6337 Annotations: Reacquisition by Prior Owner- Levy

Redemption of Properly: Reacquisition by Prior Owner

[80-2 USTC ¶9826]Russell Russo, Plaintiff v. United States of America; Jerome Kurtz, Commissioner of the Internal Revenue; Prescott A. Berry, District Director of the Internal Revenue; and Joseph Garwood, Defendants

U. S. District Court, Dist. Ariz. , No. CIV 79-103-TUC-RMB, 10/28/80

[Code Secs. 6325 and 6337]

Federal tax lien: Seizure: Redemption: Resumption of lien.--A prior owner's acquision of property, which he originally purchased subject to a tax lien, from a tax sale purchaser was a redemption rather than a purchase transaction. He, therefore, remained liable on the tax lien since the redemption returned the property to its presale status. His argument that, as a purchaser, he was an assignee of the certificate of sale and entitled to a deed was rejected.

Russell Russo, pro se., Russo, Cox, Dicker, Cartin & Sylvester, 4301 East 5th Street, Tucson, Ariz. 85711. Michael D. Hawkins, United States Attorney, Phoenix, Ariz. 85025, Max H. Lauten, Department of Justice, Washington, D. C. 20530, for defendants.

Order

BILBY, District Judge:

Plaintiff commenced action in April 1979 against the United States of America and three officers of the Internal Revenue Service. Prayers for relief included restraint of sale of real property, issuance of quitclaim deed on property to the plaintiff, judgment to quiet title, compensary and punitive damages, and other related relief. The case is now before the Court on defendants' Motion to Dismiss or for Summary Judgment.

On April 14, 1975 , the IRS made an assessment against R. C. Agnew for $15,182.97. On June 27, 1975 , the IRS filed a Notice of Federal Tax Lien relating to the assessment. At that time, Agnew owned the property involved in this litigation and, hence, the tax lien attached to the property. By Joint Tenancy Deed dated January 2, 1976 , Agnew conveyed the property to the plaintiff and his wife. The deed was recorded on January 13, 1976 . On June 4, 1976 , the IRS seized the property pursuant to I. R. C. §6331 and on September 14, 1976 , held a public auction on the property pursuant to I. R. C. §6335. An M. Levkowitz was the successful bidder, and upon payment of $500 the IRS issued a certificate of sale to him.

On September 29, 1976, the plaintiff paid Levkowitz $508.33 for his interest in the property and they executed a document entitled "Redemption." The character of this transaction is the heart of the controversy. ¹ The plaintiff claims that he bought and had assigned to him the property and the document entitled "Redemption" does not represent a redemption as provided in I. R. C. §6337(b). Defendant contends that the plaintiff redeemed the property from Levkowitz pursuant to Section 6337(b) for the amount of purchase, $500, plus the statutory interest of $8.33 within the 120 days provided for in the statute. By letter dated October 7, 1976, the plaintiff advised the IRS that he had redeemed the property and provided them with a copy of the document. By letter dated November 18, 1976, the IRS advised the plaintiff that the redemption placed the property back in presale status; thus, the tax lien remained on the property. The IRS advised the plaintiff of the discharge provisions under I. R. C. §6325(b). The plaintiff informed the defendant that the transaction was a purchase and requested title to the property. On December 26, 1978, the IRS seized the property and scheduled a sale for April 20, 1979. On April 17, 1979, the plaintiff filed this action, seeking a temporary restraining order and a preliminary injunction. On April 18, the temporary restraining order was denied. The IRS held the sale on April 20 and the plaintiff's son purchased the property for $4,300. The IRS issued a Certificate of Sale to the purchaser.

Defendant contends that the plaintiff redeemed the property and the effect of the redemption is to defeat the estate of the purchaser at the tax sale and to leave the title to the land where it had been had no sale taken place. Plaintiff contends that the transaction was an assignment of the Certificate of Sale and that the Internal Revenue Code provides that the purchaser at the sale or his assignee of the certificate may obtain a deed by surrendering the certificate.

I. R. C. §6338 provides that the Secretary or his delegate may execute a deed to real property sold pursuant to Section 6335 in favor of the purchaser at the tax sale upon the surrender of the Certificate of Sale provided no redemption under Section 6337 has occurred. Section 6337 establishes two methods by which an owner of real property may redeem. Prior to sale, an owner may redeem property levied upon by paying the amount due plus the expenses of the proceeding. I. R. C. §6337(a). After a sale, an owner or any person having an interest in the real estate may redeem by paying the purchaser the amount he paid for the property plus a 20% per annual interest rate within 120 days after the sale. I. R. C. §6337(b). Ascribing to such action a different intent does not alter the effect of the action. The record owner paid the tax sale purchaser the tax sale price plus the interest within 120 days of the sale; hence, the property was redeemed in the manner and time described in Section 6337(b). Therefore, the Secretary can execute no deed.

Although no federal law addresses the issue, state law interpreting similar tax sale statutes supports this result. ² As the West Virginia Supreme Court said in 1909:

But the law which gives him a privilege of redemption will not suffer him to convert it into a privilege of purchase; and whatever form the transaction may assume as between him and the tax-purchaser, the law will hold it to be in fact a redemption.

Callihan v. Russell, 66 W. Va. 524, 66 S. E. 695, 697 (1909).

IT IS ORDERED that defendants' Motion for Summary Judgment is GRANTED as a matter of law.

IT IS FURTHER ORDERED that JUDGMENT be entered in favor of the defendants and against the plaintiff.

The Clerk of the Court is directed to mail copies of this Order to all counsel of record.

¹ Counsel agreed at the time of oral argument that the essential facts are not in dispute, only the legal effect thereof.

² See Matthewson v. Hevel, 82 Kan. 134, 107 P. 768 (1910); Spears v. Spears, 136 So. 613 ( La. 1931); Dufour v. Woods, 346 So. 2d 863 ( La. App. 1977); Bente v. Sullivan, 52 Tex. Civ. App. 454, 115 S. W. 350 (1908); Hadlock v. Benjamin Drainage Dist., 53 P. 2d 1156 ( Utah 1936).

[92-2 USTC ¶50,433] Richard Rosen, and Susan Rosen, Plaintiffs-Appellants v. Jerome J. Norton, and United States of America , Defendants-Appellees

(CA-2), U.S. Court of Appeals, 2nd Circuit, 92-6072, 7/23/92 , 970 F2d 1079, Reversing and remanding an unreported district court decision

[Code Secs. 6337 and 6622 ]

Tax lien: Tax sale: Redemption: Sufficient tender.--A married couple tendered a sufficient amount to redeem their condominium, which had been sold at a tax sale to satisfy an IRS tax lien; thus, they were entitled to receive the certificate of sale from the purchaser. Although the taxpayers improperly used the annual compounding rate to calculate the amount of legally sufficient tender for redemption, in fact, the error resulted in an overpayment. Thus, the District Court erred in determining that the amount tendered was deficient, and the purchaser was not entitled to money for the taxpayers' use and occupancy of their home during litigation.

David I. Rosenberg, P.C., 660 Old Country Rd., Garden City, N.Y., for plaintiffs-appellants. Edwin L. Wolf, Wasserman, Chinitz, Geffner, Green & Wolf, 131 Jericho Tpke., Jericho, N.Y., for Jerome J. Norton.

Before NEWMAN, PRATT and WALKER, Circuit Judges.

Appeal from a judgment of the United States District Court for the Eastern District of New York, David F. Jordan, Magistrate Judge, awarding defendant Norton $84,035.65 for the Rosens' use and occupancy of their home, which was purchased by Norton at a tax sale, and dismissing the Rosens' complaint.

Reversed and remanded with instructions.

PRATT, Circuit Judge:

Because of non-payment of income taxes, the Internal Revenue Service acquired a tax lien on Richard and Susan Rosen's condominium in Syosset , New York . Jerome Norton bought the lien on April 2, 1986 , for $137,500, and paid for it in three installments throughout that month, as permitted by 26 U.S.C. §6335(e)(2)(D) . The Rosens attempted to redeem their property on September 29, 1986 , by tendering to Norton a check in the amount of $151,250. See 26 U.S.C. §6337(b) . This amount represented the $137,500 paid by Norton, plus $13,750, representing 20% per annum interest, compounded annually on the entire purchase price from April 2, 1986 . When the Rosens' attorney showed up at Norton's home with the certified check, Norton said "I refuse the tender. Good-bye", and shut the door.

The Rosens filed this action in October 1986 seeking to compel Norton to accept the tender. In 1987, then-District Judge McLaughlin, in denying summary judgment, concluded that the tender was $498.86 deficient because of the Rosens' use of an annual compounding rate, rather than the daily calculation required by 26 U.S.C. §6622 . The case proceeded, based on the assumption that the tender was deficient. Roughly five years later, the district court (David F. Jordan, Magistrate Judge), entered judgment awarding title to Norton and dismissing the Rosens' complaint. On February 14, 1992 , the district court amended the judgment. It confirmed the award of title to Norton, but in addition awarded him $84,035.65 on his counterclaim for the Rosens' use and occupancy of their house while the litigation had been pending.

It is correct that the Rosens did not use the proper method of calculation, but their error in calculating the amount of the tender actually resulted in an overpayment, not a deficiency. The district court erred by calculating daily interest on the entire purchase price from the date of sale (April 2, 1986), instead of from the date each payment was made to the IRS. Section 6337(b)(2) of Title 26 provides that the price of redemption is "the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum." Plainly, the "amount paid" by Norton was $30,000 on April 2, 1986 , $16,000 on April 16, 1986 , and $91,500 on April 28, 1986 , and it is only on these sums and from these dates that Norton was entitled to interest.

The plain language of this section also comports with common sense. Since interest is "compensation for the use or forbearance of money", Deputy v. du Pont [40-1 USTC ¶9161 ], 308 U.S. 488, 498 (1940), it would be anomalous to allow Norton to recoup compensation for monies not yet used. Norton therefore was entitled to daily interest on $30,000 for 180 days (April 2 to September 29), on $16,000 for 166 days (April 16 to September 29), and on $91,500 for 154 days (April 28 to September 29).

Under the factors in Rev. Proc. 83-7 , §1 , table 26, the following is the correct method for calculating the daily interest on the amounts paid by Norton in installment payments:

 Date   Payment Days  Factor    Interest

4/ 2/86 $30,000 180  .1036280? $ 3,108.84

4/16/86
 $16,000 166  .0951965? $ 1,523.15

4/28/86
 $91,500 154  .0880208? $ 8,053.91

                               ----------

                               $12,685.90

Thus, by tendering $13,750 in interest, the Rosens actually overpaid, rather than underpaid. Since they provided a legally-sufficient tender on September 29, 1986 , they were then entitled to have Norton surrender the certificate of sale to them. The Rosens have acknowledged that they are bound by the amount they tendered, and they have waived any claim to recover the overpayment.

In light of our conclusion that the Rosens made a sufficient tender, Norton is not entitled to any money for the Rosens' use and occupancy of their own home. The judgment of the district court is therefore reversed, and the case is remanded with a direction to enter judgment ordering Norton to accept the Rosens' tender and to deliver the certificate of sale to the Rosens upon receipt from the title company of the tendered certified check for $151,250 that was delivered to the title company in escrow, or if that escrow has been terminated, upon receipt of a substitute check in the same amount.

Reversed.

[93-2 USTC ¶50,583] Elizabeth A. Taylor, a widow, and GMAC Mortgage Corporation of Iowa, a corporation, Plaintiffs v. United States of America, Defendant

U.S. District Court, Dist. Ariz. , CIV 90-1929-PCT-SMM, 9/23/93

[Code Secs. 6337 and 7402 ]

Tax liens: Seizure and sale of property: Redemption: Evidence: Admissibility.--An IRS tax lien on property survived the seizure and sale of the property, which was redeemed by the debtor's estate within 180 days of the sale. Consequently, the lien took priority over the ultimate transferee's later acquired interest in the property. The evidence established that the debtor's estate, through its personal representative, redeemed the property and thereafter sold it to the transferee. After the redemption, the property was once again subject to the IRS's unsatisfied tax lien; the property remained encumbered since nothing occurred after the redemption to affect the lien's validity. Furthermore, the transferee's interest was secondary to the government's priority interest in the property, and there was no basis upon which to subrogate her interest to an interest acquired prior to the attachment of the IRS liens. Finally, certain documents submitted by the IRS to support its position were not inadmissible hearsay because they were not offered to prove the truth of the matter asserted, and other documents were admissible hearsay because they purported to effect an interest in real property or admissible business records.

Timothy W. Barton, Diane R. Neff, Jennings, Strouss & Salmon PLC, 2 N. Central Ave., Phoenix, Ariz. 85004-2393, for plaintiff. James P. Loss, Linda Ann Akers, 230 N. 1st Ave., Phoenix, Ariz. 85025, Eric M. Casper, Brian J. Feldman, Department of Justice, Washington, D.C. 20530, for defendant. Timothy W. Barton, Diane R. Neff, Jennings, Strouss, Salmon PLC, 2 N. Central Ave., Phoenix, Ariz. 85004-2393, for GMAC Mortgage Corp. of Iowa for plaintiff.

MEMORANDUM OF DECISION AND ORDER

MCNAMEE, District Judge:

The Plaintiffs, Elizabeth A. Taylor ("Ms. Taylor") and GMAC Mortgage Corporation ("GMAC"), filed a Motion for Summary Judgment. The Defendant, the United States , filed a Cross-Motion for Summary Judgment. The motions have been fully briefed and are now ready for the Court's consideration.

