In Re: For Upset Tax Sale held on September 18, 2019 & October 7, 2019 ~ Appeal of: H. Hu ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: For Upset Tax Sale held :
on September 18, 2019 and :
October 7, 2019 :
: No. 566 C.D. 2020
Appeal of: Hong Hu :
:
In Re: For Upset Tax Sale held :
on September 18, 2019 and :
October 7, 2019 :
: No. 1360 C.D. 2020
Appeal of: Fuhai Li : Submitted: July 30, 2021
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: November 15, 2021
Hong Hu (Hu) and Fuhai Li (Li) (collectively, Appellants), pro se,
appeal from the Pike County Common Pleas Court’s (trial court) March 19, 2020
order denying Li’s Petition for Objection or Exception to the Sale of Property at
4005 Milford Landing Drive, Milford, Pennsylvania (Property) (Petition).
Essentially, the issue before this Court is whether Appellants were owner occupants
of the Property at the time of the Property’s upset tax sale (Tax Sale).1
1
In their Statement of Questions Involved, Appellants present three issues: (1) whether the
trial court erred by concluding that the Property was not owner occupied; (2) whether the trial
court erred by concluding that Li had actual notice of the Tax Sale; and (3) whether the trial court
erred by concluding that the Tax Sale notice was properly posted at the Property. See Appellants’
Br. at 2-3. Because determining whether Appellants were owner occupants of the Property is
dispositive, this Court will address only that issue herein.
Relevant Law
Initially, “the collection of taxes may not be implemented without due
process of law.” Husak v. Fayette Cnty. Tax Claim Bureau, 61 A.3d 302, 312 (Pa.
Cmwlth. 2013). This Court has explained:
A property owner’s right to notice “prior to commencing
with an upset tax sale [is] established pursuant to the Due
Process Clause of the Fourteenth Amendment to the
United States [(U.S.)] Constitution[, U.S. Const. amend.
XIV, § 1,] and by the [Real Estate Tax Sale Law
(RETSL)2].” Rice v. Compro Distrib[.], Inc., 901 A.2d
570, 574 (Pa. Cmwlth. 2006). The [U.S.] Supreme Court
has held that due process is implicated in any taking of
property for the collection of taxes, stating:
[P]eople must pay their taxes, and the government
may hold citizens accountable for tax delinquency
by taking their property. But before forcing a
citizen to satisfy his debt by forfeiting his property,
due process requires the government to provide
adequate notice of the impending taking.
Jones v. Flowers, 547 U.S. 220 . . . (2006). Due process
is satisfied when the [tax claim b]ureau, before
commencing with a tax sale, “provide[s] ‘notice
reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.’”
Id. (quoting Mullane v. Cent[.] Hanover Bank & T[r.] Co.,
339 U.S. 306 . . . (1950)).
In re Consol. Reps. & Return by the Tax Claim Bureau of Northumberland Cnty. of
Props., 132 A.3d 637, 644 (Pa. Cmwlth. 2016) (en banc) (Appeal of Neff).
Section 602(e)(1) of the RETSL requires a tax claim bureau to provide
notice of a tax sale “[a]t least thirty (30) days before the date of the sale, by [U.S.]
certified mail, restricted delivery, return receipt requested, postage prepaid, to each
2
Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§ 5860.101-5860.803.
2
owner as defined by [the RETSL].” 72 P.S. § 5860.602(e)(1). Section 602(a) of the
RETSL also specifies:
At least thirty (30) days prior to any scheduled sale[,] the
[tax claim] bureau shall give notice thereof, not less than
once in two (2) newspapers of general circulation in the
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.
72 P.S. § 5860.602(a). Section 602(e)(3) of the RETSL also mandates that “[e]ach
property scheduled for sale shall be posted at least ten (10) days prior to the sale.”
72 P.S. § 5860.602(e)(3).
Relative to owner-occupied3 properties exposed to tax sale, Section
601(a)(3) of the RETSL further declares:
No owner occupied property may be sold unless the
[tax claim] bureau has given the owner occupant
written notice of such sale at least ten (10) days prior
to the date of actual sale by personal service by the
sheriff . . . . The sheriff . . . shall make a return of service
to the [tax claim] bureau . . . setting forth the name of the
person served, the date and time and place of service, and
attach a copy of the notice which was served. If such
personal notice cannot be served within twenty-five
(25) days of the request by the [tax claim] bureau to
make such personal service, the [tax claim] bureau
may petition the [trial court] to waive the requirement
of personal notice for good cause shown. Personal
service of notice on one of the owners shall be deemed
personal service on all owners.
