J. Thornton v. City of Philadelphia ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Joanne Thornton, on behalf of :
herself and others similarly situated, :
Appellant :
:
v. :
:
City of Philadelphia, and Sheriff :
Jewell Williams and Philadelphia : No. 987 C.D. 2018
Sheriff’s Office : Argued: March 12, 2019
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: April 12, 2019
Joanne Thornton (Thornton), on behalf of herself and others similarly
situated, appeals from the April 17, 2018 order of the Court of Common Pleas of
Philadelphia County (trial court) dismissing her class action complaint in equity by
sustaining the preliminary objections of the City of Philadelphia (City), Sheriff
Jewell Williams (Sheriff), and the Philadelphia Sheriff’s Office (Sheriff’s Office)
(collectively, City Appellees) pursuant to Pennsylvania Rule of Civil Procedure No.
1028(a)(7) because Thornton failed to exhaust her statutory remedies.1 Upon
review, we affirm.
1
Pennsylvania Rule of Civil Procedure No. 1028(a)(7) provides that “[p]reliminary
objections may be filed by any party to any pleading and are limited to the following grounds . . .
failure to exercise or exhaust a statutory remedy.” Pa.R.C.P. No. 1028(a)(7).
The facts alleged in the complaint and attachments are as follows.2
Thornton owned property located at 1609 Christian Street, Philadelphia,
Pennsylvania and fell behind on her mortgage payments. Complaint ¶ 11-12. The
mortgage lender filed a complaint to foreclose on the property. Id. ¶ 12. Thereafter,
Thornton’s property was sold at a sheriff’s sale on September 9, 2014 in the amount
of $305,000. Id. ¶ 13. On the same day, the Sheriff issued a proposed schedule of
distribution as required by Pennsylvania Rule of Civil Procedure No. 3136,
Pa.R.C.P. No. 3136, which governs the distribution of proceeds from the sheriff’s
sale.3 Id. ¶ 15; Complaint, Ex. B. The proposed schedule of distribution4 provided
that Thornton was entitled to receive excess proceeds in the amount of $11,968.17
and also indicated that the “distribution will be made in accordance with the above
schedule unless exceptions are filed on or before September 19, 2014.”5 Complaint,
Ex. C. No exceptions were filed to the proposed schedule of distribution.
2
When reviewing preliminary objections, a court may consider not only the facts pleaded
in the complaint, but also documents or exhibits attached to the complaint. Diess v. Dep’t of
Transp., 935 A.2d 895, 903 (Pa. Cmwlth. 2007). “[W]e must regard all relevant and material facts,
as well as documents and exhibits, as true, and sustain the objections only if those facts or
documentary attachments clearly and without doubt could not support the requested relief as a
matter of law.” Id. (citing McGriff v. Pa. Bd. of Prob. & Parole, 809 A.2d 455 (Pa. Cmwlth.
2002)). Further, “the Court need not accept as true conclusions of law, unwarranted inferences
from fact, argumentative allegations, or expressions of opinion.” Id.
3
The sheriff must prepare a schedule of the proposed distribution of the proceeds of the
sale within 30 days after sale of the real property and file the schedule in the prothonotary’s office.
Pa.R.C.P. No. 3136(a).
4
This proposed schedule of distribution was revised from the originally issued proposed
schedule of distribution, of the same date, to reflect that a lien was not included in the original
proposed schedule. Complaint, Ex. C. The parties do not dispute the inclusion or amount of the
lien that was not reflected in the originally proposed schedule of distribution. Complaint ¶ 24;
Preliminary Objections ¶ 5.
5
The sheriff must distribute the proceeds of the sale in accordance with the proposed
schedule of distribution, unless written exceptions are filed with the sheriff not later than 10 days
after the filing of the proposed schedule. Pa.R.C.P. No. 3136(d). If exceptions are filed, the sheriff
2
On or about November 29, 2014, the Sheriff purchased a title insurance
policy for $1,317.50, which insured him against any losses sustained “by reason of
his distribution of the fund arising from the sale by him of the premises” to ensure
that the Sheriff distributes proceeds as described in the attached list of liens.
Complaint ¶ 70; Ex. D & E. On August 17, 2016, Thornton submitted a DART
claim6 with the Sheriff, seeking to obtain the excess sale proceeds. Id. ¶ 22. The
Sheriff delivered a check to Thornton, which she received on November 22, 2016,
and, included with it, a breakdown of costs. Id. ¶¶ 27-28. According to the
breakdown of costs, the Sheriff charged Thornton $1,317.50 to cover the premium
on the title insurance policy.7 Id. ¶ 28; Ex. D.
