ARKANSAS COURT OF APPEALS
 NOT DESIGNATED FOR PUBLICATION
DIVISION I

CA03-704

DECEMBER 10, 2003

D3 CORPORATION AN APPEAL FROM THE WASHINGTON

COUNTY CIRCUIT COURT [CV 2001-1300-2]

APPELLANT

v.

CHARLIE DANIELS, Commissioner of State HONORABLE KIM M. SMITH , JUDGE

Lands for the State of Arkansas, ET AL.

APPELLEES AFFIRMED

Olly Neal, Judge

This is an appeal from an order of the Washington County Circuit Court dismissing with prejudice appellant's complaint to set aside deeds. On appeal, appellant argues that "[t]he relevant state and county agencies of Arkansas failed to give it adequate notice of the tax sale in violation of due process of law and the Arkansas Code" and that "[e]quity demands that the sale of the tax-delinquent land be set aside based on the facts of the . . . case." We affirm.

D3 Corporation (D3) was the record owner of six unimproved lots located in Washington County, Arkansas. A tax bill was sent for the 1993 real estate taxes to the address on file - 1458 B Shannon Street, Springdale, AR 72764. In October of 1994, Dan Brace, an officer of D3 who is also a California-licensed attorney, paid taxes on the lots. The check used to pay these taxes listed D3 as the payor. Although the check listed the Shannon Street address, the maker of the note struck through that printed address and hand-wrote an illegible Sacramento, California address.

From 1994 until the tax sale auction in October of 1999, D3 failed to pay its real estate taxes. As a result, it became delinquent on its real property taxes, which led to the sale of three lots to Harvey and Mildred Luttrell and three lots to Bobby Luttrell. After the sale and the State Land Commissioner's issuance of limited warranty deeds to Harvey and Mildred Luttrell and Bobby Luttrell, D3 brought suit, requesting that the court set aside the sale.

D3 alleged that "[t]he County Tax Assessor of Washington County neglected and failed to follow the procedure mandated by law" to verify the name and last known address of the owner of record of the tax delinquent land and that the State of Arkansas or Washington County, Arkansas failed to send notice of tax assessments or notices of tax delinquent sales to D3 at its address in Sacramento, California.

The trial court issued a letter opinion, finding that notice was attempted to D3 at its last known addresses and that Brace failed to provide a correct address as was required by law. The court found "no good excuse" for noncompliance with the requirement to provide a correct address and found that Brace, as a practicing attorney in California who paid his personal and real estate taxes every year in California, had unclean hands. The court also found that equity did not demand that it set aside the sale because Brace and D3 did not comply with Arkansas law and Brace should have known that payment of real estate taxes was required every year. It is from these findings that appellant appeals.

Our review on appeal is de novo. See Sanders v. Ryles, 318 Ark. 418, 885 S.W.2d 888 (1994); Wilson v. Daniels, 64 Ark. App. 181, 980 S.W.2d 274 (1998). When a case is tried by a circuit court sitting without a jury, our inquiry on appeal is whether the factual findings of the court are clearly erroneous or clearly against the preponderance of the evidence. Bill's Printing, Inc. v. Carder, __ Ark. App. ___, ___ S.W.3d ___ (June 18, 2003). However, a trial judge's conclusion of law is given no deference on appeal; manifestly, the trial judge does not have a better opportunity to apply the law than does the appellate court. Id.

Appellant contends that the Commissioner of State Lands and the Washington County Assessor failed to give it adequate notice of the tax sale for three reasons. First, D3 argues that the Commissioner of State Lands failed to take reasonable steps to ascertain appellant's correct address. Second, D3 contends that the verification procedure described by the Washington County Assessor failed to comport with due process. Third, appellant states that Washington County's certification of the land to the Commissioner of State Lands was particularly meaningless in this case because the evidence revealed numerous instances of contact between it and Washington County agencies.

