Some owners of the Grand Manor condominium in Lowell on Friday got another chance to collect millions of dollars they say the city owes them for allowing their homes to be built on top of a dump the city closed some 60 years ago.
In an unanimous ruling, the Supreme Judicial Court concluded the owners did not know until late 2012 that their property was permanently contaminated after the city concluded it would cost a prohibitive $11 million to completely remove the hazardous materials.
The SJC threw out a jury verdict in favor of the city, which had argued the owners could not collect any damages because they knew in 2009 that the environmental problem was permanent and should be sued that year, not three years later when the statute of limitations had expired.
“No one had knowledge of whether the damage was reasonably curable more than three years before the plaintiffs filed suit” in 2012, Justice Scott L. Kafker wrote for the court. “The city learned of the scope of the contamination, and that such contamination could not be fully remediated... sixteen months before the plaintiffs filed suit.”
He added: “Accordingly, the plaintiffs’ suit was timely as a matter of law.
During the trial, attorneys for the condo owners argued that each was due $79,000 reflecting the permanent loss in the equity of their homes, Alan B. Rubenstein, the attorney for the condo owners, said Friday. He said new market evaluations may be needed that could push the compensation figure beyond $2.5 million.
Rubenstein said some owners paid $150,000 for their units, but after the contamination was discovered units sold for in the $30,000 to $40,000 range.
“Who wants to own a condo built on top of 1.5 million cubic feet of hazardous materials?” he asked. “I’m really particularly thrilled for our clients who are not wealthy people, and the equity they had in their condos, in many cases was most of their net worth.”
According to the SJC, the city closed the dump in 1954, covered it with soil and left it unused until 1983 when the parcel was sold to Anthony Katsikas, who has since died. Environmental testing confirmed the presence of industrial chemicals, but in amounts so small they did not pose a health risk. The condo opened in 1985.
In 2008, when the condo association was installing some new drainage systems, the contractor discovered “discolored soil” and glass, bottles, metal, vehicle parts, and ash. New testing found high levels of arsenic, cadmium, chromium and lead, triggering state environmental clean-up laws, records show.
The condo association and the city have been arguing with each other since then 2008 over how to resolve the environmental problems, how much of the condo’s costs should be covered by the city and the issue that was before the SJC Friday - how much compensation is due the owners.
Rubenstein said 36 of the 48 condo owners are part of the litigation.
“The condo owners have been waiting a long time for this,’’ he said. “They really took a hit financially.”
Lowell City Solicitor Christine O’Connor was not immediately available Friday to discuss the city’s reaction to the loss before the state’s highest court.