Recently disclosed details of a lawsuit settlement indicate the city and its insurance companies paid a premium for not settling at the first opportunity.
The city of Malibu paid $4.195 million in July to settle the lawsuit brought by homeowners on Las Flores Canyon Road whose properties were flooded after a landslide blocked water from flowing down the creek.
“If we could have [settled back then], we would have,” said City Attorney Christi Hogin, but the city’s insurance companies were opposed. According to Hogin, of the $4.195 million ultimately paid, $400,000 came from the city’s general fund, with the rest split among two commercial insurance companies and a “joint powers authority” made up of a group of municipalities, including Malibu, that insure themselves in a collective fund.
“It’s been a long and winding road [but] I’m pleased with the settlement,” said Hogin. It was reached after almost eight years of litigation. Said plaintiffs’ attorney Craig Collins of Berger & Norton, “They were exhausted by it and financially desperate in some cases.”
What caused the landslide remains in dispute. According to Collins, it started in the mid-1980s after the county made cuts into the hillside west of the creek to repair Rambla Pacifico Road. Collins argued the cuts undermined support of the hillside, which began sliding easterly into the creek.
The city argued, “If it’s not an act of God, then it’s an act of the county.” The county cut into the hillside before Malibu was even incorporated, said Hogin. The court of appeal 2 2 ruled that the city stepped into the county’s shoes after incorporation.
The county settled with the homeowners in 1996 for $2 million up front plus a promise of $3 million more if the city was not found liable. The city could have joined the settlement back then, according to Collins, but refused to do so. “The city could definitely have settled for less money two years ago,” he said.
More than money changed hands because the city acquired the plaintiff homeowners’ properties in exchange. “For the plaintiffs, the case is about money,” said Hogin, but for the city the ultimate agenda is to stabilize the continuing landslide, to create an alternate access road for Rambla Pacifico and possibly to change the drainage in the area. “I’ve said all along that this problem is not going to be solved in the courtroom,” Hogin said.