Quake Repairs Run Headlong Into Stonewalls

Standing before the quake-damaged San Fernando Courthouse on the second anniversary of the Northridge earthquake, Los Angeles County Supervisor Zev Yaroslavsky threatened to sue a group of insurance companies for refusing to help pay to fix the building.

“Two years after the quake and we still have not reached an accord,” Yaroslavsky said. “It is an outrage, an absolute outrage that they have stonewalled the county for two years.”

Yaroslavsky gave the consortium of insurance companies until Monday to come to an agreement before the county files a lawsuit alleging that the insurers have acted in bad faith.

The 25 firms include the Associated International Insurance Co. of Woodland Hills and Allianz Underwriters Insurance Co. of Burbank. County estimates have fixed the cost of repairing the Spanish Mission-style building at $12.1 million.

Maxson Young Associates Inc., the adjuster for the insurance companies, maintains that damage to the block-long building is cosmetic, not structural--and that some of it existed before the Northridge earthquake struck on Jan. 17, 1994.

In a three-paragraph response to Yaroslavsky’s comments on Wednesday, Maxson Young Vice President Gary C. Brown wrote: “We received various letters from the County of Los Angeles on Thursday, January 11, demanding agreements and payments, and have faxed preliminary responses to the County. . . . The insurers are considering a further response but have had only four and a half working days at this point to respond.”

The county’s threat to pursue legal action comes after insurers told county officials that they required additional time after a county-imposed deadline passed on Jan. 16.

Yaroslavsky however, was unsympathetic.

“We asked two weeks ago for an answer by [Tuesday],” he said. “Their answer was that they needed more time. Well, I have a message for them: Your time is up.”

Yaroslavsky acknowledged that Wednesday’s news conference and ultimatum were meant to persuade the insurers to settle the dispute.

The courthouse closure has had a ripple effect that has led to frustration among court officials, business owners and city government.

Among the negative effects: Attorneys and judges who worked in San Fernando before the quake are being forced to work in the now-cramped confines of the Van Nuys Courthouse; local stores that rely on customers from the legal community have gone out of business due to the dearth of activity at the courthouse; the city of San Fernando is receiving less in sales tax revenue, and members of the city’s police department are forced to make the drive to Van Nuys for court appearances, instead of being able to stay in the city, “solving crime,” said Lt. Rico Castro of the San Fernando police.

Others at the news conference agreed.

“I’ve been here 21 years and I’ve never seen it this bad,” said Nick Yohanna, owner of Maclay Cleaners. “My clients were mostly Sheriff’s Department officers and lawyers. Now my business is 50% off. The bleeding never stops.”

“It’s not good for our city, it’s not good for the cities surrounding us,” said San Fernando Mayor Joanne Baltierrez. “The utmost concern for us is that it is causing a lot of stress on our budget” because of the probable loss in sales tax revenues.

San Fernando City Administrator Mary Strenn called the courthouse “a landmark in our community.”

“Now, it stands as evidence that the earthquake isn’t quite over.”