Saturday, June 13, 2015

Civil Rights Feds: City Of Beaumont's Excessive Zoning, Fire Code Restrictions Applied To Small Group, Companion Care Homes For Up To Four Intellectually/Developmentally Disabled Residents Per Premises Is Discriminatory, Violates Fair Housing Act, ADA

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] filed a lawsuit against the city of Beaumont, Texas, alleging violations of the Fair Housing Act and the Americans with Disabilities Act. The lawsuit, filed in U.S. District Court for the Eastern District of Texas, charges that Beaumont discriminated against persons with disabilities based on its treatment of small group homes and companion care homes for persons with intellectual or developmental disabilities by applying overly-restrictive zoning and fire code restrictions that are not imposed on similarly-situated housing for persons who do not have disabilities.(1)

    The suit seeks a court order prohibiting Beaumont from imposing a one-half mile spacing rule that effectively prohibits many small group homes and companion care homes from operating in Beaumont. The suit further seeks to prohibit Beaumont from imposing unnecessary fire code requirements that exceed those mandated by the state of Texas, which regulates such homes.

    The city’s excessive restrictions have prohibited numerous persons with intellectual or developmental disabilities from living in Beaumont and resulted in the institutionalization in a nursing home of a woman who was forced to move out of her home
    . The suit also seeks monetary damages to compensate victims, as well as payment of a civil penalty.

    This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by persons with intellectual or developmental disabilities whose homes were closed and were threatened with closure under Beaumont’s challenged housing restrictions.(2)
For the press release, see Justice Department Sues Beaumont, Texas, for Discrimination Against People with Disabilities.

For the lawsuit, see USA v. City of Beaumont.

Editor's Note: See HUD Announces Agreement With Anchorage, Alaska To Lift Housing Restrictions For People With Disabilities, where the city of Anchorage, Alaska recently resolved similar allegations that its zoning laws violated the Fair Housing Act and other civil rights laws by discriminating against people with disabilities. Specifically, HUD’s complaint alleged the city’s zoning code imposed restrictions on groups with certain disabilities such as maximum occupancy standards and fees which were not imposed on other groups.


(1) Among the allegations in the lawsuit made by the Feds:
  • The City has discriminated on the basis of disability by preventing or inhibiting the operation of small community homes of up to four residents for persons with intellectual or developmental disabilities, [...].
(2) In Olmstead v. L.C., 527 U.S. 581 (1999), the Supreme Court held that under the Americans with Disabilities Act, individuals with mental disabilities have the right to live in the community rather than in institutions if, in the words of the opinion of the Court, "the State's treatment professionals have determined that community placement is appropriate, the transfer from institutional care to a less restrictive setting is not opposed by the affected individual, and the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities." (Reference: Wikipedia).

Two Major NYC Housing Co-ops Agree To Settle Fair Housing Suits In Which Civil Rights Feds Alleged They Refuse To Make Make Reasonable Accommodations With Disabled Residents Needing Service Or Emotional Support Animals; One Outfit Attempted To Dodge Law By Imposing Unduly Burdensome Application Process, Requirements To Grant 'No-Pets Rule' Waiver

In separate announcements, the U.S. Attorney for the Southern District of New York (Manhattan) announced settlements of civil rights lawsuits with two large New York City housing cooperatives, in which the Feds alleged that the co-ops failed to provide reasonable accommodations to its disabled residents who require service or assistance animals.


USA v. Riverbay Corporation (aka "Co-op City") - according to the complaint filed in federal court:
  • RIVERBAY, located in the Bronx, New York, is the owner and operator of the largest affordable housing cooperative in the United States, with approximately 15,372 residential units and 60,000 residents. RIVERBAY has used an unlawful policy governing waivers to its no-pets rule to deny accommodation requests of persons with disabilities, and has engaged in a pattern or practice of discrimination toward persons with disabilities who request accommodations to its no-pets rule.

    Specifically, until December 2011, when RIVERBAY amended its policy and application governing reasonable accommodations, RIVERBAY’s application for requesting a reasonable accommodation to its no-pets rule consisted of five forms (including one required to be completed only in blue ink and another required to be typewritten), prohibited certain breeds of dogs, required animals to be neutered or spayed, imposed annual renewal requirements and required the applicant to provide his or her medical records. In December 2011 and again in July 2014, RIVERBAY amended its reasonable accommodation policy, but left in place many of the provisions in the first policy, including a prohibition against certain breeds of animals, a prohibition which RIVERBAY could waive based only on an applicant’s “medical need” for that particular breed.
For more, see Manhattan U.S. Attorney Settles Civil Rights Lawsuit Alleging Discriminatory Service Animal Policy At Largest Cooperative Development In The United States (Co-op City Agrees to Enhance Accessibility, Pay Civil Penalties and Establish an Aggrieved Persons Fund).


USA v. East River Housing Corporation - according to the complaint filed in federal court:
  • EAST RIVER is a private 1,672-unit housing cooperative on the Lower East Side of Manhattan. It has no written or established policies or procedures for making reasonable accommodations for individuals who require service or emotional support animals because of a disability. Complainants Amy Eisenberg, Steven Gilbert, and Stephanie Aaron, all EAST RIVER residents, each brought a dog into their apartments and sought to be permitted to keep those dogs as reasonable accommodations of their disabilities. EAST RIVER either denied the requests or failed to respond to them, and instead instituted eviction proceedings against each of the complainants in New York City Housing Court (“Housing Court”). The three residents then filed complaints with the U.S. Department of Housing and Urban Development and/or the New York State Division of Human Rights, which in each case found reasonable cause to believe that EAST RIVER had violated the Fair Housing Act by refusing to grant the requested accommodation, and in the case of Mr. Gilbert further found that EAST RIVER had retaliated against him for exercising his right to file a complaint. EAST RIVER elected to have the claims against it brought in federal court.

