Court Opinion

ID: 4400434
Source: CourtListenerOpinion
Date Created: 2019-05-24 15:45:51.113975+00
Date Added: 2024-06-11T12:20:05.321951
License: Public Domain

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                               2019 PA Super 170

 DAVID KELLER                            :   IN THE SUPERIOR COURT OF
                                         :        PENNSYLVANIA
                   Appellant             :
                                         :
                                         :
              v.                         :
                                         :
                                         :
 THE BANK OF NEW YORK MELLON,            :   No. 2628 EDA 2018
 TRUSTEE CERT HOLDER CWALT,              :
 INC., A1 TRUST 2004-27CB                :

              Appeal from the Order Entered August 8, 2018
  In the Court of Common Pleas of Monroe County Civil Division at No(s):
                              2018-00859

                                    *****

 PA PROPERTY PORTFOLIO, INC.,            :   IN THE SUPERIOR COURT OF
 AND DAVID KELLER                        :        PENNSYLVANIA
                                         :
                   Appellant             :
                                         :
                                         :
              v.                         :
                                         :
                                         :   No. 2895 EDA 2018
 BANK OF AMERICA, N.A.,                  :
 SUCCESSOR TO BAC HOME LOAN              :
 SERVICING, L.P.                         :

              Appeal from the Order Entered August 24, 2018
  In the Court of Common Pleas of Monroe County Civil Division at No(s):
                            1484-CIVIL-2018

                                    *****

 PA PROPERTY PORTFOLIO, INC. -           :   IN THE SUPERIOR COURT OF
 DAVID KELLER                            :        PENNSYLVANIA
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                                        :
                   Appellant            :
                                        :
                                        :
              v.                        :
                                        :
                                        :   No. 2902 EDA 2018
 WELLS FARGO BANK, N.A., A/K/A          :
 WELLS FARGO                            :

              Appeal from the Order Entered August 29, 2018
  In the Court of Common Pleas of Monroe County Civil Division at No(s):
                             2539-CIVIL 2018

                                 *****

 NORTHEAST INVESTORS GROUP,             :   IN THE SUPERIOR COURT OF
 INC., - DAVID KELLER                   :        PENNSYLVANIA
                                        :
                                        :
              v.                        :
                                        :
                                        :
 WELLS FARGO BANK, N.A., A/K/A/         :
 WELLS FARGO                            :   No. 2926 EDA 2018
                                        :
                                        :
 APPEAL OF: NORTHEAST                   :
 INVESTORS GROUP, INC.                  :

              Appeal from the Order Entered August 28, 2018
  In the Court of Common Pleas of Monroe County Civil Division at No(s):
                              2515-CV-2018

BEFORE: LAZARUS, J., OTT, J., and DUBOW, J.

OPINION BY LAZARUS, J.:                             FILED MAY 24, 2019

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       Appellants, David Keller, PA Property Portfolio, Inc.,1 and Northeast

Investors Group, Inc.2 (collectively “Plaintiffs”), appeal from four related

orders,3 entered in the Court of Common Pleas of Monroe County, granting

opposing parties’ preliminary objections with prejudice and dismissing

Plaintiffs’ complaints. After careful review, we affirm.

       The facts underpinning all four actions are substantially similar and the

questions of law are identical. Brief of Appellant,4 at 3 (“this appeal is one of

four appeals involving the exact same questions of law[] and general
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1 PA Property Portfolio, Inc. is a corporate entity used by Keller to purchase
foreclosed properties at sheriffs’ sales.

2Northeast Investors Group, Inc. is also a corporate entity used by Keller to
purchase foreclosed properties at sheriffs’ sales.

3 Pursuant to Pa.R.A.P. 513, we consolidate the appeals from these four orders
sua sponte, as all four appeals revolve around Keller and assert nearly
identical legal arguments. See infra, at n.4.

4 As the four briefs assert identical arguments, we refer to them collectively
as “Brief of Appellant” and use the pagination from the brief filed under 2895
EDA 2018 for clarity and brevity. We note with deep disfavor that Anthony
Roberti, Esquire, appellate counsel on three of Plaintiffs’ four cases, filed briefs
which copy the bulk of Keller’s pro se brief verbatim. See e.g. Brief of
Appellant, at 1 (replicating idiosyncratic error from pro se brief stating relevant
standard of review as “de nova” in each counseled brief). Such reliance on a
pro se brief for legal analysis implicates Attorney Roberti’s competence and
diligence under the Pennsylvania Rules of Professional Conduct. See Rule 1.1.
cmt 5 (discussing thoroughness and preparation required of a competent
attorney) and Rule 1.3 cmt 1 (directing attorneys to take sufficient measures
required to pursue client’s interests).

