complete disregard of
plaintiff’s constitutional right to due process.”39 Wilson also points out that the metal structure was
not damaged or destroyed by fire.40
In support of his claim for ownership of the metal structure, Wilson argues that the landlord
must either demand removal or make payment for improvements built upon the landlord’s land, that
Esparros did not do so and therefore cannot claim to be the rightful owner of the improvements, and
that he, Wilson, is the owner of the metal structure because he purchased the improvements at a tax
sale and the three year redemptive period has expired.41
Regarding Wilson’s state remedy, Wilson argues that there is no requirement that he first
pursue a state remedy and that, further, because the assessment and tax sale were cancelled, the
pending state court action to confirm his tax title is now moot.42 Further, Wilson argues that the
procedure employed by the Tax Commission is “violative of due process” because it does not
37
Id. at p. 1.
38
Id. at p. 2.
39
Id. at pp. 2-3.
40
Id. at p. 3.
41
Id. at p. 4.
42
Id. at p. 5.
8
require any evidence or provide an opportunity to be heard before an assessment or sale is changed
or cancelled.43 Wilson argues that he “does not contest the correctness of any assessment, but
challenges the termination of his property interest without notice or an opportunity to be heard,”44
such that the existence of a state procedure for challenging an assessor’s cancellation of a tax title
is irrelevant.
Regarding qualified immunity, Wilson argues that the Assessor has presented no new
arguments not taken into consideration in Judge MacNamara’s denial of the Assessor’s Motion to
Dismiss and that Judge McNamara’s earlier decision on the issue should stand.45 Further, Wilson
argues that the Assessor’s actions were objectively unreasonable because the Assessor did not
follow the procedures set forth under Louisiana law, as the Assessor did not obtain a statement under
oath or make any effort to verify the facts upon which the cancellation was based.46 Wilson notes
that even though the metal structure was adjudicated to the Parish for his own failure to pay taxes,
under Louisiana law, he claims the assessed ownership does not change in such a situation, and the
Assessor was not relieved of his obligation to obtain an affidavit or verify the reasons for
cancellation.47 Therefore, Wilson argues that “[a]s an owner, [he] had the right to redeem this
subsequent adjudication to the Parish [and] at the time of the Assessor’s cancellation requests [his
redemptive period had not yet expired].”48
43
Id. at p. 6.
44
Id.
45
Id. at p. 5.
46
Id. at p. 7.
47
Id.
48
Id. at p. 8.
9
In sum, Wilson argues that the Assessor’s motion should be denied because Wilson is not
required to first pursue state remedies, the Assessor is not entitled to qualified immunity, and
Wilson’s due process rights were violated when his redemptive property rights were terminated
without notice or an opportunity to be heard.
B. Wilson’s Motion
On October 2, 2011, Wilson filed a Motion for Summary Judgment,49 seeking summary
judgment concluding that he held a property interest in the metal structure at issue in this case; that
Esparros, the Assessor, and the Tax Commission participated in and implemented a process that
unconstitutionally terminated Wilson’s property interest without providing him notice and an
opportunity to be heard; and that Wilson is entitled to judgment against the defendants for their
actions.
First, Wilson notes that the procedure for correcting an erroneous tax assessment requires
the property owner to execute a statement of facts under oath, which the assessor must verify and
approve, but that state law makes no provision for notice to, or an opportunity to be heard by, the
tax sale purchaser prior to the cancellation of the sale.50 Wilson then argues that the Assessor and
the Tax Commission did not comply with even this “minimal” procedure because no affidavit was
submitted, the Assessor “made no effort to verify any factual assertion in the letter [submitted
requesting the assessment change] . . . ,” and the Tax Commission made no effort to determine
49
Rec. Doc. 50.
50
Rec. Doc. 50-3 at p. 3.
