IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Harold Myers and Vera : Myers, h/w : No. 2232 C.D. 2014 : Submitted: July 24, 2015

v. :

: RB & AK Properties, Inc. :

:

: Appeal of: Jacob Singer and : Albert Martin :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE P. KEVIN BROBSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY SENIOR JUDGE FRIEDMAN FILED: October 7, 2015

Jacob Singer and Albert Martin (Appell ant s) appeal from the November

10, 2014, order of the Montgomery County C ourt of Common Pleas (trial court)

den ying Appell ant s ’ emergency petition to intervene in a mortgage foreclosure

action. We affirm

.

Harold and Vera Myers, husband and wife

, provided a mortgage to RB

& AK Properties, Inc. ( RB ) on property located at 2728 Mt. Carmel Avenue,

Glenside, being Parcel No. 30

- 00

- 37900

- 005 (Property)

. The Myers es recorded the

mortgage on October 25, 2005, in the Office of the Recorder of Deeds for

M ontgomery County in Record Book 1162, page 1325. However, the mortgage was2

i ncorrect ly indexed under the wrong parcel n umbers, 30

- 00

- 45352

- 005 and 30

- 00

-

45351

- 204.

RB defaulted on the mortgage. O n April 2, 2013, the Myers es filed

, and

the prothonotary duly indexed

, a complaint in mortgage foreclosure against RB

regarding the Property.

Because RB failed to pay taxes on the Property, an upset tax sale was

held o n September 12, 2013

. Appellants purchased the Property at the upset tax sale

for $51,385. 1 Prior to their purchase, Appellants conducted a search of the Property

,
which failed to reveal a mortgage on the Property. On October 23, 2013, the trial

court entered a default judgment in favor of the Myers es in the mortgage for eclosure

action

. On January 17, 2014, Appellants recorded their deed to the Property.

The Myers es sought to sell the Property at a s heriff’s sale and discovered

that Appellants had purchased the Property at an upset tax sale. On April 29, 2014,

the M yers es notified Appellants of a pending s heriff’s sale, scheduled for June 25,

2014.

The sheriff’s sale was continued while Appellants and the Myers es
negotiate d a settlement . The negotiations failed and , on October 7, 2014, Appellants

filed an emergency petition to intervene in the foreclosure action.

1 A purchaser at an upset tax sale takes the property subject to all existing mortgages, liens

and encumbrances. See s ection 609 of the Real Estate Tax Sale Law, Act of July 7, 1947, P.L. 1368, as amended , 72 P.S. §5860.609.3

A hearing was held before the trial court on October 15, 2014. 2

Appellants argued that they did not have constructive notice of the mortgage pursuant

to section 3 of t he Act of April 24, 1931 (Act)

, 3 because the Myers es ’ mortgage was

2 We note that Appellants testified that they did a search of the property. However, the

record does not contain a detailed title search or testimo ny regarding what Appellants ’ search

included. Appellants attached only three pages to their ans wer to the Myers es ’ c omplaint (Answer).

In the ir Answer, Appellants explained what was included in the attachments :

Prior to purchasing the property, [Appellants] searched the records of Montgomery County to assess whether any mortgages existed against the [P] roperty, then owned by [ RB ] . The search revealed the following:

A. All mortgages recorded against [Property] are shown i [n] Exhibit 1

attached hereto. As shown thereon, there were no outstanding mortgages against [Property] . Mortgage 11627

- [0] 1325, which [ the Myers es ] claim covers the said parcel number, is not listed. B. All mortgages recorded against [ RB ] are shown in Figure 2. The
mortgage at issue, 11627

- 01325 is not listed. Thus, [Appellants] concluded that there were no mortgages outstanding against the [P] roperty and successfully bid the upset price for the [P] roperty. . . .
C. For this response to the Complaint which identifies the m ortgage in question, [Appellants] have now searched for mortgage 11627

- 01325. The result is shown as Figure 3. It is obvious why [Appellants] did not find this mortgage during their mortgage search prior to purchasing the [P] roperty: the mortgage covers parcels 30

- 00

- 453

- 20

- 4 and 30

- 00

- 45353

- 00

- 5. It does not cover the parcel owned by [Appellants]

. . . as alleged by [the] Myers [es] . Obviously, if the mortgage was to cover this parcel, it was not correctly indexed, and was not constructive notice to [A ppellants] when they purchased the [P] roperty at the tax sale.

