WEST COAST CASUALTY REPORTS ON FIRM ACHIEVEMENT!
A recent circulation by David Stern of West Coast Casualty Service, Inc., reported on a unique settlement achieved by litigators Robert Freedman and Peter Bauman of Tharpe & Howell's Sherman Oaks office.
In this communication, Mr. Stern states:
"Orange County California Superior Court John Cannon, at the conclusion of this rather difficult case, was quoted as stating this is:
'The most creative settlement in a construction case he has seen.'
By way of brief history, in the case of Callen v. Marlborough Development, a landslide completely destroyed a number of ocean view homes as well as damaging and putting at risk many others. The homeowners, with no first party insurance, sued the neighboring residential developments, the City of San Clemente, and the original developers. The case was assigned to Judge Cannon in the Orange County Complex Court.
The firm of Tharpe and Howell represented the two hundred unit Shorecliffs Mobile Homeowners Association, which is located at the base of the landslide.
While liability was disputed, it was generally agreed that the primary cause of the earth movement was saturated soils in an undeveloped canyon area between the plaintiffs' homes and the development near the toe of the slide.
The plaintiffs asserted the water that saturated the soils came from a number of sources. The plaintiffs claimed the City contributed because of a leaking storm drain and other water facilities in the canyon area. The plaintiffs asserted that the development near the toe of the slide and other neighboring properties irrigation and drainage practices contributed to the water build up. They also claimed the original developer was negligent in the way the grading for the homes was designed and executed, however, because the project was built thirty years ago the original developer had a viable statue of limitations defense.
In investigating the almost forty year of history of the area involved, Tharpe and Howell and its experts discovered the plaintiffs ocean view homes had been built on an ancient landslide area in the hills of San Clemente with a history of recent failures. They learned that the soils prevented water from percolating down into the soils, leading to a perched water condition near the surface. Other factors included the original developer's failure to properly seal scarps on the hillsides during the original grading, as well as the excessive water from the El Nino rains.
Plaintiffs claimed damages in excess of $35 million, including an approximate $27 million repair. Virtually all the defendants denied liability which prevented Ross Hart, the mediator, from moving the case anywhere close to settlement during the initial mediation leading to discovery and preparing for trial.
With Tharpe and Howell's involvement, they were successful in working with Mr. Hart to bring the defendants and their expert teams together to prepare an alternative repair plan for use at mediation, and at trial if necessary. The plan, which would repair the damaged lots and stabilize the landslide, was focused on buttressing the hillside as opposed to the use of extensive tie back systems, and was estimated to cost significantly less than that proposed by the plaintiffs.
In analyzing the affect of earth movement included in the alternate repair plan on their clients' property, the Tharpe and Howell attorneys noted the repair resulted in the creation of a large, flat parcel of land being created in the undeveloped canyon area that had not previously existed. The Tharpe and Howell attorneys conceived the idea that this parcel could be subdivided and sold, with the proceeds from the sale utilized to fund the repair to the canyon and the plaintiffs' homes. Seizing upon this concept, Mr. Hart and Judge Cannon, the trial judge, stayed the trial date and directed the settlement discussions to proceed in this direction.
After much hard work by all concerned, the Tharpe and Howell attorneys were successful in achieving a global settlement that included the creation of a new repair Limited Liability Company to repair the canyon and stabilize the landslide area. The LLC is funded by the City of San Clemente who advanced it in excess of $6 million. After the repairs are completed, the LLC will sell the newly created lots with the income being primarily used to reimburse the City for the money it advanced. The newly created lots and the homes constructed on them will be annexed and made part of the Tharpe and Howell clients' homeowners association. In addition to the canyon repair, the collective defendants and cross-defendants paid approximately $3 million to the plaintiffs to offset attorney and expert fees and other costs.
The settlement is a true "win-win" situation for all involved. The defendants and their insurers paid minimal in settlement compared with their potential indemnity and defense cost exposure. Not only will the plaintiffs get their homes back, but the canyon which has for many years caused problems for the neighboring developments, including the Tharpe and Howell clients, will finally be fixed. The settlement became final this month and the repairs have commenced.
Robert M. Freedman and Peter S. Bauman are the Tharpe and Howell attorneys who handled this matter. They can be contacted at (818) 205-9955.
West Coast Casualty is a Third Party Administrator, serving clients Nationwide from locations in Aliso Viejo, Corona, Covina, Irvine, Sacramento, San Diego, San Francisco, Simi Valley, and Tustin, California.
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