Conestoga Bank v. Tioga Invs. II, LLC

J-A05040-16

2016 PA Super 85

CONESTOGA BANK, S/B/M/ FIRST PENN IN THE SUPERIOR COURT OF
BANK, PENNSYLVANIA

Appellee

v.

TIOGA INVESTMENTS II, LLC AND YIP-
YAN WONG,

Appellants No. 1271 EDA 2015

Appeal from the Order Entered April 17, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): March Term, 2013-No. 000381

BEFORE: OLSON, J., OTT, J., and STEVENS, P.J.E.*

OPINION BY STEVENS, P.J.E.: FILED APRIL 12, 2016

Appellants Tioga Investments II, LLC and Yip-Yan Wong (collectively

“the Borrowers”) appeal from the Order entered on April 17, 2015, by the

Honorable Gary S. Glazier in the Court of Common Pleas of Philadelphia

County denying their Verified Petition to Mark Judgment Satisfied, Released

and Discharged Pursuant to 42 Pa.C.S.A. § 8103(d). Upon our review of the

record, we affirm.

The trial court set forth the relevant facts and procedural history

herein as follows:

[ ] [Conestoga Bank, S/B/M/ First Penn Bank] [“the
Bank”], loaned funds to [the Borrowers]. The loaned funds were
secured by a mortgage against five distinct real properties
located in Philadelphia, Pennsylvania. The complaint-in-

*Former Justice specially assigned to the Superior Court.
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confession-of-judgment asserts that Borrower[s] defaulted by
failing to make payments to the Bank when due.1 The Bank
confessed judgment against Borrower[s] on March 5, 2013, in
the amount of $739,924.81 (the “Judgment Amount”). On April
26, 2013, a writ of execution was issued: The writ required the
Sheriff of Philadelphia County to levy against the afore-
mentioned five mortgaged properties. A sheriff’s auction
occurred on November 7, 2013, and the Bank acquired the five
properties for $300,000.00. The five properties acquired by the
Bank appear to have a combined value inferior to the full
Judgment Amount of $739,924.81.
***
On August 22, 2014, the Bank received delivery of the
deed to the five properties from the Sheriff’s Office. This deed,
however, was incomplete because it did not contain the metes
and bounds descriptions to some of the properties therein.3
Consequently, the Sheriff of Philadelphia prepared and delivered
to the Bank a “Corrective Deed” on September 29, 2014.
Subsequently, the Bank filed a petition to fix the fair market
value of the property acquired through the Sheriff’s auction.[1]
Through this petition, the Bank seeks an Order that would fix the
value of the five properties to an amount in satisfaction of the
Judgment Amount of $739,932.81. The petition to fix the fair
market value of the five properties was filed more than six
months after delivery of the first, incomplete deed, but within six
months after delivery of the subsequent, corrective deed.
On March 4, 2015, before the Bank filed its petition to fix
the fair market value of the properties, Borrower[s] filed the
instant petition to mark the judgment satisfied, released and
discharged, notwithstanding the deficiency in the value of the
property as acquired by the Bank. In [their] petition,
Borrower[s] argue[] that the Bank failed to file the petition to fix
the real estate value of the property within the statutory period
of six months, beginning on August 22, 2014- the date of
delivery of the first, yet incomplete deed. According to
Borrower[s], the six-month period for filing of the petition began
to run upon delivery of the first, incomplete deed, and not upon
delivery of the second, corrective deed. Borrower[s] assert[]
that the second, corrective deed “does not extend or limit
____________________________________________

1
The Bank filed its Petition to Establish Fair Market Value of Real Estate
Pursuant to Pa.R.C.P. No. 3281 on March 17, 2015.

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existing record legal title or interest” [;]4 therefore, the Bank lost
its opportunity to establish a judgment deficiency by failing to
timely file its petition within six months from delivery of the first
deed.
____
1
Complaint, ¶ 13.
3
Metes and bounds are defined as “[t]he territorial limits of real
property as measured by distances and angles from designated
landmarks and in relation to the adjoining properties.” BLACKS
LAW DICTIONARY 1005 (7TH ED. 1999).
4
Brief in support of petition to mark judgment satisfied, released
and discharged pursuant to 42 Pa.C.S.A. § 8103(d), p.6 (citing
72 Pa.C.S.A. § 8103-C.3).

Trial Court Opinion, filed April 17, 2015, at 1-3.

