City of Philadelphia v. R.J. Silverberg & Assoc., P.C. & R.J. Silverberg ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. : No. 1783 C.D. 2017
: Submitted: November 15, 2018
Richard J. Silverberg & Associates, :
P.C. and Richard J. Silverberg, :
:
Appellants :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: April 4, 2019
Richard J. Silverberg & Associates, P.C. (Law Firm) and Richard J.
Silverberg (Silverberg) (collectively, Appellants) appeal from an order of the Court
of Common Pleas of Philadelphia County (trial court) denying their motion for
judgment of non pros, or alternatively, to enjoin enforcement of a default judgment
based on the doctrine of laches. We affirm.
The relevant facts are as follows. On March 11, 2008, the City of
Philadelphia (City) filed a four-count complaint against Appellants asserting that
although Appellants filed tax returns, they failed to fully pay self-assessed business
privilege taxes1 and wage and net profits taxes2 at various times between 1992 and
1
Section 19-2603(1) of the Philadelphia Code states that “[i]n accordance with the
provisions of . . . the First Class City Business Tax Reform Act, [Act of May 30, 1984, P.L. 345,
(Footnote continued on next page…)
2004.3 The City served the complaint upon Appellants’ receptionist at the Law
Firm on March 28, 2008. Appellants did not file a response. The City then served
(continued…)
as amended, 53 P.S. §§16181–16193,] a tax is hereby imposed upon every person engaging in
any business in the [City] beginning with the tax year 1985, and annually thereafter.” Phila.
Code §19-2603(1). Section 19-2603(3) states that “[a]ny person having an active presence in the
City is subject to the tax imposed by this Section,” and Section 19-2604 states that “[e]very
business shall pay an annual tax on each dollar of annual receipts at the millage rate” stated
therein. Phila. Code §§19-2603(3), 19-2604.
2
Section 19-1502(1)(a) of the Philadelphia Code states that “[a]n annual tax on salaries,
wages, commissions and other compensation earned by residents of [the City] is imposed for
general revenue purposes for the following periods at the following rates . . . stated therein.”
Phila. Code §19-1502(1)(a). Additionally, Section 19-1502(1)(b) states, “An annual tax on
salaries, wages, commissions and other compensation earned by non-residents of [the City] for
work done or services performed or rendered in [the City] is imposed for general revenue
purposes for the following periods at the following rates . . . ” stated therein. Phila. Code §19-
1502(1)(b). Finally, Section 19-1502(1)(c) provides, “The tax imposed under § 19-1502(1)(a)
and (b) shall relate to and be imposed upon salaries, wages, commissions, and other
compensation paid by an employer or on his behalf to any person who is employed by or renders
services to him.” Phila. Code §19-1502(1)(c).
Likewise, Section 19-1502(2)(a) states that “[a]n annual tax on the net profits earned in
businesses, professions or other activities conducted by residents of [the City] is imposed for
general revenue purposes for the following periods at the following rates . . . ” stated therein.
Phila. Code §19-1502(2)(a). Section 19-1502(2)(b) states that “[a]n annual tax on the net profits
earned in businesses, professions or other activities conducted in [the City] by non-residents is
imposed for general revenue purposes for the following periods at the following rates . . . .”
Phila. Code §19-1502(2)(b). Finally, Section 19-1503(c) provides, “The tax levied under § 19-
1502(2)(a) and (b) shall relate to and be imposed on the net profits of any business, profession,
or enterprise carried on by any person as owner or proprietor, either individually or in association
with some other person or persons.” Phila. Code §19-1503(c).
3
As the trial court has explained:
In this case, the City is seeking unpaid business privilege
and wage taxes. Unlike municipal claims, business privilege and
wage taxes are self-assessed taxes, which are collected by the City
(Footnote continued on next page…)
2
a notice to enter default judgment upon Appellants at the Law Firm on April 21,
2008. Again, Appellants did not file a response. On June 3, 2008, the
prothonotary entered a default judgment of $310,586.534 at the City’s request.5
(continued…)
in cooperation with the Commonwealth of Pennsylvania. Though
not required, a claimant may recover self-assessed taxes under the
Self-Assessed Tax Lien Act [(Tax Lien Act), Act of December 1,
1959, P.L. 1673, as amended, 53 P.S. §§7501-7505,] which
implicates a different set of procedures than those required to
recover municipal claims.
