SALEM — The death of Stephen C. Ingemi in 2018 brought into question the future of Steve’s Quality Market and its neighbor, Quality Liquors, two beloved downtown retailers woven into the fabric of Salem’s Washington Street corridor for generations.
As documents for the sale of the properties to new owners were drawn up, it happened with little attention paid to a court battle happening in the background. But that battle has crossed over to involve the sale of those properties, which the plaintiffs claim is an attempt by the Ingemi family to sell off valuable assets to prevent Overlook Acres from recovering any damages if it prevails in its lawsuit against the Ingemis.
The Overlook Acres lawsuit involves the “Ingemi” land, severals parcels surrounding Cedar Road that were owned by Stephen C. Ingemi’s brother, John Ingemi. A 280-unit housing project, Overlook Acres, was fully permitted to build on the site until the developers discovered decades-old contamination in the soil — which could cost tens of millions of dollars to cleanup — during pre-construction engineering studies.
The developers filed suit against the family in court, alleging the children of John Ingemi deceived Overlook into thinking the site was clean when a long-forgotten historical record said otherwise.
The two commercial properties were sold for a combined $2 million to new owners in July. The sale happened amid efforts by Overlook to place attachments on those properties, should they sell. The lawsuit otherwise focuses on John Ingemi’s trusts and his two children, Kathleen and Stephen S. Ingemi. Stephen S. is not to be confused with Steve’s Quality Market namesake Stephen C. Ingemi, John’s brother and Stephen S.’s uncle.
The Ingemis’ attorney Thomas Delaney declined comment for this story while Richard Grundy, Overlook’s attorney, did not respond to requests for comment.
Suit alleges effort to ‘terminally frustrate Overlook’
Overlook’s legal team, in its court filings in June, sought to have the court issue a writ of attachment for $1.08 million ahead of the impending sale of the two downtown properties this past summer.
Overlook characterized the Ingemi family’s efforts to sell Steve’s Quality Market and Quality Liquors as attempts to “hide the assets (belonging to the family) and terminally frustrate Overlook’s effort to recover damages,” an affidavit from Grundy reads.
“The defendants, in recognition of the strength of the plaintiff’s case, are liquidating their most valuable assets just prior to deposition and trial assignment,” he wrote. “Without these properties/assets, the plaintiff will be without recourse to recover the damages, costs, and fees incurred” from seeking approvals for the doomed housing project.
Overlook seeks the $1.08 million to offset what it paid in down payments, design and engineering fees, and other expenses related to getting the construction project fully permitted, according to court filings.
The push from Overlook to get the attachment came after the family had already sold one piece of real estate this year: 264 Washington St., a commercial property supporting The Art Corner that sold for $415,000 on April 28.
“On (April 28), the defendants (Kathleen and Stephen S. Ingemi) sold a commercial property they held in conjunction with other family members,” Grundy wrote in his affidavit. “The defendants held this property through the John M. Ingemi Trust, the original trustee being the father of the defendants. This property has been held by the Ingemi family for decades.”
Grundy argued that “the defendants’ holdings have almost exclusively passed down through the family and held by members of the Ingemi family for many decades. The sale of these holdings are rare.”
And in light of that, he argued, the sales are suspicious.
“Based on a thorough review of the Essex County Registry of Deeds, and any other public information available to be viewed, the defendants, as individuals and trustees, have no holdings capable of satisfying the recovery sought in this matter IF the sale of 36-40 Margin St. (Steve’s Quality Market) and 5 Gedney St. (Quality Liquors), and the associated businesses, occurs,” Grundy’s affidavit read. “And this could happen any day.”
The Ingemis opposed the issuance of the attachment, initially arguing that the two downtown properties and their associated trusts aren’t “a party to this litigation,” court documents show. They argued that the effort from Overlook was “designed to encumber property owned by the defendants.”
Suit focuses on what Kathleen Ingemi knew
Overlook’s suit notes that Kathleen Ingemi was documented as attending a Conservation Commission hearing in 1979 about the contaminated land, alongside her father.