On March 24, 2015, the Bank filed its Answer in opposition to the

Borrowers’ petition to satisfy, and the Borrowers filed a response to the

Bank’s petition to establish fair market value on April 6, 2015.

On April 17, 2015, the trial court entered its Order denying the

Borrowers’ petition to mark judgment satisfied. The Borrowers filed a timely

notice of appeal on April 21, 2015. In response, the parties agreed that the

Bank’s petition to establish fair market value would be withdrawn without

prejudice pending the result of the appellate proceedings.2

____________________________________________

2
Also in that Order, the trial court scheduled a hearing on the Bank’s
petition to establish fair market value which was to be held on May 11,
2015. An appeal will lie only from a final order unless otherwise permitted
by statute or rule. McCutcheon v. Philadelphia Electric Co., 788 A.2d
345 (Pa.Super. 2002). In addition, Pa.R.A.P. 341(b)(1) states: “A final
order is any order that disposes of all claims and of all parties.” The
dispositive issue in the Borrowers’ petition is whether or not the Bank timely
filed its petition to set fair market value; if it has not done so, an order must
be entered directing the Prothonotary to mark the judgment satisfied. Thus,
(Footnote Continued Next Page)

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The trial court did not direct the Borrowers to file a statement of errors

complained of on appeal pursuant to Pa.R.A.P. 1925(b), and they did not do

so. In its Opinion filed on May 12, 2015, the trial court indicated that for the

reasons contained in its Memorandum Opinion of April 17, 2015, its Order

entered on that same date should be affirmed. In its April 17, 2015,

Memorandum Opinion, the trial court noted Pennsylvania permits the

execution and delivery of a corrective deed. Trial Court Opinion, filed April

17, 2015, at 4 (citing Pa.R.C.P. 3135(b)).3 Reasoning that “a corrective

deed is a deed” the trial court, without citation to authority or a detailed

analysis, found that the Bank was entitled to file its petition for the

establishment of a fair market value of the properties both within six months

after delivery of the original deed and within six months after delivery of the

corrective deed. Id.

The Borrowers now present the following questions for our review:

1. Did the lower [c]ourt commit an error of law when it
denied [Borrowers’] Petition to Mark Judgment Satisfied,
_______________________
(Footnote Continued)

because the appealed order fully resolved all issues in the Borrowers’
petition and the Bank withdrew the petition to establish fair market value
without prejudice pending the resolution on appeal of the Borrower’s petition
and the May 11, 2015, hearing was never held, the April 17, 2015, Order is
appealable as it constitutes a final order fully disposing of the Borrowers’
petition to mark judgment satisfied released and discharged.
3
This Rule provides that: “[i]f the sheriff has made a defective return of the
execution proceeding or has executed a defective deed, including the
erroneous description of the real estate, the court upon petition of the
purchaser or the purchaser’s successors in title may correct the return or
deed or order that a new return or deed be executed.” Pa.R.C.P. 3135(b).

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Released and Discharged based upon its conclusion that the
appropriate date from which to calculate the commencement of
the six month statute of limitations for the filing of a Petition to
Set Fair Market Value could be either the date of delivery of a
corrective deed to [the Bank] or the date of delivery of the
original deed corrected thereby?

2. Did the lower [c]ourt commit an error of law when it
entered the [a]ppealed Order without first hearing oral
argument?

Brief of Appellants at 2.

At the outset, we note that when reviewing deficiency judgment

proceedings, this Court is limited to determining whether there is sufficient

evidence to sustain the holding of the trial court or whether it committed

reversible error of law. Bryn Mawr Trust Co. v. Healy, 667 A.2d 719, 721

(Pa.Super. 1995).

Herein, the Borrowers assert that the trial court’s April 17, 2015, Order

denying its petition to mark judgment satisfied should be reversed because

the Bank did not file its petition to establish fair market value within six

months of the date upon which the Sheriff delivered the deed to the

Recorder of Deeds following the real estate Sheriff’s sale. Specifically, the

Borrowers maintain that the six-month period within which the Bank was

required to file its petition commenced upon the delivery of the Sheriff’s

deeds on August 22, 2014, not upon the delivery of the corrective deeds on

September 29, 2014. In doing so, the Borrowers reason that the corrective

sheriff’s deed conveyed nothing to the Bank, and in accordance with the

parties’ clear intention, the August 22, 2014, deed actually and effectively

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conveyed title to all five of the purchased properties, notwithstanding its

omissions of certain legal descriptions. Brief for Appellant at 10-12, 13-14.

