Mass. residents fighting to reclaim money from city in 'equity theft' lawsuit (2024)

Two Greenfield residents are fighting to get back what the city has taken from them in a first-of-its-kind lawsuit that, if successful, could also put millions of dollars back in the pockets of residents across Massachusetts.The lawsuit, filed in federal court, alleges that the two residents, Stephen Woodbridge and Roberta Browning, fell behind on their taxes. The city of Greenfield then foreclosed on the residents' homes, sold their properties, and kept the profits beyond what they owed.It's a practice known as equity theft, and 5 Investigates' Karen Anderson has been exposing the impact for almost a year since the U.S. Supreme Court ruled it unconstitutional last spring. In Stephen Woodbridge's case, he fell behind approximately $5,700 in taxes. With interest and fees, his debt increased to $54,000, which he couldn't pay. In 2019, Greenfield foreclosed on his home and 19 acres of his land. The city then sold the home and 13 acres of the land for $270,000, and kept the roughly $215,000 in excess profit. The city kept six of the acres for public trails."It was his equity, he didn't even have it in the bank. It was all in that house. And basically, he was left without any income at all," said local activist Al Norman. "In one morning, gone."Norman has been fighting against equity theft in Greenfield for years."I had some neighbors come to me and say, 'Al, they're taking our home,'" he said. "They want all of our money, every single penny that we have in our house, which is mortgage-free, we've paid it off."Norman helped his neighbors retain a lawyer, pay off what they owed, and keep their home. But that experience made him wonder, how many other residents had lost everything? Could he help them, too?Then last year, after the Supreme Court's ruling, he put a notice in his local newspaper searching for former property owners who may be owed money.That's how he found Woodbridge and another resident named Roberta Browning. Browning had fallen behind on her taxes by $1,500, which increased to $15,000 with interest and fees. The city foreclosed, sold her home for $34,000, and kept the profits. Browning alleges the sale price was below market value; her home was then sold again less than two years later for $272,000.Norman talked Woodbridge and Browning, who both declined to be interviewed for this story, into taking legal action to get back their life savings and connected them with attorney Michael Aleo."This is about the Fifth Amendment. The Fifth Amendment says that government is not allowed to take private property without just compensation," Aleo said.They filed a federal lawsuit against Greenfield, demanding the city pay them for their homes."Mr. Woodbridge's property was taken, it was worth multiples of what he owed. Roberta Browning's property was taken. It was worth multiples of what she owed the city," Aleo said. "The city should pay Mr. Woodbridge and should pay Ms. Browning that surplus amount. That's what just compensation means, and that's what they are due."The city of Greenfield filed a motion to dismiss the lawsuit, which a judge has yet to rule on. City officials did not respond to our requests for comment.If the lawsuit is successful, Norman and Aleo believe it could have ramifications far beyond Greenfield."Municipalities across the Commonwealth would almost certainly owe excess of multiple millions of dollars," Aleo said in reference to other cities and towns who have participated in the same practice."I have no doubt at all that it's just a matter of time that we will be able to see people lining up to file claims and getting their money back," Norman said.While Woodbridge and Browning wait for a judge to rule on their case, a Massachusetts Supreme Court judge ruled last week the state's current law to be unconstitutional. Several bills to fix the law have been filed Beacon Hill, waiting for action from the legislature.