In re Sale of Real Estate By Monroe County Tax Claim Bureau
91 A.3d 265
Pa. Commw. Ct.2014Background
- Lisa and Peter Kelchner owned 3 Vixen Drive; they executed a mortgage in favor of Harleysville (later merged into First Niagara) in 2006 and defaulted.
- Property taxes went unpaid; Monroe County Tax Claim Bureau exposed the property to upset sale (Sept. 2011), then filed a Petition to Sell by judicial tax sale (Dec. 22, 2011).
- Sheriff personally served the Rule/Petition on February 6, 2012 at Harleysville branch address on the mortgage; return identified recipient as "Debra Alwine, Deposit Ops Supervisor." First Niagara did not appear at the March 20, 2012 hearing.
- Trial court granted the Petition; property sold at judicial tax sale May 2, 2012; purchaser sought conveyance free of liens under 72 P.S. § 5860.612.
- First Niagara filed a Petition to Vacate/Set Aside (Jan. 14, 2013), arguing inadequate notice — the Bureau should have served First Niagara at its corporate office or its local counsel and the sheriff’s return failed to show that the person served was authorized.
- Trial court denied relief; appellate court affirmed, holding service by sheriff at the Harleysville branch complied with Section 611 and Rule 424 and First Niagara failed to rebut the presumptive validity of the sheriff’s return.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice by sheriff satisfied statutory requirements for judicial tax-sale rule service | Bureau should have served First Niagara at corporate office or local counsel; search for merger certificate and counsel address required | Service by sheriff at mortgagee/branch address listed on mortgage and foreclosure caption was proper under Section 611 and Rule 424 | Held: Service was proper; no further searches required once sheriff effectuated personal service |
| Whether Section 607.1(a) required additional "reasonable efforts" after sheriff service | Section 607.1(a) required Bureau to do more (discover corporate/counsel addresses) even for judicial sales | Section 607.1(a) applies when mailed notice fails; here service was successful by sheriff, so reasonable-efforts obligation was not triggered | Held: 607.1(a) did not require additional steps because sheriff’s return showed successful personal service |
| Whether the sheriff’s return was sufficiently specific to prove valid service | Return did not identify the person served as an authorized agent or "person-in-charge"; therefore service may be invalid | Sheriff’s return is presumptively conclusive absent fraud; plaintiff bore burden to rebut with evidence | Held: Return was facially sufficient and First Niagara failed to present extrinsic evidence to overcome the presumption |
| Whether petition to set aside was timely if service was proper | Not specifically argued as primary point by plaintiff in defense of notice; plaintiff asserted lack of notice to toll statute | Purchaser argued petition was time-barred because First Niagara had proper notice; judicial-sale six-month limit applies | Held: Because service was proper, petition was untimely under six-month limit and barred |
Key Cases Cited
- Hollinger v. Hollinger, 206 A.2d 1 (Pa. 1965) (sheriff’s return that is full and complete on its face is conclusive and immune from extrinsic attack absent fraud)
- Liquid Carbonic Corp. v. Cooper & Reese, Inc., 416 A.2d 549 (Pa. Super. 1979) (sheriff’s return may be challenged where deputy lacked personal knowledge of the served person’s authority)
- Frank P. Miller Paper Co. v. Keystone Coal & Coke Co., 110 A. 79 (Pa. 1920) (defective sheriff returns permit extrinsic evidence to challenge service)
- Manufacturers & Traders Trust Co. v. Luzerne County Tax Claim Bureau, 56 A.3d 36 (Pa. Cmwlth. 2012) (notice for judicial tax-sale requirements must be strictly construed)
- In re Serfass, 651 A.2d 677 (Pa. Cmwlth. 1994) (procedural distinctions between upset and judicial tax-sale notice requirements)
- In re Sale No. 10, 801 A.2d 1280 (Pa. Cmwlth. 2002) (Section 607.1(a) reasonable-efforts requirement applies to judicial tax sales where mailed notice attempts fail)
- In re Tax Sale Sept. 10, 1990, 600 A.2d 650 (Pa. Cmwlth. 1991) (if certified mailings fail, bureau must do more to locate parties prior to sale)
- Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (U.S. 1983) (mortgagee is entitled to notice reasonably calculated to apprise of pending tax sale)