Opinion
No. 319 C.D. 2012
12-04-2012
Elizabeth Township Sanitary Authority v. Scenery Heights, LLC, Appellant
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge (P.) HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
Scenery Heights, LLC (Landowner) appeals the order of the Court of Common Pleas of Allegheny County (trial court) entering judgment in favor of Elizabeth Township Sanitary Authority (Authority) for want of sufficient defense pursuant to the provisions of the Municipal Claims and Tax Liens Law (Tax Liens Law). We affirm.
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §§7101-7505.
On February 1, 2008, the Authority filed a praecipe for a municipal lien in the amount of $6,798.78 for delinquent sewage charges against Chester Niedzwiecki, the owner of the property located at 1151 Scenery Drive, Elizabeth Township, Allegheny County. The Authority filed a praecipe for a writ of scire facias (sci fa) in March 2008, the writ was served, and the Authority terminated water service to the property in July 2008. The Authority continued to impose the minimum consumption fee for each equivalent dwelling unit on the property because the sewer service had not been severed at the property owner's request. The Authority filed amended liens in the trial court on May 12, 2008, September 14, 2009, and October 23, 2009, adding the minimum consumption fees, charges and interest to the amount owed. Ultimately, on April 14, 2010, the Authority filed an amended lien totaling $123,093.07. On July 19, 2010, the property was conveyed to Roswell Commercial Mortgage, LLC (Roswell), and Roswell conveyed the property to Scenery Heights, LLC (Landowner) on August 20, 2010. As of August 11, 2011, the penalty and interest on the liens filed to that date totaled $220,055.02.
The issuance of a writ of sci fa constitutes original process and serves the dual purposes of a summons and a complaint to commence such an action. Borough of Ambler v. Regenbogen, 713 A.2d 145, 148 (Pa. Cmwlth. 1998). A sci fa proceeding is an action in rem and the purpose of a writ of sci fa is to warn a landowner of the existence of a claim so that they may make known any defenses and show why the property should not be under judicial subjection of a municipal lien and reduced to judgment. Id. The Authority may not execute on its municipal lien until it obtains a judgment by the sci fa procedure. Id. Section 4 of the Tax Liens Law, 53 P.S. §7107, states, in pertinent part, that "[t]he lien for ... sewer rates ... shall exist in favor of, that the claim therefor, may be filed against the property thereby benefitted by, the municipality extending the benefit...."
On February 10, 2011, Landowner filed a petition to intervene and defend pursuant to Section 14 of the Tax Liens Law seeking equitable relief and to present a defense to the Authority's amended liens. Landowner argued that the Authority's imposition of the minimum consumption fees under its Resolution No. 06/06 violates Section 5607(d)(9) of the Municipal Authorities Act, 53 Pa. C.S. §5607(d)(9), requiring that the rates and charges be "reasonable and uniform" for service that has been actually provided; that the Authority's Resolution permitting the imposition of interest was misapplied; and that the 240% interest imposed on the delinquent rates and charges under the Resolution violated the ten percent statutory cap on interest under Section 9 of the Tax Liens Law, 53 P.S. §7143. In its motion to strike, Landowner asked the trial court to strike the Authority's amended liens of May 12, 2008, September 14, 2009, October 23, 2009, and April 14, 2010.
Act of May 16, 1923, P.L. 207, as amended, 53 P.S. §7182. 53 P.S. §7182 states:
Any defendant named in the claim, or any person allowed to intervene and defend thereagainst, may, at any stage of the proceedings, present his petition, under oath or affirmation, setting forth that he has a defense in whole or in part thereto, and of what it consists; and praying that a rule be granted upon the claimant to file an affidavit of the amount claimed by him, and to show cause why the petitioner should not have leave to pay money into court; and, in the case of a municipal claim, to enter security in lieu of the claim; whereupon a rule shall be granted as prayed for. Upon the pleadings filed, or from the claim and the affidavit of defense, and without a petition where an affidavit of defense has been filed, the court shall determine how much of the claim is admitted or not sufficiently denied; and shall enter a decree that upon payment by such petitioner to the claimant of the amount thus found to be due, with interest and costs if anything be found to be due, or upon payment into court, if the claimant refuses to accept the same, and upon payment into court of a sum sufficient to cover the balance claimed, with interest and costs, or upon the entry of approved security in the case of a municipal claim, that such claim shall be wholly discharged as a lien against the property described therein, and shall be stricken from the judgment index. Thereafter the material, disputed facts, if any, shall be tried by a jury, without further pleadings, with the same effect as if a writ of scire facias had duly issued upon said claim, to recover the balance thereof; but the jury shall be sworn to try the issues between the claimant and the parties who paid the fund into court or entered security, and verdict, judgment and payment, or execution, shall follow as in other cases. The same course may be pursued, at the instance of any owner, where the claim has not in fact been filed, and if, in that event, the petitioner complies with the decree made, the money paid into court or security entered shall stand in lieu of the claim and the latter shall not be filed, and if filed shall be stricken off upon motion.
