City of Phila. v. Manu

• Decision Date: 30 October 2013
• Parties: CITY OF PHILADELPHIA v. Agnes MANU, Appellant.
• Court: Pennsylvania Commonwealth Court

76 A.3d 601

CITY OF PHILADELPHIA

v.Agnes MANU, Appellant.

Commonwealth Court of Pennsylvania.

Submitted on Briefs Feb. 22, 2013.

Decided Sept. 6, 2013.

Reargument Denied Oct. 30, 2013.

Agnes Manu, pro se.

Amanda J. Dougherty, Assistant City Solicitor, Philadelphia, for appellee.

BEFORE: LEADBETTER, Judge, SIMPSON, Judge, and COLINS, Senior Judge.

OPINION BY Judge LEADBETTER.

Agnes Manu (Manu) appeals pro se from the December 8, 2011 order of the Court of Common Pleas of Philadelphia County that denied her motion to strike or vacate its September 21, 2011 order authorizing the City of Philadelphia (City) to sell her property. Because the record establishes virtually no compliance with the Act of May 16, 1923, P.L. 207, commonly known as the Municipal Claims and Liens Act of 1923 (Municipal Liens Act, or simply Act), as amended,53 P.S. §§ 7101–7283a, we reverse.

Manu is the current owner of rental property located at 7230 Cornelius Street in Philadelphia. In January 2011, the City filed a petition seeking permission to sell Manu's property free and clear of all encumbrances for delinquent water and sewer rents. The City alleged that a lien was entered on Manu's property on August 27, 1987 “for unpaid water/sewer rents ... in the amount of $0.00” and that additional delinquencies may have subsequently accrued. City's Petition, ¶ 3; Reproduced Record (R.R.) at 3a. The City also attached to the petition an “amended” claim of $657.54, plus interest and penalties, for “City Taxes for the year 1986.” R.R. at 5a. In paragraph 5 of the petition, the City listed the following parties as having interests in Manu's property based on the tax information certificate: (1) Agnes Manu, the property owner; (2) Commercial Credit Savings Bank, a mortgagee; (3) Informational Management Group, Inc., a mortgagee; (4) Eborn Business Services, Inc., a mortgagee; (5) the United States Attorney General, representing the federal lien holder; (6) the Commonwealth of Pennsylvania, Department of Revenue, the state lien holder; and, (7) Global Realty Investors Group, Inc., a mortgagee. Id., ¶ 5; R.R. at 4a. The City asked the court to issue a rule “upon the parties set forth in paragraph 5” to show cause why the court should not permit a sale of Manu's property free and clear of the claims, mortgages, rents and charges, and a rule upon the United States to show cause why it should not be added as a party defendant to the proceeding. R.R. 4a.

On January 31, 2011, the trial court issued a rule only upon Manu to show cause why an order permitting a sale of her property for delinquent water and sewer rents should not be entered and why the United States should not be joined as a party defendant. R.R. 2a. The rule was returnable within 15 days of its service. The court directed that service of the petition and the rule be made in the manner of service of writs of scire facias¹ under the Municipal Liens Act. On February 28, the City filed a Sheriff's Return of Service containing a notation, “posted premises” at 7230 Cornelius Street on February 23. Certified Record (C.R.) Item No. 2.

On April 14, 2011, Manu, proceeding pro se, filed a motion to extend the time to file an answer to the rule to show cause, alleging that she just became aware of the filing of the petition. The trial court granted the motion on May 25 and directed her to file an affidavit of defense within 30 days. On July 27, Manu filed a motion to stay the proceeding. She alleged that she had not received tax assessment notices since 1998 and was filing tax assessment appeals nunc pro tunc with the Board of Revision of Taxes. On September 21, the court issued two orders. The first stated that, after a hearing, the court denied the stay.² The second authorized the City to sell Manu's property clear of all encumbrances at a sheriff's sale to be held on October 19. The court stated that it was satisfied that service of the January 31 rule to show cause was properly made “upon all parties” and that no answers had been filed “by the respondents or any of them.” Trial Court's September 21, 2011 Order; C.R. Item No. 9. The latter order was entered in the docket on September 30.

On October 24, 2011, Manu filed a motion for clarification. She averred that it was unclear whether the City was seeking to collect delinquent water and sewer rents or delinquent real estate taxes and that the trial court's September 21 order did not specify the amount she owed to the City. On October 31, Manu filed a motion to strike or vacate the court's September 21 order. She argued that the trial court was deprived of jurisdiction to grant the petition due to defective service of the petition and the rule to show cause, and that the September 21 order, therefore, was void abinitio. The court denied the motion to strike or vacate on December 8 and, on January 5, denied the motion for clarification. She appealed the denial of the motion to strike or vacate on Monday, January 9, 2012.

