In re Tax Claim Bureau of Lehigh County 2012 Judicial Tax Sale
107 A.3d 853
Pa. Commw. Ct.2015Background
- Collado bought 24 S. 8th St., Allentown, in 2004 and executed a recorded mortgage to Mendez. Mortgage listed Collado and Mendez addresses in New Jersey.
- Lehigh County Tax Bureau issued tax-deficiency notices (2011–2012); property failed upset sale and Bureau petitioned for a rule to show cause (Rule) for a judicial tax sale set for Dec. 3, 2012 (hearing) / sale Dec. 14, 2012.
- Sheriff attempted personal service; Cobblestone address was vacant. Sheriff mailed the Rule to Collado by certified mail on Nov. 28, 2012 (returned unclaimed later) and mailed a copy to Mendez (addressed with a misspelling); USPS later produced a delivery confirmation for Mendez signed by a third party after the hearing.
- At the Dec. 3, 2012 hearing no parties appeared; the court authorized publication notice of the sale (which named only Collado) and ordered the property sold; purchaser Lee bought the property at the Dec. 14, 2012 judicial tax sale.
- Collado and Mendez learned of the sale in Feb. 2013 and petitioned to set aside the judicial sale; after an evidentiary hearing the trial court set the sale aside for defective notice (certified vs registered mail and late service).
- Commonwealth Court affirmed, holding (1) service was sent only five days before the hearing (statutorily required 15 days), (2) the return receipts were not on file before the hearing, and (3) the court could not properly find statutory service had been made before ordering the sale.
Issues
| Issue | Plaintiff's Argument (Lee) | Defendant's Argument (Collado/Mendez) | Held |
|---|---|---|---|
| Whether certified mail satisfied RETSL §611 requirement for out-of-state service (certified v. registered mail) | Certified mail is equivalent to registered mail under Pa. R. Civ. P. 76; strict textual distinction is unnecessary | Section 611 requires registered mail for out-of-state service; certified mail does not satisfy the statute | Court found trial court erred to focus solely on certified vs registered distinction but affirmed on other statutory defects (see below) |
| Whether service timing complied with §611 (15-day requirement) | Service was adequate | Sheriff mailed Rule only 5 days before hearing; did not meet 15-day statutory requirement | Service was statutorily deficient; this alone justifies setting the sale aside |
| Whether the court could order sale when record showed service had not been made before hearing | Sale order was proper because notice by publication and later returns cured defects | Trial court knew service was unsuccessful at hearing; cannot find statutory satisfaction absent required returns | Court held ordering sale despite unsuccessful service violated RETSL and due process; sale set aside |
| Applicability of §607a(a) (additional reasonable steps to locate owner) to judicial tax sales (cross-appeal issue) | N/A | §607a(a) applies and the Bureau failed to take reasonable locating steps | Commonwealth Court agreed §607a(a) does apply to judicial tax sales (trial court erred on that narrow point), but decision affirmed on defective service grounds |
Key Cases Cited
- Tracy v. Cnty. of Chester Tax Claim Bureau, 489 A.2d 1334 (Pa. 1985) (tax forfeiture is a momentous event; due process requires notice and opportunity to be heard)
- Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (U.S. 1950) (minimum due process requires notice reasonably calculated to inform interested parties)
- Smith v. Tax Claim Bureau of Pike Cnty., 834 A.2d 1247 (Pa. Cmwlth. 2003) (strict compliance with RETSL notice requirements protects due process)
- Fernandez v. Tax Claim Bureau of Northampton Cnty., 925 A.2d 207 (Pa. Cmwlth. 2007) (failure to strictly adhere to RETSL can justify vacating judicial tax sale)
- McElvenny v. Bucks Cnty. Tax Claim Bureau, 804 A.2d 719 (Pa. Cmwlth. 2002) (bureau bears burden to prove reasonably necessary steps to locate and notify parties)
- Montgomery Cnty. Tax Claim Bureau v. Mermelstein Family Trust, 836 A.2d 1010 (Pa. Cmwlth. 2003) (rule hearing is the owner’s sole opportunity to contest judicial sale; service of the rule is required)
- In re Serfass, 651 A.2d 677 (Pa. Cmwlth. 1994) (statute requires service of the rule, publication of sale date cannot cure defective service of rule)
- In re Monroe Cnty. Tax Claim Bureau, 91 A.3d 265 (Pa. Cmwlth. 2014) (Section 607a(a) applies to judicial tax sales)
- In re Sale No. 10, 801 A.2d 1280 (Pa. Cmwlth. 2002) (same: §607a(a) obligations apply)