United States District Court, S.D. Ohio, Western Division
ORDER RE: REQUEST FOR REVIEW BY HERBIE AND ANGELA
L. LITKOVITZ, MAGISTRATE JUDGE.
matter is before the Court on the Request for Review of the
denial of a Sewer Backup ("SBU") claim by Herbie
and Angela Schell (Doc. 850) and the response of the
Metropolitan Sewer District of Greater Cincinnati
("MSD") (Doc. 892). On May 9, 2017, the Court held
a hearing on Mr. and Mrs. Schell's request for review of
the denial of their SBU claim.
Mrs. Schell's request for review is filed under the Sewer
Backup program (formerly known as the
Water-in-Basement [WIB] Claims Process Plan) (Doc. 131,
Consent Decree, Exhibit 8). The Plan states in relevant part:
Subject to the requirements of this Plan, occupants who incur
damages as a result of the backup of wastewater into
buildings due to inadequate capacity in MSD's Sewer
System (both the combined and the sanitary portions) can
recover those damages. This plan also provides a means for
occupants to recover damages arising from backups that are
the result of MSD's negligent maintenance, destruction,
operation or upkeep of the Sewer System. The Claims Process
is not intended to address water in buildings caused by
overland flooding not emanating from MSD's Sewer Systems
or caused by blockages in occupants' own lateral sewer
(Id. at 1). In determining the cause of SBU, MSD
must exercise its good faith reasonable engineering judgment
and consider the following non-exclusive factors: amount of
precipitation, property SBU history, condition of the sewer
system in the neighborhood, results of a visual inspection of
the neighborhood to look for signs of overland flooding,
neighborhood SBU history, capacity of nearby public sewer
lines, and topography. (Doc. 131, Consent Decree, Ex. 8 at
2). Damages arising from basement backups for which MSD is
responsible are limited to documented real and personal
property. Id., Homeowners who are dissatisfied with
MSD's disposition of a claim under the SBU program may
request review of the decision by the Magistrate Judge, whose
decision is binding and not subject to any further judicial
review. (Docs. 154, 190).
Mrs. Schell occupy the building located at 515 Delmar Avenue,
Cincinnati, Ohio, which is owned by Mr. Schell's company,
DGS Development Ltd., and used by the Schells as their
residence. On August 28, 2016, a "100-year" rain
event caused extensive overland flooding and backup to
MSD's sewer system. The Schells sustained damage to their
personal and real property, both inside and outside their
dwelling. Mr. Schell also lost vacation time to address the
cleanup of the property. The Schells made a claim to MSD for
the damages they sustained as a result of the August 2016
rain event. MSD's adjuster evaluated the Schells'
claim submittal and, in compliance with Ohio Rev. Code §
2744.05(B)(1), deducted the $10, 000.00 they received from
their insurance carrier from the calculated total damages.
MSD's adjuster valuated the real and personal property
loss of the building and its contents at $24, 894.97. (Doc.
892-3 at 5-6). MSD offered the Schells this amount in
settlement of their claim; however, MSD disallowed any
compensation for damage to items outside of the residence,
including landscaping, yard fencing, a driveway retaining
wall, and other personal items, as well as the Schells'
claim for lost vacation time and associated expenses. On
January 19, 2017, Mrs. Schell gave MSD a signed agreement
releasing the City of Cincinnati and the Hamilton County
Board of County Commissioners from "any and all claims,
demands, actions, and causes of action whatsoever or in any
manner arising from a 'Sewer Backup' incident on or
about August 28, 2016 at 515 Delmar Avenue, Cincinnati, OH
45217." (Doc. 892-4 at 4). The settlement check for $24,
894.97 was cashed by the Schells on January 20, 2017.
(Id. at 7). On March 6, 2017, Mr. and Mrs. Schell
filed a request for review in this Court of the denial of
their claim relating to their outside property and
non-property expenses. (Doc. 850).
hearing, Mr. and Mrs. Schell stated that the damage to their
yard and basement property was caused by an MSD sewer
collapse in the parking lot of a local high school, which
resulted in the backup of water on a neighboring street and
flooding of their subdivision. Mr. and Mrs. Schell stated
they were told by MSD representatives that they would be
"fully reimbursed" for their loss, only to find out
later that much of their property was valued at 50% of its
worth. Mr. and Mrs. Schell further alleged they were told by
MSD representatives that they should file an appeal of their
claim for outside property after the claim associated with
the basement and its contents was resolved.
is no dispute that one of the causes of damage to the
Schells' property was an MSD sewer backup. MSD
appropriately reimbursed the Schells for the depreciated
value of their personal belongings and not their replacement
value or original cost. The Court notes that under the
Consent Decree that governs the Court's review of SBU
appeals, damages for SBU claims are determined based on the
market value of personal property as of the date of
loss (the depreciated value) and not on the original
purchase price or cost of replacement. Therefore, MSD's
valuation of personal property (e.g., furniture, appliances,
clothing, etc.) based on the depreciated value was correct.
Additionally, damages through the claims process under the
Consent Decree are limited to real and personal property loss
and cannot be paid for other intangibles such as forfeited
vacation time or expenses. (Doc. 131, Consent Decree, Exhibit
8 at 2). Thus, the only issue in this appeal is MSD's
denial of the Schells' claim for outside property damage.
the Schells may be compensated for property loss outside of
their dwelling is governed by the Consent Decree. "A
consent decree is essentially a settlement agreement subject
to continued judicial policing, " the terms of which a
court is obligated to enforce as circumstances dictate.
Shy v. Navistar Intern. Corp., 701 F.3d 523, 532
(6th Cir. 2012) (quoting Williams v. Vukovich, 720
F.2d 909, 920 (6th Cir. 1983)). In interpreting the terms of
a consent decree, the Sixth Circuit has clarified:
"[C]onsent decrees bear some of the earmarks of
judgments entered after litigation" and . . . "[a]t
the same time, because their terms are arrived at through
mutual agreement of the parties, consent decrees also closely
resemble contracts." Local No. 93, Int'l
Ass'n of Firefighters v. City of Cleveland, 478 U.S.
501, 519 (1986). It is this resemblance to contracts that
requires that the scope of a consent decree "be
discerned within its four corners, and not by reference to
what might satisfy the purposes of one ...