February 4, Hunter v. County of Los Angeles Los Angeles Superior Court Case No. BC

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1 February 4, 2002 Honorable Board of Supervisors 383 Kenneth Hahn Hall of Administration 500 West Temple Street Los Angeles, California 900l2 Re: Hunter v. County of Los Angeles Los Angeles Superior Court Case No. BC Dear Supervisors: The Claims Board recommends that: 1. The Board authorize settlement of the above-entitled action in the amount of $850, The Auditor-Controller be directed to draw a warrant to implement this settlement from the Department of Public Works - Flood. Enclosed is the settlement request and a summary of the facts of the case. Also enclosed, for your information, is the Corrective Action Report submitted by the Department of Public Works - Flood. Return the executed, adopted copy to Frances Lunetta, Suite 648 Kenneth Hahn Hall of Administration, Extension Very truly yours, BNU/fsl Barbara N. Uyeda, Chairperson Los Angeles County Claims Board Enclosures HOA

2 M E M O R A N D U M January 28, 2002 TO: FROM: RE: THE LOS ANGELES COUNTY CLAIMS BOARD WARREN R. WELLEN Senior Deputy County Counsel Public Works Division Hunter v. County of Los Angeles, et al. Los Angeles Superior Court Case No. BC DATE OF INCIDENT: March 1998 AUTHORITY REQUESTED: $850,000 COUNTY DEPARTMENT: Los Angeles County Flood Control District CLAIMS BOARD ACTION: Approve Disapprove Recommend to Board of Supervisors for Approval BARBARA N. UYEDA, Chief Administrative Office LLOYD W. PELLMAN, County Counsel MARIA M. OMS, Auditor-Controller on, 2/7/2002 HOA

3 SUMMARY This is a recommendation to settle for $850,000 a lawsuit by George and Marlene Hunter (the "Hunters") against the County of Los Angeles and the Los Angeles County Flood Control District ("District") for inverse condemnation, negligence, dangerous condition of public property and nuisance. LEGAL PRINCIPLES A public entity is liable in inverse condemnation when it substantially participates in the design, construction, or maintenance of a public work which, as designed and constructed, causes damage to private property. A public entity is liable for injuries and damages caused by a dangerous condition of public property. A public entity is liable for nuisance if it interferes with the free use of private property. SUMMARY OF FACTS Since 1961, the Hunters have owned a single family residence overlooking Will Rogers State Park in Rivas Canyon in Pacific Palisades. In 1978, the Mandeville Canyon fire extensively burned the Rivas Canyon watershed. This created an imminent danger that heavy winter rains could cause severe flooding and substantial debris flows in Rivas Canyon. As a result, the Board of Supervisors declared a state of emergency and authorized the District to construct two rail and timber debris retention structures in Rivas Canyon. The structures were built on property owned by the City of Los Angeles ("City") and the City of Los Angeles Department of Water and Power ("DWP"). The City and DWP gave written permission to the District to construct the structures on their property. In order to gain access to the City and DWP property to build the structures, the District restored an old dirt road that runs along the bottom of Rivas Canyon next to a natural creek. The dirt road crosses the rear of the Hunters' property below a steep slope. The Hunters granted the District permission to utilize that portion of the dirt road which crossed the rear of their property. The Hunters contend that in restoring the dirt road in 1978, the District cut the toe of their slope and graded the road so as to divert water onto their property. In 1983 and 1985, the District hired a private contractor to clean out debris collected by the rail and timber structures. The contractor used the dirt HOA

4 road for the project. It is unknown if the contractor made any changes to the road where it crosses the Hunters' property. dirt road. After 1985, the District did not engage in any projects involving the In March 1998, following heavy El Niño rainstorms, the upper portion of the Hunters' slope failed. The Hunters contend that the 1978 actions of the District to restore access across the dirt road and the use of the road up to 1985 caused the failure. The Hunters subsequently repaired the slope failure and improved their property, including increasing the size of their backyard pad by over 800 square feet. The Hunters paid $451,214 for the repairs which took 13 months to complete. The Hunters claim that, even after the repairs, their property has depreciated by $750,000. The Hunters, who are an elderly couple, also claim to have suffered significant emotional distress as a result of the slope failure. The Hunters filed a lawsuit in Los Angeles Superior Court against the County, the District, the DWP and the City alleging causes of action for inverse condemnation, negligence, nuisance, dangerous condition of public property, and breach of contract. After investigating the facts of the case, the experts retained by the County and the District concluded that the slope failure on the Hunters' property was caused by the heavy 1998 El Niño rainfall and not by any actions of the District or County. The County and District experts also concluded that the Hunters' slope failure could have been repaired for $65,000. DAMAGES The Hunters contend they are entitled to be compensated for the $451,214 they paid to repair the slope. They also contend they are entitled to $750,000 for the depreciation to their property in its repaired state. Additionally, the Hunters seek damages for their emotional distress as a result of the slope failure and subsequent repair project. The Hunters also seek reimbursement in the amount of $653,624 for their attorney fees, expert fees, costs, and interest pursuant to statute. STATUS OF CASE During a December 2000 trial, the Hunters and the City reached a settlement whereby the City agreed to pay $100,000 to the Hunters. The City's HOA

