Court Opinion

ID: 9958948
Source: CourtListenerOpinion
Date Created: 2024-04-10 14:11:56.992143+00
Date Added: 2024-06-11T08:18:08.127224
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Thomas Miron,                           :
                    Appellant           :
                                        :
             v.                         :     No. 290 C.D. 2023
                                        :     Submitted: February 6, 2024
Delaware County Tax Claim               :
Bureau, Arthur F. Urbany and            :
JAC Properties                          :

BEFORE:      HONORABLE RENÉE COHN JUBELIRER, President Judge
             HONORABLE ANNE E. COVEY, Judge
             HONORABLE MARY HANNAH LEAVITT, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY SENIOR JUDGE LEAVITT                               FILED: April 10, 2024

             Thomas Miron (Mortgagee) appeals an order of the Court of Common
Pleas of Delaware County (trial court) that denied his petition to set aside a tax sale
of property on which he held a mortgage lien. Mortgagee argues that because the
Delaware County Tax Claim Bureau (Tax Claim Bureau) did not serve him with
advance written notice of the scheduled upset tax sale, the sale should be set aside.
Additionally, Mortgagee argues that Arthur F. Urbany (Urbany) and JAC Properties
(JAC) lacked standing to participate in the tax sale set aside proceeding Mortgagee
initiated. For the reasons to follow, we affirm.
             MAC Business Services (MAC) holds a deed to property located at 15
Dougherty Boulevard, Fox Valley Condominium Unit N-3, in Glen Mills, Delaware
County, Pennsylvania (Property). MAC executed a mortgage on the Property in
favor of Mortgagee, and that mortgage was recorded in the Office of the Recorder
of Deeds. Petition ¶¶5-6; Reproduced Record at 7a (R.R.___). When MAC did not
pay its real property taxes, the Tax Claim Bureau exposed the Property to an upset
tax sale on September 14, 2017. Petition ¶¶7-8; R.R. 7a. Urbany was the successful
bidder, who then assigned his interest in the Property to JAC. Petition ¶¶17-18; R.R.
7a.
              On January 9, 2018, the trial court entered a decree of absolute
confirmation. Supplemental Reproduced Record at B251 (S.R.R. __). Thereafter,
on January 29, 2019, the Tax Claim Bureau issued a deed to the Property to JAC.
On January 31, 2019, the Tax Claim Bureau sent Mortgagee a letter informing him
that the Property was sold and that the Bureau was holding excess funds for him if
he still had a mortgage on the Property.
              On July 26, 2022, Mortgagee filed a petition to set aside the tax sale
and rescind the deed issued to JAC. Mortgagee claimed that as an owner, he was
entitled to advance notice of the Property’s scheduled tax sale. Petition ¶¶12-14;
R.R. 7a. After a hearing, the trial court denied Mortgagee’s petition by order of
February 7, 2023.
              The trial court held that because Mortgagee was not the title owner of
the Property, he was not entitled to a certified mail notice under Section 602(e)(1)
of the Real Estate Tax Sale Law (Tax Sale Law), Act of July 7, 1947, P.L. 1368, as
amended, 72 P.S. §5860.602(e)(1). Prior to a tax sale, the Tax Sale Law requires a
notice to mortgagees by publication, 72 P.S. §5860.602(d), and the Tax Claim