10
whether the Assessor had complied with the law.51
Further, Wilson argues that the Tax
Commission’s “virtually instant online assessment cancellation system” arbitrarily terminates tax
titles and violates the law.52 Additionally, Wilson notes that the reason advanced for the cancellation
of the assessment–that the building had been destroyed by fire–has been shown to be false,
according to the evidence before this Court.53
Regarding ownership of the metal structure, Wilson argues that Esparros’s claims of
ownership fail because Louisiana law provides a procedure for acquiring ownership of
improvements erected by tenants upon leased land. Specifically, Wilson argues that the landowner
must compensate the tenant for the improvement, in the amount of either the current value of the
materials or the enhanced value of the immovable, before the landowner may take possession of the
improvements.54 As Esparros has not sought removal or made payment to its former lessee, Wilson
argues that Esparros has never, and does not currently, own the improvements.55 Instead, Wilson
argues that he is the rightful owner of the improvements by way of his tax sale purchase of the metal
structure, particularly because in Louisiana, tax sales are presumed valid and that a tax deed is prima
facie evidence of a valid tax sale.56
Wilson contends that the lack of compliance with the procedure set forth under Louisiana
51
Id.
52
Id. at pp. 3-4.
53
Id. at p. 8.
54
Id. at p. 9.
55
Id. at p. 9-10.
56
Virtocom Fin., Inc. v. Palo Verde Trading Co. 869 So. 2d 194, 197 (La. App. 5 Cir. 2004) (citing La.
Const. Art. 10 § 11 (1921) and La. Const. Art. 7 § 25 (1974)).
11
law for altering or cancelling a tax assessment and tax sale resulted in the unconstitutional
termination of his property rights without due process of law. Specifically, Wilson argues that the
Assessor is liable for his actions because he “proceeded to terminate plaintiff’s property interest”
without having received a sworn statement and having made no effort to verify the facts submitted
in support of cancellation.57 Wilson contends that the Tax Commission violated his rights by
maintaining and utilizing an online assessment cancellation procedure that, despite the specific
requirements of Louisiana law, includes no requirement for a statement under oath prior to the
termination of a tax purchaser’s interest.58 Additionally, Wilson argues that the individual members
of the Tax Commission “approved the termination of [Wilson’s] tax title without providing any
notice or opportunity to be heard . . . .”59 Wilson argues that Esparros took advantage of this
allegedly lax and unconstitutional procedure.60
The Assessor, Esparros, and the Tax Commissioners61 each filed responses in opposition to
Wilson’s motion.62 The Assessor responds that Wilson’s claims must fail because Wilson “had no
property interest in the improvement at the time the assessment was corrected.”63 The Assessor
57
Rec. Doc. 50-3 at p. 11.
58
Id.
59
Id.
60
Id. at p. 13.
61
The Court notes that the Tax Commissioners’ opposition response was entitled “Louisiana Tax
Commission’s Response to Motions for Summary Judgment.” Rec. Doc. 59. However, the Louisiana Tax
Commission was terminated as a party on March 21, 2011. It is the individual Tax Commissioners who remain as
defendants. Therefore, this Court properly will refer to these parties as the “Tax Commissioners,” despite their own
characterization otherwise.
62
Rec. Doc. 53 (the Assessor); Rec. Doc. 54 (Esparros); Rec. Doc. 59 (the Tax Commissioners).
63
Rec. Doc. 53.
12
argues that Wilson lacks a property interest in the improvements because the improvements were
adjudicated to the Parish for Wilson’s failure to pay ad volorem taxes on the improvements in 2007,
resulting in the adjudication of his interest in the improvements to the Parish, and “[t]his fact defeats
all other issues” because “[i]f Plaintiff has no property interest, he has no standing in this court.”64
Further, the Assessor argues that the policies and procedures for changing or cancelling an
assessment were followed and that the Assessor does not make the final decision regarding whether
to change or cancel an assessment, such that the Assessor is not liable for the Tax Commission’s
ultimate decision that resulted in the cancellation of the tax sale.65 The Assessor argues that Wilson
could have petitioned for a declaratory judgment in state court, but that he did not do so.66 The
Assessor concludes that this Court should deny Wilson’s motion because, according to the Assessor,
Wilson had no property interest in the metal structure at the time the assessment was corrected and
the tax sale was cancelled.67
In Esparros’s response, Esparros “supports the position of the Assessor in the Assessor’s
Motion for Summary Judgment” and argues that Esparros has no liability in this matter.68 Esparros
asserts that Wilson’s claims of property ownership are “moot as to the claims against
Esparros . . . .”69 Specifically, Esparros disputes that Wilson purchased the metal structure in a
64
Id
65
Id. at p. 3.
