Schwall Hears Summary Judgment, Dispossessory Stay in Task Force Lawsuit; Emory’s Complicity Becomes Clearer
(APN) ATLANTA — Fulton County Superior Court Judge Craig Schwall heard a series of important motions in the cases involving the Metro Atlanta Task Force for the Homeless and the numerous co-conspirators who conspired to sabotage the homeless shelter by depriving it of public and private funds, in a hearing on July 11, 2014.
Most of the two and a half hour hearing was focused on the parties’ motions for or against summary judgment.
In addition, Schwall heard a motion by Premium Funding Solutions (PFS) to lift the four-year stay on dispossessory, thus allowing them to pursue dispossessory against the Task Force; various motions to disallow certain evidence gathered in discovery from being considered at trial; and a motion by the Task Force to disallow a magistrate judge, who heard the original dispossessory case against the Task Force, from representing PFS.
As previously reported by APN, the Task Force wants to go to trial to have a jury hear their claims that the co-conspirators engaged in tortious interference with private business relationships; and their claims to quiet PFS’s title for the property.
The other parties are seeking Judge Schwall to grant summary judgment in their favor, meaning that there are no genuine issues of material fact for a jury to consider; and that based on the law and facts, that the Task Force’s claims should be dismissed.
The Special Master in the case has already recommended that summary judgment should be granted on some of the Task Force’s claims, but denied on others, and that those claims, including the tort and quiet title claims, should go to trial.
Now, Judge Schwall needs to rule on the summary judgment motions, to determine whether the case is ready for trial.
Richard Robbins did most of the arguing on behalf of Premium Funding Solutions.
Robbins presented several undisputed facts, such as that the Task Force enterred into loans and defaulted on the loans; that Ichthus Community Trust acquired the loans and foreclosed upon the Task Force; and that PFS acquired the property from Ichthus.
Robbins argued that the Task Force has failed to offer legal tender for the property and that doing so is critical under Georgia law in order to assert a wrongful foreclosure claim.
Robbins said there are several Georgia cases–citing one recent one to the Court–showing that, even when a foreclosed-upon party claims impropriety on the part of the noteholder, the party must still allege that they offered legal tender for the property.
Robbins, erroneously, argued that the Task Force’s entire wrongful foreclosure claim rests upon the argument that co-conspirator Manny Fialkow schemed to prevent the Task Force from defending itself from the foreclosure by deceptively promising then-Board Chair Bob Cramer that he would work with the Task Force out of court.
Robbins argued there is no evidence that the Task Force or anybody else would have bid on the building during the foreclosure sale if not due to the conspiracy.
Finally, Robbins argued that there is no evidence that the purchase price of the building was grossly inadequate, positing that the expert testimony offered by the Task Force–which he says was later withdrawn–is inadequate.
“There is nothing in the law other than a vague sense of equity, that can hardly override Georgia law, supporting these wrongful foreclosure claims,” Robbins said.
In response, Steve Hall, pro bono attorney for the Task Force, with the Baker Donelson firm, responded, first, that the expert testimony regarding the value of the building was provided by a broker, Gene Kansas; and that his testimony was never withdrawn or struck.
Hall said that Robbins had fabricated his statement, and that it was indicative of the false and fabricated character of everything Robbins had said.
Hall then went through a bound volume of emails and other exhibits–a copy of which has been obtained by Atlanta Progressive News–that shows, step by step, in clear detail, how the co-conspirators set out to destroy the Task Force, and then carried out their plan.
Tab 14 of the binder shows A.J. Robinson telling Cousins Properties that they were trying to get Emory University to buy the Task Force’s notes as of March 03, 2009. “Emory has no $$, but will push them at the right time,” Robinson wrote.
Tab 16 of the binder shows that Emory University was in conversations, as of May 17, 2009, with Manny Fialkow, Cousins Properties, and Central Atlanta Progress, apparently–when read in conjunctions with other emails–for Fialkow to flip the building to Emory.
In Tab 17, Craig Jones of Cousins Properties wrote to Robinson, “This ‘gent’ [Fialkow] is way down the road on this. You’ve got him pretty lathered up. We really need to see what Emory is willing to do, although being realistic, they probably won’t move fast enough.”
“Agreed, but he just smells a deal and will flip to Emory if we want… also he tops out at about 2 million so we may need some back up,” Robinson wrote.
