Court Opinion

ID: 4647400
Source: CourtListenerOpinion
Date Created: 2020-12-29 16:13:05.426141+00
Date Added: 2024-06-11T08:01:05.455508
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Amy Nguyen and Kenny Pham                       :
                                                :
               v.                               :   No. 393 C.D. 2020
                                                :   Argued: November 12, 2020
Delaware County Tax Claim                       :
Bureau and Chadd Neumann                        :
                                                :
Appeal of: Chadd Neumann                        :

BEFORE: HONORABLE P. KEVIN BROBSON, Judge
        HONORABLE CHRISTINE FIZZANO CANNON, Judge (P.)
        HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE BROBSON                            FILED: December 29, 2020

      Appellant Chadd Neumann, the upset tax sale purchaser (Tax Sale Purchaser),
appeals from an order of the Court of Common Pleas of Delaware County
(Common Pleas), dated January 15, 2020, which granted Appellees Amy Nguyen’s
and Kenny Pham’s (Objectors) petition to set aside the upset tax sale (Petition).
Common Pleas determined that Objectors had standing as equitable owners of the
property, and the Delaware County Tax Claim Bureau’s (Bureau) deficiencies in
providing notice of the tax sale to the prior owner of the property pursuant to the
Real Estate Tax Sale Law (RETSL)1 constituted grounds to set aside the upset tax
sale. For the reasons that follow, we vacate the order and remand the matter to
Common Pleas for further proceedings.

      1
          Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§ 5860.101-.803.
                                I. BACKGROUND
       Pursuant to Section 607 of the RETSL, 72 P.S. § 5860.607, Objectors
filed the Petition, seeking to set aside the upset tax sale of property located at
808 Garrett Road, Upper Darby, Pennsylvania (Property). (Original Record (O.R.),
Item No. 1, ¶ 1.) Objectors averred that the “Property was reportedly exposed to
a[n] upset tax sale conducted by the [Bureau] on or about September 13, 2018,
reportedly on account of a tax claim against the prior owner of the . . . Property,
Nhi Thi Ngoc Phan [(Prior Owner)], for the years 2016 and 2017,” and that
“the Bureau failed to provide . . . Prior Owner with proper notice of the sale and
failed to make reasonable efforts to uncover . . .          Prior Owner’s location.”
(Id., ¶¶ 2, 3.)
       Objectors averred that they have standing to raise exceptions and
objections, because: (1) they purchased the Property as their residence on
September 13, 2018—the same day as the reported upset tax sale—for $140,000.00
(id., ¶¶ 5, 8); (2) at the closing for the sale of the Property, “a check in the amount
of $13,518.47 was issued to the Bureau for the delinquent taxes owed” (id., ¶ 6);
(3) after the closing, they “believed they acquired good and record title to the . . .
Property, free and clear of any tax claims or liens” (id., ¶ 7); (4) they currently live
at the Property (id., ¶ 9); (5) they “are the owners of the . . . Property through their
purchase from . . . Prior Owner” (id., ¶ 10); (6) “[d]ays after the [c]losing, the check
disbursed to the Bureau was returned to the settlement agent that handled the sale of
the . . . Property,” accompanied by a letter from the Bureau, indicating that the
property was sold in an upset tax sale on September 13, 2018 (id., ¶ 11, Ex. B);
and (7) it was at or about that time that Objectors and Prior Owner “learned for the

                                           2
first time that the . . . Property had been exposed to the underlying upset tax sale on
the same date as the [c]losing,” as Prior Owner had not received notice of the upset
tax sale (id., ¶¶ 12, 13).
       Objectors averred that “the Bureau failed to provide . . . Prior Owner with
advance notice of a tax claim, lien, or the upset sale of the . . . Property conducted
on September 13, 2018.” (Id., ¶ 14.) Objectors attached to the Petition what they
contend is the complete file they received from the Bureau concerning the upset tax
sale. (Id., ¶ 15.) The file contains copies of a certified mail card directed to
Prior Owner at the address of the Property, which Objectors describe as appearing
“to represent the Bureau’s attempt to deliver notice of the [tax] [u]pset [s]ale to . . .
Prior Owner.” (Id., ¶¶ 15-17.) The return receipt “indicates that a mailing was
directed, certified mail, restricted delivery” and “contains an illegible signature of
an individual[] and does not list the printed name of the party” who purportedly
signed the return receipt. (Id., ¶¶ 18-19.) Objectors averred that, according to the
United States Postal Service website, the notice was delivered to the Property on
July 21, 2018. (Id., ¶ 20.) Prior Owner did not sign the return receipt, as she did not
live at the Property on that date, has never lived at the Property, and had kept the
Property as an investment—i.e., rental property. (Id., ¶¶ 21-22.) It is unclear who
signed the return receipt. (Id., ¶ 23.) Moreover, Prior Owner’s tenant at the time
did not have authority to accept or sign for mail on behalf of Prior Owner, and she
did not inform Prior Owner of any notice regarding the upset tax sale.
(Id., ¶¶ 24-25.) The Bureau’s file also includes handwritten notes which appear to
indicate that the Bureau attempted to call Prior Owner on August 29, 2018, but that
the call could not be completed as dialed. It is unclear where the Bureau located the
listed phone number, and a search revealed the number could belong to three

                                           3
individuals in the greater Philadelphia area, none of which are Prior Owner.
(Id., ¶¶ 28-30.) The Bureau had previously attempted to notify Prior Owner as to
the delinquent 2016 taxes by certified mail to the Property, but the certified mail was
returned as unclaimed. (Id., ¶ 34.) Based upon the above, Objectors averred that the
Bureau was aware of circumstances raising a significant doubt as to Prior Owner’s
receipt of the notice of sale. (Id., ¶ 35.) Nevertheless, the Bureau did not send notice
to the Prior Owner at her correct address or reasonably attempt to investigate her
true address. (Id., ¶ 36.) As a result, Prior Owner never received the notice of sale
nor did she see any posted notice or advertisement of the sale in any publication.
(Id., ¶¶ 38-40.) Prior Owner had no knowledge or actual notice of the upset tax sale
until the check disbursed to the Bureau at the closing was returned days later.
(Id., ¶ 41.) Had Prior Owner known, she would have taken steps to make sure the
alleged tax claim was satisfied. (Id., ¶ 42.) Thus, Objectors asserted that the upset
tax sale should be set aside because the Bureau violated RETSL when it failed to
provide notice of the sale and failed to exercise reasonable efforts to ascertain the
whereabouts of the record owner.
      Tax Sale Purchaser answered the Petition on November 19, 2018, arguing that
Objectors did not have standing to challenge the upset tax sale on the basis of lack
of notice. (O.R., Item No. 2.) In support of that position, Tax Sale Purchaser averred
that Objectors did not become record owners of the Property until their deed was
recorded on September 24, 2018—eleven days after the upset tax sale. (Id., ¶ 1.)
Furthermore,    Objectors     were    neither   owners     nor    lien   creditors   on
September 13, 2018, when the upset tax sale occurred. (Id., ¶ 71.) The Bureau did
not answer or respond to the Petition.

