Stewarts Drops Lawsuit Against Mburgh Village - No Payout to Stewarts But Case Costs Village in Litigation Fees

MIDDLEBURGH - A lawsuit that had its roots planted more than eight years ago, has been dropped by Stewart's Shops against the Village of Middleburgh.

Village attorney Fred Mauhs told village board members Monday that Stewart's dropped a countersuit against the village, ending the matter.

"It is unfortunate Stewart's pursued a course of action that cost Village taxpayers nearly $10,000 in litigation costs over the past year, but now that Stewart's has dropped their lawsuit, we can put this issue behind us and move forward as good neighbors," Mayor Tim Knight said Tuesday.

"Thanks to the management of Village Attorney Fred Mauhs, the Stewart's litigation was concluded without any negative financial or reputational impact on the Village of Middleburgh."

The matter began in 2016 when Stewart's purchased their current location and the former dentist office next to the village. The former dentist office was demolished. A short time later, neighbors of the Main Street business reported the smell of petroleum in their homes form gas or oil in the ground. Stewart's started a remediation project which included large "sheet pylons" that were driven into the ground not far from the village hall. The installation of the pylons damaged the village hall, Mr. Mauhs said. The damage to the hall included cracks in the foundation and the building itself.

The village filed a claim and their insurance company, NYMIR, paid the village for the repair work, which was finally completed last summer. 

NYMIR then brought action against Stewart's to recover the costs, Mr. Mauhs told board members. Then, in 2020, Stewart's filed a claim against the village saying some of their own oil from the village tank had leaked, contaminating the ground.

"Why did they sue their neighbor? I don't know," Mr. Mauhs said.

The attorney said he does not think Stewart's had any direct evidence to support their claim, but contamination litigation is expensive because "you have to prove the oil is not yours."

The village had to defend the spill claim itself since the insurance company does not cover pollution issues.

Stewart's finally dropped the lawsuit a few months ago when they "saw they had an extremely weak case," Mr. Mauhs said.

He added that a court eventually ruled that the NYMIR claim was invalid.