J-A26009-24
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
PNC BANK, NATIONAL ASSOCIATION : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : v. : : MARY VODDE-HAMILTON, : ADMINISTRATRIX OF THE ESTATE OF : JASON C. HAMILTON, MARY M. : MANSUETO AND ANTHONY M. : No. 564 WDA 2024 MANSUETO :
Appeal from the Order Dated April 9, 2024 In the Court of Common Pleas of Allegheny County Civil Division at No(s): MG-22-000720
BEFORE: BOWES, J., BECK, J., and BENDER, P.J.E.
MEMORANDUM BY BOWES, J.: FILED: April 9, 2025
PNC Bank, National Association (“PNC”) appeals from the order that
granted the motion for summary judgment filed by Mary M. and Anthony M.
Mansueto (collectively “the Mansuetos”) and dismissed PNC’s foreclosure
action. We affirm.
We glean the following factual background from the certified record.
Jason Hamilton was the owner of a certain property in the borough of Dormont
in Allegheny County, a county of the second class.1 On August 20, 2011, Mr.
Hamilton granted a $14,000 mortgage on the property to PNC, which it duly
____________________________________________
1 As PNC noted: “Pennsylvania’s County Code divides the sixty-seven counties of the Commonwealth into nine classes. 16 P.S. § 210. Counties of the second class, such as Allegheny County, are those having a population of 1,000,000 and more but less than 1,500,000 inhabitants. Id.” PNC’s brief at 14 n.2. J-A26009-24
recorded. Less than two months later, PNC obtained a second mortgage on
the property to secure a loan of $76,287.50, which it recorded on October 18,
2011. Both mortgages gave PNC the right to pay taxes on the property if they
were not remitted. Mr. Hamilton died on August 27, 2015.
On August 23, 2018, Dormont filed a writ of scire facias sur tax claim
pursuant to the Municipal Claims and Tax Liens Act (“MCTLA”), 53 P.S.
§§ 7101-7505, seeking to recover unpaid 2017 real estate taxes.2 It filed an
amended writ substituting Mr. Hamilton’s estate as a party and listed a
balance due of $2,381.17. With no response from the estate, a default
judgment was entered by praecipe bn October 7, 2019.
On February 13, 2020, Dormont filed a praecipe for writ of execution of
the judgment. The following month, it filed an amended affidavit listing PNC
as the last recorded holder of every mortgage of record and verifying service
upon it. The affidavit also identified other parties having recorded or
unrecorded interests in the property, such as the local school district, the
Pennsylvania Department of Revenue, Discover Bank, and utility companies.
PNC acknowledged that it received the amended affidavit.
2 For the uninitiated, scire facias, pronounced sī-ree fay-shee-əs, is “an in rem proceeding by which a lien holder, such as a municipality obtains a judgment on [its] lien.” GLS Capital, Inc. v. Davis, 899 A.2d 371, 374 n.1 (Pa.Cmwlth. 2006). It is Latin for “you are to make known, show cause.” SCIRE FACIAS, Black’s Law Dictionary (12th ed. 2024).
-2- J-A26009-24
A sheriff’s sale of the property took place on October 5, 2020, at which
Map Consulting, LLC (“Map”) purchased the property for $93,000. On
November 6, 2020, the sheriff prepared a proposed distribution of the
proceeds of the sale to third parties providing for roughly the following
distribution: $10,000 in attorney fees; $11,250 to pay the full liens for
Dormont’s tax lien as well as county taxes, garbage and stormwater
assessment, and three other municipal liens; $700 in costs; $14,000 to PNC
for its first mortgage; $6,000 for Mr. Hamilton’s outstanding Allegheny County
criminal fines/costs/restitution; $600 to Beaver County for criminal court
costs; $38,000 to Mr. Hamilton’s estate; and $8,600 to Discover Bank for its
judgment. The document indicated that lienholders had ten days to file
exceptions, otherwise proceeds would be distributed as proposed. PNC
received the proposed distribution but did not file an exception to the omission
of its second recorded mortgage.
