In Re: Sale of Real Estate by Lackawanna County TCB ~ Real Owner: G. Brown ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Sale of Real Estate by :
Lackawanna County Tax Claim Bureau :
:
Judicial Tax Sale Property Situate at :
911 Albright Avenue Scranton, PA : No. 1346 C.D. 2019
18508 : Argued: February 9, 2021
:
Tax Map No. 14508-040-030 :
:
Real Owner: Gloria Brown :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge (P.)
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION BY
JUDGE COHN JUBELIRER FILED: May 10, 2021
Gloria Brown (Ms. Brown) appeals from the Order of the Court of Common
Pleas of Lackawanna County (common pleas) that denied Ms. Brown’s Motion for
Post-Trial Relief (Post-Trial Motion). Common pleas previously denied Ms.
Brown’s Petition to Set Aside Judicial Tax Sale (Petition to Set Aside) of her
property located at 911 Albright Avenue, Scranton, PA, 18508 (Property), agreeing
with the Lackawanna County Tax Claim Bureau (Bureau) and Kroperland, Inc.
(Purchaser) that the Petition to Set Aside was barred by the six-month statute of
limitations applicable to challenges to judicial sales pursuant to Section 5522(b)(5)
of the Judicial Code, 42 Pa.C.S. § 5522(b)(5), and that the discovery rule did not toll
the statute of limitations.1
1
That section provides: “[t]he following actions and proceedings must be commenced
within six months: . . . [a]n action or proceeding to set aside a judicial sale of property.” 42 Pa.C.S.
(Footnote continued on next page…)
On appeal, Ms. Brown argues that common pleas’ Order should be reversed
because the Bureau did not comply with the mandatory notice requirements of
Section 607.1(a) of the Real Estate Tax Sale Law (Law),2 which deprived Ms. Brown
of due process and deprived common pleas of jurisdiction to approve the judicial
sale resulting in the sale being void ab initio. Ms. Brown asserts that because
jurisdictional challenges can be raised at any time, the statute of limitations does not
bar the Petition to Set Aside. The Bureau and Purchaser do not argue that there was
strict compliance with the Law’s notice requirements but assert that any deviation
therefrom is not jurisdictional in nature. Therefore, they maintain, Ms. Brown was
required to establish that her Petition to Set Aside is not barred by the statute of
limitations before she can raise her non-jurisdictional claims of lack of notice/service
and, having not done so, common pleas’ Order should be affirmed.
I. BACKGROUND
A. Facts
In February 2017, the Bureau filed a Petition to Sell Tax Delinquent Property
at Judicial Sale Free and Clear of All Liens and Encumbrances (Petition to Sell)
relating to the Property, of which Ms. Brown was record owner. (Reproduced
Record (R.R.) at 12a.) The Petition to Sell recited that the Property had been
§ 5522(b)(5). This begins to run when the action accrues, which is “when the injured party
possesses sufficient critical facts to put [the party] on notice that a wrong has been committed and
that [the party] need[s to] investigate to determine whether [the party] is entitled to redress.” Weik
v. Estate of Brown, 794 A.2d 907, 909 (Pa. Super. 2002) (citation omitted). “The discovery rule
is an exception to the statute which provides that ‘the statute is tolled, and does not begin to run
until the injured party discovers or reasonably should discover that [the party] has been injured
and that [the party’s] injury has been caused by another party’s conduct.’” Constantino v. Carbon
Cnty. Tax Claim Bureau, 895 A.2d 72, 74-75 (Pa. Cmwlth. 2006) (quoting Fine v. Checcio, 870
A.2d 850, 859 (Pa. 2005)).
2
Act of July 7, 1947, P.L. 1368, as amended, added by Section 30 of the Act of July 3,
1986, P.L. 351, 72 P.S. § 5860.607a(a).
2
exposed to an upset tax sale on September 26, 2016, for the nonpayment of taxes for
the 2014 and 2015 tax years, (id. at 20a), the sale did not obtain a sufficient bid to
pay the set upset price, and there had been no request for stay or removal of the
Property from sale or discharge of the tax claim by Ms. Brown or any of her heirs,
successors, or assigns, lien creditors or any of those heirs, successors, or assigns, or
other interested person, (id. at 12a-13a). The Bureau stated that the judicial sale
would occur on March 27, 2017, and asked common pleas to issue a Rule on all
parties of interest to appear and show cause why the Property “should not be sold
free and clear of their respective tax and municipal claims, liens, mortgages, charges,
estates and encumbrances.” (Id. at 14a.) Common pleas issued the requested Rule,
setting the returnable date as March 16, 2017. (Id. at 11a.)
The Bureau attempted to serve the Rule and Petition to Sell personally on Ms.
Brown at the Property, but the Sheriff’s Return dated February 13, 2017, reflected
that personal service was unsuccessful and included the notation “not found[,] vacant
2/13/2017.” (Id. at 10a.) At the Bureau’s request, common pleas issued an order
approving alternative service for numerous properties set for judicial sale, including
the Property, by both publication and United States First-Class Mail to the last
known address of the property owner and indicating that such service would be
sufficient. (Original Record (O.R.) at Item 3.) Thus, the Bureau published notice of
the judicial sale and attempted to serve Ms. Brown by mailing the materials to the
Property, which was her last known address despite knowing, based upon the
Sheriff’s Return, that the Property was vacant. The Bureau filed an affidavit by its
counsel on March 13, 2017, stating that it had mailed the Rule and Petition to Sell
to Ms. Brown on March 10, 2017. (Id. at Item 4.) Satisfied that the Law’s
requirements were met, common pleas approved the judicial sale of the Property by
3
order dated March 20, 2017. (Id. at Item 5.) The Property was sold at the judicial
sale on March 27, 2017, to Purchaser for $8,000. (R.R. at 43a.) However, as
reflected in the Bureau’s records, the mailed notice was subsequently returned as
“Unable to Forward.” (Id. at 42a.) A deed from Bureau to Purchaser dated June 6,
2017, was recorded on June 30, 2017. (Id. at 44a-47a.)
