Facts

Los Angeles Department of Water and Power transformer exploded on Dec. 17, 2002 near corner of Hudson and Romaine Streets in Hollywood. The plaintiffs owned two-story, 30,000 square feet building used in entertainment industry (the building is in Hollywood Media District) adjacent to exploding transformer. The burning oil was expelled from transformer onto roof of building igniting fire and causing severe damage.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that LADWP transformer exploded causing burning oil to leap onto the plaintiff's office building and starting a fire that severely damaged the property.

DEFENDANTS' CONTENTIONS:
The defendants contended that the transformer failure was caused by smoke coming from a pre-existing fire in the building.

Settlement Discussions

The parties reached the settlement after the court found defendant liable for inverse condemnation in a bifurcated trial.

Result

The case settled for $5,750,000 following trial on liability.

Other Information

Settlement for plaintiffs followed substantial confidential settlement with insurance carrier one year earlier so recovery from LADWP was in addition to substantial insurance payment already received.