                                           4
       On December 4, 2018, Common Pleas scheduled a hearing on the matter for
January 23, 2019. (O.R., Item No. 4.) At the hearing, Tax Sale Purchaser’s attorney
informed Common Pleas regarding the “preliminary issue” of standing and
requested that the matter be continued to the April 4, 2019 list to allow the parties to
submit memoranda of law on the issue of standing before the parties get to the
Bureau’s burden with regards to the underlying sale. (O.R., Item No. 19 at 4.)
Thereafter, Objectors and Tax Sale Purchaser filed memoranda of law, addressing
only the issue of standing. (O.R., Item Nos. 9, 10.) Objectors also filed a praecipe
to attach affidavits of Objectors to the Petition, along with copies of a deed for the
Property, dated September 11, 2018—two days before the closing and upset tax
sale—as well as a reply memorandum. (O.R., Item No. 11.) At the call of the
April 4, 2019 list, the Tax Sale Purchaser requested that Common Pleas schedule
oral argument on the issue of standing. (O.R., Item No. 20 at 3-4.) Common Pleas
heard argument on May 30, 2019. (O.R., Item No. 18.) Toward the conclusion of
the hearing, Tax Sale Purchaser’s counsel stated: “I understand that if the Court
[concludes] there’s standing, we’re going to have a hearing on this. We’re going to
have a real trial . . . .”2 (Id. at 16-17.) The Bureau did not file a brief or participate
in the oral argument.
       Based on the record, it appears that nothing else occurred until Common Pleas
issued an order, dated January 15, 2020, granting the Petition. (O.R., Item No. 21
at 1.) Common Pleas also issued the following findings of fact:
       1. [Objectors] purchased the Property . . . from its [P]rior Owner on
       September 13, 2018[,] for $140,000.00.

       2
        We note, in the event that Common Pleas disagreed with Tax Sale Purchaser’s counsel’s
understanding of the procedural posture of the matter, it never indicated so.

                                             5
      2. At the closing for the sale of the Property, a check for $13,518.47
      was issued to [the Bureau] for delinquent taxes owed on the Property
      for the years 2016 and 2017.
      3. Unbeknownst to [Objectors] and the [P]rior Owner, the Property had
      been exposed to the underlying [upset] tax . . . sale on September 13,
      2018[,] and was sold to [Tax Sale Purchaser].
      4. The Record is devoid of any evidence as to the time of the [u]pset
      [t]ax [s]ale on September 13, 2018.
      5. Days after the [c]losing, the $13,518.47 check for delinquent taxes
      on the Property from the [Bureau] was returned to the [s]ettlement
      [a]gent.
      6. Subsequently, [Objectors] learned that the Property had been
      exposed for sale at the [u]pset [t]ax [s]ale on the same date as the
      [c]losing, September 13, 2018.
      7. The [P]rior Owner alleged that she did not receive notice of the
      [u]pset [t]ax [s]ale.
      8. [Objectors] purchased the . . . Property as their residence.
      9. Objectors currently live [at] the . . . Property.
      10. [Common Pleas] held Oral Argument wherein it determined that
      the central issue in this matter was . . . [Objectors’] standing in this
      matter.
      ....
      21. [Objectors] and the [P]rior Owner entered into and signed an
      Agreement of Sale for the Property on June 9, 2018[,] and
      June 16, 2018, respectively.
      22. [Objectors] received the executed deed for the Property on
      September 11, 2018, two days before the September 13, 2018 [u]pset
      [t]ax [s]ale.

(Id. at 2-5 (citations omitted).) Common Pleas concluded that, “under the doctrine
of equitable conversion, Objectors acquired rights as ‘equitable owners’ pursuant to
their [a]greement of [s]ale to purchase the Property from the [P]rior [O]wner.”
(Id., Conclusion of Law (COL) No. 20.) Common Pleas also found that, “[u]pon
review of the [r]ecord, [Common Pleas] finds that the [Bureau] failed to meet the
statutory notice requirements under [RETSL].” (Id., COL No. 24.) Common Pleas

                                           6
concluded that, “[i]n light of [Objectors’] standing as equitable owners and the
deficiencies in providing notice pursuant to [RETSL], the [u]pset [t]ax [s]ale in this
matter should be set aside.” (Id., COL No. 25.) This appeal followed.3
                                          II. ISSUES
       On appeal, Tax Sale Purchaser argues that Objectors lack standing to contest
the upset tax sale. Tax Sale Purchaser also argues that Common Pleas denied him
due process of law when it granted the Petition without an evidentiary hearing.
As to this issue, Tax Sale Purchaser contends that Common Pleas denied him the
opportunity to produce evidence pertaining to notice.
                                     III. DISCUSSION
       We begin with the threshold question of who has standing to petition to set
aside an upset tax sale. This Court has explained:
       “The traditional concept of standing focuses on the idea that a person
       who is not adversely impacted by the matter he seeks to challenge does
       not have standing to proceed with the court system’s dispute resolution
       process.” Pittsburgh Palisades Park, LLC v. [Cmwlth.], . . . 888 A.2d
       655, 659 ([Pa.] 2005) (citing William Penn Parking Garage v. City of
       Pittsburgh, . . . 346 A.2d 269, 280-81 ([Pa.] 1975) (plurality)). In other
       words, a person must be aggrieved or have a legally sufficient interest
       in a matter to have standing. As stated by our Supreme Court:
               [A]n individual can demonstrate that he is aggrieved if he
               can establish that he has a substantial, direct, and
               immediate interest in the outcome of the litigation in order
               to be deemed to have standing. An interest is ‘substantial’
               if it is an interest in the resolution of the challenge which
               ‘surpasses the common interest of all citizens in procuring
               obedience to the law.’ Likewise, a ‘direct’ interest
       3
         “Our scope of review in tax sale cases is limited to determining whether the trial court
abused its discretion, rendered a decision with a lack of supporting evidence, or clearly erred as a
matter of law.” Shipley v. Tax Claim Bureau of Delaware Cnty., 74 A.3d 1101, 1104 n.3
(Pa. Cmwlth. 2013) (quoting Plank v. Monroe Cnty. Tax Claim Bureau, 735 A.2d 178, 181 n.6
(Pa. Cmwlth.), appeal denied, 747 A.2d 373 (Pa. 1999)).

