ROSS v. ROSEN-RAGER

ther the failure of the redemptioner to make the payments set forth in subsection (c), standing alone, affects the tax-sale purchaser's right to possession, because, in any case, a tax-sale purchaser may not simply ignore a certificate of redemption as Ross did in this case.

Ross concedes, as he must, that a certificate of redemption is prima facie evidence of redemption. Ross's brief, at 34. See Ala. Code 1975, § 40-10-81 ("the books and records belonging to the office of the judge of probate . . . shall be prima facie evidence of the facts stated therein"); § 40-10-127 (to be evidence of redemption, the certificate must be signed); see also Ala. Code 1975, § 12-13-1(c) ("All orders, judgments and decrees of probate courts shall be accorded the same validity and presumptions which are accorded to judgments and orders of other courts of general jurisdiction.")

The certificate of redemption was not void on its face. If it was issued erroneously, Ross should have challenged the certificate judicially. Ross does not allege that there was no vehicle by which to challenge the correctness of the certificate of redemption. Indeed, this Court has said:

"In Alabama, circuit courts have `a general superintendence' over the probate courts. Ala. Code 1975, § 12-11-30(4). Encompassed in this superintendence is the power to review certain judgments and orders of the probate court, either through direct appeal or by petition for an extraordinary writ. See Helms v. McCollum, 447 So.2d 687 (Ala. 1984). Sections 12-22-2 and 12-22-20, Ala. Code 1975, authorize appeals from final judgments of a probate court to either the circuit court or the Supreme Court.

". . .

"The appellate jurisdiction of the circuit court can also be invoked by a petition for an extraordinary writ. Ala. Const. of 1901, [§ 142](b). Orders as to which no statute grants appellate jurisdiction are reviewed on petitions for writ of certiorari, mandamus, or prohibition. Town of Flat Creek v. Alabama By-products Corp., 245 Ala. 528, 17 So.2d 771 (1944)."

Franks v. Norfolk Southern Ry., 679 So.2d 214, 216 (Ala. 1996). See Boyd v. Holt, 62 Ala. 296 (1878) (refusal of the probate judge to issue a certificate of redemption for land sold for taxes was reviewable in the circuit court by a petition for a writ of mandamus).

Redemption divests the tax-sale purchaser of a possessory interest in the property. Washington v. ORIX Credit Alliance, Inc., 825 So.2d 828 (Ala.Civ.App. 2001). Here, the unchallenged certificate of redemption, issued in September 2004, divested Ross of his possessory interest in the property. Nevertheless, Ross thereafter leased the property, first to Fletcher, then to Hurt and Baxter. Thus, Ross caused, as a matter of law, his tenants to trespass on the property.

On the issue of wantonness, it is undisputed that, rather than mount a judicial challenge to the certificate of redemption, Ross simply ignored it and treated the property as though he still had a possessory interest. Although Ross was not formally served with process in MERS v. Campbell, CV-05-917, which involved his interest in the property, there was evidence indicating that he knew that that litigation was pending, at least as early as February 13, 2006, that is, before the March 14, 2006, judgment entered in that case, but chose to ignore that litigation and also instructed his tenants not to respond to notices involving the property.

"If the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity." Kihl v. Pfeffer, 94 N.Y.2d 118, 123, 722 N.E.2d 55, 58, 700 N.Y.S.2d 87, 90 (1999). "A party ignores a valid order of court at its own peril." United Servs. Auto. Ass'n v. Strasser, 492 So.2d 399, 402 n. 1 (Fla.Dist. Ct.App. 1986).

Regardless of the whether the provisions of § 40-10-122 were properly applied, Ross was not excused or justified in ignoring the judicial orders and processes involving this property. From September 2004 until the commencement of this action on October 24, 2006, at the least, Ross sought to occupy the property by proxy without any justifiable claim of right. There was substantial evidence that Ross induced Hurt and Baxter to enter into possession of the property with knowledge that he had no right of possession, and there was not substantial evidence that Ross acted in good faith or with any justification in so doing. Indeed, Ross's interpretation of the applicable statutes is so wholly lacking in any foundation in law as to admit of no other conclusion than that he acted with a state of mind consistent with wantonness as a matter of law.

Ross also argues that the Rosen-Ragers were not bona fide purchasers of the property. Specifically, he states:

"As a result of MERS's failure to redeem, and because the Rosen-Ragers were not bona fide purchasers, they acquired the property subject to Ross's interest. . . . As a result, Ross continued to have the right to possess and rent the property. Therefore, the Rosen-Ragers failed to prove elements essential to all of their claims, and they were not entitled to summary judgment on any claim."

