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Crestview Village Apartments v. Martinez

December 23, 2009


The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel


This claim arises out of an alleged scheme to deprive Plaintiff of its ownership of Crestview Village Apartments ("Crestview Village" or "the property"). Plaintiff's complaint alleged five counts. Plaintiff has dismissed Martinez and HUD as defendants as well as Counts III and IV. Defendants Donald Green ("Green"), the City of Kankakee ("Kankakee"), and Tony Perry ("Perry") remain. Green and Kankakee filed a joint motion for summary judgment, and Perry filed a separate motion for summary judgment. Because the arguments raised in each motion are similar, I discuss both motions for summary judgment in this order. For the foregoing reasons, Defendants' motions for summary judgment are granted.*fn1


The partnership of Crestview Village Apartments purchased and operated Crestview Village Apartments in the mid 1980s and continued to do so until the property was sold to Affordable Housing during the time that Crestview's partners were in bankruptcy. The complex was at all times, and continues to be, HUD-approved, low-income housing, and the majority of its tenants were African American. Al Belmonte ("Belmonte") was involved in the management of the property until 1999. He was followed by Nancy Carlson ("Carlson"). Perry was the owner of Eastgate Industrial Park which was a property adjacent to Crestview and president of the East Side Business Council. Green was the Mayor of Kankakee.

Kankakee and HUD periodically conducted inspections of the Crestview property. In 1996, inspections by Kankakee and HUD revealed numerous deficiencies including non-functional smoke detectors, fire extinguishers and emergency lighting. Plaintiff contends that these violations were corrected in a timely manner. In a follow up inspection on April 14, 1997, HUD found that a number of deficiencies identified in the 1996 inspection had not been corrected. On October 21, 1999, Kankakee, through the City's Attorney's Office, issued a notice to "repair or demolition." On October 22, 1999, Kankakee filed a civil complaint for non-compliance with the Kankakee City Code. The parties reached a settlement on March 8, 2001 whereby Crestview agreed to correct its existing deficiencies. The agreed order set forth specific requirements needed to bring the building into compliance. Crestview agreed to correct the violations within nine months of the date of the entry of the agreed order.

In 1999, HUD warned Crestview that continued failure to correct violations would result in possible suspension of its HUD contract. On August 16, 1999, another HUD inspection found the property in violation of its standards. HUD advised Crestview that after it had missed a mortgage payment, foreclosure was likely. On June 6, 2000, HUD gave formal notice to Crestview that it was in default. On February 6, 2001, HUD conducted another inspection which revealed below-standard conditions. On May 1, 2001, HUD advised Crestview that it would proceed to foreclose on the property. HUD formally issued a notice of default and foreclosure sale on April 2, 2002. HUD conducted an additional inspection to determine the cost of getting the property up to code and determined that the cost would be $2,283,332.00. Before the foreclosure sale was held, Crestview filed for bankruptcy protection.

Plaintiff has alleged that the actions of Kankakee and HUD were prompted by a conspiracy between Perry, Kankakee, Green and the officials at HUD. Plaintiff claims that Perry wanted to buy the Crestview property so that he could build an industrial complex. In an effort to force Plaintiff to sell its property, Plaintiff alleges that Perry used his political influence to gain the assistance of Green, Kankakee and HUD. Plaintiff disputes that inspections by Kankakee and HUD were done solely for the purpose of ensuring that the building was being maintained in compliance with applicable health and safety regulations. Instead, Plaintiff claims that these inspections were unfair and conducted to put pressure on Plaintiff to force it to sell the property to Perry for a nominal amount.

In support of its conspiracy theory, Plaintiff points to two meetings. The first meeting in January 1999 took place in Green's office. In attendance was Belmonte, Crestview's manager, Alderman Steven Hunter and Perry, president of the East Side Business Council, the area in which Crestview was located. This meeting was convened to discuss Crestview's admittedly overdue sewer bill in excess of $40,000.00 and other concerns regarding code violations. Although Plaintiff has alleged that threats were made at Belmonte at this meeting, no evidence has been put forth to substantiate this fact. In fact, Belmonte does not recall any threats being made by Perry or Green at that meeting. Both Perry and Green deny entering into an agreement to deprive Plaintiff of its property rights to Crestview Village.

The second meeting took place on Perry's boat and included Lawrence Starkman ("Starkman") of Crestview, Perry, and George Callentine ("Callentine"). Perry called this meeting because Crestview was interested in selling its property and Callentine was a potential buyer. In his deposition, Starkman speculates that the conspiracy existed based upon statements he claims Perry made to him on the boat. According to Starkman, Perry proclaimed that: (1) he had Green in his pocket and that he had gotten Green his job as Mayor; (2) he "owned" the HUD secretary and had her "under his wing" (3) Crestview's owners were destroying his plans to develop the area with all those "niggers"; (4) when he gained control of the Crestview property he would be able to get $1 million from HUD for repairs and that he would subcontract his work and get $100,000 in kickbacks from the sub-contractors. Perry denies that he made these statements. Furthermore, Perry has stated that he doesn't even know if "HUD has a person" in Kankakee.

Plaintiffs also point to the deposition of Nancy Carlson to support their conspiracy theory. In her deposition, Carlson states that she believed that Perry used political influence to coerce the actions of Kankakee and HUD. Carlson, however, does not support these allegations with any facts.

Perry admits in his deposition that he believed that Crestview had become run down, lacked maintenance, and that there was a great deal of police activity there. Perry voiced his concerns to Alderman Hunter, and that he discussed the fact that Crestview should be cleaned at the meeting with Green. Perry denies entering into an arrangement or agreement with HUD or anyone else regarding Crestview.

Plaintiff points to the depositions of Starkman and Carlson to support the claim that Kankakee and HUD inspections were done solely to harass and pressure Plaintiff. Starkman testified that he believed that all deficiencies identified by HUD were corrected. Carlson testified that when she managed Crestview, all work orders were processed and performed. Aside from their testimony, neither Starkman nor Carlson offer any other evidence to show that these violations were corrected. Carlson further testified that HUD inspectors gave Crestview an improper REACT score and that other buildings she managed had a better REACT score but were in worse condition. Again, Plaintiff offers no proof aside from Carlson's testimony to prove these assertions.

David Harmon ("Harmon") was a routine fire inspector and had involvement in inspecting Crestview Village for safety code compliance and violations starting in 1999. He recalls multiple ...

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