KAUFMAN v. GROSS CO (1978)

In this action for declaratory relief, unjust enrichment and to quiet title to a certain parcel of real property, the trial court sustained without leave to amend, demurrers to the complaint and ordered the action dismissed. The plaintiff appeals from the order of dismissal.

Plaintiff's claim to the property in question rests on a grant deed in his favor executed in October of 1975 by the owner of the fee title. Defendants' claim to the same property rests on a deed executed in their favor by the Treasurer of the City of Los Angeles in December 1975. The latter deed resulted from the foreclosure of a street lighting assessment lien pursuant to Streets and Highways Code sections 5000 et seq. (the Street Improvement Act of 1911, hereafter referred to as the Act). This action was commenced in January of 1977.

The primary basis for the sustaining of the demurrer in the instant action was the statutory six months period of limitation. Streets and Highways Code section 6571 provides that any action attacking the validity of a treasurer's deed must be commenced within six months after the issuance thereof and here the complaint itself shows that the action was not commenced within six months after the issuance of the treasurer's deed.

Plaintiff, however, contends that the treasurer's deed was absolutely void because of constitutionally deficient notice of the foreclosure and sale and as a consequence the statute of limitations does not bar the action.

The complaint alleges the existence of a treasurer's deed which is valid on its face. The action then is essentially one to remove a cloud on the title to the property pursuant to Civil Code section 3412,^[FN1] and plaintiff is required to specifically plead the factors of the invalidity of the treasurer's deed. General conclusionary allegations of the defendants' lack of title or interest will not suffice. (See 3 Witkin, Cal.Procedure (2d ed.) Pleading ss 532-538, pp. 2181-2185.)

Further, those specific factors or defects must be “jurisdictional.” If not, the six-months limitation period of Streets and Highways Code section 6571 would bar the action.

Special statutes of limitation are applicable to challenges to the validity of the deed where the alleged defects in the deed are not jurisdictional. (Sears v. County of Calaveras, 45 Cal.2d 518, 289 P.2d 425.) If, however, the alleged defects are jurisdictional, the deed is void ab initio, the statute of limitations does not run, and the deed can be challenged at any time. (Paul v. Los Angeles County Flood Control Dist., 37 Cal.App.3d 265, 112 Cal.Rptr. 274.)

From the crucial allegations of the complaint, the truth of which are admitted by the demurrer, and from matters in the file which we judicially notice, the following factual setting emerges.

Plaintiff's predecessor in title one Cochran, purchased the property in question on September 2, 1975 at a trustee's sale. Cochran in turn deeded the property to plaintiff in October of 1975.

Prior to that time the treasurer, in accordance with the Act,^[FN2] had mailed a notice of delinquency and sale to one Fred Jenkins, the person appearing as owner on the latest records of the county assessor's office. That notice was returned by the postal authorities marked “unclaimed and unoccupied.” Jenkins had in fact been dead for eight years. We are not informed as to why Jenkins still appeared as owner on the assessment roll. Presumably the ordinary taxes on the property had been paid, but this assessment lien was collected separately by the treasurer and was not part of the regular tax bill.

On July 8, 1974, the property was sold to defendants, the bond holders, for $267, the amount of the delinquency. A certificate of sale was recorded on July 22, 1974, the treasurer's deed was issued December 26, 1975, and recorded on January 7, 1976. The Act provides for a one year redemption period between the issuance of the certificate of sale and the issuance of the deed.

Neither plaintiff nor his predecessor in title ever received actual notice of any of the proceedings which culminated in the issuance of the treasurer's deed.

A defect in a tax proceeding is jurisdictional where the defect consists of nonperformance of constitutionally indispensable steps. (Ramish v. Hartwell, 126 Cal. 443, 58 P. 920; Philbrick v. Huff, 60 Cal.App.3d 633, 640, 131 Cal.Rptr. 733.)

Indispensable steps of due process are notice and opportunity to be heard. (Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865; McMaster v. City of Santa Rosa, 27 Cal.App.3d 598, 103 Cal.Rptr. 749.)

It is well established that “a person's property may not be taken from him without due process of law and that a fundamental requisite of due process is notice, reasonably calculated, under all the circumstances, to apprise the interested parties of the pendency of proceedings which could result in a deprivation of a person's property so as to afford him an opportunity to be heard.” (Philbrick v. Huff, 60 Cal.App.3d 633, at 641, 131 Cal.Rptr. 733, at 738; emphasis added.)

