Facts

On Nov. 9, 2004, at 1:22 p.m., an excavator machine operated by Javier Ramos' employer, Mountain Cascade Inc., (MCI) punctured a high-pressure petroleum line owned and operated by Defendant SFPP, L.P. (SFPP). MCI was constructing a large water supply line for East Bay Municipal Utility District (EBMUD). MCI was excavating the trench to install EBMUD's 72-inch outside diameter water supply line. The bucket of the excavator punctured SFPP's high-pressure petroleum pipeline. Gasoline was released into the trench and ignited by nearby welding activities. The resulting explosion and fire fatally injured Javier Ramos. Four other workers also died and other workers were seriously injured.

Javier Ramos, 36, was a laborer for MCI. He was the husband of Maria Ramos and the father of five children, age four through 18. Javier Ramos allegedly survived for 28 hours before succumbing to burn injuries. The plaintiffs sought compensatory damages for wrongful death.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that SFPP's petroleum pipeline was not properly designed, maintained and marked. SFPP and their contractor Comforce Technical Services were allegedly negligent in failing to monitor the construction of the EBMUD pipeline. In the area where the petroleum pipeline was punctured by MCI, the pipeline had a significant offset, which brought the pipeline next to the trenching activities for the EBMUD water line. The offset in the petroleum pipeline was designed to preserve a large oak tree, which was at the location when the petroleum pipeline was built but had since been removed.

Representatives of SFPP and Comforce were allegedly continuously at the construction site for purposes of monitoring the construction of the EBMUD water line and to protect the existing SFPP petroleum line. Allegedly no one from SFPP or Comforce indicated the close proximity of the petroleum line. MCI continued their trenching activities in a straight line unaware of the offset and struck the SFPP petroleum line.

Prior to the accident, EBMUD was allegedly aware of safety concerns raised by EBMUD original contractor Modern Continental Construction (MCI's predecessor). Modern Continental reported its concerns that other adjacent pipelines were not appropriately marked. Modern Continental warned EBMUD that the SFPP's petroleum pipeline that was struck by MCI was hard to locate. Modern Continental wanted to determine where the other pipelines were located which would delay the work and raised the cost. Modern Continental was fired by EBMUD and MCI was then hired. EBMUD pushed Mountain Cascade to finish the job, putting schedule and money ahead of safety concerns.

Carollo Engineers, P.C., and Camp, Dresser & McKee designed the EBMUD water pipeline. The design of the water line failed to adequately consider the close proximity of the SFPP petroleum pipeline including the large oak tree that marked the offset which had since been removed.

DEFENDANTS' CONTENTIONS:
The petroleum pipeline that was ruptured and subsequently exploded was owned by SFPP, L.P. ("SFPP"). The defendants further contended that MCI, the decedent's employer, caused the accident but was not pursued by platintiffs because of the workers' compensation bar. MCI was allegedly aware of the location of bends in the petroleum pipeline and had numerous opportunities to avoid the accident. SFPP, Comforce and EBMUD allegedly advised MCI of the offset.

Specifically, defendants contended that there were maps that clearly showed the offset, the provision of which, alone, met SFPP's statutory obligations to identify the location of the SFPP pipeline. The project plans identified the subject bend in the petroleum pipeline and highlighted it with an arrow and reference to Note 2, which required the contractor to verify the location of the pipeline in that vicinity prior to construction. But MCI did not follow the plans and failed to verify the location of the pipeline. MCI's project superintendent read Note 2, and called SFPP shortly before the accident, but failed to bring the bend to SFPP's attention because he claims he believed the plans were in error and so he ignored them.

Camp Dresser & McKee and Carollo Engineers contend that the water pipeline was readily constructible as designed, with adquate physical clearance with the other buried utilities in the right of way, all of which were correctly shown on their engineering plans.

In addition, SFPP contended that the offset was properly marked by SFPP personnel prior to the accident. SFPP denied any contention that any SFPP representatives stated that the SFPP pipeline ran straight between the potholes along the SFPP pipeline. MCI allegedly failed to follow the plans for the water pipeline and trenched too close to the existing petroleum pipeline. MCI continued to trench straight ahead, ignoring the construction plans and advice.

SFPP also contended that its representative located and marked the pipeline several times before the accident, including at the accident site itself, but that MCI's workers dislodged the markers during construction. MCI allegedly feared the delay would be caused by notifying SFPP to return for remarking, and so it specifically told SFPP in writing, on at least three separate occasions, that it should not return for remarking.

Because MCI was facing pressure to finish the job in light of potential financial penalties, MCI allegedly ignored safety concerns and chose not to have SFPP remark the location of the petroleum pipeline. MCI claimed SFPP and Comforce failed to mark or locate, and in fact, misrepresented the location of the SFPP pipeline.

Settlement Discussions

The plaintiffs demanded $12 million; the defendants made global offers totaling $8.2 million.

Specials in Evidence

$119,282. $94,000. $1 million.

Damages

According to the plaintiff: Javier Ramos sustained burn injuries leading to his death 28 hours later. Plaintiff Maria Ramos lost her husband of 16 years and five children lost their father. Javier Ramos was their sole source of support. The plaintiffs shared a very close relationship with Javier Ramos. He was an employee of Mountain Cascade earning $40,000 a year. The economic damages were $1 million. According to the defendants: The plaintiffs' loss of past and future support was overstated. Javier Ramos had a very spotty earnings record for the 10 years prior to the accident. He had earned $3,134 in 1998. He suffered a back injury while on the job in 1999. He was on disability and had not worked from 1999 through 2002. He had earned $1,029 in 2003 and $19,208 in 2004.

Result

$8.5 million gross settlement; $8.2 million net settlement. The workers' compensation insurance company, National Union Fire Insurance Company, waived their lien of $300,000 as part of the settlement.

Other Information

According to defendant EBMUD, the engineered drawings provided by EBMUD to the contractor clearly showed the offset in the SFPP pipeline. In fact, Spec. 1861A Drawing w-8780-35, Note 2 states: “CONTRACTOR SHALL VERIFY LOCATION OF 10” PETROLEUM LINES PRIOR TO ANY CONSTRUCTION BETWEEN PIPE STATIONS 100+00 AND 101+00 AND 103+00 TO 129+00” (CAPS in original. The accident occurred between pipe stations 100+00 and 101+00.) The construction contract required the verification of the SFPP pipeline at the location where the accident occurred and included numerous provisions regarding the need to identify and protect the SFPP pipeline, including the requirement that Underground Service Alert (“USA”) statutes be followed in marking the underground facility prior to excavation. EBMUD asserted a defense under Privette v. Superior Court (1993) 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721 and its progeny and sought indemnity from its construction contractor MCI. EBMUD was defended and indemnified by MCI’s insurance carrier. MEDIATORS: Jeffrey Krivis, Esq., John Bates, Esq.