Mayflower Oil Spill: Legal Considerations as Exxon Begins Extending Offers of Compensation

 

Andrew Vines of Johnson & Vines, PLLC, our guest author, has some valuable information about Exxon’s offers to home owners affected by the Mayflower Oil Spill.

Attorneys evaluating the legal issues raised by the Mayflower Oil Spill have received a copy of a flyer being distributed by Exxon setting forth offers of compensation to residents of the Northwoods subdivision affected by the spill. A full summary of the information contained in the flyer is listed below, and a copy of the flyer can be accessed here.

The compensation to be offered by Exxon covers four areas: 1) disruption and inconvenience in the amount of $10,000, plus payments for home cleaning and landscaping work, 2) payments to landlords and tenants impacted by the spill, 3) purchases of certain homes, 4) payments for the reduced values of other homes. The latter two areas include moving payment for moving expenses and closing costs. Valuation of homes will be set according to certain processes spelled out by Exxon in the flyer.

Despite this gesture on the part of Exxon, affected residents are still advised to proceed with caution in dealings with Exxon and to hire an attorney to protect their legal interests, especially in relation to any payment of compensation by Exxon. Negotiation of the property damage claims could be complicated under the system that Exxon has set up, and information provided to Exxon without the advice of counsel could be used against a resident in the course of negotiations, limiting the amount of compensation to which a resident might otherwise be entitled.

Moreover, in addition to limiting its offers of compensation in the flyer to residents of the Northwood subdivision, Exxon has further distinguished what it will pay to residents in the Northwoods subdivision depending on whether those residents are “directly impacted” or “non-impacted” These terms are not defined in the flyer. The flyer also fails to define what Exxon will consider reasonable efforts to “market” property.

Exxon states in the flyer that acceptance of its current offer “will not affect residents’ right to assert any claims that they may have against the company, and that the company will continue to work with residents to resolve such claims.” Accordingly, we are confident that Exxon will not be able to use this offer of compensation to cause residents to unknowingly release rights to any and all claims that they now or in the future will have. However, it is important to note that, for this very reason, payment by Exxon under the terms of the flyer should not be considered the extent of what Exxon should or might ultimately be required to pay in relation to the oil spill.

Exxon states in the flyer that it is offering to make these payments in order to compensate homeowners “for the inconvenience, disruption and loss of use and enjoyment of [their homes] due to the cleanup effort.” However, this gesture may also be an attempt to persuade affected residents to NOT hire an attorney, thereby allowing Exxon to limit the amount it must pay to fully compensate for the damage caused by the oil spill.

A resident who decides to deal with Exxon, even in response to this offer, without an attorney, or who assumes that the offers currently being made by Exxon are the extent of any compensation owed by Exxon, could risk sacrificing his or her right to recover the full extent of the damages owed as a result of the oil spill.

Summary of Flyer

According to the flyer, Exxon proposes to compensate homeowners affected by the oil spill in the following ways:

  • For all Northwoods subdivision residents:
    • A payment of $10,000 per household compensation for disruption and inconvenience.
    • One whole-house cleaning.
    • Yard maintenance service for two months re-landscaped as a result of the cleanup.
  • Moving expenses and three months’ rent for tenants whose landlord sells the home in which they are residing due to the spill.
  • Reimbursement for landlords for rental income up to one year if a tenant decides to move out as a result of the spill.
  • For residents deciding to sell their homes or lots in the Northwoods subdivision as a result of the spill within the three-year period ending March 28, 2016:
    • ExxonMobil will commit to purchase property, according to the following processes:
    • At the time of the sale, value received will not be reduced due to any diminution in property value caused by the spill. HUD-approved appraisers will establish the value.
    • Directly impacted homes or lots can be sold immediately to ExxonMobil.
    • The homeowner can market non-impacted property or lots. If there is no buyer or the best offer reflects that the spill has adversely impacted the sales price, as determined by qualified appraisers, ExxonMobil will buy the home or lot or make up the difference in the sales price caused by the spill.
    • ExxonMobil will also cover all closing costs and provide moving expenses up to $8,000.
  • For residents who decide to remain in the Northwoods subdivision, ExxonMobil will provide a one-time payment for any diminution in property value caused by the spill on any date of the homeowner’s choosing, until March 28, 2016, according to the following processes:
    • Property values will be established by local HUD approved third-party appraisers who are capable of determining any loss of value due to the spill.
    • Each homeowner and ExxonMobil will choose an appraiser, with both being paid for by ExxonMobil. The largest amount of lost value will be chosen if values are within 10 percent of each other. If the difference is more than 10 percent, a third appraisal will be obtained and a value negotiated.
  • Acceptance of these offers will not affect residents’ right to assert any claims that they may have against the company, and that the company will continue to work with residents to resolve such claims.

Johnson & Vines, PLLC is working with Hare Wynn Newell & Newton in representing individuals who have been affected by the Mayflower Oil Spill. For additional information, please contact us at 501-372-1300 or at info@johnsonvines.com.

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