Loading...
Law Offices of Ray Bourhis ;J LAW OFFICES RAY BOURHIS SIXTY GREEN STREET SAN FRANCISCO, CALIFORNIA 94111 TELEPHONE (415) 433-9000 March 6, 1986 Mayor Roberta H. Hughan Councilwoman Sharon A. Albert V~ouncilman Jay Baksa Councilman Donald F. Gage Councilman Bruce M. Jacobs Councilman Paul V. Kloecker Councilman Larry Mussallem Councilman Daniel D. Palmerlee Councilman Pete Valdez, Jr. CITY OF GILROY City Hall 7351 Rosanna Street Gilroy, CA 95020 Open letter to Mayor and City Council of Gilroy: As you know from the events of the past several weeks and from your five hour meeting with flood victims at City Hall on March 3, several hundred Gilroy residents have suffered serious damage to their homes, and destruction of their personal property. In virtually all cases, these victims had invested their life savings in their properties. By any standard, the City of Gilroy bears a large measure of responsibility for this tragedy. The area of town where loss occurred was well known by City officials and by the Gilroy Planning Department to have a history of repeated flooding. For over twelve years you sought Federal project assistance to resolve this problem. Yet during this same period and without any Federal, State or other project having been implemented, the City of Gilroy incredibly permitted the rezoning and residential development of the subject land by private developers and the selling of homes to the innocent and uninformed families who purchased these properties. No serious mitigating steps were required as a precondi tion to the outrageous approval of the zoning changes, building permits, project approvals, or occupancy permits in issue necessary to build homes on this land. with regard to February's disaster itself, the City's emergency procedures were a total failure. The long list of negligent acts and omissions by Gilroy officials and agencies was described for you by the victims in detail on March 3. Mayor and City Council of Gilroy March 6, 1986 Page 2 Although these victims appreciate your promise to "improve the situation in the future"; and to pass on the names of "youthful heroes of the flooding" to Governor Deukmejian's office for award consideration, stronger immediate and constructive action on your part is required. We have filed claims with the City of Gilroy and other public agencies as required by Government Code Section 910. These claims for property loss, diminished property value and general damages exceed $80 million. The law of joint and several liability and California Insurance Code Section 790.03 (h) (the Unfair Insurance Claims Practices Act) require that you and your liability insurance carriers attempt to bring about prompt, fair and equitable settlements of these claims. Failure to do so will expose the victims to greatly increased loss and will expose your insurance companies to actions for insur- ance bad faith. No one will ultimately benefit from this. Because of the principle of joint and several liabili ty, and because of the clear exposure of other defendants for these losses, we are proposing the following: 1. That the City of Gilroy and its insurers tender their insurance policy limits to the victims within thirty days. You have indicated that the total available coverage limit is $6 million, with a $25,000 deductible. 2. That we will recommend that upon tender of such limit our clients unequivocally release the City of Gilroy from all further liability in this matter. 3. We will recommend that our clients agree to reimburse the City and its insurers for the full amount of their settlement from any and all future settlements or recoveries obtained from other defendants in the litigation arising from this disaster. This would not be limited to the usual subrogation interests but would be extended by the victims to all monies received from any defendant on any basis. If this offer is accepted: (1) The flood victims can begin to rebuild their lives immediately; (2) The City would reduce its own exposure to its $25,000 deductible rather than to exposure for a recovery far in excess of the policy limits; Mayor and City Council of Gilroy March 6, 1986 Page 3 (3) The continuing and escalating damages and suffering of the victims would be cut far short of what such losses would otherwise be; (4) The specter of protracted litigation between the City of Gilroy against its own citizens would be obviated; and (5) Ultimately the City of Gilroy and its insur- ance companies would recover and be reimbursed for up to one hundred percent of their loss from the other jointly and severally liable negligent parties. This reimbursement would not otherwise be possible. We believe that this constructive and creative settlement proposal represents a clear and mutually bene- ficial proposal. Our offer would also operate to preclude liability for cross-complaints against the City by others who will be involved in this litigation. Our proposal accomplishes what the California Unfair Insurance Claims Practices Act and the concept of joint and several liability envision and mandate - that seriously damaged victims be promptly and fairly compensated and that those responsible for the losses and their insur- ance companies be permitted to equitably apportion the ultimate loss without delaying victim compensation. To cause such delay, instead of negotiating a settlement along the lines we have proposed, would greatly increase the extent of this disaster to those who can least afford to bear the financial and personal burdens being imposed. On behalf of our clients, we respectfully request that you give serious consideration to this offer. We are available to discuss any aspect of it with you and your insurers and we hope to hear from you soon. sz.n..c .elY. Y. our. s, ~ A7 (' , 1 / ~/ .y~" I CARdL LESLIE HAMILTON RB/CLH:tw C14-14 9 1 0 . 4:' '; ., .~-~": 75'._0 _ .~J "'1' {/ -.. M4R 1 .;::;. h IiIll' ~ 986 ~I .1;Jl>>nu ~ IJfFJ.CE :.(:'j ~''!4 ~ '~;'I JIMMY and JACKIE MANTZ, JEFFREY and PATRIC'~~M.ILLER".\:,: / DENNIS and DEBBIE MORI, JIM and BRENDA WARFIELD, on tfi".' ;~Q~j;':' behalf and on behalf of 400 other homeowners and claimants and on behalf of all others similarly situated who have suffered loss, damages and property damage as a result of the flooding of February 1986 hereby make claim against THE CITY OF GILROY and all agencies and departments of the CITY OF GILROY, CALIFORNIA (hereinafter "PUBLIC ENTITIES") for the sum of $80 million and make the following statements in support of their claim: CLAIM AGAINST PUBLIC ENTITY [GOVERNMENT CODE SECTIONS 905, 905.2, 910, ON BEHALF OF CLASS TO CITY OF GILROY: 1. Claimants' post office addresses are 170 London Place, 160 London Place, 135 London Place, 85 Victoria Drive, Gilroy, California, respectively. 2. Notices concerning the claim should be sent to attorney for claimants, Law Offices of Ray Bourhis, 60 Green Street, San Francisco, California 94111. 3. The date and place of the occurrence(s) giving rise to this claim are on or about February 17, 1986 in Gilroy, California and continuing. 4. The circumstances giving rise to this claim are as follows: The negligent acts and/or omissions of PUBLIC ENTITIES, their agents and employees in causing and permitting flood zone redesignations of the land on which claimants' homes were built; and the negligent acts and/or omissions of PUBLIC ENTITIES and their agents and employees permitting and/or resul ting in the development of the subject land and the building thereon of claimants' homes by third parties in an area known by PUBLIC ENTITIES to be a flood area; and the failure by PUBLIC ENTITIES to take any action to preclude such development or to put claimants on notice of said conditions; and the negligent acts and omissions of PUBLIC ENTITIES and their agents and employees in the design, care, maintenance, supervision and operation of properties and land under PUBLIC ENTITIES' care, control, management, administration and responsibility; and negligence in the design and/or implementation and/or execution of emergency warning and other emergency procedures utilized or which should have been utilized in preventing or limiting the loss and/or damages suffered by claimants from the events complained of. Said claims include damages from negligent design, maintenance, administration and supervising of said PUBLIC ENTITIES' properties and negligent acts and omissions resulting in the losses described. 5. Claimants' damages are property loss and damage and diminution in value to real and personal property; loss of the value of time of claimants; personal injury; emotional distress; and other damages. The class damages are the same. 1 .. 6. The names of the public employees causing the claimants' injuries are yet to be ascertained. 