Yesterday, a local lawyer, Steven Selbe, noticed an alert from the Courthouse News Service (CNS) and, in turn, alerted me.
CNS said, “Megasand Enterprises is a defendant in several Harris County Court lawsuits in which residents claim their homes flooded in August 2017 because Megasand and other gravel mining companies negligently dumped sediment into Spring Creek and the San Jacinto River, reducing the waterways’ capacity to absorb flooding caused by Hurricane Harvey. Plaintiff seeks a declaration it does not have to defend nor indemnify Megasand against the litigation.”
Underlying Cases
After Hurricane Harvey, hundreds of residents in the upper San Jacinto River watershed banded together in several lawsuits against sand mines. The suits allege that mines located near the river and its tributaries discharged silt and sediment without authorization. That, they claim, reduced the ability of the river and Lake Houston to handle floodwaters, which in turn contributed to the flooding of their homes and businesses. The first lawsuit alleges nuisance, negligent conduct, gross negligence, and violation of the Texas Water Code Section 26.121. It names Megasand as a defendant. Several subsequent lawsuits were consolidated with this one.
This is not good for the folks who actually want to recover money, but may put some sand mines out of business. The insurance company says that Megasand’s policy does not cover pollution. Therefore, Everest wants to stop paying for Megasand’s defense. If the judge agrees, Everest would not have to pay for any settlements, judgements, or legal fees.
Says Selbe, “The good thing if you are an insured being defended is that your defense fees and costs are usually paid by the insurance company and often the insurance company eventually pays to settle. In this case, the insurance company wants out of the box altogether. That’s bad for Megasand. It will have to pay to fight this lawsuit and if it loses, will have to pay to defend the flood cases and any judgments or settlements.”
Mouth bar of the San Jacinto West Fork. Photo taken on 9/14/2017, two weeks after Harvey.More than 4000 structures flooded behind this blockage.
Even though Harris County courts are trying the underlying lawsuits, Everest filed its suit against Megasand in federal court. The insurance company is incorporated in Delaware and the sand company in Texas.
Reading Everest’s policy agreement with Megasand may cause other insurers and insureds to review their own policies. If sand miners cannot get insurance because of their current business practices, it may force them to modify their practices to reduce risk.
Basis for Everest Claims
The Everest suit claims, in part:
“Our right and duty to defend end when we have used up the applicable limit of insurance…”
The insurance does not apply to…property damage that is “expected“ from the standpoint of the insured.
The insurance also does not apply to “pollution” and the “processing or treatment of waste.”
Stepen O. Venable of Walker Wilcox Matousek LLP represents Everest National Insurance Company.
It’s not clear what triggered the Everest suit at this time. Plaintiffs filed the first of the underlying suits in 2018.
Editorial Opinion
Dozens of posts on this blog have documented discharges from sand mines. I have so many aerial photographs that I have personally concluded that pollution is part of most mines’ normal business practices. If caught, mines simply pay a slap-on-the-wrist fine.
In essence, that makes Texas a “pay-to-pollute” state for sand miners.
If Everest is successful, the “expected” part of their claim may form a precedent that transforms the mining industry in this state. Especially if the Attorney General successfully prosecutes the Triple PG mine in Porter. The Attorney General alleges serial pollution and seeks fines that could exceed a million dollars. (Note: The underlying suits in this Megasand case also name Triple PG as a co-defendant.)
Posted by Bob Rehak on 4/11/2020 with thanks to Steven Selbe
956 Days after Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2018/03/Harvey-SanJac_217.jpg?fit=2000%2C1333&ssl=113332000adminadmin2020-04-11 13:19:412020-04-11 17:56:16Insurance Company to Sand Miner: Defend Yourself, We’re Not Responsible for Pollution
On Wednesday, Perry Homes resumed construction on the Woodridge Village Site in two areas: adjacent to the N2 detention pond and along Woodland Hills Drive. Today, we know more about the nature of the construction activity next to N2 thanks to receipt of construction plans from Montgomery County on Thursday morning. The plans were part of a Freedom of Information Act Request.