(Answer, 10/7/14, ¶ 11, at 1

- 2.)

3 P.L. 48, added by Section 1 of the Act of July 7, 2006, P.L. 596, as amended , 21 P.S. §358. Section 3 of the Act provides:

In order for a document presen ted for record to the office of a recorder of deeds of a county to be constructive notice for the purpose of this act or the act of May 12, 1925 (P.L. 613, No. 327), entitled (Footnote continued on next page...)4

improperly indexed

. On November 10, 2014, the trial court dismissed the petition to

intervene “based upon the holding in Financial Freedom, SFC v. Cooper , 21 A.3d

1229 (Pa. Super [

. ] 2011). ” (Trial Ct. Order , 11/10/14, at 1.) In its opinion, the trial

court concluded that Appellants had constructive notice of the mortgage foreclosure

action, which was filed before Appellants purchased the Property.

On November 18, 2014, Appellants filed a request for reconsideration of

the trial court order . On November 19, 2014, the Myers es assigned th e judgment in

mortgage foreclosure to US Asset Funding, L.P. (USAF)

. 4 The trial court denied

(continued...)

“An act regulating the recording of certain deeds, conveyances, and other instruments of writing, and fixing the effect thereof as to subsequent purchasers, mortgagees, a nd judgment creditors,” or otherwise, the document shall be recorded, and one of the following

conditions shall be satisfied:

(1) In counties where the act of January 15, 1988 (P.L. 1, No. 1), known as the “Uniform Parcel Identifier Law,” applies, the

u niform parcel identifier is endorsed or included on the document, and it is indexed properly in an index arranged by uniform parcel identifiers

.

(2) The document is indexed properly as to the party in all alphabetical indices . . . . For purposes of th is section, the term “document” means a document that is eligible to be recorded in the office of the recorder of deeds, including, but not limited to deeds, mortgages . . . and includes documents presented for record in person, by mail, electronically or in any other manner.

21 P.S. §358 (emphas e s added).

4 Thus, USAF now stands before us in the shoes of the Myers es

.5

Appellants ’ request for reconsideration by order dated December 5, 2014. On

December 8, 2014, Appellants appealed to this court. 5
, 6

Initially before this court is USAF’s motion to dismiss Appellants ’

appeal as moot

. USAF contends that because the Property was sold at a sheriff’s sale

and the deed was dul y recorded

, the Myer s es no longer own the Property and

, therefore, no effect can be given to an order ruling in favor of Appellants. Th us ,
USAF contends that the issue is moot and this appeal must be dismissed. We

disagree.

In Commonwealth ex rel. St ein v. Stein , 406 A.2d 1381, 1385 (Pa. 1979),

the Supreme Court determined that “[t]he survival of [a] petitioner’s direct pecuniary

interest in the disposition of [a] case, despite the sale of the domicile at mortgage

foreclosure, precludes a determinatio n of mootness.” Here, Appellants had a

pecuniary interest in the Property via their purchase of the Property at the upset tax

sale. Thus, regardless of the sale of the Property after the mortgage foreclosure

, Appellants ’ issue is not moot

. Id. Therefore, we deny USAF’s motion to dismiss.

Appellants initially contend that the trial court erred in holding that

Appellant s cannot intervene in this case wherein a final order has been issued

, and

5 On December 10, 2014, the Property was sold at a sheriff’s sale to Beth Stern Fleming, attorney on writ, for $3,385.83. On January 9, 2015, the sheriff’s deed was recorded in the Montgomery County recorder of deeds office.