BACKGROUND

This action arises from a dispute over a piece of real property which is located in Lake Havasu City , Mohave County , Arizona (the "subject property"). The plaintiffs contest the validity of a tax lien encumbering the subject property, and have brought this suit to quiet title.

The subject property was originally owned by Jack T. Monroe (" Monroe "), who is now deceased. At the time of the Monroe 's death, he owed federal taxes amounting to $164,472.09. Accordingly, on May 2, 1988 , the Internal Revenue Service (the "IRS") issued a Levy to Laura Poling, the personal representative for Monroe 's estate. Also, the IRS filed two Notices of Federal Tax Liens against Monroe 's estate in Mohave County .

In an attempt to partially satisfy the liens, the IRS seized and then sold the subject property at a public sale on August 17, 1988 . The subject property was sold to Jerry and Jaydene Page ("the Pages") for $48,000. The Pages recorded the Certificate of Sale on August 18, 1988 .

There is no record of a redemption of the subject property by Monroe 's estate which terminated the Pages interest in the subject property. However, on or about November 16, 1988 , Laura Poling, in her capacity as personal representative for the Monroe 's estate, entered into an agreement to sell the subject property to Robert and Dana Fowler ("the Fowlers") for $67,000.

Escrow on the sale from the Monroe 's estate to the Fowlers closed on January 20, 1989 . On that date, First American Title Insurance Agency paid the Pages $52,134.02 from the mortgage loan proceeds which came from the Fowlers. The Fowlers subsequently recorded a Quit Claim Deed from the Pages to the Fowlers and a Joint Tenancy Deed from Laura Poling.

On September 18, 1989 , the Fowlers conveyed the subject property to Scott and Karen Taylor ("the Taylors ") for $77,632.59 plus costs. A joint tenancy deed was recorded. Scott Taylor is a real estate broker who had attempted to sell the subject property for the Monroe estate before the IRS seized the subject property.

Three months later, on January 12, 1990 , the Taylors conveyed their interest in the subject property to Ms. Taylor, Mr. Taylor's grandmother. There is no evidence that Ms. Taylor paid any consideration for the conveyance, or that she made the mortgage payments after the conveyance.

On October 25, 1990 , the IRS seized the subject property pursuant to 26 U.S.C. §6331 for non-payment of taxes by Jack Monroe, deceased.

The IRS has deferred further action on the subject property until this dispute is resolved.

STANDARD OF REVIEW

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). "One of the principal purposes of the summary judgment rules is to isolate and dispose of factually unsupported claims." Celotex Corporation v. Catrett, 477 U.S. 317, 323-24 (1986). A motion for summary judgment against a party is appropriate when that party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.

DISCUSSION

A. Evidence to Be considered by the Court

As a preliminary matter, the Court addresses the Plaintiffs' objections to the admissibility of several documents submitted by the Defendant to support its Motion for Summary Judgment.

Rule 56(e) of the Federal Rules of Civil Procedure provides that evidence submitted in support or opposition to motions for summary judgment must be admissible under the rules of evidence. See e.g., In re Sunset Bay Associates, 944 F.2d 1503, 1514 (9th Cir. 1991).

The Plaintiffs contend that the following exhibits are inadmissible hearsay: (1) letters from Jerry Page to the I.R.S.; (2) settlement documents regarding sale of the subject property to the Taylors; (3) escrow instructions regarding sale of the subject property to the Taylors; (4) addendum to escrow instructions regarding sale of the subject property to the Taylors; and (5) a letter from the escrow company to the IRS.

The Court finds that the letters from the Pages to the IRS are not inadmissible hearsay because the letters are not offered to prove the truth of the matter asserted. Rather, the letters show the state of mind of the Pages and are therefore admissible under Rule 801 of the Federal Rules of Evidence. The Court finds that the letters show what the Pages' belief was regarding the nature of the transaction.

As for the settlement documents, the escrow instructions, and the addendum to the escrow instructions, the Court finds that the documents are hearsay under Federal Rule of Evidence 801. However, the Court finds the documents are admissible hearsay under Rule 803(15) because they are documents purporting to affect an interest in real property.

The letter from the escrow company to the IRS is hearsay, because it is offered to show the truth of the matter asserted. However, the Court finds that document is also is admissible as a business record under Rule 803(6).

B. Whether the Subject Property was Redeemed

The Internal Revenue Code provides that, when real property has been seized and sold at a tax sale, the owner (or the owner's heirs, executors or administrators, or any person having any interest therein) can redeem the property within 180 days of the sale. 26 U.S.C. §6337 . To redeem the property, the interested party need only pay the purchaser of the property the amount which was paid by the latter at the tax sale, plus interest at the rate of 20 percent per annum. 26 U.S.C. §6337(b)(2) .

Upon redemption, the real property regains its pre-sale status, automatically revitalizing the unsatisfied tax liens. Samet v. United States [65-2 USTC ¶9520 ], 242 F.Supp. 214 (D.N.C. 1965).

The purpose behind section 6337 is to allow taxpayers whose property has been seized by the IRS to repurchase their property, if they can do so within 180 days. However, a taxpayer who owes the IRS more than the amount the IRS received for the property cannot take back the property free and clear. Redeemed property is encumbered by the remaining amounts owing on tax liens in effect before the foreclosure and public sale.

The Plaintiffs allege the subject property was not redeemed within the 180-day period. The Plaintiffs contend that the only transfer of the subject property in the 180-day period following the public sale was a sale of the subject property by the Pages to the Fowlers. The Plaintiffs further contend that, since the Fowlers are not the taxpayer or related to the taxpayer, there was no redemption.

The Court disagrees. The evidence shows that the subject property was not sold directly from the Pages to the Fowlers. The Court finds that the taxpayer's estate, through the personal representative, redeemed the subject property and thereafter sold the subject property to the Fowlers.

In particular, the evidence shows that Laura Poling was listed as seller in the escrow instructions for the sale of the subject property from the Pages to the estate of the Fowlers. Also, the amount of money paid to the Pages was $52,134.02, which reflects the $48,000 paid by the Pages to acquire the subject property, $4,080.52 in interest from August 18, 1988 to January 20, 1989 , at the statutory interest rate of twenty percent per annum as provided for in 26 U.S.C. §6337(b)(2) , plus $53.50 for miscellaneous expenses. The Pages received no additional funds for their interest in the subject property.

Further, the Plaintiffs' own pleadings controvert the argument that the transfer was a sale from the Pages directly to the Fowlers. The Plaintiffs state that the "Fowlers agreed to purchase the property from Poling, as personal representative" of the Estate. Plaintiffs' Motion for Summary Judgment, p. 3; Plaintiffs' Statement of Facts in Support of the Motion for Summary Judgment, p. 3, ¶10. In addition, the Settlement Statement from the American Title Insurance Agency of Mohave lists "Fowler" as the buyer and "Poling" as the seller. Furthermore, the Joint Tenancy Deed issued on January 20, 1989 was conveyed by Laura Poling to the Fowlers.

The only evidence the Plaintiffs produced in support of their argument that there was a bargained for exchange between the Fowlers and the Pages was a Quit Claim Deed the Pages signed in favor of the Fowlers issued December 22, 1988 . This document, however, is of little value. The Pages had no interest to pass. Section 6338 (26 U.S.C.) states that, upon the sale of seized property, the purchaser is issued a certificate of sale. If the taxpayer does not redeem the property within the 180 days and the purchaser surrenders the certificate of sale, the Secretary must issue the purchaser a deed of the real property. 26 U.S.C. §6338 . Only a deed from the government passes the right, title and interest of the delinquent taxpayer to the tax sale purchaser. 26 U.S.C. §6339(b) ; United States v. Cassel Brothers, Inc. [82-1 USTC ¶9189 ], 49 AFTR 2d. 82-856, 82-858 (M.D. Penn. 1981). "Thus, mere possession of a certificate of sale does not pass title." Cassel Brothers [82-1 USTC ¶9189 ], 49 AFTR 2d 82-858. In this case, the government never issued a deed to the Pages. Therefore, the Pages could not have passed title for the subject property when they signed the Quit Claim Deed.

C. Plaintiffs' Right to a First Equitable Lien

The Plaintiffs assert that if the Court finds there was a redemption, then the Plaintiffs are entitled to a first preferred equitable lien on the subject property for the amount of the redemption price. The Court disagrees. The Plaintiffs have not cited any relevant authority, nor can the Court find authority, in support of their claim that they are entitled to a first equitable lien.

It is undisputed that the IRS had liens on the subject property before the property was sold to the Pages. It is also undisputed that the sale of the subject property to the Pages did not totally extinguish the liens on the property nor did the Pages take title to the property.

Before the Pages could extinguish the liens and take title to the property, Poling, on behalf of the estate, redeemed the property, which kept the IRS liens intact. Then, Poling sold the property to the Fowlers, subject to all liens. Prior to that sale, the title company failed to provide the Fowlers with notice of the IRS liens. The Fowlers sold the property to the Taylors, who in turn conveyed the property to Ms. Taylor. During these subsequent sales, the property was conveyed without the IRS liens being satisfied.

Because Ms. Taylor acquired her interest in the subject property after the redemption by Monroe 's estate, her interest is secondary to the priority interest of the government. Moreover, there is no basis upon which to subrogate her interest to an interest acquired prior to the attachment of the IRS liens. Equitable subrogation does not apply. Therefore, the Court need not address further equitable principles.

CONCLUSION

The Court finds that the subject property was redeemed by the taxpayer's estate pursuant to 26 U.S.C. §6337 . Further, when the subject property was redeemed, it regained its pretax-sale status. Accordingly, after the redemption, the subject property was once again subject to Monroe 's outstanding tax lien. Since nothing has occurred since the redemption to affect the validity of the tax lien, the subject property remains encumbered.

Further, the Court finds that the Plaintiffs have no right to equitable subrogation.

IT IS ORDERED that the Plaintiffs' Motion for Summary Judgment is denied (Doc. #15).

IT IS ORDERED that the Defendant's Motion for Summary Judgment is granted (Doc. #17). The clerk is directed to enter judgment in favor of the Defendant and against the Plaintiffs.

[97-1 USTC ¶50,288] In the Matter of the Application of W.H. Shipman, Ltd

Intermediate Court of Appeals of Hawaii , 16494, 2/28/97 , Reversing and remanding an unreported Land Court judgment

[Code Sec. 6337 ]

Tax sale: Real property: Right of redemption: Prior owner.--An individual's redemption of real property sold at an IRS tax sale was valid. The state ( Hawaii ) trial court's finding that the delinquent taxpayer's accountant and her successor-in-interest did not act as her agents in an attempted redemption was held to be clearly erroneous. The accountant's letter informing the purchasers of the redemption satisfied all of the requirements of Code Sec. 6337 . The tender of the purchase price plus the proper amount of interest was sufficient to constitute a redemption. Furthermore, a written contract providing for an agency relationship between the accountant and the taxpayer was not necessary for a valid redemption. The state ( Hawaii ) statute of frauds did not apply because a redemption for purposes of Code Sec. 6337 is not a transfer of real property.

William J. Wynhoff, Gerson, Grekin & Wynhoff, 1001 Bishop St. , Honolulu , Hawaii 96813 , for respondents-appellants. Sandra Pechter Schutte, Roehrig, Roehrig, Wilson, Hara, Schutte & De Silva, for petitioners-appellees.

Before: ACOBA and KIRIMITSU, JJ. and Circuit Judge WATANAB in place of BURNS, C.J., recused.

ACOBA, Judge:

We hold in this appeal from the award of title by the land court (the court) to Petitioners-Appellees Roland Hideo Higashi, Clifton Kenichi Tsuji, Kenneth Kenichi Tanaka, and Howard Jitsuo Mimaki, purchasers at a United States Internal Revenue Service (IRS) real property tax sale under 26 U.S.C. §6337(b) (1988) (hereinafter referred to collectively as Purchasers or the Purchasers) that the court erred in ruling that the attempt by the owner, Respondent-Appellant, Shizuko Yamamoto (Yamamoto), to redeem the subject property from the Purchasers was invalid. Consequently, we conclude that Yamamoto's redemption was valid and reverse the court's September 2, 1992 judgment which cancelled Certificate of Title No. 331690 issued to Respondent-Appellant Hanalea, Inc. (Hanalea), Yamamoto's successor-in-interest, and ordered the issuance of a new certificate of title for the subject property to the Purchasers.

I.

The following relevant facts were stipulated to by the parties at the May 8, 1992 hearing before the court. ¹

On July 25 and August 31, 1988, the IRS recorded tax liens, pursuant to 26 U.S.C. §6321, ² against Yamamoto ³ in the Hawaii Bureau of Conveyances. ⁴ Because the taxes remained unpaid, on February 21, 1988, Yamamoto's property was seized by the IRS through a written notice of seizure. ⁵ The property consists of "39.258 acres of unimproved real property located at TMK 3114, parcel 5, lot number 54" located at Kea'au, Puna, on the island of Hawaii . The assessed value of the property in 1988 was $23,988.

The IRS's notice of sealed bid sale for the property, seizure no. 99-11-89-18, advertised a minimum bid price of $12,000 for the property. The notice stated that the property was seized from Yamamoto for nonpayment of taxes. The notice also quoted that portion of the Internal Revenue Code, 26 U.S.C. §6337, which provides for redemption rights in the owner of the property being sold at a tax sale.

