HomeMy WebLinkAbout1995-01-23 95-83 ORDERCOUNCIL ACTION
Item No. 95-83
Date January 23, 1995
Item/Subject: Authorizing City Solicitor to Accept Settlement of
the City of Bangor's Claim Against Bus Industries of America, Inc.
Responsible Department: Legal
On April 30, 1993 the City's Motor Pool replaced awn pitman arm
n City bun no. 42. The new pitman a was
ordered from Bus
Industries of America, Ince of Oriskany, New York. On May 6, 1993,
n the course of a routine Mt. Hope Avenue run, bus no. 42 was
volved in a single vehicle accident. At the time of the
accident, the bus was occupied by 5 passengers and its driver Upor
inspection following the accident, it was determined that the
replacement pitman arm had broken into two pieces, causing the bus
to lose its steering control. A subsequent inspection of the
broken pitman arm revealed that the part was cracked prior to its
receipt by the City of Bangor Motor Pool.
(cont'd on next page)
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Depar nt Heed
Manager's Comnents:
Cr[y Manager
Associated Information: Order
Budget Approval:
Finance Director
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City Sol'citor
Introduced For
Passage
First Reading
Referral Page I of 3
95-83
As a result of the accident, the City lost the use of the vehicle
for approximately 3 weeks, thereby losing revenues, in addition to
repair coats, towing charges, and rental charges for a comparable
replacement vehicle. There were no reported injuries to the
passengers on the bus, but the bus driver complained of discomfort
n his back and was out of work on various dates for approximately
a month. In addition, disbursements were made on behalf of the bus
driver's pending workers compensation claim.
On May 26, 1993 a demand letter was sent to Bus Industries of
America asserting a claim in the amount of $6,351.95 by the City
because of the defective pitman arm. In response to the City's
claim, Crawford and Company of Bangor, Bus Industries' insurer,
advised us that Bus Industries was a distributor of the part and
not the manufacturer and claimed liability should fall on the
manufacturer of the part.
Since May of last year there has been ongoing discovery and
investigation of the circumstances surrounding the accident which
has resulted in
much delay. In March of 1994, Crawford and Company
informed me that they had turned the claim over to Commercial Union
Insurance Company to involve the manufacturer the part, Teldo
Machine and Tool. However, I believe that Bus Industries remains
liable to the City as our direct parts supplier and therefore
encouraged that Crawford settle out the claim with Commercial Union
and Teldo t0 avoid unnecessary litigation.
In December 1994 our office received a settlement offer from
Ontario Bus industries. Ontario Bus Industries, the parent
corporation of Buz Industries of America, Inc., is undergoing a
non -bankruptcy re organization involving liquidation of most
creditor claims.As part of that reorganization, the corporation
has offered to settle out the City of Bangor's claim for a total
payment of $5,163.96, or approximately 80k of the original claim
amount. Given the likely expense and delay of prosecuting this
claim to final judgment in the original claim amount, I recommend
acceptance of the settlement offer.
95-83
Amipmd to Caumdw Soucy January 23, 1995
CITY OF BANGOR
(TITLE) (orba Autho rng City Solicitor to Ac1. cept Settl11 ement of
the City of Bangor's Claim Against Bus Industries of America, Inc.
By do IXty CoasaA of de cum ofBnyor.
THAT the City Solicitor is hereby authorized on behalf
of the City of Bangor to execute all releasee and other documents'
necessary to accept a $5,163.96 settlement of the City of Bangor's
claim against Bus Industries of America, Inc., arising out of an
accident on May 6, 1993 involving City bus no. 921
IN CITY COUNCIL 1
95-83
January 21. 1995 i
O R D E R
Passed
Cd.
Title,
CITY C R%
AutFarlx
in Solicitor to Accept
aCi[y
a Clara
Bu
Against Industries "eric
Against Bus Industries of America. Inc.
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Auigned to
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siOOOlI Councilman