Several St. Clair County residents argue that the lawsuit they filed in federal court accusing a tax buyer of participating in a bid-rigging scheme is protected from defamation and false light claims.
The defamation lawsuit was filed by tax buyer Joseph Vassen on Jan. 2 through attorney Paul Slocomb of Hoffman Slocomb LLC in St. Louis against Madison County Board Chairman Kurt Prenzler, tax buyer Kenneth Brosh, and St. Clair County residents Kathleen Dvorak, Kevin Dvorak, John Bloyer and Adriane “Kathleen” Bloyer, alleging defamation and false light. Vassen seeks damages of an unspecified amount.
Vassen argues that a federal lawsuit alleging he participated in a bid rigging scheme in St. Clair County “contained false statements that were caused to be published by the defendants and constitute statements that are defamatory per se.”
Vassen claims the alleged false statements have damaged his reputation in the community, injured his business and deterred people from associating with him.
Vassen also alleges the defendants gave publicity to a matter that placed him before the public in a false light, which he claims “was highly offensive.”
The Dvoraks filed a motion to dismiss on Feb. 21 through attorney Nelson Mitten of Riezman Berger PC in St. Louis.
The defendants argue that statements made in the federal court complaint “are so privileged such that the person making the statement should not be deterred form speaking by the threat of civil liability.”
“In fact, an absolute privilege is granted and no cause of action will lie against a person even if the statement is made with malice.
“It is well known the prevailing rule in the United States is that alleged libelous material contained in a pleading is absolutely privileged so long as it is pertinent, relevant, or bears some reasonable relation to the judicial proceeding, irrespective of whether it is false or malicious,” the motion states.
They also argue that claims for defamation and false light are governed by a one-year statute of limitations.
“It is undisputed that plaintiff filed his complaint herein more than one year after the filing of the federal complaint against plaintiff in the Southern District of Illinois. As such, it is barred by the applicable statute of limitations,” the suit states.
They further argue that Vassen “cannot assert any set of facts by which the applicable statute of limitations is tolled by the discovery rule.”
The Bloyers filed a motion to dismiss on Feb. 13 through attorney Hrant “Hud” Norsigian Jr. of Norsigian Law Office LLC of O’Fallon.
They argue that statements made in the federal court complaint are protected by the absolute litigation privilege and cannot form the basis of any defamation or false light claim.
“In the case at bar, the Bloyers’ alleged statements made in the federal lawsuit’s complaint are obviously relevant or pertinent to the matters in controversy. Therefore, all such statements are absolutely privileged and cannot form the basis of a defamation or false light claim,” the motion states.
The defendants also argue that Vassen’s complaint is barred by the one-year statute of limitations.
“The cause of action for defamation accrues, and the statute of limitations begins to run, on the date of publication of the defamatory material.
“In the case at bar, the publication of the alleged defamatory material was when the federal lawsuit was filed on October 17, 2014,” the motion states.
The federal lawsuit in question alleged Vassen and other tax purchasers conspired with St. Clair County Treasurer Charles Suarez to fix St. Clair County real estate tax sales so that owners were required to pay “artificially high” interest penalties at or near the maximum 18 percent rate in order to redeem their properties.
According to Vassen's defamation complaint, he alleges Brosh, a dentist, participates in the annual St. Clair County delinquent tax sales and spends as much as $400,000 per sale. During the 2007 and 2008 tax sales in St. Clair County, Vassen alleges the majority of Brosh’s successful bids were also at the maximum 18 percent.
“Nevertheless, defendant Brosh contacted defendant Kurt Prenzler in Spring 2014 claiming he had doubts about the legality of the 2007 and 2008 tax sales in St. Clair County, and asked defendant Prenzler to review the tax sale data and give him his opinion.
“Defendant Brosh didn’t reference his own large number of 18% winning bids at these sales as part of his inquiry,” the suit states.
Prenzler was the Madison County Treasurer at the time and had no official position in St. Clair County.
Vassen alleges Brosh was “a competitive buyer” and “a financial contributor” to Prenzler’s Madison County political campaigns.
Brosh and Prenzler allegedly reached out to Brad Van Hoose, “a St. Clair County Republican Party Operative” to obtain the St. Clair County tax sale data.
Van Hoose was allegedly instructed by Roger Cook, who was running for treasurer against Suarez, to make a Freedom of Information Act request for the tax sale data.
“Mr. Van Hoose was present in several meetings with Roger Cook and defendant Ken Brosh during which he was informed that the purpose of the FOIA request was to file a lawsuit against Mr. Suarez in an effort to embarrass and harass Mr. Suarez before the upcoming November 2014 election,” the suit states.
Prenzler then held a press conference on May 30, 2014 at the St. Clair County Circuit Court in Belleville “in an effort to call attention to the allegedly illegal and improper tax sales.”
