Township Sues Sunoco Pipeline,L.P.

2/17/2017

West Goshen Township, in Chester County has filed a complaint with the Public Utilities Commission against Sunoco Pipeline, LP over the Mariner East pipeline.  The suit alleges a breach of an agreement with the township.

The Pipelines

Sunoco Pipeline, L.P.  in recent years repurposed a pipeline that used to deliver gasoline and other refined products from the former Sunoco Refinery in Marcus Hook, Pa (Delaware County) to a distribution point in Washington County, south of Pittsburgh.  That pipeline now flow the other direction, bringing Marcellus Shale products to Marcus Hook.  Sunoco is adding at least one other line called Mariner East II.

The Agreement with West Goshen

West Goshen negotiated a deal with Sunoco to protect the residents of West Goshen.  The deal was extensive and, among other things, required Sunoco to construct two remotely operated valves before the end of 2015.  The valves would permit the isolation of segments of the pipeline in the event of an emergency.  In addition, Sunoco agreed to limit its right to build above-ground facilities without first notifying the Township.  Lawyers from this firm relied on this agreement when negotiating additional protection for our clients.

The Alleged Breach

West Goshen alleges only one of the remotely operated valves has been installed.  In addition, it alleges an above ground valve for Mariner East II is being constructed, without notice, near Boot Road and Greenhill Road.  West Goshen has requested the PUC to issue an Order declaring a violation of the settlement agreement.  This firm is carefully monitoring the case.

 

Common Mistake Leads to Quashing of Partition Appeal

Feb 10, 2017

The Superior Court just quashed a Partition case, based on a common misunderstanding of the appellate rules.  In Zablocki v. Beining, 2017 Pa. Super 32,  an appeal was taken after the Court adopted the Report of a Master and Ordered the sale of the property. Both parties assumed that an appellate rule (Pa.R.A.P. 311(a)(7)), which permits appeals from orders directing partition, applied. Both parties were wrong. (See  http://www.pacourts.us/assets/opinions/Superior/out/J-A33032-16o%20-%2010298815116012089.pdf?cb=1 )

WHAT IS PARTITION

In a partition action  two or more property owners ask a Court to either divide up the property, or force a sale.  Courts don’t usually divide up property because subdivision is expensive and it takes a lot of time.  These cases are usually time sensitive. Often one owner is tired of paying all the taxes and the mortgage.  Family properties are often the subject.  Parents die and leave the old family farm to their children.  The children have no good reason for being partners in a property that they must share.  Often a child dies and his or her children become the owners.  You can imagine the mess.  In order to speed these cases, the Court will often appoint a Master to take testimony and make recommendations. A Master is a lawyer appointed by the Court.

SOURCE OF CASES

Family properties are often the subject of partition actions.  Parents die and leave the old family farm to their children.  The children have no good reason for being partners in a property that they must share.  Often a child dies, and his or her children become the minority owners.  You can imagine the mess.  ANother common source of these cases is where unmarried persons buy property together and then break up.  In order to speed these cases, the Court will often appoint a Master to take testimony and make recommendations. A Master is a lawyer appointed by the Court.

Early in this type of case, the Court usually enters an Order granting partition.  This is BEFORE appointing a master. It is this Order that may be appealed.  The Order adopting the Master’s report is not final and therefore, not appealable.

This case is a good example of why partition actions require special expertise.

CFPB issues $3.5M Kickback Fine

February 2, 2017

The CFPB, (Consumer Financial Protection Bureau)  this week ordered Prospect Mortgage to pay a $3.5 million fine for improper mortgage referrals. The CFPB called it a kickback scheme.

There are three reasons why the mortgage company and two real estate brokers were fined:

  1. Prospect maintained various agreements with over 100 real estate brokers, including RE/MAX and Keller Williams franchisees, to deliver payments for referrals of mortgage business. The payments were based on the number of referrals and were disguised as co-marketing agreements.
  2. Prospect obtained additional referrals by having real estate brokers engage in a practice of including the company in their real estate listings. This practice required anyone seeking to purchase the property to obtain a pre-qualification with Prospect, even where consumers had already pre-qualified for a mortgage with a different lender.
  3. Prospect and Planet Home Lending had an agreement by which planet was compensated for referrals by taking a split of the proceeds on the sale of the loan.

