Court Opinion

ID: 4373948
Source: CourtListenerOpinion
Date Created: 2019-03-05 19:36:03.01537+00
Date Added: 2024-06-11T11:59:34.621093
License: Public Domain

J-A25004-18

                                2019 PA Super 66

 WELLS FARGO BANK N.A.,                   :   IN THE SUPERIOR COURT OF
 SUCCESSOR BY MERGER TO WELLS             :        PENNSYLVANIA
 FARGO BANK MINNESOTA, N.A.,              :
 CARBON COUNTY, PA. F/K/A                 :
 NORWEST BANK MINNESOTA, N.A.,            :
 AS TRUSTEE FOR DELTA FUNDING             :
 HOME EQUITY LOAN ASSET BACKED            :
 CERTIFICATES, SERIES 1999-2,             :
                                          :   No. 405 EDA 2018
                    Appellant             :
                                          :
                                          :
              v.                          :
                                          :
                                          :
 MARIA T. ZUMAR                           :

            Appeal from the Order Entered December 29, 2017
  In the Court of Common Pleas of Carbon County Civil Division at No(s):
                                13-1664

BEFORE: PANELLA, J., DUBOW, J., and KUNSELMAN, J.

OPINION BY DUBOW, J.:                               FILED MARCH 05, 2019

      Appellant, Wells Fargo Bank, N.A., Successor by Merger to Wells Fargo

Bank Minnesota, N.A., Carbon County, Pa. f/k/a Norwest Bank Minnesota,

N.A., as Trustee for Delta Funding Home Equity Loan Asset Backed

Certificates, Series 1999-2, appeals from the Order entered December 29,

2017, denying its Petition to Set Aside Sheriff’s Sale. We affirm.

      In January 1989, John C. Zumar and Appellee, as husband and wife,

purchased a parcel of land (Vacant Lot) located in Packer Township, Carbon

County, Pennsylvania. See Zumar Deed, filed and recorded March 20, 1989.

The Vacant Lot sits adjacent to another parcel (House Lot) at one time owned
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by the Zumars. See Deed to House Lot, filed and recorded August 5, 1987.

Both parcels share the same street address, 538 Brenkman Drive, Weatherly,

Pennsylvania.1

       The Vacant Lot was one of seven created following the subdivision of a

larger tract of land owned by the Andreuzzi family. See Andreuzzi Subdivision

Plan, filed January 4, 1989.2 Viewed from Brenkman Drive, this tract of land

stretches behind the House Lot, as well as five other developed parcels. Id.

       Both the Zumar Deed and the Andreuzzi Subdivision Plan set forth

similar restrictions on the Vacant Lot.          In relevant part, the Zumar Deed

provides:

       The parcel of land conveyed herein shall become a part of the
       respective parcel of the Grantee herein [i.e., the Zumars] and may
       not be conveyed separately apart therefrom without compliance
       with all regulations and ordinances of the Township of Packer.

Zumar Deed at 2 (unpaginated); see also Andreuzzi Subdivision Plan

(similarly suggesting that subdivided parcels, conveyed to a respective

adjacent landowner, “may not be conveyed separately or apart therefrom

without prior township approval”).

       In June 1994, the Zumars conveyed both parcels to Matthew M.

McGowan and Anna Marie McGowan, as husband and wife. See McGowan
____________________________________________

1 Documents in the record of this matter identify the street as either
“Brenkman” or “Breakman.”

2The members of the Andreuzzi family were Joseph A. Andreuzzi, Anella A.
Andreuzzi, Judith Ann Arnoldi, and Joseph Andreuzzi, Jr.

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Deed, filed and recorded August 9, 1994. The McGowan Deed provides that

the conveyance is subject “to all exceptions, restrictions and reservations as

shown in the chain of title.”   Id. at 3 (unpaginated).   In April 1999, the

McGowans conveyed both parcels to Appellee. See Appellee’s Deed, filed and

recorded on April 21, 1999.     As with the McGowan Deed, Appellee’s Deed

provides that the conveyance is subject “to all exceptions, restrictions and

reservations as shown in the chain of title.” Id. at 3.

