Opinion
No. 944 C.D. 2014
04-10-2015
Arthur Kemler and Elizabeth Kemler, Appellants v. Lackawanna County Tax Claim Bureau
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE BROBSON
Arthur Kemler and Elizabeth Kemler, husband and wife, (Appellants) appeal from an order of the Court of Common Pleas of Lackawanna County (trial court), dated May 7, 2014, which dismissed Appellants' Objection to the Lackawanna Tax Claim Bureau's (Bureau) Upset Sale of Appellants' Lackawanna County, Pennsylvania Real Property. We now reverse.
Appellants purchased 502-504 South Keyser Avenue, Lackawanna County, Pennsylvania (the Property) in 1993. (Reproduced Record (R.R.) at 92a-93a.) Appellants failed to pay taxes on the Property for two years. As a result, the Bureau exposed the Property to an upset tax sale, which the Bureau conducted on September 23, 2013. (Id. at 22a.) Savannah Properties, LLC, purchased the Property at the upset tax sale for $2,269.90. (Id. at 51a).
502 South Keyser Avenue is Appellants' undisputed address, and Elizabeth Kemler's mother, Ruth Smith, lives at 504 South Keyser Avenue. (R.R. at 30a, 59a.)
On October 1, 2013, Appellants filed an objection to the Bureau's upset sale of their Property. (Id. at 3a-8a). Appellants averred that the Bureau had failed to provide them with notice pursuant to Section 602 of the Real Estate Tax Sale Law (Law). The Bureau filed an answer to Appellants' objection, and the trial court conducted a hearing on May 7, 2014.
Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. § 5860.602.
At the hearing before the trial court, the Bureau's Deputy Director, Ronald Koldjeski, testified that the Bureau caused notice of the pending upset tax sale to be published in two newspapers of general circulation—The Scranton Times and The Citizens' Voice—and a legal register at least thirty days prior to the date of the upset tax sale. (Id. at 22a-24a.) He further testified that the Bureau sent notice via certified mail to both Appellants separately at least thirty days prior to the date of the upset sale and that Elizabeth Kemler had signed for the notice mailed to her at 502 South Keyser Avenue. (Id. at 25a.) The receipt was signed "Beth Kemler." (Id. at 26a.) Mr. Koldjeski testified that the certified mail sent to Arthur Kemler at 502 South Keyser Avenue was ultimately returned as unclaimed. (Id. at 27a-28a.) Mr. Koldjeski further testified that because the certified mail sent to Arthur Kemler was unclaimed, the Bureau sent additional notice via first-class mail to both Appellants separately. (Id. at 30a.) He also explained that the Bureau had posted notice of public sale on the Property and that Ruth Smith, Elizabeth Kemler's mother, signed the posted notice. (Id. at 32a.)
Mr. Koldjeski testified that notice was published in The Scranton Times and The Times Leader. (R.R. at 22a-23a.) The exhibits presented at the hearing, however, indicate that the second newspaper is The Citizens' Voice instead of The Times Leader. (Id. at 73a-81a.)
The notice of public sale contained in the record identifies the property to be sold as 502 S. Keyser Ave., Taylor, Pennsylvania. The notice includes a portion to be completed to indicate whether the notice was posted or personally served. The form was partially completed, and it indicated that the "mother of [the] owner" accepted personal service at 504 S. Keyser on September 6, 2013. (R.R. at 96a.) There is no information provided as to the identity of the person who made service, and the "signature of person served" purports to be that of "Ruth J. Smith". (Id.)
Elizabeth Kemler testified that she could not remember if she had signed anything concerning the upset tax sale of the Property. (Id. at 52a.) She stated that the "Beth Kemler" signature on the receipt was not her signature. (Id. at 54a-55a.) On cross-examination, she indicated that Ruth Smith is the only person to call her Beth. (Id. at 56a.) Lastly, she testified that Ruth Smith did not show her a notice of public sale prior to the sale. (Id. at 55a.)
Arthur Kemler also testified before the trial court. His testimony was similar to Elizabeth Kemler's, except that he definitively stated that he had never signed a card or received mail concerning the upset tax sale. (Id. at 58a.)
