I received a call from a tenant who said that she was renting a property and the next door neighbor, whose property was attached, had a catastrophic leak of heating oil in her basement which migrated underground and came up in her sump pump in her basement and was coming through the basement wall as well. She said that there was a strong smell of heating oil in her property and a very strong smell in the neighbor’s property where the leak occurred.
I told her to leave the property because it was dangerous and have her landlord call me. I then represented her landlord in a suit against the next door neighbor.
My client’s insurance company had an exclusion for the oil leak so he had no insurance coverage. The next door neighbor, whose oil tank leaked, did have an insurance policy but it was not enough to pay for the clean up of my client’s property and her property and unless they were both cleaned up there would not be a permanent solution.
I contacted the owner of the next door property to see if she would obtain a reverse mortgage to pay the difference between the insurance proceeds and the cost to clean up both properties since she owned her property free and clear of liens and encumbrances. It was going to cost over $200,000.00 to clean up both properties because the floor had to be taken out and the walls shorn up and all of the dirt underneath the cement basement floors removed. The next door neighbor was not interested and her first attorney thought we were trying to trick her into doing something that was not in her best interest. Fortunately, the attorney hired by the insurance company was a bright, experienced attorney who worked with me and together we were able to convince his client that the reverse mortgage was the best solution. I also convinced the environmental company that did the clean up and another environmental company that obtained the Act 2 Clearances from the state so both properties would have clean title after the clean up, to do the work and then they would get paid all of the insurance proceeds with the balance to come when the next door neighbor entered into the reverse mortgage.
I was also able to recover out of the insurance and reverse mortgage proceeds all of the lost rent that my client had been unable to recover during the year it took to resolve this matter and clean up both properties.
If we had simply sued the next door neighbor we probably would have won but then would have had to sell her property in order to recover enough money to clean up both properties. By thinking outside of the box and having counsel who realized that was the best resolution for both sides, we were able to clean up both properties, have my client made whole by getting his back rent paid and letting his next door neighbor keep her property so that she could live out the rest of her life there. Sometimes it pays to think outside the box.
Attorney Michael Louis supports the needs of businesses and homeowners in a changing economic environment. He has extensive experience defending clients in mortgage foreclosures, collections and loan workouts, general counsel work and real estate litigation, including landlord-tenant litigation. In addition to practicing civil litigation as referenced above, Michael does bankruptcy for debtors and creditors. Michael has been with MacElree Harvey, Ltd. since 1980. He has received an “AV Preeminent” rating from Martindale-Hubbell, the highest level of professional excellence and ethical standards an attorney can receive from the national attorney peer review rating service. Michael has also been consistently named as one of Main Line Today’s “Top Lawyers” since 2009 and selected to Suburban Life’s “Awesome Attorneys” from 2012 through 2015. He has the highest rating possible on Avvo, which is derived from client reviews. To learn more about Michael, visit his bio.
