Four years after a methane gas explosion ripped through a Fairfax-area clothing store, the city of Los Angeles has tentatively agreed to pay $75,000 to 20 people injured in the blast and to the store's insurance company.
The settlement would free the city from any further liability involving a series of lawsuits that are scheduled to go to trial as one consolidated case this fall. Seven other defendants, including the County of Los Angeles and the Southern California Gas Co., have already agreed to pay $364,000 in separate settlements.
The city attorney's office has estimated that a jury verdict in favor of the blast victims would probably exceed $3 million, and an attorney for the victims and the insurance company said he will seek at least $10 million in damages. The insurance company, Industrial Indemnity, is seeking $2.25 million to recover claims resulting from the blast.
'A Good Settlement'
"Although the city ought to prevail if these actions were tried, the potential recovery by the plaintiffs is very large," the city attorney wrote in a report to the City Council. The city should settle "because of the extraordinary expenses involved in proceeding to trial and the risk involved due to the substantial damages suffered by the plaintiffs."
The City Council's Finance and Revenue Committee, following the city attorney's advice, recommended Tuesday that the council approve the settlement. The full City Council is expected to approve it in the next few weeks.
Assistant City Atty. Philip Shiner, who has handled the case, said in an interview that it would cost the city at least $75,000 to fight the case in court. He said it was safer for the city to pay the money up front and avoid further litigation. "It could be significant if (the jury) finds somebody at fault," he said. "It is a good settlement."
Shiner said there were several other victims of the blast who are not part of the consolidated case, but, he said, none of them have active suits against the city. The city attorney's report to the council said other "minor claims" against the city may arise in the future, but it concluded that "whatever remains will not present any significant potential exposure to the city."
The March 24, 1985, blast destroyed the Ross Dress For Less store on West 3rd Street, injured 23 people and forced the Fire Department to close off a four-square-block area for several days. Several of the victims received serious injuries, including one woman who was burned over 50% of her body and another who suffered burns on her hands, feet, legs and body.
In their consolidated case against the city, the victims and insurance company alleged that the city contributed to the explosion in the clothing store's basement by paving streets and sidewalks around the store.
The city's paved areas, the suit alleged, prevented underground methane gas from venting naturally into the atmosphere and forced it to migrate under the store and eventually inside it. The suit also alleged that the city's sewers and storm drains acted as a passageway for the gas to enter the building.
Matthew B. F. Biren, the attorney for the victims and Industrial Indemnity in the consolidated case, said he is negotiating settlements with three other defendants, including the state of California. If those discussions are successful, he said, the trial would proceed against just two defendants: Park La Brea Associates (and its owners at the time, Metropolitan Life Insurance Co. and May Co.) and McFarland Energy Co.
Park La Brea owned the West 3rd Street property, and McFarland Energy operated nearby oil wells, which Biren alleges caused underground gas to migrate beneath the clothing store. Biren said his clients were willing to settle with the city of Los Angeles and the other defendants because they are considered "peripheral to the issue."
"After having conducted tremendous investigation into the facts surrounding the accident, it appears the most likely thing facilitating the methane gas migration was the active slant wells being operated by McFarland Energy," Biren said. "We are confident that was what led to the migration of the methane gas to the explosion."
McFarland has denied responsibility for the blast. Company officials did not return phone calls Tuesday.