66
Id.
67
Id. at p. 6.
68
Rec. Doc. 54 at p. 2.
69
Id.
13
proper tax sale for unpaid 2006 ad valorem taxes.70 Instead, Esparros simultaneously claims to be
the proper owner of the structure and asserts that the property was transferred back to the Parish due
to Wilson’s failure to pay taxes on the property.71
Esparros states, “There is a genuine issue of material fact as to whether the ownership of the
building in question was legally purchased at tax sale by Wilson and was capable of being owned
by Wilson via proper title as opposed to the rightful ownership of Esparros.”72 Esparros then directs
the Court to two provisions of Louisiana law, Civil Code articles 491 and 492, which Esparros
argues demonstrate Esparros’s ownership of the metal structure.73 Also according to Esparros, the
cash sale of the metal structure from RJ’s Lounge to Country Club Restaurant & Lounge, Inc. is
flawed on its face because the sale and the lease allegedly involved different Country Club entities.74
Further, Esparros argues that “[t]here is a genuine issue of material fact [as] to whether the purported
act of Cash Sale intended to transfer the entire building structure located at 1107 East Airline
Highway in LaPlace, Louisiana.”75 Esparros argues that the sale can be construed to convey
ownership of the entire property, rather than merely the improvement, and thus Esparros concludes,
70
Id. at p. 5.
71
Id. (“Esparros Properties Airlines, LLC is the proper owner of the immovable and improvements thereon.
The Assessor for St. John The Baptist Parish has set forth legal argument which controvert Plaintiff’s allegations and
show that the property in question was actually transferred back to the parish for Plaintiff’s failure to pay subsequent
taxes on the property in question.”). The Court notes that it is undisputed that the property was adjudicated to the
Parish for nonpayment of taxes. See Rec. Doc. 48-4 at pp. 15-18; Rec. Doc. 55 at p 7.
72
Id.
73
Id. at p. 6 (citing and quoting La. C.C. arts. 491, 492).
74
Id. at p. 7.
75
Id.
14
“Because there is no evidence whatsoever of any juridical act of transfer from Esparros to RJs
Lounge, the purported Cash Sale above is null and void and has no legal effect.”76
In the Tax Commissioners’ response, they argue that Wilson has not specifically pled any
particular relief sought against them.77 They argue that they were never apprised of Wilson’s claim
in connection with the issuance of the change order and state that they are willing to reverse the
change order if presented with competent evidence.78 Further, they state that they were “duped” into
canceling the tax sale by the Assessor’s unreasonable actions.79 Appended to the response is the
affidavit of Charles Abels, Administrator for the Tax Commission.80 Mr. Abels avers that the Tax
Commission was unaware that there existed a tax sale purchaser who may have acquired rights that
were impaired by the change order.81 Mr. Abels also avers that “the practice of requiring a statement
under oath was more or less abandoned many years ago due to the number of change orders
processed by the Tax Commission each year,” despite the “statute that apparently requires an
assessor to submit its change order request under oath.”82 However, Mr. Abels noted that the Tax
Commission “assumes that a request for a change order by an assessor is made in good faith and is
tantamount to a statement made under oath because it is made by a public official in the performance
76
Id. at p. 8.
77
Rec. Doc. 59 at p. 1.
78
Id.
79
Id. at p. 2.
80
Rec. Doc. 59-1.
81
Id. at p. 3.
82
Id. at p. 2.
