City fights off many legal claims annually
CITY HALL — 2004 was a fairly typical year in the world of litigation at City Hall, which paid nearly $1.7 million to settle lawsuits brought against it.
The Big Blue Bus, City Hall’s largest department, was the leader in pay-outs with $910,348. It also paid the most expensive settlement — $425,000 to Martin Erck, who was severely hurt when a bus hit him while he was riding his bike on Ocean Avenue. Another $60,000 went to Maria Stathus after a bus struck her while she tried to pass it. And Mansoor Haghighi got $62,500 after the bus he was riding accelerated and he subsequently fell down.
The planning department in 2004 paid $125,000 in fees involving a lawsuit levied by Howard Jacobs, former operator of 2000 Main Street/Calstar Equities. Jacobs sued City Hall, claiming that the planning department dragged its feet during the environmental review process, delaying for months his plans to build a large residential and commercial complex on Main Street.
Of the $.17 million in pay-outs made in 2004, the community and cultural services department paid $119,577, with the largest one being to Irving Pell in a bodily injury case.
Environmental and public works management paid out $347,418 in 2004. A payment to Mahbubeh Ashorzadeh for $57,500 as a result of a bodily injury case was the highest settlement. Environmental and public works also paid $37,500 to Phillips Petroleum — the city unknowingly transported toxic chemicals to a landfill in Carson.
The Santa Monica Fire Department had the lowest number of claims, paying out only $4,651. The Santa Monica Police Department in 2004 paid $73,758, with the largest pay-out being $15,000 — in two separate cases but both involving bodily injury.
“Our law enforcement is low,” said Tom Phillips, City Hall’s risk manager.
Over the last five years, the largest pay-out at the SMPD was $420,000 to a person who was caught in the crossfire of a shoot-out between police and gang members at the Santa Monica Pier on July 4, 2000. The SMPD settled another case for $75,000 that involved illegal entry and an invalid search warrant. A claim was settled for $125,000 to the family of a woman who committed suicide at the Santa Monica Jail, and $36,000 was paid to an individual who was bitten by a K-9 dog.
The SMPD in the last five years has paid a total of $721,232, which is relatively low for a law enforcement agency of its size, said Lt. Frank Fabrega. There were a total of 190 claims between January 2000 and February 2005, including everything from negligence and damage to property to excessive force. Only a few dozen of those claims were paid by the SMPD.
“To put it into perspective, look at some of the other agencies who pay millions and millions of dollars,” Fabrega said. “Usually, the police department is the highest liability.”
In Santa Monica, City Hall’s biggest liability is the Big Blue Bus, which typically pays the most in settlements, Phillips said.
“There is a certain level of volatility in pay-outs with cases involving buses or tripping and falling,” he said. “In general context, the level of the total aggregate of pay-outs were down last year.”
Santa Monica employs 23 lawyers and has an entire department dedicated to investigating the 600 claims that are filed against the city each year. About 100 end up as lawsuits, said City Attorney Marsha Moutrie. And on any given year, the city pays out about $1.5 million in settlements.
But that’s not to say City Hall doesn’t have a good track record winning cases. Santa Monica is known for not backing down, and it won’t settle a lawsuit just because of its nuisance value. However, its rigorous defense policies translate into high attorney fees that ultimately come out of taxpayers’ pockets.
Some say Santa Monica’s $383 million budget and strong financial condition are the main reasons why it’s a target for being sued. Others argue that because it’s a tourist destination where the population swells from 84,000 to 350,000 during the day, Santa Monica provides so many different services that statistically the chances are greater for litigation against it.
Throw in the fact that Santa Monica sits in the one of most litigious counties in the country and Santa Monica becomes a hot bed for greedy lawyers salivating to collect fees from relatively minor slip-and-fall cases and auto accidents, officials say. Out of the hundreds of claims made against the city, an average of five suits end up at trial each year.
There are only about a dozen lawsuits for more than $15,000 that the City Council actually settles in a year. Anything less than that amount is approved without City Council consent by the city attorney’s office and the risk management department, which acts like an insurance company that investigates and adjusts claims.
The city’s risk management team examines the claims filed each year and either adjusts them or sends them to the city attorney’s office for litigation.
The risk management department budgets each year for potential liabilities and damages that most likely will be paid out. Because the city is heavily self-insured, it must be able to financially anticipate and project losses from legal claims, Phillips said.
Risk management’s primary job, however, is to minimize potential liability for the city. Phillips said his department’s job is to look at areas where the city is open for liability and find trends relating to where the claims originate. If there are a high number of claims stemming from auto and bus accidents involving city vehicles, then it’s risk management’s job to look at the city policies regarding them. Or, if there a high number of cases that involve trip-and-fall injuries, risk management investigates how departments manage their public works projects where people may get hurt as a result of construction or unsafe conditions.
The city attorney’s office and risk management will charge back departments for time spent on claims that originate from them so managers are keenly aware of liabilities that have been created as a result of their practices or policies.
Phillips said city staffers are frequently discussing how to measure City Hall’s performance in liability claims, especially since it’s not accurate to compare Santa Monica to other cities.
“Most cities don’t operate a transit system, have a refuse collecting system and a high tourist area,” he said, naming just a few of the services offered by City Hall. “The truest test is comparing against ourselves.”
Originally published in the Santa Monica Daily Press print edition on August 15, 2005. Read the original PDF.