A 94-year-old Minneapolis woman did not receive any of the $40,000 from the sale of her condo after the county sold her home because she owes $15,000 in unpaid taxes and penalties.
Geraldine Tyler didn’t take it lightly and took her case to the Supreme Court.
Tyler will get another day in court to try to recover some of the money after Hennepin County withheld the entire $40,000 when she sold her condominium on the unpaid bill. Oral arguments in the case concluded on Wednesday. A decision is likely to be issued Thursday.
The county seized ownership of the one-bedroom apartment in 2015 after it said it did nothing to keep its one-time residence and sold the apartment the following year.
In this case, the county argued, Tyler made it clear she wanted nothing to do with the apartment in the five years she owed in back taxes. There was no explanation as to why Tyler stopped paying her estate taxes when she moved out of the apartment, where she had lived since 1999.
Geraldine Tyler, 94, of Minneapolis, Hennepin County seized her condo in 2015 after she didn’t pay her taxes for five years — $2,300 total
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 one-bedroom apartment was seized by the county in 2015 after it said it did nothing to keep its one-time residence.
In court papers, the county said Tyler could have sold the property and keep whatever was left after paying off the mortgage and taxes, refinancing her mortgage to pay the tax bill, or signing up for a tax-paying plan.
Why in the world is that Tyler moved away from her home? The reason, we believe, is because there was no equity in the house, said Neil Katyal, who represents the county.
Pacific Legal said Tyler left the apartment for “health and safety” reasons.
The county said Tyler did nothing from 2010 to 2015, until after authorities followed state law and sold the apartment. The county wrote: Tyler believes “the Constitution requires the state to act as its real estate agent, sell the property on its behalf, and write a check for the difference between the tax debt and the fair market value.”
Minnesota is among nearly a dozen states and the District of Columbia that allow local jurisdictions to keep excess funds, according to the Pacific Legal Foundation, a not-for-profit equity-focused law firm that has represented Tyler in the Supreme Court.
At least 8,950 homes were sold due to unpaid taxes, and previous owners received little or nothing in those states between 2014 and 2021, according to Pacific Legal.
Still, the justices appeared to be in broad agreement with Tyler’s attorney’s arguments that Hennepin County, Minnesota, violated the Constitution’s prohibition on seizing private property without “just compensation.”
In this case, the county argued, Tyler made it clear she wanted nothing to do with the apartment in the five years she owed in back taxes. There was no explanation as to why Tyler stopped paying her estate taxes when she moved out of the apartment, where she had lived since 1999.
County said in court papers that Tyler could have sold the property and keep whatever was left after paying off the mortgage and taxes, refinancing her mortgage to pay the tax bill, or signing up for a tax-paying plan.
At the bottom, it says the county took her property and made a profit on the excess equity. ‘It belongs to her,’ said Judge Clarence Thomas.
Judges Elena Kagan and Neil Gorsuch said the county’s position appears to be that it can forfeit millions of dollars’ worth of property over small tax bills. “So $5 property tax, million dollar property, you good to go?” asked Gursosh Katyal.
Katyal basically said yes, noting that the Supreme Court in 1956 upheld New York City’s decision to keep the $7,000 she received for selling a property she confiscated on a $65 water bill.
Katyall has tried to appeal to conservative judges in particular with references to history dating back to 1272 and invoking recent court rulings that dropped Roe v. Wade and expanded gun rights.
History and tradition figured prominently in those voluminous rulings, but Katial did not attract any conservative support in the court’s final arguments until her new term begins in October.
“And I don’t understand how on earth any of that history has anything to do with this issue,” Gorsuch said.
Christina Martin, who represents Tyler, returned even before Katyall to make a key point about fairness, saying that Magna Carta in 1215 made it clear “that government cannot take more than it deserves.”
Lower courts sided with the county before the justices agreed to intervene.
The Supreme Court seemed likely on Wednesday to give Geraldine Tyler another day in court to try to recover some of the money
At the bottom, it says the county took her property and made a profit on the excess equity. Justice Clarence Thomas (front row, second left) said: It belongs to her
Minnesota and a handful of states and state associations support the boycott, warning that the Supreme Court ruling could tie the hands of local governments that rely on property taxes.
But the bulk of the support in court filings is with Tyler, including AARP, business groups, real estate interests, and others who have had similar experiences to hers.
The Biden administration has told the court that Tyler’s claim that her property was seized without fair compensation, in violation of the Fifth Amendment, is its strongest argument.
Tyler also raises an allegation that Minnesota law violates the Eighth Amendment’s prohibition on excessive fines. But if the Court rules in her favor based on the Fifth Amendment, she doesn’t have to decide the other case.
A decision in Tyler v. Hennepin County, Minnesota, is expected by late June.