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background history[.] The four . . . appeals in question are 2902 EDA 2018,

2895 EDA 2018, 2926 EDA 2018, [and] 2628 EDA 2018.”). Plaintiffs brought

the instant suits to recover state and local transfer taxes5 levied by the Monroe

County Sheriff (“Sheriff”) after successfully bidding on foreclosed properties

at Sheriff’s sales.6 Plaintiffs, however, sought to recover these sums not from

the Sheriff, but from the respective mortgage holders in each sale—namely,

the instant Appellees—Bank of New York Mellon, Bank of America, and Wells

Fargo Bank (collectively “the Banks”).

       In their pleadings, Plaintiffs argued that by being erroneously instructed

by the Sheriff to pay the transfer tax, Plaintiffs overpaid for each property,
____________________________________________

5State and local transfer taxes from a judicial sale of real estate are governed
by 72 P.S. § 8104-C and 72 P.S. § 8107-D, respectively.

6The sums at issue, number of properties, and dates of relevant Sheriff’s sales
at issue in each case are as follows: 2628 EDA 2018 concerns $3,168.34 in
principle, interest, and fees connected with the transfer tax paid on the
winning bid for one property at a Sheriff’s sale dated September 25, 2014;
2895 EDA 2018 concerns $12,946.83 in principle, interest, and fees connected
with the transfer tax paid on the winning bids for four properties at Sheriff’s
sales dated June 25, 2015, August 27, 2016, March 31, 2016, and June 30,
2016; 2902 EDA 2018 concerns $33,758.06 in principle, interest, and fees
connected with the transfer tax paid on the winning bids for fifteen properties
at Sheriff’s sales dated June 25, 2015, July 30, 2015, August 27, 2015,
September 25, 2015, December 3, 2015, January 28, 2016, April 28, 2016,
May 26, 2016, and June 30, 2016; 2926 EDA 2018 concerns $31,228.87 in
principle, interest, and fees connected with the transfer tax paid on the
winning bids for ten properties at Sheriff’s sales dated July 31, 2014, August
28, 2014, October 30, 2014, and May 28, 2015.

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creating a resultant windfall for the Banks7 in violation of Northwest Savings

Bank v. Knapp, 149 A.3d 95 (Pa. Super. 2016). In each amended complaint,

Plaintiffs asserted claims for declaratory judgment, unjust enrichment,8

equitable restitution, conversion, and special relief to pursue a class action

claim.     Amended Complaint, 2628 EDA 2018, 5/9/18, at 5–6; Amended

Complaint, 2895 EDA 2018, 5/9/18, at 4–5; Amended Complaint, 2902 EDA

2018, 6/1/18, at 8–9; Amended Complaint, 2926 EDA 2018, 6/1/18, at 6–7.

However, Plaintiffs never claimed to have filed exceptions to the Sheriff’s

proposed schedule of distributions under Pa.R.C.P. 3136, instead arguing they

had no legal duty to comply with Rule 3136 under, inter alia,9 Community

Federal Savings & Loan Assn. v. Luckenbach, 261 A.2d 327 (Pa. 1970).

See Amended Complaint, 2628 EDA 2018, 5/9/18, at 7–9; Amended

____________________________________________

7   Plaintiffs outlined this argument in their own words as follows:

        The Sheriff charged and collected said 2% transfer tax from
        Plaintiff by ‘adding said 2% transfer tax’ to the ‘bid prices paid by
        Plaintiff.’ The said 2% transfer tax should have been subtracted
        off the ‘bid prices’ (the balance of which would go to Defendant as
        a lien Creditor or said writ of execution).”

Amended Complaint, 2628 EDA 2018, at 4.

8 Plaintiffs sought relief for unjust enrichment under both the Restatement
(Second) and Restatement (Third) of Restitution.

9In each amended complaint, Plaintiffs offered additional case law in support
of his position. Those cases, however, were either not relevant or not binding
on this Court, and thus, are not discussed herein.

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Complaint, 2895 EDA 2018, 5/9/18, at 9–10; Amended Complaint, 2902 EDA

2018, 6/1/18, at 16–17; Amended Complaint, 2926 EDA 2018, 6/1/18, at 12–

14.

