Redemption From Tax Sale – Value of Permanent Improvements


Anderson Realty Group, LLC v. King, [Ms. 2201014, June 10, 2022] __ So. 3d __ (Ala. Civ. App. 2022). In a per curiam opinion, (Moore, Hanson, and Fridy, JJ., concur; Thompson, P.J., and Edwards, J., dissent), the court reverses the Jefferson Circuit Court’s judgment permitting J.C. King, III (“King”) to redeem certain real property upon the payment of $21,302.35 to Anderson Realty Group, LLC (“ARG”) which held acquired a tax deed to the property. The redemption amount did not include the value of certain permanent improvements ARG claimed that it made to the property.

The court first rejects King’s motion to dismiss the appeal based on ARG’s acceptance of the $21,302.35 tendered by King and explains “[t]he general rule is that when an appellant accepts the benefit of a judgment, that appellant must make restitution of the proceeds received as a condition precedent to the appeal or the appeal will be dismissed.” Ms. *6, citing Alco Land & Timber Co. v. Baer, 289 Ala. 567, 570, 269 So. 2d 99, 101 (1972). The court concludes ARG’s appeal falls with “[a]n exception to this general rule provid[ing] that a party can maintain an appeal without refunding judgment proceeds when the opposing party, that is, the appellee, will suffer no injury as a result of allowing the appeal to proceed while the appellant retains the proceeds or when the appellant could not, on retrial, recover less than the amount of the judgment from which he appeals. Alco Land & Timber Co., 289 Ala. at 570, 269 So. 2d at 101-02.” Ibid.

On the merits, the court notes that the statute provides that the redemption amount shall include “ ‘[t]he value of all preservation improvements made on the property determined in accordance with this section with interest ....’ § 40-10-122(c)(1) and (2) (emphasis added).” Under the statute, ‘permanent improvements’ shall include, but not be limited to, all repairs, improvements, and equipment attached to the property as fixtures.’ § 40-10-122(d).” Ms. *10.

The court looked to definition of permanent improvements in the context of redemption from mortgage foreclosure set out in Rodgers v. Dixon, 239 Ala. 72, 74, 193 So. 741, 743 [(1940)] which “ ‘includes not only ordinary repairs to restore the property after injury, decay, storm, flood, or fire, etc., but also valuable and useful additions and improvements to the property suited to its reasonable necessities, character and use.’” Ms. *12.

The court applies the Rodgers definition to tax sale redemptions because

In 2002, the Alabama Legislature established definitions of “permanent improvements” and “preservation improvements” as those terms are applied in the tax-redemption statute, § 40-10-122. In defining “preservation improvements” as “improvements made to preserve the property by properly keeping it in repair for its proper and reasonable use, having due regard for the kind and character of the property at the time of sale,” § 41-10-122(d), our legislature essentially adopted the language used to define “permanent improvements” in Rodgers and its progeny.

Ms. **13-14.

The court supports its analysis by citing the “rule of statutory construction that statutes should be construed in reference to the principles of the common law,” Ms. *15, and concludes that, “because the definition of ‘preservation improvements’ as codified in § 40-10-122(d) is the same definition of ‘permanent improvements’ set forth in Rodgers and applied for more than eighty years, the legislature must have intended that ‘preservation improvements’ have the same meaning as ascribed by the Rodgers Court to the term ‘permanent improvements’ under the foreclosure-redemption statute, § 6-5-253.” Ms. *16.

The dissent asserts that “had the legislature intended for the terms ‘preservation improvements’ and ‘permanent improvements’ to have the same import, the legislature could have used the term ‘permanent improvements’ in § 40-10-122(c). Because the legislature chose to use the term ‘preservation improvements,’ as opposed to ‘permanent improvements,’ in § 40-10-122(c), the legislature must have perceived a distinction between the two terms. See Surtees v. VFJ Ventures, Inc., 8 So. 3d 950, 975 (Ala. Civ. App. 2008) (‘The courts must presume that ... the legislature intended that each word of [a] statute have effect.’).” Ms. *21.

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