L. Auston v. County of Northampton TCB ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lorna Auston, :
Appellant :
:
v. : No. 1842 C.D. 2019
: Submitted: December 7, 2020
County of Northampton :
Tax Claim Bureau :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge1
HONORABLE J. ANDREW CROMPTON, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE CROMPTON FILED: January 12, 2021
Lorna Auston (Owner) appeals a December 3, 2019 Order of the Court
of Common Pleas of Northampton County (trial court) denying the Exceptions to
Upset Tax Sale (Exceptions) filed by Owner on September 25, 2018. Owner is the
record owner of 119 South 10th Street, Easton, Northampton County, Pennsylvania
(the Property), which is the subject of this appeal. Owner asserts that the trial court
erred in refusing to invalidate the upset tax sale of the Property for Owner’s failure
to pay yearly school taxes for 2016-2017. Owner argues that because she paid her
2017-2018 school taxes directly to Easton Area School District prior to the upset tax
sale, sale of the Property was invalid. The County of Northampton Tax Claim
1
The decision in this case was reached prior to January 4, 2021, when Judge Brobson
became President Judge.
Bureau (TCB) contends that Owner failed to pay her 2016-2017 school taxes, and
therefore, the trial court correctly refused to invalidate the upset sale of the Property.
Upon consideration, we affirm the decision of the trial court.
I. Background
Owner currently resides at 916 Walnut Street, Easton, Pennsylvania.
Reproduced Record (R.R.) at 14a, 24a-25a, 32a. Prior to the tax sale at issue in this
case, Owner directed that all tax notices be sent to her home address rather than to
the Property. Id. at 24a-25a, 32a. According to Owner, the Property has an
estimated value of $60,000 and is not subject to a mortgage. Id. at 15a.
In December 2017, the TCB notified Owner by mail of delinquent
2016-2017 school taxes for the Easton Area School District in the amount of
$1,849.33. Id. at 17a-18a. Owner had previously mailed a tax check to Berkheimer
Tax Collections in November 2017, but that sum was applied to the 2017-2018
school taxes for the Property. Id. Owner alleges that she was not aware that she had
paid a more recent bill while leaving the previous 2016-2017 bill delinquent.
The Northampton County Revenue/TCB Supervisor, Cindy Hoffer,
testified before the trial court on May 7, 2019, that on May 16, 2017, she attempted
to advise Owner of her tax delinquency through a Notice of Return and Claim sent
to Owner at her home address via certified mail. Id. at 11a, 33a-34a, 59a. Within
the Notice of Return and Claim, the TCB advised Owner that her 2016-2017 taxes
for the Property were delinquent in an amount totaling $1,849.33 and that if the taxes
remained unpaid, the Property would be sold to pay the taxes. Id. at 59a. Ms. Hoffer
further testified that the Notice of Return and Claim was unclaimed, but it was not
returned to the TCB in sufficient time to post it on the Property as a first initial
delinquent notice. Id. at 33a.
2
Ms. Hoffer further testified that on December 8, 2017, the TCB mailed
a reminder notice via regular mail to Owner at her home address. Id. at 34a. The
reminder notice was also returned to the TCB as undeliverable. Id. In July 2018,
per Ms. Hoffer’s testimony, following a “waiting period,” the TCB mailed a notice
of public tax sale to Owner via restricted certified mail. Id. at 35a. Owner signed
and returned the notice to the TCB, thereby acknowledging her receipt of the notice.
Id. at 35a-36a. Additionally, the TCB advertised Notice of Upset Sale in the
Morning Call on August 15, 2018, in the Northampton County Reporter on August
16, 2018, and in the Easton Express, also on August 16, 2018. Id. at 37a-38a.
On August 11, 2018, the TCB posted a notice of tax sale on the
Property. Id. at 36a. The notice indicated that the Property was scheduled for tax
sale on September 25, 2018. Id. Owner asserts, and Ms. Hoffer’s testimony
confirms, that Owner appeared at the TCB office in Northampton County on August
23, 2018, to inquire about delinquent taxes on two properties, including the Property.
Id. at 38a-39a. While Owner entered into a payment agreement for tax delinquency
to avoid upset sale, this agreement did not concern the Property at issue in this
appeal, but instead, Owner’s property at 137 South 10th Street, Northampton
County. Id. at 39a.
Ms. Hoffer explained before the trial court that while Owner indicated
that she paid school taxes for 2017-2018 directly to the Easton Area School District,
the TCB would not possess a record of this transaction as current bills are sent by
the school district. Id. at 40a. In the case of delinquency, as with Owner’s 2016-
2017 school taxes for the Property presently at issue, the school district notifies the
TCB to begin the upset tax sale process from notice through sale. Id. at 41a.
