Cadles of Grassy Meadows v. Shavei-Tzion, B. ( 2018 )

J-A19020-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CADLES OF GRASSY MEADOWS, II, : IN THE SUPERIOR COURT OF
LLC, SUBSTITUTED PLAINTIFF TO : PENNSYLVANIA
BROWN BARK I, L.P., ASSIGNEE OF :
SOVEREIGN BANK, SUCCESSOR BY :
MERGER TO MAIN STREET BANK :
:
v. :
:
: No. 1691 MDA 2017
BET SHAVEI-TZION A/K/A BET :
SHAVEI-TZION, INTERNATIONAL :
AND/OR BET SHAVEI-TZION, LTD., :
INTERNATIONAL :
:
Appellant :
:
:
Appeal from the Order Dated October 4, 2017
In the Court of Common Pleas of Wyoming County Civil Division at
No(s): 2007-00331
BEFORE: GANTMAN, P.J., NICHOLS, J., and FORD ELLIOTT, P.J.E.
MEMORANDUM BY NICHOLS, J.: FILED NOVEMBER 20, 2018
Appellant Bet Shavei-Tzion appeals from the order denying its petition
to set aside and/or vacate the sheriff’s sale of a 95-acre parcel. Appellant
asserts that the trial court erred by permitting Appellee Cadles of Grassy
Meadows, II, LLC, to foreclose upon a 275-acre parcel of land despite the prior
dismissal of a mortgage foreclosure action as to the 275-acre parcel.
Appellant also argues that the property sold at sheriff’s sale was incorrectly
advertised with an inaccurate legal description. We affirm.
J-A19020-18
This matter involves two parcels of land that were the subject of a
mortgage foreclosure action Appellee’s predecessor in interest1 (referred to as
Appellee) brought in 2007. Appellee initiated a mortgage foreclosure action
regarding one parcel that was approximately 275 acres and was identified as
parcel no. 03-38-67-01 (“parcel 03-38-67-01”) and a second parcel that was
approximately 95 acres and was identified as parcel no. 03-38-65 (“parcel 03-
38-65”).
Parcel 03-38-65 was described during the mortgage foreclosure
proceedings by the following:
LEGAL DESCRIPTION
Real estate located on Mount Zion Road, Eaton Township,
Wyoming County, Pennsylvania and known as Parcel no. 03-38-
65 and more fully described as: . . .
CONTAINING 190.64 acres, more or less.
EXCEPTING AND RESERVING from the above described parcel, the
following:
FIRST THEREOF:
BEGINNING at the southeast corner . . .
THENCE along line of lands of said Dombek . . . to the place of
beginning.
SECOND THEREOF:
BEGINNING at a point in the southerly line of Parcel B . . .
THENCE bearing South . . . to the place of beginning.
...
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1 Appellee was the substituted plaintiff in this action to Brown Bark I, L.P.,
assignee of Sovereign Bank, successor by merger to Main Street Bank.
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BEING PARCEL No. 03-38-65.
Answer to Appellant’s Pet. to Strike-Off or Stay the Mortgage Foreclosure
Sheriff’s Sale of February 23, 2017, Ex. 3.
In 2009, Appellant filed a summary judgment motion seeking, inter alia,
to have the mortgage foreclosure action dismissed as to parcel 03-38-67-01
since it was “not included as pledged collateral as a necessary element of asset
of the cause of action on any mortgage agreement.” Mot. for Summ. J.,
4/30/09, at 2. Appellant also sought to have the action dismissed because
the 95-acre parcel, i.e., parcel 03-38-65, was “not explicitly identified and
included in writing as a necessary element of the cause of action on any
mortgage agreement.” Id. at 2. In other words, Appellant pursued dismissal
because the mortgage document failed to sufficiently identify the parcels of
land at issue. The trial court granted summary judgment as to parcel 03-38-
67-01 on August 26, 2009, because it could not be disputed that it was
insufficiently described in the mortgage as to create a lien. See Order,
8/26/09.
