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City of Philadelphia v. F.A. Realty Investors Corp.

Commonwealth Court of Pennsylvania

June 27, 2014

City of Philadelphia
v.
F.A. Realty Investors Corp. Appeal of: F.A. Investment Group, Inc., and Information Management Group, Inc

Submitted February 11, 2014.

Appealed from No. July Term, 2010, No. T0093. Common Pleas Court of the County of Philadelphia. Tucker, J.

Jerome H. Lacheen, Philadelphia, for appellants.

Craig Gottlieb, Senior Attorney, for appellee The City of Philadelphia.

Andrew L. Miller, Bala Cynwyd, for appellee YNLME.

BEFORE: HONORABLE RENÉ E COHN JUBELIRER, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE JAMES GARDNER COLINS, Senior Judge.

OPINION

Page 378

PATRICIA A. McCULLOUGH, Judge.

F.A. Realty Investors Corporation, F.A. Investment Group, Inc., and Information Management Group, Inc. (collectively, Appellants), appeal from the February 27, 2013 order of the Philadelphia County

Page 379

Court of Common Pleas (trial court), dismissing Appellants' petition to redeem premises as premature. The question before us is one of first impression in this Court, whether Appellants may file a petition to redeem premises prior to the acknowledgment of the sheriff's deed.

Appellants own the real property located at 6001 North 17th Street, Philadelphia, PA (Property), with F.A. Investment Group, Inc., having a 95% equity interest, Information Management Group, Inc., having a 2.5% equity interest, and F.A. Realty Investors Corporation having a 2.5% equity interest. (Reproduced Record (R.R.) at 9a.) On or prior to March 10, 2003, the City of Philadelphia (City) closed the Property and forced all tenants to move out of the building. On July 22, 2010, the City filed an amended tax claim for delinquent real estate taxes for the Property against F.A. Realty Investors Corporation. On August 2, 2010, the trial court issued a rule to show cause why the Property should not be sold at a sheriff's sale. On September 14, 2010, Appellants were served with the petition to sell the Property free and clear of encumbrances and the rule to show cause; though the City did not name F.A. Investment Group, Inc., and Information Management Group, Inc., as defendants in this case, both entities were served with the petition.[1] On October 7, 2010, the sheriff posted notice on the Property. (S.R.R. at 4b-5b, 23b-25b, 31b.)

On August 19, 2011, F.A. Realty Investors Corporation filed a motion to stay the proceedings, which the trial court denied. (S.R.R. at 5b, 7b.) F.A. Realty Investors Corporation never filed a response to the trial court's rule to show cause. (Trial court op. at 2; see S.R.R. at 1b-20b.) On July 11, 2012, the trial court entered a final disposition and decreed tat the Property be sold free and clear of all encumbrances at a sheriff's sale. Appellants were served with this decree. On August 13, 2012, F.A. Investment Group, Inc., and Information Management Group, Inc., filed a motion to stay the sheriff's sale, which the trial court denied on August 15, 2012. (S.R.R. at 7b-8b, 10b, 26b-28b.)

On August 14, 2012, Steven A. Frempong (Frempong) filed a motion to intervene, which the trial court denied on September 11, 2012.[2] (Trial court op. at 2; S.R.R. at 9b-10b.) F.A. Realty Investors Corporation filed a combination petition to intervene and to vacate or open judgment on November 19, 2012, and the City filed an answer. (R.R. at 12a-14a; S.R.R. at 11b-12b.) On November 21, 2012, the Property was sold at a sheriff's sale.[3] (Trial court op. at 2.) Appellants filed a petition to redeem premises on December 6, 2012, to which the City filed an answer. (R.R. at 22a; S.R.R. at 11b, 13b-14b.) On December 28, 2012, the trial court denied F.A. Realty Investors Corporation's petition to open judgment. (S.R.R. at 13b.) The trial court dismissed Appellants' petition to redeem premises as premature on February 27, 2013.[4] (S.R.R. at 15b.)

Page 380

The trial court filed its Pennsylvania Rule of Appellate Procedure 1925(a) opinion on May 20, 2013, in support of its February 27, 2013 order.[5] The trial court noted as follows:

Pursuant to [section 32 of the act commonly known as the Municipal Claims and Tax Liens Act (Act), Act of May 16, 1923, P.L. 207, as amended ,] 53 P.S. § 7293, a property owner has the right to redeem a property after it is sold at Sheriff's Sale " at any time within nine months from the date of the acknowledgment of the sheriff's deed therefor, upon payment of the amount bid at such sale. . ." along with other costs associated with the Sheriff's Sale, including interest. 53 P.S. § 7293(a). The redemption period begins after the acknowledgment of the Sheriff's deed. Paul J. Dooling Tire Company v. City of Philadelphia, 789 A.2d 364 (Pa. Cmwlth. 2001); First Union Nat'l Bank v. Diamonds and Gold, Inc., 2004 PA Super. 115, 850 A.2d 642, 645-647 (Pa. Super. 2004). The property owner must set forth facts warranting redemption and his readiness to pay the redemption money. Id. at § 7293(c). A property will be deemed vacant unless the property owner sets forth facts showing that the property was " continually occupied by the same individual or basic family unit as a residence for at least ninety days prior to the date of the sale and continues to be so occupied on the date of the acknowledgment of the sheriff's deed therefor." Id.

(Trial court op. at 3-4.) The trial court determined that F.A. Realty Investors Corporation's petition to redeem premises was premature pursuant to section 32 of the Act based on F.A. Realty Investors Corporation's admissions in its petition to redeem premises and its memorandum of law in support of its petition to redeem premises as follows:

1.) " the Sheriff of Philadelphia has not issued the requisite acknowledgment of the Sheriff's deed that would prevent redemption of said property; "
2.) " [t]he Bid winner is yet to pay the auction price to obtain the acknowledgment of the Sheriff's deed; "
3.) The " Bid winner has not paid for the purchase; "
4.) " the Bid Winner has not completed purchase and the acknowledgement of the Sheriff's deed required to complete purchase has not occurred; "
5.) " In this case the bid winner has not completed the full payment of the purchase price. As a result the Sheriff has not also issued its acknowledgment of the Sheriff's deed."

(Trial court op. at 4.) Thus, the trial court dismissed Appellants' petition to redeem premises.

On appeal to this Court,[6] Appellants argue that: (1) they have satisfied

Page 381

the property redemption requirements under section 32 of the Act; (2) the City failed to join two indispensable parties, F.A. Investment Group, Inc., and Information Management Group, Inc., as defendants to the sheriff's sale; (3) the trial court abused its discretion in denying F.A. Investment Group, Inc., and Information Management Group, Inc.'s, petition to intervene and to vacate or open judgment; and (4) the trial court erred in interpreting ...


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