The sheriff’s deed conveying the property to Map was recorded on
November 9, 2020. On July 28, 2021, Map conveyed the property to the
Mansuetos. Fourteen months later, PNC initiated an in rem action against the
Mansuetos and Mr. Hamilton’s estate seeking to foreclose on the second
mortgage, asserting that it was in default because all payments due in June
2018 and thereafter were missed. The Mansuetos filed an answer and new
matter asserting that PNC’s mortgage was discharged by the sheriff’s sale,
-3- J-A26009-24
while the administratrix of Mr. Hamilton’s estate filed an answer disclaiming
any personal knowledge.
PNC filed a motion for summary judgment. The trial court denied PNC’s
motion, agreeing with the Mansuetos that the mortgage in question had been
divested when its prior mortgage was discharged. PNC filed an interlocutory
appeal which this Court quashed sua sponte. Meanwhile, the Mansuetos filed
a motion for summary judgment which the trial court granted by order of April
9, 2024. The order, again citing the divestiture of the mortgage on which PNC
sought to foreclose, dismissed the action in toto.
PNC filed a timely notice of appeal from the court’s final order. The
trial court did not order PNC to file a Pa.R.A.P. 1925(b) statement of errors
complained of on appeal, and none was filed. The trial court nonetheless
authored a Rule 1925(a) opinion explaining the reasons for its ruling.
Appellant presents the following questions for this Court’s resolution:
(1) Whether the trial court erred in denying PNC’s summary judgment motion on the basis that PNC has pled the elements of a mortgage foreclosure action as set forth in [Pa.R.Civ.P. 1147] and there is no genuine issue as to any material fact.
(2) Whether the trial court erred in ruling that PNC’s lien was divested by virtue of a previous sheriff’s sale, and entering summary judgment in favor of the Mansuetos where the sale occurred pursuant to the Municipal Claims and Tax Lien Act, 53 [Pa.C.S.] §§ 7101–7505, but (1) the municipality did not file a petition for rule to show cause why the property should not be sold free and clear; (2) a rule was not issued by the court to show cause why the property should not be sold free and clear; (3) no hearing was held to determine if proper service had been made of a rule to show cause why the property should not be sold free and
-4- J-A26009-24
clear; and (4) a free and clear order was not issued by the court prior to the sale.
PNC’s brief at 4 (unnecessary capitalization omitted).
We begin by observing that, in an appeal from the grant of summary
judgment, we exercise de novo, plenary review. See, e.g., Toth v.
Chambersburg Hosp., 325 A.3d 870, 873 (Pa.Super. 2024). Further:
A trial court should grant summary judgment only in cases where the record contains no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The moving party has the burden to demonstrate the absence of any issue of material fact, and the trial court must evaluate all the facts and make reasonable inferences in a light most favorable to the nonmoving party. The trial court is further required to resolve any doubts as to the existence of a genuine issue of material fact against the moving party and may grant summary judgment only where the right to such a judgment is clear and free from doubt. An appellate court may reverse a grant of summary judgment only if the trial court erred in its application of the law or abused its discretion.
Id. at 873–74 (cleaned up).
Next, we consider the salient aspects of the substantive law at issue.
Our legislature has provided that, as a general rule, a judicial sale of real
property does not affect a mortgage thereupon so long as the mortgage in
question is prior to all of the other liens on the property except, inter alia,
other mortgages and “taxes, municipal claims and assessments whose lien
though afterwards accruing has by law priority given it.” 42 Pa.C.S.
§ 8152(a). However, “[a] judicial or other sale of real estate in proceedings
under a prior judgment or a prior ground rent, or in foreclosure of a prior
-5- J-A26009-24
mortgage, shall discharge a mortgage later in lien.” 42 Pa.C.S. § 8152(c)
(cleaned up).
A purchaser’s mistaken belief that a mortgage had been discharged
through the sheriff’s sale is not grounds for relief. Thus, bidders must beware:
“It is their business to examine beforehand, and after having made themselves
acquainted with the facts and circumstances in relation to encumbrances, if
any exist, then to decide for themselves as to what will be the legal effect and
operation of the sale upon them.” Irwin Union Nat. Bank & Tr. Co. v.
Famous, 4 A.3d 1099, 1105 (Pa.Super. 2010) (cleaned up).
