United States District Court, M.D. Pennsylvania
KEB HANA BANK USA, NATIONAL ASSOCIATION, a national banking association, Plaintiff,
RED MANSION, LLC d/b/a NAOMI VILLAGE RESORT, Defendant.
KAROLINE MEHALCHICK, UNITED STATES MAGISTRATE JUDGE.
the Court is a motion to confirm the marshal's sale of
real property following grant of summary judgment in favor of
the Plaintiff, foreclosure, and conduction of a public sale
of the property. The Defendant asserts that the sale
conducted on May 24, 2017 was faulty due to an incorrect
address in advertisements that suppressed interest in the
property, and an inadequate price garnered by the sale. For
the reasons contained within this memorandum, the Court finds
that the sale was procedurally sound, and that
Plaintiff's motion is GRANTED.
Background and Procedural History
Court writes primarily for the parties, most of the factual
background is omitted from this memorandum.
August 26, 2014, Plaintiff initiated the instant action,
asserting that Defendant defaulted on a mortgage for real
property located at “2743 Route 390 North,
Mountainhome, Monroe County, Pennsylvania.” (Doc. 1).
In its complaint and subsequent amendment, Plaintiff
identified the address of the encumbered property as 2743
Route 390 North, Mountainhome, Monroe County, Pennsylvania,
and the Defendant's principal address as 2473 Route 390
North, Mountainhome, Monroe County, Pennsylvania. (Doc. 1;
Doc. 6). On January 8, 2015, default judgment was entered, as
the Defendant had not responded to the complaint despite
execution of service on December 19, 2014. (Doc. 15). In an
August 12, 2015 Memorandum and Order, Judge Caputo vacated
the default judgment, having determined that while service
was properly effectuated, the Plaintiff would not be
prejudiced by seeing the matter resolved through full
proceedings as opposed to entry of default. (Doc. 30).
answered the complaint on August 26, 2015, admitting to the
addresses identified and to the Note securing the mortgage.
(Doc. 33). The parties then proceeded through the discovery
phase, during which consent to proceed before the undersigned
was entered. On January 15, 2016, Plaintiff filed a second
amended complaint, identifying the same addresses as before.
(Doc. 41). Defendant answered on February 28, 2016, this time
admitting the validity of the business address identified,
but denying the accuracy of the address identifying the
location of encumbered property. (Doc. 49).
August 1, 2016, Plaintiff moved for summary judgment, which
the Court granted on January 18, 2017. (Doc. 62; Doc. 66;
Doc. 67). Plaintiff then conducted a sale of the property on
May 24, 2017, filing the instant motion to confirm the sale
on May 30, 2017. (Doc. 76; Doc. 77). Defendant objected on
June 1, 2017, arguing that the advertisements for the sale
contained an incorrect address, preventing potential bidders
from attending, and was therefore invalid. (Doc.
Defendant states that the correct address for the property is
2374 Route 390 Barrett Township, Mountainhome, Pennsylvania,
whereas advertisements for the property identified the
address as 2473 Route 390, Barrett Township, Mountainhome,
Pennsylvania. (Doc. 78). Further, Defendant states that the
sale netted only $305, 000, which they state is an inadequate
sum. (Doc. 78). Plaintiff counters that: the address
identified by Defendant is not recognized by the United
States Postal Service; advertisements in the Monroe Legal
Reporter and Pocono Record identify the address as
“2743 Route 390 North, Barrett Township, Monroe County,
Mountainhome, PA 18342”; the address posted in
advertisements mirrors the address on the mortgage, sworn to
by both Defendant's principal and counsel, as well as in
all loan documents, a loan-related appraisal from 2009, and
title report issued by Commonwealth Land Title Insurance
Company on January 30, 2017. (Doc. 80). Further, Plaintiff
states the sales price was $325, 000 and comported with all
legal requirements. (Doc. 80).
doctrine of estoppel plainly precludes a challenge to the
address identified in advertisements for the sale of the
property in question. Estoppel is a “bar that prevents
one from asserting a claim or right that contradicts what one
has said or done before or what has been legally established
as true.” Estoppel, Black's Law Dictionary
(10th ed. 2014). In a sworn affidavit by Jian Zheng, managing
member of the Defendant LLC, Zheng attests that the parties
entered into a loan agreement secured by a mortgage for
“real estate and improvements being operated as Naomi
Village Resort at 2743 Route 390 North, Mountainhome, Monroe
County, Pennsylvania.” (Doc. 36-4). Counsel repeated
the same in his brief in opposition to Rule 11 sanctions.
