Thanks to a ruling by the Wisconsin Supreme Court, local officials in the state now have the bitter answer to a taxing question: Can a county rescind a lawfully issued tax deed that transferred ownership of a landfill to the county, thereby unilaterally returning legal title to the prior owner without that owner's consent?
No, said the high court in a near-unanimous opinion. The county has no statutory authority to undo the transaction after it accepted a tax deed to the property.
Jackson County Sanitary Landfill Inc. (JCSL) operated a state-licensed landfill, but stopped paying real estate taxes on the property in 1998. After the landfill reached its authorized capacity, JCSL began closure. The county pursued tax delinquency proceedings against the firm.
After JCSL continued to ignore the tax bills and did not redeem the property, the county clerk in 2002 issued a tax deed, which the county accepted and recorded. JCSL then insisted that the county, as landfill owner, was responsible for all care, maintenance and any subsequent liability.
In 2003, after realizing that the responsibilities related to the landfill would create a financial burden, the county board attempted to divest its ownership and return the property to JCSL. The company, however, disavowed any interest in or responsibility for the site.
The county took its claims to state court, where the trial judge refused to set aside the tax deed, leaving the county obligated for the landfill as any owner would be.
The county appealed, asserting that, with no statute barring its rescission of the tax deed, it had the authority to do so. An intermediate appeals court referred the novel deed rescission issue to the state's Supreme Court for a definitive resolution. [See “Deed on Arrival,” Waste Age, Jan. 2006, p. 14.]
The county's brief in the Supreme Court argued that the clerk made a mistake in issuing the deed and that, under its home rule powers, it can correct that mistake. It further argued that the expenses of caring for and maintaining the landfill would unfairly burden the county's taxpayers. In response, JCSL contended simply that the county owned the property and had no authority to rescind a tax deed.
The Supreme Court ruled that the county's attempt to rescind the deed was ineffective for three reasons.
First, the county affirmed its ownership by recording the tax deed and holding ownership for more than a year before filing its lawsuit.
Second, legal title had shifted from JCSL to the county.
Third, JCSL objected to any return of ownership. Under legal principles established by court rulings over the years, a property owner cannot force another party to accept ownership of the property, and the county had no statutory authority to override the common law.
The lone dissenting judge took pity on the county, suggesting it was “euchred … by a clever but conniving landfill owner.” He believed that the court should exercise its equitable power to cancel the tax deed “to undo this scam.”
The lower courts must now resolve the county's responsibility for long-term care and maintenance.
[Jackson County v. Wisconsin Dep't. of Natural Resources, 2006 WI 96, July 11, 2006.]
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.