N2 Detention Pond Expanding North and East
The new plans show an expansion of the N2 pond to the north and the east. In the satellite image below, “A” represents the original N2 pond which Montgomery County built 15 years ago. “B” represents the approximate expansion area which will be about 8 to 10 feet deep.
A = Original N2 Pond. B = Expansion Area.
City of Houston approved the plans on 3/17/2020, according to this inspection report dated 3/30. Montgomery County approved them the same day according to the County Engineer’s stamp on the plans. Below, see what the same area looked like from a helicopter before construction started.
“Work” indicates where excavation started on Wednesday.Excavation in the area labeled “N2” pre-datesPerry’s ownership of the land.
See below what the N2 area area looked like on Good Friday morning, two days AFTER construction started. Compared to the photo above, contractors took out the crescent shaped row of trees on Thursday. They also started excavating the expansion area.
Looking south at N2.Note: trees are gone. Expansion area is about one-quarter to one-third excavated in two days. See pond in upper left.Photo courtesy Matt Swint.
Part of the dirt from this excavation work went to fill in former wetland areas in the foreground of the image above.
Here’s the same area looking west from a vantage point farther south over Taylor Gully.The area between the old pond and the expansion area still needs excavation.Photo courtesy Matt Swint.Height of excavator is about equal to depth of pond.Water in pond is due to a one-inch rain late yesterday.Photo looking west courtesy of Matt Swint.Layout of subdivision immediately north and south of triangular-shaped N2.
Also Filling Low Area Along Woodland Hills
“A” represents N2 and the expansion area. “B” is the area along Woodland Hills where other contractors used part of the excavated dirt to fill in boggy areas.This shows new fill in Area B from photo above.
Two reports (Wednesday and yesterday) from other sources suggested that Harris County was responsible for this work. However, a call to Precinct 4 Commissioner Jack Cagle’s assistant this morning indicated the County is NOT involved in this construction activity.
I counted six pieces of equipment on the southern section of Woodridge and at least 12 on the northern section, including those above. By my count, that’s a record. I’ve never seen so much earth-moving equipment on this site at one time.
Listing Sign Still Up
A sign at the Woodland Hills entrance today indicated that the Perry property is still listed for sale.
Due to the Easter weekend, with most staff off, Commissioner Cagle’s office could not reply today about the status of negotiations with Montgomery County, the City of Houston, and Perry Homes to purchase the property.
The City and MoCo previously approved plans for N1 and N3, two other detention ponds on the northern section of Woodridge Village. Contractors have not yet started excavating those.
Looking south on eastern boundary toward Elm Grove, where the N3 detention pond will go. Work has not yet started here.
Posted by Bob Rehak on 4/10/2020 with help from Matt Swint
955 Days after Hurricane Harvey and 204 after Imelda
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2020/04/20200410-RJR_0492.jpg?fit=1200%2C800&ssl=18001200adminadmin2020-04-10 21:06:182020-04-11 07:01:27Perry Homes Expanding N2 Detention Pond on Woodridge Village Site; Also Building Up Low Areas
Some recommended reading. I just finished rereading a book, published in 2017, called The Ostrich Paradox. It examines why we habitually under-prepare for disasters. Why do some people, for instance:
Fail to heed hurricane evacuation warnings?
Buy homes in flood zones without flood insurance?
Ride motorcycles without helmets?
Think they’re immune to pandemics?
Why Instinct Sometimes Overrules Reason
This book explains innate cognitive biases that often cause instinct to overrule reason.
To illustrate these biases, the authors look at a specific subset of decisions involving risks, such as flooding and earthquakes. The probability of such disasters is extremely low but the consequences extremely high. These represent rare threats for which we have little stored knowledge.
The book focuses on six cognitive biases that the authors characterize as “Our Innate Engineering.” Those biases influence our decision making in such cases.
Myopia – A tendency to focus on “here and now” costs when appraising the value of long-term protective investments. “I’m really going to have to scrimp to afford that flood insurance for a flood that may never come in my lifetime.”
