Court Opinion

ID: 6322946
Source: CourtListenerOpinion
Date Created: 2022-03-14 16:12:11.357729+00
Date Added: 2024-06-11T09:21:17.856929
License: Public Domain

J-S34016-21

                               2022 PA Super 45

 LSF8 MASTER PARTICIPATION                :   IN THE SUPERIOR COURT OF
 TRUST, C/O CALIBER HOME LOANS,           :        PENNSYLVANIA
 INC.                                     :
                                          :
                   Appellant              :
                                          :
                                          :
              v.                          :
                                          :   No. 592 MDA 2021
                                          :
 JOHN L. PETROSKY AND DONNA M.            :
 PETROSKY                                 :

               Appeal from the Order Entered April 13, 2021
  In the Court of Common Pleas of Luzerne County Civil Division at No(s):
                               201600973

BEFORE: DUBOW, J., McLAUGHLIN, J., and McCAFFERY, J.

OPINION BY McLAUGHLIN, J.:                          FILED MARCH 14, 2022

     LSF8 Master Participation Trust, c/o Cailber Home Loans, Inc. (“LSF8”)

appeals from the order denying its petition to set aside a sheriff’s sale as

untimely. We affirm.

     The trial court aptly set forth the underlying facts:

           This is a mortgage foreclosure action. Respondents, John
     and Donna Petrosky [“Petroskys”], are the owners of three parcels
     of land in Luzerne County known collectively as 51 Petrosky Lane,
     Weatherly, PA. A residential home sits on one of the tracts. The
     other two are landlocked vacant parcels. Title to the residential
     parcel was conveyed to [the Petroskys] by deed (“2002 Deed”)
     which was executed on August 16, 2002 and recorded in the
     Luzerne County Recorder of Deeds on January 24, 2012. Title to
     the vacant, landlocked parcels was conveyed to the [Petroskys]
     by deed (“1988 Deed”) on September 2, 1988 and was recorded
     on September 6, 1988.

          On November 6, 2006, John Petrosky, as borrower, and
     Donna Petrosky, as nonborrowing spouse, executed and delivered
J-S34016-21

      a mortgage (“the Mortgage”) to Beneficial Consumer Discount
      d/b/a Beneficial Mortgage Co. of Pennsylvania (“Lender”) on
      November 6, 2006. The Mortgage was recorded in the Luzerne
      County Recorder of Deeds on November 9, 2006. The legal
      description of the property (“Mortgaged Property”) in the
      Mortgage is that of the vacant, landlocked parcels, not the parcel
      on which the residence is located.

           Lender assigned the Mortgage to [LSF8]. The Assignment
      was recorded on November 19, 2014.

            On February 5, 2016, [LSF8] filed this action to foreclose
      based on the [Petroskys’] default pursuant to its terms. On June
      30, 2017, a judgment in rem was entered in favor of [LSF8]
      against the [Petroskys] in the amount of $130,129.17. A sheriff’s
      sale of the Mortgaged Property was held on December 1, 2017
      [“Sheriff’s sale”]. The purchaser was [LSF8]. Following the
      [Sheriff’s sale], the Mortgaged Property was conveyed to [LSF8]
      by Sheriff’s Deed and was recorded with the Luzerne County
      Recorder of Deeds on January 11, 2018.

            On September 20, 2020, [LSF8] filed a Petition to Set Aside
      Sheriffs Sale and Vacate Foreclosure Judgment because, it
      contends, the property description in the Mortgage should have
      been the parcel on which the residence is located, not the
      landlocked vacant land. [LSF8] seeks this relief so it can file a
      quiet title action to correct the error in the Mortgage.

Tr. Ct. Pa.R.A.P. 1925(a) Op., 6/24/21, at 1-2.

      After the trial court conducted a hearing regarding LSF8’s petition to set

aside the Sheriff’s sale on October 19, 2020, the court issued an order denying

the petition on April 12, 2021. The instant timely appeal followed and both the

court and LSF8 complied with Pa.R.A.P. 1925.

      LSF8 raises the following issues:

      1) Did the Trial Court err by applying the legal standard applicable to a
         defendant to set aside a Sheriff’s sale?

      2) Did the Trial Court err by holding that a mistake is not sufficient
         grounds for a Plaintiff to set aside a Sheriff’s sale?

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LSF8’s Br. at 1.

      In its first issue, LSF8 argues that the trial court erroneously concluded

that it lacked discretion to set aside the Sheriff’s sale. Pointing to what it terms

the courts’ “power to reform recorded instruments” for “mutual mistake,” LSF8

claims that the parties committed a mutual mistake by their “inclusion of the

incorrect legal description” in the subject mortgage. LSF8’s Br. at 8-9. LSF8

maintains that if the Sheriff’s sale is not set aside, the Petroskys will receive

an unjust windfall. In its second issue, LSF8 asserts that even though its

petition to set aside the Sheriff’s sale was facially untimely, the alleged mutual

mistake in the Mortgage should have constituted an exception to the

timeliness requirement because the mistake caused the sheriff to lack

“authority” to conduct the Sheriff’s sale. Id. at 11.

      LSF8’s issues are interrelated, and we discuss them together. We will

not reverse a trial court’s decision regarding whether to set aside a sheriff’s

sale “absent a clear abuse of discretion.” Wells Fargo Bank N.A. v. Zumar,

205 A.3d 1241, 1245 (Pa.Super. 2019). “An abuse of discretion is not merely

an 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.” Id. (citation omitted).

