Farmers Insurance, which in April sued Riverside, North Riverside and Brookfield — along with the Metropolitan Water Reclamation District of Greater Chicago, eight counties and dozens of cities across northern Illinois — to recoup money it paid out in claims in the wake of extensive flooding last year, announced “mission accomplished” earlier this week by dropping the lawsuit.
On June 3, attorneys for the insurance company filed a motion in U.S. District Court to voluntarily dismiss the suit, which claimed that the MWRD and municipalities were negligent in not preparing for the kind of flooding that came in heavy rains on April 17-18, 2013.
In a statement from the insurance company, Farmers Insurance spokesman Luis Sahagun said the lawsuit had been intended to give a voice to its customers by encouraging “cities and counties to take preventative steps to reduce the risk of harm in the future.”
The lawsuit had asked the court to order cities and counties to reimburse Farmers Insurance for the claims it paid and also to order them to pay their policy holders for uninsured losses due to the flooding.
Farmers Insurance contended that counties, cities and the MWRD were negligent in not erecting temporary flood barriers in advance of the approaching storm and in having sewer systems incapable of handling the storm runoff.
The company, however, said it would not pursue the lawsuit because Farmers Insurance had sent the message it wanted to convey.
“We believe our lawsuit brought important issues to the attention of the respective cities and counties, and that our policyholders’ interests will be protected by the local governments going forward,” said Sahagun. “Therefore, we have withdrawn the suit and hope to continue the constructive conversations with the cities and counties in Chicagoland to build stronger, safer communities.”
Many municipalities, including Riverside and Brookfield, examined ways to improve their sewer systems and to prevent flooding in the wake of the April 2013 storms.
Riverside government in 2013 commissioned its engineering firm to conduct a comprehensive study of its sewer system. In February, the engineering firm recommended a series of projects to increase Riverside’s storm sewer capacity and take the strain off the combined sewer system.
In Brookfield, officials reacted to the storms by earmarking about $100,000 annually to help fund the installation of flood-control systems, such as overhead sewers and backflow prevention valves on private property.
The village board also set aside $500,000 to fund the design and construction of a pumping station, storm water detention vault, and surface storage area near the intersection of Washington and Forest avenues, which was devastated by flooding in April 2013.
All of those efforts, however, were initiated prior to the Farmers Insurance lawsuit.
Margo Ely, executive director of the Intergovernmental Risk Management Association (IRMA), which would have represented Riverside and Brookfield in the case, questioned Farmers Insurance’s use of the courts as a way to send a message to governmental agencies.
“Filing a lawsuit to send a message is not an appropriate use of the judicial system, and it’s also a bad business decision,” said Ely, who formerly served as the city attorney for Naperville. “If they want to work cooperatively with municipalities to reach solutions, there are better alternatives.”
While Ely was still the city’s attorney, Naperville joined several other DuPage County municipalities to craft a motion to dismiss the suit, which was filed in DuPage County Circuit Court on May 27. The motion argued Farmers Insurance’s complaint was baseless.
A week later, Farmers Insurance dropped its lawsuit.
“I can’t imagine our motion didn’t have an impact on their decision to dismiss the case,” said Ely.
Farmers Insurance’s lawsuit, filed in Cook County Circuit Court on April 17, was removed to federal court on May 2.