B. Petition to Set Aside
On April 4, 2018, Ms. Brown filed the Petition to Set Aside, asserting she had
“not receive[d] actual notice of the [j]udicial [s]ale,” had “first bec[o]me aware of
the [j]udicial [s]ale in late October or early November[] 2017[,] and [had] retained
counsel to determine how the [P]roperty was sold without providing any notice to
her.” (Id. at 35a-36a.) Ms. Brown asserted she would repay Purchaser what had
been “reasonably expended in connection with the purchase of the Property,” her
sole asset, the value of which Ms. Brown believed to be more than $70,000 based
upon “the Realty Transfer Tax Statement of Value filed in connection with the June
6, 2017 Deed. . . .” (Id. at 36a-37a.) She averred that given that value, the sale of
the Property for $8,000 was grossly inadequate and was a basis to overturn the sale.
(Id. at 37a.)
The Bureau filed an Answer to the Petition to Set Aside, denying the material
allegations. (Id. at 52a-53a.) The Bureau also argued that the Petition to Set Aside
was barred by the relevant limitations period of six months, which, based on the
discovery rule, began to run on the date the deed was recorded on June 30, 2017,
citing In re Sale of Real Estate by Lackawanna Tax Claim Bureau (Pa. Cmwlth., No.
2027 C.D. 2013, filed August 1, 2014), slip op. at 14 n.9 (HSBC Bank), and Deutsche
Bank National Trust Co. v. Bendex Properties LLC, No. 3:16-CV-00432, 2018 WL
1532796, *2 (M.D. Pa. March 29, 2018). (R.R. at 53a-55a.) On April 5, 2018,
4
common pleas issued a Rule to Show Cause on the Bureau as to why the Petition to
Set Aside should not be granted, returnable on April 25, 2018, and scheduled a
hearing for May 22, 2018. (Id. at 34a.)
C. Proceedings Before Common Pleas
Ms. Brown did not appear at the May 22, 2018 hearing but was represented
by counsel. The Bureau was represented by counsel, and a Bureau claims processor,
Barbara Lynady (Claims Processor), testified.3 The Bureau argued that the Petition
to Set Aside should be dismissed for being filed outside the statute of limitations
period without consideration of the substantive arguments on the alleged lack of
notice. (Id. at 79a, 99a.) Ms. Brown asserted that “absent proper notice to [the
taxpayer], [common pleas] lack[ed] jurisdiction to even order a sale” and that, here,
“the notice was so defective . . . that [common pleas] had no ability to order a sale
. . . [of the] [P]roperty.” (Id. at 80a.) In this circumstance, Ms. Brown argued, “[t]he
statute [of limitations] would[ not] have come into play because the sale could[ not]
have taken place or should not have been able to take place” because one “can[not]
rely on a defective service to create a statute of limitations” issue. (Id. at 80a-81a.)
The Bureau responded that, “if [this] was the case[,] the statute of limitations would[
not] ever apply in tax sale cases” because “the argument always is a lack of notice.”
(Id.) Ms. Brown argued that accepting this argument “would give the tax claim
bureau free reign to ignore the statute completely,” resulting in “people los[ing] their
property without appropriate notice,” which should not be allowed under the strict
construction of the notice requirements in taxing statutes. (Id. at 81a-82a.)
3
Purchaser also briefly testified that the Property had been condemned and that, in addition
to the $8,000 purchase price, he had invested $10,000 into the Property. (R.R. at 100a-01a.)
5
The Bureau called Claims Processor to establish the filing and service of the
Petition to Sell. (Id. at 82a.) Claims Processor testified that her duties included
collecting delinquent taxes and preparing properties for tax sale and that she was
familiar with the Bureau’s record keeping system. (Id. at 83a.) She agreed that the
Bureau had a regular practice of keeping records showing compliance with the
Law’s notice requirements and had reviewed the file related to the sale of the
Property. (Id.) According to Claim Processor’s review of the file, the Bureau
attempted to serve the Petition to Sell and Rule on Ms. Brown by both Sheriff and
by First-Class Mail, after receiving permission to use alternative service, and these
attempts were unsuccessful. (Id. at 84a-86a.) In addition, she testified, the judicial
sale was published in both a paper of general circulation and a legal journal in
Lackawanna County. (Id. at 86a-87a.) On cross-examination, Claims Processor
agreed she was aware that the First-Class Mail was returned. When asked what the
Bureau then did to try to find Ms. Brown, Claims Processor testified that “[u]sually
. . . [they] try to look through the white pages or if there[ is] a different address and
it[ is] return[ed] to sender we do[ not] know if the [person is] not there, why it was
returned. It was[ not] refused, so we would look to see” “if she lived at another
location.” (Id. at 92a.) However, Claims Processor could not answer whether this
process “was done in this particular case” because this was not her property and each
Bureau claims processor had his or her “own properties, and everyone does check to
make sure everything is done for each property.” (Id.) She acknowledged there
were no notations on the Property’s file describing what efforts were performed to
find Ms. Brown once service by mail and Sheriff were unsuccessful because they
“do[ not] usually put [notations] in the file,” she had “never made notations on [her]
propert[ies],” and she thought this would be no different for this Property. (Id. at
6
92a-93a.) Therefore, Claims Processor agreed that she could not say “with any
certainty what specific actions were taken and by whom and on what date to find
Ms. Brown.” (Id. at 93a.)
On December 18, 2018, common pleas issued an order denying the Petition
to Set Aside and sustaining the March 27, 2017 judicial sale of the Property. (Id. at
58a.) Ms. Brown filed the Post-Trial Motion on December 28, 2018, challenging
common pleas’ finding in favor of the Bureau and Purchaser. Ms. Brown reiterated
her claims set forth in the Petition to Set Aside and asserted that it was clear from
the May 22, 2018 hearing that the Bureau had not established that it had complied
with the Law’s requirement that additional or special efforts be taken to find her.
