IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. :
: No. 380 C.D. 2018
Jose L. Rivera and Paula Marino, :
The United States of America, and :
Harrison, Inc. : Submitted: March 14, 2019
:
Appeal of: Jose L. Rivera and :
Paula Marino :
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE McCULLOUGH FILED: April 5, 2019
Jose L. Rivera and Paula Marino (Owners) appeal from the March 9,
2018 order of the Court of Common Pleas of Philadelphia County (trial court), which
denied their Second Motion to Redeem the property located at 802 Judson Street,
Philadelphia, Pennsylvania 19120 (the Property).
Facts and Procedural History
The pertinent background of this matter was set forth in City of
Philadelphia v. Rivera, 171 A.3d 1 (Pa. Cmwlth.), appeal denied, 176 A.3d 857 (Pa.
2017) [hereinafter Rivera I], wherein Harrison, Inc. (Harrison), the third-party
purchaser of the Property at issue here, appealed from a March 10, 2016 order of the
trial court granting Owners’ renewed motion to set aside the sheriff’s sale of the
Property:
On August 23, 2013, the City filed a petition seeking a Rule
to Show Cause why the Property should not be sold for
failure to pay taxes (Petition). On October 2, 2013, the trial
court issued the Rule to Show Cause. The City filed
attestations that the Rule to Show Cause and the Petition
were posted at the Property on October 30, 2013, and were
served by first-class and certified mail upon numerous
entities, including Owners, on November 7, 2013. On
January 29, 2014, the trial court issued the decree for a
sheriff’s sale (Decree). The Decree did not specify a date
and time, but instead directed:
Pursuant to [Section 39.2(c) of] the Act
[commonly referred to as the Municipal Claims
and Tax Liens Act (Act)],[1] 53 P.S. § 7193.2(c),
notice of this Decree and of the time, place and
date of the [s]heriff’s [s]ale, shall be served by
first[-]class mail on all respondents served with
the Petition and Rule [to Show Cause], on any
party whose interest appeared of record . . . .
The [City] shall file an affidavit of service of the
aforementioned notices prior to the date of the
[s]heriff’s [s]ale.
On May 14, 2015, the City filed an affidavit affirming that,
on May 8, 2015, it served Owners at the Property’s 802
Judson Street address, and other interested parties, the
Decree and notice of the date, time and place of the
sheriff’s sale. On May 29, 2015, the City filed another
affidavit attesting that on May 29, 2015, it served the
Decree and notice of the date, time and place of the
sheriff’s sale upon additional interested parties. The Decree
and notices were not returned as undeliverable.
1
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §§7101-7505. Section 39.2 of the Act
was added by the Act of December 14, 1992, P.L. 859.
2
On June 16, 2015, the Property was sold to Harrison at the
sheriff’s sale. On June 24, 2015, Owners filed a motion to
redeem the Property (Motion to Redeem) and, on July 12,
2015, filed a motion to set aside the sheriff’s sale (Motion
to Set Aside Sale). In their Motion to Set Aside Sale,
Owners asserted that “[t]he City did not satisfy the notice
requirements of the [Act] because [Owners] were not
properly served originally and because [Owners] should
have been served again after the Agreement with the City
failed.” The trial court issued a Rule Returnable for each
motion for August 13, 2015. On August 13, 2015, Owners
presented the trial court with proof of service of the Rule
Returnable on Harrison, but Harrison did not appear. On
August 28, 2015, Harrison’s counsel entered his appearance
as a third-party intervenor. Thereafter, the City and Owners
agreed to redeem the Property, and provided the trial court
with their agreement. Because the Motion to Set Aside
Sale would be moot if Owners successfully redeemed the
Property, the trial court continued the Rule Returnable
hearing on the Motion to Set Aside Sale.
Owners requested, and by September 30, 2015 order, the
trial court granted, additional time to complete the
redemption. A second order of the same date rendered the
Motion to Set Aside Sale moot, without prejudice to refile
after a December 2, 2015 status hearing.
