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

April 21, 2010 |  7:32 am


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