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PaperclipPerfector
1mo ago
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Notes -
Court opinion:
In year 2012, Michael dies. His two sons, Dennis and Roman, don't bother to probate his will, so Michael's house remains titled in Michael's name. Dennis is left in charge of maintaining the house.
In year 2017, the property taxes on the house are not paid. In year 2018, a company spends 7 k$ to buy from the municipal government the right to foreclose on the house.
In year 2021, the company starts a foreclosure proceeding against Michael, and serves Dennis with the complaint. Nobody responds to the complaint in court, so in year 2022 the judge declares Michael to have defaulted, and the company successfully forecloses on the house by paying off the delinquent taxes of 55 k$. In year 2023, the company sells the house to a third party for 325 k$, yielding profit of 270 k$.
Just a few days before the sale, Roman learns that the house has been foreclosed on. Months after the sale, a year after the foreclosure, and 11 years after Michael's death, Roman finally probates Michael's will, is appointed the administrator of Michael's estate, and in that capacity moves to (1) vacate the foreclosure because he had no notice of it and (2) recoup the 270 k$ of profit under the recent federal Supreme Court decision forbidding the "theft" through foreclosure of home equity in excess of the delinquent taxes.
The trial judge denies the motion, and in year 2025 the appeals panel affirms. Service of the complaint on Dennis, who resided at the house, was proper. And the Supreme Court decision prohibiting "home-equity theft" is not retroactive.
There are a lot of things I dislike about Pennsylvania law, but one thing I do like is that they got rid of the stupid redemption period nonsense. The idea is that after you lose property to tax sale you have a certain period of time to redeem the property by paying the back taxes on it. What this means in practice is that someone buying property at a tax sale has to cut a check now and then wait a year or years before they can actually take possession of the property. PA still technically has a redemption period, it just happens before the actual tax sale. In other words, if your property is put up for tax sale, it was already delinquent for several years and any possible redemption would have happened already. The New Jersey process appears to be even stupider, where you have to buy a certificate that then gives you the right to foreclose, which really means a right to spend even more money on a lawsuit at some point in the future when back taxes will only continue to accumulate. This just goes to show how a lot of aspects of property law exist as relics from the 1800s when everybody lived on farms and courts used complicated common law pleading procedure. And since none of this is a big enough deal for the state legislature to act on, it just keeps rolling along as a rather constipated discipline.
Other than that, I always find it remarkable when people do absolutely nothing for a decade and when something adverse happens they're suddenly motivated to not only file a separate suit but also appeal that suit. The guy doesn't open an estate for his father, doesn't see that the property taxes are paid, doesn't attempt to redeem the property after the auction is announced, doesn't respond to the foreclosure suit, yet immediately before the property is sold to a third party he files suit challenging the default judgment, and is motivated enough to appeal that judgment when he loses. The worst part of this is that he doesn't even attempt to claim some kind of hardship that may excuse him from not responding to the initial suit (other than that he wasn't on the best terms with his brother), but raises the cockamamie defense that service was improper because they served the brother instead of the estate, except they couldn't serve the estate because the estate didn't formally exist. If the court actually bought this argument, then anyone who inherited someone's house could avoid paying taxes on it indefinitely by simply not opening an estate and claiming improper service.
Beyond, that, though, and I don't think this was mentioned in the opinion, whether the estate was properly served is irrelevant, because the action technically isn't against the property owner but the property itself. Since they weren't seeking a judgment against the father but possession of the house, they only have to notify "the house", which they did by mailing notice to the owner of record and by personally serving notice to an adult at the residence, who happened to also be an heir and possible estate representative. It's hard for me to see what the defendant here thinks the reasonable course of action should have been.
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