$500,000: It's not fair market value, but is it fair?

The townhouse at 338 West 15th Street opened its doors to potential buyers on a hot spring day, when Chelsea’s sidewalks were thick with tourists spilling over from the High Line and the chill of winter felt like a hazy and half-forgotten dream.

Standing inside the house’s front parlor, a grand but shabby room illuminated by light from copious windows, Dexter Guerrieri, the owner, was eager to discuss his vision for the home, a vision that he had honed over his years as president of the boutique brokerage Vandenberg, the Townhouse Experts. What he described was a six-story “elevator mansion” with a glass-walled penthouse, giant soaking tub, ensuite bathrooms, roof deck and chef’s kitchen with a 48-inch-wide Subzero refrigerator and an eight-burner Viking range.

Mr. Guerrieri is selling this vision (in the form of architectural plans), along with the rundown four-story house that has been changed only sparingly since it was built in the mid-1800s, for a grand total of $6.95 million. It may be a daring asking price, even considering a beautifully renovated townhouse a few doors down selling for $7.9 million, but whatever he gets, Mr. Guerrieri’s real coup was buying the property for $500,000 in 2010.

In a move that was either a smart investment or a swindle, Mr. Guerrieri and his wife, Jane Ordway, took possession of the property from two elderly women after a protracted legal battle over the validity of a purchase agreement signed 30 years earlier. But the past was not something Mr. Guerrieri wanted to discuss that day.

“I don’t want the focus to be about that,” he said shortly when The Observer asked about the circumstances of the purchase. “I just want it to be about the house, what’s wonderful about the house.”

For Lucille Greenfield, an 83-year-old composer who prefers to be called Lu, the events that resulted in her eviction from 338 West 15th Street are difficult to forget.

“It was very nice, it was a very nice place. We met a lot of nice people and they knew me for many years in the neighborhood,” Ms. Greenfield told The Observer. “I made a lot of friends.”

Ms. Greenfield lived in the house for more than 40 years with Marion Molloy, her longtime domestic partner and the erstwhile owner of the house. Ms. Molloy had moved into the house in 1918, as a young girl.

Ms. Greenfield met Ms. Molloy, a secretary for a Catholic books publisher, when she came to the NY School of Music for singing lessons. Ms. Greenfield was her teacher.

“She was affectionate and kind and she liked to laugh,” said Ms. Greenfield. “When we met we were always laughing.”

Ms. Greenfield would play the piano and Ms. Molloy would sing (“she sang any chance she got,” said her partner). Their favorite song was “And I Love You So,” by Perry Cuomo.

During most of the years that Ms. Greenfield and Ms. Molloy lived at 338, Chelsea was still a rough-and-tumble neighborhood whose waterfront was defined by work rather than leisure. The block of West 15th between Eighth and Ninth avenues where the women lived was filled with rooming houses and warehouses, artists, writers and seamen. When she lived alone, Ms. Molloy had been the victim of several break-ins, and Ms. Greenfield, who was 20 years younger, recalled helping ward off intruders and thieves after she moved in.

In 1980, Ms. Molloy was approaching 70 and the women decided to move to Manhattan Plaza, a federally subsidized development for performing artists in Hell’s Kitchen. They met Mr. Guerrieri and his wife through a housing agent.

“Very friendly, very cordial, very nice people, we thought. They were from Colorado,” said Ms. Greenfield (both she and Ms. Molloy were native New Yorkers).

Mr. Guerrieri’s lawyer drew up a contract and Ms. Molloy signed on Valentine’s Day of 1981, agreeing to sell the house for $185,000—a fair enough price at the time; Mr. Guerrieri gave her $500 to seal the deal.

There was only one condition: the sale would take place only when Ms. Molloy vacated the premises.

But for reasons that Ms. Greenfield can’t fully recall now, the women never moved. Ms. Greenfield said that Ms. Molloy sent Mr. Guerrieri a letter a short time later telling him that she wanted to return the deposit. He denied receiving such a letter.

“They never finished paying for the house. We thought that they changed their minds,” said Ms. Greenfield. “We never heard from them again.” (Mr. Guerrieri denied this as well.)

It wasn’t until 2005, when Ms. Molloy’s niece, Patricia Bonner, tried to take out a mortgage on the house to help pay Ms. Molloy’s medical bills that she discovered the lien.

Ms. Bonner, who was poised to inherit the house along with Ms. Greenfield, launched a legal battle to void the contract; it was a byzantine back-and-forth that consumed the last years of Ms. Molloy’s life.

When Ms. Molloy died at age 97 in 2007, Mr. Guerrieri filed a motion to take ownership of the home on the grounds that she had “vacated” the property. A judge ruled his favor and the couple was free collect their prize. Only, it wasn’t 1981 anymore, and $185,000 no longer sounded like a fair price.

The family wanted to appeal, according to their attorney Richard Schwartz, but they couldn’t afford to, so they agreed to settle for $500,000. What remained after four years of legal expenses was divided between Ms. Bonner and Ms. Greenfield.

