Clark v. Cnty. of Carbon (In re Tax Claim Bureau's Sales of Real Estate for Unpaid Taxes Levied For the Year 2018)

In Re: Tax Claim Bureau's Sales of Real Estate for Unpaid Taxes Levied for the Year 2018

Daniel R. Clark and Victoria Clark Bolger trading as Split Rock Family Partnership, Appellants v. County of Carbon, Tax Claim Bureau

No. 598 C.D. 2021

Commonwealth Court of Pennsylvania

February 22, 2023

OPINION NOT REPORTED

Argued: December 12, 2022

BEFORE: HONORABLE CHRISTINE FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge, HONORABLE STACY WALLACE, Judge

MEMORANDUM OPINION

STACY WALLACE, JUDGE

Daniel R. Clark (Clark) and Victoria Clark Bolger (Bolger) trading as Split Rock Family Partnership (Split Rock) appeal from the Carbon County Court of Common Pleas' (trial court) May 17, 2021 order (Order) overruling their objections and exceptions to upset tax sale (Objections and Exceptions) and refusing to set aside the tax sale of property located at 18 Birchwood Drive, Lake Harmony, Pennsylvania (Property). For the following reasons, we reverse.

I. BACKGROUND

On September 15, 2020, the Carbon County Tax Claim Bureau (Bureau) held an upset tax sale for the Property as a result of delinquent property taxes (tax sale).

Trial Ct. Op. at 1-2. At the time of the tax sale, the record title owner of the Property was Split Rock. Id. at 2. Christian Fehrenbacher (Purchaser) was the successful bidder at the tax sale and purchased the Property for $45,000.00. Id.

On November 9, 2020, Clark and Bolger trading as Split Rock filed their Objections and Exceptions, asserting the Bureau failed to comply with the Real Estate Tax Sale Law's (Tax Law)^[1] notice requirements. Id. Purchaser filed a motion to intervene in the objection proceedings, which the trial court granted. Id. Additionally, Purchaser and the Bureau both filed Answers to Clark and Bolger's Objections and Exceptions and raised challenges to the existence and validity of Split Rock as a partnership. Id. at 3. In January 2021, the trial court held a hearing on the Objections and Exceptions. Id. at 2.

At the hearing, Clark and Bolger testified on behalf of Split Rock. Id. Bolger testified she and Clark were the only general partners of Split Rock, but the trial court noted that neither Bolger nor Clark produced any documentation supporting the existence or creation of the partnership. Id. at 3. Bolger testified she was not aware of whether any fictitious name registration was ever filed or whether any income tax filings were ever submitted for Split Rock. Id. Similarly, Clark testified he did not know if Split Rock was registered or whether taxes were paid by Split Rock. Id.

Bolger testified she previously resided at 18 Miles Road, Darien, Connecticut (Connecticut Address) and claimed not to know Split Rock's real estate tax bills were being sent there. Id. at 4. However, as the trial court noted, she also testified that if those tax bills were sent to that address while she lived there, she would have made sure they were paid or sent to her father for payment. Id. Bolger testified she moved from the Connecticut Address to New Jersey in June 2017, and claimed she completed a change of address form with the United States Postal Service (U.S. Postal Service), but she did not indicate whether she changed the certified address for the Property with anyone, including the tax collector or tax assessment office. Id. at 5. Bolger was also unaware of whether a forwarding address was ever provided for the Property. Id.

The Bureau Director testified that the Bureau sent all notices regarding the tax sale to the address on file for Split Rock, which was the Connecticut Address. Id. at 6. On April 1, 2019, the Bureau sent a Notice of Return and Claim (First Notice of Return and Claim) for unpaid 2018 real estate taxes to Split Rock at the Connecticut Address by certified mail. Id. at 6. The U.S. Postal Service returned the First Notice of Return and Claim with the notation "wrong address" and a postal sticker noting "return to sender, not deliverable as addressed, unable to forward." Id. at 7.

After receiving the First Notice of Return and Claim back, the Bureau Director researched files in the Bureau, the tax assessment office, and with the recorder of deeds in an attempt to locate another address for Split Rock but was unsuccessful. Id. On July 11, 2019, the Bureau had a Notice of Return and Claim (First Posted Notice) for the unpaid 2018 real estate taxes posted to the Property. Id. at 7. On May 1, 2020, the Bureau sent a Notice of Return and Claim (Second Notice of Return and Claim) to Split Rock at the Connecticut Address for unpaid 2019 real estate taxes. Id. at 8. The Second Notice of Return and Claim was not returned to the Bureau and was received at the Connecticut Address on May 22, 2020. Id. The signature on the U.S. Postal Service return receipt appears to read "Split" with additional writing underneath. See Reproduced Record (R.R) at 41a.

