updated 7/16/2007 10:42:03 PM ET 2007-07-17T02:42:03

A $1.63 property tax bill that never reached its destination in 1996 has turned into a nightmare for Kermit and Dolores Atwood, who are now trying to keep from losing their home over the unpaid notice.

Dolores Atwood calls the events that followed the wayward bill, including the eventual sale of their home at a sheriff's tax sale, "seven years of emotional hell."

"I don't know how much more I can endure," said Atwood, 69, while sitting in a FEMA trailer in front of her Hurricane Katrina-ravaged home north of Slidell.

The couple hope recent state court decisions, which say their home should never have been put up for sale, withstand appeals by a land company.

In 2000, the Atwoods learned their four-bedroom home had been sold in a tax sale three years earlier for the $1.63 in unpaid taxes, plus 10 cents interest and $125 in sale costs.

Period to reclaim property expires
Atwood said the couple learned of the sale about a week after the three-year period in which delinquent taxpayers can reclaim their property had ended.

The bill was sent to a defunct address and returned undelivered to the St. Tammany Parish sheriff's office. Atwood then complained to the sheriff's and assessor's offices that she never received the bill and knew nothing about it. The house, which the couple has owned mortgage-free since 1968, previously was totally state homestead exempt, meaning there was no tax bill, Atwood said.

"The sheriff's office could have easily found us," Atwood said. "We're in the phone book."

Although the State Tax Commission nullified the sale, the couple found out in 2002 — when they attempted to sell the house and got a $90,000 offer — that a buyer, Jamie Land Co., had filed suit. The company had bought the property rights from American Land Investments.

Atwood said the couple couldn't sell the house because they didn't have clear title to the property. When Katrina hit, trees fell on the house. She said they didn't have insurance, and because they didn't have clear title, they didn't qualify for federal rebuilding help.

Case could go to state Supreme Court
In May 2006, State District Judge Patricia Hedges ruled that the property title belongs to the Atwoods. Jamie Land appealed. Last month, a three-judge panel of the state 1st Circuit Court of Appeal upheld Hedges' decision. Jamie Land asked the court to rehear the case, but that request was denied last week.

Now, the company plans to ask the Louisiana Supreme Court to take up the case.

James A. Lindsay II, the company's president, said he did not want to pursue a long court case but that his rights were violated when the tax commission didn't inform him of its decision.

"I've been trying to settle this from the very beginning," Lindsay said. "I've offered to settle for very little. Every time we meet in court, we beg to settle."

Lindsay said he's made offers, ranging from $2,000 to $5,000, to settle, though Atwood said she's unaware of any offers. Lindsay said he has spent about $20,000 on the case.

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