The Borrowers’ first contention that the judgments should have been

marked as satisfied by the trial court because the Bank did not timely file its

petition to establish fair market value arises under the Deficiency Judgment

Act, 42 Pa.C.S.A. § 8103 which provides in relevant part:

(a) General rule.—Whenever any real property is sold, directly
or indirectly, to the judgment creditor in execution proceedings
and the price for which such property has been sold is not
sufficient to satisfy the amount of the judgment, interest and
costs and the judgment creditor seeks to collect the balance due
on said judgment, interest and costs, the judgment creditor shall
petition the court to fix the fair market value of the real property
sold. The petition shall be filed as a supplementary proceeding in
the matter in which the judgment was entered. If the judgment
was transferred from the county in which it was entered to the
county where the execution sale was held, the judgment shall be
deemed entered in the county in which the sale took place.
***
(d) Action in absence of petition.—If the judgment creditor
shall fail to present a petition to fix the fair market value of the
real property sold within the time after the sale of such real
property provided by section 5522 (relating to six months
limitation), the debtor, obligor, guarantor or any other person
liable directly or indirectly to the judgment creditor for the
payment of the debt, or any person interested in any real estate
which would, except for the provisions of this section, be bound
by the judgment, may file a petition, as a supplementary
proceeding in the matter in which the judgment was entered, in
the court having jurisdiction, setting forth the fact of the sale,
and that no petition has been filed within the time limited by
section 5522 to fix the fair market value of the property sold,
whereupon the court, after notice as prescribed by general rule,
and being satisfied of such facts, shall direct the clerk to mark
the judgment satisfied, released and discharged.

42 Pa.C.S.A. § 8103(a), (d).

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The Deficiency Judgment Act, as applicable herein, required the Bank

to file its petition to fix the fair market value within six months of the date

upon which the Sheriff delivered the deed, and it is presumed as a matter of

law that a judgment is satisfied if a judgment creditor fails to proceed under

the Act within the time mandated by statute. Bryn Mawr, supra at 722.

The six-month deadline derives from 42 Pa.C.S.A. § 5522 which states a six-

month statute of limitations is applicable to judicial sales:

(b) Commencement of action required.--The following
actions and proceedings must be commenced within six months:

[…]

(2) A petition for the establishment of a deficiency judgment
following execution and delivery of the sheriff's deed for the
property sold in connection with the execution proceedings
referenced in the provisions of section 8103(a) (relating to
deficiency judgments).

42 Pa.C.S.A. § 5522(b)(2).

As indicated supra, the Bank filed its petition to establish fair market

value on March 17, 2015, which was more than six months after the sheriff’s

deed omitting metes and bounds descriptions for three of the mortgaged

properties and lacking BRT4 numbers initially was delivered on August 22,

2014, but within six months of when the corrective deed which included this

missing information was delivered on September 29, 2014. As the Sheriff

____________________________________________

4
BRT refers to Board of Revision of Taxes Numbers which are assigned to
real estate located in Philadelphia County.

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J-A05040-16

delivered a deed twice herein, this Court must determine from which date

the six-month time period began to run. Our research has not revealed, nor

has the trial court or the parties identified, any legal authority addressing a

similar scenario; thus, we look to the plain language of the relevant

statutory provisions, and the principles set forth in the Statutory

Construction Act, 1 Pa.C.S.A. §§ 1501–1991, to guide our resolution of this

issue.

The object of all statutory interpretation is to ascertain and effectuate

the intention of the General Assembly while also construing each statute to

give effect to all of its provisions. Notwithstanding, when the words of the

statute are clear and free from all ambiguity, we will not disregard the letter

of the law under the pretext of pursuing its spirit. Centolanza v. Lehigh

Valley Dairies, Inc., 658 A.2d 336, 339 (Pa. 1995).

It is well-established precedent that the date of sale for purposes of

the six-month statute of limitations under the Deficiency Judgment Act is the

date of delivery of the sheriff’s deed. 42 Pa.C.S.A. § 5522(b)(2); Bryn

Mawr, supra 667 A.2d at 772. See also Marx Realty & Imp. Co. v.