A non-jury trial was held as to whether a mortgage existed on the
remaining parcel 03-38-65, and the trial court held that such a mortgage was
valid because it concluded Appellant was in default and found in favor of
Appellee. See Order, 11/19/14. Appellant appealed the judgment to this
Court. See Cadles of Grassy Meadows, II, LLC v. Shavei-Tzion, 2016 WL
3166669 (Pa. Super. filed June 7, 2016) (unpublished mem.) (Cadles I). In
Cadles I, Appellant argued that the trial court “improperly
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permitted foreclosure on both” parcel 03-38-65 and parcel 03-38-67-01. Id.
at *3. Appellant also argued that the factual findings of the trial court were
improper, specifically that the evidence at trial showed that Appellant did not
really intend to enter into a binding mortgage agreement for parcel 03-38-65.
Id. at *4.
This Court determined that competent evidence supported the findings
of the trial court that a valid mortgage had been created on parcel 03-38-65.
Id. at *4. The trial court’s ruling in favor of Appellee pertained only to parcel
03-38-65. Id. at *3. Further, this Court held that Appellant’s argument that
parcel 03-38-67-01 was improperly permitted to be foreclosed upon lacked
merit because parcel 03-38-67-01 had been dismissed from the action. Id.
Appellant sought allowance of appeal in our Supreme Court, which was denied
on October 31, 2016. See Cadles of Grassy Meadows, II, LLC v. Shavei-
Tzion, 160 A.3d 769 (Pa. 2016) (table).
Eventually, a sheriff’s sale of parcel 03-38-65 was scheduled for
February 23, 2017. Parcel 03-38-65 was advertised in advance of the sale
with the above-referenced description, which was also the description used in
the parcel’s deed. Appellant filed a petition to stay the sale on February 21,
2017, alleging that the advertised notices for the three consecutive weeks
before the scheduled sale were defective because they could be read as
describing a parcel with 190 acres rather than 95 acres.
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A hearing was held on the petition to stay on March 24, 2017.2 Appellant
called as on cross land surveyor Eric Kyttle, who testified he was retained by
Appellee to analyze the deed for parcel 03-38-65 and create a survey report.
See N.T., 3/24/17, at 9-10. Kyttle testified that the description of the parcel
indicated it contained exceptions to the 190 acres noted at the beginning of
the description. Id. at 11-13. Kyttle confirmed the description indicated a
95-acre parcel and that the description in the notices matched the description
in the deed. Id. at 16, 18. On March 31, 2017, the trial court denied the
stay.3
The sheriff’s sale of the property occurred on June 8, 2017. Following
the sale, Appellant filed a petition to set aside or vacate the sale on June 19,
2017. The petition to set aside the sale contained the same grounds as the
petition to stay the sale. The trial court conducted a hearing on the petition
to set aside the sale on October 4, 2017. Counsel for both parties agreed that
the trial court should take judicial notice of the proceedings that had taken
place on March 24, 2017. N.T., 10/4/17, at 9.
At the hearing on the petition to set aside the sale, Appellant presented
one witness, Veronica Hannevig. Hannevig testified that she attended the
sheriff’s sale of parcel 03-38-65 because she was interested in the parcel. Id.
____________________________________________
2 Numerous pro se filings were made leading up to the March 24, 2017
hearing. The trial court denied all of them on March 24, 2017.
3Appellant appealed the denial of the stay to this Court. The appeal was
quashed on June 12, 2017, since the order was interlocutory.
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at 11. In response to a question about whether she read the advertisement,
Hannevig responded as follows: “I looked at it. I cannot say that I read it in
depth because I do not understand all of the metes and the bounds and all of
that sort of information. I had the Sheriff read it to me.” Id. at 13.
Ultimately, she found the description confusing. Id. at 15. On cross-
examination, Hannevig conceded she was not going to bid for the property.
Id. at 19. The trial court denied the petition the same day as the hearing.
Appellant filed a timely notice of appeal on November 1, 2017. Appellant
and the trial court complied with Pa.R.A.P. 1925. In its concise statement of
errors complained of on appeal, Appellant raised the following issues:
1. Under the facts of this case and based upon the evidence
presented, the [c]ourt erred in finding in favor of [Appellee] and
against [Appellant], and denying the Petition to Set Aside and/or
Vacate the Mortgage Foreclosure Sheriff’s Sale held on June 8,
2017 of the real property owned by [Appellant], Bet Shavei-Tzion.
