Two weeks before the Common Council voted to pay a $1 million settlement in a case mishandled by the city’s former corporation counsel Peekskill officials learned a second such lawsuit exists.
The city now faces the possibility of legal default in another federal lawsuit that could cost another million dollars – again without ever presenting a legal defense in court.
On Nov. 27, the Council voted 6-1 to pay $1 million plus attorney fees to settle with David Maldonado, who was injured in a car crash caused by former off-duty Peekskill police officer Jonathan Mosquera in September 2016. The city drew the money from its unreserved fund balance.
The city’s former corporation counsel, Timothy Kramer, failed to respond in time to the complaint in that case and the city, found in default for missing the deadline, was never able to present a defense case in court.
Now, on Nov. 13, acting corporation counsel Michael Hartman was informed by an outside attorney hired by the city that a second defaulted case has been discovered.
Attorneys for the city are scrambling to try and persuade a federal judge that, despite the failure to respond in time, the default judgment should be overturned and the city should have their day in court to defend Peekskill in the case. A judge will hear that argument at a hearing on Jan. 4, 2024.
Charges of religious bias, delays issuing permits
The latest default case involves a lawsuit filed in October 2022 by Avrum Chaim Lebrecht and Shia Lebrecht, the owners of 104 South Division St. (the Riley Building).
The Lebrechts are Hasidic Jews who live in Rockland County. They bought the Riley Building in February 2018 for $850,000 and spent $1.4 million improving the property. They received approvals to convert the upper floors to nine residential units.
After obtaining land use approvals and a building permit for the project, work was delayed and impeded for years by the city’s “unlawful, unequal and arbitrary” enforcement of its building code and fire safety requirements, according to allegations in the court papers.
The plaintiffs charge that an “unlawful campaign” included “improperly issuing stop work orders, directing unnecessary changes to work already completed and approved, and delaying without cause approval of plans properly submitted” and that the defendants’ conduct was motivated by religious animus because they are Hasidic Jews.
Named as defendants are the City of Peekskill and two building inspectors, Thomas Leonard and Nicholas Cecere.
In his court filing, attorney Daniel Isaacs includes a copy of an email from local real estate agent Arber Balidemaj who claims Leonard made numerous disparaging remarks to him about “jews” and advised the agent not to work with the Lebrechts. Leonard was the inspector on the project and Cecere is his supervisor. Both are still employed by Peekskill. There are no specific allegations against Cecere.
The city’s attorneys have denied allegations of religious discrimination and claim that the building inspectors were exercising their professional judgment requiring that additional work and repairs be performed. According to court papers, a certificate of occupancy was issued on Oct. 27 of this year.
Missed deadline discovered
Kramer, the city’s corporation counsel at the time, didn’t respond to the Lebrechts’ original October 2022 complaint on time and a clerk’s entry of default was filed in February 2023. The plaintiff’s attorney filed papers to finalize the judgment on May 8.
Kramer then finally filed a defense to the original complaint on May 23. In July, he failed to respond to messages from the plaintiff’s attorney and the court to set up a conference meeting on the case, according to court papers.
This past September, following discovery of the default judgment in the Maldonado case, City Manager Matt Alexander explained that new procedures had been put in place to track the progress of lawsuits filed against the city. Kramer left the city’s employ in late October.
It wasn’t until Nov. 13 that the city discovered the default in the Riley Building case. Acting Corporation Counsel Hartman was notified by outside attorneys from Keane & Beane, the law firm retained by the city, and he then told the city manager and the Common Council the same day, according to court papers. Hartman was appointed acting corporation counsel on Nov. 6.
“The city is investigating Mr. Kramer’s failure to timely respond to this litigation,” Hartman wrote in the court filing.
The two building inspectors named as defendants state that Kramer told them earlier this year that outside counsel had been retained by the city to handle their defense.
“Mr. Kramer never advised me that a default had been entered against me and another Defendant in this action based upon his failure to timely answer the Complaint,” Cecere stated in court papers. “The news came as a complete shock. Given the serious nature of the allegations in the complaint, it has always been my intention to defend myself and clear my name.”
Next steps in court proceedings
City attorneys now have to convince the judge at the Jan. 4 hearing that the delayed response to the complaint has not harmed the plaintiffs and that the city has a meritorious defense.
“Initially, on behalf of the City of Peekskill, I apologize to the Court and opposing counsel for the inattention shown by Mr. Kramer with respect to the prosecution of this case, and his failure to timely respond to the Court’s directives,” Hartman wrote in court papers. “I respectfully submit that Plaintiffs have not been unfairly prejudiced by the delay that has occurred.”
In the original complaint the Lebrechts claimed they suffered additional and unnecessary costs and expenses in excess of $100,000; an unjustified delay of nearly three years to get a certificate of occupancy costing them $1 million in gross rent; and $500,000 in construction loan-related interest expenses. They are seeking general damage costs, punitive damages and attorney fees.
The Lebrechts also own a building at 200 North Water St. that rents space to the Jan Peek Shelter. Shia Lebrecht is listed as a managing member of 200 North Water St. Equities LLC.
According to a Nov. 17 post on the Facebook page of CHHOP, the shelter operator, “Our landlord has not yet agreed to extend our current lease set to expire on December 31, 2023, and has stated that any possible renewal would include a minimum 12% increase.”
Peekskill City Manager Matt Alexander did not respond to the Herald when asked to comment on the case yesterday morning.
