SUNBURY - A sheriff's sale for Center City Apartments has been delayed again as the two sides involved in an ownership dispute wait to see if the Pennsylvania Supreme Court will hear an appeal.
Representatives of the Shamokin Housing Authority and Red Gold Enterprises Inc. were back in Northumberland County Court Tuesday morning for a 15-minute hearing on whether the sale of the Shamokin apartment complex could proceed.
Red Gold attorney Robert Cravitz said the company is trying to "toe the line" by paying its share of taxes and expenses to keep the building operating, as ordered by the court refereeing the dispute.
Later in his argument, Cravitz questioned why there is a need to rush into a sheriff's sale.
"This is a mortgage that the housing authority has paid nothing for," he said. "All they are doing is causing ill repute to my clients."
Cravitz said Red Gold should be entitled to pursue every legal avenue possible before anything is done with the building.
Appeal process
On June 1, 2009, the Pennsylvania Housing Finance Agency (PHFA), through which Red Gold had acquired a mortgage and support mortgage in 1988, transferred the mortgages - totaling more than $1 million - to the authority because Red Gold failed to make payments.
On July 21, 2009, a month before the property was set to be sold at a county judicial sale, Red Gold paid its back taxes and said it had reclaimed ownership of the property and the right to collect subsidy payments from tenants. Approximately 30 people lived in the five-story complex at Shamokin and Independence streets.
A week later, Red Gold sued the authority, asking that it pay the subsidy money it had withheld. It also sought relief for defamation of character and breach of contract.
Also in the suit, Red Gold claimed that when the foreclosure action - filed by PHFA because Red Gold had not made a mortgage payment since February 1998 - was dismissed with prejudice in 2004 after four years of inactivity, it rendered the promissory notes on the mortgages invalid and the authority's acquisition of the notes didn't give it ownership of the building.
Currently, some tenants pay their rent to Red Gold, while others pay the authority, which holds the money in escrow as ordered by the court until the ownership dispute is settled.
After Northumberland County Judge Charles Saylor ruled the mortgages were valid and quashed a motion to reconsider his verdict, Red Gold on Feb. 8, 2010, appealed the case to the Pennsylvania Superior Court. On May 27, the court affirmed Saylor's verdict and the validity of the mortgages.
As the Superior Court was considering the case, however, the authority attempted to schedule a sheriff sale. Saylor ordered it delayed until the appeal was decided.
With the recent decision, authority attorney Clayton Davidson asked the court to reinstate the sheriff's sale, prompting Tuesday's hearing.
Davidson argued that, despite Red Gold appealing the ruling to the state Supreme Court on June 24 for review and possible hearing, there is no need to wait any longer.
"The Supreme Court has certain standards of granting an appeal, and they have not met them," Davidson said.
Asked by Saylor what harm would occur to continue the stay, Davidson said it is simply a matter of putting the building on the sheriff sale list.
"If the appeal is going to be heard, we can postpone the sale. If we apply now, the sale would probably be held in October. If the Supreme Court makes a decision before that time, we are set to go," Davidson said.
"I've always had the interest of the tenants in mind with this issue, and there is no great need that I can see to get on the list at this time," Saylor said. "If we wait to hear from the state Supreme Court, and then allow the property on the list, then all parties can plan for the transition, if there is a need for one."