One of the final cases the U.S. Supreme Court considered before recessing last month turns on who should get the excess proceeds of a home seized and sold in a property tax foreclosure case.
In Minnesota, where the case Tyler v. Hennepin County originated, court filings show homeowner Geraldine Tyler left the condominium she owned to move into an assisted living center in 2010 and failed to pay her property taxes for the next five years.
Hennepin County (which includes Minneapolis) sold the condo to recoup the property taxes, penalties and interest totaling about $15,000 that Tyler owed. The county sold the condo for $40,000 and kept the balance beyond the outstanding taxes and penalties.
The question at issue in front of the Supreme Court is whether, as Tyler’s attorneys argue, she should have gotten the $25,000 in equity after the sale or, as Hennepin County argues, Minnesota law entitles the county to keep the entire amount because once it forecloses on the property, it is the owner and Tyler no longer has any equity interest. (In its brief, the county notes that Tyler could have sold the property herself rather than surrendering it to the county or she could have entered into a payment plan to pay her taxes over a decade.)
Even if she’d gotten the money, Hennepin County’s attorneys argued, it wouldn’t have gone into Tyler’s pocket because she owed $48,750 on her mortgage and $11,660 to her homeowners association.
Signing on to that argument as “amici states,” i.e., supporters of Hennepin County’s argument: Mathew Platkin, the attorney general of New Jersey, and Ellen Rosenblum, the attorney general of Oregon. (Disclosure: Rosenblum is married to Richard Meeker, the co-owner of WW’s parent company.)
The New York Times and other outlets reported that justices were skeptical of the state’s argument that Heppenin County was entitled to keep the excess money from the sale when the court heard the case April 26.
“The Supreme Court seemed united on Wednesday, in the last scheduled argument of its current term, in its distaste for how county officials in Minnesota had treated a 94-year-old woman who had stopped paying property taxes on her condominium,” the Times reported.
“Are there any limits?” Justice Elena Kagan asked. “I mean, $5,000 tax debt, $5 million house, take the house, don’t give back the rest?”
Locally, Jack Bogdanski, a professor of tax law at Lewis & Clark Law School, questioned why Oregon would willingly engage in the case by joining as an amicus state.
“While we await a decision, let’s ponder the fact that our own State of Oregon, led by its fearless attorney general, Ellen Rosenbaum [sic], went out of its way to jump up and argue that the state should be allowed to keep the woman’s money,” Bogdanski wrote on his blog. “This is what Oregon stands for? This is what Rosenblum does all day? For shame.”
Roy Kaufman, a spokesman for the agency Rosenblum leads, the Oregon Department of Justice, says his boss signed on to the case to support the laws on Oregon’s books.
“The Department of Justice has a responsibility to defend Oregon statutes, and Oregon has a statute similar to Minnesota’s that would be at risk of being struck down depending on the outcome of the case,” Kaufman says.
“We joined the brief to express our view of how the legal analysis should proceed,” he adds. “But our joining in no way suggests that we think that the Minnesota county’s decision in this particular case was appropriate or just; we did not weigh in on that question either way.”