City of Phila. v. Perfetti

• Citation: 119 A.3d 396
• Decision Date: 08 June 2015
• Docket Number: Nos. 2171 C.D. 2014,s. 2171 C.D. 2014
• Parties: CITY OF PHILADELPHIA v. Raymond PERFETTI, Appellant.
• Court: Commonwealth Court of Pennsylvania

119 A.3d 396

CITY OF PHILADELPHIA

v.Raymond PERFETTI, Appellant.

Nos. 2171 C.D. 2014

Commonwealth Court of Pennsylvania.

Argued May 6, 2015.

Decided June 8, 2015.

David Denenberg, Philadelphia, for appellant.

Gerald T. Clark, Philadelphia, for appellee.

BEFORE: DAN PELLEGRINI, President Judge, RENÉE COHN JUBELIRER, Judge, ROBERT SIMPSON, Judge, MARY HANNAH LEAVITT, Judge, P. KEVIN BROBSON, Judge, PATRICIA A. McCULLOUGH, Judge, and ANNE E. COVEY, Judge.

Opinion

OPINION BY Judge ROBERT SIMPSON.

In these consolidated appeals, Raymond Perfetti (Perfetti) appeals from four orders of the Court of Common Pleas of Philadelphia County (trial court) that entered judgment in favor of the City of Philadelphia (City), directing Perfetti to pay municipal liens for want of a sufficient affidavit of defense under Section 19 of the Municipal Claims and Tax Liens Act (MCTLA).¹ Perfetti argues imposing the liens without prior notice or hearing violated his constitutional due process rights as the debt arose from his former tenants' non-payment of gas bills. He asserts the liens constitute a deprivation of property that required notice in sufficient time to allow recovery from his tenants. Upon review, we affirm.

I. Background

Perfetti has owned 1908 East Passyunk Avenue, Philadelphia (the Property) since 1965 and leases commercial and residential units therein. Pursuant to the lease terms, Perfetti's tenants were responsible for paying their own gas bills. The leases did not contain any terms obliging tenants to warrant payment of their gas bills or to grant Perfetti access to their payment histories.

The current matter stems from the failure of some of Perfetti's tenants, stretching back more than a decade, to pay their gas bills. Reproduced Record (R.R.) at 37a; see, e.g., Response to Motion for Judgment, Supplemental Reproduced Record (S.R.R.) at B39. Despite non-payment, the City continued to provide gas service to the Property after each tenant vacated the Property.² Relevantly, the City did not give notice to Perfetti of his tenants' delinquencies.

On January 14, 2011, the City placed four liens on the Property corresponding to each unpaid gas bill, totaling $1499.36³ (Liens). The City did not attempt to execute upon the Liens. The City did not notify Perfetti of the Liens. Perfetti discovered the Liens three years later while conducting a title search on the Property. R.R. at 38a. By the time Perfetti discovered the Liens, he was unable to seek contribution from his former tenants through breach of contract actions because the statute of limitations expired. R.R. at 36a.

Shortly after his discovery, Perfetti filed four “Notice[s] to File/Issue Scire Facias”⁴ pursuant to the MCTLA. The City then filed praecipes for writs to issue, and the Prothonotary of the trial court issued four writs.⁵ In response, Perfetti filed four affidavits of defense. In his affidavits of defense, Perfetti claimed the Liens should be stricken for two reasons: (1) the claims were barred by the statute of limitations; and, (2) the liens were imposed in violation of his due process rights under the Fourteenth Amendment to the United States Constitution.

The City filed motions for judgment arguing Perfetti's affidavits presented no viable defense or legal authority to challenge the writs. After receiving Perfetti's responses to the City's motions, the trial court held a consolidated hearing on all four Liens. Thereafter, the trial court granted the City's motions for judgment in four orders. Perfetti filed motions for reconsideration, which the trial court denied.

Perfetti appealed the orders. Upon direction by the trial court, he filed a Concise Statement of Errors Complained of on Appeal pursuant to Pa. R.A.P. 1925(b). In its Rule 1925(a) opinion, the trial court addressed Perfetti's constitutional due process arguments. See Tr. Ct., Slip Op., 12/16/14, at 5–6. It noted Perfetti abandoned his argument that the statute of limitations barred the Liens. The trial court reasoned that providing notice prior to filing the Liens was not constitutionally mandated because Perfetti was able to ensure proper payment for gas services that benefited the Property through the terms of the lease.

II. Discussion

The pertinent facts are undisputed. The City imposed the Liens on the Property based on unpaid gas bills incurred by Perfetti's tenants. Perfetti was unaware of the delinquencies, and the City did not interrupt gas service to the Property. Perfetti discovered the Liens approximately three years after the City filed them. He asserted lack of notice and process as defenses to the Liens.

As the material facts are not in dispute, this appeal raises a pure question of law. Therefore, our review is plenary. Pennock v. Lenzi, 882 A.2d 1057 (Pa.Cmwlth.2005).

