IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. :
:
Denise Hawkins :
: No. 2555 C.D. 2015
Appeal of: Rupali P. Singhal : Submitted: November 10, 2016
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JOSEPH M. COSGROVE, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE COSGROVE FILED: March 29, 2017
Rupali P. Singhal (Appellant), representing himself, appeals from the
November 18, 2015 order of the Court of Common Pleas of Philadelphia County
(trial court) directing Appellant to convey the property at 3113 North Pennock
Street, Philadelphia, Pennsylvania 19132 (Property) to Denise Hawkins (Appellee)
upon payment of the redemption amount. Upon review, we affirm the trial court.
I. Background
Appellee is the owner of the Property. Reproduced Record (R.R.),
Item IV at 22-24. On February 12, 2014, the City of Philadelphia (City)
commenced a real estate tax lien action against Appellee on the Property by filing
a petition for rule to show cause why the Property should not be sold free and clear
of all liens and encumbrances for delinquent taxes due and owing on the Property.
R.R., Item I at 1, Docket Entry 1; R.R., Item IV at 30, ¶9. On May 28, 2014, the
trial court signed a decree of sheriff’s sale for the Property, and docketed it on June
24, 2014. R.R., Item II. On November 18, 2014, Appellant purchased the
Property at sheriff’s sale for $12,100.00, which was acknowledged by a sheriff’s
deed on January 7, 2015. R.R., Item IV at 22-26.
On October 5, 2015, Appellee filed a petition to redeem (redemption
petition) pursuant to Section 32 of the Municipal Claims and Tax Liens Act
(MCTLA).1 R.R., Item III at 6, 10-11. The City filed an answer to the redemption
petition. R.R., Item V at 27, 29-32. Appellant also filed an answer to the
redemption petition, but did not request or obtain intervenor status on the record.
R.R., Item VI at 39-40. After a hearing, 2 the trial court granted Appellee’s
redemption petition. R.R., Item VIII at 57. Appellant filed a petition for
reconsideration, which the trial court denied. R.R., Items IX at 59-60, X at 68,
respectively. Thereafter, Appellant appealed on the merits to this Court. R.R.,
Item XI at 69-77. The trial court filed its Pennsylvania Rule of Appellate
Procedure 1925(a) opinion on February 8, 2016, in support of its order granting the
redemption petition.3 R.R., Item XIV at 82-85.
1
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §7293.
2
Court of Common Pleas of Philadelphia County, the Honorable Linda Carpenter,
presiding.
3
Although Appellant neither officially requested, nor obtained intervenor status on the
record, the trial court addressed the 1925(a) opinion to both the City and Appellant. Reproduced
Record (R.R.), Item XIV at 82-83, 85.
2
II. Issues
4
On appeal, Appellant argues Appellee did not complete the
redemption process on time. Appellant also argues that if redemption by Appellee
succeeds, she must make Appellant whole, by placing him in the same financial
position he occupied prior to the tax lien sale, to include interest and costs.
Finally, Appellant argues Appellee’s in forma pauperis (IFP) filing precluded her
from redemption.
III. Discussion
Section 32(a) of the MCTLA, governing the requirements and
procedure for a redemption petition, states in pertinent part:
(a) The owner of any property sold under a tax or municipal
claim … whose lien or estate has been discharged thereby,
may … redeem the same at any time within nine months
from the date of the acknowledgement of the sheriff’s deed
therefor, upon payment of the amount bid at such sale; the
cost of drawing, acknowledging, and recording the sheriff’s
deed; the amount of all taxes and municipal claims, whether
not entered as liens, if actually paid; the principal and
interest of estates and encumbrances, not discharged by the
sale and actually paid; the insurance upon the property, and
other charges and necessary expenses of the property,
actually paid, less rents or other income therefrom, and a
sum equal to interest at the rate of ten per centum per annum
thereon, from the time of each of such payments.