The [Tax Lien Act] treats a lien filed to enforce a self-
assessed claim as though it were a judgment without addressing
liability on the underlying tax claim. See [Section 4 of the Tax
Lien Act, 53 P.S. §7504]. Issues relating to an underlying tax
assessment must be raised in a separate appeal of the assessment
and “shall not be subject to review in any proceeding on the lien.”
[Section 5 of the Tax Lien Act, 53 P.S. §7505]. Consequently, a
self-assessed tax lien action does not require prosecution of a writ
of scire facias to judgment. See 53 [P.S. §7504(b)] (Self-assessed
tax liens “shall be given the effect of a judgment and a writ of
execution may issue directly without prosecution to judgment of a
writ of scire facias.”).
City of Philadelphia v. Wake (C.P. Phila., July Term 2008, No. 00291, filed December 21, 2018),
slip op. at 6 (citations omitted and emphasis in original).
4
Sections 19-1504(3) and 19-1509 of the Philadelphia Code provide for the imposition of
interest, penalties, and costs for improperly reported or unpaid business privilege taxes and wage
and net profits taxes. Phila. Code §§19-1504(3), 19-1509.
5
Section 3 of the Tax Lien Act states, in relevant part:
(a) Any city of the first class . . . may transmit to the prothonotary
of its county a certified record of the self-assessed tax of any
taxpayer who fails to—
(Footnote continued on next page…)
3
On September 25, 2008, with timely service to Appellants, the City
filed two praecipes for writs of attachment with interrogatories, upon garnishees,
Commerce Bank and Wachovia Bank, to enforce its judgment against Appellants.6
Only Commerce Bank submitted answers to the interrogatories. The City
subsequently filed praecipes to dissolve the writs of attachment without prejudice
(continued…)
(1) Compute and file a self-assessed tax return when required to do
so, or
(2) Pay any or all of the declared amount due, or
(3) Compute correctly or understates the amount of the self-
assessed tax due.
(b) Every certified record shall contain the name of the taxpayer,
his address, the specific self-assessed tax involved, amount of the
tax due, penalty and interest thereon, and the year for which the
said tax has been levied.
53 P.S. §7503.
6
Pennsylvania Rule of Civil Procedure (Pa. R.C.P. No.) 3102 states, “a judgment shall be
enforced by a writ of execution . . . .” Pa. R.C.P. No. 3103(a) and (e) provides, in relevant part:
(a) Execution shall be commenced by filing a praecipe for a writ
of execution with the prothonotary of any county in which
judgment has been entered.
***
(e) Upon issuance of the writ the prothonotary shall transmit it
directly to the sheriff to whom it is directed or upon plaintiff’s
request deliver it to the plaintiff or the plaintiff’s representative for
transmittal.
4
with Commerce Bank on October 22, 2008, and with Wachovia Bank on
November 4, 2008.
The City took no further action from November 4, 2008, until June 3,
2013, when the City filed a suggestion of non-payment to continue its lien.7 The
7
Section 4 of the Tax Lien Act states, in pertinent part:
(a) The prothonotary shall enter every certified record in a docket
maintained in the prothonotary’s office . . . .
(b) All certified records shall be a lien upon the real estate of the
taxpayer within the county in which such city of the first class . . .
is located from the date of entry upon the docket and until paid.
The lien shall be given the effect of a judgment and a writ of
execution may issue directly without prosecution to judgment of a
writ of scire facias . . . .
(c) The lien shall continue for five years and may be revived and
continued in the manner now or hereafter provided for revival of
judgments, or by the filing of a suggestion of nonpayment and
averment of default . . . within each period of five years
following—
(1) The date on which the certified record of self-assessed taxes
was entered and docketed,
(2) The date on which a petition and rule was filed,
(3) The date on which any judgment on the petition and rule was
entered,
(4) The date on which a previous suggestion of nonpayment and
averment of default was filed,
(5) The date on which a judgment of revival was obtained
thereon.
***
(Footnote continued on next page…)
5
City made no further efforts to enforce the judgment until 2017. On March 29,
2017, the City’s counsel entered an appearance. In June 2017, the City’s counsel
wrote a letter to Appellants demanding payment of the judgment and noting that a
recommendation would be made to the City to direct the sheriff to levy or seize as
much of Appellants’ property as was necessary to satisfy the judgment.
