FG&M’s Litigation Group Obtains Ruling for Client Before the Second Circuit Court of Appeals in NYC

Article written by Shannon A. Bertrand
Posted on Jun 28, 2011

Mark Thomas Baechle purchased a condominium in Mendon, Vermont in 1993. In 1999, he moved from 3050 South Drive in Allentown, Pennsylvania to 4170 Ascot Circle in Allentown, Pennsylvania. Mr. Baechle sent an address change card to the Town of Mendon at the time of his move. Unfortunately for all involved, Mr. Baechle’s new address was never noted by the Town of Mendon. Over the next three years, the Town continued to send tax bills to Mr. Baechle’s old address. Predictably, the tax bills were returned to the Town. The Town then sought to have a tax sale of Mr. Baechle’s property for the non-payment of taxes. Pursuant to Vermont law, the Town was required to notify Mr. Baechle of the impending tax sale. The Town sent the notices to the old address, and predictably, these notices were returned to the Town as undeliverable. Despite knowing that Mr. Baechle had not received notice of the tax sale, the Town went ahead with the sale.

Mr. Baechle learned of the tax sale more than a year after the sale and filed an action in the United States District Court for the District of Vermont seeking a declaration that the tax collector’s deed was void because the Town had failed to properly provide him notice. The Federal Court dismissed Mr. Baechle’s claim, finding that a Federal Statute (28 U.S.C. § 1341) known as the Tax Injunction Act (“TIA”) barred the Federal Court from hearing such action. The TIA states that Federal District Courts “shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” The TIA has been used extensively to bar taxpayers from seeking redress of state taxation issues in Federal Court.

Mr. Baechle brought an appeal to the Second Circuit Court of Appeals in New York City, arguing that he was not contesting his tax liability, but only the taking of his property without notice. After extensive briefing and oral argument, the Second Circuit Court of Appeals issued a decision on October 11, 2006, in which it found that the TIA did not bar the claim because Mr. Baechle was not seeking to avoid payment of his tax bill, or even seeking to question the amount of taxes owed. Instead, the Court ruled that when the landowner is only arguing that the Town had not taken adequate steps to notify him of the tax sale, the United States Constitution required that the Town at least take reasonable efforts to notify the landowner prior to taking his land. The Court’s decision was written about in the New York Law Journal on October 17, 2006.

Because of this ruling, Mr. Baechle is now allowed to pursue his original assertion that the Town failed to take efforts to notify him of the tax sale.

Download the Second Circuit Court of Appeals ruling.


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