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December 20, 1991


Appeal from the Superior Court of the District of Columbia; (Hon. Richard A. Levie, Trial Judge)

Before Terry, Farrell, and King, Associate Judges.

The opinion of the court was delivered by: Farrell

FARRELL, Associate Judge: The issues we decide in this appeal are (a) whether the trustees under a deed of trust were entitled to constitutionally adequate notice of a tax sale of real property subsequently deeded to the District of Columbia, and (b), if so, whether the District's efforts to notify them were sufficient. We answer the first question yes, the second question no, and therefore affirm the judgment of the trial court declaring the tax deed held by the District to be null and void.


The Statutory Framework

Any property in the District of Columbia may be sold at a tax foreclosure sale for non-payment of property taxes and assessments. Before a tax sale takes place, the District is required by statute to mail two notices of the tax delinquency to the "record owner," stating that the property involved will be sold at public auction if the taxes are not paid. D.C. Code § 47-1302 (1990); 9 DCMR §§ 314.1, 314.2, 314.3 (1984). *fn1 Also before the sale, the District must publish notification of the sale in two local newspapers in a manner prescribed by regulations. *fn2 To purchase the property at a tax sale, a person must bid at least the amount of the back taxes. If no one bids the amount due, the Collector of Taxes must bid the amount due and the property is deemed to have been "bid off" by operation of law to the District of Columbia. D.C. Code §§ 47-1303, -1304; 9 DCMR § 316.7 (1984). *fn3

Once a successful bid is made and the purchase price paid, the purchaser is issued a certificate of sale. D.C. Code § 47-1304. This certificate does not operate to transfer title; before such a transfer takes place, a two year redemption period must run. Within two years from the date of sale, the record owner of the property "or any other person having an interest therein" may redeem the property by paying all of the accrued taxes, interest, and penalties. D.C. Code § 47-1306 (a). Accordingly, the District must give the record owner notice of the imminent expiration of the redemption period by registered or certified mail "not less than thirty (30) days prior to the expiration date . . . ." 9 DCMR § 317.3 (1984). If the period runs without any attempt at redemption, the tax sale purchaser may apply for a deed at any time within five years from the date of the tax sale. The tax deed once issued is "prima facie evidence of a good and perfect title in fee simple . . . ." D.C. Code § 47-1304.

Property that is bid off by operation of law to the District can be disposed of in three ways. Under D.C. Code § 47-1304, if no one redeems the property during the two year period, the Mayor "shall in the name of and on behalf of the District of Columbia, sell said property at public or private sale and issue to any purchaser of such property a deed," which serves to transfer title as if the deed were issued pursuant to the annual tax sale provisions. No further notice is required if the property is disposed of in this manner. The District may also go to court to enforce a lien against the property under D.C. Code § 47-1312; the court may then, after notice to the record owner, decree a sale of the property to satisfy the lien. D.C. Code §§ 47-1313, -1314. Finally, the District may choose to place the property in the Homestead Program, D.C. Code § 45-2701 et seq. (1990), designed to let low income families purchase delinquent tax property at a reduced price. Thirty days before the property becomes part of the Homestead program, additional notice must be given to the record owner and any lienholders. D.C. Code § 45-2711; 10 DCMR § 3902.3 (b) (1987).


The Facts

The property at issue is located at 6425 14th Street, N.W. The record owner is ETDH Associates, whose current partners are the estate of B. Edith Gonska and Sandra Laake. *fn4 ETDH purchased the Fourteenth Street property in 1979. A deed of trust established at the time made Connecticut Avenue Woods No. 2, Inc. (Conn. Ave. Inc.) the beneficiary of the trust and Leon Gerber and Samuel Dweck the trustees. The deed of trust, recorded on July 20, 1979, bore the trustees' names but not their addresses. Conn. Ave. Inc. dissolved some time between October and December 1979, and the beneficial interest under the deed of trust was transferred to the United Jewish Appeal Federation (UJAF). The dissolution of Conn. Ave. Inc. and the transfer of the beneficial interest were not a matter of public record, as UJAF failed to record its interest. The trustees, however, remained the same.

ETDH failed to pay property taxes on the property. After giving notice of the delinquency, the District mailed notice to ETDH that the property would be sold at auction in the tax sale for 1984, to be held on January 16, 1985. The District also gave what purported to be proper notice by publication. See note 2, supra. The tax sale was held as scheduled, and when no one bid for the property, it was purchased by the District of Columbia as required. *fn5 On December 12, 1986, notice by mail was sent to ETDH that the two year redemption period would expire on January 16, 1987. However, no attempt was made to give notice to the trustees under the deed of trust. In November 1987, trustee Samuel Dweck died. On April 11 and 20, 1988, the District sent written notice to ETDH and to trustees under a junior trust stating that the property had been placed in the Homestead Program and that the thirty day redemption period was about to expire.

At the end of April 1988, the District made its first and only attempt to contact Conn. Ave. Inc. and the named trustees Samuel Dweck and Leon Gerber. The District learned that Conn. Ave. Inc. had dissolved and the beneficial interest under the deed of trust had been transferred; but because UJAF had not recorded its interest, the District had no way of determining to whom the beneficial interest had gone or how to contact that party. *fn6 By contrast, the trustees' names and addresses were in the Washington, D.C. telephone book. The District's attempt to contact the trustees consisted of two telephone calls made by an administrator of the Homestead program. The first was to Samuel Dweck's law firm, which told the District that Dweck was no longer with the firm and that there was no forwarding address. The District later learned that Samuel Dweck was deceased. The District official did reach Leon Gerber by phone, and asked simply if he had any connection with property on 14th street; he answered no. As the trial court found, there was no evidence concerning what else, if anything, the official asked Gerber, "nor any evidence as to whether she asked him if he was a trustee." The District made no further attempt to notify Gerber by mail or otherwise. On June 3, 1988, the property was deeded to the District for inclusion in the Homestead Program.

The appellees *fn7 contested the deed and intervened in the District's action to quiet title to the property. Besides claiming error in the published notice, note 2, supra, they asserted that the District had failed to provide constitutionally adequate notice to the trustees under the deed of trust. *fn8 On cross-motions for summary judgment, the trial court ruled in ...

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