At the time of the December 2, 2015 status hearing, Owners
had failed to redeem the Property. Thereafter, on
December 3, 2015, the trial court denied Owners’ Motion to
Redeem. On December 10, 2015, Owners sought
reconsideration. Harrison, although never having formally
filed an application to intervene, filed an answer to Owners’
reconsideration request, that Owners did not seek to quash.
By December 14, 2015 order, the trial court granted
Owners’ reconsideration request, and scheduled a January
27, 2016 hearing thereon.
On January 11, 2016, Owners filed the Renewed Motion,
alleging that “[t]he City did not satisfy the notice
requirements of the [Act] because [Owners] were not
properly served originally and because [Owners] should
have been served again after the Agreement with the City
3
failed.” On January 17, 2016, Harrison answered the
Renewed Motion, and Owners did not object. Following
the January 27, 2016 hearing, the trial court scheduled an
evidentiary hearing for March 8, 2016[,] to determine
whether the Property was subject to redemption and/or
whether the sheriff’s sale should be set aside, as well as to
address the sheriff’s refusal to return sale proceeds. The
City, Owners and Harrison appeared and participated in the
March 8, 2016 hearing. Owners did not object to
Harrison’s participation at the hearing. By March 10, 2016
order, the trial court granted the Renewed Motion.
Harrison filed a motion for reconsideration, which Owners
did not seek to quash. On March 22, 2016, the trial court
denied Harrison’s reconsideration motion. Harrison
appealed to this Court.
In its opinion, the trial court concluded, inter alia, that
Harrison is not a valid intervenor because [he] did not file
an intervention petition. The trial court also set forth its
reasons for granting Owners’ Renewed Motion, concluding
that the City had failed to comply with Pennsylvania Rule
of Civil Procedure No. (Rule) 3129.2 (governing notice
before the sale of real property) and the Act, and that its
March 10, 2016 order was justified because Owners did not
have actual notice of the Property’s sale. The trial court
explained:
Th[e trial c]ourt acknowledges . . . that the
requirements under the [Act], akin to those of
the Rules of Civil Procedure, were enacted with
a protective purpose of ensuring that individuals
have knowledge of a sale of their property. As
stated by the Commonwealth Court, with regard
to Section 39.2 [of the Act], the ‘procedural
requirements were enacted by the General
Assembly as a safeguard to ensure that a city has
taken all of the appropriate steps prior to
depriving a person of his/her right to real
property.’ [City of Phila. v. Schaffer, 974 A.2d
509, 512 (Pa. Cmwlth. 2009)]. Accordingly, th[e
trial c]ourt’s decision to set aside the sale was
not based upon a rote analysis of the City’s
failure to comply with the Rules of Civil
4
Procedure or the [Act], but instead based upon a
finding that Owners did not have actual notice
of the sale.
After reviewing Rivera’s testimony which the trial court
found to be credible, it concluded:
The [P]roperty at 802 Judson Street is a garage
that Owners use for household storage, as it is
just four houses down from their residence at
816 Judson Street. While Owners never
changed the mailing address on file with the
City for the [P]roperty, the City was clearly
aware of the nature of the [P]roperty and would
have had reason to know of Owners’ residential
address[,] as Owners had previously entered into
a repayment plan for the delinquent taxes.
Moreover, the affidavit of the posting of the
handbill with the day/time of the sale was never
made part of the docket until March 17, 2016,
after this [c]ourt had entered its Order and the
affidavit regarding the service of the notice of
sale via first-class mail did not contain any
mention of the day/time of the sale. As such, the
record evidence could not support an inference
of actual notice and, taken in conjunction with
the witness testimony refuting any notice at all,
this [c]ourt properly set the sale aside.
Rivera I, 171 A.3d at 2-5 (footnotes omitted) (internal citations omitted).
In Rivera I, we reversed the March 10, 2016 order of the trial court,
holding that it was improper for the trial court to sua sponte raise the issues of
Harrison’s standing and the City’s compliance with Rule 312.9. Id. at 6-8.
Additionally, we held that the trial court erred in granting the Renewed Motion
where, despite evidence of the City’s compliance with the Act’s service provisions,
the trial court concluded that Owners did not have actual notice of the sale. Id. at 10.
