Bulletin: WV000013

We have authorized our agents to insure tax sales inWest Virginia provided the agent can determine from the file that the statutory procedure was followed.  However, a recent (February 3, 2005) decision by the 4^th Circuit Court of Appeals has caused us to provide revised guidelines for insuring these transactions.

The case is Plemons v. Gale, 396 F. 3d 569.  Linda Plemons bought property in Kanawha County in August, 1999.  The property was sold for delinquent taxes in November, 2000.  In December 2001, the purchaser at the tax sale sought the issuance of a deed pursuant to statute, and provided the clerk with 3 addresses for Plemons to which to send the notice of right of redemption:  the property address as shown on deeds of record, the property address as known to the post office, and a third property address owned by Plemons and rented to tenants.  The purchaser also instructed the clerk to send notices to ?Occupant? at the deed and post office addresses.  All were returned promptly as ?undeliverable.?  Subsequent to the publication required by statute, the clerk issued a deed to the purchaser on May 7, 2002.  The property was subsequently conveyed by quitclaim deed to Douglas Gale.

Plemons filed an action in state court to set aside the deeds to the purchaser and to Gale.  The action was removed to Federal Court under diversity grounds.  In a split decision, the Court of Appeals ruled that when notice is not delivered and returned to the sender, the sheriff (prior to the sale) or the purchaser (seeking issuance of a deed) has an obligation to search all available public records to determine a valid address to which to send the notice.  Judge Motz stated that this standard would be the minimum that would satisfy due diligence requirements established in prior cases such as Mullane v. Central Hanover Bank & Trust and Mennonite Board of Missions v. Adams.

Therefore, in order to insure a tax sale, you must review the file to determine whether or not the statutory notices were duly delivered.  If they were returned to the sheriff or the clerk, you must then check the public records to determine if there were any other addresses for the property owner to which notice might have been sent.  You may only issue our policies of title insurance if: (1) notice was delivered to the property owner, not returned as undeliverable or unclaimed; or, (2) if notice was returned as undeliverable or unclaimed, you may insure if notice was sent to any and all other addresses for that property owner in the public records.