       The Banks filed preliminary objections under Pa.R.C.P. 1028, each

asserting the pleadings failed to state a valid cause of action as Plaintiffs failed

to follow the statutory remedy under Rule 3136 for filing exceptions to a

proposed schedule of distribution from the Sherrif’s sale.         The Honorable

Arthur L. Zulick and the Honorable David J. Williamson sustained the Banks’

preliminary objections in each case, finding Plaintiffs’ failure to allege filing

timely exceptions to the Sherrif’s sales’ distribution schedules pursuant to Rule

3136 resulted in waiver. Moreover, the courts found themselves unable to

grant equitable relief, as Plaintiffs failed to avail themselves of an adequate

remedy at law.10 Plaintiffs filed notices of appeal and subsequently complied

with Pa.R.A.P. 1925(b).

       Across all four briefs, Plaintiffs present the following identical issues,

reproduced verbatim as follows:

       1) Under Community Federal Savings v. Luckenback, 261
          A.2d 327 (Pa. 1970), [do Plaintiffs] have legal standing to file
          exceptions under Pa.R.C.P. 3136?

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10In all cases except 2895 EDA 2018, the trial court also found cause to
sustain the preliminary objections for Plaintiffs’ failure to join the Sheriff as a
necessary party.

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       2) Under Pa.R.C.P. 3136(c), does only a party holding a
          ‘recorded’ judgment/lien/mortgage under the lien priority
          statutes (42 Pa.C.S. Sections 8141–8142) have standing to file
          exceptions?

       3) Even if Pa.R.C.P. 3136 applied under P[ennsylvania] “common
          law” and Shafer Electric v. Mantie, 96 A.3d 989 (Pa. 2014)
          does the failure to exercise a remedy at law[] preclude or bar
          a later civil action for “unjust enrichment?”

       4) In view of the recent 3rd Edition (2011) of [the] reinstatement
          [sic] of law on unjust enrichment and restitution, and section
          4(2) in particular of 3rd Edition (2011) of Restatement of Law
          on “Unjust Enrichment and Restitution” render “moot” the
          defense of failure to exercise available “remedy at law?”

       5) [Plaintiff] was not a named party in the mortgage foreclosure
          case, and [was] not served with court process, therefore, under
          Martin v[.] Wilkes, 490 U.S. 755 [1989] is the appellant subject
          to Pa.R.C.P. 3136?

Brief of Appellant, at 1–3 (punctuation and capitalization adjusted) (emphasis

and use of quotation marks in original).

       Plaintiffs’ appeals are from orders sustaining preliminary objections in

the nature of a demurrer.11 We, therefore, review Plaintiffs’ claims as follows:

       Preliminary objections in the nature of     [a] demurrer test the legal
       sufficiency of the plaintiff’s complaint.   The question presented by
       the demurrer is whether, on the facts       averred, the law says with
       certainty that no recovery is possible.      Thus, our scope of review
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11 We note Plaintiffs only raise arguments concerning their unjust enrichment
claims, at no point mentioning the dismissal of Plaintiffs’ claims for declaratory
judgment, conversion, equitable restitution, or special relief under Pa.R.C.P.
1532. Consequently, all claims save those related to unjust enrichment are
waived. See Cosner v. United Penn Bank, 517 A.2d 1337, 1342 (Pa. Super.
1986) (finding all issues not included in argument section of brief waived).

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       is plenary and our standard of review mirrors that of the trial
       court.    Accepting all material averments as true, we must
       determine “whether the complaint adequately states a claim for
       relief under any theory of law.”

Schwarzwaelder v. Fox, 895 A.2d 614, 618 (Pa. Super. 2006) (citations

omitted).

       Plaintiffs assert a variety of theories in support of the proposition that

the courts below erred in ruling that failure to follow Rule 3136 precluded the

return of taxes improperly levied by the Sheriff.12 We, however, must first

explore the rules governing proceedings related to sheriff’s sales provided by

the Pennsylvania Rules of Civil Procedure before addressing plaintiffs’

argument.

       The Rules allow “any party in interest” to petition the court overseeing

a sheriff’s sale to enter “any . . . order which may be just and proper under

the circumstances.” Pa.R.C.P. 3132. “The [R]ules also state that the time for

petitioning the court should occur within a reasonable time proximity to the

date of the sale and the filing of the schedule of distribution.” Federal Nat.

