Philadelphia Court Refuses To Set Aside Sheriff’s Sale
Written by: Alan Nochumson
With the real estate market crashing and the recession otherwise hitting people hard, more and more properties are being subjected to sheriff’s sales every single month.
In Rittenhouse Plaza Inc. v. Lichtman, the Philadelphia Court of Common Pleas recently explained the difficulty in setting aside a sheriff’s sale that takes place in Pennsylvania under state court rules.
Rule 3132 of the Pennsylvania Rules of Civil Procedure outlines the process in which to set aside a sheriff’s sale. Under Rule 3132, a sheriff’s sale may be set aside by petition, which must generally be filed prior to the issuance of the sheriff’s deed.
“A petition to set aside a sheriff’s sale is grounded in equitable principles and is addressed to the sound discretion of the court. The burden of proving circumstances warranting the exercise of the court’s equitable powers is on the petitioner, and the request to set aside a sheriff’s sale may be refused due to insufficient proof to support the allegations in the petition. The material allegations of the petition generally must be proved by clear evidence. After the sheriff’s deed has been delivered, the only attacks permitted on the sheriff’s sale are those based upon fraud or on lack of authority to make the sale.”
In Lichtman, the trial court first addressed the timeliness of the petition. According to the trial court, the petition was not filed until after the issuance of the sheriff’s deed.
While acknowledging that Rule 3132 only allows a trial court to set aside a sheriff’s sale before delivery of the deed, the trial court still inquired into whether the property owner had actual notice of the sheriff’s sale.
The trial court in Lichtman pointed out that the property owner was properly served with the writ of execution and notice of sale pursuant to the state court rules in effect and an order issued by the trial court allowing for alternative service on the property owner.
Since the property owner in Lichtman entered her appearance in the underlying lawsuit, service of the writ of execution and notice of sale was made by mailing at the address listed on the appearance, in accordance with state court rules, the opinion said.
The trial court also noted that the plaintiff, in an overabundance of caution, sought and obtained the right from the trial court to serve the writ of execution and notice of sale by alternative means, which the plaintiff did as well with respect to notifying the property owner of the sheriff’s sale.
Finally and most importantly, the trial court stated that the property owner in Lichtman, prior to the sheriff’s sale taking place, had filed a motion seeking the postponement of the sheriff’s sale, and thus obviously had actual notice of the sheriff’s sale that occurred.
The trial court in Lichtman then looked into whether the property owner established fraud or lack of authority to make the sheriff’s sale.
“A sheriff’s sale may be set aside after delivery of the sheriff’s deed based on fraud or lack of authority to make the sale.” In doing so, “the petitioner must aver her claims of fraud with particularity,” the opinion said.
In denying the petition, the trial court in Lichtman believed that the property owner “failed to provide any clear evidence as to why the sheriff’s sale should be set aside.”
Rather, the property owner only made vague allegations that the sale price of the property was inadequate, the opinion said. According to the trial court, in Pennsylvania, “mere inadequacy of price is insufficient to set aside a sheriff’s sale, while gross inadequacy of price is a sufficient basis. Absent evidence of the actual or estimated value of the property sold, however, a determination of gross inadequacy cannot be made.”
The trial court in Lichtman summarily rejected the argument made by the property owner about the adequacy of the successful bid garnered at the sheriff’s sale because the property owner provided no evidence whatsoever as to the value of the property. Absent evidence of the real or actual estimated value of the property, the trial court emphasized that it “could not make a determination of the gross inadequacy of the sale price.”
In a clear bout of frustration, the trial court only stated its disgust with the property owner attempting to re-litigate the same issues that formed the basis of the judgment that was being executed upon. It is clear from the tone of the opinion that the trial court did not care for the property owner attempting to argue that the sheriff’s sale should not have taken place at all.
LESSONS LEARNED
The trial court’s ruling in Lichtman illustrates the difficulty in setting aside a sheriff’s sale that takes place in Pennsylvania when the property owner has actual notice of the sheriff’s sale prior to its occurrence. If there is actual notice of the sheriff’s sale, most courts will overlook de minimus procedural defects with the sheriff’s sale.
From a practical point of view, most attempts to set aside a sheriff’s sale only delay the inevitable. Even if the sheriff’s sale is set aside, unless the defendant can satisfy the underlying judgment, the sheriff’s sale will merely be rescheduled and take place again.
Reprinted with permission from the December 15, 2010 edition of The Legal Intelligencer © 2010 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.