On July 16, 2017, Appellants filed a motion for judgment of non pros
or, in the alternative, to enjoin enforcement of the judgment based on the doctrine
of laches. The City filed an answer asserting, inter alia, that a motion for non pros
is not applicable to matters in which judgment has already been entered. On
August 23, 2017, the trial court denied Appellants’ motion. In its opinion filed in
support of its order denying the motion, the trial court explained that the doctrine
of non pros was inapplicable because the City had already fully prosecuted the
case and a judgment on the merits had been entered. The trial court also rejected
Appellants’ laches argument because, under Section 5529(a) of the Judicial Code,
(continued…)
(e) The prothonotary shall docket and index the suggestion and
averment directed therein . . . . The filing and indexing of such
suggestion and averment within five years of filing the claim . . . or
any judgment thereon or the filing of any prior suggestion and
averment of default, shall have the same force and effect for the
purpose of continuing and preserving the lien of the claim as
though a writ of scire facias had been issued or a judgment or
judgment of revival had been obtained within such period. It shall
be lawful for a writ of scire facias to issue and be prosecuted to
judgment in the manner in which such writs are now ordinarily
employed. The above described procedures shall be in addition to
any other methods of collection that may be or are presently
authorized.
53 P.S. §7504(a)-(c), (e).
6
42 Pa. C.S. §5529(a), the City had 20 years from the date the judgment was entered
to execute against Appellants’ personal property. Appellants appealed the trial
court’s order to the Superior Court, which transferred the appeal to this Court.8 See
Section 5103(a) of the Judicial Code, 42 Pa. C.S. §5103(a) (“If an appeal . . . is
taken to . . . a court . . . which does not have jurisdiction of the appeal or other
matter, the court . . . shall not quash such appeal or dismiss the matter, but shall
transfer the record thereof to the proper tribunal . . . .”).
On appeal,9 Appellants assert that the trial court erred in denying their
motion for judgment of non pros or to enjoin enforcement of the default judgment
8
Section 762(a)(4)(i)(A) of the Judicial Code vests this Court with exclusive appellate
jurisdiction from orders of the trial court in actions where the application, interpretation, or
enforcement of any “statute regulating [the] affairs of political subdivisions, municipalit[ies] and
other local authorities or other public corporations” is drawn into question. 42 Pa. C.S.
§762(a)(4)(i)(A).
9
By February 23, 2018 Order, this Court directed the parties to address the appealability
of the trial court’s order denying Appellants’ motion in their principal briefs on the merits.
Appellants are, in essence, seeking equitable relief to prevent execution of the previously entered
default judgment. See, e.g., Wasson v. McClintock, 703 A.2d 726, 727 (Pa. Cmwlth. 1997)
(“When a party files a petition for a judgment of non pros, that party is seeking equitable relief
which is based on the equitable doctrine of laches.”) (citation omitted). As this Court has
explained:
[E]quity has jurisdiction to protect by injunction property or
personal rights when a fundamental question of legal right is
involved and when the interests of justice require relief. If a
statute sets forth an adequate procedure by which a party may
proceed but it is not the exclusive means by which the party may
seek relief, a court in its discretion may allow an action in equity.
It is an equally accepted principle that a court in which an
execution proceeding is pending has the inherent power to stay the
proceeding upon legal or equitable grounds, when it is necessary to
protect the rights of a party. [Pa. R.C.P. No.] 3121. A court
should not stay execution unless the facts of the case warrant such
(Footnote continued on next page…)
7
based on the doctrine of laches. However, after reviewing the record, Appellants’
brief, and the law, we conclude that the appellate issues have been ably resolved in
the thorough and well-reasoned opinion of Judge Daniel J. Anders, and affirm on
the basis of his opinion in the matter of City of Philadelphia v. Richard J.
Silverberg & Associates, P.C. and Richard J. Silverberg. (C.P. Phila., No. 1510
March Term 2008, filed October 24, 2017).
MICHAEL H. WOJCIK, Judge
(continued…)
an exercise of discretion, which judgment requires balancing the
rights of the creditor and debtor.
City of Easton v. Marra, 862 A.2d 170, 174 (Pa. Cmwlth. 2004) (citations omitted). Thus, the
trial court’s order denying Appellants’ motion in the instant matter is a final, appealable order.
See id. at 172 n.1 (“The court in which an execution proceeding is pending has an inherent right
to stay execution when it is necessary to protect the rights of a party. On review, an appellate
court will not disturb a trial court’s determination absent a clear abuse of discretion or error of
law.”) (citations omitted).
8
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. : No. 1783 C.D. 2017
:
Richard J. Silverberg & Associates, :
P.C. and Richard J. Silverberg, :
:
Appellants :
ORDER
AND NOW, this 4th day of April, 2019, the order of the Philadelphia
County Court of Common Pleas dated August 23, 2017, is AFFIRMED.
MICHAEL H. WOJCIK, Judge