Perfetti argues the City violated his constitutional due process rights under the Fourteenth Amendment of the United States Constitution by imposing the Liens upon the Property without prior notice or hearing. As such, he challenges the constitutionality of the MCTLA as applied in these circumstances. We begin with a review of the process required by the MCTLA.

A. MCTLA Process

The current procedure for enforcing municipal claims, including in cities of the first class, is set forth in the MCTLA. “The [MCTLA] provides for a specific, detailed and exclusive procedure that must be followed to challenge or collect on a municipal lien....” City of Phila. v. Manu, 76 A.3d 601, 604 (Pa.Cmwlth.2013). Section 3(a)(1) of the MCTLA authorizes municipalities to file liens on properties that will have priority over all other encumbrances, except taxes, tax liens or tax claims. 53 P.S. § 7106(a)(1) ; see Shapiro v. Center Twp., Butler Cnty., 159 Pa.Cmwlth. 82, 632 A.2d 994, 997 (1993) (“The assessment and imposition of the lien occur without any form of hearing.”) Once a lien is recorded, a property owner may challenge the municipal lien.

Under Section 16 of the MCTLA, a property owner may dispute a lien by requesting a lienholder to issue a writ of scire facias. 53 P.S. § 7184. A municipality may also pursue a writ without the owner filing notice. N. Coventry Twp. v. Tripodi, 64 A.3d 1128 (Pa.Cmwlth.2013). Alternatively, both parties may choose to do nothing and “[let] the municipal lien remain recorded indefinitely subject to revival of the lien in every twenty years....” Borough of Ambler v. Regenbogen, 713 A.2d 145, 148 (Pa.Cmwlth.1998). “After the lienholder issues the writ, the owner may file an affidavit, pursuant to 53 P.S. § 7182, raising defenses to the lien, such as actual payment of taxes, a defective claim or lien, fraud, or lack of process or notice. ” Roethlein v. Portnoff Law Assoc., Ltd., 623 Pa. 1, 81 A.3d 816, 818 (2013) (emphasis added).

Scire facias is an in rem proceeding in which a lien is placed on the property receiving municipal services. See Section 4 of the MCTLA, 53 P.S. § 7107 (“The lien for ... water rates, lighting rates, or sewer rates, or rates for any other service furnished by a municipality,—shall exist in favor of, and the claim therefor may be filed against the property thereby benefited by, the municipality [...].”); W. Clinton Cnty. Mun. Auth. v. Estate of Rosamilia, 826 A.2d 52, 56 (Pa.Cmwlth.2003) (the writ is a “means of enforcing payment of a municipal claim out of the real estate upon which such claim is a lien”). The reason for imposing the lien on the property as opposed to the person allegedly responsible for the delinquency is that the property received the benefits of municipal services, not the person. See City of Phila. v. Northwood Textile Mills, Inc., 395 Pa. 112, 149 A.2d 60 (1959).

Accordingly, the owner is responsible for municipal liens on the property. Id. at 62 (“[T]he sole and primary duty for the payment of this charge is that of the owner. Any delegation of this duty does not relieve the owner without the consent of the party to whom the duty is owed ...”). Section 1 of the MCTLA defines the term “owner,” in pertinent part, as “[t]he person or persons in whose name the property is registered, if registered according to law, and, in all other cases, means any person or persons in open, peaceable and notorious possession of the property, as apparent owner or owners thereof, if any, or the reputed owner or owners thereof in the neighborhood of such property.”53 P.S. § 7101. Generally, the record owner is the “owner” for the purposes of satisfying the requirements of the MCTLA and the procedures to be used to collect municipal claims. City of New Castle v. Uzamere, 829 A.2d 763 (Pa.Cmwlth.2003).

As owner of the Property, Perfetti is the party responsible for satisfying the debt secured by the Liens. Thus, he availed himself of this process and filed affidavits of defense to the Liens here. Lack of notice or process is a proper defense. See Roethlein.

There is no dispute that the municipal liens were filed in accordance with the MCTLA. The MCTLA itself does not require notice or an opportunity to be heard prior to placing a municipal lien on property. Further, the MCTLA does not contain a statute of limitations, allowing a municipality to file a lien to secure municipal debts for utilities at any time. 53 P.S. § 7432.⁶

Perfetti argues the trial court erred by granting the City's motions for judgment because the City's failure to provide pre-lien notice or an opportunity to be heard deprived him of property in violation of the Due Process Clause of the Fourteenth Amendment. Perfetti acknowledges the MCTLA does not limit the City's timeframe for filing a lien. Nonetheless, he contends the City's failure to provide notice within a reasonable time precluded him from pursuing breach of contract claims against his former tenants. He also asserts the City encumbered the Property without affording a meaningful opportunity to be heard.

First, we consider whether the Due Process Clause in the Fourteenth Amendment to the United States Constitution requires that Perfetti receive process beyond that...