BROWN INV. GROUP v. THE MAYOR AND ALD. OF SAV

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Docket Number

No. S10G1471.

Attorney(S)

Duffy Feemster, Stanley E. Harris, Jr., for appellant. Lester B. Johnson III, for appellee.

Judges

CARLEY, Presiding Justice.

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Smart Summary

Factual and Procedural Background

On August 1, 2006, Brown Investment Group, LLC acquired a tax deed to real property located in the City of Savannah. The City deemed a vacant building on the property unsafe and demolished it on July 25, 2007. Brown filed suit against the mayor and aldermen of the City seeking the full value of the destroyed building, alleging the City failed to provide prior notice of the demolition.

At the trial level, cross-motions for summary judgment were filed. The trial court granted summary judgment in favor of the City, reasoning that Brown had not barred the right to redeem the property and therefore lacked standing to seek damages. The Court of Appeals affirmed on an alternative ground, holding that at the time of demolition the 12-month statutory right of redemption under OCGA § 48-4-40(1) had not expired, so Brown neither held legal title nor the right of possession and thus lacked standing to sue for trespass. The Supreme Court of Georgia granted certiorari to review the Court of Appeals’ ruling.

Legal Issues Presented

Whether a purchaser of a tax deed who has not yet barred the right of redemption has standing to sue for trespass or damages to property demolished during the redemption period.
The nature and extent of legal title and possession rights of a tax deed purchaser during the statutory redemption period.
Whether the City’s failure to provide notice of demolition to the tax deed purchaser affects the purchaser’s rights or remedies.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Coffin v. Barbaree, 214 Ga. 149 (1958)	To maintain trespass action, plaintiff must be true owner or in possession at time of trespass.	Confirmed that standing requires ownership or possession at the time of alleged trespass.
Whitaker Acres v. Schrenk, 170 Ga. App. 238 (1984)	Reinforces that tax deed title is defeasible and purchaser lacks possession rights during redemption period.	Used to support that purchaser’s title is defeasible and no possession rights exist until redemption period expires.
BX Corp. v. Hickory Hill 1185, 285 Ga. 5 (2009)	Tax deed title is inchoate or defeasible subject to right of redemption.	Established nature of tax deed title as conditional and defeasible pending redemption.
Mark Turner Properties v. Evans, 274 Ga. 547 (2001)	Supports defeasible nature of tax deed title.	Reinforced the principle that tax deed purchaser’s title is subject to redemption rights.
Bennett v. Southern Pine Co., 123 Ga. 618 (1905)	Tax deed purchaser’s title compared to an estate defeated upon happening of a condition; no entitlement to possession during redemption period.	Clarified that purchaser’s estate is defeasible and does not confer possession rights during redemption.
Elrod v. Groves, 116 Ga. 468 (1902)	Purchaser has no constructive possession during redemption; entry before redemption expiration is trespass.	Applied to hold purchaser lacked possession and thus trespass claim was barred during redemption period.
National Tax Funding v. Harpagon Co., 277 Ga. 41 (2003)	Tax deed does not entitle purchaser to possession until redemption period expires.	Supported the conclusion that possession rights vest only after redemption period ends.
McDonald v. Wimpy, 206 Ga. 270 (1949)	Same principle regarding possession rights during redemption period.	Reinforced purchaser’s lack of possession rights during redemption period.
Morrison v. Whiteside, 116 Ga. 459 (1902)	Owner’s title not divested until redemption period expires.	Confirmed that owner retains title and possession rights during redemption period.
Bache v. McCullough, 4 Walk. 293 (Pa. 1883)	Purchaser without possession or immediate right of possession during redemption cannot maintain trespass; purchaser cannot recover damages that would impair owner’s redemption ability.	Used as persuasive authority to uphold Georgia rule limiting purchaser’s trespass claims during redemption period.
Sams v. Young, 217 Ga. 685 (1962)	Equitable remedies and actions upon the case for interference with property rights.	Noted as possible remedy for purchaser to prevent destruction of property during redemption period.
Donaldson v. Great Atlantic Pacific Tea Co., 186 Ga. 870 (1938)	Defines action upon the case as remedy for damages from acts unaccompanied by force.	Referenced as a potential common-law remedy available to purchaser during redemption period.
Pivirotto v. City of Pittsburgh, 528 A2d 125 (Pa. 1987)	Recognition of purchaser’s insurable interest and requirement of notice for demolition.	Supported the court’s acknowledgment of purchaser’s interest requiring notice despite lack of possession rights.