RE/MAX Gold Coast was fined $50,000 in civil penalties and Keller Williams MID-Willamette was ordered to pay $145,000 in disgorgement, and $35,000 in penalties. Planet Home Lending will pay $265,000 in redress to consumers.

Group moves to Stop Sunoco Pipeline.

September 26, 2016, Delaware County, PA.   The Middletown (Delaware County, PA) Coalition for Community Safety is presenting an emergency application for an Injunction today to delay the vote by the Township of Middletown, in connection with the granting of easements to Sunoco Pipeline, LP (“SPLP”), for its Mariner East II pipeline.

The group is asking the court to declare Middletown Township Council’s failure to consider independence evidence of the safety of the Mariner East II pipeline, as a violation of the constitutional rights of Township residents and businesses.

The 19-page filing (with 83 pages of exhibits) represents that SPLP:

  1. told the Township Council that its new pipeline would be built 4222 feet away from a school when in fact it is 800 feet from the center of the school, and 650 feet from the playground;
  2. informed Council that has an excellent safety record when in fact publicly available information shows it has the worst safety record in the industry;
  3. fossil informed Council that he has an emergency evacuation plan, when in fact the plan does not provide a reasonable protocol consistent with the potential blast wave from an odorless, tasteless product being transported in the pipeline;
  4. falsely informed Council it has an emergency evacuation plan consistent with public safety when in fact it’s plan does not account for the fact that the liquids and gas that escape have no load or are invisible in our flammable with the smallest heat or electrical source and that the blast wave pack so much energy that catastrophic loss of life and property are inevitable;

The Delaware County Court will consider the matter today, prior to tonight’s township meeting.

Todays filings:  Petition   Exhibits 

 

EPA Questions Atlantic Sunrise Pipeline

 

In July, 2016, the United States Environmental Protection Agency issued a four-page letter to FERC (the Federal Energy Regulation Commission), raising questions about Transco’s Atlantic Sunrise Pipeline, proposed to be built through Pennsylvania.

The 30-inch pipeline is designed to carry natural gas from Marcellus Shale production areas to Transco’s Pooling Point in Choctaw County, Alabama. For about 28% of its 197.7 PA miles, the pipeline will be co-located within, or adjacent to existing pipelines, and or electrical transmission utility rights-of-way.

Transco’s Draft Environmental Impact Statement (DEIS) created concern to the EPA, because it put forward Transco’s preferred proposal for pipe location, and did not fully study alternatives, including one alternative by which expansion of the existing PennEast Pipeline by 80 miles, could entirely eliminate the need for the Atlantic Sunrise Pipeline.

EPA expressed concern about direct, secondary and cumulative impacts to water resources, including groundwater, wetlands and waterways, and recommended full assessment of impacts to these types of resources. In addition, EPA noted there would be “large impacts” to terrestrial resources including forests and the habitats of forest interior dwelling species.

EPA noted that there is a complex infrastructure, including natural gas wells, gathering lines and other natural gas transmission facilities, that all interact with the proposed Atlantic Sunrise Pipeline. EPA recommended that FERC should actively “unravel and describe the highly complicated, interrelated network of pipelines.”

EPA summarized its review of the Draft Environmental Impact Statement, by concluding the statement had “Insufficient Information.”

DEP Notice to Sunoco – Mariner East II Pipeline

DEP Issues Technical Deficiency Notice for Chester County Chapter 105 Application of Sunoco Pipeline for Mariner East II.

On September 6, 2016, the PA DEP issued a Technical Deficiency Notice to Sunoco Pipeline, L.P. regarding its Mariner East II Pipeline in Chester County, PA. There will be similar notices for every county in which the Mariner East II Pipeline is to be constructed. The notice related to Sunoco’s application for permits under Chapter 105, Dam Safety and Waterway Management Regulations.

