Miron v. Del. Cnty. Tax Claim Bureau

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Thomas Miron, Appellant v. Delaware County Tax Claim Bureau, Arthur F. Urbany and JAC Properties

No. 290 C.D. 2023

Commonwealth Court of Pennsylvania

April 10, 2024

OPINION NOT REPORTED

Submitted: February 6, 2024

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MARY HANNAH LEAVITT, Senior Judge.

MEMORANDUM OPINION

MARY HANNAH LEAVITT, President Judge.

Thomas Miron (Mortgagee) appeals an order of the Court of Common Pleas of Delaware County (trial court) that denied his petition to set aside a tax sale of property on which he held a mortgage lien. Mortgagee argues that because the Delaware County Tax Claim Bureau (Tax Claim Bureau) did not serve him with advance written notice of the scheduled upset tax sale the sale should be set aside. Additionally, Mortgagee argues that Arthur F. Urbany (Urbany) and JAC Properties (JAC) lacked standing to participate in the tax sale set aside proceeding Mortgagee initiated. For the reasons to follow, we affirm.

MAC Business Services (MAC) holds a deed to property located at 15 Dougherty Boulevard, Fox Valley Condominium Unit N-3, in Glen Mills, Delaware County, Pennsylvania (Property). MAC executed a mortgage on the Property in favor of Mortgagee and that mortgage was recorded in the Office of the Recorder of Deeds. Petition ¶¶5-6; Reproduced Record at 7a (R.R.). When MAC did not pay its real property taxes, the Tax Claim Bureau exposed the Property to an upset tax sale on September 14, 2017. Petition ¶¶7-8; R.R. 7a. Urbany was the successful bidder, who then assigned his interest in the Property to JAC. Petition ¶¶17-18; R.R. 7a.

On January 9, 2018, the trial court entered a decree of absolute confirmation. Supplemental Reproduced Record at B25^[1] (S.R.R.). Thereafter, on January 29, 2019, the Tax Claim Bureau issued a deed to the Property to JAC. On January 31, 2019, the Tax Claim Bureau sent Mortgagee a letter informing him that the Property was sold and that the Bureau was holding excess funds for him if he still had a mortgage on the Property.

On July 26, 2022, Mortgagee filed a petition to set aside the tax sale and rescind the deed issued to JAC. Mortgagee claimed that as an owner, he was entitled to advance notice of the Property's scheduled tax sale. Petition ¶¶12-14; R.R. 7a. After a hearing, the trial court denied Mortgagee's petition by order of February 7, 2023.

The trial court held that because Mortgagee was not the title owner of the Property, he was not entitled to a certified mail notice under Section 602(e)(1) of the Real Estate Tax Sale Law (Tax Sale Law), Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §5860.602(e)(1). Prior to a tax sale, the Tax Sale Law requires a notice to mortgagees by publication, 72 P.S. §5860.602(d), and the Tax Claim Bureau "provided the requisite publication notice" to Mortgagee before the tax sale. Trial Court Op. at 5.

The trial court acknowledged that the Tax Claim Bureau did not satisfy the Tax Sale Law's post-sale notice requirements. Section 205(e) requires that a Mortgagee receive notice, via first class mail, of the petition and rule to confirm distribution. 72 P.S. §5860.205(e). Nevertheless, this failure "does not vitiate the sale." Trial Court Op. at 4 (citing First Pennsylvania Bank v. Lancaster County Tax Claim Bureau, 521 A.2d 114, 116-17 (Pa. Cmwlth. 1987)). Further, the upset tax sale did not affect Mortgagee's lien on the Property, which survived the sale.

The trial court rejected Mortgagee's argument that Urbany and JAC did not have standing to participate in his set aside petition. Mortgagee named Urbany and JAC as parties in his petition, and both filed answers. They did not need also to file a petition to intervene.

On appeal,^[2] Mortgagee raises two issues.^[3] First, he argues that the Tax Claim Bureau failed to comply with the pre-sale notice requirements in the Tax Sale Law by not giving Mortgagee written notice of the pending tax sale. Second, he argues that the trial court erred in holding that Urbany and JAC had standing to participate because neither Urbany nor JAC filed a petition to intervene.