1
  Urbany and JAC’s Supplemental Reproduced Record fails to comply with Pennsylvania Rule of
Appellate Procedure 2173, PA. R.A.P. 2173, which requires the pages of the supplemental
reproduced record to be numbered separately in Arabic figures followed by a small b. Urbany and
JAC used a large “B” instead of a small “b” and put the “B” before the record page numbers.
However, for consistency of reference, the citations herein are as reflected in the Supplemental
Reproduced Record.
                                               2
Bureau “provided the requisite publication notice” to Mortgagee before the tax sale.
Trial Court Op. at 5.
               The trial court acknowledged that the Tax Claim Bureau did not satisfy
the Tax Sale Law’s post-sale notice requirements. Section 205(e) requires that a
Mortgagee receive notice, via first class mail, of the petition and rule to confirm
distribution. 72 P.S. §5860.205(e). Nevertheless, this failure “does not vitiate the
sale.” Trial Court Op. at 4 (citing First Pennsylvania Bank v. Lancaster County Tax
Claim Bureau, 521 A.2d 114, 116-17 (Pa. Cmwlth. 1987)). Further, the upset tax
sale did not affect Mortgagee’s lien on the Property, which survived the sale.
               The trial court rejected Mortgagee’s argument that Urbany and JAC did
not have standing to participate in his set aside petition. Mortgagee named Urbany
and JAC as parties in his petition, and both filed answers. They did not need also to
file a petition to intervene.
               On appeal,2 Mortgagee raises two issues.3 First, he argues that the Tax
Claim Bureau failed to comply with the pre-sale notice requirements in the Tax Sale
Law by not giving Mortgagee written notice of the pending tax sale. Second, he

2
   Our standard of review in tax sale cases is to determine whether the trial court abused its
discretion, rendered a decision lacking in evidentiary support, or erred as a matter of law. Cruder
v. Westmoreland County Tax Claim Bureau, 861 A.2d 411, 414 n.10 (Pa. Cmwlth. 2004).
3
  In his statement of questions involved, Mortgagee raises two additional issues: whether the trial
court’s decision regarding the September 14, 2017, upset tax sale is supported by substantial
evidence; and whether the trial court erred in denying Mortgagee’s attempt to pay the back taxes
in open court through his redemptive rights under Section 603 of the Tax Sale Law, 72 P.S.
§5860.603, after the Tax Claim Bureau admitted it did not provide notice of the sale to Mortgagee.
Mortgagee, however, did not adequately develop these issues in his brief; therefore, they are
waived. City of Philadelphia v. Berman, 863 A.2d 156, 161 n.11 (Pa. Cmwlth. 2004) (holding that
the failure to develop an issue in the argument section of the brief constitutes a waiver of the issue);
see also PA. R.A.P. 2119(a) (requiring that the argument shall be divided into as many parts as
there are questions followed by discussion and citation of pertinent authority).
                                                   3
argues that the trial court erred in holding that Urbany and JAC had standing to
participate because neither Urbany nor JAC filed a petition to intervene.
               We begin with a review of the statutory procedures for the conduct of
an upset tax sale. Section 602 of the Tax Sale Law requires the tax claim bureau to
provide three separate types of notice in advance of an upset tax sale: (1) publication
at least 30 days prior to the sale;4 (2) direct notification to each owner by certified
mail at least 30 days prior to the sale; and (3) posting of the property at least 10 days
prior to the sale. 72 P.S. §5860.602. If the property listed for upset sale is occupied
by the owner, Section 601(a)(3) of the Tax Sale Law also requires the tax claim
bureau to effect personal service on the owner by a sheriff. 72 P.S. §5860.601(a)(3).
               After a tax sale, the tax claim bureau must give the owner notice of the
sale of the property and of the opportunity to challenge that sale. Section 607(a.1)(1)
of the Tax Sale Law provides:
               Notice shall be given by the bureau within thirty (30) days of the
               actual sale to each owner by United States certified mail,
               restricted delivery, return receipt requested, postage prepaid, to
               each owner at his last known post office address as determined
               in section 602(e)(2) that the property was sold and that the owner
               may file objections or exceptions with the court relating to the
               regularity and procedures followed during the sale no later than
               thirty (30) days after the court has made a confirmation nisi of
               the consolidated return.