Subsequently, Thornton filed the five-count class action complaint in
equity8 giving rise to this matter, alleging that the Sheriff imposed procedures not
required by Rule 3136 on her and other owners whose properties had been
foreclosed. Specifically, Thornton complains that the Sheriff required her to file a
DART claim prior to distributing her excess proceeds and charged her a premium
on the title policy, but neither procedure is expressly provided by Rule 3136. Id. ¶¶
must file them along with a copy of the proposed schedule of distribution with the prothonotary.
Pa.R.C.P. No. 3136(e). “The court shall determine the exceptions, and for this purpose may
receive evidence by deposition or otherwise, or may appoint an auditor to hear the evidence and
report to the court.” Pa.R.C.P. No. 3136(f).
6
DART is an acronym for “Defendant Asset Recovery Team.” Complaint ¶ 20. The
complaint alleges that prior to distributing excess sale proceeds to the property owner whose home
had been sold, the Sheriff requires the prior owner to file a DART claim. Id. ¶¶ 19-20.
7
While the total cost shown on the schedule of distribution was $11,968.17, there was no
breakdown of the costs indicating that $1,317.50 of the total cost was for the premium on a title
insurance policy. Complaint ¶ 24 & Ex. C.
8
Thornton asserts as follows: Count I breach of contract-third party beneficiary; Count II
negligent mishandling of funds; Count III unjust enrichment; Count IV conversion; and Count V
declaratory judgment against City Appellees. Complaint ¶¶ 56-84.
3
35-36 & 38. In her request for relief, Thornton seeks: an order certifying this action
as a class action; a declaration that the DART procedure and the imposition of a
premium charge is unconstitutional; the imposition of compensatory and punitive
damages, attorney’s fees and costs; and any other relief that is deemed appropriate.
Complaint, Prayer for Relief.
City Appellees responded by filing four preliminary objections to the
complaint, in the nature of a demurrer, asserting that: (1) Thornton failed to exhaust
her remedies provided by Rule 3136 and the Local Agency Law, 2 Pa.C.S. §§ 551-
555, 751-754; (2) Thornton failed to allege facts to support her claims against the
Sheriff, individually, as the Sheriff is not a legal entity separate from the City; (3)
Thornton failed to allege any facts to show that the Sheriff took any action outside
of his office to deprive Thornton of her claimed excess proceeds to support her claim
against him individually; and (4) Thornton failed to state a claim for conversion.
Preliminary Objections ¶¶ 24, 30, 39 & 46. The trial court, after reviewing the
pleadings, sustained City Appellees’ objections and dismissed the complaint, with
prejudice. 4/17/18 Trial Court Order.
In dismissing the complaint, the trial court concluded that Thornton
failed to exhaust her statutory remedies provided by Rule 3136 and further noted:
[Thornton] concedes that a former property owner may
appeal an adverse DART claim decision to the Court of
Common Pleas under Pennsylvania Local Agency Law, 2
Pa. C.S.[ ]§ 752, which provides that a person may appeal
a “final adjudication” of a City Agency to the Court of
Common Pleas.
4
Trial Court Opinion at 6-7 (footnote omitted). Thornton appeals to this Court.9
On appeal, Thornton contends that the trial court erred by concluding
that she had to exhaust the remedies provided by Rule 3136 and the Local Agency
Law because the remedies provided therein are inadequate to address her claims.
Thornton’s Amended Brief at 10. Thornton asserts that the remedies are inadequate
because she is seeking a declaration that the procedures used by the Sheriff’s Office
implementing Rule 3136, requiring the DART claim form and charging prior owners
the premium to pay for the title policy, are unconstitutional. Id. at 11. Moreover,
Thornton claims that she raises issues that are appropriate to address in a “collective
manner” via a class action because the resulting decision will apply to all “class
members equally.” Id. Thornton further asserts that “if the questions presented here
are not addressed in a class action, the Courts of Common Pleas could be burdened
with identical extensive litigation” resulting in a “multiplicity of duplicate lawsuits,”
whereas an action in equity would “provide a tidy global resolution.” Id. at 17.
City Appellees counter that the trial court correctly concluded that
Thornton had to exhaust the remedies provided by Rule 3136 and the Local Agency
Law before bringing her class action and, in support thereof, assert that this Court’s
decision in In re: Sheriff’s Excess Proceeds Litigation, 98 A.3d 706 (Pa. Cmwlth.
2014) is dispositive. City Appellees’ Brief at 6. Although Thornton seeks a
declaratory judgment, City Appellees assert that this form of relief does not allow
her to avoid the remedies available at law because a court could order the procedures
9
Our review of a trial court’s order sustaining preliminary objections and dismissing a
complaint is limited to determining whether the trial court abused its discretion or committed an
error of law. Szoko v. Twp. of Wilkins, 974 A.2d 1216, 1219 n.7 (Pa. Cmwlth. 2009).
“[P]reliminary objections shall only be sustained when they are free and clear from doubt.” Id.