In his affidavit, Overlook development partner Peter Lutts outlined that the deal between the Ingemi trust and Overlook “required that the premises be delivered not in violation of any building or zoning laws.” The agreement also warranted “that the trusts were not aware of any violations pursuant to zoning, building, health, environmental, or other applicable laws, and were not aware of the presence of any hazardous materials on the premises.”
Lutts also wrote that Kathleen Ingemi reported to an environmental investigator that she had no knowledge of any use limitations on the properties, any “spills or other chemical releases taken place on the property,” and “any obvious indicators that point to the ... likely presence of contamination.”
“I have since reviewed materials and information,” Lutts wrote, “that indicate that each of these representations made by Kathleen Ingemi to be false and to have been made knowingly and intentionally to deceive Overlook.”
Lutts then pointed to the Conservation Commission’s meeting minutes from the 1970s and ‘80s, including at least one meeting that Kathleen Ingemi was recorded as attending.
“John Ingemi was present along with his daughter Kathleen to make a proposal to donate to the Salem Conservation Commission a portion of his land ... in exchange for a promise to have the litigations brought against him dropped by (the state’s environmental authority),” minutes from Aug. 7, 1979 read. “These litigations stem from his neglect to clean up the prolerized materials and other rubble being dumped in that area.”
In her affidavit from this past June, Kathleen Ingemi said she understands “that the essence of the civil case that is now pending against me, both as an individual and a trustee, is an allegation that I knew or had reason to know that the premises contained hazardous materials.”
“I did not know that the premises contained hazardous materials,” she wrote.
She also added that she had reviewed those commission meeting minutes, and “I do not recall accompanying my father to a Conservation Commission meeting on August 21, 1979. At the time, I was 28 years old and had no involvement with the premises.”
While the minutes from the commission’s Aug. 7, 1979, meeting note Kathleen’s presence alongside her father, minutes for the Aug. 21, 1979, meeting don’t show any conversations on Ingemi’s properties or the presence of either John or Kathleen.
In her affidavit, Kathleen Ingemi wrote that Steve’s Quality Market and Quality Liquors “have been preparing for a sale of the business and the land upon which these businesses have operated for in excess of one year.”
Her affidavit also identified the tense nature that exists in the larger Ingemi family, with all sides included on the board of directors for each of the businesses and hostility between the members. “The Boards of Directors has been deeply divided for years as members of the Boards of Directors are not all children of the same parents and do not get along,” she wrote.
“Most of the key players are of a similar age to me,” wrote Kathleen Ingemi, who is 71. “For that reason, it was decided that it was time to sell. The sale had nothing to do with the litigation that is ongoing.”
The closing for the two properties, her affidavit noted, “is tentatively scheduled to occur during the week of June 26, 2023.”
Agreement reached, then sales recorded
On June 22, Overlook and the Ingemis reported they found agreement and asked for the court to delay its decision on the writ of attachment for several days so they could draft and sign the necessary documentation. They stated that “the closing on the sale of the properties which are subject of (Overlook’s) motion ... will not take place until there is either agreement between the parties” or the court issues an order on Overlook’s motion. The two sides jointly asked the court to “withhold any ruling on the Motion to Attach at this time.”
The court allowed the request on the next day, June 23, and ordered both parties to file a status report by June 29 if no agreement could be had by that date.
No further court filings have been listed on the docket since, and the properties later sold as expected.
Deed transactions for both parcels were recorded with the Registry of Deeds in July: 36 Margin St. — Steve’s Quality Market — was sold to a newly formed 36-40 Margin Street Realty Trust for $1.2 million on July 20, and 5 Gedney St. — Quality Liquors — was sold to a newly formed Jashiba Realty Trust for $800,000 on July 21.
There has been no activity on the suit since either sale was recorded. A jury trial on the lawsuit is scheduled to begin on Feb. 21, with a hearing scheduled for Jan. 3 and final trial conference on Feb. 13.
Contact Dustin Luca at 978-338-2523 or DLuca@salemnews.com. Follow him at facebook.com/dustinluca or on Twitter @DustinLucaSN.
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