On March 15, 1989 , the sealed bid sale was held. Clarence Ching, the president of Hanalea, submitted a bid of $15,000. Roland Hideo Higashi (Higashi), on behalf of Purchasers, ⁶ submitted the highest bid, $18,000. The Purchasers paid this amount, pursuant to 26 U.S.C. §6338(a), and received a certificate of sale (certificate) in return. The certificate included a notice to the Purchasers of the owner's redemption rights. The notice, which set forth 26 U.S.C. §6337(b), stated:

Redemption Rights

The rights of redemption of real estate after sale, as specified in Code 6337(b), are quoted below:

(b) Redemption of Real Estate After Sale .

(1) Period.--The owners of any real property sold as provided in section 6335, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.

(2) Price.--Such property or tract shall be permitted to be redeemed upon payment to the purchaser, or in case he [or she] cannot be found in the county in which the property to be redeemed is situated, then to the Secretary, for the use of the purchaser, his [or her] heirs, or assigns, the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum.

(Emphases added.)

On June 29, 1989 , Yamamoto received instructions from Rebecca Nadler (Nadler) of the IRS regarding the procedures for redemption of the property. Nadler instructed Yamamoto that she "should inform the IRS if the property is redeemed," including "the date the property was redeemed, the amount paid in order to redeem the property and to whom the funds were paid."

Subsequent to the purchase of the property, Higashi received a letter dated June 30, 1989 from Alfred Y. K. Au (Au). The letter included a receipt form and a cashier's check for $19,070 and stated that the cashier's check was for redemption of Yamamoto's property. This check represented the bid price plus the twenty percent interest earned on the bid price from the time of the purchase to the redemption. The parties do not dispute that the redemption, if valid, was timely made and the tendered amount correct.

The letterhead of the June 30, 1989 letter identified Au as a certified public accountant and included Au's address and telephone number. The letter stated:

Gentlemen:

Enclosed, please find the following:

1. First Hawaiian Cashier Check for $19,070.00 in full Redemption of Seizure Number 99-11-89-18, Sealed Bid Sale of SHIZUKO YAMAMOTO'S Puna Property TMK (3) 1-1-4-5, on March 15, 1989 .

2. Receipt for the above payment to be executed and returned by you to Shixuko [sic] Yamamoto and/or Hanalea, Inc.

3. A self-addressed envelope for your convenience in returning Receipt, Certificate of Sale, and other papers and documents.

Your prompt attention to this matter will be appreciated.

(Emphasis added.) The letter was signed by Au. The receipt form included with the letter stated:

RECEIPT

Received from SHIZUKO YAMAMOTO and/or HANALEA, Inc. the sum of Nineteen Thousand, Seventy Dollars and no/100--(19,070.00) for the redemption of her property. TMK (3) 1-1-4-5.

(Emphasis added.)

On July 5, 1989 , Yamamoto filed a deed with the court conveying the property to Hanalea. The deed reserved to Yamamoto "the exclusive non-transferable right to FIFTY PERCENT (50%) of the net profit to be derived from the operation, lease or other disposition and/or sale of said property." Hanalea was issued land court Certificate of Title No. 331690 to the property.

In response to Nadler's June 29, 1989 letter, Yamamoto wrote a letter dated July 25, 1989 to inform the IRS that (1) the property was redeemed on June 30, 1989 ; (2) Higashi was paid by cashier's check in the amount of $19,070; and (3) the payment was mailed by "Restricted Delivery." Attached to this letter was a copy of the "return receipt." At the bottom of the letter, Yamamoto stated, "If you have any questions please contact my CPA, Au . . .. He hanled [sic] the transaction for me."

On the day after the redemption period expired and over two months after Au wrote Purchasers, Purchasers sent a letter dated September 12, 1989 through their attorney to Au. The letter stated that "[Purchasers] are rejecting your purported redemption of the subject property" and returned the cashier's check for $19,070. Purchasers explained that they were rejecting the redemption because they were not provided with "any verification" that Au had an interest in the land or was acting on behalf of Yamamoto. In response, Au wrote a letter dated September 15, 1989 to Purchasers' attorney informing him that Nadler "proctored" the redemption. Au also referred to Yamamoto's July 25, 1989 letter to Nadler where Yamamoto indicated that Au was her CPA. ⁷ Au pointed out further "that [he] ha[d] expended much time locating [Purchasers] to explain the redemption provisions which is always part of foreclosure sales of real property."

On October 18, 1989 , the district director for the IRS issued a deed for the property to Purchasers. The deed stated that "more than 180 days have elapsed from the date of sale and the date of issuance of [the] Certificate of Sale" to Purchasers. ⁸

On December 19, 1989 , Higashi filed a petition pursuant to HRS §§501-144 and 501-191 ⁹ seeking to have the court registrar cancel Hanalea's Certificate of Title No. 331690 and issue a new certificate of title pursuant to the IRS deed dated October 18, 1989 . HRS §501-144 (1993) states in relevant part:

New certificate after enforcement of lien; tax sale. After registered land has been sold on any execution, or taken or sold for the enforcement of any lien of any description, the person claiming under an execution or under any deed or other instrument made in the course of proceedings to levy the execution or enforce any lien, may petition the court for the entry of a new certificate to the person, and the application may be granted. . ..

The hearing on Purchasers' petition occurred on May 8, 1992 . The court heard testimony from Clifford Kaminaka (Kaminaka), Nadler, Higashi, Au and Yamamoto.

Kaminaka worked for the IRS in Hilo as a collection officer. His duties included the seizure and sale of property. Kaminaka testified that a title search of the subject property did not reveal that either Au or Hanalea had an interest. Kaminaka also described the process for arriving at the minimum bid price and the information provided to potential bidders regarding the property. Information provided potential bidders included a list of encumbrances, the notice of sale, and an explanation of the bid procedure and of the taxpayer's redemption rights. Kaminaka related that five bids were received and that the Hanalea bid was $15,322. Kaminaka stated that it is his standard procedure to make an announcement of the amounts of the bids only and not to name the parties making bids. However, he did not specifically remember what he did at the auction involved. Kaminaka acknowledged that he issued Higashi a certificate of sale which stated Higashi was the successful bidder and that the property had been purchased for $18,000.

Nadler testified that she handled the file for the property involved in this case. Purchasers' counsel questioned Nadler about the procedure for dealing with seized property sold in a tax sale as follows:

Q. Okay. What about after the sale, what do you do?

A. We will normally look at the certificate of sale that was issued to the purchaser, we will place it in the file, and we will wait the six months time frame to see if the taxpayer redeems the property. That's to monitor the issuance of the deed.

Q. And then once the six months--if--if the six months expires, then what do you do?

A. I will normally send a short letter to the purchasers asking them to return to the [IRS] the certificate of sale and also ask them to inform us as to how it is that the buyers wish to hold the property.

Q. And what if a taxpayer wants to redeem the property, then what do you do?

A. Normally we don't really take any action per se. The redemption of the property is between the taxpayer and the buyer. The taxpayer can--usually will inform us that they have redeemed the property, and that's normally done. The taxpayer, will if possible, get back from the buyer the certificate of sale to show that they have redeemed the property.

(Emphasis added.) Nadler admitted that she received Yamamoto's July 25, 1989 letter informing her that the property was redeemed on June 30, 1989 . Nadler "believed that the property had been redeemed so [she] placed a copy of the letter in the file and closed out [the IRS's] seizure file on it."

On September 18, 1989 , Nadler received Purchasers' request that a deed to the property be issued on their behalf. Not knowing how to respond to the request, Nadler forwarded the file on the property to the IRS district counsel who subsequently issued a deed to Purchasers.

On October 20, 1989 , the file on the property was returned to Nadler. In the file was a "Record of Seizure and Sale of Real Estate" form. Nadler crossed out the entries which she had made on the form indicating that Yamamoto had redeemed the property on June 30, 1989 by paying Purchasers $19,070. On the side of the form she wrote, "see seizure file." Nadler explained that she placed that notation there because

after a decision had been made to issue the deed to [Purchasers], then the question as to whether--you can't both issue a deed and have the property redeemed, it was one or the other. So since we issued the deed, we lined out that the property had been redeemed.

During cross-examination, Nadler related that she spoke with Au on the phone and that she "believed [that] he was calling on [Yamamoto's] behalf," but she did not know "[w]hether or not [Au] formally represented [Yamamoto.]" In response to the court's inquiry, Nadler indicated that the IRS does not issue any document confirming a redemption and that title passes to the tax sale purchaser after the redemption period expires. According to Nadler, a deed issued by the IRS to the purchaser extinguishes the taxpayer's title to the property.

Higashi testified that the names of the unsuccessful bidders were read aloud after the sale and that he remembered Hanalea to be one of the bidders. He understood that "the taxpayer could redeem the property, or anyone else who had a lien on the property or a representative of the taxpayer." Referring to the June 30, 1989 letter from Au, he stated, "It did say it was to be submitted to Mrs. Yamamoto and/or Hanalea, Inc., but nowhere in that letter was [Au] very specific in saying I am the representative of [Yamamoto]." Further, he indicated that his "assumption was [that Au] was representing Hanalea, Inc." Not knowing who Au was, Higashi contacted the Department of Commerce and Consumer Affairs and obtained a list of officers for Hanalea. The list included Clarence Ching, Robert Hee, Laura Au, and Donald Hee. Higashi assumed that Au was related to Laura Au. Higashi also concluded that the redemption was invalid because Hanalea, an unsuccessful bidder, was attempting to obtain the property. Higashi admitted to talking to Au on the phone sometime in August. He did not remember the substance of the conversation, but he did remember Au told him the property was transferred to Hanalea. He did not ask Au whether he represented Yamamoto.

Au stated that he had been Yamamoto's accountant for almost thirty years and that his family owned shares in Hanalea. Au presented Yamamoto with a list of options that might aid her in resolving her tax problems. One of the options was for the Yamamoto family to purchase the property at the tax sale. Another option was for Hanalea to bid at the tax sale. Au acknowledged that he was instrumental in convincing Hanalea to place a bid for Yamamoto's property.

Au explained that the address on the letterhead of the June 30, 1989 letter was also the address for Hanalea. In addition, the letter did not identify Hanalea, nor did it expressly state that either he or Hanalea represented Yamamoto. However, Au believed his representation of Yamamoto was "presumed by [the] statement [that] Shizuko Yamamoto [was] supposed to get the receipt." Au also declared that the money for the redemption was provided by Hanalea.

On cross-examination, Au indicated that sometime in August 1989, he told Higashi over the phone that "there was a redemption and that Mrs. Yamamoto has executed a deed to Hanalea, Inc., reserving 50 percent of the profit for herself . . . [and] the check was sent on her behalf for the redemption." According to Au, Higashi told him that "one of these days I get the boys together and sign the check." Au stated emphatically that he represented Yamamoto from June 30, 1989 until September 12, 1989 and that he was convinced that the redemption of the property was valid.

Yamamoto testified that she asked "Au to handle [the] redemption of the property" for her, and she did not object to Au's representation despite his relationship with Hanalea. On cross-examination, she stated Hanalea paid for the redemption in exchange for her conveying the property to them.

After the witnesses testified, the court made oral findings. The court found that "neither Hanalea [n]or Mr. Au acted as an agent for Mrs. Yamamoto. But even if they did, there was no written contract . . . for the agency, which [the court] believe[s] would have been required." Thus, the court concluded "that it was reasonable for [Purchasers] to reject the attempted redemption" and found "that the attempted redemption was invalid." The written findings of fact, conclusions of law and order and the judgment cancelling Hanalea's Certificate of Title No. 331690 and ordering the issuance of a new certificate of title to the Purchasers were subsequently filed on September 2, 1992 .

On appeal, Yamamoto and Hanalea argue that the court erred in (1) "finding and concluding that Hanalea was not acting in behalf of Mrs. Yamamoto in attempting to redeem the property"; (2) finding that Purchasers did not waive their right to reject the redemption or were not estopped from rejecting the redemption; and (3) refusing admission of evidence showing that the IRS refused to take a position in the dispute. ¹⁰

In their reply brief, Yamamoto and Hanalea withdrew their third contention as an issue on appeal. We agree with their first contention, and therefore find it unnecessary to address their second point.

II.

We "review the land court's written decision and the entire record" to determine the correctness of the land court's decision. State v. Magoon, 75 Haw. 164, 180, 858 P.2d 712, 720, reconsideration denied, 75 Haw. 580, 861 P.2d 735 (1993). The land court's findings of fact will not be disturbed "[u]nless we are firmly convinced that a mistake has been made[.]" In re Wong, 47 Haw. 472, 478, 391 P.2d 403, 406 (1964) (per curiam) (adopting the "clearly erroneous" standard). ¹¹ The land court's conclusions of law are " 'not binding upon an appellate court and [are] freely reviewable for [their] correctness.' " AIG Hawaii Ins. Co., Inc. v. Estate of Caraang, 74 Haw. 620, 628, 851 P.2d 321, 326 (1993) (quoting Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 119, 839 P.2d 10, 28, reconsideration denied, 74 Haw. 650, 843 P.2d 144 (1992)).

III.

We first examine the operative statute.

A.

26 U.S.C. §6337 (1988) governs the redemption of property sold at tax sales by the IRS. Sections 6337(b)(1) and (2) provide in pertinent part:

(b) Redemption of real estate after sale.

(1) Period. The owners of any real property . . . their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold . . . at any time within 180 days after the sale thereof.

(2) Price. Such property . . . shall be permitted to be redeemed upon payment to the purchaser . . . the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum.

