Fair or Foul?
Published 11:10 pm Saturday, September 5, 2009
IRONTON — A local woman, who claims amnesia is to blame for not paying delinquent taxes on an apartment she owned and subsequently lost at auction, could regain her former property after alleging county and local officials ignored protocol and violated state ethics laws in auctioning off the delinquent parcel at the county’s recent property tax sale.
The motions, filed July 31 and Aug. 24 in Lawrence County Common Pleas Court by Linda Marshall, owner of Huntington-based Classic Management, Inc., alleges the county reneged on a verbal, payment-plan agreement the property management company entered into with treasurer Stephen Dale Burcham late last year to repay more than $4,000 in past due property taxes.
It also alleges a lack of due process by the Lawrence County Prosecutor’s Office in notifying Classic Management that the property was being placed up for auction for lack of payment.
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According to the motion, Marshall contends her company did not receive the mandatory auction notice either by regular or certified mail and that the notices the county did attempt to send were mailed to a similar, yet incorrect address.
Both a certified letter, dated April 23 and a first-class letter, dated April 27, were mailed to Classic Management at 1210 Tenth St. in Ironton — an address that does not exist.
The motion lists the company’s proper address as 1210 Tenth St. in Huntington, W.Va., which was correct in the legal notice published in The Tribune but not on the address list provided by the Lawrence County Prosecutor’s Office to the Lawrence County Clerk of Court’s office that mailed out the notices.
The property in question is a six-unit apartment located at 1125 S. Seventh St. in Ironton. The parcel, which was appraised in 2004 for $79,650, was sold on July 2, to Kathy Kratzenberg for $3,312.
The court filing lists the property as not having any other liens or debts attached to it.
According to the motion, Classic Management, Inc. purchased the parcel in 1995 and had been current with the county in its property tax payments until falling delinquent in 2005.
Marshall contends that she and Burcham entered into a telephone agreement in October 2008 stating that Classic would satisfy the company’s delinquent taxes by paying $300 against the past-due amount on the seventh day of each month.
However, the motion states that on Oct. 29, 2008, Marshall was involved in a “catastrophic motor vehicle accident” that resulted in “numerous severe and permanent injuries” including a brain contusion that induced a weeklong coma. Marshall’s attorney Warren Morford, Jr. said Friday his client is still currently disabled due to the accident.
The crash also resulted in Marshall having memory loss, neurological and cognitive deficits including amnesia and the inability to “handle activities of daily life, including financial affairs,” according to the filing.
Marshall claimed in the complaint that if it were not for the amnesia, she “would have seen to it that Classic complied with its agreement” with the county.
The company also states the property was not outside of the state’s mandated two-year window in order to be placed on the list of delinquent properties since a $600 partial payment was made to treasurer’s office in March of this year.
Morford said that the title has not been transferred back to his client, as Kathy Kraztenberg, the property’s current owner, was not party to the original complaint.
“My client expects the title to be returned,” Molford said.
Assistant County Prosecutor Kevin Waldo, who represented the county at the auction, did not return calls to his office and cell phone seeking comment.
Ironton-based attorney Mark McCown, representing Kathy Kratzenberg, said that neither he nor his client would discuss the current complaint saying, “we do not comment on pending litigation.”
A hearing on the complaint has been set for Sept. 9 at 2:30 p.m. in the courtroom of Common Pleas Judge D. Scott Bowling.
Also included in Marshall’s complaint were allegations that Kratzenberg’s husband, Jim, was an employee of Burcham’s office and as such, broke state ethic laws by benefiting from “personal gain” as both a county employee and party participant in the auction.
It alleges Jim Kratzenberg conducted title searches, research to determine real estate delinquent on taxes and recommendations as to which parcels need to be put up for foreclosure for Burcham.
Burcham categorically denied Marshall’s allegations.
“He was never employed by my office in any capacity,” Burcham said by phone on Friday.
McCown agreed, saying he checked into the allegation because Kathy Kratzenberg is his client.
“I have spoken with both the treasurer’s office and the prosecutor’s office and both have adamantly indicated he was never employed in any capacity by the either of those two offices,” McCown said. McCown is not representing Jim Kratzenberg regarding this complaint.
Jim Kratzenberg, who owns numerous properties in Lawrence County, was a frequent bidder in this year’s delinquent property tax auctions, having bought nearly 20 parcels combined during the three sessions held July 2, July 16 and Aug. 20.
The first two auctions required bids to meet a minimum reserve of the past-due amount plus $250 in court costs, while the third auction set minimum bids under the past-due amount following appraisals of each property.
In total, all three auctions and those parcels that were saved from the sale following owner repayment of the debt resulted in more than $338,000 in bids, payments and fees for the county and its school districts.
The county started out with more than 200 parcels against which legal action was taken and all properties were at least two years delinquent before being placed up for auction.
All prospective bidders were required to pre-register with Burcham’s office.
Because of the reduced rates being offered at the third auction, bidders were required to sign an affidavit declaring they were not the current property owner or an agent bidding on behalf of the deficient owner.
Further, the affidavit required successful bidders not to transfer the deed back to the original property owner.
Lawrence County officials were able to auction the delinquent parcels as property tax liens trump most any other liens.
A tax lien sits above a mortgage, deeds of trust, mechanic’s liens and even judgment holder’s liens.
However, winning bidders are only satisfying the tax lien on the property and have to absorb any other outstanding debts associated with it.
Further, Ohio law clearly favors property owners in matters such as this and allows numerous opportunities for title-holders to keep their land, provided they settle the tax debt.
Even after the tax sale, delinquent property owners have until the entry of confirmation is officially filed to redeem their property.
While rare, should that happen, the winning bidder is refunded his or her money.