Saturday, May 28, 2016

NYC Non-Profit Advocacy Group Scores Big Lawsuit $ettlement On Behalf Of Several Rent Regulated Tenants Who Used Electronic Devices To Secretly Record Notorious Landlord/Agents' Illegal Efforts Intended To Hound Them Out Of Their East Village Apartments; NYS Officials' Joint Probe Into Harassment Claims Continues

In New York City, The Real Deal (NYC) reports:
  • Raphael Toledano agreed to pay north of $1 million to settle claims that he harassed tenants at one of his East Village buildings, sources told The Real Deal.

    The settlement between Toledano, a broker-turned-multifamily investor who runs Brookhill Properties, and several rent-stabilized tenants at the six-story, 16-unit walk-up at 444 East 13th Street was finalized May 6, court records show.

    Stephanie Rudolph, a lawyer at the Urban Justice Center(1) who represented the tenants, called the settlement “very satisfactory.” She declined to comment on the terms of the agreement.

    In May 2015, the tenants filed a suit in New York City’s Housing Court against Toledano and independent property manager Goldmark Property Management for allegedly taking illegal measures to pressure them to move out.

    Tenants in eight of the apartments secretly recorded conversations with the landlord, building agents and the property manager, the New York Times reported in October.(2) The tenants claimed the landlord’s agent told them police were investigating drug use and prostitution at the building, said rents would soon soar, and the upcoming demolition of a building next door would make living at the property difficult. All these conversations, the tenants claimed, were meant to scare them into vacating.

    Last year, the judge ordered Toledano to halt construction work inside the building.

    The New York Attorney General’s office and the state Homes and Community Renewal’s tenant protection unit launched a joint investigation into the harassment claims in August. That investigation is ongoing.
Source: Toledano to pay $1M-plus in settlement of EV tenant harassment suit (AG still investigating rent-stabilized renters' claims they were pressured to vacate).
(1) The Urban Justice Center is a non-profit legal services and advocacy organization serving the New York City area. It serves the city's most vulnerable residents through a combination of direct legal service, systemic advocacy, community education and political organizing. It describes itself as an interconnected network of anti-poverty initiatives, and its activities range from one-on-one legal advice in soup kitchens, to filing class action lawsuits to bring about systemic change, to pushing social justice legislation forward.

(2) See Tenants in New York Press the Record Button in a Dispute With the Landlord (tenants have caught on to the usefulness of the electronic devices in their pockets, even in cases with little physical evidence, [...] now, in one case, they have made covert recordings of the people residents claim have been hassling them).

Posing As Landlords, Fair Housing Testers Sting Major Casualty Insurer w/ Housing Discrimination Lawsuit, Alleging Its Refusal To Provide Insurance To Landlords Who Rent To Section 8 Tenants Has A Disparate Impact On Black Renters, Female-Headed Households

In Washington, D.C., the National Fair Housing Alliance reports:
  • [T]he National Fair Housing Alliance (NFHA)(1) announced the filing of a federal lawsuit alleging race, sex, and source of income discrimination against Travelers Indemnity Company (Travelers) for failing to provide habitational insurance to apartment owners who rent to tenants who participate in the Housing Choice Voucher (HCV) program.

    This lawsuit is the result of an investigation by NFHA that uncovered this discriminatory business practice. The denial of insurance coverage because tenants subsidize their rental payments with Housing Choice Vouchers is a violation of the Fair Housing Act and the District of Columbia Human Rights Act because it has a disproportionate adverse impact on African Americans and female-headed households in Washington, D.C.

    Travelers’ business practices were discovered by NFHA’s investigators, who contacted five independent insurance agencies that market and underwrite Travelers insurance policies in the D.C. area. The investigators sought insurance coverage for multi-family apartment buildings located in Southeast Washington, D.C. When the investigators mentioned that the tenants participate in the Housing Choice Voucher program, often referred to as “Section 8,” every investigator was told that Travelers does not provide habitational insurance to apartment owners who rent to tenants using Section 8. The investigators were told to seek coverage from other insurance companies. Evidence gathered over ten months documented this ongoing pattern and practice of discrimination on the part of Travelers.
    Travelers’ alleged practices and underwriting guidelines have a discriminatory impact on the District’s most vulnerable households. Travelers’ policies disproportionately harm African Americans and women and deter apartment owners who want to help house low-income families in Washington, D.C.
    [Shanna L. Smith, President and CEO of the National Fair Housing Alliance, stated], “This lawsuit should not take Travelers by surprise. Travelers has known since at least 2013 that denying insurance to apartment owners simply because some tenants use Housing Choice Vouchers violates fair housing laws. NFHA member Project Sentinel, and apartment owners who rented to tenants using government subsidies, sued Travelers in federal district court in San Jose, California, in 2013.(2) The parties reached a confidential settlement in July 2015 after the judge denied Travelers’ motion for summary judgment and after the U.S. Supreme Court upheld disparate impact as cognizable under the Fair Housing Act. Yet, Travelers continues to utilize this discriminatory policy in the District of Columbia.
For the press release, see Travelers Insurance Accused of Discrimination against Apartment Owners Renting to Tenants with Housing Choice Vouchers (Civil Rights Organization Files Federal Fair Housing Act Lawsuit Alleging Insurance Discrimination in Washington, D.C.).

Go here for the NFHA's Power Point presentation.

For the lawsuit, see National Fair Housing Alliance v. Travelers Indemnity Company, et ano.
(1) The National Fair Housing Alliance is a consortium of more than 220 private, non-profit fair housing organizations, state and local civil rights agencies, and individuals from throughout the United States. Its sole mission is to end discrimination in housing based on race, sex, and other protected classes covered by the Fair Housing Act and state and local fair housing laws, and to promote residential integration. It pursues its mission by, among other ways, investigating fair housing violations, and enforcing fair housing laws through lawsuits.

(2) See Jones v. Travelers (USDC, ND Cal.): Landlord Can Proceed with Unfair Housing Claims Against Insurer Based on Alleged Refusal to Renew Policy for Section 8 Property.

See generally, Not-So-Sudden Impact- Insurers Face New Breed of Fair Housing Act Claim.

Proactive Indiana Civil Rights Officials Use Trained Fair Housing Testers Posing As Renters, Homebuyers In Statewide Hunt To Bag Discriminating Landlords, Home Sellers, Etc.

In South Bend, Indiana, the South Bend Tribune reports:
  • South Bend's Mar-Main Apartments has dropped its "cats-only" pet rule and, from now on, will allow tenants with disabilities, upon request, to have a companion and/or service animal. The change comes in response to a recent test case resolved in late March by the Indiana Civil Rights Commission.

    The complex, at 125 W. Marion St. near downtown South Bend, was the subject of an audit in August 2014. That test, and follow-up work, resulted in the commission filing a complaint last May.

    The complaint was withdrawn March 29 after a settlement agreement was reached through confidential mediation.

    In the complaint, it was alleged that a Mar-Main leasing staffer told a disabled rental applicant (a trained tester) with a companion dog that Mar-Main is a “cats-only” building — which the commission said amounts to refusal to make a reasonable accommodation to an applicant who represented himself to have a disability as defined by law.