(Id. at 60a-61a.) Because the Bureau had not met its burden of proving it complied
with the Law’s requirements, Ms. Brown asserted that she was entitled to judgment
in her favor. (Id. at 63a.)
Following argument, common pleas issued a Memorandum & Order denying
the Post-Trial Motion on August 21, 2019.4 Citing the Bureau’s argument that the
Petition to Set Aside was time-barred, common pleas reasoned as follows:
[Ms.] Brown acknowledged at the time of the hearing that she became
aware that the [P]roperty had been sold at tax sale in “late October or
early November[] 2017”. Thus, [Ms.] Brown avers the discovery rule
tolled the statute of limitations. The relevant factual inquiry into the
applicability of the discovery rule is the determination [of] whether,
during the limitations period, the [p]etitioner was able through the
exercise of reasonable diligence to know that she had been injured and
by what cause. See Gleason v. Borough of Moosic, 15 A.3d 479 (Pa.
2011).
4
An earlier argument was held before the common pleas judge who issued the December
18, 2018 Order, but that judge determined that he should not hear the Post-Trial Motion due to a
conflict. Therefore, a second argument was heard by a different common pleas judge, who issued
the decision on the Post-Trial Motion.
7
Our review of the record demonstrates a lack of reasonable diligence,
or any diligence, on [Ms. Brown’s] part. Even assuming the recording
of the tax sale deed on June 30, 2017[,] did not serve as constructive
notice, [Ms.] Brown, based on her admitted discovery in late October
or early November of 2017, filed her Petition outside the permitted six[-
]month period.
(Common Pleas Memorandum & Order, Aug. 21, 2019, at 2.) Ms. Brown now
appeals to this Court.5
II. THE PARTIES’ ARGUMENTS
Ms. Brown argues common pleas erred in relying on the statute of limitations
to deny the Petition to Set Aside because her challenge to the judicial sale is
jurisdictional and, therefore, can be raised at any time. McCutcheon v. Phila. Elec.
Co., 788 A.2d 345, 349 (Pa. 2002). She asserts the notice requirements of the Law,
which are detailed and extensive, are mandatory and must be strictly construed. In
re Sale of Real Estate by Lackawanna Cnty. Tax Claim Bureau, 22 A.3d 308, 315
(Pa. Cmwlth. 2011) (Rinaldi). Ms. Brown argues that, pursuant to Section 607.1(a)
of the Law, the Bureau must take reasonable steps to provide notice to delinquent
taxpayers before selling their property. Jones v. Flowers, 547 U.S. 220, 226, 234
(2006). The Bureau’s noncompliance with Section 607.1(a)’s requirements, which
define the minimum reasonable efforts a tax claim bureau should take, she argues,
results in the taking of her Property without due process. And, it is clear from this
record, Ms. Brown asserts, that the Bureau did not meet its burden of proving its
5
“Our scope of review in tax sale cases is limited to determining whether [common pleas]
abused its discretion, rendered a decision with a lack of supporting evidence, or clearly erred as a
matter of law.” Plank v. Monroe Cnty. Tax Claim Bureau, 735 A.2d 178, 181 n.6 (Pa. Cmwlth.
1999). “[A] challenge to jurisdiction raises a question of law. . . . Thus, our standard of review is
de novo, and our scope of review is plenary.” Waggle v. Woodland Hills Assoc., Inc., 213 A.3d
397, 402 n.5 (Pa. Cmwlth. 2019).
8
compliance with Section 607.1(a).6 See McElvenny v. Bucks Cnty. Tax Claim
Bureau, 804 A.2d 719, 721 (Pa. Cmwlth. 2002).
Ms. Brown next argues that “personal jurisdiction is not perfected unless and
until [the notice and service requirements of the Law] [are] complied with,” even if
compliance with those requirements “would have been futile.” (Ms. Brown’s Brief
(Br.) at 15-16.) See Rinaldi, 22 A.3d at 313; City of Philadelphia v. Manu, 76 A.3d
601, 605-06 (Pa. Cmwlth. 2013). She asserts that, due to the lack of compliance
with the notice and service provisions of the Law, common pleas lacked jurisdiction
and was “powerless to enter judgment against that party.” (Ms. Brown’s Br. at 17
(quoting City of Philadelphia v. Berman, 863 A.2d 156, 160 (Pa. Cmwlth. 2004)).)
Ms. Brown contends that, while these requirements may be viewed, on their face, as
procedural because they are the means through which common pleas obtains its
authority to order a judicial sale, in which case a voidable judgment would result,
they are really jurisdictional such that noncompliance results in a void judgment.
M&P Mgmt., L.P. v. Williams, 937 A.2d 398, 400-02 (Pa. 2007). For this reason,
Ms. Brown argues that common pleas’ order approving the judicial sale of the
Property was void ab initio and should have been struck once brought to common
pleas’ attention because a void judgment “cannot become valid through the lapse of
time.” (Ms. Brown’s Br. at 19 (quoting M&P Mgmt., 937 A.2d at 401).)
The Bureau responds that common pleas properly denied the Petition to Set
Aside because Ms. Brown’s challenges, including those relating to the failure to
6
Ms. Brown also cites Sections 602 and 607 of the Law in her brief, suggesting that these
are the relevant notification requirements for the tax sale here. However, those requirements are
for upset tax sales, which are more onerous than the notice requirements for judicial sales, which
are found at Sections 611 and 612 of the Law. 72 P.S. §§ 5860.602, .607, .611, .612; In re Serfass,
651 A.2d 677, 679-680 (Pa. Cmwlth. 1994) (explaining that the notice requirements for judicial
sales are less onerous than those for upset tax sales). Ms. Brown also notes that she did not receive
notice of the upset sale.
