Fresh Starts and Stalled Dreams : Victims: While one couple begins reconstruction, a family whose house was destroyed finds itself stuck in an insurance quagmire.

Two months after they lost their homes in Glendale’s worst fire, the Lamb and Sepilian families stand miles apart on the road to reconstruction.

The June 27 blaze damaged or destroyed 66 houses, but Ted and Claire Lamb decided immediately to rebuild their four-bedroom home on Sweetbriar Drive. Within weeks, they settled with their insurance company, obtained a building permit and put a contractor to work. Their new house should be ready by Christmas.

“As far as we know, we’re the first to rebuild,” Claire Lamb said.

Nver Sepilian and her four children have made significantly less progress. The ruins of their five-bedroom Ridge Drive house still remain. Because a key fire insurance policy had lapsed, Sepilian is uncertain that she will receive funds to rebuild.

While coping with the loss, Sepilian endured a second trauma: Her husband was trapped for three weeks in Kuwait after the Iraqi invasion.

“My kids every day used to come in from outside and say, ‘What’s happened with the insurance?’ ” she recalled. But after the invasion, she said, their most frequent query changed to: “What’s the news from Daddy?”

The Lambs and the Sepilians are at opposite extremes of recovery from the Glendale fire. City officials and disaster experts say most fire victims are somewhere in between. They are still wrestling over an insurance settlement or tinkering with the design of their new home. Many fire victims have turned to relatives and relief agencies for help.

The Glendale-Crescenta Valley chapter of the American Red Cross has assisted 22 families who lost homes. The agency provided temporary housing, food, clothing, furniture, eyeglasses and medicine, said William Dutton, the agency’s executive director. It has also replaced occupational supplies for fire victims who worked in their homes.

By last week, the agency had spent about $30,000 on the victims, Dutton said. The money came from two fund-raising events and a mail solicitation that generated $43,287. “It is our anticipation that we’ll probably spend all that and maybe more,” he said.

Through Aug. 23, state and federal officials had allocated $4 million in grants and loans to victims of the June brush fires that occurred in Los Angeles, Santa Barbara, Riverside and San Bernardino counties, according to the California Office of Emergency Services. Figures for Glendale fire victims alone were not available.

Glendale officials are trying to expedite the permit approval process for those who plan to rebuild. “We have had quite a few inquiries in the past month about the guidelines and fee structures,” said Hsiao-Bai Wu, a senior civil engineer with the city.

Through last week, he said, the city had received five applications for complete house reconstruction and a handful more for roof replacement.

The Glendale fire victims profiled in The Times one month after the fire have made varying degrees of progress.

Amelia Reinhart, who turns 88 this month, visits the ruins of her Sweetbriar Drive home regularly to water the roses. But she said last week that she has not yet settled with her insurance company and is still working on plans to rebuild the house closer to the street.

Carl W. Raggio III and his wife, Susan, are still negotiating with their insurance company over rebuilding their Foxkirk Road home. Susan Raggio said Monday that the two sides are still $150,000 apart. “It’s gone from the sublime to the ridiculous,” she said. “We’re very frustrated.”

Fritz Skinner, who escaped with only his shorts, a dirty shirt and his wristwatch when his Avonoak Terrace home burned, said he expects to close escrow this week on the sale of his lot. He planned to relocate this week to a condominium he purchased in Laguna Hills.

“There’s not much to move,” he said. “I just took my toothbrush and a few clothes.”

Eric Flora, a contractor rebuilding the Lambs’ house, said there are a range of reasons why the fire victims are at different stages of reconstruction.

“The insurance companies are handling the claims differently,” he said. “Some people are still traumatized. Other people have been told to be wary of contractors” who pester them for contracts to rebuild.

The Lambs were able to reconstruct quickly because they had the original plans for the house and decided not to stray far from that design. Flora said other residents are taking longer because they lack the original plans or want to make major design changes.

“Everything people always hated about their house, they now want to redo,” the contractor said.

Ted Lamb, a retired engineer, said he used that logic to cheer up his wife shortly after the fire consumed their home and family keepsakes.

“The second day, my wife, when we woke up in bed, she was shaking, and she wasn’t making any sense. She was babbling,” Ted Lamb said. “I said, ‘OK, we built the house in 1968. Just think about all the things you didn’t like about it. Now you can have it exactly the way you want it. Any change you want to make, you can have it.’ So, snap! She came out of it.”

With a laugh, he added, “Now, I’m sorry I said that.”

Soon after the fire, the couple realized that the damage far exceeded their insurance coverage. Their policy provided $178,000 for the structure and $89,000 for the contents, but rebuilding is expected to cost $300,000, and the furnishings were valued at $125,000.