    Did this fictional scenario amount to entrapment?

    No, the U.S. Supreme Court said in a 1982 ruling. That ruling deemed fair-housing testing to be a legitimate means of enforcing housing laws.(1)

    In fact, federal and state housing agencies often use testers who’ve successfully completed HUD-approved training to detect differential treatment or outright discrimination in the housing rental and sales markets. In many cases, the testers are volunteers or part-timers working for a local third-party, nonprofit fair housing center.

    In settling its case, Mar-Main agreed to do several things in addition to allowing companion and/or service animals, including having staff complete a commission-approved diversity training seminar.

    Unlike many states in the nation, Indiana’s civil rights officials are using this testing tool statewide to detect problems before they occur and are not waiting for complaints to be filed by those who experience or witness housing discrimination.

    “Fair-housing testing is extremely important in seeing where a community’s housing market barometer is in terms of discrimination. Some people don't file complaints because they don't realize discrimination has occurred, they're embarrassed or just don't know where to go,” said Barbara Malone, deputy director of the Indiana Civil Rights Commission, a state agency with enforcement powers in the legal areas of fair education, employment, public accommodations and housing practices.

    The Civil Rights Commission has its fair-housing audits done by a third-party vendor, whose testers are trained per guidelines of the U.S. Department of Housing and Urban Development. The commission still takes complaints from those who experienced or witnessed discrimination.

After 8-Year Wait For Transfer To Wheelchair-Accessible Apartment, Disabled Tenant Suffering From Thyroid-Related Obesity ("I Am In Prison In My Own Home!") Slaps NYC Housing Authority w/ Fair Housing Suit Over Alleged Failure To Act On Request For Reasonable Accommodation

In Staten Island, New York, the New York Daily News reports:
  • She is a prisoner of her NYCHA apartment — waiting eight years and counting for a transfer to a wheelchair accessible apartment.

    Lawyers for a 400-pound Staten Island woman finally decided that she had been living in a potential deathtrap long enough, slapped NYCHA and the agency’s CEO Shola Olatoye with a federal lawsuit accusing them of violating their duty to accommodate a disabled tenant.

    The doorways of Josephine Loya’s apartment at the Richmond Gardens Houses are 24-inches wide, and her wheelchair is more than 26-inches wide.

    A wheelchair accessible apartment has 28-inch doorways.

    The wheelchair has to be taken apart to get it through the front door,” Loya, 46, said. “I’m stuck. I am in prison in my own home.”

    Loya’s requests for a disability transfer have been stuck in NYCHA bureaucratic red tape since late 2007. She was finally approved for a transfer in September 2014, but Loya was informed by a property manager that the transfer policy requires that she remain on a waiting list for two years, according to the suit filed in Brooklyn Federal Court.

    “I would tell (the building manager), ‘Supposed there’s a fire in here?” Loya said. “He said, ‘Just pray to God it doesn’t happen.’”

    Two weeks ago, Loya was experiencing stomach pains and needed to go to the hospital. The medics and firefighters could not get Loya onto a gurney, so they had to lay her on the floor and drag her through the doorway.

    “It was embarrassing to say the least,” she said.

    “If there’s a fire, she’s going to die,” lawyer Logan Schiff of Staten Island Legal Services(1) told The News.

    Loya is mostly confined to a hospital bed in her living room. She can’t maneuver the wheelchair to the kitchen to cook, or the bathroom, so she must use a bed pan.

    Loya has lived in the apartment with her two children since 1999.

    “I wasn’t always this big,” she said. “I got sick.”

    She attributes the obesity to a thyroid condition and once weighed over 500 pounds. She also suffers from asthma and pulmonary disease, which has been exacerbated by black mold inside the apartment which NYCHA has allegedly failed to clean out.

    Loya’s only income is $1,400-per-month in Social Security to support herself and her two children.

    Her subsidized portion of the rent at the NYCHA apartment is $420 so she cannot afford to move to a wheelchair accessible apartment on her own, according to court papers.

    A Housing Authority spokeswoman said in a statement: “NYCHA will look into this case. Although we have been not served with this claim, we seek to work with Ms. Loya to resolve any outstanding mold issues in her current apartment and follow-up on any requests for transfer that she has previously made.”

    Schiff said there was a glimmer of hope last month when a NYCHA representative told Loya that there was a vacant apartment in the Mariner’s Harbor project. But when the lawyer inquired with management at Mariner’s Harbor, he was told that “no such information had been transmitted to them,” the suit says.
Source: Staten Island woman sues NYCHA after waiting eight years for wheelchair-friendly apartment and never receiving it.
(1) Staten Island Legal Services provides free civil legal assistance to low-income Staten Island residents in certain practice areas, including housing, foreclosure prevention, immigration, and family law/domestic violence.

Another HOA Takes Hit In Fair Housing Lawsuit; Must Allow Family Of 12-Year Old Autistic Child To Keep Specially-Equipped, Medically Necessary Recreational Vehicle In Their Driveway & Gets Stuck Footing Tab For Family's Legal Fees

In Perry Park, Colorado, KDVR-TV Channel 31 reports:
  • The family of a 12-year old with Autism will get to keep their medically necessary RV in their driveway. The Federal Decree is a huge legal victory for the Lofland Family of Perry Park, Colorado.

    “It is a big relief for all of us including William because William doesn’t feel that stress or tension anymore, “ said Hannah Lofland, the mother of William Lofland.

    The Fox 31 Problem Solvers first brought you their story last August when Lofland family was told parking their RV for more than 48-hours violated covenants created by the neighborhood Architectural Control Committee.

    The Lofland’s insisted their specially equipped RV was medically necessary for William, who is non-verbal and prone to outbursts, because the motion of driving soothes him.

    “William needs to feel that jolt, and when he does it calms his nervous system. Why? I don’t know,” said his mom.

    “They provided doctor’s notes and it never should have got to the point of needing lawyers to get involved,” said Amy Robertson, the Lofland family attorney.

    Robertson said the Architectural Control Committee wasn’t providing a “reasonable accommodation” for someone with a disability as required by the Federal Fair Housing Act. “The truth is the Federal Fair Housing Act and the State Fair Housing Act take precedence over HOA rules and over covenants,” said Robertson.

    Jim Cassidy, the president of the Architectural Control Committee, didn’t answer his door when Fox 31 Denver knocked Friday afternoon but last year he repeatedly called Investigative Reporter Rob Low a “fool” and a “dupe” for asking Cassidy why he was harassing the Lofland Family with threatening letters demanding the removal of the RV.

    Under the Federal Decree he has to allow the Lofland’s to keep their RV and pay their attorney fees.

Friday, May 27, 2016

NYC Landlord Accused Of Effort To Intentionally Fail HUD Inspections As "A Backdoor Way" To Oust Difficult-To-Boot, Rent-Regulated Section 8 Tenants Settles Controversy w/ Renters; Issues Created By Previous Landlord's Neglect Now Being Corrected, Most Units Pass Re-Inspection, Cleared For Reinstatement

In Ridgewood, Queens, The Real Deal (NYC) reports:
  • Silvershore Properties are one of a group of landlords being accused of abusing Section 8 regulations to force tenants to move out of potentially lucrative buildings.

