Court Opinion

ID: 9925394
Source: CourtListenerOpinion
Date Created: 2024-01-19 17:09:08.565225+00
Date Added: 2024-06-11T09:20:20.591255
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Kristen Moyer                       :
                                    :
      v.                            : No. 241 C.D. 2023
                                    :
Schuylkill County Tax Claim Bureau :
and Commonwealth Commerce, LLC, :
as Trustee for the 010722 Portfolio :
Trust                               :
                                    :
Appeal of: Commonwealth             :
Commerce, LLC, as Trustee for the :
010722 Portfolio Trust              : Argued: December 4, 2023

BEFORE:        HONORABLE RENÉE COHN JUBELIRER, President Judge
               HONORABLE CHRISTINE FIZZANO CANNON, Judge
               HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE CEISLER                                                  FILED: January 19, 2024

      Commonwealth Commerce, LLC, as Trustee for the 010722 Portfolio Trust
(Trust), appeals from the February 10, 2023 order of the Court of Common Pleas of
Schuylkill County (trial court) sustaining objections filed by Kristen Moyer (Owner)
to a September 26, 2022 upset tax sale that disposed of Owner’s real property located
at 107 Vine Street, Ringtown, Pennsylvania (Property). The Trust argues that the
trial court erred in disallowing the September 26, 2022 upset tax sale because the
sale conducted by the Schuylkill County Tax Claim Bureau (Bureau) complied with
the requirements set forth in the Real Estate Tax Sale Law (RETSL),1 including
notice of the pending upset tax sale to Owner, who failed to pay the delinquent taxes
prior to the sale date, and that the Bureau was not obligated to accept Owner’s

      1
          Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§ 5860.101-5860.803.
evidence that the Pennsylvania Homeowner Assistance Fund (PAHAF)2 would
provide the funds necessary to pay the delinquent taxes.3 After careful review, we
affirm the trial court.

                                        I. Background

       The facts in this matter are undisputed. Due to $6,946.58 in delinquent real
estate taxes, the Property was exposed to an upset tax sale on September 26, 2022,
and sold to the Trust. Owner filed objections to the upset tax sale on November 23,
2022, arguing that she notified the Bureau on September 22, 2022, that she received
funding to pay the outstanding taxes from PAHAF and that PAHAF had mailed a
check in that amount to the Bureau. The Bureau refused to review the letter Owner
provided from PAHAF to substantiate the payment, which the Bureau received on
the date of the upset tax sale. Owner contended that the Bureau erred in refusing to
accept the letter from PAHAF as evidence that the taxes would be paid, and she
requested that the trial court set aside the upset tax sale.

       The trial court held a hearing on Owner’s objections on February 2, 2023.
Owner testified on her own behalf and presented documentation from PAHAF
demonstrating that Owner had funding available to pay the delinquent taxes. The
Bureau presented the testimony of its interim Assistant Director, Deborah Dasch.

       2
          PAHAF is a program funded by the United States Department of the Treasury and
administered by the Pennsylvania Housing Finance Agency that assists homeowners facing
financial hardship because of the COVID-19 pandemic. https://pahaf.org/faqs/ (last visited Jan.
18, 2024). PAHAF’s website indicates that it has paused new applications, effective February 1,
2023.

       3
           We have reordered the Trust’s arguments and consolidated issues to the extent they
overlap. The Bureau filed a separate brief in which it adopted the Trust’s arguments and also
argued that, once Owner had notice of the upset tax sale and failed to pay the outstanding taxes
prior to the date of sale, the trial court had no authority to set aside the upset tax sale.

                                               2
        Owner acknowledged that she was delinquent in paying the 2020 real estate
taxes on the Property and that she received notice of the pending upset tax sale at the
beginning of September 2022. After receiving notice of the upset tax sale, Owner
contacted the Bureau to find out the total amount of delinquent taxes owed.
Thereafter, Owner filed an application with PAHAF for assistance with paying the
delinquent taxes, which PAHAF approved. On September 22, 2022, Owner received
an email from PAHAF with an attached letter indicating that a check for $6,946.58
was mailed to the Bureau in satisfaction of the Property’s delinquent taxes. The
letter from PAHAF provided the pertinent tax account information, along with
Owner’s name and the Property’s address. PAHAF’s letter provided an email
address and telephone number should the Bureau have any questions.

