Pacella v. Wash. County Tax Claim Bureau

• Decision Date: 23 December 2010
• Citation: 10 A.3d 422
• Parties: John B. PACELLA, Appellant v. WASHINGTON COUNTY TAX CLAIM BUREAU and E.D. Lewis.
• Court: Pennsylvania Commonwealth Court

10 A.3d 422

John B. PACELLA, Appellant
v.
WASHINGTON COUNTY TAX CLAIM BUREAU and E.D. Lewis.

Commonwealth Court of Pennsylvania.

Argued Nov. 8, 2010.
Decided Dec. 23, 2010.

10 A.3d 423

Gary M. Scoulos and Richard DiSalle, Pittsburgh, for appellant.

Blane A. Black, Monongahela, for appellee Washington County Tax Claim Bureau.

David E. Holland, Erie, for appellee E.D. Lewis.

BEFORE: LEADBETTER, President Judge, and McCULLOUGH, Judge, and FLAHERTY, Senior Judge.

OPINION BY President Judge LEADBETTER.

John B. Pacella appeals from the order of the Court of Common Pleas of Washington County denying his petition to set aside the upset sale and/or to redeem his property. Pacella challenges the trial court's determination that The Valley Independent, one of the two newspapers in which the Washington County Tax Claim Bureau (Bureau) published a notice of the upset sale, was a newspaper "of general circulation in the county" under Section 602(a) of the Real Estate Tax Sale Law (Tax Sale Law), Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. § 5860.602(a). Pacella further challenges the court's conclusion that he had no right to redeem the property after the tax sale under Section 607(g) of the Tax Sale Law, 72 P.S. § 5860.607(g), and that Section 32(a) of the Act of May 16, 1923, P.L. 207, as amended, commonly known as the Municipal Claims and Tax Liens Act (Tax Liens Act), 53 P.S. § 7293(a), granting a redemption right after the sale does not apply to this matter.

Pacella owned a residential property located at 548 Circle Drive in Peters Township, Washington County and has resided on the property since 2002. When Pacella was delinquent on real property taxes for the tax year 2008, the Bureau sent him a tax return and claim notice by certified mail and a pre-sale warning letter by first-class mail in May 2009.¹ On July 14, the

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Bureau sent him a notice of upset sale scheduled for September 23 by certified mail. The Bureau also posted the notice on his property on August 17 and advertised the upset sale in the Washington County Legal Journal and two newspapers, The Observer-Reporter and The Valley Independent, on August 20. Pacella admits that he received the notices sent by mail and saw the posting of the tax sale notice on his property.

At the September 23, 2009 upset sale, E.D. Lewis purchased Pacella's property for the upset sale price of $9077.48 as the sole bidder.² After receiving a notice informing him that his property had been sold at the upset sale, Pacella filed a petition to set aside the sale and/or to redeem the property on November 5, alleging that the upset sale should be invalidated for the Bureau's failure to comply with Section 602(a) of the Tax Sale Law, which provides:

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. [Emphasis added.]
Pacella also claimed that he had a right to redeem the property under Section 32(a) of the Tax Liens Act.³

At a hearing before the trial court, the Bureau's operations manager, Yvonne Orsatti, testified that the Bureau complied with all of the notice requirements under the Tax Sale Law by giving the tax sale notice by mail, publication and posting before the sale and the notice of actual sale. She further testified that the Bureau had advertised tax sales in the Observer-Reporter and The Valley Independent for over twenty-one years.

Pacella testified that the value of his property was between $120,000 and $130,000 and that his poor health caused the delinquency of tax payment. He claimed that The Valley Independent is not "a newspaper of general circulation" under Section 602(a) of the Tax Sale Law because its circulation was confined to the southeastern section of Washington County, representing only 16.7% of the geographical area of the county. He submitted charts and graphs to show the areas of Washington County where The Valley Independent and the Pittsburgh Post Gazette were circulated.

