WILKES-BARRE — Sherman Hills has new owners, but its old owners can’t completely cash in on the sale just yet.
A judge on Monday approved a preliminary injunction requiring Brooklyn, N.Y.-based Sherman Hills Realty LLC to place $900,000 in escrow while a wrongful death suit against them by the family of a woman shot at the complex last year works its way through the courts.
But the order issued by President Judge Thomas F. Burke Jr. will allow for the injunction to be lifted sooner if it emerges that the realty company’s insurer will provide coverage that could be drawn upon for any judgment against the company.
Meanwhile, it emerged in court that a $15.7 million sale of the housing complex to a New Jersey firm closed on Thursday, though it was not immediately clear whether there will be any short-term changes at the apartments off Coal Street.
Attorneys for a Rochester, N.Y., woman, Stacey Goodson, last week filed a wrongful death lawsuit against Sherman Hills Realty and its management company, Park Management Inc., over the Nov. 27 shooting death of her daughter, Shantique Goodson, at the complex.
Lawyers Patrick J. Doyle and Jamie J. Anzalone separately sought the injunction not to delay the sale of the apartment complex, but to protect assets in case Goodson is successful in her suit.
Shantique Goodson, 27, died from gunshot wounds she suffered while sitting in the passenger seat of a vehicle that was idling in the apartment complex. Kenneth Malik Evans III, 21, of South Sherman Street, Wilkes-Barre, was charged in the killing.
Doyle and Anzalone say Park Management and Sherman Hills Realty, its wholly-owned subsidiary, failed “to provide adequate security within the 344-unit Sherman Hills complex off Coal Street when they knew or should have known that the complex had a long history of criminal and violent activity, including drug trade, shootings, assaults, burglaries and robberies.”
Sherman Hills attorney John T. Zelinka, a partner with the Rosenn, Jenkins & Greenwald Law Firm, in paperwork filed last week took aim at Goodson’s claims, writing that the only evidence Goodson included in her injunction request is an inspection report by the U.S. Department of Housing and Urban Development that found the apartment complex had inadequate security cameras, inoperable exterior lights and broken doors and windows.
“The fact that Ms. (Shantique) Goodson had already been banned from the Sherman Hills property due to her drug dealing would certainly come out during discovery,” Zelinka wrote.
During testimony at a hearing last week, Eli Dovidowitz, an officer of Sherman Hills Realty and an employee with Park Management, said Shantique Goodson and Evans were banned from the apartment complex.
Dovidowitz, who said his responsibilities are the day-to-day operations and finances of the apartment complex, said Goodson was evicted for “criminal activity” and Evans was rejected when he filed a tenant application and eventually banned for criminal activity.
Regarding the judge’s order, Zelinka told Burke on Monday morning that the $900,000 already has been placed in escrow with Madison Title Agency, of Lakewood, N.J., as Zelinka told the judge during a hearing last week that the defendants were planning to do.
Zelinka indicated he did not have time to stop and speak with a reporter after Monday’s proceedings.
According to Burke’s order:
• The $900,000 will remain in court-supervised escrow with Madison Title pending conclusion of underlying civil litigation — including trial, if necessary, and any post-trial or appellate matters.
• Permission to make any withdrawals will require a petition to the court with notice to all parties.
• The preliminary injunction will desist if the defendants’ insurer provides coverage that would meet any obligations from the civil litigation.
The question of coverage is key. Doyle has previously said the injunction request to protect assets was sought in the event Sherman Hills “umbrella insurance policy” does not cover damages if the lawsuit is successful.
On Feb. 11, according to the motion originally filed by Doyle and Anzalone, Tower National Insurance Co. wrote that Goodson’s death is not covered under the owners’ policy. Insurance companies typically will not cover intentional acts, such as one person wilfully killing another, as is alleged in the Goodson case.
• The plaintiffs also must post a $27,000 bond with the county Prothonotary’s Office within 10 days, the judge ordered, but that requirement would be lifted if a determination on the insurance coverage proves favorable to the plaintiffs.
According to court officials, the sale of 18 out of 22 acres to Teaneck, N.J.-based Treetop Development was for $15.7 million.
In explaining his order, Burke noted that information provided by the defendants indicated that $11 million would be applied toward the property’s primary mortgage, with $1 million covering closing costs.
That leaves more than $4 million, the judge noted, about which Mr. Dovidowitz was unable last week to provide assurance regarding plans for its disposition.
Burke acknowledged concerns raised by Goodson’s attorneys that the sale would make the old owners “judgment proof” against legal action once they no longer were drawing money from the 344-unit property, which had been generating about $200,000 per month in revenues.
“It’s clear the revenue stream has now been eliminated,” the judge noted, adding that “to allow assets to be dispersed and trail off in any number of different directions is to create an immediate harm to the plaintiff.”
Thursday’s sale did not include four undeveloped acres adjacent to North Sherman Street.
Efforts to reach a Treetop spokeswoman were not immediately successful on Monday.
Earlier versions of this story, including one published on Page 1A of the April 15 edition, contained incorrect information regarding the $27,000 bond and the complex’s sale price. Both are corrected above.