Facts

In the early morning hours of April 4, 2006, the Beachwood neighborhood was flooded when the levee of an irrigation canal overtopped and washed out during a large storm event that deposited a substantial amount of rainfall and storm water runoff into a canal system owned and operated by the Merced Irrigation District. A portion of the system was also designated as a flood control project by the Army Corps of Engineers in the 1950s, which was maintained by the Merced Irrigation District, County of Merced and City of Merced under the name, the Merced Streams Group. The flooding caused substantial flooding in the neighborhood including approximately 216 homes displacing many families.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that pursuant to the California Constitution, Article 1, Section 19, that the defendants (governmental entities) caused a "taking" of Plaintiffs' real and personal property and that Plaintiffs were thus entitled to "just compensation" for the damage caused to their homes and loss of personal property. Pursuant to tort theories under nuisance and dangerous condition of public property the plaintiffs sought recover for emotional distress.

Plaintiffs alleged that pursuant to Akins v. State of California (1988) 61 Cal. App. 4th 1, the improvement that caused the flood was an irrigation canal and not part of the flood control project which subjected the defendants to strict liability. As an alternative, the plaintiffs alleged that if it was in fact a flood control project that caused the flood, then pursuant to Arreola v. County of Monterey (2002) 99 Cal.App. 4th, 722 and due to a lack of maintenance of the channels that caused the overflow at a "low spot" in the levee that led to the flooding, the defendants would be held liable.

DEFENDANTS' CONTENTIONS:
Defendants alleged that Plaintiffs lived in a designated "flood plain" and that the flooding resulted for an "act of God" when the subject storm event deposited more storm water in the flood control project channel then it was designed to handle. Defendants alleged that the channel was designed to hold 7,000 cfs and that the storm event recorded the amount of runoff in the channel to be in excess of 9,000 cfs. Plaintiffs alleged in response that if the channels had been properly maintained they would have been able to handle this amount of storm water.

Damages

Plaintiffs sought damages based on a claim that the flooding caused structural damage to the foundations of their homes in addition to a loss of personal property items and emotional distress. Defendants alleged that the foundation damage pre-existed the flood. Plaintiffs alleged structural damage of approximately $10 million and the defendants' experts estimated the structural damage to be in the range of $2 million.

Result

The case settled for $13.1 million. County of Merced settled the case for $5 million. During the course of the jury trial and near the completion of the plaintiffs' evidence, the remaining defendants, Merced Irrigation District and Merced Drainage District No. 1 settled for an additional $5 million for a total of $10 million. An earlier settlement was reached with the Merced Irrigation District/Merced Drainage District No. 1, County of Merced and City of Merced for $3.1 million regarding toxic tort claims arising from the subject-flooding event.

Other Information

The parties engaged in confidential mediation efforts regarding the inverse condemnation claims. No settlement was reached.