IN THE COMMONWEALTH COURT OF PENNSYLVANIA Washington School District : : v. : : George Retos, Jr., : No. 2376 C.D. 2012 Appellant : Argued: November 14, 2013 BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McGINLEY FILED: March 5, 2014 George Retos, Jr. (Appellant) appeals from the Orders of the Court of Common Pleas of Washington County (common pleas court) which denied his Motion to Dismiss the Writs of Scire Facias 1 filed by the School District of Washington County (School District) and granted the School District s Petition to sell Appellant s property free and clear pursuant to the Municipal Claims and Tax Liens Act (MCTLA). 2 Appellant owns a property located at 103 Lemoyne Avenue in the borough of East Washington, Pennsylvania. The School District enlisted the services of a private tax collector, Portnoff Law Associates, to collect its school 1 The object of a writ of scire facias is to ascertain the sum due on a lien of record and to give the taxpayer an opportunity to show cause why the municipality should not have executed. Newberry Township v. Stambaugh, 848 A.2d 173, 177 n.10 (Pa. Cmwlth. 2004). 2 Act of May 16, 1923, P.L. 207, as amended, 53 P.S. 7101-7105.
taxes beginning with the 2004 school year. 3 The School District sued Appellant to collect taxes owed for the years 2004, 2005, 2006, and 2007. For each of these tax years, the School District filed liens against Appellant s property and Writs of 3 The MCTLA and the Real Estate Tax Sale Law (RETSL), Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. 5860.101-5860.803, provide alternative methods for taxing districts to collect delinquent real estate taxes. The two statutes, although similar in purpose, set forth different procedures. Under the RETSL, the county tax claim bureau is responsible for the prosecution and collection of delinquent taxes, and the management and disposition of property as payment for those taxes. Each taxing body must file or make a return to the tax claim bureau on or before the last day of April of each year, which contains a list of all properties against which taxes were levied by the taxing body, but remain unpaid. Section 306 of the RETSL, 72 P.S. 5860.306. The tax claim bureau, in turn, prepares a tax claim for each property which is then entered in a suitable claim docket. The tax claim acts as a lien against the property. The bureau gives notice to the taxpayer of the return of such taxes. Section 308 of the RETSL, 72 P.S. 5860.308. The taxpayer is provided the opportunity to pay the taxes or to file timely exceptions to the claim. Section 314 of the RETSL, 72 P.S. 5860.314. Relevant to this appeal is Section 312 of the RETSL, 72 P.S. 5860.312. Under Section 312 of the RETSL, if the taxing body fails to make a return (i.e., report the delinquent taxes to the tax claim bureau for collection) within the time required (by the last day of April of each year), the taxing district s lien on the property shall be wholly lost. 72 P.S. 5860.312. Appellant seizes upon this provision to support his argument that the School District s lien on his property was wholly lost and a nullity because the School District did not abide by Section 312 of the RETSL, 72 P.S. 5860.312. It is undisputed that the School District did not proceed under the RETSL and it did not make a return to the Washington County Tax Claim Bureau which reported Appellant s property as delinquent. The Washington County Tax Claim Bureau did not prosecute the tax claim against Appellant. Instead, the School District proceeded under the MCTLA. It hired a private tax collector and recorded its liens by filing them in the Office of the Prothonotary. Section 9 of the MCTLA, 53 P.S. 7143. Under the MCTLA, a taxing district pursues a judgment on its lien through the issuance of a writ of scire facias. Section 17 of the MCTLA, 53 P.S. 7185. Once the taxing body issues the writ of scire facias, the taxpayer may file an affidavit of defense raising all defenses to the tax lien. Section 14 of the MCTLA, 53 P.S. 7182. In this appeal, Appellant argues, inter alia, that the School District was not empowered or authorized to collect delinquent taxes via the procedures set forth in the MCTLA because Washington County never adopted a resolution which granted the School District permission to proceed under the MCTLA. Appellant asserts that the judgment obtained by the School District under the MCTLA was therefore, ultra vires, and must be stricken. 2
Scire Facias in the Office of the Prothonotary of Washington County under the MCTLA. Appellant filed an Affidavit of Defense, Answer and New Matter for each tax year. Appellant raised defenses related to the legality of the interest, fees and costs assessed by the School District, the procedure used by the School District to assess interest, fees and costs, the constitutionality of the School District s actions, the School District s failure to join indispensable parties, and the School District s failure to give notice to all parties. Appellant did not dispute the amount of the underlying delinquent taxes. He also did not argue that the School District lacked the authority to proceed under the MCTLA or that the School District failed to file returns with the County Tax Claim Bureau under the RETSL. The School District, in turn, filed Motions for Judgment for Insufficient Affidavit of Defense. The common pleas court consolidated the proceedings under one docket. On April 22, 2009, the common pleas court entered judgment in favor of the School District in the amount of $28,300.87, which represented the principal amount of the delinquent real estate taxes due and owing. Appellant did not appeal this judgment (hereinafter the April 22, 2009 judgment ). On June 1, 2011, a Praecipe for Writ of Execution was issued by the School District. On June 15, 2011, a Motion to Reassess Damages was filed and a hearing was scheduled. The motion was granted and the damages were reassessed in the amount of $49,287.56 plus 10% interest. 3
