Monday, March 07, 2016

tax sale - MCTLA - posting not proper - sale set aside

City of Philadelphia v. Morris Park Congregation of Jehovah’s Witnesses – Cmwlth. Court -3-7-16 – ** unreported memorandum opinion

Held:  Notice of tax sale inadequate and sale set aside where
 - city knew that service by mail had not been accomplished
 - affidavit of posting did not include information about date, time, place of posting nor any photo of posted notice and thus did not satisfy the MCTLA statute or due process requirements

* The purpose of a sheriff’s sale under the MCTLA “is not to strip an owner of his or her property but to collect municipal claims.” City of Philadelphia v. Manu, 76 A.3d 601, 606 (Pa. Cmwlth. 2013); see also Fernandez v. Tax Claim Bureau of Northampton County, 925 A.2d 207, 215 n.18 (Pa. Cmwlth. 2007).  The primary purpose of a taxing authority is to “insure payment of taxes. Although selling of the property may end up being the ultimate means used toward achieving that end, it is not the end itself.”).

* Strict complaince required - Section 39.2 of the MCTLA mandates strict service requirements that the City must follow for a court to gain the jurisdiction necessary to authorize a sheriff’s sale, including service of the petition and rule to show cause why the property should not be sold by “posting a true and correct copy of the petition and rule on the most public part of the property.” 53 P.S. § 7193.2(a)(1); City of Philadelphia v. Schaffer, 974 A.2d 509, 512 (Pa. Cmwlth. 2009). Strict compliance with the service mandates of the MCTLA protects the procedural due process rights of all parties involved by guaranteeing that they receive notice and an opportunity to be heard and protects an owner against deprivation of his or her property without substantive due process of law. Manu, 76 A.3d at 606; First Union National Bank v. F.A. Realty Investors Corp., 812 A.2d 719, 726 (Pa. Super. 2000); see also Tracy v. Chester County, Tax Claim Bureau, 489 A.2d 1334, 1339 (Pa. 1985).

* Duty of court to conduct independent inquiry -- A sheriff’s sale pursuant to the MCTLA is conducted under the auspices of the court and it is the court’s duty to conduct an independent inquiry to ensure that the MCTLA has been complied with, and that the due process rights guaranteed by the Pennsylvania and United States Constitutions are adequately safeguarded.  U.S. National Bank Association v. United Hands Community Land Trust, __ A.3d __, __ (Pa. Cmwlth No. 2237 C.D. 2014, filed December 15, 2015), 2015 WL 8718035, slip op. at 5; Manu, 76 A.3d at 606.

* Presumption of regularity of posting – does not apply where neither affidavit nor testimony shows date, time, place or posting.   The presumption of of regularity afforded a public official cannot overcome a statutory mandate. Unlike the RETSL, the statutory language in the MCTLA requires posting of “the petition and rule on the most public part of the property.” 53 P.S. § 7193.2(a)(1) (emphasis added). There is no evidence in the record that the petition and rule were posted on the most public part of the Property.  U.S. National Bank Association held that the presumption of regularity cannot be applied to private individuals; the facts in this case demonstrate the limits of the application of the presumption of regularity to public officials.

* Posting – policy – Posting is of critical importance where notice by mail was not successful - In a first class city in this Commonwealth, proper posting is not only an additional reasonable step that should be taken to adequately safeguard constitutional due process once a municipal authority has knowledge that service through the mail was ineffective, but a basic and longstanding statutory obligation.  There is no overestimating the great challenges facing the City in its efforts to collect municipal taxes. In recognition of that challenge, the City was granted the power to take private property, a power so extraordinary under our system of governance that it is constitutionally restrained. In accordance with this constitutional restraint, the General Assembly established strict procedural requirements that a municipality must follow to exercise its power to take private property from one and sell it to another. The momentous nature of the act of taking property from one and selling it to another to collect municipal taxes likewise requires the courts to examine the record in a sheriff’s sale with a close, independent and vigorous eye to ensure that the procedural requirements for notice of the sale have been adhered to and due process of law has been adequately safeguarded. The Trial Court had a duty to conduct an independent inquiry to ascertain if the City had fulfilled its statutory and constitutional obligations; by failing to do so here, the Trial Court abused its discretion, and by relying on facts not in evidence, the Trial Court erred as a matter of law in concluding that it gained jurisdiction to authorize the sale of the Property for the collection of municipal taxes.  Accordingly, the order of the Trial Court is reversed and the tax sale is set aside.
** An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

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