Warren County's lien against a Sugar Grove Township property stands following a ruling by Judge Gregory Hammond on Tuesday afternoon.
Hammond denied a petition for equitable relief by attorneys for the U.S. Bank National Association and Randal and Rebecca Brown.
The matter concerned a property at 9231 Jackson Run Rd.
According to Lorri Dunlap, Warren County grants administrator, in 1996 the county utilized federal grant funds to rehabilitate the property as part of a low-to-moderate income housing program that it has since ended. Funds for the county program originated from the U.S. Department of Housing and Urban Development's HOME Investments Partnerships Program and were released to the county through the Pennsylvania Department of Community and Economic Development.
Improvement work, which totaled approximately $52,000, was completed on the property on May 17, 2006.
Under the program, funds were recovered for the work by placing a lien against a property mortgage. In the case of the Jackson Run property, the lien would have been discharged five years after completion of work in May 2011.
Before the lien could be discharged, Charles and Carolyn Dickson, the mortgage holders for the property, went through foreclosure.
U.S. Bank acquired the Jackson Run Road property at a sheriff's sale for $4,244.26 in November 2010.
In turn, the bank sold the property to the Browns after having the property appraised at approximately $21,000.
At the time, liens against the property, including approximately $10,000 required to discharge Warren County's claim, totaled approximately $28,000.
Claiming it could not recover enough from the sale of the property to cover the cost of purchase of the property and the liens against it, U.S. Bank petitioned the court for equitable relief in an effort to have the liens discharged.
The bank had already sold the property to the Browns prior to its petition for relief.
"How is it they (U.S. Bank) could give a quit claim deed to the Browns knowing these liens are outstanding?" Hammond asked an attorney representing the bank on Tuesday. "How is it they can, in good faith, misrepresent ownership in their motion to this court?"
On Monday, July 2, Warren County filed a petition for interventionist status to allow it to argue to have its lien upheld.
Randal Brown, who purchased the property through a realtor and closed the purchase through a sale company, said he was unaware of any problems with the title until Warren County Solicitor Barry Klenowski contacted him.
"I assumed that was all being taken care of by the sale company," Brown told Hammond, referring to a title search.
Brown verified he had purchased title insurance and, prior to issuing his denial, Hammond assured Brown he "found no fault" with his actions in the matter. Hammond said he felt the title insurance would cover any obligations Brown might later be found liable for.
"I filed the petition because I didn't think it was fair to Mr. Brown or the county," Klenowski said. "The bank is essentially asking the court to put the horse back in the barn."
According to Hammond, the basis of his denial was that the bank did not notify the county at the time of sale of the property and misrepresented the situation to both the court and the Browns. As a result, he denied the petition for equitable relief and the county's lien stands.
"Generally, when a party comes into court to ask for equitable relief, they come with clean hands," Hammond said just prior to the ruling.
Dunlap noted the county would apply funds recovered from the lien to existing open grant programs as the original program has ended.