IN THE COMMONWEALTH COURT OF PENNSYLVANIA

City of Philadelphia :

: No. 862 C.D. 2017

v. :

: Argued: March 6, 2018

Thuy Phan and :

DMB Investments, LLC :

:

Appeal of: DMB Investments, LLC :

BEFORE: HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE ELLEN CEISLER, Judge

HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION 

BY JUDGE McCULLOUGH FILED: April 2, 2018

DMB Investments, LLC (DMB) appeals from the May 30, 2017 order of 

the Court of Common Pleas of Philadelphia County (trial court) allowing Thuy Phan 

(Phan) to redeem property located at 5311 North 5th Street, Philadelphia, Pennsylvania

(the Property), upon payment of a redemption price of $46,637.50, denying DMB’s 

request for reimbursement for repairs made to the Property in the amount of 

$35,210.00, and forever barring DMB from asserting any right, title, lien, or interest in 

the Property.

Facts and Procedural History

This matter returns to this Court following our previous order dated 

October 24, 2016, which affirmed the trial court’s grant of Phan’s petition for 
2

redemption and award to DMB of reimbursement of its bid amount of $46,000.00 plus 

10% interest, but reversed the trial court’s order denying DMB reimbursement for other 

necessary expenses paid by DMB to repair the Property. See City of Philadelphia v. 

Thuy Phan, 148 A.3d 962 (Pa. Cmwlth. 2016). We remanded the matter to the trial 

court with the direction to award DMB additional costs in the amount of $2,763.60 plus 

interest,1and to allow DMB to present evidence of the necessary and reasonable 

amount of the aforementioned repairs.

The underlying facts of this case are set forth in our previous opinion and 

we will briefly summarize them here. In a tax claim filed February 25, 2013, the City 

of Philadelphia (City) requested a free and clear sale of the Property, seeking recovery 

of delinquent real estate taxes in the amount of $7,650.33 for tax years 2010 and 2011. 

On March 4, 2014, the trial court granted the City’s tax claim and ordered a sheriff’s 

sale of the Property. At the May 21, 2014 sheriff’s sale, the Property was sold to DMB 

for its bid amount of $46,000.00. The sheriff’s deed was acknowledged on June 10, 

2014, and recorded on August 15, 2014. 

On October 9, 2014, Phan filed a petition to set aside the tax sale and, 

alternatively, requested the relief of redemption,2averring that the Property was 

continuously occupied for at least three months prior to the sale. By order dated 

 

1 These costs included payments made by DMB in the amounts of $2,063.00 for 2015 real 

estate taxes, $400.00 for a new stove, and a refuse collection fee of $300.00.

2 Section 32(a) of what is commonly known as the Municipal Claims and Tax Liens Act (Tax 

Liens Act), Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §7293(a), permits an owner to redeem 

property sold under a tax or municipal claim upon payment of the bid amount and other costs 

associated with the purchase of the property by a third party. This section will be discussed in further 

detail below. 
3

February 2, 2015, the trial court denied the petition to set aside and issued a rule to 

show cause why redemption should not be granted. 

DMB denied the averments of Phan’s petition and raised the following 

relevant new matter: (1) the Property was rented as a barber shop on the first floor and 

as a housing unit on the second floor; (2) the Property is zoned and utilized as a 

commercial mixed use, and commercial properties could not be redeemed under the 

Tax Liens Act; (3) Phan did not have the requisite rental licenses for the Property and 

was precluded from the relief of redemption due to the equitable doctrine of unclean 

hands; and (4) should Phan be permitted to redeem, DMB was entitled to 

reimbursement in the amount of $92,348.26, which included the purchase price of 

$46,000.00, repair and maintenance costs of $37,952.96, and $8,395.30 in interest.

The trial court conducted a hearing on March 17, 2015. The trial court 

first held argument on whether the Property was subject to redemption. It was 

undisputed that the Property was zoned for commercial mixed use and was comprised 

of a single building, in which a commercial tenant occupied the first floor, and a 

residential housing unit (apartment) was located on the second floor. Notably, the 

parties stipulated the apartment was occupied by tenants during the requisite statutory 

time period.3 Based upon this stipulation, the trial court granted Phan’s petition for 

redemption, and proceeded to conduct a hearing limited to the amount of costs to be 

reimbursed pursuant to section (a) of the redemption statute. 

Following testimony from Phan and Dan Achen, who essentially owned 

DMB and Caledonia Builders (CB), the latter company being contracted to perform the 

 

3 Section 32(c) of the Tax Liens Act prohibits redemption of vacant property, which it defines 

as property that was not “continuously occupied by the same individual or basic family unit as a 

residence for at least ninety days prior to the date of the sale and continues to be so occupied on the 

date of the acknowledgment of the sheriff’s deed therefor.” 53 P.S. §7293(c).
4

repairs at the Property, the trial court issued an order dated April 16, 2015, granting

Phan’s petition for redemption but limiting DMB’s reimbursement to the sum of 

$49,833.00, which represented DMB’s bid amount of $46,000.00 plus 10% interest. 