“They got the house for practically nothing,” said Ms. Greenfield, “They took advantage. I mean it makes me think that I was a fool.”

The agreement had no parameters, no time limit at all, Mr. Schwartz told us. The contract, with no conditions, never should have been binding nearly 30 years after it was signed, he believed.

“It was one of the worst decisions of any court I’ve ever seen and I’ve been practicing law since 1953,” Mr. Schwartz told The Observer. “It was a travesty.”

He said they’d estimated the house, even in its state of disrepair, to be worth $3 million or perhaps $4 million.

The Observer told him the current asking price.

“That’s criminal, criminal!” he cried. But of course, it wasn’t the asking price that was criminal. It was just fair market value, or at least something close to it, in 2012.

Four days after the settlement was finalized, Ms. Greenfield was served with a 30-day notice of termination of tenancy. The home’s other occupants: a family and the two home health-care aides who had taken care of Ms. Molloy for 14 years and were now taking care of Ms. Greenfield, also received eviction notices. Mr. Guerrieri and Ms. Ordway also asked the court to direct Ms. Greenfield to pay $16,000 per month in use and occupancy fees during the eviction proceedings.

“I think Lu expected to live there for the rest of her life,” said block association president James Jasper.

Ms. Greenfield sought the help of the LGBT Law Project at the New York Legal Assistance Group. In the end, her NYLAG lawyer Virginia Goggin was able to negotiate for 11 months “rent free” for the residents.

“It was a terrible outcome,” said Ms. Goggin. “But I wasn’t able to do much because of that settlement. I wish that I had been able to handle the appeal. I don’t think they got a fair shake. I think the Guerrieris know what they’re doing—they’re very successful realtors. And I think that Ms. Greenfield and her domestic partner were taken advantage of whether it was intentional or not.”

Mr. Guerrieri and Ms. Ordway’s case was also helped by two seemingly contradictory passages in the will. Although Ms. Molloy clearly bequeathed her real property estate, “whatsoever kind and nature and wherever the same may be situated” to “my loving niece Patricia Bonner and my dear friend Lucille Greenfield,” she was also afraid to leave her aging partner in a house that she couldn’t take care of, according to Ms. Goggin, and included a troublesome passage in her will (a passage that Mr. Guerrieri quoted to prove that, in evicting Ms. Greenfield, he had done nothing contrary to Ms. Molloy’s wishes).

“My express intention is not to leave a life estate in the residence or any opportunity to remain in possession of the residence to Lucille Greenfield due to her failing health and concern for her limited financial ability to properly care for and maintain the residence during the remainder of her life,” it read.

Asked if marriage would have protected Ms. Greenfield, Ms. Goggin said it may have changed some things, especially in the first court battle, although not necessarily the outcome.

“I think she would have been treated differently,” Ms. Goggin said. “I don’t know if the outcome would have been different, but I think it would have gone down differently.”

As it turned out, Ms. Greenfield couldn’t even afford to stay in Chelsea. And even with her extended deadline of 11 months, it was difficult for her to leave the house where she’d lived with Ms. Molloy for decades.

“I had to get out in a hurry, I had to get all my things in a mad rush,” she said. “It was terrible.”

Fortunately, she was not without friends. Jassondra Luchtman, the home health aide who had nursed Ms. Molloy, then helped to care for Ms. Greenfield as her health declined, invited her to move in with her. The women now share an apartment in Queens.

“Since I’ve known them we were always like best friends,” Ms. Luchtman said, who has spent more than 14 years caring for the two women.

“Marion couldn’t do without this lady at all,” Ms. Luchtman continued. “She’d leave for one moment and Marion would be looking for her, asking for her.”

“I would never let her go in the street, I would never let her live in a home,” Ms. Luchtman said. “We live like family.”

Ms. Greenfield remains committed to her music; right now, she's working on a musical about Mary Lincoln. She still plays the piano, even though she doesn’t have one in her new apartment.

“The piano was Marion’s, it was a concert grand,” Ms. Greenfield said. “I don’t need a concert grand but I’m without the piano and trying to get one for reasonable.”

She paused.

“It’s one of the things I miss, the piano.”

When we reached Mr. Guerrieri on the phone a few weeks later, he was willing (or resigned) to discuss the history of the house. To him, the transaction has more to do with Chelsea, and how it has changed, than anything else. It was a real estate investment that had panned out.

“The simple version was that we had a contract to buy at the market value,” he said, noting that the courts had resolved the question and ruled that he was correct.

But was it fair, we asked?

“That’s what we agreed to and they agreed to; it’s what the parties could agree to.”

But was it fair?

A long pause. “Yes,” he finally replied. “Some areas grow in value, some don’t grow in value, some go down in value.”

“It worked out for them,” Mr. Guerrieri explained. “Marion got to live there her whole life and so did Lucille, really.”

kvelsey@observer.com