    Residents of one of the company’s rental buildings, at 1071 Cypress Avenue in Ridgewood, many of whom take advantage of the Section 8 housing voucher program, accused the landlord of failing to make critical repairs and then not responding to the calls.

    Advocates say Silvershore’s policy might be a deliberate attempt to take advantage of a Section 8 rule that requires tenants to leave apartments that fail to pass maintenance inspections. While the rule is normally designed to protect tenants, advocates say it allows landlords who buy buildings in up-and-coming neighborhoods a way to move out their less profitable residents, WNYC reported.

    It’s kind of like a backdoor way to remove Section 8 tenants and really to lose units of affordable housing,” Kenny Minaya, the tenant’s’ attorney, told the paper.

    In a statement, a spokesperson for Silvershore said the company didn’t receive documentation about Section 8 tenants at the time of purchase, wasn’t notified of Section 8 inspections, and is cooperating fully with the Section 8 tenants’ attorneys.
For more, see Silvershore accused of trying to force out Section 8 tenants by failing to make repairs (Advocates say investment firm's policy might be deliberate attempt to boot poorer tenants).

For a follow-up story, see Ridgewood tenants resolve rental beef:
  • The Ridgewood residents who rallied outside of their apartment building earlier this year claiming the new owners were abusing Section 8 regulations to force them out of their rent-regulated apartments have come to an agreement with the landlord and the NYC Department of Housing and Development (HPD).
    A spokesperson for Silvershore Properties said that the owners were not provided with Section 8 voucher numbers for tenants when they purchased the property from an absentee landlord in November 2015. Also, Silvershore was not added to the NYCHA Section 8 Extranet until March of 2016, meaning

    Silvershore was not notified of any Section 8 inspections, according to the spokesperson.

    “Silvershore has never commenced any action to evict any of the Section 8 tenants for non-payment and the accusations are completely false,” the spokesperson said. “Since being notified, six apartments of the eight that failed inspection have been completed and reinstated. Silvershore has been compliant with all issues since being notified and is working directly with the Section 8 tenants’ attorneys to complete any outstanding issues that were a result of the previous landlords’ neglect.”

    According to HPD, no apartments in the building were suspended from the Section 8 program due to violations. HPD said there was a payment issue when the property switched owners in 2015 and they wanted to be sure they were paying the correct landlord.

Building Condemnation, Utilities Shutoff Spell Immediate Code Enforcement-Related Boot For About 50 [Presumably Poor] Tenants In Troubled St. Louis Apartment Building

In St. Louis, Missouri, KTVI-TV Channel 2 reports:
  • An estimated 50 residents and one business owner in an apartment building in the Bevo neighborhood were forced to move out earlier than expected.

    The city condemned the building nearly a month ago and Thursday the utilities and electricity were turned off.

    Tenants complained that the landlords were still collecting rent and allowing people to move in even after the building was condemned. According to the city, the landlord never appealed.

    Police said clearing out the building will also cut down on disturbance calls.

    "We get disturbance calls, fights, we had a robbery call and shooting here just a couple weeks ago," said Captain Steven Mueller, St. Louis Police. "We have constant police activity here because of people calling."

    The property has been considered a nuisance every year since 2011, with multiple drug busts, littering, prostitution, and even a shooting connected to that property on March 16.

    The owner was cited for "Failure to Abate a Nuisance" several times.

Failed Building Inspection Over Safety Concerns, Mortgage Foreclosure Lead To 46 Tenant-Families Getting Code Enforcement-Related Boot

In Shreveport, Louisiana, KEEL Radio 710 reports:
  • 46 families received notice from Chimney Hill Apartments that they have 30 days to leave the complex due to ongoing safety concerns. The property recently went into foreclosure and inspectors decided it was no longer safe for residents to live there.

    While some families of the Shreveport complex are finding it difficult to find other living arrangements on short notice, the management company is giving financial incentive for residents to leave quickly. If folks are out in 30 days or less, they’ll get a refund of this months rent and a cash bonus.

Thursday, May 26, 2016

Reverse Mortgages, "Widow Foreclosures", Ticking Time Bombs?

In Minneapolis, Minnesota, KMSP-TV Channel 9 reports:
  • An 83-year old widow who has lived in her Minnesota house for more than 50 years is facing foreclosure and state officials say it could happen to other unsuspecting spouses who have reverse mortgages.

    Colleen Hodroff and her husband, Monroe, moved into their Minneapolis home in 1963 and raised six children in a tidy tutor just off of Cedar Lake. They were often called the Brady Bunch of Ewing Avenue.

    "We've loved this house. It's our heart and soul," Colleen said in an interview with the Fox 9 Investigators.

    It was a classic marriage of the times. Carol raised the kids and Monroe, who ran several convenience stores, paid the bills. He died two years ago at the age of 92.

    "My husband and I've loved this home, to think of it being taken away is gut wrenching," Colleen commented.

    Just 10 days after Monroe died, she got a letter from the bank saying it was foreclosing on the home and she had 60 days to leave.

    10 years ago the Hodroff's had taken out a reverse mortgage. Monroe had seen a commercial for a company called Financial Freedom, promising people 62 or older they could live off the equity already built up in their home, get cash up front, or pay off debt, all with no mortgage payments.

    As the Hodroff's understood it, they could both live in their home until they died, when the bank would take possession of the house.

    Suing to keep her home

    Colleen filed a lawsuit against the bank. According to her attorney, John Braun, one of the documents Hodroff signed over at the time was the deed to the house. She had given up her interest in their home, by literally taking her name off their mortgage. She said she couldn’t fathom the implications of such a decision.

    "What she tells me is: when her husband presented her something to sign, she signed it," said Braun.

    In return, the bank got to calculate the reverse mortgage based on Monroe's life expectancy, who was more than a decade older than his wife. The Hodroff’s got more money based on that calculation. The bank would also likely get their money more quickly that way.

    The practice even has a name, "widow foreclosures,” and sometimes the changes are made at the last minute.

    "This particular lender is notorious for making statements at or near the closing where the excluded spouse is told don't worry about it you'll be able to live there as long as you want, we'll put you back on later," said Braun.

    Financial Freedom was the reverse mortgage division of the notorious IndyMac, the sub-prime lender that collapsed in the 2008 financial crisis.

    It was sold to a group of billionaire investors, including Donald Trump's new campaign fundraiser, Steve Mnuchin, who renamed it OneWest Bank. OneWest Bank merged last year with CIT Group.
    Minnesota Commerce Commissioner, Mike Rothman said it's just one of many cautionary tales when it comes to reverse mortgages. And the true scope of the problem, isn't even known.

    "These are ticking time bombs. There's only one spouse on them and usually an older spouse, and they're still out there," said Rothman.

Maryland AG Sues Finance Outfit That Allegedly Ran Racket To Dupe Victims Of Lead Paint Poisoning Into Selling Their Structured Settlements For Paltry Lump-Sums Amounting To A Fraction Of Their True Value; State Seeks To Void Transactions & Recover Victim Restitution

From the Office of the Maryland Attorney General:
  • Attorney General Brian E. Frosh announced [] that his office has filed suit against Access Funding, LLC and other affiliated companies, for allegedly misleading victims of lead paint poisoning and other injured Marylanders to convert future structured settlement payments into immediate cash.