        Owner contacted the Bureau to confirm it received the payment from PAHAF.
Based on a conversation Owner had with the Bureau’s staff, Owner understood that
PAHAF’s check had not yet arrived, and that the Bureau would not accept the letter
PAHAF emailed to Owner as proof of payment. Instead, PAHAF had to contact the
Bureau directly. After speaking with someone from PAHAF, Owner believed that
PAHAF forwarded the September 22, 2022 letter to the Bureau. Approximately two
weeks later, Owner was notified by “[s]omebody” that the Property had been sold at
the September 26, 2022 upset tax sale. Reproduced Record (R.R.) at 89.4

        Ms. Dasch testified that the Property’s delinquent taxes had to be paid by 4:30
p.m. on September 23, 2022, before the Property would be removed from the upset
tax sale. Regarding the assistance available through PAHAF, Ms. Dasch advised

        4
          The Trust’s reproduced record does not comply with Pa.R.A.P. 2173, which requires that
“the pages of . . . reproduced record . . . shall be numbered separately in Arabic figures . . . followed
by a small a[.]” The Trust failed to include the small “a” in its page numbers. Therefore, the
citations herein reflect those in the reproduced record.

                                                   3
her contacts with PAHAF of the September 23, 2022 payment deadline. If payment
was not received by September 23, 2022 at 4:30 p.m., the Bureau required that
someone affiliated with PAHAF send the Bureau an email confirming that PAHAF
was “in the process of cutting a check” and that the delinquent taxes were
“guaranteed to be paid.” Id. at 105. If PAHAF could provide proof that a taxpayer
qualified for assistance, the Bureau would “pause” the upset tax sale of the
associated property. Id. at 108. Ms. Dasch acknowledged that she received an email
from Karmesha Pitt, a servicing specialist with PAHAF, on September 21, 2022, in
which Ms. Pitt requested the total amount of taxes owed for the Property; however,
Ms. Dasch did not receive any confirmation from PAHAF that Owner’s application
was approved or that PAHAF had issued a check to cover the Property’s delinquent
taxes. Ultimately, the Bureau received PAHAF’s check for $6,946.58, along with
PAHAF’s September 22, 2022 letter, on September 26, 2023, after the Property had
been sold. Ms. Dasch testified that, had she received an email from PAHAF before
4:30 p.m. on September 23, 2022, the Bureau would have paused the upset tax sale
of the Property.

      During cross-examination, Ms. Dasch acknowledged that she “may have”
spoken with Owner in the week prior to the upset tax sale and that nothing would
have prevented her from reviewing the letter Owner received from PAHAF. Id. at
111. Ms. Dasch stated that the Bureau does not accept such letters from taxpayers,
however, because they could modify an email to “make it say whatever they want it
to say.” Id. at 112. Ms. Dasch conceded that, if she “had the time[,]” she could have
reached out to PAHAF to confirm that the letter Owner would have provided was
legitimate; however, Ms. Dasch advised that her office is “swamped with work and
customers and phone calls” prior to an upset tax sale. Id. at 118.

                                          4
      The Bureau submitted into evidence two email exchanges between Ms. Dasch
and PAHAF staff. In an August 31, 2022 email, Sharon Gagel, a servicing specialist
with PAHAF, inquired of Ms. Dasch as to the last date upon which upset tax sales
could be stayed, and whether Ms. Dasch would “accept an email that a grant ha[d]
been drafted . . . .” Id. at 140. Ms. Dasch replied that she had been given the
authority to “‘pause’ any property for which [PAHAF] can provide proof that the
owner is qualified for the program and a check will be sent to us.” Id. If Ms. Gagel
provided the information prior to 4:30 p.m. on September 23, 2022, Ms. Dasch
would “pause the parcel in question to get it off the sale.” Id. The September 21,
2022, email Ms. Dasch received from Ms. Pitt requested tax information specific to
Owner and the Property. Ms. Pitt advised that Owner was seeking financial
assistance from PAHAF and that time was “of the essence[.]” Id. at 140. In her
response, Ms. Dasch attached several documents detailing the taxes owed on the
Property, and she advised Ms. Pitt to “let [her] know if [she] had any questions.” Id.
at 130.

      The trial court issued an order and opinion on February 10, 2023, sustaining
Owner’s objections and disallowing the September 26, 2022 upset tax sale. The trial
court noted that Ms. Dasch could have confirmed Owner’s receipt of funding from
PAHAF, as Ms. Dasch had previously corresponded with PAHAF staff by email.
Ms. Dasch did not dispute the legitimacy of the September 22, 2022 letter Owner
wished to forward or refute that PAHAF sent funds prior to the September 23, 2022
deadline.   The trial court rejected Ms. Dasch’s explanation that her office is
understaffed and busy in the week prior to an upset tax sale. Although Owner
indisputably failed to pay the real estate taxes on the Property, the trial court found
that Owner took appropriate steps to apply for emergency funding from PAHAF.

