County to Sue Over Courthouse Insurance

The Los Angeles County Board of Supervisors will file a lawsuit Tuesday against a group of insurance companies for refusing to help pay to fix the earthquake-damaged San Fernando Courthouse.

County Supervisor Zev Yaroslavsky, who represents the district that includes the courthouse, said the county gave the insurance companies until last Friday to cooperate and they did not.

“It is a classic runaround and a classic stonewall,” Yaroslavsky said Monday at a Chatsworth meeting of Valley business leaders. “We’ve been treated the way everybody else has been treated--very shabbily.”

For more than two years, the county, the Federal Emergency Management Agency and adjusters for the insurance companies that issued earthquake policies on the facility have quarreled about the amount of damage the building actually sustained in the Northridge quake and which entity would pay for the repair of what damage.

The county did not want to pursue legal action against the 25 insurance firms, Yaroslavsky said, but it had no choice.

According to county Chief Administrative Officer Sally Reed, the courthouse needs at least $18 million to rebuild or reconstruct, and the county wants the insurance companies to pledge $12 million and arbitrate the rest. She said the insurance companies would agree to paying only about $6 million before entering into arbitration, an amount county officials have deemed far too low.

“We have negotiated in good faith for numerous weeks . . . and I have been given no indication that we will resolve it,” Reed said. “It’s time to move. I’m completely supportive” of filing suit.

The quake damaged the Spanish mission-style courthouse, which housed the north Valley branches of the Superior and Municipal courts, leaving deep cracks, exposed wiring and major structural problems, forcing its closure. Judges and attorneys from that facility were moved to the Van Nuys Courthouse. Other county workers are conducting business out of trailers, Yaroslavsky said, and merchants around the San Fernando Courthouse have seen a 50% to 70% drop in business.