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Victims of water main break say L.A. is slow to pay claims; city says some claims raise red flag


When a 62-inch water pipe burst and sent hundreds of thousands of gallons of water pouring into homes in Studio City last fall, Department of Water and Power officials knew they would be on the hook for a lot of money to pay back homeowners for damaged property.

But 7-1/2 months later, what many thought should have been a relatively straightforward process of paying residents who claimed the deluge of water and sludge destroyed their homes and upended their lives has turned into anything but.

Some residents claim the city is dragging its feet. City officials said some of the claims filed by residents have raised red flags and require careful examination to make sure the city isn't being ripped off.

"We have folks seeking recovery for a $95,000 diamond ring allegedly washed off a kitchen counter," said City Atty. Joe Brajevich.

He continued: "A $16,000 patio set, $15,000 curtains. One individual seeks $200,000 for personal items which with limited exception have no supportive documentation. The city attorney’s office takes its responsibility seriously and is going to make sure that the claims that get paid out have legal and factual merit."

The dispute is now coming to a head.

Several angry residents testified at a hearing last week that the DWP and the city attorney’s office, far from apologizing for the havoc and promptly paying their costs, is treating distraught homeowners "like criminals," forcing them to come up with receipts for every little item and refusing to pay what they owe.

"We are just so stunned by the way we have been treated," Naghmeh Sefaradi told a City Council Committee. "We lost our home overnight. It has been amazing to me. The coldness.... Nobody has done anything to help us out."

City Councilman Paul Koretz, who represents the area where the flood occurred, said he has been "embarrassed" and that he found it "shocking" how his constituents have been treated by the department. Some people still have not received anything, he said. Others, including an elderly couple, felt beaten down into settlements worth far less than their losses because they were tired of fighting.

Koretz said he has not reviewed every single claim in detail, but his feeling is that the DWP has "dealt with some folks with a lack of sensitivity. And I think they may be demanding more in terms of documentation than I think is realistic."

The DWP arranged for displaced homeowners to stay at the Oakwood, for example, but some residents refused and instead rented homes elsewhere in the Valley -- with rents in some cases topping $5,000 a month. Residents want those payments reimbursed.

Michael Yaghoubi, who is renting a $6,500 home plus furniture costs while he waits for his home to be fixed, said, “These are multimillion-dollar homes that are flooding out, and they don’t know how to deal with it.”

Still officials stressed that most of the claims from the rash of water main breaks have been settled.

After the rupture beneath Coldwater Canyon Boulevard, 108 families and businesses filed claims -- 41 from homeowners, 23 from businesses and 44 from insurance companies that paid out damages and now want to be reimbursed by the DWP. The agency has settled 25 claims with homeowners, officials said.

--Jessica Garrison

Photo: Scene after water main failure in Studio City. Credit: Los Angeles Times

Comments () | Archives (26)

You figure that half those claims are bogus...so, Water and Power officials need to conduct a thorough investigation on all the claims...The suspicious claims should be forwarded to the DA's office for prosecution...

People claiming more then they lost?? NEVER!!

thank you DWP for actually looking out for our bills, cause that is where the money will come from, our pockets, not the DWP.. and leaving a 95K ring on a counter??? hogwash.. Sue them for false claims...
Yes it was horrid and awful, but dont try to rip off the city, cause then you are ripping of *me* and that annoys me.. a lot..

I think that the city has an obligation to ALL of the residents to investigate claims being put forward. Especially claims like a $95,000 diamond ring that was left on a kitchen counter?? There should be a limit to how much someone can expect to be compensated for housing - to expect to be compensated $6,500 a month for housing (God knows how much the cost is for *renting* furniture - most likely it is a scheme that allows purchase for a dollar at the end of the term of rental) is completely outrageous - Mr. Multi-millionaire I really don't care if you are used to living in a multi-million dollar home, you do not *need* to live in one, you choose to - your compensation should be based on what is needed on an average basis. As for the $16,000 patio set...the person that had that patio set was able to enjoy it for a time and should be compensated for its depreciated cost - that is usually how it works for us average working-class folk...that is how it should work for you too!

"Michael Yaghoubi, who is renting a $6,500 home plus furniture costs while he waits for his home to be fixed, said, 'These are multimillion-dollar homes that are flooding out, and they don’t know how to deal with it.' "

The taxpayers shouldn't need to pay for someone to live the same lifestyle while waiting for repairs. It should be safe and comfortable, but it shouldn't be a resort. The DWP should pay for the mortgage while the homes could not be occupied, though.

Every dime paid out will be added to our water and power bills tomorrow so I hope the city requires proof of loss and limits rentals to reasonable. It's not like Obama's stash, this isn't free money from heaven, it will be added to our bills.

Big wall of water taking out a diamond wedding ring? Infidelity or cleaning? Or just a plane outright lie? How about the scientists claims of water rationing broke the pipes. Bull, the pipes that broke are not hooked up to your house. Or your toilet would lift off like some rocket ship. Six to eight inch mains supply your home with pressure.

Actually, why doesn't DWP let their liability carrier handle it? And yes, they do have a right to the standard of living that they are accustomed to! I am certainly not accustomed to that standard of living, but if I were, I should not have to lower it because of someone else's liability. Just like when my car was damaged in an accident and the other insurance co. refused to pay for OEM parts....My car didn't have after market parts when it was hit, what makes you think it is ok to put them on now??? Not ok! (My own ins. ended up totalling it out...should have stuck with after market parts LOL)

People. Sometimes stuff happens. We get cheap, clean drinking water delivered to our homes every day, but it's a system that can have accidents. There isn't always a way to make an accident okay. Especially when there is a tendency among many people to exaggerate their claims, feeling they're not really ripping anyone off (which of course they are). The DWP is in the business of delivering water and they do a fine job; they are not Oprah who's gonna hold your hand and boo-hoo with you after an accident. Prove your loss and you'll get paid. If you're not keeping good records for insurance purposes alone, then don't blame others if you can't recover every nickel.

