The Responsibility And Liability Of The DWP For Their Deliberate And Outrageous Conduct
Let’s begin with the responsibility and liability of the DWP and our lawsuit against them. What I am about to express with respect to the DWP are my personal views, as well as the allegations in our lawsuit against them.
By way of background, DWP is the single largest municipal utility in the United States. It employs more than 11,000 people and has an annual budget in excess of 6 billion dollars. The Chief Executive and Chief Engineer - Janisse Quinones, is well paid for her decision-making and personally brings in ¾ of a million dollars annually – and we’ll get to her decisions shortly.
With respect to the DWP and the Palisades fire, the facts we know for CERTAIN are the following:
The Palisades sits just below the Santa Monica mountains and is part of a well-mapped, high-risk fire area well known to DWP.
DWP is responsible for servicing and maintaining the water supply system which serves the Palisades.
The system that supplies water to the Palisades includes reservoirs, storage tanks, pumps, and water lines, which, in turn, provide water supply and pressure to the fire hydrants in the Palisades.
The largest and most important source of water in the Palisades is the 117-million-gallon Santa Ynez reservoir. The Santa Ynez is a CRITICAL COMPONENT of the overall system which supplies water and water pressure to the Palisades.
How Did DWP’s Water System Perform During the Palisades Fire?
So, how did the DWP’s water system perform during the Palisades fire? It failed MISERABLY.
Specifically, fire hydrants in the Palisades lost pressure and failed after 3 water tanks - each holding one million gallons – all went dry within 12 hours after the fire broke out. The first tank was dry in six hours, and all 3 tanks were dry by 3 a.m. on January 8th.
The fires continued to rage for days with little to no pressure in fire hydrants for firefighters to defend Palisade's homes and businesses.
DWP’s Excuses
So, what are DWP’s excuses for the failure of the water supply system? Let’s break down each of them.
First, DWP claims that the “system was prepared, but overwhelmed [by] four times the normal demand” and that the fire was “like a worst-case scenario.”
The fact is - it is the responsibility and duty of DWP to ANTICIPATE, PLAN and PREPARE for all reasonably likely scenarios, including a fire in the mountains and canyons right above the Palisades, and to ensure that there is sufficient water supply to maintain pressure in the fire hydrants in the case of such a fire.
DWP failed this responsibility miserably.
Second, DWP claims that the water supply “remained strong to the area.” This is false. Critical fire hydrants had little to zero water pressure when firefighters needed it the most.
Third, DWP claims that the water pressure was lost due to “unpreceded and extreme water demand to fight the wildfire without aerial support.”
As to aerial support – as DWP SHOULD know, but apparently doesn’t, being able to drop water and Phos-Chek by air is completely dependent on visibility and the winds. Aerial support is never guaranteed, and any reasonable planning and assessment must account for this.
Next, of course the water demand was “unprecedented,” the Palisades has never had a fire of this magnitude before. The fact that something has not happened before does NOT mean that it is not reasonably foreseeable and should be ignored. For example – If you have never been in a car accident before, does that mean that you should drive recklessly? Of course not. DWP's claim that the demand on the water supply system was “unprecedented” and therefore could not have been reasonably anticipated and planned for is ridiculous.
Also, WAS the water demand during the fire “extreme” as claimed by DWP? – Is 4X normal demand to fight a fast moving, wind driven wildfire, as compared to a normal day of water consumption, really “extreme”? I don’t think so. Any sensible and reasonable planning certainly should have accounted for four times demand – compared to a “normal” day of use for bathing, drinking and other personal consumption.
Now, what about the words you DON’T hear DWP and its lawyers using? What they DON’T say is that the higher demand for water during the fire could not have been reasonably anticipated. Why? Because it SHOULD have been, and they know it.
Why DID The Water System Fail? – The Santa Ynez Reservoir
So -why DID the water system fail? This brings us to the Santa Ynez reservoir.
As I noted before, the water supply system in the Palisades is made up of reservoirs, storage tanks, pumps, and water lines, which, working together, provide water pressure to the fire hydrants in the Palisades.
The largest and most important source of water in the Palisades is the 117-million-gallon Santa Ynez reservoir. This reservoir is a CRITICAL COMPONENT of the overall water system.
So, how did the Santa Ynez perform during the fire? The answer is: It didn’t provide a SINGLE DROP of water. Why? Because DWP drained the reservoir and left it bone dry for nearly a year during one of the highest-risk and most dangerous fire seasons in history.