Court's Reasoning and Analysis

The Court began by reiterating that to maintain a trespass claim, the plaintiff must be either the true owner or in possession at the time of the alleged trespass. The tax deed purchaser’s title is defeasible and subject to the statutory right of redemption, which lasts 12 months. Until this redemption period expires, the purchaser has no legal title or right of possession and is effectively a stranger to the property in terms of possession rights.

Because Brown had not barred the right of redemption when the City demolished the building, it did not hold legal title or possessory rights. Therefore, Brown lacked standing to sue for trespass or to recover damages for the destroyed building. The Court emphasized that allowing a purchaser to recover damages during the redemption period could undermine the owner’s ability to redeem the property, contrary to legislative intent.

However, the Court acknowledged that during the redemption period, the purchaser may have equitable remedies to prevent destruction of the property’s chief value or may pursue an action upon the case for damages not involving force. Furthermore, the Court recognized that Brown’s defeasible fee gave it an insurable interest sufficient to require the City to provide notice of demolition, although this interest does not confer the right to recover full value damages during the redemption period.

Holding and Implications

The Court affirmed the judgment of the Court of Appeals.

The holding confirms that a tax deed purchaser who has not yet barred the right of redemption lacks standing to sue for trespass or seek damages for destruction of property during the redemption period, as the legal title and possession rights remain with the owner or defendant in fi. fa. The decision preserves the legislative scheme protecting the owner’s redemption rights and clarifies the limited remedies available to tax deed purchasers during the redemption period. No new precedent beyond the application of established principles was set; the direct effect is that Brown Investment Group’s claim for damages was properly dismissed.

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BROWN INVESTMENT GROUP, LLC et al. v. THE MAYOR AND ALDERMEN OF THE CITY OF SAVANNAH.

CARLEY, Presiding Justice.

On August 1, 2006, a tax deed to real property located in the City of Savannah was executed in favor of Brown Investment Group, LLC. The City determined that a vacant building on the property was unsafe and demolished it on July 25, 2007. Brown brought suit against the mayor and aldermen of the City for the full value of the destroyed building, alleging that the City failed to give it prior notice of the demolition. On cross-motions for summary judgment, the trial court granted summary judgment in favor of the City on the ground that Brown "has failed to bar the right to redeem the property and therefore, has no standing to seek damages against the [City]." The Court of Appeals affirmed on an alternative basis, holding that, when the building was demolished, the absolute 12-month right of redemption under OCGA § 48-4-40 (1) had not expired and, as a result, Brown held neither legal title nor the right of possession and therefore lacked standing to sue the City for trespass. Brown Investment Group v. Mayor and Aldermen of the City of Savannah, 303 Ga. App. 885 ( 695 SE2d 331) (2010). We granted certiorari to review that ruling.

"`To maintain an action for trespass or injury to realty, it is essential that the plaintiff show either that he was the true owner or was in possession at the time of the trespass.' [Cits.]" Coffin v. Barbaree, 214 Ga. 149, 151 ( 103 SE2d 557) (1958). See also Whitaker Acres v. Schrenk, 170 Ga. App. 238, 240 (2) ( 316 SE2d 537) (1984). It is well-settled that the title acquired by the purchaser of a tax deed is "not a perfect fee simple title, but rather an inchoate or defeasible title subject to the right of redemption. [Cit.]" BX Corp. v. Hickory Hill 1185, 285 Ga. 5, 7 ( 673 SE2d 205) (2009). See also Mark Turner Properties v. Evans, 274 Ga. 547, 548 (1) ( 554 SE2d 492) (2001). As Justice Lumpkin observed, "[t]he nature of the title which he has may be compared to an estate which will ripen upon a condition, or rather perhaps to one which will be defeated upon the happening of a condition." Bennett v. Southern Pine Co., 123 Ga. 618, 622-623 ( 51 SE 654) (1905). See also Whitaker Acres v. Schrenk, supra.