6 Our review of the trial cou rt’s denial of a petition to intervene is limited to determining

whether it abused its discretion or committed an error of law. Realen Valley Forge Greenes Associates v. Upper Merion Township Z oning Hearing Board , 941 A.2d 739, 743 n.6 (Pa. Cmwlth. 2008).6

Appellant s did not have actual or constructive not ice of a mortgage or of any pending

mortgage foreclosure litigation.

Pursuant to Pa. R.C.P. No. 2327

, a party may petition to intervene in an

action “[a]t any time during the pendency of an action.” (Emphasis added.) The

Superior Court in Financial Fre edom determined that a petition to intervene in an

action is not permitted “after default judgment was entered in favor of [a] ppellee” and

the matter was finally resolved. 21 A.3d at 1231. The Superior Court further

determined that the a ppellant in Finan cial Freedom was not an indispensable party

because the mortgage foreclosure proceeding was commenced before the a ppellant

purchased the property at a tax sale. Id. at 1231

- 32. Therefore, the a ppell ant was not

required to be join ed as a party. Id.

Here, the Myer s es filed the mortgage foreclosure action on April 2,

2013, before A ppellant s purchas ed the P roperty on September 12, 2013

. Further, the

matter was finally resolved on October 23, 2013, when a default judgment was

entered in the Myer s es ’ favor. Th us , because the mortgage foreclosure action was

filed prior to Appellants’ purchase, the Myers es were not required to notify or join

Appellants as a party in its mortgage foreclosure action

. See id.

Next , Appellants allege that because the Myer s es failed to properly

index the mortgage by parcel number

, Appellants did not have constructive notice of

the mortgage prior to purchase. Proper indexing is required to impose constructive

notice of the mortgage on Appellants. See 21 P.S. §358

. However , Appellants failed7

to argue or present any testimony or evidence before the trial court that the mortgage

foreclosure action w as improperly indexed.

In Financial Freedom , it was the mortgage foreclosure action, not the

mortgage itself

, that dictated the notice. Here, absent any testimony or evidence

regarding the filing and indexing of the mortgage foreclosure action , it is impossible

for the trial court or this court to determine whether the mortgage foreclosure action

was improperly index ed

.

Further, section 3 of the Act requires that the document be properly

indexed by “parcel identifier” or by “party.” Here, Appellant s fail ed to allege that the

mortgage was not properly indexed by party. Thus, Appellant s are deemed to have

had cons tructive notice of the mortgage, as well as the mortgage foreclosure action.

The trial court did not err in so finding.

Next, Appellants contend that the trial court erred in first stating the

reasons for denying Appellants’ petition to interve ne in its Pa. R.A.P. 1925 (a)

opinion. We disagree.

The trial court filed its order on November 10, 2014, dismissing the

petition to intervene based on Financial Freedom . On November 18, 2014,

Appellants requested reconsideration, which the trial court denied by order dated

December 5, 2014. On December 8, 2014, Appellants appealed to this court.

Thereafter, on December 23, 2014, Appellants filed their statement of errors8

complained of on appeal, and, on February 11, 2015, the trial court filed its Pa.

R.A.P. 1925 (a) opinion.

Pursuant to Pa. R.A.P. 1925 (a)(1)

, “upon receipt of the notice of appeal,

the judge who entered the order giving rise to the notice of appeal . . . shall forthwith

file of record at least a brief opinion of the reasons for the order .” That is exactly

what the trial court did in this case.

Accordingly, we affirm.

___________________________________ ROCHELLE S. FRIEDMAN, Senior Judge

Judge Brobson dissents.IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Harold Myers and Vera : Myers, h/w : No. 2232 C.D. 2014

:

v. :

: RB & AK Properties, Inc. :

:

: Appeal of: Jacob Singer and : Albert Martin :

O R D E R

AND NOW, this 7 th day of October , 201 5

, we hereby deny the motion to

dismiss filed by US Asset Funding, L.P. and affirm the November 10, 2014, order of

the Montgomery County Court of Common Pleas.

___________________________________ ROCHELLE S. FRIEDMAN, Senior Judge