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12 Appellees do not dispute that the Sheriff erred in demanding Plaintiffs pay
the transfer tax. See Northwest Savings Bank v. Knapp, 149 A.3d 95,
(Pa. Super. 2016) (sustaining taxpayer’s objections where “Appellant filed
timely exceptions contending that the transfer taxes should have been
deducted from—and not added to—the winning bid[.]”) (emphasis added).
They do, however, assert Plaintiffs waived their right to the disputed funds by
failing to avail themselves of the procedural mechanism set forth by Rule 3136
for contesting the schedule of distributions following a sheriff’s sale.

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Mort. Ass’n v. Citiano, 834 A.2d 645, 648 (Pa. Super. 2003). Rule 3136

lays out the time period for contesting amounts owed at a sheriff’s sale, stating

in relevant part:

       The sheriff shall distribute the proceeds of sale in accordance with
       the proposed schedule of distribution, unless written
       exceptions are filed with the sheriff not later than ten (10)
       days after the filing of the proposed schedule.

Pa.R.C.P. 3136(d) (emphasis added).13            If no party files exceptions or a

petition to set aside the sale, the sheriff is obligated to execute a deed to the

property. See Pa.R.C.P. 3135(a) (“[T]he sheriff, at the expiration of twenty

days but no later than 40 days after either the filing of the schedule of

distribution or the execution sale if no schedule of distribution need be filed,

shall execute and acknowledge before the prothonotary a deed to the

property sold.”) (emphasis added).

       The rules make clear that a party dissatisfied with the schedule of

distribution has ten days to file exceptions. Concord-Liberty Sav. And Loan

Ass’n v. NTC Properties, Inc., 312 A.2d 4, 5 (Pa. 1973). After the delivery

of the sheriff’s deed to the purchaser, the only possible attacks are those

based on fraud or lack of authority to make the sale. Id. at 6 (“[A]fter the

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13 In explicating Rule 3136, the comment states, inter alia, “[t]he rule . . .
does not require the sheriff to serve or notify the parties that a schedule has
been prepared. As a result, the parties must monitor the sheriff’s office on a
daily basis to acquire the schedule in order to have the full ten days with which
to prepare and file the exceptions.” Rule 3136, comment.

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delivery of a sheriff’s deed to a purchaser[,] the only attacks possible on the

sheriff’s sale are those based on fraud which vitiates the transaction, or a lack

of authority to make the sale.”) (citation omitted); see also Sklaroff v.

Weiner, 203 A.2d 366, 368 (Pa. Super. 1964) (“Where, as here, no fraud is

alleged or shown but the only issue is the amount to which the holder of a

valid lien is entitled out of the proceeds, the remedy under Pa.R.C.P. 3136 is

adequate[.]”). If, after a sheriff’s sale, an appellant “neglect[s] to pursue the

procedural remedies available to him, appellant has waived such challenges.”

Citiano, supra at 648.

      Knapp, supra, offers a case-in-point example of how, under the Rules,

purchasers of property at a sheriff’s sale are obligated to seek redress for the

improper assessment of transfer taxes. In Knapp, just as in the instant case,

county sheriffs sold real property to a third-party purchaser. Knapp, supra

at 96. Following the sale, the sheriff added state and local transfer taxes to

the winning bid, increasing the amount owed by the purchaser. Id. at 96–97.

The purchaser in Knapp, however, properly filed timely exceptions to the

sheriff’s proposed schedule of distributions. Id. at 97. Consequently, this

Court was obligated to reverse the lower court’s order dismissing the third-

party purchaser’s exceptions to the sheriff’s schedule of proposed distributions

where the sheriff required the purchaser to pay transfer taxes associated with

the sale. Id.

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        The instant facts differ in one critical respect—Plaintiffs failed to file

timely exceptions (or any exceptions whatsoever) to the Sheriff’s proposed

distributions as required by Rule 3136. In light of the above-mentioned case

law and an absence of any allegation of fraud, we find both that the remedy

offered under Rule 3136 for protesting the schedules of distribution was

adequate and that Plaintiffs’ failure to avail themselves of a valid statutory

remedy resulted in waiver. See id.; see also NTC Properties, Inc., supra

at 5.    As the remedy offered was adequate, Plaintiffs are precluded from

seeking relief related to their unjust enrichment14 claim as “equitable relief

will be appropriate only where the statutory remedy is inadequate.”

Chartiers Valley School Dist. v. Virginia Mansions Apartment Inc., 489

A.2d 1381, 1386 (Pa. Super. 1985).