In Tab 18, Peterson of Emory describes exactly what the University’s intents were: “Quick question – is there any value in figuring out how to buy the note with Manny? The idea would be to let Manny get the discount from Mercy/ICE [(Institute for Community Economics), the noteholders] at $800 or so, and have Emory pick up the tab for the difference to the full amount.”
Tab 28 of the binder shows that just hours before the foreclosure sale, on May 04, 2010, Fialkow was colluding with Dane Peterson of Emory to offer to flip the building to Emory. The Task Force argues that this illegally depressed the foreclosure sale price because Emory would have bid on the building if they were not being promised the building at a lower price from Fialkow on the back end.
Hall then responded to Robbins’s argument that the Task Force’s only argument regarding wrongful conduct was Fialkow’s successful interference with the Task Force’s legal defense against the foreclosure sale.
“That’s the tip of the iceberg of the wrongful conduct; the wrongful conduct started in ‘06, and continued up through the foreclosure sale,” Hall said.
Hall then noted that, under Georgia law, any and all members of a conspiracy are responsible for the conduct of all the members of the conspiracy, even if any one particular member did not engage in any particular part of the conduct.
Hall said that the foreclosure sale was wrongful because the only reason Emory did not bid on the property is because Fialkow had already promised to sell the property to Emory. Fialkow was able to purchase the building for 780,000 dollars, when it was worth 8 million dollars on the market.
Robbins then reiterated his argument that nothing that the co-conspirators did matters because, under Georgia law, the Task Force did not offer legal tender for the building.
Hall responded, “Equity is there for situations where the law doesn’t specifically prescribe how you should do things. The fundamental principle of equity that Mr. Robbins belittles… is do what’s right.”
“99 times out of 100, maybe 999 times out of 1,000, that means, the borrower should pay off the note first. However, if you are on your way to pay off your note, and I’m a bank and I send someone to steal your money out of your car and I stole all the money you had, would equity say you don’t get to come to court because I stole your money?” Hall said.
The attorney for CAP and ADID argued that Dan Cathy of Chic-fil-A–who stopped funding the Task Force after the co-conspirators met with him to disparage the Task Force and convince him to stop funding the Task Force–stopped funding the Task Force for reasons have nothing to do with his meeting with the co-conspirators.
Hall said in response that Mr. Cathy’s testimony was clear that his posture towards the Task Force changed after he was approached by the co-conspirators; and that the co-conspirators patted each other on the back in emails for the success of their efforts.
The CAP/ADID also argued that CAP and ADID did not tortiously interfere in the relationship between the Task Force and its lenders, Mercy Housing/ICE, because Mercy Housing had invited CAP and ADID into the relationship.
Hall said in response that Mercy/ICE only invited CAP/ADID to attend a luncheon, but did not invite them into the relationship, and that they could not be part of the relationship unless they had a financial interest. Hall also noted that in depositions, AJ Robinson and Horace Sibley admitted that they were not part of the business relationship between the Task Force and Mercy Housing.
The CAP/ADID also argued there is no evidence that Mercy Housing/ICE sold the notes because of anything that CAP or ADID said. He disputed the validity of the testimony of Raylene Clark, who previously worked for ICE and had witnessed as CAP and ADID’s statements about the Task Force altered the lenders’ posture towards the Task Force.
Hall responded that Raylene Clark was the loan officer for the Task Force’s note and was well-positioned to observe the impact of CAP and ADID’s actions upon the posture of Mercy/ICE towards the Task Force’s note.
Judge Schwall seemed to agree that Clark’s testimony was not hearsay.
An attorney for Fialkow argued that Fialkow wasn’t really part of the conspiracy. Hall argued in response that Fialkow was “up to his eyeballs” in the conspiracy and is liable for his own acts; the acts of his corporation, Ichthus; and the acts of the rest of the conspiracy.
EVIDENCE ADMISSIBILITY ISSUES
Hall addressed the admissibility of several depositions, emails, and other evidence.
“I think you’re right on the law,” Judge Schwall said on one of the items, shortly thereafter moving along to other issues.
TASK FORCE OBJECTION TO APPEARANCE BY JUDGE LEVENSON AS PFS ATTORNEY
The Task Force then presented its objection to part-time Fulton County Magistrate Judge Louis Levenson appearing as an attorney for PFS, where Levenson wanted to argue why the stay of dispossessory should be lifted.
