MUKWONAGO - Amid one of last winter's deep freezes, a pipe burst at the Mukwonago Food Pantry Resource Center, sending streams of water onto its shelves.
The resulting mess required a costly cleanup — much pricier than food pantry officials had anticipated — from a contractor who was hired after the Feb. 1 incident. The $111,594 bill hasn't been paid.
Now the contractor, Cudahy-based Emergency Restoration Specialists, has sued the pantry, seeking to foreclose on a lien placed earlier on the property at 325 Eagle Lake Ave., which the Mukwonago Food Pantry has owned and operated since 2002 in the village.
Essentially, on July 16, the cleanup company filed a construction lien, a method of tying a property's value to an unpaid debt until that debt is settled. After the bill still went unpaid, the firm initiated a legal action to foreclose in order to be reimbursed.
Because the food pantry is a charitable nonprofit organization and doesn't pay taxes on its three-quarters of an acre property, Waukesha County tax records do not list the property's value, though that value likely far exceeds the cleanup debt.
The lawsuit, filed Oct. 1, also alleges breach of contract and other legal claims resulting from the pantry's failure to pay for the water mitigation, contents handling and debris removal.
In an email response to questions, ERS' attorney, Gerald Mayhew, said the company's intent is to force the food pantry to follow through on what it agreed to before the work was completed, not to strip the organization of its resources and property.
"Mukwonago Food Pantry has insurance through Church Mutual Insurance and so this is not a legal action which I believe will jeopardize the pantry and the good work it does," Mayhew said. "The work was completed by my client on February 13, 2019, and as of the date of this e-mail my client has not been paid anything."
He added: "My client believes it has invoiced fairly for its work, and assuming good faith on the part of the Church Mutual, I expect this will be resolved fairly quickly now that we have had to resort to this legal action."
However, Judith Bostetter Buchs, the pantry's attorney, said it was the insurer who waved red flags at the billed amount, prompting a review and delaying payment to date.
"The food pantry's insurer had two different consultants review the invoice from ERS, and in the consultants' opinion, that bill was more than twice what it should have been," Buchs said in a phone interview.
She indicated that pantry officials, initially shocked about the cleanup invoice, were subsequently surprised by the cleanup company's decision to act on a lien so quickly, given the circumstances.
She said the two sides had been negotiating and talking as recently as the day before the lawsuit was filed, with no indication of the pending lawsuit.
"It is unusually aggressive, especially since the contractor had just only recently filed its claim for lien (less than four months earlier)," Buchs said. "So (ERS) was protected while the matter was under review by the insurance company's consultants. (The lawsuit) absolutely took the food pantry by surprise."
Buchs said she wasn't ultimately qualified to address how common such fast-tracked lien actions are, but added, "In my personal experience, this is very unusual."
If the foreclosure action is successful, the pantry would be forced to sell the property, with some of the proceeds going to Emergency Restoration Specialists to pay off the debt.
Contact Jim Riccioli at (262) 446-6635 or james.riccioli@jrn.com. Follow him on Twitter at @jariccioli.
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