Section 6 of the Authority's Resolution No. 06/06 states that "[a]ny and all EDUs are subject to the fixed minimum use charge, notwithstanding water usage or lack thereof. This includes EDUs where there is a meter, but water is shut off to the dwelling." (Reproduced Record (R.R.) at 13a.)
53 Pa. C.S. §5607(d)(9) states, in pertinent part:
(d) Powers.—Every authority may exercise all powers necessary or convenient for the carrying out of the purposes set forth in this section, including, but without limiting the generality of the foregoing, the following rights and powers:
* * *
(9) To fix, alter, charge and collect rates and other charges in the area served by its facilities at reasonable and uniform rates to be determined exclusively by it for the purpose of providing for the payment of the expenses of the authority, the construction, improvement, repair, maintenance and operation of its facilities and properties ... the payment of the principal of and interest on its obligations and to fulfill the terms and provisions of any agreements made with the purchasers or holders of any such obligations, or with a municipality and to determine by itself exclusively the services and improvements required to provide adequate, safe and reasonable service, including extensions thereof, in the areas served....
53 P.S. §7143 states, in pertinent part, that "[i]nterest as determined by the municipality at a rate not to exceed ten per cent per annum shall be collectible ... on claims for ... sewer rates from the date of the filing of the lien therefor...."
The trial court then issued a Rule to Show Cause why Landowner would not be entitled to the requested relief, that the petition would be disposed of under Pa. R.C.P. No. 206.7, and that argument would be held on praecipe of either party. Discovery was conducted through written interrogatories. Landowner did not object to the use of the Rule to Show Cause procedure.
A rule to show cause is an ex parte procedure "directing an adverse party to show cause why an action should not be taken." Rusbarsky by Rusbarsky v. Rock, 471 A.2d 107, 108 (Pa. Super. 1984). It is auxiliary in nature, based on an existing controversy, and may not substitute for original process. Id. Also, the rule's effect is prospective, permitting the adverse party to contest the rule after a court enters the rule. Pilawa v. Department of Environmental Protection, 698 A.2d 141, 144 (Pa. Cmwlth. 1997). Pa. R.C.P. No. 206.7 sets forth the procedure for Rules to Show Cause including allowing for discovery. It provides:
Rule 206.7. Procedure After Issuance of Rule to Show Cause
(a) If an answer is not filed, all averments of fact in the petition may be deemed admitted for the purposes of this subdivision and the court shall enter an appropriate order.
(b) If an answer is filed raising no disputed issues of material fact, the court on request of the petitioner shall decide the petition on the petition and answer.
(c) If an answer is filed raising disputed issues of material fact, the petitioner may take depositions on those issues, or such other discovery as the court allows, within the time set forth in the order of the court. If the petitioner does not do so, the petition shall be decided on petition and answer and all averments of fact responsive to the petition and properly pleaded in the answer shall be deemed admitted for the purpose of this subdivision.
(d) The respondent may take depositions, or such other discovery as the court allows.
On September 14, 2011, the trial court issued an order granting in part and denying in part Landowner's request to strike the Authority's amended liens. The trial court granted Landowner's request to strike the penalty/interest the Authority imposed ($220,055.02 as of August 11, 2011), but denied Landowner's request to strike the face amount of the sewer fees due ($34,931.94), interest on the face amount due ($8,668.25), filing fees ($190.05), and attorney fees ($6,642.00), totaling $50,432.69 as of the August 11, 2011 hearing. The trial court also directed that further amended liens may be asserted, but without calculations based upon the 20% monthly penalty previously imposed by the Authority. No appeal was taken from this order.