72 P.S. §5860.607(a.1)(1). Notice of the tax sale must also be provided to lien
creditors. Section 607(b) of the Tax Sale Law states:
               The bureau shall, at the expense of the county, within ten (10)
               days after confirmation nisi of the consolidated return, publish a

4
  The published notice “shall be addressed to the ‘owners of properties described in this notice and
to all persons having liens, judgments or municipal or other claims against such properties.’”
Section 602(d) of the Tax Sale Law, 72 P.S. §5860.602(d) (emphasis added).
                                                 4
             general notice once in a newspaper of general circulation
             published in the county, and in the legal journal, if any,
             designated by rules of court for the publication of legal notices,
             stating (1) that the consolidated return of the bureau with respect
             to any such sale for taxes has been presented to the court, (2)
             giving the date of confirmation nisi and (3) that objections or
             exceptions thereto may be filed by any owner or lien creditor
             within thirty (30) days after the court has made a confirmation
             nisi of the consolidated return or that the return will be confirmed
             absolutely.

72 P.S. §5860.607(b) (emphasis added).
             Finally, Section 205(e) of the Tax Sale Law provides that prior to
distribution of moneys collected from the upset tax sale,
             the bureau shall petition the court of common pleas for a
             confirmation of distribution. The petition shall set forth a
             proposed schedule of distribution for each account and shall
             request the court to issue a rule to show cause on each distributee
             why the court should not confirm the distribution as proposed.
             The rule to show cause and a copy of the petition shall be served
             by first class mail upon each distributee and upon the purchaser,
             with proof of mailing to the last residence or place of business of
             the distributee known to the bureau and to the purchaser at the
             address given to the bureau. If the rule to show cause is not
             returned by any distributee or purchaser on or before the time set
             for its return, the court shall forthwith confirm the distribution
             absolutely. If any distributee or purchaser makes a return of the
             rule within the time set by the court, the court shall forthwith hear
             any objections and exceptions to the proposed distribution and
             thereafter adjust the schedule of distribution as it deems just and
             equitable according to law and confirm the distribution
             absolutely as adjusted. An absolute confirmation of distribution
             by the court shall be final and nonappealable with respect to all
             distributees listed in the petition.

72 P.S. §5860.205(e) (emphasis added). Distributees include “mortgagees and other
lien holders.” 72 P.S. §5860.205(d).

                                           5
             With this background, we address Mortgagee’s arguments seriately.
             In his first issue, Mortgagee argues that the Tax Claim Bureau failed to
comply with the notice requirements of the Tax Sale Law, which deprived him of
due process. Mortgagee’s brief incorporates by reference his “analysis of the notice
requirements of the [Tax Sale Law]” contained in his brief filed before the trial court,
in which he contended that he is “the person in whose name the property is last
registered” and, thus, meets the definition of “owner” under Section 102 of the Tax
Sale Law, 72 P.S. §5860.102. Mortgagee Trial Brief at 9; R.R. 70a. As an owner,
he should have received written notice of the upset tax sale at least 30 days before
the date of sale.
             Urbany and JAC respond that Mortgagee was not the person in whose
name the Property was last registered; it was MAC. Simply, Mortgagee was not an
“owner” within the meaning of the Tax Sale Law. Had the legislature intended a
mortgagee to receive the notice afforded owners, the legislature would have included
mortgagees in Section 602(e), just as it did in Section 602(d) of the Tax Sale Law.
Mortgagee’s complaints about the post-sale distribution procedures cannot
invalidate the tax upset sale, as the trial court so held.
             Section 602(e)(1) of the Tax Sale Law states:
             (e) In addition to such publications, similar notice of the sale
             shall also be given by the bureau as follows:
                    (1) At least thirty (30) days before the date of the sale, by
                    United States certified mail, restricted delivery, return
                    receipt requested, postage prepaid, to each owner as
                    defined by this act.

72 P.S. §5860.602(e)(1) (emphasis added). Owner is defined 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
                                            6
            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 by any county, “owner” shall mean the county.