53 P.S. §7293(a).
4
Our review in tax sale cases is limited to determining whether the trial court abused its
discretion, rendered a decision which lacked supporting evidence, or clearly erred as a matter of
law. City of Allentown v. Kauth, 874 A.2d 164 (Pa. Cmwlth. 2005).
3
The purpose of a sheriff’s sale under the MCTLA “is not to strip the
[property] owner of his or her property but to collect municipal claims.” City of
Philadelphia v. F.A. Realty Investors Corp., 95 A.3d 377, 384 (Pa. Cmwlth. 2014)
(citing City of Philadelphia v. Manu, 76 A.3d 601, 606 (Pa. Cmwlth. 2013)). To
this end, Section 32(a) of the MCTLA provides for redemption of the property by
the owner. To redeem a property sold at a tax sale, the property owner must
exercise the right of redemption within nine months from the date of
acknowledgment of the sheriff’s deed by filing a redemption petition pursuant to
Section 32(b) of the MCTLA.5 In re Gonzalez, 550 B.R. 711 (Bankr. E.D. Pa.
2016). The property owner must pay the tax sale purchaser the amount bid at the
sale, plus certain other amounts designated by the MCTLA. Id.
However, the time restriction of nine months from the date of the
acknowledgement of the sheriff’s deed found in Section 32(a) does not mandate
the owner complete all acts of redemption, including final payment of the
redemption money, within the nine-month period of filing the initial petition to
redeem. City of Philadelphia v. Philadelphia Scrapyard Properties, LLC, 132 A.3d
1060 (Pa. Cmwlth. 2016). Rather, Section 32(a) of the MCTLA only requires the
redemption process begin within the nine-month period by filing the redemption
5
Section 32(b) of the MCTLA provides:
(b) Any person entitled to redeem may present his petition to the proper
court, setting forth the facts, and his readiness to pay the redemption
money; whereupon the court shall grant a rule to show cause why the
purchaser should not reconvey to him the premises sold; and if, upon
hearing, the court shall be satisfied of the facts, it shall make the rule
absolute, and upon payment being made or tendered, shall enforce it by
attachment.
53 P.S. §7293(b).
4
petition in the proper court, setting forth the facts along with his or her readiness to
redeem. Id.
Since the purpose of sheriff’s sales under [the MCTLA] is to collect
delinquent taxes and not to strip owners of their property, [the
MCTLA] must be construed to allow debtors the ability to file a
[redemption petition for the] premises at any time so long as it is filed
within nine months after the sheriff’s deed has been acknowledged
(emphasis omitted).
F.A. Realty Investors Corp., 95 A.3d at 387. “The mechanical process for delivery
of the [redemption amount designated by the MCTLA], and the restoration of the
owner’s title is subject to the control of the court after the [r]edemption [p]etition
has been filed and the court has determined the owner’s eligibility to exercise the
right of redemption.” In re Gonzalez, 550 B.R. at 716 (internal citation omitted).
Consequently, “the actual payment of the [r]edemption [a]mount may be made
after the expiration of the nine (9) month statutory redemption deadline; it is the
[r]edemption [p]etition that must be filed before the deadline.” Id. (emphasis
added).
Here, the trial court’s findings regarding Appellee’s timely filing of
her redemption petition are supported by substantial, competent evidence in the
record. Appellant asserts Appellee did not complete the redemption process by
October 6, 2015, or within the nine-month time frame allowed by the MCTLA.
At the outset, the record evidences the tax sale deed was
acknowledged on January 8, 2015, not January 7, 2015, as asserted by Appellant.
R.R., Item IV at 24. Consequently, the redemption period expired on October 8,
2015, not October 6, 2015 as asserted by Appellant. See also Pa. R.C.P. No. 108
(relating to the computation of time). Appellee filed her redemption petition on
October 5, 2015, or three days before the expiration of the redemption period.
