Neena Satija Photo
It’s been more than two years since the bathroom ceiling in Delwanna Wiggins’ apartment caved in on her. It’s been four months since Apple Holdings LLC — one of New Haven slumlord Michael Steinbach’s corporate aliases — was ordered to pay her $30,665.50 in damages.
Wiggins never got a cent.
Steinbach, on the other hand, continued to collect rent for her apartment from the government long after the ceiling collapsed — courtesy of the taxpayer. Wiggins (pictured beneath the ceiling) lives in a property with rents subsidized by the federal Department of Housing and Urban Development’s (HUD) Section 8 program.
Her encounter is the latest example of the individual impact of a string of problem properties controlled by Steinbach and his partner Janet Dawson, with the generous help of government officials.
“I was going through a hell of a lot of pain,” said the 34-year-old Wiggins, who was pregnant at the time of the accident. She miscarried a few months later.
She called her lawyer about the accident, gave her testimony. They filed suit. They won. She thought justice had been served.
But when her attorney, Loren Costantini, sent out a notice to Michael Steinbach to collect the $30,665.50 judgment in September, all he got in return was a notice of Chapter 11 bankruptcy.
It turned out that Apple Holdings, LLC had filed for bankruptcy in August. That would make it far more difficult for the damages to be collected, Costantini said. “I’m disgusted by the situation.”
Since then, Wiggins has given up hope of getting any money. She has an infant son to care for. Her mother, who lives in the apartment directly below her, has cancer and visits the doctor as often as twice a month. Before the accident Wiggins was a store manager at McDonald’s making good money; she hasn’t been able to work since then.
“Why are you even writing about this?” she asked a reporter at her house in Fair Haven on Monday. “It’s not like anything’s going to be done about [Dawson or Steinbach].”
Wiggins has been living in her second-floor apartment for nearly four years. A few weeks before the accident in August 2009, she noticed that her bathroom ceiling had started leaking and called her landlord.
“They kept saying they were going to send somebody out to fix it, and they never did,” Wiggins said.
On the morning of Aug. 15, she got up to use the bathroom. She heard a tenant in the third-floor apartment moving around right above her. “Next thing you know, the whole ceiling just caved in on me.”
Her brother pulled her out of the bathroom as rocks and cement fell top of her.
After that, somebody from Apple finally showed up to fix the problem, Wiggins said. “He said I was lucky the toilet [on the third floor] didn’t fall on me, too,” she recalled.
She suffered back and shoulder pain for months, but doctors were reluctant to give her medication because of her pregnancy. So she took Ibuprofin and Motrin. Doctors aren’t sure why she miscarried, but they told her undue stress after the accident and the painkillers may have played a role.
Slumlord Central
Michael Steinbach and his business partner, Janet Dawson, own hundreds of rental properties in New Haven under a never-ending string of corporate aliases. Rents at many of the properties are paid for by the government’s Section 8 program, which means they must pass regular housing inspections. Tenants allege rampant abuse by the landlords, who they say just “barely” fix what needs to be fixed and then let the problems rot until the next year’s inspection.
City inspectors consider them among the most notorious of New Haven’s problem landlords and have been chasing them for years to take better care of their properties. The two are listed as defendants in more than 100 lawsuits in Connecticut. Many of those are foreclosure lawsuits that they’ve managed to drag out for years while continuing to collect government rent. Others allege defective premises and were filed by people like Wiggins. (Click here to read a story in the New Haven Advocate about more of those lawsuits.)
Steinbach and Dawson failed to respond to repeated requests for comment about their properties over the past month.
In some cases, it’s up to the city’s housing authority to make sure the couple’s properties are up to code in order to continue receiving Section 8 payments.
But in other cases, the state, not the city, is responsible. In those cases, the state contracts with a Waterbury company, J. D’Amelia and Associates, on Dawson/Steinbach-owned and other properties. (The city administers about 3,000 Section 8 vouchers in New Haven; the state does about 1,200 through the Waterbury company).
227 Clinton Ave., where Wiggins lives, falls under the state’s and J D’AMelia’s purview.
Because there’s no electricity in the hallways, Wiggins and her mother put candles in the narrow winding staircases.
According to records provided by the state, Wiggins’ apartment failed its most recent health inspection on Nov. 2. The state will stop paying rent in December if the problems aren’t fixed. Inspectors cited damaged floors, clogged drains, missing smoke detectors, loose outlets, lead paint, a rotted porch, broken windows, and hallways without electricity.
The state failed to produce records for previous inspections by the time this story went to press.
