LAKE PLACID - The town of North Elba unsuccessfully tried to get a local real estate broker brought up on charges with the state after she was asked to file an affidavit in a lawsuit against the town.
But there's no record in the minutes of any town board meeting at which members discussed or authorized the filing of a complaint against Margie Philo, owner of Lake Placid-based Adirondack Premier Properties.
The town filed the complaint with the Department of State's Division of Licensing Services in December 2009. It alleged Philo had committed an unlicensed business practice and requested the case be referred to the state attorney general's office for possible civil or criminal prosecution.
The Freedom of Information Law was asserted in making this report.
But the Department of State dismissed the complaint, a copy of which was obtained by the Enterprise through a Freedom of Information Law request, as being without merit less than a month after it was filed. The matter never made it to the AG's office.
Philo is a former employee and now competitor of town Supervisor Roby Politi, who owns and operates Merrill Thomas Real Estate in Lake Placid, but Politi recused himself from town board's discussion and vote on the matter.
The case centers on a sworn affidavit Philo signed in early February 2009 on behalf of Debra Spellman, who has been involved in a lengthy legal case with the town over its failure to repair drainage problems on her Mirror Lake property.
Philo was asked to provide the weekly and monthly rental prices of comparable properties on the lake, which Spellman added up to highlight what she claimed she lost in rental income during the legal dispute. The affidavit lists a "conservative estimate" between $156,332 and $312,465, though Philo later said in a deposition that she didn't provide those totals, only the comparable weekly and monthly rates.
The affidavit was included in court papers Spellman filed seeking to find the town guilty of contempt of court. Spellman also sought a $205,513 fine against the town, most of which was to cover her alleged lost rental income.
In May 2009, state Supreme Court Justice Robert Muller granted Spellman's contempt motion but only fined the town $7,900. Spellman refiled the motion in December 2009, claiming the town still hadn't done the drainage work. That's when the town board decided to pursue charges against Philo.
The town's Dec. 22, 2009 complaint, filed with the Department of State by Deputy Town Supervisor Jack Favro on the board's behalf, claims what Philo provided to the court was an "appraisal," and that since she's not a licensed real estate appraiser, she violated the law.
The town also said Philo admitted at her deposition that her affidavit contained "untrue statements," presumably referring to the fact that she said the total estimates of lost rental income in the affidavit were not her numbers; she only provided the rates of comparable properties.
Philo's attorney, J. Michael Naughton of Albany, said his client did not hold herself out as an appraiser in her affidavit. He said Philo only gave an opinion of rental income rather than an appraised value of the property.
Naughton also said Philo "never once admitted" that the statements in her affidavit were untrue. He noted that the town never challenged the accuracy of the market rental rates Philo provided.
Less than a month after the town filed the complaint, and just nine days after Naughton submitted his response on Jan. 11, 2010, the Department of State found the charges had no merit.
"Based on the information provided, we are of the opinion that no violation of the licensing law or regulations has been indicated," Senior License Investigator Sang Lee wrote in a Jan. 20 letter to Favro. "Accordingly, we are closing our file."
A Department of State lawyer told the Enterprise that real estate professionals in New York do not have to be licensed as appraisers to provide an opinion of value. She also said there's nothing wrong with the fact that Philo relied on someone else to do the math in her signed affidavit.
The town board could have simply objected to Philo's affidavit and challenged her qualifications in court papers, which it did, and left it at that. But the town took it a step further and sought state sanctions and potential civil or criminal charges against Philo. Why?
Town Attorney Ronald Briggs, who recommended the board take action against Philo, said he felt it was important to debunk the evidence Spellman provided in her case against the town.
"Litigation is oftentime bare knuckles and hard hitting," Briggs said. "You assert claims. You assert positions. Some are successful, and some are not."
The four councilmen who made the decision to pursue charges against Philo told the Enterprise that they were protecting the taxpayers and following Briggs' advice.
But Councilman Derek Doty, who didn't join the town board until a month after the complaint was filed, feels it was a "personal vendetta" against Philo because she's a competitor of Politi, although he admits he has no evidence to back up that claim.
"As a town board, they didn't just object to Margie's giving that information," Doty said. "They sent a letter to the Department of State basically asking them to revoke her license and put her out of business. That's what I'm saying is wrong."
Philo, in a statement to the Enterprise, wrote, "I am disappointed and offended that town officials used our town resources and the town attorney to attack me professionally and personally. Perhaps the public should question the motivations and examine in fact who stood to benefit from this fabrication."
The four councilmen refuted the allegations that their decision was fueled by anything other than trying to do the best thing for the town.
"I'll swear it on a stack of Bibles," said Councilman Bob Miller. "I never, ever got the impression during these discussions that it had anything to do with any personality issues."
Favro recalled talking to Doty about his suspicions.
"He's entitled to his opinion," Favro said. "But he wasn't there. How does he know? I've never heard anytime anybody say 'Hey, let's go get this person because I'm mad at them and I don't like them.'"
Briggs also denied Doty's claims. He said he and Politi never talked about Philo's affidavit or taking action against her.
"We had no conversation on this aspect of the case," Briggs said. "None. He would never do such a thing."
Politi flatly refuted any claims that he influenced the board's decision.
"Whether I like someone or not or whether I agree with what they've done or not has no bearing on my responsibility to conduct this office with the ethics it deserves," Politi said. "I cannot believe there would be anybody out there who would think I would use my position to influence anyone."
Naughton, Philo's lawyer, had asked town Clerk Laurie Curtis Dudley to provide copies of any resolution authorizing Favro to file the complaint, the minutes of any town board meeting during which the subject was discussed and any bill for legal services in connection with the complaint, among other things.
Dudley told the Enterprise earlier this month that she responded to Naughton in a letter that said "no record relating to those items exists."
"It was all done out of executive session with no reporting," Doty said. "That's the first thing I did when I got on the board; I requested all 12 prior months of board minutes, and I said 'You guys are out on a limb; you were set up by this damn attorney. You have personal liability in this because you didn't make it a board action.'"
Favro admits the board made a mistake by not recording its vote to file the complaint in the minutes.
"Unfortunately we screwed that up," he said. "Certainly we should have done it."
Board members said they weren't trying to hide the decision from the public, although Chuck Damp, a town councilman at the time of the Philo decision, said they "didn't want to make a public splash of it in an attempt to hurt (Philo's) business."
Philo said she's moved on.
"I decided not to make this public in the newspaper a year ago," she said in a statement. "I discerned that it was better to rise above these petty tactics which have only resulted in discrediting those who attempted to hurt me."
Philo declined to elaborate on her statement or answer any more questions when contacted by the Enterprise.
Contact Chris Knight at 518-891-2600 ext. 24 or email@example.com.