    The Government’s complaint alleges that EAST RIVER violated the Fair Housing Act by refusing to make reasonable accommodations when such accommodations may be necessary to afford persons with disabilities equal opportunity to use and enjoy their dwellings, and by coercing, intimidating, threatening, and interfering with the exercise or enjoyment of a dwelling on account of a complainant’s having exercised his or her rights under the Act.

    The Government further alleged that EAST RIVER’s conduct constituted a pattern of resistance to the full enjoyment of rights granted by the Fair Housing Act, and a denial to a group of persons of the rights granted by the Fair Housing Act.

Bankster Agrees To Cough Up $9M Plus Administrator's Costs To Resolve Allegations That It Soaked Thousands Of Blacks, Hispanics For Higher Fees On Home Mortgages Based, Not On Borrower Risk, But On Race/Nat'l Origin

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department and Consumer Financial Protection Bureau (Bureau) filed a consent order [] to resolve allegations that Provident Funding Associates (Provident) engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2006 and 2011 from Provident’s nationwide network of mortgage brokers.

    The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Northern District of California. The complaint alleges that Provident violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA) by charging thousands of African-American and Hispanic borrowers higher fees on mortgage loans not based on borrower risk, but because of their race or national origin. Provident cooperated fully with the agencies’ investigation into its lending practices and agreed to settle this matter without contested litigation.


    The lawsuit originated from a 2011 referral by the Federal Trade Commission (FTC) to the Justice Department’s Civil Rights Division. In 2012, the Bureau joined the Justice Department’s investigation.

    Under the terms of the proposed settlement, Provident will pay $9 million into a fund for the benefit of victims of its alleged mortgage lending discrimination. The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies identify as victims of Provident’s discrimination, at no cost to the borrowers. Provident will pay all costs and expenses of the administrator. Borrowers who are eligible for compensation will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.
For the press release, see Justice Department and Consumer Financial Protection Bureau Reach Settlement with Provident Funding Associates to Resolve Allegations of Mortgage Lending Discrimination (Settlement Provides $9 Million in Compensation to African-American and Hispanic Borrowers).

Friday, June 12, 2015

Three-Time Loser Gets 28 Years For Forging Title To Dead Houston Woman's Residence & Flipping It To Unwitting Couple; Evidence Points To Scammer Being Part Of Larger Racket Of Title Hijackers Who've Run Dozens Of Similar Home Heists Targeting Mostly Black Neighborhoods

In Houston, Texas, the Houston Chronicle reports:
  • Calvin Remo, described by Harris County prosecutor Valerie Turner as a player in one of the biggest deed scam fraud schemes in Harris County history, was sentenced to 28 years for real estate theft [...].


    A jury found Remo guilty of the scam on May 22 based on testimony the Humble man used falsified deed records to lay claim to a house that really belonged to an absentee owner in California, the only son of a Houston woman who died in 1999. He and an accomplice forged the dead woman's name on a deed and resold that stolen property to an unsuspecting Hispanic family.

    Remo was charged with the theft of only one home but faced a long sentence because he had two prior felony convictions and because of evidence that he was connected to a ring that carried out dozens of similar deed scams. His sentencing was delayed for days after major flooding closed down the Harris County courthouse for two days after the Memorial Day storm, sending water into the basement and entering elevator shafts.

    Cheated home buyers

    In Remo's trial, witnesses said he and another convicted felon, Herther Solomon, allegedly posted for sale signs in Spanish in front of houses they did not own in order to lure unsuspecting buyers. Clemente Puente, a construction worker originally from Monterrey, Mexico, said he and his wife bought a house from the pair as a retirement home in order to live near their grandchildren in Houston.


    Many false deeds

    Testimony in the trial, records in other criminal cases as well as a civil lawsuit filed by the Texas Attorney General's Office (go here for temporary restraining orderaccused Remo and Solomon of being part of a larger group of Houstonians who used bogus deeds to steal dozens of properties in different mostly African-American Houston neighborhoods.(1) Case files show many of those scams involved falsifying deed records, sometimes using the names of long-dead property owners to lay claim to mostly empty houses that typically belonged to absentee or elderly home owners.

    There have been so many different organized real estate theft rings in Harris County involving forged deeds that both the Harris County district attorney and the Harris County clerk asked for authorization from the legislature this year to require anyone who records a property sale by deed to present identification that county officials can track in a separate log.
For more, see Humble man sentenced to 28 years for real estate theft (Felon, partner forged records, resold homes that did not belong to them, prosecutors say).


(1) See Texas AG Takes Legal Action to Halt Houston Area Mortgage Scheme (The Texas Attorney General's civil lawsuit named James Lanier King, Edward Charles Gray, Charles Eddie Hensley; Callie Hall Herpin; Gustavia Renee Hall; Calvin Balanda Remo; Matthew Wade; Cheryl Shree Swinson; Oscar Hernandez; and Vallery’s House, a nonprofit corporation, as defendants.)

Another Tax Deed Declared Void; County's Failure To Take Further Action When Mailed Notice Of Tax Sale To Homeowner Is Returned Unclaimed Fatal To Sale Process; Oklahoma Supremes: Gov't Can't Simply Shrug Shoulders & Say 'We Tried'

From a Justia US Law Opinion Summary:
  • The question presented on appeal to the Oklahoma Supreme Court in this case was whether an owner of real property received constitutionally sufficient notice of the sale of his property for delinquent taxes when notice was provided only by publication and certified mail that was returned undelivered.

    Appellant-landowner neglected to pay taxes on certain real property in McIntosh County. The property was sold at a tax sale and a tax deed was issued to the buyer. The landowner filed suit seeking to invalidate the tax deed and quiet title in himself, asserting that the sale and resultant deed were void because he was not given constitutionally sufficient notice of the sale and was denied his right to redeem the property. Both the landowner and the county defendants moved for summary judgment.

    The trial court granted the county defendants' motion and denied the landowners. The landowner appealed, and the Court of Civil Appeals affirmed.

    After review, the Supreme Court held: (1) that the landowner did not receive constitutionally sufficient notice; and (2) the sale and resultant tax deed were therefore void.(1)
Source: Opinion Summary - Crownover v. Keel.

For the court ruling, see Crownover v. Keel, 2015 OK 35 (Okla. May 26, 2015) (Editor's Note: At this time, this opinion has not yet been released for publication. Until released, it is subject to revision or withdrawl).


(1) Some of the Oklahoma Supreme Court's reasoning backing its conclusion follows:
  • ¶ 1 The question presented on appeal is whether an owner of real property received constitutionally sufficient notice of the sale of his property for delinquent taxes when notice was provided only by publication and certified mail that was returned undelivered. We hold that he did not.


    ¶ 19 The notice requirement of due process is not satisfied where, as here, notice sent via certified mail is returned undelivered and no further action is taken. The decision of the United States Supreme Court in Jones v. Flowers, 547 U.S. 220, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006), is directly on point concerning notice required to satisfy the requirements of due process prior to sale of real property for delinquent taxation.

    In Jones, under similar facts to this cause, the Supreme Court of the United States determined that "when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so." Jones, 547 U.S. at 225. The tax sale in Jones occurred after the State published notice in a newspaper and attempted to notify the property owner—who no longer lived on the property—by certified mail twice, with the notice returned unclaimed both times. Jones, 547 U.S. at 223-224.

    ¶ 20 The Jones Court reaffirmed that the due process clause of the United States Constitution does not require that a property owner receive actual notice before the government may take his property. 547 U.S. at 226; Dusenberry v. United States, 534 U.S. 161, 170, 122 S.Ct. 694, 151 L.Ed.2d 597 (2002). However, the Court also noted that:

    .... due process requires the government to provide "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections."

    . . . .

    .... In Mullane we stated that "when notice is a person's due ... [t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it" . . .

    Jones, 547 U.S. at 226, 229 (quoting Mullane v. Central Bank & Trust Co., 339 U.S. 306, 314-315, 70 S.Ct. 652, 94 L.Ed. 865 (1950)).

    In Jones, much as in this cause, the State argued that it satisfied the notice requirement of due process through the act of sending notice via certified mail. The Court disagreed, holding:

    .... We do not think that a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed.

    .... If the Commissioner prepared a stack of letters to mail to delinquent taxpayers, handed them to the postman, and then watched as the departing postman accidentally dropped the letters down a storm drain, one would certainly expect the Commissioner's office to prepare a new stack of letters and send them again. No one "desirous of actually informing" the owners would simply shrug his shoulders as the letters disappeared and say "I tried." Failure to follow up would be unreasonable, despite the fact that the letters were reasonably calculated to reach their intended recipients when delivered to the postman.

    Jones, 547 U.S. at 229 (emphasis added).

    The Jones court also stated succinctly that the property owner's failure to keep his address updated, which was required by statute, did not result in the owner somehow forfeiting his right to constitutionally sufficient notice.

    547 U.S. at 229. Further, "the common knowledge that property may become subject to government taking when taxes are not paid does not excuse the government from complying with its constitutional obligation of notice before taking private property." 547 U.S. at 232.

    ¶ 21 While the Jones Court determined that the State should have taken other reasonable measures to reach the property owner, it stopped short of requiring the state to search elsewhere for an address for the property owner, noting that an open-ended search for a new address would unduly burden the State.

    547 U.S. at 236. Rather, the Court suggested reasonable measures such as posting notice on the property door, or even sending notice by regular mail, which could at least have resulted in its delivery and presence on the property. Jones, 547 U.S. at 235. The Court noted that it was not its responsibility to redraft the State's notice statute, but it was sufficient that the Court was confident additional reasonable steps were available for Arkansas to employ before taking the property. Jones, 547 U.S. at 238. The Court concluded:

    .... There is no reason to suppose that the State will ever be less than fully zealous in its efforts to secure the tax revenue it needs. The same cannot be said for the State's efforts to ensure that its citizens receive proper notice before the State takes action against them. In this case, the State is exerting extraordinary power against a property owner-taking and selling a house he owns. It is not too much to insist that the State do a bit more to attempt to let him know about it when the notice letter addressed to him is returned unclaimed.

    Jones, 547 U.S. at 239.

Thursday, June 11, 2015

Florida Appeals Court To Cash-Snatching Judgment Creditor: Hands Off Debtor's $458K In Home Sale Proceeds! State Exemption Against Certain Collection Activity Protects 'Homeless' Homeowner In Between Abodes

The following facts have been adapted from a recent ruling from a Florida appeals court:
  1. In 2010, a judgment creditor obtained its judgment for over $740,000 against homeowner.
  2. Under Florida law (Florida Constitution, Article X, Section 4), the homeowner's home (with certain limitations not relevant here) is generally exempt from collection actions from creditors holding non-consensual liens (ie. non-mortgage judgment creditors). Consequently, the creditor's judgment did not create a lien on the home.
  3. On October 28, 2013, in connection with a divorce from his co-owner/wife, the marital home was sold. Until he could buy himself a new home, the 'now-homeless' homeowner took his $458,000+ share of the sale proceeds and dumped it into an account with a financial institution (ie. Wells Fargo), which he entitled "FL Homestead Account" and was split into three sub-accounts.
  4. As of February 28, 2014, a cash sub-account held $139,000+, and two securities/brokerage sub-accounts containing mutual funds and unit investment trusts held a total of $322,000+. Apparently, the value held in these accounts (now totaling $461,000+) had appreciated by a couple of thousand dollars.
  5. Early in 2014, the judgment creditor (obviously in the mood to get paid, now that the homeowner sold his home and his share of the now-liquidated home equity therein is being held in the form of cash and marketable securities with Wells Fargo) makes a grab for the loot sitting in the brokerage accounts by serving garnishment writs on Wells Fargo directed at those accounts (it left the $139,000+ in the cash account alone).
  6. The judgment creditor claimed that, because this "now-homeless" homeowner used a portion of his home sale proceeds to buy securities instead of reinvesting it in a new homestead, that portion of the money forfeited its homestead protection and should be made available to satisfy the $740,000+ money judgment.
Under Florida case law, a homeowner has a "reasonable period of time"(1) (although no court has specifically defined exactly how much time is reasonable) to reinvest the proceeds of a home sale into a new homestead without subjecting the money to creditor claims. In this case, the courts decided that taking some of the sale proceeds and temporarily investing it in mutual funds and unit investment trusts until a new home could be purchased was not inconsistent with the purposes of homestead and. accordingly, held that the funds did not lose their protected status(2) (although in its ruling, the appeals court did say that the exemption should not be applied in a way that encourages excessive speculation with the proceeds of a sale. Here, the court pointed out that there was no evidence that the securities in the brokerage account were particularly risky and the funds were kept "separate and apart" from the homeowner's other funds(3)).

Consequently, the trial court dissolved the garnishment writs, and told the judgment creditor to come back in over a month to check on the status of the money held in the accounts and that it could feel free to reassert its claim on the money at that time or thereafter.

The Florida appeals court affirmed the lower court ruling (although it did specifically point out that it was not necessarily ruling that the appreciation in value of the securities held in the accounts was also protected, since that point was not argued by the parties; maybe this was the appeals court's way of telegraphing an invitation to the judgment creditor to argue in the future that, even if the sale proceeds maintain their protected status, the accrued appreciation on those funds does not).(4)

For the appeals court ruling, see JBK Associates, Inc. v. Sill Bros., Inc., No. 4D14-3049 (Fla. App. 4th DCA, March 11, 2015).

See also:

(1) The appeals court recited the case law applying the Florida homestead exemption protection from certain creditors' claims to the proceeds of a voluntary sale of the homestead:
  • Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201 (Fla. 1962), is the seminal case on the application of the homestead exemption to the proceeds of the voluntary sale of a homestead. The Supreme Court held that

    the proceeds of a voluntary sale of a homestead [are] exempt from the claims of creditors just as the homestead itself is exempt if, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time. Moreover, only so much of the proceeds of the sale as are intended to be reinvested in another homestead may be exempt under this holding. Any surplus over and above that amount should be treated as general assets of the debtor. We further hold that in order to satisfy the requirements of the exemption the funds must not be commingled with other monies of the vendor but must be kept separate and apart and held for the sole purpose of acquiring another home. The proceeds of the sale are not exempt if they are not reinvested in another homestead in a reasonable time or if they are held for the general purposes of the vendor.
(2) The appeals court describes how Florida case law has dealt with non-cash proceeds from a homestead sale, and sale proceeds that may ultimately go uninvested:
  • Non-cash proceeds of a sale of a homestead "can be eligible for exemption, so long as they serve the same function that cash proceeds do, i.e., a temporary form of the homestead, to be reinvested, to be converted back into real-property homestead within the Orange Brevard reasonable time period." Sun First Nat'l Bank of Orlando v. Gieger, 402 So. 2d 428, 432 (Fla. 5th DCA 1981) (involving a note and mortgage received as part of the sale price of a homestead). Proceeds of a sale not invested in a new homestead are not entitled to homestead protection. See Shawzin v. Donald J. Sasser, P.A., 658 So. 2d 1148, 1151 (Fla. 4th DCA 1995); Rossano v. Britesmile, Inc., 919 So. 2d 551, 552 (Fla. 3d DCA 2005).
(3) In an ostensible attempt to discourage the use of homestead funds for speculative investment activities when a homeowner is in between abodes, the appeals court observed:
  • This case does not involve the speculative put and call option trading of up to 302 transactions per month that led a bankruptcy panel to conclude that such use of the proceeds was inconsistent with the purposes of Arizona's homestead exemption. In re White, 389 B.R. 693, 697, 704 (B.A.P. 9th Cir 2008).
(4) The court stated:
  • Because it was not argued, we do not reach the issue of whether any profits realized from the securities, over and above the proceeds from the sale, are "held for the general purposes" of the debtor so that they are "general assets" not entitled to homestead protection. Orange Brevard, 137 So. 2d at 206.

    Elderly NYC Woman: Uptown Deed Thief Filed Phony Papers & Is Trying To Hijack & Flip My $1.5M Home Of 70 Years ... & Give Me The Boot!

    In New York City, the New York Daily News reports:
    • Call it the great Hamilton Heights house heist.

      A deed thief is trying to steal a family’s $1.5 million brownstone out from under them, according to papers filed in Manhattan Surrogate’s Court.

      Jacqueline Hembrick, 85, has lived in the four-story Convent Ave. house since her parents bought it in 1945 — but a cold-hearted con man has forged the deed to the home and has been trying to force her out on the street, the court papers say.

      The “house was fraudulently, indeed criminally, transferred to an individual who has no connection” to Hembrick’s family, named Henry Rothenberg — and he’s apparently been trying to sell it, Hembrick’s son Kevin said in the court filings.

      The brazen fraudster has repeatedly called the police on the Hembricks, falsely reporting break-ins and home invasions at the house, the court papers say. “Each time, the Hembrick family would explain to the police that they have lived there for decades and no one was breaking in,” the filings say.

      Then on Sept. 29, Kevin Hembrick, 62, said he “answered the door and was ordered to leave the house immediately by two black men (one wearing a yarmulke), and one Asian man carrying what appeared to be carpenter/locksmith tools.” Hembrick called the cops himself and the men fled, court papers say.

      Police identified the man in the yarmulke as Rothenberg, who a neighbor said is a former real estate agent. Area residents said the last name is an alias. One of Rothenberg's neighbors on W. 145th St. said he also uses the names Henry Yisrael and Henrique Nixon.

      “We call him Mr. Wall Street,” a neighbor said. “He always walks around in a suit with a briefcase.” ”He ain’t got s--- going on. I know him from the shelter.

      A law-enforcement source said Rothenberg is being actively investigated, and they believe he’s responsible for similar scams on Convent Ave.

      The Hembricks’ headaches started last May, when they got a notice from the city Department of Finance notifying them of an issue with the transfer of the deed to the 15-room house. But Jacqueline Hembrick, who inherited the home after her mother’s death in 1994, had never touched the deed.

      They hired a lawyer, who did a title search and found the deed had been transferred in October 2013 to a woman named Alexis Stanton, who claimed to be the “sole heir” to Hembrick’s mother.

      Stanton then transferred the deed through a company called CLE Abstract to Rothenberg. The family lawyer, Mark Gray, found out that neither Stanton nor CLE Abstract apparently exist.

      Stanton’s name appears to have been lifted from "a series of books called the 'Alexis Stanton Chronicles' by JC Phelps," and CLE Abstract's phone number was actually UNICEF's, the court papers say.

      Using a private investigator, Gray was able to get a phone number for Rothenberg, who wasn’t happy to hear from him. “I have big lawyers, big law firms, and we’re going to sue you and you’ll be sorry you ever messed with me! I’m going to have you disbarred!” Gray quoted him as saying.

      About an hour later, "a person claiming to be 'attorney Mark Schwartz,' but who was obviously Henry Rothenberg using a barely disguised voice, asked for our law firm address and said 'We're coming after you' and we're going to take you down,'" Gray said.

      Hembrick’s family is asking for an emergency court order declaring the deed a phony.

      A spokeswoman for the city Department of Finance, Sonia Alleyne, said there’s been a surge in deed fraud in recent years, and stopping it is their “top priority.”

      “In the last year we’ve implemented a number of changes that has resulted in 755 referrals to the Sheriff’s Office and 9 arrests — the first ever for this department," Alleyne said. They've also proposed legislation to attack the problem.

      Sheriff Joseph Fucito told, which first reported the Hembricks' case, that, "We're taking proactive steps to protect property owners and pursue individuals who study ways to cheat the property recording process."

      The house built in 1902, has four floors plus a basement, four fireplaces and 15 rooms. Its present value is approximately $1.5 million.

    Wednesday, June 10, 2015

    Who's On First? Creditor's 'Anticipated' Judgment In Fraudulent Conveyance Suit Trumps Earlier-Recorded Lien Where Former Relates Back To Recording Of Lis Pendens; Debtor Used New Wife, Multiple Quit-Claims Of $10M Pacific Palisades Home In Failed Effort At Playing High Stakes Game Of "Keep Away" From Ex-Wife, Lender

    In Los Angeles, California, The Recorder reports:
    • [M]use Family Enterprises, Ltd. (Muse parties) made loans to BTM Funding, Inc., a company wholly owned by David T. Smith. In 2008, Smith used BTM to buy an expensive home [Editor's Note: $10 million, according to the court ruling; and formerly owned by NBA star Kobe Bryant, according to attorneys for the Muse parties]. David had BTM take title to hide the Property from his former wife during divorce proceedings.

      David later had the home deeded to himself by quitclaim deed from BTM. On the same day, he quitclaimed the property to his then-new wife. She later quitclaimed it to her revocable living trust. The quitclaim deeds were not recorded until 2009.

      David and his former wife settled their claims by having Mira Overseas Consulting Ltd., owned by David, transferred to her.

      In September 2010, the Muse parties filed suit against BTM and others in Los Angeles for breach of contract and fraud, and to set aside the quitclaim deeds as fraudulent transfers. The Muse parties recorded a lis pendens regarding their action and the property. A stipulated judgment on breach of contract was entered in October 2012. Upon trial of the fraudulent transfer claims, a jury found in favor of the Muse parties. An amended judgment was entered in January 2013 awarding damages and nullifying the quitclaim deeds as fraudulent transfers. The amended judgment was recorded in February 2013.

      In the meantime, about six months after the Los Angeles action began, Mira sued BTM and related parties in Santa Monica. The action resulted in entry of a stipulated judgment in June 2011. The Muse parties first learned of the Los Angeles action in August 2011.

      Mira sued the Muse parties, BTM, and others in early 2012, seeking a declaration that its judgment lien was superior to any lien that might be obtained by the Muse parties.

      The Muse parties cross-complained, contending that their anticipated judgment lien related back to the recording of their lis pendens. The trial court found that the Muse parties’ judgment did not relate back to the lis pendens. The Muse parties appealed.

      The court of appeal reversed, holding that the trial court erred in concluding the judgment did not relate back to the lis pendens.

      Code of Civil Procedure §405.24, relating to lis pendens, provides that the “rights and interest of the claimant in the property, as ultimately determined in the pending noticed action, shall relate back to the date of the recording of the notice.”

      In Kirkeby v. Superior Court (2004) 33 Cal.4th 642, the California Supreme Court that a fraudulent conveyance claim affects title to or the right to possess real property, thereby supporting the recording of a lis pendens.

      Here, the action below involved the same type of property claim as that in Kirkeby. The plaintiff in Kirkeby filed a fraudulent transfer claim to void property transfers to the extent necessary to satisfy the claims set out in the plaintiff’s complaint. The court in Kirkeby reasoned that because the Uniform Fraudulent Transfer Act allows the remedy of avoidance of the transfer to the extent necessary to satisfy a creditor’s claim, a fraudulent conveyance claim seeking avoidance of transfer qualifies as a real property claim for purposes of the lis pendens statutes. The court here reasoned that a necessary corollary was that a successful claimant’s rights and interests in the property relate back to the recording of the claimant’s lis pendens.

      The Muse parties indisputably had the right to record a lis pendens with respect to their fraudulent transfer claim. Accordingly, their rights and interest in the property, namely, the avoidance of transfers of the property to satisfy their claims, related back to the date they recorded their lis pendens. This date was earlier than the date Mira recorded its abstract of judgment. Thus, the Muse parties’ judgment lien had priority.
    Go here for the story.

    For the ruling, see Mira Overseas Consulting Ltd. v. Muse Family Enterprises, Ltd., B254298 (Cal. App. Dist. 2, Div. 2, June 2, 2015) (certified for publication).

    Tuesday, June 09, 2015

    Lauderdale Man's Anticipated Hefty Payday On Pending Sale Of Small Beach-Area Property To Hotel Developer Hits The Rocks When Activist Neighbor Files Request Asking City To Slap Historic Landmark Designation On 79-Year Old Structure & Keep Wrecking Ball Away

    On Fort Lauderdale Beach, Florida, the South Florida Sun Sentinel reports:
    • A beach property owner is being told his home is not his castle, and he can't do with it as he pleases. The reason: one of his neighbors has sought protected status from the city for the 79-year-old structure.

      Owner James Ostryniec does not want a historic landmark designation slapped on the Villa Torino apartment building he has a contract to sell. But that did not stop neighbor Charlie Esposito from paying a $650 fee for the city's Historic Preservation Board to consider the matter.

      The board agreed Monday that the 1936 Art Moderne structure at 3017 Alhambra St. is architecturally significant and recommended on an 8-1 vote that it be protected, which means any alterations would require the board's approval. The recommendation goes to the City Commission, which has the final say.

      Esposito said somebody had to step up to protect the city's history and property owners of older buildings should be aware of that possibility.

      "That's a risk you take as an owner, when you have a piece of property like that," said Esposito, who lives on the street behind the building. "I think properties need to be preserved, We can't just tear everything down."

      Ostryniec wrote to the board that his property "is not of any historically important style" and has gone through numerous renovations: from a two-story duplex to a nine-room motel to a five-unit apartment building. He called the filing a "ploy" to prevent his property from being sold to a hotel developer. It will also harm his family financially.

      OTO Development hopes to build a 10-story, 175-room AC Hotel by Marriott on Alhambra Street, using the Villa Torino and two other properties for the project.

      One of those properties, Casa Alhambra at 3029 Alhambra St., was also on the preservation board's agenda for historic designation, but the owner of that 1936 home demolished it last month, catching neighbors by surprise. The other has a 1938 building on it by noted architect Courtney Stewart, who was also responsible for the Coca-Cola bottling plant on Andrews Avenue.

      Beach resident Abby Laughlin, who encourages preservation of older properties with historic value, didn't support giving the historic designation to Villa Torino. She said the city has no policy in place to compensate Ostryniec for the lost value of his property.(1) She fears historic preservation is being used as a weapon in a development war.

      "A designation should not be placed on a property without an owner's willingness," beach resident Karen Turner said.

      However, preservation advocates nationally say acting without an owner's consent may be the only way to prevent a historic resource from falling to a wrecking ball.

      Beach resident Steve Glassman knows the challenge. He filed the historic designation request for the Lauderdale Beach Hotel and was successful in having its facade preserved in 2002.

      Glassman, president of the Broward Trust for Historic Preservation, doesn't think Ostryniec is being harmed. The historic designation may keep him from making millions by selling to a hotel developer, Glassman said, but it won't prevent "reasonable use of his property." "You're entitled to make a reasonable profit," Glassman said. "Are you just all of a sudden entitled to hit the jackpot?"

      Preservationists say development and history can co-exist, pointing to the planned Gale Boutique Hotel and Residences. The project includes a new condominium tower along with a restored Escape Hotel, which opened in 1951 and was the first hotel on the beach with a pool.

      Preservation board members say city rules allow non-owners to request property designations and the board has to look at the merits of the case.

      Representatives for Ostryniec argued the building didn't have any recognizable historic value. But Board Chairman David Kyner told them this wasn't, "Paris, Venice, Rome," it is Fort Lauderdale where there are "very few star buildings."

      Kyner said the windows at sharp corners, the building's striping and asymmetrical chimney help identify it as a fine Art Moderne example.

      "There are a lot of things that to me look easily identifiable, even to a lay person," Kyner said.
    Source: Historic label derails owner's plan to sell '36 home.


    (1) If the city commission agrees with the Historic Preservation Board and votes to slap the property with historic designation status, and assuming the landowner can demonstrate that he has been denied all or a substantial portion of the beneficial uses of his property as a result of said status, the landowner may have to resort to an inverse condemnation lawsuit (a burdensome process) against the city in an effort get the city to compensate him for his economic loss.

    See Joint Ventures, Inc. v. Dept. of Transp., 563 So. 2d 622 (Fla. 1990):
    • Generally, the state must pay property owners under two circumstances. First, the state must pay when it confiscates private property for common use under its power of eminent domain. Second, the state must pay when it regulates private property under its police power in such a manner that the regulation effectively deprives the owner of the economically viable use of that property,[6] thereby unfairly imposing the burden of providing for the public welfare upon the affected owner.[7]


      Although regulation under the police power will always interfere to some degree with property use, compensation must be paid only when that interference deprives the owner of substantial economic use of his or her property. In effect, this deprivation has been deemed a "taking." Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980); Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 138 n. 36, 98 S.Ct. 2646, 2666 n. 36, 57 L.Ed.2d 631 (1978). Thus, when compensation is claimed due to governmental regulation of property, the appropriate inquiry is directed to the extent of the interference or deprivation of economic use.
    See also, Shands v. City of Marathon, 999 So. 2d 718 (Fla. 3d DCA 2008):
    • In an as-applied taking claim, the landowner challenges the specific impact of the regulation on a particular property.

      The standard of proof for an as-applied taking is whether there has been a substantial deprivation of economic use or reasonable investment-backed expectations. Taylor, 659 So.2d at 1167.

      This requires a "fact-intensive inquiry of impact of the regulation on the economic viability of the landowner's property by analyzing permissible uses before and after enactment of the regulation." Id. at 1174 n. 1; see, Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978); see also Palazzolo v. Rhode Island, 533 U.S. 606, 617, 121 S.Ct. 2448, 150 L.Ed.2d 592 (2001) ("[w]here a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government action"); Glisson v. Alachua County, 558 So.2d 1030, 1037 (Fla. 1st DCA 1990) (holding that diminution in value of the property is not the test, rather, it is incumbent on the landowner to demonstrate that he has been denied all or a substantial portion of the beneficial uses of his property.); Golf Club of Plantation, Inc. v. City of Plantation, 717 So.2d 166, 170 (Fla. 4th DCA 1998) (overview of federal takings analysis).
    See also J. Sackman, Nichols' The Law of Eminent Domain § 6.09, at 6-55 (rev. 3rd ed. 1985) ("The modern, prevailing view is that any substantial interference with private property which destroys or lessens its value ... is, in fact and in law, a `taking' in a constitutional sense."

      Monday, June 08, 2015

      Credit Reporting Agency Agrees To Confidential Settlement In Suit Alleging It Refused To Acknowledge "God" As Brooklyn Consumer's Given Name; Victim: Outfit's Failure To Add Me To Its Database Crippled My Buying Power - One Rep Actually Suggested I Change My First Name!

      In Brooklyn, New York, the New York Post reports:
      • So it turns out God does exist — and he’s living in Brooklyn.

        A Br​ighton Beach man named God Gazarov has settled ​his federal lawsuit against ​credit-reporting giant Equifax ​after the company finally agreed to enter his unusual moniker into its database.

        As reported exclusively by ​T​he Post last year, the 27-year-old Russian native was falsely branded as having no credit history because Equifax refused to recognize his ​given first name.

        The bizarre snafu made it impossible for the jewelry-store owner to secure basic loans, court papers say. While other agencies accepted his name, the Equifax block crippled his buying power.

        After more than a year of haggling, Gazarov secured a confidential payout from Equifax [] and emerged from the negotiations at the Brooklyn federal courthouse with a wide smile. Now boasting a ​healthy 820 credit score, Gazarov said he was relieved to have settled the case and plans to put his refurbished financial profile to use with a new BMW. “It’s been five years of this,” he said. “I’m glad that it’s over.”

        In his suit, Gazarov claimed he had been ignored after repeatedly insisting to Equifax representatives that his first name was legitimate.

        Gazarov said he was stunned by the company’s refusals to acknowledge his name and noted that it is relatively common in his native land.(1) “This was my grandfather’s name,” he said. “I was named after him. I’m sort of like God Jr.”

        The graduate of Brooklyn College said an Equifax customer-service representative even suggested he change his first name.

        “The whole point of the system is to report fairly and accurately,” his attorney, James Fishman, said after the case concluded. Fishman said that Equifax quickly added Gazarov’s name to its credit-reporting database after he took legal action last year but that the financial settlement took time to hammer out. Equifax attorneys refused to comment.
      Source: Man named God settles lawsuit with credit agency.

      See also, New York Daily News: God (Gazarov) proves his existence in Brooklyn court after Equifax threatens to deny him credit over divine name.


      (1) Probably as common as the name "Jesus" (pronounced hāso͞os') in Spanish-speaking countries, I imagine.

      S. Florida Woman Bagged For Allegedly Stealing $100k+ By Forging Documents Altering Stepdad's Will, Using Quit Claim Deed To Put His Home In Her Name, Screwing Siblings Out Of Their Share Of Inheritance; Grand Theft, Fraud, Forgery Charges Pending

      In Tamarac, Florida, the South Florida Sun Sentinel reports:
      • A Tamarac woman is accused of altering her stepfather's will to steal more than $100,000 in inheritance from two sibling beneficiaries.

        Brigitte Lee Gursky, 46, forged documents and lied about it, according to the arrest warrant.

        Gursky allegedly filed court documents shortly after Troy Barger Sr. died in July 2013, falsifying the value of his estate and forging her siblings' signatures, the warrant stated.

        Advising Gursky not to speak in court, defense attorney Louis Pironti said the full story has not been told. "Nothing's been proven beyond a reasonable doubt and certainly everybody's presumed innocent," he said. "There's a lot more to the case than meets the eye, that's for sure."

        Barger Sr. was a career Navy navigator. The 33-year veteran lost both his legs during his years of service. He died in 2013 at the age of 74, said Gursky's sister Gina Lanzo after Gursky's bond court appearance.

        "Basically, she forged my name stating that I was waiving my rights to my [step]father's estate, a blatant forgery," Lanzo said.

        Lanzo said her stepfather owned a specially modified recreational vehicle worth over $100,000, but Gursky traded it in for an Audi for herself and another car for her adult son.

        Gursky also has lived in her stepfather's Tamarac home since filing a quit claim deed putting the property in her name, Lanzo said. Broward public records show a quit claim deed that was executed in June 2012 and recorded in October 2013.

        Their mother, Antonietta Barger, died at age 74 in 2012 in her native Italy. She did not leave a will, but Lanzo and Gursky are entangled in Italian probate court over their mother's estate, Lanzo said.

        Broward Sheriff's Detective Scott Stone told Broward Judge John Hurley that Gursky had expressed a need to go to Italy to handle those legal matters, but the judge set bond at $100,000 and ordered Gursky to surrender her U.S. and Italian passports. She also was ordered to wear a GPS monitor and to stay away from airports and seaports.

