In Re: B.L. Strickler, An Incapacitated Person ~ Appeal of: Blackhawk Property Investors, LLC ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Brenda L. Strickler, :
An Incapacitated Person : No. 2651 C.D. 2015
: Submitted: September 15, 2016
Appeal of: Blackhawk Property :
Investors, LLC :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE SIMPSON FILED: October 12, 2016
In this matter involving a tax sale under the Real Estate Tax Sale Law
(Tax Sale Law),1 Blackhawk Property Investors, LLC (Purchaser), a Utah
corporation, appeals from an order of the Court of Common Pleas of York County,
Orphans’ Court Division (trial court),2 setting aside a tax upset sale. The trial court
determined the York County Tax Claim Bureau (Bureau) failed to comply with the
mandatory notice requirements of the Tax Sale Law by failing to make reasonable
efforts under the circumstances of this case to discover the whereabouts of
landowner Brenda L. Strickler (Owner), or her appointed guardian at that time,
Gary L. Landis (First Guardian). Purchaser advances several arguments, asserting
the trial court erred in setting aside the tax sale after it was confirmed and after
Purchaser obtained a default judgment in a quiet title action. For the reasons that
follow, we affirm.
1
Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§5860.101-803.
2
The Honorable John S. Kennedy presided.
I. Background
Owner and her husband were the owners of a residential dwelling
located at 3884 Hearthstone Court (Springettsbury Township), York, PA 17402.
In November 2009, the trial court, Orphans’ Court Division adjudicated Owner
incapacitated. See Reproduced Record (R.R.) at 22a-27a. The trial court also
appointed First Guardian as plenary guardian of Owner’s person and estate. At the
time of the adjudication, Owner was 68 years old and resided at the Pleasant Acres
Nursing Home, 118 Pleasant Acres Road, York, PA. In 2010, Owner’s husband
died. This vested the entire title to the property in Owner. Thereafter, First
Guardian failed to pay the 2012 county and township taxes. He also failed to pay
the 2012-2013 school tax assessed on the property.
In September 2014, the Bureau sold Owner’s property to Ralph Neely,
a member of Purchaser, at a tax upset sale. Shortly thereafter, the Bureau filed a
deed transferring the property to Purchaser. See R.R. at 176a-77a.
In January 2015, Purchaser commenced a quiet title action against
Owner and her deceased husband. Purchaser served First Guardian with a copy of
the complaint. When no answer was filed, Purchaser sent notice of default
judgment in the quiet title action to First Guardian at Owner’s nursing home
address: 118 Pleasant Acres Road, York, PA, 17042. This was not First
Guardian’s address. Consequently, he did not receive the notice.
On March 4, 2015, Purchaser filed a motion for default judgment in
the quiet title action against Owner and mailed a copy of the notice to First
2
Guardian at Owner’s nursing home address. First Guardian did not receive this
document until March 10, 2015. The same day, the trial court entered a default
judgment against Owner.
Seven days later, First Guardian filed a motion to strike or open
judgment. First Guardian simultaneously filed a petition nunc pro tunc to set aside
the tax sale. Two days later, the trial court, upon consideration of the petition nunc
pro tunc, entered a rule upon Purchaser and the Bureau to show cause why the tax
sale should not be set aside. The trial court also directed that an answer be filed
within 20 days. Thereafter, Purchaser filed an answer to First Guardian’s petition
to set aside the tax sale, and First Guardian filed an answer to Purchaser’s quiet
title action.
In April 2015, the trial court removed First Guardian as plenary
guardian of Owner’s person and estate. The same day, the court appointed
Emerald Guardian Services, LLC (Second Guardian) as the successor plenary
guardian of Owner’s person and estate.
On June 1, 2015, Second Guardian filed a voluntary substitution and
entered an appearance on behalf of Owner. The same day, all parties agreed to
stipulations permitting Second Guardian to file, as a consolidated action: an
amended petition to set aside the tax upset sale; an amended petition to strike or
open the default judgment; and, an amended answer and new matter to Purchaser’s
complaint in the quiet title action. On the same date, Second Guardian filed all the
amended pleadings.
3
On June 2, 2015, Second Guardian filed a motion to consolidate and
for an interdivisional transfer of the amended petition to set aside tax sale and the
quiet title action to the trial court’s Orphans’ Court Division. All parties concurred
in the motion, and the trial court entered a consolidation and transfer order.
On October 7, 2015, the trial court held an evidentiary hearing on the
petition to set aside the upset sale. See R.R. at 948a-93a. At the beginning of the
hearing, Purchaser requested that the trial court address the amended petition to
open or strike the default judgment in the quiet title action prior to addressing the
amended petition to set aside the tax sale. R.R. at 950a-55a. However, the trial
court noted Purchaser never indicated to the court or Second Guardian at a status
conference before the hearing that anything other than the petition to set aside the
tax sale would be addressed. R.R. at 955a. Nonetheless, Purchaser indicated it
was prepared to proceed on the petition to set aside the tax sale. Id.