15
of his official duties.”83
Following leave of Court, on October 27, 2011, Wilson filed a reply brief .84 Therein,
Wilson argues that Esparros “attempts to create factual controversies precluding summary judgment
which do not exist.”85 Specifically, Wilson notes the discrepancy in the name of the Country Club
entity that purchased the improvements and responds that this discrepancy is irrelevant and merely
a typographical error.86 Wilson then reasserts his position that he is the true owner of the metal
structure in question and that the subsequent adjudication of the property to the Parish is
immaterial.87
Finally, Wilson argues that the Civil Code provisions cited by Esparros are
inapplicable and that Esparros “has never complied with the applicable provisions of law that would
entitle it to claim ownership.”88 Therefore, Wilson concludes that there is no dispute that (1) RJ’s
Lounge constructed the metal structure with the consent of Esparros; (2) the structure was separately
assessed to Country Club Restaurant & Lounge, Inc. for several years prior to the tax sale; (3)
Wilson purchased the structure at a tax sale; (4) after the end of the statutory redemptive period and
based upon misrepresentations, Esparros had the Assessor cancel the assessment, resulting in the
cancellation of the tax sale; and (5) the Assessor cancelled the assessment without providing Wilson
with notice or an opportunity to be heard, in violation of his constitutional rights.89
83
Id.
84
Rec. Doc. 61.
85
Id. at p. 1.
86
Id. at pp. 1-2.
87
Id. at p. 2.
88
Id. at p. 3.
89
Id.
16
III. Law and Analysis
A. Summary Judgment Standard
Summary judgment is appropriate when “the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”90 When assessing whether a dispute as
to any material fact exists, the Court considers “all of the evidence in the record but refrains from
making credibility determinations or weighing the evidence.”91 All reasonable inferences are drawn
in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate
or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion for
summary judgment.”92
If the dispositive issue is one on which the moving party bears the burden of proof at trial,
the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if
the evidence went uncontroverted at trial.’”93 The nonmoving party can defeat the motion by either
countering with sufficient evidence of its own, or by “showing that the moving party’s evidence is
so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving
90
Fed. R. Civ. P. 56(c)(2); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23(1986); Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
91
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008).
92
Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.
93
Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-65 (5th Cir. 1991).
17
party.”94
If the dispositive issue is one on which the nonmoving party will bear the burden of proof
at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the
record is insufficient with respect to an essential element of the nonmoving party’s claim.95 Then
the burden shifts to the nonmoving party, who must, by submitting or referring to evidence, set out
specific facts showing that a genuine issue exists.96 The nonmovant may not rest upon the pleadings,
but must identify specific facts that establish a genuine issue for trial.97
B. Requirements for a Procedural Due Process Claim
Wilson contends that the defendants are liable under Section 1983 because they allegedly
deprived him of property without providing him with due process of law. As the Fifth Circuit has
explained, “[t]he central theme of procedural due process under the federal constitution is that
parties whose liberty or property rights are affected by governmental action are entitled to notice and
an opportunity to be heard in a meaningful manner.”98 A plaintiff must first establish a denial of a
constitutionally protected property right in order to establish a procedural due process violation99;
94
Id. at 1265.
95
See Celotex, 477 U.S. at 325.
96
See id. at 324.
97
See, e.g., id. at 325; Little, 37 F.3d at 1075; Isquith ex rel. Isquith v. Middle South Utils., Inc., 847 F.2d
186, 198 (5th Cir. 1988), cert. denied, 488 U.S. 926 (1988).
98
Price v. City of Junction, 711 F.2d 582, 589 (5th Cir. 1983).
99
Bryan v. City of Madison, 213 F.3d 267, 274 (5th Cir. 2000).
18
that is, a plaintiff must establish both the existence of a property right and the deprivation of that
right. Property rights are not created by the United States Constitution; instead, a plaintiff must
show that he was denied a property right that stems from an independent source, such as state law.100
If a plaintiff establishes that he has been deprived of a protectible property interest, the due process
clause requires that the deprivation by adjudication “be preceded by notice and an opportunity for
hearing appropriate to the nature of the case.”101 Where the deprivation is not preceded by such
notice and hearing, a plaintiff may have a valid claim under Section 1983 for a procedural due
process violation.
C. Whether Wilson was Deprived of a Property Right by Virtue of the Cancellation of the Tax
Sale
1. Parties’ Arguments
The parties present a number of arguments concerning whether Wilson did or did not have
a property right in the metal structure at issue in this case at the time the tax sale was cancelled. In
Wilson’s Motion for Summary Judgment, Wilson argues that the cancellation of the tax sale
deprived Wilson of property. For support, Wilson relies on Judge McNamara’s previous Order and
Reasons102 denying the Assessor’s Motion to Dismiss,103 wherein Judge McNamara held that
100
Id. at 274-75.