This decision was deliberate and outrageous.
Why did DWP do this? Was it because of some unanticipated emergency - a breach or a leak endangering life and property below the reservoir? NO. Was it due to scheduled maintenance, which, due to bad luck, just happened to be shortly before the fire broke out? NO.
Rather, it was drained and left dry due to a small, superficial tear in the floating cover that remained UNREPAIRED for 11 months before the fire.
The decision to empty the reservoir and leave the cover unrepaired for 11 months was deliberate and was done KNOWING that this decision would render one of the most critical components of the Palisades water supply system USELESS in the event of a fire.
More DWP Excuses
What is DWP's excuse for draining and leaving the Santa Ynez empty for 11 months? They claim it was necessary to meet safe drinking water regulations due to the potential for “bird droppings and other debris” to enter the water supply through the superficial tear in the cover.
This excuse is complete nonsense.
The relatively small and superficial tear could and should have been repaired, temporarily or permanently, by DWP’s own personnel in order to ensure the availability of this crucial water supply during a period of extreme fire risk.
According to a manager at DWP’s employee union: “It’s completely unacceptable that the reservoir was empty for almost a year for minor repairs.” He explains: “This work SHOULD have been done in-house, and they should not have depended on a contractor to do it.” He says: “I truly believe it’s something that could have been avoided.”
We couldn’t agree more. LADWP had a duty to properly maintain and operate its water supply system, and it failed miserably in this obligation.
So – with this crucial water supply intentionally removed from the system, what was DWP’s back up plan to replace the water lost from the reservoir? They claim: “As soon as LADWP identified the risk of losing water in the tanks and water pressure in the system, we immediately deployed potable water tankers to sustain and support firefighting efforts.”
Let’s break down THIS excuse.
First, potable water (which is water safe for human consumption - drinking and brushing your teeth for example) is NOT necessary to fight a fire. DWP should know this.
Second, let’s do the math on how many tanker trucks would have been needed to replace the 117 million gallons lost by shutting down the Santa Ynez.
A typical water tanker truck holds between 2,000 and 6,000 gallons of water. At 2000 gallons each, that means DWP would need more than 58,000 tanker trucks to replace the water lost by shutting down the Santa Ynez. Obviously, DWP’s backup plan was massively incomplete.
Would The Santa Ynez Have Made A Difference?
Finally, I want to address the claims, which I have heard from a number of pundits apparently in support of the DWP, that maintaining water pressure in the system would not have made a difference in fighting the fire. This is absurd. Look no further than the areas that maintained water supply and pressure, including numerous businesses in the Palisades, which are still standing today, and compare that to the areas that had no water pressure, which are now in ashes.
Join Our Lawsuit Against DWP
If you would like to join our lawsuit against DWP, or if you would like more information, please do not hesitate to contact us, and I would be pleased to speak with you directly at absolutely no cost or obligation.
You Must Act Promptly To Join Our Lawsuit
If you DO want to join our lawsuit, it is important that you act promptly. Unlike some other types of property damage claims, which may be brought in California for up to two years from the date of injury, the timeline is much shorter for a claim against a public entity such as DWP, which must be brought within 6 months from the date of injury - here January 7th.
What Are The Benefits And Advantages Of Suing Independently vs. Joining A Class Action?
Let’s talk a little bit about our TYPE of lawsuit against DWP, which is an independent action rather than a class action. We believe structuring our lawsuit as an independent action presents several important advantages to our clients.
By way of background, in certain situations, a class action has benefits, including where there are a large number of claimants, each with a relatively small amount of damages. Under these circumstances, it may not make sense from a cost standpoint for each of the claimants to bring an independent lawsuit. In this situation, pooling the claims together in a class action is certainly sensible.
In contrast, where the individual damages are significant, such as here with the total loss of your home or business, we believe that the advantages of an independent lawsuit outweigh those of a class action.
The most important advantages of suing individually are control and leverage. When suing independently, YOU are in the driver’s seat, especially when it comes time to decide whether to accept a settlement or continue to trial. In contrast, in a class action, this decision is driven more collectively by the class.
Also, importantly, the compensation and proceeds in an independent lawsuit are not limited by the interests of the other plaintiffs and rather are tailored to your specific damages, which could mean a significantly higher payout when compared to a class action.