        Arrested Wednesday, Gursky is facing grand theft, fraud and forgery charges, jail records showed.

        Calling her stepfather "stoic and fair," Lanzo said he would want this family skirmish ended. "I know what my father would want," Lanzo said. "Justice."

      Sunday, June 07, 2015

      Civil Rights Feds, L.A. County Sheriff's Dept. Settle Race Discrimination Charges That, Among Other Things, SWAT-Armored, Gun-Blazing Cops Used Section 8 Compliance Checks (aka "Section 8 Raids") For Possible Housing Rules Violations As Pretext In Campaign Of Harassment, Intimidation Targeting Mostly-Black Voucher-Holding Tenants

      In Los Angeles, California, the Los Angeles Times reports:
      • Los Angeles County supervisors [approved] a settlement with the U.S. Department of Justice over allegations that sheriff’s officials systematically targeted racial minorities in the Antelope Valley [northern Los Angeles County]. [See lawsuit: USA v. County of Los Angeles; go here for related letter from Justice Department to Los Angeles Sheriff's Department]

        After a two-year investigation, the justice department in 2013 accused the county and the cities of Lancaster and Palmdale of waging a campaign of discrimination against African American residents, particularly those living in low-income subsidized housing.(1)

        Federal officials said some sheriff's personnel in the Antelope Valley had engaged in a “pattern or practice of unconstitutional and unlawful policing regarding stops, searches and seizures, excessive force, and discriminatory targeting of voucher holders in their homes.”

        That targeting often took the form of teams of armed sheriff's deputies accompanying county housing agency investigators on surprise inspections of Section 8 housing, looking for violations of housing rules. Some city and county officials at the time argued that the compliance checks were needed to root out abuses in the program.

        The federal investigation also found that African Americans were disproportionately more likely to be stopped and searched than other residents and that deputies had used excessive force against handcuffed detainees.


        Community activists in the Antelope Valley said relations with the sheriff’s department have dramatically improved as a result of the justice department investigation and a separate lawsuit that was filed by community groups in 2011.

        Palmdale resident V. Jesse Smith, one of the founders of The Community Action League, an advocacy group for minorities in the Antelope Valley and plaintiff in the lawsuit, said that the situation had improved dramatically since then.


        The reforms made as a result of the lawsuit and DOJ investigation, he said, have “broken down the walls of distrust, and we’re finally able to have a dialogue rather than a monologue.”

        Maria Palomares, an attorney with Neighborhood Legal Services of Los Angeles,(2) who represented plaintiffs in the lawsuit, said her organization, which used to be flooded with complaints about the Section 8 raids, is no longer getting calls from residents complaining of deputies showing up “with guns blazing.”

        Palomares said she still hears complaints of racial profiling in the Antelope Valley, but she said the Section 8 compliance checks are no longer used as a “as a tool to discriminate against black and Latino families.”

        Sheriff Jim McDonnell and representatives of the justice department’s civil rights division could not be reached for comment.
      For the story, see Settlement expected over U.S. allegations that Sheriff's Dept. targeted minorities.

      For the U.S. Department of Justice press release, see Justice Department and the Los Angeles County Sheriff's Department Agree to Policing Reforms and Settlement of Police-Related Fair Housing Claims in the Antelope Valley.


      (1) See U.S. orders $12.5-million payment to victims of racial harassment:
      • The nearly two-year federal civil rights investigation found support for allegations by Antelope Valley residents that black residents were targeted for surprise inspections of subsidized, or Section 8, housing. The checks, which were ostensibly to ensure that residents met the terms of their assistance, often involved deputies, some of them in full SWAT armor.
      (2) Neighborhood Legal Services of Los Angeles ("NLSLA") is a public interest law firm that provides free assistance each year to more than 100,000 individuals and families through projects that expand access to justice and address the most critical needs of Los Angeles’ poverty communities. Founded in 1965, NLSLA attorneys, based in offices, courthouses and clinics throughout Los Angeles County, specialize in areas of the law that disproportionately impact the poor, including housing, public benefits and healthcare.

      Maine Non-Profit Law Firm Conducts Fair Housing 'Sting', Using Testers, Audio Recording To Gather Evidence Of Discrimination Against Families w/ Kids & Uses It To Squeeze Settlement Worth About $15K Out Of Local Landlord

      In Winthrop, Maine, WABI-TV Channel 5 reports:
      • The owners of three apartment complexes in the Winthrop area have agreed to pay $5,000 to settle claims they refused to rent to families with children.

        Jane and Donald Belanger will pay the money to Pine Tree Legal Assistance, a non-profit organization for fair housing.

        Officials with the U.S. Department of Housing and Urban Development say the Belangers posted an ad for an apartment saying it was best for single people and couples with no children. An investigation also found they held security deposits for tenants with families, but not others.(1)

        As part of the agreement, the Belangers will also return security deposits and partial rent payments to families, hold two apartments just for families and fund two summer camp scholarships at the YMCA.

        In all the agreement is valued [at] about $15,000.
      Source: Winthrop Landlords Reach Deal Over Claims of Refusing to Rent to Families with Kids.

      Go here for the Voluntary Compliance Agreement Between Pine Tree Legal Assistance Inc. and Jane S. and Donald J. Belanger.

      (1) According to the Voluntary Compliance Agreement, the Complainant, Pine Tree Legal Assistance, assigned fair housing testers to gather their evidence in this case. It alleged that the tester who claimed to have children was not provided with application materials, but the tester who claimed not to have children was provided an application and pressed to apply. It supported these allegations with an audio recording. Landlord denied allegations, but agreed to, among a slew of other things, certify that rental apartments have been de-leaded or do not need to be de-leaded, and to pay Pine Tree Legal a total of $5,000 in damages (in 12-monthly payments) for frustration of mission and diversion of resources. See, generally: