LOCKPORT – The city has decided to fight a lawsuit filed by a man who submitted the high bids on two properties at the 2012 tax foreclosure auction and then was barred from claiming the land or from reclaiming his down payments.

Corporation Counsel John J. Ottaviano said Thursday that the Common Council decided against settling with Daryl Ubiles, who put down deposits totaling $6,150 and then was barred from buying the parcels because he owed $399 in city and school taxes on another property he already owned.

The news came as a surprise to Ubiles’ attorney, A. Angelo DiMillo, who said Ottaviano had told him earlier this week that the city would settle the suit with a refund to Ubiles.

That assurance became inoperative after a closed-door Council session Wednesday night, Ottaviano said. “We had discussed it, and once we learned all the facts, we decided not to settle,” he said.

The city’s auction rules say that if an apparent high bidder is found to owe taxes on any other property in the city, he won’t be allowed to buy the land, and the city will keep his deposit.

The city has sold the parcels on Center and North Transit streets to the second-highest bidder from the Oct. 23 auction.

The lawsuit claims that Ubiles didn’t know about the $399 in taxes he owed on his Clinton Street property because he didn’t receive the tax bills. The suit says he paid the taxes as soon as he found out, six days after the auction.

“This person has multiple addresses,” Ottaviano said. He said the bills were sent to another of Ubiles’ addresses. He owns four properties in the city besides the two he tried to buy at the auction.

DiMillo said it doesn’t make any difference how many mailing addresses Ubiles might have, because the city’s auction rules are “unfair.”

As a result of the policy, the city made more money than it would have if it had let Ubiles close on the parcels he won.

“The city has suffered no loss. It is unfair,” DiMillo said. “I think it’s improper for the city to take a deposit and not let people cure unpaid taxes.”

He said it would be fairer to let bidders clear up their back taxes before closing on auction properties.