Turning to laws peculiar to sales to execute upon government liens, the
Municipal Claims and Tax Liens Act (“MCTLA”), 53 P.S. §§ 7101-7505,
establishes that all municipal taxes on a property are a lien on that property
with priority over all other liens such that they must be paid in full first from
the proceeds of any judicial sale.3 See 53 P.S. § 7106(a)(1). A tax claim that
has been reduced to a judgment by being docketed by the prothonotary “shall
be enforceable as a lien against real property in the same manner and to the
same extent as a judgment for money under the generally applicable laws of
this Commonwealth.” 53 P.S. § 7106(a)(2), (b).
3 Hereinafter, reference within our discussion to a statute by section number
shall refer to title 53 of the Pennsylvania Statutes unless otherwise indicated or obvious from context.
-6- J-A26009-24
The MCTLA provides multiple avenues for a municipality to execute on
a debtor’s property to satisfy its tax lien.4 Relevant to the arguments before
us in the case sub judice are statutes providing for an upset sale, a judicial
sale, and a free-and-clear sale. Regarding an upset sale, § 7279 provides that
the plaintiff in any judgment recovered on a tax claim may, “upon paying the
sheriff’s costs, fix an upset price to be realized at any sale under such
judgment, sufficient to pay all taxes and municipal claims, and all accrued but
unfiled taxes and claims, in full.” 53 P.S. § 7279. If no one bids enough to
fully cover all taxes and municipal claims, the municipality may purchase the
property for sheriff’s costs, “subject to the lien of all taxes and municipal
claims, and liens not otherwise discharged by the sale under existing law.”
Id.
Rules that apply to any judicial sale of a property subject to a tax or
municipal lien are found in § 7281. That statute provides at the outset that
no judicial sale of a property divests a tax claim “where the amount due is
indefinite or undetermined, or where the same is not due and payable,” or
where “the proceeds of such sale may be insufficient to discharge” the lien.
53 P.S. § 7281. Section 7281 continues:
On any such sale being made all tax claims shall be paid out of the proceeds thereof: first, the oldest tax having priority; and ____________________________________________
4 There are other options available to municipalities, such as filing a claim pursuant to the Real Estate Tax Sale Law (“RETSL”), §§ 5860.101-5860.803. Since Dormont chose to utilize the MCTLA, this memo focuses solely on the workings of that statutory scheme.
-7- J-A26009-24
municipal claims shall be paid next, the oldest in point of lien having priority. Mortgages. . . which were recorded . . . before any tax other than for the current year accrue . . . shall not be disturbed by such sale unless a prior lien is also discharged thereby.
Id. (emphasis added).
If the judicial sale of a property subject to a municipal or tax lien does
not produce a bidder willing to pay a sum sufficient to pay all the municipal
claims and costs, the plaintiff can postpone the sale and file a petition for the
court to issue a rule to show cause [(“RTSC”)] why the property should not
be sold free and clear of all “claims, mortgages, charges, and estates.” Id.
If the court finds that all interested parties received notice in accordance with
§ 7193.2,5 it orders the free-and-clear sale with “the proceeds realized
therefrom [to] be distributed in accordance with the priority of such claims,”
after which “the purchaser at such sale shall take, and forever thereafter have,
an absolute title to the property sold, free, and discharged of all tax and
municipal claims, liens, mortgages, charges, and estates of whatsoever kind,
subject only to the right of redemption as provided by law.” Id.
In this vein, § 7283 establishes a procedure “in addition to the remedies
prescribed in,” inter alia, § 7281 for free-and-clear sales in municipalities in
5 Section 7193.2 provides specifics for the RTSC procedure.
-8- J-A26009-24
counties of the second class, among others.6 Pursuant to § 7283, the tax
claimant may file a petition for a RTSC why the property at issue should not
be sold clear of all “claims, liens, mortgages, ground rents, charges and
estates.” 53 P.S. § 7283(a). The petition must satisfy the court that the
claimant has “the right to sell, together with searches or a title insurance
policy, showing the state of record and the ownership of the property,” along
with “all tax and municipal claims, liens, mortgages, ground rents or other
charges on, or estates in, the land, as shown by the official records of the city
or county, or the political subdivision in which the real estate is situate[.]” Id.