The trial court denied DMB’s request for reimbursement of additional repair costs in 

the amount of $37,952.96, concluding that DMB failed to submit evidence of costs 

actually paid. However, as noted above, by order dated October 24, 2016, this Court 

reversed the trial court’s order to the extent that it denied DMB these additional costs 

and remanded to allow DMB to present evidence of the necessary and reasonable 

amount of the same. City of Philadelphia v. Thuy Phan.

Consistent with our remand, the trial court issued an order dated February 

1, 2017, directing Phan to reimburse DMB costs in the amount of $2,763.60, plus 

interest, and directed that an evidentiary hearing be held on April 4, 2017, to allow 

DMB to present evidence of the necessary and reasonable amounts actually paid for 

repairs to the Property. At this hearing, DMB sought reimbursement for the costs of 

repairs in the amount of $35,210.00. In support of this request, DMB again presented 

the testimony of Achen, during which several exhibits were shown and discussed that 

purportedly identified the expenses paid for repairs at the Property. Achen first 

confirmed a check was issued in the amount of $400.00 for replacement of a stove at 

the Property. (Notes of Testimony (N.T.), April 4, 2017, at 9.) Achen next identified 

an August 18, 2014 estimate submitted by CB for various repairs to the Property, 

including, inter alia, a partial new roof, installation of a new sump pump in the 

basement, and repair/replacement of doors and locks, as well as a corresponding check

issued to CB by DMB dated November 8, 2016, in the amount of $15,540.00. Id. at 

10-12. 
5

Achen also identified an October 20, 2014 estimate for significant repairs 

to the apartment at the Property, as well as a corresponding check issued to CB by 

DMB dated November 8, 2016, in the amount of $14,940.00. Id. at 13-14. Achen 

further identified a September 15, 2014 invoice for replacement of a sewer pipe at the 

Property, as well as a corresponding check issued to CB by DMB dated November 8, 

2016, in the amount of $4,730.00. Id. at 14-15. Achen testified that all of the repairs 

were necessary to maintain the structure and provide a safe environment for tenants. 

Id. at 15. Achen also presented photographs which he alleged showed the condition of 

the Property both before and after the repairs. Counsel for Phan thereafter objected to 

DMB’s attempt to move these exhibits into the record, noting that at most they 

represented letters/invoices from Achen to himself since he essentially owned both CB 

and DMB and they were not purchase orders, receipts, or proof of payments to laborers. 

Id. at 17-18. The trial court overruled the objection but noted that Phan could certainly 

cross-examine Achen as to each of these exhibits.

On cross-examination, Achen admitted that the $400.00 check for the 

stove was a check he wrote to reimburse himself for the purchase. Id. at 19. Achen 

disagreed that he did not have any proof of payments being made for the repairs at the 

Property, stating that the photographs established that the work was completed. Id. at 

20. Achen acknowledged that both CB and DMB were his companies. Id. at 22. Achen 

also acknowledged that while the estimates laid out a specific payment scheme, i.e., 

25% paid upfront, 50% paid at a specific stage of work completion, such as completion 

of the roof, and the remaining 25% paid upon completion of the project, said scheme 

was not followed in this case. Id. at 22-24. Upon questioning by the trial court, Achen 

conceded that this payment scheme was not followed, that he just needed to put 
6

something “on paper,” and that he would essentially pay himself when the money 

became available. Id. at 24. 

With respect to the replacement of the sewer pipe, Achen admitted that 

the work was completed as of September 15, 2014, but the bill was not paid until later. 

Id. at 26-27. In fact, Achen did not dispute that the checks for these letters/invoices

were all dated November 8, 2016. Id. at 29-30. However, Achen further stated that all 

of the bills remained unpaid as of the date of the hearing as he was waiting for DMB 

to accumulate sufficient funds to pay CB. Id. at 30. Finally, Achen acknowledged that 

a tenant occupied the second floor apartment on the Property at the time DMB became 

owner, for which he received a monthly rental payment of $600.00 until the tenant 

vacated on his own a short time later. Id. at 35-36, 38. Achen stated that he also 

collected a monthly rent of approximately $1,150.00 for a year of occupancy of the 

first floor of the Property. Id. at 38-40. 

On re-direct examination, Achen clarified that he received rent for one 

year from a hair salon that operated on the first floor of the Property in the monthly 

amount of $1,050.00. Id. at 45. Achen testified that the first floor was reoccupied for 

a period of six months by another tenant, also a beauty salon, for which he received a 

monthly rent of $1,000.00. Id. at 46. 