                                          5
After PAHAF approved her application, Owner contacted the Bureau to provide
documentation that she had funding to cover the delinquent taxes on the Property,
which the Bureau refused to review. The trial court recognized that PAHAF
“appear[ed] to have dropped the ball[,]” as Owner advised PAHAF that it should
contact the Bureau directly. Id. at 32. Regardless, the trial court observed that the
Bureau “works for the people and not the other way around[,]” suggesting that the
Bureau could hire more staff if it was overly busy, particularly given the Bureau’s
awareness of the emergency funding program administered by PAHAF. Id. The
trial court deemed the Bureau’s staffing issues an insufficient reason to divest Owner
of her property when confirmation of payment was available. Ultimately, the trial
court concluded that allowing the upset tax sale of the Property to go forward would
punish Owner, who did “everything within her power to pay the delinquent taxes on
or before the deadline.” Id. at 33.

       This appeal followed.5

                                              II. Issues

       On appeal, the Trust argues that the trial court erred in disallowing the
September 26, 2022 upset tax sale because the Bureau complied with the
requirements set forth in the RETSL, including notice of the pending upset tax sale
to Owner, who failed to pay the delinquent taxes prior to the sale date, and that the
Bureau was not obligated to accept Owner’s evidence that PAHAF would provide
the funds necessary to pay the delinquent taxes.

       5
         This Court’s scope of review in tax sale cases is limited to determining whether the trial
court abused its discretion, rendered a decision that lacks supporting evidence, or clearly erred as
a matter of law. Nguyen v. Del. Cnty. Tax Claim Bureau, 244 A.3d 96, 101 n.3 (Pa. Cmwlth.
2020).

                                                 6
                                   III.   Discussion

      “[I]t is a momentous event . . . when a government subjects a citizen’s
property to forfeiture for the non-payment of taxes.” Tracy v. Chester Cnty. Tax
Claim Bureau, 489 A.2d 1334, 1339 (Pa. 1985). The primary purpose of RETSL is
not to strip away a citizen’s property rights but to ensure the collection of taxes. In
re Consol. Reports and Return by Tax Claims Bureau of Northumberland Cty. of
Prop., 132 A.3d 637, 651 (Pa. Cmwlth. 2016) (internal citations omitted). “Prior to
the sale of real property for unpaid taxes, a tax claim bureau must give a taxpayer
notice and opportunity to cure the unpaid taxes.” Jenkins v. Fayette Cnty. Tax Claim
Bureau, 176 A.3d 1038, 1044 (Pa. Cmwlth. 2018) (emphasis in original).

      The Trust argues that the trial court erred in disallowing the September 26,
2022 upset tax sale because the Bureau complied with all requirements in RETSL
and Owner indisputably received notice of the upset tax sale. The Trust contends
that the trial court imposed burdens on the Bureau that do not appear in RETSL,
such as accepting Owner’s evidence that she received funding from PAHAF or
contacting PAHAF to confirm Owner’s receipt of same. Additionally, the Trust
argues that the trial court erred in finding that Owner provided the Bureau with
adequate proof that the delinquent taxes would be paid and in disallowing the upset
tax sale based on the Bureau’s refusal to accept Owner’s proof of payment by
PAHAF. The Trust notes that the Bureau would not accept proof from Owner due
to potential fraud and PAHAF did not provide the required communication by
September 23, 2022 at 4:30 p.m. RETSL does not mandate that a tax claim bureau
accept a property owner’s “potentially fraudulent communication” from PAHAF or
require that a tax claim bureau take affirmative steps to confirm a property owner’s
acceptance into the PAHAF program. Trust’s Br. at 19.

                                          7
      In disallowing the upset tax sale, the trial court relied on Jenkins, in which this
Court upheld the setting aside of an upset tax sale where the taxpayer attempted to
pay her delinquent taxes three days before the sale and the county tax claim bureau
“improperly refused” her payment. Jenkins, 176 A.3d at 1043. We rejected the
argument that the county tax bureau had fully complied with RETSL because,
“[p]rior to the sale of real property for unpaid taxes, a tax claim bureau must give a
taxpayer notice and opportunity to cure the unpaid taxes.” Id. at 1044 (emphasis in
original).

      The facts in Jenkins differ somewhat from the instant appeal, as Owner
indisputably did not pay the taxes prior to the upset tax sale. It is clear from Ms.
Dasch’s testimony, however, that had PAHAF presented proof prior to the
September 23, 2022 deadline that payment was forthcoming, the Bureau would have
removed the Property from the upset tax sale. The Bureau would not consider the
identical proof offered by Owner well in advance of the September 23, 2022
deadline.