Purchaser first called the Bureau’s Supervisor, Vanessa Shive (Bureau
Supervisor), as a witness. R.R. at 958a. She was responsible for scheduling the
tax sale and for complying with the Tax Sale Law. R.R. at 959a. In August 2014,
the Bureau sent notice of the tax sale to Owner by certified mail. R.R. at 969a.
However, the postal authorities returned it to the Bureau unsigned and marked
“return to sender.” R.R. at 969a-70a. Of significance to our analysis, Bureau
Supervisor further testified the Bureau took no action when the notice was returned
unsigned. R.R. at 970a.
4
Bureau Supervisor also testified the Bureau posted Owner’s property.
R.R. at 970a. The person who posted the property determined it was not owner-
occupied. Id.
Thereafter, the Bureau sent notice to Owner and her deceased husband
by first class mail. R.R. at 971a. The first class mail did not come back. Id. The
Bureau did not make any further efforts to determine Owner’s whereabouts before
the tax sale. Id.
Purchaser also called First Guardian as a witness. R.R. at 980a.
However, First Guardian testified he was unaware that Owner’s taxes were not
paid or that the Bureau had posted the property for sale. R.R. at 983a.
In November 2015, the trial court issued an opinion and order setting
aside the tax sale of Owner’s property to Purchaser. In its decision, the trial court
found the following facts:
(1) [Bureau Supervisor], in her capacity as supervisor of
the [Bureau], was responsible for scheduling and
following the process based on the [Tax Sale Law].
(2) A Notice of Intent to File Tax Claim was sent to
[Owner and her deceased husband] on March 8, 2013.
(3) A Tax Claim against Real Estate indicating [Owner
and her deceased husband] as property owners was filed
on April 17, 2013 in the York County Office of the
Prothonotary.
(4) A posting was made at 3884 Hearthstone Court,
York, PA 17402 on or around July 11, 2014.
5
(5) The Notice of Sale was sent to [Owner and her
deceased husband] via first class mail and certified mail
on August 22, 2014.
(6) The Petition for Confirmation nisi showing
advertisements in the York Newspaper Company and the
York Legal Record was filed on October 7, 2014.
(7) An order of Court Confirmation nisi of Consolidated
Return was signed on October 17, 2014 by the Honorable
Judge Stephen P. Linebaugh.
(8) The tax sale was confirmed by the [Bureau] on
November 10, 2014 and a deed was signed to [Purchaser]
on November 10, 2014.
(9) The Deed was recorded in the York County Recorder
of Deeds on December 1, 2014 naming [Purchaser] as
grantee.
(10) John W. Stitt, Esq., having represented [Owner and
her deceased husband] in the past, sent a letter dated
January 22, 2015 to [Bureau Supervisor], indicating that
[Owner] had been declared an Incapacitated Person in
2009 and that [her husband] predeceased [Owner] on
June 27, 2010, as evidenced by the filing of an
information in the Office of the Register of Wills. The
letter also asked for the remaining proceeds from the sale
of [Owner’s] former residence to be forwarded to [First
Guardian], the then legal guardian of [Owner], for her
continued care as a resident of Pleasant Acres nursing
facility.
(11) [Bureau Supervisor] testified that a notice of sale
was sent to [Owner] via certified mail on August 22,
2014 and the certification was returned to the tax
collection office as ‘return to sender.’
(12) After receiving the returned certification, [Bureau
Supervisor] testified that the tax collection office did not
take any action.
6
(13) [Bureau Supervisor] testified that personal service
was made on [Owner] pursuant to [Section 613 of the
Tax Sale Law, 72 P.S. §5860.613,] via the posting at the
residence. The posting also determined that the residence
was not owner occupied.
(14) [Bureau Supervisor] testified that since the first class
mailing did not come back to the tax collection office, no
other reasonable efforts were made by the tax collection
office to determine the owners of the property.
(15) [Bureau Supervisor] testified that the certified
mailing came back unsigned and that the tax collection
office did not undertake any other actions until the tax
sale took place.
(16) [First Guardian] testified that he did not have actual
notice of the tax sale.
Tr. Ct., Slip Op., 11/23/15, at 2-3; R.R. at 850a-51a.
In its analysis, the trial court first noted that due process requirements
demand strict compliance with the Tax Sale Law. Geier v. Tax Claim Bureau of
Schuykill County, 588 A.2d 480 (Pa. 1991). Further, the trial court observed, the
essence of Geier and Tracy v. Chester County Tax Claim Bureau, 489 A.2d 1334(Pa. 1985), is that due process also requires that taxing bureaus in the
Commonwealth conduct reasonable investigations to ascertain the identity and
whereabouts of the latest owners of record of property subject to an upset sale for
purposes of providing notice to them. However, a taxing bureau’s duty to
investigate such matters is limited to determining the owners of record and then to
use ordinary common sense business practices to ascertain the proper addresses
where notice of the tax sale may be given. Farro v. Tax Claim Bureau of Monroe
County, 704 A.2d 1137 (Pa. Cmwlth. 1997).