3
Section 102 of the RETSL defines owner occupant as “the owner of a property which has
improvements constructed thereon and for which the annual tax bill is mailed to an owner residing
at the same address as that of the property.” 72 P.S. § 5860.102.
3
72 P.S. § 5860.601(a)(3) (emphasis added); see also Montgomery Cnty. Tax Claim
Bureau v. Queenan, 108 A.3d 947, 951 (Pa. Cmwlth. 2015) (“[N]otice . . . must be
personally served on an owner[]occupier of real property at least [10] days prior to
the date of actual sale . . . .”). “The requirements of Section 601(a)(3) [of the
RETSL] are cumulative and apply in addition to the tax claim bureaus’ obligations
to provide notice through publications, posting, and mail.” Appeal of Neff, 132 A.3d
at 645-46.
This Court has ruled that “[t]he [RETSL’s] notice provisions are to be
strictly construed, and a tax claim bureau’s failure to comply with all of the notice
requirements ordinarily nullifies a tax sale.” Montgomery Cnty. Tax Claim Bureau,
108 A.3d at 950. Accordingly,
[“]the [tax claim b]ureau has the burden of proving
compliance with the statutory notice provisions of the
[RETSL].” In re Tax Sale of Real Prop[.] Situated in
Jefferson T[wp.], 828 A.2d 475, 478 (Pa. Cmwlth. 2003)[,]
aff’d, . . . 859 A.2d 471 ([Pa.] 2004). [Although a]
presumption of regularity attaches to tax sales[,] . . . a
property owner can overcome this presumption by
challenging the sale based on the agency’s non-
compliance with statutory tax sale requirements. In re
1999 Upset Sale of Real Estate, 811 A.2d 85, 88 (Pa.
Cmwlth. 2002).
Dwyer v. Luzerne Cnty. Tax Claim Bureau, 110 A.3d 223, 225-26 (Pa. Cmwlth.
2015).
Facts
Appellants, husband and wife, are the Property’s record owners.
Appellants and their daughters resided at the Property after Appellants purchased it
in 2011. See Original Record, January 24, 2020 Notes of Testimony (N.T.) at 134;
see also N.T. Pike County Tax Claim Bureau (Bureau) Ex. 2. The Property’s address
4
- 4005 Milford Landing Drive - is Appellants’ mailing address, and is the address at
which Appellants have received the Bureau’s annual Property tax bills.
In 2018, Hu began staying at Appellants’ property located at 146 Rising
Meadow Way, East Stroudsburg, Pennsylvania, during the week to be closer to her
job, but she regularly returned to and continued to reside at the Property. See N.T.
at 13-15, 30-32. In addition, on July 11, 2018, the U.S. Marshals Service took Li
into federal custody.4 Li was originally held in the Lackawanna County Prison, and
then was transferred to the Federal Correctional Institution (FCI)-McKean in
Bradford, Pennsylvania, on May 24, 2019.
On March 20, 2019, the Bureau sent a Notice of Return and Claim to
Appellants at the Property’s address notifying them of a claim for unpaid 2017/2018
real estate taxes, and that their failure to pay the taxes could result in the Property
being sold without their consent. See N.T. at 56-57; see also N.T. Bureau Ex. 1 at
13.
On April 9, 2019, the Bureau sent separate Notices of Return and Claim
by first-class and certified mail to Li and Hu at the Property’s address. See N.T. at
57-59; see also N.T. Bureau Ex. 1 at 1-4. Both certified mailings were returned to
the Bureau. See N.T. at 57-60; see also N.T. Bureau Ex. 1 at 2, 4. Li’s return receipt
was marked “RETURN TO SENDER,” “NOT DELIVERABLE AS ADDRESSED,” “UNABLE TO
FORWARD.” N.T. Bureau Ex. 1 at 2. Hu’s return receipt was marked “RETURN TO
SENDER,” “UNCLAIMED,” “UNABLE TO FORWARD.” N.T. Bureau Ex. 1 at 4. The first-
class mailings were not returned to the Bureau. See N.T. at 59.