      Appellee financed the conveyance with a loan secured by a mortgage.

See Appellee’s Mortgage, 4/13/99.      However, the legal description of real

property encumbered by the Mortgage describes only the Vacant Lot. Id. at

13 (unpaginated).

      In December 2001, the trial court entered a default Judgment of

Foreclosure on the Mortgage. See Trial Court Mem. Op., filed December 29,

2017, at 6 n.6. In December 2006, execution proceedings ended in a Sheriff’s

sale at which Bank One—a predecessor-in-interest to Appellant—purchased

the Vacant Lot. Id. Thereafter, in April 2010, upon Petition by Bank One, the

court vacated the prior Judgment without prejudice and set aside the Sheriff’s

sale. Id. In October 2010, the court granted Bank One’s Motion to Reform

Appellee’s Mortgage to include an accurate description of the real property

encumbered, including both the Vacant Lot and House Lot. Id. at 2.

      In August 2013, Appellant filed a Complaint seeking a Judgment of

Foreclosure.   Despite the prior Order reforming Appellee’s Mortgage, the

Complaint’s description of real property encumbered by the Mortgage again

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referenced only the Vacant Lot. See Complaint, 8/21/13. In December 2013,

the court entered a default Judgment against Appellee.           See Notice of

Judgment, 12/13/13. In February 2014, execution proceedings ended in a

Sheriff’s sale at which Appellant purchased the Vacant Lot.       See Sheriff’s

Deed-Poll, filed and recorded March 28, 2014.3

       In December 2016, having discovered its error, Appellant filed a Petition

to Set Aside Sheriff’s Sale.          See Petition, 12/27/16.   Referencing the

restriction set forth in the Zumar Deed, Appellant averred that the Sheriff was

without authority to sell the Vacant Lot separately from the House Lot. Id. at

4 (unpaginated). Appellee responded to the Petition, asserting that it was

untimely filed and, further, that the restriction set forth in the Zumar Deed

was unenforceable as a perpetual restraint on alienation.        See Appellee’s

Answer, 1/25/17.

       In August 2017, the court held a hearing in this matter.       Appellant

introduced testimony from James Markovchick, a neighbor who also owned

two adjacent parcels, one of which was formed pursuant to the Andreuzzi

Subdivision Plan. See Notes of Testimony (N.T. Hearing), 8/22/17, at 74-90.

____________________________________________

3 Thereafter, Appellant purportedly conveyed both parcels to an unrelated
party, Luis Diaz. See Trial Court Mem. Op. at 5-6. Mr. Diaz has consented to
the current proceedings. See Diaz Consent, 12/27/16.

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Mr. Markovchic testified to a similar deed restriction on his property that

nominally precluded separate conveyance of his adjacent parcels. Id. at 86.4

       In December 2017, the trial court denied Appellant’s Petition.         See

Order, 12/29/17. The court also issued a memorandum opinion, explaining

its decision. See Trial Court Mem. Op. at 6-10 (concluding (1) Appellant’s

Petition untimely; (2) Zumar Deed restriction unenforceable as restraint on

alienability; and, thus, (3) Sheriff was authorized to convey Vacant Lot).

Appellant timely appealed and filed a court-ordered Pa.R.A.P. 1925(b)

Statement. In response, the court entered a statement pursuant to Pa.R.A.P.

1925(a), directing our attention to its prior opinion.

       Appellant presents the following issues for our review:

       1. [Whether] the court abuse[d] its discretion or commit[ted] an
          error of law when it found that the Sheriff had authority to sell
          the property at foreclosure sale when there is contained a
          restrictive covenant preventing the two lots at issue being sold
          separately[;]

       2. [Whether] the trial court err[ed] when it determined the
          validity of the restrictive covenant in the context of a
          foreclosure action[; and]
____________________________________________