On December 2, 2011, Appellant s property was subject to an upset sale at an announced price of $95,065.82. When the upset price was not obtained, the School District petitioned the common pleas court to permit the property to be sold free and clear of all taxes, municipal claims, mortgages, and judgments. On May 2, 2012, Appellant filed a Motion to Strike [the School District s] Claims. Appellant argued that the School District s delinquent tax claims were defective at their core due to the failure of [the School District s] private tax collector to properly make returns as required by law [RETSL]. Motion to Strike, May 2, 2012 at 5; Reproduced Record (R.R.) at 119. Appellant argued that the failure of Portnoff Law Associates to file delinquent tax returns with the County Tax Claim Bureau rendered the School District s actions and the April 22, 2009 judgment a nullity. A hearing on the School District s request to sell the property free and clear was held on August 9, 2012. Appellant argued that the actions of the School District were without legal justification, illegal, and ultra vires; therefore, the common pleas court had no subject matter jurisdiction to entertain the School District s Petition to Sell Free and Clear. The common pleas court gave the parties the opportunity to take depositions 4 and file briefs on the issue of whether the court had subject matter jurisdiction. On October 23, 2012, Appellant filed a Motion to Dismiss Writ of Scire Facias on the grounds that: (1) the School District failed to file delinquent tax returns with the Washington County Tax Claim Bureau with respect to 4 The depositions of the County Chief Clerk and the County Chief Assessor established that Washington County did not pass an ordinance adopting the MCTLA. 4
Appellant s taxes for the years 2004, 2005 and 2006, as required by Section 312 of the RETSL, 72 P.S. 5860.312; 5 and (2) the School District was not authorized to use the MCTLA to collect taxes from Appellant because Washington County never adopted the MCTLA as an alternative to the RESTL. Appellant argued that the common pleas court had no subject matter jurisdiction to entertain the School District s Petition to Sell Free and Clear or to permit the School District to proceed any further in the matter. In two orders, the common pleas court denied Appellant s Motion to Dismiss, granted the School District s Petition to Sell Free and Clear, and reassessed the damages at $51,755.02. While the common pleas court agreed that the School District was required to file delinquent tax returns with the Washington County Tax Claim Bureau under the RETSL, it found that the School District may proceed under either the MCTLA or the RETSL. Pennsylvania Land Title Association v. East Stroudsburg School District, 913 A.2d 961 (Pa. Cmwlth. 2006). The common pleas court concluded that it had subject matter jurisdiction over the scire facias proceeding, and since Appellant did not timely appeal from the entry of the April 22, 2009 judgment, he was estopped from attacking its validity. 6 5 This Section states: [i]f a tax is not returned to the bureau within the time required by this act, its lien on the property shall be wholly lost. 6 Generally, collateral estoppel forecloses re-litigation of issues of fact or law in subsequent actions where the following criteria are met: (1) the issue in the prior adjudication was identical to the one presented in the later action; (2) there was a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication; (4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in a prior action; and (5) the determination in the prior proceeding was essential to the judgment. Callaghan v. Workers' Compensation Appeal Board (City of Philadelphia), 750 A.2d 408 (Pa. Cmwlth. 2000). 5
