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Danversport Explosion

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November 20, 2007

Danversport Trust wants to stay out of court

Matthew K. Roy

DANVERS — Last November's chemical plant explosion has yet to generate the avalanche of lawsuits that many expected.

Seven have been filed so far, including four by insurance companies seeking to recoup payments they made to property owners.

There would be a thicker tangle of litigation if the majority of residents affected by the blast hadn't opted for an alternative response. More than 150 home and business owners have pooled their claims against those potentially responsible for the explosion under a single umbrella -- the Danversport Trust.

The goal of the trust is to avoid a lawsuit. It will instead pursue a settlement with the responsible parties through voluntary mediation.

The man behind the novel approach is lawyer Jan Schlichtmann, a Beverly resident made famous by the book and movie version of "A Civil Action." He has represented neighbors in other environmental cases and successfully used a court-supervised trust.

The creation of the Danversport Trust was approved in Salem Superior Court on June 8. The trust wants to complete its own investigation of the blast before negotiating a settlement.

"It's a continuing process, trying to figure out what happened and what should be done about it. We're in the midst of that," Schlichtmann said.

The trust has excavated part of the chemical plant site on Water Street and a portion of Bates Street to determine if there was a pathway for natural gas to the plant. Neighbors, citing a history of gas leaks in Danversport and reports that people smelled gas the day before the explosion, have speculated that gas played a role.

It's a theory that federal and state investigators have dismissed. Both found that the accidental overheating of a chemical mixing tank used by CAI likely caused the explosion. The overheated tank generated flammable vapors that filled the plant and found an ignition source.

Schlichtmann said the neighbors' investigation should be finished by next month and they could be ready to present their findings sometime in January.

In the meantime, five separate lawsuits have been consolidated in Essex Superior Court to help streamline evidence gathering. In addition to two insurance-related cases | by Travelers Insurance and Merrimack Mutual Fire Insurance | CAI has filed suit to preserve evidence.

Another case | Borelli v. Arnel, CAI Inc. et al | is a class action suit initiated by the owner of a boat destroyed in the blast, seeking compensation for uninsured and underinsured property owners. There's also a suit involving Concord Oil Co., the operator of a gas station on Water Street that's seeking reimbursement from CAI.

Commerce Insurance Co. last week filed suit in Salem Superior Court to recover $1.8 million from CAI, Arnel and their owners, money the insurer says it paid out to 47 customers.

The insurer for Kimball Memorials, Pioneer Garage and the owner of the land where the Danversport Bakery stood has also filed a lawsuit seeking to recover at least $682,000.

High hopes

Add up the family members involved, and the Danversport Trust has more than 260 beneficiaries. One hurdle they face is finding the money to cover uninsured losses.

CAI and Arnel are believed to have $6 million or $7 million in insurance coverage. It's an amount likely to be swallowed up or severely depleted by insurance companies looking to recover the money they paid out in claims | an amount estimated at well over $10 million, and that could go as high as $20 million.

But leaders of SAFE (Safe Area for Everyone), a neighborhood association formed along with the trust, have high hopes for whatever compensation property and business owners might receive.

"We're really hoping that a lot of people will decide to keep the money in the trust," said Susan Tropeano of SAFE.

The amount held by the trust could be invested and grow. "What it can be is money that people can draw on when they need it," Tropeano said.

The trust could issue no-interest loans. "It could actually be retirement for people, it could be betterment for the community as a whole," she said.

Using a trust expands people's perspective, Schlichtmann said. "It lets people look beyond their own problems and put them in the context of everyone else's," he said.

Alan Greene of 24 Bates St. sees the trust as an instrument of change.

"We're going to take this negative," Greene said, "and make it a positive."

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