Once the court is satisfied that all the identified parties have received notice
pursuant to § 7193.2, it orders the sale free and clear to the highest bidder.
After the tax lien is paid, “the balance of the proceeds realized . . . shall
be distributed in accordance with the priority of the remaining claims, liens,
mortgages, ground rents, charges and estates,” while the purchaser obtains
“an absolute title to the property sold, free and discharged of all tax and
municipal claims, liens, mortgages, ground rents, charges and estates of
whatsoever kind, subject only to the right of redemption as provided by law.”
53 P.S. § 7283(a). Any party that desires to challenge the validity of the free-
and-clear sale or the sufficiency of the notice thereof, “and any party claiming
6 Notably, for a tax claim, as opposed to other types of municipal claims, “a
writ of execution may issue directly without prosecution to judgment of a writ of scire facias” and a property sold through this means of execution “shall be sold in compliance with the provisions of [§ 7283].” 53 P.S. § 7106(c).
-9- J-A26009-24
to have an interest in the premises which was not discharged by the sale must
file a petition seeking to overturn the sale or to establish the interest within
three months of the acknowledgment of the deed to the premises by the
sheriff.” 53 P.S. § 7193.3.
In sum, the MCTLA details three types of execution sales relevant
herein:
(1) An upset sale pursuant to § 7279, which seeks only to recover all
outstanding tax and other municipal claims. Through this procedure a new
owner can supplant the old by just paying the past-due taxes, but the new
owner takes the property subject to all other liens thereon.
(2) A judicial sale pursuant to § 7281 initiated by any party seeking to
execute a judgment on a property that is subject to tax or municipal liens.
This sale does not discharge recorded mortgage liens “unless a prior lien is
also discharged thereby.” If the sale does not produce a bid sufficient to pay
all municipal liens, then the plaintiff may postpone the sale and follow the
procedures outlined in § 7192.2 to obtain a court order for a free and clear
sale.
(3) A free-and-clear sale pursuant to § 7283, which gives the successful
bidder title to the property free of an and all liens and estates. In order to do
this, the claimant causing the execution sale must first have the court issue a
rule that allows any party whose interest will be affected by the sale to receive
notice and protect its interests by, for example, itself paying the municipal
- 10 - J-A26009-24
lien, bidding on the property, or objecting to the sale or proposed distribution
in accordance with § 7193.3. This procedure must be utilized, pursuant to
§ 7106(c), if the writ of execution issued without prosecution to judgment
upon a writ of scire facias.
We now turn to the trial court’s ruling and the arguments of the parties.
The trial court determined that the sale at issue was a § 7281 judicial sale,
not an upset sale. It observed that, while that statute initially provides that
“a mortgage recorded prior to the tax year for which the taxes remain unpaid”
is not disturbed by a sheriff’s sale, its “later language provides that this
protection is inapplicable if a prior lien to the mortgage is discharged.” Trial
Court Opinion, 7/5/24, at 4. Here, since “[t]he first mortgage, a prior lien,
was divested by the sheriff’s sale,” it follows that “the second mortgage was
correspondingly divested.” Id. (cleaned up).
Arguing that the trial court erred in so holding, PNC advocates the view
that unless the RTSC procedure is followed, any judicial sale to collect a
municipal or tax lien is an upset sale. It contends that the decision of our
sister Court in EMC Mortgage Corp. v. Lentz, 972 A.2d 112 (Pa.Cmwlth.
2009) (discussed further infra), establishes that any sale pursuant to the
MTCLA that does not follow the RTSC provisions of §§ 7181-7183 does not
divest any mortgages that were recorded before the municipal lien arose.
PNC further argues that there is no factual or legal support for the notion
that any prior encumbrances were discharged by this sale. It posits:
- 11 - J-A26009-24
Any suggestion that PNC’s first mortgage or [second] mortgage w[as] discharged by virtue of the scire facias proceeding is incorrect. As held in EMC, a judicial sale pursuant to the [MTCLA] will not discharge a prior-in-time mortgage unless a free and clear sale is held. Given that the first mortgage and the [second] mortgage were both recorded in 2011, and that [Dormont] in the scire facias proceeding did not follow the show cause procedure set forth in the Act, the property was not sold free and clear of prior-in-time encumbrances such as the [second] mortgage.