2. Under the facts of this case and based upon the evidence
presented, the [c]ourt erred in failing to set aside and/or vacating
the Mortgage Foreclosure Sheriff’s Sale held on June 8, 2017 of
the real property owned by [Appellant], Bet Shavei-Tzion.
3. [The trial court] erred as a matter of law in failing to find that the
Sheriff[’]s Sale of June 8, 2017 was improper and illegal and
should be set aside and/or vacated as to [Appellant’s] real
property only.
4. [The trial court] erred as a matter of both fact and of law in failing
to find that the Sheriff’s Sale of [Appellant’s] real property was
not properly advertised with the correct legal description for three
(3) consecutive Fridays prior to the sale.
5. [The trial court] erred as a matter of both fact and of law in failing
to find that the Sheriff’s Sale of [Appellant’s] real property was
not properly advertised with the correct legal description for three
(3) consecutive Fridays prior to the sale.
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6. [The trial court] erred as a matter of both fact and of law in failing
to find that [Appellant’s] real property was advertised for
Sheriff[’]s Sale, but the legal description incorrectly and
improperly states that 190.64 acres of [Appellant’s] land would be
sold at the Sheriff[’]s Sale.
7. [The trial court] erred as a matter of law in failing to find that
former President Judge Vanston’s Court Order dated August 26,
2009, controlled the instant matter, wherein the Court ruled and
decided that:
“...the [c]ourt concluding that [Appellant’s] 275 acre parcel
of land is not sufficiently described in the mortgage so as to
create a lien on said parcel; and the [c]ourt further
concluding that there exist genuine issues of material fact
as to whether the mortgage creates a lien upon the
[Appellant’s] 95 acre parcel of land IT IS ORDERED that the
said Motion for Summary Judgment is granted in part and
denied in part; [Appellee’s] complaint in mortgage
foreclosure as to the said 275 acre parcel of land is
dismissed."
8. [The trial court] erred as a matter of law in failing to find that
Pennsylvania Rule of Civil Procedure 3129.2 Subdivisions (b) & (d)
were mandatory in requiring the correct description of the
property to be sold must be given by publication by the sheriff
once a week for three successive weeks in one newspaper of
general circulation in the county and in the legal publication, if
any, designated by rule of court for publication of notices, the first
publication to be made not less than twenty-one days before the
date of sale. Failure of [Appellee] to properly advertise the June
8, 2017 Sheriff[’]s Sale, under the facts of this case, is a fatal
defect to conducting the said Sheriff[’]s Sale.
9. [The trial court] erred as a matter of law in failing to find that
Pennsylvania law required the [c]ourt, when considering Petitions
to set aside and/or vacate, to use legal or equitable means to
provide relief to the Petitioner.
10. [The trial court] erred as a matter of law in failing to find
that the June 8, 2017 Sheriff[’]s Sale should have been set aside
or vacated pursuant to equitable principles, as the failure to
properly advertise the June 8, 2017 Sheriff[’]s Sale publically led
to a much reduced sales price, as the general public was unaware
of the true nature of the sale, and, that the amount of money
received in the Sheriff[’]s Sale was less than should rightfully be
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recovered, therefore increasing any balance amount due to
[Appellee] from [Appellant].
11. The [c]ourt erred as a matter of law in failing to observe the
settled law in the Commonwealth of Pennsylvania that the
mortgage foreclosure Sheriff[’]s Sale was not properly advertised
with the correct legal description for three (3) consecutive Fridays
prior to the sale.
12. The [c]ourt’s decision was against the weight of the
evidence.
13. The [c]ourt’s decision was contrary to law.
Concise Statement, 11/17/17, at 1-4.
On appeal, Appellant asserts the following questions for our review:
1. Whether the trial court committed plain error in its [c]ourt [o]rder
by mistakenly permitting the Appellee to foreclose upon a 275
acre parcel of land, despite the fact that the immediate past-
President Judge of Wyoming County had previously granted
summary judgment, dismissing the 275 acre parcel from the
mortgage foreclosure action?
