Trends: Bringing Ms. J. Home

BRINGING MS. J. HOME

BY PROFESSOR ANN GOLDWEBER

Five years ago, Ms. J.* walked into the Law School carrying a shopping bag filled with documents. By that point, the widowed retiree had been turned away by everyone she had reached out to for assistance. The Consumer Justice for the Elderly: Litigation Clinic, which I co-direct with Professor Gina Calabrese, was her last hope. Like other low-income, older Queens residents represented by our in-house clinic at St. John’s Law, Ms. J. was the victim of a home improvement contractor scam. Her story exposes the regulatory gaps, unchecked predation, and systemic racism that have left countless New Yorkers vulnerable to losing their homes and accumulated wealth. But it also shows that justice can be served, with the perseverance of hardworking student clinicians. Students participate in our civil litigation and advocacy clinic for one semester. To date, under my supervision, 11 student teams have worked on Ms. J.’s case, each one seamlessly picking up where the last one left off. The first team to interview Ms. J. and review her documents pieced together that she obtained a Federal Housing Administration (FHA) mortgage to pay for the work on her home. By the loan’s terms, the lender hired a United States Department of Housing and Urban Development (HUD) consultant to go on site and inspect the construction before releasing installment payments to the contractor.

Although Ms. J.’s home improvement project was supposed to take just six months from start to finish, the students learned, it was nowhere near complete in that time. To make matters worse, the authorities issued Ms. J. violations and penalties for failure to obtain proper building permits. Then the contractor abandoned the job and locked Ms. J. out, leaving her with a home that was inaccessible and uninhabitable. With this fuller view of the matter, the students and I strategized about how to meet Ms. J’s goals of completing construction, moving back into her home, and holding the contractor liable.

Step one, we decided, was to fire the contractor and HUD consultant formally. Then, we brought in an engineer to assess the contractor’s work on Ms. J.’s house. He found that much of it needed to be redone. He also determined that the consultant paid the contractor for work that was incomplete or never even started. Finally, he reported that the remainder of Ms. J.’s loan wouldn’t cover the cost of finishing the project. With that assessment, it became clear to us that the home improvement contractor and HUD consultant had colluded to defraud Ms. J. Researching possible legal claims, the students found that Ms. J. couldn’t sue the consultant, even though her FHA mortgage loan was designed to protect borrowers. While that was disappointing, their research and case investigation also uncovered that the contractor had engaged in similar fraudulent conduct in the past, creating a pattern and practice of unscrupulous conduct. So, on our advice, Ms. J. decided to pursue claims against the contractor for breach of contract, fraud, and a violation of New York’s General Business Law.

Since the home improvement contract contained a mandatory arbitration clause, Ms. J. was forced to bring her claims before the American Arbitration Association. It was the first time in our clinic’s almost 28-year history that a case was being heard by an arbitrator. But that didn’t deter the students. With characteristic enthusiasm and curiosity, they dove in and familiarized themselves with the rules and procedures of that dispute resolution forum. Ahead of the November 2021 arbitration hearing, the students drafted and submitted a Memorandum of Law in Support of Claim for Damages, affidavits of Ms. J. and the expert witness, and numerous exhibits. The hearing was held on zoom and we were prepared to present our arguments and evidence. The arbitrator had read the submissions and had some targeted questions and concerns, which the students addressed in a supplemental submission. In March, we received the arbitrator’s final decision. We won on every claim, successfully piercing the corporate veil to hold the contractor individually liable. The students were thrilled to tell Ms. J. that she was awarded $237,711 plus interest, including $100,000 in punitive damages. Now, after nearly six years of displacement from her home, with the clinic students’ assistance, Ms. J. has a new home contractor and HUD consultant and is close to securing a Certificate of Occupancy. The latest team of students is preparing legal papers to turn the final arbitration award into a judgment, so we can start collection activities. It’s been a long journey, with many roadblocks, but we’re finally getting closer to the finish line. Our happiest day will be when Ms. J. is back home where she belongs. She plans to host a barbeque for all the students who have worked on her case so tirelessly. We can’t wait.

*The clinic client’s name has been changed to protect her privacy.