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Half Moon Bay Mayor Announces Legal Victory in Yamagiwa Insurance Claim

Arbiter awards $10 million to City of Half Moon Bay in Beachwood land-use case.

Half Moon Bay Mayor Allan Alifano announced today that the City has received an interim award of $10 million from a former insurer following 10 years of litigation over the Beachwood property.

The award by retired California Supreme Court Justice Edward A. Panelli is in the City’s arbitration against Insurance Company of the West (ICW), which seeks reimbursement for payments made in the settlement agreement in the Yamagiwa litigation.

“While we are very pleased with this positive outcome, we will consider this arbitration fully settled when the funds are in our City’s hands. At this time, I feel it is appropriate to thank our staff and our legal counsel for all the hard work they devoted to this case. And at the same time this also did require our Council to make some difficult decisions to continue to pursue this case,” stated Mayor Alifano in a prepared press release.

In the Yamagiwa litigation, extensive evidence was introduced showing that a City project constructed in the mid-1980s, coupled with the failure to maintain drainage improvements, contributed to the emergence of wetlands on the Beachwood property over the period of time covered by the ICW policies. This evidence was a key factor in Justice Panelli’s decision, holding that damages awarded Yamagiwa were a “covered loss” under the ICW-issued liability policies, according to City Attorney Tony Condotti in the press release.

The City Council plans to meet soon to discuss the best possible use of the proceeds.

"Naturally, we will be looking to pay off much of the $18 million of bonds from the Yamagiwa case. Regardless of exactly how these settlement funds are used, they will free up revenue for critical needs within our community, especially our library, for example,” said Alifano.

ICW issued four different liability insurance policies to the City covering two successive annual periods, from July 1, 1990 to June 30, 1991 and from July 1, 1991 to June 30, 1992. Each policy year provided $5 million in coverage.

The $10 million award is only for the first phase of the City’s action against ICW. Further proceedings on the bad faith claims against ICW have not been scheduled.

The interim award brings the total amount recovered from insurance carriers relating to the Yamagiwa case to $15 million. In early 2008 the City settled a separate claim against the ABAG PLAN for a different coverage period for the $5 million policy limit.

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Jack wilson September 21, 2012 at 12:11 AM
the fact that the city has recovered all of their losses only encourages them to repeat their actions again in the future. I believe the granolas will still attempt to block growth especially after the tunnel is opened.
Steve N. September 21, 2012 at 02:25 AM
If most of the money has been recovered, and the city is still not done litigating with ICW, and we are saving money contacting essential services, should we still be asked to support a tax increase?

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