                                                 7
             mandates a showing that the matter complained of ‘caused
             harm to the party’s interest,’ i.e., a causal connection
             between the harm and the violation of law. Finally, an
             interest is ‘immediate’ if the causal connection is not
             remote or speculative.
      Id. . . . , 888 A.2d at 660 (citations omitted).

CR 2018 LLC v. Columbia Cnty. Tax Claim Bureau, 229 A.3d 398, 402 (Pa.
Cmwlth. 2020) (quoting Shipley, 74 A.3d at 1105). “‘Whether [an individual] ha[s]
standing, as an equitable owner, to file [a petition to set aside a tax sale] pursuant to
Section 607 of the [RETSL, 72 P.S. § 5860.607,] is a question separate from whether
[the individual is] entitled to notice.’” Id. (quoting Shipley, 74 A.3d at 1105).
      “Section 607(b) of the RETSL provides, in relevant part, that ‘objections or
exceptions [to a tax sale] may be filed by any owner or lien creditor.’”
Id. (quoting 72 P.S. §5860.607(b)). Section 102 of the RETSL, 72 P.S. § 5860.102,
defines “owner” 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 name last appears as an owner of record on any deed or
      instrument of conveyance recorded in the county office designated for
      recording and in all other cases means any person in open, peaceable
      and notorious possession of the property, as apparent owner or owners
      thereof, or the reputed owner or owners thereof, in the neighborhood of
      such property; as to property having been turned over to the bureau
      under Article VII [(relating to property purchased by taxing districts
      prior to the RETSL)] by any county, ‘owner’ shall mean the county.

Section 607(d) of the RETSL limits the challenges to upset tax sales by owners of
the real estate at the time of the upset tax sale and limits objections or exceptions to
the “regularity or legality of the procedures of the bureau in respect to such sale.”
      “This Court has recognized that ‘[t]he legislature designated [in the RETSL]
that only owners or lien creditors may file objections or exceptions to the return of
the [tax bureau] and confirmation nisi by the trial court of the tax sale.’”

                                           8
CR 2018 LLC, 229 A.3d at 402-03 (quoting Appeal of Yardley, 646 A.2d 751, 755
(Pa. Cmwlth. 1994) (emphasis omitted)). “Therefore, one who is neither an ‘owner’
nor a lienholder [on the date of the tax sale] cannot complain of noncompliance with
the notice provisions.”     In re Petition of Crouthamel, 412 A.2d 645, 647
(Pa. Cmwlth. 1980).
      Simply stated, persons who are not owners or lien creditors of the property at
the time of the tax sale do not have standing to file objections or other exceptions.
First Horizon Home Loan Corp. v. Adams Cnty. Tax Claim Bureau, 847 A.2d 774,
777 (Pa. Cmwlth. 2004) (First Horizon). Objectors, based on the record before us,
are not lien holders. Consequently, their only avenue to have standing in this case
is to show they were “owners” of the property at the time of the upset tax sale
pursuant to Section 102 of the RETSL. As noted above, Common Pleas concluded
that Objectors were equitable owners of the Property at the time of the upset tax sale.
                               A. Equitable Owners
      Tax Sale Purchaser contends that Common Pleas erred when it concluded that
Objectors have standing to challenge the tax sale based on their equitable interest in
the Property at the time of the tax sale. We begin by briefly reviewing the law that
provides for equitable ownership.
      The Pennsylvania Supreme Court has stated that “[i]t is well-established
law . . . that when the [a]greement of [s]ale is signed, the purchaser becomes the
equitable or beneficial owner through the doctrine of equitable conversion.”
DiDonato v. Reliance Standard Life Ins. Co., 249 A.2d 327, 329 (Pa. 1969) (citing
Payne v. Clark, 187 A.2d 769 (Pa. 1963)). The Supreme Court has explained:
             The doctrine of equitable conversion arose out of the power of
      the chancellor to compel the performance which was intended by the
      parties. This power was grounded in the principle that equity treats as
      done those things that should be done, quod fieri debet facile

                                          9
      praesumitur. It is precisely because of the equitable remedy of specific
      performance that fundamental real property rights are created in a
      purchaser of realty prior to delivery of the deed. Kerr v. Day, 14 Pa.
      112 (1850). The principles applicable to the sales of real property
      between private parties are equally applicable to sales for delinquent
      taxes. . . . Thus, the doctrine of equitable conversion is applicable to a
      sale for delinquent taxes and its operation conveys equitable title to the
      purchaser.

