9 Briarcliff Dr. in Granite City--Peach offered $68,900 for it.
35 Briarcliff Dr. in Granite City recently sold for $35,000.
Posing as the buyer of a Granite City home, a resourceful Madison County woman pulled $20,000 in $100 bills out of her purse and handed it over to an incredulous seller as down payment for a $68,900 house she had never seen on the inside.
That initial outlay was all Armettia Peach had to expend for the fixed up house at 9 Briarcliff Dr. more than two years ago. In this industrial steel town where average home prices hover close to $50,000, Peach--whose brush with Madison County's judicial system includes a class action lawsuit, a bad check, three straight years of orders of protection from a boyfriend, and bankruptcy--may end up getting more than $140,000 for it.
But Peach is no brilliant market-timer.
Peach sued Granite City for letting her move into a home that allegedly had a leaky roof and won a court judgment against the city for more than $100,000--including attorneys fees--all because the city failed to answer her lawsuit filed last year in Madison County Circuit Court.
Granite City Mayor Ron Selph, who after 12 years is not seeking another term in Tuesday's election, said he could not comment on pending litigation. In general, though, he said he has seen many unwarranted lawsuits during his tenure.
In addition to the judgment she stands to gain from Granite City, Peach sold the house last November for $40,000--substantially less than what she had offered to pay in cash to seller Kevin Link in 2002.
Who's house is it, anyway?
As home repairman Link tells it, the peculiar story started when Peach brought a substitute buyer with her at the time of closing. Link, who thought he would be selling the home to Peach, was initially a target in her lawsuit.
Chad Carpenter accompanied Peach at the closing on Aug. 13, 2002, paid the remaining balance--$48,900--and had the home titled in his name.
A class action lawsuit against Nissan Motors was filed by a Chad Carpenter on Sept. 11, 2002 in Madison County Circuit Court, related to an auto that was purchased on July 13, 2002. It remains unclear if he is the same Chad Carpenter involved in the sale of 9 Briarcliff Dr.
Seven months after Carpenter bought the house, he turned it over to Peach--for nothing--on a quit claim deed in March 2003.
John O'Brien, chairman of the Illinois Real Estate Lawyers Association, said loan fraud is a problem in some parts of the state. Bit players pose as buyers and "substitutes" show up at the last minute, he said.
"People are not who they say they are," O'Brien added.
For instance, someone can buy a home for $100,000, have it appraised at $150,000, borrow 95 percent of the appraised value and disappear with the profit, he said.
O'Brien said street gangs commonly launder money through real estate.
"Mortgage money is cheap and the pace of lending is frantic," he said. "The county recorders of deeds, the guardians of integrity, are underfunded and overworked."
Asked about a down payment of $20,000 cash, O'Brien said, "Nobody has twenty thousand. Where did it come from?"
Solving a problem by filing suit
According to Peach's lawsuit-- which originally named the co-owners of A2Z Construction, Link and David Lambert as defendants-- she claimed that water leaked through the roof, rotted timbers, weakened walls, ruined insulation and caused mold and mildew.
"I told her to call if she had problems," said Link, who fixes up rundown homes and then resells them.
"The roof was guaranteed for a year."
Rather than call for repairs, Peach sought legal assistance from Thomas Maag of the Lakin Law Firm of Wood River. Maag, the son of former Illinois Supreme Court candidate Gordon Maag, represents Peach in her class action lawsuit against CIM Insurance.
The Lakin Law Firm also represents Armettia Peach's daugther, Ashley Peach in her three class action lawsuits against retailers, and Carpenter in his class action lawsuit against Nissan.
Maag did not return a call for comment.
Augie Butera, a senior vice president and general counsel at Attorneys Title in Chicago, leads seminars for lawyers on real estate fraud. She says "pretend you're me" scams usually hurt lenders.
If no lender appeared at closing, he said, there may be no problem.
"It's a little odd and a little different," Butera said, "but I am not sure there is anything wrong with it."
Ed Murnane, president of the Illinois Civil Justice League, said he could not speculate whether justice had been abused in Peach's case against Granite City.
"What I have heard of the case is confusing, curious and certainly would cause someone to raise not one, but both eyebrows," he said. "Hopefully, the bright legal minds in Madison County will review this case and bring it to the appropriate authorities if merited."
Peach has not yet collected from Granite City because the city has asked Madison County Circuit Judge Andy Matoesian to stay execution of the judgment he entered last July.
Matoesian set an April 15 hearing for the city to explain why it should not have to pay.
Jane Unsell, an East Alton attorney representing Granite City in the matter, believes Judge Matoesian should rule in the city's favor, setting aside the judgment and dismissing the complaint.
"The city has a valid defense," Unsell said. "Illinois statute gives (cities) immunity when there is a claim of negligence on inspections."
Beyond that, Unsell said the original complaint was improperly filed. The suit did not state what damages the plaintiffs were attempting to recover, which is necessary in demanding a default judgment, she said.