7 . $80 million. The class claim as of the date of this claim is 8. The basis of computation of the above amount is as follows: The difference in value of the properties before and after the acts and losses complained of, cost of repair and replacement of damaged property, loss of the value of time of claimants, reasonable general damages and other such damages resulting from their losses as described. 9. The class on whose behalf this claim is made can be identified and ascertained as those homeowners who purchased property in the ARCADIA Development area of Gilroy and the UVAS area of Gilroy and the southeast portion of Gilroy and all other homeowners in Gilroy suffering loss as a result of the aforemen- tioned events. Please note: Claimants request and demand that any and all insurance carriers insuring or indemnifying the PUBLIC ENTITIES abide by the provisions of California Insurance Code Section 790.03 in the evaluation of this claim. Dated: March 6, 1986. By LAW OFFICES RAY :iRIS / ~~~\/ RAY BOjljI AttorjfYs for Claimants 2 LAW OF"F"ICES RAY BOURHIS SIXTY GREEN STREET SAN l"RANCISCO. CALIFORNIA. 94111 TELEPHONE ('''5) 433-9000 March 24, 1986 r~ t~ ~~. Nino Crisafulli Senior Vice President, Claims Harbor Insurance Company 4201 Wilshire Blvd. Los Angeles, CA 90010 ~uce Jacobs, Esq. /City Attorney City of Gilroy 7351 Rosanna Street Gilrqy, CA--95020 Mr. Gerald May, Claims Manager Associated International Insurance Company 3450 Wilshire Blvd. Los Angeles, CA 90010 Gentlemen: As you know, this office represents over 300 residents of the City of Gilroy who have suffered property loss and damage as a result of a series of events which culminated in February 1976. I am enclosing herewith a demand letter to the City of Gilroy dated March 6, 1986. On behalf of our clients I would like to request that we commence immediate discussions and negotiations in an effort to seek a resolution of this matter insofar as the potentional liability and interests of the City of Gilroy, its agencies and insurance carriers is concerned. Thank you for your consideration of this matter. Sinc,erely ysmrs, / " ,.. RB : tw C14-36 '. _J,: / I - ... - ,I' ~ _.I~. ',' ~~,' I '~._.: , / RAY BOURH'I S .I i .I i / / I -........ LAV. orF"'CES RAY BOURHIS SIXTY GREEN STREET SAN FRANCISCO. CA.I..IFORNlA 941ll TeLEPHONE: (.US) "33'9000 March 6, 1986 Mayor Roberta H. Hughan Councilwoman Sharon A. Albert Councilman Jay Baksa Councilman Donald F. Gage Councilman Bruce M. Jacobs Councilman Paul V. Kloecker Councilman Larry Mussallem Councilman Daniel D. Palmerlee Councilman Pete Valdez, Jr. CITY OF Gl:!:rROY CH:y Hall 7351 Rosanna Street Gilroy, CA 95020 _# Open letter to Mayor and ,City Council of Gilroy: As you know from the events of the past several weeks and from your five hour meeting with flood victims at City Hall on March 3, several hundred Gilroy residents have suffered serious damage to their homes, and destruction of their personal property. In virtually all cases, these vict~s had invested their life savings in their properties. By any standard, the City of Gilroy bears a large measure of responsibility for this tragedy. The area of town where loss occurred was well known by City officials and by the Gilroy Planning Department to have a history of repeated flooding. For over twelve years you sought Federal project assistance to resolve this problem. Yet during this same period and without any Federal, State or other project having been implemented, the City o,f Gi lroy incredibly permitted the rezoning and residential development of the subject land by_private developers and the selling of homes to the innocent and uninformed families who purchased these properties. No serious mitigating steps were required as a precondi tion to the outrageous approval of the zoning changes, building permits, project approvals, or occupancy permits in issue necessary to build homes on this land. With regard to Febru~ry's disaster itself, the City's emergency procedures were a total failure. The long list of negligent acts and omissions by Gilroy officials and agencies was described for you by the victims in detail o~~ March 3. Mayor and City. Council of Gilroy March 6, 1986 Page 2 Although these victims appreciate your promise to nimprove the situation in the futuren: and to pass on the names of "youthful peroes of the floodingn to Governor Deulanej ian f s office for award consideration, stronger immediate and constructive