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

principles[.]” Id. at 1244 (citing GMAC Mortgage Corp. of Pa. v. Buchanan,

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929 A.2d 1164, 1167 (Pa.Super. 2007)). The petitioner bears the burden of

establishing grounds for relief. Id.

      A court may only grant a petition to set aside a sheriff’s sale when it is

filed before the sheriff’s delivery of the deed. Mortgage Elec. Regis. Sys. v.

Ralich, 982 A.2d 77, 79 (Pa.Super. 2009); Pa.R.C.P. 3132 (“Upon petition of

any party in interest before delivery of the personal property or of the

sheriff’s deed to real property, the court may, upon proper cause shown,

set aside the sale and order a resale or enter any other order which may be

just and proper under the circumstances”) (emphasis added).

      Further, Pa.R.C.P. 3135 provides:

      (a)When real property is sold in execution and no petition to set
      aside the sale has been filed, the sheriff, at the expiration of
      twenty days but no later than 40 days after either the filing of the
      schedule of distribution or the execution sale if no schedule of
      distribution need be filed, shall execute and acknowledge before
      the prothonotary a deed to the property sold. The sheriff shall
      forthwith deliver the deed to the appropriate officers for recording
      and for registry if required. Confirmation of the sale by the court
      shall not be required.

Id.

      Taken together, Rules 3132 and 3135(a) “make clear a party must raise

a challenge to a sheriff’s sale within a period of time after the sale, but before

the deed is delivered.” Mortgage Elec. Regis. Sys., 982 A.2d at 80. “There

is an exception to this time bar, however. A sheriff’s sale may be set aside

after delivery of the sheriff’s deed based on fraud or lack of authority to make

the sale.” Id.

                                       -4-
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      In this case, the trial court determined that LFS8’s petition was untimely

because it was filed in September 2020, approximately two years and nine

months after the sheriff’s deed at issue was recorded with the Luzerne County

Recorder of deeds, in January 2018. See id. at 79. The court considered

LFS8’s argument regarding a “mutual mistake” in the Mortgage but rejected

it. The court explained that “although the possibility exists that the description

of the land in the Mortgage might not be what the parties intended, the

Mortgage nonetheless contained a valid legal description of existing land

owned by [the Petroskys] that was able to be sold at a sheriff’s sale and

conveyed to [LFS8] by sheriff’s deed.” Tr. Ct. Op., at 4. Thus, the court

concluded that LFS8 failed to establish that any alleged mutual mistake in the

Mortgage caused the sheriff to lack authority to conduct the Sheriff’s sale.

      Although LFS8 cites authority regarding mutual mistakes and the

reformation of documents, it cites no precedent or other authority stating that

a court may set aside a sheriff’s sale after delivery of the deed because of a

mutual mistake in the mortgage. Its citation to Mackanass v. Long, 85 Pa.

158 (Pa. 1877), is utterly inapt. That case relates to the sale of personal

property, was decided long before the promulgation of the Rules of Civil

Procedure, and nowhere states that an execution sale may be set aside on

account of mistake. Indeed, it nowhere uses the word “mistake.” The

reference to 1400 Market St., LLC v. Fox Funding, LLC, No. 3391 EDA

2014, 131 A.3d 90 (Pa.Super. 2015) (mem.), is impermissible. See LFS8’s Br.

at 10-11. This Court’s memorandum decisions filed on or before May 1, 2019

                                      -5-
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may not be cited for any reason other than for purposes of law of the case

and related doctrines. Pa.R.A.P. 126.1

       LFS8’s reliance on Wells Fargo Bank, N.A. v. Lupori, 8 A.3d 919

(Pa.Super. 2010), is likewise misplaced. There, the mortgagors moved to

strike a default judgment and set aside a sheriff’s sale after the execution and

recordation of a sheriff’s deed. This Court concluded that the default judgment

was facially defective because the record did not show that the plaintiff/bank

was the real party in interest. We therefore reversed the denial of the petition

to strike the default judgment and set aside the sheriff’s sale. LFS8 posits that

the case sub judice is analogous because an alleged mutual mistake in the

Mortgage regarding the description of the Mortgaged Property should have

rendered the sheriff without proper authority to conduct the Sheriff’s sale. We

disagree.

       The instant case is readily distinguishable because the sheriff did not

lack authority to conduct the Sheriff’s sale. To the contrary, as the trial court

noted, the Mortgage contained a valid legal description of the Mortgaged

Property, and the foreclosure proceeding and Sheriff’s sale included the

necessary parties. Therefore, LFS8’s argument that the sheriff lacked

____________________________________________

1 Moreover, we have reviewed this Court’s decision in 1400 Market St., and
even if we were to consider it as persuasive authority, it would offer LSF8 no
help. There, the real owner of the property at issue was not a party to the
mortgage foreclosure proceedings that ultimately led to the sheriff’s sale. An
entity with a similar name had been named. We held that the omission of an
indispensable party resulted in the sheriff lacking authority to conduct the
sale. No similar omission of an indispensable party has occurred here.

                                           -6-
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authority to conduct the sale does not warrant relief. Hence, we hold that

LSF8’s petition to set aside the Sheriff’s sale was patently untimely and not

subject to a timeliness exception due to fraud or lack of authority for the sale.

Accordingly, we affirm the trial court’s order denying LSF8’s petition to set

aside the Sheriff’s sale.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/14/2022

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