101
Small Engine Shop, Inc. v. Cascio, 878 F.2d 883, 887 (5th Cir. 1989) (citing Mullane v. Cent. Hanover
Bank & Trust, 339 U.S. 306 (1950)).
102
Rec. Doc. 19.
103
Rec. Doc. 12.
19
Wilson’s complaint sufficiently alleged that he was deprived of property by alleging that he was
deprived of his ownership interest in the improvements by virtue of the cancelled tax title.104 Wilson
notes that Esparros misrepresented to the Assessor that the improvements were destroyed by a fire,
suggesting that there were no improvements existing and able to be purchased at the time of the tax
sale. Wilson also disputes Esparros’s claim that it is the owner of the improvements, arguing that
Esparros failed to follow the procedures provided by the Louisiana Civil Code that would establish
Esparros as owner of the improvements.
In the Assessor’s Motion for Summary Judgment, as well as in the Assessor’s opposition to
Wilson’s Motion for Summary Judgment, the Assessor responds that Wilson was not deprived of
property because Wilson did not have a property interest in the improvements at the time the tax sale
was cancelled. Specifically, the Assessor argues that because Wilson did not pay the 2007 ad
valorem taxes on the improvements and because this failure resulted in the improvements being
adjudicated to the Parish, starting in 2008, Wilson had no property interest in the improvements.
Esparros makes a similar argument in its opposition to Wilson’s Motion for Summary
Judgment, contending that Wilson was not deprived of property because Wilson did not have a
property interest in the improvements at the time the tax sale was cancelled. Specifically, Esparros
argues that certain portions of the Louisiana Civil Code require either an instrument filed for registry
or a judicial act of the owner of an entire building before an improvement can be recognized as
property belonging to a tenant, such that Country Club’s purchase was not a valid transfer of
104
Rec. Doc. 19 at pp. 6-7.
20
ownership. Further, Esparros argues that the purported cash sale from RJ’s Lounge to Country Club
is not sufficient evidence of a transfer of ownership of the improvements at issue in this case because
it is not clear that the same entity purchased the improvements as leased the premises from Esparros
and because the description contained in the purported tax sale to Wilson could be construed as
selling the entire premises, which no party argues it did, thus making the sale null and void
according to Esparros.
Wilson responds that he was, in fact, deprived of property when his tax sale was cancelled.
First, Wilson points to the affidavit of Rita Langston, president of RJ’s Lounge, who stated that the
improvements were constructed by RJ’s Lounge with the consent of Esparros.105 Therefore, Wilson
argues that, under Louisiana law referenced in his motion, the improvements were owned by RJ’s
Lounge unless purchased by Esparros, which Wilson contends never occurred.
Wilson also responds that the discrepancy in the name of the purchaser and the name of
Esparros’s lessee is irrelevant, as the deed clearly denominates Country Club Restaurant & Lounge,
Inc. as the purchaser of the improvements from RJ’s Lounge, and Country Club Restaurant &
Lounge, Inc. is the same entity that was the tax debtor and assessed owner prior to Wilson’s tax sale
purchase. Wilson argues that he does not base his claim of ownership on the lease between
Esparros and its tenant, but rather on Country Club Restaurant & Lounge, Inc.’s purchase of the
improvements and Country Club Restaurant & Lounge, Inc.’s subsequent delinquent tax status.
Therefore, Wilson argues that the discrepancy pointed out by Esparros is immaterial. Wilson further
105
Rec. Doc. 55-5.
21
argues that the denotation in the lease of “Country Club Restaurant & Club, Inc.” is a clear
typographical error because it states “Club” twice, because the Louisiana Secretary of State does not
contain a listing for Country Club Restaurant & Club, Inc., and because Michael Beard, an officer
for Country Club Restaurant & Lounge, Inc., signed the lease with Esparros.