On appeal, 7 Appellant raises two issues: (1) whether the common pleas court erred when it held that Appellant s challenge to the Writs of Scire Facias was untimely; and (2) whether the common pleas court erred when it held that the School District was empowered to act through the MCTLA rather than the RESTL to collect taxes from Appellant? I. First, Appellant argues that the common pleas court erred when it found his challenge to the April 22, 2009 judgment to be untimely. He relies on Section 31 of the MTCLA, 53 P.S. 7281, which he claims sets forth the time when a judgment obtained thereunder becomes final: Upon delivery by the sheriff of a deed for any property sold under a tax or municipal claim, the judgment upon which such sale was had shall thereupon and forever thereafter be final and conclusive as to all matters of defense which could have been raised in the proceeding, including payment, and no error or irregularity in obtaining or entering of such judgment shall effect the validity thereof. Appellant asserts that under the plain language of this provision, a judgment obtained under the MCTLA becomes final only upon delivery by the sheriff of a deed. Appellant contends that his property was not yet sold and the deed was not yet delivered by the sheriff. Therefore, the April 22, 2009 judgment was not final and his challenge was timely. 7 This Court s scope of review in a tax sale case is limited to determining whether the common pleas court abused its discretion, rendered a decision which lacked supporting evidence or clearly erred as a matter of law. Bell v. Berks County Tax Claim Bureau, 832 A.2d 587 (Pa. Cmwlth. 2003). 6
The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly. Every statute shall be construed, if possible, to give effect to all its provisions. 1 Pa.C.S. 1921(a); Commonwealth v. McCoy, 599 Pa. 599, 613, 962 A.2d 1160, 1167 68 (2009). A statute's plain language generally provides the best indication of legislative intent. McCoy, 599 Pa. at 613, 962 A.2d at 1166; Ephrata Area Sch. Dist. v. County of Lancaster, 595 Pa. 111, 938 A.2d 264 (2007); Pennsylvania Fin. Responsibility Assigned Claims Plan v. English, 541 Pa. 424, 430, 664 A.2d 84, 87 (1995) ( Where the words of a statute are clear and free from ambiguity the legislative intent is to be gleaned from those very words. ). Only where the words of a statute are not explicit will we resort to other considerations to discern legislative intent. Ephrata Area Sch. Dist., see also 1 Pa.C.S. 1921(c); In re Canvass of Absentee Ballots of Nov. 4, 2003 Gen. Election, 577 Pa. 231, 843 A.2d 1223 (2004). Moreover, in this analysis, [w]e are not permitted to ignore the language of a statute, nor may we deem any language to be superfluous. McCoy, 599 Pa. at 613, 962 A.2d at 1168. Governing presumptions are that the General Assembly intended the entire statute at issue to be effective and certain, and that the General Assembly does not intend an absurd result or one that is impossible of execution. See 1 Pa.C.S. 1922(1)-(2). This Court finds that Appellant s interpretation is not supported by the plain language in the statute. First, this section does not state that delivery of the deed by the sheriff is the only way judgment becomes final under the MCTLA. 8 8 See Shapiro v. Center Twp., Butler County, 632 A.2d 994 (Pa. Cmwlth. 1993); Upper Gwynedd Twp. Authority v. Roth, 536 A.2d 875 (Pa. Cmwlth. 1988); Borough of Fairview v. Property Located at Tax Index No. 58-67-4, 453 A.2d 728 (Pa. Cmwlth. 1982) (judgments (Footnote continued on next page ) 7
Rather, it provides that no challenges to the judgment may be considered by the court after delivery of the deed by the sheriff to a good faith purchaser in a sheriff sale. Section 31 of the MTCLA, 53 P.S. 7281, was meant to protect a good faith purchaser at a sheriff s sale from challenges to his title. A good faith purchaser at a sheriff s sale has a right to rely upon the validity of the judgment. In Township of Upper Darby v. Bennett, 87 Pa. Super. 414, 420, (Pa. Super.), the Superior Court held that [t]he language of this statute clearly means that where the interest of a third party has become involved, the purchaser, the judgment shall not be in any manner questioned, either by direct or collateral attack, upon the ground that there has been some mere irregularity in the proceedings. This provision did not create a separate procedure under the MCTLA to challenge judgments that is different from the law of finality of judgments under general Pennsylvania law. 9 Section 31 of the MTCLA, 53 P.S. 7281, was intended to set a point in time after which there would be an absolute bar to raising challenges to the judgment even where such a challenge would not otherwise be barred by common law principles of finality of judgments under Pennsylvania law. Appellant failed to appeal the April 22, 2009 judgment within thirty days. Section 31 of the MTCLA, 53 P.S. 7281, did not enlarge his time to appeal. (continued ) entered in adverse proceedings on writs of scire facias under the MCTLA were final and appealable before any delivery of the deed by the sheriff). 9 A judgment entered in adverse proceedings becomes final if no appeal therefrom is filed within thirty days. 42 Pa.C.S. 5505. 8