Ruth Smith testified that she did not remember receiving certified mail at her address. (Id. at 60a.) She also did not remember receiving certified mail on behalf of Elizabeth Kemler. (Id.) She testified that she did not remember signing the notice of public sale, but that the signature on the notice was hers. (Id.)
On May 7, 2014, the trial court issued an order dismissing Appellants' objection to the sale. Appellants then filed a Notice of Appeal with this Court. In accordance with Pa. R.A.P 1925(a), the trial court issued an opinion in support of its order. In so doing, the trial court explained that it accepted the testimony of Mr. Koldjeski that the Bureau complied with the newspaper publication requirements of Section 602(a) of the Law, and it noted that Appellants failed to raise the issue of newspaper publication in its objection to their upset tax sale. (Trial Ct. Op. at 4.) The trial court also concluded that the Bureau had complied with Section 602(e)(1) of the Law because it sent notice of the sale via certified mail to Appellants' address on three different occasions, each of which was more than thirty days before the sale was to take place. (Id. at 4-5.) The trial court further concluded that the Bureau complied with Section 602(e)(2) of the Law because it sent Appellants additional notice via first-class mail thirteen days before the upset sale. (Id. at 5-6.)
The trial court did not enter an order directing Appellants to file a statement pursuant to Pa. R.A.P. 1925(b). Instead, the trial court appears to have based its opinion solely on the issues raised in Appellants' objections. See Battisti v. Tax Claim Bureau of Beaver Cnty., 76 A.3d 111, 114 n.7 (Pa. Cmwlth. 2013) ("[An appellant] is only required to file such a statement of errors complained of upon appeal when the trial court orders such.")
On appeal, Appellants first argue that the trial court erred in determining that the Bureau complied with the publication requirements of Section 602(a) of the Law by failing to publish notice in two newspapers of general circulation in the county. Appellants next argue that the trial court erred in concluding that the Bureau complied with Section 602(e) of the Law because the Bureau did not send Appellants notice via restricted delivery.
"Our scope of review in cases dealing with tax sales is limited to determining whether the [c]ommon [p]leas [c]ourt abused its discretion, rendered a decision with lack of supporting evidence or clearly erred as a matter of law." In re Exceptions to Sale of Prop. of Molchan, 503 A.2d 1051, 1053 (Pa. Cmwlth. 1986).
The relevant provisions of Section 602 of the Law provide:
(a) At least thirty (30) days prior to any scheduled sale the bureau shall give notice thereof, not less than once in two (2) newspapers of general circulation in the county, if so many are published therein, and once in the legal journal, if any, designated by the court for the publication of legal notices. Such notice shall set forth (1) the purposes of such sale, (2) the time of such sale, (3) the place of such sale, (4) the terms of the sale including the approximate upset price, (5) the descriptions of the properties to be sold as stated in the claims entered and the name of the owner.
. . .
(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 identified by this act.
(2) If return receipt is not received from each owner pursuant to the provisions of clause (1), then, at least ten (10) days before the date of the sale, similar notice of the sale shall be given to each owner who failed to acknowledge the first notice by United States first class mail, proof of mailing, at his last known post office address by virtue of the knowledge and information possessed by the bureau, by the tax collector for the taxing district making the return and by the county office responsible for assessments and revisions of taxes. It shall be the duty of the bureau to determine the last post office address known to said collector and county assessment office.
At the outset, we note that "[t]he purpose of the ... Law is to ensure the collection of taxes, not to deprive citizens of their property," and, for that reason, courts have strictly construed the provisions of the Law as they relate to notice. Aldhelm, Inc. v. Schuylkill Cnty. Tax Claim Bureau, 879 A.2d 400, 403 (Pa. Cmwlth.), appeal denied, 890 A.2d 1060 (Pa. 2005); Stanford-Gale v. Tax Claim Bureau of Susquehanna Cnty., 816 A.2d 1214, 1216 (Pa. Cmwlth.), appeal denied, 816 A.2d 1214 (Pa. 2003). Tax sales are generally presumed to be valid. Barylak v. Montgomery Cnty. Tax Claim Bureau, 74 A.3d 414, 416 (Pa. Cmwlth. 2013). A property owner, however, may overcome this presumption "by filing exceptions to the tax sale averring that the Law's notice provisions were not strictly followed." Id. "The burden then shifts to the Bureau or the purchaser to show that the Bureau strictly complied with the notice provisions of the Law." Id. The Bureau must show that it provided notice in the form of publication, notice by certified mail, and posting of the property. See In re Tax Sale of Real Prop. Situate in Paint Twp., Somerset Cnty., 865 A.2d 1009, 1014-15 (Pa. Cmwlth. 2005). "If the bureau fails to carry out all three, the tax sale is void." Id. at 1015.
