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Collector of Revenue of St. Louis v. Parcels of Land Encumbered With Delinquent Tax Liens Land Tax Suit 178

Court of Appeals of Missouri, Eastern District, Second Division

November 21, 2017

COLLECTOR OF REVENUE OF ST. LOUIS, MISSOURI, Respondent,
v.
PARCELS OF LAND ENCUMBERED WITH DELINQUENT TAX LIENS LAND TAX SUIT 178, Defendants,
v.
BJLIK, INC., Appellant.

         Appeal from the Circuit Court of the City of St. Louis Honorable Thomas Charles Clark II Circuit Court No. 1422-LT00178

          ROY L. RICHTER, JUDGE.

         BJLIK ("Appellant") appeals from the Amended Order to Pay Out Excess Funds and Final Judgment ("Amended Order and Judgment"), entered by the Circuit Court of the City of St. Louis on September 8, 2016, ruling in favor of the Sheriff and the Collector of Revenue for the City of St. Louis ("Respondents") that a child support wage withholding order has special statutory priority payment status over a previously recorded judgment lien to monies generated from the sale of real estate. We reverse and remand.

         I. Background

         The facts of this case originate from a parcel of land located at 5291 Lindell Boulevard in St. Louis ("Parcel"), which was owned by James Wright, III ("Wright"). When Wright failed to pay on a contract to purchase a business from PJMW, Inc., a judgment lien was filed against Wright on the Parcel in favor of PJMW, Inc. in the amount of $251, 625; it was transcribed and recorded by the Circuit Court of the City of St. Louis on November 9, 2012. Eventually, after a land tax sale took place, PJMW, Inc. was unaware that the Parcel had been sold and sold its judgment lien to the newly formed Appellant for a discounted sum of $75, 000 when it was valued at more than $250, 000 plus accrued interest (amounting to $322, 479.84 as of August 17, 2015).

         In addition to the judgment lien held by Appellant, Wright was delinquent in paying his city real estate taxes. There were other liens on the Parcel as well. In August 2014, the circuit court entered Findings of Fact, Conclusions of Law and Order of Judgment and Decree (of Foreclosure) in Land Tax Suit 178, Cause No. 1422-LT00178 ("Foreclosure Order"), ordering the foreclosure of the real estate pursuant to the Municipal Land Reutilization Law Act, Sections 92.700 et seq., RSMo, [1] to pay delinquent property taxes that were owed to the City of St. Louis. The Collector of Revenue for the City of St. Louis ("Collector of Revenue") pursued the foreclosure order, and the Sheriff of the City of St. Louis ("Sheriff") provided notice that on July 14, 2015, a foreclosure sale would take place to auction and sell the Parcel, the proceeds of which were to be applied to satisfy foreclosure expenses and pay Wright's delinquent real estate tax bills.

         On July 14, 2015, the Sheriff conducted a land tax foreclosure sale and the Parcel was sold to Alps, LLC ("Alps") for $341, 000. After deducting Wright's delinquent real estate tax bills and the land tax foreclosure sale costs, fees, and expenses from the payment by Alps to purchase the property, there were remaining excess funds of more than $315, 000 subject to distribution following the circuit court's confirmation of Alp's purchase of the Parcel.

         Shortly after the foreclosure sale, on July 29, 2015, an Order to Withhold, recorded by the Missouri Family Support Division ("Family Support Division") was served upon the Sheriff, naming Wright as the obligor for collection of Wright's delinquent child support obligation totaling more than $60, 000 at the time, from the proceeds of the land tax sale pursuant to Section 454.505. The Family Support Division filed a Motion for Distribution of Funds the next day, on July 30, 2015, requesting a distribution from any excess funds from the sale of the Parcel in order to satisfy Wright's child support arrearage.

         On August 5, 2015, Alps filed a Motion to Confirm Land Tax Sale. The next day, Appellant (which had just purchased the judgment against Wright from PJMW, Inc.) filed a Motion to Pay Out Excess Funds "up to $322, 479.84, " requesting a distribution from any excess funds from the sale of the Parcel to satisfy the judgment lien on the Parcel, based on the November 9, 2012 transcript judgment processed in the circuit court.

         On August 17, 2015, the circuit court confirmed the sale of the Parcel to Alps. A hearing was also held on the claims to the excess funds, whereby Appellant and the Family Support Division appeared and argued their motions. Additional briefs were filed thereafter.

         On June 29, 2016, the circuit court entered an Order to Pay Out Excess Funds. On September 8, 2016, the circuit court amended that order in its Amended Order to Pay Out Excess Funds and Final Judgment ("Amended Order and Judgment") and ruled the Order to Withhold asserted by the Family Support Division had payment priority from the excess funds gained from the sale of the Parcel over Appellant's previously recorded judgment lien. The trial court judgment awarded the excess funds from the land tax sale in order of priority as follows: $4, 203.50 to Metropolitan Sewer District;[2] $60, 446.49 to Family Support Division pursuant to the payout order; and the remaining $250, 900.29 to Appellant pursuant to its lien from the transcript default judgment. This appeal follows.

         II. Discussion

         In its sole point relied on, Appellant alleges the trial court erred in ruling that Section 454.505 provided special statutory priority status to Family Support Division's withholding order to payment from funds generated by the sale of real estate over a prior in time recorded judgment lien on the same real estate that generated the funds. Appellant argues the prior in time recorded judgment lien on real estate had payment priority over the Family Support Division's order to withhold, thereby resulting in reversible error.

         A. ...


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