    The complaint alleges that, in violation of the Maryland Consumer Protection Act,
  • [that] Access Funding aggressively targeted young, intellectually-impaired Marylanders, including numerous groups of Baltimore City siblings who were exposed to lead paint as children in their family home;
  • that Access Funding arranged for its customers to get sham "independent professional advice" about these transactions from a Maryland lawyer who secretly functioned as a member of Access Funding's own team;(1)
  • that injured Marylanders who did business with Access Funding, after relinquishing future settlement payments intended to support them for years or decades into the future, received a cash equivalent only to a fraction of the value of those future payments; and
  • that Access Funding committed fraud on the Maryland courts that approved these transactions, including by falsely asserting that its injured and cognitively-impaired customers received the independent professional advice that Maryland law requires as a prerequisite to the transactions.
    According to the complaint, the majority of Access Funding's customers are young people between the ages of 18 and 26 who reside in Baltimore City, and more than 70 percent of Access Funding's customers were victims of childhood lead paint poisoning. "Victims of lead paint poisoning suffer permanent cognitive injuries. Structured settlements are a lifeline that provides long term care and support," said Attorney General Brian Frosh. "My office will fight to prevent vulnerable Marylanders from having their money taken from them through illegal practices."

    In the complaint, the Attorney General requests that the court award restitution to injured and cognitively-impaired Marylanders who were harmed by Access Funding's practices, impose civil penalties on Access Funding and its principals under the Maryland Consumer Protection Act, and declare void prior transfers of structured settlement payment rights.
Source: Attorney General Frosh Files Suit Against Access Funding for Exploiting Lead Paint and Other Injured Marylanders (AG Frosh Seeking Restitution for Marylanders Harmed by These Unfair and Deceptive Practices).

See also, The Washington Post: Company that reaped millions from deals with Baltimore’s lead-poisoning victims violated law, authorities say:
  • The civil suit alleges that Access Funding violated state law when it aggressively pursued scores of mentally impaired lead-poisoning victims, persuaded them to sell the settlements they received in personal injury lawsuits for a fraction of their worth and then withheld vital information from the courts that approved the deals.

    The agency asked that the Baltimore City Circuit Court order Access Funding to repay the victims the millions of dollars they lost when they sold their settlements — which in most cases were their only assets.

    “The conduct that we lay out in the complaint is disturbing,” said state Attorney General Brian Frosh. “It is infuriating. It lays out a strong case that you have people who took advantage of a vulnerable population, who almost by definition are cognitively impaired, and stripped them from the support that would take them through the rest of their lives.”
    The subsequent deals allowed the company to purchase settlements worth $32.6 million, if they had been paid out over time, for $7.5 million, authorities found.

    Frosh’s office launched the eight-month probe after The Washington Post published an investigation last year [see How companies make millions off lead-poisoned, poor blacks] exposing Access Funding’s dealings with victims of lead poisoning. The articles also pointed to loopholes in regulations governing structured-settlement purchasing in Maryland and Virginia. Both states have since passed legislation reforming that industry.

    Unlike traditional lawsuit settlements, which are paid out to a plaintiff in a lump sum, structured settlements dispense the income in small increments across decades. To protect someone from immediately spending their entire settlement, lawyers routinely recommend a structured settlement for unsophisticated clients who have been permanently injured. There are hundreds, if not thousands, of Baltimore residents who grew up in dilapidated, lead-painted tenements and then sued their landlords for lead poisoning, ultimately receiving structured settlements. The vast majority are African American.
(1) No surprise that a sleazy lawyer is in the middle of all this.

Arkansas Homebuyer-Couple Tags Closing Attorney w/ Lawsuit Accusing Him Of Failing To Pay Off Existing Mortgage Out Of Closing Proceeds, Leaving Them Facing Foreclosure; Arkansas Supremes Recently Placed Defendant On Interim Suspension For Presently Posing Substantial Threat Of Serious Harm To Public Or Client

In Hope, Arkansas, reports:
  • The American dream of owning a home turned into a nightmare for one Hope couple, allegedly caused by Attorney James Pilkinton, according to a lawsuit filed with the Hempstead County Circuit Clerk.

    Plaintiffs Martin Gonzales and Rocio Moreno of Hope did everything right – they worked hard and they saved their money, planning to purchase their first home. Once they had a down payment, they found the house they loved, found a lender and began the process to purchase it.
    Pilkinton served as closing attorney for the sale. His role was to collect the money from Mr. Gonzales and Mrs. Moreno, prepare and file the necessary documents, distribute the money to Chase to pay off the mortgage and disburse the rest to the Sellers. The Plaintiffs included documents prepared by Mr. Pilkinton from August 2013 stating that the existing Chase mortgage was paid in full by Mr. Pilkinton in August 2013.

    Nothing more was heard of it until October 2, 2015 when Carrington Mortgage Services, LLC (who acquired the mortgage on the property from JPMorgan Chase Bank) filed a Trustees Notice of Default and Intention to Sell, essentially a notice of foreclosure auction, against the house that Mr. Gonzales and Mrs. Moreno had purchased two years earlier. Carrington Mortgage Services claims that the mortgage of almost $50,000.00 was never paid off in August 2013.

    Mr. Gonzales and Mrs. Moreno had been led to believe, based on documents from Pilkinton, that he had paid the mortgage in full, as he was required to do in his role as closing attorney.

    On December 2, 2015, one week before the auction was to be held, Mr. Gonzales and Mrs. Moreno filed a lawsuit against Pilkinton alleging any and all causes of action against Pilkinton, including breech of contract and fraud.

    The lawsuit sought a preliminary injunction to stop the foreclosure sale until the Court can properly examine and rule on the circumstances of the transaction. Circuit Judge Duncan Culpepper granted that request and issued a Temporary Restraining Order to postpone the foreclosure auction.

    All local judges have recused on this case and the Supreme Court of Arkansas assigned retired Circuit Judge Ted Capeheart, formerly of Ashdown, to hear the case.

    Since the filing of the lawsuit, the Sellers have filed a Cross-Complaint against Pilkinton alleging that he was directed to pay off the mortgage and failed to do so. Pilkinton has filed an Answer to the lawsuit denying almost all of the allegations by the Plaintiffs and the Sellers.

    After the filing of Pilkinton’s Answer, the Plaintiffs sent discovery requests to Pilkinton, formal requests for him to answer questions and produce documents, as provided by Arkansas law. The Plaintiffs has since filed a Motion to Compel Plaintiffs First Set of Discovery to Pilkinton, alleging that he refuses to comply with discovery procedures. Pilkinton did not file a response to the discovery in the time limits allowed by law, and as of May 13, 2016, he had not responded to the discovery requests at all.

    As previously reported by, Pilkinton’s law license was placed under interim suspension by the Arkansas Supreme Court on March 28, 2016, as he ‘presently pos[ed] a substantial threat of serious harm to the public or his client’.(1)(2)
For the story, see Civil Court Case Filed Against Local Attorney James Pilkinton.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:
  • This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.