Under the sale procedure, a purchaser does not initially receive the deed to the real property. Instead, the purchaser is issued a "certificate of sale" which the purchaser must surrender if the property is redeemed within 180 days. See 26 U.S.C. §6338. The purchaser will only be issued a deed to the real property pursuant to 26 U.S.C. §6338(b) after the redemption period has expired. The deed "shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real property . . . at the time the lien of the United States attached thereto." 26 U.S.C. §6339(b)(2). The delivery of the deed to a purchaser discharges any "liens, encumbrances, and titles" which attached to the real property after the federal tax lien. 26 U.S.C. §6339(c). ¹² In contrast, after redemption, the owner obtains the real property subject to any remaining liens or tax debts not paid in the tax sale.

B.

A version of section 6337(b) has been a part of the laws of the United States since 1866. ¹³ The language of section 6337(b) remains substantially unchanged from its original version. Prior enactments of the section gave owners a longer one-year grace period within which to redeem their property. ¹⁴ The IRS adopted a regulation on the redemption of real property in 1954. However, the regulation is essentially section 6337 verbatim. See Treas. Reg. §301.6337-1 (as amended 1972). ¹⁵

Although a form of section 6337(b) has been in existence for quite some time, only a limited number of cases have construed this particular section. However, "the general rule of courts [is] to give to statutes authorizing redemption from tax sales a construction favorable to owners[.]" Corbett v. Nutt, 77 U.S. 464, 474 (1870) (interpreting Act of June 7, 18 62, §7, 12 Stat. 423 ¹⁶). Furthermore, courts have applied this general rule of liberal construction benefitting owners when interpreting section 6337(b).

In United States v. Lowe [67-2 USTC ¶9654], 268 F. Supp. 190, 191-92 (N.D. Ga. 1966), aff'd, Lowe v. Monk [67-2 USTC ¶9650], 379 F.2d 555 (5th Cir. 1967), cert. denied, 389 U.S. 1039 (1968), the issue was whether a party who was owner of a one-half undivided interest in certain real property sold at a federal tax sale and who held quitclaim deeds of the subject property was entitled to redeem the property under the provision in section 6337(b) which allows "any person having any interest" in the property to redeem. The court pointed out that "[f]rom the earliest times this right [to redeem] has been clearly recognized and jealously guarded by United States Courts." Id. at 192. Although the court acknowledged that Corbett involved a different redemption statute, it found the general rule in Corbett applicable to section 6337(b) inasmuch as Corbett "clearly show[ed] that leniency should be afforded in the redemption of property." Id. Consequently, the court held that the person had the right to redeem the property under the statute. Id.

Furthermore, the rule of liberal construction has been applied to extend redemption rights to the beneficial owner of an interest in land. In DiFoggio v. United States [79-2 USTC ¶9448], 484 F. Supp. 233, 234 (N.D. Ill. 1979), the plaintiff's beneficial interest to a land trust was sold at a tax sale. The purchaser rejected an attempted redemption by the plaintiff arguing that a beneficial interest is a personal property interest and was not covered by the statute. The court disagreed, stating that "[c]ourts traditionally looked with favor upon redemption and have given liberal construction to redemption statutes." Id. at 236 (citations omitted). Therefore, it held, "as a matter of law[,] that the owner of the beneficial interest in [a] . . . land trust is entitled to redeem that property under §6337[(b)] of the Code." Id. at 236-37. The court reasoned that the owner "should not be precluded from redeeming her property after the extraordinary remedy of seizure and sale of her home simply because her ownership rights have been labeled personal property." Id. at 236.

In Anselmo v. James [78-2 USTC ¶9696], 449 F. Supp. 922, 925 (D. Mass. 1978), the court stated that "[t]he owner's right to redeem property seized by the United States for non-payment of taxes has long been recognized . . . [and] the general rule is one of leniency to the owner[.]" (Citations omitted.)

As we discern it, the underlying rationale for liberal construction of section 6337(b) is to provide delinquent taxpayers relief from "[g]overnmental seizure and sale of land [which] is one of the most potent weapons in the government's tax collection arsenal." Reece v. Scoggins [75-1 USTC ¶9202], 506 F.2d 967, 971 (5th Cir. 1975). For "[t]he consequences of seizure and sale are often staggering and irreversible; this action not only deprives a taxpayer of a sometimes significant capital investment but also denies him [or her] a source of additional income." Id. Thus, "[t]he purpose behind section 6337 is to allow taxpayers whose property has been seized by the IRS to repurchase their property, if they can do so within 180 days." Taylor v. United States [93-2 USTC ¶50,583], 72 A.F.T.R.2d 93-6577, 93-6579 (D. Ariz. 1993). Accordingly, when applying 26 U.S.C. §6337, we liberally construe its provisions in favor of the owner/redeemer. ¹⁷

IV.

Next, we review the pertinent court findings of fact and conclusions of law.

A.

Finding of fact No. 17 states, "In the attempted redemption neither Hanalea nor Mr. Au acted as agent for Mrs. Yamamoto." In light of the redemption provision, 26 U.S.C. 6337(b), we believe that the court's finding was clearly erroneous. See Cho Mark Oriental Food v. K & K Int'l, 73 Haw. 509, 515, 836 P.2d 1057, 1061 (1992) (Trial court errs when, despite evidence to support findings, appellate court is left with definite and firm conviction upon review of whole record that a mistake has been made).

Initially, we note that the court's finding No. 15 is somewhat inconsistent with finding No. 17. Finding No. 15 states: "Mr. Au had been Yamamoto's CPA for over thirty years[,] and his motives were proper in trying to help Yamamoto with the IRS sale; however, at the time of the attempted redemption, Mr. Au was also acting as an agent for Hanalea." We might on this finding alone resolve the issue of "agency." Nothing in section 6337 prohibits Au from also acting on behalf of Hanalea (assuming that he did) as well as Yamamoto. But, in our view, there was additional evidence in the record to establish that Au redeemed the property on behalf of Yamamoto.

Au's June 30, 1989 letter satisfied all the requirements of a notice of redemption. See 26 U.S.C. §6337(b). It was addressed to the Purchasers. It referenced the proper IRS sequence number. It correctly identified the property tax number and the date of sale. It identified the property sold as having belonged to Yamamoto. It transmitted a check made out to the Purchasers in the correct amount for redemption, well within the 180-day period. It expressly indicated that the check was "in full redemption" of the sale of Yamamoto's property. It requested return of the "certificate of sale" as provided for under the statute.

The evidence presented to the court also demonstrated that Au acted "in behalf" of Yamamoto. In Yamamoto's July 25, 1989 letter to Nadler at the IRS notifying Nadler that she had redeemed the property, Yamamoto stated that "Au hanled [sic] the transaction" for her. This letter was stipulated into evidence by the parties but was not referred to by the court in its findings of fact or conclusions of law. Yamamoto's testimony that she asked Au to handle the redemption of her property was unrebutted.

The June 30, 1989 letter to Purchasers transmitting the notice of redemption, receipt, and check was written and signed by Au. Au's name, address and phone number appeared on the letterhead. Au wrote that the enclosed cashier's check was "in full [r]edemption of [the] [s]eizure" and the "[s]ealed [b]id [s]ale of SHIZUKO YAMAMOTO'S Puna Property . . . on March 15, 1989 ." A self-addressed envelope was enclosed for returning the receipt and Purchasers' certificate of sale. The attached receipt form indicated that the sum was "Received from SHIZUKO YAMAMOTO and/or HANALEA, Inc." and was "for the Redemption of her property[.]" (Emphasis added.) The fact that the return was to be made to "Shixuko [sic] Yamamoto and/or Hanalea, Inc." indicates that in sending the letter, Au was acting on behalf of Yamamoto. Moreover, Au testified that although there was no statement to the effect that he represented Yamamoto, "it is presumed by [his] statement [that] Shizuko Yamamoto is supposed to get the receipt."

In addition, Au testified that he contacted Higashi in August 1989 and informed him that

[T]here was a redemption and that Mrs. Yamamoto has executed a deed to Hanalea, Inc., reserving 50 percent of the profit for herself--for her family. And, therefore, the--there were--the check was sent on her behalf for the redemption.

And the reply I got from Mr. Higashi is that one of these days I get the boys together and sign the check.

Based upon the foregoing, we are firmly convinced that the court made a mistake in finding that Au did not act as an "agent" for Yamamoto. We believe it is clear that Yamamoto sought to have her property redeemed, and furthermore that Au acted in her behalf in doing so.

B.

In findings of fact Nos. 19 and 20, the court concluded that a written contract providing for an agency relationship between Au and Yamamoto was necessary for a valid redemption. Findings of fact Nos. 19 and 20 state as follows:

19. The Statute of Frauds, Chapter 656, Hawaii [Hawaii] Revised Statutes, requires a writing for a contract to transfer an interest in real property and the Equal Dignities Rule provides that if the underlying real estate contract requires a writing, then the agency to transfer that contract and to act on behalf of others in the transfer of the interest in real property requires equal dignity and must be in writing.

20. If there had been an agency relationship between Hanalea and Yamamoto, the relationship it [sic] could not [be] recognized by the Court since such agency was required to be in writing under the Statute of Frauds, and under the Equal Dignities Rule.

For purposes of appellate review, the nature of the determination, not the label given by the trial court, is critical. Molokoa Village Dev. Co., Ltd. v. Kauai Elec. Co., Ltd., 60 Haw. 582, 596, 593 P.2d 375, 384 (1979). Accordingly, although the above statements were labeled as findings of fact, they are really conclusions of law with respect to the purported relationship between our statute of frauds and 26 U.S.C. §6337(b). Therefore, we review these conclusions de novo. Id.

1.

Our statute of frauds provides that

[n]o action shall be brought and maintained . . . [u]pon any contract for the sale of lands . . . or of any interest in or concerning them . . . unless the promise, contract, or agreement, upon which the action is brought, or some memorandum or note thereof, is in writing, and is signed by the party to be charged therewith, or by some person thereunto by the party in writing lawfully authorized. . ..

HRS §656-1 (1985). The statute "requires that documents transferring any interest in land be in writing and signed by the person to be charged therewith and that if they are signed by another on his behalf, the authorization of such other [should] also be in writing." Honolulu Memorial Park, Inc. v. City and County of Honolulu , 50 Haw. 189, 191, 436 P.2d 207, 209 (1967) (interpreting Rev. Laws Haw. §190-1 (1955)). Thus, for transactions falling within the statute of frauds, the authorization for another to act on behalf of the person transferring an interest in land must be in writing.

However, the statute of frauds only applies to instruments involving the transfer of an interest in real property. Redemption under 26 U.S.C. §6337(b) does not involve a transfer of interest in real property. Redemption is defined as "[t]he process of cancelling and annulling a defeasible title to land, such as is created by a . . . tax-sale, by paying the debt or [by] fulfilling the other conditions." Black's Law Dictionary 1278 (6th ed. 1990). "It restores the owner to his [or her] title as it stood before the sale[.]" Samet v. United States [65-2 USTC ¶9520], 242 F. Supp. 214, 222 (M.D.N.C. 1965) (citation and internal quotation marks omitted). The effect of "redemption . . . [is] to (1) defeat the estate of the purchaser at the tax sale, and (2) to leave the title to the land where it would have been had no sale taken place." Id. at 223. Because no real property interest was transferred to Yamamoto by virtue of her redemption, the statute of frauds is inapplicable.

2.

Section 6337(b) moreover does not require that an agency agreement between the owner and the person acting in the owner's behalf in redeeming the property be in writing. The statute only provides that "owners . . . or any person in their behalf, shall be permitted to redeem the property . . .." 26 U.S.C. §6337(b)(1) (emphasis added). Furthermore, we are not aware of any case involving section 6337(b) which holds that one acting in the owner's behalf to redeem property must have a written agency contract to do so.

In any event, imposing a written agency requirement on the right of the owner to engage any person to act in the owner's behalf for redemption purposes would place an unjustified qualification upon the broad language of the statute. "[T]he extent or measure of the [redemption] right is found in the statutory terms prescribing the time and method of its exercise and designating the persons who may exercise it." Lynch v. Burt, 132 F. 417, 429 (8th Cir. 1904). A written agency requirement would only serve to restrict the exercise of the owner's redemption right in a manner not expressly or implicitly intended under the language of the statute. "It would, therefore, seem not to be necessary for the purposes of justice, or to effectuate the objects of the law, that the right to redeem should be narrowed down by [such] a strict construction." Dubois v. Hepburn, 35 U.S. 1, 22 (1836).

C.

Having concluded that Au did act on behalf of Yamamoto to redeem her property and his agency was valid, we are faced with the issue of whether Au's actions constituted a valid redemption. ¹⁸

1.

Section 6337(b) provides that "[s]uch property or tract of property shall be permitted to be redeemed upon payment to the purchaser, or in case he [or she] cannot be found in the county in which the property to be redeemed is situated, then to the Secretary ¹⁹ . . .." 26 U.S.C. §6337(b)(2). Thus, "[t]o redeem the property, the interested party need only pay the purchaser of the property the amount which was paid by the latter at the tax sale, plus interest at the rate of 20 percent per annum." Taylor [93-2 USTC ¶50,583], 72 A.F.T.R.2d at 93-6579.