action on your part is required. We have filed claims with the Ci tv of Gilrov and other public agencies as required by Gove~nment Code Section 910. These claims for property loss, diminished property value and general damages exceed $80 million. The law of joint and several liability and California Insurance Code Section 790.03 (h) (the Unfair Insurance Claims Practices Act) require that you and your liability---i.lH;urance carriers attempt to bring about prompt, fair and equitable settlements of these claims. Failure to do so will expose the victims to greatly increased loss and will expose your insurance companies to actions for insur-: ance bad faith. No one will ultimately benefit from this. Because of the principle of joint and several liability, and because of the clear exposure of other defendants for these losses, we are proposing the following: 1. That the City of Gilroy and its insurers tender their insurance policy limits to the victims within thirty days. You have indicated that the total available coverage limit is $6 million, with a $25,000 deductible. 2. That we will recommend that upon tender of such limit our clients unequivocally release the City of Gilroy from:all further liability in this matter. 3. We will recommend that our clients agree to reimburse the Citv and its insurers for the full amount of their settlement -from any and all f~ture settlements or recoveries obtained from other defendants in the litigation arising from this disaster. This would not be limited to the usual subrogation interests but would be extended by the victims to all monies received from any defendant on any basis. If this offer is accepted: (1) The flood victims can begin to rebuild their lives ~ediately; (2) The City would reduce its own exposure to its $25,000 deductible rather than to exposure for a recovery - far in excess of the policy limits; Mayor and City Council of Gilroy March 6, 1986 Page 3 (3) The continuing and escalating damages and suffering of the victims would be cut far short of what such losses would otherwise be: (4) The specter of protracted litigation between the City of Gilroy against its own citizens would be obviated: and (5) Ultimately the City of Gilroy and its insur- ance companies would recover and be reimbursed for up to one hundred percent of their loss from the other jointly and severally liable negligent parties. This reimbursement would not otherwise be possible. --- ~t We believe that this constructive and cre-ative settlement proposal represents a clear and mutually bene- ficial proposal. Our offer would also operate to preclude. liabili ty for cross-complaints against the City by others . who will be involved in this litigation. Our proposal. accomplishes what the California Unfair Insurance Claims Practices Act and the concept of joint and several liability envision and mandate - that seriously damaged victims be promptly and fairly compensated and that those responsible for the losses and their insur- ance companies be permitted to eauitably aoportion the ultimate less without de laving victim compensation. To -cause such delay, instead of negotiating a settlement along the lines we have proposed, would greatly increase the extent of this disaster to those who can least afford to bear the financial and personal burdens being imposed. On behalf of our clients, we respectfully request that you give serious consideration to this offer. We are available to discuss any aspect of it with you and your insurers and we hope to hear from.you soon. Sincerely yours, RAY BOURHIS - '- CAROL LESLIE HAMILTON RB/CLH:tw C14-l4 ---- LAW OF'TICES RAY BOURHIS SIXTY GREEN STREE:T SAN FRANCISCO. GALIYORNIA 94111 TELEF>HONE (415)433-9000 March 24, 1986 Mr. Nino Crisafulli Senior Vice President - Claims Harbor Insurance Company 4201 Wilshire Blvd. Los Angeles, CA 90010 Your Insured: Policy No: City of Gilroy HI 207633 Re: - -- Dear Mr. Crisafulli: This will confirm that we are extending the thirty-day period referred to in the enclosed letter to 5:00 p.m., April 18, 1986, thirty days from the date of our conversation, March 19. Thank you very much. Sincerely VDurs, / ;;. . / / f' . / . ~ , -;> ,.,.\ } Jj// ,/rjJ)r, I '..'. ~ . -1 RAY ~OUR!IIS RB : lr C14-32 cc: ~e Jacobs, City Attorney City of Gilroy Esq. Mr. John Booth, Risk Manager City of Gilroy Mr. Gerald May, Claims Manager Associated International Insurance Company