On May 22, 2019, the Bureau conducted an internet search via
TruePeopleSearch.com for Appellants’ addresses, and confirmed that the Property’s
4
Li granted Hu his power-of-attorney while he was incarcerated, which gave her authority
to act on his behalf. See N.T. at 33-34, 45, 125, 156-157.
5
address was the current mailing address for both of them.5 See N.T. at 60-61; see
also N.T. Bureau Ex. 1 at 5-8. That same day, the Bureau sent updated Notices of
Return and Claim via first-class mail to Li and Hu.6 See N.T. at 62, 101. Although
Li’s Notice of Return and Claim was eventually returned to the Bureau marked
“RETURN TO SENDER,” “NOT DELIVERABLE AS ADDRESSED,” “UNABLE TO FORWARD,”
N.T. Bureau Ex. 1 at 9, Hu’s was not returned to the Bureau. See N.T. at 61, 101;
see also N.T. Bureau Ex. 1 at 9-11.
On July 18, 2019, the Bureau posted a Notice of Return and Claim and
a Notice of Public Tax Sale at the Property. See N.T. at 62-63; see also N.T. Bureau
Ex. 1 at 12. The Notice of Public Tax Sale specified that the Property would be sold
on September 18, 2019. See N.T. Bureau Ex. 1 at 14, 19. Hu saw the posting of the
impending Tax Sale notices on the Property at the end of July 2019, and informed
Li,7 who instructed Hu to contact his criminal defense counsel and the Bureau. See
N.T. at 15-17, 23, 35, 42-43, 51-52, 144, 149-154.
On July 25, 2019, the Bureau sent a Notice of Public Tax Sale to Hu by
first-class and certified mail restricted delivery. See N.T. Bureau Ex. 1 at 19-21.
The certified mailing was returned to the Bureau marked “RETURN TO SENDER,” “NOT
DELIVERABLE AS ADDRESSED,” “UNABLE TO FORWARD,” N.T. Bureau Ex. 1 at 20, but
the first-class mailing was not returned to the Bureau. N.T. at 66, 101.
On July 30, 2019, the Bureau sent a Notice of Public Tax Sale to Li by
first-class and certified mail. See N.T. Bureau Ex. 1 at 14-16. The first-class mailing
was returned to the Bureau marked “RETURN TO SENDER,” “NOT DELIVERABLE AS
5
TruePeopleSearch.com listed 146 Rising Meadow Way, East Stroudsburg, Pennsylvania,
as an address for Hu and Li in “Jul[y] 2012.” N.T. Bureau Ex. 1 at 6, 8.
6
The Notices of Return and Claim contained updated tax amounts due, including accrued
interest and fees. See N.T. at 62.
7
Li claimed Hu informed him of the Tax Sale in August 2019, but he was not aware at that
time that the Tax Sale had actually been scheduled. See N.T. at 151-154.
6
ADDRESSED,” “UNABLE TO FORWARD,” N.T. Bureau Ex. 1 at 17, and the certified
mailing was returned to the Bureau “RETURN TO SENDER,” “ATTEMPTED - NOT
KNOWN,” and “UNABLE TO FORWARD.” N.T. Bureau Ex. 1 at 15.
The Bureau advertised the Property’s Tax Sale in the August 8, 2019
Pike County Dispatch, the August 9, 2019 Pike County Legal Journal, and the
August 10, 2019 News Eagle. See N.T. at 68; see also N.T. Bureau Ex. 1 at 29-35.
On August 13, 2019, the Bureau conducted an internet search for
Appellants on Advanced Person Search, which confirmed that their current mailing
address was the Property’s address.8 See N.T. at 67-68; see also N.T. Bureau Ex. 1
at 24-28. Because the Advanced Person Search reflected an additional 2019 address
for Li at 200 Third Street, Milford, Pennsylvania, on August 14, 2019, the Bureau
sent a Notice of Public Tax Sale to Li by first-class mail to that address, but it was
returned to the Bureau marked “RETURN TO SENDER,” “NOT DELIVERABLE AS
ADDRESSED,” “UNABLE TO FORWARD.” See N.T. Bureau Ex. 1 at 17. The returned
first-class mailing envelope contained a handwritten notation that the Bureau
checked Li’s voter registration records, but found “nothing different.” See N.T. at
65; see also N.T. Bureau Ex. 1 at 17.