Pivirotto v. City of Pittsburgh, 528 A.2d 125, 127-28 (Pa. 1987).
      We have previously addressed whether non-record owners of a property
subject to an upset tax sale have standing to file objections to the upset tax sale under
Section 607 of the RETSL. Husak v. Fayette Cnty. Tax Claim Bureau, 61 A.3d 302
(Pa. Cmwlth. 2013). In Husak, the owners acquired the subject property via a
quitclaim deed in 2006, but they did not record the deed until after the tax sale.
Id. at 303. The tax sale purchaser argued that the owners lacked standing to file
objections because a lender, Fannie Mae, was the record owner of the property at the
time of the September 2010 tax sale and remained so until the owners finally
recorded their quitclaim deed in March 2011. Id. at 304. The tax sale purchaser
argued that the owners were not record “owners” as defined by Section 102 of the
RETSL so they could not file objections pursuant to Section 607 of the RETSL. Id.
(citing 72 P.S. §§ 5860.102, 5860.607). The Court of Common Pleas of Fayette
County determined that, despite not recording the deed until after the sale, the
owners were the equitable, if not legal, owners of the property at the time of the tax
sale; therefore, they were persons aggrieved by the tax sale. Id. at 305. We agreed
with common pleas that the owners had standing even though they did not hold
record title and concluded that, “[b]y purchasing the subject property back from
Fannie Mae in April 2006 for $150,000 and receiving a quitclaim deed for it,

                                           10
[the o]wners acquired, at the very minimum, equitable title, a legally recognized
interest in the subject property.” Id. at 310 (citing Pivirotto, 528 A.2d at 128).
      A few months later, in Shipley, we determined that a wife had an equitable
interest in a property purchased with joint funds while she and her husband were
married, even though she was not mentioned on the recorded deed. Shipley, 74 A.3d
at 1106. Consequently, she had standing to challenge the judicial tax sale of the
property. Id. The Court of Common Pleas of Delaware County denied her petition
to set aside the judicial tax sale and found that the county tax claim bureau satisfied
the notice requirements of Section 102 of the RETSL, 72 P.S. § 5860.102. Id.
We reversed, holding that, although the tax claim bureau was not required to provide
notice to the wife of the impending judicial sale because she was not the legal owner,
the wife had standing to challenge the judicial tax sale of the property. Id.
      The following year, in Moore v. Keller, 98 A.3d 1 (Pa. Cmwlth. 2014),
we reviewed a case involving a petition to set aside a tax sale filed by the executrix
of the estate of a deceased record owner. The Court of Common Pleas of Luzerne
County denied the petition, concluding that the executrix was neither an “owner”
nor “lien creditor” of the property as defined by Section 102 of the RETSL and,
consequently, lacked standing to petition to set aside the tax sale pursuant to
Section 607(b) of the RETSL. Moore, 98 A.3d at 3 (citing 72 P.S. §§ 5860.102,
5860.607(b)). On appeal, we reversed common pleas’ decision. We reasoned:
             The Section 102 definition of “owner” is relevant to whether the
      [tax bureau] was required to provide [the executrix] with notice of a
      real estate tax sale conducted pursuant to Section 602 of the [RETSL].
      As demonstrated by Husak, whether [the executrix] had standing to
      challenge the tax sale is based upon whether she had the requisite
      substantial, direct, and immediate interest in the sale of property to
      qualify as an aggrieved party. [Husak,] 61 A.3d at 309-10. At the time
      of the tax sale, [the executrix] had been living at the [p]roperty
      for 18 years and had invested substantial sums in capital improvements

                                          11
       and had been paying the tax bill. . . . Although [the executrix] is not an
       “owner” as defined by the [RETSL] because her name is not on the last
       registered deed to the [p]roperty, she is an equitable owner of the
       [p]roperty as a devisee[,] . . . [and] [w]e conclude that [the executrix],
       as an equitable owner, has the requisite substantial, direct and
       immediate interest in the sale of property to challenge a tax sale.
Id. at 4.
       Tax Sale Purchaser argues that the facts and law in Husak, Moore, and Shipley
are easily distinguishable and should not apply to Objectors’ situation in this case.
He argues that, in Husak, we concluded that the petitioners were owners as defined
by Section 102 of the RETSL because they “were in open, peaceful and notorious
possession of the property for many years prior to the sale and were in possession of
an unrecorded Quit Claim Deed executed by the immediately previous titleholder,
Fannie Mae.” (Tax Sale Purchaser’s Brief at 11.) He submits that, in Moore, we
granted standing to the executrix based on her being a specific devisee of the
deceased record owner and that, when her mother died in 1999, no decedent estate
was ever opened for her prior to the tax sale in September 2012. (Id. at 11, 12.)
Tax Sale Purchaser argues that we reversed because, “as a specific devisee
(as contrasted to merely an intestate heir) under her mother’s will, legal title to that
property passed at her death to the [t]estatrix . . . . This all occurred well before the
date of the upset tax sale.” (Id. at 12.) Finally, he notes that, in Shipley, we granted
the wife standing because of her “inchoate and contingent right to equitable
distribution in the subject property under . . . Pennsylvania[’s] Divorce Code”4 based
on the fact of her marriage, purchase of the property, and contribution of joint funds
to purchase the property, which occurred long before the upset tax sale. (Id.)
       Tax Sale Purchaser instead directs our attention to this Court’s decision in
Fongsue v. Tax Claim Bureau of Delaware County and Roland Oris (Pa. Cmwlth.,

       4
            23 Pa. C.S. §§ 3101-3904.

                                           12
No. 1229 C.D. 2007, filed January 5, 2009) (Oris), appeal denied, 981 A.2d 221
(Pa. 2009).5 There, the purchaser of a property at an upset tax sale, Roland Oris
(Oris), appealed the order of the Court of Common Pleas of Delaware County that
granted a petition to set aside the upset tax sale. Oris, slip op. at 1. In January 1956,
a deed was recorded for the property naming Oscar and Louise Boozer as owners.
Id., slip op. at 1, 2. Both owners died intestate in the 1990s. Id., slip op. at 2.
In September 2002, the Delaware County Board of Assessment changed the mailing
address for notices concerning the property to Ronald Boozer (Boozer), the elder
Boozers’ only child, who lived in Baltimore, Maryland. Id. As of that date, no
executor or administrator of Louise Boozer’s estate had been appointed by the
Register of Wills of Delaware County. Id.
       In the summer of 2006, the property was vacant and Boozer placed the
property on the market. Id., slip op. at 3. Sometime before July 19, 2006, the
Tax Claim Bureau of Delaware County sent three separate notices of public sale to
Boozer in Baltimore, and he signed for all three notices on the certified mail return
receipt cards. Id., slip op. at 2. A notice of public sale was posted on the property
on July 25, 2006, and the property was among those listed for tax sale in three area
newspapers. Id. On August 4, 2006, a notice of public sale was sent to Boozer in
Baltimore, and the notice was not returned as undeliverable. Id. That same day,
Boozer and Fongsue executed a standard agreement for the sale of real estate, with
the closing scheduled to take place on September 6, 2006. The closing did not take
place on September 6, 2006, and it was rescheduled to September 22, 2006, because
Boozer failed to obtain Letters of Administration on behalf of Louise Boozer. Id.