5
R.R., Item II, at No. 7; R.R., Item VII, at 5. The trial court properly found
Appellee timely filed her redemption petition, and thereby, properly exercised her
redemption right within the nine-month time period required in Section 32 of the
MCTLA. Thus, Appellee’s timely filing of her redemption petition began the
redemption process. Philadelphia Scrapyard Properties, LLC.
In arguing Appellee did not complete the redemption process within
nine months from the date of acknowledgement of the deed, Appellant asserts
Appellee did not pay the full redemption amount within that nine-month
redemption period. Thus, Appellant asserts the trial court erred in granting
Appellee’s redemption petition.
Appellant relies on the holding in City of Philadelphia v. Keilyk, 551
A.2d 1094 (Pa. Super. 1988) to support his argument that Appellee cannot exercise
and complete her redemption right under the MCTLA until she tendered the full
redemption amount within nine months from the date of acknowledgment of the
deed. In Keilyk, the Superior Court set down the payment requirement for
accomplishing redemption, only upon “payment of the amount bid at [the sheriff’s]
sale….[the MCTLA], therefore, provides for redemption only upon payment of the
full sum paid by the successful bidder.” Id. at 1096.
In Keilyk, the debtor only held a one-third ownership in the property
prior to the tax sale and sought to redeem the property by paying one-third of the
redemption money. The city urged the court to consider the adverse consequences
that would result by permitting redemption upon payment of only a portion of the
full redemption amount required by the MCTLA. The Superior Court, however,
did not consider this argument, “since the express terms of the statute require
payment of the full amount of the bid in order to redeem property sold at tax sale.”
6
Id. Thus, the issue in Keilyk was not about the timing of the payment when a
petition to redeem was decided, but rather the issue was the requirement that the
entire redemption amount must be paid, not an amount proportional to the
petitioner’s interest in the property.
Here, the MCTLA does not mandate the Property owner complete all
acts of redemption, including final payment of the redemption money, within the
nine-month period of filing the initial petition to redeem. Rather the relevance of
the MCTLA here is that it requires the redemption process begin within the nine-
month period. Philadelphia Scrapyard Properties, LLC. Appellee began
redemption within the prescribed time.
Appellant next argues the only way the full redemption amount is paid
is by making Appellant whole by placing him in the same financial position he
occupied prior to the tax lien sale, to include interest and costs.
The trial court’s order directed conveyance of the Property to
Appellee “upon payment of the redemption amount of $13,048.38 as of [November
18, 2015]. Should payment not be paid today [November 18, 2015], the
calculation of interest shall continue to accrue.” R.R., Item VIII. The trial court’s
order required Appellee to pay the full redemption amount before she could
redeem the Property and acquire title. The order also required that interest
continue accruing until such time as Appellee paid the full redemption amount. 53
P.S. §7293(a); In re Gonzalez.
Here, Appellant claims interest calculations made by Appellee and
ordered by the trial court are inconsistent with the amount of interest due and
owing on the redemption under the MCTLA. Consequently, Appellant contends
he was not placed in the same financial position he occupied prior to the tax lien
7
sale, therefore Appellee failed to properly exercise her right of redemption under
the MCTLA because she did not offer the full amount “as required by the statute
permitting redemption.” Pet’r’s Br. at 9.
Appellant asserts as follows. He purchased the property at a sheriff’s
sale on November 18, 2014, for $12,100.00. At that time, he placed a $2,000.00
down payment with the sheriff and owed $10,100.00, which he paid on December
16, 2015.6 Thereafter, Appellee redeemed the property on November 18, 2015,
exactly one year later. Appellant claims that, in order to redeem the property,
Appellee was required to pay the purchase price of $12,100.00 plus interest, from
the date of the deed acknowledgement until the date of redemption. According to
Appellant, the amount of interest owed to him is $1,125.83. 7 In addition,
Appellant asserts he was entitled to $50.00 for “the license.” R.R., Item VII, at 8;
Item IX at 59. Appellant also asserts Appellee is responsible for “all the closing
costs including transfer taxes, utility bills, real estate taxes and deed preparation
fee, etc. to make [Appellant] whole.” Pet’r’s Br. at 18. Thus, Appellant asserts the
redemption amount was $13,275.83,8 rather than the $13,048.38 Appellee paid and
therefore, anything less is tantamount to a failure by Appellee to complete the
redemption process on time.