On September 3 and 4, 2019, the Pike County Sheriff attempted to serve
Li and Hu with the Notice of Public Tax Sale at the Property on three different
occasions, but the Sheriff’s return affidavit reflected that personal service was not
obtained. See N.T. at 70, 98; see also N.T. Bureau Ex. 1 at 37-38. The Bureau did
not seek to have the personal service requirement waived.
Hu called the Bureau office twice on September 9, 2019. The first time,
Hu provided the Bureau her cell phone number; the second time, she spoke to Paula9
8
Advanced Person Search listed 146 Rising Meadow Way, East Stroudsburg,
Pennsylvania, as a previous address for Li from “Jul[y] 2006-2019,” N.T. Bureau Ex. 1 at 24, and
as a previous address for Hu from “Jul[y] 2006-2018.” N.T. Bureau Ex. 1 at 26.
9
Paula’s last name is not included in the record.
7
who informed Hu that since the Property is in her name, she was responsible for
paying the taxes or the Property would be sold. See N.T. at 68-69; see also N.T.
Bureau Ex. 1 at 36. On September 12, 2019, Hu notified Bureau Director Cynthia
Gehris (Gehris) that the federal government had seized the Property and Hu wanted
to enter into a payment agreement but, when Gehris quoted the amount and
referenced a two-year agreement, Hu declined. See N.T. at 26, 36, 69-70, 92, 95,
164-165; see also N.T. Bureau Ex. 1 at 36.
The Tax Sale of the Property was held on September 18, 2019, and was
continued to October 7, 2019. See N.T. at 39, 70-72. On October 7, 2019, Tore
Properties, LLC (Tore Properties) purchased the Property at the Tax Sale for
$23,518.59.10 See N.T. at 70-72; see also N.T. Bureau Ex. 1 at 39.
By notice dated October 9, 2019, the Bureau sent Hu a post-Tax Sale
notice by certified and first-class mailings. See N.T. at 76, 107; see also N.T. Bureau
Ex. 1 at 44-48. Also, on or about October 9, 2019, Gehris reviewed the properties
sold on October 7, 2019, and made the connection to a newspaper article she had
read previously about a Li who had been incarcerated. Gehris then searched prison
records, located Li’s address, and sent the post-Tax Sale notice to Li by first-class
and certified mail at FCI-McKean. See N.T. at 74-75, 82-84, 114, 122, 144-145; see
also N.T. Bureau Ex. 1 at 40-43.
On November 18, 2019, Li filed the Petition, alleging therein that,
because he is an owner occupant of the Property, the Bureau was required to
personally serve him with notice of the Tax Sale. However, Li did not serve the
Petition on the Board. See Trial Ct. Order at 1. Also on November 18, 2019, the
Bureau filed a Petition for Confirmation Nisi, which the trial court granted on
10
The $23,518.59 is the total of the $21,000.00 purchase price, plus an $83.75 recording
fee, a $5.50 prothonotary fee, a $25.00 deed preparation fee, a $1,202.17 state transfer tax, and a
$1,202.17 local transfer tax. See N.T. at 117.
8
November 19, 2019. See N.T. at 72. Unaware that Li had filed the Petition, the
Bureau recorded the Property’s deed on November 21, 2019. See N.T. at 72-73.
On January 24, 2020, the trial court conducted a hearing.11 At the
hearing, Tore Properties filed a Motion to Intervene, which the trial court granted.
See N.T. at 4, 6. On March 19, 2020, the trial court denied the Petition and confirmed
the Tax Sale, declaring that Li and Hu had actual notice of the Tax Sale. See
Appellants’ Br. Ex. B (Trial Ct. Order) at 2, 4-7. Li and Hu filed separate appeals
in this Court.12
Discussion
Appellants argue that they are the owner occupants of the Property and,
therefore, the Bureau was required to notify them of the Tax Sale by personal
service. This Court agrees.
It is undisputed in the instant matter that the Bureau timely published
and posted notices of the impending Tax Sale, and that the Bureau sent certified and
first-class mailings to Appellants at their record address at the Property. However,
if a property is owner occupied, “notwithstanding whether a taxpayer received actual
notice, the Bureau must [also] demonstrate that it personally served notice on any
owner[]occupant of the [p]roperty subject to the upset tax sale or obtained a waiver
11
Li participated in the hearing by telephone from FCI-McKean.