Wilson further argues that Esparros has failed to provide any evidence to support its claim
that it became the owner of the improvements at any time after RJ’s Lounge constructed the
improvements. Finally, Wilson argues that Esparros misinterprets the Louisiana Civil Code for the
proposition that a judicial act or an instrument filed into the registry is necessary for a lessee to
become the owner of improvements, and that therefore, neither RJ’s Lounge and Country Club
Restaurant & Lounge, Inc., ever were owners of the improvements. Wilson restates his position that
Esparros only could become the owner of the improvements by compensating the tenant for the
improvements in the amount of either the current value of the materials or the enhanced value of the
immovable, which it never did.
2. Analysis
The parties dispute whether Wilson held a property interest in the improvements at the time
that the tax sale was cancelled, but the Court need not reach a conclusion on that issue. Even
assuming, for purposes of considering the facts in the light most favorable to Wilson, that Wilson
had a property interest in the improvements, Wilson has not demonstrated that the cancellation of
the tax sale deprived him of this property interest, as is necessary to support his procedural due
22
process claim. Although Judge McNamara originally determined that Wilson alleged sufficient facts
to support his claim, there is an important difference between alleging sufficient facts to overcome
a motion to dismiss and providing enough evidence to succeed on, or defeat, a motion for summary
judgment. Even assuming the facts favorable to Wilson, he has not established, as a matter of law,
that he has been deprived of any interest in property by the defendants’ actions here.
In asserting a claim that he was deprived of property without due process of law, Wilson
contends that he was denied ownership of the improvements by virtue of the tax sale cancellation.
Prior to the cancellation of the tax sale, on July 26, 2010, Wilson filed suit in the 40th Judicial
District Court for the Parish of St. John the Baptist to quiet title and confirm his ownership of the
improvements.106 No party has asserted that this suit has been decided or otherwise adjudicated.
A tax-sale purchaser may quiet title by following the procedures set forth in Louisiana Revised
Statute, Section 47:2266(A), which states:
A. (1) After expiration of the redemptive period, an acquiring person may institute
an ordinary proceeding against the tax sale parties whose interests the petitioner
seeks to be terminated. The petition shall contain a description of the property, the
time and place of the sale, and the name of the officer who made the sale, the page
and record book and date of filing of the tax sale certificate, and for adjudicated
properties sold or donated by a political subdivision, reference to the page of record
book and date of filing of the sale or donation, notice that the petitioner is the holder
of tax sale title to the property by virtue of tax sale or is the owner of the property by
virtue of a sale or donation of adjudicated property, and notice that the title and full
ownership in the property will be confirmed unless a proceeding to annul is instituted
within six months after the date of service of the petition and citation. This suit shall
be brought in the parish in which the property is located unless it lies in two or more
parishes, in which case this suit may be instituted in either of the parishes.
106
Rec. Doc. 1-4.
23
(2) The petition and citation shall be served as in ordinary suits . . . . If no
proceeding to annul the sale has been instituted after the lapse of six months after the
date of service of petition and citation, judgment shall be rendered quieting and
confirming the title and the full ownership interest therein.107
Here, Wilson argues that his suit to quiet title was rendered moot by the cancellation of the
tax sale, such that he was deprived of his ability to quiet title and confirm his ownership. However,
the cancellation of the tax sale does not prevent Wilson from seeking to quiet title, and therefore,
the actions of the defendants did not render the suit to quiet title moot, as Wilson contends. In Jamie
Land Company v. Atwood,108 the Louisiana First Circuit Court of Appeal held that an individual who
acquired title at a tax sale, which title was later cancelled by the Louisiana Tax Commission, can
challenge the cancellation in a suit to quiet title.109 Therein, the First Circuit stated that a plaintiff
may challenge the propriety of the cancellation of a tax sale by the Tax Commission in a suit to quiet
title.110 Here, before the tax sale was cancelled, Wilson had filed suit to quiet title, but he apparently
has not pursued that claim any further, or, if he was unsuccessful, has not provided any information
to this Court as to the reasoning. Therefore, Wilson was not deprived of property when the
defendants cancelled the tax sale because, if Wilson can demonstrate in a suit to quiet title that the
tax sale cancellation was improper, Wilson will still be able to quiet title, unless, of course, quieting
title would be improper for other reasons.
107
La R.S. § 47:2166(A).
