Legal & Financial

NEXT HEARING DATE: Friday, September 13 at 1:30PM

PREVIOUS UPDATE: At a hearing held June 21st,  Judge Kuhnke gave her final decision on all outstanding matters, except alternate living expenses (ALE). The next hearing has been postponed.

The final settlement for the structure is the policy limit of $316K. From that, fees have been paid to the adjustor, umpire, attorney, storage facility, and for miscellaneous work conducted just after the fire. There is a mortgage owed on the property. Here’s how the judge ruled on other outstanding matters:

• Debris removal was included in an unspecified payment previously made by AAA, so that matter is closed.
• City code enforcement fees are to be paid by AAA when they are incurred.* 
• Other structures and landscaping (porches and landscaping next to the house) will be paid by AAA when they are incurred and only if destruction is necessary to rebuild.*
• Interest on monies owed, that weren’t paid within 60 days of the fire, are subject to an interest penalty.
• ALE:
• AAA will pay for expenses Johnny has incurred during his time in the school house. Expenses will be reviewed at the next hearing.
• Johnny is not required to “incur” ALE before it’s paid out.
• The judge will determine any further ALE resolution, including whether the timeline should be extended to reasonably allow Johnny time to rebuild.
• When ALE is resolved, the judge will issue a final order and close the case, retaining control if further issues arise.

* For these two rulings, Johnny has to submit bills to AAA for reimbursement. If they refuse to pay, the judge will reopen the case to hear the matter.

AAA argued the house is rebuildable, even though there’s a gaping hole in the roof where the elements and nature have poured in over the past 1 -½ years. They also claim the porches attached to the house and landscaping alongside the house can be saved during razing and construction. If the past is any indication, a prompt payment, much less any payment, won’t be forthcoming without a renewed fight.

PREVIOUS UPDATE: The wheels of justice are turning ever so slowly, but they’re turning. After a hearing on April 10th and another on the 16th, both focused on reviewing the unusual award that the arbitrator produced, it was determined that yet another hearing (or possibly more) will be needed to resolve five outstanding issues. The next hearing scheduled for Friday, June 21, at 10am.

• No amount provided for landscaping (will be destroyed in the rebuild, is required by the city for runoff along with a “mudmat” and gravel to avoid tracking dirt on the road)
• No amount provided for proper ingress and egress to home (decks and porches will be destroyed in tear down, required by the city)
• No amount was provided for other code-building requirements (design, permitting)
• Interest penalty on accumulated unpaid amounts has yet to be determined (paid by AAA)
• The amount and time frame of alternate living expenses (ALE) remains in question. Another Show Cause hearing is scheduled for Friday, June 21, 10am.
  • The low amount the arbitrator set was because “Mr. Williams is likely to be able to enjoy his northern Michigan home during part of this summer” (he refers to the Mancelona, MI schoolhouse, which is not remotely a “home”.) A landlord will not “pause” rent because Johnny leaves town for a few days or a week and the amount doesn’t consider rental furniture.
  • The award expires at the end of September 2024. A landlord is highly unlikely to sign a lease for less than one year. More to the point, it’s an impossibility to design a replacement home, find and hire a contractor, obtain all the proper permitting from the city, tear down the existing structure, mitigate the mold, mildew and smoke damage to the Speakeasy, rebuild the home, buy furnishings, and move in – all in less than six (6) months.

Johnny remains 220 miles away, in the schoolhouse in Mancelona, driving back and forth while all of this gets decided.

PREVIOUS UPDATE:  What we thought would be a final hearing, wasn’t. The next hearing is on April 16th at 10AM. 101 E Huron, 2nd Floor, Room 9 (Judge Kuhnke). Johnny still is living in the school house in Mancelona.

April 10th (Postponed hearing from April 3rd) – Questions about the arbitrator’s settlement  were discussed: certain line items had been omitted and alternate living expenses didn’t address Johnny’s specific situation.

March 6th and 20th – Show Cause hearings regarding alternate living expenses. Judge’s decision put over to await Arbitrator’s award.

March 13th – In-depth meeting with the arbitrator regarding rebuilding expenses and alternate living expenses.

On February 2nd Judge Kuhnke issued the following orders:

• AAA has to show cause explaining why they didn’t obey order to pay for additional living expenses. The hearing is scheduled for March 6th.
• AAA cannot impose a deadline for submission of claims.
• The building code coverage will apply if the structure is demolished and rebuilt.
• AAA must produce all requested non-privileged materials and data that underlies their appraiser’s assessments.
• The arbitrator must conclude his appraisal by April 2nd, unless he finds a legal or coverage issue.