Pennsylvania Trial Judge's Undoing Of Sheriff's Sale Where Property Sold At Less Than 50% Of Value Nixed By State Appeals Court

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette reports:

• The state Superior Court has ruled that a sheriff's sale of real estate in Middlesex, Butler County, cannot be set aside simply because a buyer came forward after the fact and made a substantially higher offer.
• A split three-judge panel said Butler County Common Pleas Judge S. Michael Yeager abused his discretion when he set aside the sheriff's sale of a home after the estate of the homeowner found a buyer willing to pay more than double what it sold for.
• Judge Christine L. Donohue said appellants Gregory Simakas and Michael Newman, the winning bidders, had lawfully purchased the property at issue. "If the property can be resold at a profit, appellants are entitled to reap the reward of the risk they took in purchasing the property at the sheriff's sale," Judge Donohue said. She was joined by Judge John L. Musmanno.

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• [M]r. Simakas and Mr. Newman purchased the house at the sheriff's sale with the winning bid of $255,800. [T]he [homeowner's] estate filed a petition to set aside the [sheriff's] sale, and Judge Yeager conducted a hearing on Jan. 26, 2011. At that hearing, the estate, pointing to comparative market analyses, argued that the property was actually worth $562,000 and that a new buyer, Alexander K. Wing, was prepared to offer $580,000 for it, Judge Donohue said.
• Judge Yeager ruled that the price Mr. Simakas and Mr. Newman had paid was grossly inadequate and ordered Mr. Wing and the estate to enter a binding purchase agreement on Jan. 31, 2011, and to close the sale by Feb. 28. On Feb. 18, however, Mr. Simakas and Mr. Newman filed a petition to intervene, asking the court to rescind the order, according to Judge Donohue.
• On Feb. 24, 2011, Judge Yeager allowed Mr. Simakas and Mr. Newman to intervene but refused to rescind the order. They appealed to the Superior Court the following day.
• Judge Donohue said that, under the Superior Court's 2002 ruling in Blue Ball National Bank v. Balmer, a decision regarding whether a sale is adequate is one that must be made on a case-by-case basis.

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• In addition, Judge Donohue said the sheriff's sale was duly advertised and lawfully conducted, noting that Mr. Wing offered no explanation as to why he wasn't present to make his bid at the sale. (Mr. Wing owns land adjoining the property, and wanted to buy the Hood property as a "buffer" for his land.)

For more, see Sale can't be set aside for late bidder.

For the court ruling, see Bank of America, NA v. Hood, 2012 PA Super 70 (Pa. Super. March 22, 2012).