Finally, with respect to timing, independent lawsuits often have a faster timeline and outcome for resolution compared to class actions, which tend to draw out over a period of many years. This extended timeline may be driven by class action lawyers who could be incentivized by increased attorneys’ fees over a longer period of time.
On behalf of OUR clients, we have chosen the benefits of an independent lawsuit against DWP.
Again, if you would like to join us, please don’t hesitate to reach out to me directly, and I would be happy to answer any of your specific questions.
Would Any Recovery In The Lawsuit Against DWP Affect Your Insurance Claim And Proceeds?
Generally, proceeds from our lawsuit against DWP may not have ANY effect on your insurance claim and proceeds. Please contact me directly, and I would be happy to discuss this issue with you in the context of your own insurance claim and policy.
Insurance Claims Arising From the Palisades Fire – Answers To The Most Common Questions
Now, let’s switch gears to your insurance claim arising from the Palisades fire.
My goal here is to answer some of the most common questions I have received.
The two main issues I have been advising and assisting my clients on with respect to their insurance claims are:
Their insurance company’s obligation of good faith and fair dealing when it comes to handling their insurance claim, and
In the difficult and unfortunate situation where the limits of the insurance coverage are inadequate to fully pay for the loss, or where exclusions apply, is there any potential responsibility on the part of the insurance agent or broker who originally placed the inadequate insurance?
Let me address each of those issues separately.
The Duty Good Faith and Fair Dealing
First, with respect to the insurance company’s obligation of good faith and fair dealing, let me give a quick recap of the law on this issue.
In California, the law is very well established that an insurance company owes a duty of good faith and fair dealing to their own insured.
This duty applies to 1st party insurance claims - in other words when you are making a claim to your own insurance company. This is exactly the case here.
Under California law, in the context of a 1st party claim, the law is uniquely favorable to you, the policyholder. Your insurance company must act in good faith and deal with you fairly when handling and adjusting your insurance claim.
What Is Breach Of The Covenant Of Good Faith And Fair Dealing?
So, what constitutes a breach of this duty? It may occur, for example, if your insurance company withholds policy benefits unreasonably or without proper cause. This type of conduct could allow a policyholder to recover damages, including economic losses, emotional distress, attorney’s fees, and, in some cases, punitive damages if the insurer acted with malice, fraud, or oppression.
When it comes to punitive damages, one measure is an amount that is sufficient to punish the wrongdoing of the insurance company and make an example of that bad conduct. That’s why punitive damages are also referred to as “exemplary” damages.
As you can imagine, with respect to a large insurance company with revenues in the hundreds of billions of dollars each year, these types of damages can be incredibly significant, and even a small risk of punitive damages can lead to big settlements in favor of the insured.
Examples of Bad Faith By An Insurance Company
What are some examples of bad faith?
You may have a claim for bad faith if your insurance company deliberately undervalues your claim, wrongfully denies your claim, or engages in a pattern of behavior that is intended to limit their payment on your claim. Generally, bad faith requires some affirmative, deliberate conduct by your insurer that is designed to avoid paying the benefits that you are entitled to under your policy.
Additional examples of bad faith include: Misrepresenting the policy language or the facts underlying your claim in order to deny or limit a claim, unjustifiably and unreasonably delaying investigation of your claim, unreasonably delaying payments on a valid claim, failing to provide proper, written justification for a claim denial, failing to conduct a full investigation before denying a claim, engaging in conduct to persuade an insured to accept an unreasonably low payment, or unjustifiably sending burdensome and unnecessary document requests to an insured. Prior bad faith judgments also have included bullying tactics designed to induce an insured to accept a low-ball payment under the policy.
If you believe that your insurance company has not acted reasonably and fairly with respect to handling your claim, please contact me directly, and I would be more than happy to discuss these issues directly with you and best next steps.
What If Your Loss Far Exceeds The Limits Of Your Insurance Coverage, Or Your Insurance Company Is Claiming A Policy Exclusion Applies To Your Claim?
In assisting my clients since the Palisades fire, one of the most difficult and challenging situations is where my clients’ actual losses far exceed the limits of their insurance coverage or when the insurance company claims that an exclusion applies to the insurance coverage.
First, you need to carefully review the terms of your policy, including the policy limits and exclusions. These are long and complicated documents, and I would be happy to help.
If the policy review confirms the limit or exclusion, what to do next?