Boulevard Center, Inc., 156 A.2d 827, 830 (Pa. 1959) (stating that since

the Deficiency Judgment Act “requires giving credit on the judgment to the

extent of the fair value, no bidder has anything from which to give credit

until he gets title, and hence no sale to him can be said to have taken place

until a deed is delivered). A plain reading of Section 5522(b)(2) reveals it

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does not specifically differentiate between dates of delivery of an incomplete

deed and a corrective deed, but rather anticipates the delivery of a single

one as is evident in its reference to the “execution and delivery of the

sheriff’s deed for the property sold in connection with the execution

proceedings” (emphasis added). Borrowers assert that the date of delivery

of the corrective deed is “entirely irrelevant” to a consideration of the six (6)

month limitations period of Section Pa.C.S.A. 5522(b)(2), and reasons that

the use of the article “the” rather than “a” denotes a single incident such

that the trial court erroneously determined the six month time period began

to run from the date of either the sheriff’s deed or the corrective deed.

Brief of Appellants at 12, 15.

Contrary to this rationale, the Legislature specifically contemplated a

“deed for the property sold.” 42 Pa.C.S.A. § 5522(b)(2). A deed is the

principal method by which to convey real estate in Pennsylvania and the

term “denotes an instrument in writing, signed, sealed and delivered by the

grantor whereby an interest in realty is transferred from the grantor to the

grantee.” Mountain Properties v. Tyler Hill Realty, 767 A.2d 1096, 1099

(Pa.Super. 2001) (citation omitted). It is well-settled that if a legal

description found in a deed is not completely technically accurate or by

metes and bounds, it must, nevertheless, be clear and sufficiently precise to

enable a surveyor to locate and identify the property referenced therein.

Dickson v. Pennsylvania Power and Light Company, 423 A.2d 711,

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712-713 (Pa.Super. 1980). In addition, pursuant to 21 Pa.C.S. § 10.1,

entitled “Uniform parcel identifier; conveyances, mortgages, releases, and

other instruments,” real estate may be conveyed only pursuant to a deed

containing a uniform parcel identifier and either a metes and bounds

description or a lot number reference to a recorded subdivision plan. 21

Pa.C.S. § 10.1(1),(2). Moreover, it is noteworthy that our Supreme Court

has stressed the description of a parcel of property is crucial in a conveyance

of land through a tax sale and held that a sale is not valid unless both the

assessment and the treasurer’s deed contain sufficient descriptions to

identify and disclose the property taxed and sold. Bannard v. New York

State Natural Gas Corp., 293 A.2d 41, 46 (Pa. 1972).

While two sheriff’s deeds were delivered herein, the August 22, 2014,

deed delineated a metes and bounds description of Parcels “A” and “B” only

and omitted a metes and bounds description and lot number reference for

parcels “C,” “D,” and “E.” In contrast, the sheriff’s deed delivered on

September 29, 2014, contained a complete description of and BRT numbers

for all five properties the Bank had acquired in connection with the execution

proceedings to enable a surveyor to locate the property that was the subject

of the sheriff’s sale. Moreover, the latter deed is entitled “Deed of

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Correction” and bears a separate Instrument Number than that assigned to

the August 22, 2014, sheriff’s deed.5

We are cognizant that the purpose of the Deficiency Judgment Act is:

to protect debtors after their property was foreclosed. The act
was aimed at shielding the mortgagor-debtor from the
mortgagee who would purchase the mortgaged property for less
than fair market value, usually for cost, and then reduce the
debt only by the purchase price. Prior to the Deficiency
Judgment Act, the judgment creditor often recovered the
property and the full amount of the debt. The Deficiency
Judgment Act prevented this by requiring the judgment creditor
to reduce the debt by the fair market value of the property.

Fidelity Fed. Sav. And Loan Ass’n v. Capponi, 684 A.2d 580, 586

(Pa.Super. 1996) (citations omitted) (emphasis in original). Prior to

September 29, 2014, the Bank had not obtained clear title to “the property

sold,” for the deeds lacked descriptions for three properties and the required

BRT numbers, thus necessitating the delivery of the corrective deed. This

corrective deed was not merely supplementary of the August 22, 2014,

instrument, but was delivered “to add missing portion of legal” as the

notation on both the Realty Transfer Tax Statement of Value and the

Philadelphia Real Estate Transfer Tax Certification forms indicates. 6 As such,

____________________________________________

5
While the August 22, 2014, deed was filed at Instrument No. 52819798,
the September 29, 2014, Deed of Correction was filed at Instrument No.
52833256.
6

It can never be supposed that it was the meaning of the parties,
that a valuable consideration should be paid for a defective title.
“The obvious and plain rule,” says Yeates, J., in Steinhauer v.
(Footnote Continued Next Page)

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J-A05040-16

the August 22, 2014, sheriff’s deed was inoperative since it in no way

complied with the aforesaid legal principles that a deed must adequately

describe the subject property. Because the August 22, 2014, sheriff’s deed

did not contain a sufficient description of all five properties which were to

have been conveyed to the Bank, it was a legal nullity.