12
“This [C]ourt’s review of a trial court’s order in a tax sale matter is limited to determining
whether the trial court erred as a matter of law, rendered a decision that is unsupported by the
evidence, or abused its discretion.” City of Phila. v. Rivera, 171 A.3d 1, 4 n.7 (Pa. Cmwlth. 2017)
(quoting City of Phila. v. Auguste, 138 A.3d 697, 700 (Pa. Cmwlth. 2016)). “Statutory
interpretation is a question of law over which our standard of review is de novo, and our scope of
review [is] plenary.” Thomas Jefferson Univ. Hosps., Inc. v. Pa. Dep’t of Lab. & Indus., Bureau
of Lab. Law Compliance, 162 A.3d 384, 389 (Pa. 2017).
Hu’s appeal was docketed at No. 566 C.D. 2020. Li’s appeal was docketed at No. 1360
C.D. 2020. However, this Court consolidated the appeals on March 30, 2021.
9
of personal service from the trial court.” Appeal of Neff, 132 A.3d at 646 (emphasis
added).
Substantial record evidence supports that Appellants had received the
Property’s tax bills at the Property since 2011; the Property is listed as Appellants’
current address on the internet, by the Recorder of Deeds and the tax assessment
office, and they have never provided the Bureau with an alternate address; although,
beginning in 2018, Hu stayed in East Stroudsburg during the week for her job, she
did not officially move from the Property until October or November 2019; Hu was
at the Property almost daily during the summer of 2019; and, based on its belief that
Appellants lived at the Property, the Bureau made three attempts to personally serve
notice on Appellants at the Property in September 2019.13 Notably, in its brief to the
trial court, the Bureau admitted that Hu was an owner occupant of the Property.14
In addition, Li resided at the Property until he was incarcerated in July
2018. This Court ruled in In Re Appeal of Hansford, 218 A.3d 995 (Pa. Cmwlth.
2019), that incarceration does not change an owner occupant’s status. The Hansford
Court reasoned:
The fact that an owner may be temporarily physically
incapable of inhabiting his property [due to his
incarceration] does not mean he is no longer an owner
occupant. . . . Consequently, this Court concludes that,
13
In determining that Appellants were not owner occupants, the trial court relied on the
following facts: “Hu testified that at the time of the hearing, she resided in East Stroudsburg,
Pennsylvania, not [at] the Property. Hu also indicated she returned to the Property on weekends
in order to retrieve mail sent to the Property, but that ended in October or November of 2019.”
Trial Ct. Order at 4. However, where Hu resided at the time of the January 2020 hearing is
irrelevant when analyzing whether the Property was owner occupied in 2018 and 2019. And, Hu’s
testimony that she returned to the Property on weekends to retrieve mail until October or
November of 2019 was alone insufficient to support the trial court’s conclusion that the Property
was not owner occupied.
14
The Bureau declared: “[I]t is undisputed that the only owner occupant of the subject
[P]roperty, Hu, received actual notice of the sale . . . when she read the posted Notice of [Public
Tax] Sale on her garage.” Appellants’ Br. Ex. 1 (Bureau Trial Ct. Br.) at 7.
10
although [Li] was physically incapable of inhabiting the
Property at the relevant time period, he is an owner
occupant under the RETSL.
Id. at 1001-02 (footnote omitted). Accordingly, the record evidence supports, and
this Court concludes, that Hu and Li were owner occupants of the Property.
Conclusion
Because as owner occupants, Appellants were entitled to personal
service of written notice of the Tax Sale, and the Bureau did not personally serve
them with such notice or seek a waiver of that requirement, the Tax Sale was
invalid.15
Based on the foregoing, the trial court’s order is reversed.
_________________________________
ANNE E. COVEY, Judge
15
Because the Property was owner occupied and the Bureau did not personally serve
Appellants, or seek a waiver, pursuant to Section 601(a)(3) of the RETSL, the Property could not
be sold at Tax Sale. Therefore, this Court need not address Appellants’ remaining issues - whether
Li had actual notice of the sale or whether it was properly posted at the Property.
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
In Re: For Upset Tax Sale held :
on September 18, 2019 and :
October 7, 2019 :
: No. 566 C.D. 2020
Appeal of: Hong Hu :
:
In Re: For Upset Tax Sale held :
on September 18, 2019 and :
October 7, 2019 :
: No. 1360 C.D. 2020
Appeal of: Fuhai Li :
ORDER
AND NOW, this 15th day of November, 2021, the Pike County
Common Pleas Court’s March 19, 2020 order is reversed.
_________________________________
ANNE E. COVEY, Judge