TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS

FROM: ASSISTANT TO THE CITY MANAGER

DATE: APRIL 18, 2006

SUBJECT: CLAIM AGAINST THE CITY BY GEORGE CARABET

RECOMMENDATION
Reject the claim and direct staff to notify the claimant.

BACKGROUND
According to the claimant, city contractor Damon Construction damaged a water line while replacing portions of an uplifted sidewalk adjacent to 26815 Diamondhead Lane in August/September 2003. Damon Construction made arrangements directly with the claimant to repair the water pipe. The claimant observed unusually high water bills, which the water company suggested may be due to a water leak between the main line and the house. A private plumber discovered a leaky water pipe in the same area Damon Construction performed the sidewalk repair. The claim filed against the City is for the plumbing repair and water bills during 2004 and 2005. The claim amount is for $2,471. A copy of the claim is attached.

The City’s Claims Administrator, Carl Warren and Company, has advised the City to reject the claim. On April 4, 2006 the City Council continued this item to allow the claimant to speak before the City Council.

DISCUSSION

On April 3, 2006 the claimant contacted the City Council and staff questioning the staff recommendation to reject his claim. Claimant George Carabet also requested that the City either offer a settlement or file claims and any additional legal action against the City Contractor and their insurance carrier for his damage. Below is a brief explanation of the steps taken by Carl Warren & Company, the claim administrator for all member cities of the California Joint Powers Authority.

After reviewing the available facts of Mr. Carabet’s claim, Carl Warren & Company sent the attached letter (dated March 14, 2006) to Mr. Carabet that Carl Warren & Company will forward his claim to Damon Construction for consideration and its recommendation that the City not settle the claim. To date, Damon Construction has not released its determination to Carl Warren & Company.

The City is not held liable for any damage caused solely by a City contractor. Therefore, minor claims involving a City contractor are routinely forwarded to the appropriate contractor for consideration as a courtesy to the claimant. Claimants are informed of this and advised to file individual claims with the city contractor, because Carl Warren & Company is neither authorized nor responsible for filing claims on behalf of private individuals.

If the City contractor is unresponsive to a legitimate claim against the contractor, Carl Warren & Company will forward the claim to the contractor’s insurance carrier as a courtesy to the claimant. The claimant is still responsible for filing an individual claim directly against the contractor’s insurance carrier; Carl Warren & Company cannot do that for the individual. Carl Warren & Company is monitoring Mr. Carabet’s claim and has not yet sent Mr. Carabet’s claim to Damon Construction’s insurance carrier at the time this report was written.

If both the City and contractor deny Mr. Carabet’s claim, Mr. Carabet may still pursue his claim through small claims court.

Should the City Council wish to bypass the standard claim protocol of Carl Warren & Company and authorize a claim settlement, Carl Warren & Company would settle the claim at the City’s expense. However, staff does not advise this action, because it would establish a negative precedent for resolving third party claims at the City’s expense for damages by City contractors.

FISCAL IMPACT
None associated with this report.

PREPARED BY

Gina Park
Assistant to the City Manager

APPROVED BY

Les Evans
City Manager

Attachment: claim