Friday, February 05, 2016

tax sale - owner-occupied property - personal service - waiver - good cause

Consolidated Reports and Return of TCB of Northumberland Co. – Appeal of Neff – Commonwealth Court – en banc (6-1) – January 21, 2016

The majority upheld the tax sale in this case, in which

  -the resident property owner did not get service by certified mail, as required by RETSL, 72 P.S. 5860.101 et seq.
  - because of lack of such service, tax claim bureau (TCB) had to attempt personal service
  - 3 attempts at person service made (August 5th, 8th, 9th) – all during the normal work day
  - personal service not successful
  - trial court granted TCB petitions court for waiver of personal service

The majority held that the property owner had actual notice of the tax sale, thus obviating strict compliance with the notice provisions of RETSL.   Strict compliance with the notice requirements of Section 5860.602 is not required when the Bureau proves that a property owner received actual notice of a pending tax sale. Sabbeth v. TCB of Fulton County, 714 A.2d 514, 517 (Pa. Cmwlth. 1998).

In addition to the notice requirements of Section 602, if the property is, as here, occupied by the owner, Section 601(a)(3) of the Law requires that each owner-occupant receive additional notice of a tax sale by personal service by the sheriff, a deputy or other person appointed by the country commissioners. 72 P.S. § 5860.601(a)(3). The requirements of Section 601(a)(3) are cumulative and apply in addition to the tax claim bureaus’ obligations to provide notice through publications, posting, and mail.  This provision shows the General Assembly’s “heightened concern for owner[-]occupants being divested of the very property in which they are residing.” Matter of Tax Sales by Tax Claim Bureau of Dauphin County, 651 A.2d 1157, 1159 (Pa. Cmwlth. 1994).   

However, the requirement of personal service can be waived “for good cause shown.”   “In sum, in the absence of actual notice, the Bureau must prove strict compliance with the notice requirements of Section 602 of the Law. Further, and notwithstanding whether a taxpayer received actual notice, the Bureau must demonstrate that it personally served notice on any owner-occupant of the Property subject to the upset tax sale or obtained a waiver of personal service from the trial court.”

The trial and appellate courts held that a waiver was appropriate, since the TCB had shown “good cause” for it.  The appellate court held that the trial court’s finding of “good cause” was a “factual-based inquiry...entrust to the trial court’s discretion” and thus subject to only very limited appellate review for abuse of discretion  (slip opinion at 19-21).

Judge Leavitt filed a strong dissent.  She argued that  the “process followed by the Tax Claim Bureau...turned the statutory scheme on its head” and that the required “good cause” for waiver of personal service had not been shown.    She noted that the TCB’s attempt at service were not a “practical effort,” since the attempts at service were made during a single week and at times when the taxpayer “was not there and not likely to be there.”   She also noted that service was not made by sheriff, a deputy, or a person properly appointed by the county commissioners, as required by the statute

Judge Leavitt also decisively and at length rejected the notion that the issue of good cause was a fact-based inquiry.  “Whether a trial court reaches the proper legal conclusion on the evidence presented is a question of law....[citations omitted] Likewise, a question of statutory interpretation is a question of law. Navickas v. UCBR, 787 A.2d 284, 288 (Pa. 2001). As our Supreme Court has explained, the proper interpretation and application of language [in a contract] … presents a question of law over which our scope of review is plenary and standard of review de novo.Pennsylvania National Mutual Ins. Co. v. St. John, 106 A.3d 1 (Pa. 2014). Likewise, the interpretation and application of language in a statute presents a question of law; accordingly, the trial court is afforded no deference and its decision “will instead be reviewed de novo.Id.  A tribunal lacks discretion to construe a statute incorrectly. The application of the law to facts is a legal conclusion, and the appellate standard of review is de novo; no deference is owed to the tribunal below. See, e.g., Bowling v. Office of Open Records, 75 A.3d 453, 466 (Pa. 2013)....See also In re Doe, 33 A.3d 615.

The dissent argued that “by affirming the trial court, this Court has established the paradigm for a waiver of personal service in all 67 counties: three property visits (i) in a single week in August (when owner-occupants often vacation), (ii) between the hours of 9:19 a.m. and 4:10 p.m., and (iii) by any person, whether or not qualified by virtue of being a member of the sheriff’s office or having been appointed by the county commissioners. Effectively, this replaces the personal service requirement with three visits to an owner-occupied property by anyone who can read and operate a vehicle.

"At stake is a family home scheduled for a tax sale. It was the legislature’s intent that the sheriff, or server appointed by the county, notify the owner of that sale, at least ten days before its occurrence, by placing a notice into the hands of the owner-occupant. The Tax Claim Bureau made three visits to Taxpayer’s property. It did not make a practical effort at personal service upon Taxpayer herself. It did not designate a server qualified to make personal service."

The link may have become stale if the case of old.  You can use the case name, court, and date to find the opinion in another source (e.g., Westlaw, Lexis, Google Scholar)