“Such review raises a question of law as to which our standard of review is de novo and our scope
of review is plenary.” Id.
5
used by the Sheriff’s Office invalid if she prevails. Id. at 14. Further, City Appellees
contend that “a class action does not automatically exempt [Thornton] from her
statutory remedies . . . .” Id. Upon review, we agree that Thornton failed to
demonstrate that the remedy available to her pursuant to Section 752 of the Local
Agency Law is inadequate to address her claims.
Initially, we note that Rule 3136(d) allows prior owners to file
exceptions no later than 10 days after the sheriff files the proposed distribution
schedule. Pa.R.C.P. No. 3136(d). The sheriff must transmit the exceptions and a
copy of the proposed distribution schedule to the prothonotary. Pa.R.C.P. No.
3136(e). Thereafter, the trial court is required to render a determination on the
exceptions and may take evidence to do so as provided therein. Pa.R.C.P. No.
3136(f).
Specifically, Thornton alleges that over two years passed before she
received her refund check after the sheriff’s sale of her property, which is a “lengthy”
delay not contemplated by Rule 3136 and “illustrates the constitutional infirmities
of DART.” Thornton’s Amended Brief at 16. Thornton further asserts that she did
not know that the Sheriff charged her the premium for the title policy until she
received a breakdown of costs with her refund check, over two years after the
expiration of the Rule 3136 10-day exception period. Id. at 16 & 24. As a result,
inter alia, Thornton asks the Court to declare that the Sheriff may not charge costs
which include title insurance premiums to all prior owners and to declare the DART
procedure unconstitutional as applied because it is much more burdensome than the
procedures permitted by Rule 3136(d). Id. at 19.
We agree that Thornton could not file a timely objection to the proposed
distribution within the Rule 3136 10-day exception period because she was unaware
6
of the title insurance premium charge and had not yet filed the DART claim.
However, Thornton fails to explain how the remedy provided by Section 752 of the
Local Agency Law, 2 Pa.C.S. § 752, is inadequate to address her claims relating to
the cost charged and procedures used by the Sheriff’s Office.
Section 752 provides “[a]ny person aggrieved by an adjudication of a
local agency who has a direct interest in such adjudication shall have the right to
appeal therefrom to the court vested with jurisdiction of such appeals . . . .” 2 Pa.C.S.
§ 752. Thornton alleges that the Sheriff is “an adult individual” employed by the
“County and City” and “at all times material hereto” acted within the scope of his
employment. Complaint ¶ 5. Thornton alleges that the Sheriff’s Office is an entity
of the City, which is a political subdivision of “Pennsylvania and City of the First
Class, located entirely within and comprising all of Philadelphia County.” Id. ¶¶ 3-
4. Accepting Thornton’s allegations as true, both the Sheriff’s Office and the Sheriff
meet the definition of a local agency. 2 Pa.C.S. § 101 (defining a local agency to
include any “political subdivision or municipal or other local authority, or any
officer or agency of any such political subdivision or local authority”).
By making a final distribution, the Sheriff’s Office has rendered an
adjudication. An adjudication includes “[a]ny final order, decree, decision,
determination or ruling by an agency affecting personal or property rights.” 2
Pa.C.S. § 101. In Excess Proceeds, this Court explained that the purpose of the
sheriff’s office’s procedures is, in part, to “reunite property owners with their excess
sale proceeds” and the excess sale proceeds are property rights recognized pursuant
to the United States and Pennsylvania Constitutions. Excess Proceeds, 98 A.3d at
721. Thornton’s complaint relates to the title policy premium charge by the Sheriff’s
Office, which resulted in her receipt of reduced excess proceeds, and the use of the
7
DART claim form, which she contends delayed her receipt of the proceeds and does
not comport with Rule 3136’s procedure. Thornton’s Amended Brief at 16. The
final distribution of excess proceeds, therefore, constitutes a final order to which
appeal rights attach. McDaniels v. Flick, 59 F.3d 446, 461 (3d Cir. 1995) (explaining
that the Local Agency Law provides sufficient process to protect property rights for
those seeking to challenge an agency decision). Because Thornton received a final
order from a local agency, she has the right to file an appeal of the final distribution
with the trial court, which “may hear the appeal de novo.” 2 Pa.C.S. § 754(a). The
trial court may also “remand the proceedings to the agency for the purpose of making
a full and complete record or for further disposition in accordance with the order of
the court.” Id.
Thornton offers no explanation as to why the trial court could not order
the relief she requests as a result of a Section 752 appeal, nor does she provide this
Court with analysis explaining how a Section 752 appeal is unavailable, defective or
inadequate for her to obtain full relief on her claims.10 Excess Proceeds, 98 A.3d at
10
Thornton brought a similar complaint in Thornton v. City of Philadelphia, (E.D. Pa., No.