2. Whether the findings of the trial court are premised on errors in
the application of the law?
3. Whether the [t]rial [c]ourt abused its discretion and committed an
error of law in denying Appellant’s Petition to Set Aside the
Sheriff’s Sale?
Appellant’s Brief at 4.
In its first issue, Appellant argues that the trial court mistakenly
permitted Appellee to foreclose on parcel 03-38-67-01. Id. at 14. Appellant
also asserts that the legal description of the sold parcel improperly described
the property as containing 190.64 acres. Id. Appellant cites to Pa.R.C.P.
3129.2, arguing that since an incorrect description of the property was used
in the notice of the sheriff’s sale for the three weeks before the sale, the notice
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was defective. Id. Appellant asserts that strict compliance is required with
notice requirements for a property to be sold at a sheriff’s sale. Id. at 15
(citing Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306 (1950),
First Pennsylvania Bank, N.A. v. Lancaster Cty. Tax Claim Bureau, 470
A.2d 938 (Pa. 1983), and Grace Bldg. Co. v. Chester Cty. Land Corp., 339
A.2d 161 (Pa. Cmwlth. 1975)).
We note that
[t]he purpose of a sheriff’s sale in mortgage foreclosure
proceedings is to realize out of the land, the debt, interest, and
costs which are due, or have accrued to, the judgment creditor.
Pursuant to Rule 3132 of the Pennsylvania Rules of Civil
Procedure, a sheriff’s sale may be set aside upon petition of an
interested party “upon proper cause shown” and where the trial
court deems it “just and proper under the circumstances.”
Pa.R.C.P. 3132. The burden of proving circumstances warranting
the exercise of the court’s equitable powers is on the
petitioner. Equitable considerations govern the trial court’s
decision to set aside a sheriff’s sale, and this Court will not reverse
the trial court’s decision absent an abuse of discretion. An abuse
of discretion occurs where, for example, the trial court misapplies
the law.
Nationstar Mortg., LLC v. Lark, 73 A.3d 1265, 1267 (Pa. Super. 2013)
(some internal quotation marks and some citations omitted).
Before we reach the merits of Appellant’s first issue, we note that under
Pa.R.A.P. 302(a), “[i]ssues not raised in the lower court are waived and cannot
be raised for the first time on appeal.” Pa.R.A.P. 302(a). Here, the assertion
that parcel 03-38-67-01 was actually sold at sheriff’s sale, rather than parcel
03-38-65, was not raised until Appellant’s appellate brief. See Concise
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Statement, 11/17/17, at 1-4. Accordingly, this issue was not raised in the
trial court and was not preserved for appeal. See Pa.R.A.P. 302(a).
Regardless, under the law of the case doctrine, “a court involved in the
later phases of a litigated matter should not reopen questions decided by
another judge of that same court or by a higher court in the earlier phases of
the matter.” Morgan v. Petroleum Prods. Equip. Co., 92 A.3d 823, 827
(Pa. Super. 2014) (citation omitted).
The law of the case doctrine expresses the practice of courts
generally to refuse to reopen what has been decided. The doctrine
is composed of a collection of rules that not only promote the goal
of judicial economy but also operate (1) to protect the settled
expectations of the parties; (2) to insure uniformity of decisions;
(3) to maintain consistency during the course of a single case; (4)
to effectuate the proper and streamlined administration of justice;
and (5) to bring litigation to an end.
Bienert v. Bienert, 168 A.3d 248, 254 (Pa. Super. 2017) (internal quotation
marks, brackets, ellipses, and citations omitted).
In Cadles I, this Court held that the trial court properly authorized
foreclosure on parcel 03-38-65, and not parcel 03-38-67-01, because the
latter 275 acre parcel had been dismissed from the suit. Cadles I, 2016 WL
3166669 at *3. Appellant has now re-raised the exact same argument, which
was previously resolved in Cadles I. Because Appellant has not presented
any relevant argument as to why we should revisit the issue, we decline to
reopen it. See Bienert, 168 A.3d at 254; Morgan, 92 A.3d at 827.
