Opinion
No. 2613 C.D. 2010
04-20-2012
The City of Philadelphia v. Phil Ellena Holdings, LP and Matag, Inc. Appeal of: Phil Ellena Holdings, LP
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE BROBSON
Appellant, Phil Ellena Holdings, LP (Phil Ellena) appeals from an order of the Court of Common Pleas of Philadelphia County (trial court), dated August 19, 2010, denying its petition to set aside a tax sale of real property. The City of Philadelphia (City) conducted the tax sale pursuant to what is commonly referred to as the Municipal Claims and Tax Liens Act, Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §§ 7101-7505 (the MCTLA). For the reasons set forth below, we affirm.
Phil Ellena initially filed its appeal with Superior Court of Pennsylvania. However, because this case involves the MCTLA and involves the City of Philadelphia as a party, the case was transferred to this Court. See Pa. R.A.P. 751; 42 Pa. C.S. § 762(a)(4).
The underlying dispute involves Phil Ellena's failure to pay real estate taxes in year 2007 for property located at 102-110 E. Phil Ellena Street, Philadelphia, Pennsylvania (the Property). (Reproduced Record (R.R.) at 18a.) Phil Ellena purchased the property in question in 2005 from the Church of God and Prophesy, Philadelphia, Pennsylvania for $125,000.00. (R.R. at 115a.) The grantee's address on both the tax information certificate as well as the deed reads as follows: 102-110 E. Phil Ellena Street, Philadelphia, Pennsylvania, 19119. (Id. at 18a, 41a.)
In March of 2008, the City filed a claim against Phil Ellena pursuant to the MCTLA for unpaid city and school taxes totaling $5,148.67. (Id. at 12a.) On July 6, 2009, the trial court granted the City's petition and issued a rule to show cause why a decree should not be entered permitting the sale of the Property. (Id. at 23a.) The City posted the petition and rule to show cause on the Property on November 5, 2009. (Id. at 24a.) The City also mailed, by first class and certified mail, the petition and rule to show cause to: Phil Ellena Holdings, LP, Jerry Fulton, Marvin T. Scottin and Joseph Thompson. (Id. at 25a.) The petition and rule to show cause were mailed to the above-named parties at the Property address. (Id.) After receiving no response, the trial court issued a decree on November 30, 2009, ordering the sale of the Property on December 16, 2009. (Id. at 26a, 27a.) Y.N.L.M.E., Inc. successfully bid $87,500.00 at the December 16, 2009 tax sale and assigned its bid to Matag, Inc. Phil Ellena motioned to set aside the tax sale based on insufficient notice and a grossly inadequate sale price.
The City also served the above-listed individuals with a copy of the decree of sale and further filed an affidavit of service of decree with the trial court. (R.R. at 26a.)
Matag, Inc. intervened in this matter subsequent to Phil Ellena's motion to set aside. Matag, Inc. filed a motion to quash the appeal with this Court. Matag, Inc. subsequently motioned to withdraw a portion of its motion to quash and requested that Phil Ellena post a bond as supersedeas, pursuant to Pa. R.A.P. 1731-1735. Senior Judge Friedman denied Matag Inc.'s application, concluding that Phil Ellena was not required to post a bond.
The trial court held a hearing on the motion to set aside on August 5, 2010. At the hearing, Phil Ellena alleged that it never received notice that taxes were owed on the Property. (Id. at 116a.) Phil Ellena conceded that the only address listed on both the tax information certificate and the deed is the Property address. (Id.) Phil Ellena's witness and partner, Mr. Charles Lomax, had no recollection of filing an amended address registration with the City or any other taxing authority. (Id. at 117a.) However, Mr. Lomax testified that the City should have made additional efforts to locate its primary address, such as communicating with other City departments. (Id. at 117a, 120a.) The City, however, maintained that the sale was valid because it fulfilled the statutory notice requirements under the MCTLA.
The trial court's order, dated August 19, 2010, denied Phil Ellena's motion to set aside the tax sale. The trial court reasoned that, based on the City's compliance with the notice requirements set out in Section 39.2 of the MCTLA and Phil Ellena's failure to register an accurate address with the City, sufficient notice was received prior to the sale of the Property. (Trial court's opinion and order at p. 4, attached to Appellant's Brief as Exhibit B.) With respect to the sale price of the Property, the trial court concluded that Phil Ellena failed to overcome the presumption that the sale price was the highest and best attainable. (Id.) See S&T Bank by Dalessio v. Dalessio, 632 A.2d 566 (Pa. Super. 1993), appeal denied sub nom. Savings & Trust Co. of Pa. v. Dalessio, 538 Pa. 614, 645 A.2d 1318 (1994); Blue Ball Nat'l Bank v. Balmer, 810 A.2d 164 (Pa. Super. 2002), appeal denied, 573 Pa. 662, 820 A.2d 702 (2003). Specifically, the trial court noted that, beyond Mr. Lomax's testimony, Phil Ellena failed to present any evidence of an inadequate sale price. (Trial court's opinion and order at p. 4, attached to Appellant's Brief as Exhibit B.)
