A 94-year-old Minneapolis woman did not receive any of the $40,000 from the sale of her apartment after the county sold her home because she owed $15,000 in unpaid taxes and fines.
Geraldine Tyler didn’t take that lightly and has taken her case all the way to the Supreme Court.
Tyler gets another day in court to try to recover some money after the Hennepin County kept the entire $40,000 when it sold her condominium over the unpaid bill. Oral arguments in the case closed on Wednesday. A decision is likely to be made on Thursday.
The county seized title to the one-bedroom apartment in 2015 after it said it did nothing to hold on to its one-time residence and sold the apartment the following year.
In this case, the county argued that Tyler had made it clear she wanted nothing to do with the apartment in the five years she owed back taxes. There’s no explanation as to why Tyler stopped paying her property taxes when she moved out of the apartment she’s lived in since 1999.
Geraldine Tyler, 94, of Minneapolis, had her apartment foreclosed by Hennepin County in 2015 after failing to pay her taxes for five years — a total of $2,300
A year later, the house sold for $40,000 and the county kept the money, as Minnesota is one of the states that allows local jurisdictions to keep the money. The county seized title to the one-bedroom apartment in 2015 after it said it did nothing to hold on to its one-time residence
The county said in court documents that Tyler could have sold the property and kept what 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.
“Why on earth would it be that Tyler ran away from her house? The reason, we believe, is that there was no equity in the home,” said Neal Katyal, who represents the county.
Pacific Legal said Tyler left the apartment for “health and safety reasons.”
Tyler did nothing from 2010 to 2015, the county said, until authorities followed state law and sold the apartment. The county wrote: Tyler believes that “the Constitution requires the state to act as its real estate agent, sell the property on its behalf and issue a check for the difference between the tax liability and fair market value.”
Minnesota is one of about 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 Tyler represented at the Supreme Court.
According to Pacific Legal, at least 8,950 homes have been sold between 2014 and 2021 due to unpaid taxes, and former owners in those states have received little or nothing.
However, the judges seemed to broadly agree with Tyler’s attorney’s arguments that Hennepin County, Minnesota, violated the Constitution’s prohibition against taking private property without “just compensation.”
In this case, the county argued that Tyler had made it clear she wanted nothing to do with the apartment in the five years she owed back taxes. There’s no explanation as to why Tyler stopped paying her property taxes when she moved out of the apartment she’s lived in since 1999.
The county said in court filings that Tyler could have sold the property and kept what 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
“Actually, she’s saying the county took her property and made a profit on her excess assets. It’s hers,” Judge Clarence Thomas said.
Judges Elena Kagan and Neil Gorsuch said the county’s position appeared to be that it could seize multimillion-dollar properties because of minor tax bills. “So a $5 million dollar property tax ready to go?” Gorsuch asked Katyal.
Katyal essentially said yes, noting that in 1956 the Supreme Court upheld New York City’s decision to keep the $7,000 it received for the sale of a property it seized over a $65 water bill.
In particular, Katyal sought to appeal to the conservative justices by citing history dating back to 1272 and invoking 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 seem to gain conservative support in the court’s final arguments until the new term begins in October.
“And I just don’t understand what that history has to do with this case,” Gorsuch said.
Christina Martin, representing Tyler, went back even before Katyal to make a fundamental point about fairness, saying that in 1215 the Magna Carta made it clear “that the government could not take more than it owed.”
Lower courts sided with the county before the judges agreed to intervene.
The Supreme Court on Wednesday looked likely to give Geraldine Tyler another day in court to try to recover some money
“Actually, she’s saying the county took her property and made a profit on her excess assets. It’s hers,” said Judge Clarence Thomas (front row, second from left).
Minnesota and a handful of states and government associations support the county, warning that a Supreme Court ruling could tie the hands of local governments dependent on property taxes.
But most of the litigation support is with Tyler, including AARP, corporate groups, real estate interests, and other people who have gone through experiences similar to hers.
The Biden administration told the court that Tyler’s claim that her property was taken without just compensation, in violation of the Fifth Amendment, is the strongest of its arguments.
Tyler also argues that Minnesota law violates the Eighth Amendment’s ban on excessive fines. But if the court decides in its favor based on the Fifth Amendment, it doesn’t have to decide the other issue.
A decision in Minnesota’s Tyler v. Hennepin County is expected in late June.