      The Trust is correct that RETSL does not require a tax claim bureau to take
affirmative steps to confirm that payment of delinquent taxes is forthcoming. This
Court has declined to find that an affirmative duty exists on the part of a tax claim
bureau where a corresponding statutory right of the taxpayer does not also exist. For
example, in Matter of Tax Sale 2018-Upset, 227 A.3d 957 (Pa. Cmwlth. 2020), this
Court held that a tax claim bureau did not have an affirmative duty to notify
taxpayers of the option to enter into an installment agreement for the payment of
delinquent taxes because Section 603 of RETSL, 72 P.S. § 5860.603, did not create
a statutory right for the payment of taxes in installments. Rather, installment
payments were an option to be determined by the tax claim bureau.

                                           8
      This Court has held that an affirmative duty exists, however, where a statute
grants an individual “an actual entitlement” or “an unqualified right to receive the
benefit[.]” Miller v. Workers' Compensation Appeal Board (Pavex, Inc.), 918 A.2d
809, 812-13 (Pa. Cmwlth. 2007). In such a situation, the individual is entitled to
protection under the due process clause. Instantly, per Jenkins, Owner was entitled
to have the “opportunity to cure the unpaid taxes.” Jenkins, 176 A.3d at 1044
(emphasis in original). To that end, Owner received funding from PAHAF to cover
the delinquent taxes, the proof of which she attempted to provide to the Bureau. The
Bureau refused to review the substantiating documentation Owner received directly
from PAHAF, despite the Bureau’s policy of pausing the sale of properties for which
PAHAF could provide proof that an owner qualified for relief from PAHAF and
provide confirmation that payment would be sent. While Ms. Dasch testified that
only documentation sent directly by PAHAF was acceptable, her August 31, 2022
email to Ms. Gagel did not specify that a property owner could not forward
information received from PAHAF, and there is no dispute that the letter Owner
wished to present to the Bureau was a copy of the letter PAHAF mailed to the
Bureau.

      Ultimately, the Bureau created a policy that offered Owner an additional
opportunity to cure the delinquent taxes on the Property – a policy that the Bureau
failed to follow when it rejected the proof of payment Owner obtained from PAHAF.
Thus, Owner’s opportunity to cure was essentially illusory, as Owner was forced to
rely on the assurances of PAHAF that it sent the requisite proof. As noted above,
the purpose of RETSL is to ensure the collection of taxes, not to strip a taxpayer of
her property. While Owner obtained funding to pay the delinquent taxes on the
Property, and obtained proof that payment was forthcoming, the Bureau elected to

                                         9
strip Owner of her property instead. Under the specific facts of this case, the
Bureau’s concerns that taxpayers would manipulate an email to “make it say
whatever they want it to say,” are simply insufficient to justify disposing of the
Property at an upset tax sale. R.R. at 112.

      The Trust argues that Owner is solely responsible for not paying the
delinquent taxes on the Property, resulting in its sale. It suggests that the trial court’s
decision to grant Owner’s exceptions creates a slippery slope that would permit
objections to a tax sale for reasons beyond a tax claim bureau’s failure to comply
with RETSL. The Trust contends that, should this Court affirm the trial court, any
taxpayer could prevent an upset tax sale by submitting a fraudulent document
indicating that a third party had committed to paying the taxes.

      We are not convinced by the Trust’s argument, as the instant appeal presents
specific and unique facts, and our holding herein is limited to those circumstances.
Moreover, Ms. Dasch testified that an upset tax sale would only be paused based on
payment by a government-funded program. The Bureau’s policy would not apply
where payment was guaranteed by a private individual.

      For the reasons set forth above, we conclude that the trial court did not err in
sustaining Owner’s objections to the September 26, 2022 upset tax sale.
Accordingly, we affirm the trial court.

                                          __________________________________
                                          ELLEN CEISLER, Judge

                                            10
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Kristen Moyer                       :
                                    :
      v.                            : No. 241 C.D. 2023
                                    :
Schuylkill County Tax Claim Bureau :
and Commonwealth Commerce, LLC, :
as Trustee for the 010722 Portfolio :
Trust                               :
                                    :
Appeal of: Commonwealth             :
Commerce, LLC, as Trustee for the :
010722 Portfolio Trust              :

                                ORDER

     AND NOW, this 19th day of January, 2024, the February 10, 2023 order of
the Court of Common Pleas of Schuylkill County is hereby AFFIRMED.

                                   __________________________________
                                   ELLEN CEISLER, Judge