The purchaser "`has consequently no constructive possession of the premises, and no more right to go upon and make use of them than any stranger to the title would have. . . .' [Cits.]" Elrod v. Groves, 116 Ga. 468, 470 ( 42 SE 731) (1902). See also Whitaker Acres v. Schrenk, supra. A tax deed does not entitle a purchaser to possession as a matter of law or right until the right to redemption is terminated. National Tax Funding v. Harpagon Co., 277 Ga. 41, 43 (1) ( 586 SE2d 235) (2003); McDonald v. Wimpy, 206 Ga. 270, 273 (4) ( 56 SE2d 524) (1949). "He is not entitled to possession, or to rents, issues, and profits, during the time allowed for redemption. [Cit.]" Bennett v. Southern Pine Co., supra at 622. See also Whitaker Acres v. Schrenk, supra. "`His entry upon the premises would be a trespass upon the possession, actual or constructive, of the owner, who might recover against him for any injury committed.' [Cits.]" Elrod v. Groves, supra. See also Whitaker Acres v. Schrenk, supra.

The owner, or defendant in fi. fa., is the one who is entitled either to rent or possession during the period allowed for redemption. Elrod v. Groves, supra at 469. Until the expiration of that period which the law fixes for the defendant in fi. fa. to exercise his right to redeem, his title as owner is not divested. Morrison v. Whiteside, 116 Ga. 459, 462 ( 42 SE 729) (1902); Whitaker Acres v. Schrenk, supra. He is the one who has "standing to sue for a trespass which occurs during this period." Whitaker Acres v. Schrenk, supra at 241 (2).

The Georgia precedent reviewed above is also the rule elsewhere and is "decisive of the rights of the parties to this action. . . . [I]f [the purchaser] has not within [12 months] the possession, or the immediate right of possession, he cannot maintain trespass; [cit.]" Bache v. McCullough, 4 Walk. 293 (Pa. 1883). If the purchaser were permitted to recover the value of improvements destroyed by a trespasser, "he might in that way deprive the owner of the means of raising the money to redeem, a result not within the intention of the legislature and in opposition to the construction of the [tax sale and redemption] statute[s] by [this] Court." Bache v. McCullough, supra. Accordingly, the Court of Appeals correctly held that, in the absence of any assignment to Brown by the defendants in fi. fa. of their cause of action, Brown does not have "standing to sue the City for trespass or the value of the destroyed building because it was not the legal owner and had no right to possession of the real property when the building was demolished." Brown Investment Group v. Mayor and Aldermen of the City of Savannah, supra at 886.

However, we note that, during the period allowed for redemption a tax sale purchaser may have an equitable remedy to restrain the defendant in fi. fa. or another from destroying the chief value of the property or may have a "remedy by an action upon the case." Bache v. McCullough, supra. See also Sams v. Young, 217 Ga. 685, 687-688 ( 124 SE2d 386) (1962) (appropriate remedies for interference with an easement). Such a common-law action on the case was "`an action for the recovery of damages, for acts unaccompanied with force, and which in their consequences only are injurious.' [Cits.]" Donaldson v. Great Atlantic Pacific Tea Co., 186 Ga. 870, 873 ( 199 SE 213) (1938).

We further note that the Court of Appeals correctly observed that Brown's defeasible fee gave it both an insurable interest in the property and sufficient interest therein to require the City to provide it with notice of the demolition. Brown Investment Group v. Mayor and Aldermen of the City of Savannah, supra at 887, fn. 2. See also Pivirotto v. City of Pittsburgh, 528 A2d 125, 127-128 (Pa. 1987). Contrary to Brown's argument, recognition of this interest is in no way inconsistent with the legal title held by the defendants in fi. fa. Pivirotto v. City of Pittsburgh, supra at 128. As already discussed, however, the tax sale purchaser during the time allowed for redemption does not have a sufficient interest to recover the full value of the destroyed improvements and thereby prevent the defendant in fi. fa. as the true owner from obtaining such a recovery.

Judgment affirmed. All the Justices concur.