HomeMy WebLinkAbout96-01233
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LESTER ASSOCIATES, a general I
partnership, I
Plaintiff I
I
V. I
I
GATEWAY SQUARE ASSOCIATES, I
LLC, a Tennessee limited I
liability company,
Defendant I
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 96-1233 CIVIL TERM
IN REI PLAINTIFF'S MOTION FOR ADJUDICATION AND FINAL DECREE
UPON DEFAULT JUDGMENT
BEFORE OLER. J.
ADJUDICATION AND DECREE NISI
AND NOW, this l' tLday of July, 1996, upon consideration of
Plaintiff's Motion for Adjudication and Final Decree upon Default
Judgment, and following a hearing held pursuant to Pennsylvania
Rule of Civil Procedure 1511(b) at which counsel from the
Pennsylvania Department of Revenue and Attorney General's Office
were present but declined to request party status in this
declaratory judgment action, and the following facts being
established as bet.ween the parties as a consequence of Defendant's
failure to respond to Plaintiff's complaint or to Plaintiff's
amended complaint, or being otherwise demonstrated by the record,
1. Plaintiff, Lester Associates, is a general partnership
with its principal office at III Presidential Boulevard, Suite 140,
Bala Cynwyd, Montgomery County, Pennsylvania 19004-1086.
2. Plaintiff is registered as a fictitious name with the
Pennsylvania Department of State, Corporation Bureau.
3. Defendant, Gateway Square Associates, LLC, is a Tennessee
limited liability company with its registered office at 408 North
Cedar Bluff Road, Suite 350, Knoxville, Tennessee 37923.
NO. 96-1233 CIVIL TERM
4. Defendant is not registered with the Pennsylvania
Department of State, Corporation Bureau, as a foreign limited
company.
5. By way of a deed dated August 19, 1992, and recorded
October 23, 1992, in the Cumberland County Recorder of Deeds Office
in Deed Book Y-35, Page 442, Plaintiff took title to a certain
commercial real property (hereinafter "Real Property") located in
Hampden Township, Cumberland County, Pennsylvania, known as Tax
Parcel No. 10-20-1842-088A, a shopping center.
6. On March 20, 1995, a deed was recorded in Cumberland
County Deed Book 119, Page 916, in which Plaintiff conveyed the
Real Property to "Lester Associates, L.L.C."
7. Lester Associates, L.L.C., is not registered as a
fictitious name or 4S a limited liability company in Pennsylvania,
or in any other jurisdiction.
8. At recording, an exclusion from transfer tax was claimed
on the basis that the transfer was in the nature of a corrective
deed.
9. On August 23, 1995, a deed was recorded in Cumberland
County Deed Book 127, Page 62, in which Lester Associates, L.L.C.,
conveyed the Real Property to Defendant.
10. At recording, an exclusion from transfer tax was claimed
on the basis that the transfer was in the nature of a corrective
deed.
11. On December 8, 1995, a notice of determination was mailed
by the Department of Revenue notifying Plaintiff that realty
transfer tax had been assessed against the March 20, 1995 deed.
12. The Department of Revenue determined that one of the two
deeds may have been corrective; therefore, one tax determination
was made on the March 20, 1995 deed.
13. On March 6, 1996, Plaintiff filed an appeal with the
Department's Board of Appeals. On that same date, Plaintiff filed
the instant action asking that the two deeds recorded respectively
on March 20, 1995, and August 23, 1995, be declared null and void
ab initio.
14. Gateway Square Associates, LLC and the Department of
Revenue were named as defendants.
2
NO. 96-1233 CIVIL TERM
15. On March 15, 1996, the Attorney General filed Preliminary
Objections on behalf of the Department of Revenue contending that
the sole involvement of the Commonwealth concerned the imposition
of realty transfer tax and that the issue should be resolved at the
Department of Revenue Board of Appeals.
16. On April 19, 1996, Plaintiff filed an amended complaint
which removed the Department of Revenue as a defendant.
17. Defendant Gateway Square Associates, LLC, did not file an
answer to the complaint or amended complaint or otherwise plead.
18.
default
thereto.
On May 24, 1996, Lester Associates filed a praecipe for
judgment with a copy of the default notice attached
19. On the same day, the Cumberland County Prothonotary
entered a default judgment against the Defendant.
20. The hearing on June 27, 1996, was attended by Plaintiff's
counsel, Mark E. Halbruner, Esq., and by Sidney Becker, one of
Plaintiff's general partners.
21. Mr. Becker testified that to the best of his knowledge
there never was an entity called Lester Associates, L.L.C., and
that he had simply made a mistake in preparing the deed in that
regard. N.T. 9-11.
22. Also present at the hearing were Kathleen K. Shaulis,
Esq., from the Department of Revenue, and Ronald H. Skubecz, Esq.,
assisted by John Bobber, legal intern, from the Attorney General's
Tax Litigation Section.
23. Defendant did not appear and was not represented at the
hearing.
24. At the conclusion of the hearing, the Court entered an
Order closing the record and taking the matter under advisement.
25. Plaintiff has submitted a brief in support of its
position that title to the property in question remains in
Plaintiff.
It is DECLARED, ADJUDGED, AND DECREED that by virtue of Defendant's
default, and as between the parties to this action, title to the
property bounded and described as follows shall be deemed to be in
3
NO. 96-1233 CIVIL TERM
Plaintiff, Lester Associates:
BEGINNING at an iron pin on the Southern right
of way line of Carlisle Pike, of U.S. Route
11, said point being thirty (30) feet South of
centerline of said Carlisle Pike at the lands
now or formerly of Hampden Township, then from
said point of beginning South 10 degrees 3
minutes 57 seconds West 790.29 feet to an iron
pin, thence by the same lands South 88 degrees
34 minutes 24 seconds West 1113.75 feet to an
iron pin in the centerline of Brandy Lane, a
33 foot wide road; thence along the centerline
of said Brandy Lane and by the lands now or
formerly of the united States Government the
following courses and distances: North 3
degrees 40 minutes 36 seconds West 275.55 feet
to a spike; thence by the same, North 00
degrees 40 minutes 36 seconds West 315.49 feet
to a spike, said point being the Southerly
line of New Brandy Lane, as shown on the
aforesaid Plan of Subdivision for Crossgates,
Inc.: thence by said line of New Brandy Lane,
with a curve to the right, having a radius of
270.00 feet, (subtended by a chord North 59
degrees 42 minutes, 27 seconds East 266.86
feet) an arc distance of 279.14 feet to a
point; thence by the same North 89 degrees 19
minutes 24 seconds East 152.81 feet to a
point; thence by the same with a curve the
left, having a radius of 390.00 feet
(subtended by a chord North 74 degrees 45
minutes 54 seconds East 196.96 feet) an arc
distance of 198.189 feet to a point; thence by
the same South 29 degrees 47 minutes 36
seconds East 15.00 feet to a point; thence by
the same, with a curve to the left, having a
radius of 405.00 feet, (subtended by a chord
North 48 degrees 53 minutes 47 seconds East
158.86 feet) and arc distance of 159.89 feet
to a point; thence by the same, North 37
degrees 35 minutes 11 seconds East 175.65 feet
to a point; thence the same, with a curve to
the right, having a radius of 65.00 feet,
(subtended by a chord North 77 degrees 58
minutes 44 seconds East 84.24 feet) an arc
distance of 91. 65 feet to a point on the
southern right of way of Carlisle pike
4
NO. 96-1233 CIVIL TERM
Ronald 5. Skubecz, Esq.
Office of the Attorney General
Tax Litigation Section
15th rloor, Strawberry Square
Harrisburg, PA 17120
(Courtesy Copy)
Kathleen x. Shaulis, Esq.
Pennsylvania Department of Revenue
Office of Chief Counsel
Department 281061
Harrisburg, PA 17128-1061
(Courtesy Copy)
.ra
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Barnett 1& Weiskopf ,
Aqents for Gateway Square Associates,
408 North Cedar Bluff Road
Suite 350
Knoxville, TN 37923
LBSTBR ASSOCIATBS, a
partnership,
Plaintiff ,
qeneral
VS.
'GATEWAY SQUARE ASSOCIATBS,
LLC, a Tennessee limited
liability company,
Defendant.
To:
I
I
I
I
I
I
I
I
I
I
IN THl!l COURT OF COMMON PLBAS
COMBBRLAND COUNTY, PBmlSYLVAHIA
NO. 96'1233 CIVIL TB~
ACTION FOR DBCLAlUTORY ~
,.
LtC
Date of Notice: May 13, 1996
IMPORTANT NOTICE
YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN
APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE
COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET PORTH AGAINST
YOU. UNLESS YOU ACT WITHIN TEN (10) DAYS FROM THE DATE OF THIS
NO'rICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND
YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD
TAKE THIS NOTICE TO A LAWYER AT ONCE. IF YOU 00 NOT HAVE A LAWYER
OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE FOLLOWING OFFICE TO
FIND OUT WHERE YOU CAN GET LEGAL HELP:
Court Administrator
CUmberland County Courthouse, 4th Floor
One Courthouse Square
carlisle, PA 17013
(717) 240'6200
GATES 1& ASSOCIATES, P.C.
nzav!; ~r {(b
Mark E. Halbruner, Esquire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for Plaintiff)
LAW OFFICES OF
GATES & -ASSOCIATES, P.C.
"
lOtUII_-.IUlTlIIGO,WIOYHI,I'INHlnVAHIIo Ull.a
LESTER ASSOCIATES, a qeneral
partnerlhip,
Plaintif f,
VI.
GATBWAY SQUARE ASSOCIATES,
LLC, a Tennellee limited
liability company,
Defendant.
~....~.~"----,--.
I IN THB COURT 0' COMMON PLUS
I CUMBERLAND COt1N'l'Y, PENNSYLVANIA
: a
i NO. "-'2" CIVIL T'''c:;.~.lt-
I ACTION POR DECLARATORY JUDGMBNT
.
PLAINTIFF'S MOTION FOR POST-TRIAL RELIBP
AND NOW, comes Lester Associates (hereinafter "Plaintiff"), by
and throuqh its counsel, Gates & Associates, P.C., and respectfully
makes the fOllowing motion for Post-trial relief from the
Adjudication and Decree Nisi entered JUly 26, 1996, in the above-
captioned matter:
1. Plaintiff submits that the AdjUdication should have
included the followinq findinqs of fact which were previously
requested in Plaintiff's motion for adjUdication and final decree,
Plaintiff's brief and Plaintiff's supplemental memorandum of law:
a.
Plaintiff
property.
From October 23, 1992, to the present,
has treated the Real Property as a partnership
b.
and the
Affidavit
The Complaint was duly
Attorney General of
of Service was filed.
served on both parties
Pennsylvania, and an
c. A copy of the default notice was served on
Rovenue and the Attorney General.
d. Notice of the default jUdgment was served on
Defendant, Revenue and the Attorney General by first-
class mail on May 24, 1996.
-~" ......' ,J
e. On May 24, 1996, Plaintiff filed a Motion for
Adjudication and Final Decree Upon Default Judgment and
served Defendant, Revenue and the Attorney General with
copies of the motion.
f. By Order dated June 7, 1996, a hearing on the
motion was scheduled for June 27, 1996, and the Order was
served on Defendant, Revenue and the Attorney General.
g. At the outset of the hearing and after an in
camera discussion with all counsel. the Court afforded
Attorneys Shaulis and Skubecz an opportunity to formally
enter their appearances in this matter on behalf of the
Commonwealth.
h. Speaking on behalf of himself and Ms. Shaulis,
Mr. Skubecz acknowledged that the Commonwealth had been
given a full opportunity to intervene in the proceeding
and then stated that the Commonwealth declined to enter
its appearance.
i. Attorneys Shaulis and Skubecz observed but did
not participate in the remainder of the hearing.
The proposed finding of fact stated in (a), above. concerns
the manner in which the Real Property was managed from the time
that Lester Associates acquired title through the time of the
hearing. This fact has implications on the liability for taxes,
expenses and damages incurred in connection with the Real Property.
For example. different taxes and tax rates are applicable to
partnerships and 11mi ted liabili ty companies.
Furthermore, a
customer who slipped and fell in the parking lot of the shoppinq
center would arguably have legal rights against the owner of the
Real Property.
Although this finding of fact may not have a
binding effect on those not parties to this proceeding. it is
important as between Plaintiff and Defendant.
The proposed findings of fact stated in (b)-(i), above, all
2
concern the notice given to the Attorney General's office and the
Department of Revenue throughout this proceeding. The findings of
fact demonstrate that the Commonwealth was given, ~ declined, an
opportunity to intervene in this matter by cross-examining Sidney
Becker, offering additional evidence of its own, and otherwise
contesting the relief sought by Plaintiff. Without the inclusion
of these findings of fact, the Court's adjudication would not be
complete.
WHEREFORB, Plaintiff requests that the Court modify the
Adjudication by adding the findings of fact listed above.
2. The Adjudication includes finding of fact 1U2 which reads
as follows:
"The Dapartment of Revenue determined that one of
the two deeds may have been corrective; therefore, one
tax determination was made on the March 20, 1995 deed."
Plaintiff submits that this item includes facts that do not
appear on the record.
Plaintiff pleaded the existence of the
Department of Revenue's December 8, 1995 determination letter which
assessed realty transfer tax against the March 20, 1995 deed.
However, the determination letter was not entered on the record,
and the rationale stated in the determination letter was neither
pleaded by Plaintiff nor discussed on the record at the hearing.
WHBREFORE, Plaintiff requests that the Court modify the
AdjUdication by deleting finding of fact #12.
3
3. Plaintiff submits that the Adjudication should have
included the following conclusions of law which were previouSly
requested in Plaintiff's motion for adjudication and final decree,
Plaintiff's brief and Plaintiff's supplemental memorandum of law:
a. This is an action for declaratory jUdgment
pursuant to 42 Pa.C.S. S753l at seq" for the purpose of
determining a question of actual controversy between the
parties hereto.
b. JuriSdiction of this action is based on 42
Pa.C.S. S7533.
c. Lester Associates, L.L.C. does not exist as a
legal entity.
d. As a non-existent entity, Lester Associates,
L.L.C. could neither receive nor convey title to the Real
Property.
e. This action involves the effect of the parties'
legal relation, status, right and privilege upon the
aforesaid determination of realty transfer tax, and
Revenue may therefore have entered its appearance in this
action pursuant to 42 Pa.C.S. S7540(b).
f. Revenue's interests in this action have been
adequately represented as contemplated by 42 Pa.C.S.
S7540(b) .
The proposed conclusions of law stated in (a) and (b), above,
describe the nature of this proceeding and the Court's jurisdiction
to decide the matter in controversy. The proposed conclusions of
law stated in (c) and (d), above, provide the foundation for the
Court's determination that the deeds in question had no legal
effect.
The proposed conclusion of law stated in (e), above,
explains why Revenue and the Attorney General were given on-going
notice of this proceeding and Why they were given an opportunity to
4
intervene at the hearing. The Adjudication would not be complete
without these ~tatements.
Section 7540(bl states that the requirements of notice to a
taxing authority shall be satisfied if the taxing authority
declines to make an appearance but the court finds that the
authority's interests have been adequately represented. The
proposed conclusion of law stated in (fl. above. is inevitable when
17540 (bl is applied to the facts of this case. Revellue and the
Attorney General had an .interest in the determination of this
matter but affirmatively declined the opportunity to intervene in
open court. If the Commonwealth's interests as a taxing authority
have not been adequately represented in this matter. it is
difficult to imagine any circumstances under which S7540(bl would
be satisfied.
1fHBUI'OllB. Plaintiff requests that the COurt modify the
Adjudication by adding the conclusions of law listed above.
4. Plaintiff submits that. in addition to the declaration of
title contained in the Decree Nisi. the decree should have declared
the deeds of March 20. 1993. and August 23. 1993. to be null and
void ab initio. that said deeds did not convey. transfer. devise,
vest. confirm or evidence any transfer or devise of real estate,
and that said deeds should be expunged from the public record.
These declaratory statements were previously requested in the
Amended Complaint. Plaintiff's motion for adjudication and final
5
decree, Plaintiff's brief and Plaintiff's supplemental memorandum
of law.
The declaratory statements requested by Plaintiff are intended
to make clear that the deeds in question had no leqal effect and
that title to the Real Property has remained in Lester Associates
at all times relevant hereto.
The fact that Plaintiff has
continued to treat the Real Property as a partnership property is
consistent with the requested declarations.
The requested
declarations will be important in resolvinq any questions as to
liability for taxes, expenses and damages incurred between the
filing of the March 20, 1995 deed and the time of the Court's
Decree.
WHERBFORE, Plaintiff respectfully requests that the Court
amend the Decree Niei by adding the declaratory statements stated
above.
5. The Decree Nisi contains the fOllowing statement:
"NOTHING HEREIN is intended to represer.t a
determination as to any issues of real estate transfer
tax liability, nor to bind any entity not now a captioned
party to this litigation."
Plaintiff submits that this statement is unnecessary and
should be deleted from the Decree Nisi. Plaintiff understands the
Court's reluctance to intervene in tax questions that fall within
the jurisdiction of other tribunals, and Plaintiff has not asked
the Court to do so.
Plaintiff has petitioned the Court to
6
determine whether the deeds in question had any legal effect upon
title to the Real Property and, collaterally, whether the
Commonwealth's interests as a taxing authority have been adequately
represented in this proceeding. Both of these determin&tions fall
within the Court's juriSdiction under the Declaratory Judqrnents
Act.
Moreover, the determinations requested by Plaintiff will not
decide the realty transfer tax issues which remain the subject of
an administrative appeal. The tribunals with juriSdiction over
realty transfer taxatioll will decide those issues after considering
this Court's determinations along with the other facts presented
before them. Therefore, Plaintiff respectfully submits that this
Court should not (and does not have juriSdiction to) declare the
effect its decree will have on the transfer tax issues. The effect
of this Court's decree on the transfer tax issues will ultimately
be decided by other tribunals.
WHEP.EFORE, Plaintiff requests that the Court modify the Decree
Nisi by deleting the declaratory statement set forth above.
6. The Decree Nisi contains the following statement:
"It is DECLARED, ADJUDGED, AND DECREED that by
virtue of Defendant's default, and as between the oarties
to this action. title to the property bounded and
described as follows shall be deemed to be in Plaintiff,
Lester Associates:" (emphasis added)
Plaintiff submits that the Decree Nisi should not have
included the underlined portion of the foregoing statement. For
7
LESTER ASSOCIATES, a general
partnership,
Plaintiff
.
.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
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CIVIL ACTION - LAW
GATEWAY SQUARE ASSOCIATES,
LtC, a Tennessee limited
liability company,
Defendant
NO. 96-1233 CIVIL TERM
IN R~I PLAINTIFF'S MOTION FOR ADJUDICATION AND FINAL DECREE
.UPON DEFAULT JUDGMENT
BEFORE OLER. J.
ADJUDICATION AND DECREE NISI
AND NOW, this Z, "'day of July, 1996, upon consideration of
Plaintiff's Motion for Adjudication and Final Decree upon Default
Judgment, and following a hearing held pursuant to Pennsylvania
Rule of Civil Procedure l5ll(b) at which counsel from the
Pennsylvania Department of Revenue and Attorney General's Office
were present but declined to request party status in this
declaratory jUdgment action, and the following facts being
established as between the parties as a consequence of Defendant's
failure to respond to Plaintiff's complaint or to Plaintiff' 8
amended complaint, or being otherwise demonstrated by the record,
1. Plaintiff, Lester Associates, is a general partnership
with its principal office at III Presidential Boulevard, Suite 140,
Bala Cynwyd, Montgomery County, Pennsylvania 19004-1086.
2. Plaintiff is registered as a fictitious name with the
Pennsylvania Department of State, Corporation Bureau.
3. Defendant, Gateway Square Associates, LLC, is a Tennessee
limited liability company with its registered office at 408 North
Cedar Bluff Road, Suite 350, Knoxville, Tennessee 37923.
- .
NO. 96-1233 CIVIL TERM
4. Defendant is not registered with the Pennsylvania
Department of State, Corporation Bureau, as a foreign limited
company.
5. By way of . deed dated August 19, 1992, and recorded
October 23, 1992, in the Cumberland County Recorder of Deeds Office
in Deed Book Y-35, Page 442, Plaintiff took title to a certain
commercial real property (hereinafter "Real Property") located in
Hampden Township, Cumberland County, Pennsylvania, known as Tax
Parcel No. 10-20-1842-088A, a shopping center.
6. On March 20, 1995, a deed was recorded in Cumberland
County Deed Book 119, Page 916, in which Plaintiff conveyed the
Real Property to "Lester Associates, L.L.C."
7. Lester Associates, L.L.C., is not registered as a
fictitious name or as a limited liability company in Pennsylvania,
or in any other jurisdiction.
8. At recording, an exclusion from transfer tax was claimed
on the basis that the transfer was in the nature of a corrective
dead.
9. On August 23, 1995, a deed was recorded in Cumberland
County Deed Book 127, Page 62, in which Lester Associates, L.L.C.,
conveyed the Real Property to Defendant.
10. At recording, an exclusion from transfer tax was claimed
on the basis that the transfer was in the nature 01 a corrective
deed.
11. On December 8, 1995, a notice of determination was mailed
by the Department of Revenue notifying Plaintiff that realty
transfer tax had been assessed against the March 20, 1995 deed.
12. The Department of Revenue determined that one of the two
deeds may have been corrective; therefore, one tax determination
was made on the March 20, 1995 deed.
13. On March 6, 1996, Plaintiff filed an appeal with the
Department's Board of Appeals. On that same date, Plaintiff filed
the instant action asking that the two deeds recorded respectively
on March 20, 1995, and August 23, 1~95, be declared null and void
ab initio.
14. Gateway Square Associates, LLC and the Department of
Revenue were named as defendants.
2
-
NO. 96-1233 CIVIL TERM
l5. On March 15, 1996, the Attorney General filed Preliminary
Objections on behalf of the Department of Revenue contending that
the sole involvement of the Commonwealth concerned the imposition
of realty transfer tax and that the issue should be resolved at the
Department of Revenue Board of Appeals.
16. On April 19, 1996, Plaintiff filed an amended complaint
which removed the Department of Revenue as a defendant.
17. Defendant Gateway Square Associates, LLC, did not file an
answer to the complaint or amended complaint or otherwiee plead.
18.
default
thereto.
On May 24, 1996, Lester Associates filed a praecipe for
judgment with a copy of the default notice attached
19. On the same day, the Cumberland County Prothonotary
entered a default judgment against the Defendant.
20. The hearing on June 27, 1996, was attended by Plaintiff's
counsel, Mark E. Halbruner, Esq., and by Sidney Becker, one of
Plaintiff's general partners.
2l. Mr. Becker testified that to the best of his knowledge
thsre never was an entity called Lester Associates, L.L.C., and
that he had simply made a mistake in preparing the deed in that
regard. N.T. 9-11.
22. Also present at the hearing were Kathleen K. Shaulis,
Esq., from the Department of Revenue, and Ronald H. Skubecz, Esq.,
assisted by John Bobber, legal intern, from the Attorney General'.
Tax Litigation Section.
23. Defendant did not appear and was not represented at the
hearing.
24. At the conclusion of the hearing, the Court entered an
Order closing the record and taking the matter under advisement.
25. Plaintiff has submitted a brief in support o~ its
position that title to the property in question remains in
Plaintiff.