7
Nonetheless, the trial court continued, Geier and Tracy require a
taxing bureau to go beyond the mere ceremonial act of notice by certified mail
where such notice is obviously ineffective in reaching the owner of record. To that
end, Section 607.1(a)3 (additional notification efforts), 72 P.S. §5860.607a(a),
provides:
(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’s
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.
In the present case, the court observed, the Bureau did not receive a
signed certified mail receipt with Owner’s signature. Therefore, Section 607.1(a)
3
Added by the Act of July 3, 1986, P.L. 351.
8
of the Tax Sale Law required the Bureau to exercise reasonable efforts to discover
Owner’s whereabouts and notify her of the pending tax sale. Geier; Tracy. At
hearing, Bureau Supervisor testified the certified mail notice was returned to the
Bureau’s office unsigned and marked “return to sender.” Tr. Ct., Slip. Op., at 5-6.
Upon return of the certified mail, the Bureau sent out notice by first class mail. Id.
This notice did not come back to the Bureau as undeliverable. Id. Bureau
Supervisor testified the Bureau took no further action to discover the whereabouts
of Owner or First Guardian. Id. at 6.
Based on Bureau Supervisor’s testimony, the trial court determined
the Bureau failed to make reasonable efforts to locate Owner as prescribed by
Section 607.1(a) of the Tax Sale Law. For example, the Bureau did not inquire as
to any alternate address for Owner or her deceased husband or check the dockets
and indices of the County’s tax assessment offices, recorder of deeds, or
prothonotary’s office.
In particular, the trial court noted, if the Bureau would have contacted
Fran Surdich, the current tax collector for Springettsbury Township, it would have
discovered the 2013-2014 school tax bill addressed to Owner was sent to First
Guardian’s address at: P.O. Box 732, York, PA 17404. Tr. Ct., Slip Op., at 6-7.
In addition, the Bureau could have discovered that the prior tax collector, Margaret
E. Cousler, sent the 2011 tax bill for Springettsbury Township to First Guardian’s
post office box address. Tr. Ct., Slip. Op., at 7.
9
Also, if the Bureau would have checked its own records it would have
discovered that in June 2013 it received checks from First Guardian in the amount
of $3,116.31 for payment of Owner’s 2011 County taxes and $2,116.30 for
Owner’s 2011-2012 school taxes. Tr. Ct., Slip. Op., at 7.
Citing Maya v. County of Erie Tax Claim Bureau, 59 A.3d 50 (Pa.
Cmwlth. 2013), the trial court reasoned that a taxing bureau’s attempts at making
additional notification were insufficient under Section 607.1(a) where the search
failed to discover an alternative address in the county that the taxpayer used for
other filings, and the bureau failed to use other search resources, including an
internet search. The trial court also observed that additional notification efforts are
required under Section 607.1(a) where, as here, certified mail notifications were
returned without the required receipt, the bureau failed to make personal service on
any owner, and where none of the notices were acknowledged in any respect. In re
1999 Upset Sale of Real Estate, 811 A.2d 85 (Pa. Cmwlth. 2002).
Finally, the trial court recognized that an upset sale may be valid, even
where the taxing authority failed to comply will all statutory notice requirements.
Sabbeth v. Tax Claim Bureau of Fulton Cnty., 714 A.2d 514 (Pa. Cmwlth. 1998).
Here, however, the trial court determined the record did not show First Guardian
had actual notice of the tax sale. Consequently, the trial court found, the Bureau’s
failure to comply with Section 607.1(a) was not cured by actual notice.
10
Accordingly, the trial court granted Second Guardian’s amended
petition to set aside the tax sale and declared void the September 2014 tax upset
sale of Owner’s property. Purchaser appeals.
II. Issues
On appeal,4 Purchaser presents the following issues. First, Purchaser
contends the trial court erred by not adjudicating Second Guardian’s amended
petition to open or strike the default judgment prior to considering the amended
petition to set aside the sale. Second, Purchaser asserts the trial court erred by not
requiring Owner or her guardian to prove Owner was excused from the statutory
requirements in Section 607 of the Tax Sale Law, 72 P.S. §5860.607, pertaining to
the filing of objections and exceptions within 30 days of confirmation nisi. To that
end, Purchaser argues the trial court erred by disregarding the confirmation of the
sale. Purchaser also argues the trial court erred where the court concluded that
First Guardian was at fault for not paying the property taxes.
