For months, Detroiters have argued that Wayne County is using an opaque legal process to avoid paying them profits from past tax foreclosures — money the courts have ruled counties must return to former homeowners.
Don’t believe it? Ask the judge who was assigned to hear their claims.
Sheila Gibson will apparently miss out on more than $26,000 the county owes her because she failed to file a form in time.
She is among the 47% of approximately 6,000 eligible people who missed the deadline to start the claims process, likely because they didn’t know the money existed. (Even more people dropped out during subsequent steps of the process.)
Gibson’s case is only unusual — and perhaps illustrative — because she’s the Third Circuit Court judge who was appointed to oversee the very bureaucracy that shut her out of a five-figure windfall.
It’s unclear whether Gibson didn’t know the county owed her money or if she chose not to file a claim. Either way, the situation alarmed other Detroiters waiting on their own payments.
“She’s down there with them, and she still got got,” said Latesa Sanders, who’s owed thousands after she lost her home to foreclosure in 2018. She owed about $8,000 in overdue taxes when the county foreclosed then auctioned off the house for $31,000. The state Supreme Court ruled counties shouldn’t have kept those profits and allowed some former homeowners to claim them.
Wayne County made minimal effort to publicize the claims process, which could cost it tens of millions of dollars. Hundreds of Detroiters only made claims after Outlier Media reached out to them.
Last month, Gibson recused herself from the case, saying in a court filing that continuing would “create an appearance of impropriety.”
Neither she nor court officials provided a more detailed explanation or answered specific questions about her personal link to the claims process.
The “Third Circuit Court lets the decisions of our judges be the public voice of matters before the court,” spokesperson Michael Scott said.
‘Bewildering’ delays
Detroiters told Outlier they’re frustrated by the slow pace of the claims process.
“It’s bewildering,” Kim James said. She filed a motion to claim auction profits in September and still hasn’t heard back. “The absence of information is just problematic.”
Many claimants have low incomes and were counting on receiving funds before the holidays. They had to file their final claim documents before Oct. 1.
Instead, few claimants will receive a check before the New Year.
Gibson’s recusal may have delayed resolution for hundreds of former homeowners, though Third Circuit Chief Judge Patricia Fresard, who took over the claims process in November, has signed some orders.
Ultimately, the process is slow primarily because Wayne County, unlike virtually every county in Michigan, hasn’t settled a lawsuit demanding repayment of surplus proceeds from past tax auctions. Settling the suit — which the county could still do — would create a streamlined process and more uniform outcomes. Instead, claimants have had to navigate the state’s complex, multistep claims process on their own.
It can’t get resolved quickly enough for Latesa Sanders.
“You know what I could do with $20,000? Catch up on a lot of bills, get ahead of some of the bills, take my baby on a trip somewhere, and put some in savings,” she said.
Gibson’s claim
Public records show that Gibson purchased a vacant plot in the upscale Palmer Woods neighborhood in 2005. She paid off the property quickly but fell behind on tax payments.
In 2015, Wayne County seized the property over $11,300 in unpaid taxes, then auctioned it off for $39,000.
That would mean the county owes the judge roughly $26,000 after the 5% statutory commission that Wayne County is allowed to keep.
However, Gibson failed to file a key form to claim the funds before the April 8 deadline, public records show.
The next month, she was assigned to process former homeowners’ claims.
It’s unclear if Gibson’s connection to the 2015 foreclosure is the reason for her recusal.
She is listed as an owner on another property less than a mile away that is currently subject to foreclosure for unpaid taxes. If it is foreclosed and sold at auction for a profit, she would be eligible to make a claim, albeit in a separate foreclosure case.
Gibson would just have to file by the deadline.
This article first appeared on Outlier Media and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.