It is DECLARED, ADJUDGED, AND DECREED that by virtue of Defendant's
default, and as between the parties to this action, title to the
property bounded and described as follows shall be deemed to be in
3
NO. 96-1233 CIVIL TERM
Plaintiff, Lester Associatesl
BEGINNING at an iron pin on the Southern right
of way line of Carlisle Pike, of U.S. Route
11, said point being thirty (30) feet South of
centerline of said Carlisle pike at the lands
now or formerly of Hampden Township, then from
said point of beginning South 10 degrees 3
minutes 57 seconds West 790.29 feet to an iron
pin, thence by the same lands South 88 degrees
34 minutes 24 seconds West 1113.75 feet to an
iron pin in the centerline of Brandy Lane, a
33 foot wide road; thence along the centerline
of said Brandy Lane and by the lands now or
formerly of the United States Government the
following courses and distances I North 3
degrees 40 minutes 36 seconds West 275.55 feet
to a spike; thence by the same, North 00
degrees 40 minutes 36 seconds West 315.49 feet
to a spike, said point being the Southerly
line of New Brandy Lane, as shown on the
aforesaid Plan of Subdivision for Crossgates,
Inc.: thence by said line of New Brandy Lane,
with a curve to the right, having a radius of
270.00 feet, (subtended by a chord North 59
degrees 42 minutes, 27 seconds East 266.86
feet) an arc distance of 279.14 feet to a
point; thence by the same North 89 degrees 19
minutes 24 seconds East 152.81 feet to a
point; thence by the same with a curve the
left, having a radius of 390.00 feet
( subtended by a chord North 74 degrees 45
minutes 54 seconds East 196.96 feet) an arc
distance of 198.189 feet to a point; thence by
the same South 29 degrees 47 minutes 36
seconds East 15.00 feet to a point; thence by
the same, with a curve to the left, having a
radius of 405.00 feet, (subtended by a chord
North 48 degrees 53 minutes 47 seconds East
l58.86 feet) and arc distance of 159.89 feet
to a point; thence by the same, North 37
degrees 35 minutes 11 seconds East 175.65 feet
to a point; thence the same, with a curve to
the right, having a radius of 65.00 feet,
(subtended by a chord North 77 degrees 58
minutes 44 seconds East 84.24 feet) an arc
distance of 91.65 feet to a point on the
southern right of way of Carlisle Pike
4
LESTER ASSOCIATES, a general
partnership,
Plaintiff.
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
CIVIL ACTION - LAW
I
I
I
I
I
I
I
I
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company; and
DEPARTMENT OF REVENUE OF
THE COMMONWEALTH OF
PENNSYLVANIA,
Defendants
NO. 96-1233 CIVIL TERM
AND NOW, this
?tl.
OROER OF COURT
day of June, 1996, upon consideration of
Plaintiff's Motion for Adjudication and Final Decree upon Oefault
Judgment, a hearing on the matters contained therein is scheduled
for Thursday, June 27, 1996, at 2130 p.m., in Courtroom No.5,
Cumber.land County Courthouse, Carlisle, Pennsylvania.
BY THE COURT,
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Mark E. Halbruner, Esq.
Suite 100
1013 Mumma Road
Lemoyne, PA 17043
Attorney for Plaintiff
Barnett , Weiskopf
Suite 350
408 North Cedar Bluff Road
Knoxville, TN 37923
Agents for Gateway Square
Associates, LLC
Ronald H. Skubecz, Esq.
Office of the Attorney General
Tax Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
--- ~_._--_.-.~_..-
Kathleen K. Shaulis, Esq.
Pennsylvania Department of Revenue
Office of Chief Counsel
Department 28106l
Harrisburg, PA 17128-1061
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6. On April 19. 1996. Plaintiff filed an Amended Complaint
which. inter alia. removed Revenue as a defendant.
7. On April 19. 1996. Plaintiff served the Amended Complaint
on Defendant, Revenue and the Attorney General by certified mail.
8. Both the Complaint and Amended Complaint were properly
endorsed with a notice to defend.
9. Defendant has not filed an answer to the Complaint or
Amended Complaint or otherwise pleaded thereto.
10. On May 13, 1996, Plaintiff served Defendant with a notice
of its intention to file a praecipe for default judgment.
11. A copy of the default notice was served on Revenue and
the Attorney General.
12. On May 24, 1996, Plaintiff filed a praecipe for default
judgment with a copy of the default notice attached thereto.
13. On May 24. 1996, the Cumberland County Prothonotary
entered a default judgment against Defendant.
14. Notice of the default judgment was served on Defendant,
Revenue and the Attorney General by first-class mail on May 24,
1996.
15. This proceeding involves the effect of the parties I legal
relation, status, right and privilege upon the determination of
realty transfer tax, and Revenue may therefore enter its appearance
in this proceeding pursuant to 42 Pa.C.S. S7540(b).
16. with the exception of the preliminary Objections filed by
the Attorney General in response to the original Complaint, neither
2
Revenue nor the Attorney General has pleaded or otherwise entered
an appearance in this proceeding.
WHIRBFORB. Plaintiff respectfully requests that, pursuant to
Pa.R.C.p. 1601(a) and 1511(b), the Court enter an Adjudication with
findings of fact and conclusions of law and a Final Decree
declaring that:
A. The deeds recorded on March 20, 1995. and Auqust 23.
1995. as described in the Amended Complaint, were null and void ab
initio and did not convey. transfer, devise. vest, confirm or
evidence any transfer or devise of real estate;
B. Said deeds should be expunged from the public record; and
C. Title to the real property located in Hampden Township.
Cumberland County. Pennsylvania. and known as Tax Parcel No. 10'20-
1842-088A is vested in Lester Associates. a PennsYlvania general
partnership.
Respectfully sUbmitted.
GATES & ASSOCIATES. P.C.
DATED:
1M) )J(
By:n~~C. ~fn<<12-.
Mark E. Halbruner. Esquire
Supreme Court 1.0. #66737
1013 Mumma Road. Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for Plaintiff)
, 1996
)
~ .
LESTER ASSOCIATES, a gsneral
partner.hip
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
v. CIVIL ACTION - LAW
GATEWAY SQUARE ASSOCIATES,
LLC, a T.nne...e limited
liability company; and
DEPARTMENT OF REVENUE OF THE
COMMONWEALTH OF PENNSYLVANIA,:
Defendants 96-1233 CIVIL TERM
ORDER OF COURT
AND NOW, this 27th day of June, 1996, upon
consideration of the Plaintiff's Motion for Adjudication and
Final Decree upon Default Judgment, and following a short
hearing at which testimony and exhibits were presented on behalf
of the Plaintiff for the purpose of assisting the Court in
framing a proper decree, and pursuant to an agreement of counsel
for the Plaintiff in the person of Mark E. Halbruner, Esquire,
the record is declared closed, the matter is taken under
advisement, counsel is requested to furnish any supplemental
memorandum which he cares to submit within 14 days of today's
date, and it is noted that Plaintiff's counsel has waived any
deadline under the Rules of Civil Procedure for the Court's
adjudication and final decree in this matter.
It is noted that the Department of Revenue was
present in court during the hearing herein and was represented
in the person of Ronald H. Skubecz, Esquire, of the Office of
the Pennsylvania Attorney General, and Kathleen K. Shaulis,
Esquire, of the Department, but that the Department has not
entered an appearance in the case and has declined the
Pl r7[)-C;,=i!::
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1 June 27, 1996
2 Carlisle, Pennsylvania
3
4 (Whereupon, the following proceedings were
5 held at 3:41 p.m.)
6 (Whereupon, a discussion was held off the
7 record. )
8 THE COURT: This is the time and place for a
9 hearing on the motion for adjudication and final decree upon
10 default judgment in the above-captioned matter.
11 Would counsel pl~ase identify themselves and
12 any other persons present in the courtroom for the record.
13 Mr. Halbruner, do you want to begin first?
14 MR. HALBRUNER: Yes, Your Honor, may name is
15 Mark Halbruner from the firm of Gates and Associates. We
16 represent the Plaintiff, Lsster Associates.
17 THE COURT: All right. And with you today
18 is?
19 MR. HALBRUNER: Sidney Becker, general
20 partner.
21 THE COURT: All right. Yes, sir.
22 MR. SKUBECZ: Yes, my name is Ronald Skubecz.
23 I am from the Office of Attorney General. I am the deputy
24 attorney general. I am representing the Commonwealth of
25 Pennsylvania. With me is my law clerk, John Bobber, and
.")
J
1 the Department of Revenue, assistant counsel, Kathleen
2 Shaulis, S-h-a-u-1-i-s.
3 THE COURT: All right. And we will let the
4 record indicate that although the Department of Revenue is
5 not a party in the case at the present time, the Court did
6 notify the Department as well as the Attorney General's
7 Office of this hearing, and Mr. Skubecz has presented
8 himself today, but I understand will not be entering an.
9 appearance or moving to intervene, that is, moving for the
10 Department of Revenue to intervene; is that correct?
11 MR. SKUBECZ: That is correct, Your Honor.
12 THE COURT: All right. Did you wish to say
13 anything for the benefit of the Court before the hearing
14 begins, Mr. Skubecz?
15 HR. SKUBECZ: Yes. I would simply like to
16 say that the Commonwealth is not a party in this proceeding.
17 The Court has afforded it an opportunity to participate as a
18 party or to intervene, and the Commonwealth has declined.
19 The Commonwealth's only interest in this proceeding is with
20 the transfer tax associated with the deed of March 20th,
21 1995. Its interest is whether or not that conveyance is
22 excluded from tax. The appropriate forum to determine that
23 is the Department of Revenue board of appeals, and the
24 Plaintiff here, Lester Associates, is presently before the
25 board of appeals pursuing the question of taxability on the
4
1 transfer. Thallk you.
2 THE COURT: All right. Thank you. Do you
3 wish to stay and watch the proceedings?
4 MR. SKUBECZ: Yes, I do, Your Honor.
5 THE COURT: All right. Mr. Ha1bruner.
6 MR. HALBRUNER: Thank you, Your Honor.
7 Before calling Mr. Becker to the stand, I would like to
8 submit Plaintiff's Exhibits 1 through 3, which have been
9 previously marked. They are respectively a deed recorded
10 October 23, 1992, in the Cumberland county Recorder of
11 Deed's Office in Book Y35, beginning at Page 442, a second
12 deed recorded March 20, 1995, in the Cumberland County
13 Recorder of Deeds Office in Book 119, beginning at Page 916,
14 and a third deed recorded August 23, 1995, in the Cumberland
15 County Recorder of Deeds Office in Book 127, beginning at
16 Page 62.
17 THE COURT: And they have been marked
18 already?
19 MR. HALBRUNER: That is correct.
20 THE COURT: All right. Plaintiff's Exhibit
21 1, 2 and 3 are admitted
22 (Whereupon,
23 Plaintiff's Exhibit Nos. 1, 2 and 3
24 were admitted into evidence.)
25 THE COURT: And I would indicate,
5
1 Mr. Halbruner, I think your burden at this point in the
3 hearing is to establish the forum of the decree that you
3 think should be entered, that is, establish a basis for the
4 Court to enter a proper decree.
5 I will assume that the facts alleged in the
6 complaint are to be considered admitted by virtue of the
7 default judgment, but as to the proper decree to be entered,
8 I think that's something that you must convince the Court of
9 based on those admissions.
10 MR. HALBRUNER: Is Your Honor --
11 THE COURT: If you would like, you certainly
13 may present additional evidence as well in support of the
13 averments of the complaint and so forth.
14 MR. HALBRUNER: Is Your Honor inviting a
15 legal argument on the facts or just additional evidence?
16 THE COURT: I would be glad to hear either.
17 MR. HALBRUNER: At this point I would call
18 Sidney Becker to the stand.
19 THE COURT: certainly.
20 Whereupon,
21 SIDNEY BECKER,
22 having been duly sworn, testified as follows:
23 DIRECT EXAMINATION
24 BY MR. "ALBRUNER:
25 Q Would the witness please state your full name
6
1 and address for the Court?
2 A Sidney Becker, 111 Presidential Boulevard,
3 Bala Cynwyn, Pennsylvania, 19004.
4 Q Mr. Becker, is that your home address or
5 business address?
6 A That's the business address.
7 Q And what is your business?
8 A Real estate.
9 Q Are you familiar with an entity by the name
10 of Lester Associates?
11 A Yes, I am.
12 Q What is your connection with that entity?
13 A I am a partner.
14 Q Are you a general partner?
15 A Yes.
16 Q What type of entity is Lester Associates?
17 A Lester Associates holds real estate.
18 Q Is it a partnership?
19 A Yes, it is a general partnership.
20 Q And is it registered in Pennsylvania as a
21 fictitious name?
22 A Yes.
23 Q Are you familiar then with real estate that's
24 located in Hampden Township, Cumberland County, known as tax
25 parcel 10-20-1842-088A?
7
1 A Yes.
3 Q How would you describe that property?
3 A It's a shopping center.
4 Q Do you know what the approximate f~ir market
5 value of that property is?
6 A About 10 million dollars.
7 Q At some point in time did Lester Associates
8 purchase that property?
9 A Yes.
10 MR. HALBRUNER: I am going to approach the
11 witness.
13 BY MR. HALBRUNER:
13 Q Mr. Becker, I am showing you what has already
14 been marked as Plaintiff'S Exhibit 1, a deed recorded in the
15 Cumberland County Recorder of Deeds Office. Have you ever
16 seen that document before?
17 A Yes, I have.
18 Q Would you identify the nature of this
19 document?
30 A Yes, that was a deed transferring the
21 property from the previous owner to our partnership, Lester
22 Associates.
23 Q Mr. Becker, I am now going to show you what'.
24 already been marked as Plaintiff'S Exhibit 2, a deed
25 recorded in Cumberland County Deed Book 119, Page 916.
8
.-., ---'..'-~ --",-
1 Would you please tell me if you recognize that.
2 A Yes, I do.
3 Q Would yO!! please tell me who was named as the
4 grantor on that document?
5 A Lester Associates.
6 Q And would you please tell me who is named as
7 the grantee?
8 A Lester Associates, L.L.C.
9 Q To the best of your knowledge, Mr. Becker, is
10 there an entity in existence now named Lester Associates,
11 L.L.C.?
12 A No, there isn't.
13 Q To the best of your knowledge, has there ever
14 been an entity named Lester Associates L.L.C.?
15 A No, there has never been.
16 Q Mr. Becker, I am going to show you what's
17 already been marked as Plaintiff's Exhibit Number 3, a deed
18 recorded in Cumberland county Deed Book 127, Page 62. Would
19 you please tell me if you have ever seen that before.
20 A 'tes, I have.
21 Q Could you please tell m3 who was named as the
22 grantor in that document?
23 A Lester Associates, L.L.C.
24 Q And could you please tell me who is named as
25 the grantee in that document?
9
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
A Gateway Square, Associates, L.L.C.
Q And again, to the best ot your knowledge, has
there ever been an establishment called Lester Associates,
L.L.C.?
A No, there has not.
Q Okay. Thank you.
MR. HALSRUNER: Nothing further tor the
witness, Your Honor.
THE COURT: I have a couple ot questions, if
I may.
EXAMINATION
BY THE COURT:
Q What was the purpose ot the transfer to
Lester Associates, L.L.C., it in tact there was no such
organization?
A I beg your pardon?
Q What was the purpose of that transfer it
there is no entity such as that? What was the intention
behind it?
A It was a mistake.
Q But there must have been some reason for it.
A Yes, I must explain. We own a number of
shopping centers, my brother and I, and when my attorney
prepared the limited liability company organizations for
most of our properties, then he asked me to prepare deeds
10
1 transterring from ths partnership to the L.L.C., and I
2 inadvertently -- I just made up these tor everyone ot the
3 propertie. not realizing that Lester Associates was never
4 turned to a L.L.C. So it was an erroneous deed prepared in
5 the tirst place, and it should have never gone into
6 recording.
7 Q So are you saying that there are a number of
8 these transters to L.L. -- to Lester Associates, L.L.C.
9 which are to a nonexistent entity?
10 A That's right.
11 Q When I was growing up in cynwyn I knew a
12 Sharon Becksr. Is she a member of your tamily?
13 A Sharon Becker?
14 Q Sharon Becker.
15 A NO, no, there is no Sharon Becker in my
16 family.
17 Q I wanted to be sure that I did not know
18 somebody related to the case. Are allot the tacts in your
19 complaint true and correct?
20 A Yes, they are.
21 THE COURT: Okay. Any further questions,
22 Mr. Halbruner?
23 MR. HALBRUNER: No, '{our Honor.
24 THE COURT: okay. '{ou may step down. Thank
25 you. Anything turther, Mr. Halbruner?
11
1 MR. HALSRUNER: Just in a way of a brief
~ legal argument, Your Honor.
3 It'. my understanding that a declaratory
4 judgment proceeding is supposed to be handled in an equity
5 proceeding, and that when a default judgment is entered, a
6 final decree with an adjudication of facts and conclusions
7 of law is to be entered by the Court based on that default
8 judgment, and I believe that is why we are here today. It
9 is our request that you would enter such an adjudication
10 with a decree in the form previously submitted with the
11 motion that has brought us here today, specifically the
1~ conclusions of law that we wish to have the Court find are
13 as follows:
14 We wish the Court to determine that the deeds
15 recorded respectively on March 20, 1995, in Cumberland
16 County Deed Book 119, Page 916, and on August 23, 1995 in
17 County Deed Book 127, Page 62 were null and void ab initio,
18 from the beginning, and did not convey, transfer, devise,
19 vest, confirm or evidence any transfer of real estate, that
20 the aforesaid deeds should be removed from the public
21 record, that title to the real property lucated at Hampden
22 TownShip, Cumberland County, PA, known as tax parcel number
23 10-20-1842-088A is vested in Lester Associates, and that the
24 interests of the Department of Revenue have been adequately
25 represented in this hearing and in that proceeding by giving
12
1 them an opportunity to be heard.
2 THE COURT: All right. with your permission
3 I would like to take a little time to be satistied as to the
4 law in this area, and I would ask it you would be willing to
5 submit a briet within two we.ks ot today's date, assuming
6 that all of the tacts in the complaint are tru. and correct
7 as to what the legal eftect of thos. tacts is in terms of
8 what decree should be entered.
9 MR. HALBRUNER: Your Honor, a brief was filed
10 today with the Court. With your permission I will leave
11 that briet on the record, but would also suggest maybe a
12 memorandum ot law to make any additional comments which need
13 to be made based on what happened here today.
14 THE COURT: That would be tine. Is two weeks
15 a tair period for that?
16 MR. HALBRUNER: That's tine, Your Honor.
17 THE COURT: All right. And may I have a
18 waiver ot any time limit that I might have for entering this
19 particular order?
20 MR. HALBRUNER: Yes.
21 THE COURT: All right. We will enter this
22 order: AND NOW, this 27th day of June, 1996, upon
23 consideration of the P1aintitt's Motion for Adjudication and
24 Final Decree upon Default Judgment, and following a short
25 hearing at which testimony and exhibits were presented on
13
1 behalt ot the Plaintitt tor the purpose of assisting the
2 Court in framing a proper decree, and pursuant to an
3 agreement ot counsel tor the Plaintitt in the person ot Mark
4 Ha1bruner, Esquire, the record is declared closed, the
5 matter is taken under advisement, counsel is requested to
6 furnish any supplemental memorandum which he cares to submit
7 within 14 days ot today's date, and it i. noted that
8 Plaintitf's counsel has waived any deadline under the Rules
9 of civil Procedure tor the Court's adjudication and tina1
10 decrse in this matter.
11 It is noted that the Department ot Revenue
12 was present in court during the hearing herein and was
13 represented in the person of Ronald H. Skubecz, Esquire, of
14 the Otfice of the Pennsylvania Attorney General, and
15 Kathleen K. Shaulis, Esquire of the Department, but that the
16 Department has not entered an appearance in the case and has
17 declined the opportunity to move to intervene in the matter.
18 Notices ot orders in this case shall continue, however, to
19 be sent to Mr. Skubecz and Ms. Shaulis.
20
21
22
23
24
25
All right. Thank you.
MR. SKUBECZ: Thank you, 'lour Honor.
THE COURT: Yes, sir.
MR. BECKER: Thank you, 'lour Honor.
THE COURT: Court's adjourned.
(Whereupon, court adjourned at 4:11 p.m.)
14
LESTER ASSOCIATES, A GENERAL
PARTNERSHIP,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PA
plaintiff
CIVIL ACTION - LAW
v.
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company; and
DEPARTMENT OF REVENUE OF THE
COMMONWEALTH OF PENNSYLVANIA
, .
Defendants
,
,
,
. ,
No. 96 -1233 CIviL TERM' 19!1'Ei'
ACTION FOR DECLARATORY JUDGMENT
\:.1 ~
PRELIMINARY OBJECTIONS
AND NOW, comes the Commonwealth of Pennsylvania and enters
the following Preliminary Objections to the Action for
Declaratory Judgment filed at the above term and number naming
the Commonwealth of Pennsylvania, Department of Revenue, as a
party defendant.
DEMURRER
1. The Action for Declaratory Judgment filed by Plaintiff,
Lester Associates, raises issues of fact and law as between
Plaintiff and the other named Defendant, Gateway Square
Associates, with regard to certain real property located in
Hampden Township, Cumberland County, Pennsylvania.
2. The Action for Declaratory Judgment presents no issue of
fact or question of law relating to the Commonwealth of
Pennsylvania, Department of Revenue that affects any claim or
interest of the Commonwealth other than the Commonwealth's
6. To the extent that this reque~t can be read to suggest
that state realty transfer tax is not due and owi~g on the
conveyance of the subject property from plaintiff Lester
Associates, grantor, to Lester Associates, L.L.C., grantee,
recorded on March 20, 1995, or the conveyance of the subject
property between Lester Associates, LLC, grantor, to Defendant
Gateway Square Associates, grantee, recorded on August 23, 1995,
this Court is without jurisdiction to rule on such matter or hear
such claim.
7. Under the Realty Transfer Tax Act, 72 P.S. ~8101-C, et
seq., appeals from determinations of realty transfer tax are
appealable, in the first instance, to the Department of Revenue's
Board of Appeals, 72 P.S. ~8111-C(b). The Plaintiff has
initiated an appeal from a Notice of Determination of realty
transfer tax due on the conveyance recorded March 20, 1995
(Complaint '14).
8. Jurisdiction over any further appeal from this
determination is conferred upon the Board of Finance and Revenue.
72 P.S. ~8111-C(c), and thereafter the Pennsylvania Commonwealth
Court, 42 Pa.C.S. ~763(a).
WHEREFORE, the Commonwealth prays that it be dismissed as a
defendant herein on the grounds that this Court is without
jurisdiction in actions based on determinations of state realty
. ~
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LESTER ASSOCIATES, a general
partnership,
Plaintiff,
IN THE COURT OF COMMON PLEAS
I CUMBERLAND COUNTY, PENNSYLVANIA
I
I
I CIVIL ACTION . LAW
I
I NO. 96.1~33 CIVIL TERM
VS.
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company,
Defendant.
I
I ACTION FOR DECLARATORY JUDGMENT
AMENDED COMPLAINT
AND NOW, comes Lester Associates (hereinafter "plaintiff"), by
and through its counsel, Gates & Associates, P.C., and makes the
fallowing complaint for declaratory judgment:
1. This is an action for declaratory judgment pursuant to 42
Pa.C.S. S7531 g1~, for the purpose of determining a question of
actual controversy between the parties hereto.
2. Jurisdiction of this action is based on 42 Pa.C.S. S7533.
3. Plaintiff is a general partnership with its principal
office '.it 111 presidential Boulevard, Suite 140, Bala cynwyd,
Montgomery County, Pennsylvania 19004-1086.
4. Plaintiff is registered as a fictitious name with the
pennsylvania Department of State, corporation Bureau.
5. Gateway Square Associates, LLC (hereinafter referred to
as "Defendant") is a Tennessee limited liability company with its
registered office at 408 North Cedar Bluff Road, Suite 350,
Knoxville, Tennessee 37923.
6. Defendant is not registered with the pennsylvania
Department of State, Corporation Bureau, as a foreign limited
liability company.
7. By way of a deed dated August 19, 1992, and recorded
October 23, 1992, in the Cumberland County Recorder of Deeds Office
in Deed Book Y-35, Page 442, plaintiff took title to a certain
commercial real property (hereinafter the "Real property") located
in Hampden Township, Cumberland County, pennsylvania, and known as
Tax Parcel No. 10-20-1842-088A.
8. On March 20, 1995, a deed was recorded in Cumberland
County Deed Book 119, Page 916, in which Plaintiff purported to
convey the Real property to Lester Associates, LLC. A copy of the
deed is attached hereto as Exhibit "A".
9. On August 23, 1995, a deed was recorded in Cumberland
County Deed Book 127, Page 62, in which Lester Associates, LLC
purported to convey the Real Property to Defendant. A copy of the
deed is attached hereto as Exhibit "B".
10. Lester Associates, LLC is not registered as a fictitious
name or as a limited liability company in pennsylvania, or to the
best of Plaintiff's knowledge, in any other jurisdiction.
11. As a non-existent entity, Lester Associates, LLC could
neither receive nor convey title to the Real property.
12. The deeds recorded on March 20, 1995, and August 23,
1995, as described hereinabove, did not effect a transfer of title
to the Real Property.
