Commonwealth v. Hoffman

OPINION BY

Sandra Hoffman appeals the judgment of sentence entered in the Court of Common Pleas of Mercer County (trial court) which sentenced Hoffman to pay fines totaling $700.00 based upon the adjudication of guilt for Hoffman’s seven violations of Section 829.09 of the Codified Ordinances (Ordinance) 1 of the City of Sharon (City). 2 *1159 We reverse the judgment of sentence and discharge Hoffman.

The facts as stipulated in the trial court reveal the following. Hoffman owns seven properties located at the following addresses in the City’s Fourth Ward: (1) 678 Stambaugh Avenue; (2) 926 Sherman Avenue; (3) 554 Sherman Avenue; (4) 710 Stambaugh Avenue; (5) 702 Stambaugh Avenue; (6) 432 Baldwin Avenue; and (7) 172 White Avenue. There are tenants residing in each of the properties, and tenants have been continually residing in the properties since at least January 1, 2004. All of the tenants are on a month-to-month tenancy based on oral leases, and each tenancy is automatically renewed each month absent notice of termination by either Hoffman or the tenant. Hoffman has not received a license for any of the rental properties as required by Chapter 829 of the Ordinance because there were past due sewage charges owing for the properties at the time she had applied for the licenses with the City.

On August 14, 2006, citations were issued by the City’s Code Enforcement Officer charging Hoffman with violating Section 829.09 of the Ordinance by failing to secure a rental license for each of the rental properties after receiving a twenty-day written notice from the officer. 3 On *1160 September 29, 2006, a district justice adjudged Hoffman guilty of the violations and imposed fines and costs totaling $1,088.50.

Hoffman appealed the convictions to the trial court, which conducted a de novo hearing on November 30, 2006. At the hearing, counsel for the Commonwealth and Hoffman’s counsel entered the foregoing stipulated facts into the record. See N.T. 11/30/06 4 at 2-3. Following the hearing, the trial court issued an order stating that it had taken the case under advisement, and directed Hoffman to file a brief addressing her assertion that the Ordinance was unconstitutional because it violates her rights as guaranteed by the Due Process Clause of Section 1 of the Fourteenth Amendment to the United States Constitution 5 , 6 , and because it interferes with her right to contract as guaranteed by Article 1, Section 17 of the Pennsylvania Constitution 7 and Article 1, Section 10, Clause 1 of the United States Constitution. 8 Ultimately, on January 19, 2007, the trial court issued an order denying Hoffman’s constitutional claims, adjudicating Hoffman guilty of each violation of the Ordinance, and imposing a $100.00 fine for each violation of the Ordinance. Hoffman then filed the instant appeal. 9 , 10 , 11

In this appeal, Hoffman claims that the convictions for violating Chapter 829 of the City’s Ordinance violate her due process rights as guaranteed by the United States Constitution and her right to contract as guaranteed by the Pennsylvania and United States Constitutions. Because *1161 the instant convictions are based upon a void ordinance, we agree that its continued enforcement would violate Hoffman’s due process rights. 12

In Trigona v. Lender, 926 A.2d 1226 (Pa.Cmwlth.2007), the City of Jeanette adopted an ordinance prohibiting the issuance of licenses and permits pertaining to real property in Jeanette if the applicant owes real estate taxes or municipal debt. 13 A corporation filed an action in the Court of Common Pleas of Westmoreland County alleging, inter alia, that the ordinance was a tax collection device not authorized by the Third Class City Code 14 , and seeking a declaration that the ordinance exceeded Jeanette’s statutory authority. The court found that the intent of the ordinance was to sanction persons delinquent in the payment of taxes and, as a result, served as a tax collection device. The court also found that the Third Class City Code did not authorize the enactment of the ordinance. As a result, the court determined that the ordinance was invalid.

