Omaha Mun. Land Bank & Cnty. of Douglas v. Ekwen

30 Neb.App. 209

967 N.W.2d 724

OMAHA MUNICIPAL LAND BANK and County of Douglas, appellees,

v. Vitaly EKWEN, appellant,andVandelay Investments, L.L.C., et al., appellees.

No. A-20-679.

Court of Appeals of Nebraska.

Filed October 12, 2021.

Thomas C. Dorwart, Omaha, of Goosmann Law Firm, P.L.C., for appellant.

Matthew G. Munro, of McGrath, North, Mullin & Kratz, P.C., L.L.O., Omaha, for appellees Omaha Municipal Land Bank and County of Douglas.

Riedmann, Bishop, and Arterburn, Judges.

Bishop, Judge.

INTRODUCTION

Vitaly Ekwen appeals the Douglas County District Court's order confirming a sheriff's sale of real property under a decree of foreclosure on a tax lien. Ekwen claims that because of improper or insufficient service and notice, the court should have vacated and set aside the sale, its previous order on a motion for service by publication, and the decree of foreclosure. We affirm the district court's decision not to vacate and set aside its previous order on the motion for service by publication and the decree of foreclosure. However, we reverse the district court's decision to confirm the sale, and we remand the cause to the district court with directions.

BACKGROUND

On February 23, 2018, Omaha Municipal Land Bank (Bank) and the County of Douglas, Nebraska (County), filed a complaint against several defendants seeking the payment of delinquent real estate taxes or, if payment was not made, an order that the real estate be sold in a tax lien foreclosure proceeding. Both Ekwen and the "Real Property located at 3525 North 28th Avenue Omaha, NE 68111" (real property) were among the named defendants. The Bank and the County alleged the County was the owner and holder of a tax sale certificate issued by the Douglas County treasurer in 2014, which constituted "a first and superior lien" on the real property legally described as "Lot 22, Block 2, Redicks Park, an addition to the city of Omaha, in Douglas County, Nebraska." The Bank and the County further alleged that the tax sale certificate had not been redeemed, nor subsequent taxes paid, and that because 3 years had elapsed since the issuance of the tax sale certificate, they were now entitled to foreclose the lien for taxes represented by the tax sale certificate, as well as for subsequent years’ taxes paid by the County. The Bank and the County alleged that certain named defendants, including Ekwen, had a claim or interest in the real property. The Bank and the County's praecipe requested that the clerk of the court "issue a Summons directed to the Defendants listed below and return to the undersigned for service upon said Defendants by CERTIFIED MAIL as provided by law"; Ekwen was listed at a specified post office box (P.O. Box) in Omaha.

On July 2, 2018, the Bank and the County filed a motion for service by publication, alleging that Ekwen, the real property, and some of the other defendants could not be served by any other means. The affidavit of Martin A. Barnhart was said to be "filed contemporaneously" in support of the motion; however, the affidavit does not appear in our transcript, nor was it requested in the praecipe for transcript. The "Certificate of Service" stated that a copy of the motion was served by "United States mail" on Ekwen at the P.O. Box in Omaha. Although both parties reference the district court's order on the motion for service by publication, which was apparently granted, the order does not appear in our transcript, nor was it requested in the praecipe for transcript.

Nearly 1 year later, on June 20, 2019, the Bank and the County filed a motion for default judgment against the defendants, including Ekwen and the real property, for failure to answer the complaint. The Bank and the County stated that in support of the motion, they intended to rely on the affidavit of Barnhart. Barnhart's May affidavit in support of the motion for default judgment stated that he is the executive director of the Bank; on February 23, 2018, the Bank and the County filed the complaint in this action; the Bank and the County served the summons and complaint on the defendants by certified mail or publication, as indicated in the court file; and the defendants failed to file an answer or other responsive pleading within 30 days of service. Barnhart also set forth the amounts due and owing related to the tax sale certificate and the case. The "Notice of Hearing" stated that the motion for default judgment would be called for hearing on June 25. Additionally, the "Certificate of Service" stated that a copy of the motion was served by "First Class Mail" on Ekwen at the P.O. Box in Omaha. It also stated that "No Service" was provided to "Lot 22 Block 2 Redicks Park."