13. From October 23, 1992, to the present. Plaintiff has
2
treated the Real Property as a partnership property.
14. The Department of Revenue (hereinafter referred to as
"Revenue") is an agency of the Conunonwealth of Pennsylvania with
its executive offices located at Strawberry Square. Harrisbur.g,
Dauphin County. pennsylvania.
15. By way of a notice of determination mailed December B,
1995. Revenue notified Plaintiff that realty transfer tax had been
assessed against the March 20. 1995 deed.
16. Plaintiff has appealed the realty transfer tax assessment
by filing a petiticn for redetermination with Revenue'S Board of
Appeals.
17. This proceeding .involves the effect of the parties' legal
relation, status. right and privilege upon the aforesaid
determination of realty transfer tax, and Revenue may therefore
enter its appearance in this proceeding pursuant to 42 Pa.C.S.
S7540(b) .
WHERBFORE. Plaintiff respectfUlly requests that the Court
issue a jUdgment declaring that:
A. The deeds recorded on March 20, 1995, and August :013,
1995. as described hereinabove, are null and void and do not
convey. transfer, devise, vest, confirm or evidence any transfer or
devise of real estate;
B. Said deeds should be expunged from the public record; and
C. Title to the real property located in Hampden Township,
Cumberland County. Pennsylvania. and known as Tax Parcel No. 10-20-
3
(i
1842-088A is vested in Lester Associates, a Pennsylvania general
partnership.
Respectfully submitted,
DATED: ~, 1996
GATES & ASSOCIATES, P.C.
m fll ~
BY: (i/lU -'_.
Mark E. Halbruner. Esquire
Supreme Court I.D. #66737
1013 Mumma Road. Suite 100
Lemoyne. PA 17043
(717) 731-9600
(Attorneys for Plaintiff)
4
VERIFICATION
The foreqoing Amended Complaint is based upon information
which has been gathered by my counsel in preparation of the
lawsuit. The language of the document is that of my counsel and is
not my own. I have read the document and to tne extent that it is
based upon information which I have given to my counsel, it is true
and correct to the best of my knowledge, information and belief.
To the extent that the content of the document is that of my
counsel, I have relied upon my counsel in making this verification.
This statement and verification are made subject to the penalties
of 18 Pa.C.S. 64904 relating to unsworn falsification to
authorities, which provides that if I make knowingly false
averments, I may be subject to criminal penalties.
LESTER ASSOCIATES, a general
partnership
BY:
Sidney
General Partner
Dated:
1/ 1'/
,
, 1996
EXHIBIT A
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(tItis ., ~ndtnturt, JUDB THB
,,:./ i\ First "1101 .111nuarl/ inth,"lQ,r
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01011.1' I.prd on, 11uJUI~nd nin, hundrlcl and rlinetv rive
"II,tw"u Lester 'Associates, HOMe Olliee at 111 "residential' Blvd., Suite l4'l,
Ba I a C,vm~vd PA 19'104
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01 IhtJ flr.e par', and
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, "Lester Associates L.L.C;. r,rantee
,111 Presidential Blvd.
, 'Suite WI
'Bala Cynwvd, PA 19'104
of 1M IIc(md pari:
.tt"fBBft~. ThaI th, .aid. party fJl thtJ jlr" pc.rt, lor and in con,icl,ration 01
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Ihu"m 01 $1.01) .
lawfu' mon'lJ 01 the Unittd Sta.t" ol.41Mrlctl
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w,,, and tndy paid 6y tIuI ,aid
pa.rtU 01 thtJ "com!, po.r' to thtJ ,aid party 01 thtJ jlr,' pari, 'tI' ami 'NION IhtJ ",-
IIa'lnt tlna' cldZlv,,.,, 01 tMII pr"tmtl, IIUJ ",c,lpt whtJrf/o/ W htJrNJ71 lUJknowl,dt,d,
has Irant,d, ba.rlalll,d, ,old: all~lI.(l, onlt'.ojf,d, r.ualBd, conv,y,d
and confirmsd, and by till" pr'IIn" Irant, ba,rltlin, "", alun, ,nl,off,
,.,ucu" conv,y a.nd confirm, unto thtJ ,a.Ul party of 'h, ,scond pari,
.
htJira and culip." .4LL
(See attached descrintion)
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This Deed Drenared bv Sidney l1eel:er.
I hereby certify address of r.rantee is:
111 "residential !llvd., Dala Cvm~"d. ",~ 11}'l'J4
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polAt 01 bqlClAll11 'OIIeb U 4'1~'" * aiaue.. 17 ..00IIde
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aa h'DIl plA iD ebe lIUe'~UM 0' '~AlId1 LIDe,' a U 'oot w14.
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LallI. lIital . ollne C~ CIlII'dIIlC., ,--viAl . JIl4~"" 01 a10.00
c.ee, 1.lIllcea4IcS by . ohord ~b II date... .a lI1auc... 31
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a poillC, CIlIIDO' &11' tbe .... IfOnla It date... lI,lI1auce. at
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a ollne CIIe 1.'C, bavtAt I eadiu. o. J'O,Q~ '~(aubeea4e4
by a lIIIord Monla 74 eMle... II llillUe.. 14 .ee*, lUe
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CClIn'ADIIJ1Q aa .IS aoc.. &114 &leills pan of a ccaae elf' 1&114
lunaf.d by D.'. Iaff.DlpaCSI" &ad ".aciae.. '?!l' CRlqac..
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~n Uu 11141' olouI' LortJ OM IMU6t111fJ nlM Au1lfJ1'Id tlnd 'I ~
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Uu 11'1&1161'1' DIm,. to NtJltll 'lIid'n".d 611 tM willlln cUld, tU lueh con.id'1'I&1Ion 16
. d.6/l1u4111 P. L.19t/8, 0.49,810.1(0),161 . .411 01 whloh u
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NOTARIAL SEAL
MEUNOA S PAOLO, NoIII~ PuDIoC
L_ MertOll Twp. Montgomll_Co
CommisSion . tel 22. ,
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EXHIBIT B
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~htn ~u tutnft, JUDE THE
2nd "11 01
01 our Lord on' 'hocuand ntn, lnmdr,fl c"lei
I IttuJffU
tra th, II1C1r
January
Ninety Five (1995)
Lester Associates L.L.C., Grantor
. ....
ol'Mfil"J,parl,ant!, Gateway Square Assochtes, L.L.C.. a Limited L1abl1ltl'
Com~any, r,rantee
01 1M "contl par':
IIttnfssttl,. XIuU tlu ,aUi partu..ol 'Iu fird par', for and tra coraluuN'iora of
'M ."m 0/ One Dollar
lawful mon'l! 0/ tlu Untl,d SlaUl 01.47JUrlCA
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WlU a"dlru'1/ paW l>1/ '^' lCIid
partu 0/ thl "co,", par' 10 'M ,aUZ partu 0/ 'M fir" pu.rl, cd and H/o", '^' IIl-
IlIa'inf and ,"liv,ry of lhu. pr",n", tAl ".cllol whlrlOj i.I hR.l>y ADlcnQwuaJ,d,
has Jranl.d, barJain.d, 'oW, alilnMl, .n/lOff.d, ,.,lMuld, conv~1d
and confirm,d, and l>/I 11u" pr".nl. ,.Jranl, bar,lai1a, ..U, aJilII, ,rallOff,
,.,ucu', conv.y and confirm, unlo 'Iu ,aJd, pa.rlu 01 'hi "~nd pal", the 1 r
!uti', and cu,t.tn., .4LL ' .'
(See attached description)
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This Deed prepared by Sidney Becker.
J hereby certify address of the ~rantees
l1,l,P~~l1dential Blvd.. Ball Cynwyd. PA
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UfOgftl1'f wi',. AU Anci lintu~, CM 6~llcilnt" Improwrrunll, WOCHlI, IIICIV', "'""",
JiHrllu, prlviul", lurldltal1WlI" allei appur"nallCU, 10 'M 'al1W wWlltlnl 0,. In
all1/ wil. apPIJI'tainlnlamt 'M ,..v.rllon All/I 1'IIv.r,101ll, r'mGliUUr CIIIIl r.mAln-
iUr., ,..n", lI.u", CJnci 'M pro/lll Uulr,ol, AlIll 01 ,v.rl/ PtJI" Gnci pG1'DIIJ IJur,ol:
.Anb also, AU 'M "tau, "'tlll, mill, 'n"",,', prop'''''', 1JOI''',lDn, Gla4m, Amt ,"_
manll wl",,',o.v.r, bo,h, In law anci lII/ul'lI, 0/ 'M ,alei PtJI"1I 0/ 1M jlr" pal", of, I,.
anlllo 'I" ,alei p1'IImll", 1411'11, '/l/J appurt.nanG"" .
Ufo l1auf anh to l1o(h 1M ,Glci p,."",II.., wllA AU Amt .IIItular IhII APPum-
IICInDII, unto 1M 'AIei party 0/ 'A. "Gonci pari, their MIl" AIIIlGI,111ll,10 'h. DnlV
pro/Hr UMII, wn,jI' Anll b,'wol olllu 'Alei par'lI 01111. "conll parl, . hiliI'M
IInll CII/llllU /or.v,r.
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.4J(D 1Il/J ,aill party of the first part, themselves,
Their MIl", 'XlD:l.lor, alld tulmlnll'ralor, ho 61/ 'hII" p1'll"nll QQV,.
FUJII', Iran' amt all'" 10 anll wi,h, Ilu ,alei par'lI 0/ 'All 'lIcomt par', the1 r
lull" amt ""IJll', IIlal Ilu ,alei of the f1 rs t part,
Their MIl", aU anllllllJular'M lundUanun'. Gnci 1'1'11",,11.. hIIl'fm lIbov.
cUlcrlbtlci allllll'Clll"ei, or mtllI'lo1UJei amt inumUei 10 HIIJ, willi, Ilu appurU1ICI1I1lU
unlo lIu ,alei par'v 0/ CM 'IIGonll par', the'r ' lull" anll GIll".., atailU'
1Il/J ,alei party of the f1 rs t !,art .
The1rhtlir" anci QIGlnI. cUI anci nil"'" DUNr
p,r,oll or plr'olU WhDmltHllI,r lau'/uII1/Dlal".lnl or 10 Dlalm Ilu ,GnU or AnJl par'
1lu1'll0f, by, from, or under it, them or any of them
8H.IlLL amt WILL subject IS aforesaid
fo,./JIJI,. DEFEND.
31ft IIUnlJJJJ .~ff'of, Ilu IaUj pari
do M,.,..,.1o ,,' their ha1&ci s A
fI,.., lI60vII WI'l'U,.,
IIClMn\ ...al.... AND DILIVUID}
IN 'rHII 'UllllQI or By :
Jr.4BIUN2' All
of Ilu fir" pari 10 IAn. P,...1IlIN
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It, U I,mtmbtr,b. lhalon '1&16 12th d41/ 01 July
in U~, 1/141' 01 QUI' LmJ DII' 'IUIUlana nln, h.unam and Ninety r lYe
lHlol" mI,
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pI7'onan1/Gp~nhi Sidney Becker, Leonard Becker, Hark Becker, Brie
Becker, Judith Becker and Wilma Shapiro
IC/IUI, r Gm 'Gli6ftMJ i a 1M pallIDI' mln'lolllG ill ,.. CIllON tIud 01' OOllW1/"
Gnc, ana ac/enowudJ,d IJuJI they "J1Ud, 'laud Gild d4Uu,,,d "". ,tJIIU (II
their acl Gnd cllld. TM lulI4IId tJC'ua' oo1lofKUrallon paltJ 01' to 6, paltJ 101'
1M IrQlUl'" o/Ii'" 10 ,."d'/I ,uid,nQlct bll'll, wi'h.in a"d, (II 11"'11. con,id,ro'ion 16
d4ft1Ud in P. L. 1988, c. 49, a,c.l(e), 1611.00 . .4" olIC/AlM"
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NOTARIAL SI"L
. MARK J. ~l:' f,;i. !'Ihl.'1 P"b'lt
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POLICY HO. D049B33CP
· EXHI81T A
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ALL THAT CERTAIN tract of land
County. Pennsylvania. bein~ d.,
Subdivision aad. for Croll~atec
D..ds Offic. of Cuab.rl.nd Cou~,
bounded Irld ducribed as folio..
,~t.d in Ha.pden Townlhip. Cu.berl.nd
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.n Plan Book 51. Pa,. 109. .nd b.inl
BEGINNINC .t .n iron pin on the tiwllth.rn ritht-of-way lin. of C.rli.l.
Pil.. U.S. Rout. 11 Cal.o known a~ P.nn.ylvani. L.~ill.tive Rout. No.
34). ..id point bein~ 3Q fe.t..outh of the c.nt.rlin. of ..id C.rli.l.,
Pike at the line at llnda naw or tar..rly ot Ha.pd.n Tawn.hip' thence :
fro. ..id point of b'linnin~. South 10 d'lr.el 03 .inut.s 57 ..conds
W..t. 790.29 fe.t to an iron pin' th.nc. by the .... I Ind. 80uth 8B
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dl~r... 34 .inut.. 24 I.cond, W..t. 1113.75 f..t to .n iron pin in the
cent.r line of Br.ndy Lftn~. . 33 foot wid.'ro.dl th.nc. .lon~ the c.nter
line of ..id Brlndy Lan. ~nd bY~~~.I'nd. now or for..rly of the Unit.d
8t.t. Gov.rn..nt the tollowin~ ~our... end di.t.nc"1 North 03 delr...
40 ainut.. 36 ..cond. W"\':.275 5~i~.,t.:ta~.,IPik" th.nc. by the .....
Nor.th 00 d'~re.. 40 .inut~. 36 eC!J!'ldll">('I.il}., 315.49, flit to . .pik..
..id point b.int the lout~erly in. pt,~.w 'r.ndy Lane. a. .hown on the
.tor...id Pl.n'of 8ubdivi~ion f r Cro.I..t... Inc.' th.nc. by ..id line
of N.w Br.ndy L.n.. with. curv to the right. h.vin. . r.diu. of 270.00
t..t. C.ubt.nd.d by I chO~d Nor h ~9 de.re.. "2 .inut.. 27 ..cond. E.lt.
266.86 fee\) .n arc dhhflCI!' of~79~14..1'..t ,to . pointa ~h.nc. by the
...e North 89 d.~r"1 19 ~inut.. 24 ~.cond. Ea.t. 1~2.Bl f..t to .
point' thence by the la.. ~i~h I curve to th.:l.ft. havin~ I rldiu. ot
390.00 t.et. C.ubtend.d by .chord'Horth 74 d.~r... 45 ainut.. 54
..condl E..t. 196.06 f..tf~.n/lrc'~i.t.nce ot l'B.19 t..t to . point'
thence by the .a.. South 29 d..r... 47 .inute. 36 ..condl E..t. 15.00
teet to . point' thence by the ..... with. curv. to the 1.ft. h.vint .
r.diu. of 405.00 feet. Clubt.nd.d by . chord North 4B de.r... 53 .inute.
47 ..cond. E.lt. 158.B6 f..t) .n .rc di.t.nc. of 159.B9 f.et to a point'
th.nc. by the ..... North 37 de,re.. 35 .inut.. 11 ..cond. E..t. 176.65
f..t to . pointl th.nc. by the ..... with. curv. to the ri~ht. h.vin. I
radius of 65.00 f..t. C.ubt.nd.d by a chord North 77 d.~r... 5B .inut..
44 ..cond. E..t. 84.24 fe.t) .n .rc di.t.nc. of 91.65 f..t to a point on
the .outh.rn ritht-of-w.y of C.rlille Pike afor...idl th.nc. by the
..... with . curv. to the ri~ht. havin~ . radius of 760',49 f.et.
Csubt.nd.d by a chord 80uth 59 de~re.s 57 .inut.. 47 ..cond. Ea.t.
442.68 f..t) .n arc diltanc. of 442.74 f..t to .n iron pin It the point
of BEGINNING.
CONTAINING 22.35 .cr.. Ind b.in~ part of . tr.ct of land .urv.Yld by
D.P. Raften.per~.r Ind AIsoci.te. for Crol.~.t... Inc.. la.t r.vi..d
.June 19. 1986.
BaOIl .;1.2'7 PACE
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LISTIR ASSOCIATIS, a qeneral
partnerlhip,
Plaintiff ,
IN THI COURT or COMMON PLIAS
CUMBlllLAND COUNTY, PENNSYLVANIA
GATEWAY SQUAll ASSOCIATIS,
LLC, a Tennessee limited
liability company, and
DIPAJl'l'MBN'l' or azVBNUI or THI
COMMONWEALTH or PENNSYLVANIA,
Defen4ants .
CIVIL ACTION . LAW
NO. ",f.;) ')3 CIVIL TERM 1996
VI.
ACTION FOR DECLARATORY JUDGMIN'l'
COMPLAINT
AND NOW, comes Lester Associates (hereinafter "plaint.iff"), by
and through its counsel, Gates & Associates. P.C., and makes the
following complaint for declaratory judgment:
1. This is an action for declaratory judgment pursuant to 42
Pa.C.S. S7531 et ~, for the purpose of determining a question of
actual controversy between the parties hereto.
2. Jurisdiction of this action is based on 42 Pa.C.S. S7533.
3. Plaintiff is a general partnership with its principal
office at 111 presidential Boulevard, Suite 140, Bala Cynwyd,
Montgomery County, pennsylvania 19004-1086.
4. Plaintiff is registered as a fictitious name with the
Pennsylvania Department of State, corporation Bureau.
5. Defendant Gateway square Associates, LLC (hereinafter
referred to as "Gateway") is a Tennessee limited liability company
with its registered office at Executive Towers One, 408 North Cedar
Bluff, Knoxville, Tennessee 37923.
6. Defendant Gateway is not registered with the pennsylvania
Department of State. Corporation Bureau. as a foreign limited
liability company.
7. Defendant Pennsylvania Department of Revenue (hereinafter
referred to as "Revenue") is an agency of the Commonwealth of
Pennsyl vania wi th its executi va of fices loca ted a t Strawberry
Square. Harrisburg. Dauphin County, Pennsylvania.
8. By way of a deed dated August 19, 1992, and recorded
October 23, 1992. in the Cumberland County Recorder of Deeds Office
in Deed Book Y-35, Page 442. Plaintiff took title to a certain
commercial real property (hereinafter the "Real Property") located
in Hampden Township. Cumberland County, Pennsylvania. and known as
Tax Parcel No. 10-20-1842-088A.
) 9. On March 20. 1995. a deed was recorded in Cumberland
County Deed Book 119, Page 916. in which Plaintiff purported to
convey the Real property to Lester Associates, LLC. A copy of the
deed is attached hereto as Exhibit "A".
10. Lester Associates, LLC is not registered as a fictitious
name or as a limited liability company in Pennsylvania, or to the
best of Plaintiff's knowledge. in any other jurisdiction.
11. On August 23. 1995, a deed was recorded in Cumberland
County Deed Book 127. Page 62, in which Lester Associates, LLC
purported to convey the Real Property to Defendant Gateway. A copy
of the deed is attached hereto as Exhibit "B".
12. From October 23, 1992. to the present. Plaintiff has
2
trebted the Real Property as a partnership property.
13. By way of a notice of determination mailed December 8,
1995, Defendant Revenue notified plaintiff that realty transfer tax
had been assessed against the March 20, 1995 deed.
14. plaintiff has appealed the realty transfer tax assessment
by filing a petition for redetermination with Defendant Revenue's
Board of Appeals.
WHEREFORE, plaintiff respectfully requests that the Court
issue a judgment declaring that:
A. The deeds recorded on March 20, 1995, and August 2:'\,
1995, as described hereinabove, are null and void and should be
expunged from the public record; and
B. Title to the real property located in Hampden Township,
Cumberland County, Pennsylvania, and known as Tax Parcel No. 10-20.
1842-088A is vested in Lester Associates, a pennsylvania general
partnership.
Respectfully submitted,
GATES & ASSOCIATES, P.C.
By:'J"7Io1i/1k.ct2
Mark E. Halbruner, Esquire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for plaintiff)
DATED:
j-b
, 1996
3
EXHIBrT A
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Ba I a C,vn'1vd PA 191)()4
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Lester Associates L.L.C., r,rantee
111 Presidentfal Blvd.
Su f te 14'1
Bala Cvnwvd, PA 19104
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.ttt1tJlJl,t~, T/uU th, ,aid. parlg fJl tlu ftr" pll,.t, fo,. and in tJoll,uuraUon 01
'h. "''''' 01 $1.01) .
lawfu.l 7n(Jn'1J 01 tM Ulliud Stau, 01.A7lUrlcCl
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PtJI"1J of elu "cond par' w 'Iu ,aid. parlg of elul fird pari, 'II' tlnd, ~/or' elu ",,_
"41;"'1 and,' cldllvtJ,." of th4" "r,,/Jn". UWI ncsipt w/uJrtlo! t. lurNJ7/ a.Dkllou,'l~d!sll,
has IranttJd" barlainsd, ,old.: alimed, unleotftJd, reua,sd, conl1,y,d
and confirm,d, and by tlu" pn,mu Irallt, barlllin, "ll, alun, /JIJltJolf,
NUCU", conl1tJy and, confirm, Wlto lluI ,aid. PtJI'ty of IhtJ "c9nll ptJri,
1uIi1-, and cu,ll1u,.ALL
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I hereby certifv address of ~rantee Is:
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polAe oC bqlllAlq louth 10 deina. I ~C.. 11 ..cOlld.a
Il..e 1Io.a. "ae Co all bOA pla, theAC. by Che _ l&llda
'outb .. dair... J, alAyta. a, .aClOllda 1l..C 1113,'1 Caae to
all bOA pia ia I:IIe aent.rUIIe oC 'r&lldy LIlla, a U tOOl: wida
road, eheaaa alOAf ClIa a.ae.rllDe oC aald iraady LIlla lUlcl by
the laDda IIOW or 'olMrly 0' tile \/IUCed ICaC.. GovarllMlll:
ebt tollo.l,ae lIOIIra.. &lid dl.eaac... IIorl:h J cIai.... .0
alAye.. J.'..cOAda Wa.C a7S.IS C..e to. .p1ka, ebtAa. ~
tile a..., Norcll 00 deir... ,0 ~t.. II aaClClll4ll 1f..1: US."
'.at co a ap1ka. .aid polae lIalae, Cllt 'OIIClltrly UJ18 0' araw
'r&lldy LIlla. .. .1lowQ OA tile .Cor.aald .lall 0' llIIldlvi.10A
'or C;rouiat:a., JAG., ebaAc. ~ ..ld llne 0' ar.. .rlUlclY
LIlla. wlell a CNrVa co t:lIa'rli"C, ,lIav!af . J~III ot :170.00
"ae, 1.~eeadN ~ a allol'd "ore~ II deice.. ,a II1l11&e.., a,
..aODda 1a.1: a..... t..CI all era 4l.l:IACe ar a7,.1, t.al: co
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1".0' taatl all era 4l.taACla oC 1".1' Caac Co . polDl:,
ebaAca ~ tile .... 80111:~ at deice.. n 1IiAa.It.. JI .acOAda
l&8e lS.00 Caae to a polAe, tbaAce by t:lIa ...., wlt~ a CYrYa
co Cllt latc, lIavlDi a radi... aC 'OS.OO r..t, (AYbcaadtd by a
abord Kortll ,. dtir... .3 II1l11&ta. " .aaOAda l&8e lS.."
taacl all era dl.t:aIlGa ot 151." Caat to. pellAC, cbaAca by
ebt ..... Korell n clair... IS aiAye.. 11 ..00Dda 1I&at: US."
taae CD a poue, ebtAca by ehe ..... wiell a CIIrYa to tile
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rlill~, bavlAi . radJ.... ot 'S.OO Ca.t. 1.~eaD4ad by a ollorel
KCll:eb 77 deice.. sa allll&ta. at .aaOAda Ia.e ...a, Caacl ..
era dheaaca oC n." Caat eo a polAe OA ella aCl\ltbtna riihe
ot way oC CArll.la .ika aCon.aid, CMllea by eM .~, wlell
a CIIrva riihe, bavlllg a radJ.ya oC 760'." CHe, '(.~eaaded
by . ebol'd .ouell 51 desraa. $7 ~DllCI. t1 .aeOA4a ilul:
"a." Caacl all era 4l.talle. ot ,.a.7. Caae co aD 1roo plD
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tM tran.f,r 01 tillI to ,.,alty ,videnc,d by th, within d,ed" al such consideration i6
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NOTARIAL SEAL
MELINDA S PAOLO, Nola', PulllOC
Lower Mellon Twp I Monlgomt.>fy Co
M Commission e. res JUnd 12. 1998
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MI.lDE THE
2nd day 0/
0/ our Loret 011. tlunucmd nin. hunetr.et and
iit~fn Lester Associates L.L.C.,
January
Nfnety Five (1995)
in thtl1llQ,r
Grantor
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o/fhefirlJepan,anf!, Gateway Square Associates, L.L.C" a Lfmfted Liabilfty
Com~any, r,rantee
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01 Uu 'Ilcona part:
IIUausSdl,. That tha .aill party.,ol tha fir,' part, for and in co1llill.ra,ion 01
th. ."m 0/ One Dollar
lawfu~ money 01 the Ulliuet Stau. oll.lmerica
... .
willi anet trul1l paut b1l U&4 "ill
party of the .eCOM ]XJrt to lha .aiel party 0/ 1ha fir.t part, at anet lNJlor. tJu 1111-
Bllalinl1 anet ddivllry 01 ehBBIl pr/l8l1nts, the reclliut wMrlJ()f i.I herllb!l acknowua.llld,
has 1rant/lcl, bar.laJnlld, .olel, alun/ld, .nflJ()/fllet. rBZ.cuBa, conv41I1Icl
and con/il'mllet, anet by tlU'B pr...nta '.Irant, bar.lain, '1111, alun, .,./.00',
NJUCUB, conv.y and confirm, unto tha .aut pa.l'ty (Jf tM BII~net pa.rl, thei r
luirJl and allBiJnl, .4LL . ..