6
The record does not explain why Appellant was permitted to pay the remaining balance
after Appellee filed her redemption petition. Appellee, however, does not argue Appellant did
not pay the full purchase price.
7
Appellant’s interest calculation is as follows: $2,000.00 (Property down payment) x
10% (monthly interest) x 12 (months) = $200.00 interest on the $2,000.00 down payment;
$10,100.00 (Property purchase balance paid on 12/16/15) x 10% (monthly interest) x 11
(months) = $925.83. Thus, Appellant’s overall interest calculation on the Property purchase is
$1,125.83.
8
$12,100 (Property purchase price) + $1,175.83 (total interest and license).
8
Pursuant to Section 32 of the MCTLA, in order for Appellee to
redeem the Property, she was required to pay the price Appellant paid for the
Property at the tax lien sale ($12,100.00), plus interest on the price paid from the
date the sheriff’s deed was acknowledged, (January 8, 2015) to the date of the
petition (October 5, 2015) at the rate of “ten per centum per annum.” 53 P.S.
§7293(a).
Here, interest of ten percent on $12,100.00 increased daily at the rate
of $3.315068 a day.9 There were 270 days between January 8, 2015 and October
5, 2015. Thus, interest of ten percent on the redemption amount of $12,100.00
amounted to $895.07.10
In accordance with Section 32(b) of the MCTLA, a petitioner may
redeem property if, after hearing, the trial court is satisfied of the facts in the
petition, including facts demonstrating the petitioner’s readiness to pay for the
redemption. See City of Philadelphia v. Frempong, (Pa. Cmwlth. No. 2380 C.D.
2013, filed November 12, 2014) 2014 WL 10298870 (unreported); see also F.A.
Realty Investors Corp., 95 A.3d at 380 (stating that section 32(b) of MCTLA
requires the property owner to ‘set forth facts warranting redemption and his
readiness to pay the redemption money’ (quoting trial court)).
At the hearing, the trial court questioned Appellee as to proof of
readiness to pay for Property redemption pursuant to the MCTLA:
THE COURT: So we’re now at the redemption petition itself.
9
Calculated as ($12,100 x .1)/365.
10
Calculated as 270 (days between deed acknowledgement and redemption petition) x
$3.315068/day = $895.06836 ($895.07 rounded).
9
[Appellee’s Counsel] MS. NYLUND: As Your Honor
stated, we filed within the redemption period. [Appellee] is
ready and willing to pay, not just the amount bid, but the
interest rate from the date of sheriff sale. The sheriff’s sale
… was exactly one year from today’s date, November 18,
2014. Ten percent through today’s date would be … $12,
265 –
THE COURT: Are you saying you have checks here ready
to go?
MR. SINGHAL [Appellant]: [$]12,100 of purchase price.
Upon the interest from that is [$]1,210. And I also paid $50
for license.
THE COURT: All right. Well, what I can say – did you
have a proposed order?
MS. NYLUND: I did, yes.
[City’s Counsel] MS. SCHLEICHTER: [$]13,250.
THE COURT: All right. So the redemption amount is –
you have a check for how much today?
MS. NYLUND: So I got three checks here. $12,500.
Whether or not interest runs through the date the motion was
filed or today’s date, I’m not sure.
THE COURT: What’s the difference are we talking about?
MS. NYLUND: It’s like –
THE COURT: [$]12,500. If the interested [sic] was to run
through today’s date, than [sic] it would be $12,765.38.