Ross's brief, at 44-45 (emphasis in original). In response, the Rosen-Ragers contend that their "status as bona fide purchasers is irrelevant, as Ross possessed no claim in the property against which [they] must assert their status as bona fide purchasers." Rosen-Ragers' brief, at 55 (emphasis added). We agree with the Rosen-Ragers.

Ross lost his interest in the property when he failed timely to challenge the certificate of redemption. The loss fore-closed Ross's defenses against any trespass claim that might have been brought by MERS, as well as his defenses against the Rosen-Ragers, regardless of whether they were bona fide purchasers of MERS's interest. Consequently, the circuit court did not err in entering a summary judgment for the Rosen-Ragers on their claim of wanton trespass.

B. Evidentiary Issues at Trial

Ross raises two issues relating to the admissibility of evidence during the trial of the case, which errors are reviewed to determine whether the circuit court exceeded its discretion. Bowers v. Wal-Mart Stores, Inc., 827 So.2d 63, 71 (Ala. 2001). According to Ross, some evidence was improperly admitted, while some evidence was improperly excluded. "A trial court's ruling on the admission or exclusion of evidence will be reversed only if it is shown that the trial court exceeded its discretion in so ruling." Jimmy Day Plumbing Heating, Inc. v. Smith, 964 So.2d 1, 7 (Ala. 2007).

1. Admission of Evidence of Defendant's Wealth

First, Ross contends that the circuit court improperly allowed the Rosen-Ragers to place before the jury evidence of Ross's financial condition. Specifically, the Rosen-Ragers presented evidence indicating that, including the $1,612.93 MERS had paid to redeem the property — which money Ross refused to collect — the Madison County Probate Court was holding approximately $150,000 that Ross was refusing to collect in other such cases for similar reasons. According to Ross, he "had acquired a number of tax-sale properties" for which he had not been reimbursed for insurance and improvements, and he was refusing payment as in this case, "because he was concerned that accepting the probate money might be construed as ratification of an incomplete redemption." Ross's brief, at 53.

The Rosen-Ragers contend that the evidence that Ross was refusing to collect money held for him by the probate court was admissible to show that Ross's refusal to relinquish possession of the property in this case was part of a systematic scheme or practice calculated to deny the rights of "legal title holders to peacefully possess their property," Rosen-Ragers' brief, at 61, and that, in any case, Ross did not properly object to the evidence when proffered. In connection with the non-preservation argument, the following colloquy occurred at trial during the testimony of Jan Dismuke, an accountant clerk at the Madison County Probate Office:

"Q. [By the Rosen-Ragers' counsel:] Did Mr. Ross ever come and pick that money up? !

"A. [By Dismuke:] No, sir.

"Q. How much redemption money are you holding for Howard Ross that he has not come and picked up?

"[By Ross's counsel:] Objection, Judge, that's irrelevant.

"[The court:] Overruled.

"Q. [By the Rosen-Ragers' counsel:] You may answer.

"A. One hundred and forty-nine thousand, two hundred and thirty-seven dollars and fifty-nine cents.

"Q. No more questions."

(Emphasis added.)

It is well settled that a "specific objection is a condition precedent to appellate review while a general objection is a waiver of appellate review. . . . A general objection to evidence is one which does not definitely and specifically state the ground upon which it is based so that the court may intelligently rule on it." II Charles W. Gamble Robert J. Goodwin, McElroy's Alabama Evidence § 426.01(7), at 2125 (6th ed. 2009) (hereinafter referred to as " McElroy "). This rule applies "unless the evidence is patently illegal and cannot be made legal for any purpose." Harris v. Martin, 271 Ala. 52, 53, 122 So.2d 116, 118 (1960). An objection on the ground that the proffered evidence is "irrelevant" is a general objection. Few v. State, 518 So.2d 835, 837 (Ala.Crim.App. 1987); Manson v. State, 349 So.2d 67, 81 (Ala.Crim.App. 1977). "The party who lodges a general objection at trial may not expand the objection on appeal by including specific grounds." McElroy, supra, at 2125.

Dismuke's testimony was not patently inadmissible and illegal for every purpose. It bore a logical relationship to the ultimate question — whether Ross had consciously or deliberately engaged in oppression or wantonness with regard to the Rosen-Ragers. Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Rule 401, Ala. R. Evid. Indeed, Ross essentially concedes that evidence of multiple, similar instances of ignoring certificates of redemption would have been admissible for that purpose. In this Court, Ross states: "The Rosen-Ragers could have made their point simply by asking the probate clerk how many other tax-sale properties Ross owned as to which he had not picked up funds deposited for redemption. The amount of funds deposited was . . . inadmissible evidence of Ross's financial condition." Ross's reply brief, at 27-28 (emphasis in original). This is an argument that should have been made to the circuit court at the time of the proffer, not for the first time in this Court. Because Ross did not properly object to Dismuke's testimony, he is not entitled to a reversal based on its allegedly improper admission.