In the meantime, on December 14, 2011, Informational Management Group, Inc. (Informational Management), which was listed in the City's petition as one of the mortgagees on Manu's property, filed a petition to intervene and to open the judgment. It alleged that it had never been served notice of the underlying lien and that the City failed to join it in the petition as an indispensable party. On January 12, 2012, the court dismissed Informational Management's petition without prejudice as the matter was already on appeal.

All lawfully imposed or assessed municipal claims are liens on the property by operation of law. Section 3 of the Municipal Liens Act, 53 P.S. § 7106; N. Coventry Twp. v. Tripodi, 64 A.3d 1128, 1132 (Pa.Cmwlth.2013). The Municipal Liens Act provides for a specific, detailed and exclusive procedure that must be followed to challenge or collect on a municipal lien placed in cities of first class, such as the City. Tripodi, 64 A.3d at 1133. Section 31.2(a) of the Municipal Liens Act, added by Section 1 of the Act of March 15, 1956, P.L. (1955) 1274, 53 P.S. § 7283(a), provides:

[I]n cities of the first class, whenever a claimant has filed its tax or municipal claim in accordance with the requirements of this act, it may file its petition in the court in which the proceeding is pending, setting forth the facts necessary to show the right to sell, together with searches or a title insurance policy, showing the state of record and the ownership of the property, and of all tax and municipal claims, mortgages, ground rents or other charges on, or estates in, the land ..., and thereupon the court shall grant a rule upon all parties thus shown to be interested, to appear and show cause why a decree should not be made that the property be sold, freed and cleared of their respective claims, mortgages, ground rents, charges and estates. If upon a hearing, the court is satisfied that service had been made of the rule upon the parties respondent in the manner provided in this act for the service of writs of scire facias to obtain judgments upon tax and municipal claims, and that contemporaneously with the service of the rule on the parties respondent notice of the rule has been published by the claimant in at least one newspaper of general circulation in the county, and in a legal periodical published therein, if any, and that the facts stated in the petition be true, it shall order and decree that the property be sold at a subsequent sheriff's sale at a time to be fixed thereafter by the claimant, clear of all claims, liens, mortgages, ground rents, charges and estates, to the highest bidder at such sale.... [Emphasis added.]

The City had the burden of proving strict compliance with the requirements of the Act. In re Somerset Cnty. Tax Sale of Real Estate in the Name of Tub Mill Farms. Inc., 14 A.3d 180, 183 (Pa.Cmwlth.2010). In reviewing each of these mandatory steps, it is apparent that there was not even substantial, let alone strict, compliance. The petition neither listed “all tax and municipal claims,” nor gave any sense of their magnitude. The only claim listed in the petition is a lien for unpaid water and sewer rents in the amount of $0. Subsequently, the City filed an amended claim for unpaid taxes in the amount of $657.54. Nonetheless, the City asserts that its actual lien is for $14,702.99 and, presumably, expects to collect at least that amount from the sale if the proceeds are sufficient.

Next, the court issued a rule only upon Manu, not any of the other interested parties as is required. The record reflects that no one was served “in the manner provided in this act for the service of writs of scire facias to obtain judgments upon tax and municipal claims.” Section 18 of the Act, 53 P.S. § 7186, providing for service of writs of scire facias, requires personal service of all persons named in the writ, and any other persons found in possession of the property. If no one is found in possession of the property, it is to be posted. Here, the sheriff's return of service reflected only posting of the property. Confusingly, contrary to the plain language of Section 31.2(a), Section 39.2 of the Act, added by Section 4 of the Act of December 14, 1992, P.L. 859, 53 P.S. § 7193.2, provides that notice of a rule to show cause issued pursuant to Section 31.2 is to be made by posting and first class mail to all interested parties. The parties assume that the latter is the pertinent requirement, although the court ordered the former.³ At all events, it is undisputed that there was no personal service on anyone, and whether or not service was made by first class mail is disputed.

The City asserts in its brief: “The City filed its affidavit of service of the petition and rule on February 28, 2011, indicating service was made on February 23, 2011 through posting of the premises. This satisfied 53 P.S. § 7193.2(a)(1). The City's affidavit of service of the petition and rule also indicates service by certified and...