    There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.

    This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.
(1) See In re: James H. Pilkinton, Jr. - Order of Interim Suspension (March 28, 2016).

(2) The Arkansas Client Security Fund manages and distributes money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the Arkansas bar acting in an attorney-client relationship or as a fiduciary between the lawyer and claimant. Go here for the rules of the Fund. A reimbursable claim is limited to $40,000.

Unlike most of the other attorney ripoff reimbursement funds, it appears that the Arkansas Fund, whether by design or inadvertence, doesn't seem to make much information available to the public about how to file a claim, or about itself, generally, on its website in a consumer-friendly way. In fact, the Arkansas Supreme Court has once observed that "The Arkansas Bar Association and some individual members of the Bar of Arkansas have suggested that the Fund is under-utilized because of lack of public information about the Fund." See In The Matter Of Client Security Fund, 858 S.W.2d 670 (Ark. 1993).

For those victims of thieving Arkansas attorneys desirous of filing a claim, you'll have to get the information the old-fashioned way: by contacting the office of the Clerk of the Arkansas Supreme Court and asking them to send whatever information they can provide, or at least direct you to the appropriate person or office. Good luck!

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

Wednesday, May 25, 2016

Elderly Home Hijacking Victim's $1 Million Lawsuit Accusing NYC Officials With Improperly Accepting Forged Deed From Convicted Felon For Recording Gets Heave-Ho

In Jamaica, Queens, the New York Post reports:
  • An elderly Manhattan woman whose family home was allegedly stolen by a scheming squatter cannot sue the City nor the City Registrar’s Office for damages, a Queens judge ruled Friday.

    Supreme Court Justice Kevin Kerrigan ordered that Jennifer Merin, 72, must drop her nearly $1M actions because the City Registrar has no obligation and “no authority” under New York law to ensure the deeds it accepts are legitimate.

    Merin filed suit in April 2015 seeking nearly $600,000 from the City for negligence, plus $400,000 in property cost after ex-con Darrell Beatty broke into the family home, changed the locks, and filed a forged deed with the City.

    “[The city] was negligent in the way in which they allowed the deed to be registered,” she bitterly told The Post after filing suit. “There was no indication that any of those signatures were related to my family or the property.”

    Merin sued to cover the legal fees she poured into attempting to evict Beatty, as well as the damage he’d done to the home.

    The Laurelton 1930 Tudor was left to Merin when her mother died.

    The 72-year-old, who lives on the Upper West Side, was using the property to store heirlooms, but realized something was amiss when water bills spiked in May 2014.

    When cops refused to throw-out Beatty — a convicted armed robber — Merin took the battle to Surrogates Court, where she was named as administrator of the estate and transferred the title to herself.

    Beatty was indicted on charges of grand larceny in Sept. 2015, but moved back into Merin’s house after he got out on bail.

    While she eventually had Beatty evicted in Civil Court, the criminal case against him is still pending.

    In his decision, Kerrigan said the clerks’ only responsibilities arethe deed be acknowledged and that the recording fees are paid.” “The recording clerk has no authority to look beyond the instrument that is being presented for recording,” he wrote.

    Merin could not be immediately reached for comment.

Cops Pinch South Jersey Man For Allegedly Hijacking Possession Of Vacant Foreclosed Homes, Then Pocketing Over $12K By Renting Them Out To Unwitting Tenants; Cops Won't Boot Victims, Leaving Mess For The Banks To Clean Up

In Monroe Township, New Jersey, reports:
  • Police say a Camden man broke into foreclosed properties and rented them out to unwitting victims. Authorities believe he has pulled the scam in many towns around South Jersey, according to Monroe Township Police.

    Levar Michael Taylor (aka Raymond Erving), 38, allegedly entered two foreclosed properties in Monroe, [...]. Utilities were illegally turned back on and winterization stickers placed on the closed-up homes were scraped off, police said. Taylor then posed as an agent to lease the properties.

    Taylor allegedly received more than $12,000 from people seeking to lease the homes for cash in Monroe Township, police said.

    The transactions were conducted under Taylor's name and his company, Financial Adjustment Bureau Corp. Neither Taylor nor FAB Corp. are licensed to conduct real estate transactions, police said.

    Investigators have identified other victims in surrounding counties, police said, and are asking anyone who did business with Taylor to contact them. Police believe he has pulled similar scams in Mount Holly, Pennsauken, Willingboro and Woodbury, among other towns.

    "If you have rented, leased or purchased a home from Mr. Taylor or the Financial Adjustment Bureau Corp., we encourage you to contact your local police department," police said in a release.

    Anyone with information may also contact Monroe Detective Derrick Jacobus at 856-728-9800, ext 501.

    Police became aware of the alleged crimes when neighbors called to report squatters in the foreclosed homes, Jacobus explained. When officers came to the homes, the residents showed them the bogus lease agreements. The victims were able to identify Taylor as the "agent."

    The renters are still living in the homes, Jacobus said. "Law enforcement cannot evict them," he noted. It will be up to the banks owning the foreclosed properties to determine how to proceed.

    Taylor was charged with two counts of burglary, theft by deception, identity theft, forgery, criminal mischief and failure to register as a sex offender.

    He was placed in Salem County Correctional Facility on $75,000 bail.

Tuesday, May 24, 2016

Suspected Seattle-Area Crackpot Faces Criminal Charges For Allegedly Fleecing Thousand$ From Unwitting Wannabe Homeowners By Peddling Program Purporting To Allow Squatters To Record Legitimate Real Estate Documents To Hijack Legal Ownership Of Vacant Homes

In Seattle, Washington, reports:
  • Call him Naziyr Yishmael.

    Or James Allen Keith. Or Ruwack Yishmael. Or Ahmad Abdullah-Muhammad.

    Investigators say the Des Moines man who has gone by all those names was hawking a bogus homestead scheme purported to allow squatters to seize legal ownership of abandoned houses.

    Yishmael, 46, is alleged to have swindled desperate people out of thousands of dollars each, selling the dream that home ownership could be achieved through a legal loophole. He has been charged with first-degree theft and five related counts but has not been jailed.

    Prosecutors claim Yishmael marketed his bogus system as a legitimate way for people to own houses facing foreclosure. According to charging papers, Yishmael sent out lists of homes ripe for seizure and helped his clients file bogus paperwork meant to legitimize the takings.

    Investigators claim to have identified at least 11 homes occupied by members of Yishmael’s club. Some members managed to hang on to the houses for months before being evicted by police.

    The criminal action comes as Yishmael pursues a lawsuit against a mortgage lender in which he claims he was wrongly foreclosed upon. Yishmael, who is acting as his own attorney in the matter, has claimed he lost the deed to the property for four years before finding and filing the paperwork 10 days before the Des Moines home was slated to go up for auction. Despite all the litigation, Yishmael’s legal name wasn’t entirely clear.

    Prosecutors now list James Keith as his true name, though the people he is alleged to have swindled knew him as Yishmael. He was known as Yishmael in 2001 when he was prosecuted federally for bank fraud after stealing $85,000 from his employer, Boeing Employees Credit Union.

