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Allegheny County v. Golf Resort

June 4, 2009

ALLEGHENY COUNTY
v.
GOLF RESORT, INC. APPELLANT



The opinion of the court was delivered by: Senior Judge Flaherty

Argued: May 5, 2009

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE JOHNNY J. BUTLER, Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

Golf Resort, Inc. (Golf) appeals from the order of the Court of Common Pleas of Allegheny County (trial court) which denied Golf's petition to set aside the sheriff's sale. We reverse and remand.

Golf is the owner of a parcel of land consisting of approximately 100 acres located in Allegheny County in addition to 28 acres located in Westmoreland County. Thomas Rodgers (Rodgers) is the 89 year-old president and shareholder of Golf. The 128 acres contains a 9-hole par 3 golf course, a 19-hole miniature golf course, a 50 station driving range and five or six buildings.

On May 5, 2005, Allegheny County (County) commenced a scire facias proceeding against Golf to collect delinquent 2001 taxes with respect to property located at 1450 Greensburg Road in New Kensington (Property)*fn1, which contains 68 acres and is part of the previously mentioned 128 acres. At that time, Golf owed, with interest and penalties, $2,770.75. Golf was served on May 10, 2005. Golf did not respond following service and on February 27, 2006, after giving notice required by Pa. R.C.P. No. 237.1, County obtained a default judgment against Golf in the sum of $3,130.60. On November 28, 2006, the trial court issued a rule to show cause why the Property should not be sold pursuant to Section 31.1 of what is commonly known as the Municipal Claims and Tax Lien Act (MCTLA).*fn2

On January 16, 2007, the trial court entered an order permitting the Property to be exposed to public sale. Thereafter, on March 20, 2007, the County filed a praecipe for writ of execution in the amount of $4,901.94, plus additional costs, interest and attorney fees, and the Property was scheduled to be exposed to public sale by way of a sheriff's sale on June 4, 2007. Rodgers testified that the Property was never posted with notice by the Sheriff and that he did not become aware of the impending sheriff's sale until he received a letter from the County's agent, Jordan Tax Service (Service).

Upon learning of the sheriff's sale scheduled for June 4, 2007, Rodgers, on behalf of Golf, called Service and had several conversations with an attorney for Service. Rodgers testified that such attorney was known to him as "Jake". Rodgers informed Service that Golf had a verbal agreement with the Five Points Investment Company which was part of the Park West Corporation, to purchase both the Property and adjoining farmland in Westmoreland County for a minimum of $2,800,000.00 and that the tentative closing date was June 15, 2007. Rodgers also asked Service to postpone the sale, so that Golf would have an opportunity to close the proposed sale and a payment agreement could be worked out. Allegedly, Jake, on behalf of Service, assured Rodgers that the sale would be postponed until sometime in August and that Service would provide at least ten days notice of the rescheduled sale date. As a result of the conversations with Service, Rodgers did not attend the June 4, 2007 sheriff's sale. At the June 4, 2007 sheriff's sale, a public announcement was made postponing the June 4, 2007 sale until the next sheriff's sale on July 2, 2007.

On July 2, 2007, the Property was re-exposed to public sale and ultimately sold. Rodgers was not notified of the rescheduled sale date. The bidding opened at the upset sale price of $39,499.81 and was sold at the final bid of $140,000.00 to David Bundy (Bundy). The sale was conducted by Sergeant Richard Fersch (Sgt. Fersch), who indicated that Bundy was an active bidder at sheriff's sales and is one of two individuals permitted to pay with a personal check. Sgt. Fersch further indicated that Bundy sat next to Dustin Monokian, an attorney for Service (Monokian), and that Monokian had represented Bundy in the past. Thereafter, Bundy requested the deed to the Property be recorded in the name of Jeff and Amy Stewart, his daughter and son-in-law. Bundy posted ten percent of his bid, $14,000.00.

Prior to paying the balance due, Jeff Stewart (Stewart), Bundy and James Swindell (Swindell), Bundy's brother-in-law, were together at a family function. Swindell testified that Stewart informed him that he was going to default on his bid. The group then discussed various sheriff's sale procedures. Swindell stated that Stewart told him the amount of unpaid taxes on the Property was $39,499.81. Thereafter, Swindell obtained a cashier's check in the amount of $39,000.00 and went to the sheriff's office with Bundy to purchase the Property on July 9, 2007.

Sgt. Fersch testified that on July 9, 2007, the day the balance was due on the Property, Bundy appeared by himself at the Sheriff's office and indicated that he was going to forfeit his bid and $14,000.00 deposit. Sgt. Fersch indicated that forfeiture was a rare occurrence. A few minutes later, Monokian appeared without being informed by the sheriff's office that Bundy was forfeiting. At some point, Stewart and Swindell arrived at the sheriff's office. All parties waited until 10:00 a.m., as the rule provides, at which time, Sgt. Fersch informed Monokian that the Property was going to be forfeited and asked Monokian whether he would like to re-expose the Property to public sale or get a court order to postpone the sale to a later date at which more people could attend. Monokian instructed Sgt. Fersch to re-expose the Property to sale immediately, a decision which Sgt. Fersch also thought to be highly unusual due to the existence of such active bidding at the July 2, 2007 sale. Sgt. Fersch also described the decision as unusual, as the attorney of record normally obtains an order of court to postpone the sale to another date so that there would be more people in attendance to bid. Sgt. Fersch further believed that this was unusual due to the fact that bidding in this case had risen to $140,000.00 and was now being immediately re-exposed for costs and taxes when only one bidder was present.

Nevertheless, with only Bundy, Stewart, Monokian and Swindell present, Sgt. Fersch reopened the sale of the Property at the upset price of $39,499.81 in the Sheriff's office. Swindell then bid the upset sale price plus an additional $100.00. Due to the fact that there were no other bidders present, Swindell obtained the Property at that first bid. Swindell, the only bidder at the resale on July 9, 2007, is Bundy's brother-in-law and had never invested in real estate before this transaction.*fn3

Rogers did not find out about the July sales until he telephoned Service in mid-July to find out the exact amount of the taxes Golf owed. At that time, he was informed that the Property had been sold at a sheriff's sale, that the buyer, Bundy, had forfeited the Property and that it had been resold to Swindell.

Rogers confronted Swindell regarding the July 9, 2007 sale and was informed by Swindell that Rogers would be wasting his time, as the deed had already been delivered to Swindell. However, this was untrue, as Sgt. Fersch had filed a report with the Sheriff, as he believed the transaction showed signs of impropriety. Sgt. Fersch testified that the series of events that ultimately led to the sale of the Property at the upset price "didn't look right [and] it didn't feel right." R.R. ...


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