On June 3, 2020, the Bureau sent a Notice of Public Tax Sale (First Notice of Public Sale) to Split Rock at the Connecticut Address advising that unless it paid $1,481.43, the Property would be sold at a public sale on September 15, 2020. Id. at 8. This notice was received at the Connecticut Address on June 12, 2020. Id. The signature on the U.S. Postal Service return receipt was illegible. Id. at 44a. On July 8, 2020, the Bureau had a Notice of Public Sale posted on the Property. Id. at 9.

On August 17, 2020, the Bureau sent another Notice of Public Tax Sale (Second Notice of Public Sale) to Split Rock at the Connecticut Address. Id. at 9. The U.S. Postal Service returned this mailing to the Bureau on August 26, 2020, with a label affixed to it indicating "return to sender, not deliverable as addressed, unable to forward." Id. at 10.

The Bureau held the Tax Sale on September 15, 2020, and afterwards, made a consolidated return to the trial court. Id. at 10. Clark and Bolger both testified they did not see any of the notices or sign for any certified mail. Id. at 6. Additionally, Bolger testified she never authorized anyone at the Connecticut Address to sign for any notices after she moved to New Jersey. Id. Further, Bolger testified she never received the consolidated return and Clark testified he only knew the Property was sold because a handyman notified him the locks to the house were changed. Id. at 10.

On May 17, 2021, the trial court issued its order overruling and dismissing Clark and Bolger's Objections and Exceptions. First, the trial court concluded Clark and Bolger, trading as Split Rock, lacked standing to raise objections to the loss of the Property because Split Rock was the title owner of the Property and Split Rock is a "fictitious name devoid of any proper names to identify its partners." Trial Ct. Op. at 15. As such, the trial court concluded that because Split Rock is an unregistered general partnership and an unregistered fictitious name, Split Rock lacked standing to file the Objections and Exceptions.

Notwithstanding the trial court's conclusion that Split Rock lacked standing, the trial court went on to address the merits of the case. The trial court concluded the Bureau's notices were adequate and complied with the Tax Law's notice requirements. Additionally, the trial court considered the Bureau Director's testimony that after the U.S. Postal Service returned the First Notice of Return and Claim, she researched files in the Bureau, the tax assessment office, and with the recorder of deeds to attempt to locate another address for Split Rock. Id. at 26. The trial court indicated that because two of the notices were accepted and signed for at the Connecticut Address, the Bureau did not need to take additional notification efforts. Id. at 27. The trial court concluded the Bureau met its burden regarding the Tax Law's notice requirements before the sale of the Property and, as such, overruled and dismissed Clark and Bolger's Objections and Exceptions.

Issues on Appeal^[2]

Clark and Bolger raise several issues on appeal. First, Clark and Bolger assert the trial court erred in finding that they lacked standing because Split Rock was not required to register under the Fictitious Names Act,^[3] the Fictious Names Act does not apply to petitions to set aside a tax sale, and the Bureau and Purchaser waived the issue of standing. Second, they assert the trial court committed reversible error when it found the Bureau strictly complied with the Tax Law. Third, they assert the trial court erred when it ruled that the Bureau was excused from complying with the additional notice requirements of the Tax Law. Fourth, they contend the trial court erred in refusing to set aside the sale because the Bureau failed to memorialize its efforts to locate Clark and Bolger. Finally, they assert the trial court erred in finding that the Bureau properly posted the property.

In response, Purchaser argues the trial court exercised proper discretion in determining the Bureau and Purchaser adequately raised the issue of standing. Additionally, he contends the trial court properly determined that Clark and Bolger lacked standing to challenge the tax sale as a partnership operating as an unregistered fictitious name. Next, Purchaser asserts evidence adequately supported the trial court's determination that the Bureau complied with the notice requirements of the Tax Law and that in light of the information known at the time to the Bureau, the Bureau made a reasonable effort to determine the owner of record and ascertain a proper address for Split Rock. Finally, Purchaser asserts evidence adequately supported the trial court's determination that the Bureau complied with the Tax Law's posting requirements.^[4]

II. DISCUSSION

Our standard of review in tax sale cases is limited to determining whether the trial court abused its discretion,...