2. Exclusion of the Tax-Sale and Redemption Statutes

During the trial, Ross attempted to read to the jury, or otherwise to place in evidence, portions of the redemption and tax-sale statutes, which, he alleged, gave him the right to place tenants on the property after, and despite, the issuance of the certificate of redemption. After an objection by the Rosen-Ragers' counsel, Ross's counsel stated to the circuit court:

"If we can read certain aspects of the statute. . . . That gives us an opportunity to show our primary defense of justification.

If we are not able to discuss the specific statute and what it states and his understanding of it at all, then I think that entirely eliminates our . . . defense.

". . . .

". . . If there is no degree that Mr. Ross would have any justification, then, obviously, the [punitive] damages could be higher. If there is complete justification for the actions that he has done, even though you determined they're wrong previously, there would be no damages, conceivably."

(Emphasis added.)

The circuit court disallowed Ross's proffer. Ultimately, it charged the jury solely on wantonness as a basis for punitive damages. Ross objected to the charge on the ground that it did not contain an instruction on reliance on the statutes as "justification." That objection was overruled. Ross now argues that the judgment entered on the jury's verdict must be reversed, because, he says, "[e]xcluding the statutes deprived the jury of information vital to assessing [his] conduct and determining whether and what punishment was appropriate." Ross's brief, at 57.

We disagree with this argument. The partial summary judgment finding Ross liable for wantonness being proper as discussed above, Ross's alleged understanding of the statutes was irrelevant. The admission of the statutes into evidence would merely have invited the jury to nullify the partial summary judgment, which had correctly resolved in the Rosen-Ragers' favor the issue whether, as a matter of law, Ross was justified to any degree. Consequently, the circuit court did not exceed its discretion in shielding the jury from the text of the statutes.

C. Review of the Punitive-Damages Award

Finally, Ross contends that the punitive-damages award is excessive, and he seeks a substantial remittitur. This Court has a duty to conduct a de novo review of a punitive-damages award. Acceptance Ins. Co. v. Brown, 832 So.2d 1 (Ala. 2001). According to Ross, the amount of the jury's verdict "far exceeds" the amount that, as stated in Green Oil Co. v. Hornsby, 539 So.2d at 222, "`will accomplish society's goals of punishment and deterrence.'" Ross's brief, at 60.

In reviewing a punitive-damages award, we apply the factors set forth in Green Oil, within the framework of the "guideposts" set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), and restated in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). See AutoZone, Inc. v. Leonard, 812 So.2d 1179, 1187 (Ala. 2001) ( Green Oil factors remain valid after Gore).

The Gore guideposts are: "(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases." Campbell 538 U.S. at 418, 123 S.Ct. 1513. The Green Oil factors, which are similar, and auxiliary in many respects, to the Gore guideposts, are:

"(1) the reprehensibility of [the defendant's] conduct; (2) the relationship of the punitive-damages award to the harm that actually occurred, or is likely to occur, from [the defendant's] conduct; (3) [the defendant's] profit from [his] misconduct; (4) [the defendant's] financial position; (5) the cost to [the plaintiff] of the litigation; (6) whether [the defendant] has been subject to criminal sanctions for similar conduct; and (7) other civil actions [the defendant] has been involved in arising out of similar conduct."

Shiv-Ram, Inc. v. McCaleb, 892 So.2d 299, 317 (Ala. 2003) (paraphrasing the Green Oil factors).

1. Gore Reprehensibility Guidepost and Green Oil Factors (1), (2), (5), and (7)

"Perhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct." Gore, 517 U.S. at 575, 116 S.Ct. 1589. The circuit court's Hammond order is instructive on this point; it states, in pertinent part:

"Ross is an anathema upon the court system and the public. He has engaged in a pattern and practice of ignoring and actively avoiding the authority of the courts himself, while using hyper-technical or distorted interpretations of the law that suit him against others. The harm Ross causes in the process is substantial, not only to the private parties directly involved, but also to the integrity of the law and the integrity of society.

