A Missouri appeals court has ordered the Clay County collector to allow a Kansas City North couple to participate in future tax sales as long as they remain qualified bidders.
The couple, Joel and Dawn Yoest, appealed a Clay County Circuit Court judgment dismissing their petition for a writ of mandamus against Clay County Collector of Revenue Lydia McEvoy.
On Tuesday, the Western District Court of Appeals reversed the decision.
Jonathan Sternberg represented the Yoests. He said it was a correct decision.
“It’s a good clarification that government agents only have those powers that the legislature gives them or that can be fairly implied from the powers they’re given,” he said. “When they go beyond that, the courts are there to correct the process.”
The action stemmed from an email McEvoy sent the Yoests in August 2016, informing them she was permanently banning them from participating in the 2016 tax sale and any future tax sales in the county.
According to the decision, McEvoy informed the Yoests the decision was the result of an ongoing investigation against them.
The day after receiving the email, the Yoests filed a petition for a writ of mandamus and requested a temporary restraining order against McEvoy.
McEvoy opposed the petition, arguing she had a duty to refuse bids “from those who have demonstrated a history of dishonesty, lack of integrity, and lack of reliability.”
She accused the couple, whose businesses purchase distressed homes to rehab and then flip or rent the properties, of wrongdoing.
The trial court ultimately dismissed the petition, finding the Yoests “failed to establish a clear, unequivocal right to be bidders.”
In the opinion, written by Judge Thomas H. Newton, the court found the trial court erred in ruling mandamus did not lie. It found the Yoests demonstrated that McEvoy had a ministerial duty to allow them to participate in the tax sale.
The panel ruled that under Section 140.150, the collector has a ministerial duty to “commence” and “continue” the sale of lands at a public auction. Newton wrote that the chief purpose of the statute is to put delinquent landowners on notice, but also provide notice to potential purchasers.
“The public notice followed by the public auction leads this court to believe that a tax sale is an event meant to be open to all members of the public,” he said. “The Yoests are members of the public and are, therefore, entitled to participate as long as they are not excluded by other statutory provisions.”
McEvoy argued Section 140.190.2 does not refer to persons who may be excluded and instead refers to who may be the winning bidder, leaving her with exclusionary power. The court disagreed.
Newton wrote the court interprets the statute to mean there are two categories of people who can be excluded from a tax sale, those who are delinquent on tax payments and people who aren’t Missouri residents and have not consented to the county court’s jurisdiction in writing.
“Given these two explicit exclusions and the auction’s public nature, it is this Court’s opinion that the Yoests had a clear and unequivocal right to participate in the tax sale,” Newton wrote.
Sternberg, who was hired to represent the Yoests on appeal, said one aspect that made him apprehensive about taking the case was that it was a writ of mandamus case.
“From the outset, if there was an Achilles heel of the case, that was it,” he said, noting if he had the case at the district court level, he would have sought declaratory action instead.
Assistant County Counselor Patricia Hughes represented the county. She could not immediately be reached for comment on the ruling.
The case is State of Missouri ex rel. Joel Yoest et al. v. Lydia H. McEvoy, WD80556.