The common pleas court correctly found that he may not now collaterally attack the April 22, 2009 judgment. 10 II. In the alternative, Appellant asserts that despite his failure to appeal the April 22, 2009 judgment, the judgment must be stricken because it was void by virtue of the fact that the School District had no authority to collect delinquent taxes from him under the MCTLA. Appellant contends that the School District had no authority to act through the MCTLA. He asserts that Section 201a of the RETSL, 72 P.S. 5860.201a, only gives counties, not taxing districts, the authority to choose whether to use the tax claims bureaus established by the RESTL or an alternate method of tax collection: (a) In lieu of or in addition to creating a bureau, counties are authorized to provide by ordinance for the appointment and compensation of such agents, clerks, collectors and other assistants and employes, either under existing departments, in private sector entities or otherwise as may be deemed necessary, for the collection 10 Appellant s underlying argument is without merit in any event. He argues that the judgment should be stricken because the School District s failure to file delinquent tax returns with the Tax Claim Bureau resulted in its lien being wholly lost. Section 312 of the RETSL, 72 P.S. 5860.312. Again, Appellant misconstrues the purpose of this provision. It is not, as Appellant would have it, a tool to be used by a taxpayer to avoid paying delinquent real estate taxes. The RETSL requires a taxing body to file its delinquent tax returns with the tax claim bureau for collection within the time required, that is, by the last day of April of each year. If the taxing body fails to comply with the filing deadline, it will lose its lien because it will not be prosecuted and collected by the tax claim bureau. The provision was not triggered here because, although the School District did not file delinquent tax returns with the Tax Claim Bureau, the Tax Claim Bureau did not act as the School District s agent in collecting delinquent taxes. Instead, the School District proceeded under the MCTLA, hired as its agent a private tax collector, recorded its lien by filing it in the Office of the Prothonotary, and pursued judgment on its lien through the issuance of a writ of scire facias. The issue of whether the School District was empowered to proceed under the MCTLA is addressed in the review of the next issue. 9
and distribution of taxes under this act. Any alternative collection method should be subject to all notices, time frames, enumerated fees and protections for property owners contained in this act. Section 201a of the RETSL, 72 P.S. 5860.201a (Emphasis added). Appellant argues that Washington County never adopted the MCTLA; therefore, the School District was not authorized to use it to collect taxes from him. He contends that the judgment was void on his face and should be stricken. 11 As a threshold matter, this Court notes that nothing in Section 201a of the RETSL, 72 P.S. 5860.201a, limits the independent right of a school district to use the MCTLA. This section requires only that a county that wishes to use a collection method other than RETSL to adopt a resolution authorizing same. Nothing in the section requires the county to adopt a resolution to enable a school district to exercise its independent right to collect under the MCTLA. Further, the MCTLA explicitly provides authority for a school district to collect its delinquent real estate taxes by utilizing the method and specific procedures afforded by the MCTLA. Section 4 of the MTCLA, 53 P.S. 7107, provides: The lien for taxes shall exist in favor of, and the claim therefor may be 11 A petition to strike a judgment is an attack upon the judgment's validity. To strike a judgment, there must be an irregularity or fatal defect of record which renders the order or judgment invalid. City of Philadelphia Water Revenue Bureau v. Towanda Properties, Inc., 976 A.2d 1244 (Pa. Cmwlth. 2009). When considering a petition to strike, the court may only look to the facts of record at the time the judgment was entered to decide if the record supported the judgment. Id. Fatal defects may include, for example, a judgment entered without authority or jurisdiction, or a judgment entered in violation of the applicable rules of civil procedure. 7 Standard Pennsylvania Practice, Ch. 30, 168, p. 197 202. 10
filed against the property taxed by any municipality to which the tax is payable. (Emphasis added). A school district is included in the definition of municipality: The word municipality, as used in this act, means any county, city, borough, incorporated town, township, school district, or a body politic and corporate created as a Municipal Authority pursuant to law and any assignees thereof. Section 1 of the MTCLA, 53 P.S. 7101. This Court recently recognized that a school district may independently choose to use the MCTLA. In County of Carbon v. Panther Valley School District, 61 A.3d 326 (Pa. Cmwlth. 2013), this Court stated: Under the Real Estate Tax Sale Law, property taxes may be collected by a county on behalf of all county taxing authorities, including school districts. However, school districts may choose to collect their own taxes under authority of the [MTCLA]. Id. at 331. Based on the foregoing, it is clear that the School District had an independent right to collect its delinquent real estate taxes under the MCTLA without the need for Washington County to adopt a resolution. The order of the common pleas court is affirmed. BERNARD L. McGINLEY, Judge 11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA Washington School District : : v. : : George Retos, Jr., : No. 2376 C.D. 2012 Appellant : O R D E R AND NOW, this 5 th day of March, 2014, the Order of the Court of Common Pleas of Washington County in the above-captioned matter is hereby AFFIRMED. BERNARD L. McGINLEY, Judge