108
965 So. 2d 873 (La. App. 1 Cir. 2007).
109
Id. at 877.
110
Id.
24
Additionally, Wilson alleged in his complaint that the cancellation of the tax sale deprived
him of possession of the improvements.111 However, Wilson himself has stated that he has never
been in possession of the improvements and that Esparros had possession of the improvements prior
to the time when the tax sale was cancelled.112 Louisiana law provides the procedure for a tax sale
purchaser to obtain possession of the purchased property:
Writ of possession
(A)When necessary to comply with an order of a political subdivision for the
purpose of enforcing property standards, upon the presentation of the order and a
certified copy of a tax sale certificate for immovables to a judge of a competent
jurisdiction (determined by the value of the immovables described and not the
amount of the taxes), the judge shall grant ex parte an order of seizure and
possession, commanding the sheriff to seize the property and place the purchaser
in actual possession. A writ of possession shall be issued by the clerk, but the
purchaser may take actual possession without the order with the consent or
acquiescence of the tax debtor or otherwise, provided no force or violence is used.113
Thus, without the acquiescence of Esparros by it voluntarily relinquishing possession of the
improvements, Wilson would have been required to seek an order of seizure and possession to
obtain possession of the improvements. There is no evidence here to show that Wilson ever engaged
in the proper process to be placed in possession of the improvements, and therefore, he was not in
possession of the property such that the cancellation of the tax sale could deprive him of possession.
Therefore, at the time of the cancellation of the tax sale, Wilson was not in possession of the
property because he had not followed the procedures under Louisiana law to obtain possession, nor
111
Rec. Doc. 1 at p. 7.
112
Rec. Doc. 50-3 at p. 10 (“The fact of the matter is that Esparros has appropriated the improvements by
leasing same to third parties . . . .”).
113
La. R.S. § 47:2158.
25
had he followed the Louisiana procedure for quieting title in the improvements. The cancellation
of Wilson’s tax sale by the defendants did not prevent Wilson from asserting his alleged property
rights by challenging the cancellation of the tax sale in an appropriate forum, nor did it deprive him
of possession of property, as he never was in possession of the improvements. Accordingly, Wilson
is in the same position today as he was prior to the cancellation of the tax sale, and thus, Wilson was
not deprived of property without due process of law.
Considering that Wilson’s position that he has been deprived of a property right without due
process of law is not supported by Louisiana law, the Court need not address the other arguments
raised by the parties concerning the other elements of Wilson’s Section 1983 claim or the elements
of the Assessor’s affirmative defense of qualified immunity. Further, because Louisiana law does
not support Wilson’s assertion that he was deprived of property, Wilson has not met the first element
of his procedural due process claim, and therefore, he is unable to prove his claim pursuant to
Section 1983 against the defendants for their alleged violations of Wilson’s procedural due process
rights.114
IV. Conclusion
The material facts are not disputed here. Wilson alleges that the defendants violated his
procedural due process rights by depriving him of property, without prior notice or hearing, when
the defendants’ actions resulted in a cancellation of the tax sale from which Wilson purchased the
improvements at issue. Assuming that Wilson held a legal property right in the improvements at the
time of the cancellation of the tax sale, application of Louisiana law does not support Wilson’s
114
Bryan, 213 F.3d at 276 (“Because [plaintiff] has failed to establish the denial of a property right, his due
process claims fail.”).
26
asserted conclusion that he was deprived of this property; a necessary element to his claim under
Section 1983. Therefore, for these reasons, the Assessor’s Motion for Summary Judgment is
granted. Similarly, Wilson’s Motion for Summary Judgment against all defendants must be denied
for his same failure to establish an essential element of his claim Accordingly;
IT IS ORDERED that the Assessor’s Motion for Summary Judgment115 is GRANTED.
IT IS FURTHER ORDERED that Wilson’s Motion for Summary Judgment116 is DENIED.
IT IS FURTHER ORDERED that Wilson’s claims against the Assessor are DISMISSED
WITH PREJUDICE, each party to bear its own costs..
NEW ORLEANS, LOUISIANA, this ______ day of July, 2012.
11th
________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE
115
Rec. Doc. 48.
116
Rec. Doc. 50.
27
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