Summary
The Oklahoma Supreme Court reviewed a district court order certifying a class action brought by Marshall County concerning allegedly unpaid documentary stamp taxes on foreclosure-related sheriff's deeds. The court held that counties have standing to seek declaratory or injunctive relief regarding the Documentary Stamp Tax Act but may not sue to collect unpaid taxes or pursue related fraud and conspiracy claims. The class certification order under the damages provision was reversed, and the case was remanded for consideration of possible certification for equitable relief.
Topics
Practice areas
Questions Presented
- Whether the Supreme Court had jurisdiction to review the district court's interlocutory order denying defendants' motion to dismiss for lack of standing.
- Whether Marshall County had standing to prosecute claims seeking collection of unpaid documentary stamp taxes.
- Whether the district court properly certified a class of Oklahoma counties under 12 O.S. Supp. 2013 § 2023(B)(3).
- Whether the record was sufficiently developed to permit certification under 12 O.S. Supp. 2013 § 2023(B)(2).
- What standard of appellate review applies to class-certification orders entered after November 1, 2009.
Holdings
- The district court's order denying defendants' motion to dismiss for lack of standing was not appealable as a matter of right at that stage and was not properly certified for immediate appeal; the appeal from that order was dismissed.
- Marshall County lacks standing to sue to collect unpaid documentary stamp taxes, but it has standing to seek declaratory and injunctive relief concerning whether a conveyance is subject to the tax or whether an exemption is warranted.
- The district court erred in certifying a damages class under section 2023(B)(3) because Marshall County lacked standing to pursue monetary claims for unpaid documentary taxes.
- The record was insufficient for the Supreme Court to determine whether the County could satisfy the commonality and other prerequisites for certification of a declaratory or injunctive-relief class under section 2023(B)(2); the issue was remanded for further proceedings.
- Class-certification orders entered after November 1, 2009, are reviewed de novo because class certification resolves a question of law for appellate purposes.
Key quotations
“We hold that it is not because a county does not have standing to sue to collect unpaid documentary taxes.” (¶ 1)
“What the County may not do is sue to collect unpaid documentary taxes.” (¶ 12)
“The asserted common issues must make some difference in the case.” (¶ 16)
Factual background
JPMorgan obtained a mortgage-foreclosure judgment, successfully bid at the sheriff's sale, assigned its interest to Homesales at the confirmation hearing, and caused a sheriff's deed to be issued and recorded in Homesales's name. No documentary tax was paid because the deed claimed an exemption for deeds executed in foreclosure proceedings where the grantee is the mortgage holder. Marshall County alleged that Homesales was not entitled to the exemption and sought to collect documentary taxes, asserting similar claims concerning hundreds of foreclosure-related conveyances.
Procedural history
Marshall County sued Homesales, JPMorgan, and Howell concerning allegedly unpaid documentary stamp taxes on a sheriff's deed issued in a mortgage foreclosure proceeding. The district court denied defendants' motion to dismiss, later certified a class consisting of all seventy-seven Oklahoma counties under section 2023(B)(3), and defendants appealed. The Supreme Court dismissed the appeal from the nonappealable denial of the motion to dismiss, reversed the class-certification order, and remanded for consideration of possible certification under section 2023(B)(2).
Remand instructions
Reverse the order certifying the class under 12 O.S. Supp. 2013 § 2023(B)(3), and remand for consideration of the County's request to certify a class under section 2023(B)(2), including whether the County can satisfy the statutory prerequisites and demonstrate commonality.