Notice of the assessment of a tax or other levy is jurisdictional. (Capital Freight Lines v. City of Sacramento, 206 Cal.App.2d 279, 23 Cal.Rptr. 752; Johnson v. Alma Investment Co., 47 Cal.App.3d 155, 120 Cal.Rptr. 503.) Further, a property owner is constitutionally entitled to adequate notice that he is delinquent in his taxes, and that the property will be sold either to the State or to a purchaser in a foreclosure sale. (Litchfield v. County of Marin, 130 Cal.App.2d 806, 280 P.2d 117; Philbrick, supra.) Conversely, notice to a property owner after sale has been made to the State or to a purchaser in a foreclosure sale is not jurisdictional. (Litchfield, supra ; Philbrick, supra.)

Hence the timing of the notice, which in turn affects the opportunity to be heard, is equally as important as the form of notice. No specific formula as to the form and quality of the required notice has been articulated by the cases.

In both his complaint and in his brief on appeal plaintiff's principal attack on the treasurer's deed is grounded on the contention that the notice provisions of the Act are themselves constitutionally defective in that they are not reasonably calculated to inform the property owner. His secondary contention is that even if the statute is facially constitutional the procedure followed in this case denied him due process of law. If he is correct in either of these positions then the defect in the deed is jurisdictional and the statute of limitations would not apply.

The Act provides for two forms of notice to the property owner (1) the mailing of the notice of delinquency and intended sale (Sts. & Hy.Code, s 6501), and (2) publication of the notice six months following the above mentioned mailing and at least 30 days prior to sale (Sts. & Hy.Code, s 6503).

The Act carries a presumption of constitutionality. (Henry's Restaurants of Pomona, Inc. v. State Bd. of Equalization, 30 Cal.App.3d 1009, 106 Cal.Rptr. 867.) Furthermore, we conclude that the Act does comport with constitutional requirements. The elements of due process which are “jurisdictional,” as we have previously indicated, are notice at a proper time and in adequate form. The notice of delinquency and intended sale, as required by the Act, satisfies the timing requirement, and mailing and publication of that notice, as provided in the Act, satisfies the form requirement. The selection of the latest assessment roll as the source of the relevant information as to title was within the Legislature's prerogative.

Inasmuch as plaintiff does not allege the failure of the City to comply with the publication requirement, we must conclude that publication was duly accomplished. (McMaster v. City of Santa Rosa, supra.)

Thus we turn our attention to which form of the notice is indispensable and thus “jurisdictional.” In Mullane v. Central Hanover Tr. Co., supra, the United States Supreme Court addressed the problem of whether notice by publication alone satisfied the due process requirement. The court concluded that if the name and address of the party entitled to notice was known, then a means of notice less likely than the mail to provide that notice was inadequate.

Following Mullane, however, California cases have continued to hold, in tax delinquency cases, that publication alone was sufficient and that mailing of the notice was not a jurisdictional requirement. (McMaster v. City of Santa Rosa, supra; Philbrick v. Huff, supra.)

Also, even after Mullane, the Legislature has not amended Streets and Highways Code section 6502 to remove the provision that failure of a property owner to receive actual notice shall not invalidate the foreclosure sale. That provision, however, cannot excuse a failure to comply with the requirement of due process.

We emphasize the fact that the California decisions on publication have been in cases involving ordinary property tax delinquencies because in our opinion that fact distinguishes those cases from the type of levy involved here.

In McMaster, which involved notice of delinquency of ordinary property taxes and sale of the property, the party claiming a jurisdictional defect in notice knew that the taxes had been assessed, and that they were delinquent. In Philbrick, the court pointed out that publication alone satisfied jurisdictional requirements “at a time when the owner of the land knew that the taxes had been assessed, the amount thereof and that he was delinquent in the payment of the taxes.” (60 Cal.App.3d page 647, 131 Cal.Rptr. page 742; emphasis added.) In the case at bar, plaintiff had no such knowledge.

Furthermore, the Legislature, in 1974, amended section 6502 of the Act to provide that “(n)o sale of property shall be made pursuant to this chapter unless the notices are sent pursuant to Sections 6501 and 6505.” Such an amendment would indicate a recognition on the part of the Legislature that such mailing would be required by due process. No similar provision is included in the ordinary property tax schemes referred to in the above cited cases.