Subsequently, Owners filed a Second Motion to Redeem the Property,
citing a footnote in the March 10, 2016 order of the trial court, which stated “[i]f this
5
matter is taken up on appeal, the redemption period for the [P]roperty is stayed.
Should this matter be reversed on appeal, [Owners] still ha[ve] the right of
redemption.” (Reproduced Record (R.R.) at 28.)2 Harrison filed a petition to
intervene, which was granted, and a response in opposition. The trial court entered a
Rule to Show Cause, which stated, “At the time of the hearing, the parties shall be
prepared to present evidence and/or testimony as to the issues raised in the [Second
Motion to Redeem] and any response thereto.” (R.R. at 68.) A hearing was held on
March 8, 2016, at which counsel for Owners, the City, and Harrison appeared.
During the hearing, counsel for Owners acknowledged that the sheriff
had returned the proceeds from the sale, which equated to $82,677.72. (R.R. at 14;
Trial court op. at 4.) However, when asked by the court whether Owners had the
redemption amount, counsel stated, “We have most of it and [Owners] would be able
to get it within a reasonable period of time.” (R.R. at 14.) When asked whether
Owners could show proof that funds were readily available at the hearing, counsel for
Owners stated, “[W]e don’t have [$]95,000.” (R.R. at 14.) On March 9, 2018, the
trial court issued an order denying the Second Motion to Redeem. Owners appealed.
In its opinion, the trial court observed that, while section 32 of the Act
states that the owner of a property may “redeem the [property sold under a tax or
municipal claim] 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 a sale,” 53 P.S. §7293(a), this Court has held that the owner is not required to
complete all acts of redemption, including final payment, within the nine-month
2
Owners have failed to comply with the Pennsylvania Rule of Appellate Procedure 2173,
requiring the pages of the reproduced record to be numbered “in Arabic figures . . . followed in the
reproduced record by a small a, thus 1a, 2a, 3a, etc.” Pa.R.A.P. 2173.
6
period. (Trial court op. at 2-3) (citing City of Philadelphia v. Philadelphia Scrapyard
Properties, LLC, 132 A.3d 1060, 1066 (Pa. Cmwlth. 2016)). The trial court observed
that, in this case, the sheriff acknowledged the deed on July 23, 2015, and thus, the
nine-month period would have expired on April 23, 2016. However, the court noted
that, instead of paying the redemption amount by January 30, 2016, as the court had
previously ordered, Owners filed the Motion to Set Aside Sale. (Trial court op. at 3.)
The court emphasized that Owners filed the Second Motion to Redeem
the Property pursuant to the March 10, 2016 order, but at the hearing, nearly three
years after the sheriff acknowledged the deed, Owners’ counsel stated on the record
that Owners were not ready or financially able to pay the redemption amount of
$95,000.00 plus interest to Harrison. The court stated that, although they were not
required to complete all acts of redemption before the nine-month redemption period
expired, “it is undisputed that—in the three years since the [s]heriff acknowledged
the deed—[Owners] have never been ready and financially able to pay the
redemption amount to [Harrison].” (Trial court op. at 4.) The court explained that, in
denying the Second Motion to Redeem, it properly weighed the competing objectives
of promoting justice with bringing finality to the redemption process, given the fact
that Owners had never been ready or financially able to repay the redemption amount
in the past three years. Id.
Discussion
On appeal,3 Owners argue the trial court erred in holding that they were
required to show that they were then presently able to pay the redemption amount.
“This Court’s scope of review in tax sale cases is limited to a determination of whether the
3
common pleas court abused its discretion, rendered a decision which lacked supporting evidence or
(Footnote continued on next page…)
7
Owners argue that “[t]here is no statutory requirement that the redemption amount be
paid within the statutory period,” because state and federal case law indicate that the
redemption amount may be completed “long after that period, depending on the
circumstances.” (Owners’ brief at 5.)
Section 32(a) and (b) of the Act provides, in pertinent part, as follows:
(a) The owner of any property sold under a tax or municipal
claim, or his assignees, or any party whose lien or estate has
been discharged thereby, may, except as provided in
subsection (c) of this section, redeem the same at any time
within nine months from the date of the acknowledgment 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 [sic] 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. . . .
