Tax Lien Foreclosures - Recovery of Attorney's Fees
The Arizona legislature, probably with some good ol' vested interest prodding, provides a nice little mechanism to insulate tax lien investors from some of their down-side risk. Under A.R.S. Section 42-18206, any person who redeems a tax lien after they have been personally served with a complaint seeking to foreclose their right to redeem then becomes responsible for the costs and reasonable attorney's fees that the investor instituting the action incurred. Sometimes it is very difficult to get the owner of record or any other interested party in a given parcel, subject to a tax lien, personally served. Indeed, sometimes it is not possible to effect personal service in the way we normally think of people getting served - a process server handing the lawsuit to the person - because they are evading service or cannot be located despite diligent efforts. Consequently, a person sometimes must be served by publishing a copy of the summons in a newspaper for four weeks in the county that the person is believed to live in and the property is located.
In Richie v. Salvatore Gatto Partners, Division I of the Arizona Court of Appeals faced the legal question of whether an award of attorney's fees and costs under A.R.S. Section 42-18206 may be triggered by initiating service of process via publication or is available only after completion of the publication process under the Arizona Rules of Civil Procedure.
The appeals court ruled that the entitlement to an award under the statute requires completion of service. The court reasoned that because the redemption occurred before the conditions to perfect service by publication were met, service of process was not actually complete. Merely initiating service, but not completing service was not sufficient for an award of fees.
I find it hard to believe that the trial court ruled the other way on this one. It seems pretty clear that you need to actually complete service before you are entitled to fees.
