Insurers Sue Chicago-Area Towns In Bid To Get Flood Money
By Robert McCoppin, Lisa Black and Dan Hinkel, Chicago Tribune | |
McClatchy-Tribune Information Services |
Still, the village is among nearly 200 communities in the
"Their underwriters must have had a brain cramp that day,"
But Farmers asserts that flooding is no act of God. Filed as another spring rainy season commences, the lawsuits also make the novel argument that global warming will make such problems more common and government should be doing more to plan for that.
While some legal experts question the merits of the case, they acknowledge it raises a fundamental issue: When floods occur, who should pay for the damages?
The suits, filed in
The suits argue that public agencies should have taken more emergency measures, such as emptying their reservoirs before the rains hit and employing more sandbags and inflatable flood barriers. That, the suits assert, could have prevented problems such as sanitary sewers backing up into homes so forcefully that "geysers of sewer water shot out from the floor drains."
"The common, central and fundamental issue in this action is whether the defendants have failed to safely operate retention basins, detention basins, tributary enclosed sewers and tributary open sewers/drains for the purpose of safely conveying stormwater," the lawsuit states.
The suit is an extreme example of "subrogation," by which insurance companies pay out claims but then go after another party to pay for the damages. The practice is common on a smaller scale, such as when insurers pay for damages from a car accident, then go after the driver who caused the crash.
But attorneys and officials contacted for this story said they hadn't heard of that kind of a claim on such a broad scale. The insurance industry defends the practice as justly seeking compensation from the parties that should be held responsible.
But
"I view it as double-dipping," she said. "The ultimate payer would be the same people who are paying the insurance companies to insure them: our residents and taxpayers."
While each municipality could argue individually it should be removed from the suit, Ely said it would be much more efficient to make a blanket defense of tort immunity, which protects municipalities from a broad range of lawsuits.
The insurance company declined to comment beyond a prepared statement: "Farmers has taken what we believe is the necessary action to recover payments made on behalf of our customers, for damages caused by what we believe to be a completely preventable issue, as well as to prevent it from happening again."
Though the Farmers suit casts an unusually broad net, there are similar cases in recent legal history.
In 2001, an apartment owner filed a class-action suit against the city of
Last year, an appellate court ruled against a man who sued
One resident whose home suffered damage in last year's floods wishes local governments would do more to prevent flooding but is unsure of Farmers' approach.
He was approved for a federal grant of
Of course, local governments have taken many steps and spent millions to minimize flooding. Chief among the efforts has been the
Like other suburban counties, Jasica said,
And also like other public entities around the
"On behalf of the county, we will certainly be vigorously defending the case," Jasica said.
Just Tuesday, the
Other municipal leaders also noted what they said were extensive, expensive efforts to address flooding.
In
Hileman called the Farmers lawsuit "a publicity stunt" and said it's unrealistic for any municipality to have perfect infrastructure.
"What's next?" he said. "Is there not going to be any potholes allowed?"
In fact, insurance companies have gone after local governments over potholes too.
Though suits seeking reimbursement for insurance companies are not unusual, this type of class-action litigation against dozens of governments is unusual, experts said.
"Is the interest of the insured going to be protected?" he said.
In the case of the Farmers lawsuits, the financial implications could be even murkier because many municipalities buy insurance to help pay legal claims against them. That means if Farmers wins damages from any of the municipalities, the payouts might be made by another insurance company.
Tribune reporter Alex Chachkevitch contributed.
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