A couple whose ocean-view property in Palos Verdes Estates was undermined by escaping water from a faulty city storm drain will receive nearly $1.7 million under terms of a settlement reached this week.
The City Council in an emergency meeting Monday night approved the settlement, in which the city agrees to pay Richard and Anne Kazan $1.675 million in exchange for the five-bedroom house they built in 1976 on a lot of nearly half an acre at 1117 Palos Verdes Drive West.
"Yes, I'm happy," said Anne Kazan after the settlement was announced Monday afternoon in the courtroom of Torrance Superior Court Judge George Perkovich Jr., where 19 attorneys worked out the settlement over several days. A trial date was to have been set Monday if the agreement had not been reached.
"The settlement was not as much as we had hoped to receive, but it allows us to put animosity in the past and go on with our lives," said Richard Kazan.
In announcing unanimous approval of the settlement, Mayor Ronald B. Florance said, "We're pleased that we were able to settle this matter with minimal amount of exposure and cost to the city. The city was well served from a cost standpoint."
Cost to Be Split
Nine of the insurance carriers that covered the city during the period when the house was built and problems emerged will split the cost.
Three other insurance companies that provided the city coverage during that period disputed liability and will not contribute to the settlement. City Atty. Mark Allen said the city may sue them to recoup nearly $200,000 in legal fees.
The Kazan suit was only one of several legal actions against the city that allege negligence in designing storm drains in the Bluff Cove area. Eight suits asking for about $2 million each remain, but Judge Perkovich said the Kazan settlement is not to be considered a precedent.
The Kazans claimed in their suit that during construction of their home, they told the city that a storm drain on the north side of their property was inadequately designed and maintained. The Kazans offered to split the cost of building a new drain, but the city refused.
The Kazans were required to extend their yard drain down the 250-foot cliff to the ocean. The city storm drain, however, extended less than halfway down the cliff. The Kazans claim that water escaped from the faulty city storm drain and undermined the cliff.
In September, 1982, a 25-foot strip along the edge of the property collapsed into the ocean. In March, 1983, another 10-foot strip fell off. Although the property was not officially declared unsafe, the Kazans moved out of their home on the advice of a geologist. They now live in Rancho Palos Verdes.
Palos Verdes Estates has a 10-year, $8-million plan to reconstruct its entire storm drain system, built in the 1920s and upgraded in the 1950s, according to City Manager Tom Devereux. He said the storm drains in the Bluff Cove area have already been rebuilt at a cost of more than $800,000.
"At this stage I just want bygones to be bygones," said Richard Kazan, "but if the city had allowed me back then to pay half the cost of a new storm drain, I could have saved it a lot of money."
The Bluff Cove suits are not related to another group of suits by Palos Verdes Peninsula homeowners over land slippage in other areas.