Deed on Arrival

FACED WITH A DISPUTE BETWEEN a landfill owner and a local government that poses novel questions of environmental and fiscal policy, a Wisconsin appeals court called for help. Now, a key issue in the case will be taken up by the state Supreme Court. The story begins with Jackson County Sanitary Landfill Inc. (JCSL), which operated a landfill in Jackson County. JCSL's president and sole shareholder is Thomas McNulty. Eight years ago, JCSL stopped paying real estate taxes on the landfill.

As it does with other properties for which taxes are unpaid, the county filed proceedings that ended in 2002 with the county clerk issuing a tax deed, vesting the county with absolute ownership of the property.

Oops! Maybe not such a good idea, county officials realized.

In late 2003, the county Board of Supervisors attempted to divest its ownership and return the property to JCSL by adopting resolutions to rescind the tax deed on the grounds that the issuance of the deed was “inadvertent, improvident and contrary to the public interest.” For its part, JCSL refused to take back the site and disclaimed any interest in the landfill, as well as any responsibility for care, maintenance and liability.

The county filed a lawsuit against the state Department of Natural Resources, JCSL and McNulty, asking for a determination that the county does not own the property, or, if it does own the landfill, that it has no obligations under the state's solid waste laws.

To the county's chagrin, the trial judge ruled that the county had no authority to revoke the tax deed and to allow the county to do so would be inequitable. Moreover, the court said, the county is responsible for the landfill in the same manner as any other owner would be.

On appeal, the county argued that its home rule authority gives it broad and general leeway to “exercise any organizational or administrative power.” Therefore, as the county saw it, with no statutory impediment to annulling the tax deed, the county may invalidate it. However, the county did concede that even if it has the statutory authority to rescind, it may do so only if the action does not affect “vested rights” of others.

The county insists that the vested rights of JCSL and McNulty are not affected, noting that during the period between the issuance of the tax deed and the attempted rescission, they took no action to their detriment in relying on the deed. A “mere change in title” is not enough to endow the company and its owner with vested rights, the county added.

JCSL and McNulty argued that the county had no authority to rescind the deed and, even if it could, rescission is not permissible after ownership changes hands.

Citing the issue — whether a county may rescind a tax deed without the former owner's consent — as without precedent in the state, the appeals court referred the issue to the state's highest court, which may or may not decide to resolve it. The appeals court also was concerned about “broad, statewide implications” for local government tax delinquency procedures.

A decision by the state high court that the county owns the landfill might include a ruling on the liability and cost implications.

[Jackson County v. Wisconsin Dept. of Natural Resources, No. 2004AP2582 (Wis. App. Oct. 13, 2005)]

The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].

The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.