Insurance Judgment for California City

The fight against unfair insurance practices saw another success in California recently. Half Moon Bay, California, has found itself in the enviable position of being flush with cash after the city won a $10 million interim award in an ongoing case against the Insurance Company of the West. Retired California Supreme Court Justice Edward Panelli was the arbiter and he ruled that the insurance company was on the hook for part of the expense due to a bungled municipal drainage project. That project resulted in an $18 million settlement over the Beachwood development project.

The original Beachwood saga started when the city was developing a 24-acre property owned by developer Charles “Chop” Keenan, and it allowed water to pool on the site, inadvertently creating wetlands unsuitable for development. In November 2007, a US District Judge issued an inverse-condemnation judgment against Half Moon Bay for $37 million. Then, in April 2008, Half Moon Bay agreed to pay an $18 million legal settlement with Keenan and took over control of the damaged Beachwood property, issuing bonds to pay for it. This settlement crippled the city’s finances, hit with the nation-wide recession at the same time, and three years later it voted to outsource the police and recreation services to the San Mateo County Sherriff’s Office and the city of San Carlos. Since 2008, Half Moon Bay has been cutting services and laying off employees. However, this month, the $10 million dollar award came as Justice Panelli decided that the city’s liability insurance policy covered Beachwood and ordered the insurance company to pay.

The $10 million is more than 90 percent of the city’s yearly budget, according to local officials. Mayor Allan Alifano called it “obviously a huge deal”. The city’s attorney said it would still take several months for the city to be paid and that there is a second phase of arbitration that must be heard. The city will ask for legal fees from the arbiter as well, to cover the estimated $100,000 spent on attorneys. The city’s attorney maintained it was still a “great victory”. Half Moon Bay already secured $5 million from an Association of Bay Area Government’s insurance plan, which was used to pay down the debt from the bonds. Mayor Alifano said much of the $10 million from the Insurance Company of the West will also likely go to further, paying off the bonds, but the City Council has the final say in how the money is used. Regardless of the new windfall, the city still plans to keep an initiative for a proposed half-cent sales tax on the November 6 ballot, but it may be a harder sell with the new rosy outlook from this legal victory.

San Francisco Insurance Lawyers
If your insurance company is trying to cheat you out of the benefits you have paid for and deserve, contact a San Francisco insurance attorney to gain understanding of your legal options. Individuals are just as entitled to compensation when their insurance company treats them unfairly, and you may need a legal advocate in your corner.

See Our Related Blog Posts:
State Supreme Court Rules Against Insurers in Landmark Environmental Case
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