PLM Tax Certificate Program 1991-92 L.P. v. Schweikert – 7/17/2007

July 24, 2007

Arizona Court of Appeals Division One Rules County Not Liable to Buyer of Tax Liens That Were Found to Be Invalid.

Plaintiff (“PLM”) purchased tax liens from the Maricopa County Treasurer. The tax liens were later found to be invalid because the property was in receivership when the liens would have attached to the property. Upon remand from a prior appeal, the trial court granted summary judgment against PLM on its claims for unjust enrichment, negligent misrepresentation, and rescission. PLM appealed.

The Arizona Court of Appeals affirmed. The negligent misrepresentation claim failed as a matter of law because the relevant statutes impose no duty on the county treasurer to determine the validity of a tax lien offered for sale. Nor is the contract remedy of rescission available under the statutory scheme, which provides that a purchaser may seek to recover the purchase price only in a case in which the tax lien is sold on property for which no tax is due. See A.R.S. § 42-18125. The risk that a tax lien is invalid for any other reason thus falls on the purchaser. The Court declined to consider PLM’s argument regarding the unjust enrichment claim because PLM could have raised the issue in its previous appeal but did not.

Judge Weisberg wrote the opinion; Judges Winthrop and Ehrlich concurred.