9
comply with the Law’s notice requirement, were barred by the six-month statute of
limitations applicable to judicial sales. The Bureau argues that the six-month statute
of limitations began to run at the recording of the deed, which provided constructive
notice of the judicial sale of the Property. HSBC Bank, slip op. at 14 n.9; Deutsche
Bank, 2018 WL 1532796, at *7. The expiration of the statute of limitations period,
the Bureau argues, “bars [Ms. Brown] from challenging any potential defects in the
Tax Sale.” (Bureau’s Br. at 5 (quoting Pfeifer v. Westmoreland Cnty. Tax Claim
Bureau, 127 A.3d 848, 852 (Pa. Cmwlth. 2015) (emphasis omitted)); Constantino v.
Carbon Cnty. Tax Claim Bureau, 895 A.2d 72, 76 (Pa. Cmwlth. 2006). The Bureau
was silent regarding its compliance with the Law’s notice requirements and did not
directly address Ms. Brown’s jurisdictional arguments in its brief. However, at oral
argument, the Bureau asserted that accepting Ms. Brown’s jurisdictional arguments
would effectively eliminate the statute of limitations, which serves to provide finality
to tax sales and as a bar to prevent the litigation of stale claims.
Purchaser agrees with the Bureau that the Petition to Set Aside is barred by
the six-month statute of limitations, which began to run on the recording of the deed.
The recording of the deed, Purchaser asserts, constitutes constructive notice on
landowners because the Pennsylvania recording statute,7 21 P.S. § 351, has been
7
Section 1 of the Act of May 12, 1925, P.L. 613, as amended, 21 P.S. § 351. This provision
states:
All deeds, conveyances, contracts, and other instruments of writing wherein it shall
be the intention of the parties executing the same to grant, bargain, sell, and convey
any lands, tenements, or hereditaments situate in this Commonwealth, upon being
acknowledged by the parties executing the same or proved in the manner provided
by the laws of this Commonwealth, shall be recorded in the office for the recording
of deeds in the county where such lands, tenements, and hereditaments are situate.
Every such deed, conveyance, contract, or other instrument of writing which shall
not be acknowledged or proved and recorded, as aforesaid, shall be adjudged
(Footnote continued on next page…)
10
interpreted as giving notice to the public of the title transfer and contents of the deed.
Weik v. Estate of Brown, 794 A.2d 907, 911 (Pa. Super. 2002). Further, Purchaser
points out two cases where this Court did not address claims of insufficient notice
and procedural irregularities of a tax sale, similar to those made by Ms. Brown, due
to the expiration of the statute of limitations. Pfeifer, 127 A.3d at 854; Poffenberger
v. Goldstein, 776 A.2d 1037, 1041-42 (Pa. Cmwlth. 2001). Purchaser asserts that
Ms. Brown admitted, through the Petition to Set Aside, that she knew about the sale
within the six-month limitations period and retained counsel. But, Purchaser argues,
because Ms. Brown did not testify at the hearing, there was no sworn testimony
regarding whether she received the bills and notices regarding the past due taxes,
how and when she became aware of the tax sales, when she retained counsel, and
why she waited until after the expiration of the limitations period to file the Petition
to Set Aside. Purchaser warns that, “[u]nder these circumstances, without any sworn
testimony, an aggrieved owner (like [Ms. Brown] here) can make[ ]up any set of
facts to support a petition at any time after a [j]udicial . . . [s]ale,” which would
render Section 5522(b)(5)’s specific limitations period for challenges to judicial
sales “futile and greatly prejudice[s] purchasers like [Purchaser] here.” (Purchaser’s
Br. at 7-8.)
fraudulent and void as to any subsequent bona fide purchaser or mortgagee or
holder of any judgment, duly entered in the prothonotary’s office of the county in
which the lands, tenements, or hereditaments are situate, without actual or
constructive notice unless such deed, conveyance, contract, or instrument of writing
shall be recorded, as aforesaid, before the recording of the deed or conveyance or
the entry of the judgment under which such subsequent purchaser, mortgagee, or
judgment creditor shall claim. Nothing contained in this act shall be construed to
repeal or modify any law providing for the lien of purchase money mortgages.
21 P.S. § 351.
11
III. DISCUSSION
The parties offer compelling arguments in support of their respective positions
that due process requires more than was done here and that there be finality to tax
sales. In considering those arguments, however, we must be cognizant that the
purpose of the Law is to ensure the collection of taxes, not to deprive citizens of their
property. Rinaldi, 22 A.3d at 315. These provisions “were never meant to punish
taxpayers who omitted through oversight or error . . . to pay their taxes.” In re Return
of Sale of Tax Claim Bureau, 76 A.2d 749, 753 (Pa. 1950). Our Supreme Court has
stated that, over time, “taxing authorities have lost sight of the fact that it is a
momentous event under the United States and the Pennsylvania Constitutions when
a government subjects a citizen’s property to forfeiture for the non-payment of
taxes.” Tracy v. Cnty. of Chester, Tax Claim Bureau, 489 A.2d 1334, 1339 (Pa.
1985) (emphasis added). “It is a fundamental provision of both our state and federal
constitutions that no person shall be deprived of property except by the law of the
land or due process of law,” which requires notice and an opportunity to be heard.
Hess v. Westerwick, 76 A.2d 745, 748 (Pa. 1950). Such notice must be reasonable
under the circumstances. Id.The General Assembly has established, via the Law, what notice is reasonably
required prior to selling a property at tax sale. These notice requirements are
mandatory and must be strictly construed. Mfrs. & Traders Tr. Co. v. Luzerne Cnty.