       5
         Pursuant to Commonwealth Court Internal Operating Procedure Section 414(a), 210 Pa.
Code § 69.414(a), an unreported opinion of the Court filed after January 15, 2008, may be cited
only “for its persuasive value, but not as binding precedent.”

                                              13
In the interim, Oris purchased the property for the upset tax sale price on
September 13, 2006. Id. At the closing between Boozer and Fongsue held on
September 22, 2006, Fongsue paid $89,000.00 in consideration for the property, plus
closing costs. Id. Immediately after the closing, a check was tendered for past taxes
due to the tax bureau. Id.
      Fongsue filed a petition to set aside the upset tax sale in November 2006, and
common pleas granted the petition in May 2007, concluding that Fongsue had
standing because “she was an aggrieved party with an interest in the [p]roperty and
deserved legal protection.” Id., slip op. at 4. Common pleas reasoned that because
the owners of the property were deceased and could not receive notice of the sale,
the provisions of Section 607.1 of RETSL,6 72 P.S. § 5860.607a, were triggered, and
the tax bureau did not use reasonable effort to discover the whereabouts of the
owners. Id.
      Oris, on appeal, contended that Fongsue lacked standing because she was not
the owner of the property at the time of the tax sale and Boozer’s interest had already
been divested by the tax sale when he delivered the deed to Fongsue. Id., slip op.
at 4, 5. We reversed common pleas and concluded that, pursuant to Section 102 of
the RETSL, Fongsue was neither an owner nor a lien holder of the property at the
time of the upset tax sale. Id., slip op. at 5. We noted that Fongsue “has not pointed
to any statute or case law which expands the definition of owner to include an
equitable owner.” Id., slip op. at 7. “The trial court erred when it determined
Fongsue had standing.” Id.
      We relied on this Court’s decision in First Horizon, where we addressed a
similar situation. First Horizon Home Loan Corporation (First Horizon) was the

      6
          Added by the Act of July 3, 1986, P.L. 351.

                                               14
holder of a mortgage federally insured by the Department of Housing and Urban
Development (HUD) on property located in Adams County.                First Horizon,
847 A.2d at 775. After the mortgage fell into default, First Horizon acquired
ownership of the property through foreclosure and obtained a deed to the property
in March 2002. Id. The deed was recorded the same day. Id. In July 2002, the
Adams County Tax Claim Bureau sent a notice of public tax sale to First Horizon
stating that the property was scheduled for sale on September 13, 2002, due to unpaid
real estate taxes for the year 2000. Id. First Horizon received the notice. Id.
      In August 2002, First Horizon conveyed the property to HUD in accordance
with applicable federal regulations. Id. The deed from First Horizon to HUD was
recorded that same month, but First Horizon did not contact the tax bureau
concerning the September 13, 2002 tax sale and the transfer of the property to HUD.
Id. The property was sold at a tax sale on September 13, 2002. Id. at 775.
First Horizon filed objections and exceptions to the tax sale pursuant to
Section 607 of the RETSL, asserting that the tax sale must be set aside because
proper notice was not provided to HUD, the owner of the property on the date of the
sale. Id. The tax bureau argued, in relevant part, that First Horizon lacked standing
to file objections to the tax sale. Id. at 776. Common pleas, after a hearing on
First Horizon’s objection to the tax sale, concluded that First Horizon lacked
standing because, under Section 607 of the RETSL, it was neither an owner nor a
lien creditor. Id. First Horizon appealed. Id. We concluded, in pertinent part, that
there was no statutory basis to support First Horizon’s claim to standing, and
common pleas properly held that First Horizon lacked standing to contest the sale.
Id. at 777.

                                         15
      Recently, in Matos v. Berks County Tax Claim Bureau, 228 A.3d 976
(Pa. Cmwlth. 2020), we held that an option to purchase a leased property creates an
equitable interest in a tenant who holds such an option. In Matos, two tenants entered
into a “rent to own” agreement with the owner of the property paying a down
payment of $7,000.00, $850.00 a month to rent the property, and $250.00 a month
toward the purchase of the property. Matos, 228 A.3d at 978. The lease agreement
expired on March 30, 2018. Id. The property was sold at a tax sale to the purchaser
in September 2018. Id. The tenants challenged the sale based on the tax claim
bureau not complying with the strict notice requirements of the RETSL and asserted
they had standing based on the lease agreement that included an option to purchase
the property. Id. The Court of Common Pleas of Berks County held that the tenants
lacked standing to challenge the tax sale because their lease agreement expired
before the tax sale, and it dismissed the case based on the pleadings. Id. The tenants
appealed. Id.
      We reversed common pleas’ decision concerning the tenants’ standing and
remanded the case for further proceedings. Id. at 982. After reviewing our decisions
in Shipley and Husak, we noted that “Pennsylvania courts have long held that an
option to purchase land conveys a substantial and legally recognized equitable
interest in the optionee,” using the Pennsylvania Supreme Court’s decision in
Detwiler v. Capone, 55 A.2d 380 (Pa. 1947), as an example. We noted our Supreme
Court’s decision in Detwiler, wherein that court observed:
             An option to purchase is analogous to a contract for the sale of
      land; it is in nature an encumbrance on the land pledged. In such case
      the [optionor] is a trustee of the legal title for the benefit of the
      purchaser. . . . Equity regards the person bound to convey as having
      done what he should have done, i.e.[,] made the conveyance, and treats
      him as trustee for the optionee. Where an option is exercised the title

                                         16
       to the optionee relates back to the date of the option and his interest is
       regarded as real estate of that time[.]