PNC’s brief at 22 (cleaned up).
The Mansuetos maintain that the scire facias proceeding is distinct from
both an upset sale and a free-and-clear sale. They assert that the judgment
that culminates from the scrie facias writ, pursuant to § 7106(a)(2), is
enforceable the same as any other judgment for money. The Mansuetos
contend that the sheriff’s sale to execute Dormont’s judgment was thus a
generic judicial sale recognized in § 7281 of the MTCLA. Since PNC’s second
mortgage was behind its first mortgage in priority, and the first mortgage was
discharged by the sale, pursuant to § 7281, the second mortgage was
divested. As such, its present attempt to foreclose on that mortgage must
fail. See Mansuetos’ brief at 8-9.
Upon thorough consideration of the statutes and the parties’ arguments,
we cannot agree with PNC’s position. This was not an upset sale in accordance
with § 7279 because Dormont did not, prior to the sale, set an upset price
sufficient to pay all taxes and municipal claims and prepay sheriff’s costs.
Further, since Dormont obtained a judgment on its tax claim, § 7283’s free-
and-clear RTSC procedures were not required by § 7106(c), which only
- 12 - J-A26009-24
mandates compliance with § 7283 when a writ of execution issues “directly
without prosecution to judgment of a writ of scire facias” 53 P.S. 7106(c).
Likewise, since the sheriff’s sale produced a bidder willing to pay an amount
sufficient to satisfy all municipal claims and costs, Dormont did not have to
follow § 7281’s procedure calling for the postponement of the sale and
obtaining a court order for a free and clear sale.
Rather, as is expressly contemplated by § 7106(a)(2), Dormont elected
to satisfy its judgment in the same manner as any money judgment under the
generally-applicable laws of this Commonwealth through a judicial sale.
Therefore, PNC’s two mortgages that were recorded prior to any of the
municipal liens on the property, were not “disturbed by such sale unless a
prior lien [wa]s also discharged thereby.” 53 P.S. § 7281. Here, the
judicial sale effectively discharged PNC’s first mortgage by satisfying it with
proceeds from the sale. Since PNC’s first mortgage which was “prior” in both
legal priority and time to PNC’s second mortgage, pursuant to § 7281, PNC’s
second mortgage was discharged by the judicial sale.
The Commonwealth Court’s EMC decision, relied upon by PNC, does not
alter our assessment. First, that decision is not binding on this Court. See,
e.g., In re Estate of Simpson, 305 A.3d 176, 189 n.18 (Pa.Super. 2023)
(noting that, while they may be considered for their persuasive value,
Commonwealth Court decisions are not binding on this Court). Nor do we find
that decision persuasive, as we deem it to be both distinguishable and based
- 13 - J-A26009-24
upon an unsound reading of the Judicial Code’s pronouncement on the effect
of a judicial sale on a mortgage lien.
Section 8152 of that title provides in full:
(a) General rule.--Except as otherwise provided in this section, a judicial or other sale of real estate shall not affect the lien of a mortgage thereon, if the lien of the mortgage is or shall be prior to all other liens upon the same property except:
(1) Other mortgages, ground rents and purchase money due the Commonwealth.
(2) Taxes, municipal claims and assessments, not at the date of the mortgage duly entered as a lien in the office of the clerk of the court of common pleas.
(3) Taxes, municipal claims and assessments whose lien though afterwards accruing has by law priority given it.
(b) Property of a decedent, etc.--A judicial sale of the property shall divest the lien of a mortgage to the extent authorized by the court pursuant to the following provisions of Title 20 (relating to decedents, estates and fiduciaries):
Section 3353 (relating to order of court).
Section 3357 (relating to title of purchaser).
(c) Sale on prior lien.--A judicial or other sale of real estate in proceedings under a prior judgment or a prior ground rent, or in foreclosure of a prior mortgage, shall discharge a mortgage later in lien.
(d) Unseated lands.--Subsection (a) shall not apply to mortgages upon unseated lands or sales of unseated lands for taxes.