Moreover, judicial admissions, “i.e., those contained in pleadings,
stipulations, and the like . . . cannot later be contradicted by the party who
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has made them.” Tops Apparel Mfg. Co. v. Rothman, 244 A.2d 436, 438
(Pa. 1968) (footnotes omitted). Here, Appellant had previously moved for
summary judgment because, among other reasons, parcel 03-38-65,
comprising 95 acres, allegedly was not included in the mortgage agreement.
Mot. for Summ. J. at 2. Appellant cannot now contend that the trial court
mistakenly permitted Appellee to foreclose on the 275-acre parcel. See
Rothman, 244 A.2d at 438; see also Cadles I, 2016 WL 3166669 at *3.
In any event, to the extent that Appellant asserts that the parcel sold at
the sheriff’s sale was improperly described in the notice as containing 190.64
acres, Appellant is not entitled to relief for the following reasons.
Regarding the burden of proof in setting aside a sheriff’s sale,
[a]s a general rule, the burden of proving circumstances
warranting the exercise of the court’s equitable powers is on the
applicant, and the application to set aside a sheriff’s sale may be
refused because of the insufficiency of proof to support the
material allegations of the application, which are generally
required to be established by clear evidence.
Bank of Am., N.A. v. Estate of Hood, 47 A.3d 1208, 1211 (Pa. Super. 2012)
(citation omitted). A sheriff’s sale can be set aside for a material
misdescription of the property being sold. Calhoun v. Commercial Credit
Corp., 30 A.2d 735 (Pa. Super. 1943). Additionally, a sheriff’s sale can be
set aside where the price obtained is grossly inadequate. Estate of Hood,
47 A.3d at 1211.
Pennsylvania Rule of Civil Procedure 3129.2 specifies that
(a) Notice of the sale of real property shall be given by handbills
as provided by subdivision (b), by written notice as provided by
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subdivision (c) to all persons whose names and addresses are set
forth in the affidavit required by Rule 3129.1, and by publication
as provided by subdivision (d).
(b) The handbills shall be posted by the sheriff in the sheriff’s
office and upon the property at least thirty days before the sale,
and shall include
(1) a brief description of the property to be sold, its location,
any improvements, the judgment of the court on which the sale
is being held, the name of the owner or reputed owner, and the
time and place of sale, and
(2) a notice directed to all parties in interest and claimants that
a schedule of distribution will be filed by the sheriff on a date
specified by the sheriff not later than thirty days after the sale
and that distribution will be made in accordance with the
schedule unless exceptions are filed thereto within ten days
after the filing of the schedule.
***
(d) Notice containing the information required by subdivision (b)
shall also be given by publication by the sheriff once a week for
three successive weeks in one newspaper of general circulation in
the county and in the legal publication, if any, designated by rule
of court for publication of notices, the first publication to be made
not less than twenty-one days before the date of sale. No
additional publication shall be required.
Pa.R.C.P. 3129.2.
In Greater Pittsburgh Bus. Dev. Corp. v. Braunstein, 568 A.2d 1261(Pa. Super. 1989), a sheriff’s sale of personal property took place.
Braunstein, 568 A.2d at 1263. The appellant attempted to have the sheriff’s
sale set aside, in part on the basis that the items sold were vaguely described
in the notices of the sale. Id. at 1264. We reiterated that “[m]isdescription
of the property to be sold at a sheriff’s sale may be grounds for setting aside
the sale if the property is ‘misdescribed’ in some material respect.” Id.(citing Calhoun, 30 A.2d at 736) (emphasis in original). The burden is on the
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moving party to “establish by clear evidence” that the purported
misdescription was material. See id. (emphasis in original).
Here, the trial court, relying on Rule 3129.2 and the testimony at the
hearings, found that the description for the 95-acre property was not
misleading and Appellant was not entitled to have the sale set aside. Trial Ct.
Op., 12/21/17, at 6. The court noted Appellant’s argument that the
“advertisement of the property at issue was misleading to someone who is not
a surveyor.” Id. at 4. The court, however, disagreed, finding that upon
review of the plain language of Rule 3129.2, “the record of both hearings and
the description at issue, this [c]ourt found that the property was correctly
described in the legal advertisement.” Id. at 6.
