United States District Court, E.D. Pennsylvania
R. Sánchez, J.
Joanne Thornton brings this putative class action against the
City of Philadelphia, the Philadelphia Sheriff's Office,
and Philadelphia Sheriff Jewell Williams alleging she and
other class members were denied procedural due process in
connection with the distribution of unused proceeds from
sheriff's sales of the class members' real property.
being unable to pay her mortgage, Thornton's home was
foreclosed upon and sold at a sheriff's sale to a
third-party purchaser for $305, 000. The Sheriff's Office
collected the proceeds and thereafter proposed a Schedule of
Distribution, indicating that, after paying liens and costs
associated with the property and sheriff's sale, the
unused proceeds due to Thornton amounted to $193, 795.18.
Included in the costs associated with the sheriff's sale,
and thus deducted from the proceeds, was a title insurance
policy in the amount of $1, 317.50. The Sheriff's Office
later amended the Schedule of Distribution to include, among
other things, a $179, 454 lien on the property, thus reducing
the unused proceeds to $11, 968.17. Thornton filed a claim
for the unused proceeds, which have been distributed to her.
In her Amended Complaint, Thornton asserts she was deprived
procedural due process in the distribution of the unused
proceeds, and that the Schedule of Distribution should not
have been amended and should not have accounted for the title
move to dismiss Thornton's Amended Complaint for failure
to state a claim upon which relief may be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6), alleging Thornton
was afforded sufficient process in connection with the
distribution of the sheriff's sale proceeds and has
available to her further process, under Pennsylvania law, to
challenge the calculation and distribution of unused
proceeds. Because the Court agrees, Defendants' motion
will be granted, and Thornton's Amended Complaint will be
dismissed without prejudice.
previously owned real property located at 1609 Christian
Street in Philadelphia. Thornton was unable to make her
mortgage payments. In May 2011, her mortgagee, EverBank,
filed a complaint for mortgage foreclosure in the Court of
Common Pleas of Philadelphia County. In September 2014,
Thornton's property sold at a sheriff's sale for
$305, 000 to a third party purchaser.
Philadelphia Sheriff's Office collected the proceeds from
the sale and thereafter issued a Proposed Schedule of
Distribution of the proceeds listing taxes, fees, costs,
liens, and mortgages associated with the property, as well as
“unused proceeds” from the sale to be distributed
to Thornton. One such deduction includes the cost of a title
insurance policy in the amount of $1, 317.50. After
accounting for all costs and liabilities from the sale
proceeds, the Proposed Schedule of Distribution listed the
unused proceeds as $193, 795.18. Sometime thereafter, the
Proposed Schedule of Distribution was amended to include,
among other things, a Redevelopment Authority of the City of
Philadelphia (RDA) mortgage in the amount of $179, 454.
the amendment, the unused proceeds amounted to $11, 968.17.
Pursuant to Pennsylvania law, Thornton filed a Defendant
Asset Recovery Team claim for the unused proceeds in August
2016, about two years after the sheriff's sale. The
Sheriff's Office disbursed a check to Thornton for the
brings this putative class action lawsuit against the City,
the Sheriff's Office, and the Sheriff, asserting she was
deprived of procedural due process because she did not
receive the amount of unused proceeds calculated in the
original Schedule of Distribution, that the Sheriff's
Office improperly amended the Schedule of Distribution, and
that the sale proceeds should not have been used to pay for
the title insurance policy. In bringing this class action,
she seeks to represent two classes of individuals. As to the
first class, Thornton seeks to represent those individuals
“whose real property was foreclosed and sold at sheriff
sale for an amount in excess of the legal credit price plus
costs and who did not recover the excess funds remaining from
the proceeds of such sheriff's sale after all proper
liability had been satisfied.” Am. Compl. ¶ 40. As
to the second class, Thornton seeks to represent those
individuals “who were charged a premium by Defendants
for a title insurance policy insuring Defendants for their
actions related to a sheriff's sale.” Id.
also brings claims under Pennsylvania law for breach of
contract, negligent mishandling of funds, unjust enrichment,
and conversion. Thornton seeks compensatory and punitive
damages and a declaratory judgment that Defendants'
policies are unconstitutional. Defendants move to dismiss the
Amended Complaint for failure to state a claim upon which
relief may be granted under Federal Rule of Civil Procedure
withstand a motion to dismiss pursuant to Rule 12(b)(6),
“a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
facially plausible when the facts pleaded “allow the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. In
evaluating a Rule 12(b)(6) motion, a district court first
must separate the legal and factual elements of the
plaintiff's claims. See Fowler v. UPMC
Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). The court
“must accept all of the complaint's well-pleaded
facts as true, but may disregard any legal
conclusions.” Id. at 210-11. The court must
then “determine whether the facts alleged in the
complaint are sufficient to show that the plaintiff has a
‘plausible claim for relief.'” Id.
at 211 (quoting Iqbal, 556 U.S. at 679).
state a claim under § 1983 for deprivation of procedural
due process rights, a plaintiff must allege that (1) he was
deprived of an individual interest that is encompassed within
the Fourteenth Amendment's protection of ‘life,
liberty, or property, ' and (2) the procedures available
to him did not provide ‘due process of law.'”
Hill v. Borough of Kutztown, 455 F.3d 225, 233-34
(3d Cir. 2006) (quoting Alvin v. Suzuki, 227 F.3d
107, 116 (3d Cir. 2000)).
evaluating Thornton's procedural due process claims, the
Court must first determine whether her asserted individual
interest is constitutionally protected. See Baraka v.
McGreevey, 481 F.3d 187, 205 (3d Cir. 2007). Property
interests protected by the Due Process Clause of the
Fourteenth Amendment “are not created by the
Constitution.” Cleveland Bd. of Educ. v.
Loudermill, 470 U.S. 532, 538 (1985). Rather,
“they are created and their dimensions are defined by
existing rules or understandings that stem from an
independent source such as state law.” Id.
(quoting Bd. of Regents v. Roth, 408 U.S. 564, 577
(1972)). To have a protected property interest in a benefit,
a person must have “more than an abstract need ...