42 Pa.C.S. § 8152.
The ECM Court concluded that § 8152 was in conflict with § 7281 of the
MCTLA as to whether a mortgage survives a judicial sale for tax liens that
- 14 - J-A26009-24
post-date the mortgage. In so doing, the Court viewed § 8152’s three
enumerated exceptions as exceptions to the general rule that mortgages are
preserved. See EMC, 972 A.2d at 117 (“Where . . . § 7281 ostensibly
demands a municipal lien filed prior in time as a condition of discharging a
mortgage upon judicial sale, [§] 8152 of the Judicial Code discharges a
mortgage where the municipal lien is after-filed yet accorded legal priority.”).
However, this interpretation is contrary to the the plain language of
§ 8152(a). Therein, the clause “except as otherwise provided in this section”
refers to subsections (b) through (d), which describe instances when a
mortgage that would have survived a judicial sale pursuant to subsection (a)
are divested, namely through certain provisions of the estates and fiduciaries
code, when the sale is to satisfy a prior-in-time judgment or mortgage, and
when the mortgage in question applies to unseated lands.
The second “except” in § 8152(a) describes the mortgages that are
preserved by subsection (a), namely mortgages that have no liens prior to
them other than taxes, municipal liens, and other mortgages. The import of
this is that if there is a prior lien of a type other than the three enumerated,
then the mortgage in question does not survive the sale. Hence, if a mortgage
was granted on a property that was already subject to a lien on a civil
judgment, for example, then a judicial sale to satisfy that prior civil judgment
would divest the mortgage.
- 15 - J-A26009-24
Meanwhile, the Judicial Code also provides that a sale to discharge a
prior lien “shall discharge a mortgage later in lien.” 42 Pa.C.S. § 8152(c).
This is the consistent with § 7281’s provision that “[m]ortgages, ground-rents,
and other charges on or estates in the property which were recorded, or
created where recording is not required, before any tax other than for the
current year accrue . . . shall not be disturbed by such sale unless a prior
lien is also discharged thereby.” 53 P.S. § 7281.
Here, the judicial sale effectively discharged PNC’s first mortgage by
satisfying it with proceeds from the sale. Since the first mortgage which was
“prior” in both time and legal priority to PNC’s second mortgage, pursuant to
§ 7281, PNC’s second mortgage was discharged by the judicial sale the same
as it would have been if the sale had been made to execute a foreclosure
judgment on the first mortgage.
Moreover, even if PNC were correct that the judicial sale of the
mortgaged property was a defective § 7283 free-and-clear sale, we would
conclude that it waived its right to contest the discharge of its second
mortgage. As recounted above, the MCTLA provides that any party wishing
to challenge the validity of the free-and-clear sale, including the sufficiency of
the notice thereof, “and any party claiming to have an interest in the premises
which was not discharged by the sale must file a petition seeking to overturn
the sale or to establish the interest within three months of the
acknowledgment of the deed to the premises by the sheriff.” 53 P.S. § 7193.3.
- 16 - J-A26009-24
Instead of objecting to the sheriff’s proposed distribution or filing a petition to
establish its surviving interest in the property, PNC sat back and watched over
$50,000—nearly the entire balance owed on the second mortgage—be
distributed to not only junior lienholders, but to its debtor’s estate.
In short, PNC had notice, motive, and opportunity to avoid divestiture
of its second mortgage. It could have paid the taxes before or after Dormont
filed its writ. It could have bought the property itself. After its first mortgage
was satisfied, it could have objected to its other prior lien being passed over
in favor of Discover Bank and Mr. Hamilton’s estate. Having sat on its rights,
PNC cannot now complain that there were irregularities in the sale.
Therefore, whether viewed as a result of the discharge of its first
mortgage from a § 7281 judicial sale, or as its failure to utilize the mechanisms
to timely advocate for the survival of its second mortgage following a
procedurally-defective § 7283 free-and-clear sale, PNC’s second mortgage on
the property in question was divested by the sheriff’s sale. As such, the trial
court properly dismissed its foreclosure complaint.
Order affirmed.
DATE: 04/09/2025
- 17 -