LYNNFIELD — A potential agreement between Perley Burrill property owner Joseph Pedoto and the town over removing five underground storage tanks from the site at 906-914 Salem St. broke down on Friday, Dec. 19 as the Villager went to press.

According to local officials, Pedoto will likely be facing contempt charges for failing to comply with an outstanding court order to remove the five tanks.

Essex Superior Court Judge Paul D. Wilson ordered Pedoto, trustee of the Little Joe Realty Trust, to remove the five underground storage tanks from the property in August.

This action was taken after Town Counsel Thomas Mullen sought a permanent injunction against Pedoto to remove the tanks. The single-walled tanks have not been in use since Dec. 2011 and the monitoring system designed to determine any leakage only works if the electrical power is on. Mullen believes the power to the tanks is currently off.

“We fear the tanks are leaking into the ground and the groundwater,” Mullen said at last week’s selectmen’s meeting. “We are not being hypothetical about this. There is a real threat here to the health and safety to the people of Lynnfield.”

The judgment issued against Pedoto stipulated that he needed to apply for a permit from Fire Chief Mark Tetreault to remove the tanks within 30 days after the judgment was issued on August 14. After this permit was pulled, Pedoto would have another 60 days to remove the tanks.

“Of course nothing happened,” said Mullen.

After Pedoto missed the Sept. 14 deadline to pull the permit from the fire department, Mullen filed a contempt complaint, which sought to punish Pedoto for failing to “honor an Order of the Court.”

During an early October court hearing on the matter, Mullen learned that Pedoto had filed the five applications with the Fire Department. According to Mullen, the judge entered a finding that Pedoto was in contempt for failing to meet the court-ordered deadline to pull the permit. However, Mullen said the judge decided “to give Mr. Pedoto some time to see if he could remove the tanks in the next 60 days.”

Pedoto failed to comply with the court order once again by the new deadline of Dec. 8. At a hearing held on Dec. 11, Mullen said he had a “very interesting meeting” with Pedoto and his attorney, Joseph Brodigan. According to Mullen, Pedoto said he was very close to selling the Perley Burrill property to a third party, who would remove the five tanks.

“This, of course, is baloney on stilts,” Mullen told the selectmen. “This is the same kind of thing we have heard repeatedly over the course of many months. I don’t even think his lawyer was buying it.”

According to Mullen, Brodigan told the court that filing for bankruptcy was the only way to resolve the case. Mullen said he agreed with Brodigan’s assessment of the case.

The judge had set a hearing date for Dec. 18. If Pedoto had not filed for bankruptcy by last Thursday, Mullen said the court hearing would weigh potential penalties against Pedoto. Mullen said the penalties could be either fines or jail time.

Mullen told the selectmen that he “did not expect the hearing to occur” on Dec. 18 because Pedoto’s “back is against the wall.” He also told the selectmen that he believes dealing with a bankruptcy trustee would be easier than dealing with Pedoto.

“We have never had any success dealing with Mr. Pedoto,” said Mullen. “On the other hand, a bankruptcy trustee and a bankruptcy judge have an interest in making sure the public interest is served.”

Back taxes nearing $170,000

In addition to not obeying the court order to remove the tanks, Pedoto also owes the town a significant amount of money in back property taxes. According to the town treasurer’s office, Pedoto has not paid his property taxes since 2007 and currently owes the town close to $170,000.

The cost to remove the tanks is estimated to be at least $45,000.

In response to a question from Board of Selectmen Chairman Dave Nelson, Mullen said he has had experience dealing with bankruptcy trustees and bankruptcy judges while serving as Wakefield’s town counsel. Mullen recalled a situation in Wakefield in which a developer filed for bankruptcy. He said Wakefield “was able to work very cooperatively with the bankruptcy trustee and bankruptcy court.”

Selectman Phil Crawford asked Mullen what would happen if Pedoto did not file for bankruptcy.

“Right now his alternatives are to either (file for bankruptcy) or to show up with a toothbrush,” said Mullen.

Mullen also told the selectmen on Dec. 15 that he had not heard from Pedoto since the Dec. 11 hearing, but he did hear reports that bankruptcy papers were in the process of being drafted.

Nelson said he was pleased the case against Pedoto was “moving in the right direction.”

“This isn’t going to be let go,” said Nelson. “It’s going to just keep going, to be resolved. It’s gone on too long.”

Selectman Tom Terranova recused himself from the discussion due to a prior business relationship he had with Pedoto.