Molchan v. Mercer County Tax Claim Bureau (TCB)
319 A. 3d 363 (Pa. Cmwlth. 2024)
Held: Field report of agent of TCB was hearsay and not admissible as a business record, where
- property owner testified that he did not see/receive proper notice of tax sale
- owner testified that he could/would have paid taxes if he'd received notice
- TCB director offered report of agent re notice as business record
- agent did not appear and testify
- director had no direct knowledge of posting
Due process applies to collection of taxes
"[T]he collection of taxes may not be implemented without due process of law." Husak v. Fayette Cnty. Tax Claim Bureau, 61 A.3d 302, 312 (Pa. Cmwlth. 2013).
A property owner's right to notice "prior to commencing with an upset tax sale [is] established pursuant to the Due Process Clause of the Fourteenth Amendment to the United States [(U.S.)] Constitution[, U.S. Const. amend. XIV, § 1,] and by the [RETSL]." Rice v. Compro Distrib[.], Inc., 901 A.2d 570, 574 (Pa. Cmwlth. 2006).
TCB has burden of proving strict compliance with notice of tax sale
"[S]trict compliance with the [RETSL's] notice provisions is essential to prevent the deprivation of property without due process." Est. of Marra v. Tax Claim Bureau of Lackawanna Cnty., 95 A.3d 951, 956 (Pa. Cmwlth. 2014).
In all tax sale cases, the tax claim bureau "has the burden of proving compliance with the statutory notice provisions." Krawec v. Carbon[Cnty.] Tax Claim Bureau, 842 A.2d 520, 523 (Pa. Cmwlth. 2004). Section 602 [of the RETSL] requires three different forms of notice to property owners prior to an upset tax sale: publication, posting, and mail. "If any of the three types of notice is defective, the tax sale is void." Gladstone v. Fed[.] Nat['l] Mortg[.] Ass['nThe business record exception to hearsay did not apply ....], 819 A.2d 171, 173 (Pa. Cmwlth. 2003).
The exception can apply to tax sales if adequate proof is show, by virtue of a statute, 42 Pa. C.S. 6108 (b) and Pa. Rule of Evidence 803 (6)
The Act and [ ] Rule [803(6)] substantially overlap in that both generally require that a custodian or other qualified witness testify that the record was made at or near the time of the event recorded and that the record was kept in the regular course of business. Moreover, both provide for the trial court to make a determination in regard to whether the circumstances surrounding the record justify its admission or indicate a lack of trustworthiness. Bayview, 206 A.3d 474, 483 (Pa. 2019)
Authenticating witness is required for the exception to apply
There must be a qualified, authenticating witness concerning preparation and maintenance of the records, in order to establish the trustworthiness of the record.
Here, the director of the TCB was not a qualifying witness under Pa. law. The Pennsylvania Supreme Court has held:
[W]e neither adopt a bright line rule forbidding the authentication of documents recorded by a third party, nor do we endorse an automatic incorporation doctrine. Instead, we will continue to allow our trial courts to utilize their broad discretion in evidentiary matters by applying the business record exception of Rule 803(6) and the Act to determine if the witness "can provide sufficient information relating to the preparation and maintenance of the records to justify a presumption of trustworthiness" subject to the opponent rebutting the evidence with any other circumstances indicating a lack of trustworthiness. In re Indyk's Est[., 488 Pa. 567,] 413 A.2d [371,] 373 [(1979)].
The director of the TCB never stated that she was the custodian of the Bureau's records or owner's file, nor did she offer any testimony regarding the manner in which the agent prepared and maintained the Report or the timing of preparation in relation to the posting, which information is not evident from the Report itself.. . .The mere fact that the Bureau possesses the Report and calls it a business record is not sufficient to make it so. [emphasis added] . . . The TCB director was not a qualified witness whose testimony alone was sufficient to offset the Report's hearsay character.
