MUD says its payout to plaintiffs in 2016 Old Market fire totals $3.15 million

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OMAHA — The publicly owned Metropolitan Utilities District has agreed to pay the last claim left in the 2016 Old Market explosion case — bringing MUD’s combined plaintiffs’ payout to $3.15 million.

The $975,000 settlement with M’s Pub was approved Aug. 2 by the MUD Board, said M’s attorney, Tom White.

It follows more than seven years of legal wrangling. It also follows a mid-June ruling by Douglas County District Judge Tim Burns that MUD was responsible for paying half of about $3 million in damages incurred by the M’s Pub owners.

The judge ruled that the contractor installing fiber-optic cable in the area was liable for the other half.

White said MUD had threatened to continue to appeal, but ultimately agreed to the $975,000. That is an amount just under the $1 million cap per claimant that Nebraska law allows for negligence by public entities such as MUD.

Other business and condo owners that sued for damages from the fire settled earlier.

White said his clients, led by Ann Mellen, who has since rebuilt and reopened M’s Pub, had “courage” to go the distance.

“Because she had the strength of finance and will, she saw full justice,” said White, of White & Jorgensen law firm.

Mellen and business partner Ronald Samuelson were leasing the M’s Pub space in the Old Market’s Mercer Building on Jan. 9, 2016, when Minnesota contractor North Central Services was drilling for a fiber optic cable project for Verizon Wireless, and hit an underground gas line outside the pub.

Gas leaked into the pub’s basement, leading to an explosion and fire that raged as MUD workers struggled to find the correct valve to shut off the gas that fueled the flames.

In an earlier ruling, Burns found negligence in MUD’s actions, including the marking of gas lines in front of M’s Pub. He also found fault with NCS, which earlier settled with plaintiffs.

MUD told the Nebraska Examiner in a statement Monday that it had set aside adequate reserves to ensure that the settlement payoff would not require an increase in gas rates.

The utility, which provides natural gas and water to a four-county area, maintains that its employees acted appropriately in marking the gas line and in responding to the resulting fire.

“The district is pleased to bring all matters related to the January 9, 2016 Old Market Fire to a close,” it said.

MUD said that more than 30 claims were presented to the utility, totaling about $32.8 million.

To resolve all claims, MUD said it entered into settlement agreements totaling $3.15 million.

“The district entered into these settlements with the claimants because they represented opportunities to resolve the claims in the best interest of the district’s ratepayers,” MUD said.

The payoff amount to claimants does not reflect costs of the MUD defense team during the lengthy case which, early on, involved dozens of plaintiffs and multiple lawsuits against MUD and other companies involved in the fiber-optic project.

Nobody died or was severely injured in the fire that, in addition to M’s Pub, heavily damaged a neighboring boutique. It also displaced numerous people who owned condos above the restaurant in the iconic building owned by the Mercer family, who founded the Old Market.

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by Cindy Gonzalez, Nebraska Examiner August 7, 2023

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Senior Reporter Cindy Gonzalez, an Omaha native, has more than 35 years of experience, largely at the Omaha World-Herald. Her coverage areas have included business and real estate development; regional reporting; immigration, demographics and diverse communities; and City Hall and local politics.