Attorneys joust in Greenfield home equity case

GREENFIELD — City attorneys have filed a motion to dismiss a lawsuit against the city that seeks to compensate two former homeowners who lost excess home equity after the sale of their properties for unpaid taxes.

In response, attorneys representing the two plaintiffs in the case, Stephen Woodbridge and Roberta Browning, filed their opposition to the city’s motion on Monday.

“We were disappointed to learn that the city of Greenfield won’t voluntarily agree to return the excess value of plaintiffs’ property to them,” said attorney Thomas Lesser of Lesser, Newman, Aleo & Nasser LLP, who is among the attorneys representing Woodbridge and Browning. Referencing the decision in Tyler v. Hennepin County, he added, “The Supreme Court has made it clear that municipalities are not entitled to windfall profits when they collect taxes from people who, sadly enough, are unable to pay.

“Both plaintiffs owed relatively small amounts to the city on their respective properties. The city took their properties and, effectively, their life savings. That is why we brought this suit,” Lesser continued.

In effect, Lesser and attorney Michael Aleo allege the city violated the Takings Clause of the Fifth Amendment by failing to compensate the two property owners for the excess value of the property over and above the money they owed to the city.

“Until the state Legislature comes up with new laws, we’ll follow laws as they exist today,” Mayor Roxann Wedegartner told councilors at a City Council meeting last week. “Foreclosures are always our last resort here, and we go to great lengths in this city to ensure people are given an opportunity to get right with their taxes. Sometimes that just can’t happen.”

Wedegartner referenced H. 3053, legislation that would improve the notice procedures for people undergoing tax foreclosure proceedings and also guarantee that any excess proceeds generated by tax sales are returned to the original property owner. Wedegartner said she supports new laws in handling homeowners’ equity following foreclosures.

“It’s moving through its various committees, so hopefully we’ll hear something very soon,” the mayor said. “In the interim, we have been given permission, so to speak, by the [Department of Revenue], to set up what’s called an agency fund. I’ve directed the Finance Department to set up an agency fund to hold any excess funds, equity, in essence, in anticipation of the Legislature making new laws that instruct municipalities how to move forward after foreclosures … specifically, what happens to the money that is left after the city has recouped all of the legal costs.”

The lawsuit against Greenfield, filed in September, comes in the wake of the U.S. Supreme Court decision in Tyler v. Hennepin County in May that ruled that government can only retain tax debts owed, and no more, when seizing and selling private property, putting an end to what some describe as “home equity theft.” Before this ruling, Massachusetts, along with 11 other states, allowed municipalities to foreclose on private property when taxes were overdue and keep all the proceeds, even if the taxes owed were a fraction of that amount.

The complaint was originally filed in relation to the property, formerly owned by Woodbridge, at Stone Ridge Lane, which sold at auction in October 2021.

Though a 13-acre parcel of the property at 87 Stone Ridge Lane was retained by the city, a second 6-acre parcel that included Woodbridge’s residence — assessed for $258,400 — sold for $270,000, according to the complaint filed in U.S. District Court in Springfield. The property was taken for unpaid taxes from fiscal year 2016 in the amount of $4,791.74, according to the Franklin County Registry of Deeds.

According to the complaint, the 13-acre parcel of land retained by the city, valued at $50,200, was taken for $970.11 in unpaid taxes, interests and other costs. The complaint states Woodbridge also is seeking “the difference between the monies [he] owed to the city and the fair market value of the parcel.”

The city calculated its costs in taking the two properties, including past due taxes and interest, to be $54,098, which will be deducted from the sale amount the property.

The property at 3 Vernon St., meanwhile, formerly owned by Browning, was taken by the city in April 2016 for taxes, interest and expenses owed totaling $1,578, according to the Franklin County Registry of Deeds. In 2017, the city filed a complaint to foreclose on the property, and by 2020, the property was sold at auction for $34,000.

According to the complaint, the city calculated its cost in taking Browning’s property, including past due taxes and interest, at $18,455.

Reporter Mary Byrne can be reached at mbyrne@recorder.com or 413-930-4429. Twitter: @MaryEByrne.