Courts interpreting section 6337(b) have held that under the statute, a tender of the proper amount of money is sufficient to constitute redemption. For example, in Rosen v. Norton [92-2 USTC ¶50,433], 970 F.2d 1079 (2d Cir. 1992), cert. denied, Norton v. Rosen, 507 U.S. 918 (1993), an attorney for the owners went to the home of the purchaser and tendered a certified check to the purchaser, within the statutory period, for the purpose of redeeming the owners' property. The purchaser told the attorney, " 'I refuse the tender. Goodbye', and shut the door." Id. at 1079. The owners' motion to compel the purchaser to accept the tender was denied based on the district court's finding that the amount tendered was deficient. The United States Court of Appeals for the Second Circuit reversed, finding that the amount tendered was sufficient. It held that "[s]ince [the owners] provided a legally-sufficient [timely] tender . . . they were entitled to have [the purchaser] surrender the certificate of sale to them." Id.

In Guthrie v. Curnutt [70-1 USTC ¶9168], 417 F.2d 764 (10th Cir. 1969), the owner's agent went to the IRS office to redeem the property on the last day of the redemption period. The owner's agent "told the I.R.S. officer that he had been unable to locate the [purchaser] and offered to pay the required amount in cash or by a cashier's check. The I.R.S. officer refused the offer and told [owner's] agent that he would have to redeem from [the purchaser]." Id. at 765. The agent did not produce the required amount or present the check to the IRS officer. The following day, the purchaser told the owner that the redemption period had expired.

In a suit filed by the owner, "the trial court held that 'the tender to the IRS officer was timely and sufficient to effect redemption in compliance with the provisions of the Code,' and ordered that [the owner] be permitted to redeem." Id. On appeal, the purchaser argued that proper redemption requires that an owner or his or her agent actually produce the necessary amount and that the amount be offered to either the purchaser or the IRS officer. The court of appeals held that "[t]he failure of the agent to count out the cash or to present a cashier's check in the actual amount d[id] not destroy the tender." Id. It stated that "when a party, able and willing to do so, offers to pay another a sum of money and is told that it will not be accepted the offer is a tender without the money being produced." Id. at 765-66 (citations omitted). Consequently, the court of appeals affirmed the trial court's holding that because tender was timely and sufficient, the owner had complied with the statute and had the right to redeem his property. Id. at 766.

Hence, in order to effect a proper redemption, an owner is required to make a sufficient and timely tender. Purchasers do not dispute that if Yamamoto's redemption was valid, it was for the proper amount and timely made. Purchasers received the required amount in July 1989. It is undisputed that Au spoke to Higashi after the tender. This phone call should have dispelled any doubt regarding Yamamoto's intent to redeem her property. Prior to September, there is no evidence that Higashi ever advised Au or Yamamoto of a possible problem with the redemption. Instead, before responding, Higashi held the check for two months. When Higashi did respond by letter, the letter was written on the 181st day after the tax sale. The redemption period is 180 days. Hence, by waiting to respond, Higashi prevented Yamamoto from clarifying any question regarding the redemption. ²⁰ Such conduct cannot be countenanced under section 6337(b). See Rosen, supra, Guthrie, supra. Therefore, under the statute Yamamoto's redemption was effective upon tender of the purchase price plus interest.

2.

We further determine whether the fact that the redemption check was furnished by Hanalea or that Yamamoto conveyed the real property to Hanalea following the attempted redemption invalidates the redemption. This determination involves an examination of certain findings of fact and conclusions of law.

Findings of fact Nos. 21, 25, and 26 state in relevant part:

21. Yamamoto could not and was not acting on behalf of herself in the attempted redemption because she could not pay the sum required for the redemption.

25. The attempted redemption was ineffective and invalid because the redemption was not done by Yamamoto as the owner of the real property or by any person on behalf of Yamamoto. This Court believes that to hold otherwise would make the bidding process senseless. All that one would have to do is show up at the opening of the bid, figure out who the high bidder was, offer the taxpayer fifty dollars to sign a letter which states that the person is acting on behalf of the taxpayer, and then send off a letter to the high bidder redeeming the property for the bid price plus fifty dollars. No one would bid under those circumstances. To hold otherwise would also undermine the policy of reducing the indebtedness of the taxpayer by obtaining the highest price possible for the sale of the taxpayer's property.

26. It was reasonable and proper for the Petitioners to reject the attempted rejection.

Conclusions of law Nos. 2 and 3 state in relevant part:

2. The attempted redemption by Hanalea through Au was ineffective and invalid.

3. The rejection of the redemption by Petitioners was reasonable and justified.

a.

Subsection 6337(b)(2) sets out the amount the owner must pay the purchaser to redeem his or her property. This subsection does not condition an owner's redemption on any particular source of the payment price. All that is required is that the owner pay "the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum." 26 U.S.C. §6337(b)(2). There is nothing in the statute to prohibit an unsuccessful bidder or any other person from financing the owner's redemption. A contrary interpretation of the statute would unduly restrict an owner's ability to redeem because owners who lose their real property through a tax sale may lack the funds to redeem. One obvious way to raise the necessary amount, as Yamamoto did here, is to enter into an agreement with a party interested in the land who would provide benefits to her. Restricting the right to redeem, as the Purchasers propose, would be contrary to the general rule of interpreting the statute liberally as it applies to the owner.

We conclude that it is immaterial in determining whether property was redeemed under section 6337(b) that the funds for the redemption of property came from a party interested in acquiring the property from the owner, even if that party, like Hanalea, was an unsuccessful bidder at the tax sale. The policy argument advanced by Purchasers and apparently adopted by the court in finding of fact No. 25 is without merit. Hanalea's actions do not undercut the bidding process. A potential bidder does not have an incentive to wait until after the tax sale to arrange a "deal" with the owner. Under an arrangement for redemption through the owner instead of an outright purchase, the land would still be burdened by all "liens, encumbrances, or conflicting claims which were previously operative" against the owner. Samet [65-2 USTC ¶9520], 242 F. Supp. at 222. In contrast, the successful bidder receives all of the right, title, and interest of the owner, free and clear of all taxes and interests junior to the taxes. See 26 U.S.C. §6339.

In Taylor [93-2 USTC ¶50,583], 72 A.F.T.R.2d 93-6577, the decedent's land was seized and sold by the IRS. The IRS sold the property to Jerry and Jaydene Page (the Pages). After the tax sale but before the redemption period ended, the decedent's personal representative entered into an agreement to sell the land to Robert and Dana Fowler (the Fowlers). Id. at 93-6578. In the land sale from the decedent's estate to the Fowlers, the escrow company, at closing, paid the Pages $52,134.02 from proceeds belonging to the Fowlers. Id. The Fowlers then recorded a quitclaim deed from the Pages to the Fowlers and a joint tenancy deed from the personal representative to the Fowlers. Id. The Fowlers in turn then sold the property to Scott and Karen Taylor (the Taylors ), who eventually conveyed it to the plaintiff, Ms. Taylor's grandmother. Because the taxes of the decedent's estate were never satisfied, the IRS again seized the land. Id.

The propriety of the second seizure depended on whether the property had ever been redeemed under section 6337(b). Id. at 93-6579. If the property were treated as having been sold directly from the Pages to the Fowlers, then the IRS's second seizure was improper because a purchaser at a tax sale takes the property free of tax liens, and hence the Pages' sale to the Fowlers would not have been burdened by any tax liens. Id. However, if the property were treated as having been redeemed by the personal representative and sold by the representative to the Fowlers, then the seizure was proper because a redemption would not extinguish any outstanding tax liens, and the Fowlers, as purchasers from the estate, took the property subject to the tax liens still on the property. Id.

The court held that the decedent's estate, through its personal representative, had redeemed the property and thereafter sold it to the Fowlers. Id. The court found it persuasive that the amount paid to the tax sale purchaser corresponded to the amount required under section 6337(b)(2). Id. at 93-6579-80. Although not expressly addressed by the court, we believe it significant that the court's primary concern when determining the validity of the redemption was the amount--not the source--of the funds.

b.

We also conclude that Yamamoto's conveyance of her property to Hanalea did not invalidate the redemption. The terms of the redemption statute only require that Yamamoto be an owner of the property at the time she exercised her right of redemption. Clearly, this requirement was met. Furthermore, there is nothing in the statute that limits Yamamoto's right to transfer her property once she redeems it. Redemption "restores the owner to his [or her] title as it stood before the sale[.]" Samet [65-2 USTC ¶9520], 242 F. Supp. at 222 (citation and internal quotation marks omitted).

In light of the policy of liberally construing the statute in favor of the property owner, we conclude that once Yamamoto exercised her redemption rights as the owner of the land, she had the right to deal with the property as her own. Redemption did not affect Yamamoto's right to dispose of the property in any manner she desired. In that sense, the devolution of the property after redemption vested Yamamoto with the sole discretion, as with all other incidents accruing to ownership, to transfer the property in whatever manner she chose to. Consequently, Yamamoto's subsequent conveyance to Hanalea did not invalidate her redemption. ²¹

V.

For the foregoing reasons, we hold that the June 30, 1989 letter from Au to Purchasers constituted a valid redemption under section 6337(b). Therefore, we reverse the judgment filed on September 2, 1992 , and remand this case to the court for proceedings consistent with this opinion.

¹ All documents referred to were received into evidence by stipulation.

² 26 U.S.C. §6321 states in relevant part:

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.

³ The notices were issued against Hirotoshi Yamamoto and his wife, Shizuko Yamamoto (Yamamoto). The property involved here was conveyed to Yamamoto by her husband.

⁴ 26 U.S.C. §§6323(a) and (f) and Hawaii Revised Statutes (HRS) §505-1 (1985) authorize the United States Internal Revenue Service (IRS) to file notice of a tax lien in the Hawaii Bureau of Conveyances.

⁵ 26 U.S.C. §§6331(a) and (b) authorize the IRS to seize property.

⁶ Part of the stipulation was that Roland Hideo Higashi (Higashi), at all relevant periods, acted on behalf of Petitioners-Appellees Higashi, Clifton Kenichi Tsuji, Kenneth Kenichi Tanaka, and Howard Jitsuo Mimaki (Purchasers or the Purchasers).

⁷ Alfred Y.K. Au's (Au) letter to the Purchasers' attorney made references to Yamamoto's letter to Rebecca Nadler (Nadler) as exhibit B, Nadler's June 29, 1989 letter to Yamamoto as exhibit A, and the deed transferring title to Hanalea, Inc. (Hanalea) as exhibit C.

⁸ The deed was issued pursuant to 26 U.S.C. §6338(b) (1988):

(b) Deed to real property

In the case of any real property sold as provided in section 6336 and not redeemed in the manner and within the time provided in section 6337, the Secretary shall execute (in accordance with the laws of the State in which such real property is situated pertaining to sales of real property under execution) to the purchaser of such property at such sale, upon his surrender of the certificate of sale, a deed of the real property so purchased by him, reciting the facts set forth in the certificate.

On December 20, 1989 , Yamamoto filed a complaint in the United States Claims Court against the commissioner of the IRS challenging the tax deficiencies assessed by the tax court and seizures made pursuant to the tax court judgment. On June 1, 1990 , Yamamoto amended the complaint to challenge the propriety of the IRS deed. On April 29, 1991 , the claims court filed an order dismissing Yamamoto's complaint for lack of jurisdiction. The order did not discuss Yamamoto's claim against the IRS deed.

⁹ This section was repealed in 1988.

¹⁰ The subject of this particular contention was a March 1, 1990 letter from the IRS regional counsel apparently sent in response to a letter from Au to the IRS commissioner. In the letter, the regional counsel made clear that the IRS took no position on the merits of the instant case:

Absent some indication of bad faith or fraud on the part of the purchasers, it is our policy in this situation to issue the deed to the purchasers, thereby allowing the parties to litigate the disputed redemption without delay and without further involvement on the part of the Internal Revenue Service. This was done here, and we understand that the purchasers have instituted legal proceedings in Land Court to clear title to the property and resolve the disputed redemption. This judicial proceeding should provide you with a full and fair opportunity to resolve your dispute.

(Emphasis added.)

¹¹ The applicability of a more restricted standard of review for findings of fact issued under a writ of error, left undecided in In re Wong, 47 Haw. 472, 478 n.1, 391 P.2d 403, 406 n.1 (1964) (per curiam), and in In re State, 49 Haw. 537, 546, 425 P.2d 83, 89 (1967), has been settled by the abolition of writs of error. Hawaii Rules of Civil Procedure Rule 73(i) (deleted 1984).

¹² The statute provides in relevant part, "A . . . deed to real property executed pursuant to section 6338 shall discharge such property from all liens, encumbrances, and titles over which the lien of the United States with respect to which the levy was made had priority." 26 U.S.C. §6339(c).

A party acquiring a judgment lien on real property after the government files a federal tax lien on it is constitutionally entitled to "personal service or mailed notice" before its lien can be extinguished under section 6339(c). Verba v. Ohio Casualty Ins. Co. [88-2 USTC ¶9425], 851 F.2d 811, 816 (6th Cir. 1988).

¹³ The statute read as follows:

The owners of any real estate sold as aforesaid, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the land sold as aforesaid, or any particular tract thereof, at any time within one year after the sale thereof, upon payment to the purchaser, or, in case he cannot be found in the county in which the land to be redeemed is situate, then to the collector of the district in which the land is situate, for the use of the purchaser, his heirs or assigns, the amount paid by the said purchaser and interest thereon at the rate of twenty per centum per annum.