Arkansas Code Annotated section 26-37-101 (Repl. 1997) et seq. sets forth the procedure governing the forfeiture and sale of tax-delinquent land. Arkansas Code Annotated section 26-37-101(a)(1) provides that all lands upon which the taxes have not been paid for one year following the date the taxes were due shall be forfeited to the State of Arkansas and transmitted by certification to the Commissioner of State Lands for collection or sale. Prior to certification to the Commissioner of State Lands, "the county assessor shall . . . [v]erify the name and last known address of the owner of record of the tax-delinquent land[.]" Ark. Code Ann. § 26-37-103(a)(1) (Repl. 1997). Subsequent to receiving tax-delinquent land, the Commissioner of State Lands shall "notify the owner, at the owner's last known address, by certified mail, of the owner's right to redeem by paying all taxes, penalties, interest, and costs, including the cost of notice." Ark. Code Ann. § 26-37-301(a)(1) (Repl. 1997).

With regard to appellant's first argument - that the Commissioner of State Lands failed to take reasonable steps to ascertain appellant's correct address - we affirm. Appellant argues, as it did below, that it did not receive notice of the tax delinquency from the State of Arkansas. However, as it states in its brief,

It is well-settled that in cases involving the redemption of tax-delinquent lands, strict compliance with the requirement of notice of a tax sale is required before an owner can be deprived of her property. See Jones v. Double "D" Prop., Inc., 352 Ark. 39, 98 S.W.3d 405 (2003); Pyle v. Robertson, 313 Ark. 692, 858 S.W.2d 662 (1993); Trustees of First Baptist Church v. Ward, 286 Ark. 238, 691 S.W.2d 151 (1985).

At trial, Clinton Daniels, Northwest Arkansas field representative for the State Land Commissioner, testified that his job is, among other things, to perform pre-research prior to a tax sale. In essence, Daniels testified that the Little Rock office sends out notices of tax-delinquent properties that have been certified to it by a county; thus, the Little Rock office sent notices to D3 Corporation informing it of its delinquency. From there, Daniels testified that he receives a field report and he looks on the computer to see if there have been any transactions since certification to the Commissioner of State Lands. Daniels stated that he relies on records from the assessor's office and the collector's office to perform his research. From his research of county records in this particular case, Daniels located the address of 1445 Masonic Street, Fayetteville, Arkansas. Daniels turned in his pre-sale research to the Little Rock office, and he was "sure that [the] office sent out certified letters to the Shannon Street and also to the Fayetteville address."

Arkansas Code Annotated section 26-37-301(a)(1) only requires that the Commissioner of State Lands notify the owner by certified mail at the owner's last known address. Additionally, appellant's reliance on Mennonite Board of Missions v. Adams, 462 U.S. 791 (1983), is misplaced. Although the Supreme Court has held that notice by certified mail is required prior to a tax sale where an interested party such as a mortgagee's name and address could have been ascertained by reasonably diligent efforts, it also noted that "[w]e do not suggest, however, that a governmental body is required to undertake extraordinary efforts to discover the identity and whereabouts of a mortgagee whose identity is not in the public record." Id. at 798, n. 4. From the evidence presented at trial, it is clear that the Commissioner of State Lands sent certified notices to both the last known address of appellant and to the address Daniels found in his pre-sale research. These letters were returned and stamped "attempted, not known." Therefore, the Commissioner of State Lands did all that he was required to do under the statute.

Next, D3 argues that the verification procedure described by Washington County failed to comport with due process. Appellant states that "[s]imply certifying the address currently on file fails to rise to the level of due process required in cases where a citizen may be deprived of his property as a result of the certification." We disagree.

Washington County Assessor Sue Phillips testified that her office continuously updates its records to verify taxpayers' addresses. She explained that, "[w]e continuously verify those addresses daily. My staff does. And we've always got the latest address in our computer system on our records. It's an ongoing process." Phillips testified that when a deed is recorded in the clerk's office, the assessor's office receives a copy of the deed and enters the address shown on the deed into the computer. If there is not an address shown on the deed, the assessor's office searches its other real estate and personal property records to see if an address can be located. Phillips opined that state law requires a property owner to furnish them with an address. Phillips acknowledged that nobody from D3 ever notified her office of a California address, stating "[i]f they had, it would have been on our records. We're very careful with that."

