The City of Scottsdale remains locked in litigation with two prominent Valley advertising executives who are suing the city after backed-up sewage damaged their Paradise Valley home in 2017.
In a lawsuit, Tim and Mirja Riester, principals at the Phoenix-based Riester advertising firm, claim the city is responsible for damages after sewage flooded their home in July 2017.
The lawsuit also names the Town of Paradise Valley, which has a contract with Scottsdale to maintain part of the town’s sewer system.
In a notice of claim sent to the City of Scottsdale in late 2017, the Riesters asked for $619,518 in damages, including $360,000 to account for a perceived 20 percent home value devaluation that could result from disclosing the sewage issue to potential future homebuyers.
The home, which has six bathrooms, was most recently valued at over $2.4 million on Zillow, an online home marketplace.
A City Council memo prepared by city staff stated the family is now asking for over $1 million in damages — well beyond what the city appears willing to pay. On May 21, Council approved making an offer of judgement for $50,000.
“A recent mediation with the Riesters was unsuccessful as the City denies liability and further believes that the Riesters have an unrealistic picture of what their true legal damages are,” reads the memo.
The offer is not an admission of liability by the city but rather a legal tactic that could require the Riesters to cover some of the city’s litigation costs, depending on the outcome of the lawsuit.
Under Arizona law, if the Riesters reject the offer of judgment and fail to obtain a more favorable decision from the court, they could be required to pay the city’s expert witness fees and other costs.
Court documents show the Riesters and the City disagree over who is at fault, with the City pointing the finger at the home builder, plumbing contractors and others who participated in construction and maintenance of the home.
According to the lawsuit, the home flooded with sewage at 1 a.m. on July 30, 2017, and again on July 31, 2017, after a manhole in front of the home “popped its lid and poured raw sewage onto the Riesters’ property and into their home for many hours.”
City Wastewater Collections Lead Bill Wilson told Tim Riester the problem was caused by a malfunction with the rain guard in the manhole in front of the house, according to the lawsuit.
In its own court filings, the City acknowledged that Wilson spoke to Riester on July 31, 2017 but does not make any statement about the contents of that conversation. City officials did not respond to a request for comment for this story.
The initial notice of claim includes a number of invoices and receipts for costs the Riesters claim resulted from the flooding, including over $205,000 for home restoration such as removing tile and wood flooring, replacing drywall and sanitizing the home’s concrete slab.
A Google Maps image of the property from May 2018 shows extensive construction on the property.
The invoice from Bedbrock Developers, a luxury home contractor, also states the family was told to vacate the home during restoration for safety purposes.
The costs sent to the city include $35,000 for a five-month home rental.
The Riesters claim in the lawsuit that Paradise Valley and Scottsdale are guilty of negligence for failing to maintain the sewer properly.
The city argued that it performed all necessary maintenance of the sewer system and does not owe any duty to the Riesters under its agreement with the Town of Paradise Valley, according to court filings.
The City tells a different story.
It claimed outside parties not named in the lawsuit are liable.
The City claims the that Atlas Development Co., a contractor hired by the Riesters after a previous backup in 2013, improperly installed a backwater valve, which resulted in the July 2017 backup.
The City also argued that home is located below the sewer grade, making it prone to flooding. It blamed unknown architects and site engineers for potentially creating faulty site plans and home builder Swedin Enterprises for failing to properly construct the residence.
Swedin Enterprises is no longer active, according to the Arizona Corporation Commission.
The city also blamed on Riggs Plumbing, the original plumbing contractor, for failing to properly install the sewer system.
The litigation is ongoing and it is unclear how the Riesters will respond to the city’s offer.
An attorney for the Riesters did not respond to a request for comment.