BY COUNCILOR STOVER:
RESOLVED, that the proper city officials are authorized to pay to Auto Owners Insurance Company, as subrogee of the Buena Vista Motel, the amount of $29,089.95 in full and final settlement of all claims for damage to their insured's property at 1144 Mesaba Avenue resulting from a watermain break which occurred on March 6, 2003; payment to be made from the Self Insurance Fund 0610.
STATEMENT OF PURPOSE: On March 6, 2003, a six inch city-owned watermain burst in front of 1144 Mesaba Avenue. Escaping water flooded the basement and one motel room of the building. The property owners were reimbursed for their damages by their insurance company, Auto Owners Insurance Company, which now seeks recovery from the city. The city's liability is based upon the city's duty to operate its mains in a way that does not damage adjoining property. Proper notice of claim was given. The city of Duluth has investigated this claim and verified the damages and expenses. The civil division of the city attorney's office analyzed the city's loss exposure. Settlement negotiations were conducted and an agreement has been reached in the amount of $29,089.95. The city attorney's office recommends this settlement.