THE COURT: Okay.
MS. SCHLEICHTER: I don’t think that’s right. It was one
year. A simple 10 percent on [$]12,100 would be [$]1,210,
would be interest.
THE COURT: What’s the difference? What are you guys –
10
MS. NYLUND: So the sheriff sale was November 18, 2014.
[the MCTLA] says 10 percent runs form [sic] the date of
acknowledgment.
THE COURT: Which was in January.
MS. NYLUND: Which was in January. So that’s not one
year.
THE COURT: So it’s not one year. Date of
acknowledgment. So you’ve done the math?
MS. NYLUND: Yes.
THE COURT: So you’re saying January through today
brings you up to $2,765.38 and that there is a check here
right now for that amount, plus $50.
MS. NYLUND: Yes – well, plus $70.[11]
MR. SINGHAL: Judge, interest is $100 a month on 10
months. It’s $1,000.
THE COURT: You’re going to each write your calculations
down and give them to me. I’m not going to have an
argument back and forth. You write your interest
calculations. And I am not going to do the math problem
sitting up here on the bench. It’s unfair for either of you to
ask me to do that. You’re meant to do your calculations and
give them to me and then I will look at your calculations just
like when you had the little math problems, and I’ll look to
see who’s math is correct. But we’re not going to have an
argument and take up everybody’s time.
…
THE COURT: So the amount is going to be $70 dollars,
plus whatever the proper interest is on [$]12,500. If you got
11
Appellee’s Counsel referred to “plus $70,” without identifying the specific purpose of
this amount. Appellee avers she is ready, willing and able to pay “other amounts” due under the
MCTLA. See e.g., R.R., Item III at 11, ¶5. Appellant asserts he paid $50 for “the license.” See
e.g., R.R., Item IX at 59.
There is nothing in the record regarding either of these amounts.
11
that amount right here today, I will order that the deed is to
be conveyed today. So you guys are going to talk, maybe
make an agreement, and go out in the hallway. (Emphasis
added.)
R.R., Item VII at 52-55; see also R.R., Item VII at 7-10.
The record evidenced the trial court’s satisfaction of the facts in the
petition, including facts demonstrating the petitioner’s readiness to pay for the
redemption. F.A. Realty Investors Corp.; Frempong; see also Philadelphia
Scrapyard Prop., LLC, (court affirmed the calculation of interest due from date of
acknowledgement and construed the MCTLA to preclude manipulation by third
party buyer that would increase interest due).
To the extent Appellant asserts the trial court erred in finding the
redemption process made Appellant whole, by placing him in the same financial
position he occupied prior to the tax lien sale, such findings are within the sole
province of the trial court and cannot be disturbed on appeal absent an abuse of
discretion, or a decision which lacked supporting evidence, or where the trial court
clearly erred as a matter of law. City of Allentown.
Upon review, we conclude the trial court’s findings are supported by
substantial competent evidence. Appellee demonstrated she was ready, willing and
able to pay the full redemption amount of $13,048.3812 at the time of redemption
purchase, as ordered by the court. The trial court, satisfied of the facts in the
redemption petition, granted redemption. F.A. Realty Investors Corp.; Frempong.
12
Calculated as $12,100.00 (Property purchase price) + $895.07 (interest) (see note 11
herein) + $50 (“the license”) = $13,045.07. The additional $3.31 awarded is most likely
attributable to the rounding of the daily interest amount to $3.32/day (see note 10 herein).
12
Thus, we are satisfied the trial court did not err in concluding
Appellee tendered full redemption payment under the MCTLA, thereby making
Appellant whole by placing him in the same financial position he occupied prior to
the tax lien sale.
Appellant next argues Appellee’s IFP filing precluded her from
redemption. Appellant contends that even though Appellee had funds to pay the
redemption amount, “not having money to pay the court costs [because of her IFP
status] are inconsistent to say the least.” R.R., Item XII at 78, ¶2.