“We ‘maxed’ out on everything in the policy,” Ted Lamb said. “They paid us right away.”

He said he underestimated the risk when he updated the policy.

“I told the insurance people that, with the fire station so close--less than a mile away--and with a fire hydrant next door, the chances of the house burning down were very, very slim,” Lamb said. “That couldn’t happen. And they agreed that it probably wouldn’t happen.

“We had not kept track of the escalating price per square foot for rebuilding. We built the house in 1968, and our total cost was $52,000.”

The Lambs said they will have to dip into savings or obtain a loan to cover the costs that exceed their insurance check. They chose not to pursue a Small Business Administration loan that is available to disaster victims who have insufficient coverage.

Since the fire, they have been living 86 miles away at their vacation house in Arrowhead. But they have had no second thoughts about returning to their familiar hillside neighborhood.

“We have to live someplace,” Claire Lamb said. “We have four kids that live in this area. That’s why we decided, if we can possibly stay here, we’re going to stay.”

Like the Lambs, Sepilian was caught off guard by the inferno. In 1982 and 1986, she had lost two houses in Beirut to bombing attacks and looting by Syrian soldiers. When she and her husband bought a $400,000 house in Glendale two years ago, she believed that she was secure at last.

“I said, ‘Here, there are no bombs, nothing,’ ” Sepilian recalled. “I never thought a fire would happen, and I would lose it completely. Especially in the United States. I said, ‘This is the safest place. No militias. No Syrian attacks. No nothing.’ ”

After the fire, Sepilian thought that she might be able to replace her furnishings with those from another house she rents in Kuwait, where her husband’s interior construction business is based. She is now uncertain about the fate of those belongings, in the wake of the Iraqi invasion.

In the fire, Sepilian lost precious jewelry and needlework heirlooms that had survived the Mideast turmoil. When she contacted her insurance agent, she believed that her coverage would be sufficient to cover her rebuilding costs.

Instead, she learned that her California Fair Plan policy--state-mandated pool coverage for homes in hillside brush areas--had been canceled because the premium was not paid. She learned that the payment notice had been sent to the wrong address. Family members, however, had continued to pay an expanded-coverage State Farm policy and believed that the insurance was complete.

Usually, the bank that provides a home loan alerts the owner if the fire insurance lapses. But the Sepilians’ insurance agent, Ara Papazian of Lakewood, said the coverage was obtained before the family settled on a bank, and no lender was listed.

Sepilian said she received a $5,000 insurance check to cover immediate fire expenses before the lapsed policy was discovered. Since then, she said, she has received no payment to clear her lot or cover her daily expenses.

“The insurance is telling us, ‘Next week, next week. . . .’ ” she said. “My patience is finished. Two months now, and we don’t know if it’s yes or no.”

Papazian said the Glendale woman’s bid for reimbursement is being reviewed by State Farm and may be covered under an “errors and omissions” provision. “It hasn’t been turned down,” he said Tuesday. “We do everything in our power to take care of our customers.”

Because of her insurance problems, the Red Cross paid the first-month’s rent and security deposit on a three-bedroom apartment for the family.

Although the agency will be reimbursed if the insurance payment is approved, Sepilian was reluctant to accept the help. “It bothered me,” she said. “I used to work as a volunteer and helped the needy people. I told the Red Cross, ‘Now, I’m one of the victims you are helping.’ ”

She also received a $3,300 Federal Emergency Management Agency grant to help with her temporary housing costs. She said she may seek an SBA loan if her insurance company does not pay for reconstruction.

While shopping for new furniture, Sepilian was stunned by the attitude of some merchants who learned that she was a fire victim. “They say, ‘Oh, so your insurance will pay. Let me write it at a higher price,’ ” she said.

In contrast, she said, “We Armenians have sympathy for those who have had fires. If we are going to sell it for $100, we give them a 25% discount because there’s already been a tragedy.”

Already shaken by the fire, Sepilian learned in early August that her husband, Joseph, a Syrian, was caught in Kuwait during the Iraqi invasion. Because there is animosity between Syrians and Iraqis, she feared for his safety. “We were so scared,” she said.

She did not know her husband’s fate until Aug. 23, when she learned that he had escaped to Jordan with the help of a Palestinian friend. Her husband had lost his business and assets in Kuwait, but his first concern was the status of the fire insurance policy, she said.

Until the issue is resolved, Sepilian must continue to pay $1,300 a month rent for her apartment and $2,300 a month for the mortgage on her burned house. She looks to her religious faith for support.

“I believe in God,” she said. “I am a strong believer, and this has kept me on my feet. I know the Lord will help me and guide me. That’s what I trust in. Sometimes I say, ‘Why should this happen all at the same time?’ Then I read the word of God. I get my strength from there.”