Gov. Hickenlooper vowed 'real time' claims process, Lower North Fork Fire victims still waiting

New law was supposed to speed up claims process

DENVER - As the one year anniversary approaches for the Lower North Fork Fire, lawmakers will spend Wednesday debating an increase to the amount of money the state is liable for in a state-caused incident.

Right now, the state is only liable up to $600,000 for all those harmed and no more than $150,000 for any one individual.

The bill at the legislature would increase the state's liability to $990,000, with no more than $440,000 to any one individual. It also calls for the dollar amounts to be adjusted for inflation every four years.

While lawmakers debate increasing the limit for future incidents, 7NEWS has learned that none of the Lower North Fork Fire victims are close to receiving compensation from the state for the March 26, 2012, fire that killed three residents and destroyed 22 homes.

"Not one dollar. Not one dollar to the people that were burned to the ground. Not a penny and the fire was 11 months ago today," Scott Appel told 7NEWS.

Appel's wife, Ann, was killed in the fire. His home and all his belongings were destroyed.

"I certainly think that they need to care of the catastrophe that was rained down upon the people in this neighborhood, on this road, before they move forward and change things for the future," said Appel. "The thing that makes it worse than just the damage that's been inflicted on all these people is the utter lack of responsibility and accountability."

In May, 7NEWS aired a 30-minute special entitled, "Investigating The Fire." The special uncovered governmental mistakes and communication failures.

One day after the special aired, Gov. John Hickenlooper, Attorney General John Suthers and lawmakers announced a compromise on two pieces of legislation.

One bill created a commission to investigate the Lower North Fork Fire. The other bill created a process for victims to bypass the courts and have their claims heard by a legislative claims board instead.

At a May news conference, 7NEWS asked about the speed of the claims process.

"How soon would this take effect and how soon could these victims be getting money?" asked 7NEWS reporter Marshall Zelinger.

"Well, it takes effect immediately, right? Upon my signature, it takes effect," Hickenlooper said. "They prepare or present their claims to the claims board. It's happening in real time."

"There's been one delay after another," said Appel.

"The Governor and Attorney General promised you a legislative process for your claim to be heard. Has your claim been heard yet?" asked Zelinger.

"No, it hasn't," said Appel. "We were told by the Deputy Attorney General, in several meetings, that our claims would be heard, 'No time soon, maybe years.'"

Other fire victims share Appel's outrage.

"I think so many people think we've been taken care of. We just want people to know, 'No, we have not been taken care of.' This has not been resolved. We have not been made whole," said fire victim Kristen Moeller. "It feels exhausting. We would just rather have this be done with. We just want the end like we thought we would have when we sat with the Governor that day."

"The way it feels and the way it looks is, it's like they're just stalling, hoping we're just going to go away," said Kristen's husband David Cottrell. "The board they put together to do the review has done pretty much everything except look at our cases. I don't know what they've been doing exactly, but they certainly haven't been looking at our situation."

7NEWS reached out to the Attorney General's Office to find out why the victims' claims have not been heard through the legislative process. We found out that once the insurance companies sued the state, the victims' claims were bundled into the court process. The victims must now wait for the judicial process to play out before any additional claims can be heard by the legislative claims board.

7NEWS also contacted State Rep. Bob Gardner, R-Colorado Springs, who sponsored the bill to create the legislative claims process. He told 7NEWS that he is disappointed that the victims have not received a faster way to compensation. He also said he meant for his bill to give the victims a choice of going through the court system or through the legislative claims process.

In an email to 7NEWS, the Attorney General's Office provided this explanation:

When insurers sued the state on July 2, 2012, we interpleaded the amount available to pay damages from the Risk Management Fund according to the cap on damages of §24-10-114(1)(b) among the plaintiff insurers and fire victims who had filed notices of claims as of the date of our response to the insurers' lawsuit, July 23, 2012.  At that time we asked the court to stay proceedings until the close of the notice period so that all claimants could be joined and have a chance in participating in the available coverage, and the court agreed with that process. 

When the claims notice period expired, we promptly amended our petition in interpleader to name all who filed notices of claims. We then began the process of serving the interpleader on all unrepresented claimants, but many were difficult to locate. To expedite service, we requested attorneys who had filed notices of claims on behalf of their clients to accept informal service and they did or did not to varying degrees.  As part of agreements to waive formal service, we agreed that we conceded liability for claims under §24-10-106.1, the new waiver of the State's immunity passed by the General Assembly in the 2012 session.  Service was largely completed by the time of the January 25, 2013, status conference in Jefferson County District Court.  By then, the bulk of represented claimants, through counsel, represented that their responses to the interpleader, including their counterclaims and third party claims, would be filed by January 31, 2013.  However they were not filed by that date.  Some have still not been filed to this date.  A large portion of the responses, counterclaims, and third party claims were only filed at the close of business yesterday, February 25, 2013.

The process for hearing claims in front of the Claims Board involves authority given to the Claims Board in last year's HB 1361, which calls for recommendations from the Claims Board to the General Assembly to pay additional compensation to fire victims.  The political process envisioned by the General Assembly in that the bill requires that the Claims Board's recommendation for additional compensation include only noneconomic losses or injuries, "reduced to the extent the claimants loss is or will be covered by another source …".  In other words, the Claims Board may only consider otherwise uncompensated losses (emphasis added).  Litigation brought by claimants, including claims outside of §24-10-106.1 for inverse condemnation, and claims against third parties, will thus delay consideration by the Claims Board.  If claims were limited to those for which the General Assembly waived immunity under §24-10-106.1, there could be a very much expedited process through the courts and into the General Assembly for consideration.  These other claims we are required to vigorously defend, however.

It is necessary to exhaust funds available from the Risk Management Fund and resolve other claims before the Claims Board can consider recommendations.  The process will be more complicated and lengthier the more we face claims outside of claims envisioned by the General Assembly.

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