Chapter 105, in non-technical terms, governs the crossing of streams, wetlands and other waterways. It also governs erosion and sedimentation controls.

A Sampling of the Deficiencies

The Technical Deficiency Notice comprises 21 pages of single spaced comments. Here is a sample of some of the deficiencies:

  • provide details of each stream and wetland crossing, together with associated erosion and sedimentation controls;
  • provide site plans depicting work within a floodway or floodplain;
  • provide detail on any proposed cathodic protection;
  • identify all locations for horizontal direct drilling work, and all temporary crossings of wetlands associated with this work;
  • provide actual floodway boundaries as opposed to assuming floodway’s are within 50 feet of stream;
  • revised plans to delete stockpiling of soil in wetlands;

Safety Issues-Private Wells

The types of comments listed above are normally associated with a Chapter 105 application.  A significant requirement is found on page 17 of the report: “the application will need a comprehensive Preparedness Prevention Contingency Plan (PPC) combined with the Inadvertent Release Plan (IRP). The plan needs to include downstream notification lists of public and other water intakes and public and private water wells along the ROW, noting those water users along areas where HDD will be utilized.”

The report notes that Sunoco talked about wanting to protect private water supplies but did not include a formal plan doing so. The DEP suggested four possible options:

  • map where the pipeline crisis sensitive geology and aquifers;
  • locate and identify contact information for drinking water wells in the vicinity of the pipeline;
  • acknowledge that within one half mile wells are potentially vulnerable over a long period of time and within 400 feet wells are vulnerable in a short time after he release; and
  • water quality sampling and analysis of nearby wells could monitor quality impacts.

Summary 

Sunoco Pipeline, L.P. has a lot of additional work to complete before PA DEP will issue its permits.  The requirements related to neighboring wells may significantly increase their burden, but will help to speed emergency notification to neighboring well owners.

Special Alert- Property Owners Signing Pipeline Easements

Our firm represents many landowners who have had to deal with new pipeline easements.  Whether it is the Sunoco Mariner East series of lines, the Columbia Lines, Eastern Shore Natural Gas, the Williams Atlantic Sunrise, Constitution Pipeline or any other pipeline, there are lingering issues you need to consider:

Sooner or later, most of us will sell all the real estate we own.  What would you think if I told you that you would be in default under the contract, the minute you signed it?

Let’s take this apart and discuss residential real estate first.  Most homes are sold with contracts using the Pennsylvania Association of Realtors® form.  That form requires a Seller to deliver a special warranty deed at closing.  A special warranty deed is one in which you, the seller, warrant that you have not done anything to diminish the absolute title to the property received by you.  Guess what?  The execution of an easement for a pipeline diminishes the title to your property.

Why is this important?  Let me give you a very realistic example.  You are at closing; the buyer wants money, because they saw something during the walk through.  You say no.  They say ‘give me a $5000 credit or I will not buy the house.’  You say, ‘you are in default and I will take your deposit.’  They say, ‘OK deliver to me a special warranty deed, and I will immediately sue you for the money you were paid by the pipeline company.”   Oops, they have you.

What is the solution?  First, prior to signing a contract, make reference to the pipeline easement in your sellers’ disclosure. Next, you need to modify the agreement of sale. The reason is you need to be obligated to deliver a deed of special warranty, excepting the pipeline easement you have executed. Finally, at the time of closing, you need to modify the warranty provision in the deed to exclude from the warranty anything related to the pipeline easement.

If you signed a pipeline easement, print this page out and put it where you can find it when you want to sell.

If you have a commercial property, the issue may be even more dangerous.  That is because buyers often spend considerable money on due diligence.  If a buyer has spent $20,000 before they learn you cannot deliver a special warranty deed, you will not have a pleasant day.

Pipeline Eminent Domain Condemnation

Pipeline Eminent Domain Condemnation

Action on this issue is needed immediately.    Most of the amicable settlements between Sunoco Pipeline, L.P., and property owners over right of way agreements related to the Mariner East pipelines are on the books.  The Atlantic Sunrise line is now two years in acquisition and in a similar posture.  For those that did not reach an agreement, the sheriff will be by with a Declaration of Taking. If it is your intent to fight, once you are served with the papers, the clock begins to run.

