In a non-jury trial before Judge Trial Referee Richard Rittenband, McKeever presented hand-made, poster board charts showing his understanding of the figures. The city ridiculed McKeever's presentation, and his grasp of accounting procedures. Hartford had supplied a variety of numbers, and in what he called an effort to be fair, McKeever used the figures most favorable to the city.
The judge gave McKeever credit for trying to be fair, but had little regard for the city's witnesses. "Arthur Greenblatt, the head of the CDC, was arrogantly dismissive of McKeever's claims," Rittenband wrote. Hartford was arguing "that this is a simple matter," the judge noted. "It is not."
The judge held that McKeever "has proven the overpayment of $195,909. [He] has proven that the City is liable for said overpayments by being an assignee of State Street Bank, which in turn was an assignee of CDC, and the City took the assignment with all of the obligations it and its predecessors had in these transactions."
Taiman, Hartford's lawyer at trial, said Rittenband was drawing heavily on traditional principles of equity, focusing on making sure McKeever was treated fairly in this specific case. The judge didn't let McKeever's status of being in default keep him from recovering overpayments "because the method of collection was incompetently done."
Furthermore, Rittenband held, "it would be highly inequitable for the City, CDC and or State Street Bank to be unjustly enriched by monies paid by McKeever that were not in fact due."
The judge entered judgment for McKeever on the foreclosure action, and awarded him his full counterclaimed amount of $195,909.
McKeever's lawyer, Reeves, noted that it's not every day that a defendant goes into court to fight a foreclosure, and walks out instead with a $200,000 judgment, after fighting city hall, bureaucrats and banks.
If this were a Francis Ford Coppola movie, we would fade to black here. But Hartford filed an appeal, contending that Rittenband, while focusing on an equitable solution for McKeever, did so by creating a dangerous precedent for the financial world's law of assignments.
In October, Appellate Judges Michael Sheldon and Barry Schaller, for the majority, subjected Rittenband's decision to strict legal analysis. Judge F. Herbert Greundel dissented, primarily on equitable grounds.
Sheldon noted that the decision did not specify which count of McKeever's counterclaim provided the basis for Rittenband's $195,909 award, so it could not be upheld. After that, questions of pure law remained. Could Hartford really be held liable for an amount that was more than the face value of the loan? Was Hartford, as the "assignee" of the loan, really liable for overcharges or other mistakes by the CDC and State Street Bank?