Matos, 228 A.3d at 981 (quoting Detwiler, 55 A.2d at 383) (internal quotation marks
and citations omitted). Based upon that reasoning, we concluded that the tenants
asserted a substantial, immediate, and direct interest in the property because they
hold an option to purchase the property and paid $18,000.00 toward the purchase.
Id. We determined that common pleas erred by focusing on the expiration of the
lease agreement, “which did not extinguish [the t]enants’ equitable interest in the
property[,] . . . [and] [t]he equitable interest created by the option agreement will
relate back to the date of the option.” Id.
       Here, Common Pleas concluded that Objectors were equitable owners of the
Property at the time of the upset tax sale due to their execution of an agreement to
purchase the Property prior to the closing on September 13, 2018. Common Pleas
did so without having created an evidentiary record, presumably having relied on
the pleadings and affidavits. In support of Common Pleas’ disposition of the matter
at this stage of the proceedings, Objectors contend that Tax Sale Purchaser failed to
verify his response to the Petition or challenge Objectors’ affidavits and, as a result,
admitted all the facts in the Petition and lost the opportunity to make a later factual
challenge via an evidentiary hearing. We disagree.
       In Battisti v. Tax Claim Bureau of Beaver County, 76 A.3d 111, 113
(Pa. Cmwlth. 2013), we determined that the Pennsylvania Rules of Civil Procedure
did not apply to proceedings under Section 607 of the RETSL because they are not
civil actions; the term “pleading” as used in the Rules of Civil Procedure “is a term
of art that does not include a petition filed under Section 607 of the [RETSL].”7

       7
         In Battisti, the appellant (taxpayer) paid her 2008 school district taxes six days late
causing her payment to be short $6.30 in interest. Battisti, 76 A.3d at 112. The taxpayer later paid
(Footnote continued on next page…)
                                                17
Id. at 115. We further concluded that there was no mechanism that allowed a petition
filed pursuant to Section 607 to be decided on the petition and answer and that the
“pleadings” were not closed when the motion for judgment on the pleadings was
filed.8 Id. We determined that denying the objections to the upset tax sale without
an evidentiary hearing was a denial of due process to the taxpayer. Id.
       Based upon Battisti, we are persuaded that Common Pleas erred in relying on
the pleadings and affidavits as evidence of the circumstances surrounding Objectors’
purchase (or attempted purchase) of the Property for purposes of determining
whether Objectors were equitable owners at the time of the upset tax sale rather than
conducting an actual evidentiary hearing.
                                        B. Legal Owners
       Objectors offer an alternate basis for standing, not directly addressed by
Common Pleas or Tax Sale Purchaser—i.e., legal ownership of the Property.
Objectors argue that they acquired status as legal owners of the Property when
Prior Owner executed and delivered the deed to them on September 11, 2018
(i.e., two days before the tax sale of the property). Objectors submit:

her 2009 taxes, but the $6.30 delinquency for the 2008 taxes remained unpaid, leading to the tax
claim bureau selling her home in an upset tax sale. Id. The taxpayer challenged the upset tax sale,
arguing that she did not have notice that her payment for the 2008 taxes was short by $6.30, and
she did not have notice of the scheduled upset tax sale. Id. The taxpayer’s petition named the
purchaser of the property and the tax claim bureau as respondents. Id. at 113. The court of
common pleas, without holding a hearing, granted the purchaser’s motion for judgment on the
pleadings and dismissed the petition to set aside the upset tax sale. Id. The taxpayer appealed. Id.
       8
          For example, some counties utilize standing orders or local rules to specify the procedures
for petitions challenging an upset tax sale. If a court of common pleas chooses to have the
Pennsylvania Rules of Civil Procedure apply to this type of statutory proceeding, it can certainly
make that known through a standing order or a local rule. In this case, neither party has asserted
that a standing order or a local rule exists that allows a party to file the equivalent of a motion for
judgment on the pleadings to dismiss the case. In the absence of such an order or local rule, we
will follow our decision in Battisti.

                                                 18
             Under Pennsylvania law, title to real estate may be passed by
      execution and delivery of a deed, before or even without recording it.
      In re Estate of Pentrack, 405 A.2d 879 (Pa. 1979); Sovereign Bank v.
      Harper, 674 A.2d 1085 (Pa. Super. [] 1996). The delivery of the deed
      for real property is necessary to render it legally operative and to
      convey title. Herr v. Bard, . . . 50 A.2d 280 ([Pa.] 1947); Atiyeh v. Bear,
      . . . 690 A.2d 1245 [(Pa. Super.), appeal denied, 698 A.2d 63
      (Pa. 1997)]); Hogue v. Hogue, . . . 174 A. 598 ([Pa. Super.] 1934).
             Significantly, legal title to real property passes from a grantor to
      a grantee as of the date of delivery of the deed thereto. Malamed v.
      Sedelsky, . . . 80 A.2d 853 ([Pa.] 1951). It is not necessary that delivery
      of a deed should be made to the grantee himself or herself, but rather, a
      delivery to a third person (e.g., a settlement agent) for the grantee may
      constitute a valid delivery sufficient to pass title. Fiore v. Fiore, . . .
      174 A.2d 858 ([Pa.] 1961); In re: Rynier’s Estate, . . . 32 A.2d 736
      ([Pa.] 1943); DiMaio v. Musso, 762 A.2d 363 ([Pa. Super.] 2000);
      In re Padezanin, 937 A.2d 475 (Pa. Super. [] 2007).

(Objectors’ Brief at 12, 13.) A close examination of the four Pennsylvania Supreme
Court cases Objectors rely upon is warranted.
      First, in In re Estate of Pentrack, the decedent’s nephew was appointed
administrator of the decedent’s estate. In re Estate of Pentrack, 405 A.2d at 880.
The decedent’s brother and sister-in-law conveyed property to the decedent by a
deed in April 1962, but the deed was never recorded. Id. Decedent, several months
before he died, gave the deed to his nephew with instructions to return the property
back to his brother by destroying the deed when he died. Id. The nephew did not
destroy the deed. Id. Instead, the nephew filed a petition for a declaratory judgment,
which, in pertinent part, sought a determination of whether the title to the property
was legally conveyed by the decedent back to the decedent’s brother and the
brother’s wife. Id. The Orphans’ Court division of the Court of Common Pleas of
Cambria County held there was no gift of real estate back to the brother and
sister-in-law and that the property remained with the estate. Common pleas, upon
review en banc, determined that there was a gift of the real estate and the property