(Doc. 36, at 7). Further, Defendant twice admitted to the
accuracy of this address in answering Plaintiff's
complaints. On the third occasion, Defendant merely agreed
that “a promissory note and mortgage were executed on
December 23, 2009.” (Doc. 49, ¶ 6). This is the
same date as conceded by Defendant for the loan and mortgage,
a copy of which reflects the same address as attested to and
contained in advertisements for the marshal's sale.
Having already sworn that the address for the property is
“2743” and not “2374, ” Defendant is
estopped from now asserting the address identified is
incorrect. Further, the loan and mortgage documents all
reflect that the address for the property is indeed
event, the Court finds that the advertisements for the sale
comport with Pennsylvania law. Plaintiff has provided copies
of publication from a newspaper of general circulation in the
county and a relevant legal publication as required for
effective notice. Pa. R. Civ. P. 3129.2(d). (Doc. 80-2; Doc.
80-3). This notice contains “a brief description of the
property to be sold, its location, any improvements, the
judgment of the court on which the sale is being held, the
name of the owner or reputed owner, and the time and place of
the sale” and required distribution notices. Pa. R.
Civ. P. 3129.2(b)(1)-(3). As Defendant's challenge is to
the noticed location, and this Court is satisfied that the
location noticed mirrors the location provided by all loan
and mortgage documents as well as that provided in these
proceedings, Defendant's argument is without merit.
assuming arguendo that the location provided is
inaccurate, the Court still finds that the advertisements
accurately conveyed all required information. Under
Pennsylvania law, the description of property sales requires
“sufficient information to put any prospective bidder
on notice as to the location and the general nature of the
property subject to the sale.” Penn Sec. Bank &
Trust Co. v. Matchulat, 30 Pa. D & C.3d 427, 431
(Lackawanna Cty. Ct. Com. Pl. 1983). See Orlando
v. Butler & Orlando, 54 Pa. D. & C. 554, 555
(Delaware Cty. Ct. Com. Pl. 1946) (“It is the object of
a description of real estate in an advertisement of sale to
give full notice to the public so as to arrest the attention
and excite the inquiries of all who are able and disposed to
purchase.”). A notice is not fatally insufficient by
virtue of providing an inaccurate street number of the
property to be sold. In fact, a notice is not fatally
insufficient even where it provides no street number at all.
Shimkus v. Klimatis, 105 A.2d 592, 593 (Pa. 1954).
The advertisements in the present case contained parcel and
pin numbers for “eleven tracts and pieces or panels of
land with improvements” comprising the property sold.
(Doc. 80-2; Doc. 80-3). Any prospective bidder could easily
determine the true location and bounds of the property for
the formalities of a sale are met, the sale will not be set
aside and the price received will be deemed a reflective
value of the property. Defendant argues that the price
received is plainly inadequate and evidences suppressed
bidding. (Doc. 81). In support, it points out that the
property was initially purchased for $1, 800, 000, while the
marshal's sale net only $305, 000 (though the Plaintiff
states the price was actually $325, 000).
either amount, the Court does not find that the price fetched
at the marshal's sale was grossly inadequate.
“Without some assurance of a substantially higher bid,
the assumption that a higher price could be obtained is pure
speculation.” Matchulat, 30 Pa. D. & C.3d
at 431 (citing Shimkus, 105 A.2 592). Mere
speculation is not adequate justification to cancel a sale.
Matchulat, 30 Pa. D. & C.3d at 431 (citing
Senge v. Border, 181 A. 509 (Pa. 1935)). The
Defendant has not provided any evidence of a substantially
higher bid that would permit the Court to cancel the