Pennsylvania Bank & Trust Co. v. Hanisek

• Decision Date: 28 January 1977
• Docket Number: Civ. A. No. 75-30 Erie.
• Citation: 426 F. Supp. 410
• Parties: The PENNSYLVANIA BANK & TRUST CO. v. Andrew HANISEK, Sheriff of Erie County.
• Court: U.S. District Court — Eastern District of Pennsylvania

426 F. Supp. 410

The PENNSYLVANIA BANK & TRUST CO. v. Andrew HANISEK, Sheriff of Erie County.

Civ. A. No. 75-30 Erie.

United States District Court, W. D. Pennsylvania.

January 28, 1977.

Will J. Schaaf, Erie, Pa., for plaintiff.

Michael Visnosky, Erie, Pa., for defendant.

FINDINGS OF FACT, DISCUSSION AND CONCLUSIONS OF LAW

KNOX, District Judge.

Plaintiff brought this suit as a class action against the Sheriff of Erie County Pennsylvania claiming that he had consistently been charging excessive amounts for poundage or commissions in connection with sheriff sales of real property conducted by him. The action is a civil rights action specifically brought under 42 U.S.C. § 1983. The court has jurisdiction under 28 U.S.C. § 1343(3). The case was tried and argued to the court upon and agreed upon stipulation of facts and is now before the court for decision. The court makes the following

FINDINGS OF FACT

(1) Plaintiff, The Pennsylvania Bank and Trust Company is a Pennsylvania banking corporation with its principal place of business in the Western District of Pennsylvania.

(2) Defendant, Andrew J. Hanisek, is the duly elected, qualified and acting sheriff of Erie County Pennsylvania and a resident of the Western District of Pennsylvania, and has been since prior to March 26, 1969.

(3) This case has been certified as a class action and is brought by plaintiff on behalf of itself and numerous other banks, finance corporations, savings and loan associations and other individual and corporate lenders who have found it necessary to cause real property of their debtors to be sold by the Sheriff of Erie County, Pennsylvania at sheriff's sales during the period from March 26, 1969 to March 26, 1975 the date of filing this suit.

(4) During this six year period of time defendant was at all times Sheriff of Erie County Pennsylvania conducting sheriff's sales of real property by virtue of his office and pursuant to provisions of Pennsylvania law.

(5) Various other banks, savings and loan associations, finance companies and individuals have opted out in accordance with the report of the class action manager filed December 16, 1976 and are no longer considered as plaintiffs in this case.

(6) The court incorporates by reference in these findings of fact paragraphs 1-30, inclusive of the stipulation of facts filed in this case on August 3, 1976.

(7) In assessing poundage or commission for his services in connection with the sale of real estate the sheriff is governed by the provisions of Pennsylvania law, 16 P.S. 11301(b) (Act of May 9, 1949 P.L. 927 as last amended (Act October 17, 1974 P.L. 72) regulating the fees and commissions of sheriffs in counties other than counties of the first class. Erie County, Pennsylvania is a county of the third class and the fees of the defendant are regulated by said statute.

(8) The defendant, the Sheriff of Erie County, for a period of six years prior to March 26, 1975, charged poundage or commissions based on the amount of the judgment debt (which includes the debt and interest) or the highest bid price at the time of sale whichever was greater.

(9) That all poundage collected by the defendant at each and every Sheriff sale of real estate has been transferred to the Treasurer of Erie County for inclusion in the general fund of the budget of Erie County.

(10) That there were no exceptions filed to the distribution of the proceeds in any of the foregoing sheriff sales or in any of the sheriff sales conducted at all times material hereto objecting to the sheriff's collection of poundage and his computation of poundage as set forth in Stipulation of Fact No. 32.

(11) That at all times material hereto, the defendant, Andrew J. Hanisek, Sheriff of Erie County, Pennsylvania acted in good faith and upon the reasonable belief that the method employed for the computation of poundage was consistent with the existing statute. It appears that the sheriff was acting upon the advice of his solicitor Wendell R. Good, Esquire, Erie, Pennsylvania, now deceased.

DISCUSSION

The instant case is an illustration of the expansion of litigation under the Civil Rights Act, 42 U.S.C. § 1983¹ to bring within the purview of the federal courts matters which no one would have considered appropriate for their consideration a few years ago. The court, however, has determined that under the peculiar circumstances of this case and the lack of any apparent remedy afforded plaintiffs under Pennsylvania law this court must assume jurisdiction and determine the question presented here as to whether excessive poundage has been collected by a Pennsylvania sheriff in connection with the sales of real estate.