Amnesia – A tendency to forget too quickly the pain of past disasters. “Harvey was two years ago. I don’t want to worry about flood mitigation now. It just reminds me of the pain.”
Optimism – A tendency to underestimate losses that could result from rare, future hazards. “Harvey was a 1000-year storm. You can’t plan for one of those.”
Inertia – A tendency to maintain the status quo or chose a default option when making difficult decisions with a high level of uncertainty. “I just can’t figure out whether these new flood maps are valid. I’m not going to buy that flood insurance now.”
Simplification – A tendency to examine a subset of factors when making complex choices involving high risk. “I never flooded before, even during Harvey. Why buy flood insurance now?”
Herding – A tendency to base choices on what people around you are doing. “None of my neighbors have flood insurance. Why should I?”
Finding Ways to Overcome Your Biases
The theory behind the book: that by recognizing our own cognitive biases, we may be able to overcome them.
After the introduction, the authors divide the book into two main parts.
The first devotes a chapter to each of the biases. Within each chapter they give dozens of examples and present academic studies that illustrate the difficulty people have making rational choices about these rare events.
The second devotes three chapters to strategies that can help us overcome them.
About the Authors
The authors are two professors from the Wharton School of Business at the University of Pennsylvania: Robert Meyer and Howard Kunreuther. They both specialize in risk management and decision processes. Wharton ranks as one of the nation’s leading business schools.
The writing can get dense at times. It’s not for the feint of heart or the casually interested. Primary audiences include academics, insurance executives, government leaders, policy makers, emergency preparedness planners, etc.
Afternoon Read That Could Make You a Better Decision Maker
That said, with enough coffee, most people could wade through this in an afternoon during the virus lockdown and get a lot out of it. It’s available for $1.99 as an e-book from Amazon.
The primary value: it helps us understand HOW we think so that we can understand WHY we make the decisions we do.
As I read it, I found myself replaying some of my own past decisions and recognizing myself in several examples. I also reflected on the dozens of flood victims I have interviewed who replayed similar arguments…with regret.
The Ostrich Paradox may help make you a better decision maker. Or help you convince other people to make better decisions.
For instance, do you have a family member who thinks he or she is immune to the corona virus?
That said, I will pass along some wisdom from an ER Nurse, based on real life examples. “Now’s not the time to learn how to ride an ATV, use a chainsaw or climb a ladder.”
Stay in. Stay safe. Stay healthy.
Posted by Bob Rehak on 4/9/2020
954 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2020/04/Ostrich-Paradox-1.jpg?fit=324%2C500&ssl=1500324adminadmin2020-04-09 15:05:112020-04-09 15:05:22The Ostrich Paradox: Why We Habitually Under-prepare for Disasters
Insurance Company to Sand Miner: Defend Yourself, We’re Not Responsible for Pollution
On 4/9/2020, Everest National Insurance company filed a lawsuit in US District Court for the Southern District of Texas, against one of its policy holders, Megasand, Inc. Everest wants a declaratory judgment stating that it is not responsible for the defense of its client, nor for any settlements or judgments that may arise from underlying cases that it specified (see below).
Courthouse News Service Alert
Yesterday, a local lawyer, Steven Selbe, noticed an alert from the Courthouse News Service (CNS) and, in turn, alerted me.
CNS said, “Megasand Enterprises is a defendant in several Harris County Court lawsuits in which residents claim their homes flooded in August 2017 because Megasand and other gravel mining companies negligently dumped sediment into Spring Creek and the San Jacinto River, reducing the waterways’ capacity to absorb flooding caused by Hurricane Harvey. Plaintiff seeks a declaration it does not have to defend nor indemnify Megasand against the litigation.”
Underlying Cases
After Hurricane Harvey, hundreds of residents in the upper San Jacinto River watershed banded together in several lawsuits against sand mines. The suits allege that mines located near the river and its tributaries discharged silt and sediment without authorization. That, they claim, reduced the ability of the river and Lake Houston to handle floodwaters, which in turn contributed to the flooding of their homes and businesses. The first lawsuit alleges nuisance, negligent conduct, gross negligence, and violation of the Texas Water Code Section 26.121. It names Megasand as a defendant. Several subsequent lawsuits were consolidated with this one.
