X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Even Morris Arthur’s courtroom foes describe his lawsuit as if it’s something out of Dickens. In the words of lawyers for the D.C. government, the case “deserves a Jarndyce v. Jarndyceaward,” a reference in the District’s appeals brief to the generations-long lawsuit in Charles Dickens’ Bleak House. It’s an apt comparison. The roots of Morris Arthur v. District of Columbiastretch back nearly a quarter-century to a fairly routine predatory lending dispute between a married couple and a lender over $14,500. Over the years, the case, which is pending in the D.C. Court of Appeals, has been delayed by everything from missing parties to Arthur’s seven-year stint in jail on an assault charge. And these delays have helped alter the case from a small mortgage controversy into a much larger fight over the District’s policy of claiming the right to interest accumulated on funds held in a court registry. The D.C. Legal Aid Society, which is representing Arthur, says the District has engaged in an unconstitutional taking of Arthur’s property by seizing about $40,000 in interest that has accrued on the cash in the registry. And a host of advocacy groups have lined up behind Arthur, saying the issue is an important one for the city’s poor. “This isn’t the only case of this type,” says Legal Aid’s Barbara McDowell, who argued the case for Arthur before the appeals court in May. “It’s quite a common practice when there’s a dispute over the payment of rent for the court to order the payment of the disputed rent into a court registry. It can be many months before a trial, and it would be beneficial if the winning party could get interest. This could help D.C. tenants who are impoverished.” OFF TRACK Back in 1981, of course, no one expected the case to last this long or the interest to pile up as high as it has. A year earlier, Arthur and his now-estranged wife Christine Gibson-Arthur borrowed $14,500 on a second mortgage from Irving Kamins, an unlicensed D.C. lender. They hoped to prevent their home in Northeast D.C. from being foreclosed upon. The couple used the $14,500 from Kamins to pay down their first mortgage. But that did not cure the family’s financial woes, and Kamins quickly took steps to foreclose on the house as well. The Arthurs’ house was sold in 1981 as part of a court settlement, and $14,500 of the proceeds was placed in the registry of the Superior Court to await the outcome of the dispute between the Arthurs and Kamins, whom the Arthurs claimed was a predatory lender who was not entitled to a penny. The case began to get off track in 1982, when a trial that had been scheduled in Superior Court was postponed after a judge ruled that Christine Gibson-Arthur had to be formally served and brought in as a party. Gibson-Arthur had moved with the couple’s five children to Philadelphia and was not served at that time. Kamins had sold his legal rights on the second mortgage to a third party, who hired a lawyer to pursue the case. That lawyer, however, took no action for more than a decade and let the case languish. Meanwhile, Morris Arthur was convicted in D.C. Superior Court of assault with a deadly weapon after he stomped on and severely injured a female friend, court records say. He served time in prison from 1989 to 1996. A year before Arthur’s release, the third party who had taken over Kamins’ claim hired a new lawyer to reactivate the case against the Arthurs, seeking the $14,500. The case began to heat up again in 1997 when Gibson-Arthur, who by some accounts had been unaware for 15 years of the sale of her former home, made a surprise appearance in the case. (Her signature had evidently been forged when the house was sold in 1981, court records indicate.) Gibson-Arthur claimed, in opposition to her estranged husband, that she had a right to a share of the $14,500 principal corresponding to her share of the couple’s equity. Meanwhile, significant interest had been accruing on the money. The D.C. government, following its general practice in such cases, had taken the interest and placed it in the city’s general fund. In 1999, Morris Arthur, represented by lawyers from the D.C. Neighborhood Legal Services Program, first raised the claim that he had a right to the interest as well as the principal. He brought the District in as a party to the case. After a trial in 2000, Superior Court Judge Gregory Mize ruled that Arthur and his wife were jointly entitled to the principal of $14,500 — but denied them any right to the interest. Judge Mize wrote that the 1981 agreement regarding the sale of the house contained “no reference of any sort to interest” and that therefore “the parties in 1981 waived their right” to receive interest. CONSTITUTIONAL QUESTION For the advocacy groups — which include the Washington Council of Lawyers, Ayuda, and the Public Citizen Litigation Group, as well as Legal Aid — what happens to the interest is the central question. And it’s one that has never been decided by a D.C. court. On May 26, a D.C. Court of Appeals panel comprising Judges Frank Schwelb, Vanessa Ruiz, and Inez Smith Reid heard arguments in the case. McDowell of Legal Aid told the appeals panel that the D.C. government’s policy of taking court-registry interest for itself is a clear violation of the takings clause of the U.S. Constitution. Notably, that clause has been used far more frequently in recent years by wealthy landowners — claiming that their property has been taken without just compensation — than by poverty lawyers. The general operations of the D.C. government, McDowell wrote in a brief, “should be borne by the taxpayers generally, not disproportionately by persons who happen to have made use of the court registry.” McDowell is a former assistant U.S. solicitor general, recruited by Legal Aid this year as part of a concerted effort by the group to enhance the rights of D.C.’s indigent population through the courts. Legal Aid entered Arthur’s case this year. In an amicus curiae brief, Bernard Nigro Jr., then a partner at Fried, Frank, Harris, Shriver & Jacobson, argued that according to Supreme Court precedent, “private funds, once deposited, do not become public funds.” Nigro was writing on behalf of the Washington Council of Lawyers, Ayuda, and other D.C. advocacy groups. “The expropriated interest,” Nigro wrote, “belongs to the party awarded the principal funds at the outcome of litigation, not to the District.” Nigro also noted in the brief that “not a single one of the 94 federal district courts employs a scheme like that currently used in the District.” Nigro, now a deputy director at the Federal Trade Commission, declines comment. “D.C.’s practice is unconstitutional,” says McDowell. “The takings clause says that the costs of government are to be spread among the taxpayers in an equitable manner.” Arthur, who has moved to North Carolina, could not be reached for comment. Christine Gibson-Arthur, who lives in South Carolina, also could not be reached. VOLUNTARY ARRANGEMENT Through a spokeswoman, D.C. Attorney General Robert Spagnoletti declines comment. But the District responds in its court papers that there has been no unconstitutional taking because in 1981 Arthur agreed that all he would ever receive out of the court registry was the $14,500 in principal. “A ‘taking’ necessarily presupposes an involuntary action against a citizen by the government,” lawyers in the D.C. attorney general’s office wrote. “Here, Mr. Arthur’s right to receive only principal, not interest, was far from involuntary — it was part and parcel of the arrangement with which he agreed.” The D.C. government points to the fact that the 1981 agreement placing the money in the registry mentioned only the principal, not the interest. This meant, they say, that he had waived “any claim to interest.” The government lawyers also say it is irrelevant what the 94 federal districts do. “The question is not which jurisdiction has devised the . . . ‘most fair’ method for handling court-registry deposits,” the District lawyers wrote. “Rather, the question is simply whether the District’s retention of interest earned on the monies deposited in this specific case pursuant to a stipulation waiving the right to interest was constitutional.” McDowell counters that the District was overreaching when it took all the interest for itself. “The District is certainly entitled to take a service charge for maintenance of the account,” she says. “But this is too much.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.