16-5554, filed Aug. 28, 2017) 2017 WL 3620058. In Thornton, the court dismissed the complaint
because Thornton failed to avail herself of the processes available to her, including an appeal
pursuant to the Local Agency Law. Id., slip. op. at ___, 2017 WL 3620058, at *5. Thornton
asserted in her complaint before the Eastern District Court of Pennsylvania that she was deprived
of procedural due process because “she did not receive the amount of unused proceeds calculated
in the original [s]chedule of [d]istribution, that the Sheriff’s Office improperly amended the
[s]chedule of [d]istribution, and that the sale proceeds should not have been used to pay for the
title insurance policy.” Id., slip. op. at ___, 2017 WL 3620058, at *2.
Here, however, Thornton fails to, in any way, identify a constitutional claim in her
complaint or develop the argument in her brief to this Court, and therefore, it is waived. Pa.R.A.P.
302(a) (“Issues not raised in the lower court are waived and cannot be raised for the first time on
appeal”); Borough v. Glendon Energy Co. v. Dep’t of Envtl. Res., 603 A.2d 226, 236 (Pa. Cmwlth.
1992) (explaining that issues must be raised in the brief or they are deemed waived). Thornton
simply alleges that this matter “arises under the common and statutory laws of the Commonwealth
of Pennsylvania” and seeks relief “for claims arising under the Pennsylvania Rules and common
law.” Complaint ¶ 7. Thornton alleges that “[t]he policy, customs and practices of the [City
Appellees] are both unlawful and unconstitutional” and seeks a declaration that the City Appellees’
8
730 (concluding that plaintiffs made no allegations that the remedies available to
them are inadequate to afford them full relief and, therefore, upholding trial court’s
conclusion that it was not the proper forum to decide case). Thornton states that an
appeal under the Local Agency Law would not “effectively address the corrective
declaratory relief” that she seeks, would not provide any “expertise or guidance” to
this Court, and would ultimately put her in the “same Court.” Thornton’s Amended
Brief at 16 n.5. But, as explained by the trial court, Thornton offered her conclusion
that the remedy is inadequate, and this, without more, is not sufficient to meet her
burden. See Diess, 935 A.2d at 903 (explaining that the court does not have to accept
as true conclusions of law, argumentative allegations or expressions of opinion when
ruling on preliminary objections).
Furthermore, “[i]t is well-settled that where the Legislature has
provided a specific statutory remedy, the asserted need for a class action will not
justify a deviation from the statutory remedy.” Zarwin v. Montgomery Cty., 842
A.2d 1018, 1023 (Pa. Cmwlth. 2004) (citing Lilian v. Commonwealth, 354 A.2d 250
(Pa. 1976)). Thornton’s request asking this Court to resolve this matter as a class
action to aid with judicial economy and “provide a tidy global resolution” of the
claims is likewise without merit. The class action is a procedural device and not a
substantive right. Id. Class status or the lack of it is not pertinent “to the question
of whether an action is to be heard in equity or at law or whether, indeed, either form
is available in light of the statutory remedy.” Id. With no independent basis for
“acts and policies are both unconstitutional and unlawful,” but fails to identify any provision of
the constitution that has been violated. Complaint ¶¶ 83 & 84. Brown v. Dep’t of Corr., 932 A.2d
316, 318 (Pa. Cmwlth. 2007) (explaining that to ascertain whether a complainant has alleged a
constitutional violation, the complaint must identify the constitutional right allegedly infringed by
the conduct at issue).
9
equity jurisdiction, Thornton cannot generate it simply by alleging class status. See
id. Numerosity of claims will not justify a class action where a specific statutory
remedy is provided to process claims. Id. at n.9. As explained herein, Thornton has
an adequate remedy to address her claims through Section 752 of the Local Agency
Law. Where the legislature provides “a specific exclusive, constitutionally adequate
method” to resolve a particular type of dispute, the statutory method to resolve it
must be followed and “no action may be brought in any ‘side’ of the Common Pleas
to adjudicate the dispute by any kind of ‘common law’ form of action other than the
exclusive statutory method.” Id. at 1024. Thornton’s asserted need for a class action
does not justify a deviation from that remedy.
Accordingly, the trial court did not abuse its discretion or err as a matter
of law by granting City Appellees’ preliminary objections and dismissing
Thornton’s complaint. We affirm.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
10
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Joanne Thornton, on behalf of :
herself and others similarly situated, :
Appellant :
:
v. :
:
City of Philadelphia, and Sheriff :
Jewell Williams and Philadelphia : No. 987 C.D. 2018
Sheriff’s Office :
ORDER
AND NOW, this 12th day of April, 2019, the April 17, 2018 order of
the Court of Common Pleas of Philadelphia County is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge