May 30, 2024

Superior Court Judge Finds State’s Method of Taking Property for Unpaid Taxes Unconstitutional in Local Case

BY Catherine Kay, Senior Supervising AttorneyCommunity Legal Aid

Mills v. City of Springfield, 23 79CV 00545 (Hampden Superior Court)

Springfield, MA: A Hampden County Superior Court judge recently issued an important decision in favor of Community Legal Aid’s client, Ashley Mills, who was at risk of losing her home and over $200,000 of equity she had built up, over an unpaid tax bill of $22,000. Massachusetts is one of only a handful of states that allow local governments to take property for the taxes they are owed (plus interest and fees) but also keep the entire equity in the property, a practice that many label “equity theft.” In Ms. Mills’ case, Judge Michael Callan ruled that municipalities cannot use the law to take property when the homeowner’s tax debt is less than the value of the property.

When she sought help from Community Legal Aid in 2023, Ms. Mills was on the verge of losing her Springfield home, which was worth around $230,000. Ms. Mills lives with her 2-year-old son and disabled mother in the home she inherited from her grandmother. In 2016, Ms. Mills was unable to pay $1,636.70 in property taxes. Over the next three years, she entered into payment agreements with the city, but was unable to catch up, largely due to a punitive 16 percent interest rate and other charges imposed by Springfield under the Massachusetts tax lien foreclosure law, G.L. Chapter 60. The property tax debt ballooned to $22,000, and the city filed a motion for judgment of foreclosure in May 2023. Community Legal Aid is representing Ms. Mills in the foreclosure case in the Land Court.

The Pioneer Public Interest Law Center, Greater Boston Legal Services, and the law firms of Morgan Lewis and Greenberg Traurig filed a separate lawsuit on Ms. Mills’ behalf in Hampden County Superior Court to challenge the law that would have allowed Springfield to keep the equity in Mills’ home, which far exceeded the tax debt. The Court’s ruling on April 18, 2024 was a major victory for Ms. Mills and her legal team, which is fighting cases of “equity theft” across the Commonwealth.

Community Legal Aid Senior Supervising Attorney Catherine Kay represents Mills in the Land Court tax lien foreclosure case that led to the Superior Court lawsuit. “We see many low-income or elderly homeowners who, having long ago paid off their mortgages, fall behind in their taxes. Suddenly they face losing their homes and all the equity they built over the years.”

Ms. Mills said, “I am grateful the judge understood how unfair this law is. All I want is to keep a roof over our heads. If the City sells my house, not only will I be homeless, but because the city keeps all the money from the sale, I would not have the money to get new housing.”

The Court’s ruling relied on a U.S. Supreme Court case decided last year, Tyler v. Hennepin County. In Tyler, the Supreme Court ruled that a Minnesota statute was unconstitutional because it denied reasonable compensation to a homeowner for the taking of her property.

“In Tyler, the Supreme Court sent a clear message that any surplus beyond the tax debt should be returned to the homeowner,” said Pioneer Public Interest Law Center President Frank Bailey. “Massachusetts is one of a minority of states that has a law like Minnesota’s, and the Court’s ruling makes it clear that such laws are unconstitutional and therefore unenforceable. We have been fighting in the Massachusetts courts to invalidate this predatory law for over a year and finally Judge Michael Callan has issued an order invalidating Chapter 60 in cases like this one where the home’s value is greater than the taxes due. Cities and towns are on notice that using Chapter 60 in this predatory manner violates fundamental rights under the federal and state constitutions.”

“This is primarily a legislative issue,” said Attorney Todd Kaplan of Greater Boston Legal Services. “Judge Callan properly called upon the Legislature to take action to correct the injustice of Chapter 60.”

About Community Legal Aid  (CLA): CLA provides free civil services to the low-income and elderly residents of the counties of Western and Central Massachusetts (Berkshire, Franklin, Hampden, Hampshire, and Worcester), and maintains offices in Worcester, Fitchburg, Springfield, Northampton and Pittsfield.  Serving more than 8,000 individuals and families annually, CLA works to assure fairness for all in the justice system, protecting homes, livelihoods, health and families.  For more information, please visit www.communitylegal.org.

About Greater Boston Legal Service (GBLS): GBLS assists survivors of domestic violence, homeless families, elders, people with disabilities, homeowners facing foreclosure, tenants facing eviction, low-wage workers, families with no source of income, and immigrants facing persecution. Annually, GBLS provides legal assistance to more than 10,000 families and individuals who live at or below 125% of the federal poverty standard. GBLS also provides legal counsel to dozens of community-based groups and organizations and conducts strategic impact advocacy to bring about positive systematic change throughout the region and state. For more information, please visit www.gbls.org.

About Pioneer Public Interest Law Center (PPILC): PPILC is a nonprofit, nonpartisan legal research and litigation entity, organized under Section 501(c)(3) of the Internal Revenue Code. PPILC is a public-interest law firm that defends and promotes educational options, accountable government and economic opportunity across the Northeast and around the country. Through legal action and public education, PPILC works to preserve and enhance liberties grounded in the constitutions and civil rights laws of the United States and the individual New England states.