(See attached descriptfon)
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This Deed prepared by Sidney Becker.
I hereby certify address of the ~rantees fs:
11,1.P374~l1dentfal Blvd.. Bala C.vnwyd, PA 19004
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BOOK 127 r,~Cf
62
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ALL THAT CERTAIN tra~t at l.nd situated in Ha.pden Township, Cu~ber1and
County, Pennsylvania, bein~ designated as Tract 'A' on a Plan at
Subdivision .ade tor Crass~ate.. In~. and re~orded in the R.~order at
Deed. Dtti~e at Cu.berl.nd County in Plan Book 51, Page 109, and bein~
bounded and des~ribed a. tallawsl
BEGINNING at an iron pin on the southern right-at-way line at Carlisle
Pile, U.S, Route 11 Cal.o known a. Pennsylvania Legislative Route No.
34), .aid point being 3Q teet,louth at the ~enterline at .aid Carlisle,
Pike at the line at l.nd. now or tor~erly at Ha.pden Township' then~e
troll ..id point at beginning, South 10 de~rees 03 .inutes 57 .econds
Ne.t, 790.29 teet to .n iran pinJ then~e by the ..ae l.nds South 88
degree. 34 .inute. 24 .e~Dnds Nest, 1113.75 f.et to .n iron pin in the
~enter line at Br.ndy Lan~, a 33 toot wide'roadJ then~e .lons the ~enter
li~. at ..id Br.ndy L.ne and by the l.nds now or for.erly of the United
State Covernaent the tollowing fourses and di.t.nces' North 03 d.sr..s
40 .inuhs 36 .e~ond. N.s~,,275 5=iiifel!t.:to '.., .pik.' th.n~e by the ...e, '
North 00 desre.s 40 ainute. '36 eC\lnd5"'>(' es}, ,315.49 fe.t to . spike, ,
.aid point beins the .aut~erlv ini',' Ilt,,~ew Ilrandy L.n.. .. shown on the
.tar..aid Plan-at Subdivi~ion t I' Crossgat.., In~., th.n~e by said line
at New Brandy Lane, with. curv to the risht, havins a radius ot 270.00
te.t, Csubhnded by a ~ho~d Nor h :S9 degree. '''2 .inuh. 27 se~ond. Ea.t,
266.86 feeU an ar~ dhtall~. ot~79.1,4..reet ,to. pointJ ~h.n~. by the
.... North 89 de~r..s 19 .inute. 24 se~ands East, 152.81 teet to .
paint' then~e by the .a.e ~i~h a ~urve to the:lett, having. r.diu. of
390.00 faet, Csubt.nd.d bv a,chord'North 74 d.sre.. 45 .inutes 54
I." '. .",; ,
..~onds E..t, 196.06 f..U....n...r~:cIht.n~. at .98.19 f..t to . pointJ
th.n~. by the .a~. South 29 degr.es 47 .inut.. 36 .e~ands East, 15.00
fee~ to . point' th.n~e by the sa~e, with . ~urve to the l.ft, h,vins a
radius at 405.00 t.et, Csubtended by a ~hard North 48 degr..s 53 lIinute.
47 ..~ands Ea.t, 158.86 feet) an ar~ distance at 159.89 feet to a paintJ
th.n~e by the .aae, North 37 degrees 35 ainutes 11 se~ond. East, 176.65
fe.t to a point' then~e by the .a.., with a ~urv. to the risht, having a
radiO. at 65.00 teet, Csubtended by a chord North 77 degre.. 58 .inute.
44 .econds East, 84.24 feetl an arc diltan~e at 91.65 feet to a point on
the .outhern right-Of-way at Carlisle Pike ator.said' then~e by the
...., ~ith . curve to the right. having a radius at 7609.49 feet,
Csubt.nded by . chord South 59 degrees 57 .inut.s 47 s.cands East,
442.68 feetl an arc di.tan~e at 442.74 teet to an iron pin .t the pDint
at BEGINNINC.
-
CONTAINING 22.35 acr.s and being part at a tr~ct at land .urvey.d by
D.P. Rattenlp.rger and As.ociate. tar Cross~atel' In~., last revi..d
.June 19, 1986.
"4.01
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BOOK 127 PAGE 65
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THIS IHJ)Dm1U RO~E:i:T P. ZIECLER
'0 LJ.... RECOfl.DER 9E DEEDS
MADB this ~ day o~ ~' 1993, by Ohio ~9M!XtXr.61ttUHTY'PA
Properties, an Ohio general partnership, by its geDM"l1cp~3tnpi'f 2 2S
Joseph H. Swolsky and Robert D. Gersten ("GRANTOR")
TO
Laater Aaeociatea, a Pennsylvanla Canaral Partnarshlp
,
h i dd till Presidential Blvd., Suite 140, Bala Cynwyd, PA 19001
av ng an a ress a
("GRANTBB")
WITNBSSBTH, That the said GRANTOR in consideration of the
sum of T9n ($10.00) Dollars and other good and valuable
consideration including, but not limited to the Amended Plan o~
Reorganization Submitted by CoreStates Bank, N.A., the Order
Confirming Amended Plan o~ Reorganization Submitted by CoreStates
Bank, N.A. and Notice of Auction Sale dated May 1, 1993, and the
Order Confirming Auction Sale of Real and Personal Property of
the Estate dated August 11, 1993, in GRANTOR's bankruptcy case
styled In re Ohio Pennsvlvania procerties pending before the
United States Bankruptcy Court for the Middle District of
Pennsylvania at No. 1-91-00393, paid by the GRANTBB, receipt of
which is hereby acknowledged, does grant, bargain, sell and
convey to, the said GRANTBB, its successors and assigns forever:
· to be held as I'ortnership pro.perty
ALL THAT CBRTAIN tract or and situated in Hampden Township,
Cumberland County, Pennsylvania, being designated as Tract
"A" on a Plan of Subdivision made for Crossgates, Inc. and
recorded in the Recorder of Deeds Office of Cumberland
County in Plan Book 51, Page 109, and being bounded and
described as follows:
BEGINNING at an iron pin on the Southern right of way 11ne
Carlisle Pike, of U.S. Route 11, said point being thirty
BOO~ Y35 PACE 442
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(30) feet South of centerline of said Carlisle Pike at the
lands now or formerly of Hampden Township, thence from said
point of beginning South 10 degrees 3 minutes 57 seconds
West 790.29 feet to an iron pin, thence by the same lands
South 88 degrees 34 minutes 24 seconds West 1113.75 feet to
an iron pin in the centerline of Brandy Lane, a 33 foot wide
road; thence along the centerline of said Brandy Lane and by
the lands now or formerly of the United States Government
the following courses and distances: North 3 degrees 40
minutes 36 seconds West 275.55 feet to a spike; thence by
the same, North 00 degrees 40 minutes 36 seconds West 315.49
feet to a spike, said point being the Southerly line of New
Brandy Lane, as shown on the aforesaid Plan of Subdivision
for Crossgates, Inc.; thence by said line of New Brandy
Lane, 'with a curve to the right, haVing a radius of 270.00
feet, (subtended by a chord North 59 degrees 42 minutes, 27
seconds Bast 266.86 feet) an arc distance of 279.14 feet to
a point; thence by the sarna North 89 degrees 19 minutes 24
seconds Bast 152.81 feet to a point; thence by the same with
a curve the left, having a radius of 390.00 feet (subtended
by a chord North 74 degrees 45 minutes 54 seconds East
196.06 feet) an arc distance of 198.19 feet to a point;
thence by the same South 29 degrees 47 minutes 36 seconds
East 15.00 feet to a point; thence by the same, with a curve
to the left. having a radius of 405.00 feet, (subtended by a
chord North 48 degrees 53 minutes 47 seconds Bast 158.86
feet) an arc distance of 159.89 feet to a point; thence by
the same, North 37 degrees 35 minutes 11 seconds Bast 175.65 ,
feet to a point;
thence by the same, with
BOOR Y35 PACE 443
a curve to the
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right, having a radius ot 65.00 teet, (subtended tiy a chord
North 77 degrees 58 minutes 44 seconds East 84.24 feet) an
arc distance of 91.65 feet to a point on the southern right
of way of Carlisle Pike aforesaid; thence by the same, with
a curve right, having a radius ot 7609.49 feet, (subtended
by a chord south 59 degrees 57 minutes 47 seconds Bast
442.68 feet) an arc distance ot 442.74 feet to an iron pin
at THB POINT OF BBGINNING1
CONTAINING 22.35 acres and being part of a tract ot land
surveyed by D.P. Raftensperger and Associates for Crossgates
Inc last revised June 19, 1986.
TO HAVB AND TO HOLD the same to and tor the use of the said
GRANTBB, its successors and assigns forever; the above-described
~to be held as
premises conveyed by this Deed are conveyed without warranty! psrtnership
property.
This Deed is made under and by virtue ot the Amended Plan ot
Reorganization Submitted by CoreStates Bank, N.A., the Order
Confirming Amended Plan of Reorganization Submitted by CoreStates
Bank, N.A. and Notice of Auction Sale dated May 1, 1992, and the
Order Contirming Auction Sale of Real and Personal property ot
the Bstate dated August 11, 1992, tiled and entered by the Court
in the bankruptcy case styled In re Ohio Pennsylvania Pr0gerties,
pending'betore the United States Bankruptcy Court for the Middle
District of Pennsylvania at No. 1-91-00393.
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".." OD a n.. o. llIWiviaiOD M4e 'ow CII'ClU9a~.., Iao. &114
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lI'aClorded ill &1Ie laClOll'du o. IlMU O'UCItI 0' CllIlIIedNld
CllWIt)' ia .laa IGOI& 11, '-Sa 10', lIlI4 aMUf "-'-".~ &114
deaClII'1DId .. 'oliow..
'UQDIllDQ n .. 111'0O pia OD &lie 1ou&1Ie" 1I'1tM 0' _)' UCItI
Call'ilai. Pika. o' V... ~ta ii. ..14 polo& IIelQf thll1't)'
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iGda DOW ow '_11'1)' 0' a,.", To~p. &Iluce '11'_ .d4
polot o. tegiaAio; lOUtb 10 des"a.a I al4li&U 51 a.C10a0M
W.n 1Io.a. 'a.& &0 .. hOD plo, tllellC. ~ &lie _ i~
lOU&b .. 4.gll'a.. I. ~ytu a. ..00Dda MI.& llil.1' '..e to
.. l"OD pia ill &lie C1_tuU... 0' IlI'&II4r Lue, . U 'ooe wlde
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&1Ie i~ _ 011' '_lI'i)' o. &114 Vla1&ecI '&a&.. ClGvu_t
tile 'oliOlll,A4r 1IOIlA.. &114 cU.caaoa.. IIonla I 4es1l'- .0
aloyt.. If' .aCloaoM lien a15. u 'a.& &13 a ,plA, tllaao. b)'
tll4 _. lIoII'&b 00 desll'''. ..0 al4liu. If .aClOlldll ....& U....
'..e &0 . .p1ka. .ai4 poio& aMialr &lie lOlI&lledr U.. o. lI.w
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11I'U14)' Lue, u 1!lOlIll' OD &1Ie .'011'...14 'i.. o. IlIbcUvl.10D
'011' 1;1I'0..ga&... 1M., &huea ~ ..14 U... 01 ..w IlI'lIAlIv
Lue, wltb . CIlIII'V8 &0 &!Ie' 1I'1gbe, lleviae a 1I't4$1II 01 a10. 00
,..t. 1.llbtude4 ~ a CIlIoII'4 lIo:r&b It \lefl1I'- ..a alllU&.., a1
..C1aad1 ...e acc... ...&) .. all'C1 diacaao. 0' a1'.1.. ..., &0
a poia', -llaRCI. b)' &1Ie _ IIOlI'tb II llesll'- UlI1AIit.. a..
..CIOIIdlI ..., 152.81 '.n &0 . POU', &JIuc:. ~ &1Ie _ wl&1a
a llIIn. &lie hh, lIavialr . lI'acUIIt 0' ISlO.llO. '..r. IlIIIb&1II4..a
br . CIbO:r4 ilonA ,.. desll"" ... ~&u 54 a.ow. ...,
11'.0' 'M') .....0 diacaao. 0' 11'.11 ..., &0 . poU'l
&1Ieao. by &!Ie .... lOUtb all cSegll'a.. n a1lIut.. U HCloaoM
.an 15.00 'H' '0 a pou', &b_. ~ &!Ie _, IIltla a CI\LI'V.
to &!Ie i..e, lIav1ae a 11'&4111I o. "05.00 '.." IlIIIbtaa4ed by a
aboII'4 1I0nb ... desn.. u lI1AIiu. n ,.oODCll "'t 15....
'a.&) .. all'0 1118caao. o. iSlI... '.ee to a pout, tllaao. by
the _. 10ll'tb n degn.. IS alClllt.. 11 ..CIOIIdlI "" ns...
'In to a poiat, thue. by tile _. wltb a CYn. '0 UIe
. ..'.-:'_ .. '~':;.H'~'''~'~.:I~~''...' ..:''';' ;', ,.'.'.'" _:
dllla~, bav1ae a 11'14111I 0' ".00 '"&, I.YIltta4a4 b)' . elloll'll
1l0ll'th 17 desll'M. II alllUt.. .. .aCloaoM Ian ....a. 'Mt) ..
all'o dinaac. o. n." ,..t to a polo' OD tile ""'tbana dllht
0' way 0' Call'il.ia ,1ka a'olfe.all1, tlleoca by &lie ...., wl&b
a CllII'VtI I'l.!lht. Mvlo; . .-14111. 0' HOIl." 'Mt, '1.llbt.llde4
by a cboll'll aOlltb 51 clltl'a.. 51 aJ.cwt.. t7 "C1aad1 ""
..a... '.at) AQ '11'0 di.taoo. o. ..a.7. '..t &0 .. ill'OD pia
at TU JODn' o' UQDIIlIJ1(J,
COIl'I'A1IlIJllJ aa. JS aen. u4 balog pan 0' . &:rag; 0' 1&114
'Yl'Vayed b)' D.'. "".aapU!lA&' &lid A..odat.. '~II' ~lI!Ina.
1Dc l&1t l'avl.a4 JUDe 11, l'.C,
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I,. 1M lJlO,1' of OU1' LoN/, OM tlwUlla1la 1Ii", "'U1Iana a1la '1 -0
lHfo1'l1PU, "'3,dt\tJ ~Oro...rc.\, m......\<. E:v i I<;. &c\<:~"'"
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WM, I am ,atilflld. tlu pallial' 1PU1ItiolllG in the abov. and, 01' convey-
/MO, /Md. a.ck1l0wud.I'd, that, dI1led" 'Ilaud, alia d.Uvllnd. tM ,am. IU
' Gal Gild. d.,d.. TM fu,ll and C1Ctual cOll,uuration. paUl 01' to bll paUl/o1'
1M lran,/,1' of title to Nalty ,vUl'nc,a bll tlu within d,ed" IU such. con.id'1'aUon u
, rUft1utJ in P. L.1988, c. 49, 8,c. l(c), ill . .4110/ which. u
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NOTARIAL SEAL
MELINDA S PAOLO, No""y Pub/oC
lower Menon Twp, MomgomurvCO
M Comml5~n e. rtf! Jund ;n '998
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lB'npU,ef with GU Gnd IinJu~, 1M b~ildillJ', improu'11UlIt8, wooclI, UlGY', rlJhtI,
Wurlu" prlui18Ju, lu",dita.1TUnu aIId appurtsnanc", to t/w 'a11WJ 68/,onJinJ or ill
Gny wil, app4rta.ininl ana tlu nu,r,lon and r,u,,,i01ll, rSmGilUkr and r,main-
iUr" ,.,n", i8,IUI, and eM profttl tlur,of, IUUt 01 ,u,ry part ana pare,/' IMNof:
.Anb alsu. all tlu llfeats, rilht, titl" intsr,st, prop,rly, p06""wn, claim, ana d,-
mana wh4t,o,u,r, both in law and Bquity, 01 tM ,aid partll of llu lir" pari, of, ill
land to t1u ,aid pnmia", with. tM appurt,nancII:
mn J,aue Dnb to J,ulb eM 'Gid p,.,miall, wiU. all anet ,inJular tlUJ appurta-
IUUIC", unto llu ,aid party 01 t/w IIC01l.l1. part, thefr I~,ir' and alsiJ1II, to th. onlll
prop''' ""', 'Nn'Ii' and bMool 01 1M ,aid party 01 tll' "cond ptl/'t, ,luir8
1111" ",11111 /onu,,..
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.otD tI'4 ,aid party of the ff rst part, themselves,
Thef r /Wlr" ,;uoutor, allli Gdminiatrator, bu by tlull pr",ntB COli...
IUUIt, Jrant ana alr" to ana with, eM ,aid party of ths "C01l4 part, thef r
I..il', and ""iJ1II, that tl.. ,aid of the ffrst Dart,
Their lui,." all and sinJulal' thl I..reliitanulIts and premia" lur,in aboUII
ducri'Nd Gnd Jranl,d, or 11UJnlwmd and int,ncUli to bs so, wilh, eM appurtslUUlcs,
unlo U.. 'Gld par'l/ of 1M ',cond part, thefr Iuil" anli alsiJn" IIlains'
UU'lIid party of the first "art .
Theirhsir" and a.tainst all ana eu,'1I ot/UJ,.
p,r,on or p,r,ons w/~omso~u'r lau1'ullll claiminJ 01' to claim tM sa11WJ 01' any par'
IJunof, by, from, or under it. them or any of them
BHALL and WILL SUbject as aforesa fd
/01''''''' DEFEND.
3In lIuUl.PS .J,eftuf, tlu ,aid part
do lununto lit thei r liand 5 a
fir" aboH wr"ts,..
1IllND. I&ALID AND DILIVUID }
1M TIlII rllllDlQl fW
JY'.JlRR.4.N7' aM
of eM ftrllt pari to Uulil pru,ntB
:S daUd, tlu day ana yltll'
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PDlICY ND. D049B33CP
EXHIBIT A
ALL THAT CERTAIN tra~t of land .ituat.d in Ha.pd.n Township, Cu.b.rland
County. Penn.ylvania. b.ing d..ignat.d as Tract 'A' on a Plan of
Subdivi.ion .ad. for Crossgat... In~. and r.cord.d in the R.~ord.r ot
D..d. Office of Cu.b.rland County in Plan Book 51. Page 109. and b.ing
bound.d .nd d..~rib.d .. followsl
BEGINNING at .n iron pin on the .outh.rn right-ot-wav 1in. ot C.rli.le
Pil.. U.S. Route 11 C.1.0 known .s P.nn.vlvanla L.gi.l.tive Rout. No.
34), .aid point b.ing 30. f..t,.outh ot the ~.nt.rlin. ot ..id C.rli.l.
Pike .t the line ot l.nd. now or tor~.rlv ot Ha.pden Town.hipl th.n~.
tro. ..id point at b.ginning. South 10 degr.e. 03 .inut.. 57 ..~ond.
W..t. 790.29 fe.t to .n iron pinl th.n~. by the .... l.nd. South 88
d.gre.. 34 .inut.. 24 ..~ond. W..t. 1113.75 t..t to .n iron pin in the
c.nter line at Br.ndv L.ne. . 33 foot wide roadl then~. .long the c.nt..
line ot ..id Br.ndv l.ne end bv ~he l.nd. now or to,..rlv of the Unit.d
Bt.t. Goye,n..nt the tollowing Four... .nd di.t.n~..t North 03 degr...
40 .inut.. 36 .econd. We.,. ,275 5~i:1..t.:tci " .pik., thence bv the ...e.
North 00 d.g.... 40 .inut~. 36 .~lInd~"'~"}' 31:1.49 t.et. to . .pike. '
.aid point being the .outh..lv in. "t,tf.w "r.ndv Lane. a. .hown on the
.to...aid 'l.n-ot SubdiYi.ion t I' C.o..g.te.. Inc.1 thence by ..id 1in.
at New Brandv l.n.. with a cu'y to the right. hiving a ,.diu. at 270.00
t.et, C.ubt.nded by a cho~d Nor h 59 d.gr... ~2 ainute. 27 ..~ond. Ea.t.
266.86 ,..t) en ..~ di.t.n~. 0'~79.14 r..t to . point I ~hen~. bv the
.... No.th 89 d.g.... 19 .inut.. 24 ..~on~. E.st. 152.81 '.et to .
point' then~e bv the .... ~ith a ~urY. to the,lett. having. ,.diu. Dt
390.00 t..t, C.ubt.nded bv . chord No.th 74 deg,... 45 .inut.. 54
'.~ond. E..t. 196.06 ,..U'"..n:.rc .eli.tance of 19B.19 '..t to . point!
thence bv the .... South 29 d.gr... 47 .inut.s 36 ,.cDnd. E.,t, 15.00
'..t to . point. th.n~. by the ..... with . ~urY. to the 1.,t, h.ving a
r.diu. 0' 405.00 t..t. C.ubt.nd.d bv . ~hord North 4B dlgr... 53 .inut..
47 .e~ond. Ea.t, 158.86 t..t) .n .r~ di.tln~. at 159.89 t..t to . point'
th.n~. bv the ..... North 37 d.gre.s 35 .inut.s 11 ..cond. Ea.t. 176.65
,..t to a paint. th.n~. by the ..... with . ~u.y. to the right. hiving.
radius at 65.00 t..t. C.ubtended by I chord North 77 degr... 58 .inut..
44 ..~ond. E..t, 84.24 t..t) an ar~ di.tan~. of 91.65 '..t to . point on
the .outh..n right-ot-wav ot Carlisle Pike Itoresaidl th.n~. bv the
..... with. curv. to the right. having a radius 0' 7609.49 t..t,
(subt.nd.d bv a ~ho.d South 59 d.~ree. 57 .inut.s 47 ..cond. E.st.
442.6B t..t) an .r~ di.tan~. of 442.74 te.t to an iron pin at the point
of BEGINNING.
..
CONTAINING 22.35 I~r.s and being part of a tra~t 0' land .uryev.d bv
D.P. Rltt.nsp.rg.r .nd ASlociat.s tor Crolsgat.l. In~., lilt revi..d
Jun. 19. 1986.
,-
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LISTBR ASSOCIATBS, I IN THE COURT or COMMON PLEAS
Plaintiff, I CUMBERLAND COUNTY, PENNSYLVANIA
I
VI. I CIVIL ACTION - LAW
I
GATIWAY SQUARB A8S0CIATIS, I NO. 96-1233 CIVIL TBRM
LLC, et al. , I
Defendants. I ACTION rOR DBCLARATORY JUDGMEN'r
A~rIDAVIT O~ SBRVICB
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
: SS:
,., ;/1 n /
Be it known, that on the .i...!:::- day of h'Dr,'
before me. the subscriber, a Notary Public. personally
MARK B. HALBRUNBR. who, being duly sworn according to
depose and state as follows I
1. I am an attorney licensed to practice law in the
Commonwealth of Pennsylvania. and I am employed by the law firm of
Gates & Associates. P.C., Lemoyne, pennsylvania.