Dean Potter, Washington County's Chief Deputy Collector, testified that if a parcel comes from the assessor's office to the collector's office without an address, they "try to find one in the phone book, the city directory, or see if they have other property." Ms. Potter noted that they send out a bill and that the bill to D3 would have gone to the Masonic address in Fayetteville. She further acknowledged that her office never received a request for address correction from D3.

Arkansas Code Annotated section 26-37-103 requires that prior to certification to the Commissioner of State Lands, county assessors verify the name and last known address of the owner of record of the tax-delinquent land. Arkansas Code Annotated section 26-35-705 provides that "the sheriff or collector shall be required to mail statements of taxes due by any taxpayer to the address provided by the taxpayer. In the event that the address of the taxpayer changes, the taxpayer has an obligation to furnish the correct address." It is clear from the evidence that the county assessor verified the name and last known address of D3 using its computer system and records kept and maintained in the ordinary course of her business. Therefore, the county assessor did all that she was required to do under statutory law. As such, we affirm on this point.

Third, appellant argues that the assessor's certification was meaningless since D3 had previously had contact with county agencies using its Sacramento address. Appellant contends that the Washington County assessor, tax collector, county clerk, and county attorney had reason to be aware of its correct address in Sacramento, California based on a history of continuous contact between the two. D3 relies on the facts that (1) it paid the 1993 taxes with a check where it indicated a Sacramento address, (2) several deeds had been recorded in Washington County that were notarized in Sacramento, and (3) correspondence, which was sent from the county attorney to Dan Brace regarding a lawsuit filed by the county against D3 to compel completion of roads in the Burlington Heights subdivision pursuant to county regulations, listed a Sacramento, California address. We find this argument unpersuasive.

The county attorney, George Butler, in a stipulated affidavit attested that he handled litigation for the county and that he initially wrote a letter to D3 Corporation, using the address of 1445 East Masonic, Fayetteville, Arkansas. A letter was also sent to 1458 B Shannon Street, Springdale, Arkansas. Both letters were returned. Butler indicated that only after a conversation with Bill Devault of the road department and Mike Colly of ReMax did he obtain the name, address, and telephone number of Dan Brace in Sacramento, California. He further attested that he had never checked nor was he ever made aware of by the assessor or collector that the taxes were delinquent on these properties. Based on Butler's stipulated affidavit, there is no basis upon which we can find that this information was imputed to the county collector, clerk, or assessor.

As an aside, appellant further seems to suggest that it paid income taxes and sent correspondence, which bore appellant's California address, relating thereto to the Secretary of State. Testimony from Daniels and Potter noted that records from the Secretary of State were not used by their offices. Furthermore, evidence submitted indicates that the Secretary of State's office still had on record the address of 1458 B Shannon Street, Springdale, AR. Further, the Secretary of State records revealed that D3's incorporation status was revoked in January of 1995 and reinstated in November of 1998.

Based on the foregoing, we cannot say that the court's decision was clearly erroneous; therefore, we affirm.

As its last point, D3 contends that equity demands that the sale of the tax-delinquent land be set aside. The trial court found that equity did not demand that it set aside the sale because Brace and D3 did not comply with Arkansas law and Brace should have known that payment of real estate taxes was required every year. We hold that the doctrine of equity was simply inapplicable in this case.1

Affirmed.

Crabtree, J., agrees.

Griffen, J., concurs.

1 The clean-hands maxim, which was obviously applied by the judge, bars relief to those guilty of improper conduct in the matter as to which they seek relief. Lucas v. Grant, 61 Ark. App. 29, 962 S.W.2d 388 (1998). Equity will not intervene on behalf of a party whose conduct in connection with the same matter has been unconscientious or unjust. Wesley v. Estate of Bosley, 81 Ark. App. 468, 105 S.W.3d 389 (2003). In determining whether the clean-hands doctrine should be applied, the equities must be weighed. Id. It is within the judge's discretion as to whether the interests of equity and justice require application of the doctrine. Id. Further, acourt of equity may fashion any reasonable remedy justified by the proof. Id.