Courts: No class action payment for thousands whose properties have been sold at sheriff's sale

(NOTE: Previous post had an inaccurate headline. Not everyone needs to hire an attorney to get any sheriff's sale monies they are owed.) 

Former Philadelphia property owners who lost their homes to a sheriff’s sale must claim sale proceeds, if any, individually, Commonwealth Court ruled last week, dismissing a class action suit appeal.

Joseph O’Hara and his company Finn Land Corp., the representatives in the class in the 2011 lawsuit, sued the Philadelphia Sheriff’s Office for failure to distribute millions of dollars to former property owners who were owed proceeds. The lawsuit was based on a City Controller’s audit of the sheriff’s office that questioned the use of $53 million in custodial funds. A later forensic audit concluded that the “primary source” of $5.2 million in unclaimed bank balances between 2006 and 2010 were undistributed excess sale proceeds.

The complaint stated that excess proceeds remained with the sheriff’s office after the liens were paid and that, despite numerous requests, the sheriff’s office did not distribute the monies.

“The basis of our lawsuit was distribute the money instead of having every individual file a lawsuit,” said Christy Adams, the lawyer who represented O’Hara. The plaintiffs were also seeking the interest on the unclaimed funds.

Philadelphia Common Pleas Court ruled against O’Hara and on Thursday a three-judge Commonwealth Court panel released an opinion agreeing with the lower court’s ruling.

“The major issue was whether class is an appropriate way to distribute this money,” said Stephanie Kosta, a Duane Morris attorney who represented the state in the matter. The Department of Treasury intervened in the lawsuit against the Sheriff’s office, citing its responsibility in holding the sale proceed funds once they have gone uncollected for five years.

Commonwealth Court Judge Anne E. Covey, who wrote the opinion, said there was already a structure in place for people to request monies owed to them by the sheriff or state and that the classes were not defined with “sufficient precision.”

Adams said she will be appealing to state Supreme Court. 

“For $500, $1,000 or $2,000 that they are owed, many don’t have resources to hire an attorney," Adams said. "Most people just give up.”

But Pennsylvania Treasury Chief Counsel Christopher Craig said people don't need to hire an attorney to claim money due to them once it is in the state's possession. (The city turns over unclaimed sheriff's sale funds to state Treasury after five years.) 

"Property held by the State Treasurer remains, in perpetuity, available to be claimed by the lawful property owner," Craig said. "It only requires downloading a form, completing it, and submitting it for approval."

That form can be found at 

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