. 1996,
appeared
law. did
2. My law firm represents Lester Associates, a general
partnership, in connection with the above-referenced matter.
3. On March 29, 1996, I personally served a true and correct
copy of the complaint in the above-referenced matter by certified
mail to Barnett & Weiskopf, Agents for Gateway Square Associates,
LLC, 408 North Cedar Bluff Road, Suite 350, Knoxville, Tennessee
37923, which accepted delivery of the same on AprilS, 1996. The
certified mail receipts are attached hereto as Exhibit "A".
4. On March 6, 1996, I personally served a true and correct
copy of the complaint in the above- referenced matter by hand
delivery to each of the following:
Office of Chief Counsel
pennsylvania Department of Revenue
10th Floor, Strawberry Square
HarriSburg, Pennsylvania
Office of the Attorney General
16th Floor, Strawberry Square
Harrisburg, pennsylvania ,11 ~
~A/{, v~
MARK E. HALBR ER
day
SWO~ TO AND
of n r; /
I
SUBSCRIBED before me, a Notary public, thia ~?/~h
~;<' -I (! J-"Ji I! (u_~
No ary Public
My Commission Ex lres: NolanalS...
Jane' C, Nacleno, Nolary P\JllIo
Lemayne So,o, Combelland CoIr1lV
My CommiSSion E.pir.. Apn/18. ,_
M<mler, Pemsytvaria..............
, 1996.
-..' ,
PRAECIPE FOR usmc; C.-'SE FOR ."aCiC:'tIE:'lT
t:'tlual 1M ryplw~nln md submimd in duplic::ul'
TO mE PROTHONOTARY/OF C1.,)IBERL\."iD COl':IITY:
PIaII !In dIt wldWI malllt (or :hi lIur:
o Jl:t.Trial ..vpm.rll CJIIn
[i) AtJWIl.IU C~urr
. CAPTION OF CASE
(11Im apdoD IIIUII bl IWlllIll Cull)
Lester Aqsociates,
a general partnership,
.
(PbiIIam
...
Gateway Square Asso~iates, LLP,
a Tennessee limited liability
company,
(Iltinuwu)
...
" 96-1233
.,\J.
Term
9 96
1-
C!\'i1
I. SWlllllrlIf to be ~d (L ... jlbIIlriff's maaoll far nrw t:W.
dlC1IIdIIl1'1 dImIIrm to .:GDJtlblllt. .rc.):
Plaintiff's Motion for Adjudication and Final Decree upon Default Judgment.
.
:. IdIIlU(y CIlWIIIIwllo w\IllqUI =e:
.
(a) Cor ;1aiIItIIl':
Addr..al
(b) Cor dlinubllt:
Addnlll
Nark E. llalbruner, Esquire
Gates & Associates, P.C.
lOD ~turrma Road, Suite 100. Lemoyne, PA 17043
No appearance has been entered.
J.
I wIIll101lfy all panIa III wtirlq wi:* cwo day, =r :1m ~ lw :1111
Uaud (or 1tIUJlI'lI1. ~
4.
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LESTER ASSOCIATES, a general
partnership,
Plaint if f,
I IN '!'HE COURT 01" COMMON PLEAS
I CUMBERLAND COUN'l'Y, PENNSYLVANIA
I
I
I
I
I NO. 96-1233 CIVIL TERM
I
I
I ACTION l"OR DECLARATORY JUDGMBN'l'
vs.
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company,
Defendant.
BRIEl" IN SUPPORT OF MOTION POR ADJUDICATION
AND PINAL DECREE UPON DEl"AULT JUDGMENT
I. STATEMENT OF FACTS AND PROCEDURAL HISTORY
Lester Associates (hereinafter "Plaintiff") is a general
partnership with its principal office at 111 Presidential
Boulevard. Suite 140. Bala Cynwyd. Montgomery County. pennsylvania
19004-1086. Plaintiff is registered as a fictitious name with the
pennsylvania Department of State. Corporation Bureau. By way of a
deed dated August 19. 1992. and recorded October 23. 1992. in the
Cumberland County Recorder of Deeds Office in Deed Book Y-35. Page
442. Plaintiff took title to a certain commercial real property
(hereinafter the "Real property") located in Hampden Township.
Cumberland County. Pennsylvania. and known as Tax Parcel No. 10-20-
1842-088A.
Gateway Square Associates. LLC (hereinafter referred to as
"Defendant") is a Tennessee limited liability company with its
registered office at 408 North Cedar Bluff Road. Suite 350.
Knoxville. Tennessee 37923. Defendant is not registered with the
Pennsylvania Department of State. Corporation Bureau. as a foreign
limited liability company.
On March 20. 1995. a deed was recorded in Cumberland COunty
Deed Book 119. Page 916. in which Plaintiff purported to convey the
Real Property to "Lester Associates. L.L.C." On August 23, 1995.
a deed was recorded in Cumberland County Deed Book 127. Page 62. in
which "Lester Associates. L. L.C." purported to convey the Real
property to Defendant. "Lester Associates. L.L.C." is not
registered as a fictitious name or as a limited liability company
in Pennsylvania. or to the best of Plaintiff's knowledge. in any
other jurisdiction. Despite the aforementioned deeds inVOlving
"Lester Associates. L.L.C.". Plaintiff has treated the Real
Property as a partnership property from October 23. 1992. to the
present.
By way of a notice of determination mailed December 8, 1995.
the Pennsylvania Department of Revenue (hereinafter "Revenue")
notified Plaintiff that realty transfer tax had been assessed
against the March 20. J.995 deed. Plaintiff has appealed this
determination to Revenue' s Board of Appeals (hereinafter the "Board
of Appeals") .
On March 6. 1996. Plaintiff filed the original COmplaint in
which Defendant and Revenue were named as defendants. The
Complaint was duly served on both parties and the Attorney General
of Pennsylvania. and an Affidavit of Service was filed. On or
about March 15. 1996. the Attorney General filed Preliminary
Objections on behalf of Revenue. On April 19. 1996. Plaintiff
2
'I
filed an Amended Complaint which. inter alia. removed Revenue as a
defendant.'
On Avril 19, 1996, Plaintiff served the Amended
Complaint on Defendant. Revenue and the Attorney General by
certified mail.
Both the complaint and Amended COmplaint were
properly endorsad with a notice to defend.
Defendant did not file an answer to the Complaint or Amended
Complaint or otherwise plead thereto. On May 13. 1996. Plaintiff
served Defendant with a notice of its intention to file a praecipe
for default judgment. A copy of the default notice was served on
Revenue and the Attorney General.
On May 24. 1996, Plaintiff filed a praecipe for default
judgment with a copy of the default notice attached thereto. On
May 24. 1996. the Cumberland County Prothonotary entered a default
judgment against Defendant. Notice of the default jUdgment was
served on Defendant, Revenue and the Attorney General.
The instant motion was filed on May 24. 1996, and was listed
at that time for argument on June 26. 1996. Along with the notice
of default judgment, copies of the motion and praecipe to list for
argument were served on Defendant. Revenue and the Attorney
General. By Order dated June 7. 1996. a hearing on this motion was
scheduled for June 27. 1996. By Plaintiff's praecipe filed June
17. 1996. this motion was removed from the argument court list. On
'The Amended complaint was filed in response to the Attorney
General's Preliminary Objections which claimed that Revenue should
not have been named as a party defendant but that Revenue should
have been given notice of the proceeding under 42 Pa.C.S. 57540 (b).
3
jurisdiction of this declaratory judgment action is based on 42
Pa.C.S. 57533, which provides:
"Any person interested under a deed may have
determined any question of construction or validity
arising under the instrument ... and obtain a declaration
of rights, status, or other legal relations thereunder."
In order to remove this case from the Common Pleas COurt, the
Attorney General argues that the subject matter falls within the
exclusive juriSdiction of the Board of Appeals and the Board of
Finance and Revenue. It is true that a matter lying within the
exclusive jurisdiction of a non-judicial tribunal may not be the
subject of a declaratory judgment by this Court.
However, the
Attorney General fails to demonstrate how a case, such as this one,
inVOlving the validity of deeds and the title to real property
comes within the exclusive juriSdiction of any tribunal other than
the Common Pleas CQurt. To the contrary, the question of title to
real property can only be raised in the Common Pleas Court. In re
Waltz' Petition for Viewers, 4 Monroe L.R. 67 (1942).
Implicit in the Attorney General's juriSdictional argument is
the assumption that this Court's decision will affect the realty
transfer tax assessment which Revenue has made against Plaintiff.
The Attorney General has apparently taken the position that the
recording of the deeds created the transfer tax liability and
forever transferred jurisdiction over the deeds to the Board of
Appeals and Board of Finance and Revenue. This is not so. Realty
transfer tax is due on any document which "conveys, transfers,
5
devises, vests, confirms or evidences any transfer or devise of
title to real estate". 72 P.S. 58101-C at saq. Therefor&, there
is no basis for assessing realty transfer tax until this COurt has
determined whether the deeds effected a transfer of title to the
Real Property.
The Attorney General makes a second juriSdictional argument.
A realty transfer tax statement of value was filed along with each
of the deeds. On each of these forms, an exemptlon from realty
transfer tax was claimed, and as the basis for the exemption, the
box marked "Corrective or confirmatory deed" was checked. Pointinq
to the claimed exemptions, the Attorney General assumes that the
deeds were valid corrective or confirmatory deeds and maintains
that the question of the deeds' exemption from realty transfer tax
therefore falls within the juriSdiction of the Board of Appeals and
the Board of Finance and Revenue. Again, the Attorney General
overlooks the fact that this Court must first determine whether the
deeds were valid deeds. If the deeds did not correct or confirm
title to the Real Property, and if the deeds did not otherwise
transfer title to the Real Property, there is no basis for
assessing realty transfer tax.
The impact that this Court's decision will have on Revenue's
ability to collect realty transfer tax does not affect the Court's
juriSdiction. The Pennsylvania Declaratory JUdgments Act recog-
nizes the possibility that declaratory relief may effect the
determination of tax by providing:
6
"In any proceeding which involves the effect of any
asserted legal relation, status, right, or privilege upon
the determination of any tax, the appropriate taxing
authority shall be served with a copy of the proceeding,
but if such taxing authority does not enter its
appearance, the requirements of this section shall
nevertheless be satisfied if the court considers that the
interests of the taxing authority are adequately
represented." 42 Pa.C.S. 57540(b).
If, as the Attorney General requests, this case were removed from
the Common Pleas Court because of its effect on realty transfer
tax, the specific language of the Declaratory Judgments Act would
be rendered moot.
B. 'l'JUl COURT SHOULD ENTER A PINAL DBeRBE WI'l'H AN
ADJUDICATION SETTING l"OR'l'H ITS J'INnINGS OJ' PACT AND CONCLUSIONS OJ'
LAW.
In an action for declaratory relief, "It] he practice and
procedure shall follow, as nearly as may be, the rules governing
the Action in Equity." Pa.R.C.P. 1601(a). The rules pertaining to
a default judgment in an equity action are, therefore, also
applicable to a default judgment in a declaratory judgment action.
Darlark v. Henrv S. Lehr, Inc., 360 Pa.super. 509, 511-512, 520
A.2d 1206, 1207 (1987). In an equity action (and by extension, in
a declaratory judgment action), the prothonotary may, upon the
plaintiff'S praecipe, enter a default judgment against the
defendant for failure to timely plead to a complaint containing a
notice to defend. Pa.R.C.P. 1511(a); Darlark, supra.
When a default judgment has been entered by the prothonotary
in an equity or declaratory judgment action, the court must then
enter a final decree upon the default judgment. Pa.R.C.p. 1511(b);
7
Darlark, 360 Pa. Super. at 512, 520 A.2d at 1208.
Although
Pa.R.C.p. l517(a) generally requires the entry of a decree nisi in
an equity or declaratory judgment action, a decree nisi is not
necessary where judgment has been entered by default. Goodrich-
Amram Jd, 51517: 11. For purposes of the adjudication and final
decree, the facts pleaded in the complaint and unanswered by the
defendant should be treated as admissions.
Pa.R.C.p. 1029 (b).
Although the Court may hear testimony to assist in framing the
decree and adjUdication, the Court should not take testimony on the
merits of the controversy and thereby open the default judgment.
Pa.R.C.p. 1511 (b) I Deet. of Environ. Resources v. Allias, 20
~a.cmwlth. 222, 341 A.2d 226 (1975).
C. '!'HE DEEDS RECORDED ON MARCH 20, 1995, AND AUGUST 23,
1995, DID NOT El"l"BCT A TRANSl"BR 01" TITLE TO THE REAL PROPERTY.
It is an elementary rule that in order for a deed to be valid
the grantee must be capable of taking title at the time of the
conveyance. Zulver Realtv Co. v. SnYder, 191 Md. 374, 62 A.2d 276,
279 (1948). "It is basic real property law that a deed from the
owner to a non-existent entity is a nUllity." Daniels v. Berrv,
513 So.2d 250, 251 (Fla. App. 5 Dist. 1987).
"An attempted
conveyance of land to a non-existent entity is void." Share v.
Riekhof, 747 P.2d 1044, 1046 (Utah 1987).
For example, in Trexler v. Africa, 42 Pa.Super. 542 (1910),
the court held that a deed to the non-existent "American Stove &
Lumber Co." did not pass title to the land described therein.
8
Therefore, title to the property remained in the grantors. See
also McCabe v. Burns. 66 Pa. 356 (1870) (title remained in grantor
where grantee company was never incorporated); BOrouqh of Elizabeth
v. Aim Sher CorD., 316 Pa.Super. 97, 462 A.2d 811 (1983) (deed
which purported to convey real estate to a non-existent corporation
had no effect); Zulver Realty Co. v. Snyder, supra (deed did not
pass title where grantee was a supposed corporation that was never
incorporated); Piedmont and Western Investment COrD. v. Carnes-
Miller Gear Co. Inc., 96 N.C. App. 105, 384 S.E.2d 687 (1989), rev.
den. 326 N.C. 49, 389 S.E.2d 93 (1990) (deed did not convey title
to dissolved corporation) .
The first of the two deeds in question named "Lester
Associates L.L.C." as grantee. "L.L.C." is commonly used to refer
to a limited liability company. a relatively new corporate-type
entity which may be formed by performing certain statutory
requirements. See 15 Pa.C.S. S8901 et seq. There has never been
a limited liability company with the name "Lester Associates
L.L.C." Furthermore, "Lester Associates L.L.C." is not a
registered fictitious name. Therefore, the grantee in the first
deed was incapable of taking title to the Real Property, the first
deed was null and void and the title to the Real property remains
in the grantor, i.e., Plaintiff.
The second of the two deeds in question purported to pass
title from "Lester Associates L.L.C." to Defendant. A deed is
ineffective where it attempts to convey land that the grantor does
9
not own. Hershey v. Poorbauqh, 145 Pa.Super. 482, 21 A.2d 434
(1941). Because the first deed was invalid and conveyed no title,
"Lester Associates L.L.C." had no title to convey. Therefore, the
second deed was null and void. and the title to the Real property
remains vested in Plaintiff.
The Attorney General has suggested that the second deed
corrected the erroneous grantee designation contained in the first
deed and that the two deeds together transferred the Real Property
to Defendant. This argument ignores two facts. First, although
the realty transfer tax statements of value claim that the deeds
were corrective or confirmatory, neither deed indicates that it is
intended to correct or confirm title to the Real property. Second,
and more importantly, the second deed compounded the error
contained in the first deed by naming "Lester Associates, L.L.C."
as the grantor. If the second deed were truly a corrective deed it
would have named Plaintiff as the grantor rather than a non-
existent entity. Because the second deed neither indicates that
title is being conveyed from Plaintiff to Defendant nor recites
that "Lester Associates, L.L.C." originally received title from
Plaintiff, the second deed should not be treated as a valid
corrective deed.
D. RBVENUE'S INTERESTS IN '!'HIS ACTION HAVE BEEN ADEQUATELY
REPRESENTED .
Section 7540 (b) of the Declaratory Judgments Act, which is
quoted in SIII(A), above, gives a taxing authority the opportunity
10
to participate in a declaratory judgment proceeding where it is not
a party to the dispute but where the resolution of that dispute
will effect the determination of tax. In reference to a similar
provision, the Alabama Supreme Court has noted that the purpose of
the notice requirement is to "protect the state and its citizens
should the parties be indifferent to the outcome of the
litigation". Board of Trustees of Erno!. Retirement SYs. v. Talley,
291 Ala. 307, 280 So.2d 553, 555 (1973).
The government's
opportunity to participate may be waived expressly or by failure to
plead. Id.; Leonard v. City of Seattle, 81 Wash.2d 479, 503 P.2d
741, 744-745 (1972).
The determination of this action will effect Revenue's right
to collect realty transfer tax on the two deeds in question.3
Therefore, Plaintiff has served Revenue and the Attorney General
with copies of all documents filed in this proceeding. Because
Revenue and the Attorney General have failed to plead to the
Amended Complaint or otherwise object to the entry of the default
judgment, it can only be concluded that; they have waived their
right to participate in this proceeding and that thair interests
have been adequately represented within the meaning of 42 Pa.e.s.
3The determination of this action will also effect the
assessment and collection of realty transfer tax by the local
authorities. However, local realty transfE:!r tax may only be
assessed and collected to the extent that the transaction is
subject to realty transfer tax at the state level. 72 P.S. S8101-
D. Thus, Revenue is the real taxing authority at interest in this
action.
11
a party to, or given notice of, the Common Pleas Court action; tha
defendants denied the material allegations of the complaint; the
consent decree contained no stipulations of fact; and the Common
Pleas Court did not make any findings of fact but merely accepted
the conclusions of law as stated in the parties' consent decree.
The Board of Finance and Revenue, the commonwealth COurt and the
Supreme Court all decided against the taxpayers with no factual
record before them other than the consent decree.
The instant case may be distinguished from Sabatine on three
important grounds.! First, Revenue has been given the opportunity
to participate in this case from the outset. Plaintiff initially
named Revenue as a party def endant.
When the Attorney General
objected, Plaintiff removed Revenue as a defendant but continued to
notify both Revenue and the Attorney General of all developments in
the case.
Second, there is no consent decree in this case.
Indeed,
Defendant has not even entered an appearance. The Attorney General
implies that the common ownership of plaintiff and Defendant
IIn addition to the differences discussed at greater length in
the text, the following facts distinguiSh the two cases. In
Sabatine, the appellants sought a refund of realty transfer tax
they had paid at the time the deed was recorded. In the instant
case, no realty transfer tax has been paid. In Sabatine, both the
grantors and grantees were married couples. In the instant case,
the grantees were entities, one of which did not exist. In
Sabatine, the Common Pleas COurt action was brought in equity to
void a facially valid deed because of fraud in the underlying
transactlon. In the present case, the relief sought is a
declaratory judgment voiding two deeds inVOlving ~ non-existent
entity.
13
57540(b). To conclude otherwise would mean that taxing authorities
could deny declaratory relief in cases such as this by simply
refusing to participate. Moreover, having waived their right to
participate, Revenue and the Attorney General should not be heard
to complain that Defendant is indifferent to the outcome of this
case.
In an effort to circumvent the meaning of 57540 (b), the
Attorney General compares the instant case to Sabatine v.
COmmonwealth, 497 Pa. 453, 442 A.2d 210 (1981). In Sabatine, the
supreme COurt held that Revenue was not bound by a Common Pleas
COurt consent decree deClaring a deed null and void ab initio.
Consequently, the parties to the consent decree (i.e., the grantor
and grantee in the voided deed) were not entitled to a refund of
realty transfer tax previously paid on the deed.
The comparison between this case and Sabatine would be more
appropriate if it were being made before the Board of Appeals, the
Board of Pinance and Revenue, or the Commonwealth Court, i.e., the
tribunals ultimately responsible for determining whether realty
transfer tax is owed on the two deeds in question. Those tribunals
will have to apply the realty transfer tax law to the facts of
record, inCluding this Court's decree and adjudication. In other
words, those tribunals will decide whether Revenue is bound by this
Court's decision.
Nevertheless, the reference to Sabatine warrants a closer
analysis of that case. In Sabatine, the Commonwealth was not made
12
- ,
transforms this Court's decree into a consent decree. The common
ownership referred to by the Attorney General does not appear in
the record and should not be considered by the COurt when rendering
its decree.
However, even if the common ownership were on the record, it
would not effect the nature of this Court's decree because two
distinct legal entities (a general partnership and a limited
liability company) are named as parties and a default judgment has
been entered in favor of one and against the other. The existence
of the two entities has legal significance despite the common
ownership of interests in those entities.' This fundamental truth
is recognized by the realty transfer tax law and regulations which
provide that corporations and partnerships are distinct entities
from their owners and that a transfer between two entities is
taxable regardless of their ownership. 72 Pa.C.S. SB102-C.4; 61
Pa, Code S91.154.
Third, there is a factual record in this case. Pursuant to 42
Pa.e.s. S7540(bl, the Commonwealth could have entered an appearance
and contested the facts as pleaded by Plaintiff. However, neither
Revenue, the Attorney General nor Defendant answered the Amended
'For example, the same individuals might own the two entities,
but their ownerShip shares might differ from one entity to the
other; the controlling interests in the two entities might he owned
by different individuals; the ownership interests in the two
entities might be subject to two different sets of by-laws or
transfer restrictions; and the two entities might be governed by
different laws and regulations.
14
CERTIPlCATB or SERVICE
I, MaI'k E. Halbruner, of the law firm of Gates & Associates,
P.C., hereby certify that I served a true and correct copy of the
foregoinq Brief in Support of Motion For Adjudication and Final
Decree Upon Default Judgment on this date by first-class mail,
postage prepaid, to the following persons at their respective
addresses:
Barnett & Weiskopf
Agents for Gateway Square Associates, LLC
408 North Cedar Bluff Road
Suite 350
Knoxville, TN 37923
Ronald H. Skubecz, Esquire
Office of the Attorney General
Tax Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
Kathleen K. Shaulis, Esq.
pennsylvania Department of Revenue
Office of Chief Counsel
Department 281061
Harrisburg, PA 17128-1061
GATES & ASSOCIATES, P.C.
By: '(hC0JII fh r;o
Mark E. Halbruner, Esquire
1013 Mumma Road
Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for plaintiff)
Dated: June 27, 1996
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LISTIR ASSOCIATES, a general
partnership,
plaintiff ,
I IN THE COURT 01" COMMON PLIAS
I CUMBBRLAND COUN'l'Y, PENNSYLVANIA
I
I
I
I
I NO. 96-1233 CIVIL TBRM
I
I
I ACTION FOR DECLARATORY JUDGIIBNT
VI.
GATBMAY SQUARE ASSOCIATES,
LLC, a Tennelsee limited
liability company,
Defendant.
SUPPLEMBN'l'AL MBMORANDUM OF LAW IN SUPPORT 01" MOTION l"OR
ADJUDICATION AND PINAL DECREE UPON DBl"AULT JUDGMBN'l'
On Thursday, June 27, 1996, a hearing was held in this matter
before Hon. J. Wesley Oler, Jr., at which time the Court entered an
Order Closing the record and directing plaintiff, within fourteen
days thereafter, to submit a supplemental memorandum of law in
support of its motion for an adjudication and final decree upon the
default judgment previously entered in this matter. Pursuant to
said Order, now comes Plaintiff, by and through its counsel, Gates
& Associates, P.C., and submits the following memorandum of law to
supplement the brief which Plaintiff filed on June 27, 1996:
I. SUPPLEMENTAL FACTS AND PROCEDURAL HISTORY
Sidney Becker, a general partner in Plaintiff, appeared at the
hearing on June 27, 1996, along with Plaintiff's counsel. Also
present at the hearing were Kathleen K. Shaulis, Esquire, who
represented the pennsylvania Department of Revenue, and Ronald H.
Skubecz, Esquire, and John Bobber, a legal intern, who represented
the Tax Litigation Section of the Pennsylvania Attorney General's
office. Defendant did not appear at the hearing.
At the outset of the hearing and after an in camera discussion
with all counsel, the Court afforded Attorneys Shaulis and Skubecz
an opportunity to formally enter their appearances in this matter
on behalf of the Commonwealth. Speakinq on behalf of himself and
Ms. Shaulis, Mr. Skubecz acknowledged that the Commonwealth had
been given a full opportunity to intervene in the procceeding and
then stated that the Commonwealth declined to enter its appearance.