Also before this Court is First Guardian’s request that we direct the
Prothonotary to indicate on the docket that he is not a party to the appeal. First
Guardian asserts he is no longer a party to this case because the trial court removed
him from the case and appointed Second Guardian, which voluntarily substituted
itself as Plaintiff in the petition to set aside the tax sale and as Defendant in the
quiet title action.
4
In tax sale cases, our review is limited to determining whether the trial court abused its
discretion, rendered a decision without supporting evidence, or clearly erred as a matter of law.
Husak v. Fayette County Tax Claim Bureau, 61 A.3d 302 (Pa. Cmwlth. 2013).
11
First Guardian also requests an award of costs and counsel fees
pursuant to Pa. R.A.P. 2744 where Purchaser joined or kept First Guardian as a
defendant even though Purchaser knew he was removed from the case.
III. Discussion
A. Petition to Open or Strike Default Judgment
1. Argument
Purchaser first contends the trial court erred by not adjudicating
Second Guardian’s amended petition to open or strike default judgment in the quiet
title action prior to considering the amended petition to set aside. At the October
2015 hearing before the trial court, Purchaser took the position that the court could
not address the pending petition to set aside the tax sale without first addressing the
amended petition to open or strike the default judgment in the quiet title action,
which established Purchaser’s title to the subject property. See R.R. at 950a-54a.
Purchaser asserts a default judgment may only be opened if the
moving party can show (1) it promptly filed a petition to open the default
judgement, (2) it provided a reasonable excuse or explanation for failing to file a
responsive pleading, and (3) it pled a meritorious defense to the allegations
contained in the complaint. McFarland v. Whitman, 544 A.2d 929 (Pa. 1988).
Purchaser argues Owner, through First Guardian, never provided an
excuse for failing to file a responsive pleading. Purchaser also notes that First
Guardian demanded that excess tax sale monies be released following the sale.
Because First Guardian’s legal counsel filed this demand, Purchaser asserts any
12
claim of confusion must be rejected. Thus, Purchaser asserts the trial court erred in
not addressing the petition to open the default judgment prior to considering the
petition to set aside the tax sale.
2. Analysis
In Husak v. Fayette County Tax Claim Bureau, 61 A.3d 302 (Pa.
Cmwlth. 2013), we determined that a quiet title action had no preclusive effect on
the owners where they were not a party to the quiet title action. Here, in January
2015, following the tax sale, Purchaser filed a quiet title action against Owner at
her vacant residential address, the subject property. In February 2015, the trial
court mailed to Owner’s vacant residential address an order requiring that Owner
file a case management plan. This order was returned as undeliverable as
addressed. Notice of intent to enter a default judgment, dated February 18, 2015,
directed to First Guardian, was mailed to Owner’s nursing home address, not First
Guardian’s business or residence address. On March 10, 2015, the trial court
mailed notice of entry of default judgment to First Guardian at Owner’s nursing
home address. R.R. at 204a.
On March 17, 2005, seven days after entry of the default judgment,
First Guardian filed a motion to strike or open the default judgment. R.R. at 214a-
19a. In his motion, First Guardian alleged he did not receive adequate notice of the
intent to enter default judgment. Mot. to Strike at ¶6; R.R. at 217-18a. First
Guardian also indicated Owner was an incapacitated person and her husband was
deceased. Mot. to Strike at ¶¶9-10; R.R. at 218a. On the same day, First Guardian
filed a petition nunc pro tunc to set aside the tax sale.
13
As noted above, in June 2015 Second Guardian filed amended
petitions to open or strike the default judgment in the quiet title action and to set
aside the tax sale. These petitions raised fundamental due process challenges
involving notice to Owner and First Guardian. These petitions were consolidated
for hearing. At the October 2015 hearing, the trial court questioned Purchaser as to
why it could not address the petition to set aside the tax sale prior to motion to
open the default judgment. R.R. at 954a. Notably, at the end of the hearing, the
trial court advised the parties that it would review the entire matter and determine
whether additional testimony was needed to resolve the motion to open the default
judgment. See R.R. at 987a-88a. Purchaser did not object. Thereafter, in its Pa.
R.A.P. 1925(a) opinion, the trial court noted there is no procedural rule requiring
that a motion to open a default judgment must be determined prior to a petition to
set aside a tax sale. See Supplemental Reproduced Record (S.R.R. Emerald
Guardian Services); at 12c-13c.
Further, we note that strict compliance with the mandatory notice
provisions of the Tax Sale Law is essential in every tax sale. Tracy; Murphy v.
Monroe Cnty. Tax Claim Bureau, 784 A.2d 878 (Pa. Cmwlth. 2001). The purpose
of the Tax Sale Law is not to strip an owner of his property, but to ensure the tax is
collected. Tracy; Murphy. In addition, Section 607(g) provides that if objections
and exceptions are not filed to confirmation nisi and the sale is confirmed
absolutely, the proceedings of the Bureau may still be challenged “with respect to
the giving of notice under the act ….” 72 P.S. §5860.607(g) (emphasis added).
