Missouri Case Law

Respondent, v. LA-SHA CONSULTING, INC., Appellant. WD
66385, WD 66386, and WD 66387. Missouri Court of Appeals,
Western District. December 26, 2006.

Appeal from the Circuit Court of Jackson County, Missouri,
Honorable Jack Richard Grate, Jr., Judge.


THOMAS H. NEWTON, Presiding Judge.

La-Sha Consulting, Inc. (La-Sha) appeals the judgment of
the circuit court, denying its motion to set aside the tax
sale. Because the considerations for the parcels were so
grossly inadequate, we reverse.

Factual and Procedural Background

La-Sha had failed to pay real estate taxes on three parcels
of land it owned. The Jackson County Collector (County)
sued La-Sha to foreclose the tax liens against the parcels.
La-Sha did not answer. The circuit court at Independence
entered default judgments for the County after finding
La-Sha was properly notified, and ordered the Jackson
County Court Administrator to sell the parcels. La-Sha
neither appealed the foreclosure judgments nor redeemed its
parcels, as provided in sections 141.510[fn1] and 141.530.
Subsequently, the parcels were advertised for sale in a
legal publication (Daily Record), and notice of the sale
(date, location, and time) was mailed to La-Sha’s last known
address. The parcels were sold by auction at the
Independence Courthouse: Parcel I § $288.79, Parcel
II-$260.79, and Parcel III § $254.80, with each
property having a discounted land value of $3,300; La-Sha
was not present. The circuit court at Independence entered
judgments confirming the purchase prices. La-Sha filed
motions to set aside the judgments because of inadequate
consideration paid for the parcels and lack of notice to
them of the tax sale. The circuit court denied the motions,
and La-Sha appeals those judgments, which we have
consolidated into one appeal. La-Sha raises two points on
appeal. Because the first is dispositive, we need not
address the second.

Standard of Review

Our review is the same as with any other judge-tried case.
In re Foreclosure of Liens for Delinquent Land Taxes, 190
S.W.3d 416, 418 (Mo.App.W.D. 2006). We will reverse the
decision only if it is not supported by substantial
evidence, it erroneously applies or declares the law, or it
is against the weight of the evidence. Id.

Legal Analysis

La-Sha argues that the circuit court’s decision was not
supported by substantial evidence and was against the
weight of the evidence because the amounts paid for the
parcels were grossly inadequate. La-Sha claims the amounts
paid ($288.79, $260.79, and $254.80) for the land were
grossly inadequate because each parcel was appraised at
$5,000.00 with a discounted value of $3,300.00. A court of
equity cannot set aside a tax sale because of mere
inadequate consideration. Hatten v. Parcels of Land
Encumbered with Delinquent Tax Liens, 217 S.W.2d 511, 514
(Mo. banc 1949). Rather, the consideration paid must be so
grossly inadequate that it amounts to constructive fraud or
confiscation, shocking the court’s conscience. See
Delinquent Land Taxes, 190 S.W.3d at 419 (citing Brasker v.
Cirese, 269 S.W.2d 62, 67 (Mo. banc 1954)); Hatten, 217
S.W.2d at 514.

Adequate consideration means “such an amount as the court
is satisfied is substantial, and fairly and reasonably
commensurate with the value of the land in the
circumstances of a forced-tax sale.” Hatten, 217 S.W.2d at
514. Adequate consideration does not require the sale price
to mirror the full value or the reasonable market value of
the land. Id. Although no set percentage of the land’s
value constitutes inadequate consideration, Missouri cases
suggest consideration that is less than ten percent of the
value of the land is constructive fraud or amounts to
confiscation. See Wieser v. Linhardt, 257 S.W.2d 689, 691
(Mo. 1953) (listing cases that set aside tax sales where
the sale prices were less than ten percent of the land

Here, the sale prices were less than ten percent of the
discounted land value. Nothing in the record supports a
finding that the considerations were adequate. Although the
land parcels are “landlocked behind surrounding vacant
lots, and can only be useful to the adjacent property
owners,” that fact does not justify the sale prices as the
County claims. Such limitations were accounted for when the
County’s appraiser discounted the land values from $5,000
to $3,300. The discounted values also reflect that the
parcels were to be sold at a forced tax sale. See
Delinquent Land Taxes, 190 S.W.3d at 419. The appraisal
reports indicate that the land was residential in a
neighborhood with quality parks, schools, view, and noise
levels. The reports also indicate that the land would be
worth $50,000 to $175,00 if a single-family residence were
built on the land. The trial court should have disapproved
the sale and proceeded in accordance with section 141.580.
See J. C. Nichols Inv. Co. v. Roorbach, 162 S.W.2d 274,
274-75 (Mo. 1942) (reversing trial court’s denial of motion
to set aside deed).

Because there is insufficient evidence to support the
decision, and it was against the weight of the evidence, we
reverse the denial of the motion to set aside the
confirmation judgment, and the tax sale is set aside.

[fn1] All statutory references are to RSMo. (2000) unless
otherwise indicated.