Justices Rule Home Equity Theft Unconstitutional – Will Have Local Implications

Joyce and Gracemarie Tomaselli,  6-23

Last month the U.S. Supreme Court justices unanimously ruled that home equity theft by government entities is unconstitutional, securing an individual’s right to just compensation when their property is confiscated and sold in a tax foreclosure.

“This decision affirms that property rights are fundamental and don’t depend solely on state law. The court’s ruling makes clear that home equity theft is not only unjust, but unconstitutional,” said Christina Martin, a Pacific Legal Foundation lawyer.

For years Pacific Legal Foundation has argued that home equity theft—when governments satisfy property tax debt by taking a person’s home, selling it, and keeping more than the amount owed—violates the Fifth Amendment’s prohibition on taking property without compensation.

The case originiated when Geraldine Tyler, a 94 year-old grandmother, failed to pay her property taxes of $2,300.

The government started tacking on thousands of dollars in interest, fees, and other penalties until her total bill reached $15,000.

When Tyler failed to pay the debt, Hennepin County, Minnesota, seized her condo and sold it at auction for $40,000. Instead of keeping the $15,000 owed and refunding Ms. Tyler the sale surplus, the county kept all $40,000, essentially pocketing a $25,000 windfall at Ms. Tyler’s expense.

The Pacific Legal Foundation then brought her case to the Supreme Court. According to their research, home equity theft predominantly occurs in lower-income and minority areas. Older adults also face a disproportionate risk of falling victim to home equity theft; home equity theft is legal in Massachusetts and 11other states and DC, they have robbed homeowners of nearly 9,000 homes and more than $860 million in life savings from 2014 to 2021.

The justices concluded unanimously that Geraldine Tyler can pursue her argument against Hennepin County’s decision to keep the surplus as it violated the takings clause of the Constitution’s Fifth Amendment. That Clause requires that the government pay just compensation when property is taken.

Chief Justice John Roberts wrote, in a reference to a passage from the Bible, that taxpayers are only required to pay the government what it is owed.

“The taxpayer must render unto Caesar what is Caesar’s but no more,” he wrote. By keeping the $25,000 surplus amount, the county “effected a ‘classic taking in which the government directly appropriates private property for its own use.’”

Justice Neil M. Gorsuch, joined by Justice Ketanji Brown Jackson, issued a concurring opinion that explored another possible ground for ruling in Ms. Tyler’s favor: the Eighth Amendment’s prohibition of “excessive fines.” See Tyler v. Hennepin County, Minn., May 26, 2023, SCOTUS No. 22-166.

This case hits home with us because we too, lost our home & restaurant (Mangia a Cafe Restauant, Salisbury Beach, MA) because the Town did the same thing to us; the Town of Salisbury auctioned our property for $775,000 and didn’t give us a penny!

This tax taking was the direct result of sewer charges that government documents prove we never owed in the first place. We had paid off our mortgage and thousands in taxes and licenses.

Because the town revoked all our 1995 restaurant licenses, overnight, because of sewer bills that we later discovered were never owed in the first place. This started our financial devastation. Although we tried for many years to reopen, and the town admitted that they made errors in their tax billing, they would not correct the bills or give us our licenses.

We paid the Town of Salisbury an additional $15,492.04 check to bring us current in 2002, the Town accepted it, didn’t cash it and proceeded with Land Court.

Kopelman & Paige (now KP Law) Town Counsel cancelled our meeting with the Department of Revenue scheduled to waive the interest because the Town made errors in their sewer charges and real estate taxes. (https://valleypatriot.com/why-did-salisbury-refuse-to-cash-15k-check-from-tomaselli-sisters

The Tax Taking amount was $45,763.28 comprised mostly of sewer charges for the building lot and $4,351.62 sewer betterment for the marsh lot that did not have a sewer, plus 16% interest from 2001 until 2015, plus Town’s legal fees amounted to $250,889.32.
For years we tried to have the Town correct their billing errors so that we could pay what we rightfully owed, get current and reopen Mangia.

Through these many years, we went to numerous courts to have the sewer bills corrected but to no avail because the Town attorneys KP Law, and Coppola and Coppola, misstated facts, and concealed evidence to mislead judges in order to win and take our property – that is how they won!

We commend the Supreme Court justices for doing the right thing in Tyler v. Hennepin County, Minn. case.

With the hope of helping others and because of the anguish that we have had for three (3) decades, we petitioned two (2) State Senate Bills currently pending hearings.
The first: Senate Bill S. 1131 ‘An Act to Strengthen rules governing attorney conduct; penalties for misconduct’.

and Senate Bill S. 1326 ‘An Act to provide clarification to Mass General Laws for betterments with regard to sewer projects.’