SEWER LINE BREAK PITS MAN AGAINST INSURER.

Byline: Holly Edwards Staff Writer

ENCINO - When Michael Conley bought his first home seven years ago, he thought it was the smartest purchase of his life - a long-term investment in his future financial security.

Then the sewer line between his home and the street ruptured in the fall - something that happens to about 100 Los Angeles homeowners every year. And what is typically a fairly simple repair - although admittedly messy and fairly expensive - became a nightmare.

Conley says his house has become a worthless biohazard floating atop eight feet of rancid, sewage-saturated sludge. Water damage has now spread throughout the Zelzah Avenue home - cracking walls, filling the two-bedroom house with a sickening stench, and spawning a barnyard-caliber infestation of flies.

``I've been living on top of a pool of feces. I have to go to Ralphs in the middle of the night to use the bathroom, and I've woken up with flies in my ears,'' said the 41-year-old public relations agent and part-time comedy writer. ``If this weren't so tragic, it would make a great sitcom.''

Conley started to have the damage fixed, but discovered that his homeowner's insurance - like most policies - does not cover water damage and that the city assumes no responsibility for sewer lines under private property.

Conley is now waging war against his insurance company, Century National in North Hollywood, trying to obtain the estimated $200,000 it will cost to repair the home.

While Century National officials declined to comment on Conley's case, state insurance officials say insurance companies as a rule do not cover long-term water damage because it is so costly. And, they say, the state cannot compel insurance companies to offer any particular type of coverage.

``Losses from water damage and mold are starting to escalate, and it's the insurance companies' job to limit their losses,'' said Nanci Kramer, a spokeswoman for the state Department of Insurance, adding that many companies now exclude losses from earthquakes and terrorism, as well.

``There are so many more exclusions now than there used to be, so it's more important than ever for homeowners to read their policies.''

Lee Freeman, an insurance law attorney in Woodland Hills, said it is impossible to buy a policy covering long-term water damage, and that homeowners with such damage are on their own.

``People call me with water damage problems all the time, and I tell them there's nothing they can do,'' Freeman said. ``But a person's home is usually their biggest investment, and I think insurance companies should at least be required to offer the coverage as an additional policy.

``There should be some way a homeowner can go to sleep at night knowing their investment is safe, but we know that's not the case.''

But Conley maintains that he purchased additional insurance coverage to protect him should his house ever become unlivable. While his mortgage company has declared the house worthless, city Building and Safety officials have not yet condemned it.

Public Works officials recently cleared large tree roots from the sewer lines that run under the street in front of Conley's home. And because the pipes that connect the home to the main line are installed by contractors when the home is built, the city is not responsible.

Conley has hired a general contractor to help him through the repair process and said he would like to repair his home - but only if he can recover the costs from his insurance company.

His contractor, Hannah Eisenberg, said it would cost at least $200,000 to lift the house from its foundation, pump out the contaminated soil and repair the structure.

``It's not going to be pretty, but it could be done,'' said Eisenberg.

Conley said he has stopped paying his $2,200 monthly mortgage because the house has no value, and that his mortgage company has taken initial steps to foreclose on the property.

However, after inspecting the damage, mortgage company officials told Conley the property is too contaminated to be resold. To date, the company has not determined what it will do with the property.

Conley blamed the extent of the water damage on his insurance company because his agent told him to postpone repairing the damage until the company could determine whether it would cover the claim.

For a month, Conley said, he watched the damage worsen until the insurance company finally told him in December that it had rejected the claim because it resulted from water damage.

Conley then hired a firm to inspect the damage, but the contractor refused to go under the house until the sewage had dried. Huge fans were placed under Conley's house for several weeks so workers could safely inspect the damage.

``These industrial fans vibrated the whole house,'' Conley recalled. ``It was like living at LAX.''

The company has since given Conley a $5,200 estimate to repair the sewer line, but refused to do the work until the property is decontaminated. And Conley said he is now having trouble finding a company willing to do the decontamination work.

While the cards appear to be stacked against the homeowner, Conley said he will not give up without a fight.

``I just want my house back and I want my life back,'' he said. ``I want to get this fixed and move on.''

CAPTION(S):

2 photos

Photo:

(1 -- color) A ruptured sewer line beneath Michael Conley's Encino home has rendered his house worthless and has the resident fighting his insurance company. The insurance company says it is not responsible for water damages.

(2) Michael Conley is fighting his insurance company for the $200,000 it would cost to repair his Encino home from damages incurred from a ruptured sewer line.

Gus Ruelas/Staff Photographer