14 Stat. 93, 109 (1866).

¹⁴ In 1966, the existing one-year redemption period was reduced to 120 days. Pub. L. No. 89-719, title I, §104(e), 80 Stat. 1137 (1966). The period was reduced because "a long redemption period tends to unnecessarily depress the price which potential purchasers are willing to bid for property at [the tax] sales." S. Rep. No. 1708, 89th Cong., 2d Sess., reprinted in 1966 U.S. Code Cong. & Admin. News 3722, 3741. See Annotation, Construction and Application of §6337(b) of Internal Revenue Code of 1954 (26 USCS §6337(b)), Providing for Redemption of Real Estate After Tax Sale , 12 A.L.R. Fed. 979, 983 (1972).

In 1982, the redemption period was expanded from 120 days to its present 180 days. Tax Equity and Fiscal Responsibility Act, Pub. L. No. 97-248, title III, §349A(a), 96 Stat. 639 (1982).

In 1977, the words "or his delegate" which appeared after "Secretary" were stricken. Pub. L. No. 94-455, title XIX, §1906(b)(13)(A), 90 Stat. 1834 (1977).

¹⁵ The present treasury regulation on redemption of property does not reflect the 1982 amendment to the statute changing the period of redemption from 120 to 180 days. See 95(13) CCH-Standard Federal Tax Reports, ¶39,141 at 65,671.

¹⁶ The statute provided:

[T]he owner of the land, or any loyal person of the United States having any valid lien upon or interest in the land, may at any time, within sixty days after the sale, appear before the board of tax commissioners, in proper person, and redeem the land from sale upon paying the amount of the tax and penalty, with the interest and expenses prescribed, and taking an oath, if a citizen, to support the Constitution of the United States.

Corbett v. Nutt, 77 U.S. 464, 473 (1870).

¹⁷ In construing Hawaii 's redemption statute, HRS §246-60 (1968), the Hawaii Supreme Court has acknowledged that "[t]he statute should be liberally construed in the taxpayer's favor because it is the policy of this State to give the taxpayer every reasonable opportunity to redeem his [or her] property[.]" Hawaiian Ocean View Estates v. Yates, 58 Haw. 53, 58-59, 564 P.2d 436, 440 (1977) (citations omitted).

¹⁸ Neither 26 U.S.C. §6337(b) nor the regulation promulgated thereunder set forth detailed steps regarding the course a taxpayer-owner must follow to properly exercise his or her right of redemption.

¹⁹ Under Title 26 " 'Secretary' means the Secretary of the Treasury or his delegate." 26 U.S.C. §7701(a)(11) (1988).

²⁰ The land court commented in its oral ruling that retaining the check from June 30 to September 15, 1989 was "good strategy."

²¹ Arguably, upon deeding the land to Hanalea, Yamamoto merely changed her status from owner to "any person having an interest in the land" who was still entitled to redeem under 26 U.S.C. §6337(b)(1). However, a fair reading of the statute makes the status of the claimant at the time of the tax the relevant consideration.

[2000-2 USTC ¶50,630] United States of America and Internal Revenue Service, Plaintiffs v. Gaechter Outdoor Advertising Inc., a New Mexico Corporation, Defendant Cross-Claimant-Cross-Defendant-Appellant v. Harry Garcia, Defendant Cross-Defendant-Appellee

(CA-10), U.S. Court of Appeals, 10th Circuit, 99-2201, 99-2212, 7/18/2000, 2000 U.S. App. LEXIS 17411. Affirming in part, reversing in part, and remanding an unreported District Court decision

[Code Sec. 6331 ]

Tax liens and levies: Property subject to: Rental: Rental payments: Remittance to IRS: Damages: Unjust enrichment: Duty to disclose: Reasonable reliance: Due diligence: Sufficiency of evidence.--The district court erred in determining that the limitations period for a delinquent property owner's claim for unjust enrichment against the lessee of the property was tolled pursuant to the doctrine of fraudulent concealment because it did not determine whether the owner should have discovered his cause of action through reasonable diligence before the applicable statute ran. A duty of good faith was properly imposed on the lessee to disclose its nonpayment of rent to the IRS pursuant to the IRS's notice of intent to levy, but the taxpayer was required under state ( New Mexico ) law to prove that he could not have discovered the lessee's nonpayment through the exercise of reasonable diligence. Insufficient evidence existed on the record to determine whether the taxpayer exercised the requisite diligence. Moreover, the district court failed to determine the applicable limitations period. However, damages awarded to the taxpayer on his claim for unjust enrichment were upheld.

[Code Sec. 6337 ]

Tax liens and levies: Property subject to: Redemption: Validity of: Redemption price, payment of: Notification.--The district court properly concluded that a deposit of funds with the IRS by a delinquent property owner, whose property was purchased by its lessee at a tax sale, was insufficient for purposes of redemption under Code Sec. 6337 . The taxpayer failed to remit payment to the lessee as required or otherwise notify the lessee that a deposit was made to the IRS. His contention that the lessee's legal, correct address was at issue was unpersuasive.

[Code Sec. 6339 ]

Tax liens and levies: Property subject to: Rental income: Certificate of sale: Redemption period.--The district court properly concluded that a delinquent property owner, whose property was purchased by its corporate lessee at a tax sale, was entitled to lease payments during the redemption period. The certificate of sale received by the lessee at the tax sale did not give it conditional ownership of the property; rather, the certificate of sale gave the lessee the right to either receive the redemption price under Code Sec. 6337(b) or a deed under Code Sec. 6338(b) after expiration of the redemption period.

John J. Kelly, U.S. Attorney, Manual Lucero, Office of the United States Attorney, Albuquerque, N.M. for Plaintiffs (99-2201, 99-2212). Alice Lorenz, Marte D. Lightstone, Miller, Stratvert, Torgerson & Schlenker, Albuquerque, N.M. for Gaechter Outdoor Advertising Inc. Thomas A. Tabet, Albuquerque, N.M. for Harry Garcia.

Before: TACHA, EBEL and BRISCOE, Circuit Judges.

è Caution: This court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.ç

ORDER AND JUDGMENT ^*

EBEL, Circuit Judge:

After examining the briefs and appellate record, this panel has determined unanimously to grant the parties' request for a decision on the briefs without oral argument. See Fed.R.App.P. 34(f); 10th Cir. R. 34.1(G). The cases are therefore ordered submitted without oral argument.

This case involves claims for rent and ownership of property originally owned by Harry Garcia that Gaetcher Outdoor Advertising, Inc. (" GOA ") first leased from Garcia and later purchased at a tax sale from the Internal Revenue Service. The district court granted summary judgment to GOA on its claim to ownership of the property, holding that Garcia failed to properly redeem the property following the tax sale. The court then held a bench trial on Garcia's claim that GOA was unjustly enriched by its failure to make rent payments to Garcia or to the IRS under tax levies against Garcia, and the court awarded judgment in favor of Garcia. Both parties appeal. As explained below, we reject most of the parties' contentions of error. However, we conclude the district court needs to further consider GOA 's argument that a portion of Garcia's claim is barred by the statute of limitations. We also conclude that the court erred in determining the amount of postjudgment interest to which Garcia is entitled.

The general facts are not disputed. In August and September 1986, GOA and Garcia entered into two three-year leases for a parcel of property Garcia owned in Albuquerque on which GOA constructed two advertising billboards of differing size. The rent on the lease for the larger billboard was $23,400 per year, and the rent for the smaller one was $1,800 per year. The leases required payment of the first and third years' rents in advance, and GOA made those payments to Garcia.

Around April 1987, before the second year's rents were due, GOA received a notice of levy from the Internal Revenue Service regarding taxes owed by Garcia. Richard Zanotti, GOA 's general manager, testified that he understood the levy to require that any rent payments should be made to the IRS, not Garcia, but that he did not understand the levy to be a demand for payment from the IRS. See GOA 's App. Vol. 2 at 183-84. Although GOA contends it is disputed whether it made the 1987 rent payment, it is undisputed that GOA did not make any payments for use of the property to either Garcia or the IRS from 1989 to 1995, see id. at 192-94, even though GOA continued to lease the billboards to third parties, see id. at 199-200, and continued to receive IRS levies, see id. Vol. 1 at 113, throughout this period.

In April 1995, the IRS seized the property because of Garcia's unpaid taxes, and GOA purchased it at a tax sale on June 7, 1995 . Several days prior to the end of the 180-day redemption period for tax sales, Garcia deposited funds with the IRS seeking to redeem the property. In January 1996, the IRS brought this action as an interpleader. Claiming no interest in or entitlement to the funds, the IRS filed this action against Garcia, GOA and Charter Southwest Commercial, Inc., to determine who was entitled to the funds and to the deed to the property. (Charter Southwest settled and is not part of this appeal.) GOA answered and filed a cross-claim asserting that Garcia's attempt to redeem was procedurally defective and that it was entitled to the deed to the property. Garcia answered and asserted that he had successfully redeemed the property. He also filed a cross-claim against GOA for unjust enrichment because GOA had failed to pay rent to either the IRS or Garcia.

The district court granted GOA 's motion for summary judgment regarding ownership of the property following the tax sale. The court held that Garcia's attempt to redeem was ineffective because he failed to make his redemption payment to the purchaser, GOA , within the redemption period, as required by 26 U.S.C. §6337(b). Following a bench trial on Garcia's unjust enrichment claim, the court found in favor of Garcia. It awarded him damages totaling $184,946.30 for the rental amounts that GOA failed to pay either Garcia or the IRS for 1987 and 1989 to 1995; prejudgment interest at fifteen percent totaling $381,968.75, and postjudgment interest also at fifteen percent. Both parties appeal.

I. GOA 's Appeal

A. Statute of Limitations

The district court determined that Garcia's claim was not barred by the statute of limitations or other affirmative defenses because of GOA 's "misrepresentations, misconduct, and concealment of material facts." GOA 's App. Vol. 1 at 115. Challenging the court's ruling, GOA contends that Garcia failed to prove the elements of fraudulent concealment necessary to toll the statute, that the applicable limitations period is four years, and that Garcia's claim for payments before 1992 is therefore barred.

Though obviously critical to at least part of Garcia's claim, the statute-of-limitations issue was not well-developed by the parties. In its proposed findings of fact and conclusions of law filed before trial, ¹ GOA asserted that a four-year limitations period applied to Garcia's claim, ² but it did not assert that any part of Garcia's unjust enrichment claim was barred by the statute of limitations. See id. at 91. In his proposed findings and conclusions, Garcia argued that if any limitations period applied, it would be the six-year period provided by N.M. Stat. Ann. §37-1-3 (Michie 1990) for actions on written contracts. See GOA 's App. Vol. 1 at 97. The district court apparently raised the doctrine of fraudulent concealment as a means for tolling the statute sua sponte at trial. It subsequently made the following findings of fact relevant to the limitations issue:

6. Following Gaechter's receipt of the Notice of Levy [around April 1987], Garcia meet [sic] with Richard Zanotti (Zanotti), Gaetcher's general manager, and discussed the IRS levy. Thereafter, Garcia and Gaechter both understood that future lease payments owed by Gaechter to Garcia were required by law to be paid to the IRS.

7. Garcia reasonably relied upon Gaechter to pay to the IRS the 1987 payments that were due him.

8. Although the initial term of the leases expired in 1989, Garcia and Gaechter understood that they continued unless either party terminated them by oral or written communication. Neither Garcia nor Gaechter ever communicated to the other party such intention to terminate either lease.

9. Garcia knew that Gaechter continued to receive IRS notices of levy regarding his unpaid taxes from 1989-1995 and reasonably relied on Gaechter to pay to the IRS the 1989 through 1995 payments that were due him.

. . . .

14. Gaechter willfully decided to make no payments for the use of Garcia's property to the IRS, made no such payments, and consciously concealed this fact from Garcia while continuing to use his property.

15. Garcia lacked knowledge until sometime after March 31, 1995 , that Gaechter had not remitted its obligations owed him to the IRS.

GOA 's App. Vol. 1 at 112-14. The court then stated its legal conclusion that "due to Gaechter's misrepresentations, misconduct, and concealment of material facts, Garcia's claim is not barred by the statute of limitations, waiver, estoppel, laches, or any other affirmative defenses." Id. at 115.

Under principles of equitable estoppel, New Mexico law recognizes the doctrine of fraudulent concealment as a means of tolling a statute of limitations. See Garcia ex rel. Garcia v. La Farge, 119 N.M. 532, 893 P.2d 428, 432 (N.M. 1995); see also Ballen v. Prudential Bache Sec., Inc., 23 F.3d 335, 337 (10th Cir. 1994). A party seeking to toll a statute of limitations through this doctrine must prove that (1) the other party engaged in conduct amounting to intentional false representation or concealment of material facts; (2) the injured party reasonably relied on the other party and the concealment was successful; and (3) the injured party did not know, and through the exercise of reasonable diligence, could or should not have known the true facts giving rise to a cause of action. See Continental Potash, Inc. v. Freeport-McMoran, Inc., 115 N.M. 690, 858 P.2d 66, 74 (N.M. 1993); Kern ex rel. Kern v. St. Joseph Hosp., Inc., 102 N.M. 452, 697 P.2d 135, 139 (N.M. 1985). ³

GOA contends that Garcia failed to prove the first and third elements. ⁴ It claims that it did not make any fraudulent representations and that Garcia could not rely on its silence regarding its failure to make the payments because there was no fiduciary relationship between the parties. It further argues that Garcia failed to show that, through exercise of reasonable diligence, he could not have known about GOA 's nonpayment prior to 1995. In response, Garcia contends that GOA had a duty to disclose its nonpayment on the basis of either a fiduciary relationship between the parties or the duty of good faith and fair dealing implied as part of the leases. He further contends that he is not required to show that he exercised due diligence in discovering the truth. See Garcia's Br. at 14.