Tax Claim Bureau, 56 A.3d 36, 39 (Pa. Cmwlth. 2012). One of these mandatory
requirements is a tax claim bureau’s obligation to make reasonable efforts to find an
owner pursuant to Section 607.1 when mailed notice is returned or when there is
doubt that the owner received such notice. Specifically, Section 607.1 of the Law
provides:
12
(a) When any notification of a pending tax sale or a tax sale subject
to court confirmation is required to be mailed to any owner,
mortgagee, lienholder or other person or entity whose property interests
are likely to be significantly affected by such tax sale, and such mailed
notification is either returned without the required receipted personal
signature of the addressee or under other circumstances raising a
significant doubt as to the actual receipt of such notification by the
named addressee or is not returned or acknowledged at all, then, before
the tax sale can be conducted or confirmed, the bureau must exercise
reasonable efforts to discover the whereabouts of such person or
entity and notify him. The bureau’s efforts shall include, but not
necessarily be restricted to, a search of current telephone directories for
the county and of the dockets and indices of the county tax assessment
offices, recorder of deeds office and prothonotary’s office, as well as
contacts made to any apparent alternate address or telephone number
which may have been written on or in the file pertinent to such property.
When such reasonable efforts have been exhausted, regardless of
whether or not the notification efforts have been successful, a notation
shall be placed in the property file describing the efforts made and the
results thereof, and the property may be rescheduled for sale or the sale
may be confirmed as provided in this act.
(b) The notification efforts required by subsection (a) shall be in
addition to any other notice requirements imposed by this act.
72 P.S. § 5860.607a (emphasis added). This provision applies to judicial sales. In
re Sale No. 10, 801 A.2d 1280, 1288 (Pa. Cmwlth. 2002). Not strictly applying the
notice provision could result in an owner being deprived of her property without due
process. In re Upset Tax Sale of Sept. 29, 2014, 163 A.3d 1072, 1074 (Pa. Cmwlth.
2017). “Service of the rule to show cause is the final required notice to be served on
[a] landowner prior to the [j]udicial [s]ale,” and there is no requirement under the
Law that landowners receive actual notice of the date of a judicial sale. In re Sale
of Real Estate Northampton Cnty. Tax Claim Bureau, 874 A.2d 697, 698, 701 (Pa.
Cmwlth. 2005).
13
A. Whether Noncompliance with the Law’s Notice Requirements Would be
a Jurisdictional Defect that Renders the Judicial Sale of the Property
Void Ab Initio?
It is beyond purview that a court that lacks personal jurisdiction is powerless
to enter judgment against the defendant. Berman, 863 A.2d at 160. As we explained
in Fraisar v. Gillis, 892 A.2d 74, 77 (Pa. Cmwlth. 2006), “[b]efore a court may
determine a legal action, it must possess both subject[] matter jurisdiction and
jurisdiction o[ver] the person.” (Emphasis added.) Where the court lacks
jurisdiction, any judgment entered thereby is void and can be challenged at any
time.8 M&P Mgmt., 937 A.2d at 401.
Although Berman and Fraisar did not involve tax sales, their fundamental
principles have been applied in tax sale cases, including those Ms. Brown argues
support her argument that compliance with the notice requirements implicates a
court of common pleas’ jurisdiction and, therefore, its authority to order a judicial
tax sale in the first instance. In contrast, the Bureau and Purchaser argue that caselaw
supports their arguments that challenges to defects in notice may be addressed only
through a timely-filed petition to set aside. Upon review, we determine that Ms.
Brown’s position is supported by that caselaw, while the cases cited by the Bureau
and Purchaser are distinguishable.
In Rinaldi, the Court reviewed the denial of a petition to set aside a judicial
tax sale based on the Bureau’s noncompliance with Section 611 of the Law’s
requirement that a sheriff serve the rule to show cause when it had a state constable
serve the documents on the son/stepson of the property owner. Although the court
of common pleas discounted the noncompliance because the service was consistent
with a county resolution that allowed for service by constable and because the
8
In contrast, a procedural defect results in voidable judgment that must be challenged
within a certain period of time. M&P Mgmt., 937 A.2d at 401.
14
taxpayer had constructive notice of the matter, we reversed. This Court explained
that “[t]he primary purpose of service is to give adequate notice of the pendency
of an action,” and that “[p]roper service is a prerequisite to a court acquiring
personal jurisdiction over a defendant.” Rinaldi, 22 A.3d at 313 (emphasis added)
(citing Fraisar, 892 A.2d at 77). The Court distinguished Section 601(a)(3) of the
Law, 72 P.S. § 5860.601(a)(3), which pertains to the service requirements for upset
tax sales and allows for personal service by someone other than a sheriff, from
Section 611 of the Law, which applies to judicial tax sales and requires personal
service of the rule by sheriff. Strictly construing Section 611’s requirement that the
rule to show cause be served by a sheriff, the Court held that service was invalid,
and the judicial sale had to be set aside.
Subsequently, in Manu, we reiterated our statement in Rinaldi that proper
service is needed for a court to have personal jurisdiction over a defendant and
further explained that “[f]ailure to strictly comply with the service requirement[s]
deprives the court of jurisdiction to authorize a sheriff’s sale.” 76 A.3d at 605-06(emphasis added) (citing Fraisar, 892 A.2d at 77). Manu involved a challenge to a
sheriff’s sale of property under what is commonly known as the Municipal Claims
and Tax Liens Act (MCTLA)9 due to noncompliance with that act’s notice
provisions, which, like a judicial sale, require court approval of the requested sale
and is free and clear. With regard to service, the City of Philadelphia presented an
affidavit claiming to show that service occurred prior to the sale, but the affidavit
had been signed after the court of common pleas had approved the tax sale. Id. at
605. Explaining that, prior to “granting a petition for sale, the court must make ‘an
independent inquiry’ regarding the [C]ity’s strict compliance with the service
9
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §§ 7101-7455.