Section 102 of the Tax Sale Law, 72 P.S. §5860.102 (emphasis added). At the time
of the upset tax sale, the record owner of the Property was MAC, which Mortgagee
does not dispute. Hearing Transcript at 5; R.R. 23a (Counsel for Mortgagee
confirmed that MAC was the owner of the Property).
            Nevertheless, Mortgagee contends that he is the “last registered name”
on the Property because the “mortgage was recorded February 2, 2015[,] after
MAC’s deed was recorded.” Petition ¶13; R.R. 7a. Our Court has explained the
rights of a mortgagee as follows:
            Pennsylvania courts have held that a mortgage is both a
            conveyance in form as well as security interest. Pines v. Farrell,
            848 A.2d 94, 100 (Pa. 2004). For purposes of actions involving
            the recording acts, mortgages are treated as conveyances. Id.
            Pennsylvania courts have held that a mortgage is a conveyance
            between the mortgagor and the mortgagee so far as is necessary
            to enforce it as security and with regard to other parties the
            mortgagor is the owner of the property and the mortgage merely
            an encumbrance. Warden v. Zanella, 423 A.2d 1026 (Pa. Super.
            1980) [quoting Eastgate Enters., Inc. v. Bank & Trust Co. of Old
            York Rd., 345 A.2d 279, 281 (Pa. Super. 1975)]. See also Pines,
            84[8] A.2d at 99–100; Pa. Law Encyclopedia Commercial
            Transaction §87 (2013).

                                         7
Mountain Manor Development Company LP v. Monroe County Board of Assessment
Appeals (Pa. Cmwlth., No. 1187 C.D. 2013, filed May 22, 2014) (unreported),5 slip
op. at 8 (emphasis added). Here, at the time of the upset tax sale, MAC was the
owner of the Property, and Mortgagee held “an encumbrance.” Simply, Mortgagee
was not an owner for purposes of the Tax Sale Law.
              Because Mortgagee was not the owner of the Property but, rather, a lien
creditor, the only notice to which he was entitled in advance of the tax sale was by
publication, which the Tax Claim Bureau provided. Trial Court Op. at 5. Post sale,
the Tax Claim Bureau published notice of the confirmation nisi, stating, in part, that
any lien creditor could file objections or exceptions. Original Record, Item No. 5,
Exhibit 2. This complied with the post-sale notice requirements of Section 607(b)
of the Tax Sale Law, 72 P.S. §5860.607(b). The Tax Claim Bureau was also required
to serve a rule to show cause and a copy of the petition for confirmation of the
distribution “by first class mail upon each distributee[,]” which included Mortgagee.
Section 205(e) of the Tax Sale Law, 72 P.S. §5860.205(e). The Tax Claim Bureau
did not do this. However,
              [f]ailure of such notice [to the mortgagee] does not inure to the
              benefit of the owner. It does not vitiate the sale. Its effect is not
              to discharge the lien, and the purchaser takes the property subject
              thereto.

In re Tax Claim Bureau of Lehigh County 1981 Upset Tax Sale Properties, 507 A.2d
1294, 1297 (Pa. Cmwlth. 1986).
              In sum, although Mortgagee did not receive notice of the distribution
of the upset sale proceeds, his mortgage lien on the Property survived the sale

