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HomeMy WebLinkAbout2004-1288 Civil PHILIP V. HOFFMAN and : IN THE COURT OF COMMON PLEAS OF BARBARA D. HOFFMAN, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs : : CIVIL ACTION - LAW vs. : NO. 04-1288 CIVIL : HOMECOMINGS FINANCIAL : NETWORK, INC., and : FAIRBANKS CAPITAL CORP., : ACTION TO QUIET TITLE Defendants : IN RE: ACTION TO QUIET TITLE BEFORE HESS, J. MEMORANDUM AND ORDER At issue are four lots, owned by the plaintiffs, in Reis Acres Estates in Middlesex Township, Cumberland County. The lots are numbered B-23, B-24, B-10 and B-11. In June, 2002, a mortgage and a fixed note were executed between plaintiffs and People’s Choice Home Loan, Inc., on Lot B-23. Although plaintiffs represented that the mortgage was a lien against the entire property (all four lots), the mortgage contained a metes and bounds description of Lot 23 only. Defendants have alleged that plaintiffs knew or should have known that the mortgage was not a lien against the entire property and intentionally failed to disclose this fact to People’s Choice. The mortgage was assigned to Homecomings Financial Network, Inc. (Homecomings). After plaintiffs failed to make required payments on the obligation secured by the mortgage, an action for mortgage foreclosure was instituted. At that time, Homecomings waived its right to seek a deficiency judgment in exchange for a consent judgment in rem against plaintiffs. Judgment was entered. The sheriff advertised Lot B-23 for sale, and it was sold on December 10, 2003, to Homecomings. The sheriff executed a deed which was duly recorded. NO. 04-1288 CIVIL Homecomings subsequently listed Lots B-23, B-24, B-10, and B-11 for sale. That prompted plaintiffs to file an action to quiet title to Lots B-24, B-10, and B-11, which were neither secured by the mortgage nor sold by the sheriff. The defendants have filed a counterclaim seeking to set aside the sheriff’s sale and to have judgment entered against all four lots. After delivery and acknowledgement of the sheriff’s deed, a sheriff’s sale may be set aside only for (a) fraud in the foreclosure, or (b) lack of authority to make the sale. The seminal case on this issue is Knox v. Noggle, in which the court concluded, “. . . a sheriff's sale would not be set aside after the deed was acknowledged and delivered, except for fraud or want of authority . . .” Knox v. Noggle, 196 A. 18, 19 (Pa. 1938). A more in-depth look at that particular case leads to the conclusion that the fraud in question must affect the integrity of the sheriff’s sale itself. Id. A case which would appear to be on point is that of Trachtenberg v. Glen Alden Coal Co., where the Pennsylvania Supreme Court concluded that where there is a mistake in the description of the mortgaged property and that mistake has been carried through to sale and not recordation, the purchaser is entitled to have the deed revised “so as to vest in him property which was not expressly included in the mortgage and was not included in the sheriff’s advertisement of the property to be sold.” Trachtenberg v. Glen Alden Coal Co., 47 A.2d 820, 824 (Pa. 1946) (emphasis added). In Trachtenberg, the plaintiff owned two adjoining lots each with a frontage of thirty-five feet. The Trachtenbergs borrowed money to remodel two houses, one on each lot. In the course of remodeling, the owners installed a new front covering both buildings so as to unify the two structures. The mortgage, in that case, described only one of the lots with a frontage of thirty- 2 NO. 04-1288 CIVIL five feet. The lower court had found as fact that it was the intention of the Trachtenbergs and of the officials of the bank that the entire seventy-foot frontage should be included in the mortgage and the description of only one of the lots was the result of a mutual mistake. The Supreme Court found this fact to be supported by the record. The court went on to hold, however, that the mistake in the description of the mortgage was not the issue in the case. The question whose answer decides this case is this: Where a mistake in the description of mortgaged property has been carried to the foreclosure proceedings and the sheriff’s deed, is the purchaser entitled to have a court of equity correct the deeds so as to vest in him property which was not expressly included in the mortgage and was not included in the sheriff’s advertisement of the property to be sold? On every sound consideration of public policy, this question must be answered in the negative. To embody in a judicial opinion an affirmative answer to this question would be to countenance and establish a procedure which would be likely to open the door to irregularities prolific of great injustice and which would tend to cast uncertainty on land titles derived through or from sheriff’s deeds of title. Id., at 824. The court stated a number of reasons why it would be inequitable for a court to order the reformation of a deed after foreclosure and sheriff’s sale. We will not repeat them here. The court went on to recite the law in other jurisdictions, noting that courts have uniformly held that equity had no power to reform mortgages under the circumstances here presented. Among those discussed were cases from Alabama, Indiana, Utah, Missouri, Florida, Texas and California. We agree with the defendants that a failure to set aside the sheriff’s sale in this case will result in a windfall to the plaintiffs. This is because they will be in a position to retain real estate which clearly should have been included in the original mortgage and subsequent foreclosure. 3 NO. 04-1288 CIVIL The Supreme Court, however, has been clear in its statement of the law. Admittedly, the case is older than I am (though not by much). Nonetheless, if there is to be a change in this legal precedent, it must come from the Supreme Court and not from us. ORDER st AND NOW, this 21 day of September, 2006, it is ordered and directed that the plaintiffs are both the legal and equitable owners of Lots B-24, B-10, and B-11 of the Plan of Lots known as Reis Acres Estates in Middlesex Township, Cumberland County, Pennsylvania, and any right, title or interest of the defendants therein is herewith discharged. The request of the plaintiffs for an award of reasonable attorney’s fees is DENIED. The counterclaim of the defendants is DISMISSED. BY THE COURT, ______________________ Kevin A. Hess, J. Christopher Rice, Esquire For the Plaintiffs David Banks, Esquire For the Defendants :rlm 4 PHILIP V. HOFFMAN and : IN THE COURT OF COMMON PLEAS OF BARBARA D. HOFFMAN, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs : : CIVIL ACTION - LAW vs. : 04-1288 CIVIL : HOMECOMINGS FINANCIAL : NETWORK, INC., and : FAIRBANKS CAPITAL CORP., : ACTION TO QUIET TITLE Defendants : IN RE: ACTION TO QUIET TITLE BEFORE HESS, J. ORDER st AND NOW, this 21 day of September, 2006, it is ordered and directed that the plaintiffs are both the legal and equitable owners of Lots B-24, B-10, and B-11 of the Plan of Lots known as Reis Acres Estates in Middlesex Township, Cumberland County, Pennsylvania, and any right, title or interest of the defendants therein is herewith discharged. The request of the plaintiffs for an award of reasonable attorney’s fees is DENIED. The counterclaim of the defendants is DISMISSED. BY THE COURT, ______________________ Kevin A. Hess, J. Christopher Rice, Esquire For the Plaintiffs David Banks, Esquire For the Defendants