    In October 2014, King County prosecutors filed burglary and title fraud charges against five people accused of taking over Seattle-area homes. The charges were dismissed a year ago as investigators came to believe those people were the victims of a fraud, not the perpetrators.

    Writing in court papers, a special agent with the Federal Housing Finance Agency’s investigative arm said those four women and five men paid Yishmael thousands of dollars to become part of the Association of Autonomous People, also known as the People’s Autonomous Society.

    Leading group meetings, Yishmael claimed Washington’s homestead law allowed people to claim vacant homes as their own, the special agent said in charging papers. Yishmael and his wife then sent out emails alerting members of properties “available” for squatting.

    Many of the homes involved had been abandoned in the face of foreclosure. The squatters often weren’t discovered immediately, and the debtors had little interest in removing them from homes their lenders were trying to claim.

    Yishmael then helped members file false paperwork at the King County Recorder’s Office in an effort to legitimize the squatting, the special agent continued. A member of the group changed the locks on the homes.

    “Even after the arrest of several of the members, Yishmael continued to tell the group that what they had done was legal and he would sue the government for their wrongful prosecutions,” the federal agent said in court papers.

    Members of Yishmael’s group each paid him more than $7,000 for the guidance that saw them face felony charges, according to charging papers. Several of those members were already in dire financial straits when they turned to Yishmael.

    One woman told investigators she and her daughter were being evicted from her home when she learned of Yishmael’s “adverse possession” scheme. Because the woman was a friend, the special agent said, Yishmael allowed her to make payments on the $7,500 membership fee.

    Yishmael, the agent said, “told her that the program is to help ‘folks that are doing what they can to make it.’”

    Yishmael held classes at South King County libraries and community centers outlining a complex, and specious, system through which he claimed members could seize possession of vacant homes, the special agent continued. He is alleged to have assured them it was legal to move into the abandoned homes.
Source: Charges: Squatter guru bilked Seattle-area followers (Des Moines man took in thousands selling scheme to ‘homestead’ in abandoned, foreclosed homes, investigators claim).

Real Estate Agent Pinched On Suspicion Of Grand Theft, Elder Abuse For Allegedly Filching Nearly $1 Million From Clients Conned Into Believing They Were Buying Foreclosed Homes At Bargain Prices

In Santa Clara County, California, Bay Area News Service reports:
  • A real estate agent has been arrested for allegedly defrauding her older clients out of nearly a million dollars by fooling them into thinking they were buying foreclosed homes at bargain prices and then keeping the cash for herself, according to the Santa Clara County Sheriff's Office.

    A $1 million arrest warrant has landed Geana Or, 46, of Lathrop, in San Joaquin County jail on suspicion of grand theft and elder abuse, the Sheriff's Office announced []. Arrangements are being made to transport her to Santa Clara County for prosecution. The suspect also goes by Geana Lay.

    According to investigators, the West Valley Patrol Division was alerted to the fraud after a 73-year-old Los Altos Hills resident reported that he was approached by his real-estate agent last year and proposed that he purchase two homes that were "supposedly approaching foreclosure." Between January and March of 2015, the agent, since identified as Or, convinced him to write 10 cashier's checks in her name, totaling about $475,000.

    Or allegedly convinced a resident of South Santa Clara County to buy into a similar arrangement, investigators said. In December, both clients said they were informed that the real-estate deals fell through, but never saw their money again.

    An investigation led to the issuing of an arrest warrant for Or, who was arrested May 1 near her home.

    The Real Estate Fraud Unit with the Santa Clara County District Attorney's Office is prosecuting the case, and Sheriff's investigators believe Or could have additional victims. Anyone with information for authorities can contact Sgt. Mark Roggia at 408-868-6631 or their local law-enforcement agency.

Monday, May 23, 2016

Florida Appeals Court Temporarily Slams Brakes On 2nd Foreclosure Attempt On Same Property; No Proceedings Allowed Until Bankster Pays Off Homeowner's Court-Awarded Legal Fees From Earlier Dismissed Case

A recent ruling from a Florida appeals court serves as a reminder that, when a homeowner successfully obtains a dismissal of a foreclosure action and, in the process, obtains a court award ordering the bankster to pay the homeowner's legal fees, a subsequent foreclosure involving the same property cannot go forward until the legal fee award in the earlier case is paid.

Further, this is required even when the bankster in the earlier lawsuit tries to dodge paying the legal fees by subsequently assigning its note and mortgage to another bankster, so that it is the second bankster, not a party to the first foreclosure action, that is bringing the subsequent foreclosure lawsuit.(1)

For the court ruling, see Villalona v. 21st Mortgage Corp., No. 4D15-4151 (4th DCA May 4, 2016).
(1) From the court ruling:
  • The defendant in a foreclosure action petitions for certiorari review of the circuit court’s order denying her motion for stay of the action. The defendant argues she was entitled to a stay because she had not been paid her attorney’s fees and costs incurred in defending an action previously dismissed by a first plaintiff, which later assigned the note and mortgage to the second plaintiff. We grant the petition, because the second plaintiff acquired not only the rights, but also the obligations, of the first plaintiff.

California Homeowners' Claims Attributable To Attorneys Running Illegal Loan Modification Rackets Play Significant Role In Driving State Bar's Client Security Fund Into Insolvency

The following excerpts come from the recently-issued audit report by the California State Auditor blasting the California State Bar for financial mismanagement:
  • [T]he primary purpose of the State Bar’s Client Security Fund is to compensate victims of dishonest attorneys through a claims process.(1) However, the number of claim applications to the Client Security Fund program soared beginning around 2009, in large part because many Californians had become victims of loan modification schemes.

    By the end of 2015, the State Bar indicated it had about 5,500 applications either in process or awaiting payment, and it estimated that it would pay a total of about $18.9 million related to those claims. Unfortunately, the available balance in the Client Security Fund had dropped to approximately $2.2 million by that time; this lowered balance thus severely reduced the State Bar’s ability to pay these claims.(2)
    A 2015 report by the State Bar to its board of trustees (board) noted an unprecedented increase in claim applications for its Client Security Fund program beginning in 2009, with about half of the fund’s pending claims as of July 2015 related to loan modification schemes. In 2009 the number of new claim applications nearly tripled, as shown in Figure 3. The State Bar’s reports show that applications it received peaked at 3,900 in 2010, compared to only 800 applications in 2008.

    By the end of 2012, pending applications totaled 7,800. The Client Security Fund’s administrative costs rose as it employed temporary help and authorized overtime in 2013 and 2014 to help reduce the large inventory of pending applications, but at the end of 2015 the State Bar indicated it still had about 5,500 applications in process or awaiting payment, compared to only 710 applications at the end of 2008. The Client Security Fund currently has 11 staff, including three attorneys, who process the applications.

    Client Security Fund applicants can experience significant delays in obtaining reimbursement for their claims in part because the State Bar has to wait to complete the processing of most applications until the California Supreme Court (Supreme Court) orders that the attorney in question be disciplined, as Figure 4 on page 26 illustrates. The State Bar reported that in 2014 the median total time from its receipt of a complaint to the final decision by the Supreme Court was 505 days.

