Luana Savings Bank v. John Eveland

IN THE COURT OF APPEALS OF IOWA

No. 21-0752
Filed April 13, 2022

LUANA SAVINGS BANK,
Plaintiff-Appellant,

vs.

JOHN EVELAND, ET AL.,
Defendant-Appellee.
________________________________________________________________

Appeal from the Iowa District Court for Clayton County, Alan Heavens,

Judge.

Luana Savings Bank appeals the district court’s order granting judgment in

favor of John Eveland. AFFIRMED.

John E. Lande and William M. Reasoner of Dickinson, Mackaman, Tyler &

Hagen, P.C., Des Moines, for appellant.

Charles P. Augustine of Klatt, Augustine & Rastede, P.C., Waterloo, for

appellee.

Considered by Bower, C.J., and Vaitheswaran and Chicchelly, JJ.
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VAITHESWARAN, Judge.

This appeal involves a tax sale under Iowa Code chapter 446 (2019), the

right of redemption under chapter 447, and issuance of a tax deed under chapter

448.

A county treasurer is to offer property subject to delinquent taxes for public

sale. See Iowa Code § 446.7. The purchaser will receive a tax sale certificate

from the county. Id. § 446.29. The property owner, or an interested party such as

a mortgagee, has two years to redeem the property from the certificate holder. Id.

§§ 447.1, .5. After one year and nine months, the tax sale certificate holder may

serve a notice, stating in part, “the right of redemption will expire and a deed for

the parcel be made unless redemption is made within ninety days from the

completed service of notice.” Id. § 447.9. “The notice shall be served by both

regular mail and certified mail to the person’s last known address and such service

is deemed completed when the notice is deposited in the mail and postmarked for

delivery.” Id. § 447.9(1). The right of redemption period “begins as provided in

section 447.12.” Id. Under that section, “[s]ervice is complete only after an affidavit

has been filed with the county treasurer.” Id. § 447.12. Once the ninety-day

deadline expires, the county treasurer must issue the tax certificate holder a tax

deed. Id. § 448.1. “Where service is incomplete, the right of redemption is not cut

off and no valid tax deed can issue.” Nelson v. Forbes, 545 N.W.2d 576, 582 (Iowa

Ct. App. 1996). “[T]he statutory provisions as to notice found in chapter 447 must

be strictly complied with before parties are deprived of their property.” Id.; see

Rehr v. Guardian Tax Partners, Inc., No. 16-1962, 2017 WL 1401569, at *3–5

(Iowa Ct. App. Apr. 19, 2017) (affirming the district court’s finding that the affidavit
3

of service did not comply with section 447.12 where it failed to specify the individual

who served the notice).

Luana Savings Bank (LSB) held a mortgage on real estate located in

Clayton County, Iowa. When the owner failed to keep up with property tax

payments, the county put the property up for sale. John Eveland paid the

delinquent taxes and received a tax sale certificate. In time, Eveland’s attorney

served LSB and others with a notice of expiration of the right of redemption.

Eveland’s attorney used metered mail rather than a United States Postal Service

postmark on the notice sent to LSB. He followed up by filing an affidavit of service

with the Clayton County Treasurer. The property was not redeemed during the

ensuing ninety-day redemption period, and the county treasurer conveyed a tax

deed to Eveland.

LSB sued Eveland and others alleging “defects in the [a]ffidavit of

[c]ompleted [s]ervice.” LSB asked the district court to set aside the tax sale

because “it did not receive notice of its right of redemption as required by Iowa

Code [chapter] 447.” Eveland filed a motion for summary judgment, which the

district court denied. Following trial, the court filed a comprehensive order

addressing each aspect of the notice, service, and affidavit requirements. The

court concluded LSB did not show “that Eveland failed to comply with any statutory

requirements necessary to receive a tax deed.” In a second equally

comprehensive order, the court denied LSB’s motion for enlarged findings and

conclusions.

The primary issue LSB raises on appeal is whether the notice Eveland

mailed to LSB was properly “postmarked for delivery” within the meaning of Iowa
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Code section 447.9(1), in light of the attorney’s use of a postage meter.1 The Iowa

Supreme Court addressed the question in Severs v. Abrahamson, 124 N.W.2d

150, 153 (Iowa 1963). There, the court was asked to decide whether a postage

meter satisfied a statutory postmark requirement contained in what is now Iowa

Code section 452A.61.2 Severs, 124 N.W.2d at 151–53. The court began with the

“known fact that postage meters had been in common business use long before”

the time the statute was enacted. Id. at 151. Indeed, “the postmaster general . . .

promulgated rules and regulations bearing on the use and handling of the postage

meters and the mail run through them.” Id. After taking “judicial notice of such

rules and regulations,” the court cited several regulations equating meter stamps

with postmarks. Id. at 153. Applying a common definition of “postmark” which

included “both the meter stamp affixed by the sender and the postmark affixed by

a post office employee,” the court concluded

the General Assembly intended to include in the term “postmarked”
as used in [now section 452A.61] both the affixing by the sender of
a meter stamp by use of a postage meter to an envelope deposited
in the mail and the affixing of a postmark by a post office employee.