Hall argued that it was against the court rules for Levenson to appear as an attorney in the present cases, when, in fact, Levenson previously heard the original dispossessory case.
Schwall asked another attorney, Mr. Robbins, to argue on behalf of PFS while he considered whether or not Levenson could appear on behalf of PFS in the future.
As previously reported by APN, Judge Schwall also scheduled the July 11 hearing for the purpose of reconsidering whether to lift the four-year stay of dispossessory, upon an umpteenth motion by PFS for dispossessory against the Task Force.
The fact that Schwall would even consider the possibility of dispossessory at this point–after years of discovery and when the case was finally getting ready for trial–seemed odd. After all, the Task Force’s tort claims and quiet title claims would go forward whether they were dispossessed or not, but if the Task Force is evicted before a trial on its claims is held, there is the possibility of irreparable harm.
“Whatever your honor holds on summary judgment, that does not affect our right to dispossessory,” Robbins argued, adding that the case could end up on appeal, lasting one to three years, before the case gets to trial, depriving PFS of its rights as the title-holder to the Peachtree-Pine building.
“Any further delay is intolerable and, in my opinion, unconstitutional as a deprivation of our property rights,” Robbins said.
As previously reported by APN, Schwall previously dispossessed the Task Force twice, once overturning its own action, and a second time, after being overturned by the Court of Appeals of Georgia.
Robbins said that the Georgia statute on dispossessory says the Court “shall” grant a dispossessory when basic requirements are met.
Robbins attempted to go through case law, but Schwall said, “Mr. Robbins, you’ve made yourself quite clear to the court.”
Hall, in response, argued that, as the Special Master found, there is a clear question as to who actually owns the building in the first place.
Hall cited a scholarly treatise, Georgia Landlord and Tenant: Breach and Remedies, with Forms, by William Dawkins.
Dawkins wrote in his fourth edition, citing a Supreme Court of Georgia case: “In certain cases, a tenant may have a dispossessory proceeding enjoined if, for example, the basic dispute between landlord and tenant is one of ownership. Injunctive relief may lie if the proceeding is in magistrate court and state court, since superior courts have exclusive jurisdiction in cases involving title to land.”
Hall further argued that the parties consented to the stay of dispossessory earlier on in the case.
“Let’s talk about the logic of this…. Let’s say we have this dispossessory, and he gets in there and convinces whatever this judge goes to, that you can’t hear anything other than whether the Task Force paid rent. What going to happen then?” Hall asked the Court.
“I know what’s gonna happen, you’re gonna come to me and ask me to stay the dispossessory,” Schwall said.
“Of course I am,” Hall said.
“How’s this case ever going to get tried?” Schwall said.
“It’s very simple. Let’s just set a date for the trial,” Hall said. “We’re ready to go. I’ve never asked for a continuance in this case.”
“It’s a devastating tactical maneuver,” Hall said of PFS’s motion. “We get thrown out because we can’t pay the rent. They turn around and sell the building… because now they’ve cleared their title. The building’s gone, we’ve now lost grandfather status as a homeless shelter–we’ve now lost three homeless shelters in the City of Atlanta–I’ve got 650 to 1,000 people out on the streets dying.”
“Regardless of how I rule on the dispossessory, how are we gonna get ready to go to trial? Somebody’s gonna wanna appeal those rulings,” Schwall said.
“Your honor, there’s nothing to be appealed,” Hall said.
Schwall asked for PFS’s response, but Robbins did not directly respond.
Schwall then cut Robbins off, “I’ll have a ruling in two weeks, in two weeks on everything that’s been before me today…Y’all will have a ruling two weeks from today.”
That ruling is therefore expected on or around July 25, 2014.
“When can we go to trial after that?” Schwall asked again.
“We’re ready to go at any time. I don’t believe there is any–unless you grant the dispo–I don’t think there is any issue that is appealable as a matter of right for the Defendants. This has just been a summary judgment response, and the way to handle this thing–if we want to avoid error in this case–let’s get this case in front of a jury, let’s not play games,” Hall said.
“I think that we have to figure out whether or not they have the right to file the dispossessory. I think that’s front and center and must be decided, one way or the other,” Schwall said.
“I think the Special Master has ruled correctly,” Hall said.
“Y’all will get a ruling in two weeks. I appreciate your’all’s courtesies and professionalism,” Schwall said.