While it has been held that a landowner must be diligent to protect his property against delinquency in the payment of taxes and improvement bonds (Union Paving Co. v. East Del Paso Heights, 217 Cal.App.2d 772, 31 Cal.Rptr. 915) the fact remains that while all property is subject to taxes, not all or even most is subject to a separate special assessment for improvements. Everyone who owns property knows or should know that there is an annual tax assessed against the property but that is not the situation in a case, as here, of separately assessed payments on improvement bonds.

Drawing on the holding in Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865, we hold that in the case of a foreclosure under the Act, publication of notice alone is insufficient to satisfy the requirements of due process. In addition to publication, the mailing of notice of delinquency and sale prior to foreclosure, as required by the statute, is jurisdictional and failure to comply with that requirement renders the deed void.

Defendants, of course, argue that plaintiff's complaint fails to state a cause of action because it admits that the treasurer complied with the statute and did mail the notice as required, albeit to a deceased person. This contention has a hollow ring. A superficial and perfunctory compliance with a facially constitutional procedure can still effect an unconstitutional result.

We reiterate that the fundamental requirement is that the sovereign follow a procedure which is reasonably calculated to provide notice and an opportunity to be heard. (McMaster v. City of Santa Rosa, supra, 27 Cal.App.3d 598, 103 Cal.Rptr. 749.) In our opinion that requirement is not fulfilled by simply “going through the motions” with full knowledge that notice has in fact not been achieved.

The number of cases reaching the courts in which notice to the last person shown on the assessment rolls has failed to reach the actual owner of the property suggests that such a procedure is not always the most effective method of notice.

Perhaps that fact, coupled with the Mullane decision, is what prompted the Legislature in 1971 to amend Streets and Highways Code section 6500 to authorize the treasurer, at the bond holder's expense, to obtain a title search when he “deems it necessary to determine ownership of the property.”

The Legislature cannot be presumed to have intended to achieve an absurd or unjust result nor to require a useless act. (Barber v. Blue, 65 Cal.2d 185, 52 Cal.Rptr. 865, 417 P.2d 401; Breenfleck v. Worker's Comp. App. Bd., 3 Cal.App.3d 666, 84 Cal.Rptr. 50; Netwig v. Huntington Beach Union High Sch. Dist., 52 Cal.App.3d 529, 125 Cal.Rptr. 170.) The 1971 amendment to Streets and Highways Code section 6500 makes it clear that the Legislature intended that the procedure would generally and reasonably result in actual notice to the property owner.

In two recent cases, one by the California Supreme Court (People v. Amor, 12 Cal.3d 20, 114 Cal.Rptr. 765, 523 P.2d 1173) and one by the Court of Appeal (Roth v. City of Los Angeles, 53 Cal.App.3d 679, 126 Cal.Rptr. 163) the court refused to declare statutes unconstitutional because those statutes failed to specifically spell out all the requirements of due process. The holding of those cases was essentially that the important factor was “whether the minimum requirements for due process had (in fact) been satisfied not whether they were statutorily required.” (People v. Amor, supra, 12 Cal.3d at p. 30, 114 Cal.Rptr. at p. 770, 523 P.2d at p. 1178.)

In the case before us the requirements of due process are spelled out in the statute but literal compliance therewith resulted in a denial of due process in fact. If the facts pleaded in the complaint are true, as we are bound to assume at this point, the treasurer engaged in a perfunctory and superficial ritual with knowledge of its lack of efficacy, while having available to him a statutorily approved means of accomplishing the Legislature's true purpose. The end result is a harsh forfeiture of plaintiff's property.

The judgment of dismissal is reversed and the matter is remanded to the trial court with direction to enter an order overruling the demurrers.

FOOTNOTES

1.  Civil Code section 3412 provides: “A written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.”

2.  Streets and Highways Code section 6501 provides in part:“The treasurer shall mail a notice of sale to the owner of any property to be sold for nonpayment of either principal or interest upon any delinquent bond. The notice shall be sent by certified mail to the owner of the property as shown on the last equalized assessment roll and to any person whose name appears as an owner on the records of the county assessor's office which the county assessor will use to prepare the next assessor's roll.”

COMPTON, Associate Justice.

ROTH, P. J., and BEACH, J., concur.