14
We recognize that resolving the challenges to the default judgment
would logically precede other relief; nevertheless, we perceive no prejudice to the
parties by the manner in which the trial court resolved the underlying dispute.
Given the fundamental due process issues at the heart of both the petition to open
the default judgment and the petition to set aside the tax sale, we discern no
reversible error or abuse of discretion by the trial court in granting the petition to
set aside the tax sale without first expressly ruling on the motion to open the
default judgment.
Further, we recognize that a petition to open or strike a default
judgment must be filed within 10 days of the entry of judgment. Pa. R.C.P. No.
237.3. Here, First Guardian satisfied the first prong of McFarland by showing he
promptly filed a petition to open the default judgment.
Regarding the second prong in McFarland, First Guardian established
a reasonable explanation for failing to file a timely responsive pleading. Purchaser
sent notice of the quiet title action and its notice of intent to take default judgment
to First Guardian at Owner’s nursing home address. This is not First Guardian’s
residential or business address. Where a defendant does not receive notice of a
lawsuit against him, a reasonable explanation for his failure to respond is
established. Brown v. Great Atlantic & Pacific Tea Co., 460 A.2d 773 (Pa. Super.
1983).
The third prong in McFarland requires that a party seeking to open a
default judgment plead a meritorious defense to the allegations contained in the
15
complaint. Here, First Guardian simultaneously filed a petition nunc pro tunc to
set aside the tax sale with his petition to open the default judgment in the quiet title
action. First Guardian’s petition to set aside the tax sale, based on the Bureau’s
failure to comply with the mandatory notice provisions of the Tax Sale Law,
provided a meritorious defense to the allegations in Purchaser’s quiet title action.
As such, First Guardian’s petitions to open the default judgment
satisfied the necessary requirements for opening or striking the default judgment.
McFarland. Therefore, we reject Purchaser’s argument that the trial court’s failure
to first address the petition to open the default judgment constituted reversible
error.
B. Confirmation of Sale; Objections and Exceptions
1. Argument
Section 607 of the Tax Sale Law provides (with emphasis added):
(a) It shall be the duty of the bureau, not later than sixty
(60) days after a sale was held, to make a consolidated
return to the court of common pleas of the county,
wherein it shall set forth, (1) a brief description of each
property exposed to sale, (2) the name of the owner in
whose name it was assessed, (3) the name of the owner at
the time of the sale, and to whom notice by mail was
given as provided by this act, (4) a reference to the record
of the tax claim on which the sale was held, (5) the time
when and the newspapers in which the advertisement for
sale was made, with a copy of said advertisement, (6) the
time of sale, (7) the name of the purchaser, if any, and (8)
the price for which each property was sold …. Within
thirty (30) days of presentation of the consolidated return,
if it shall appear to said court that such sale has been
regularly conducted under the provisions of this act, the
consolidated return and the sales so made shall be
16
confirmed nisi. No consolidated return shall be made to
the court until notice has been given to the owner under
subsection (a.1)(1).
(a.1)(1) Notice shall be given by the bureau within thirty
(30) days of the actual sale to each owner by United
States certified mail, restricted delivery, return receipt
requested, postage prepaid, to each owner at his last
known post office address as determined in section
602(e)(2) that the property was sold and that the owner
may file objections or exceptions with the court relating
to the regularity and procedures followed during the sale
no later than thirty (30) days after the court made
confirmation nisi of the consolidated return.
****
(b.1) If notice is given under subsection (a.1)(2), proof
that notice under subsection a.1(1) was not received by
the owner shall not defeat a sale nor invalidate title to
property. If the mailed or published notice under this
section is defective or was served in an untimely manner,
the court shall enter an order nunc pro tunc for cause,
and, upon proof of prejudice, shall grant the owner leave
to file objections and exceptions.
(c) In case no objections or exceptions are filed to any
such sale within (30) days after the court has made a
confirmation nisi, a decree of absolute confirmation shall
be entered as of course by the prothonotary.
72 P.S. §5860.607(a)-(c).
In light of Section 607(b.1), Purchaser asserts it is Owner’s burden to
establish prejudice related to her untimely filing beyond the 30-day statutory
requirement and the 30-day period begins to run when the sale is confirmed. Here,
the court confirmed the sale on October 7, 2014. Purchaser asserts First Guardian
became aware of the tax sale in December 2014 and was served with the quiet title
17
action in January 2015. In addition, Purchaser served First Guardian with a motion
for default judgment in early March 2015. However, First Guardian waited until
March 17, 2015, to file a petition nunc pro tunc to set aside the tax sale.