5
  An unreported panel decision of this Court, “issued after January 15, 2008,” may be cited “for
its persuasive value[.]” Section 414(a) of the Commonwealth Court’s Internal Operating
Procedures, 210 Pa. Code §69.414(a).
                                               8
pursuant to Section 609 of the Tax Sale Law, 72 P.S. §5860.609.6 His property
rights were not affected by the tax sale.
                 In his second issue, Mortgagee challenges the participation of Urbany
and JAC in his set aside petition proceeding. Mortgagee explains that his petition
included the names of the successful bidders, i.e., Urbany and JAC, “not as an
intervenor” but only because they would have a right to a refund of their purchase
price. He claims Urbany and JAC had to petition to intervene in order to participate
in the proceeding before the trial court.
                 Urbany and JAC respond that they have standing to participate in the
proceedings because Mortgagee expressly named them as co-respondents and served
them with a copy of the petition. As of January 2019, JAC became the record owner
of the Property pursuant to the recorded tax claim deed and, thus, had a substantial,
direct, and immediate interest in the outcome of this case.7
                 We have held that “the Tax Sale Law does not require or entitle a
successful bidder to notice of an owner’s objections to a tax sale.” In re Lehigh
County Tax Claim Bureau Upset Sale of September 19, 2018, 263 A.3d 714, 718
(Pa. Cmwlth. 2021). “Likewise, it is not the responsibility of the owner who files
objections under Section 607 of the Tax Sale Law to name the successful bidder as
a party or serve him with a copy of the owner’s objection petition.” Id. at 719.

6
    Section 609 of the Tax Sale Law states:
        Every such sale shall convey title to the property under and subject to the lien of
        every recorded obligation, claim, lien, estate, mortgage, ground rent and
        Commonwealth tax lien not included in the upset price with which said property
        may have or shall become charged or for which it may become liable.
72 P.S. §5860.609.
7
  Urbany and JAC also argue that Mortgagee lacked standing to challenge the tax sale because he
was not adversely affected. Because of our disposition of Mortagee’s issues on appeal, we need
not address this issue.
                                              9
Usually “successful bidders must petition to intervene in order to be considered
parties in an objection proceeding challenging a confirmation nisi.” Id. (quoting In
re 2005 Sale of Real Estate by Clinton County Tax Claim Bureau Delinquent Taxes,
915 A.2d 719, 723 (Pa. Cmwlth. 2007)). These cases are distinguishable.
               The caption of Mortgagee’s petition identified the parties as follows:
               THOMAS MIRON, Petitioner
                               v.
               TAX CLAIM BUREAU OF
               DELAWARE COUNTY, PA and
               ARTHUR F. URBANY and
               JAC PROPERTIES, Respondents

R.R. 6a. Section 2 of the Judicial Code defines “party” as “[a] person who
commences or against whom relief is sought in a matter.” 42 Pa. C.S. §102
(emphasis added). See also PA.R.CIV.P. 1018.8 (Every pleading must contain a
caption setting forth, in part, “the names of all the parties[.]”). Mortgagee named
Urbany and JAC as parties; accordingly, they did not need to file a petition to
intervene.
               In sum, the Tax Claim Bureau was not required to provide Mortgagee,
a lien creditor, with direct notice prior to the upset tax sale. Although the Tax Claim
Bureau did not provide Mortgagee notice of the confirmation of distribution, this
oversight did not invalidate the tax sale because Mortgagee’s mortgage interest has
survived the sale. Finally, Urbany and JAC were named respondents and, thus, a

8
  We recognize that a trial court is not required to use the Pennsylvania Rules of Civil Procedure
in tax sale proceedings. However, it is the practice of at least some trial courts to use the Rules of
Civil Procedure where appropriate. See, e.g., Plank v. Monroe County Tax Claim Bureau, 735
A.2d 178 (Pa. Cmwlth. 1999).

                                                 10
petition to intervene would have been redundant. For these reasons, we affirm the
trial court’s order.
                          _____________________________________________
                          MARY HANNAH LEAVITT, President Judge Emerita

                                       11
         IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Thomas Miron,                       :
                  Appellant         :
                                    :
            v.                      :     No. 290 C.D. 2023
                                    :
Delaware County Tax Claim           :
Bureau, Arthur F. Urbany and        :
JAC Properties                      :

                                  ORDER

            AND NOW this 10th day of April, 2024, the order of the Court of
Common Pleas of Delaware County, dated February 7, 2023, in the above captioned
matter, is AFFIRMED.

                         _____________________________________________
                         MARY HANNAH LEAVITT, President Judge Emerita