Attorneys Shaulis and Skubecz observed but did not participate in
the remainder of the hearing.
After Mr. Skubecz finished his statement, Sidney Becker
testified on behalf of Plaintiff. Mr. Becker identified a deed
dated August 19, 1992. and recorded October 23, 1992, in the
Cumberland County Recorder of Deeds Office in Deed Book Y'35, paqe
442, by which Plaintiff took title to a certain commercial real
property (hereinafter the "Real property") located in Hampden
Township, cumberland County, pennsylvania, and known as Tax Parcel
No. 10-20-1842-088A. Mr. Becker also identified the following two
deeds recorded in 1995 which are the subject of this proceedinql
~1) a deed recorded March 20, 1995, in Cumberland
COunty Deed Book 119, Page 916, in which Plaintiff
purported to convey the Real Property to "Lester
Associates, L.L.C."
(2) a deed recorded August 23, 1995, in Cumberland
County Oeed Book 127, Page 62, in which "Lester
Associates, L.L.C." purported to convey the Real Property
to Defendant.
Mr. Becker stated that he prepared the two questioned deeds
without the assistance of legal counsel while under the belief that
2
"Lester Associates, L.L.C." was an existing legal entity. Mr.
Becker now knows that there is no such entity. Mr. Becker verified
the remaining facts averred in the Amended Complaint, and the COurt
admitted the three deeds identified by Mr. Becker. After a brief
legal argument by Plaintiff's counsel, the Court entered an Order
Closing the record.
II. LEGAL ARGUMENT
A. THE DUDS RECORDED ON MARCH 20, 1995, AND AUGUST 23,
1995, DID NOT El"l"ECT A TRANS PER OF TITLE TO THB REAL PROPBRTY.
In its previous brief, Plaintiff cited decisions holding that
(1) a deed cannot convey real property to a non-existent entity,
and (2) a grantor cannot convey real property which it does not
own. The facts of record are short and simple. Plaintiff executed
a deed in favor of a non-existent entity, and a second deed was
then made in the name of the non-existent entity in favor of a
third party. Plaintiff has continued to act as if it still owned
the Real Property, i.e., as if the Real Property was a partnership
asset. The third party grantee named in the second deed did not
appear in this matter to defend its title to the Real Property.
Therefore, a judgment should be entered deClaring that the deeds
recorded in 1995 were null and void ab initio and did not convey,
transfer, devise, vest confirm or evidence any transfer or devise
of real estate, that said deeds should be expunged from the public
record, and that title to the Real Property is vested in Plaintiff.
3
B. RBVBNUB' S INTERESTS IN 'l'HIS ACTION HAVB BEIDl ADEQUATBLY
UPUSBNTBD .
The Pennsylvania Declaratory Judgments Act recognizes the
possibility that declaratory relief may effect the determination of
tax:
"In any proceeding which involves the effect of any
asserted legal relation, status, right, or privilege upon
the determination of any tax, the appropriate taxing
authority shall be served with a copy of the proceeding,
but if such taxinq authority does not enter its
aooearance. the reauirements of this section shall
nevertheless be satisfied J.f the court considers that the
interests of the taxinq authority are adeauatelY
reoresented." 42 Pa.C.S. S7540(b) (emphasis added).
The determination of this action will affect Revenue's ~ight
to collect realty transfer tax on the two deeds in question.
Therefore, in an effort to fully comply with 42 Pa.C.S. 57540(b),
Plaintiff served Revenue and the Attorney General with copies of
all documents filed in this action. In light of the continuinq
notice which has been provided to both Revenue and the Attorney
General, the presence of Attorneys Shaulis and Skubecz at the
hearing, and Mr. Skubecz's acknowledgment on the record that the
commonwealth was afforded, but declined, an opportunity to
participate in this action, the Court should conclude as a matter
of law that the Commonwealth's interests as a taxinq authority have
been adequately represented as contemplated by 42 Pa. C. S. 57540 (b) .
C. 'l'HE COURT SHOULD ENTER A PINAL DECREB WI'l'H AN
ADJUDICATION SBT'l'ING FOR'!'H ITS FINDINGS or FACT AND CONCLUSIONS 01'
LAW.
At this stage of the proceedings, it is appropriate for the
4
COurt to enter a final decree with an adjudication containing
findings of fact and conclusions of law. To assist the COurt in
this regard, Plaintiff has attached as Exhibit "A" a proposed
"Adjudication with Final Decree Upon Default Judgment". 1 The
findings of fact set forth in Exhibit "A" were taken from the
pleadings and the hearing record. The proposed conclusions of law
and decree are consistent with the relief requested in the Amended
COmplaint and the legal arguments raised by Plaintiff.
IV. CONCLUSION
For the foregoing reasons, Plaintiff respectfully requests
that the Court enter an adjudication with final decree containing
the findings of fact, conclusions of law and declaratory relief set
forth in the proposed form attached hereto as Exhibit "A".
Respectfully subrrdtted,
GATES & ASSOCIATES, P.C.
By:r!lttg ~ @
Mark E. Halbruner, Esquire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731- 9600
(Attorneys for plaintiff)
DATED: July 11, 1996
IThe proposed adjudication and final decree which was included
with plaintiff's motion has been modified to reflect the
developments that took place at the June 27 hearing.
5
EXHIBIT A
LaSTBR ASSOCIATBS, a general
partnerlhip,
Plaintiff ,
I IN '!'HB COURT or COMMOR PLBAS
I CUMBIUlLAND COlJlil'l'Y, PBNHSYLVANIA
I
I
I
I
: NO. 96-1333 CIVIL TBRM
:
I
VI.
GATBWAY SQUARB ASSOCIATBS,
LLC, a Tennessee limited
liability company,
Det endan t .
ACTION l"OR DBCLARATORY JUDGM1DI'1'
ADJUDICATION AND PINAL DECREB UPON DBPAULT JUDOMIDI"1'
AND NOW, this
day of
1996, upon
consideration of the foregoing Motion for Adjudication and Final
Decree upon Default Judgment, and pursuant to Pa.R.C.P. 1601(a) and
1511 (b), said motion is granted, and the following Adjudication and
Final Decree are entered upon the default judgment issued May 24,
1996:
ADJUDICATION
I. FINDINGS OF FACT
1. Plaintiff is a general partnership with its principal
office at 111 Presidential Boulevard, Suite 140, Bala Cynwyd,
Montgomery COunty, pennsylvania 19004-1086.
J. Plaintiff is registered as a fictitious name with the
pennsylvania Department of State, Corporation Bureau.
3. Gateway Square Associates, L.L.C. (herei.nafter referred
to as "Defendant") is a Tennessee limited liability company with
its registered office at 408 North Cedar Bluff Road, Suite 350,
Knoxville, Tennessee 37923.
4. Defendant is not registered
Department of State, Corporation Bureau,
liability company.
5. By way of a deed dated August 19, 1992, and recorded
October 23, 1992, in the Cumberland County Recorder of Deeds Office
in Deed Book Y-35, Page 442, Plaintiff took title to a certain
commercial real property (hereinafter the "Real property") located
in Hampden Township, Cumberland County, pennsylvania, and known as
Tax Parcel No. 10-20-1842-088A.
6. On March 20, 1995, a deed was recorded in cumberland
COunty Deed Book 119, Page 916, in which Plaintiff pu~orted to
convey the Real Property to Lester Associates, L.L.C.
7. On August 23, 1995, a deed was recorded in C~~erland
County Deed Book 127, Page 62, in which Lester Associates, L.L.C.
purported to convey the Real Property to Defendant.
8. Lester Associates, L.L.C. is not registered as a
fictitious name or limited liability company in pennsylvania or, to
the best of Plaintiff's knowledge, in any other juriSdiction.
9. From October 23, 1992, to the present, Plaintiff has
treated the Real property as a partnership property.
10. The Department of Revenue (hereinafter referred to as
"Revenue") is an agency of the Commonwealth of pennsylvania with
its executive offices located at Strawberry square, HarriSburg,
Dauphin County, Pennsylvania.
with the pennsylvania
as a foreign limited
2
11. By way of a notice of determination mailed December 8,
1995, Revenue notified Plaintiff that realty transfer tax had been
assessed against the March 20, 1995 deed.
12. On March 6, 1996, plaintiff filed the original Complaint
in which Defendant and Revenue were named as defendants.
13. The Complaint was duly served on both parties and the
Attorney General of Pennsylvania, and an Affidavit of Service was
filed.
14. On or about March 15, 1996. the Attorney General filed
preliminary Objections on behalf of Revenue.
15. On April 19, 1996, Plaintiff filed an Amended Complaint
which, inter alia, removed Revenue as a defendant.
16. On April 19, 1996, Plaintiff served the Amended complaint
on Defendant, Revenue and the Attorney General by certified mail.
17. Both the complaint and Amended Complaint were properly
endorsed with a notice to defend.
18. Defendant did not file an answer to the Complaint or
Amended Complaint or otherwise plead thereto.
19. On May 13, 1996, Plaintiff served Defendant with a notice
of its intentJon to file a praecipe for default judgment.
20. A copy of the default notice was served on Revenue and
the Attorney General.
21. On May 24, 1996, Plaintiff filed a praecipe for default
judgment with a copy of the default notice attached thereto.
3
22. On May 24, 1996, the Cumberland County Prothonotary
entered a default jUdgment against Defendant.
23. Notice of the default judgment was served on Defendant,
Revenue and the Attorney General by first-class mail on May 24,
1996.
24. On May 24, 1996, Plaintiff filed a Motion for
Adjudication and Pinal Decree upon Default Judgment and served
Defendant, Revenue and the Attorney General with copies of the
motion.
25. By Order dated June 7, 1996, a hearing on the motion was
scheduled for June 27, 1996, and the Order was served on Defendant,
Revenue and the Attorney General.
26. The hearing on June 27,1996, was attended by Plaintiff's
counsel, Mark E. Halbruner, Esquire, and by Sidney Becker, one of
Plaintiff's general partners.
27. Also present at the hearing were Kathleen K. Shaulis,
Esquire, who represented Revenue, and Ronald H. Skubecz, Esquire,
and John Bobber, a legal intern, who represented the Attorney
General's Tax Litigation Section.
28. Defendant was not represented at the hearing.
29. At the outset of the hearing and after an in camera
discussion with all counsel, the Court afforded Attorneys Shaulis
and Skubecz an opportunity to formally enter their appearances in
this matter on behalf of the Commonwealth.
4
30. Speaking on behalf of himself and Ms. Shaulis, Mr.
Skubecz acknowledged that the Commonwealth had been given a full
opportunity to intervene in the procceeding and then stated that
the commonwealth declined to enter its appearance.
31. Attorneys Shaulis and Skubecz observed but did not
participate in the remainder of the hearing.
32. At the conclusion of the hearing, the COurt entered an
Order Closing the record.
II. CONCLUSIONS OF LAW
1. This is an actiorl for declaratory judgment pursuant to 42
Pa.e.s. 57531 et seq.. for the purpose of determininq a question of
actual controversy between the parties hereto.
2. Juriadiction of this action is based on 42 Pa.e.S. S7533.
3. Lester Associates, L.L.C. does not exist as a legal
entity.
4. As a non-existent entity, Lester Associates, L.L.e. could
neither receive nor convey title to the Real property.
5. This action involves the ef f ect of the parties' legal
relation, status, right and privileqe upon the aforesaid
determination of realty transfer tax, and Revenue may therefore
have entered its appearance in this action pursuant to 42 Pa.e.S.
S7540(b).
6. Revenue's interests in this action have been adequately
represented as contemplated by 42 Pa.C.S. S7540(b).
Based on the foregoing, the following Final Decree is entered:
5
Barnett & Weiskopf
Aqents for Gateway Square Associates, LLC
408 North Cedar Bluff Road
Suite 350
Knoxville, TN 37923
Ronald H. Skubecz, Esquire
Office of the Attorney General
Tax Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
Kathleen K. Shaulis, Esq.
Pennsylvania Department of Revenue
Office of Chief COunsel
Department 281061
Harrisburg, PA 17128-1061
Mark E. Halbruner, Esquire
Gates , Associates, P.C.
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(Attorneys for Plaintiff)
CBRTIPICATE 01" SERVICE
I, Mark E. Halbruner, of the law firm of Gates & Associates,
P.C., hereby certify that I served a true and correct copy of the
foregoinq Supplemental Memorandum of Law in Support of Motion For
Adjudication and Final Decree upon Default Judgment on this date by
first-class mail, postage prepaid, to the following persons at
their respective addresses:
Barnett & weiskopf
Agents for Gateway Square Associates, LLC
408 North Cedar Bluff Road
Suite 350
Knoxville, TN 37923
Ronald H. Skubecz, Esquire
Office of the Attorney General
Tax Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
Kathleen K. Shaulis, Esq.
pennsylvania Department of Revenue
Office of Chief Counsel
Department 281061
Harrisburg, PA 17128-1061
GATES & ASSOCIATES, P.C.
By: rnJ!- ~ @;J
Mark E. Halbruner, Esquire
1013 Mumma Road
Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for plaintiff)
Dated: July 11, 1996
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JUN 2419~6 CV"
Lester Associates, a general
partnership,
Plaintiff
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company; and
DEPARTMENT OF REVENUE OF
THE COMMONWEALTH OF
PENNSYLVANIA,
Defendants
CIVIL ACTION - LAW
NO. 96-1233 CIVIL TERM
MEMORANDUM OF LAW
FACTUAL BACKGROUND
Realtv Transfers Involved
By deed dated August 19/ 1992, and recorded October 23, 1992,
in the Cumberland County Recorder of Deeds Office (Deed Book Y-35,
Page 442), Le.ter A..ociate., plaintiff herein, took title to
certain real property (the "Real Property") located in Hampden
Township, Cumberland County, Pennsylvania, and known as Tax Parcel
No. 10-20-1842-088A.
On March 20, 1995, a deed was recorded in Cumberland County
(Deed Book 119, Page 916), by which Lester A.sociate. conveyed the
Real property to Lester Associates, LLC.
At recording, an
exclusion from transfer tax was claimed on the basis that the
transfer was in the nature of a correctional deed.
On August 23, 1995, a deed was recorded in Cumberland County
(Deed Book 127, Page 62), by which Lester Associates, LLC conveyed
the Real property to the defendant herein, Gateway Square
A..ociates, LLC, At recording, an exclusion from transfer tax was
claimed on the basis that the transfer was in the nature of a
correctional deed.
On December 8, 1995, a notice of determination was mailed by
the Department of Revenue notifying plaintiff, Le.ter A..ociate.,
that realty transfer tax had been assessed against the March 20,
1995 deed in the amount of $110,692.32. The Department of Revenue
determined that one of the two deeds may have been correctional;
therefore, one tax determination was made on the March 20, 1995
deed. On March 6, 1996, Lester Associates filed an appeal with the
Board of Appeals.
Parties Involved
Le.ter A..ociate. is a general partnership with its principal
office at 111 Presidential Boulevard, Suite 140, Bala Cynwyd, PA
19004-1086. Sidney and Leonard Becker are the general partners of
Le.ter A..ociate. and Le.ter A.sociate. has been registered as a
fictitious name with the Pennsylvania Department of State,
Corporation Bureau since November 4, 1965.
Gateway Square A..ociate., LLC is a Tennessee limited
liability company with its registered agent's office at 408 North
Cedar Bluff Road, Suite 350, Knoxville. Tennessee 37923. Gateway
Square A..ociate., LLC has been registered with the Tennessee
Department of State since December 28, 1994 and is not registered
with the Pennsylvania Department of State, Corporation Bureau. The
principal address of the company is 111 presidential Boulevard,
Suite 140, Bala Cynwyd, PA.
Gateway Square A..ociate. is a general partnership with its
principal office at 111 Presidential Boulevard, Suite 140, Bala
Cynwyd, PA, (The same address as Lester Associates) . Gateway
Square Associates was registered with the Pennsylvania Department
of State, Corporation Bureau on October 8, 1993 and its general
partners are: Sidney Becker, Leonard Becker, Mary Becker, Eric
Becker, Judith Becker, and Wilma Shapiro.
Lester As.ociate., LLC is not registered as a fictitious name
or as a limited liability company in Pennsylvania.
The Commonw.alth of Pennsylvania Department of Revenue is an
agency of the Commonwealth with its executive offices located at
Strawberry Square, Harrisburg, Pennsylvania. The Department is
responsible for administering the Realty Transfer Tax Act. 72 P.S.
S8101-C, S8111-C.
PROCEDURAL BACKGROUND
On March 6, 1996, Lester Associates filed a declaratory
judgment action asking that the two deeds recorded respectively on
March 20, 1995, and on August 23, 1995, be declared null and void
ab initio. Gateway Square Associates, LLC and the Department of
Revenue were named as defendants.
On March 15, 1996, the Attorney General filed Preliminary
Objections on behalf of Department of Revenue contending that the
sole involvement of the Commonwealth concerned the imposition of
realty transfer tax and that issue should be resolved at the
Department of Revenue Board of Appeals.
On April 19, 1996, Lester Associates filed an Amended
Complaint which, inter alia, removed the Department of Revenue as
a defendant. The Defendant, Gateway Square Associates, LLC, did
not file an answer to the Complaint or Amended Complaint or
otherwise plead.
On May 24, 1996, Lester Associates filed a praecipe for
default judgment with a copy of the default notice attached
thereto. On the same day, the Cumberland County Prothonotary
entered a default judgment against Gateway Square Associates, LLC.
Notice of the default judgment was served on Gateway Square
Associates, LLC, Department of Revenue and the Attorney General by
first-class mail on May 24, 1996.
By Order dated June 7, 1996, this Court scheduled a hearing in
this matter for June 27, 1996.
I. THE DEEDS INVOLVED IN THIS CASE ARE CLAIMED TO BE CCRRECTIONAL
DEEDS. THE VALIDITY OF THAT CLAIM SHOULD BE DETERMINED AT THE
DEPARTMENT OF REVENUE'S BOARD OF APPEALS.
The Action for Declaratory Judgment filed in this matter asks
that certain deeds recorded on March 20, 1995 and August 23, 1995,
in the Cumberland County Recorder of Deeds Office be declared null
and void and that certain real estate in Cumberland County be
vested in the Plaintiff, Lester Associates. However, at recording,
Lester Associates claimed that the deeds that were filed on March
20, 1995, and August 23, 1995 were correctional deeds.
Correctional Deeds are excluded from the state realty transfer tax.
72 P.S. ~8102-C.3(4). Department regulations provide that:
A deed made without consideration for
correcting an error in the description
the premises conveyed is not taxable.
applies if:
(1) The property interest in the correctional deed is
identical to ':he property intended to pass with the
original deed.
(2) The parties treated the property interest described
in the correctional deed as that of the grantee from the
time of the original transaction.
(3) The parties have not treated the property interest
described in the original deed as the property of the
grantee from the time of the original transaction.
the sole purpose of
of the parties or of
This exclusion only
61 Pa.Code ~91.151.
On December 8, 1995, after review of the Statements of Value,
the Department of Revenue mailed Lester Associates a Realty
Transfer Tax Notice of Determination with regard to the Real
property based on its conclusion that the deed of March 20, 1996
was not a correctional deed.
The Tax Reform Code of 1971 imposes on every person who
presents for recording any document in respect to a real estate
conveyance a state tax at the rate of one percent of the value of
the real estate represented by such document. 72 P.S. 58102-C.3.
Documents which evidence transfers between associations are fully
taxable. Association is defined by the Code, "A partnership,
limited partnership, or any other form of unincorporated
enterprise, owned or conducted by two or more persons other than a
private trust or decede~t's estate. 72 P.S. 58101-C. Associations
are entities separate from their partners. 72 P.S. 58102-C.4.
The event which triggers realty transfer tax is the recording
of the deed. Comach Const.. Inc. v. City of Allentown, 633 A.2d
1336 (Pa.Cmwlth.1993), appeal denied 652 A.2d 1327, 539 Pa. 682.
In the absence of an agreement between the parties. the realty
transfer tax must be borne by seller. Stefanko v. Reed, 86 Pa. D.&
C. 145 (1954). Lester Associates held and transferred real estate
in its capacity as a partnership, and the transfer was between two
separate entities. Such transfers are fully taxable and Lester
Associates sho'lld be liable for the realty transfer tax on the
March 20, 1995 deed.
Lester Associates can contest the imposition of the transfer
tax in the forum the legislature has established. Under the Realty
Transfer Tax Act, 72 P.S. 58101-C, et seq., appeals from
determinations of realty transfer tax are appealable, in the first
instance, to the Department of Revenue's Board of Appeals. 72 P.S.
58111-C(b) . Jurisdiction over any further appeal from this
determination is conferred upon the Board of Finance and Revenue,
72 P.S. 58111-C(c), and thereafter the Pennsylvania Commonwealth
Court, 42 Pa.C.S. 5763(a).
II. THERE IS NO UNCERTAINTY FACED BY EITHER THE GRANTOR OR GRANTEE
UNDER THE DEEDS EXCEPT THE IMPOSITION OF TRANSFER TAX. AN
ACTION FOR DECLARATORY JUDGMENT IS NOT APPROPRIATE UNDER SUCH
CIRCUMSTANCES.
Lester Associates asserts that the Court of Common pleas has
jurisdiction under the Declaratory Judgment Act, 42 Pa.C.S.A.
57533, to decide that no realty transfer tax is due in this case.
The Act states that "any person interested under a deed .., or
whose rights, status, or other legal relations are affected by a
statue .., may have determined any question of construction or
validity arising under the instrument, statute, ... and obtain a
declaration of rights, status, or other legal relations
thereunder." 42 Pa.C.S.A. !i7533. The statute further provides
that, "Relief shall not be available under this subchapter with
respect to any proceeding within the exclusive jurisdiction of a
tribunal other than a court." 42 Pa.C.S.A. !i7541(c) (2). A
tribunal includes a government unit when performing quasi-judicial
functions. The Board of Appeals and the Board of Finance and
Revenue are such tribunals. Mvers v. Commonwealth DeDartment of
Revenue, 423 A.2d 1101, 1103 (Pa.cmwlth.19801; ~lackwell v.
Commonwealth State Ethics Commission, 556 A.2d 988, 990
(Pa.cmwlth.19881.
Where a proceeding lies within the exclusive jurisdiction cf
either the Department of Revenue's Board of Appeals or the
Department's Board of Finance and Revenue, declaratory relief is
unavailable under the Declaratory Judgment Act. Mvers, 423 A.2d
1101 at 1103. The Act may not be used in cases to which it is not
III. THIS ACTION IS IN THE NATURE OF A CONSENT DECREE BETWEEN THE
GRANTOR AND GRANTEE AND IS AN IMPROPER ATTEMPT TO UNDERMINE
THE COMMONWEALTH'S AUTHORITY TO DETERMINE ISSUES CONCERNING
TRANSFER TAX.
In Sabatine v. Commonwealth, 442 A.2d 210, 497 Pa. 453 (1981),
it was held that parties to an executed conveyance of real estate
were not entitled to refund of taxes paid thereon solely by reason
of fact the deed was subsequently declared null and void ab initio
by a consent decree entered in equity action. It was held that
since the Commonwealth was not a party to the equity action, it was
not bound by its resolution. Sabatine, 442 A.2d at 212, 497 Pa. at
458. The final decree that the plaintiff asks for here would have
the same effect as a consent decree.
Lester Associates and Gateway Square Associates, LLC, by
bringing the Commonwealth into this action, are attempting to make
the Commonwealth a party to the consent decree. A consent decree
is not a legal determination of the matters in controversy and it
is binding only on the parties thereto. IS. Since the
Commonwealth is not properly a party to this action, it should not
be bound by its resolution. Any agreernent that the original
conveyance was invalid should not be given legal weight in any
other proceeding.
claimed on the basis that the transfer was in the nature of a
correctional deed,
On December 8, 1995, a notice of determination was mailed by
the Department of Reven~e notifying plaintiff, Lester Associates,
that realty transfer tax had been assessed against the March 20,
1995 deed in the amount of $110,692.32. The Department of Revenue
determined that one of the two deeds may have been correctional;
therefore, one tax determination was made on the March 20, 1995
deed. On March 6, 1996, Lester Associates filed an appeal with the
Board of Appeals.