(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.
(continued…)
clearly erred as a matter of law.” Brentwood Borough School District v. HSBC Bank USA, N.A.,
111 A.3d 807, 810 n.1 (Pa. Cmwlth. 2015).
8
53 P.S. §7293(a)-(b) (emphasis added). We have previously noted that this
redemption statute “is to be liberally construed so as to effect its object and to
promote justice.” City of Philadelphia v. F.A. Realty Investors Corp., 95 A.3d 377,
384 (Pa. Cmwlth. 2014). However, we have also held that a petition to redeem
should be denied where the owner cannot show it is “ready, willing and able to pay
the redemption price.” City of Philadelphia v. F.A. Realty Investors Corp., 146 A.3d
287, 300 (Pa. Cmwlth. 2016). See also Philadelphia Scrapyard Properties, 132 A.3d
at 1068 n.7 (“In accordance with Section 32(b) of the Act, 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.” (emphasis added)).
Here, the trial court was not satisfied that Owners were ready, willing,
and able to pay the redemption amount based upon the declaration by their attorney
that Owners “don’t have [$]95,000.” (R.R. at 14.) Given that admission by Owners,
the trial court did not err in denying their Second Motion to Redeem. Significantly,
during the hearing, Owners did not attempt to produce evidence of their ability to
pay, nor did they specify what was the “reasonable” period of time in which they
could produce the funds. Id. Further, Owners did not explain why they were unable
or unwilling to introduce evidence of their readiness to pay at the hearing, pursuant to
section 32(b) of the Act and the Rule to Show Cause, which notified them that they
must “be prepared to present evidence and/or testimony” related to their Second
Motion to Redeem. (R.R. at 68.)
Although Owners cite various cases in which courts have permitted the
redemption amount to be paid at a later date, where “factors outside the control of the
parties” constituted sufficient justification to extend the time to pay the redemption
9
amount, they are inapplicable here.4 (Owners’ brief at 6.) Owners argue the original
delay in payment of the redemption amount was due to the sheriff’s refusal to turn
over the purchase price and assert that “[t]his is exactly the type of circumstance
beyond the control of the former property owner . . . .” (Owners’ brief at 7.)
However, Owners ignore that they acknowledged during the hearing that the sheriff
had since returned the proceeds from the sale. Owners cite no other factor outside
their control rendering them unable to pay the redemption price.
Although Owners repeatedly argue in their brief that extensions on time
to pay are permissible, they did not introduce any evidence at the hearing justifying
an extension. Indeed, Owners did not even request additional time to pay the
redemption price at the hearing. Moreover, as the trial court noted, despite having
received numerous extensions during the three years since the sheriff’s
acknowledgement of the deed, Owners do not explain why yet another extension is
appropriate here. Put simply, Owners failed to produce any evidence regarding their
readiness to pay as is required under section 32(b) of the Act and, having failed to
meet their burden to establish their ability to pay, the trial court appropriately denied
the Second Motion to Redeem.
4
For example, Owners cite Philadelphia Scrapyard Properties, wherein we refused to
impute the sheriff’s failure to disburse funds to the owner and characterize it as an inability of the
owner to pay the redemption price. 132 A.3d at 1067-68. There, pursuant to a stipulation and order
in the case, the exchange of funds was to occur simultaneously (sheriff to petitioner and petitioner
to third-party purchaser). Philadelphia Scrapyard Properties is inapplicable here, however,
because, as noted above, the sheriff had already returned the purchase price to Owners by the time
of the hearing and thus the lack of those funds cannot justify Owners’ present inability to pay.
10
Accordingly, order of the trial court is affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge
Judge Ceisler did not participate in this decision.
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
City of Philadelphia :
:
v. :
: No. 380 C.D. 2018
Jose L. Rivera and Paula Marino, :
The United States of America, and :
Harrison, Inc. :
:
Appeal of: Jose L. Rivera and :
Paula Marino :
ORDER
AND NOW, this 5th day of April, 2019, the March 9, 2018 order of
the Court of Common Pleas of Philadelphia County is hereby affirmed.
________________________________
PATRICIA A. McCULLOUGH, Judge