Originally published on Forbes.com.
It is amazing how long tax litigation can persist. Legal fights about long ago taxes are something that I note in a fairly unsystematic manner. The oldest that I have previously covered was about the colorful Marvel Comics creator, Stan Lee’s, even more colorful friend Harry Stonehill. The Ninth Circuit was ruling in 2011 about a raid conducted in 1962 that resulted in tax assessments going as far back as 1958. More than half a century. Pretty good.
County Tax On Mineral Rights
A decision in March by the Wyoming Supreme Court blows that away. Here is some of Justia’s summary of Andarko Land Corporation v Family Tree Corporation.
The parties in this case disputed title to certain mineral interests underlying certain property. The dispute arose out of a 1911 Laramie County tax assessment against Union Pacific’s mineral interests in the property and the county’s subsequent tax sale and issuance of a tax deed for the property. Family Tree Corporation, which claimed title to portions of the minerals, filed a complaint for quiet title and declaratory judgment against Three Sisters LLC, which also claimed an ownership in the minerals, and Anardarko Land Corporation. The district court quieted title to Family Tree based upon the 1912 tax sale.
The mineral rights in question had been issued to Union Pacific by the US Government in 1901. That’s how we built the infrastructure that made America great. Take land from the indigenous people and give chunks of it to subsidize railroads. The railroads could then sell the land to settlers and charge them to move produce to market.
At any rate, Laramie County taxed Union Pacific’s mineral rights in 1911. Union Pacific did not pay. There was some remarkably quick work done as the mineral rights were auctioned in 1912. No bidders so Laramie County ended up with the mineral rights. In 1919 Laramie County sold the rights to Iowa Land & Livestock Company. For some reason, no deed was recorded until 1949.
Different Chains of Title
Union Pacific had sold Iowa Land the property in 1914 reserving for itself the mineral rights, even though UP had not done anything to redeem the mineral rights from the 1912 tax sale.
What you end up with are multiple chains of title for the same mineral rights one ending with Andarko and the other ending with Family Tree.
Which of the two chains is the right one turn on the validity of Laramie County seizing the mineral rights in 1912 for nonpayment of the 1911 real estate tax. Anadarko is arguing that the tax was unconstitutional making it void ab initio. Family Tree argues that the tax was hunky-dory and that if Union Pacific has a problem with it, there should have been an appeal within the six-year statute of limitations which was a bit before it was over over there back in 1918.
Voidable Not Void
The decision has a lengthy lawyerly discussion, which I found kind of fascinating, but you might not. As is common, both sides were kind of right and kind of wrong, but the bottom line was in favor of Family Tree which traced its title back to the tax sale. Here is the key part.
The error in the 1911 assessment was not, however, a clear jurisdictional error. It was an error in the manner of taxation – in the when and how of the assessment.
I did not note much in the way of coverage of this decision. I’m not sure what the practical takeaway is other than to not ignore real estate tax bills.
Updates To My Regular Readers
I want to apologize for my posting level which has been pretty low of late. I’m inclined to blame my covivant who is also my business partner. CV ruled that after completing entity returns, I had to work on individuals and that during our subsequent vacation, just ended, I couldn’t do very much blogging. I’m hoping to pick up the pace, but we will see.
Followers of the Kent Hovind drama should be alert that something is up. I declared an end to L’affaire Kent Hovind nearly two years ago. I have kept up with his post-prison adventures, but have not found them forbes worthy. The current drama almost makes it but not quite.
Freekenthovind.com was the flagship website of the Hovindication movement. The webmaster was always behind the scenes, but now he has opened up and become a Hovind critic. The url now points to something called Lies of the Devil and includes a link to a video promising that an “insider” will expose Hovind as a false prophet. Hovindologists, like Bob Baty are breaking out the popcorn. I can’t spare the lifespan to dive into the videos right now, but I will try to catch up in the next week.