On appeal, Phil Ellena contends that the trial court abused its discretion or erred as a matter of law in denying Phil Ellena's petition to set aside the tax sale of the Property because (1) the City failed to comply with the notice provisions of the MCTLA, and (2) the consideration received for the Property was grossly inadequate. We will, therefore, address Phil Ellena's arguments in that order.
"This Court's review in tax sale cases is limited to a determination of whether the trial court abused its discretion, erred as a matter of law or rendered a decision with lack of supporting evidence." Wiles v. Washington Cnty. Tax Claim Bureau, 972 A.2d 24, 28 n.2 (Pa. Cmwlth. 2009).
We note that Phil Ellena presents an array of other claims in its brief. Phil Ellena claims that the City violated its procedural due process rights under the United States Constitution and the Pennsylvania Constitution. Phil Ellena further contends that its substantive due process rights were violated, along with its Fourth Amendment protection against illegal search and seizure. Finally, Phil Ellena argues that equitable grounds exist to set aside the tax sale. Having failed to raise any of these arguments to the trial court, however, these additional arguments are waived. Pa. R.A.P. 302; In Re F.C. III, 607 Pa. 45, 64, 2 A.3d 1201, 1212 (2010).
I. NOTICE UNDER THE MCTLA
Section 39.1 of the MCTLA, 53 P.S. § 7193.1, requires an owner of real property in a first class city having a lien, claim, or interest to "register a notice of interest with the department of the city of the first class responsible for collection of tax and municipal claims stating his name, residence and mailing address and a description of the real property in which the person has an interest." Further, interested parties must file an amended registration as needed. 53 P.S. § 7193.1. Regarding notice, Section 39.2(a) of the MCTLA, 53 P.S. § 7193.2(a), requires taxing authorities to provide notice to property owners in the following manner:
Act of May 16, 1923, P.L. 207, added by the Act of December 14, 1992, P.L. 850, as amended, 53 P.S. § 7193.1.
Act of May 16, 1923, P.L. 207, added by the Act of December 14, 1992, P.L. 859, as amended, 53 P.S. § 7193.2.
(1) By posting a true and correct copy of the petition and rule on the most public part of the property;53 P.S. § 7193.2(a).
(2) By mailing first class mail to the address registered by any interested party pursuant to section 39.1 of this act a true and correct copy of the petition and rule; and
(3) By reviewing a title search, title insurance policy or tax information certificate that identifies interested parties of record who have not registered their addresses pursuant to section 39.1 of this act, the city shall mail by first class mail and either by certified mail, return receipt requested, or by registered mail to such addresses as appear on the respective records relating to the premises a true and correct copy of the petition and rule.
Notice is accomplished on the date of mailing. 53 P.S. § 7193.2(a). Section 39.2(b) of the MCTLA, 53 P.S. § 7193.2(b), clearly provides that notice that complies with Section 39.2(a) is considered sufficient notice prior to a tax sale: "Notwithstanding any other requirement set forth in this act or any other law to the contrary, the notice required by subsection (a) of this section shall constitute the only notice required before a court may enter a decree ordering a tax sale." (Emphasis added.) In order to determine whether a property owner received sufficient notice prior to a tax sale, we must only analyze whether the taxing authority complied with the statute used to pursue its claim. See Pacella v. Washington Cnty. Tax Claim Bureau, 10 A.3d 422, 430 (Pa. Cmwlth. 2010).
Section 39.2 of the MCTLA sets forth a specific timeline the City must follow, such that the trial court may ensure that the property was posted in the appropriate manner and that all notices were sent to the proper parties, including notice of the decree directing that a tax sale will occur at a specified time, place, and date. City of Philadelphia v. Schaffer, 974 A.2d 509, 512 (Pa. Cmwlth. 2009).
We initially note that the property owner bears the burden of providing the taxing authority with a proper address to receive notice. 53 P.S. § 7193.1. Here, it is undisputed that Phil Ellena did not accurately register a new address with the City, which is mandated by Section 39.1 of the MCTLA. It is further undisputed that the Property's address is the only address listed on the deed and tax certification information. Phil Ellena failed to provide any explanation for this oversight, despite its experience in the real estate business. Nevertheless, the City must comply with Section 39.2(a) of the MCTLA prior to the trial court issuing a decree of sale.