Rule 240 of the Pennsylvania Rules of Civil Procedure quite clearly
addresses the entitlement of a party who is without financial resources to proceed
IFP and the manner in which a party must request such status:
(d)(1) If the party is represented by an attorney, the
prothonotary shall allow the party to proceed [IFP] upon the filing of a
praecipe which contains certification by the attorney that he or she is
providing free legal service to the party and believes the party is
unable to pay the costs.
Pa. R.C.P. No. 240(d)(1).
In considering a party’s petition and affidavit to proceed IFP, a court
examines a multitude of factors, including debts and obligations. Pa. R.C.P. No.
230(h)(3)(f). The court, however, does not require that a party be penniless in
order to proceed IFP, only that the party may not have the funds necessary to pay
fees, after accounting for such basic needs including food, clothing and housing.
Leave to proceed IFP is discretionary with the court, and “there exists no fixed net
worth which disqualifies a party as a pauper.” Ward v. Werner, 61 F.R.D. 639,
640 (M.D. Pa. 1974). Poverty sufficient to qualify for IFP status does not require
penniless destitution. Walters v. Belleville Commons Stanford Mgmt., LLC,
13
(M.D. Pa. No. 1:08-CV-01800 filed, September 30, 2008) 2008 WL 4462085
(unreported).
When represented by counsel, Pa. R.C.P. No. 240(d) permits a party
to proceed IFP upon the filing of a praecipe as set forth in the rule, providing the
attorney believes the party is unable to pay the costs and that counsel is providing
free legal services. Once IFP is granted, Rule 240(f)(1) exempts a party permitted
to proceed IFP from payment of any cost or fee imposed. “A party permitted to
proceed [IFP] shall not be required to…pay any cost or fee imposed or authorized
by Act of Assembly or general rule which is payable to any court or prothonotary
or any public officer or employee…” Pa. R.C.P. No. 249(f)(1).
Here, Appellee filed a praecipe to proceed IFP. R.R., Item III at 7.
The court granted IFP status to Appellee. See R.R., Item I at 2, Docket Entry 10;
R.R., Item XIV at 83. As identified by the trial court in its opinion, “[this court]
was not the issuing authority of the [IFP] status and, thus, cannot be meant to take
such status into its own findings.” Id. at 85; see generally, Commonwealth v.
Torres, 764 A.2d 532 (Pa. 2001) (the reviewing court must accord deference to the
issuing authority's determination). Further, we note Appellant did not challenge
Appellee’s IFP status, but only questioned her ability to redeem the Property
because her IFP status exempted her from paying the costs associated with
redemption.
To the extent Appellant asserts the trial court erred in determining IFP
status precluded her from redemption, such findings are within the sole province of
the trial court and cannot be disturbed on appeal absent an abuse of discretion, a
decision which lacked supporting evidence, or where the trial court clearly erred as
a matter of law. Torres; City of Allentown.
14
Upon review, we conclude the trial court’s findings are supported by
substantial competent evidence. Appellee clearly demonstrated her IFP status,
which was never contested before the issuing court. The trial court, satisfied of
Appellee’s poverty sufficient to qualify for IFP status, granted redemption. Ward;
Walters.
IV. Conclusion
In sum, the trial court’s findings are supported by substantial
evidence. The trial court properly determined Appellee’s timely exercise of her
right of redemption, calculation of the redemption amount and grant of the
Property to Appellee via redemption. Accordingly, we affirm.
___________________________
JOSEPH M. COSGROVE, Judge
15
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. :
:
Denise Hawkins :
: No. 2555 C.D. 2015
Appeal of: Rupali P. Singhal :
ORDER
AND NOW, this 29th day of March, 2017, the order of the Court of
Common Pleas of Philadelphia County is AFFIRMED.
___________________________
JOSEPH M. COSGROVE, Judge