We agree with Garcia that GOA had a duty to disclose its nonpayment to him. Because the district court found that the leases were the result of arm's length negotiations between the parties, see GOA's App. Vol. 1 at 112, we believe the duty is best characterized as arising not from any fiduciary duty GOA owed to Garcia, but rather from the duty of good faith and fair dealing implied as part of the contracts between them. ⁵ In Allsup's Convenience Stores, Inc. v. North River Ins. Co., 1999 NMSC 6, 976 P.2d 1, 14, 127 N.M. 1 (N.M. 1998), the court rejected an argument that implied covenants never require a party to take the affirmative act of disclosing material information:

The concept of the implied covenant of good faith and fair dealing requires that neither party do anything that will injure the rights of the other to receive the benefit of their agreement. We see no reason in law or logic why this duty should always be a negative one; if good faith and fair dealing require it, there can be an affirmative duty to act in order to prevent the denial of the other party's rights under the agreement.

Id. (quotation, citation omitted). In Allsup's, the court upheld a jury finding that an insurer breached the implied covenant by failing to disclose information relating to inadequate claims handling that increased the insured's premiums. See id. Although the issue in Allsup's arose in an insurance context, we see no reason not to extend the principle to this situation. Moreover, like Allsup's, this is not a situation in which GOA would have had to "bend over backwards" and "subordinate its legitimate interest," id., in the course of disclosing its nonpayment. In a finding unchallenged on appeal, the district court found that "Garcia and Gaechter both understood that future lease payments owed by Gaechter to Garcia were required by law to be paid to the IRS." GOA 's App. Vol. 1 at 112. GOA merely had to inform Garcia that it was not complying with that understanding. And GOA had no legitimate interest in using Garcia's property for free.

We disagree, however, with Garcia's contention that he is somehow excused from the due diligence requirement. Under New Mexico law, even in situations involving confidential or fiduciary relationships, the party claiming fraudulent concealment must show that he could not have discovered the relevant facts through exercise of reasonable diligence. See, e.g., Garcia, 893 P.2d at 432; Hardin v. Farris, 87 N.M. 143, 530 P.2d 407, 409-10 (N.M. Ct. App. 1974). Garcia cites no authority to the contrary to support his contention.

GOA contends that Garcia failed to show he could not have discovered that it was not making payments to the IRS. Garcia testified that he had been working with IRS officials to reduce his tax liability since he was audited in 1984 and that he eventually reduced it from nearly half a million dollars to about $30,000. See GOA 's App. Vol. 2 at 221-23. He also testified that he knew that had GOA been making its payments to the IRS as it was required to do, his tax liability, including interest and penalties, would have been lower. See id. at 224-25. During the period from 1987 to 1995, he assumed that GOA was paying the IRS, but he never checked to make sure. See id. at 225-26. Relying on these facts, GOA contends that had Garcia exercised reasonable diligence during this period, he could have discovered that GOA was not making the required payments.

The existence of the grounds justifying a claim of fraudulent concealment, including whether a party exercised due diligence, is a question of fact. See Continental Potash, 858 P.2d at 74; Kern, 697 P.2d at 140. We review a district court's factual findings for clear error. See Salve Regina College v. Russell, 499 U.S. 225, 233, 113 190, 111 S.Ct. 1217 (1991). The district court did not expressly address the issue of whether Garcia exercised due diligence. The court did address the related matter of Garcia's reliance on GOA to make the payments, and it found that reliance to be reasonable. Because, as indicated above, GOA had a duty to disclose its nonpayment to Garcia, this finding is not clearly erroneous. ⁶ However, while a finding of reasonable reliance informs the question of the amount of diligence a party may need to exercise, under New Mexico law, it does not fully replace a due diligence finding. Cf. Continental Potash, 858 P.2d at 74 (noting that party asserting estoppel must show both reasonable reliance and lack of means of discovering truth).

We therefore conclude that the district court erred in applying the doctrine of fraudulent concealment to toll the statute of limitations without finding that, through exercise of reasonable diligence, Garcia should not have discovered his cause of action before the statute ran. GOA asks that we determine as a matter of law that Garcia should have discovered his cause of action before 1992 because the information was available from the IRS. It contends that since he did not file his counterclaim until May 1996, his claim for payments prior to 1992 would be barred by the four-year statute applicable to unwritten contracts. ⁷

We decline to make this finding for several reasons. As we noted, the district court found that GOA received the notices of levy and Garcia reasonably relied on GOA to make the payments to the IRS from 1987 on. This reasonable reliance informs the level of diligence Garcia was obligated to exercise and affects any finding regarding when Garcia should have been on notice that GOA might not be making the payments. GOA contends that Garcia should have been able to determine readily from the IRS that it was not making the payments, but the only IRS documents it cites in the record are notices of tax liens that include a variety of corrections, indicating that discovering the correct information from the IRS may not have been as simple as GOA supposes. See GOA 's Exhibits, Ex. A. Finally, the district court never determined what the applicable statute of limitations is. GOA contends that the four-year statute for unwritten contracts applies. But the leases were written, and while the district court found that the initial terms of the leases expired in 1989, it also found that the parties understood that the leases continued until terminated. Thus, there is some question whether the six-year statute for written contracts might apply.

We therefore conclude that we must remand the case to the district court for it to determine when Garcia should have discovered he had a cause of action and whether any part of it is barred by the applicable statute of limitations.

B. 1987 Lease Payments

GOA challenges the district court's award of damages for its failure to make the 1987 lease payments on two grounds. First, it contends that any damages in this regard would be for breach of contract and Garcia never asserted a claim for breach of contract. Second, it contends that the evidence does not support the district court's finding that GOA did not make these payments.

We decline to consider GOA 's first argument because it failed to properly present it to the district court and therefore preserve it for appeal. See Sac & Fox Nation, 213 F.3d at 575. GOA contends that it raised the issue in its "additional" proposed findings of fact and conclusions of law filed after the trial. See GOA 's Opening Br. at 10. In that document, as a proposed finding of fact, GOA asserted that "Garcia did not allege in his Cross-Claim or raise at any time in the litigation a claim for breach of contract, pre-judgment interest, post-judgment interest, or a claim for attorneys fees and costs." GOA 's App. Vol. 1 at 104. Its proposed conclusions of law did not explain what effect Garcia's failure to assert a breach-of-contract claim might have on Garcia's damages in general or his recovery for 1987 lease payments, nor, obviously, did it provide the district court with any legal authority supporting this position. (In fact, it failed to present any legal authority supporting its position on this issue until its reply brief on appeal.) Similarly, GOA 's arguments to the court at trial omitted any reference to this issue, see id. Vol. 2 at 170-74, 250-53, 287-302, as did its motion to alter or amend the court's eventual judgment, see id. Vol. 1 at 120-21. ⁸

We thus conclude that GOA did not adequately raise in the district court the legal issue of the effect of Garcia's failure to assert a breach-of-contract claim on his ability to recover damages related to rents due in 1987. See Bancamerica Commercial Corp. v. Mosher Steel of Kan. , Inc., 100 F.3d 792, 798-99 (10th Cir.) (declining to address issue on appeal presented only in vague, ambiguous way in district court), modified on other grounds, 103 F.3d 80 (10th Cir. 1996). Though we have discretion to consider issues on appeal that were not raised in the district court if "proper resolution is beyond doubt or injustice might otherwise result," Sac & Fox Nation, 213 F.3d at 575, neither of these reasons encourages us to exercise that discretion here.

GOA is correct that Garcia asserted only an unjust enrichment claim. But New Mexico law does not strictly enforce the general rule on which GOA's argument is based, that is, that "one could not sue on a contract and recover on quantum meruit," New Mexico ex rel. Gary v. Fireman's Fund Indem. Co. , 67 N.M. 360, 355 P.2d 291, 294-95 (N.M. 1960) (relaxing "strict rule" with respect to pleading requirements). In a situation somewhat analogous to this one, the court permitted a plaintiff's recovery under an unjust enrichment theory despite the existence of an express contract because "his adversary litigated the issue with him on the basis of quantum meruit." Harbison v. Clark, 59 N.M. 332, 284 P.2d 219, 222 (N.M. 1955). Moreover, GOA can hardly claim injustice from the failure to apply the rule, since Garcia's recovery would be the same under either theory. See United States v. Applied Pharmacy Consultants, Inc., 182 F.3d 603, 609 (8th Cir. 1999) (holding in rejecting similar argument for application of "wooden" rule that "there is no inconsistency whatsoever, in terms of substance, between the plaintiff's recovery on a theory of unjust enrichment and what it would have recovered had the contract theory been pursued"). ⁹

Turning to GOA's second argument, that the evidence does not support the district court's finding that it did not make the 1987 payment to either Garcia or the IRS, we review the district court's factual findings for clear error, giving due regard to its opportunity to judge the credibility of witnesses. See Salve Regina College, 499 U.S. at 233 (citing Fed.R.App.P. 52(a)). GOA's general manager Zanotti initially stated at trial that he knew GOA did not make the 1987 payments to Garcia but could not recall whether the payments were made to the IRS. See GOA 's App. Vol. 2 at 187-88. However, he subsequently testified regarding these payments as follows:

Q. You made a determination, a willful determination, not to pay Mr. Garcia the annual rent for those two leases?

A. That's correct.

Q. And you also made a determination that you had no obligation to pay the United States government that money?

A. If you want to call it a determination? I made the decision, yes.

Q. It wasn't something that you just forgot to do, it was something that you actually decided to do?

A. That's correct.

Id. at 188-89. The court's finding that GOA did not make the 1987 payments is not clearly erroneous.

C. 1995 Payment during Redemption Period

GOA next challenges the district court's determination that Garcia was entitled to payment for the period between the GOA's purchase of the property at the tax sale (June 7, 1995) and the expiration of Garcia's redemption period 180 days later (December 4, 1995). GOA contends that its purchase of the property at the tax sale gave it conditional ownership of the property, and that it was entitled to any income generated by the property during the redemption period. We conclude the district court correctly found Garcia entitled to payment for this period.

When the government sells seized property under 26 U.S.C. §6335, it provides the purchaser with a certificate of sale. See §6338(a). "In the case of real property, such certificate shall set forth the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor." Id. For real property, the tax sale purchaser can exchange the certificate of sale for a deed to the property after the 180-day statutory redemption period has expired. See §6338(b). Section 6339(b)(2) provides that the "deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the United States attached thereto." Thus, in Babb v. Frank [97-1 USTC ¶50,139], 947 F.Supp. 405, 407-09 (W.D. Wisc. 1996), the court rejected arguments, similar to those made by GOA, that the delinquent taxpayer's ownership rights in the property transferred to the purchaser at the tax sale, or even to the government at the time of levy. Instead, it held that under the plain language of §6339(b)(2), "the tax sale purchaser does not receive the delinquent taxpayer's right, title and interest to the property until he obtains the deed." Id. at 407. The district court here relied on Babb in holding that Garcia was entitled to payment for the redemption period.

While GOA criticizes Babb for not having "thought through" the implications of its holding, GOA does not argue that Babb's statutory analysis is incorrect. GOA cites two cases it claims indicates that the tax sale conditionally transferred title to it and gave it the right of possession. One , United States v. Whiting Pools, Inc. [83-1 USTC ¶9394], 462 U.S. 198, 211, 76 515, 103 S.Ct. 2309 (1983), involved personal property, which is governed by different rules from real property. See §6339(a)(2) (certificate of sale transfers taxpayer's right, title and interest in personal property). GOA 's other case, Roig Commercial Bank v. Dueno [86-1 USTC ¶9345], 617 F.Supp. 913, 915 (D. P.R. 1985), is either simply incorrect or, as Babb indicates, based on superceded law, see Babb [97-1 USTC ¶50,139], 947 F.Supp. at 408-09. ¹⁰

We are more concerned with a case GOA did not cite but should have, since it is on point and would lead to the result GOA wants. In United Bank of Denver National Ass'n v. Ferris, 847 P.2d 146, 149-50 (Colo. Ct. App. 1992), the Colorado Court of Appeals held that state law governs the determination of who is entitled to income on property during §6337(b)'s redemption period. In so holding, the court relied on a case from this court, Crow v. Wyoming Timber Products Co. [70-2 USTC ¶9561], 424 F.2d 93 (10th Cir. 1970), to say that "the state court has jurisdiction to determine, in accordance with state law, the rights to and arising from a parcel of real estate redeemed under §6337(b)." United Bank, 847 P.2d at 149. Though under Colorado law, the redeeming owner is entitled to income from the property during the redemption period, see id. at 150, the opposite result would obtain under New Mexico law, see N.M. Stat. Ann. 39-5-22 (Michie 1991); Western Bank v. Malooly, 119 N.M. 743, 895 P.2d 265, 273 (N.M. Ct. App. 1995). The question now becomes whether state law governs this issue.

With all due respect to the Colorado court, we believe it read too much into Crow. There, we held that state law "rather than federal law determines the nature and extent of the taxpayer's interest in property to which a federal tax lien can attach." Crow [70-2 USTC ¶9561], 424 F.2d at 96. The fact that state law governs a taxpayer's substantive property rights does not mean that state law dictates when those rights are transferred to a purchaser under federal procedures governing tax sales, or more specifically, what the legal effect is of a certificate of sale issued pursuant to §6338 of the Internal Revenue Code.