15
requirement,” we held that “[o]bviously,” the affidavit of service “could not have
been before the court [of common pleas] by any means . . . when the order for sale
of the property was entered,” and the finding of proper service made by the court of
common pleas was not supported by the record. Id. at 605-06. We held that “[s]trict
compliance with the service requirement protects the procedural due process
rights of all interested parties to notice and an opportunity to be heard and guards
against deprivation of property without substantive due process of law.” Id. at
606 (emphasis added). Due to the numerous violations of the MCTLA, which
implicated the due process rights of interested parties, we vacated the order
authorizing the sale of the property. Id. at 607.
In Serrino v. County of Luzerne Tax Claim Bureau (Pa. Cmwlth., No. 2014
C.D. 2012, filed August 1, 2013), slip op. at 11-12 (quoting Berman, 863 A.2d at
160) (emphasis added),10 we stated, based on the requirements of service of original
process under Pennsylvania Rules of Civil Procedure 402(a) and 405(b), Pa.R.C.P.
Nos. 402(a), 405(b), that “[s]ervice of process is the mechanism by which a court
obtains jurisdiction over a defendant” and “[i]n the absence of valid service, a
court lacks personal jurisdiction over the party and is powerless to enter
judgment against that party.” In Serrino, the sheriff’s return reflected that the
petition to sell and rule to show cause were handed to a person at the property
owner’s business address, but there was no indication on the sheriff’s return of that
person’s relationship with the property owner and, therefore, why service on that
individual was valid. Due to the return of service in Serrino being “facially
10
Although unreported panel decisions of this Court are not binding, they may be cited as
persuasive authority pursuant to Pennsylvania Rule of Appellate Procedure 126(b), Pa.R.A.P.
126(b), and Section 414(a) of this Court’s Internal Operating Procedures, 210 Pa. Code
§ 69.414(a).
16
defective,” it was insufficient to establish that service was proper when the court of
common pleas issued the order directing that the property could be sold at judicial
sale. Id. at 12. Because the property owner “did not receive proper legal notice[] in
accordance with the Law,” we affirmed the order setting aside the judicial sale “and
declar[ed] the . . . judicial sale of the [p]roperty null and void. . . .” Id. at 12, 14
(emphasis added).
These cases support Ms. Brown’s argument that defects in notice or
compliance with the Law’s notice requirements not only deprived her of due process
but also deprived the court of common pleas of jurisdiction and the authority to order
the judicial sale of the Property, which can be raised at any time. We recognize that
Rinaldi, Manu, and Serrino all involved timely filed challenges; however, we must
give effect to the Court’s repeated and consistent application of the principle that the
notice requirements are jurisdictional. Doing so, such sales were void ab initio.
Accord Pa. Game Comm’n v. Thomas E. Proctor Heirs Tr., Civil No. 1:12-CV-
01567, 2019 WL 6954101 (M.D. Pa. Feb. 21, 2019) (holding that a defendant to a
2012 quiet title action could challenge a 1908 treasurer’s sale for nonpayment of
taxes based on lack of proper notice because the lack of notice was a jurisdictional
defect that could be raised at any time), exceptions denied, Pa. Game Comm’n v.
Thomas E. Proctor Heirs Tr., 455 F. Supp. 3d 127, 152 (M.D. Pa. 2020).
The cases cited by the Bureau and Purchaser do not compel a different result.
In Poffenberger, the plaintiffs filed a quiet title action relating to 23 acres in 1997
against the purchaser of property at a 1985 upset tax sale, who in turn argued that
the plaintiffs’ record title only gave them ownership of 13 acres and that the action
was barred by the statute of limitations for tax sales. There had been a prior tax sale
of the 23 acres in 1964, and there was no information on whether the Law’s
17
requirements were followed for that sale. The trial court held that the statute of
limitations did not bar the quiet title action and that because there was no evidence
that the Law’s notice requirements were followed, that sale was invalid. On appeal,
we reversed, without analysis, “conclud[ing] that the procedural regularity of th[e]
tax sale [was] beyond challenge” because the statute of limitations had passed for
both the 1985 and 1964 tax sales. Poffenberger, 776 A.2d at 1041-42. However,
we recognized at least one exception, where a property is improperly listed for upset
tax sale, such as where all of the taxes had been paid, the upset sale of that property
was void ab initio notwithstanding that the petition to set aside was filed outside the
applicable statute of limitations period. Id. at 1042.
In Pfeifer, individuals who asserted they owned certain oil and gas rights filed
an action in 2013 challenging the sale of those rights in a 1990 upset tax sale without
the tax claim bureau having provided them proper notice under the Law, which the
tax claim bureau argued was barred by the statute of limitations. The court of
common pleas granted summary judgment and dismissed the action, concluding that
the individuals had received constructive notice of the sale and any delay was due to
their own failure to exercise due diligence. Noting that “a discussion of the statute
of limitations . . . must be examined in conjunction with a discussion of notice,” we
explained, citing Poffenberger, that the Court had held that a cause of action to set
aside a tax sale on the basis of deficient notice accrued and the statute of limitations
began to run on the date of the tax sale.” 127 A.3d at 851. We agreed with the court
of common pleas that the tax sale had occurred more than 23 years before the filing
of the action to set aside the sale and that “[r]ecording the deed of the [t]ax [s]ale by
[the purchaser] put the public on notice of the sale,” and, therefore, “[t]he passage
of time and/or [] constructive notice bar[red] them from challenging any potential
18
defects in the [t]ax [s]ale.” Id. at 851-52. Finally, after reviewing Section 5527(b)
of the Judicial Code, which provides for a six-year statute of limitations period for
challenging an upset tax sale, 42 Pa.C.S. § 5527(b), we concluded “that an action to
challenge a tax sale must be initiated within [that period], regardless of a lack of
notice.” Pfeifer, 127 A.3d at 854.