How To Avoid Paying On A Lawsuit
It appears that after the accident, Steinbach continued to collect $2,855 per month in rent for the three-family house, according to bankruptcy filing records. The majority of that rent came from federal Section 8 money. (Wiggins said she never contacted any administrators of the government program about the accident; she dealt directly with her landlord).
Steinbach and Dawson drag out their defective premises lawsuits using some of the same tactics as in their foreclosure lawsuits, often by failing to respond to a summons and then not appearing in court. Wiggins’ is one of the few suits that has ever came to a judgment. It did so through default; no one representing the defense ever appeared.
“The other side didn’t even appear even though they were given sufficient warning and served,” said Costantini. “They just ignored it, as they do everything.”
About two months after Judge Howard Zoarski ordered Apple Holdings to pay Wiggins the damages, the company filed a petition for bankruptcy, listing $2,500 of cash on hand, $1.5 million in assets (consisting of nine rental properties), and $2.8 million in liabilities.
Costantini said he doesn’t think it’s a coincidence that the company filed for bankruptcy so soon after it was ordered to fork over more than $30,000. “It’s so completely unethical. It’s just unconscionable.”
Reached at his law offices in East Berlin, Steinbach’s attorney, William Carter, said his client had done nothing wrong. (Carter said Dawson is also a client).
“Bankruptcy is an action that’s available to just about anybody,” he said. “Bankruptcy is a legal defense that people have to help try and save property that they own.”
U.S. bankruptcy trustees weren’t so sure about this particular bankruptcy. According to bankruptcy court records, Apple Holdings’ petition was dismissed on Sept. 21 of this year — just days after Steinbach sent his notice to Costantini.
“Soon after the Debtor filed its bankruptcy petition, the United States Trustee advised Debtor through counsel that Debtor must provide proof that the Debtor is maintaining sufficient liability and casualty insurance to both protect the assets of the bankruptcy estate and the public in general,” wrote trustee Steven Mackey in his motion to dismiss the lawsuit a month earlier. “The Debtor’s failure to maintain adequate insurance indicates the Debtor’s willingness to impose the risk of an uninsured event on this bankruptcy case.”
It was actually the second time Apple Holdings had tried to file for bankruptcy and failed. The first time was in August 2010, weeks before Steinbach and Dawson were served with nine foreclosure judgments for failing to pay more than $1 million in mortgages for those properties from First County Bank. One of those properties was Wiggins’ house on Clinton Avenue.
Court records show that this first bankruptcy attempt was eventually dismissed in early 2011 because, in trustee Richard Coan’s words, “it appears…this case was filed solely to delay the vesting of title of several parcels of real estate which were in foreclosure. It appears there is no equity in any of these parcels of real estate.”
He added, “the principals of this debtor reside in Fort Lauderdale, FL, and an order compelling them to attend a meeting of creditors is likely to be unenforceable.”
Dawson and Steinbach and their affiliated LLC’s are indeed difficult to reach. No listed number of Apple Holdings, LLC could be found online or otherwise. (The company was dissolved, according to state business filings.) A call to Diamond Properties Management, LLC, which is registered under Janet Dawson and lists the same business address as Apple Holdings at 238 Butler St., brings up a message with the company’s directory. But dialing extensions for “Mike” and “Janet” only direct the caller back to the original message; it’s not possible to leave either of them a voicemail.
A person who finally responded to the extension for maintenance said she didn’t know anything about a property at 227 Clinton Ave. When asked who would be appropriate to contact, she hung up.
Carter declined to confirm that both bankruptcy petitions filed by Apple Holdings were dismissed. He said he represented Dawson and Steinbach on many different cases, along with other clients on hundreds of bankruptcy cases, and couldn’t recall the specifics.
No Exit
Meanwhile, Wiggins and her mother are hoping to move out of their apartments soon. But they don’t have the money for a security deposit on a new place; local assistance programs are swamped with applications from others in the same situation.
What about the security deposit Wiggins paid when she moved into the house on Clinton Avenue in 2007? Apple Holdings refused to give it back, she said: They told her she owes them rent.
Not true, Wiggins says. “How could I owe them rent when Section 8 is the one that’s been paying most of the rent?”
Meanwhile, now that Apple Holdings’ latest attempt at bankruptcy has failed, Costantini said his client should still be entitled to her money. But that might be more complicated — now that her house has changed ownership. More about that in an upcoming story.
Related Stories:
• Slumlords Stiff Banks — & Rake In Sec. 8 Bucks
• One family moves in, another forced out
• Showpiece House Rises Next To Problem House
occupyAppleHoldingsLLC