Parties Involved
Lester Associates is a general partnership with its principal
office at 111 presidential Boulevard, Suite 140, Bala Cynwyd, PA
19004-1086. Sidney and Leonard Becker are the general partners of
Lester Associates and Lester Associatea has been registered as a
fictitious name with the Pennsylvania Department of State,
Corporation Bureau since November 4, 1965.
Gateway Square Associates, LLC is a Tennessee limited
liability company with its registered agent's office at 408 North
Cedar Bluff Road, Suite 350, Knoxville, Tennessee 37923. Gateway
Square Associates, LLC has been registered with the Tennessee
Department of State since December 28, 1994 and is not registered
with the Pennsylvania Department of State, Corporation Bureau. The
principal address of the company is 111 Presidential Boulevard,
Suite 140, Bala Cynwyd, PA.
Gateway Square Associates is a general partnership with its
principal office at 111 presidential Boulevard, Suite 140, Bala
PROCEDURAL BACKGROUND
On Narch 6, 1996, Lester Associates filed a declaratory
judgment action asking that the two deeds recorded respectively on
March 20, 1995, and on August 23, 1995, be declarftd null and void
ab initio. Gateway Square Associates, LLC and the Department of
Revenue were named as defendants,
On March 15, 1996, the Attorney General filed Preliminary
Objections on behalf of Department of Revenue contending that the
sole involvement of the Commonwealth concerned the imposition of
realty transfer tax and that issue should be resolved at the
Department of Revenue Board of Appeals.
On April 19, 1996, Lester Associates filed an Amended
Complaint which, inter alia, removed the Department 'of Revenue as
a defendant. The Defendant, Gateway Square Associates, LLC, did
not file an answer to the Complaint or Amended Complaint or
otherwise plead.
On May 24, 1996, Lester Associates filed a praecipe for
default judgment with a copy of the default notice attached
thereto. On the same day, the Cumberland County prothonotary
entered a default judgment against Gateway Square Associates, LLC.
Notice of the default judgment was served on Gateway Square
Associates, LLC, Department of Revenue and the Attorney General by
first-class mail on May 24, 1996.
By Order dated June 7, 1996, this Court scheduled a hearing in
this matter for June 27, 1996.
conveyance a state tax at the rate of one percent of the value of
the real estate represented by such document. 72 P.S. 58102-C.3.
Documents which evidence transfers between associations are fully
taxable. Association is defined by the Code, "A partnership,
limited partnership, or any other form of unincorporated
enterprise, owned or conducted by two or more persons other than a
private trust or decedent's estate. 72 P.S. 58101-C. Associations
are entities separate from their partners. 72 P.S. 58102-C.4.
The event which triggers realty transfer tax is the recording
of the deed. Comach Const.. Inc. v. Citv of Allentown, 633 A.2d
1336 (Pa.Cmwlth.1993), appeal denied 652 A.2d 1327, 539 Pa. 682.
In the absence of an agreement between the parties, the realty
transfer tax must be borne by seller. Stefanko v. Reed, 86 Pa. D.&
C. 145 (1954). Lester Associates held and transferred real estate
in its capacity as a partnership, and the transfer was between two
separate entities. Such transfers are fully taxable and Lester
Associates should be liable for the realty transfer tax on the
March 20, 1995 deed.
Lester Associates can contest the imposition of the transfer
tax in the forum the legislature has established. Under the Realty
Transfer Tax Act, 72 P.S. 58101-C, et seq., appeals from
determinations of realty transfer tax are appealable, in the first
instance, to the Department of Revenue's Board of Appeals. 72 P.S.
58111-C(b) . Jurisdiction over any further appeal from this
determination is conferred upon the Board of Finance and Revenue,
72 P.S. 58111-C(c) , and thereafter the Pennsylvania Commonwealth
Court, 42 Pa.C.S. 5763(a).
II . THERE IS NO UNCERTAINTY FACED BY EITHER THE GRANTOR OR GRANTEE
~ER THE DEEDS EXCEPT THE IMPOSITION OF TRANSFER TAX. AN
ACTION FOR DECLARATORY JULlGMENT IS NOT APPROPRIATE UNDER SUCH
CIRCUMSTANCES.
Lester Associates asserts that the Court of Common Pleas has
jurisdiction under the Declaratory Judgment Act, 42 Pa.C.e.A.
S7S33, to decide that no realty transfer tax is due in this case.
The Act states that "any person interested under a deed ... or
whose rights, status, or other legal relations are affected by a
statue ... may have determined any question of construction or
validity arising under the instrument, statute, ... and obtain a
declaration of rights, status, or other legal relations
thereunder." 42 Pa.C.S.A. S7S33. The statute further provides
that, "Relief shall not be available under this subchapter with
respect to any proceeding within the exclusive jurisdiction of a
tribunal other than a court." 42 Pa.C.S.A. !i7S41 (c) (2). A
tribunal includes a government unit when performing quasi-judicial
functions. The Board of Appeals and the Board of Finance and
Revenue are such tribunals. Mvers v. Commonwealth Deo~rtment of
Revenue, 423 A.2d 1101, 1103 (Pa.Cmwlth.1980) i Rlackwell v.
Commonwealth State Ethics Commission, SS6 A.2d. 988, 990
(Pa.Cmwlth.1988) .
Where a proceeding lies w:fthin the exclusive jurisdiction of
either the Department of Revenue's Board of Appeals or the
Department's Board of Finance and Revenue, declaratory relief is
unavailable under the Declaratory Judgment Act. Mvers, 423 A.2d
1101 at 1103. The Act may not be used in cases to which it is not
III. THIS ACTION IS IN THE NATURE OF A CONSENT DECREE BETWEEN THE
GRANTOR AND GRANTEE AND IS AN IMPROPER ATTEMPT TO UNDERMINE
THE COMMONWEALTH'S AUTHORITY TO DETERMINE ISSUES CONCERNING
TRANSFER TAX.
In Sabatine v, Commonwealth, 442 A.2d 210, 497 Pa. 453 (1981),
it was held that parties to an executed conveyance of real estate
were not entitled to refund of taxes paid thereon solely by reason
of fact the deed was subsequently declared null and void ab initio
by a consent decree entered in equity action. It was held that
since the Commonwealth was ~ot a party to the equity action, it was
not bound by its resolution. Sabatine, 442 A.2d at 212, 497 Pa. at
458. The final decree that the plaintiff asks for here would have
the same effect as a consent decree.
Lester Associates and Gateway Square Associates, LLC, by
bringing the Commonwealth into this action, are attempting to make
the Commonwealth a party to the consent decree. A consent decree
is not a legal determination of the matters in controversy an~ it
is binding only on the parties thereto. ~. Since the
Commonwealth is not properly a party to this action, it should not
be bound by its resolution. Any agreement that the original
conveyance was invalid should not be given legal weight in any
other proceeding.
LESTER ASSOCIATES, a general
partnership,
Plaintiff
v.
GATEWAY SQUARE ASSOCIATES,
LLC, a Tennessee limited
liability company; and
DEPARTMENT OF REVENUE OF THE
COMMONWEALTH OF PENNSYLVANIA
Defendants
I IN THE COURT OF COMMON PLEA~
I CUMBERLAND COUNTY, PENNSYLVANIA
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I 96-1233 CIVIL TERM
IN REI PLAINTIFF'S MOTION FOR POST-TRIAL RELIEF
BEFORE BAYLEY and OLER. JJ.
FINAL DECREE
'Tit. day of October, 1996, upon consideration
AND NOW, this
of Plaintiff's Motion for Post-trial Relief with respect to the
Adjudication and Decree Nisi dated July 26, 1996, and for the
reasons stated in the accompanying opinion, the relief requested is
granted in part and denied in part, with the following facts being
found to have been established as between the parties as a
consequence of Defendant's failure to respond to Plaintiff's
complaint or amended complaint, or being otherwise demonstrated by
the record:
1. Plaintiff, Lester Associates, is a general partnership with its
principal office at III Presidential Boulevard, Suite l40, Bala
Cynwyd, Montgomery County, Pennsylvania 19004-1086.
2. Plaintiff is registered as a fictitious name with the
Pennsylvania Department of State, Corporation Bureau.
3. Defendant, Gateway Square Associates, LLC, is a Tennessee
limited liability company with its registered office at 408 North
Cedar Bluff Road, Suite 350, Knoxville, Tennessee 37923.
4. Defendant is not registered with the Pennsylvania Department of
State, Corporation Bureau, as a foreign limited company.
96-1233 CIVIL TERM
5. By way of a deed dated August 19, 1992, and recorded October
23, 1992, in the cumberland County Recordur of Deeds Office in Deed
Book 35Y, Page 442, Plaintiff took title to a certain commercial
real property (hereinafter "Real Property") located in Hampden
Township, Cumberland County, penneylvania, bearing Tax Parcel
Number 10-20-1842-088A, and being a shopping center.
6. It is uncontroverted in the record that from October 23, 1992
to the present, plaintiff has treated the Real Property as a
partnership property.
7. On March 20, 1995, a deed was recorded in Cumberland County
Deed Book 119, Page 916, in which plaintiff conveyed the Real
Property to "Lester Assor.:iates, L.L.C."
8. At recording, an exclusion from transfer tax was claimed on the
basis that the transfer was in the nature of a corrective deed.
9. On August 23, 1995, a deed was recorded in Cumberland County
Deed Book 127, Page 62, in which Lester Associates, L.L.C, conveyed
the Real Property to Defendant.
10. At recording, an exclusion from transfer tax was claimed on
the basis that the transfer was in the nature of a corrective deed.
11. On December 8, 1995, a notice of determination was mailed by
the Department of Revenue notifying Plaintiff that realty transfer
tax had been assessed with respect to the March 20, 1995 deed.
l2. On March 6, 1996, plaintiff filed an appeal with the
Department of Revenue's Board of Appeals.
13. On March 6, 1996, plaintiff also filed the instant action
asking that the two deeds recorded respectively on March 20, 1995,
and August 23, 1995, be declared null and void ab initio and that
title to the Real Property be vested in Plaintiff.
14. The instant action was brought as an action for declaratory
judgment pursuant to 42 Pa, C.S. SS7531-411 with the expressed
purpose of determining a question of actual controversy between the
parties thereto; jurisdiction was based on 42 Pa, C.S. S7533.'
15. Gateway Square Associates, LLC, and the Department of Revenue
were named as defendants.
I
Declaratory Judgment Act of July 9, 1976, P.L. 586, S2.
rd.
>
16. An affidavit of service indicates that the complaint was
served on both parties and the Attorney General of Pennsylvania.
17. On March 19, 1996, the Attorney General filed preliminary
objections on behalf of the Department of Revenue, contending that
the sole involvement of the Commonwealth concerned the imposition
of realty transfer tax and that that issue lay within the exclusive
jurisdiction of the Department of Revenue's Board of Appeals.
18. On April 19, 1996, Plaintiff filed an amended complaint which
eliminated the Department of Revenue as a defendant.
19. Defendant Gateway Square Associates, LLC, did not file an
answer to the complaint or amended complaint or otherwise respond.
20. On May 24, 1996, Lester AlIsociates filed a praecipe for
default judgment with a notice to defend attached.
21. A certificate of service by Plaintiff's counsel indicates that
the praecipe for entry of judgment by default against Defendant was
served by first-class mail upon Defendant, the Department of
Revenue, and the Attorney General.
22. The Cumberland County Prothonotary entered a default judgment
against the Defendant on May 24, 1996.
23. Notice of the entry of a default judgment was served on
Defendant.
24. On May 24, 1996, Plaintiff filed a motion for adjudication and
final decree upon default judgment pursuant to Pennsylvania Rule of
Civil Procedure 151l(b). A certificate of service indicates that
Defendant, the Department of Revenue and the Attorney General were
served with copies of the motion.
25. By Order dated June 7, 1996, a hearing on the motion was
scheduled for June 27, 1996, and the Order was served on Defendant,
the Department of Revenue and the Attorney General.
26. The hearing on June 27, 1996, was attended by Plaintiff's
counsel, Mark E. Halbruner, Esq., and by Sidney Becker, one of
Plaintiff's general partners.
27, Mr. Becker testified that to the best of his knowledge there
never was an entity called Lester Associates, L.L.C., and that he
had simply made a mistake in prepacing the deed in that regard.
28. It is uncontroverted in the record that Lester Associates,
L.L.C., is not registered as a fictitious name or as a limited
liability company in Pennsylvania, or in any other jurisdiction.
29. Also present at the hearing were Kathleen K. Shaulis, Esq.,
from the Department of Revenue, and Ronald H. Skubecz, Esq.,
assisted by John Bobber, legal intern, from the Attorney General's
Tax Litigation Section.
30. The court afforded Attorneys Shaulis and Skubeca an
opportunity to formally enter their appearances in this matter on
behalf of the Commonwealth.
31. Speaking on behalf of himself and Hs. Shaulis, Hr. Skubeoa
acknowledged that the Commonwealth had been given a full
opportunity to intervene in the proceeding. Hr. Skubeoa then
stated that the Commonwealth deolined to enter its appearance, a.
its only interest in the proceeding was the transfer tax a.sooiat.d
with the deed of Harch 20, 1995, an issue then pending before the
Department of Revenue's Board of Appeals.
32. Attorneys Shaulis and Skubecz observed but did not participate
in the remainder of the hearing.
33. As the instant action does not direotly involve the transfer
tax associated with the deed of March 20, 1993, the Court believes
that the Department of Revenue's interests in this aotion have been
adequately represented as contemplated by 42 Pa. C.S. S7540(b).'
34. Defendant did not appear and was not represented at the
hearing.
35. At the conclusion of the hearing, the Court entered an Order
closing the record and taking the matter under advisement.
36. Plaintiff has submitted a brief in support of its position
that title to the property in question remains in Plaintiff.
37. An adjudication and decree nisi was entered by the court on
July 26, 1996.
38. Plaintiff filed a motion for post-trial relief with re.pect to
the adjudication and decree nisi pursuant to Pennsylvania Rule of
civil Procedure ,227.1.
) Act of July 9, 1976, P.L. 586, 52, 42 Pa. C.S. 57540(bl
provides thatl
In any proceeding which involves the effsct of any
asserted legal relation, status, right, or privilege upon
the determination of any tax, the appropriate taxing
authority shall be served with a copy of the proceeding,
but if such taxing authority does not enter it.
appearance, the requirements of this section shall
nevertheless be satisfied if the court considers that the
interests of the taxing authority are adequately
represented.
96-1233 CIVIL TERM
It is DECLARED, ADJUDGED, AND DECREED that, by virtue of
Defendant's default, and as between tha parties to this action,
title to the property bounded and described as follows shall be
deemed to be in plaintiff, Lester Associatesl
ALL THAT CERTAIN tract of land situated in Hampden
Township, Cumberland County, pennsylvania, being
designated as Tract "A" on a plan of Subdivision made for
Crossgates, Inc. and recorded in the Recorder of Deeds
Office of Cumberland County in plan Book 51, Page 109,
and being bounded and described as follows I
BEGINNING at an iron pin on the Southern right of way
line Carlisle pike, of U.S. Route 11, said point being
thirty (30) feet South of centerline of said Carlisle
Pike at the lands now or formerly of Hampden Township,
thence from said point of beginning South 10 degrees 3
minutes 57 seconds West 790.29 feet to an iron pin,
thence by the same lands South 88 degrees 34 minutes 24
seconds West 1113.75 feet to an iron pin in the
centerline of Brandy Lane, a 33 foot wide roadl thence
along the centerline of said Brandy Lane and by the lands
now or formerly of the United States Government the
following courses and distancesl North 3 degrees 40
minutes 36 seconds West 275.55 feet to a spikel thence by
the same, North 00 degrees 40 minutes 36 seconds West
315.49 feet to a spike, said point being the Southerly
line of New Brandy Lane, as shown on the aforesaid plan
of Subdivision for Crossgates, Inc.l thence by said line
of New Brandy Lane, with a curve to the right, having a
radius of 270.00 feet, (subtended by a chord North 59
degrees 42 minutes, 27 seconds East 266.86 feet) an arc
distance of 279.l4 feet to a point 1 thence by the same
North 89 degrees 19 minutes 24 seconds East 152.81 feet
to a point I thence by the same with a curve the left,
having a radius of 390.00 feet (subtended by a chord
North 74 degrees 45 minutes 54 seconds East 196.06 feet)
an arc distance of 198.19 feet to a pointl thence by the
same South 29 degrees 47 minutes 36 seconds East 15.00
feet to a pointl thence by the same, with a curve to the
left, having a radius of 405.00 feet, (subtended by a
chord North 48 degrees 53 minutes 47 seconds East l58.86
feet) and arc distance of l59.89 feet to a pointl thence
by the same, North 37 degrees 35 minutes 11 seconds East
175.65 feet to a pointl thence by the same, with a curve
LESTER ASSOCIATES, a general . IN THE COURT OF COMMON PLEAS
.
partnership, . CUMBERLAND COUNTY, PENNSYLVANIA
.
Plaihtiff .
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GATEWAY SQUARE ASSOCIATES, .
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LLC, a Tennessee limited .
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liability company; and I
DEPARTMENT OF REVENUE OF THE I
COMMONWEALTH OF PENNSYLVANIA I
Defendants I 96-1233 CIVIL TERM
IN REI PLAINTIFF'S MOTION FOR POST-TRIAL RELIEF
BEFORE BAYLEY and OLER. JJ.
OPINION and FINAL DECREE
This case involves the question of title to commercial real
property located in Hampden Township,
Cumberland County,
pennsylvania, bearing Tax Parcel Number 10-20-1842-088A. Presently
before the court is plaintiff's Motion for post-trial Relief
requesting that the court add certain findings of fact and
conclusions of law to the adjudication and decree of July 26, 1996,
delete other findings of fact and conclusions of law, and declare
two deeds purporting to convey title to the Real Property to Lester
Associates, L.L.C., and Defendant, respectively, to be null and
void ab initio.
STATEMENT OF FACTS: PROCEDURAL HISTORY
The pertinent facts in this case are as follows. On March 20,
1995, a deed was recorded in which Plaintiff conveyed certain real
property located in Hampden Township, Cumberland County,
Pennsylvania,
bearing
Parcel
Number
lO-20-1842-088A
Tax
(hereinafter, Real Property) to "Lester Associates, L.L.C." Then,
96-1233 CIVIL TERM
in a deed recorded on August 23, 1995, "Lester Associates, L.L.C."
conveyed the Real Property to Defendant. An exemption from the
real estate transfer tax was claimed at each recording 0[1. the
ground that the transfer was in the nature of a corrective deed.
Nevertheless, a realty transfer tax was assessed against the March
20, 1995 deed by the Department of Revenue. Plaintiff filed an
appeal with the Department of Revenue's Board of Appeals,
contesting the realty transfer tax assessment.
Plaintiff also filed a declaratory judgment action in this
court, asking that the two deeds be declared null and void ab
initio and that title to the Real Property be vested in Plaintiff.
Both Gateway Square Associates, L.L.C., and the Department of
Revenue were named as defendants in this action. Preliminary
objections were filed by the Department contending that the sole
involvement of the Commonwealth in the matter concerned the
imposition of realty transfer tax, an issue that was required to be
resolved by the Department of Revenue's Board of Appeals.
Plaintiff then voluntarily filed an amended complaint which
eliminated the Department of Revenue as a defendant in this action.
When Defendant Gateway failed to file an answer to the
complaint or amended complaint or otherwise respond, a default
judgment was entered against it, in favor of Plaintiff. Plaintiff,
then, filed a motion for adjudication and final decree pursuant to
2
96-1233 CIVIL TERM
Pennsylvania Rule of Civil Procedure 15ll(b). A hearing on the
motion was held on June 27, 1996.
Following the hearing, the court entered an adjudication and
decree nisi dated July 26, 1996. In response, Plaintiff filed the
post-trial motion presently before the court requesting several
forms of relief. First, Plaintiff requests that the following
findings of fact be added to the Adjudication and Decreel (1) From
October 23, 1992, to the present, Plaintiff has treated the Real
Property as a partnership propertYl (2) the Complaint was duly
served on both parties and the Attorney General of Pennsylvania,
and an Affidavit of Service was filedl (3) a copy of the default
notice was served on the Department of Revenue and the Attorney
General; (4) notice of the default judgment was served on
Defendant, the Department of Revenue and the Attorney General by
first-clus mail on May 24, 1996; (5) on Hay 24, 1996, Plaintiff
filed a motion for adjudication and final decree upon default
judgment and served Defendant, the Department of Revenue and the
Attorney General with copies of the motion; (6) by Order dated June
7, 1996, a hearing on the motion was scheduled for June 27, 1996,
and the Order was served on Defendant, the Department of Revenue
and the Attorney General; (7) at the outset of the hearing and
after an in camera discussion with all counsel, the Court afforded
Attorneys Shaulis and Skubecz an opportunity to formally enter
their appearances in this matter on behalf of the Commonwealth; (8)
3
96-1233 CIVIL TERM
speaking on behalf of himself and Ms. Shaulis, Mr. Skubecz
acknowledged that the Commonwealth had been given a full
opportunity to intervene in the proceeding and stated that the
Commonwealth declined to enter its appearance~ and (9) attorneys
Shaulis and Skubecz observed but did not participate in the
remainder of the hearing.
Plaintiff maintains that the first requested finding of fact
is necessary to determine whethftr Plaintiff or Defendant is liable
for taxee, expenses, and damages incurred in connection with the
Real Property. The remaining requested findings of fact are,
according to Plaintiff, important to the issue of notice given to
the Department of Revenue.
Second, Plaintiff requests that the following finding of fact
be deleted from the Adjudication and Decreel The Department of
Revenue determined that one of the two deeds may have been
corrective~ therefore, one tax determination was made on the March
30, 1995 deed. Plaintiff maintains that this finding of fact is
not supported by the record.
Third, Plaintiff asks that the following be added as
conclusions of law: (1) This is an action for declaratory judgment
pursuant to 42 Pa, C.S. S7531 et seq., for the purpose of
determining a question of actual controversy between the parties
hereto~ (2) jurisdiction of this action is based on 42 Pa, C.S.
S7533~ (3) Lester Associates, L.L.C. does not exist as a legal
4
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96.1233 CIVIL TERM
entity; (4) as a non-existent entity, Lester Associates, L.L.C.
could neither receive nor convey title to the Real Property; (5)
this action involves the effect of the parties' legal relation,
status, right and privilege upon the aforesaid determination of
realty transfer tax, and Revenue may therefore have entered its
appearance in this action pursuant to 42 Pa, C.S. S7540(b); and (6)
Revenull's interests in this action have been adequately represented
&s contemplated by 42 Pa, C.S. S7540(b).
Plaintiff maintains that the first two conclusions of law are
necessary to describe the nature of these proceedings and the
court's jurisdiction over them. The third and fourth conclusions
of law are said by Plaintiff to be the foundation of the court's
determination that the deeds in question had no legal effect. The
remaining conclusions of law are purportedly necessary to explain
why the Department of Revenue and the Attorney General were given
notice of the proceeding and the opportunity to intervene in the
hearing.
Fourth, Plaintiff requests that the Court declare that the
deeds of March 20, 1993 and August 23, 1993, were null and void ab
initio, that the eaid deeds did not convey, transfer, devise, vest,
confirm or evidence any transfer or devise of real estate, and that
the said deeds should be expunged from the public record. This is
necessary, according to Plaintiff, to make clear that the deeds had
no effect, in order to resolve any questions that might arise as to
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Plaintiff's liability for taxes, expenses, and damages incurred
between the time of the recording of the March 20, 1995 deed and
the time of this court's decree.
Fifth, Plaintiff asks that the court delete the following
statement from the Adjudication and Decree: "NOTHING HEREIN is
intended to represent a determination as to any issues of real
.state transfer tax liability, nor to bind any entity not now a
captioned party to this litigation." Plaintiff claims that this
statement is unnecessary and that the court does not have
jurisdiction to state what effect its decree will have on such
issues.
Finally, Plaintiff requests that the court delete the
following underlined passage from the Adjudication and Decree: "It
is DECLARED, ADJUDGED, AND DECREED that by virtue of Defendant's
default, and as between the carties to this action, title to the
property bounded and described as follows shall be deemed to be in
Plaintiff, Lester Associates." Plaintiff contends that the court
should not indicate impact, or lack of impact, its decree will have
on non-parties.
For the reasons stated below, the relief requested will be
granted in part and denied in part.