Ultimately, by order dated May 30, 2017, the trial court declared the 

Property to be redeemed by Phan and directed that a deed be prepared transferring the 

Property from DMB to Phan upon her payment of the redemption price in the amount 

of $46,637.50. The trial court calculated this redemption price by including the bid 

amount of $46,000.00, plus 10% interest over a period of 34 months, for a total of 

$59,022.00, and actually-paid reasonable and necessary expenses proven by the 

evidence of $6,365.50 (representing DMB’s payments for the stove, real estate taxes, 
7

and refuse collection fees, plus interest), for a total of $65,387.50. From this amount, 

the trial court deducted $15,750.00 (representing rental payments of 15 months at 

$1,050.00 per month and for an indicated time period of June 2014 through September 

2015), and an additional $3,000.00 (representing rental payments of $600.00 per month 

for 5 months), totaling $18,750.00. After deducting these rental payments from the 

established redemption price of $65,387.50, the trial court arrived at the final 

redemption price of $46,637.50. 

DMB thereafter filed a notice of appeal with the trial court. By order dated 

June 22, 2017, the trial court directed DMB to file a concise statement of errors 

complained of on appeal in accordance with Pa.R.A.P. 1925(b). DMB complied and 

filed its concise statement on July 10, 2017, alleging that the trial court erred and/or 

abused its discretion in failing to find that it was entitled to reimbursement of 

$35,210.00 in maintenance/repair costs that it actually paid during its possession of the 

Property and in failing to find that such costs were reasonable and necessary.

The trial court subsequently issued an opinion in support of its order in 

accordance with Pa.R.A.P. 1925(a). In this opinion, the trial court first noted that, in 

the case of redemption, section 32(a) of the Tax Liens Act only requires reimbursement 

of “other charges and necessary expenses of the property, actually paid.” 53 P.S. 

§7293(a). Citing our Superior Court’s decision in City of Philadelphia v. Watkins, 494 

A.2d 1135 (Pa. Super. 1985), the trial court noted that there is a distinction between 

necessary expenses, which are reimbursable as part of a property owner’s right of 

redemption, and improvements, which are not. In the latter case, a purchaser that buys 

a property with knowledge of the right of redemption takes “the risk of not being able 

to demand of the redemptor such expenditures as were not necessary to keep [the 
8

property] in the condition in which it was bought.” Id. at 1138 (citing Philadelphia v. 

Rutherford, 62 A.2d 122, 122-23 (Pa. Super. 1948)). 

The trial court explained that, in this case, DMB “provided no evidence 

that the costs of repair were actually paid.” (Trial court op. at 7.) The trial court stated 

that the only evidence provided by DMB evidencing expenses actually paid were 

checks from DMB to CB for $15,540.00, $14,940.00, and $4,730.00, respectively. 

However, the trial court noted Achen’s testimony that both DMB and CB were his 

companies, thereby making Achen both the contractor and the client; that the checks 

were issued on November 8, 2016, two years after the work was completed and only 

two weeks after the parties received our prior decision remanding this matter; and that 

Achen admitted that DMB had not yet paid CB. Additionally, the trial court noted that 

DMB had not provided any receipts or documentation relating to the repairs made at 

the Property. Further, the trial court specifically rejected Achen’s testimony as not 

credible. 

Discussion

On appeal to this Court,

4 DMB reiterates its argument that the trial court 

abused its discretion in failing to find that it was entitled to reimbursement of 

$35,210.00 in reasonable and necessary repair costs that it actually paid during its 

possession of the Property. We disagree. 

Section 32(a) of the Tax Liens Act provides, in pertinent part, as follows:

 

4

In tax sale cases, our scope of review is limited to determining whether the trial court “abused 

its discretion, rendered a decision which lacked supporting evidence or clearly erred as a matter of 

law.” City of Allentown v. Kauth, 874 A.2d 164, 165 n.4 (Pa. Cmwlth. 2005), appeal denied, 912 

A.2d 839 (Pa. 2006). “An abuse of discretion occurs when the course pursued represented not merely 

an error of judgment, but where the judgment is manifestly unreasonable or where the law is not 

applied or where the record shows that the action is a result of partiality, prejudice, bias or ill will.” 

Ligonier Township v. Nied, 161 A.3d 1039, 1045 n.4 (Pa. Cmwlth. 2017) (citations omitted). 
9

The owner of any property sold under a tax or municipal 

claim, or his assignees, or any party whose lien or estate has 

been discharged thereby, may, except as provided in 

subsection (c) of this section, redeem the same at any time 

within nine months from the date of the acknowledgment of 

the sheriff’s deed therefor, upon payment of the amount bid 

at such sale; the cost of drawing, acknowledging, and 

recording the sheriff’s deed; the amount of all taxes and 

municipal claims, whether [sic] not entered as liens, if 

actually paid; the principal and interest of estates and 

encumbrances, not discharged by the sale and actually paid; 

the insurance upon the property, and other charges and 

necessary expenses of the property, actually paid, less 

rents or other income therefrom, and a sum equal to interest 

at the rate of ten per centum per annum thereon, from the 

time of each of such payments.