We begin with a review of the statutory procedures for the conduct of an upset tax sale. Section 602 of the Tax Sale Law requires the tax claim bureau to provide three separate types of notice in advance of an upset tax sale: (1) publication at least 30 days prior to the sale;^[4] (2) direct notification to each owner by certified mail at least 30 days prior to the sale; and (3) posting of the property at least 10 days prior to the sale. 72 P.S. §5860.602. If the property listed for upset sale is occupied by the owner, Section 601(a)(3) of the Tax Sale Law also requires the tax claim bureau to effect personal service on the owner by a sheriff. 72 P.S. §5860.601(a)(3).

After a tax sale, the tax claim bureau must give the owner notice of the sale of the property and of the opportunity to challenge that sale. Section 607(a.1)(1) of the Tax Sale Law provides:

Notice shall be given by the bureau within thirty (30) days of the actual sale to each owner by United States certified mail, restricted delivery, return receipt requested, postage prepaid, to each owner at his last known post office address as determined in section 602(e)(2) that the property was sold and that the owner may file objections or exceptions with the court relating to the regularity and procedures followed during the sale no later than thirty (30) days after the court has made a confirmation nisi of the consolidated return.

72 P.S. §5860.607(a.1)(1). Notice of the tax sale must also be provided to lien creditors. Section 607(b) of the Tax Sale Law states:

The bureau shall, at the expense of the county, within ten (10) days after confirmation nisi of the consolidated return, publish a general notice once in a newspaper of general circulation published in the county, and in the legal journal, if any, designated by rules of court for the publication of legal notices, stating (1) that the consolidated return of the bureau with respect to any such sale for taxes has been presented to the court, (2) giving the date of confirmation nisi and (3) that objections or exceptions thereto may be filed by any owner or lien creditor within thirty (30) days after the court has made a confirmation nisi of the consolidated return or that the return will be confirmed absolutely.

72 P.S. §5860.607(b) (emphasis added).

Finally, Section 205(e) of the Tax Sale Law provides that prior to distribution of moneys collected from the upset tax sale,

the bureau shall petition the court of common pleas for a confirmation of distribution. The petition shall set forth a proposed schedule of distribution for each account and shall request the court to issue a rule to show cause on each distributee why the court should not confirm the distribution as proposed. The rule to show cause and a copy of the petition shall be served by first class mail upon each distributee and upon the purchaser, with proof of mailing to the last residence or place of business of the distributee known to the bureau and to the purchaser at the address given to the bureau. If the rule to show cause is not returned by any distributee or purchaser on or before the time set for its return, the court shall forthwith confirm the distribution absolutely. If any distributee or purchaser makes a return of the rule within the time set by the court, the court shall forthwith hear any objections and exceptions to the proposed distribution and thereafter adjust the schedule of distribution as it deems just and equitable according to law and confirm the distribution absolutely as adjusted. An absolute confirmation of distribution by the court shall be final and nonappealable with respect to all distributees listed in the petition.

72 P.S. §5860.205(e) (emphasis added). Distributees include "mortgagees and other lien holders." 72 P.S. §5860.205(d).

With this background, we address Mortgagee's arguments seriately.

In his first issue, Mortgagee argues that the Tax Claim Bureau failed to comply with the notice requirements of the Tax Sale Law, which deprived him of due process. Mortgagee's brief incorporates by reference his "analysis of the notice requirements of the [Tax Sale Law]" contained in his brief filed before the trial court, in which he contended that he is "the person in whose name the property is last registered" and, thus, meets the definition of "owner" under Section 102 of the Tax Sale Law, 72 P.S. §5860.102. Mortgagee Trial Brief at 9; R.R. 70a. As an owner, he should have received written notice of the upset tax sale at least 30 days before the date of sale.

Urbany and JAC respond that Mortgagee was not the person in whose name the Property was last registered; it was MAC. Simply, Mortgagee was not an "owner" within the meaning of the Tax Sale Law. Had the legislature intended a mortgagee to receive the notice afforded owners, the legislature would have included mortgagees in Section 602(e), just as it did in Section 602(d) of the Tax Sale Law. Mortgagee's complaints about the post-sale distribution procedures cannot invalidate the tax upset sale, as the trial court so held.

Section 602(e)(1) of the Tax Sale Law states:

(e) In addition to such publications, similar notice of the sale shall also be given by the bureau as follows:

(1) At least thirty (30) days before the date of the sale, by United States certified mail, restricted delivery, return receipt requested, postage prepaid, to each owner as defined by this act.

72 P.S. §5860.602(e)(1) (emphasis added). Owner is defined as

the person in whose name the property is last registered, if registered according to law, or, if not registered according to law, the person whose

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