4 Appellant also introduced testimony from Daniel Miscavige, Esq., who has
served as the Solicitor for Packer Township since the Andreuzzi Subdivision.
See N.T. Hearing at 30-31. Attorney Miscavige suggested that, absent a
variance, any “independent structure” erected on the Vacant Lot would not
comply with a local zoning regulation passed in 1989. Id. at 67-69; see also
Stipulation of Facts, 8/21/2017, at 2 ¶ 6 (quoting Packer Township Zoning
Regulation Article 502.6(A) as requiring “[e]ach principal building or use shall
be located upon a lot having a minimum lot area of not less than two (2)
acres”). Appellant pursues no claim based upon this evidence. See generally
Appellant’s Br.; see also Trial Court Mem. Op. at 8 n.7 (ascribing no
significance to this regulation as it effects use not alienability).

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      3. [Whether] the trial court err[ed] when it held that due to the
         procedural posture of the matter, equity could not be invoked
         by Appellant[.]

Appellant’s Br. at 2.

      “A petition to set aside a sheriff's sale is grounded in equitable

principles[.]” GMAC Mortg. Corp. of Pa. v. Buchanan, 929 A.2d 1164, 1167

(Pa. Super. 2007). The burden of establishing grounds for relief rests with

the petitioner. Id.

      Generally, a court may only grant a petition “when [it] is filed before the

sheriff’s delivery of the deed.”    Mortg. Elec. Registration Sys., Inc. v.

Ralich, 982 A.2d 77, 79 (Pa. Super. 2009) (citations omitted) (Ralich),

appeal denied, 992 A.2d 889 (Pa. 2010); Pa.R.C.P. 3132.               However, a

petitioner may invoke the equitable powers of the court upon establishing an

exception to this time bar for “fraud or a lack of authority to make the sale.”

Ralich, 982 A.2d at 80. This restraint on the court’s equitable powers is well

settled.   See Knox v. Noggle, 196 A. 18, 19 (Pa. 1938) (citing Case of

McCulloch, 1 Yeates 40 (Pa. 1791)). As noted by our Supreme Court, “[a]

weakening of the rule . . . would seriously impair the stability of titles acquired

through sheriff's sales.” Knox, supra at 19.

      The decision to set aside a sheriff’s sale is within the sound discretion of

the trial court, and we shall not reverse its decision on appeal absent a clear

abuse of discretion. Merrill Lynch Mortg. Capital v. Steele, 859 A.2d 788,

791 (Pa. Super. 2004) (Steele). “An abuse of discretion is not merely an

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error of judgment, but if in reaching a conclusion the law is overridden or

misapplied, or the judgment exercised is manifestly unreasonable, or [the

judgment is] the result of partiality, prejudice, bias or ill-will, as shown by the

evidence of record, discretion is abused.” National Penn Bank v. Shaffer,

672 A.2d 326, 328 (Pa. Super. 1996) (citation omitted).

      Appellant, having sought relief more than two years after delivery of the

Sheriff’s Deed-Poll, acknowledges that its Petition was untimely.             See

Appellant’s Br. at 16; see also Ralich, 982 A.2d at 79; Pa.R.C.P. 3132. Thus,

it purports to invoke the trial court’s equitable powers by exception.        See

Ralich, 982 A.2d at 80.

      Before we address those issues properly preserved by Appellant, we

note that its Brief does not conform to the Pennsylvania Rules of Appellate

Procedure. For example, Rule 2119(a) provides that an “argument shall be

divided into as many parts as there are questions to be argued.” Pa.R.A.P.

2119(a). While Appellant presents three issues for our review, its argument

is divided into four distinct parts.     Compare Appellant’s Br. at 2, with

Appellant’s Br. at 16, 18, 26, 27. This has hampered our review.

      Additionally, in the third part of its argument, Appellant asserts that it

was procedurally improper for the trial court to address the validity of the

Zumar Deed restriction sua sponte. Id. at 26. In our view, this argument is

not “fairly suggested” by the issues preserved for appeal.         See Pa.R.A.P.

