Appeal from the Order of the Court of Common Pleas of Mercer County, Civil Division, at No. 1996-773.
Before: Popovich, Hudock and Hester, JJ.
From March of 1991 through April of 1993, the Internal Revenue Service of the United States (IRS) filed a total of eight notices of federal tax liens with the Prothonotary of Mercer County against David W. Fuller (Appellant). These liens, the aggregate of which equal $244,296.68, reflect Appellant's unpaid individual federal income tax liabilities for the years 1984 through 1991.
In 1994, the United States District Court for the Western District of Pennsylvania considered the substantive validity of the liens. Thereafter, on October 10 of that year, the court affirmed the liens' underlying validity. See Gaertner v. Fuller, 1994 U.S. Dist. LEXIS 16403, 1994 WL 758345.
On March 6, 1996, Appellant filed a "Petition for Removing Notices of Lien" in the Court of Common Pleas of Mercer County. In support thereof, Appellant alleged that the IRS had not complied with the filing mandates prescribed by Pennsylvania law and that the liens were, therefore, inoperative. More particularly, Appellant averred that the lien notices should be stricken because they were not certified by the Secretary of the Treasury or his delegate in accordance with the Uniform Federal Lien Registration Act, 74 P.S. section 157-4, which provides as follows:
Section 157-4. Execution of notices and certificates
Certification of notices of liens, certificates or other notices affecting Federal liens by the Secretary of the Treasury of the United States, or his delegate, or by any official or entity of the United States responsible for filing or certifying of notice of any other lien, entitles them to be filed, and no other attestation, certification or acknowledgment is necessary.
On April 26, 1996, the trial court issued a rule to show cause why the liens should not be stricken. This rule was directed to the Pittsburgh District Office of the IRS although, at this time, the United States was not a party to the action. In response to the rule, the United States filed a notice of removal of Appellant's petition to the United States District Court for the Western District of Pennsylvania. Appellant, in turn, filed a motion to remand the proceedings to the Mercer County Court of Common Pleas.
Finding that the underlying petition alleged a violation of state law filing requirements, and did not question the substantive validity of the liens, the District Court granted Appellant's petition. Upon remand, the trial court ordered that the IRS be joined as a party to the action. Thereafter, the parties filed briefs on the merits of the action.
By order dated January 30, 1997, the court denied Appellant's petition. Initially, the court noted that the filing requirements of the disputed statute were enacted to establish the priority of third party creditors' claims against a taxpayer. The liens are operative against the individual taxpayer upon proper notice of unpaid taxes without regard to whether the lien notices are filed. Therefore, the court held, because a determination as to whether the notices were properly filed could have no impact upon Appellant's legal rights, he lacked standing to litigate the claim. Moreover, the court continued, a review of the applicable law revealed that the IRS did in fact comply with the applicable filing requirements.
On February 10, 1997, Appellant filed a timely post-trial motion in which he argued that the court erred by not giving effect to the plain meaning of the statute. By order dated February 25, 1997, the court denied Appellant's post-trial motion due to the fact that motions for post-trial relief may not be filed pursuant to the rules governing petition practice in Pennsylvania.
On February 28, 1997, Appellant filed the instant direct appeal to this Court. Therein, Appellant alleged that the trial court erred in holding that the IRS liens were properly filed in accordance with 74 P.S. section 157-4. On June 20, 1997, the IRS filed a motion to dismiss the appeal for mootness. In support thereof, the IRS argued that on February 8, 1997, after the Mercer County Court entered its order but while post-trial motions were pending, the United States Bankruptcy Court ...