Another suit filed this February represents 437 plaintiffs and 55 defendants, also including Megasand. This suit alleges negligence and negligence per se. Negligence per se is the unexcused violation of a statute. The suit alleges, in part, that defendants owed a duty to Plaintiffs to implement procedures to reduce the discharge of sediment, but did not.
Impact if Everest is Successful
This is not good for the folks who actually want to recover money, but may put some sand mines out of business. The insurance company says that Megasand’s policy does not cover pollution. Therefore, Everest wants to stop paying for Megasand’s defense. If the judge agrees, Everest would not have to pay for any settlements, judgements, or legal fees.
Says Selbe, “The good thing if you are an insured being defended is that your defense fees and costs are usually paid by the insurance company and often the insurance company eventually pays to settle. In this case, the insurance company wants out of the box altogether. That’s bad for Megasand. It will have to pay to fight this lawsuit and if it loses, will have to pay to defend the flood cases and any judgments or settlements.”
Even though Harris County courts are trying the underlying lawsuits, Everest filed its suit against Megasand in federal court. The insurance company is incorporated in Delaware and the sand company in Texas.
Basis for Everest Claims
The Everest suit claims, in part:
Stepen O. Venable of Walker Wilcox Matousek LLP represents Everest National Insurance Company.
It’s not clear what triggered the Everest suit at this time. Plaintiffs filed the first of the underlying suits in 2018.
Editorial Opinion
Dozens of posts on this blog have documented discharges from sand mines. I have so many aerial photographs that I have personally concluded that pollution is part of most mines’ normal business practices. If caught, mines simply pay a slap-on-the-wrist fine.
Since mines were forced to register in 2011, the average fine has been only $800.
If Everest is successful, the “expected” part of their claim may form a precedent that transforms the mining industry in this state. Especially if the Attorney General successfully prosecutes the Triple PG mine in Porter. The Attorney General alleges serial pollution and seeks fines that could exceed a million dollars. (Note: The underlying suits in this Megasand case also name Triple PG as a co-defendant.)
Financial risk may produce changes in business practices that Austin has not been willing to legislate.
Posted by Bob Rehak on 4/11/2020 with thanks to Steven Selbe
956 Days after Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
Perry Homes Expanding N2 Detention Pond on Woodridge Village Site; Also Building Up Low Areas
On Wednesday, Perry Homes resumed construction on the Woodridge Village Site in two areas: adjacent to the N2 detention pond and along Woodland Hills Drive. Today, we know more about the nature of the construction activity next to N2 thanks to receipt of construction plans from Montgomery County on Thursday morning. The plans were part of a Freedom of Information Act Request.
N2 Detention Pond Expanding North and East
The new plans show an expansion of the N2 pond to the north and the east. In the satellite image below, “A” represents the original N2 pond which Montgomery County built 15 years ago. “B” represents the approximate expansion area which will be about 8 to 10 feet deep.
City of Houston approved the plans on 3/17/2020, according to this inspection report dated 3/30. Montgomery County approved them the same day according to the County Engineer’s stamp on the plans. Below, see what the same area looked like from a helicopter before construction started.
See below what the N2 area area looked like on Good Friday morning, two days AFTER construction started. Compared to the photo above, contractors took out the crescent shaped row of trees on Thursday. They also started excavating the expansion area.
Part of the dirt from this excavation work went to fill in former wetland areas in the foreground of the image above.
Also Filling Low Area Along Woodland Hills
Two reports (Wednesday and yesterday) from other sources suggested that Harris County was responsible for this work. However, a call to Precinct 4 Commissioner Jack Cagle’s assistant this morning indicated the County is NOT involved in this construction activity.
New Contractors On Job
Plans show that detention pond N1 will eventually go where these trucks are now parked.
I counted six pieces of equipment on the southern section of Woodridge and at least 12 on the northern section, including those above. By my count, that’s a record. I’ve never seen so much earth-moving equipment on this site at one time.