In short, Purchaser argues, a person wishing to challenge a tax sale
may do so by (1) filing exceptions or objections within 30 days after the trial court
issues a confirmation nisi or (2) by filing an action in equity or a civil proceeding.
M.C. & E.K. Lees, Inc. v. Capenos, 119 A.3d 1092 (Pa. Cmwlth. 2015). Here,
neither Owner nor her guardian filed exceptions or objections within 30 days of
confirmation. Therefore, Purchaser urges, the trial court erred in setting aside the
tax sale.
2. Analysis
The provisions of Section 607(b.1) of the Tax Sale Law, relied upon
by Purchaser, apply to the notice that a tax sale has taken place, not to the pre-sale
notices in Section 602 of the Law, 72 P.S. §5860.602. Nevertheless, Section
607(g) provides that if objections and exceptions are not filed to confirmation nisi
and the sale is confirmed absolutely, the proceedings of the Bureau with respect to
such tax sale shall not be challenged “except with respect to the giving of notice
under the act ….” 72 P.S. §5860.607(g) (emphasis added).
Section 602 of the Tax Sale Law (relating to notice prior to sale),
provides in pertinent part (with emphasis added):
(a) At least thirty (30) days prior to any scheduled sale
the [B]ureau shall give notice thereof, not less than once
in two (2) newspapers of general circulation in the
18
county, if so many are published therein, and once in the
legal journal if any, designated by the court for the
publication of legal notices. Such notice shall set forth
(1) the purposes of such sale, (2) the time of such sale,
(3) the place of such sale, (4) the terms of the sale
including the approximate upset price, (5) the
descriptions of the properties to be sold as stated in the
claims entered and the name of the owner.
****
(e) In addition to such publications, similar notice of the
sale shall also be given by the [B]ureau as follows:
(1) At least thirty (30) days before the date of the sale,
by United States certified mail, restricted delivery, return
receipt requested, postage prepaid, to each owner as
defined by this act.
(2) If return receipt is not received from each owner
pursuant to the provisions of clause (1), then at least ten
days before the date of the sale, similar notice of the sale
shall be given to each owner who failed to acknowledge
the first notice by United States first class mail, proof of
mailing, at his last known post office address by virtue of
the knowledge and information possessed by the bureau,
the tax collector for the taxing district making the return
and the county office responsible for assessments and
revisions of taxes. It shall be the duty of the bureau to
determine the last post office address known to said
collector and county assessment office.
72 P.S. §5680.602(a), (e)(1), (e)(2).
The Bureau bears the burden of showing it complied with the specific
requirements of Section 602 and the additional notification efforts of 607.1 of the
Tax Sale Law. Rice v. Compro Distrib., Inc., 901 A.2d 570 (Pa. Cmwlth. 2006);
McElvenny v. Bucks County Tax Claim Bureau, 804 A.2d 719 (Pa. Cmwlth.
19
2002). Here, the Bureau did not meet its burden of showing compliance with
either Section 602 or Section 607.1.
First, Bureau Supervisor testified that the Bureau sent notice by
certified mail to Owner at her residential address of 3884 Hearthstone Court, York,
PA 17402. R.R. at 969a. The notice was returned to the Bureau unsigned and
marked “return to sender.” R.R. at 970a. Upon return of the unsigned notice, the
Bureau did not, as required by Section 602(e)(2) of the Tax Sale Law, search for
Owner’s last known address by checking with the tax collector for the taxing
district and the county office responsible for the assessments. See 72 P.S.
§5860.602(e)(2).
Bureau Supervisor also testified that the Bureau posted the property.
R.R. at 970a. However, the person who posted the property noticed it was not
occupied. Id.
However, the Bureau did not inquire as to any alternate addresses for
Owner. Tr. Ct., Slip Op., 11/23/15, at 6. If the Bureau would have contacted the
current tax collector for Springettsbury Township, it would have discovered that
the 2013-2014 school tax bill addressed to Owner was sent to First Guardian’s
address at: P.O. Box 732, York, PA 17404. Id. at 6-7. In addition, the Bureau
could have also discovered that the Township’s prior tax collector, sent the 2011
tax bill for Springettsbury Township to First Guardian’s post office box address.
Tr. Ct., Slip. Op., at 7.
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In addition, the trial court observed, if the Bureau would have checked
its own records it would have discovered that in June 2013 it received checks from
First Guardian in the amount of $3,116.31 for payment of Owner’s 2011 County
taxes and $2,116.30 for Owner’s 2011-2012 school taxes. Id. at 7. First Guardian
made the payment with a cashier’s check indicating his status as Owner’s guardian.
Id.
Second, Bureau Supervisor testified that other than mailing another
notice first class to Owner and her deceased husband at the vacant property’s
address, which the postal authorities did not return to the Bureau, the Bureau took
no further action to determine Owner’s whereabouts. R.R. at 970a-71a.