We agree with the trial court’s assessment that Appellant failed to
establish by clear evidence that the use of the deed description for the
property in the notices of the sheriff’s sale was materially incorrect or
misleading. See Estate of Hood, 47 A.3d at 1211; Braunstein, 568 A.2d
at 1264. Appellant called as on cross Appellee’s own expert, who testified
without contradiction that the description of the property in the notices
indicated a property of 95 acres. See N.T., 3/24/17, at 16, 18; Estate of
Hood, 47 A.3d at 1213.
In Appellant’s remaining two issues, it asserts that the trial court
committed an error of law in denying the petition to set aside the sheriff’s
sale. Appellant cites Pa.R.C.P. 3132 for the proposition that proper cause
must be shown to set aside a sheriff’s sale, and this is based on equitable
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principles. Appellant’s Brief at 17-18. According to Appellant, under Pa.R.C.P.
3132 and 3135(a), a petitioner must challenge a sheriff’s sale within the
period after the sale but before the deed is delivered, except in cases of fraud
or lack of authority. Id. at 19. Appellant asserts that it filed its petition to
set aside the sheriff’s sale within ten legal days of the sale, so there is no need
to prove fraud or lack of authority. Id. at 19-20. Appellant argues that the
sale should be set aside based on equitable principles because “the failure to
properly advertise the June 8, 2017 Sheriff's Sale public[ly] led to a much
reduced sales price, as the general public was unaware of the true nature of
the sale.” Id. at 21.
Pennsylvania Rule of Civil Procedure 3132 provides that
[u]pon petition of any party in interest before delivery of the
personal property or of the sheriff’s deed to real property, the
court may, upon proper cause shown, set aside the sale and order
a resale or enter any other order which may be just and proper
under the circumstances.
Pa.R.C.P. 3132. Pennsylvania Rule of Civil Procedure 3135 states that
[w]hen real property is sold in execution and no petition to set
aside the sale has been filed, the sheriff, at the expiration of
twenty days but no later than 40 days after either the filing of the
schedule of distribution or the execution sale if no schedule of
distribution need be filed, shall execute and acknowledge before
the prothonotary a deed to the property sold. The sheriff shall
forthwith deliver the deed to the appropriate officers for recording
and for registry if required. Confirmation of the sale by the court
shall not be required.
Pa.R.C.P. 3135. We note that is well-settled that “[e]quity must follow the
law.” Murray v. Willistown Twp., 169 A.3d 84, 93 (Pa. Super. 2017);
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accord Bauer v. P.A. Cutri Co. of Bradford, 253 A.2d 252, 255 (Pa. 1969)
(stating, “a court of equity follows and is bound by rules of law, and does not
use equitable considerations to deprive a party of his rights at law”).
Initially, we agree with Appellant that its petition was timely filed. See
Pa.R.C.P. 3132. However, we cannot agree with Appellant’s assertion that
equitable principles dictate that the sale should be set aside because the
description led to a much-reduced sale price. We held above that Appellant
failed to “establish by clear evidence,” any misdescription, let alone that the
misdescription was material. See Braunstein, 568 A.2d at 1264. It follows
that Appellant’s argument—that a flawed description of the parcel “led to a
much-reduced sales price”—is premised on establishing a material
misdescription. See id. Having failed to establish a misdescription, Appellant
cannot succeed on its equitable argument because equity must give way to
the law. See Murray, 169 A.3d at 93.
Even assuming otherwise, we agree with the trial court’s observation
that “[n]o testimony was presented from a potential bidder alleging being
dissuaded from making a bid on the property in question due to any defects.”
Trial Ct. Op., 12/21/17, at 4. Indeed, Appellant presented no proof regarding
fair market value in comparison to the price parcel 03-38-65 was sold for at
sheriff’s sale. See Estate of Hood, 47 A.3d at 1211. Absent any such proof,
Appellant’s equitable argument, on its merits, fails. Because Appellant failed
to establish an abuse of discretion, we affirm. See Lark, 73 A.3d at 1267.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/20/2018
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