What is a Declaration of Taking?

SUNOCO      When Sunoco Pipeline, L.P. exercises its Eminent Domain powers (I know, there are a lot of people who think they don’t have that power.  The simple fact is that the Commonwealth Court recently ruled, stating Sunoco does have the power. We can talk about that issue later), it files a document in the county court called a Declaration of Taking.  It will be a 60 to 70 paragraph document with a caption that reads like this:  IN RE: CONDEMNATION BY SUNOCO PIPELINE, L.P. OF A PERMANENT RIGHT OF WAY FOR THE TRANSPORTATION OF ETHANE, PROPANE, LIQUID PETROLEUM GAS, AND OTHER PETROLEUM PRODUCTS IN   XYZ TOWNSHIP,   ABC COUNTY, PENNSYLVANIA, OVER THE LANDS OF JOHN AND MARY SMITH.

WILLIAMS   When Williams takes this same action, the issue of power to condemn is not available. Preliminary Objections will have to address one or more of the other four permitted issues set forth in the Eminent Domain Code.

Back to the procedure……   Getting served with a Declaration of Taking is no different than being sued. The pipeline company is asking the court to set the amount of compensation to which you are entitled because of their taking. I know that sounds strange. Most people think the pipeline company is asking for the right to take part of your property. The fact is, when they file the declaration of taking, they have by that action taken your property. If you don’t think they have any rights to do so, there are filings which must be made. If you want to agree on a number, you need to move quickly and have a lawyer that understands condemnation, and also understands the business side of all of this. The more you wait the worst things will get.

When Sunoco, or Williams were negotiating for an amicable agreement they were willing to pay a premium over the fair market price. Once things go to condemnation, or eminent domain, many property owners are shocked to find they are now negotiating for significantly less money. (The moral of the story is the best time to negotiate is before they decide to turn the matter over to the lawyers for condemnation.)

If you disagree with the money you’re being offered after the Declaration of Taking, your remedy is to ask for a Board of View. A Board of View generally consists of one lawyer and two non-lawyers, appointed by the court to conduct view of the property and hear testimony from competing appraisers as to the value of that which was taken. When this kind of testimony is given, it is immediately clear that there are appraisers, and there are eminent domain, or condemnation appraisers. There is a wide gulf between the appraiser that provides a report to your mortgage company, and the appraiser that gets you the most money when someone takes part of your property.

If you get one of these Declarations of Taking, it is time to take immediate action.  We are finding that in some cases we are able to drag the case out of legal status and back into the ability to negotiate a favorable settlement.

When you consider the financial value of what you will get from having part of your property taken, the most money is obtained by negotiation before the pipeline company turns the case over to lawyers for eminent domain proceedings. Immediately after the filing, the settlement value of the landowners’ claim drops significantly. If you have to actually go to trial, the settlement value will be at the lowest point. This seems counter-intuitive. After all, in the case of automobile accidents, sometimes the best settlements are made on the steps of the courthouse. In pipeline condemnation cases that rule does not apply.

THE MOST IMPORT THING TO REMEMBER:    I’ve talked about money.  In a year, the money will be gone, but the easement will be around forever.  If you choose to fight the right to build the pipeline to the death, or if you simply let things go to condemnation, you will be stuck with the standard easement agreement.  Recognize that if you do chose to negotiate,  the revisions to the standard easement agreement will prove to be more important than the money.  In five years or ten years, those terms will still be around.  No one should ever settle for the standard terms.

If you need help with this, we are able to represent landowners on pipeline issues anywhere in the state.

 

Bobbie Kalia Meets with Senator Dinniman

 

 

 

MBK

As part of her duties as 6th District Leader for the Humane Society of the United States, Attorney Bobbie Kalia recently met with leaders in Harrisburg to promote issues related to animal rights.  Bobbie is a senior associate of this firm. She heads our Pipeline Team.  She represents property owners who have land taken for pipelines, utility lines, highway widening and more.