Therefore, as the Easton Area School District notified the TCB that Owner was
3
delinquent on her 2016-2017 school taxes, the Property was sold at the upset tax sale
for $14,000 on September 25, 2018. Id.
On October 30, 2018, Owner filed Exceptions to the upset tax sale. A
trial was held on the matter before the trial court on May 7, 2019, and the trial court
denied Owner’s Exceptions on December 3, 2019. Owner now appeals to this
Court.2
II. Discussion
Owner asserts that the trial court erred in denying her Exceptions and
declining to invalidate the upset tax sale of the Property. Owner argues that because
she was not aware that her tax payment was applied to school taxes owed in 2017-
2018, not the 2016-2017 delinquent school taxes, and she believed that she paid the
delinquent taxes, the tax sale is invalid. Further, Owner avers that the TCB was
required to apply her payment to the 2016-2017 delinquent school taxes instead of
her 2017-2018 school tax balance.
The TCB notes that throughout the upset tax sale process for the
Property, it complied fully with the Real Estate Tax Sale Law (RETSL),3 and
importantly, Owner does not challenge the TCB’s compliance with the RETSL,
including its notice provisions.4 Instead, Owner bases her argument that the trial
court erred in upholding the upset tax sale solely in the TCB having a duty to apply
2
Our review in a tax sale case is limited to determining whether the trial court abused its
discretion, committed an error of law, or rendered a decision unsupported by the evidence.
Montgomery Cnty. Tax Claim Bureau v. Queenan, 108 A.3d 947 (Pa. Cmwlth. 2015).
3
Real Estate Tax Sale Law, Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§
5860.101-5860.803.
4
See 72 P.S. §§5860.602(a), 5860.602(e)(1), & 5860.602(e)(3) (concerning advertising,
notice, and posting requirements for upset tax sales).
4
her payment for the 2017-2018 school taxes to her delinquent school taxes for 2016-
2017. While Owner acknowledges in her brief that she is unaware of any
Pennsylvania case law that puts forward this argument, Owner asks this Court to
interpret the factual situation at issue in this case in keeping with the “commercial
world” of creditors and debtors. Owner’s Br. at 9.
In articulating her argument, Owner relies almost exclusively on the
“Pardee principle,” so called for the 1886 Pennsylvania Supreme Court decision in
Pardee v. Markle, 5 A. 36, 111 PA. 548 (1886). Owner’s Br. at 11. In Pardee, a
partner in a firm wrongly appropriated money from the firm after having been
indemnified by another partner. The misappropriating partner subsequently made
partial payments to the firm, but without specification as to which funds, the
indemnifying partner’s or more generally, the firm’s, the repayments should apply.
Id. The Pardee Court observed that credits will ordinarily be applied to the discharge
of the oldest debt, and in following this principle, held that the repayments should
be applied in the chronological order of the wrongful withdrawals or overdrafts
made. Id. at 41.
Owner asks that this Court apply Pardee to the present case to
determine that the TCB should have applied payments made on the Property to the
earliest debt, the 2016-2017 delinquent school taxes, as opposed to the 2017-2018
school taxes. Then, according to Owner, the upset tax sale must be invalidated
because the basis for sale, the 2016-2017 delinquency, would not exist. However,
nothing within prior case law or relevant statutory provisions indicates that this
Court has the authority, or should assume the authority, to overturn the upset tax sale
at issue in this case by applying the so-called “Pardee principle.”
5
“[I]t is a general rule in Pennsylvania that where a debtor owes more
than one debt to a creditor, the debtor has the first right to specify the particular debt
to which a payment is to be applied.” UHL Constr. v. Fid. & Deposit Co., 538 A.2d
562, 565 (Pa. Super 1988). By this principle, it is conceivable that Owner could
choose to direct her payment to either outstanding tax bill. However, in this case,
the TCB asserts that it did not make such a choice, thereby depriving Owner of her
right to choose, but instead, Owner herself directed payment to apply to her 2017-
2018 school taxes. Owner returned a check for the exact amount of the 2017-2018
taxes due to Berkheimer Tax Collections with a copy of the 2017-2018 tax bill.
The trial court agreed, finding that “[n]othing in the [2017-2018
payment] receipt suggested that [Owner]’s payment of $1,883.18 had been applied
to the delinquent 2016 taxes rather than the 2017 taxes specified in the receipt.” Tr.