On appeal to this Court, Jeanette maintained that the ordinance was a valid exercise of its police power, and that it possessed inherent rights under the Third Class County Code, the Local Tax Enabling Act 15 , and the statute commonly known as the Municipal Claims and Tax Liens Act (Municipal Claims Act) 16 , to withhold licenses and permits as a means of collecting real estate taxes and municipal debt. In rejecting these assertions, this Court stated the following, in pertinent part:

The Supreme Court recently explained the difference between real estate taxes and other municipal claims:

Historically, the legislature divided taxes into two categories: general and special taxes. General taxes were levied by a municipality to pay for its expenses, compelling all citizens and property within its limits to contribute. [...] Special taxes, on the other *1162 hand, were levied by a municipality on certain properties to pay for improvements that only enhances the value of the specially taxed property. Today, the General Assembly continues to differentiate between the legal claims arising from these two types of assessments, calling claims arising from unpaid general taxes as “tax claims” and claims arising from unpaid special taxes as “municipal claims”. Specifically, Section [1 of the Municipal Claims Act] defines a “tax claim” as a “claim filed to recover taxes.” 53 P.S. § 7101. Meanwhile, “municipal claim” is defined as a claim arising out of or resulting from a tax assessed by a municipality to recover for a taxpayer’s benefits from local improvements, services supplied, work done, or improvements authorized and undertaken by the municipality[.... ] Thus, [the Municipal Claims Act] makes an explicit distinction between tax claims filed as a result of unpaid general taxes, ... and municipal claims filed as a result of unpaid special taxes.

This distinction is further observed in the statutory collection methods authorized by the Municipal Claims Act and the Third Class City Code. Section 1 of the Municipal Claims Act[, Act of March 21, 1945, P.L. 47, as amended, 53 P.S. § 7102,] sets local taxes as first hens on real property when assessed by the proper authority. Similarly, Section 3 of the Municipal Claims Act, 53 P.S. § 7106, provides all municipal claims are hens on the improved property when assessed. In accord with these provisions, Sections 9 through 11, 53 P.S. §§ 7143-45, set forth the time, place and manner of filing of claims. Consistent with the Municipal Claims Act, the Third Class City Code requires the city treasurer to schedule uncollected taxes for the purpose of lien or sale. Sections ‘2537 and 2541 of the Third Class City Code, 53 P.S. §§ 37537 and 37541.

A third class city derives its municipal claims collection authority from the Third Class City Code. In particular, Section 3302 of the Third Class City Code, 53 P.S. § 38302 authorizes assessment collection in the same manner as the collection of municipal claims. Municipal claims collection is governed by Section 4601 of the Third Class City Code, 53 P.S. §§ 39601. In addition to the filing of hens, Section 4601 authorizes third class cities to proceed in as-sumpsit against the appropriate property owner. The Third Class City Code is consistent with Section 1 of the Municipal Claims Act, which authorizes other municipal corporations to pursue actions in assumpsit in addition to filing hens for the cohection of municipal claims. 53 P.S. § 7251.

The above statutory provisions provide an exclusive framework for the collection of real property taxes and municipal claims by third class cities. Municipal claims are creatures of statute; and any right to enforce collection is also statutory.

Trigona, 926 A.2d at 1234-1235 (citations and footnotes omitted and emphasis in original). As a result, this Court concluded that Jeanette lacked the express, implied and necessary power to enact the ordinance to withhold licenses and permits as a means of collecting real estate taxes and municipal debt. Id. at 1235-1236.

As an additional reason for concluding that the enactment of the ordinance was beyond Jeanette’s municipal powers, this Court noted:

[T]he Ordinance here imposes a disability on a dehnquent property owner, not on dehnquent property. It raises, *1163 therefore, a procedure against persons, as opposed to an in rem or property-based remedy....

However, the statutory provisions discussed above restrict the collection of municipal obligations to those directly associated with the particular property for which the taxes or claims are owed. For this reason, the Ordinance creates an impermissibly broad remedy.

Id. at 1236 (citations omitted).

Based on the foregoing, it is clear that the City lacked the express, implied and necessary power to enact the provisions in the Ordinance to withhold licenses and permits as a means of collecting real estate taxes and municipal debt. Id. As a result, the provisions in the Ordinance authorizing the imposition of civil fines and imprisonment are void. Id. Because the judgment of sentence in this case is based upon these void provisions in the Ordinance, it must be reversed and Hoffman must be discharged. Michuck.

Accordingly, the judgment of sentence is reversed, and Hoffman is discharged.

ORDER

AND NOW, this 11th day of December, 2007, the judgment of sentence entered in the Court of Common Pleas of Mercer County, dated January 19, 2007 at No. 71 SA 2006, 72 SA 2006, 73 SA 2006, 74 SA 2006, 75 SA 2006, 77 SA 2006 and 78 SA 2006, is REVERSED, and Sandra Hoffman is DISCHARGED.