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In Re: Sale of Real Estate By Lackawanna County Tax Claim Bureau

May 17, 2011

IN RE: SALE OF REAL ESTATE BY LACKAWANNA COUNTY TAX CLAIM BUREAU PROPERTY SITUATE AT 250 KEYSER AVENUE PARCELS A & B
OLD FORGE, PA TAX MAP NO. 165.02-040-011 REAL OWNERS: ROBERT J. RINALDI, SR. AND JANET RINALDI, HIS WIFE, APPELLANTS



The opinion of the court was delivered by: P. Kevin Brobson, Judge

Submitted: March 8, 2011

BEFORE: HONORABLE DAN PELLEGRINI, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JAMES R. KELLEY, Senior Judge

OPINION BY JUDGE BROBSON

Robert J. Rinaldi, Sr. and Janet Rinaldi, his wife, (Appellants) appeal from the July 27, 2010, order of the Court of Common Pleas of Lackawanna County (trial court), which denied Appellants' Petition to Set Aside Judicial Tax Sale of the property located at 250 South Keyser Avenue, Parcels A & B, Old Forge, Pennsylvania (Property). For the reasons stated below, we reverse.

Appellants purchased the Property in 1999 at a delinquent tax sale held by Lackawanna County. (Reproduced Record (R.R.) at 96a.) Appellants' failure to pay taxes on the Property from 1999 to 2002 led to the Property being exposed at an upset tax sale conducted by the Lackawanna County Tax Claim Bureau (Bureau) on January 29, 2002. (Id. at 2a.) The Property was not sold at the upset tax sale because a bid sufficient to pay the upset price was not obtained. (Id. at 3a.)

On January 7, 2010, the Bureau filed a petition with the trial court to expose the Property to judicial sale, requesting the trial court issue to all parties in interest a Rule to Show Cause why the Property should not be listed for judicial sale directed. (Id. at 2a.) On January 7, 2010, the trial court issued the Rule to Show Cause and scheduled a hearing for February 12, 2010. (Id. at 1a.) On February 12, 2010, the trial court found that service of the Rule to Show Cause had been made upon all parties of interest, and it ordered the Property to be sold by judicial tax sale on February 22, 2010, free and clear of all tax and municipal claims, mortgages, liens, charges, and estates. (Id. at 18a.) The judicial tax sale was continued to March 22, 2010, where Anthony Carmadella successfully bid on the Property with a bid price of $25,000.00. (Id. at 101a, 108a.) On June 2, 2010, Appellants filed a petition with the trial court to set aside the judicial tax sale of the Property, asserting lack of notice and invalid service. (Id. at 33a.) On June 15, 2010, the Bureau filed an answer to Appellants' petition to set aside the judicial tax sale, asserting the sale was in accordance with the Real Estate Tax Sale Law.*fn1 (Id. at 87a.) The trial court scheduled a hearing for July 27, 2010.

At the hearing, Ron Koldjeski, Director of the Bureau, testified that Appellants had not made any real estate tax payments on the Property since 1999. (Id. at 105a.) Mr. Koldjeski also testified that notice of the February 2010 judicial tax sale was published in the Scranton Times at least thirty (30) days prior to the judicial tax sale. (Id. at 106a.) Mr. Koldjeski also testified that an advertisement of the judicial sale was also published on January 27, 2010, in the Lackawanna County Jurist. (Id.) Mr. Koldjeski further testified that on June 10, 2009, the Lackawanna County Board of Commissioners authorized the State Constable to effectuate personal service in tax sale proceedings.*fn2 (Id. at 107a.)