Ct. 1925(a) Statement, 03/02/2020, at 5; R.R. at 61a. At trial on May 7, 2019, Owner
testified before the trial court that “[Easton Area School District] sen[t] me a letter
with . . . an envelope to send it back. So I just wrote them a check and sen[t] it to
them.” R.R. at 17a. The trial transcript further provides:
Owner’s Counsel: Okay. And I’m showing you what’s -- a stamp that
appears to say, Paid, Berkheimer Tax -- I guess that’s Berkheimer Tax
Collections, and it says 11/16/17. Did you mail it to Berkheimer?
Owner: Yes.
Owner’s Counsel: And you received this copy back in the mail?
Owner: Yes.
Owner’s Counsel: How much is the amount that you paid on that day?
Owner: This one says $1,883.18.
Owner’s Counsel: And that appears to represent both school real estate
tax for 2017/2018 and something called school public library tax. [. . .]
Owner: Uh -huh.
R.R. at 17a. Therefore, the documentation accompanying Owner’s returned
payment clearly indicated collection of the 2017-2018 school taxes for the Property.
6
Nothing provided within the 2017-2018 tax bill indicated that payment would
instead be applied to the 2016-2017 school tax delinquency for the Property. Thus,
as determined by the trial court, Owner was aware, or should have been aware, that
her payment applied to her 2017-2018 school taxes for the Property.
However, regardless of Owner’s belief, Owner asks that this Court
recognize a duty for the TCB to apply the 2017-2018 payment to the 2016-2017 tax
delinquency on the Property. See generally Pardee. Not only does this request
overlook the logistical reality that the TCB was not involved in the receipt of the
2017-2018 payment, but rather Easton Area School District, it also imposes
requirements on the TCB outside of the RETSL. The TCB contends that the parties’
respective rights and obligations are governed by the RETSL and as the trial court
noted, it cannot “disrupt those rights and obligations to assist a party who has failed
to use the protections available under the regulatory scheme.” Tr. Ct. 1925(a)
Statement, 03/02/2020, at 27 (citing First Fed. Sav. & Loan v. Swift, 321 A.2d 895,
898 (Pa. 1974)). We agree with the trial court’s determination.
In First Federal Savings and Loan, the Pennsylvania Supreme Court
recognized that it lacks the power to modify the comprehensive legislative scheme
of the RETSL by creating a new provision, such as the additional duty on the TCB
that Owner requests. See 321 A.2d at 898. “Where, as here, the parties’ rights are
regulated and fixed by a comprehensive scheme of legislation, the maxim ‘equity
follows the law’ is entitled to the greatest deference.” First Fed. Sav. & Loan, 321
A.2d at 898. In the present case, the trial court correctly found that the RETSL does
not contain a provision that would require the TCB to automatically apply a property
owner’s tax payments first to delinquent taxes, satisfying the oldest outstanding
balance prior to current taxes. Further, the TCB did not make any misrepresentations
7
to Owner that it would adopt this procedure beyond its existing upset tax sale
requirements as outlined in the RETSL.
“[The Commonwealth] Court's scope of review in tax sale cases is
limited to determining whether the trial court abused its discretion, clearly erred as
a matter of law or rendered a decision with a lack of supporting evidence.” In re Tax
Sale of Real Prop. Situated in Jefferson Twp., 828 A.2d 475, 478 n.6 (Pa. Cmwlth.
2003), aff'd, 859 A.2d 473 (Pa. 2004); accord In re Consol. Rep. & Return By Tax
Claim Bureau of Northumberland Cnty., 132 A.3d 637, 643 n.2 (Pa. Cmwlth. 2016);
Rice v. Compro Distrib., Inc., 901 A.2d 570, 574 (Pa. Cmwlth. 2006). “The trial
court, as the finder of fact, has exclusive authority to weigh the evidence, make
credibility determinations, and draw reasonable inferences from the evidence
presented.” Rice v. Compro Distrib., 901 A.2d at 574. As the trial court provided
evidence from which reasonable inferences can be drawn in deciding that it lacked
the authority to reimagine the RETSL to include additional provisions imposing a
further duty on the TCB, the trial court did not commit an error of law in denying
Owner’s Exceptions and upholding the upset tax sale of the Property.
III. Conclusion
For the foregoing reasons, we affirm the Order of the trial court.
______________________________
J. ANDREW CROMPTON, Judge
8
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Lorna Auston, :
Appellant :
:
v. : No. 1842 C.D. 2019
:
County of Northampton :
Tax Claim Bureau :
ORDER
AND NOW, this 12th day of January 2021, we AFFIRM the Order of
the Court of Common Pleas of Northampton County.
______________________________
J. ANDREW CROMPTON, Judge