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DISCUSSION
The purpose of the Declaratory Judgment Act "is to settle and
to afford relief from uncertainty and insecurity with respect to
rights, status, and other legal relations, and [the act] is to be
liberally construed and administered." Act of July 9, 1976, P.L.
586, 52, 42 Pa. C.S. 57541(a). However, "th& presence of
antagonistic claims indicating imminent and inevitable litigation
coupled with a clear manifestation that the declaration sought will
be of practical help in ending the controversy are essential to the
granting of relief by way of declaratory judgment." Gulnac v.
South Butler School District, 526 Pa. 483, 487, 587 A.2d 699, 701
(1991). "A declaratory judgment must not be employed to determine
rights in anticipation of events which may never occur or for
consideration of moot cases or as a medium for the rendition of an
advisory opinion." Id. at 488, 587 A.2d at 701.
Furthermore, declaratory relief is not available with respect
to any "[p]roceeding within the exclusive jurisdiction of a
tribunal other than a court [or any] proceeding involving an appeal
from an order of a tribunal." Act of July 9, 1976, P.L. 586, 52,
as amElnded, 42 Pa. C.S. 57541(c) (2), (3) (Supp. 1996). If
declaratory judgment proceedings are "used to prejudge issues that
are committed for initial resolution to an administrative forum ...
then the trial court can be said to have exceeded the limitations
7
96-l233 CIVIL TERM
of the Act." Clearfield Bank , Trust Co. v. Shaffer, 381 Pa.
Supe~. 259, 262, 553 A.2d 455, 456 (1989).
Unde~ the Realty Transfer Tax Act, Act of Ma~ch 4, 1971, P.L.
6, 551101-C to l1l3-C, <IS amended, 72 P.S. 558l01-C to 8113-C,
appeal. from determination. of ~ealty transfe~ tax are to be heard,
in the fi~.t in.tance, by the Department of Revenue'. Boa~d of
Appeals. Juri.diction over any further appeal from the Boa~d'.
determination i. conferred upon the Board of Finance and Revenue,
Act of March 4, 1971, P.L. 6, 5l111-C, as amended, 72 P.S. 58111-
C(c), and, thereafter, upon the Pennsylvania Commonwealth Court,
Act of June 2, 1915, P.L. 736, 5427, as amended, 42 Pa, C.S.
5763 (a) . Thus, declarato~y relief is unavailable in matters
relating to tax assessments. See Deigendesch v. County of Bucks,
505 Pa. 555, 565-66, 482 A.2d 228, 233 (l984).
Firet, regarding Plaintiff's requested additions to the
findings of fact, the court has added those findings of fact
requested by Plaintiff to the extent that they are suppo~ted by the
record. As to the service of the notice of the default judgment on
the Department of Revenue and the Attorney General, the record
includes a certificate of service by Plaintiff's counsel indicating
that the praecipe for entry of judgment by default against
Defendant was served by first-class mail upon Defendant, the
Department of Revenue, and the Attorney General. The record is
less clear that the Prothonotary's entry of jUdgment in compliance
8
96-1233 CIVIL TERM
with the praecipe was served upon the Department or the Attorney
General, and no finding will be made that it was.
Second, regarding the deletion requested by plaintiff, the
record does not explicitly contain the Department of Revenue's
determination that one of the two deeds may have been corrective
and the court has removed this finding of fact in the final decree.
The record does indicate that a tax assessment was made by the
Department of Revenue as to the March 20, 1995 deedl however, sinc~
this finding of fact is included in paragraph 11 of the Decree, it
need not be retained in the finding which plaintiff finds
offensive.
Third, regarding the conclusions of law requested by plaintiff
on the subject of whether Lester Associates, L.L.C., existed as a
legal entity, the findings which the court is willing to make have
been supplied in paragraphs 27 and 28 of the Decree.
Regarding the conclusion of law sought on the effect which
this court's decree should have on the issue of the realty transfer
tax assessed, it is noted that the tax issue is the subject of an
administrative appeal to the Department of Revenue's Board of
AppealS. A declaratory judgment on this issue is not within the
jurisdiction of this court; we must, instead, under the Declaratory
9
96-l233 CIVIL TERM
Judgment Act, limit our determination to a controversy which exists
between named Plaintiff and Defendant.'
In this regard, a controversy purportedly exists between
Plaintiff and Defendant over whether title to the Real Property is
vested in Plaintiff or Defendant.
In response to Defendant's
default, the court has resolved this controversy by decreeing that,
as between Plaintiff and Defendant, title to the property is vested
in Plaintiff and not in Defendant.
It is unnecessary for this
court to involve itself through conclusions of law in an area
within the jurisdiction of another body.
Fourth, regarding the requested declaration that the deeds
were null and void ab initio; such a declaration would primarily
serve to advance Plaintiff's interests against a nonparty in an
area within another body's jurisdiction.' Such a declaration would
probably not have the desired effect,' and the court is not willing
to participate in this endeavor in the context of a default
judgment.
, See Gulnac v. SQuth Butler School District, 526 Pa, 483,
587 A.2d 699 (199l).
, See Generally Bolus V. United Penn Bank, 360 Pa, Super.
234, 520 A.2d 433 (l987).
· See Sabatine V. Commonwealth, 497 Pa, 453, 442 A.2d 210
(1981) (parties to an executed conveyance of real estate held not
entitled to refund of taxes paid thereon solely by reason of fact
that the deed was subsequently declared null and void ab initio
by a consent decree entered in equity action).
10
96-1233 CIVIL TERM
Finally, regarding plaintiff's request that the court delete
statements from the Decree that the Decree is not "intended to
represent a determination as to any issues of real estate ~ransfer
tax liability, nor to bind any entity not now a captioned party to
this litigation," and that the court's declaration is meant to
resolve the controversy "as between the parties to this action"
only, the statements represent the court I s intent and understanding
of the law.
The former statement will, however, be modified
somewhat to be less dispositive in tone.
For the above stated reasons, the following Final Decree will
be entered I
fINAL DECREE
AND NOW, this 7th day of October, 1996, upon consideration of
plaintiff's Motion for Post-trial Relief with respect to the
AdjUdication and Decree Nisi dated July 26, 1996, and for the
reasons stated in the accompanying opinion, the relief requested is
granted in part and denied in part, with the following facts being
found to have been established as between the parties as a
consequence of Defendant's failure to respond to plaintiff's
complaint or amended complaint, or being otherwise demonstrated by
the record I
1. plaintiff, Lester Associates, is a general partnership with its
principal office at 111 presidential Boulevard, suite 140, Bala
cynwyd, Montgomery County, pennsylvania 19004-1086.
11
96-1233 CIVIL TERM
2. Plaintiff is registered as a fictitious name with the
Pennsylvania Department of State, Corporation Bureau.
3. Defendant, Gateway Square Associates, LLC, is a Tennessee
limited liability company with its registered office at 408 North
Cedar Bluff Road, Suite 350, Knoxvill~, Tennessee 37923.
4. Defendant is not registered with the Pennsylvania Department of
State, Corporation Bureau, as a foreign limited company.
5. By way of a deed dated August 19, 1992, and recorded October
23, 1992, in the Cumberland County Recorder of Deeds Office in Deed
Book 35Y, Page 442, Plaintiff took title to a certain cODlDlercial
real property (hereinafter "Real property") located in Hampden
Township, Cumberland County, Pennsylvania, bearing Tax Parcel
Number 10-20-1842-088A, and being a shopping center.
6. It is uncontroverted in the record that from October 23, 1992
to the present, Plaintiff has treated the Real Property as a
partnership property.
7. On March 20, 1995, a deed was recorded in cumberland County
Deed Book 119, Page 916, in which Plaintiff conveyed the Real
Property to "Lester Associates, L.L.C."
8. At recording, an exclusion from transfer tax was claimed on the
basis that the transfer was in the nature of a corrective deed.
9. On August 23, 1995, a deed was recorded in Cumberland County
Deed Book 127, Page 62, in which Lester Associates, L.L.C, conveyed
the Real property to Defendant.
10. At recording, an exclusion from transfer tax was claimed on
the basis that the transfer was in the nature of a corrective deed.
ll. On December 8, 1995, a notice of determination was mailed by
the Department of Revenue notifying Plaintiff that realty transfer
tax had been assessed with respect to the March 20, 1995 deed.
12. On March 6, 1996, Plaintiff filed an appeal with the
Department of Revenue's Board of Appeals.
13. On March 6, 1996, Plaintiff also filed the instant action
asking that the two deeds recorded respectively on March 20, 1995,
and August 23, 1995, be declared null and void ab initio and that
title to the Real Property be vested in Plaintiff.
12
96-1233 CIVIL TERM
l4. The instant action was brought as an action for declaratory
judgment pur8uant to 42 Pa. C.S. 557531-41' with the expressed
purpose of determining a question of actual controversy between the
parties thereto; jurisdiction was based on 42 Pa, C.S. 57533..
l5. Gateway Square A8sociates, LLC, and the Department of Revenue
were named as defendant8.
l6. An affidavit of service indicates that the complaint was
8erved on both parties and the Attorney General of Pennsylvania.
17. On March 19, 1996, the Attorney General f Hed preliminary
objections on behalf of the Department of Revenue, contending that
the sole involvement of the Commonwealth concerned the imposition
of realty transfer tax and that that issue lay within the exclusive
jurisdiction of the Department of Revenue's Board of Appeals.
18. On April 19, 1996, Plaintiff filed an amended complaint which
eliminated the Department of Revenue as a defendant.
19. Defendant Gateway Square Associates, LLC, did not file an
answer to the complaint or amended complaint or otherwise respond.
20. On May 24, 1996, Lester Associates filed a praecipe for
default judgment with a notice to defend attached.
2l. A certificate of service by Plaintiff's counsel indicates that
the praecipe for entry of judgment by default against Defendant was
served by first-class mail upon Defendant, the Department of
Revenue, and the Attorney General.
22. The Cumberland County Prothonotary entered a default jUdgment
against the Defendant on May 24, 1996.
23. Notice of the entry of a default judgment was served on
Defendant.
24. On May 24, 1996, Plaintiff filed a motion for adjudication and
final decree upon default judgment pursuant to Pennsylvania Rule of
Civil Procedure 1511(b). A certificate of service indicates that
Defendant, the Department of Revenue and the Attorney General were
served with copies of the motion.
,
Declaratory Judgment Act of July 9, 1976, P.L. 586, 52.
Id.
.
13
96-1233 CIVIL TERM
25. By Order dated June 7, 1996, a hearing on the motion was
8cheduled for June 27, 1996, and the Order was served on Defendant,
the Department of Revenue and the Attorney General.
26. The hearing on June 27, 1996, was attended by Plaintiff'8
coun8el, Mark E. Halbruner, E8q., and by Sidney Becker, one of
Plaintiff's general partners.
27. Mr. Becker testified that to the best of his knowledge there
never was an entity called Lester Associates, L.L.C., and that he
had simply made a mistake in preparing the deed in that regard.
28. It is uncontroverted in the record that Lester Associates,
L.L.C., is not registered as a fictitious name or as a limited
liability company in Pennsylvania, or in any other jurisdiction.
29. Also present at the hearing were Kathleen K. Shaulis, Esq.,
from the Department of Revenue, and Ronald H. Skubecz, Esq. ,
assisted by John Bobber, legal intern, from the Attorney General's
Tax Litigation Section.
30. The court afforded Attorneys Shaulis and Skubecz an
opportunity to formally enter their appearances in this matter on
behalf of the Commonwealth.
31. Speaking on behalf of himself and Ms. Shaulis, Mr. Skubecz
acknowledged that the Commonwealth had been given a full
opportunity to intervene in the proceeding. Mr. Skubecz then
stated that the Commonwealth declined to enter its appearance, as
its only interest in the proceeding was the transfer tax associated
with the deed of March 20, 1995, an issue then pending before the
Department of Revenue's Board of Appeals.
32. Attorneys Shaulis and Skubecz observed but did not participate
in the remainder of the hearing.
l4
96-1233 CIVIL TERM
33. As the instant action does not directly involve the transfer
tax associated with the deed of March 20, 1993, the Court believes
that the Department of Revenue's interests in this action have been
adequatsly represented as contemplated by 42 Pa. C,S. S7540(b).'
34. Defendant did not appear and was not rapresented at the
hearing.
35. At the conclusion of the hearing, the Court entered an Order
closing the record and taking the matter under advisement.
36. plaintiff has submitted a brief in support of its position
that title to the property in question remains in Plaintiff.
37. An adjudication and decree nisi was entered by the court on
July 26, 1996,
38. Plaintiff filed a motion for post-trial relief with respect to
the adjudication and decree nisi pursuant to pennsylvania Rule of
Civil Procedure 227.1.
It is DECLARED, ADJUDGED, AND DECREED that, by virtue of
Defendant's default, and as between the parties to this action,
title to the property bounded and described as follows shall be
deemed to be in Plaintiff, Lester Associates:
ALL THAT CERTAIN tract of land situated in Hampden
Township, Cumberland County, Pennsylvania, being
designated as Tract "A" on a plan of Subdivision made fol';'
Crossgates, Inc. and recorded in the Recorder of Deeds
Office of Cumberland County in Plan Book 51, Page l09,
and being bounded and described as followsl
, Act of July 9, 1976, P.L. 586, 52, 42 Pa. C.S. S7540(b)
provides that:
In any proceeding which involves the effect of any
asserted legal relation, status, right, or privilege upon
the determination of any tax, the appropriate taxing
authority shall be served with a copy of the proceeding,
but if such taxing authority does not enter its
appearance, the requirements of this section shall
nevertheless be satisfied if the court considers that the
interests of the taxing authority are adequately
represented.
l5
96-1233 CIVIL TERM
BEGINNING at an iron pin on the Southern right of way
line Carlisle pike, of U.S. Route 11, said point being
thirty (30) feet South of centerline of said Carlisle
pike at the lands now or formerly of Hampden Township,
thence from said point of beginning South 10 degrees 3
minutes S7 seconds West 790.29 feet to an iron pin,
thence by the same lands South 88 cegrees 34 minutes 24
seconds West 1113.75 feet to an iron pin in the
centerline of Brandy Lane, a 33 foot wide roadl thence
along the centerline of said Brandy Lane and by the lands
now or formerly of the united States Government the
following courses and distances I North 3 degrees 40
minutes 36 seconds West 27S.SS feet to a spike! thence by
the same, North 00 degrees 40 minutes 36 seconds West
31S.49 feet to a spike, said point being the Southerly
line of New Brandy Lane, as shown on the aforesaid plan
of Subdivision for Crossgates, Inc.1 thence by said line
of New Brandy Lane, with a curve to the right, having a
radius of 270.00 feet, (subtended by a chord North S9
degrees 42 minutes, 27 seconds East 266.86 feet) an arc
distance of 279.14 feet to a pointl thence by the same
North 89 degrees 19 minutes 24 seconds East lS2.81 feet
to a point! thence by the same with a curve the left,
having a radius of 390.00 feet (subtended by a chord
North 74 degrees 4S minutes S4 seconds East 196.06 feet)
an arc distance of 198.19 feet to a point! thence by the
same South 29 degrees 47 minutes 36 seconds East lS.OO
feet to a pointl thence by the same, with a curve to the
left, having a radius of 405.00 feet, (subtended by a
chord North 48 degrees 53 minutes 47 seconds East lS8.86
feet) and arc distance of 159.89 feet to a pointl thence
by the same, North 37 degrees 3S minutes 11 seconds East
17S,65 feet to a point; thence by the same, with a curve
to the right, having a radius of 65.00 feet, (subtended
by a chord North 77 degrees 58 minutes 44 seconds East
84.24 feet) an arc distance of 91.65 feet to a point on
the southern right of way of Carlisle pike aforesaid!
thence by the same, with a curve right, having a radius
of 7609.49 feet, (subtended by a chord south 59 degrees
S7 minutes 47 seconds East 442.68 feet) an arc distance
of 442.74 feet to an iron pin at THE POINT OF BEGINNING;
CONTAINING 22.3S acres and being part of a tract of land
surveyed by D.P. Raffensperger and Associates for
Crossgates Inc last revised June 19, 1986.
16
96-1233 CIVIL TERM
NOTHING HEREIN is intended to express an opinion as to the
effect of this Decree, it any, upon any issues of real estate
transfer tax liability.
BY THE COURT,
s/ J. Weslev Oler. Jr.
J. Wesley Oler, Jr., J.
Mark E. Balbruner, Esq.
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
Attorney for Plaintiff
Barnett , Weiskopf
408 North Cedar Bluff Road
Suite 350
Knoxville, TN 37923
Agents for Gateway Square
Associates, LLC
./~
ur~(j\l\b
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Ronald H. Skubecz, Esq.
Office of the Attorney
Tax Litigation Section
15th Floor, Strawberry
Harrisburg, PA 17120
(Courtesy Copy)
Kathleen K. Shaulis, Esq.
Pennsylvania Department of Revenue
Office of Chief Counsel
Department 28106l
Harrisburg, PA 17l28-1061
(Courtesy Copy)
General
Square
Irc
17
PRAECIPE FOR LISroIG C..uE FOR ARGt'XE:Vr
1)flUr be rypewricun md submirmd In dupllQrll
TO THE PROTHONOT.UY,OF ct.~B!lU.-\.'iD COI.':'ITY:
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, CAI1IOH 0' CASE
(11I_ capdoa 11IIII1 b. IIaUd III full)
Lester Associates,
a general partnership,
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Gateway Square Associates, LLP,
a Tennessee limited liability company,
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~ll. 96-1233 CiI'i1
Term
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. Plaintiff's Motion for Post Trial Relief
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(b) lor d.titllCbllc
Addrll"
Mark E. Halbruner, Esquire
1013 ~fumma Road, Suite 100, Lemoyne, PA 17043
No appearance has been entered.
3. I will nouty ill panIa ill Vll'iliq Ivj::JlD lWO day, :lw ~ .::sf lw ="11
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4. MlUlIIll1t COUrt DatI:
Call of Mlumlnt Lile
October 2, 1996
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e. On May 24, 1996, Plaintiff filed a Motion for
Adjudication and Pinal Decree upon Default Judgment and
served Defendant, Revenue and the Attorney General with
copies of the motion.
f. By Order dated June 7, 1996, a hearing on the
motion was scheduled for June 27, 1996, and the Order was
served on Defendant, Revenue and the Attorney General.
g. At the outset of the hearing and after an in
camera discussion with all counsel, the Court afforded
Attorneys Shaulis and Skubecz an opportunity to formally
enter their appearances in this matter on behalf of the
Commonwealth.
h. speaking on behalf of himself and Ms. Shaulis,
Mr. Skubecz acknowledged that the Commonwealt.h had been
given a full opportunity to intervene in the proceeding
and then stated that the Commonwealth declined to enter
its appearance.
i. Attorneys Shaulis and Skubecz observed but did
not participate in the remainder of the hearing.
The proposed finding of fact stated in (a), above, concerns
the manner in which the Real Property was managed from tha time
that Lester Associates acquired title through the time of the
hearing. This fact has implications on the liability for taxes,
expenses and damages incurred in connection with the Real property.
For example, different taxes and tax rates are applicable to
partnerships and limited liability companies.
Furthermore, a
customer who slipped and fell in the parking lot of the Shopping
center would arguably have legal rights against the owner of the
Real property.
Although this finding of fact may not have a
binding effect on those not parties to this proceeding, it is
important as between Plaintiff and Defendant.
The proposed findings of fact stated in (b) - (i), above, all
2
concern the notice given to the Attorney General's office and the
Department of Revenue throughout this proceeding. The findings of
fact demonstrate that the Commonwealth was given, but declined, an
opportunity to intervene in this matter by cross-examininq Sidney
Becker, offerinq additional evidence of its own, and otherwise
contesting the relief sought by Plaintiff. Without the inclusion
of these findinqs of fact, the Court's adjudication would not be
complete.
WHBRBFORB, Plaintiff requests that the Court modify the
Adjudication by adding the findings of fact listed above.
2. The AdjUdication includes finding of fact #12 which reads
as follows:
"The Department of Revenue determined that one of
the two deeds may have been corrective; therefore, one
tax d~termination was made on the March 20, 1995 deed."
Plaintiff submits that this item includes facts that do not
appear on the record.
Plaintiff pleaded the existence of the
Department of Revenue's December 8, 1995 determination letter which
assessed realty transfer tax against the March 20, 1995 deed.
However, the determination letter was not entered on the record,
and the rationale stated in the determination letter was neither
pleaded by Plaintiff nor discussed on the record at the hearinq.
WHEREFORE, Plaintiff requests that the Court modify the
AdjUdication by deleting finding of fact #12.
3
3. Plaintiff submits that the Adjudication should have
included the fOllowing conclusions of law which were previously
requested in Plaintiff's motion for adjudication and final decree,
Plaintiff's brief and Plaintiff's supplemental memorandum of law:
a. This is an action for declaratory jUdgment
pursuant to 42 Pa.C.S. S7531 at seq., for the purpose of
determining a question of actual controversy between the
parties hereto.
b. Jurisdiction of this action is based on 42
Pa.e.s. 57533.
c. Lester Associates, L.L.C. does not exist as a
legal entity.
d. As a non-existent entity, Lester Associates,
L.L.C. could neither receive nor convey title to the Real
Property.
e. This action involves the effect of the parties'
legal relation, status, right and privilege upon the
aforesaid determination of realty transfer tax, and
Revenue may therefore have entered its appearance in this
action pursuant to 42 Pa.C.S. S7540(b).
f. Revenue's interests in this action have been
adequately represented as contemplated by 42 Pa. C. s.
S7540(b).
The proposed conclusions of law stated in (a) and (b), above,
describe the nature of this proceeding and the Court 1 s jurisdiction
to decide the matter in controversy. The proposed conclusions of
law stated in (c) and (d), above, provide the foundation for the
Court's determination that the deeds in question had no legal
effect.
The proposed conclusion of law stated in (el, above,
explains Why Revenue and the Attorney General were given on-going
notice of this proceeding and Why they were given an opportunity to
4
\
intervene at the hearinq. The Adjudication would not be complete
without these statements.
section 7540(b) states that the requirements of notice to a
taxing authority shall be satisfied if the taxing authority
declines to make an appearance but the court finds that the
authority' a interests have been adequately represented. The
proposed conclusion of law stated in (f), above, is inevitable when
57540 (b) is applied to the facts of this case. Revenue and the
Attorney General had an interest in the determination of this
matter but affirmativelY declined the opportunity to intervene in
open court. If the commonwealth'S interests as a taxing authority
have not been adequately represented in thia matter, it is
difficult to imaqine any circumstances under which S7540(b) would
be satiafhd.
WHBREFORE, Plaintiff requests that the Court modify the
Adjudication by adding the conclusions of law listed above.
4. Plaintiff submits that, in addition to the declaration of
title contained in the Decree Nisi, the decree should have declared
the deeds of March 20, 1993, and August 23, 1993, to be null and
void ab initio, that said deeds did not convey, transfer, devise,
vest, confirm or evidence any transfer or deviae of real estate,
and that said deeds should be expunged from the publiC record.
These declaratory statements were previouslY requested in the
Amended complaint, plaintiff'S motion for adjudication and final
5
determine whether the deeds in question had any legal effect upon
title to the Real Property and, collaterally, whether the
Conunonwealth's interests as a taxing authority have been adequately
represented in this proceeding. Both of these determinations fall
within the Court's jurisdiction under the Declaratory Judgments
Act.
Moreover, the determinations requested by Plaintiff will not
decide the realty transfer tax issues which remain the subject of
an administrative appeal. The tribunals with jurisdiction over
realty transfer taxation will decide those issues after considering
this Court's determinations along with the other facts presented
before them. Therefore, Plaintiff respectfully submits that this
COurt should not (and does not have jurisdiction to) declare the
effect its decree will have on the transfer tax issues. The effect
of this Court's decree on the transfer tax issues will ultimately
be decided by other tribunals.
1I1lBRBl"ORE, Plaintiff requests that the Court modify the Decree
Nisi by deleting the declaratory statement set forth above.
6. The Decree Nisi contains the fOllowing statement:
"It is DECLARED, ADJUDGED, AND DECREED that by
virtue of Defendant's default, and as between the oarties
to this action. title to the property bounded and
described as follows shall be deemed to be in Plaintiff,
Lester Associates:" (emphasis added)
Plaintiff submits that the Decree Nisi should not have
included the underlined portion of the foregoing statement. For
7
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