                                          19
was conveyed back to the brother and sister-in-law. Id. The nephew appealed the
en banc decision. Id.
      The Pennsylvania Supreme Court determined that because title to real estate
may be passed by delivery of a deed without recording it, the 1962 conveyance of
the property gave title to the decedent. Id. (citing Malamed, 80 A.2d at 853).
The Supreme Court, however, determined that decedent’s attempt to re-convey the
title to his brother and sister-in-law at the time of his death violated Section 4 of
what is referred to as the Statute of Frauds, Act of April 22, 1856, P.L. 532, 33 P.S.
§ 2, and that “[a]n agreement to sell land not signed by the seller or an agent cannot
be enforced against the seller.” Id. The Pennsylvania Supreme Court concluded
that, because there was not a writing signed by decedent re-conveying the property,
the property remained with the estate. Id. Accordingly, we agree with Objectors
that title to real estate may be passed by execution and delivery of a deed, before or
even without recording it.
      Second, in Herr, the plaintiffs were two sisters who filed a bill in equity
seeking to compel their other sister, the defendant, to: (1) produce and record two
deeds for three tracts of land in Lancaster County; (2) declare two deeds covering
part of the same property null and void; and (3) enjoin the defendant from selling or
in any way disposing of the real estate. Herr, 50 A.2d at 281. The chancellor, after
a hearing on the bill and answer, found against the plaintiffs. Id. The Court of
Common Pleas of Lancaster County, en banc, dismissed the plaintiffs’ exceptions
and affirmed the chancellor’s decision. Id. The plaintiffs appealed, arguing, in
relevant part, that the chancellor erred in finding that there was no delivery of the
deed conveying the home property and the thirteen-acre tract even though the deed

                                         20
was executed and acknowledged by their father in 1935. Id. The Pennsylvania
Supreme Court wrote:
              It is well established that delivery of a deed is necessary in order
      to render it legally operative . . . and that delivery is to be inferred from
      grantor’s words and acts evidencing an intention on his part to surrender
      his title to the property embraced by his conveyance, and to invest his
      grantee therewith . . . . It is the general rule that there is a presumption,
      in the absence of proof to the contrary, that a deed was executed and
      delivered on the day it was acknowledged.

Id. at 281, 282 (citations omitted). The Supreme Court concluded that the grantor,
by keeping the deed, did not intend to divest himself of the title to the home property
and thirteen acres, and it affirmed common pleas’ decision. Id. at 282. Accordingly,
we agree with Objectors that the delivery of the deed for real property is necessary
to render it legally operative and to convey title.
      Third, in Malamed, the defendants purchased a property in Philadelphia by
paying the down payment and taking title in the name of one of the defendant’s
brothers, who was a veteran, in order to obtain a mortgage through the Veteran’s
Administration. Malamed, 80 A.2d at 854. The defendant’s brother obtained a
mortgage for the property, “but all of the purchase price over and above the
mortgage, as well as the adjustment expenses at settlement, were paid by the
[defendants,] who entered into and remained in the exclusive possession of the
premises.” Id. The deed to the defendant’s brother was dated and recorded in
February 1947, and in June 1949, he executed and delivered a deed for the premises
to the defendants. Id. The deed was not recorded until December 1949. Id.
The defendant’s brother, after delivery of the deed to the defendants but before it
was recorded, executed a judgment note in favor of the plaintiff, and judgment was
entered in October 1949. Id. The judgment was executed, and the sheriff sold the

                                           21
property to the plaintiff, as judgment creditor, in July 1950, with the deed delivered
to the plaintiff in due course. Id. The plaintiff filed an action for possession and to
quiet title. The Court of Common Pleas of Philadelphia County entered judgment
for the plaintiff, reasoning that a trust against judgment creditor, mortgagees, or
purchasers is void unless a written declaration of trust by the holder of legal title has
been recorded. Id. The defendants appealed.
      On appeal, the Pennsylvania Supreme Court, in relevant part, reversed the
common pleas’ decision, concluding that the “trust was completely executed by the
delivery of an unrecorded deed by [the defendant’s brother] to defendants before the
plaintiff had become a creditor of [the defendant’s brother] . . . .” Id. at 854
(emphasis in original). The Supreme Court further concluded that the defendants
were not relying on “equitable title but upon a legal title established by the delivery
of a prior unrecorded deed.” Id. at 856. “Delivery is all that is necessary to pass
title, recording is only essential to protect by constructive notice any subsequent
purchasers, mortgagees and new judgment creditors.” Id. (emphasis in original).
Accordingly, we agree with Objectors that legal title to real property passes from a
grantor to a grantee as of the date of delivery of the deed thereto.
      Finally, in Fiore, the husband-grantor, during his lifetime, executed a deed to
his wife-grantee, conveying his interest in lands in Allegheny County.
Fiore, 174 A.2d at 859. In September 1940, the husband asked an attorney to
prepare a deed for purposes of recording. Id. At that time, the deed was executed,
witnessed, and acknowledged. Id. The husband died in September 1942. Id.
The deed was not recorded until November 1957, long after the husband’s death,
when the wife became aware of the transaction after the deed was rediscovered.
Id. at 860. His son, the plaintiff, instituted an action in equity in the Court of

                                           22
Common Pleas of Allegheny County against decedent’s wife, the defendant, to
obtain judicial nullification of the deed. The chancellor dismissed the complaint,
and common pleas, en banc, granted a final decree in favor of the defendant.
Id. at 859. The plaintiff appealed. Id.
      The Pennsylvania Supreme Court summarized the relevant law as follows:
              In order to validate defendant’s claim to the ownership of
      the property involved[,] there are two indispensable requisites:
      (1) a donative intent upon the part of the grantor, i.e., an intent to make
      a gift to the grantee then and there, when the deed was executed; [and]
      (2) a delivery of the deed to the grantee, either actual or constructive,
      which divested the donor of all dominion over the property and invested
      the donee therewith. The recording of the deed was not essential to its
      validity or transaction of the title. Nor was it essential that the grantee
      have knowledge of the transaction. By subsequent acceptance, she
      ratified the original delivery if such occurred.
            However, there must have been a delivery of the instrument to
      the grantee and while the execution, sealing, acknowledging, and
      recording of a deed gives rise to a presumption of delivery, this is a
      factual presumption and as such, is rebuttable.
              For a legal delivery to be effected, it is not necessary that the
      deed be delivered directly to the grantee. It may be placed in the
      possession of a third party for delivery to the grantee upon the
      happening of a specified contingency. In such cases, the delivery date
      is that when the donor effectuated his intention.