    Further, in March 2016, the State Bar reported that 1,100 claims filed during 2009 and 2010 against one attorney for loan modification schemes were still awaiting completion of the discipline process. Once the Supreme Court orders that an attorney be disciplined, the State Bar can pay the related claims from the fund if it has money available.(3)
For the California State Auditor's report, see The State Bar of California: Its Lack of Transparency Has Undermined Its Communications With Decision Makers and Stakeholders.
(1) The California State Bar's Client Security Fund is intended to be a public service of the California legal profession. The State Bar sponsored the creation of this fund to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

(2) California State Auditor's Report, p. 1.

(3) Ibid., p. 24.

Trump's World-Famous South Florida Golf Course Faces June 28 Lien Foreclosure Sale After Paint Supplier Claims It Was Stiffed Out Of $30K+

In Miami, Florida, the Miami Herald reports:
  • Miami-Dade County Circuit Court Judge Jorge Cueto has ordered the Donald Trump-controlled company that owns the Trump National Doral Miami golf club to pay a paint supply company $34,863.92 by June 28 or face the forced sale in auction of the world-famous property.

    Trump bought the property in 2012 for $150 million. But, according to records, Cueto has already filed the paperwork for a 9 a.m. foreclosure sale to the highest bidder June 28 at the main courthouse in downtown Miami.

    Trump’s spokesman didn’t return a call for comment.

    The billionaire GOP presidential frontrunner has been the target of dozens of liens from contractors hired for a major overhaul of Trump National.

    But, so far, only The Paint Spot, a paint supplier, actually acted on a lien with an attempt to foreclose.

    According to court records, The Paint Spot claims it’s been owed the money since 2014.

    At least, The Paint Spot knocked $76 from the total bill, according to records, for erroneously billing Trump for a step ladder.

Sunday, May 22, 2016

Facing Accusations Of Bullying Code Enforcement Efforts (Inspections w/ Armed Police Escorts, Arrest Threats, Unwarranted Condemnation, etc.) Targeting Mostly Non-English-Speaking Latino Mobile Home Owners, City Of Richmond Agrees To Cough Up $40K, Comply w/ Other Non-Monetary Terms To Settle Lawsuit Alleging Fair Housing/Civil Rights Violations

In Richmond, Virginia, WTVR-TV Channel 6 reports:
  • The City of Richmond has settled a housing discrimination lawsuit(1) over alleged civil rights violations of 33 current and former mobile home park residents.

    The residents, majority of them are Latino [of Mexican & Central American origin], were represented pro bono by the Legal Aid Justice Center(2) and the law firm of Crowell & Moring LLP. They alleged that an aggressive housing code enforcement campaign violated their civil rights.

    Neighbors in Rudd's Trailer Park were among those who sued, saying city inspectors with armed escorts went into their homes without warning. They said they felt targeted, because the inspector condemned homes for not meeting unrealistic standards.

    “This settlement is a positive outcome for our clients and for all mobile home park residents in the City of Richmond,” said Marie Diveley, Crowell & Moring senior counsel. “The City has agreed to take important steps that will not only benefit vulnerable mobile home park residents, but will also ensure that limited English speakers can access City services without unnecessary language barriers.”

    According to the lawsuit, the City also refused to provide adequate interpretation and translation services for the limited English proficient residents, in violation of federal civil rights laws.

    The city admitted no wrong-doing, but agreed to pay about $40,000 to help residents make repairs or relocate.

    Under the terms of the settlement, the City of Richmond agreed to institute policies that will help minimize the displacement of mobile home residents in future enforcement activities and will better serve residents who are not fluent in English.

    “This settlement is the culmination of a long process of negotiation to address serious concerns on both sides,” according to Phil Storey, the Legal Aid Justice Center’s lead attorney on the case. “We are pleased that the City and the residents were able to reach a mutually agreeable resolution.”
Source: Mobile home residents, City of Richmond reach settlement in discrimination lawsuit.
(1) For the lawsuit, see Altamira-Rojas, et al. v City of Richmond, et. al.

Among the allegations made by the mobile home residents:
  • Beginning in 2012, the City adopted a policy targeting mobile homes and mobile home parks with an aggressive campaign of inspections and Virginia Maintenance Code (“VMC”) enforcement. The City formulated and, in early 2014, began executing this policy with the knowledge that it would likely result in the forced displacement of hundreds of disproportionately Latino families of Mexican and Central American national origin in violation, inter alia, of the federal Fair Housing Act, 42 U.S.C. § 3601 et seq.

    Even after a Coalition of concerned mobile home park residents and non-profit service providers approached the City offering less discriminatory alternatives that would address poor housing conditions without displacing families, the City continued to issue violation notices and to condemn mobile homes, leaving families homeless. Further, the City refused to provide these violation notices to Plaintiffs and other residents in languages other than English, despite the City’s knowledge that many of the Plaintiffs and other residents of the mobile home parks do not understand English.

    The City has subjected Plaintiffs and other mobile home park residents to: intrusive inspections with armed police escorts; threats of unwarranted condemnation, criminal prosecution, and large monetary fines; unreasonable and legally unjustified standards that make compliance nearly impossible; and no coordinated effort to address the entirely foreseeable mass displacement and resulting hardships created by condemnations.
(2) The Legal Aid Justice Center provides legal representation for low-income individuals in Virginia, having offices in Charlottesville, Falls Church, Petersburg and Richmond.

Texas City Agrees To $475K Squeeze To Settle Fair Housing, ADA Allegations That It Used Overly Restrictive Zoning, Land Use Ordinances To Keep Out Small Group Homes For Persons w/ Intellectual, Developmental Disabilities

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] announced that the city of Beaumont, Texas, has agreed to pay $475,000 and change its zoning and land use practices to resolve a lawsuit alleging that it discriminated against persons with intellectual or developmental disabilities who sought to live in small group homes in the city’s residential neighborhoods.(1)  The consent decree must still be approved by the U.S. District Court for the Eastern District of Texas.

    The lawsuit, filed on May 26, 2015, alleged that the city violated the Fair Housing Act and the Americans with Disabilities Act when it imposed a one-half mile spacing rule that prohibited many small group homes from operating in Beaumont. The suit further sought to prohibit the city from imposing fire code requirements that exceeded those imposed by the state of Texas as part of its certification and funding of such homes.

    These restrictions 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. Although the city alleged that its restrictions were justified by a Texas statute, the state of Texas later clarified in a statement it submitted to the court during the litigation that neither the spacing requirement nor the heightened fire code requirements were required by Texas law.

    Under the terms of the consent decree, the city will allow small group homes to operate in any residential district and will not subject such homes to fire code requirements that exceed the state’s requirements for certification of such homes. The city will also pay $435,000 in monetary damages to 11 individuals with disabilities, their family members and companion care providers who were subject to the city’s discriminatory code enforcement practices.

    The city will also pay $15,000 to the United States as a civil penalty and $25,000 to Disability Rights Texas, the organization that represents the individuals who filed the U.S. Department of Housing and Urban Development (HUD) complaints and intervened in the United States’ lawsuit. Beaumont will take other remedial measures, including implementing a comprehensive reasonable accommodation policy, requiring its officials to attend fair housing training and appointing a fair housing compliance officer.

