Flood claims denied
The city of Grand Junction’s insurance company has rejected damage claims filed by three business owners whose stores were inundated with water, mud and rocks when a crumbling, city-owned waterline burst in October.
The claims were denied despite city officials’ acknowledgment that the pipe was deteriorating, a fact the city used to justify proceeding with a project to replace the line and beautify Main Street in the midst of the economic downturn.
Moe Torabbeigi, co-owner of the Persian Rug Gallery, 438 Main St., which sustained the vast majority of the damage caused by the ruptured line, said he was shocked when he received a letter last month denying his claim.
“It’s sad because you’re sitting here and you get damaged and it’s not your fault at all,” he said.
But City Attorney John Shaver said state law indicates the city isn’t legally liable for the damage because it didn’t occur as a result of any formal action taken by the city.
The 55-year-old, 10-inch, cast-iron line blew up early on the morning of Oct. 15, sending water into the Persian Rug Gallery, Page-Parsons Jewelers, 444 Main St., and New York Moon Boutique & Salon, 418 Main St. Page-Parsons and New York Moon were closed for a day or two, while the Persian Rug Gallery officially reopened Friday.
Torabbeigi said he had nearly 300 of the Persian Rug Gallery’s 1,200 rugs professionally cleaned and later determined that roughly 80 were beyond repair. His brother and business co-owner, Mori, broke his apartment lease in California and moved to Grand Junction to help clean up the store and inventory.
The brothers submitted a letter to the city estimating damage at more than $250,000. The claim was passed along to the city’s insurance company, the Colorado Intergovernmental Risk Sharing Agency, or CIRSA.
In two letters dated Nov. 5 and Nov. 19, CIRSA told the Torabbeigis the city was not at fault for the break, and it would not compensate them for the damage.
“Our investigation indicates the cause of the damage to your property was due (sic) water line break,” CIRSA senior claim representative Susan Eisenhoffer wrote in the Nov. 19 letter. “There is no history of water main breaks in this area. Since the cause of the damage was not as a result of any act or omission of the City of Grand Junction, we must deny this claim.”
Similar claim rejection letters were sent to Page-Parsons and New York Moon.
Reached by phone Thursday and asked why CIRSA denied the claims, Eisenhoffer referred questions to the city.
Shaver said there are some exceptions to the Colorado Governmental Immunity Act, which shields public agencies from most lawsuits alleging injury. One of those exceptions in which the city or another government can be held liable is “the operation and maintenance of any public water facility.”
But Shaver said the operation and maintenance of a water facility — the water main, in this case — generally “means some kind of affirmative action.”
“The nature of this is there wasn’t anything the city did that created (the break),” he said. “It just happened. It’s an old pipe. It’s unfortunate.”
The CIRSA letter indicates the city has an emergency “Good Neighbor Assistance Program” that would reimburse the business up to $2,500 for professional cleanup services and up to an additional $2,500 for cleanup costs or property damage above the initial $2,500 amount.
The city’s program would fully cover the damage incurred by New York Moon. Owner Evelyn Brady said the cost to clean up and replace the salon’s floor totaled $2,496.
But $5,000 in compensation for the rug gallery would cover only about 2 percent of Persian Rug Gallery’s claimed losses.
It’s unclear how much damage Page-Parsons sustained. Owner Peggy Page told The Daily Sentinel on the day of the waterline break that water soaked the store’s carpet and dampened display cases and a few clocks. Page didn’t return calls this week seeking comment.
The Torabbeigis now stand to not receive any sort of insurance compensation because they don’t hold a policy on their business.
They acknowledged this week that was a mistake on their part, noting they canceled a policy covering both their Grand Junction store and one they owned in Denver when they closed the Denver location two years ago. At the time of the waterline break, they said they had received an insurance quote from a local agent but hadn’t written the check.
But they say failing to have their own insurance doesn’t change the fact they believe the city is at fault for the damage.
“If we had something from our property damage city property, we’d have to pay for it,” Moe Torabbeigi said. “(The city) would come auction our rugs.”
The Torabbeigis said they don’t have the desire or money to hire an attorney to fight the claim rejection.
“This is our life,” Mori Torabbeigi said. “We were born and grew up in this business. We work hard in this business.”
The brothers said they will continue to operate, although it could be a challenge. They estimated 80 percent of their revenue from rug sales and restoration comes in between October and February.
And next month, the city will close Main Street between Fourth and Seventh Streets to begin the second phase of the Downtown Uplift.
“Life goes on,” Mori Torabbeigi said. “But it’s not fair.”