Awesome~ I hope LA County crashes and burns! I love seeing the local gov. bound and gagged financially, can't waste it if it's not there!!! hahahahaaa lovin' it!

my neighborhood was without power for 45 hours one weekend in February, and DWP has denied all of our claims. When your power goes out for an extended period of time, you need to throw away everything in your refrigerator and freezer. We submitted a VERY REASONABLE replacement bill of about $85 for replenishing the fridge and it was PROMPTLY denied. DWP is really quick about that.

What you expect people to keep receipts forever? Make sure the damn pipes don't break and you would'nt have this problem. Now you prove I didn't have what I said I did. Any way they shift the blame. We would be arguing till the cows come. Even up to a law suite.

how convenient this all is......you know this isn't the first time this has happened out in that area of town, with water mains breaking....

Hey, maybe they can condemn a few of those houses. That way Richard Alarcon would have a choice of districts.


James Andrews:
Obama, does not have a stash, but you have a problem with Obama. Any article you comment about you bring up Obama. You need to get yourself a life.

Studio City is the area you pay big bucks for your homes. How come these people with Red Flags did not turn things over to their insurance companies? Naghmeh Sefaradi, said "we lost our home over night". Why isn't his insurance company dealing with DWP? Michael Yachoubi, would not be renting a home for $ 6,500 if he had known DWP would not foot the bill for it. Even if these people had lived on my side of town, they still would be dishonest. I LOL about the $ 95,000 ring because no one in their good mind would do that. These people call themselves being smart, and did not figure out they would need paper work to back up their claims. As for the ring turned it into your insurance company, and tells them the same story.

Kristen--It makes no sense to pay somebody's inflated mortgage while they are displaced. I wouldn't blame the city to only pay off legitimate insurance company claims. Just the claims that come directly from insurance companies. There is homeowner's insurance and renter's insurance. No? too bad. The break was probably caused by an earthquake so it's an act of GOD.

Here's a thought - I'm sure most of the million-dollar home dwellers have insurance. Let them file a claim with their insurance company and prove their losses to them. If the insurance company indemnifies the loss, then the DWP can pay what the insurance company paid for the claim, and that's it. I can't imagine that all these people would have no insurance on their homes.

The resident claiming the 95k ring should have had extended coverage for it through the homeowners policy (if the ring actually exists - which I doubt). If I had a piece of jewelry worth that much - I would've kept the receipt to prove what I paid for it and I wouldn't be stupid enough to just leave it lying on the kitchen counter either. Its unfortunate that all of these watermain breaks are happening right and left - but you know there are people out there taking advantage of the situation and that is what is ruining it for the homeowners who are playing by the rules.

This is why I moved from LA years ago. The power base have their collection heads where the sun doesn't shine. They have let the infrastructure crumble around them. But hey, at least there is a subway that few people use. Improve Water mains? Nahhh. Improve the freeway system in LA County... Nahhh...

The East LA interchange is exactly the way it has been for decades - absolutely no improvements. No widening. No care pool lanes. Nothing. Contrast that with Orange County. Every Orange County freeway has a car pool lane. Every Orange County freeway has widened lanes. And they are constantly improving them.

When was the last time that you heard of a broken Water main anywhere in Orange County? LA is rife with waste and corruption, and yet they still vote the same sort of people into office. What a mess!

"...some claims raise red flags..."
Is the City of LA serious...isn't that like the pot calling the kettle black???

Funny how quick people are to jump on the residents making the claims.

Did it ever dawn on anyone that the city may have anticipated a breakdown in the water system citywide, LONG before the breaks began to occur??? Has it ever occurred to ANYONE that these breaks could have been prevented in the first place - had city funds been spent properly? Maybe you people should open your eyes and stop being so gullible.

take photos of all you own. I tell my insureds all the time that carriers will ask for some kind of proof. A photo is fine in most cases because how many of us have receipts for everything we own. Now a $95,000 ring does need some proof. But with basic items, most of us dont have or keep receipts.

I bet that the people complaining the loudest are the ones who are trying to squeeze the DWP. That type always comes out of the woodwork in situations like this. I appreciate that the City is going through the process before forking out money. Shame on those who are screaming the loudest. $6,500/month home rental? Unacceptable!

It happend in a ritzy area of course it is going to be exspensive. Plus I work for a contractor that does a lot of work for DWP, and they take several months to pay us and we have contracts, so I am not suprised at all.

Taxpayers should not have to pay for DWP's negligence, and DWP needs to clean up its act and do their jobs correctly. All that DWP seems to work on IS finding ways to increase our utility bills and THEIR SALARIES. Plus, we need a government to be sure that DWP do their jobs and not just rubber stamp everything that they ask for. Why haven't they maintained the infrastructure? Why weren't they smart enough to find out what their water cut-back would do to the OLD, OLD, OLD, unmaintained system? It appears the powers that be in DWP are there only to draw a paycheck. Apparently few of them are worth a dime.

to anonymous below: im sorry you havent been able to live in the lifestyle that some of us have been able to support. but as for me getting washed out of a $2m home, then they should have to pay to rent me a similar home. this was not my fault, it was theirs.
as for the bogus claims like the 95k ring, please investigate and file criminal charges. but as for those of us with valid claims, we should be reimbursed completely.

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