Vassen alleges the press conference was orchestrated by Prenzler for political purposes at the behest of Brosh, “who hoped to financially benefit from making public accusations” against other tax buyers.
At the time of the press conference, Prenzler was running for reelection as Madison County treasurer against Maureen Suarez, who is related to Charles Suarez. Prenzler allegedly gave the information he analyzed to the St. Clair County Republican Committee.
An article was published in the St. Louis Post Dispatch in May 2014 indicating that Prenzler planned to announce that he discovered potentially criminal conduct.
Brosh was quoted in a Belleville News Democrat article in May 2014 saying he believed the tax sale practices were rigged and unethical. He was also quoted in a May 2014 article in The Telegraph saying he believed the tax sales were unethical.
“Defendant Brosh was disappointed that the press conference didn’t generate any follow-up press so he spoke to defendant Prenzler numerous times and they decided that defendant Brosh should track down some of the individuals who did not pay their taxes and convince them to contact attorney Don Weber, who was referred by defendant Prenzler, so they could file a lawsuit before the election,” the suit states.
Vassen alleges Brosh looked up publicly available records at the St. Clair County courthouse for several days following the press conference.
“Defendant Brosh claims he identified about 20-25 names of individuals who had failed to pay their property taxes. Defendant Brosh made no attempt to track down any of the people that owned properties that he had received an 18% Tax Sale Certificate upon at the same tax sales,” the suit states.
Vassen alleges Brosh went to the homes of 15 people who had failed to pay their property taxes to speak with them.
A lawsuit was then filed in the U.S. District Court for the Southern District of Illinois on Oct. 17, 2014, less than three weeks before the Nov. 4 election. The plaintiffs in that lawsuit were Kathleen and Kevin Dvorak and Kathleen and John Bloyer.
Vassen alleges the defendants conspired to file a class action against him and other tax buyers with allegations of common-law civil conspiracy, money had and received, violations of the Federal Sherman Act and violations of the Illinois Antitrust Act.
Vassen alleges the Dvoraks failed to pay their 2007 real estate taxes on their property located at 518 East Washington Street in O’Fallon. They alleged in the federal court lawsuit that they were damaged when White Oak Securities LLC purchased the delinquent property tax certificate at the November 2008 tax sale.
The Bloyers failed to pay their 2007 real estate taxes on their property located at 410 W. 5th Street in O’Fallon. They also allege they were damaged when White Oak Securities LLC purchased their delinquent property tax certificate at the November 2008 tax sale.
The lawsuit filed in federal court sought recovery for “losses arising from an illegal and improper agreement and conspiracy” between Suarez and several tax purchasers “to artificially inflate” penalties at the 2006 and 2007 tax sales. Those sales were conducted in 2007 and 2008.
Vassen had denied the allegations raised in the federal court lawsuit.
Vassen claims he did not purchase the delinquent taxes in question and did not receive any compensation whatsoever from the sale of the Dvoraks’ taxes or the Bloyers’ taxes.
Vassen alleges the plaintiffs in the federal court lawsuit justify the lawsuit’s filing date well beyond the applicable statute of limitations period by arguing that they did not learn of the alleged conspiracy until Prenzler’s press conference.
However, Vassen alleges the defendants did not discover any alleged wrongdoing from the press conference.
He alleges Kathleen Dvorak did not see a copy of the complaint before it was filed and had “no personal firsthand knowledge” of the alleged conspiracy.
Vassen claims Kathleen Dvorak received an unsolicited letter from Brosh asking her to call him. When she did, she was allegedly referred to Weber. Within a few days of her conversation with Weber, the lawsuit was filed, Vassen claims.
Vassen alleges Kathleen Bloyer testified in the federal lawsuit that she and her husband did not even own the property referenced in the complaint, and she hadn’t seen the lawsuit until almost two years after it was filed.
Vassen claims the Bloyers first became aware that they were named as plaintiffs in the federal lawsuit in April 2015, almost six months after it was filed.
Brosh was allegedly deposed in the federal lawsuit and stated that he believed that the tax sales were rigged, “but he admitted that he was not aware of any evidence whatsoever that the sales were in fact rigged.”
Vassen alleges he was not deposed in the federal lawsuit and denied the allegations of the alleged conspiracy.
The federal lawsuit was dismissed in its entirety on March 29, 2018 when District Judge Staci Yandle granted summary judgment for the St. Clair County tax buyer defendants.
Yandle found that there were insufficient facts to state any cause of action against Suarez or any of the tax buyers.
Vassen is also a named defendant in a similar ongoing class action in Madison County, alleging former Madison County Treasurer Fred Bathon orchestrated a "pay to play" scheme.
Bathon pleaded guilty to structuring property tax sales in a way that increased interest rates for tax buyers in exchange for campaign contributions. He was sentenced to 30 months in prison.
St. Clair County Circuit Court case number 19-L-6