Listing Sign Still Up
A sign at the Woodland Hills entrance today indicated that the Perry property is still listed for sale.
Due to the Easter weekend, with most staff off, Commissioner Cagle’s office could not reply today about the status of negotiations with Montgomery County, the City of Houston, and Perry Homes to purchase the property.
In their meeting Tuesday, Harris County commissioners discussed trying to negotiate Atlas-14 compliance and closure of the “beat the peak” loophole with Montgomery County. As a contribution from the City, they also requested land in lieu of cash to help defray costs on other Flood Control projects.
Two More Detention Ponds Planned But Not Started
The City and MoCo previously approved plans for N1 and N3, two other detention ponds on the northern section of Woodridge Village. Contractors have not yet started excavating those.
Posted by Bob Rehak on 4/10/2020 with help from Matt Swint
955 Days after Hurricane Harvey and 204 after Imelda
The Ostrich Paradox: Why We Habitually Under-prepare for Disasters
Some recommended reading. I just finished rereading a book, published in 2017, called The Ostrich Paradox. It examines why we habitually under-prepare for disasters. Why do some people, for instance:
Why Instinct Sometimes Overrules Reason
To illustrate these biases, the authors look at a specific subset of decisions involving risks, such as flooding and earthquakes. The probability of such disasters is extremely low but the consequences extremely high. These represent rare threats for which we have little stored knowledge.
Six Innate Cognitive Biases
The book focuses on six cognitive biases that the authors characterize as “Our Innate Engineering.” Those biases influence our decision making in such cases.
Myopia – A tendency to focus on “here and now” costs when appraising the value of long-term protective investments. “I’m really going to have to scrimp to afford that flood insurance for a flood that may never come in my lifetime.”
Amnesia – A tendency to forget too quickly the pain of past disasters. “Harvey was two years ago. I don’t want to worry about flood mitigation now. It just reminds me of the pain.”
Optimism – A tendency to underestimate losses that could result from rare, future hazards. “Harvey was a 1000-year storm. You can’t plan for one of those.”
Inertia – A tendency to maintain the status quo or chose a default option when making difficult decisions with a high level of uncertainty. “I just can’t figure out whether these new flood maps are valid. I’m not going to buy that flood insurance now.”
Simplification – A tendency to examine a subset of factors when making complex choices involving high risk. “I never flooded before, even during Harvey. Why buy flood insurance now?”
Herding – A tendency to base choices on what people around you are doing. “None of my neighbors have flood insurance. Why should I?”
Finding Ways to Overcome Your Biases
The theory behind the book: that by recognizing our own cognitive biases, we may be able to overcome them.
After the introduction, the authors divide the book into two main parts.
The first devotes a chapter to each of the biases. Within each chapter they give dozens of examples and present academic studies that illustrate the difficulty people have making rational choices about these rare events.
The second devotes three chapters to strategies that can help us overcome them.
About the Authors
The authors are two professors from the Wharton School of Business at the University of Pennsylvania: Robert Meyer and Howard Kunreuther. They both specialize in risk management and decision processes. Wharton ranks as one of the nation’s leading business schools.
The writing can get dense at times. It’s not for the feint of heart or the casually interested. Primary audiences include academics, insurance executives, government leaders, policy makers, emergency preparedness planners, etc.
Afternoon Read That Could Make You a Better Decision Maker
That said, with enough coffee, most people could wade through this in an afternoon during the virus lockdown and get a lot out of it. It’s available for $1.99 as an e-book from Amazon.
As I read it, I found myself replaying some of my own past decisions and recognizing myself in several examples. I also reflected on the dozens of flood victims I have interviewed who replayed similar arguments…with regret.
The Ostrich Paradox may help make you a better decision maker. Or help you convince other people to make better decisions.
For instance, do you have a family member who thinks he or she is immune to the corona virus?
That said, I will pass along some wisdom from an ER Nurse, based on real life examples. “Now’s not the time to learn how to ride an ATV, use a chainsaw or climb a ladder.”
Stay in. Stay safe. Stay healthy.
Posted by Bob Rehak on 4/9/2020
954 Days since Hurricane Harvey