Appellants first argue that the trial court erred in determining that the Bureau complied with the publication requirements of Section 602(a) of the Law by failing to publish notice in two newspapers of general circulation in the county. Essentially, Appellants argue that there is no evidence that The Citizens' Voice is circulated in Lackawanna County. The Bureau counters that Appellants have waived this argument by failing to raise the issue in their objection or before the trial court. The Pennsylvania Rules of Appellate Procedure provide that "[i]ssues not raised in the lower court are waived and cannot be raised for the first time on appeal." Pa. R.A.P. 302(a). "By requiring that an issue be considered waived if raised for the first time on appeal, our courts ensure that the trial court that initially hears a dispute has had an opportunity to consider the issue." In re F.C. III, 2 A.3d 1201, 1212 (Pa. 2010). Thus, before we reach the merits of Appellants' argument, we must determine whether Appellants properly raised this issue before the trial court.
In their objection to the upset tax sale, Appellants averred:
8. Additionally, after the sale on September 23, 2013, plaintiffs inquired and found out that the paper work had been delivered to Ruth Smith, Elizabeth's mother who lives next door. Ruth Smith never turned the paper work over to Arthur or Elizabeth Kemler prior to the sale.
9. Defendants failed to abide by the policies, procedures and notice requirements of the Real Estate Tax Sale Law in the following aspects:
(R.R. at 6a-7a.) This Court has held that a general averment that the Bureau failed to comply with the notice requirements of Section 602 of the Law may suffice to alert the Bureau that it would need to prove its compliance with all of the notice requirements. In re Dauphin Cnty. Tax Claim Bureau, 834 A.2d 1229 (Pa. Cmwlth. 2003). In In re Dauphin County Tax Claim Bureau, the property owner "aver[red] that the Bureau 'failed to comply with the statutory notice provisions under the tax sale laws,' and that 'the first time that [the landowner] received actual notice that the [Dauphin County] Tax Claim Bureau was going to proceed with the tax sale of his property was [after the property had already been sold].'" Id. at 1233. The Dauphin County Tax Claim Bureau argued that the property owner did not specifically aver that notice was improperly posted and, thus, the issue of improper posting was waived. This Court, however, concluded:a. Plaintiffs were not timely notified, nor property [sic] served, by the Defendant with Notice of the date and time of the Upset Tax Sale of his Lackawanna County real property, as the Defendant failed to provide any notice to the Plaintiffs.
Arguably the preferred practice is to identify each deficiency with specificity but the foregoing averment alerted [the Dauphin County Tax Claim Bureau] that [the landowner] challenged the Bureau's compliance with notice requirements and that the Bureau would have to prove its compliance with the requirements set forth in Section 602 of the Tax Sale Law.Id. Thus, the property owner in In re Dauphin County Tax Claim Bureau properly preserved the issue of improper posting with a general averment that the Dauphin County Tax Claim Bureau failed to comply with the notice requirements of Section 602 of the Law. See also Somerset Cnty., 865 A.2d at 1014.
The instant matter, however, is distinguishable from In re Dauphin County Tax Claim Bureau. In In re Huss, (Pa. Cmwlth., No. 2417 C.D. 2008, filed Jan. 5, 2010), appeal denied, 14 A.3d 829 (Pa. 2010), this Court concluded that an averment that the property owner "did not receive himself, personally, proper notice of the sale of the properties" did not constitute a general notice challenge. Instead, such an averment "limit[ed] his challenge on its face to personal notice," and "distinguish[ed] [the] matter from the facts of Dauphin County." Slip op. at 15. Thus, the property owner waived any argument concerning notice by publication.
