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Woman got $0 in condo sale after unpaid tax bill; justices weigh in

Geraldine Tyler, 94, wants some of the $40,000 profit that a Minnesota county received after selling her condo because of a $2,300 unpaid tax bill.
Woman got $0 in condo sale after unpaid tax bill; justices weigh in
Posted at 11:26 AM, Apr 27, 2023

The Supreme Court seemed likely to give a 94-year-old Minneapolis woman another day in court to try to recoup some money after the county kept the entire $40,000 when it sold her condominium over a small unpaid tax bill.

The justices on Wednesday seemed in broad agreement with arguments by the lawyer for Geraldine Tyler that Hennepin County, Minnesota, violated the Constitution's prohibition on the taking of private property without “just compensation.”

“At bottom, she's saying the county took her property and made a profit on her surplus equity. It belongs to her,” Justice Clarence Thomas said.

Tyler, who now lives in an apartment building for older people, owed $2,300 in unpaid taxes, plus interest and penalties, when the county took the title to the one-bedroom apartment in 2015. The county said she did nothing to hold on to her one-time residence. The apartment sold the next year.

Justices Elena Kagan and Neil Gorsuch said the county's position appeared to be that it could seize million-dollar properties over tiny tax bills. “So a $5 property tax, a million dollar property, good to go?” Gorsuch asked Neal Katyal, who was representing the county.

Katyal essentially said yes, noting that the Supreme Court in 1956 upheld New York City's decision to keep the $7,000 it received for selling a property it seized over a $65 water bill.

In this case, Katyal said, Tyler made clear she wanted nothing to do with the condo in the five years she owed back taxes.

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“Why in the world would it be that Tyler walked away from her home? The reason, we think, is that there was no equity in the home,” Katyal said. The justices could leave it to a lower court to sort out the money details.

Katyal tried to appeal to the conservative justices in particular by references to history dating back to 1272 and the invocation of the court's recent rulings overturning Roe v. Wade and expanding gun rights.

History and tradition figured prominently in those blockbuster rulings, but Katyal didn't appear to attract any conservative support in the court's final arguments until its new term begins in October.

“And I just don’t understand what on earth any of that history has to do with this case,” Gorsuch said.

Christina Martin, representing Tyler, went back even earlier than Katyal did to make a basic point about fairness, saying that the Magna Carta in 1215 spelled out “that the government could not take more than it was owed.”

Minnesota is among roughly a dozen states and the District of Columbia that allow local jurisdictions to keep the excess money, according to the Pacific Legal Foundation, a not-for-profit public interest law firm focused on property rights that represented Tyler at the Supreme Court.

There has been no explanation about why Tyler stopped paying her property taxes when she moved from the condo, where she had lived since 1999. She moved for “health and safety” reasons, Pacific Legal said.

The county said in court papers that Tyler could have sold the property and kept whatever was left after paying off the mortgage and taxes, refinanced her mortgage to pay the tax bill or signed up for a tax payment plan.

Instead, she did nothing for five years, the county said, until after authorities followed state law and sold the condo. The county wrote: Tyler believes "the Constitution required the State to serve as her real estate agent, sell the property on her behalf, and write a check for the difference between the tax debt and the fair market value."

Lower courts sided with the county before the justices agreed to step in.

A decision in Tyler v. Hennepin County, Minnesota, 22-166, is expected by late June.

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