Judge Awards $405K in Lincoln Flood Plain Suit

By Lori Pilger
Lincoln Journal Star – Saturday, Dec 27, 2008

A Lancaster County judge has ordered the city of Lincoln to pay $405,000 to three couples given city-issued building permits but not told that their new homes would be in a 10-year flood plain.

The city owes Troy and Shari Stonacek $165,000, Brad and Jennifer Sheaff $140,000 and George and Lori Bristol $100,000 in damages for not informing the families when it gave the permits for them to build, according to the ruling by District Judge Steven Burns.

Government officials told the families at a meeting in May 2005 their homes were in a flood plain – prompting three lawsuits.

In 2007, Burns found the city negligent after a bench trial.

On Dec. 1 and Dec. 4, he heard testimony again in the cases.

At issue was the amount of damage the couples had as a result of the city’s actions.

Experts for the couples and for the city didn’t vary greatly as to how much the homes in the Cardwell Woods subdivision in southwest Lincoln would be worth if they weren’t in a 10-year flood plain, where 4 to 5 inches of rain in 24 hours causes a flood.

The Stonaceks’ home would be worth $600,000 to $630,000; the Bristols’ $300,000 to $330,000; and the Sheaffs’ $500,000 to $525,000, they said, according to the order.

"However, there is significant difference between the experts on the method of determining the amount of damage to the properties in this case," Burns wrote.

John Bredemeyer, the expert for the plaintiffs, put total damages at $755,000. Defense expert Frank Frost put it at $178,125.

In the end, Burns ruled almost smack in the middle.

According to the order, Bredemeyer considered that the couples essentially could not use their basements; that homes within a flood plain were valued 5 percent less than comparable homes outside the flood plain; and that the homes were affected more because they were in a 10-year flood plain rather than a 100-year flood plain.

Frost argued that method unfairly compounded damages. He said the only question necessary was if the property was in or out of a flood plain. He said he relied on three studies that reflected an 8- to 12-percent difference in price between homes in a flood plain and homes that aren’t. It was his opinion the homes had been damaged by
12.5 percent.

But Burns’ order said it was unclear how he arrived at 12.5 percent.
He said Frost testified that he had found two homes in a flood plain in Lincoln that sold for 18-19 percent less than homes like them that were not in a flood plain.

"The court is persuaded that it must guard against overlapping impact on value from the variables considered," Burns wrote.

But, he said, he was persuaded to take three factors argued by the plaintiffs into consideration:

1.) That there is a distinction between a home with a dry basement and one that takes on water, regardless of if it’s in a flood plain;

2.) That a home in a flood plain would be valued differently than the same home in another location, and;

3.) That the frequency of flooding probably also would affect what someone would pay for it.

Burns said he found it is "more than probable than not" that the plaintiffs have been damaged in the three areas.

"Having made this finding, the court of necessity  must engage in some degree of estimation – speculation, if you will – as to the amount of the damage," he said.

Then Burns entered judgment for the Stonaceks for $165,000, the Sheaffs for $140,000 and the Bristols for $100,000.

According to court records, the city knew well before 2005, even before the families purchased the lots, the area was in a flood plain.

A state Natural Resources study of the area, completed and submitted to the city in January 1997, showed a flood-elevation level of 1,208 feet.

City employees put the map in the Cardwell Woods file at the Building and Safety office. Yet, when the city issued building permits to the families between 1998 and 2003, each was given a flood plain elevation based on an older, and inaccurate, FEMA map.

At trial, the city argued – among other things – that it had no legal obligation to the families. It also contended it was immune from the claims because whether or not its employees disclosed the Natural Resources map to the plaintiffs was a "discretionary act" and, thus, protected by tort law.

Burns rejected the arguments.