This case is cited pursuant to Section 414 of the Commonwealth Court's Internal Operating Procedures for its persuasive value but not as binding precedent.
Here, Appellants' averments are not general; rather, Appellants specifically limit the scope of their challenge to the issue of personal notice. Appellants limit the scope of their challenge by alleging that the Bureau failed to comply with the notice requirements in one specific aspect—namely, that Appellants were "not timely notified" because the Bureau "failed to provide any notice to [Appellants]." This averment is not general and it is not sufficient to alert the Bureau to the fact that Appellants intended to raise a publication issue rather than a posting or mailing issue. Further, additional averments, in particular Paragraph 8, which only concern delivery of notice to Ruth Smith instead of to Appellants, further demonstrate that Appellants challenged the lack of personal notice only. Lastly, at no point during the hearing before the trial court did Appellants raise the issue of publication. Thus, Appellants have waived their issue concerning publication.
In Hicks v. Och, 331 A.2d 219 (Pa. Cmwlth. 1975), this Court explained the purpose of publication:
[A]dvertisement requirements [a]re quite apart from and in addition to the registered mail notice requirements. . . . [T]he purpose of the advertising [i]s to notify the public in general. Not only does this tend to make the sale 'well-attended by bidders', but it also informs many people who may be concerned for the welfare of the owners. Such advertising, calling attention to the owners' plight, might prompt these people to take such steps as they may consider appropriate to see to it that the owners' interests are protected.Hicks, 331 A.2d at 220. Appellants have not generally averred that the Bureau failed to comply with the notice requirements, nor have Appellants averred that the general public did not have notice of the sale. Rather, Appellants appear to argue that they personally did not have notice of the sale, which is insufficient to raise a publication challenge.
Even if we had concluded that Appellants' have not waived the issue regarding publication, we would still reject the notion that the Bureau failed to comply with the publication requirements of Section 602 of the Law. Mr. Koldjeski, when questioned about an advertisement in The Citizens' Voice (Tax Claim Bureau Ex. 2), identified the advertisement as "the advertisement for the second newspaper of general circulation." (R.R. at 23a.) This testimony provides sufficient evidence to support the conclusion that the The Citizens' Voice, though not published in Lackawanna County, is a newspaper of general circulation within the meaning of Section 602 of the Law. See Pacella v. Washington Cnty. Tax Claim Bureau, 10 A.3d 422, 426 (Pa. Cmwlth. 2010) (concluding that county of publication and number of editions circulated is not dispositive to issue of whether newspaper is in general circulation in county).
Lastly, Appellants argue that the Bureau failed to strictly comply with Section 602(e)(1) of the Law, as it did not provide any evidence that the notice mailed to Appellants was delivered via restricted delivery. Section 602(e)(1) of the Law provides that notice must be delivered "by United States certified mail, restricted delivery." (Emphasis added.) Our Supreme Court has concluded that "in several instances, the types of mailings expressly delineated in Section 602(e) are specific [United States Postal Service (USPS)] terms specifying specific USPS services, which are explained and defined on the USPS website." Horton v. Washington Cnty. Tax Claim Bureau, 81 A.3d 883, 890 (Pa. 2013). The Supreme Court further concluded that "the legislature intended these terms to be interpreted pursuant to USPS definitions." Id. at 891. "Restricted delivery" is an "extra" service offered by USPS, which allows the sender to "[s]pecify the person who can sign for and receive [the] item." Ins. & Extra Servs., USPS, https://www.usps.com/ship/insurance-extra-services.htm (last visited Feb. 25, 2015). In contrast, certified mail is a means of keeping shipping records. Ins. & Extra Servs., USPS, https://www.usps.com/ship/insurance-extra-services.htm (last visited Feb. 25, 2015) ("See when it was delivered or that a delivery attempt was made, and get the signature of the person who accepts the package when combined with Return Receipt.").