We admit to being surprised at the absence of case law answering the latter question. State law gives differing effects to analogous sales. See 4 Richard R. Powell, Powell on Real Property §37.46 (Rev. ed. 1997); 30 Am. Jur. 2d Executions and Enforcement of Judgments §562, 580 (1994). But we see no reason to apply state law because we conclude the applicable federal statutes answer the question. We hold that a certificate of sale for real property gives the purchaser only the right to receive either the redemption price, see §6337(b), or a deed, see §6338(b), and that only on receipt of the deed does the purchaser obtain the taxpayer's right, title and interest in the property, see §6339(b). Cf. Sari-Tech Enters., Ltd. v. Nassau County, 62 Misc. 2d 992, 310 N.Y.S.2d 107, 109 (N.Y. Sup.Ct. 1970) ("Until the deed is received [under §6339(b)], a purchaser at the tax sale has no cognizable interest in the real property, but possesses merely a chose in action."). We thus conclude that the district court correctly found Garcia entitled to the lease payments for the period of redemption.

D. Prejudgment interest

GOA contends that the district court erred in awarding Garcia prejudgment interest of fifteen percent pursuant to N.M. Stat. Ann. §56-8-3(B) (Michie 1996), which provides for a maximum of fifteen percent interest "on money received to the use of another and retained without the owner's consent expressed or implied." The award of prejudgment interest is a matter of state law. See Chesapeake Operating, Inc. v. Valence Operating Co. , 193 F.3d 1153, 1156 (10th Cir. 1999). Under New Mexico law, the award of prejudgment interest is a matter of right, subject to equitable considerations, when the amount due is fixed and ascertainable, and a matter of the court's discretion when it is not. See Taylor v. Allegretto, 118 N.M. 85, 879 P.2d 86, 89 (N.M. 1994); Sunwest Bank of Albuquerque , N.A. v. Colucci, 117 N.M. 373, 872 P.2d 346, 350-51 (N.M. 1994). Finding the amount due here fixed and ascertainable and no countervailing equities, the district court determined that Garcia was entitled to prejudgment interest as a matter of right. See GOA 's App. Vol. 1 at 126-27.

GOA first contends that the judgment Garcia obtained does not qualify him for prejudgment interest under the statute because his claim was for GOA 's failure to pay the IRS, not himself. The district court found this argument "disingenuous, at best." Id. at 126. We need say only that it is clearly without merit. Prejudgment interest under §56-8-3(B) "constitutes an obligation to pay damages to compensate a claimant for the lost opportunity to use money owed the claimant and retained by the obligor between the time the claimant's claim accrues and the time of judgment (the loss of earning power of the claimant's funds)." Sunwest Bank, 872 P.2d at 350. As the court explained in Taylor , a judgment based on unjust enrichment or quantum meruit is a valid basis for an award of prejudgment interest under §56-8-3(B):

When a person is found to be liable in quantum meruit the factfinder has made, in essence, a determination that the person has received the benefit of money expended, or services or material provided, by another, and has not paid over that money (or the value of the services or materials) to the person entitled to reimbursement. Thus the person has retained the money due and has deprived the claimant of the opportunity to use the money.

879 P.2d at 89. The district court's decision was based on its conclusion that GOA owed money to Garcia that, due to the tax liens, was payable to the IRS. As the district court explained, Garcia "lost the opportunity of the benefit of having these monies timely credited toward the taxes he owed IRS," Appellant's App. Vol. 1 at 126, and thus fell within the purview of the statute. We agree with the court's analysis. To the extent GOA contends the court erred because Garcia's pleading did not seek prejudgment interest, we note that such specific pleading is not required. See Taylor , 879 P.2d at 88.

GOA also contends that it was inequitable for the court to award prejudgment interest sua sponte. GOA was able to address this issue in a postjudgment motion, and the court considered its arguments. We see no abuse of discretion in the court's award of prejudgment interest. See Chesapeake Operating, 193 F.3d at 1156.

E. Postjudgment interest

The district court computed postjudgment interest pursuant to N.M. Stat. Ann. §56-8-4(A) (Michie 1996). GOA contends the district court erred by awarding postjudgment interest pursuant to state law rather than federal law. We agree. See Adams-Arapahoe Joint Sch. Dist. No. 28-J v. Continental Ins. Co., 891 F.2d 772, 780 (10th Cir. 1989). We therefore vacate the court's award of postjudgment interest, and remand for a redetermination pursuant to 28 U.S.C. §1961.

II. Garcia's Cross-Appeal

Garcia appeals from the district court's determination, on GOA's motion for summary judgment, that Garcia failed to redeem the property in accordance with 26 U.S.C. §6337, and that GOA was therefore entitled to the deed to the property at the end of the redemption period. We review the district court's grant of summary judgment de novo, applying the same standards the district court did under Fed.R.Civ.P. 56. See McKnight v. Kimberly Clark Corp., 149 F.3d 1125, 1128 (10th Cir. 1998). "Summary judgment is appropriate 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' " Id. (quoting Rule 56(c)).

Section 6337(b)(2) provides that real property sold pursuant to §6335 may be redeemed by the original owner, or certain others,

upon payment to the purchaser, or in the case he cannot be found in the county in which the property to be redeemed is situated, then to the Secretary, for the use of the purchaser . . ., the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum.

The property is located in Albuquerque , which is in Bernalillo County . The certificate of sale listed the purchaser as "Gaechter Outdoor Advertising, Inc." and its address as " P.O. Box 13059 , Albuquerque , NM 87192 ." GOA 's Suppl. App. at 25. In response to GOA's requests for admissions and in its opposition to GOA's summary judgment motion, Garcia admitted that in 1995, GOA's "business office was located in Bernalillo County at 3540 Pan American Freeway NE, Albuquerque, New Mexico 87110," and that GOA's registered agent's office was also located in Albuquerque. See id. at 1; Appellant's App. Vol. 1 at 33; id. Vol. 2 at 147, 149. In attempting to redeem the property, Garcia paid the apparently correct amount to the Secretary, through the local IRS office, several days prior to the end of the redemption period. It did not pay GOA, though it notified GOA by fax that it had paid the IRS. The district court determined that because GOA could be "found" at the post office box listed on the certificate of sale, Garcia was required to make his redemption payment to GOA at that address. It concluded that Garcia's payment to the IRS was therefore ineffective to redeem the property.

On appeal, Garcia contends that the district court was wrong in holding that he was required to send his payment to GOA 's post office box. He concedes, however, that this issue is not dispositive because the question remains "whether the district court's decision was nonetheless correct, albeit for the wrong reasons. Thus, this Court must decide whether Gaechter could have been 'found' in Bernalillo County for purposes of paying the redemption funds." Garcia's Br. at 27. He contends that there was some question as to GOA's legal status and address and that GOA failed to respond to his counsel's telephone calls seeking to clarify this information. Relying on Guthrie v. Curnutt, 417 F.2d 764 (10th Cir. 1969), Garcia argues that GOA's purposeful refusal to return his telephone calls frustrated his efforts to "find" GOA in the county, and therefore relieved him of his obligation to pay GOA. See id. at 766 (holding that where purchaser purposefully avoided owner in effort to prevent redemption, purchaser would be considered "not found" in county where property was situated).

We begin our analysis by first noting that none of the authority Garcia cites, see Fitshugh v. Ryles [81-2 USTC ¶9698], 517 F.Supp. 1361 (E.D. Ark. 1981); Silver Bell Indus., Inc. v. United States [74-2 USTC ¶9691], 1974 U.S. Dist. LEXIS 7448, No. C-4168, 1974 WL 653 (D. Colo. July 25, 1974 ), supports his contention that a purchaser cannot be "found" under §6337(b) at a post office box address. While we have no reason to disagree with the district court's conclusion regarding this matter, we note we have not located authority one way or the other. In any event, we need not address the issue since Garcia concedes it is not dispositive of the appeal. See Perry v. Woodward, 199 F.3d 1126, 1141 n.13 (10th Cir. 1999) (court of appeals may affirm district court's ruling for any reason supported by record).

The dispositive issue is whether GOA could be found in Bernalillo County . However, we also need not address Garcia's argument based on Guthrie that GOA should not be considered "found" in Bernalillo County because of its purposeful acts to frustrate his effort to verify its status and address. He failed to make this argument in the district court. See Sac & Fox Nation, 213 F.3d at 575. In the district court, Garcia argued that because his counsel was uncertain as to GOA's proper legal status and address, it was reasonable for him to "constructively pay" GOA by making the redemption payment to the IRS. GOA 's App. Vol. 1 at 38-42, id. Vol. 2 at 147-58. Even were we to consider his appellate argument as pursuing this contention, we would find it unpersuasive. As noted above, Garcia admitted that GOA could be found at a Bernalillo County address. There being no disputed issue of fact regarding this issue, we conclude the district court correctly granted summary judgment to GOA on the redemption issue.

The judgment of the district court is AFFIRMED in part and REVERSED in part, and the case is REMANDED to the district court for further proceedings consistent with this order and judgment.

Entered for the Court

^* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

¹ The parties apparently did not prepare a pretrial order. Before trial, they each submitted proposed findings of fact and conclusions of law and trial briefs, though neither party included the trial briefs in the appendices filed on appeal.

² In relevant part, N.M. Stat. Ann. §37-1-4 (Michie 1990) provides a four-year limitations period for actions on unwritten contracts and "all other actions not herein otherwise provided for."

³ We note that New Mexico courts use both "could" and "should" with respect to the discovery aspect of the doctrine. Compare Continental Potash, 858 P.2d at 74 ("could not have known"), with Kern, 697 P.2d at 139 (using term "should," but also quoting New Mexico Court of Appeals decision using "could," Hardin v. Farris, 87 N.M. 143, 530 P.2d 407, 410 (N.M. Ct.App. 1974)). Because the discovery aspect of the doctrine is further modified by requiring the party to have exercised reasonable or ordinary diligence, we do not believe the choice of terms makes a material difference in application of the doctrine.

⁴ GOA also contends that Garcia should not be allowed to benefit from the doctrine of fraudulent concealment because he failed to plead it. GOA, however, did not argue in the district court that Garcia's failure to plead the doctrine was fatal to his statute of limitations defense, see GOA 's App. Vol. 1 at 104, and we therefore decline to consider the argument on appeal. See Sac & Fox Nation of Missouri v. Pierce, 213 F.3d 566, 575 (10th Cir. 2000) (issues raised but not argued in the district court ordinarily not considered on appeal).

⁵ Citing cases such as FDIC v. Noel, 177 F.3d 911, 915 (10th Cir. 1999), cert. denied, 145 L.Ed.2d 814, 120 S.Ct. 935 (2000), Zinn v. McKune, 143 F.3d 1353, 1360 (10th Cir. 1998), and Tele-Communications, Inc. v. Commissioner [94-1 USTC ¶50,020], 12 F.3d 1005, 1007 (10th Cir. 1993), GOA argues that the district court's decision cannot be affirmed on the basis of the implied covenant because Garcia failed to raise that issue below. The waiver rule on which GOA relies applies to appellants' attempts to reverse district court decisions, not appellees' attempts to affirm them. See Hernandez v. Starbuck, 69 F.3d 1089, 1093-94 (10th Cir. 1995). Moreover, we have the "freedom to affirm a district court decision on any grounds for which there is a record sufficient to permit conclusions of law, even grounds not relied upon by the district court." Id. (quotations, citations omitted).

⁶ We also note that the district court held that the notices of levy IRS sent to GOA demanded payment from GOA, see GOA 's App. Vol. 1 at 116, and that failures to comply with such demands are subject to substantial penalties. See Kane v. Capital Guardian Trust Co. [98-2 USTC ¶50,491], 145 F.3d 1218, 1222 (10th Cir. 1998); 26 U.S.C. §6332(d).

⁷ GOA contends that because Garcia's claim involves periodic payments, the cause of action accrues and the statute runs from the time each payment was due. See Plaatje v. Plaatje, 95 N.M. 789, 626 P.2d 1286, 1287-88 (N.M. 1981).

⁸ GOA had earlier filed its original version of its proposed findings of fact and conclusions of law, see Appellant's App. Vol. 1 at 79-85, and then an amended version of that document, see id. at 86-92. In neither of these documents did it raise the contract-versus-unjust-enrichment argument it now presents. It did assert, in its proposed conclusions of law, that "the doctrine of unjust enrichment does not apply because there are/were adequate remedies of law and one cannot claim equity when there were other causes of action that accrued and expired through the operation of the statute of limitations and through one's failure to assert." Id. at 84, 91. Even were we to consider these documents, our conclusion would remain the same.

⁹ Even GOA, in its argument regarding the appropriate statute of limitations, admitted that "while Garcia labeled his claim as one for 'unjust enrichment,' " it is essentially based on "an implied-in-law contract or an implied duty to pay based upon Gaechter's continued use of the billboards." GOA 's Opening Br. at 20-21.

¹⁰ Roig stated that "[a] tax-sale certificate transfers title to the purchaser from the moment of the sale," citing S.R.A. v. Minnesota, 327 U.S. 558, 567, 90 L.Ed. 851, 66 S.Ct. 749 (1946), which in turn relied on Van Brocklin v. Tennessee, 117 U.S. 151, 179, 29 L.Ed. 845, 6 S.Ct. 670 (1886). Roig [86-1 USTC ¶9345], 617 F.Supp. at 915. Section 6339(b)(2), stating that the deed obtained in exchange for the certificate of sale transfers title, was part of the Internal Revenue Code of 1954.