Deutsche Bank Nat'l Trust Co. v. Bendex Props. LLC., CIVIL ACTION NO. 3:16-cv-00432
Decision Date | 29 March 2018 |
Docket Number | CIVIL ACTION NO. 3:16-cv-00432 |
Parties | DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for Morgan Stanley Capital Inc. Trust 2006-HE2 Mortgage Pass-through Certificates, Series 2006-HE2, Plaintiff, v. BENDEX PROPERTIES LLC., Defendant. |
Court | U.S. District Court — Middle District of Pennsylvania |
(SAPORITO, M.J.)
This is an action for declaratory relief under 28 U.S.C. § 2201. The basis for federal subject matter jurisdiction is diversity of citizenship under 28 U.S.C. § 1332. Accordingly, although federal law governs whether we can properly render declaratory judgment, the substantive law of Pennsylvania applies in this matter. See generally Liberty Mut. Ins. Co. v. Sweeney, 216 F.2d 209, 210 (3d Cir. 1954); Am. Motorists Ins. Co. v. Mack, 248 F. Supp. 1016, 1018 (E.D. Pa. 1965).
The plaintiff, Deutsche Bank National Trust Company, as Trustee for Morgan Stanley Capital Inc. Trust 2006-HE2 Mortgage Pass-through Certificates, Series 2006-HE2 ("Deutsche Bank"), is the assignee of a mortgage on real property located at 727 N. Lincoln Avenue, Scranton, Pennsylvania, formerly owned by Tiffany F. Buck, the mortgagor (the "Property"). Deutsche Bank filed the complaint in this matter on March 10, 2016, seeking declaratory judgment against defendant Bendex Properties LLC ("Bendex"). (Doc. 1). Bendex is the current owner of the Property, having purchased it at a judicial tax sale on April 20, 2015. A second defendant, the Lackawanna County Tax Claim Bureau (the "Bureau") was subsequently granted leave to intervene as an additional defendant in this action. (Doc. 20; Doc. 21).
Deutsche Bank seeks a declaration by this Court that either (a) the judicial tax sale to Bendex is void ab initio because the petition for judicial tax sale, the rule to show cause, and the judicial sale deed identify the Property by the wrong street address; or alternatively (b) Deutsche Bank's lien on the Property was not discharged by the judicial tax sale because it did not receive adequate notice of the judicial tax sale, and thus Bendex took the Property subject to Deutsche Bank's mortgage lien.
The parties have filed cross-motions for summary judgment. (Doc. 30; Doc. 36). These motions are fully briefed and ripe for disposition.
The Property is located at 727 North Lincoln Avenue, Scranton, Pennsylvania. The Property is also identified on the county tax maps as Parcel No. 14510-040-030. The prior record owner of the Property was non-party Tiffany F. Buck.
The attached schedule provided the following legal description of the Property:
MERS recorded the mortgage with the Lackawanna County Recorder of Deeds on January 12, 2006, as Instrument Number 200601097.
Buck fell into arrears on both this mortgage and the real estate taxes due on the Property. On or about September 29, 2014, the Bureau exposedthe Property to a public upset sale, but a sufficient minimum bid was not received. See generally 72 P.S. § 5860.601 et seq.
On or about January 22, 2015, the Bureau filed a Petition to Sell Tax Delinquent Property at Judicial Sale Free and Clear of All Liens and Encumbrances with the Lackawanna County Court of Common Pleas (the "Petition"). The Petition was docketed as case No. 15-cv-205, and it described the subject property as "747 North Lincoln avenue, Scranton, PA[,] Tax Map No. 145.10-040-030[,] more fully described on Exhibit "A" attached hereto." Exhibit A to the Petition was a copy of a special warranty deed conveying the Property to Tiffany F. Buck, dated December 2, 2005, and recorded with the Lackawanna County Recorder of Deeds on January 12, 2006, as Instrument Number 200601096. The attached deed provided the following legal description of the Property:
The Petition also included, as an attached exhibit, a record search showing record ownership of the Property and all claims, liens, and encumbrances of record as of January 5, 2015. In addition to the record owner, Tiffany F. Buck, the Petition identified all parties with interests in the Property, so they could be served with appropriate notice. The Petition explicitly listed mortgagee "Mortgage Electronic Registration Systems, Inc." with an address of "PO Box 2026, Flint MI 48501-2026," and lender "Decision One Mortgage Company, LLC" with an address of "6060 J.A. Jones Dr., STE 1000, Charlotte, NC 28287" as interested parties to receive notice of the judicial tax sale.1 Several other lienholders and interestedparties were also identified.
The Petition requested issuance and service of a Rule to Show Cause why the Property should not be sold free and clear of all tax and municipal claims, liens, mortgages, charges, estates, and encumbrances. That same day—January 22, 2015—a judge signed the Rule.
On February 6, 2015, the sheriff served the Rule and Petition on MERS by certified mail, return receipt requested, addressed to its Flint, Michigan, address of record. On or about February 17, 2015, the sheriff received a domestic return receipt indicating that the Rule and Petition were received by a "Michael LaLonde" on behalf of MERS. The return receipt did not indicate the date of receipt by MERS, On March 18, 2015, a sheriff's return documenting service of the Rule and Petition upon MERS was filed with the court.
On February 6, 2015, the sheriff also served the Rule and Petition on Decision One by certified mail, return receipt requested, addressed to its Charlotte, North Carolina, address of record. On or about March 26, 2015,a sheriff's return was filed indicating that this service packet was returned by the Post Office as undeliverable, and the Post Office was unable to forward it.
On that same day—February 6, 2015—the state court entered an order authorizing advertisement of the judicial tax sale in a local newspaper of general circulation and a local legal journal. The order further provided that this advertisement would be "construed as service upon all owners, mortgage holders, lienholders, or any other party having an interest in the subject properties if service has been attempted by the Sheriff and has been unable to be made, and service has further been attempted by regular first class mail to the last known address of the affected party." On February 20, 2015, identical advertisements appeared in the Lackawanna Jurist and the Scranton Times-Tribune, stating that a judicial tax sale would take place on March 23, 2015, and that the following property would be among those exposed to sale "FREE AND CLEAR of all tax and municipal claims, mortgages, liens, charges and estates of whatsoever kind, except ground rents separately taxed":
Sale #89 (15-CV-205): Tax Map No. 145.10-040-030, located at 747 North Lincoln Ave., Scranton, PA, real owner Tiffany F. Buck, Minimum Bid $4,055.48
On March 13, 2015, a Corporate Assignment of Mortgage was executed with respect to the...
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