Here, Appellants contend that neither Arthur Kemler nor Elizabeth Kemler received notice via restricted delivery. The record reveals, however, that with regard to Arthur Kemler, delivery of the notice was attempted on July 11, 2013, July 24, 2013, and July 29, 2013, and that, ultimately, delivery was not accomplished. (R.R. at 87a.) The notice attempted to be delivered on those dates was marked "Restricted Delivery." (Id. at 88a.) Thus, the Bureau carried its burden to prove that it complied with the restricted delivery requirement of Section 602 of the Law with regard to Arthur Kemler, and the trial court did not err in concluding that the Bureau had so complied. With regard to Elizabeth Kemler, however, the trial court did err in concluding that the Bureau strictly complied with all the notice requirements of Section 602 of the Law. The only receipt that indicates Elizabeth Kemler received notice via certified mail does not show whether that delivery was restricted. (Id. at 86a.) The Bureau did not produce a copy of the notice sent to Elizabeth Kemler, as it did with Arthur Kemler, which would indicate whether the mail was sent as a restricted delivery. Further, there was no testimony to indicate whether the delivery was restricted. Without such evidence, the Bureau has failed to show that it complied with the notification requirements, and the trial court erred in concluding that it complied. In re Exceptions to Sale of Prop. of Molchan, 503 A.2d 1051, 1054 (Pa. Cmwlth. 1986) (concluding that Bureau did not meet its burden where it provided no evidence that it complied with statutory notice provisions).
The record reflects some discrepancy in the address to which Arthur Kemler's notice was sent. The document which provides that the notice was unclaimed indicates that delivery was attempted at 504 South Keyser Avenue. The notice itself provides that the notice was addressed to 502 South Keyser Avenue. The trial court resolved this discrepancy in the evidence by finding that the notice was sent to Appellants' undisputed address, 502 South Keyser Avenue. (Trial Ct. Op. at 4-5.) "As the finder of fact, the trial court has exclusive authority to weigh the evidence, make credibility determinations and draw reasonable inferences from the evidence presented." In re Sale of Real Estate by Lackawanna Cnty. Tax Claim Bureau, 986 A.2d 213, 216 (Pa. Cmwlth. 2009). Thus, the trial court was within its purview to resolve the evidentiary conflict.
Even if Arthur Kemler received proper notice pursuant to Section 602 of the Law, the "Law requires separate and individual notice to each named owner of property," and, thus, the Bureau was required to comply with the notice requirements with regard to both Arthur and Elizabeth Kemler individually. Teslovich v. Johnson, 406 A.2d 1374, 1378 (Pa. 1979).
The certified mail receipt was signed by "Beth" Kemler. (R.R. at 86a.) In its brief, the Bureau concedes that Ruth Smith signed the receipt in Elizabeth Kemler's name. (Bureau Br. at 13.) Thus, it is undisputed that Elizabeth Kemler did not sign a certified mail receipt. Further, the certified mail sent to Elizabeth Kemler was not returned as unclaimed. The purpose of Section 602 of the Law is to ensure that a property owner either receives notice via certified mail or via first-class mail if the certified mail is attempted but returned as unclaimed. Here, the purpose of Section 602 of the Law was clearly frustrated when the certified mail was neither received and signed for by Elizabeth Kemler nor returned as unclaimed.
Because the Bureau failed to meet its burden of proving that it strictly complied with the personal notice provision requiring certified mail, restricted delivery to Elizabeth Kemler, we are constrained to reverse the trial court's order.
/s/_________
P. KEVIN BROBSON, Judge ORDER
AND NOW, this 10th day of April, 2015, the order of the Court of Common Pleas of Lackawanna County dated May 7, 2014, is hereby REVERSED.
/s/_________
P. KEVIN BROBSON, Judge BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge OPINION NOT REPORTED
DISSENTING OPINION BY JUDGE LEADBETTER
I would affirm the trial court. I believe it exalts form over substance to say that notice is proper where undelivered certified mail is followed by regular mail, but notice is insufficient where regular mail follows certified mail's being signed for in the intended recipient's name by someone else. Accordingly, I must respectfully dissent.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge