McKeithen, etc. v. City of Richmond - Validity of a tax lien

Published: June 20, 2023, 4:43 p.m.

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The case involves the validity of a lien and the distribution of funds related to a property sale.\\xa0The Caldwell Trust had a lien on the property, which was subject to a tax lien by the City of Richmond.\\xa0The Caldwell Trust argues that the judgment lien is an interest in property rights, protected under both the US Constitution and the Virginia Constitution.The City of Richmond argues that the Caldwell Trust's lien is subordinate to the tax lien and the deed of trust, which must be satisfied first.

The trial court found that the deed of trust had a lien of $14,000, which the Caldwell Trust does not challenge.\\xa0The Caldwell Trust argues that the City of Richmond cannot keep the $14,000, as it is not entitled to it.\\xa0The City of Richmond argues that it can keep the money if the first lien holder does not show up within two years, according to a statute.\\xa0The Caldwell Trust argues that the statute is problematic and violates property rights.

A writ was granted on the following issues:

The Trial Court erroneously ruled that Appellant\\u2019s lien claim established under Va. Code \\xa7 58.1-3967 to the net tax sale proceeds to be distributed after payment in full of the City of Richmond\\u2019s statutory tax lien is not a constitutionally protected private property interest in the Disputed Tax Sale Proceeds.

The Trial Court erroneously failed to rule that the provisions of Va. Code \\xa7 58.1-3967 granting the City of Richmond the right to the Disputed Tax Sale Proceeds remaining after satisfaction of all obligations due the City of Richmond under its statutory tax lien was an unconstitutional taking of the Caldwell Trust\\u2019s property right in the Disputed Tax Sale Proceeds without just compensation under the United States and Virginia Constitutions.

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