Greenfield Recorder – Judge denies Greenfield’s bid to dismiss equity case

GREENFIELD — A federal judge denied the city’s motion to dismiss a case involving two residents who sued the city for taking the excess value of their foreclosed properties on a tax lien, a practice the U.S. Supreme Court ruled that it was unconstitutional last year.

Plaintiffs Stephen Woodbridge and Roberta Browning filed suit against Greenfield in September, alleging the city violated their rights under the Revenue Clauses of the Fifth and Eighth Amendments to the Constitution by taking their property to recover unpaid taxes without compensating them for approximately $289,000 in excess combined value. the city won on resale.

In 2021, Greenfield sold one of Woodbridge’s two foreclosed parcels of land, located at 87 Stone Ridge Lane, for $270,000 and kept the second parcel, which was assessed at $50,200 in 2023. The city foreclosed on parcels because Woodbridge owed a total of $5.761. in taxes.

The city sold Browning’s property, valued at $109,900, for $34,000 in 2020 after Browning owed the city $1,578 in delinquent taxes. Neither Browning nor Woodbridge received any of the excess value the city realized from either sale.

“As noted, the combined amount of taxes owed on the Woodbridge property was under $6,000. Woodbridge Parcel 2 itself was worth over $49,000 and therefore the sale of that property would have paid more than the tax liability of both properties. However, the city chose to foreclose on both properties and in doing so realized an enormous gain,” U.S. District Court Judge Timothy Hillman wrote in a footnote to his court order.

City Attorney Jesse W. Belcher-Timme filed a motion to dismiss in October on the grounds that the city did not take independent action to deprive the plaintiffs of their property, but rather followed the state’s statutory scheme for taking taxes.

“I think the plaintiffs … oversimplified their analysis here,” Belcher-Timme told Hillman during a motion to dismiss hearing last fall. He said the question is really whether the statutory scheme — or the laws established by the Legislature — in Massachusetts is constitutional.

In Hillman’s order denying the city’s motion to dismiss, which was filed May 29, the judge wrote that a significant factor in the case centers on whether the plaintiffs had access to a legal process by which they could reclaim the excess funds under state law.

Hillman’s decision came just days after the state Senate unanimously passed an amendment to the state’s annual spending plan that would bar municipalities and private companies from taking a home’s entire equity in a tax foreclosure, a practice some critics refer to as “equity theft.”

The Senate decision sought to bring Massachusetts equity laws in line with the results of Tyler v. Hennepin County, Minnesota last year, in which the Supreme Court ruled the practice unconstitutional.

“While the statutory scheme would have allowed the city to take action against both properties, its choice to take advantage of them to line its coffers to this extent serves as a clear example of why this statutory scheme is subject to constitutional challenge in several cases throughout the Commonwealth,” Tillman said in his order.

In an email to the Recorder, attorney Michael Aleo, who represents Woodridge and Browning, called the judge’s ruling a “big win” for his clients.

“The litigation will continue and we will fight to get the plaintiffs the justice they deserve,” Aleo said.

Anthony Cammalleri can be reached at [email protected] or 413-930-4429.