Lance R. Pomerantz
Attorney at Law

Land     Title     Law

“Constructive Notice”  The  Newsletter

Excerpted from the March 30, 2016 mailing of "Constructive Notice":

Effect of Bankruptcy on Adverse Possession

A very murky area of adverse possession law got murkier with a recent decision from the Superior Court of Pennsylvania.

In 2010, the Superior Court adopted the rule that a bankruptcy filing by the record owner of property interrupted the continuity of possession claimed by the adverse possessor. Because the property is deemed to be in custodia legis during the pendency of the bankruptcy proceeding (pursuant to the Bankruptcy Code), the time from the filing of the petition until the order of closure is omitted from calculation of the adverse possession period, Showalter v. Pantaleo, 9 A. 3d 233 (2010) appeal denied, 20 A.3d 489 (Pa. 2011).

The recent case, however, extends this concept even further. In Bezjak v. Diamond, 2016 PA Super 57 (March 3, 2016), the court found the rule applicable when the adverse claimant was the party who had been in bankruptcy. In Bezjak, Pontorero Coal Co. had taken physical possession of the disputed land in 1977, filed bankruptcy in 1983, and continued in physical possession until 2002, when Bezjak purchased it from the bankruptcy trustee. After excluding the time from 1983 until 2002, during which the property was part of the bankruptcy estate, Bezjak could not show the requisite twenty-one years of continuous possession needed for Pontorero Coal to have established title under Pennsylvania law.


The earliest case law concerning bankruptcy of the record owner rationalizes the doctrine on the ground that the bankruptcy court could have adjudicated the adverse claim in the debtor’s (and therefore, the estate’s) favor, had the claim been presented. In a Bezjak fact pattern, the custodial possession by the bankruptcy court could be characterized as continuing the possession of the debtor in order to maximize the value of the estate. The adverse possession claim was apparently not set up in the Pontorero Coal petition because the debtor believed the disputed parcel was within the record description of its adjoining parcel. Query: would a different result obtain had the case been brought as an adversary proceeding in a re-opened bankruptcy?