However, neither Poffenberger nor Pfeifer involved, as here, an argument that
this defect was jurisdictional and, therefore, could be raised at any time. More
importantly, neither case involved a judicial sale, meaning that there was no need
for a valid court order to approve the tax sale prior to it occurring. Further,
Poffenberger recognized that the statute of limitations does not bar a claim where a
tax sale is found to be void ab initio. Thus, these cases are distinguishable and do
not require that the judicial sale here be upheld.
Ultimately, given the fundamental rights at issue when the government sells
private property for nonpayment of taxes and the critical role compliance with the
Law’s reasonable notice requirements plays in protecting those fundamental rights,
Ms. Brown’s arguments that noncompliance with the Law’s requirements is a
jurisdictional defect that can void a judicial sale are persuasive and supported by our
caselaw. As we held in Manu, “[f]ailure to strictly comply with the service
requirement[s] deprives the court of jurisdiction to authorize a sheriff’s sale.” 76
A.3d at 605-06. This is because “[s]trict compliance with the service requirement
protects the procedural due process rights of all interested parties to notice and
an opportunity to be heard and guards against deprivation of property without
substantive due process of law.” Id. at 606 (emphasis added); see also Fraisar,
892 A.2d at 77 (“The rules governing service . . . [are] to ensure notice . . . .”). In
cases where, as here, the sale of property is directed by the court of common pleas,
19
it is important for that court to “make ‘an independent inquiry’ regarding . . . strict
compliance with the service requirement[s],” Manu, 76 A.3d at 605, in order to
confirm that it has jurisdiction. Strict compliance with the notice requirements, as a
matter of due process, is of particular importance in judicial sale cases because such
sales extinguish the interests, not only of the property owner, but also, among others,
of mortgagees and lienholders. Further, the confirmation of proper service and
notice is crucial in judicial sales because the statute of limitations to challenge such
sales is a mere six months, as opposed to the six-year limitations period available
to challenge upset tax sales. Absent jurisdiction, common pleas lacked the authority
to approve the judicial sale of the Property in the first instance.
Although the Bureau and Purchaser raise understandable concerns regarding
the need for finality in tax sales and to prevent stale claims, this is not a situation
where the judicial sale being challenged occurred in the distant past.11 Ms. Brown’s
claims that the Bureau did not strictly comply with the Law’s requirements cannot
reasonably be characterized as “stale” notwithstanding that they were filed more
than six months after the judicial sale of the Property and Purchaser’s recording of
the deed. Here, by the time the mailed notice was returned by the postal service to
the Bureau as undeliverable, the sale had already occurred. Moreover, to the extent
that the Bureau’s and Purchaser’s finality arguments raise concerns regarding upset
tax sale cases, such arguments are not persuasive. While noncompliance with the
Law’s notice requirements is often an issue in upset tax sale cases, those types of
sales do not require a court order to proceed and, thus, do not implicate the
jurisdictional question before the Court in this matter.
11
We offer no opinion as to what defenses may be available to a tax claim bureau or a
purchaser under circumstances other than those presented here.
20
For these reasons, in order to establish common pleas’ jurisdiction, and,
therefore, authority to approve the judicial sale of the Property, the Bureau had to
demonstrate its compliance with the Law.
B. Did the Bureau Establish its Compliance with the Law’s Notice
Requirements so as to Provide Common Pleas with Jurisdiction to
Approve the Judicial Sale of the Property?
For judicial tax sales, the rule to show cause must be served by the sheriff,
who must “attach his return, the return receipts, and if the person named in the rule
. . . cannot be found at his last known address” evidence thereof. 72 P.S. § 5860.611.
In addition, Section 607.1 of the Law addresses what steps a tax claim bureau is to
take to find an owner when mailed notice is returned or when there is doubt that the
owner received such notice. 72 P.S. § 5860.607a. Further, under that section, the
tax sale is to be delayed while the tax claim bureau engages in those reasonable
efforts and is to be rescheduled when those requirements have been met. Id. Section
612(a) of the Law requires that, prior to ordering the judicial sale of a property, the
court must be “satisfied that service of the rule has been made upon the parties named
in the rule, in the manner provided by the [Law].” 72 P.S. § 5860.612(a)
(emphasis added). The tax claim bureau bears the burden of proving that it complied
with the statutory notice requirements. In re: Sale of Real Estate by Lackawanna
Tax Claim Bureau (Appeal of Yankowski), 986 A.2d 213, 216 (Pa. Cmwlth. 2009).
In the case sub judice, because the sheriff’s deputy was unable to personally
serve the Rule and Petition to Sell at the Property, the Bureau received permission
from common pleas to provide alternative service of the pending tax sale by
publication and by mail. As service was now to be by mail, the requirements of
Section 607.1(a) were triggered. Here, the Bureau presented Claim Processor’s
testimony and evidence from the Property’s file to describe the Bureau’s efforts to
21
serve the Rule and Petition to Sell on Ms. Brown. It is apparent from the record,
however, that the Bureau did not comply with the notice provisions of the Law.
First, Section 607.1(a)’s language reflects that there must be sufficient time
between the mailing of the notice and the tax sale itself to allow for the attempted
delivery of the mailed notice and its return to the tax claim bureau so that the tax
sale could be delayed to allow the tax claim bureau time to perform reasonable
efforts to find the owner as statutorily required. Here, after receiving permission to
serve the Rule and Petition to Sell to Ms. Brown by First-Class Mail, the Bureau
claimed to have mailed same on March 10, 2017,12 but did not wait to see if that mail
would be returned. Rather, on March 13, 2017, the Bureau filed an affidavit with
common pleas stating that it had mailed the documents to Ms. Brown. Common
pleas, which had approved the alternative service by mail, did not wait to see if
service of the Rule and Petition to Sell by mail satisfied the requirements of Section
607.1(a), but approved the judicial sale of the Property seven days later, on March
20, 2017, notwithstanding that Ms. Brown did not appear at the March 16, 2017
hearing on the Rule. The Property was sold a week later, on March 27, 2017, after
which the Bureau received the returned notice, which was marked “return to sender”
on March 27, 2017. Had it been returned to the Bureau earlier, the Bureau’s statutory
obligation to perform additional inquiries into Ms. Brown’s whereabouts would have
been triggered. Thus, Ms. Brown’s rights to the Property were terminated in a mere
17 days (and perhaps less) without her ever receiving notice of the judicial sale. The
haste at which these actions were taken is not consistent with the notice requirements
of the Law, particularly where the forfeiture of a citizen’s property for the non-
12
We note that the envelope bearing Ms. Brown’s name and the Property’s address in the
record bears a postmark of March 13, 2017, not March 10, 2017. (R.R. at 42a.)
