When Kenneth Karst passed away a little more than a decade ago, he left his Ellsworth home to his surviving son, Kerry. Last month, the city sold the house — on which it had foreclosed two years ago — at auction, and appears to be keeping the proceeds, well above and beyond what it was owed.
One Ellsworth city councilor, Steve O’Halloran, is calling that move tantamount to theft. In the wake of a 2023 U.S. Supreme Court case deeming such takings to be unlawful, some in Ellsworth are now asking if their municipal government has gone too far.
Due to a series of unfortunate events, the younger Karst fell behind in his property tax payments on the family home at 16 5th Street. But when the city foreclosed on the home, it was during the peak of the COVID-19 pandemic and Kerry never got the notice — the local postmaster just signed off on its having been delivered which the contact-less rule at the time allowed, Councilor O’Halloran recently told The Maine Wire.
Even though Kerry Karst, who has since moved to Brewer, had fallen behind on some local tax and utility payments, the key question remains whether this in itself could justify the city requiring him to forfeit the property altogether.
“Since my father’s passing, I regrettably admit that I have been negligent in my fiscal responsibilities for the property. Life just got in the way and I didn’t have follow through without trying to excuse anything or shirk responsibility … I was also dealing with my personal issues and didn’t focus the energy that was required to finalize the details of his estate,” Kerry Karst wrote to the city in 2022.
“I would, I would like to make amends by paying all owed back taxes, sewer and water bills, any fees incurred due to my delinquency, I earnestly ask the city and the city council to honor my request, and not put my father’s property and my inheritance out for bid to the highest Prospector, who will most likely destroy what little remains of the property and my memories,” he added at the time.
Karst’s plea would have fallen on deaf ears had it not been for O’Halloran, who took his case on because he saw what was happening as an unjust taking.
According to a city memo dated August 18th, the house sold at auction for $148,500 and by the time all tax arrears, unpaid utilities and auction fees were paid, a surplus of $117,907.99 remained, which the city transferred to its “real estate fund.”
Kerry Karst was left with nothing.
The same year that Ellsworth foreclosed on the Karst family home, the U.S. Supreme Court ruled on Tyler v. Hennepin County, a case involving a comparable set of circumstances. In that ruling, such a “taking” was found to be unconstitutional in nature.
Because the city of Ellsworth did not have an ordinance stating that excess funds be returned to the property’s original owner, its legal counsel – the Bangor-based firm of Rudman Winchell – justified the municipality’s holding onto the money. More recent law requires the funds to be returned but, the city’s lawyers said, what matters is the law that was in effect at the time of the foreclosure.
It is difficult to understand how Ellsworth city officials can, beyond their lawyers’ sterile justification, accept an outcome that seems so wrong. But, as the old saying goes, “the house always wins,” and this seems to be the case in the Hancock County seat.
As property taxes soar through the roof in towns and cities across Maine and economic opportunities stagnate, the dilemma faced by Kerry Karst is not an isolated one. Even if some towns act to protect their citizens from such arbitrary takings, those measures seem ad hoc or few and far between.
State Rep. Chad Perkins (R-Dover Foxcroft) championed a bill, which in 2023 became law, preventing towns from doing what Ellsworth did to the Karst family. Yet the city’s seizure of all proceeds from the recent sale appear, at least to the satisfaction of Ellsworth’s lawyers, to have been grandfathered.
“As far as the city of Ellsworth is concerned (the question of whether Karst can recover some of the proceeds from the family estate) is dead. However, the family is exploring legal options (including but not limited to) the city’s failure to provide proper legal notification to the family during the foreclosure process,” O’Halloran told The Maine Wire this week.
Ellsworth City Manager Charles Pearce did not respond to The Maine Wire’s request for an explanation.