    “Persons with disabilities have the same right to live in and enjoy their communities as all other families do throughout our nation,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The Justice Department will continue to eliminate discriminatory barriers that impede these individuals from doing so.”

    “I applaud the parties for reaching this common-sense, fair agreement,” said U.S. Attorney John M. Bales of the Eastern District of Texas. “Beaumont is a great city in which to live and the prior restrictions now being set aside were inconsistent with that greatness. Now everyone can reside where they wish in an environment that is best for their lives.”

    “Group homes provide a critical source of housing for persons with disabilities and their availability shouldn’t be limited by discriminatory practices,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s settlement reaffirms HUD and the Justice Department’s commitment to ensuring that jurisdictions meet their obligation to adhere to the nation’s fair housing laws.”

    The lawsuit arose as a result of complaints filed with HUD by persons with intellectual or developmental disabilities whose homes were closed and were threatened with closure under the city’s challenged housing restrictions. After conducting an investigation, HUD referred the matter to the Justice Department. The individuals who had filed complaints with HUD later intervened in the United States’ lawsuit. Today’s settlement resolves their lawsuit as well.
Source: Justice Department Reaches $475,000 Settlement With Beaumont, Texas, to Resolve Disability Discrimination in Housing Lawsuit.

Go here for the consent decree - USA, et al. v. City of Beaumont, Texas.
(1) Olmstead v. L.C., 527 U.S. 581 (1999), is a United States Supreme Court case regarding discrimination against people with mental disabilities. 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).  zoning land use 

Michigan Municipality Gets Tagged w/ Fair Housing Complaint For Passing Ordinance Banning Tenants' Use Of Gov't Housing Subsidies (ie. Section 8, etc) In Newly-Constructed Residential Complexes

In Ypsilanti, Michigan, National Public Radio-affiliate Michigan Radio reports:
  • The Fair Housing Center of Southeast and Mid Michigan has filed a discrimination complaint with the United States Department of Housing and Urban Development against Ypsilanti Township. The complaint relates to an ordinance the township passed last year banning government subsidies in a new development. That would exclude tenants with Section 8 vouchers. It is the first time a Michigan municipality has attempted to ban subsidized housing.

    Pam Kisch, Director of the Fair Housing Center, says the ban violates the U.S. Fair Housing Act. "It has what's called a disparate impact on people who either have Section 8 vouchers or are on a waiting list for Section 8 vouchers."

    The township has asked for more time to respond to the complaint. Kisch says that the desired outcome of the ban is, "First and foremost, the ordinance has to be repealed." She also hopes that the township will meet with representatives from the Fair Housing Center to discuss further changes to correct discriminatory housing practices.
Source: Fair housing complaint filed against Ypsilanti Township.

For a follow-up story, see Justice Department investigating Ypsilanti Township over section 8 housing discrimination (The Justice Department is investigating Ypsilanti Township over alleged housing discriminations stemming from rules the township put in place to limit Section 8 and rental housing. Last July, the township developed a first-of-its-kind plan to ban section 8 housing and limit rentals in new subdivisions). zoning land use

Lawsuit: California Municipality Used Zoning, Land Use Ordinances In Effort To Unlawfully Restrict Transitional Homes, Support Services For Convicts Released On Probation & Otherwise Banish People w/ Criminal Records From Community

The American Civil Liberties Union of Southern California recently announced:
  • A charitable organization dedicated to reducing homelessness and several of its clients filed a federal lawsuit [] challenging the city of Hesperia’s attempts to unlawfully restrict housing and support services for individuals with criminal records.

    The ACLU Foundation of Southern California (ACLU SoCal) filed the lawsuit on behalf of Victor Valley Family Resource Center (VVFRC), a nonprofit in Hesperia that connects individuals who are homeless or at risk of becoming homeless to transitional supportive housing. The suit argues that efforts by Hesperia to shut down three transitional homes are intended to banish residents released on probation.

    “The city’s efforts to shutter these homes is little more than an attempt to banish individuals with criminal records from their community,” said Adrienna Wong, a staff attorney with ACLU SoCal. “That’s unacceptable and violates the California Constitution and the 1st & 14th amendments of the U.S. Constitution.”

    Currently, the San Bernardino County Probation Department refers individuals released from incarceration who have no place else to go to VVFRC, which provides transitional housing for up to one year, as well as meals, case management services and permanent housing placement.

    The lawsuit, filed against the city of Hesperia, San Bernardino County Sheriff John McMahon and other city and sheriff’s officials, argues that several Hesperia municipal codes which were used to target VVFRC violate both the California and U.S. Constitutions. In some cases, Hesperia enforced a code prohibiting residential structures that house more than one individual on probation who are not related by blood or marriage, violating the individual plaintiffs’ right to association. One of VVFRC’s transitional homes was forced to close as a result, and the remaining homes may face the same fate.

    The city also violated privacy rights by enacting an ordinance requiring landlords to provide their tenants’ personal information to police in Hesperia for purposes of a background check and registration of tenants in a database administered by the police.

    Under the same ordinance, the city requires landlords to evict tenants if the chief of police sends a “notice of criminal activity” – even if the tenants are never convicted, charged, or even arrested for any crime.

Another New Jersey Municipality's Restrictive Zoning, Land Use Rules Again At Issue In Federal Suit Brought By Orthodox Jewish Congregation Alleging Violations Of Fair Housing, Religious Land Use Acts

In Howell Township, New Jersey, reports:
  • An Orthodox Jewish congregation has filed a federal lawsuit against Howell Township and its zoning board of adjustment, saying the township's denial of its plan to build a religious education center was motivated by religious "hostility."

    Congregation Kollel and its land holding company filed the complaint Tuesday.

    The congregation, the lawsuit says says, wants to build a classroom building for teen-aged and young adult males studying to become future Orthodox leaders, a dormitory and townhouses for faculty.

    However, actions taken before and after the Kollel bought the property were designed specifically to prevent Orthodox facilities from being built in the township, the lawsuit says.

    Township Attorney McKenna Kingdon did not immediately return a request for comment.

    The new lawsuit is at least the fourth active case involving a religious group suing a New Jersey community over restrictive land-use rules. An Islamic Society is suing Bernards Township over its rejection of a proposed mosque, a decision that has attracted the attention of the U.S. Justice Department. Additionally, a Jewish community is suing Toms River over its rejection of a religious center and another is suing Ocean Township over its rejection of a proposed Yeshiva.

    The Kollel's lawyer, Christopher K. Costa, says in the lawsuit that the property the congregation bought last year on Ford Road was, at the time, in a zoning district that permitted educational facilities. The tract, at 344 Ford Road, is 10.1 acres, the lawsuit says.

    Howell Township Council in May of that year revised land-use requirements that "severely restricted" where schools could be located — a move motivated by "animus toward ultra-Orthodox Jews," it says.
    The 11-count suit cites the Religious Land Use and Institutionalized Persons Act of 2000, the First and Fourteenth Amendments, the Fair Housing Act, the state constitution in seeking to void the township's land use ordinances; overturn the application's denial; prohibit new efforts to overburden religious exercise; and damages and costs.