$36,000,000 – Montco Apartment Fire

Robert J. Mongeluzzi Patrick Howard

Less than 14 months after a devastating apartment building fire in Conshohocken, Pa., left scores of residents homeless, lawyers unveiled a global settlement worth more than $36 million that will resolve all property damage and insurance claims.

About $27 million will go toward rebuilding the two Riverwalk towers, a project now nearing completion and set to reopen in November. The remaining $9 million must be approved by a Montgomery County judge and will reimburse a class of tenants for their lost property as well as satisfying insurers' subrogation claims for payments already made to tenants who had insurance.

Attorney Robert J. Mongeluzzi of Saltz Mongeluzzi Barrett & Bendesky, the lead lawyer for the class of tenants, hailed the settlement as "an amazing result" and credited the work of mediator James Melinson, a former federal magistrate judge now with JAMS.

"This was one of the most challenging puzzles I have ever seen and Melinson was everywhere, working tirelessly on this settlement since July," Mongeluzzi said.

Early on in the litigation, Mongeluzzi said, the lawyers for all of the major players agreed that it made more sense to work toward settlement because the accidental cause of the fire was clear.

Workers on a building project across the street from Riverwalk had been using acetylene torches to remove aluminum balconies, Mongeluzzi said, and fire investigators later determined that molten metal found its way into wood and sparked a fire after the workers left.

Mongeluzzi's associate, Patrick Howard, said the class settlement will ultimately be handled by an independent claims administrator and that members of the tenant class will be required to participate in a claims process that will be designed to reimburse subrogating insurers at the same time.

Under the terms of the settlement, Cavan Construction Co., whose workers were determined to have accidentally started the fire, will pay $16 million; Merion Construction, the general contractor, will pay $11 million; Lynch 2 Inc., a construction management firm, will pay $6 million; and O'Neill Properties Group, the owner of the site where the fire originated, will pay $3 million.

Three additional defendants will pay sums ranging from $50,000 to $150,000, for a total settlement of $36.25 million.

Mongeluzzi said the three top-settling defendants had contributed the entirety of their insurance coverage and that the settlement is therefore likely to be deemed as good of a result as the plaintiffs could have achieved.

The settlement also resolves subrogation claims brought by attorney Robert A. Stutman of Fort Washington, Pa., who served as liaison counsel on behalf of the subrogated insurance company plaintiffs.

"This is an example of an excellent outcome as a result of the pooled resources of our respective attorneys and experts," Stutman said.

Christopher Konzelmann of White & Williams represented Riverwalk Realty Co., a unit of J.P. Morgan Chase Bank, which will be paid $27 million in the settlement to reimburse it for the cost of rebuilding.

Cavan Construction was represented by attorneys Marc B. Zingarini of Weber Gallagher Simpson Stapleton Fires & Newby, along with Donald M. Grimes of Kelly Grimes Pietrangelo & Vakil in Media, Pa.

Merion Construction was represented by Philip D. Priore of McCormick & Priore in Philadelphia; Lynch 2 was represented by Elizabeth Horneff of Margolis Edelstein; and O'Neill Properties Group was represented by F. Warren Jacoby, Julie Negovan, Mark E. Opalisky and Elliott R. Feldman of Cozen O'Connor.

Related Attorneys

Robert J. Mongeluzzi

Office: 215-575-2989

Patrick Howard
Patrick Howard Partner

Office: 215-575-3895