1925(b)(4), 2116(a). Moreover, following our review of the record, it is clear

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that Appellant has not challenged previously the court’s authority to make this

determination. See generally N.T. at 92-110 (addressing issues for court’s

consideration); see also Appellant’s Pa.R.A.P. 1925(b) Statement, 2/8/18, at

2-3 (asserting several substantive errors but failing to suggest that the court

erred by sua sponte addressing validity of restrictive covenant). Accordingly,

we deem this issue waived. See, e.g., Krebs v. United Ref. Co. of Pa., 893

A.2d 776, 797 (Pa. Super. 2006) (finding waiver where appellant failed to

preserve issue pursuant to Pa.R.A.P. 1925(b), 2116(a)); Pa.R.A.P. 302(a)

(“Issues not raised in the lower court are waived and cannot be raised for the

first time on appeal.”).

      We note further that the premise of Appellant’s argument—that the trial

court raised this issue sua sponte—does not accurately reflect the proceedings

below. The basis for relief set forth in Appellant’s Petition was that the Zumar

Deed restriction “deprived the Sheriff of the authority to sell [the Vacant Lot]

separately from the [House Lot].” Appellant’s Petition at 4 (unpaginated) ¶

22; see also N.T. at 93 (Appellant’s Counsel: “The first argument being made

by [Appellant] relies upon the restrictive covenant.”). Appellant raised the

validity of this restrictive covenant, not the court.

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       Essentially, Appellant has preserved two issues for our review.5 In the

first, Appellant contends that the Sheriff lacked authority to sell the Vacant

Lot because the sale violated a valid restrictive covenant. Appellant’s Br. at

15, 16-18.     Having thus invoked the equitable powers of the court, in its

second issue, Appellant asserts that “procedural errors” committed in prior

attempts to foreclose on Appellee’s Mortgage should not undermine its prayer

for relief. Id. at 27-30 (suggesting further that we balance the grave injury

to Mr. Diaz, who purchased the Vacant Lot, against the windfall afforded

Appellee, i.e., a free house). Appellant’s first issue is dispositive.

       The foundation of Appellant’s argument is its assertion that the Zumar

Deed restriction prescribes a reasonable and enforceable restraint on the

separate conveyance of the Vacant Lot. Id. at 18, 20-25.

       A restraint on the free alienation of property is not favored in the law.

Lauderbaugh v. Williams, 186 A.2d 39, 41 (Pa. 1962). While a “limited and

reasonable restraint” may be valid, “an absolute restraint is against public

policy and, therefore, of no legal effect.”       Id.    Whether a restraint is

reasonable presents a question of law that we consider in light of the specific

facts and circumstances of the case, “including any time limit on the restraint.”

Ralston v. Ralston, 55 A.3d 736, 740 (Pa. Super. 2012); see also, e.g.,

____________________________________________

5We merge the first and second issues raised by Appellant and address them
concurrently.

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Hyatt v. Hyatt, 417 A.2d 726, 729 (Pa. Super. 1979) (holding that agreement

to suspend partition action indefinitely constituted an unlawful restraint on

alienation); Lauderbaugh, 186 A.2d at 41 (noting that right of alienation

preconditioned upon admittance to local association was “not limited in time

and purports to be a perpetual one, a fact which militates strongly against its

enforcement”).

      In the Zumar Deed, we discern two restraints on an owner’s right to

convey the Vacant Lot: (1) conveyance of the Vacant Lot is permitted if the

Vacant Lot is sold along with the House Lot; and (2) separate conveyance of

the Vacant Lot is permitted if there is compliance with all local regulations and

ordinances.   Zumar Deed at 2 (unpaginated).        Thus, we must determine

whether these restraints are “limited and reasonable.” Lauderbaugh, 186

A.2d at 41.

      According to Appellant, the first restraint does not “prevent absolutely

the transfer of property . . . but only prevents the lots [from being] sold

separately.” Appellant’s Br. at 21. In support of its assertion that this limited

restraint is reasonable, Appellant directs our attention to the Andreuzzi

Subdivision Plan.   According to Appellant, the purpose of the Plan was to

increase the value of current homeowners’ property by ensuring that their

respective homes would front undeveloped open space, a “general scheme”

beneficial to the neighborhood. Appellant’s Br. at 21-23 (citing in support Fey

v. Swick, 454 A.2d 551, 554 (Pa. Super. 1982)).

