In re Sheriff's Excess Proceeds Litigation

29 Pa. D. & C.5th 54, 2013 Phila. Ct. Com. Pl. LEXIS 80
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedMarch 12, 2013
DocketNo. 00387
StatusPublished

This text of 29 Pa. D. & C.5th 54 (In re Sheriff's Excess Proceeds Litigation) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Sheriff's Excess Proceeds Litigation, 29 Pa. D. & C.5th 54, 2013 Phila. Ct. Com. Pl. LEXIS 80 (Pa. Super. Ct. 2013).

Opinion

GLAZER, J.,

Named plaintiffs Joseph O’Hara and his company Finn Land Corp. purport to represent two classes of persons aggrieved by the Sheriffs Office of Philadelphia County’s mishandling of excess proceeds from the sale of foreclosed properties. Plaintiffs define those two classes as follows:

[56]*56a. Each owner of real property within the County of Philadelphia whose real property was sold at a Philadelphia Sheriffs sale during the time period running from the date of judgment in this action through the preceding five years and who is entitled to, but did not receive, payment from the Philadelphia Sheriffs Office, of the excess sheriffs sale proceeds after satisfaction of the judgment lien(s) creditor’s obligation, other applicable encumbrances, and the Sheriffs costs and fees. (“Excess Funds Class”);
b. Each owner of real property within the County of Philadelphia whose real property was sold at a Philadelphia sheriffs sale during the time period running from five years preceding the date of judgment in this action through January 1, 1999, and who was entitled to, but did not receive payment from the Philadelphia Sheriffs Office, of the excess sheriff’s sale proceeds after satisfaction of the judgment lien(s) creditor’s obligation, other applicable encumbrances, and the Sheriffs costs and fees, and who was damaged by the wrongful acts committed by the sheriff, and does not include claims for the actual moneys which were or have been transferred from the Sheriff Defendants ’ unclaimed funds escrow accounts to the State Treasurer’s escrow account pursuant to DAUPA (“Interest Class”).

Plaintiffs brought these two, now consolidated, class actions in response to a 2010 audit report by the controller of the city of Philadelphia and a subsequent forensic audit of the Sheriffs Office by an outside accounting firm. Both [57]*57audits showed that, for many years, the Sheriff’s Office failed to distribute millions of dollars in excess proceeds from foreclosure sales of real property to the former owners of such property.

In these actions, plaintiffs1 assert claims against the Sheriff2 for excess proceeds and interest on such proceeds based on the theories of unjust enrichment, equitable conversion, fraudulent concealment, violation of the Pennsylvania Constitution, and mandamus. The Treasurer of the Commonwealth of Pennsylvania filed a motion to intervene as a defendant, which was granted.3 The treasurer’s interest in this action arises under the Commonwealth’s Disposition of Abandoned and Unclaimed Property Act (“DAUPA”), which describes when and how funds held by the sheriff, such as those sought by the plaintiffs, escheat to the treasurer, who is. then responsible for disbursing them.

Plaintiffs filed a motion for class certification, which both the sheriff and the treasurer oppose, and which is presently before the court. For the reasons that follow, certification is denied.

The court may certify this action as a class action only [58]*58if each of the following requirements are met:

(1) The class is so numerous that joinder of all members is impracticable;
(2) There are questions of law or fact common to the class;
(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class;
(4) The representative parties will fairly and adequately assert and protect the interests of the class under the criteria set forth in [Pa. R. Civ. R] 1709; and
(5) A class action provides a fair and efficient method for adjudication of the controversy under the criteria set forth in [Pa. R. Civ. R] 1708.4

“It is essential that the proponent of the class establish requisite underlying facts sufficient to persuade the court that the Rule 1702 prerequisites were met.”5 In this case, plaintiffs have failed to satisfy requirements no. 1 (numerosity), no. 3 (typicality), no. 4 (adequacy of representation), and no. 5 (fair and efficient method), so class certification must be denied.

I. The Fair and Efficient Method Requirement Is Not Satisfied.

In determining whether a class action is a fair and [59]*59efficient method of adjudicating the controversy, the court shall consider:

1) whether common questions of law or fact predominate over any question affecting only individual members;
2) the size of the class and the difficulties likely to be encountered in the management of the action as a class action;
3) whether the prosecution of separate actions by or against individual members of the class would create a risk of
i) inconsistent or varying adjudications with respect to individual members of the class which would confront the party opposing the class with incompatible standards of conduct;
4) the extent and nature of any litigation already commenced by or against members of the class involving any of the same issues;
5) whether the particular forum is appropriate for the litigation of the claims of the entire class;
6) whether in view of the complexities of the issues or the expenses of litigation the separate claims of individual class members are insufficient in amount to support separate actions;
7) whether it is likely that the amount which may be [60]*60recovered by individual class members will be so small in relation to the expense and effort of administering the action as not to justify a class action.6

In this case, the second and fifth considerations weigh heavily against allowing this action to proceed as a class action.

A. This Forum Is Not Appropriate For the Litigation of the Plaintiffs’ Claims.

Defendants argue that plaintiffs’ claims may not be asserted as class claims before this court, but instead should be asserted, if at all, individually in other fora under DAUPA and the Pennsylvania Rules of Civil Procedure. “Where the Legislature has provided a specific statutory remedy, a class action may not be used to provide a different remedy.”7

The Pennsylvania Rules of Civil Procedure govern the sheriffs sales of foreclosed properties and disbursement of the proceeds from such sales.8 The rules provide a remedy for individual property owners who believe the proceeds from the sale of their property are not being properly disbursed; a property owner may file exceptions to the sheriffs proposed schedule of distribution, which [61]*61exceptions are heard by the court that entered the judgment upon which execution is based.9

If a property owner fails to file such exceptions and the sheriff fails to disburse the excess proceeds, the property owner may claim them from the sheriff.10 If the excess proceeds are not disbursed by the sheriff within five years, they are then transferred to the Treasurer pursuant to DAUPA.

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Bluebook (online)
29 Pa. D. & C.5th 54, 2013 Phila. Ct. Com. Pl. LEXIS 80, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sheriffs-excess-proceeds-litigation-pactcomplphilad-2013.