"In this case, Ross purchased the tax interest in the property at issue. [MERS], holding a pre-existing mortgage on the property, foreclosed upon and then redeemed the property from the tax sale by payment to the Madison County Judge of Probate, receiving a Certificate of Redemption. Ross began negotiation with [MERS] for further payment to him for purported improvements he made to the property. Simultaneously, [MERS] instituted Court proceedings to remove Ross's tenants from the property. Ross's knowledge of and involvement with those proceedings is evident, as is his avoidance of legitimately having his entitlement to any payments finally determined through such proper channels. Ross made considerable effort to keep his right to additional payments a live issue, giving him, in his mind, a colorable claim to possess the property, while actively avoiding any action he might be required to admit resolved the issue. Ross also, during the relevant time, unsuccessfully sued [Fletcher] for failing to pay him rent on the involved property and received a judgment indicating he was not entitled to collect rent from tenants on that property [ Ross v. Fletcher, DV-05-2689].

"Despite . . . court rulings that provided Ross ample notice of his tenuous position, Ross persisted in possessing the property and renting it to tenants. [MERS], having received a final order of the Madison County Circuit Court ejecting Ross's tenants, informed Ross of that Court action and conveyed the property to the [Rosen-Ragers]. . . .

". . . .

"Ross's conduct in this case cannot be viewed in isolation. This Court previously adjudicated the case of Cindy L. Schrock v. Howard Ross, CV 06-900. In that case, Ross also purchased the tax interest in a property. That property was redeemed by a mortgage company after foreclosing on the property. That property was sold to an innocent third party, Cindy Schrock. Ms. Schrock entered into her new property and evidenced her possession. When Ms. Schrock was away from her property on vacation, Ross moved tenants in and fought to keep them in the property. This Court, after a full trial, restored possession to Ms. Schrock and ordered Ross to pay damages of $16,639.

". . . .

"The scope of Ross's enterprise, as well as his general way of doing business, is further evidenced by the fact that the Madison County Judge of Probate holds approximately $150,000 for Ross. When the property at issue in this case was redeemed by a payment of approximately $1,600 to the Probate Judge, Ross did not collect the redemption money, to which he was entitled, as the tax sale purchaser. According to Ross's testimony, he purposely failed to collect the funds for concern that his claims to possession of the property would thereby be diminished. Similar evidence was presented in Ms. Schrock's case. Ross's approach to these funds is further evidence of the reprehensible gamesmanship he applies to his enterprise. The accumulation of these funds to approximately $150,000 evidences the vastness of his scheme. Finally, that Ross would deny himself possession of such a sum to further his scheme is evidence of its profitability and Ross's resources.

"Any citizen owning one of the numerous properties represented by the $150,000 in redemption proceeds held for Ross by the Probate Judge must beware. Ross avoids collecting those funds to aid his articulation of an excuse for possession of those properties. Ross has demonstrated that, if he can find those properties vacant due to an owner's holiday vacation, renovation or otherwise, he will lease them. He will lease them after a court rules his tenants cannot possess them. He will lease them after a court rules he is not entitled to collect rent on them. Every month he can lease them equals another rental payment received. He will not prosecute a resolution of his articulated excuses for possessing the properties or collect redemption payments due him, because to do so would alleviate excuses for possession and collecting further rent.

"Ross's tactics are of great concern. Each time Ross places tenants in a home belonging to another (whether the homeowner be on vacation or absent for other reasons), he places tenants and homeowners at great risk for dangerous confrontation. Each time he displays to a homeowner his ability to, in fact, place tenants in their home and collect rent in the face of deeds, certificates of redemption, court orders and other protections in which our society vests faith, he erodes confidence in our society and encourages the worst of behavior. Ross challenges those in his path to navigate the Court system and laws (with which he is quite experienced) and stop him if they can.

"The purpose of a punitive damages award is to deter conduct. Many court rulings should have deterred Ross before the punitive damages award in this case. Ross, however, is persistent."

The circuit court correctly noted that this case cannot be considered in a vacuum. Although it is unrefuted that service of process was never formally effected upon Ross in MERS v. Campbell, CV-05-917, in which he could have resolved the precise issue regarding his possessory interest in this property, he had actual notice of ongoing litigation as early as February 13, 2006, when MERS informed him of an imminent hearing involving his claim to the itemized expenses. Also, as the trial court's Hammond order reveals, Schrock v. Ross, CV-O6-900, was another civil action involving similar conduct in which an identical substantive issue was litigated to a conclusion adverse to Ross. ( Green Oil factor (7).) Ross appealed the judgment entered in that case, and this Court affirmed the judgment without an opinion on December 7, 2007. Ross v. Schrock, 25 So.3d 1204 (Ala. 2007) (table). Although the trial court's final judgment in Schrock was not entered until December 22, 2006, that is, approximately two months after the Rosen-Ragers sued Ross, Schrock is still evidence of similar conduct, though not necessarily of Ross's knowledge of wrongdoing.

