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Strict Compliance with the Municipal Liens Act is Required to Collect

The Commonwealth Court of Pennsylvania (“Court”), in the matter of City of Philadelphia v. Manu, 2013 WL 4768308, has made it clear that it expects strict compliance with the black letter of the Municipal Liens Act (“Act”). Defendant Agnes Manu (“Manu”), who litigated pro se, appealed an Order of the Court of Common Pleas of Philadelphia (“CCP”) denying her motion to strike or vacate and that provided the context for the Court to make its ruling and issue its opinion accordingly.

The procedural history of this matter is somewhat complex. Manu owns real estate (“Property”) in Philadelphia that is allegedly the subject of a municipal lien held by the City of Philadelphia (“City”). In January 2011 the City filed a petition with the CCP requesting permission to sell the Property free and clear of all encumbrances for delinquent water and sewer rents. The liens claimed by the City included one entered on August 27, 1987 for an unpaid water/sewer bill totaling $0.00 (no, that is not a typographical error) which was amended in its January 2011 petition to include an alleged claim of $657.54, plus interest and penalties, for City taxes allegedly owed in 1986.

In its January 2011 petition, the City identified seven (7) different parties, along with the United States, which/who allegedly have an interest in the Property based on the tax information certificate, and requested the CCP to issue a rule upon these aforesaid parties. For reasons which are unclear from the record available, the CCP issued a rule only upon Manu and directed that service should be made in the matter for writs of scire facias pursuant to the Act. The CCP granted Manu’s request for additional time to respond to the aforesaid rule, but instead of responding to the rule, Manu elected to file a motion to stay the proceedings on the basis that she had filed an appeal nunc pro tunc with the Board of Revision of Taxes due to, Manu alleged, never having received service of any tax assessment notice since 1998. Perhaps, due to the fact that Manu failed to respond to the rule, and filed a motion to stay instead, the CCP entered orders denying the motion to stay and granting the City permission to sell the Property as it requested and described above. The CCP indicated that it was satisfied that the rule was properly served and, indeed, served upon all relevant parties.

A few days after the above two (2) orders by the CCP were entered, Manu filed a motion for clarification as she could not discern whether the lien was for water/sewer bills or real estate taxes, nor was it clear how much she owed; the CCP denied this motion. Subsequent to the motion for clarification, Manu then filed a motion to strike or vacate the CCP order permitting the sale of the Property due to lack of jurisdiction based on the failure to effect proper service pursuant to the Act; this motion, too, was denied by the CCP and Manu appealed that denial. The appeal of this denial is the subject of the Commonwealth Court case described herein. While the above was transpiring, another party, namely Informational Management Group, Inc., filed a petition to intervene and open on the basis that it, too, was never properly served with the underlying lien and was not joined into the case by the City as an indispensable party; the CCP denied this petition as well.

When analyzing this matter, the Court began by emphasizing that the Act lays out a specific, detailed, and exclusive procedure which must be followed with precision. Furthermore, the Court made it clear that the City had the burden of proving strict compliance with the Act. In its review of how the CCP handled this case, the Court observed that the CCP did not even require substantial compliance with the Act, let alone strict compliance. Namely, the petition filed by the City did not provide a list of all the municipal claims at issue or a sense of their magnitude; indeed a lien which totals $0.00 is absurdly the opposite of demonstrating its magnitude, even if the City later revealed it is actually pursuing at least $14,702.99. In addition, without any explanation in the record, and at variance with the requirements of the Act, the CCP issued a rule only upon Manu instead of all interested parties and, further, none of the parties were served in the manner required by the Act. The Court noted that the Act is somewhat confusing inasmuch as one (1) section requires personal service and posting whilst another requires posting and first class mail; what was not confusing to the Court was that the record of the proceedings in CCP revealed that service was not perfected on any party using any of the above-listed options. Moreover, even if service was perfected, the Act requires the CCP to hold a hearing to determine whether service was properly perfected on all parties, whether there was contemporaneous publication of the rule, and whether the facts alleged in the petition are true. Needless to say, the CCP record contained absolutely no evidence that such a hearing was ever held. The CCP must make an independent inquiry into whether the City strictly complied with the Act and the CCP record reveals no such inquiry ever occurring.

Finally, the City attempted to argue that Manu’s appeal was untimely filed. The Court dispensed with this argument by pointing out that the CCP continued to retain jurisdiction over the Property when the sale of the same had neither occurred nor concluded. Regardless, the Court ruled that a petition to open a judgment can be filed at any time when there is a lack of subject matter jurisdiction and Manu’s claim that not all parties were served and, indeed, not all indispensable parties were joined into the case, clearly deprives the CPP of subject matter jurisdiction over the case.

In the final analysis, the Court in the instant matter made it abundantly clear that a municipality pursuing liens must strictly comply with all of the terms of the Act in order to collect on its alleged liens and Courts of Common Pleas must ensure compliance.

Originally published in Upon Further Review on October 22, 2013 and can be viewed here.

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