Preliminarily, it will be noted that originally the sheriff had brought in the County of Erie as a third party defendant claiming that he had paid all monies collected by way of poundage on real estate sales over to the county treasurer and that if he, the sheriff, was required to reimburse plaintiff for monies improperly collected the county in turn should indemnify him against such liability.²

The county upon being joined originally presented a motion to dismiss which was denied, the court holding that it had pendent jurisdiction of this claim by the sheriff under United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). On June 24, 1976, however the United States Supreme Court handed down its decision in Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276, holding that a federal court in a civil rights case did not have pendent or ancillary jurisdiction of a claim against a party not within its statutory jurisdiction under the Civil Rights such as a county. This court thereupon dismissed the third party claim against the County of Erie without prejudice to the right of the defendant sheriff to present his claims for indemnity, if any, in the appropriate state court.

In connection with the plaintiff's request for a class action the court did on December 2, 1975, enter an order pursuant to stipulation certifying this as a class action under Rule 23(b)(2) and (b)(3), the class being described as "all plaintiffs both corporate and individual or otherwise who have been execution creditors in sales of real property conducted by the sheriff of Erie County Pennsylvania from June 20, 1969 to June 20, 1975".

Provisions were made for notices to members of the class which were represented as of November 14, 1975, according to stipulation, to consist of at least 46 corporate plaintiffs and 49 individual plaintiffs in 319 sheriff sales conducted by the defendant during this period of time. A class action manager was appointed who reported on December 16, 1976, that 18 corporate and individual plaintiffs had notified him of opting out of the class. The exact names of the persons or corporations now contained in the class as represented by the plaintiff have not yet been made known to the court and will be determined in connection with the assessment of damages as hereinafter provided.

It will be noted that 42 U.S.C. § 1983 provides for a cause of action to "any citizen of the United States or other persons within the jurisdiction thereof." It therefore has been properly held that a corporation as well as an individual has a right to bring a suit under the Civil Rights Act. Leslie Tobin Imports, Inc. v. Rizzo, 305 F.Supp. 1135 (E.D.Pa.1969). It is obvious that this must be so since a corporation is a "person" entitled to the protection of the Fourteenth Amendment with respect to due process of law and equal protection of the laws which are the rights at issue in this case. See Grosjean v. American Press Company, Inc., 297 U.S. 233, 56 S.Ct. 444, 80 L.Ed. 660 (1936). In any event, we have numerous individual plaintiffs who have not opted out who are also entitled to protection under this class action.

With these preliminary matters out of the way, the court now turns to the merits of the case.

(A) Due Process of Law.

As previously noted the sheriff of Erie County has been collecting poundage or commissions with respect to properties sold at sheriff sale under the provisions of 16 Purdon's Pa. Statutes 11301 governing the fees to be charged by sheriffs in counties other than counties of the first class which insofar as is relevant here reads as follows:

"In addition, the sheriff shall charge and receive, as an official fee, a commission charge of two cents on every dollar, based upon the total amount bid for the property, whether paid to the sheriff or credited to the purchaser: Provided, That the amount of same does not exceed one thousand dollars ($1,000), in which case one-half cent (½ cent) on every dollar in excess of this amount shall be charged in addition.

It will be noted that the statute says that the commission shall be based upon the "total amount bid for the property whether paid to the sheriff or credited to the purchaser". It appears that the vast majority of the properties bid at sheriff sales in Erie County (as well as in most counties throughout the state) are bid in for "costs and taxes", leaving nothing to be applied against the debt. Nevertheless the sheriff of Erie County and certain other sheriffs elsewhere in the state have been charging poundage on the total amount of the judgment upon which the property is sold including the debt and interest. The cases described in the stipulation of facts show that the sheriff's computations have led to the collection of excessive poundage. Thus in case No. 2 poundage was charged on a judgment debt of $2252.70 plus interest of $131.58 whereas the bid for costs and taxes amounted to only $737.32 which at the rate of two percent on amounts less than $1,000 collected. It is apparent of course that the larger amount of poundage was levied and collected by the sheriff under color of his office notwithstanding the fact that the bid for costs and taxes was only for a nominal amount.

The plaintiffs further claim that they are...