22
payment of taxes is a “momentous event under the United States and Pennsylvania
Constitutions.” Tracy, 489 A.2d at 1339.
Second, Section 607.1(a)’s reasonable efforts requirements are not limited
only to where the mailed notice is returned, but are triggered where there are “other
circumstances [that] rais[e] a significant doubt as to the actual receipt of such
notification by the named addressee. . . .” 72 P.S. § 5860.607a(a) (emphasis added).
In this instance, after the personal service was unsuccessful, the Bureau received
permission to use alternative service via publication and First-Class Mail but then
mailed the Petition to Sell and Rule on March 10, 2017, to the same address that the
sheriff’s deputy had earlier indicated in the Sheriff’s Return was vacant.13 When
Ms. Brown or a representative did not appear at the March 16, 2017 hearing on the
Rule, her absence, in addition to the knowledge that the Property was vacant, should
have “rais[ed] a significant doubt as to the actual receipt of [the Petition to Sell and
Rule] by [Ms. Brown]” so as to trigger the Bureau’s obligation to exercise reasonable
efforts to discover her whereabouts under Section 607.1(a). Id.
Third, the record is devoid of evidence that the Bureau took any reasonable
efforts to find Ms. Brown in accordance with Section 607.1(a). The Bureau did not,
and does not, make notations in its files to reflect what efforts were made, which is
contrary to Section 607.1(a). And, while Claims Processor described what she did
to find an unknown property owner and what the Bureau’s general practice was, she
could not say what efforts were made to find Ms. Brown in this matter because this
13
While common pleas stated that such service would be sufficient, it cannot be consistent
with due process for the Bureau to mail the Petition to Sell and Rule to a property that the Bureau
knows is vacant and then sell the property without waiting to see if the mail was returned as
undeliverable thereby requiring the Bureau to take reasonable efforts to ascertain the owner’s
whereabouts.
23
was not her file and there were no notations therein. Therefore, the Bureau did not
meet its burden of showing compliance with the Law.14
Finally, under these facts, there is a real question of whether common pleas
complied with its obligations under Section 612 of the Law. Per Manu, common
pleas was obligated to make an “an independent inquiry,” 76 A.3d at 605, to
determine if the Law’s requirements were strictly satisfied prior to approving the
judicial sale of the Property. However, its approval of the Property’s sale was given
within days of when the notice had been mailed, without requiring the Bureau to
wait a sufficient period of time to ensure that the mail was not returned, and despite
Ms. Brown or a representative not appearing at the hearing on the Rule.
Because the Bureau did not comply with the Law’s service and notice
requirements, common pleas lacked jurisdiction to direct the judicial sale of the
Property. Therefore, common pleas’ March 20, 2017 order directing the sale of the
Property is null and void, and the judicial sale of the Property must be set aside.
Manu, 76 A.3d at 606-07; Serrino, slip op. at 12, 14; Rinaldi, 22 A.3d at 313.15
IV. CONCLUSION
While we are cognizant of the need to ensure the collection of taxes, we are
left to wonder, based on this record, whether the Bureau has “lost sight of the fact
that it is a momentous event under the United States and the Pennsylvania
14
The swiftness of the Bureau’s actions raises questions regarding how it undertakes its
obligations when exposing a property to judicial sale, particularly where it admittedly does not
follow even the requirement that it make notations of the reasonable efforts it takes with regard to
locating a property owner. The Bureau’s actions do not seem to provide notice of an impending
judicial sale and, instead, it here relies on the very short limitations period applicable to judicial
sales to insulate its actions from review.
15
Because of this disposition, it is not necessary to address whether the statute of
limitations began to run on the recording of the deed.
24
Constitutions when a government subjects a citizen’s property to forfeiture for the
non-payment of taxes.” Tracy, 489 A.2d at 1339. The Law, which incorporates the
principles of due process, requires that notice of judicial sales be provided to a
property’s owner, among others, and the Law sets forth what notice is reasonably
required prior to the sale of a property at judicial sale. Where, as here, a tax sale
requires prior court approval, the Court has repeatedly and consistently applied the
principles that the notice requirements are jurisdictional, that noncompliance with
those requirements leaves the approving court without jurisdiction, and that a sale
directed under these circumstances is void ab initio. Here, the Bureau did not
comply with its obligations under the Law’s notice requirements, leaving common
pleas without jurisdiction to direct the judicial sale of the Property, and that sale must
be set aside. Accordingly, common pleas’ Order is reversed.
_____________________________________
RENÉE COHN JUBELIRER, Judge
25
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Sale of Real Estate by :
Lackawanna County Tax Claim Bureau :
:
Judicial Tax Sale Property Situate at :
911 Albright Avenue Scranton, PA : No. 1346 C.D. 2019
18508 :
:
Tax Map No. 14508-040-030 :
:
Real Owner: Gloria Brown :
ORDER
NOW, May 10, 2021, the Order of Court of Common Pleas of Lackawanna
County, entered in the above-captioned matter, is REVERSED.
_____________________________________
RENÉE COHN JUBELIRER, Judge