Tips for First Time Home Buyer

March 20, 2016

We are coming into a strong spring market.  The inventory, or number of homes on the market, is low compared with the number of buyers.  Let’s face it, mortgage rates remain at an all-time low.  Twenty years ago, if the interest rate went up 1%, the result was a 10% +/- increase in the rates.  Now a 1% increase is equivalent to a 25% +/- increase.  Buyers are jumping in while they can.  Many first time buyers do not stop and ask for independent advice from someone who has no stake in the transaction.  The same applies to buyers who have not really paid attention in the past.

Here are a few tips, based on the experience of representing home buyers and sellers, for over 40 years.

  • Write down everything the seller or seller’s agent says in an effort to sell you the house. (I will tell you what to do with this in a moment)
  • Take note the standard agreement of sale has a clause (called an integration clause) which in essence says: We the buyers did not rely on the sellers’ disclosure or anything said to us and therefore none of those representations were part of our decision to buy the house.   We all know that is not true.
  • Amend the agreement of sale BEFORE you make an offer to fix the following issues at a minimum:
    1. Amend the integration clause to include, as part of the agreement, both the sellers’ disclosure and the representations made to induce you to buy.
    2. Limit the exposure you have, in the event of default, to your deposit as liquidated damages. (We can help you with this)
  • Get the best home inspector you can find and slowly, and carefully look at everything in the house. The big issues are:
    1. The roof, flashing, downspouts and gutter:  this includes a thorough inspection from the underside of the roof.  Make sure you check for ventilation of the space under the roof and for signs of mold or mildew.  If it is too hard to get up into the space under the roof, remember it is not too hard for water or mold…..check this space thoroughly.
    2. The basement: This really includes inspecting the manner in which the lot is excavated, so you know where the water will flow if there is a 6” rain on top of ground that has been frozen for 2 months.  In the basement, look for signs of water entry or the cover up of water.  A rust line on the furnace or the steel lolly columns is a giveaway.  If you see white powder on the wall, this may not indicate water entry.  It could mean water is flowing inside the wall to a drainage system.  Look for a well-used sump pump.  In the ideal home, there will be drains in the basement floor which connect to pipe that flow outside to a location LOWER than the basement.  Check out all mechanical systems (hot water, heat, AC, pipes, electric) throughout the house.  Make sure ALL drainage pipes go either to the public sewer or to the septic system which you will inspect.  Beware of a grey water system.  Look for structural defects in the walls, the steel and the wood.
    3. Stucco, or artificial stone. Defective stucco or stone is caused by many things.  Often the roofer will install the rake board before the stucco.  That is the wrong order. Many stucco installers fail to create a water channel behind the stucco, or they fail to create weep holes at the bottom for the water to get out.  The first cousin of the stucco problem is failure of windows.
    4. Water in the living areas. I know, we are back to water!  Look for fresh paint, patched ceiling and signs of little black spots on ceilings.
    5. The septic system and water. You need an absolutely clear septic system report.  All repairs must by pursuant to a health department permit.  Check water for both quality and quantity.  You need about 4 gal/minute continuous yield from the source.
    6. IF THE SELLERS OR THEIR AGENT explain away any problems discovered in the inspection, amend the agreement of sale to include an inclusion of that statement as an item not excluded by the integration clause.
  • Consider a survey. If you do not have a survey, you may find the fences are not on the borders, that the house is not on the lot that a pipeline goes through the front or backyard.
  • Title Report. Yes, this is an important part of the inspection process. Order your title from a company that is independent of the parties that will profit if the deal goes through.  Companies owned by sellers or real estate agents may have a conflict, if a title issue arises which should end the deal unless it is corrected.  Our related company, Academy Professional Settlement Services, can handle this for you, and when you use our company, we do not charge for attendance at closing in most cases.
  • Talk to the neighbors. They may know about issues that are not immediately apparent.

 

Don’t be afraid to hire a lawyer.  We are real estate lawyers.  We can help you quickly an inexpensively.  Our average billable time in a normal home purchase transaction is less than two hours.