It is also noteworthy that this Court has stated “courts faced with

determining the precise date on which the six-month period began have

followed the Marx rule, only carving out an exception where the executing

creditor’s delay in obtaining delivery of the deed is inexcusable.” Fidelity

Bank, N.A. v. Bourger, 663 A.2d 213, 215 (Pa.Super. 1995). There is no

evidence in the record of the Bank’s dilatory conduct in procuring the

issuance of a complete deed for the property sold. In fact, the Sheriff

prepared both of the deeds at issue, promptly corrected the errors contained

therein and delivered the corrective deed five weeks later. The parties may
_______________________
(Footnote Continued)

Witman, 1 S. & R. 446, “is, what was the true meaning of the
contracting parties? Was it contemplated mutually, that the
purchaser should hold the land under a good right, or that he
should run his chance of getting a title, and be exposed to all
hazards.” The sheriff's writ commands him to levy on the
property of the defendant, and he has no right to put up to sale
or dispose of a mere pretence or shadow of title. It would be a
dangerous doctrine to say that every purchaser is bound by his
bid, though it turns out immediately after, that nothing can be
conveyed by the sheriff. No person would bid at sheriffs' sales on
such terms.

Friedly v. Scheetz, 1822 WL 2005, at *3 (Pa. 1822).

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henceforth engage in proceedings to determine the fair market value of the

real properties and thereby determine the Borrower’s remaining liability, if

any.

In light of the foregoing, we find that under the circumstances

presented herein, the trial court’s decision the Bank, as a creditor, was

entitled to file a petition to establish fair market value within six months

after the Sheriff’s delivery of the corrective deed on September 29, 2014, is

consistent with the Act. See 42 Pa.C.S.A. §§ 8103(a), (d), 5522(b)(2)7 It

follows that the Bank’s petition filed on March 17, 2015, was timely, and, as

a result, the trial court did not err in denying the Borrowers’ petition to mark

judgment satisfied, released and discharged.

The Borrowers also contend the trial court erred in deciding their

petition to mark the judgment satisfied, released and discharged without

first hearing oral argument. Relying upon Pa.R.C.P. 211 and local rules of

civil procedure which they explain fail to establish a prescribed procedure for

requesting oral argument, Borrowers contend that the default position is that

oral argument is required on all motions.

____________________________________________

7
This Court may affirm an order of the trial court on any basis.
Wilkinsburg v. Sanitation Dep’t of Wilkinsburg, 345 A.2d 641 (Pa.
1975).

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It is well-settled in this Commonwealth that parties to a civil action

generally have the right to orally argue motions. Pa.R.C.P. 211.8 While the

Borrowers point out the failure of local rules to delineate clearly the

procedure for requesting oral argument on a petition or motion, they

nowhere specifically indicate in their appellate brief that they actually wished

and attempted to make such a request. Also, a review of the Verified

Petition to Mark Judgment Satisfied, Released and Discharged Pursuant to

42 Pa.C.S.A. 8103(d) does not reveal such a request. 9 Therefore, we

conclude the Borrowers may not predicate error upon the trial court's failure

to require oral argument prior to disposing of their petition, as the trial court

properly may dispose of a motion without first hearing argument. See

Godlewski v. Pars Mfg. Co., 597 A.2d 106, 108 (Pa.Super. 1991)

Order affirmed.

____________________________________________

8
Effective January 1, 2016, this rule was amended to read as follows: “Any
interested party may request oral argument on a motion. The court may
require oral argument, whether or not requested by a party. The court may
dispose of any motion without oral argument.” Pa.R.C.P. No. 211.
9
In the “WHEREFORE clause,” Borrowers respectfully requested only that
the trial court “enter an order directing the Prothonotary to mark the
Judgment satisfied, released and discharged.” See Verified Petition to Mark
Judgment Satisfied, Released and Discharged Pursuant to 42 Pa.C.S.A.
8103(d) at ¶ 3.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/12/2016

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