Although the Bureau did send notice to the subject property by first
class mail, which was not returned, this falls far short of the notice requirements of
both Section 602(e)(2) and Section 607.1 of the Tax Sale Law. In particular, the
Bureau knew the subject property was vacant, but it made no other efforts to
determine Owner’s whereabouts. Inquiries to the tax collector or even a check of
its own records would have indicated that First Guardian was responsible for
paying Owner’s taxes.
As this Court explained in Maya, Section 607.1(a) of the Tax Sale
Law provides that when any notification of a pending tax sale or a tax sale subject
to court confirmation is required to be mailed to any owner, and 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 by the addressee,
21
the bureau must make reasonable efforts to discover the whereabouts of the person
or entity and notify him. 72 P.S. §6860.607(a)(a). Here, given the unsigned
certified mail notice and the vacant property, the Bureau was required by Section
607.1(a) to conduct reasonable efforts to determine Owner’s whereabouts.
However, Bureau Supervisor clearly testified that the Bureau failed to do so.
Consequently, the Bureau failed to comply with the statutory notice requirements
of the Tax Sale Law. Tracy; Maya; Rice; McElvenny.
Third, where the taxing bureau fails to comply with the mandatory
notice provisions of the Tax Sale Law, a tax sale may be set aside even after the
sale is confirmed absolutely. Section 607(g) of the Tax Sale Law; Rice.
Therefore, the trial court did not err in setting aside the tax sale based on the
Bureau’s failure to comply with the mandatory notice provisions of the Tax Sale
Law regardless of the confirmation of the sale.
C. First Guardian’s Failure to Pay Taxes
1. Argument
Purchaser also contends the trial court erred in setting aside the tax
sale because First Guardian rather than the Bureau, was at fault for failing to pay
Owner’s property taxes.
2. Analysis
We disagree. Although First Guardian may have been negligent in
failing to pay Owner’s 2012-2013 real estate taxes, the trial court found he had no
actual knowledge of the tax sale. As discussed above, the Bureau is required to
22
strictly adhere to the mandatory notice provisions of the Tax Sale Law. Rice. The
focus is not on the alleged neglect of the owner or her agent, which is often present
in some degree; rather, the focus is on whether Bureau complied with the
requirements of the statute. See id.
D. First Guardian’s Party Status
1. Argument
Also before the Court is First Guardian’s request that we direct the
Prothonotary to indicate on the docket that he is not a party to the appeal. First
Guardian argues that where one party is substituted as the party in interest for
another party, the other party is no longer a party to any further litigation. Dep’t of
Educ. v. Empowerment Bd. of Control of Chester-Upland Sch. Dist., 938 A.2d
1000 (Pa. 2007). In April 2015, the trial court removed First Guardian and
appointed Second Guardian as successor plenary guardian for Owner. R.R. at
419a. In June 2015, Second Guardian filed an amended petition to open the
default judgment in the quiet title action, an amended answer to the quiet title
action, and an amended petition to set aside the tax sale.
On June 12, 2015, Second Guardian filed a motion to consolidate the
amended petition to open or strike the default judgment in the quiet title action and
the amended petition to set aside the tax sale. The motion was granted and the
amended petitions were transferred to the Orphan’s Court Division. R.R. at 531a.
Because the trial court removed him as Owner’s guardian, First
Guardian argues he is no longer an extant party and thus he does not have party
23
status before this Court. Empowerment Bd. of Control. First Guardian further
asserts Purchaser refused a request under Pa. R.A.P. 908 to notify this Court’s
prothonotary of its belief that First Guardian had no interest in the outcome of this
appeal. See Appellee Landis’ Br. at 13. In addition, First Guardian asserts
Purchaser refused to discontinue the action against him under Pa. R.A.P. 1973. Id.Therefore, First Guardian asks the Court to direct our Prothonotary to indicate on
the docket that he is no longer a party to the appeal.
2. Analysis
Pursuant to Pa. R.A.P. 1973(a), an appellant may discontinue an
appeal as to less than all appellees if all parties stipulate to the discontinuance, or
by leave of court upon application by the appellant.
In addition, pursuant to Pa. R.A.P. 908, an appellant may notify the
prothonotary of the appellate court of its belief that one or more parties has no
interest in the outcome of the appeal.
Here, the parties filed no stipulation, and Purchaser filed no
application for discontinuance alleging First Guardian no longer had an interest in
the case. Absent such a stipulation or motion for discontinuance, First Guardian
will remain a named appellee in this case.
Regardless, we note that a party who no longer desires to be involved
in the appeal may file a notice of non-participation. See Pa. Indep. Waste Haulers
Ass’n, 885 A.2d 1106, 1107 n.1 (Pa. Cmwlth. 2005).
