PHILADELPHIA – The statute of limitations applied to a complaint regarding outstanding costs related to a Philadelphia property sold at sheriff’s sale more than three years ago, has led that complaint to be dismissed in federal court.

On Jan. 10, U.S. District Court Judge Cynthia M. Rufe ruled to dismiss as time-barred and with prejudice the complaint brought by plaintiffs Thomas Kelly Jr. and Donald S. Sabatini against the defendant, the City of Philadelphia.

Kelly and Sabatini initiated the instant action on April 8, in the Philadelphia County Court of Common Pleas, and the case was removed to federal court on June 14. The plaintiffs’ original complaint named the “Philadelphia Water Department” as the sole defendant, and sought approximately $27,000 in damages for supposed violations of due process under 42 U.S.C. Section 1983.

Specifically, the plaintiffs claimed they purchased a delinquent mortgage on a property in 2002, a property sold at sheriff’s sale due to unpaid taxes on Aug. 26, 2013. The plaintiffs alleged they should have received approximately $27,000 from the sale, representing the value of the mortgage at that time.

Yet, the plaintiffs received no funds from the sale because the property was subject to super-priority water liens held by the Philadelphia Water Department, due to unpaid water bills. The plaintiffs allege this decision ran contrary to the Water Department’s “policy of routinely shutting off water service…when a customer reaches a delinquent balance of roughly $150”, and deprived them of the value of their mortgage in violation of their due process rights under the Fourteenth Amendment.

The defense moved to dismiss on several grounds, and the plaintiffs did not respond. On Sept. 15, the Court granted the motion without prejudice, due to the Philadelphia Water Department not being an entity able to be sued.

The plaintiffs then filed an amended complaint which named the City of Philadelphia as a defendant, but did not materially change any allegations associated with the complaint. The defendant again moved to dismiss, and plaintiffs again did not respond, which led the Court to resolve the defendant’s motion on the merits.

The City argues: (1) That plaintiffs fail to state a claim for municipal liability under Monell v. Department of Social Services of New York City; (2) That plaintiffs fail to state a Fourteenth Amendment claim because they have not stated either a procedural or substantive due process claim; and (3) That plaintiffs’ claim is barred by the statute of limitations.

Ultimately, the Court concluded the plaintiffs’ claim is barred by the applicable statute of limitations, nullifying the defendant’s other arguments against those claims.

Rufe explained all claims under Section 1983 are subject to a two-year statute of limitations under Pennsylvania law, which began to toll when the plaintiffs “knew or should have known of the injury that constitutes the basis for their claim.”

In this case, the plaintiffs allege the property in question was sold on Aug. 26, 2013 and for “many months” before, the property accumulated unpaid water bills, but plaintiffs did not file suit until April 8 of this year.

“Plaintiffs do not allege that they lacked notice of the sheriff’s sale, or that anything prevented them from discovering the existence of the delinquent water bills prior to the sale. Thus, at the latest, plaintiffs knew or should have known of the water liens by the date of the sheriff’s sale, and plaintiffs’ complaint, filed more than two years later, is untimely,” Rufe stated.

“Defendant argues that plaintiffs’ claims should be dismissed with prejudice, and as noted, plaintiffs have not responded or otherwise requested leave to amend. Thus, defendant’s motion to dismiss will be granted with prejudice, as plaintiffs’ claims are time-barred and leave to amend would be futile,” Rufe said.

The plaintiffs are represented by Sabatini in Philadelphia.

The defendant is represented by Jonathan Cooper of the City of Philadelphia’s Law Department, also in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-02963

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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