A Philadelphia woman’s property could not be sold at a sheriff’s sale because the city failed to notify all the property owners, including mortgagees, of the sewer and water liens against it, the Commonwealth Court has ruled.
In City of Philadelphia v. Manu, the Commonwealth Court ordered that the case be remanded, determining that the city failed to serve notice to all the parties holding stake in a rental property of the unpaid liens and additional tax claims against the property.
Additionally, the city neglected to specifically detail the claims against the property, Judge Bonnie Brigance Leadbetter said in the court’s opinion, noting also that the city failed to adhere to the procedures for the collection of liens outlined in the Municipal Liens Act.
“The city had the burden of proving strict adherence to the act,” Leadbetter said. “In reviewing each of these mandatory steps, it is apparent that there was not even substantial, let alone strict, compliance.”
According to Leadbetter, the MLA states, “‘If upon a hearing, the court is satisfied that service had been made of the rule upon parties respondent in the manner provided in this act for the service of writs 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 therein, and that the facts stated in the petition be true, it shall order and decree that the property be sold.’”
The city filed a petition in the Philadelphia Court of Common Pleas seeking permission to sell a rental property belonging to Agnes Manu for delinquent sewer and water rents in the amount of $0, with a lien to that effect being entered against Manu’s property on August 27, 1987, according to Leadbetter.
Furthermore, the city added an amended claim to the petition for $657, plus interest, for city taxes for the year 1986, Leadbetter said.
Leadbetter said that in addition to Manu’s ownership of the property, several other entities held interest in it, including Commercial Credit Savings Bank, a mortgagee; Informational Management Group Inc., a mortgagee; Eborn Business Services, a mortgagee; the U.S. attorney general, representing the federal lienholder; the state Department of Revenue, the state lienholder; and Global Realty Investors Group Inc.
The city asked the court to issue a ruling upon the parties to show why the court should not permit the sale; however, on January 31, 2011, the court issued notice of the ruling only to Manu, according to Leadbetter.
Manu filed a motion to extend the time to file a response, and subsequently filed a motion to stay the proceedings, which was denied by the court, Leadbetter said, ultimately leading to the court authorizing the city to sell the property.
On October 24, 2011, Manu filed a motion for clarification, contending that the court’s September 21, 2011, order was unclear as to whether the city was trying to collect delinquent sewer and water rents or delinquent real estate taxes. Manu also claimed that the order did not specify the amount owed, according to Leadbetter.
Several days later, Manu motioned to strike or vacate the court’s ruling, arguing that the court was “deprived of jurisdiction to grant the position due to the defective service of the petition and the rule to show cause,” Leadbetter said.
Both the motion to strike and vacate, as well as the motion for clarification, were denied by the court, according to Leadbetter.
On December 14, 2011, Information Management Group filed a motion to intervene, alleging that although it had been listed as one of the mortgagees in the city’s petition to sell the property, it had not been served notice of the lien and that the city had also neglected to consider it an indispensable party, Leadbetter said. The motion was denied by the court.
In terms of the city’s petition to sell the property, Leadbetter said “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.”
Leadbetter also noted that, again, only Manu was notified of the rule, not any of the other interested parties, contending that the record reflected that no one was served in the manner prescribed by the MLA.
“At all events, it is undisputed that there was no personal service to anyone,” Leadbetter said.
Leadbetter noted that although the city claimed it had filed an affidavit of service, no such documentation of filing existed on the docket and, furthermore, the record was devoid of any evidence of publication of the service or petition to sell.
In terms of the denial of Information Management Group’s motion to intervene, Leadbetter cited Fulton v. Bedford County Tax Claim Bureau, which states that “failure to join an indispensable party to a lawsuit deprives the court of real subject-matter jurisdiction. … A party is deemed indispensable when his or her rights are so connected to the claims of the litigants that no decree can be made without impairing those rights.”
As a result, the Commonwealth Court determined that the case needed to be remanded for additional proceedings, in line with the procedures set forth in the MLA, according to Leadbetter.
“Given the manifest and multiple violations of the mandatory procedures of the act and the obvious due process rights at stake of the other interested parties, one of which had a pending motion to intervene, it was a clear abuse of discretion not to strike the order of September 21,” Leadbetter said.
(Copies of the 11-page opinion in City of Philadelphia v. Manu, PICS No. 13-2607, are available from Pennsylvania Law Weekly. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)