West Pittston couple responds to Luzerne County Council rejections of lease

A West Pittston couple filed court paperwork Tuesday presenting their side of a lease settlement rejected twice by Luzerne County Council.

The new filing in federal court seeks enforcement of a settlement stemming from 2018 litigation filed by Richard and Kimberly Hazzouri.

Their filing asserts the lease was always a key part of the settlement negotiated by both sides and that the county’s decision to treat the lease as a separate action in public votes has caused misleading media coverage that is unfairly casting the couple in a negative light.

The litigation argued West Pittston did not adhere to requirements in a flood buyout program funded by disaster recovery assistance channeled through the county after record 2011 Susquehanna River flooding, preventing the Hazzouris from participating in the program.

County council had voted last September to pay $585,000 toward the $650,000 purchase of the Hazzouris’ residential property on Susquehanna Avenue in West Pittston to close out the litigation.

However, council unanimously voted last month to deny a lease allowing the Hazzouris to remain in the property for up to two years for $200 per month while they secure a new residence. Several council members said they were never informed a lease was part of the settlement when they voted on the settlement purchase.

Council declined to vote last week on a revised one-year lease at $1,700 per month with an additional four-month option at $2,000 per month.

According to arguments presented in Tuesday’s filing by the Hazzouris:

Following extensive discovery in the litigation, U.S. Magistrate Judge Joseph F. Saporito Jr. presided over a full-day July 2021 settlement conference that led to legal counsel for both sides agreeing to settle the matter for a $650,000 purchase price and a lease-back that would not exceed two years and would be for a “nominal” sum of money.

Shortly after the July settlement conference, legal counsel for both sides agreed the nominal lease sum would be $2,400 per year for up to two years.

The plaintiffs agreed to accept $650,000 for the purchase, even though it was “significantly lower than what they were entitled to,” because the lease was a “critical” part of the settlement.

”The lease-back was an essential part of the settlement agreement from the Hazzouri’s perspective because it allowed them to remain in their family home while looking for a new residence, which provided their children stability during the inevitably difficult transition process of leaving their home,” it said.

Acceptance of the $650,000 and lease-back was “extremely reasonable given the strength of their case” and the defendants’ risk for significantly higher damages.

The Hazzouris had made numerous, unsuccessful attempts to resolve the matter before filing any litigation and initially named only West Pittston in their legal action. The borough joined the county Office of Community Development (OCD) in the litigation.

“Plaintiffs developed a very strong case demonstrating that the borough and/or the OCD tried to keep the buy-out program ‘hush-hush’ and then hand-picked which residents would get a buy-out in violation of various federal laws and regulations,” it said.

The Hazzouris demonstrated at the settlement conference they “could prove damages in excess of $4 million,” which included loss of the buyout, $763,750 in pre-judgment interest, attorney fees expected to exceed $500,000 at the time of trial and claims for emotional distress and punitive damages.

It notes the $650,000 was not arbitrary. When the couple applied for a buyout in 2012, the county’s agent said their property had a seven-figure value but set his pre-flood appraised value at $650,000 because he “needed to come up with a number” that would be acceptable to the borough and county. This appraisal did not include a parcel directly behind the residence that the Hazzouris later agreed to include in the county’s settlement purchase.

In early December, when it was time to sign the purchase/sale and lease agreements that counsel for both sides had approved, the county’s community development attorney “shockingly” informed the Hazzouris the county would not sign the documents because the county solicitor’s office had taken the position the September resolution passed by council approved the purchase price but not the lease-back portion of the settlement.

If council members were unaware of the lease-back portion of the settlement, it is not the fault of the Hazzouris or their legal counsel.

“Responsibility for that oversight lies with all of the individuals who were responsible for securing council’s approval at the September 14, 2021 meeting. Moreover, plaintiffs were totally unaware that there was any issue whatsoever with respect to the lease-back until five months after the settlement terms, including the lease-back, were agreed to by counsel for all parties,” it said.

When council rejected the lease-back Dec. 14, the Hazzouris informed the court they planned to file a motion to enforce the agreement.

The court scheduled another settlement conference. The judge said the county had come up with an additional $15,000 from West Pittston to cover the cost of proposed increased lease payments, which meant the Hazzouris would not be required to pay more than the $2,400 per year they had initially agreed to pay. This revised lease was not approved by county council.

As a result of the county’s actions, the Hazzouris “have and continue to suffer additional harm and injuries in that they are being negatively and inaccurately portrayed in the news by Luzerne County Council and the media,” it said.

The media’s focus has been on the settlement agreement terms instead of the “wrongdoing of the defendants which gave rise to the settlement,” it said. Media coverage makes it appear the Hazzouris received the buyout agreement and then returned seeking a lease-back, when both the purchase and lease were always part of the global settlement, it said.

“As such, Mr. Hazzouri’s business is at risk of being negatively impacted because of the incorrect and unfair publicity,” it said, adding that the Hazzouris are suffering negative consequences “even though they have done nothing wrong.”

County Acting Chief Solicitor Shannon Crake Lapsansky issued a statement Tuesday night indicating the administration became aware of the filing by the Hazzouri’s legal counsel — Hourigan, Kluger and Quinn — with the “most salient point being an alleged agreement of certain leaseback terms from Luzerne County to plaintiffs as proposed by plaintiffs.”

“Luzerne County has no further comment regarding this litigation at this time as we will not litigate this matter, or any legal matter, in the court of public opinion,” she wrote. “Luzerne County Council has been advised of the filings, and the county will file responsive pleadings with the court.”