A review of the record indicates that the City complied with the notice provisions set out in Section 39.2(a) of the MCTLA. Pursuant to Section 39.2(a)(1), the City is required to post the petition and the rule to the most public part of the Property. 53 P.S. § 7193.2(a)(1). Here, the sheriff posted the documents to the property on November 5, 2009. (R.R. at 24a.) Pursuant to Section 39.2(a)(2), the City must also serve the petition and rule by first class mail to any interested party at the registered address. 53 P.S. § 7193.2(a)(2). Because Phil Ellena never registered an address by filing a notice of interest pursuant to Section 39.1, this subsection is inapplicable. Finally, under Section 39.2(a)(3), the City must identify any interested parties by reviewing a title search, tax insurance policy, or tax information certificate. 53 P.S. § 7193.2(a)(3). Here, upon the City's review, the tax information certificate identified Phil Ellena as the owner of record and listed the Property address as the "grantee's address." (R.R. at 18a.) In accordance with the statute, the City notified Phil Ellena using the address provided in the tax information certificate. See 53 P.S. § 7193.2(a)(3). This is evidenced by the affidavit of service of the petition and rule. (R.R. at 25a.) Moreover, the City filed an affidavit of service of the decree of sale in accordance with Section 39.2. (Id. at 26a.) Therefore, the record evidence is sufficient to prove that the City fulfilled its statutory notice obligations prior to the tax sale. The City notified Phil Ellena using the address Phil Ellena itself provided. Moreover, contrary to Phil Ellena's position, the City has no obligation to make additional efforts to locate a property owner at an alternative location. See 53 P.S. § 7193.2.
To the extent Phil Ellena argues that notice was improper because the City failed to present evidence of the posting and, further, that the posting was inadequate, such arguments are meritless. The record reveals that the sheriff posted the premises on November 5, 2009, pursuant to Section 39.2(a)(1). (R.R. at 24a.) Any other argument Phil Ellena posits related to inadequate notice is waived, as Phil Ellena failed to preserve those issues for this appeal. See Pa. R.A.P. 302; In Re F.C. III, 607 Pa. at 64, 2 A.3d at 1212.
Because the City complied with the notice provisions of Section 39.2(a) of the MCTLA, Phil Ellena received proper notice prior to the tax sale.
II. ADEQUACY OF SALE PRICE
Where a sale is challenged based upon the adequacy of the price, our courts have frequently held that mere inadequacy of price, standing alone, is not a sufficient basis for setting aside a sheriff's sale. Allegheny Cnty. v. Golf Resort, Inc. 974 A.2d 1242, 1247 (Pa. Cmwlth. 2009) (citing Provident Nat'l Bank, N.A. v. Song, 832 A.2d 1077, 1081 (Pa. Super. 2003)). However, where a gross inadequacy exists, courts have found proper grounds to set aside a sheriff's sale, and each case is determined on its own facts. Golf Resort, Inc., 974 A.2d at 1247. The presumption exists that the price received at a public sale is the highest and best available. Plummer v. Wilson, 322 Pa. 118, 124, 185 A. 311, 314 (1936); Blue Ball Nat'l Bank, 810 A.2d at 167.
We note that, in cases involving grossly inadequate sale prices, the courts have typically examined sheriff's sales as opposed to tax sales. We believe, however, that the same principles are applicable to the case at hand.
Here, there is no evidence in the record that the sale price of the Property is grossly inadequate. Phil Ellena purchased the property in 2005 for $125,000.00. (R.R. at 115a.) Phil Ellena claimed that it had invested approximately $310,000.00 into the Property, which it planned to develop for lucre, but Phil Ellena provided no evidence to substantiate that claim. (Id. at 116a.) It is undisputed that Y.N.L.M.E., Inc. was one of fifteen (15) bidders at the December 16, 2009 tax sale. (Id. at 120a.) Presumably, $87,500.00 was the highest and best available price, and Phil Ellena failed to present evidence to the contrary. Therefore, the trial court did not err in denying Phil Ellena's petition to set aside the tax sale based on the sale price of the Property.
Because the City complied with the notice requirements under the MCTLA and Phil Ellena failed to present evidence of an inadequate sale price, the trial court did not err in denying Phil Ellena's petition to set aside.
Accordingly, we affirm the order of the trial court.
/s/_________
P. KEVIN BROBSON, Judge
ORDER
AND NOW, this 20th day of April, 2012, the order of the Court of Common Pleas of Philadelphia County is hereby AFFIRMED.
/s/_________
P. KEVIN BROBSON, Judge