Tax Sales of Mineral Estates
In a detailed opinion, the Utah Supreme Court ruled that the statute of limitations does not bar a challenge to a tax sale of a severed mineral estate for which inadequate notice was given the fee owner. Jordan v. Jensen, 2017 UT 1 (2017).
At one time, Jordan owned the entire surface and subsurface estate. They sold the surface, but retained the mineral interest. Eventually, a subsequent surface owner defaulted on payment of real estate tax. Despite the failure of the taxing authority to notify Jordan, the resulting tax sale putatively conveyed the unified estate. More than a decade after the tax sale, Jordan challenged its validity. The tax sale purchaser defended on the ground that state law prohibited challenges commenced more than four years after the sale.
A 1955 Utah Supreme Court case had held the four-year bar applicable despite failure to provide statutorily required notice. Treating the bar more like a statute of repose rather than one of limitation, the 1955 Court determined the purpose of the bar was to validate tax titles that were “valid on their face.” The 2017 Court, however, held that “subsequent Supreme Court case law interpreting the Due Process Clause,” e.g., Mennonite Board of Missions v. Adams and others, rendered the 1955 case “no longer good law on this point.”
Comment:
The parties framed the appellate issue as a due process question from the outset. Hence, the opinion doesn’t discuss possible salient facts such as the deed language by which the mineral estate was originally retained, whether the severed interest was reflected in the chain for the surface estate, or whether the mineral estate was separately assessed in the tax records.
While this result is unsurprising in light of Mullane, Mennonite, Jones v. Flowers, etc., the opinion provides a nice refresher on the principles of modern-day tax sale due process jurisprudence.