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       Notably absent from Appellant’s analysis is any discussion of the

perpetual nature of this restraint. See Appellant’s Br. at 20-25. By its plain

terms, however, the restraint prohibits the conveyance of a distinct parcel of

real property indefinitely.6 See Zumar Deed at 2 (unpaginated). Thus, we

reject Appellant’s characterization of this restraint as limited. See Hyatt, 417

A.2d at 729; Lauderbaugh, 186 A.2d at 41.

       Further, Appellant’s reliance on Fey is misplaced.        In that case,

residential lot owners brought a class action seeking to enjoin construction of

an apartment complex on an adjacent subdivision. Fey, 454 A.2d at 551-53.

The various lots and subdivisions involved originated from a common grantor,

and near-identical restrictive covenants limited their use. Id. The trial court

enjoined construction, and this Court affirmed. Id. at 551. On appeal, our

analysis considered whether the residential lot owners had established

themselves as third party beneficiaries of the covenants restricting use of the

adjacent subdivision. Id. at 554. We concluded they did so based on the

“general scheme of residential development.” Id.

____________________________________________

6 There is no evidence that a merger or consolidation of the Vacant Lot and
the House Lot occurred.      Rather, the documentary evidence suggests
otherwise. See Zumar Deed (evincing an intent that the Vacant Lot “become
a part of” the House Lot); but see McGowan Deed (describing two distinct
parcels); Appellee’s Deed (same). Indeed, the genesis of Appellant’s Petition
suggests a tacit acknowledgment of this, as its Complaint in foreclosure
provided an incomplete description of real property encumbered by the
Mortgage, describing only one of the two parcels.

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        The validity of the restrictive covenants was not at issue in Fey, as it is

here.    Moreover, the Fey covenants restricted the size and the manner in

which subdivided parcels could be used. Id. at 551-553 (limiting lots to a

single, private residence). They did not restrict an owner’s authority to convey

property to another. Id. Thus, we deem Fey inapposite.7

        Appellant does not address the second restraint, i.e., separate

conveyance of the Vacant Lot is permitted provided an owner complies with

all local regulations and ordinances, nor has Appellant averred the relevance

of any local regulation or ordinance.              See generally Appellant’s Br.;

Appellant’s Petition. Thus, we need not consider the restraint in detail. As

noted by the trial court, a township’s regulations and ordinances address the

use, and not the conveyance, of real property. See Trial Court Mem. Op. at

8 (characterizing this condition for separate conveyance as “illusory”). We

agree and, therefore, attribute no significance to this language. See Ralston,

55 A.3d at 740.

        For these reasons, the restraints on alienation set forth in the Zumar

Deed are neither limited nor reasonable.             The first imposes a perpetual

restraint on an owner’s right to convey property, whereas the second offers

____________________________________________

7 Similarly misplaced is Appellant’s reliance on Estate of Hoffman v. Gould,
714 A.2d 1071 (Pa. Super. 1998) (holding that a restrictive covenant, which
required prior approval by developer of building plans, was valid and
enforceable). See Appellant’s Br. at 20.

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no meaningful limitation on that right.            Thus, they are unenforceable.

Ralston, 55 A.3d at 740; Lauderbaugh, 186 A.2d at 41.8

       As the Zumar Deed restriction seeks to impose restraints that are

unenforceable, the restriction did not undermine the Sheriff’s authority to

convey the Vacant Lot separately from the House Lot. Accordingly, Appellant

failed to invoke the equitable powers of the trial court. Ralich, 982 A.2d at

80. Further, as such, we need not address the equitable arguments untimely

raised by Appellant in its second issue. Id. For these reasons, we discern no

abuse in the court’s discretion to deny Appellant’s Petition to Set Aside

Sheriff’s Sale. Steele, 859 A.2d at 791.

       Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/5/19

____________________________________________

8Similarly, the restraint contemplated by the Andreuzzi Subdivision Plan is
unenforceable.

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