Pennsylvania State Constable Jason Genell testified that he was appointed by the Bureau to serve the rule to show cause/judicial sale petitions upon Appellants. (Id. at 114a.) Mr. Genell testified that he went to the addresses that were on the paper work and could not locate Appellants. (Id.) Mr. Genell testified he went to the Rinaldi restaurant, Appellants' ordinary place of business, and spoke with Russell Rinaldi (Rinaldi Jr.), Appellants' son/step-son, who was part-owner of the restaurant. (Id. at 115a.) Mr. Genell testified that he explained the tax situation regarding the Property to Rinaldi Jr., and Rinaldi Jr. accepted service on behalf of both Appellants. (Id. at 116a.) Mr. Genell testified that it was his understanding that Rinaldi Jr. was going to give the papers to his parents. (Id.) Rinaldi Jr. testified that he accepted and signed the documents he received from Mr. Genell on behalf of his father and Janet Rinaldi and placed them on the shelf in the kitchen of the restaurant. (Id. at 123a.) Russell Rinaldi testified that his father, Russell J. Rinaldi, Sr. (Rinaldi Sr.), worked at the restaurant part-time. (Id.)

Rinaldi Sr. testified that he was manager at Cafe Rinaldi and was the owner of the Property. (Id. at 127a.) As to the Property, Rinaldi Sr. testified that he had sold the Property in 2004, but the people backed out. (Id. at 128a.) He re-mortgaged the Property in 2007, but "something at the bank was taken over and that stalled out." (Id.) He then got sick and was in the hospital with a major heart attack and "everything got put on hold." (Id.) As to service of process, Rinaldi Sr. testified that he did not specifically authorize his son, Russell, to accept legal service on his behalf. (Id.) Rather, he testified that his son called him and informed him that someone was trying to collect rent from him sometime in the summer of 2010. (Id. at 129a.) Rinaldi Sr. further testified that he became aware of the petition after the judicial tax sale had occurred. (Id.) He testified that because he was going through a divorce, the lawyers advised him and his wife not to pay taxes. (Id. at 130a.) He was not aware that the Property had been exposed to a tax sale in 2001. (Id. at 131a.)

Following the hearing, the trial court issued an order denying Appellants' Petition to Set Aside Judicial Tax Sale of the Property. (Id. at 95a.)

Thereafter, in accordance with Pa. R.A.P. 1925(a), the trial court issued an opinion in support of its decision. (Id. at 96a.) The trial court found that service upon Appellants was proper as it was in accordance with County Resolution 09-0147. (Id. at 97a.) The trial court further concluded that service was properly made upon Appellants because they had constructive knowledge of the sale and because service was made at Appellants' usual place of business and to one owner of the business. (Id. at 98a.) In addition, the trial court concluded that notice was published in the Scranton Times and Lackawanna County Jurist more than thirty (30) days before the sale occurred. (Id.) Appellants now appeal to this Court.

On appeal,*fn3 Appellants first argue that the trial court erred in denying Appellants' motion to set aside the judicial tax sale by concluding that Appellants received constructive notice of the sale when a state constable (rather than a sheriff) served judicial sale petitions and a rule to show cause upon Appellants' son/step-son at their usual place of business in violation of Section 611 of the Tax Sale Law, 72 P.S. § 5860.611.*fn4 Specifically, Appellants contend that because judicial tax sales are governed by Sections 610 through 612 of the Tax Sale Law, 72 P.S. §§ 5860.610-.612, the Commissioners cannot utilize Section 601 of the Tax Sale Law, pertaining to upset sales, to appoint a person to make personal service as required by Section 611 of the Tax Sale Law, pertaining to judicial sales.

Appellants next argue that the sale of the Property should be set aside because the petition for judicial sale was filed more than eight (8) years after the date of the scheduled upset sale in violation of Section 616 of the Tax Sale Law, 72 P.S. § 5860.616.

Section 611 of the Tax Sale Law provides:

Service of the rule shall be made in the same manner as writs of scire facias*fn5 are served in this Commonwealth. When service cannot be made in the county where the rule was granted, the sheriff of the county shall deputize the sheriff of any other county in this Commonwealth, where service can be made. If service of the rule cannot be made in this Commonwealth, then the rule shall be served on the person named in the rule by the sheriff, by sending him, by registered mail, return receipt requested, postage prepaid, at least fifteen (15) days before the return day of the rule, a true and attested copy thereof, addressed to such person's last known post office address. The sheriff shall attach to his return, the return receipts, and if the person ...


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