Facts

In 1999, a group of 20 homeowners living in San Clemente filed a claim against the Marlborough Seaview Estates Homeowners Association, the City of San Clemente, Shorecliffs Golf Course and Shorecliff Mobile Home Park for allowing water to infiltrate the soil around their properties, resulting in the re-activation of an ancient landslide system.

The homeowners, who lived near the ancient landslide, claimed that land movement began in 1999 after the separation of a city water line. Thereafter, in 2001, three homes were red-tagged as inhabitable by the city as a result of further land shifting. Some of the homeowners had already suffered damage to their homes while others contended they would likely be affected in the future. Various defendants, including the city, cross-complained against the homeowners, challenging the homeowners' own water uses.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that the city was responsible for the pipe separation because the pipe's joint was not proper for water lines in an area prone to landslides. Consequently, the plaintiffs argued that the resulting leak was a cause of the landslide. They further contended that the City citation failed to maintain and repair cracks in the streets and repair damage to storm drains. In addition, the plaintiffs blamed the golf course and mobile home park for furthering the damage to the landslide area by allowing excess water to drain into the soil. They also claimed that the area's developers should have informed them about the instability of the area.

DEFENDANTS' CONTENTIONS:
The city contended that the landslide occurred due to prior-existing soil conditions and as a result of El Nino, a 1997 storm that brought severe rain. The city further contended that the leak was not substantial enough to have caused the landslide (several homeowners filed claims for landslide damage before the pipe pulled apart).

The mobile home park contended that there was no evidence that the irrigation and/or drainage activities on the property was a cause of the landslide, and, that the landslide was caused by a combination of factors, including the pre-existing landslide condition, defects related to the original grading and development of the plaintiffs' homes in the early 1970s, and the saturation of the soils during the El Nino rains.

The plaintiffs countered the defendants' argument by presenting expert testimony that in the years prior to 1997, there were extreme cases of rain fall exceeding that of El Nino. Thus, El Nino would not have caused such severe damage.

Damages

Three homes owned by the plaintiffs that were red-tagged as inhabitable were in need of being rebuilt.

Result

The collective non-City defendants and cross-defendants (including the homeowners) paid a total of just over $3 million. In addition, the City of San Clemente agreed to fund over $6.5 million to make repairs to the landslide area and will recover the money spent from the sales of habitized as well as newly-developed real estate lots.

Other Information

Some settlement funds will be placed in escrow and used for repairs and grading of new lots which will be sold. The proceeds of sale will be used to reimburse the city of San Clemente for its contributions to the settlement. The owners of the uninhabitable homes will receive $500,000 each and their lots will be re-established. The remainder of the settlement amount will be used to pay for attorney fees and expert costs. According to defendant City of San Clemente, this settlement is not final until there is an approved, executed set of construction contracts within budget and all permits have been obtained.