Water district pipe leaks, damages commercial buildings. Contra Costa County.

Summary

Public water line leak alleged to damage commercial buildings. $331,000 net verdict after defendant had offered $1 million per CCP 998.

The Case

Case Name: Kelly v. Contra Costa Water District
Court and Case Number: Contra Costa Superior Court / C10-01388
Date of Verdict or Judgment: Friday, August 09, 2013
Date Action was Filed: Monday, May 10, 2010
Type of Case: Dangerous Condition Public Property, Real Estate Condemnation
Judge or Arbitrator(s): Hon. Laurel Brady
Plaintiffs:
Wayne Kelly and Byron Kelly, owners of StoreMaster self storage.
Defendants:
Contra Costa Water District (CCWD) operated a water pipeline adjacent to plaintiffs’ property.
Type of Result: Jury Verdict

The Result

Gross Verdict or Award: $414,000 For trespass of water, only.
Net Verdict or Award: $331,200
Award as to each Defendant:
Judgment entered 8/9/13.

Jury verdict - Found liability only on the trespass cause of action, and found for defendant on the nuisance and dangerous condition of public property causes of action. Jury determined damage award.

Bench verdict - For defendant as to the inverse condemnation cause of action.
Contributory/Comparative Negligence: 20%
Economic Damages:
$331,200
Trial or Arbitration Time: 23 days.
Jury Deliberation Time: 6 hours.
Jury Polls: Most were 12-0.
Post Trial Motions & Post-Verdict Settlements: Defendant filed a cost bill, seeking offset of $113,118, effectively reducing the judgment to $218,082. Plaintiffs have appealed the Court’s ruling for the defendant on the inverse condemnation cause of action.

The Attorneys

Attorney for the Plaintiff:
Law Office of Don Odell by Don Odell, Pleasanton.
Attorney for the Defendant:
Bold, Polisner, Maddow, Nelson, and Judson by Craig Judson and Sharon Nagle, Walnut Creek.

The Experts

Plaintiff's Technical Experts:
Daniel Rhoades, M.S., geotechnical engineer; Pleasant Hill.
Charles Allen, B.S., civil engineer, general contractor, San Rafael.
John Schneider, B.A., general contractor; Fremont.
Carl Touhey, B.S. , real estate broker; Emerald Hills.
Defendant's Technical Experts:
Patrick Lucia, Ph.D., geotechnical engineer, San Francisco.
Deron Van Hoff, M.S., civil engineer; San Francisco.
Michael Hughes, B.S., civil engineer; San Francisco.
Paul Brown, B.S., civil engineer, construction, Concord.

Facts and Background

Facts and Background:
Plaintiffs constructed a mini-storage facility in Pittsburg, California, in the early 1990s. There was a dispute as to when the plaintiffs first noticed cracking in the foundations of their property, but evidence was presented of patching of cracks prior to the water leak being discovered.

Defendant CCWD was first called to the property on 12/24/04 because the onsite manager noticed water ponding near the entrance to the property. Defendant monitored the property for the presence of water over the next few years and investigated the condition of the pipeline. Defendant was unable to determine the cause of the leak, but eventually determined that a repair was required, and made that repair in April, 2008.
Plaintiff's Contentions:
Contra Costa Water District operated a water pipeline adjacent to plaintiffs’ property, a mini-storage facility. Plaintiffs alleged the pipe leaked and caused damage to their property.

Plaintiffs' experts testified that leaking water from CCWD’s pipe traveled underground along an abandoned, buried roadway and caused damage at distant portions of plaintiffs’ property.

Plaintiffs contended that they could only repair the property by vacating all tenants and replacing the foundation throughout the site.
Defendant's Contentions:
Contra Costa Water District admitted that its water pipeline leaked for 3 1/2 years, but contended that the leak was small and only caused minimal damage at the site adjacent to the leak. Defendant further asserted that the majority of the damage at the site was caused by soils settlement and poorly constructed foundations.

Injuries and Other Damages

Physical Injuries claimed by Plaintiff:
None.
Plaintiffs originally sought $4.2 million, which was limited to $2.72 million during trial. Plaintiffs claimed $1.4 million in repair costs, $120,000 in lost rental income during repairs, and $1.2 million lost rental income during a “re-rental” period after repairs were completed.

Demands and Offers

Plaintiff Final Demand before Trial: $3,200,000
Plaintiff Demand during Trial: None.
Defendant §998 Offer: $1,000,000
Defendant Offer during Trial: High ($1,500,000) - Low ($500,000)

Additional Notes

Because defendant obtained a verdict lower than its CCP Section 998 offer, defendant is entitled to recover its costs. Further, the Court’s ruling in favor of defendant on the inverse condemnation cause of action precludes plaintiffs from recovering approximately $700,000 - $800,000 in attorney’s fees and litigation costs.

A critical issue in this case was the cause of damage at the site. Defense attorney said that discussions post-trial with jurors revealed jurors found defense expert Deron Van Hoff to be a particularly credible witness. The other major issue was how to repair the property. Jurors also revealed that they found the damage estimates by plaintiff's expert to be high.

Defense attorney said that jurors did not find credible the expert testimony that plaintiffs would lose $1.2 million during the ten-year re-rental period after proposed repairs.