Potential Liability On The Part Of The Agent Or Broker
One area to review is the potential liability of the agent or broker that originally placed your inadequate insurance.
By way of background, generally, California courts have held that an insurance agent or an insurance broker does not have an affirmative or active duty to advise or recommend specific or adequate insurance coverage.
However, there are very important exceptions under the law that could create potential responsibility by the agent or broker under specific circumstances. When I refer to potential liability by the agent or broker, what we are really referring to is a claim under their professional liability insurance policy.
So, what are the exceptions under the law which could create liability for the agent or broker?
One of the exceptions that have particular application to the Palisades fire is where you, the insured, indicated to the agent or broker at the time you placed coverage that you specifically wanted replacement cost coverage for your home, and the agent or broker acknowledged this request and agreed to procure this coverage, but failed to do so.
California courts have held that an agent who verbally represented there would be 100% replacement cost coverage, regardless of policy limits, was liable for failing to deliver the agreed-upon coverage.
In addition, California courts have also held that an agent or broker may also be liable for misrepresenting the nature, scope, or extent of insurance coverage.
If you feel that your agent or broker may be responsible for placing inadequate insurance, please contact me directly, and I would be happy to discuss your particular circumstances and potential next steps.
So Many Lawyers Advertising As A Result Of The Palisades Fire. Do You Need One?
Next, I would like to address the unbelievable number of advertisements and solicitations from attorneys offering to assist you with your losses as a result of the Palisades fire.
The question is – do you need one?
Personally, one of my biggest concerns with these ads and solicitations is that many of these lawyers do not highlight ANY type of experience in handling complex, public entity litigation, such as against DWP, nor any experience with complex insurance coverage issues or insurance bad faith claims.
Rather, many of the Ads seem to be from the same lawyers that have Ads on buses, billboards, and TV seeking clients injured in a fender bender, a dog bite, or a slip and fall.
Watch out For Lawyers That Want A Percentage Of Your Insurance Proceeds
I am also concerned with the Ads that offer to assist you with your 1st party insurance claim in exchange for a percentage of your insurance proceeds. Remember, this percentage fee will be deducted directly from the payment by your insurance company, which could mean a very significant reduction to your NET insurance proceeds.
Let’s say, for example, you have a $3M policy homeowners’ policy, and your insurance company pays the full policy limit. A 10% fee obviously would be $300,000 off the top of your net proceeds. Now, let's say an attorney spends 10 hours assisting you with preparing and submitting your insurance claim, this represents a cool $30,000 an hour to the attorney.
In short, I would be very cautious and wary of attorneys who charge a percentage of your 1st party insurance proceeds.
If You Do Hire A Lawyer, Consider An Hourly Arrangement Rather Than A Percentage Fee
An hourly arrangement with an attorney may be your best bet. That way you can see the type of work and value that he or she provides to you, and you are in full control to continue that relationship only as long as you are satisfied with the attorney’s work for you.
In contrast, if you do enter into a contingency arrangement with an attorney for a percentage of your insurance proceeds, keep in mind that it may be difficult to terminate the services agreement without paying the full fee or a significant part of the fee, to the attorney.
On this issue, I would pay particular attention to the part of the legal services agreement on termination of the legal services and make sure you fully understand and agree to those terms. If you are considering a contingency or percentage fee arrangement regarding your 1st party insurance claim, I would be happy to review any legal services agreement that you are considering entering into.
In short, it is extremely important that you make an informed decision before hiring an attorney on a percentage fee basis. Once you hire him or her, it may be very difficult to reverse course.
When Should You Consider Hiring A Lawyer To Assist With Your Palisades Fire Insurance Claim
So, this leads to the question – WHEN may it be appropriate to retain an attorney to assist you with your Palisades fire insurance claim?
The answer to this question really depends on how your claim process is going. If you feel that your insurance company is treating you fairly and is responding to you in a manner that is timely, honest, and accurate, then trust your instinct.
To be clear, most insurance companies and their adjusters do the right thing and fairly adjust the claims under their policies. However, unfortunately, this is not the case ALL the time.
As a result of the Palisades fire, there are over 5000 insurance claims being adjusted, most well into the millions of dollars. The total losses from the fire are well into the Billions. With losses of this extent and magnitude, there will be many bad faith claims, and I am already advising a number of clients on this issue.
I hope this information has been helpful, and again, please do not hesitate to reach out to me directly. I would be happy to speak with you at no cost or obligation. Thank you.
