Dupont v. Reuter – 9/11/2008

September 16, 2008

Arizona Court ofAppeals Division One Holds That Lien Holder’s Use of Regular U.S. Mail Rather Than Certified Mail to Serve a Notice of Intent to Foreclose Does Not Deprive a Court of Jurisdiction to Hear a Tax Lien Foreclosure Action.

Bruce Dupont and Brad Barding held a certificate of purchase of a tax lien on property owned by Francis Reuter.  Dupont sought to foreclose on Reuter’s right to redeem the property.  Therefore, he sent to Reuter, by first-class mail, a notice of intent to foreclose.  Dupont then filed a foreclosure complaint, which he served on Reuter.  Reuter argued that jurisdiction was lacking because Dupont failed to serve the notice of intent to foreclose by certified mail, as required by A.R.S. § 42-18202(A).  The court agreed, and Dupont appealed.     

The ArizonaAppeals Court reversed and remanded for further proceedings.  The Court concluded that the failure to send by certified mail, instead of regular mail, the notice of intent to foreclose did not deprive the court of jurisdiction to hear the foreclosure action, particularly given that the property owner did not dispute that she had received notice of the action.  The Court relied primarily on A.R.S. § 42-18101(B), which provides that an “insubstantial failure to comply” with the tax lien statutes “does not affect the validity of” a tax lien foreclosure.  That statute, enacted in 1984, effectively liberalized previous case law holding that “each duty specified in the tax lien sale and redemption statutes is a mandatory obligation required to establish jurisdiction.”               

Judge Johnsen authored the opinion; Judges Barker and Irvine concurred.