Tax foreclosures

County challenged with ‘equal protection’ lawsuit

A Livonia man is filing suit against Livingston County to reclaim ownership of his property from foreclosure.

The lawsuit highlights a concession made for a home in Mount Morris — and claims that the same concession should have been be made for anyone whose property was seized for foreclosure auctions in 2011 and 2012.

Robert E. Chabot’s home at 5147 Blank Road was among over 40 parcels destined for sale in the county’s 2011 foreclosure auction. Due to a title complication caused by Chabot selling the property to a friend after missing the June redemption deadline payment, ownership remains in legal limbo. Chabot himself, his friend Bethany Rogue, Livingston County, and the high bidder at the 2011 auction are candidate holders.

Chabot’s suit hinges on a legal precedent connected with the home at 35 Barone Avenue in Mount Morris. The house is under the name of Julia Wiggins, widow of the late Livingston County district attorney and county judge Theodore Wiggins who died in office in 1994. Wiggins was the brother of current Livingston County judge Robert Wiggins.

The home was also one of the 40 properties with delinquent taxes at the June 15, 2011 deadline — and thus also subject to seizure and foreclosure. However, Wiggins’ house turned out to be one of just two parcels which the county has backed off from foreclosing.

Livingston County adopted the ‘Article 11’ rules for foreclosure in 2004, holding the first auction under those rules in 2007. The Barone Avenue and Clay Street properties have been the only ones to sidestep the strict June redemption deadline specified by Article 11.

Three sought relief

The Barone Avenue property was one of three 2011 foreclosures appealed before Livingston County Judge Dennis Cohen — and the first such case to be heard.

According to Livingston County Treasurer Carolyn Taylor, Cohen held an in-chambers consultation between herself, county administrative representatives, and a special counsel for the county from the Philips Lytle law firm. Consequently, the treasurer agreed to accept four years of unpaid property tax, in excess of $20,000, and allow Wiggins to retain her title.

In hearings for the other two properties — at 2381 Clay Road in Lima (whose owner was Robert Leschander) and 10260 Pennycook Road in Portage (whose owner was Jeff Mort) — Judge Cohen likewise ordered relief, directing the property owners and county to negotiate a settlement of the unpaid taxes. In rendering his decision, Judge Cohen cited Leschander’s medical condition at the time he was notified, as well as the very recent Barone Avenue precedent.

At this point, the Livingston County Board of Supervisors opted to challenge all three late payments in a higher court, even though the county had already accepted the payment on Barone Avenue.

When Leschander managed to circumvent foreclosure through a federal bankruptcy strategy, the supervisors withdrew their pursuit of his and Wiggins’ cases. The county’s Pennycook Road appeal is still pending, Taylor said.

Attorney comments

Robert Chabot is represented by Derrick A. Spatorico, with the Rochester firm Pheterson Stern, Calabrese, Neilans & Spatorico.

Chabot’s suit challenges the county’s right to have disallowed his post-June 15 payment of back taxes and penalties. The case centers on the fact that the Wiggins property at 35 Barone Avenue in Mount Morris and the Leschander property at 2381 Clay Street in Lima have remained in possession of the original owners, even though those two owners likewise failed to pay their taxes before the deadline.

These exceptions to what the county claims is a blanket policy violates constitutional protections, said Spatorico. “Our argument is that the county has two sets of rules. One set of rules is for most everybody, but there is another set of rules for those who protest.”

Such differential treatment is a violation of both the New York and United States constitutions which insist upon equal protection of all citizens. “It’s a fairness argument. We’re arguing that the law needs to be clearly defined and equally applied — and it’s not,” Spatorico said.

Spatorico concedes that, of the two examples, the Clay Street case is the weaker, because the medical condition of the owner and his later bankruptcy do make it somewhat exceptional. However, the Barone Avenue case offers an inarguable example of county government treating one taxpayer different from the others.

Amnesty solution proposed

Chabot’s property was sold at the 2011 auction, but when the buyer learned of the complicated chain of title, he opted out of the purchase.

Livingston County responded with an action to confirm the title and foreclosure against Chabot.

With Spaterico recently hired as his counsel, Chabot is challenging the county’s legal ability to foreclose, based upon what Spatorico suspects may be inadequate noticing and posting in addition to equal protection before the law

In the latest update, Spatorico and his client have now submitted an answer and counter claim. It will likely be several months before Judge Cohen hears the case, Spatorico suspects.

As a solution to the unfairness, Spatorico would hope to see something along the lines of an amnesty program — tied to a specific time frame where Livingston County would accept back tax payment beyond the redemption deadline.

“Until the county rectifies this situation and starts to apply the law equally to everyone, then I think that they have an established practice of allowing exceptions to the rule,” Spatorico said.

Liability implications

If Chabot wins his case, will a similar challenge be opened to every property owner who has experienced loss of his or her property to foreclosure in Livingston County since 2011?

“The county opened the door for this when they failed to apply the law equally to everyone in the county,” Spatorico commented. “They cannot selectively and arbitrarily apply the law.”

“Leschander may not be exactly on point here. Because of the medical and bankruptcy, it’s distinguishable, but Wiggins is directly on point because the county voluntarily worked out a payment arrangement with her,” Spatorico stated. “In the Wiggins case, the county entered into a private agreement with the property owner to accept the payment a month after it was due.”

Owners of the properties which were foreclosed and have already been sold to bona fide buyers for value would likely have a hard time getting their property back, Spatorico noted, because of “issues around statutes of limitation, governmental immunity, governmental function, and inherent fairness” which would block such retrieval.

Nevertheless, if the Chabot case offers proof the county has failed to offer equal protections to its taxpayers, Spatorico thinks, as far as damages go, there would be a group of homeowners who are aggrieved validly.

Whatever liability Livingston County might have incurred, Spatorico emphasizes, “Was created by the county, not by my client. My client simply took a stand for his rights in a court of law.”

“When the county treasurer and their attorneys deviate from the law to make special exceptions for some residents, it is my opinion they have to make exceptions for all residents.”