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Purchaser agreed to pay property assessments

Petitioners Delancey Street Financial LLC and Delancey Street Financial II, LLC initiated this action requesting this court to compel its Clerk to “cause the lien of taxes, levies, and assessments to be marked satisfied upon the list of delinquent lands regardless of whether the same shall have been paid in full” following confirmation of a judicial sale, pursuant to Code §8.01-98. Delancey has moved for summary judgment, and all parties involved have submitted a joint stipulation of undisputed facts.

Delancey argues that Code § 8.01-98 directs a clerk, following a judicial sale, to mark as satisfied the lien of assessments, regardless of whether they have been paid in full at the time of sale; the clerk purportedly has no discretion. An amendment to Code § 15.2-5158(A)(9), which preserved such assessments, was enacted in 2015, after the date of the sale and court order, so at the time of sale there was no law in place to prevent the original assessment from being marked as satisfied.

This argument ignores two facts: (1) at the time of purchase, Delancey contractually agreed to pay the ongoing assessments, and (2) Delancey sought to intervene in the approval of the sale and argued to the court that the ongoing CDA assessments amounted to a financial burden that reduced the value of the property, thereby justifying a reduced price based on an adjusted appraisal. The Special Commissioner then filed a Memorandum in Support of a Decree of Non-Confirmation asserting that the issue of the installments as an outstanding obligation was a factor for the court to consider and ultimately filed a Memorandum in Support of Entry of a Final Decree based upon this fact. Thus, the parties and the court relied on this assertion.

Further, U.S. Bank, as an intervenor in this action, correctly contends that Delancey’s claim is barred by issue preclusion because it already argued that it should not be subject to the assessments after May 31, 2014 due to delayed closing. This argument was rejected by the court. Thus, the concept of res judicata can properly be applied to the present parties – and would operate to bar Delancey’s current request.

U.S. Bank is also correct that, under Delancey’s interpretation of Code § 15.2-5158(A)(9), bond holders would be denied payments that they had anticipated; such a result would work an injustice to those bond holders who were not notified of this change in position. To follow Delancey’s request would thus lead to an end result that would divest the bond holders of expected revenues without notice – a result that on its face is worrisome.

Judicial estoppel also bars Delancey’s request. Although Delancey contends that it presents a question only of law, not fact, this argument fails to address the basic question: Was Delancey obligated to pay the ongoing assessments?

This question can be answered in numerous ways, but one point is evident: Delancey agreed by contract to make the payments, argued to the court that this fact should permit a reduced price, and secured a favorable price; the court and the Special Commissioner relied on those positions, to which Delancey secured a benefit. Accordingly, the basic elements of judicial estoppel are met.

Delancey’s motion for summary judgment is denied; U.S. Bank’s cross-motion is granted.

Delancey Street v. Clerk, Stafford Cir. Ct., Case No. CL 16000705-00, Feb. 8, 2018; Stafford Cir. Ct. (Willis). VLW No. 018-8-012, 7 pp.