The buyer dominates a tax sale dispute with mortgage holders.



The financial group won overturn in its favor from the Indiana Court of Appeals after its initially successful bid for the tax sale waned.

Trouble began for S&C Financial Group more than a year after it registered a deal for a property in Indianapolis sold as part of a tax sale. About 14 months later, the Horizon Trust Company, acting as custodian of the mortgage holder Patricia McCabe, the IRA, filed a petition to intervene and cancel the tax sale. After a second petition to cancel the sale was filed by Insider’s Cash LLC, the original owner of the McCabe IRA mortgage, Marion District Court allowed the intervention and the parties filed counter-motions for summary judgment.

Ultimately, the trial court ruled against McCabe IRA and Insider’s, and rejected a summary judgment by S&C, abandoning the tax document. But in overturning the trial court’s ruling, the Indiana Court of Appeals found that none of them were eligible for a tax sale notice.

“The trial court here, without giving reasons, appears to have treated McCabe IRA and Insider as a single party, and the court ruled that Insider was entitled to a tax sale notice, Insider did not receive that notice, and therefore Insider had the right to summary judgment. The trial court also ruled in a summary judgment in favor of the McCabe IRA, without drawing any conclusions to support such a decision, ”Judge Elizabeth Tavitas wrote in her appeal on Monday.

The Court of Appeal noted that the pertinent question under Indiana Code § 6-1.1-23.9-3 was not whether a party had an interest in the property, but whether that party had a substantial property interest.

“Insider’s transferred its mortgage to the McCabe IRA and thus ceased to maintain the necessary interest in the property. Consequently, Insider did not have the right to be notified, and, accordingly, his challenge to the tax act should be rejected, ”Tavitas wrote. “The McCabe IRA challenge also fails, but for a different reason; The McCabe IRA was unable to timely record its interest in … property by fixing the transfer of the mortgage that it owned. Thus, these percentages did not appear in public records at the time of the publication of the tax sale notice. ”

Looking at the simple language of the statute to resolve issues, the appellate court concluded that the McCabe IRA was unable to overcome the presumption that the sale of the tax and all the steps leading up to the tax act were correct. Likewise, given that the McCabe IRA was neither a registered owner nor a person with a significant publicly registered ownership interest, it was determined that the McCabe IRA was not entitled to a tax sale notice.

“Since we conclude that neither party had the right to be notified, we do not need to consider arguments regarding the timeliness of their objections to the issuance of a tax act,” concluded the COA in S&C Financial Group LLC v. Insider’s Cash LLC and Guardian of Horizon Trust Company FBO Patricia McCabe, IRA, 20A-TP-2193.


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