On June 25, 2019, the district court entered an "Order Granting Default Judgment/Decree of Foreclosure." The court found that the defendants had been validly served but had not filed an answer or otherwise pled. The court further found that the Bank and the County had a valid first lien on the real property and were entitled to foreclose their lien against the real property. The court ordered that in the event that the sums due as set forth in the decree were not paid within 20 days from the entry of the decree, an order of sale would be issued and the real property sold for the satisfaction of the Bank and the County's lien. Upon confirmation of the sale, the default defendants would be foreclosed and forever barred of all right, title, and interest in the real property. The "Certificate of Service" does not show that Ekwen was served a copy of the court's order, but it does show that service was sent via U.S. mail to "Lot 22 Block 2 Redicks Park an addi 3525 North 28th Ave. Omaha, NE 68111."

The Bank and the County's "Praecipe for Order for Sale" was filed on July 26, 2019; it asked the clerk of the district court to issue an order of sale directing the Douglas County sheriff to sell the property, because "[n]one of the real estate has been redeemed from the Decree of Foreclosure and the statutory period for redemption has expired." The "Certificate of Service" stated that a copy of the praecipe was served by "regular, first class mail" on Ekwen at the P.O. Box in Omaha.

On October 18, 2019, a deputy sheriff filed a document stating:

Received this order of sale on August 7, 2019, and thereupon on September 16, 2019, I caused a notice to be published in the Daily Record, a newspaper printed and in general circulation in [Douglas] County, that I would offer said property for sale at 1616 Leavenworth Street, Omaha, Nebraska on October 16, 2019, at 11:00 a.m., of said day. After having so advertised the same for more than thirty days, and at the time and place stated in said notice I offered the said lands and tenements for sale at public auction, and sold the same as follows to-wit:

Lot 22, Block 2, Redicks Park, an Addition to the City of Omaha, in Douglas County, Nebraska.

Sold to: Omaha Municipal Land Bank and County of Douglas[.]

For the sum of: ... $12,942.49[.]

On December 4, 2019, the Bank and the County filed a motion to confirm the sale of the real property. The "Certificate of Service" stated that a copy of the motion was served by "regular United States mail" on Ekwen at the P.O. Box in Omaha. It also stated that "No Service" was provided to "Lot 22 Block 2 Redicks Park."

On December 12, 2019, Ekwen filed an "Objection to Motion to Confirm and Motion to Vacate and Set Aside." Ekwen stated he objected to the motion to confirm, and he also moved for an order vacating and setting aside the order on the motion for service by publication, the decree of foreclosure, and the sheriff's sale. He alleged that the judgment was rendered without service of process upon him other than by publication. Ekwen further alleged that the Bank and the County failed to make diligent investigation and inquiry into his whereabouts; there was no return of service showing any attempts to serve him in any manner prior to the order for service by publication; notice of the sheriff's sale was not published in accordance with Neb. Rev. Stat. §§ 77-1912 (Reissue 2018) and 25-1501 et seq. (Reissue 2016 & Cum. Supp. 2020); the motion for default judgment and the motion to confirm were not served upon him at his last known address; and a substantial injustice would result from the denial of due process if the motion to confirm was not denied and the order on the motion for service by publication, the decree of foreclosure, and the sheriff's sale were not vacated and set aside.

A hearing on the motion to confirm sale, as well as Ekwen's objection and his motion to vacate and set aside, was held on July 27, 2020. On August 19, the district court entered an order and a nunc pro tunc order confirming the sale of the real property and for issuance of a deed to the Bank. The court found that the sale had been "conducted in all respects according to law" and that the real property was sold for its fair value under the circumstances and conditions of the sale. The court further found that the order on the motion for service by publication and the decree of foreclosure were "issued in all respects according to law." The "Certificate of Service" shows that Ekwen's counsel was served via email and that service was sent to "Lot 22 Block 2 Redicks Park an addi 3525 North 28th Ave. Omaha, NE 68111."

Ekwen appeals.

ASSIGNMENTS OF ERROR

Ekwen assigns, restated, that the district court erred in (1) finding that the Bank and the County made sufficient diligent investigation and inquiry into his whereabouts by executing service by publication and (2) failing to affirmatively find that proper notice of the time and place of the foreclosure sale of his property was not provided to him in accordance with Nebraska law and the principles of due process. Accordingly, Ekwen claims that the court erred in granting the motion to confirm the sale of his real property and in denying his motion to vacate and set aside the sale and the court's previous order on the ...