Pacella also presented the testimony of Jeff Simmons, the circulation director of Trib Total Media that owns The Valley Independent. Simmons testified that The Valley Independent is published in Westmoreland County and that 5720 copies of its daily edition are circulated in 17 zip code areas of Washington County, not including Peters Township where Pacella's property and 32 other properties listed for

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the upset sale were located, reaching 6.8% of Washington County households. Gary Owens, the Pittsburgh Post Gazette's sales and circulation manager, testified that the Pittsburgh Post Gazette circulates 10,778 copies daily in Washington County, including Peters Township, and reaches 12.8% of Washington County households.

The trial court found that The Valley Independent is a newspaper of general circulation. The court noted that it would be burdensome to the Bureau and cost-prohibitive to taxpayers to require publication of a tax sale notice in two newspapers with greatest circulation or with circulation in the specific areas of Washington County. The court also rejected Pacella's contention that he should be permitted to redeem the property under Section 607(g) of the Tax Sale Law, which provides in relevant part:

If no objections or exceptions are filed or if objections or exceptions are finally overruled and the sale confirmed absolutely, the validity of the tax, its return for nonpayment, the entry of the claim, or the making of such claim absolute and the proceedings of the bureau with respect to such sale, shall not thereafter be inquired into judicially in equity or by civil proceedings by the person in whose name such property was sold, ... except with respect to the giving of notice under the act, to the time of holding the sale, or to the time of petitioning the court for an order of sale. There shall be no period of redemption after such sale and the sale shall be deemed to pass a good and valid title to the purchaser, free from any liens or encumbrances whatsoever, except such liens as are hereafter specifically saved, and in all respects as valid and effective as if acquired by a sheriff's deed. [Emphasis added.]

The court interpreted Section 607(g) as permitting redemption of the property after the upset sale only when objections or exceptions to the sale are sustained, and the sale is invalidated. The court also cited Section 501(c) of the Tax Sale Law, 72 P.S. § 5860.501(c), which provides that "[t]here shall be no redemption of any property after the actual sale thereof." The court concluded that the redemption right under Section 32(a) of the Tax Liens Act does not apply to an upset sale conducted under the Tax Sale Law. The court accordingly denied Pacella's petition and upheld the upset sale. Pacella's appeal to this Court followed.⁴

The purpose of tax sales "is not to strip the taxpayer of his property but to ensure the collection of taxes." Tracy v. County of Chester, Tax Claim Bureau, 507 Pa. 288, 297, 489 A.2d 1334, 1339 (1985) [quoting Hess v. Westerwick, 366 Pa. 90, 98, 76 A.2d 745, 748 (1950) ]. A tax claim bureau must provide three separate methods of notice to each property owner: notification of a tax sale by certified mail and publication of the notice at least thirty days prior to the sale and posting of the notice on the property at least ten days prior to the sale. Section 602 of the Tax Sale Law. The tax claim bureau must strictly comply with these notice requirements to guard against deprivation of property without due process of law. Gladstone v. Fed. Nat'l Mortgage Ass'n, 819 A.2d 171 (Pa.Cmwlth.2003). The presumption of regularity attached to tax sales exists only until an objection or exception to the tax sale is filed raising a deficient tax sale notice.

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In re Upset Sale Tax Claim Bureau McKean County, 965 A.2d 1244 (Pa.Cmwlth.2009), appeal denied, 602 Pa. 682, 981 A.2d 221 (2009). If any notice is defective, the tax sale is void and must be set aside. Id. The Bureau has the burden of proving compliance with the notice requirements. Gladstone.

Pacella argues that the Bureau failed to comply with the publication requirement in Section 602(a) of the Tax Sale Law. Pacella maintains that The Valley Independent is not a newspaper of general circulation in Washington County and that the trial court's contrary finding is not supported by substantial evidence. According to Pacella, the court's decision sanctioned the Bureau's practice of advertising tax sales in The Valley Independent with only modest circulation in a small area of Washington County, which does not serve the purpose of publication requirement.⁵

The Legislature enacted the Newspaper Advertising Act, 45 Pa.C.S. §§ 301-310, to provide uniformity in the publication of legal notices and official advertisement. Section 302(1), 45 Pa.C.S. § 302(1). Section 307 of the Newspaper Advertising Act, 45 Pa.C.S. § 307, provides in...