Private Entity Owes Tax Sale Surplus, Nebraska Justices Rule

A private third party must pay a former homeowner for the surplus proceeds from a tax foreclosure because the entity performed an unconstitutional state action, the Nebraska Supreme Court held Friday.

Continental Resources bought a tax lien certificate linked to the property, which it then used to execute the tax foreclosure after Kevin Fair didn’t redeem the property by paying off the taxes due, the unsigned opinion said. Because Continental had the authority to repossess the property—and did—the private entity is liable for compensating Fair, the court said.

The Nebraska high court revisited the case after the US Supreme Court ...