1 LSB also takes issue with Eveland’s claimed failure to “send the expiration notice
by certified mail.” Eveland counters that LSB did not raise that claim at trial and it
is not preserved. In fact, the claim was raised and addressed. The district court
stated, “Paragraph 3 of Eveland’s affidavit (Exhibit B) states the notices were sent
by certified mail and there are certified mail return receipts in evidence (Exhibit C).
Eveland clearly sent the expiration notice to LSB via certified mail.” On our de
novo review, we discern support for the court’s finding. See Strong v. Jarvis, 524
N.W.2d 675, 677 (Iowa Ct. App. 1994) (setting forth standard of review).
2 The court construed Iowa Code section 324.60 (1958), which stated: “The reports

and remittances required under this chapter shall be deemed filed within the
required time if postpaid, properly addressed and postmarked on or before
midnight of the day on which due and payable.” Severs, 124 N.W.2d at 151. That
provision has not materially changed.
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Id. at 153.3 The court reasoned, “Both [postmarked mail and metered mail] serve

the same purpose and have the same safeguards. If the legislature had intended

otherwise it would have so stated. Where more safeguards are desired it has so

stated.” Id.

LSB contends “Severs is no longer controlling” because the opinion “relied

on postal regulations and definitions that were in effect in 1963.” True. But

the substance of those postal regulations and definitions has not changed. The

regulations quoted by the court on the “[u]se of [m]eter stamps,” logistical details

of usage, the benefits of meter stamps, and safeguards for ensuring a correct date

of mailing have been incorporated into the United States Postal Service’s Domestic

Mail Manual, which in turn has been incorporated into the Federal Register,

thereby becoming an official rule of the agency. 39 C.F.R. § 111.1 (2022); see

U.S. Postal Serv., Domestic Mail Manual: 604 Postage Payment Methods and

Refunds §§ 4.1.1, 4.1.2(a), 4.1.5, 4.2.1, 4.6.3, https://pe.usps.com/text/dmm300/

604.htm#ep1080496 (last visited Apr. 5, 2022) (defining postage meters as

“postage evidencing systems” that “allow download, storage, and accounting of

postage in the device”; stating “[m]ailers may use postage evidencing systems, as

provided by standard, to affix or apply indicia on any class of mail except

[p]eriodicals and [b]ound [p]rinted [m]atter”; authorizing deposit of metered mail “at

any Postal Service facility”; and stating a customer who enters into an agreement

authorizing the use of postage evidencing systems “accepts responsibility for

3 LSB cites the Black’s Law Dictionary definition of “postmark.” But the court stated
“[i]t is not necessary to consider it as a technical word.” Severs, 124 N.W.2d at
152.
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control and use of the system and agrees to abide by all rules and regulations

governing its use”).4 As the court underscored almost half a century ago,

No one dealing with mail, or providing for use of the postal system,
can be heard to say he did not intend the use to be in accord with post
office department rules and regulations and the acts of Congress.
Only Congress regulates the mails in this country. U.S. Const., art. I,
§ 8. We think the General Assembly is charged with such knowledge
in enacting section 324.60.

Severs, 124 N.W.2d at 151–52. Severs is controlling. In the district court’s words:

The case for distinguishing Severs out of existence due to
subsequent events since 1963 is not well supported. To the contrary,
LSB’s position is severely undermined by the many states who
followed the lead of the Iowa Supreme Court and found that private
meter marks are “postmarks” under statutes which are required to be
strictly construed. Severs has all the appearances of a fine wine
getting better with age as opposed to the stale beer LSB thinks it is.

On our de novo review, we fully concur in the court’s findings, analysis, and

conclusion. Eveland satisfied the requirements of sections 447.9 and .12 and was

entited to a tax deed.

AFFIRMED.

4 LSB points to a Postal Service handbook containing a definition of postmark. See
U.S. Postal Serv., About § 1-1.3, https://about.usps.com/handbooks/po408/
ch1_003.htm (last visited Apr. 5, 2022). While the handbook defines a postmark
as “an official Postal Service imprint applied in black ink on the address side of a
stamped mailpiece,” it also states, “[p]ostmarks are not required for mailings
bearing a permit, meter, or precanceled stamp for postage, nor to pieces with an
indicia applied by various postage evidencing systems.” Id.