Id. at 859-60 (citations omitted). The Supreme Court reasoned that based on the
record, the husband “continued his complete control over the property until his death
. . . [and] [a]t no time did he tell the grantee in the deed, or any members of his
family, that he had deeded over his interest to the defendant.”            Id. at 860.
The Supreme Court reversed the decree and directed common pleas to enter a decree
in favor of the plaintiff. Id. at 861. Accordingly, we agree with Objectors that it is
not necessary that delivery of a deed be made to the grantee himself or herself, but

                                          23
rather, a delivery to a third person (e.g., a settlement agent) for the grantee may
constitute a valid delivery sufficient to pass title.
       For the reasons set forth above, a determination based on the pleadings and
affidavits as to whether Objectors were legal owners at the time of the upset tax sale
based on having allegedly received the deed to the Property prior to the
September 13, 2018 upset tax sale would be improper. An evidentiary hearing is
required to resolve this issue.
                                    C. Due Process
       We now address Tax Sale Purchaser’s argument that Common Pleas abused
its discretion when it denied him due process of law by granting the Petition without
an evidentiary hearing. Tax Sale Purchaser argues that Common Pleas abused its
discretion when he was denied the opportunity to produce evidence that Prior Owner
was provided with the notice of sale prescribed by Section 602 of the RETSL and
that Prior Owner had actual notice of the upset tax sale prior to September 13, 2018.
Common Pleas did not address this issue in its Pa. R.A.P. 1925(a) opinion.
       “It is the trial court’s exclusive province, as fact-finder, to evaluate evidence
adduced at the proceedings, make credibility determinations, and draw inferences
from the evidence presented.” In re Consolidated Reps. & Return by Tax Claims
Bureau of Northumberland Cnty. of Props., 132 A.3d 637, 644 (Pa. Cmwlth.)
(Northumberland Cnty.) (en banc), appeal denied, 141 A.3d 482 (Pa. 2016).
“‘Pennsylvania courts have long recognized the broad discretion of the fact-finding
[t]rial [c]ourt . . . .’” Id. (quoting Brady v. Borough of Dunmore, 479 A.2d 59, 62
(Pa. Cmwlth. 1984)). As our Supreme Court explained:
       “[J]udicial discretion” requires action in conformity with law on facts
       and circumstances before the trial court after hearing and due
       consideration . . . . An “abuse of discretion” or failure to exercise sound
       discretion is not merely an error in judgment. But if, in reaching a

                                            24
      conclusion, [the] law is overridden or misapplied, or the judgment
      exercised is manifestly unreasonable or lacking in reason, discretion
      must be held to have been abused.

Northumberland Cnty., 132 A.3d at 653 (quoting In re Deed of Trust of Rose Hill
Cemetery Ass’n Dated Jan. 14, 1960, 590 A.2d 1, 3 (Pa. 1991)).
      “Our Supreme Court has emphasized that due process under both the
United States and Pennsylvania Constitutions must be satisfied whenever the
government subjects a citizen’s property to forfeiture for nonpayment of taxes.”
Battisti, 76 A.3d at 113. Further:
      [A] taxing authority’s strict compliance with the tax law does not
      necessarily satisfy the demands of due process. There can be no
      deprivation of property without notice and an opportunity to be heard.
      Interests in real property [are] entitled to the most rigorous
      [due process] protections. Where a question of fact is raised, a hearing
      is necessary because [w]ithout a full hearing on the matter, the door
      might be opened to fraud.
              Once [the t]axpayer presented a prima facie challenge to the tax
      sale, it became the burden of the [t]ax [c]laim [b]ureau to prove strict
      conformance with the notice provisions of the [the RETSL]. The [t]ax
      [c]laim [b]ureau’s answer and [the p]urchaser’s answer and new matter
      raised a dispute on the central factual question, i.e., whether
      [the t]axpayer was given the notice required for an upset tax sale to be
      valid under the [RETSL] and under the Due Process Clause found in
      the United States and Pennsylvania Constitutions.

Battisti, 76 A.3d at 116 (citations omitted). We vacated the common pleas order
granting the purchaser’s motion for judgment on the pleadings, and we remanded
the matter for an evidentiary hearing. Id. at 116-17.
      Here, we agree with Tax Sale Purchaser that Common Pleas abused its
discretion when it denied him the opportunity to produce evidence at an evidentiary
hearing. Common Pleas denied Tax Sale Purchaser an opportunity to present
evidence in support of his contentions that Prior Owner was provided with the notice
of sale prescribed by Section 602 of the RETSL and that Prior Owner had actual
                                         25
notice of the upset tax sale prior to September 13, 2018. As a result, Tax Sale
Purchaser did not receive the due process to which he is entitled. See Battisti.
                               IV. CONCLUSION
      For the above reasons, we vacate Common Pleas’ order and remand the matter
to Common Pleas with direction that it conduct an evidentiary hearing. During that
hearing, the parties may present evidence regarding Objectors’ standing and whether
the Bureau complied with the requirements of RETSL, including evidence relating
to notice received by Prior Owner and the Bureau’s attempts to notify Prior Owner
of the upset tax sale.

                                          P. KEVIN BROBSON, Judge

                                         26
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Amy Nguyen and Kenny Pham              :
                                       :
            v.                         :   No. 393 C.D. 2020
                                       :
Delaware County Tax Claim              :
Bureau and Chadd Neumann               :
                                       :
Appeal of: Chadd Neumann               :

                                   ORDER

      AND NOW, this 29th day of December, 2020, the order of the Court of
Common Pleas of Delaware County (Common Pleas), dated January 15, 2020, is
VACATED, and the matter is REMANDED to Common Pleas with instructions that
Common Pleas conduct an evidentiary hearing and issue a new decision and order.
      Jurisdiction relinquished.

                                       P. KEVIN BROBSON, Judge