5 settlement was premised on the fact that it did not participate in the planning, design, restoration, or use of the dirt road across the Hunters' property. On June 7, 2001, a judgment was issued awarding damages of $2,501,214 against the County, the District, and DWP. On July 27, 2001, a motion for new trial was denied. On the same date, the judge awarded the Hunters attorney fees, expert fees, and interest in the amount of $653,624 pursuant to a State statute. Under a 1978 permit between the District and DWP, the District agreed to defend and indemnify DWP, and therefore the District is responsible for any judgment against DWP. On August 15, 2001, our office filed a Notice of Appeal. EVALUATION At trial, the Court agreed with the Hunters' arguments on liability and damages. The Court found that by cutting the toe of their slope in 1978, the District caused the eventual slope failure in The Court found that the District graded the dirt road so as to divert water towards the toe of the slope, which contributed to the failure. Our office filed an appeal because we believe there was insufficient evidence to support the judgment. We believe the evidence demonstrated that heavy El Niño rainfall in 1998 caused the slope failure on the Hunters' property. We believe that the Court made various erroneous legal rulings during the case that justify vacating the judgment and entering a dismissal in favor of the County, the District, and the DWP. Of course, although we believe there are substantial legal grounds for reversing the trial court's decision, we cannot predict the outcome at the appellate level. The Court of Appeal must show a substantial amount of deference to the lower court s decision. Typically, it is difficult to obtain a reversal of a judgment following a bench trial. Given the considerable risks and costs associated with an appeal, we recommend that this case be settled in the amount of $850,000. The Department of Public Works concurs with this recommendation. HOA

6 DEPARTMENT OF PUBLIC WORKS CORRECTIVE ACTION PLAN Facility: RIVAS CANYON WATERSHED Name: George H. Hunter, Jr. and Marlene J. Hunter vs. City of Los Angeles, et al. Case No.: BC RISK MANAGEMENT ISSUES _ Systems el Personn ISSUES This is an inverse condemnation case against the County of Los Angeles ( County ), the Los Angeles County Flood Control District ( District ), the City of Los Angeles, and the City of Los Angeles Department of Water and Power ( DWP ). In 1978, the District constructed two emergency erosion control structures in Rivas Canyon following a major brush fire. The District also restored and graded an existing dirt road to allow access for equipment to construct and clean the structures. The dirt road passes over the Hunters property at the bottom of a steep slope. In 1998, the slope failed following heavy rains. The Hunters claimed that the District cut the lower portion of the steep slope in 1978 and that this ultimately caused the slope failure in Following a bench trial, the Court entered judgment in favor of the Hunters and against the County, the District, and the DWP totaling approximately $3.1 million. The other defendant, City of Los Angeles, settled with the Hunters during trial. The County, the District, and the DWP appealed the judgment. A 1978 contract obligates the District to indemnify the DWP. Economic concerns justify the proposed settlement. The outcome of the appellate process is uncertain, and the District and the County risk greater loss.

7 INVESTIGATIVE SUMMARY DATE October 20, 1999 INVESTIGATION Department personnel first became aware of the issue after plaintiff filed a claim with the Executive Office of the Board of Supervisors. No Department action was taken since the road was inaccessible and the Department had no rights to maintain the access road. CORRECTIVE ACTIONS (PERSONNEL) Personnel involved Status Time of event Current Status Disciplinary Action Taken No personnel action necessary. All Department personnel involved with the landslide handled their responsibilities in a professional manner. Date Completed

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9 CORRECTIVE ACTIONS (SYSTEMS) System Corrective Action Date Completed Flood Maintenance Division In landslide-prone areas, Flood On-going Maintenance Division will have engineering and/or geo-technical studies completed for flood control activities before grading or restoring roads adjacent to slopes. In addition, Flood Maintenance Division will follow recommendations, such as design, construction techniques and monitoring, regarding slopes adjacent to those roads. When dirt roads created for flood control activities are located next to a stream bank, Flood Maintenance Division will construct a cross slope on the road so that when steam flows exceed the height of the stream bank, those flows are directed away from the adjacent slope rather than becoming concentrated against the adjacent slope next to the road, unless an engineering study recommends different measures to handle such excessive storm runoff conditions.

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11 CHRONOLOGY OF EVENTS DATES , 1983 and 1985 March 1998 October 20, 1999 March 2, 2000 June 7, 2001 Present INVESTIGATION The District constructed two emergency erosion control structures in Rivas Canyon to protect nearby residential areas from eroded debris. The District also restored the subject dirt road to allow for access for equipment used during cleanout activities. The District used the subject dirt road to clean out the structures. The Hunters discovered the slope failure. The Hunters filed claim against County Lawsuit served on the Executive Office of the Board of Supervisors. A judgment of $3.1 million was entered against the County, the District, and the DWP. Settlement negotiations with the Hunters. Tentative agreement reached.