24
E. Counsel Fees and Costs
1. Argument
First Guardian also contends he is entitled to counsel fees and costs
under Pa. R.A.P. 2744 for a frivolous appeal on the ground that Purchaser’s brief
lacks legal support or citation to pertinent authority. Venafro v. Dep’t of Transp.,
Bureau of Driver Licensing, 796 A.2d 384 (Pa. Cmwlth. 2002) (an appeal that
raises an issue that is well-settled and presents no legal support is frivolous; a brief
that lacks support for an argument and citation to pertinent authority is grounds to
find appeal frivolous).
Here, First Guardian points out he requested that Purchaser
discontinue the action against him under Pa. R.A.P. 908 and 1973, but Purchaser
refused his requests. Rather, First Guardian asserts Purchaser’s “joinder” was
frivolous, obdurate and vexatious, thereby entitling him to counsel fees in the
amount of $5,867.50, plus copying and service costs.
Pursuant to Pa. R.A.P. 906(a)(1), Purchaser responds, an appellant
must serve all parties to the matter in the trial court, including parties previously
dismissed pursuant to an interlocutory order, unless: (i) the interlocutory order of
dismissal was reviewed by an appellate court and affirmed; or (ii) the interlocutory
order of dismissal was made final under Pa. R.A.P. 341(c) and no party appealed
from that date. Therefore, Purchaser argues this is not a joinder.
Purchaser also asserts First Guardian could have filed a notice of non-
participation and would not have incurred the alleged counsel fees and costs.
25
2. Analysis
The imposition of counsel fees and costs under Rule 2744 is solely
within this Court’s discretion. Canal Side Care Manor, LLC v. Pa. Human
Relations Comm’n, 30 A.3d 568 (Pa. Cmwlth. 2011). An appeal is frivolous if the
realistic chances of success are slight and continuation of the contest is
unreasonable. Waste Mgmt. v. Unemployment Comp. Bd. of Review, 651 A.2d
231 (Pa. Cmwlth. 1994). However, in awarding counsel fees, this Court is guided
by the principle that an appeal is not frivolous merely because it lacks merit. Canal
Side Care Manor. Rather, the appeal must have no basis in law or in fact. Id.Such a high standard is necessary to avoid discouraging parties from bringing
appeals based on fear of being sanctioned. Id.Here, although Purchaser’s appeal lacks merit, we do not believe the
appeal is frivolous so as to warrant the imposition of counsel fees under Pa. R.A.P.
2744. To that end, the trial court issued a confirmation nisi of the September 2014
tax sale. R.R. at 808a. First Guardian did not file objections or exceptions within
30 days of the confirmation nisi. As a result, the trial court confirmed the sale
absolutely. Further, Purchaser attempted to quiet title to the property and obtained
a default judgment in that action.
This Court describes a frivolous appeal as “one presenting no
justiciable questions and so readily recognizable as devoid of merit on face of [the]
record that there is little prospect that it can ever succeed,” Appeal of Langmaid
Lane Homeowners Ass’n, 465 A.2d 72, 75 (Pa. Cmwlth. 1983) (citation omitted),
and “one in which no justiciable question has been presented and [the] appeal is
26
readily recognizable as devoid of merit in that there is little prospect that it will
ever succeed.” Erie v. Int’l Ass’n of Firefighters, Local 293, 522 A.2d 132 (Pa.
Cmwlth. 1987) (citation omitted). A vexatious appeal is one instituted without
reasonable cause. Dep’t of Transp., Bureau of Driver Licensing v. Grubb, 618
A.2d 1152 (Pa. Cmwlth. 1992). Further, obdurate is defined as unyielding or
stubborn. In re Padezanin, 937 A.2d 475 (Pa. Super. 2007). And, dilatory is
defined as tending to cause delay. BLACK’S LAW DICTIONARY 488 (8th ed. 2004).
Given the totality of the circumstances in this case, including the
confirmation of the tax sale without objection and Purchaser’s efforts to quiet title
after confirmation of the sale, we do not agree with First Guardian’s assertions that
Purchaser’s appeal of the trial court’s ultimate order setting aside the tax sale was
frivolous, vexatious or brought simply to cause a delay. Therefore, we deny First
Guardian’s request for counsel fees and costs under Pa. R.A.P. 2744.
IV. Conclusion
For the above reasons, we discern no error or abuse of discretion by
the trial court in setting aside the September 2014 tax sale of Owner’s property to
Purchaser. Accordingly, we affirm.
ROBERT SIMPSON, Judge
27
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: Brenda L. Strickler, :
An Incapacitated Person : No. 2651 C.D. 2015
:
Appeal of: Blackhawk Property :
Investors, LLC :
ORDER
AND NOW, this 12th day of October, 2016, for the reasons stated in
the foregoing opinion, the order of the Court of Common Pleas of York County,
Orphan’s Division, is AFFIRMED.
ROBERT SIMPSON, Judge