With regard to the cost of litigation ( Green Oil factor (5)), the Rosen-Ragers submitted the affidavit of their attorney, which stated that the Rosen-Ragers had already paid attorney fees totaling $9,880.41 and had incurred other expenses totaling $6,247.21. In lieu of the further payment of attorney fees on an hourly basis, the Rosen-Ragers agreed to pay their counsel an undisclosed percentage of any sums ultimately collected from Ross. Notwithstanding this contingency-fee arrangement, the Rosen-Ragers' counsel computed the hours expended by the legal professionals employed as if billed at the regular hourly rates and arrived at $82,000 as the value of costs, expenses, and legal fees attributable to the prosecution of this case.

To be weighed against these observations is the fact that the purchasing of tax-sale property is, in itself, a laudable practice, one to be encouraged, rather than discouraged. Hence, "[t]he Alabama legislature . . . has enacted statutes favoring the sale of land to secure payment of delinquent taxes." William R. Justice, Redemption of Real Property Following Tax Sales in Alabama, 11 Cumb. L. Rev. 331, 331 (1980) (emphasis added). Ross testified that if the punitive-damages verdict is upheld, it will "effectively put [him] out of business regarding properties that [he] could afford to buy at tax sales," and he will simply stop purchasing tax-sale properties. Because such a result would be counterproductive, the goal must be not to discourage Ross from engaging in the practice per se, but essentially to dissuade him from ignoring probate court orders and certificates. He has already been required to pay $16,639 in the Schrock case.

2. Civil-Penalties Guidepost in Gore

The parties do not discuss this guidepost or direct us to any evidence or authority related to its application.

3. Gore Guidepost of Disparity Between the Damage and the Award and Green Oil Factors (3) and (4)

The final Gore guidepost we will consider is "the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award." Campbell, 538 U.S. at 418, 123 S.Ct. 1513. The Rosen-Ragers' complaint does not include claims based on personal injury. There is only the potential for personal injury each time Ross's practice of deliberately ignoring certificates of redemption brings competing claimants for the same property into direct physical contact.

Also, "`[i]f the wrongful conduct was profitable to the defendant, the punitive damages should remove the profit and should be in excess of the profit, so that the defendant recognizes a loss. . . . The financial position of the defendant [is also] relevant.'" Green Oil, 539 So.2d at 223 (quoting Aetna Life Ins. Co. v. Lavoie, 505 So.2d 1050, 1062 (Ala. 1987) (Houston, J., concurring specially) (factor (3))). Ross profits from this scheme by keeping tenants on properties until they are evicted by judicial action, in some cases, long after the issuance of the certificates of redemption. In this case, Hurt and Baxter paid Ross approximately $1,000 in rent.

Although Ross values his assets at $1,167,000, his testimony at the Hammond hearing regarding his financial condition was confusing, at best, and failed to establish anything definitive regarding his status. ( Green Oil factor (4).) In that connection, the circuit court stated: "Ross has not provided this court credible evidence upon which to fully judge his financial condition." Indeed, the evidence he did offer as to his financial condition was referable only to the time of trial and later, rather than to the "time of the occurrence made the basis of the suit," as required by Ala. Code 1975, § 6-11-21(c), to establish the specific damages limitations provided in § 6-11-21(b) for "a small business."

Viewing these factors in toto, including the limited objective to be achieved and the absence of any actual personal injury, we conclude that a $120,000 punitive-damages award is sufficient to punish Ross and to deter further conduct similar to that evidenced in this case, without compromising his due-process rights.

III. Conclusion

In conclusion, the partial summary judgment is affirmed. The judgment entered on the jury's punitive-damages verdict is affirmed, on the condition that the Rosen-Ragers file with this Court, within 21 days, a remittitur of the punitive-damages award to $120,000; otherwise, the judgment will be reversed and the cause remanded for a new trial on the issue of punitive damages.

AFFIRMED IN PART AND AFFIRMED CONDITIONALLY IN PART.

Note from the reporter of decisions: The Supreme Court's docket sheet indicates that on September 2, 2010, the appellees filed an acceptance of the remittitur, and on December 2, 2010, following the denial of the application for rehearing, filed a restated acceptance of the remittitur.

COBB, C.J., and LYONS, STUART, SMITH, BOLIN, PARKER, and SHAW, JJ., concur.