On November 16, 2011, by leave of court, Landowner this time filed an affidavit of defense to the writ of sci fa again disputing the Authority's minimum use charges totaling $20,972.38 that were imposed after water service was terminated in July 2008 as violative of 53 Pa. C.S. §5607(d)(9); the interest imposed on these charges when there was no actual service provided; the Authority's attorney fees; and any amounts of combined penalty and/or interest in excess of the 53 P.S. §7143 statutory cap. The Authority filed a Petition for Rule to Show Cause Why Judgment Should Not be Entered for Want of a Sufficient Defense alleging, inter alia, that each of the defenses asserted by Landowner was fully considered and rejected by the trial court in its September 14, 2011 order disposing of Landowner's petition to intervene and defend; that Landowner failed to appeal that order; and that res judicata precluded re-litigation of those issues.
Finding that the identical issues were addressed and resolved by the court in its September 14, 2011 order, the trial court granted the Authority's petition and issued the Rule and entered judgment in the Authority's favor for want of sufficient defense because the September 14, 2011 order constituted a final, unappealed order, the substance of which the court could not revisit in the proceedings on the pending petition. Landowner then filed the instant appeal.
Our scope of review in municipal lien cases is limited to determining whether the trial court abused its discretion, committed an error of law, or whether constitutional rights were violated. Dreibelbis v. State College Borough Water Authority, 654 A.2d 52, 54 n.1 (Pa. Cmwlth. 1994).
Landowner claims that the trial court erred in holding that its September 14, 2011 order disposing of its motion to strike was a final, appealable order that precluded the court from addressing its affidavit of defense because it is not an appealable final order. A motion to strike only raises the sufficiency of the lien and matters of form. City of New Kensington v. Gardner, 372 Pa. 72, 92 A.2d 685 (1952); Penn Township v. Hanover Foods Corporation, 847 A.2d 219, 223 (Pa. Cmwlth. 2004) (citation omitted). See also Petition of Mausoleum Construction Company, 423 A.2d 809, 810 (Pa. Cmwlth. 1980) ("[T]he petition to strike and motion for a rule against the lienholder is not the proper procedure by which to challenge the liens on the grounds put forth by taxpayer. Under this procedure, a lien can be stricken only for defects appearing on its face...."). And, as Landowner contends, normally an order denying a motion to strike a municipal lien is not an appealable final order. Borough of Ambler, 713 A.2d at 147.
With respect to the form of a lien, Section 10 of the Act, 53 P.S. § 7144, provides, in pertinent part:
Said claim shall set forth:
1. The name of the municipality by which filed;
2. The name of the owner of the property against which it is filed;
3. A description of the property against which it is filed;
4. The authority under or by virtue of which the tax was levied...;
5. The time for which the tax was levied....
* * *
Said claim shall be signed by, or have stamped thereon a facsimile signature of, the solicitor or chief executive officer of the claimant.....
However, while titled a "motion to strike," it raised no issue regarding the form or sufficiency of the lien. Instead, it raised matters of substance that would be normally contained in an affidavit of defense. Befitting a petition raising substantive rather than procedural claims, the trial court then issued a Rule to Show Cause stating that the petition would be disposed of under Pa. R.C.P. No. 206.7 which is a procedure used to address the substantive claims not begun by a civil action and which allows discovery to be taken. The trial court in its September 14, 2011 order disposed of all of the substantive claims that were raised. Because the September 14, 2011 order "disposes of all the claims of all the parties," under Pa. R.A.P. 341(1), it is a final appealable order.
Because Landowner failed to appeal the September 14, 2011 order, we similarly reject Landowner's additional assertion that the trial court erred in denying its request to place the matter at issue and/or schedule it for a jury trial. --------
Accordingly, the trial court's order entering judgment in the Authority's favor for want of sufficient defense is affirmed.
/s/_________
DAN PELLEGRINI, President Judge ORDER
AND NOW, this 4th day of December, 2012, the order of the Court of Common Pleas of Allegheny County, dated February 2, 2012 at No. GD-08-002223, is affirmed.
/s/_________
DAN PELLEGRINI, President Judge