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Swinka Realty Investments, LLC v. Lackawanna County Tax Claim Bureau

United States District Court, Third Circuit

October 15, 2013

SWINKA REALTY INVESTMENTS, LLC, Plaintiff,
v.
LACKAWANNA COUNTY TAX CLAIM BUREAU and LACKAWANNA COUNTY, Defendants,

MEMORANDUM OPINION

ROBERT D. MARIANI, District Judge.

I. Introduction

Before the Court are Defendants' Partial Motion to Dismiss (Doc. 3) and Plaintiffs Motion to Bifurcate Count IV from the Complaint (Doc. 14). For the reasons set forth below, the Court will grant Defendants' motion, deny Plaintiffs motion, and will grant Plaintiff leave to file an Amended Complaint.

II. Factual Allegations

Plaintiff, Swinka Realty Investments, LLC, "properly registered to be an authorized bidder at the September 20, 2010 Upset Tax Sale conducted by the Defendant, Lackawanna County Tax Claim Bureau." (Complaint, Doc. 1, at ¶¶ 1, 5). At the Upset Tax Sale, Plaintiff was the only bidder on a property located at "905 Woodmere Avenue, Dickson City, Pennsylvania and referenced under Lackawanna County Tax Parcel Number XXXXX-XXX-XXX, " and successfully bid on it for $541.16. ( Id. at ¶¶ 7-9). That day, Plaintiff's agent tendered a money order for $541.16 to Defendants, who accepted it ( Id. at §§ 10, 13, 22; see also Ex. A).

By the close of business on September 20, 2010, the owners of the property, John and Elizabeth Fennell, had not redeemed the property by paying off the outstanding tax lien. ( Id. at ¶¶ 11, 18, 21). In addition, "[n]o party filed any objections or exceptions to the Upset Tax Sale relative to the Lackawanna County Tax Claim Bureau's offering of the Property for sale, or for Swinka's purchase at the Upset Tax Sale." ( Id. at ¶ 35).

However, the next day, "an unknown female representative of Lackawanna County and the Lackawanna County Tax Claim Bureau contacted a representative of Swinka and advised him that the taxes were paid' on the Property, and that Lackawanna County and the Lackawanna County Tax Claim Bureau were going to refund Swinka's money." ( Id. at ¶ 37). The agent further represented "to the agent for Swinka that the taxes were timely paid by the owners, John J. Fennell and Elizabeth M. Fennell" ( Id. at ¶ 38). When pressed by Swinka's agent as to the timeliness of the owners' payment, Defendants' representative responded, she "did not know" when the taxes had been paid. ( Id. at ¶¶ 39-40).

Upon investigation of the matter on November 19, 2010, Plaintiff obtained a copy of a tax claim receipt for the Property. ( Id. at ¶ 42; see also Ex. C). The receipt indicated that the taxes had been paid by "Joanne Huddy" on October 24, 2010, several weeks after the Upset Tax Sale took place on September 20, 2010. ( Id. at ¶¶ 42-44). The Lackawanna County Assessor's database indicates that Joanne Huddy "purchased the Property by deed on October 8, 2010, through a Deed filed in Lackawanna County's Office of the Recorder of Deeds under Reference Number XXXXXXXXX." ( Id. at ¶ 55; see also Ex. E).

Despite Plaintiff's tender of payment, Defendants did not "tender the deed to Swinka in due course, " and "failed to present Swinka's purchase of the Property to the Court [of Common Pleas] for confirmation." ( Id. at ¶¶ 21, 27). In addition, Defendants did not refund Plaintiff's money until February 15, 2011, long after notifying Plaintiff they would refund the purchase price. ( Id. at ¶ 29).

Plaintiff then filed suit against Defendants and asserted four counts: (1) breach of contract, (2) action in mandamus, (3) due process and equal protection violations, and (4) a request for the appointment of a board of viewers under Section 502 of the Eminent Domain Code. Defendants then filed the pending Partial Motion to Dismiss (Doc. 3), arguing that Plaintiff (1) failed to state a proper Monell claim and (2) failed to allege sufficient facts in support of a Substantive Due Process claim. Plaintiff subsequently filed a Motion to Birfurcate Count IV from the Complaint. (Doc. 14).

III. Motion to Dismiss

To survive a motion to dismiss under FED. R. CIV. P. 12(b)(6), a plaintiff must state a "plausible claim for relief.'" Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009)). FED. R. CIV. P. 8(a)(2) requires only that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to give the defendant fair notice of what the... claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1959, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957)).

"The court should freely give leave [to amend] when justice so requires." FED. R. CIV. P. 15(a)(2). In addition, "if a complaint is vulnerable to 12(b)(6) dismissal, a District Court must permit a curative amendment, unless an amendment would be inequitable or futile." In re New Jersey Title Ins. Litigation, 683 F.3d 451, 462 (3d Cir. 2012). "The Rule 15(a) factors include undue delay, bad faith, prejudice, or futility." Burtch v. Milberg Factors, Inc., 662 F.3d 212, 230-31 (3d Cir. 2011) (internal citation and quotation marks omitted).

IV. Analysis

Count III: Due Process and Equal Protection Claims

To establish a prima facie case under 42 U.S.C. § 1983, plaintiffs must demonstrate that: (1) they were deprived of afederal right; and (2) the person who deprived them of that right acted under color of state law. Burrella v. City of Philadelphia, 501 F.3d 134, 139 (3d Cir. 2007). Section 1983 is not an independent source of substantive rights, but merely "provides a remedy for deprivations of rights established elsewhere in the Constitution or federal laws." Kopec v. Tate, 361 F.3d 772, ...


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