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12/09/97 JOSEPH A. FARRO AND MARIA FARRO v. TAX

December 9, 1997

JOSEPH A. FARRO AND MARIA FARRO, APPELLANTS
v.
TAX CLAIM BUREAU OF MONROE COUNTY AND S2M ASSOCIATES



Appealed From No. 1425 Civil 1996. Common Pleas Court of the County of Monroe. Judge O'Brien.

Before: Honorable Jim Flaherty, Judge, Honorable Bonnie Brigance Leadbetter, Judge, Honorable Silvestri Silvestri, Senior Judge. Opinion BY Judge Flaherty

The opinion of the court was delivered by: Flaherty

BY JUDGE FLAHERTY

FILED: December 9, 1997

Joseph and Maria Farro (the Farros) appeal from an order of the Court of Common Pleas of Monroe County (trial court), dated January 15, 1997, denying their petition to set aside the 1994 tax sale of their real property identified as Tax Parcel No. 17/15C/1/30 (subject property). We affirm.

The relevant facts in this case are not in dispute. The Farros purchased the subject property by a deed dated August 10, 1987, which was recorded in the Monroe County Recorder of Deeds office on October 13, 1987. As a result of delinquent taxes for the 1989 tax year, the Farros' property was sold, without proper notice to the Farros, to Raymond Lavigne (Lavigne) at a tax sale on September 17, 1991, and the Monroe County Tax Claim Bureau (Bureau) forwarded a deed for the subject property to Lavigne who recorded it.

When the Farros discovered the sale, they filed a petition to set aside the sale. The trial court determined that the Bureau did not comply with the notice provisions of the Real Estate Tax Sale Law (Act), Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §§ 5860.101-5860.803, and entered an order, dated June 25, 1992, setting aside the sale. The trial court's order also directed the Farros to forward the amount of the purchase price of the property and the costs of the tax sale to the Bureau and to provide evidence to the Bureau that all taxes were paid and current. Additionally, the trial court's order directed Lavigne to execute a quitclaim deed in favor of the Farros once the Bureau reimbursed him for the money that he had paid for the subject property.

By letter dated August 25, 1992, Steven Gladstone (Gladstone), counsel for Lavigne, delivered a quitclaim deed to the Farros' counsel requesting that the deed be held in escrow until Lavigne was reimbursed for all the tax monies paid at the sale. By letter dated November 17, 1992, Gladstone authorized counsel for the Farros to record the quitclaim deed. Farro's counsel, however, did not record the quitclaim deed until April 21, 1995. Although the Farros apparently paid Lavigne's purchase price to the Bureau, they failed to furnish evidence to the Tax Claim Bureau that all taxes due and owing were paid and current and failed to pay any of the 1992 taxes. (R.R. 72a, Finding of Fact No. 3). In Stipulation No. 1, the complete file of the Bureau is set forth in Exhibit "A". Although the exhibits in the Reproduced Record are not marked as such, since numerous notices and tax claims are found between the last page of the Stipulation and the copy of the 1987 deed which is referred to in the Stipulation as Exhibit B (but not marked), such pages must be assumed to be the "complete file" of the Bureau. There is only one reference to the Farros, dated September 24, 1992, which is an unsigned form "Installment Agreement" for Joseph Farro to pay taxes for the year 1991 in two installments which also contained a new address for the Farros "per Joseph 9/24/92," which address is also set forth in Paragraph 1 of the petition. There is no record that the Farros paid either the September, 1992 installment or the October, 1992, installment or that he ever agreed to the terms of the unsigned installment sale agreement. The other notices by the Bureau were all directed to Lavigne for delinquent taxes for the years 1991, 1992, and 1993 with notice of the 1994 tax sale based upon those delinquencies and indicate no taxes were ever paid for the 1991 calendar year by Farro. Meanwhile, between the date of the first tax sale, September 17, 1991, and April 21, 1995, the property owner of record was Lavigne to whom all tax bills, delinquency notices and tax sale notices were mailed. On October 19, 1994, the subject property, which was still recorded only in the name of Lavigne, was sold a second time by the Bureau to S2M Associates at a tax sale for the collection of delinquent taxes incurred in the 1992 tax year. S2M Associates is the name of a firm owned by Gladstone, Lavigne's counsel, who admittedly acted as a straw man for Lavigne in this latter sale.

The Farros, seeking to have the second tax sale invalidated due to lack of notice, thereafter filed a petition to set aside the second tax sale with the trial court. This time, the trial court denied the Farros' petition and determined that the Farros were not entitled to notice of the second tax sale because they failed to record the quitclaim deed prior to the second tax sale which recording would have established their ownership of record in accordance with the Act and, further, were not entitled to further equitable relief because the Farros refused to comply with the express conditions of the first court order granting relief by their persistent refusal to pay any taxes on the premises. This appeal followed. *fn1

Farro raises the following issues for our review: (1) whether the trial court erred in concluding that the Farros' failure to record the quitclaim deed foreclosed their entitlement to notice of the second tax sale; and (2) alternatively, whether the Bureau's actual and constructive knowledge of the Farros' location and of the fact that the Farros were the legal owners of the subject property required the Bureau to notify the Farros of the second tax sale.

I

The Farros argue that the trial court erred by relying on the Farros' failure to record their quitclaim deed in concluding that the Farros were not record owners of the subject property and therefore, were not entitled to notice as provided in Section 602 of the Act, 72 P.S. § 5860.602. The Farros contend that, in order for a tax sale to be valid, notice is required to be given to the owners of the property by publication, posting, and certified mail. If any of the three types of notice are defective, the sale is void. Krumbine v. Lebanon County Tax Claim Bureau, 153 Pa. Commw. 457, 621 A.2d 1139 (Pa. Cmlwth.1993), aff'd, 541 Pa. 384, 663 A.2d 158 (1995). The Farros further maintain that the basis for the Farros' title is the deed granting the subject property to the Farros on August 10, 1987 from other persons. The Farros contend that the quitclaim deed merely renounced an interest in the property held by Raymond Lavigne.

Whether the Farros were entitled to notice of the second tax sale of 1994 for the delinquent 1992 taxes depends on whether they are owners of the subject property, as defined in Section 102 of the Act, 72 P.S. § 5860.102, or whether Lavigne was the owner of the subject property according to that definition. Section 102 defines the term "owner" in the following manner:

[1] The person in whose name the property is last registered, if registered according to law, or, [2] if not registered according to law, the person whose name last appears as an owner of record on any deed or instrument of conveyance recorded in the county office designated for recording and [3] in all other cases means any person in open, peaceable and notorious possession of the property, as apparent ...


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