Record Rainfall Will Lead to a Flood of Litigation

As Los Angeles inches toward its highest annual rainfall total on record, the property damage left in the wake of the storms is devastating. All across the Southland, homes have toppled down hillsides as if they were toys. Long after television news ends its “Stormwatch” coverage, these homeowners will be left to try to piece together their lives and return to some semblance of normalcy. That means seeking recovery for their losses so they can start over. And that means many homeowners will be turning to the courts.

Their likelihood of success depends on a multitude of factors. Some homeowners will be able to recover losses, and others will not. Experienced lawyers will know how to spot the fact patterns that will likely lead to recovery. This is critical not only to assisting homeowners who can recover for their losses, but counseling those who are not likely to do so.

Landslide litigation is an expensive battle of experts. It is not unusual for both sides to have their own geologists, geotechnical engineers, hydrologists, civil engineers and appraisers–to name just a few.

Without knowing some of the basics of earth movement law, inexperienced counsel may spend lots of money with little likelihood of success.

What laymen generically refer to as landslides may in fact be one of several different things. A landslide is a perceptible downward sliding or falling of a relatively dry mass of earth, rock, or a mixture of the two. Mudflow is the rapid movement of fine-grained saturated soil. Debris flow is the rapid movement of highly fractured rock. Subsidence is a sinking of earth caused by excavations, improper compaction of fill, decaying vegetation or withdrawal of underground fluid.

The distinction can be legally critical, as the theories of liability and responsible parties may vary. A geotechnical engineer is needed to create a descriptive model of what caused the earth movement. The lawyer who files first and investigates later will often discover no supportable theory of liability.

Most homeowners will begin by looking to their homeowners insurance. But first-party property insurance is not a likely source of recovery. Most homeowners insurance policies specifically exclude coverage for earth movement or flood damage.

Many years ago we handled a landslide case where the homeowners insurance agent told the insureds, “The only way you’re covered is if the house catches on fire as it slides down the hill.”

These days, not far from the truth.

One possible exception is where the landslide or flood can be traced to the aftereffects of a fire. In burn areas, increased mudflow is expected for years after the blaze. Homeowners may be entitled to first-party insurance in such cases (Howell v. State Farm Fire & Casualty Co., 1990).

The general lack of first party coverage actually leads to litigation. If an uphill home topples into a downhill home, neither homeowner will likely have first-party coverage for the damage to their homes. But if the uphill homeowner sues the downhill homeowner (and vice versa), both homeowners’ third-party liability coverage will be invoked–perhaps the only route to triggering insurance coverage. Ironically, the insurance industry’s elimination of first-party earth movement coverage will lead to the filing of more litigation.

Owners of adjacent property may be liable under theories of negligence, nuisance, removal of lateral or subjacent support, or trespass. In Sprecher v. Adamson (1981), the Supreme Court rejected the common law doctrine that once immunized landowners or possessors from damages to adjacent properties caused by natural conditions of the land. Thus, under traditional notions of negligence, a landowner has a duty to act reasonably in the managing of property to avoid damaging adjoining properties.

A nuisance includes anything that interferes with the comfortable enjoyment of property. Successive owners who fail to abate a continuing nuisance may be liable in the same manner as the former owner who created the nuisance. Proof of negligence is not required.

Where downslope property is damaged by surface water runoff from upslope property, the rule of Keys v. Romley (1966) will apply. Both upper and lower landowners must act reasonably in discharging and accepting surface water runoff. If both act reasonably, the upper landowner who has modified the natural system of drainage is responsible for damage to the lower property.

The Court in Burrows v. State of California (1968) deftly reviewed the applicable rules: “1. If the upper owner is reasonable and the lower owner is unreasonable, the upper owner wins; 2. If the upper owner is unreasonable and the lower owner reasonable, the lower owner wins; 3. If both the upper and lower owner are reasonable, the lower owner wins also.”

In surface water cases, negligence is not an important issue. Even a non-negligent upper landowner can be found liable under the rule of Keys v. Romley. In fact, it is error for the court to instruct the jury as if the case involved traditional principles of negligence.

A much more powerful theory of liability is derived from Article 1 Section 19 of the California constitution. A public entity may be liable in inverse condemnation when a public work is a substantial cause of damage to private property–even if there are other contributing causes. The standard is one of strict liability.

How a public work may have contributing to earth movement damage to private property is not always immediately apparent. Most frequently, the tie-in arises from construction of public streets or drainage improvements.

For example, the State of California built Pacific Coast Highway through Malibu in the early 1920s and then substantially widened the highway in the 1930s. Significant cuts into the hillside–often leaving oversteepened slopes–were made to create the space to widen the highway. Over time, the mountains gradually attempt to revert to their natural angle of repose. This is the geological equivalent of pouring a pile of sugar on the table and removing some of the bottom of the pile–the sugar will slide into a new position, seeking its natural angle of repose.

Constitutional liability for inverse condemnation is not governed by the rules that govern rights and responsibilities between private parties. The purpose of inverse condemnation is to “distribute throughout the community the loss inflicted upon the individual by the making of public improvements” (Holtz v. Superior Court, 1970). The constitutional mandate requires the public to pay for the true costs of a public project–not just the direct costs of labor and materials, but the damages to private property which the project substantially causes.

When inverse condemnation liability is established, the measure of damages is the diminution in the property’s value before and after the landslide. Attorneys’ fees, expert fees, and prejudgment interest are also recoverable.

Public entities may also be liable in earth movement cases for nuisance. These tort theories differ from inverse condemnation in that they allow recovery for emotional distress, but they must also face the array of immunities that protect governmental entities. In addition, a landowner who wishes to pursue such theories must file a tort claim under Gov’t Code §905 (usually within six months of the damage) before doing so. By contrast, tort defenses do not apply to a constitutional inverse condemnation claim, and no claim need be filed as a precursor to suit.

Handling earth movement cases is full of traps for the unwary. Getting a skilled expert involved early on is essential to determining whether a theory of liability exists. Counsel need to think like a geotechnical engineer and a hydrologist in order to evaluate cases and advise homeowners.

Losing one’s home is perhaps the most devastating property loss one can suffer. But the legal system is not going to compensate every homeowner who owned hillside property which was damaged by rainfall. As homeowners turn to lawyers to recover for their losses, they need dispassionate counseling by experienced lawyers who can separate the fact situations that are likely to lead to recovery from those that are not.

Topics Lawsuits California Flood Property Homeowners