        All of Plaintiffs’ arguments directly or indirectly assert the inapplicability

of Rule 3136; each one lacks merit. Brief of Appellants, at 1–2. Plaintiffs first

argue Luckenbach, supra, divested Plaintiffs of standing to protest the

Sheriff’s proposed distributions of funds under Rule 3136. Id. at 6–9. Their

reliance on Luckenbach, however, is entirely inapposite. In Luckenbach,

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14“Unjust enrichment is an equitable remedy defined as ‘the retention of a
benefit conferred by another without offering compensation, in circumstances
where compensation is reasonably expected, and for which the beneficiary
must make restitution.’” Commonwealth by Shapiro v. Golden Gate
National Senior Care LLC, 194 A.3d 1010, 1034 (Pa. 2018) (quoting
Roethlein v. Portnoff Law Assocs., Ltd., 81 A.3d 816, 825 n.8 (Pa. 2013)).

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our Supreme Court held that purchasers of real property at a sheriff’s sale

could not hold themselves out as lien creditors to participate in the fund

created by the sheriff’s sale as a means to recover damages caused by the

previous homeowners. Luckenbach, supra at 474–75. Moreover, the facts

of Knapp illustrate that third-party purchasers not only have standing to file

exceptions under Rule 3136, such purchasers are entitled to relief when

county sheriff’s erroneously levy transfer taxes so long as that purchaser

timely files exceptions. Knapp, supra at 97.

        Plaintiffs’ second argument claims that Rule 3136(c) precluded Plaintiffs

from having standing to file exceptions as Plaintiffs were not “lien creditors.”

Brief of Appellant, at 9–12. As above, this argument is not borne out by the

plain text of Rule 3136(c), which, rather than addressing standing, details the

sheriff’s duty to provide a certified list of liens upon properties sold at sheriff’s

sales.15

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15   The full text of Rule 3136(c) reads as follows:

        (c) In sales of real property the sheriff shall attach to the schedule
        a list of liens upon the property sold as certified from the record
        by the proper officers or a guaranteed search from any title
        company authorized to do business within the county. The cost
        of certifying the list of liens or the title search, the
        acknowledgment, recording and registry of the deed and transfer
        or documentary stamps shall be charged as an expense of
        distribution.

Pa.R.C.P. 3136(c).

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      Plaintiffs’ third argument cites to Shafer Elec. & Constr. v. Mantia, 96

A.3d 989 (Pa. 2014), for the proposition that procedural law cannot preclude

a party from seeking relief for unjust enrichment. Brief of Appellant, at 12–

14. This argument incorrectly construes our Supreme Court’s holding, which

stated that the Home Improvement Consumer Protection Act (“the Act”) did

not preclude a plaintiff from recovering in quantum meruit, as the Act did not

contemplate the preclusion of equitable common law remedies. Id. at 996.

More importantly, the Act is not at issue in this case.

      Plaintiffs’ fourth argument states that the Third “reinstatement [sic] of

Law on Unjust Enrichment . . . render[s] ‘moot’ the defense of failure to

exercise available ‘remedy at law[.]’” Brief of Appellant, at 14–17. Not only

is this argument virtually unintelligible, it is rendered meaningless by the fact

that “Pennsylvania courts have yet to adopt or apply the Restatement (Third)

of Restitution in any context.”     Sabella v. Appalachian Development

Corp., 103 A.3d 83, 100 (Pa. Super. 2014).

      In their final argument, Plaintiffs assert that because they were not

named parties in the underlying foreclosure cases, and thus not served with

process, it would violate Due Process under the United States Constitution to

require that Plaintiffs follow Rule 3136. Brief of Appellant, at 17–21. This

argument is misguided. Plaintiffs were not parties to the underlying mortgage

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foreclosure suits because those matters were between the Banks and the

relevant homeowners. Rather than searching for a constitutional remedy, the

Plaintiffs would be better served by consulting the explanatory comment to

Rule 3136, which states: “The rule . . . does not require the sheriff to serve

or notify the parties that a schedule has been prepared.       As a result, the

parties must monitor the sheriff’s office on a daily basis to acquire the

schedule in order to have the full ten days with which to prepare and file the

exceptions.” Rule 3136, comment.

      For the reasons described above, we find no basis upon which the trial

courts could have concluded that Plaintiffs stated a valid claim for relief under

any theory of law. As such, we affirm the trial courts’ orders sustaining the

defendants’ preliminary objections in the nature of a demurrer.

      Orders affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/24/19

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