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In re Sale of Real Estate by Monroe County Tax Claim Bureau

Commonwealth Court of Pennsylvania

April 30, 2014

In Re Sale of Real Estate By Monroe County Tax Claim Bureau Appeal of: First Niagara Bank, N.A., successor by merger to Harleysville National Bank and Trust Company

Submitted March 10, 2014

Page 266

Appealed from No. 333 CV 2013. Common Pleas Court of the County of Monroe. Zulick, J.

Kelly L. Eberle, Perkasie, for appellant.

Mark A. Primrose, Stroudsburg, for appellee.

BEFORE: HONORABLE RENÉ E COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge. OPINION BY JUDGE COHN JUBELIRER.

OPINION

Page 267

RENÉE COHN JUBELIRER, Judge

First Niagara Bank, N.A. (First Niagara), successor by merger to Harleysville National Bank and Trust Company (Harleysville), appeals from the Order of the Court of Common Pleas of Monroe County (trial court) denying First Niagara's Petition to Vacate and Set Aside Tax Sale (Petition to Set Aside) of property located at 3 Vixen Drive, Kresgeville, Polk Township, Monroe County (Property), which was sold at judicial tax sale on May 2, 2012. First Niagara argues tat the Monroe County (County) Tax Claim Bureau (Bureau) did not properly serve First Niagara with notice of the judicial tax sale and, therefore, the sale should be set aside and/or First Niagara's liens should not be discharged. Because we conclude that the Bureau properly served First Niagara with notice of the judicial tax sale, we affirm.

Lisa A. Kelchner and Peter G. Kelchner (Kelchners) owned the Property. (Trial Ct. Op., Findings of Fact (FOF) ¶ 1.) On or about August 4, 2006, the Kelchners executed a mortgage in favor of Harleysville on the Property, which was recorded in the County Office of the Recorder of Deeds in Mortgage Book 2277, page 8604. (FOF ¶ 2.) Harleysville and First Niagara Commercial Bank merged on or about April 9, 2010, forming First Niagara. (FOF ¶ 3.) The Kelchners failed to make their monthly mortgage payments and defaulted on their mortgage, and First Niagara, as Harleysville's successor, began mortgage foreclosure proceedings in the County on or about November 5, 2010. (FOF ¶ ¶ 4-5.) First Niagara obtained a judgment in its favor on or about February 1, 2012. (FOF ¶ 5.)

The Kelchners also did not pay their property taxes, and the Bureau exposed the Property to a tax upset sale on September 14, 2011. (FOF ¶ ¶ 6-7.) The Property did not sell and, pursuant to Section 610 of the Real Estate Tax Sale Law[1] (Law), the Bureau filed a petition to sell the Property via judicial tax sale (Petition to Sell) with the trial court on December 22, 2011.[2]

Page 268

(FOF ¶ ¶ 8-9.) The trial court issued a rule returnable on the Petition to Sell (Rule), with a hearing date of March 20, 2012. (FOF ¶ 10.) The Petition to Sell and Rule were served upon " First Niagara Bank" at 483 Main Street, Harleysville, Pa. 18438 by a Montgomery County Deputy Sheriff on February 6, 2012.[3] (FOF ¶ 11.) The Sheriff's Return of Service (Sheriff's Return) indicates that the Petition to Sell and Rule were served on " Debra Alwine, Deposit Ops Supervisor." (FOF ¶ 12.) The trial court held a hearing on March 20, 2012, at which First Niagara did not appear, and issued an Order granting the Petition to Sell.[4] (FOF ¶ 13.) Dynasty Custom Homes, Inc. (Purchaser) bought the Property for $40,000 at the May 2, 2012 judicial tax sale. (FOF ¶ 14.)

First Niagara filed the Petition to Set Aside on January 14, 2013. (FOF ¶ 15.) First Niagara argued that it did not have adequate notice of the sale, Alwine was not authorized to receive service and, because First Niagara had received a judgment in the separate foreclosure action in the County, its local counsel should have been served with the Rule. The trial court found that notice was adequate because the Sheriff's Return was conclusive and immune from attack by extrinsic evidence and, even if it could be challenged, First Niagara did not provide any evidence, only its attorney's assertion that Alwine was not authorized to receive service on First Niagara's behalf.[5] (Trial Ct. Op. at 5.)

First Niagara appealed, asserting, inter alia, that a better search of public records would have revealed to the Bureau the address for First Niagara's local counsel and the certificate of merger between Harleysville and First Niagara Commercial Bank, which would have listed First Niagara's corporate address. The trial court issued a Statement in support of its Opinion pursuant to Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure, Pa. R.A.P. 1925(a). The trial court noted that the caption of the foreclosure proceeding against the Kelchners refers to the Harleysville branch's address, which is where the Rule was served on First Niagara and is also the address that appears on the first page of the Kelchners' mortgage. (Trial Ct. 1925(a) Op. at ...


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