53 P.S. §7293(a) (emphasis added). We have previously noted that this redemption 

statute “is to be liberally construed so as to effect its object and to promote justice.” 

City of Philadelphia v. F.A. Realty Investors Corp., 95 A.3d 377, 384 (Pa. Cmwlth. 

2014) (citation omitted).

As did the trial court, DMB also cites to City of Philadelphia v. Watkins

for support. DMB relies on that case for the proposition that reasonable expenses 

incurred to make a property habitable are reimbursable under section 32(a) of the Tax 

Liens Act. However, City of Philadelphia v. Watkins is distinguishable from the 

present case. In that case, the third-party purchasers had intended to reside at the 

property and submitted a contract for the work performed on the property and copies 

of their receipts for payment of the work before the common pleas court. Additionally, 

the common pleas court accepted the testimony of these third-party purchasers as 

credible and persuasive.

Herein, DMB purchased the Property as an investment property, and not 

as a residence. Indeed, the Property was a mixed use, with a commercial/rental space 
10

on the first floor and a residential/apartment space on the second floor. During the trial 

court’s April 4, 2017 hearing, DMB submitted the same 2014 letters/invoices that it 

had submitted during the prior proceedings before the trial court, payment of which 

was ultimately denied and led to this Court’s remand for the presentation of further 

evidence.5 While DMB did present copies of checks consistent with said 

letters/invoices issued to CB in the recent proceeding, these checks were all dated 

November 8, 2016, more than two years after the work was completed and only two 

weeks after the issuance of our remand decision. Additionally, DMB did not present 

any receipts for construction materials, nor did it present any payroll documentation, 

related to the work done at the Property. This was especially important because Achen 

owned both DMB and CB and he was essentially paying himself for the work 

completed at the Property. While DMB asserts that it should not matter that the 

transactions in this case occurred between two closely held corporations, this is 

precisely why the nature of the evidence was critical in this case. Indeed, we stressed 

the unique nature of Achen’s ownership/involvement with both DMB and CB in our 

prior opinion and remanded to essentially give DMB a second opportunity to present 

more detailed evidence related to the expenses it incurred at the Property. 

Unfortunately, DMB failed to present such evidence before the trial court on remand. 

Moreover, the trial court specifically rejected Achen’s testimony regarding the 

reasonableness and necessity of the repairs made to the Property as not credible. 

Further, Achen testified before the trial court that the 2014 letters/invoices

were “still not paid.” (N.T., April 4, 2017, at 30.) DMB alleges that the trial court took

 

5 Of the three letter/invoices submitted by DMB, only one specifically itemized the repairs to 

be performed at the Property and the costs associated with each repair. See Reproduced Record (R.R.) 

at 49a-50a. The other two letters/invoices simply described the repairs to be done and included a total 

price. See R.R. at 51a-52a, 55a. Nevertheless, these letters/invoices do not establish the necessity of 

the repairs or that the cost of the same was actually incurred by CB and paid by DMB. 
11

Achen’s testimony out of context, and its reliance on Achen’s “admission” rendered its 

ultimate decision an abuse of discretion. The following passage reflects the exchange 

between Achen and counsel for Phan at the April 4, 2017 hearing upon which the trial 

court based its finding that the letters/invoices were not paid:

Q So all three of these checks or all of the invoices that you 

submitted were not paid at all until November 8, 2016 which 

is, well, about two years after the work was done, isn't that 

correct?

A That's correct, but they’re still not paid.

Q But here’s the thing, why all of a sudden having not being 

paid all this time what’s unique about November 8, 2016?

A Because the company did not have any money to pay those 

invoices so we’re waiting until DMB has money to pay 

Caledonia Builders. So I don’t think that should be a crime.

Id. (Emphasis added.) We fail to see how the trial court took this testimony out of 

context or how its reliance on this testimony constituted an abuse of discretion. 

Conclusion

Because DMB did not present sufficient evidence establishing that 

necessary expenses were incurred for repairs at the Property, and that payment for such 

repairs was actually made, the trial court did not abuse its discretion in denying DMB 

reimbursement for the same.

Accordingly, the trial court’s order is affirmed.

________________________________

PATRICIA A. McCULLOUGH, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

City of Philadelphia :

: No. 862 C.D. 2017

v. :

:

Thuy Phan and :

DMB Investments, LLC :

:

Appeal of: DMB Investments, LLC :

ORDER

AND NOW, this 2

nd day of April, 2018, the order of the Court of 

Common Pleas of Philadelphia County, dated May 30, 2017, is hereby affirmed.

________________________________

PATRICIA A. McCULLOUGH, Judge