$97-Million Settlement Over Malibu Landslide : Agreement Requires County, Caltrans, Insurers to Pay Homeowners for Big Rock Mesa Damage

Attorneys for Los Angeles County, the California Department of Transportation, dozens of insurance companies and the attorneys representing 240 Malibu hillside homeowners reached a tentative settlement Tuesday that will pay the property owners $97 million for damage they suffered during a massive 1983 landslide.

The settlement was reached after 4 1/2 years of litigation over who was responsible for the damage from the Big Rock Mesa landslide, one of the worst in state history, in which 250 Malibu homes collapsed, cracked or slid off their foundations. Under the agreement, Los Angeles County will pay $35 million to the Malibu homeowners, Caltrans will pay $40 million and the insurance companies will contribute the remaining $22 million. The money will be paid over a three-year period.

About $200,000 Apiece

After lawyers’ fees are paid from the settlement, the homeowners will receive about $200,000 apiece, according to the attorneys for the Malibu residents. Sixteen homeowners who declined to be part of the settlement are trying to reach a separate agreement.

As a result of the settlement, none of the parties is to admit responsibility for the landslide and the homeowners agree to drop future claims against the county, the state and the insurance companies.

The settlement will erase the need for a massive trial, with most of the 240 homeowners as plaintiffs, that had been scheduled in Los Angeles next month. A special courtroom three times larger than any other in the United States was to have been built for that trial. It also will cancel a separate trial involving seven other Big Rock Mesa homeowners.

“We’re satisfied that this was the best agreement we could get,” homeowners’ attorney Ken Chiate said after the settlement was announced by Los Angeles Superior Court Judge Robert I. Weil. “The vast majority of the homeowners wanted out. It’s been a long five years. No matter how much money we got, there’s no way it could pay for the damage some of them suffered.”

Ed Edelman, chairman of the Board of Supervisors, announced the county’s part of the settlement in the board’s chambers after a closed session Tuesday afternoon. The county, which has spent more than $7 million defending the case and had been expected to spend $13 million more in the massive trial, had been the main recent stumbling block to a settlement.

“This settlement will avoid enormous litigation costs for all parties, remove a continuing burden from the court calendar and uncertainty from the county budget,” Edelman said. “It is also fair to the homeowners.”

Not all of the Big Rock homeowners agreed, however. Actor Pernell Roberts said the settlement does not punish the parties who were responsible for the landslide.

“We will never have an opportunity to get at the real heart of the crime,” he said. “This was a tragic situation where many people will never come close to being fully compensated for their loss and the people responsible for what happened will continue to make bad judgments involving innocent people.

“What this case shows is that the judicial system is not equipped to handle events of this magnitude.”

The homeowners had sued the county and the state for more than $200 million in damages for approving development of the Big Rock Mesa area above Pacific Coast Highway with seepage pits and horizontal drains rather than with sewers. They claimed that the county’s action contributed to a rise in ground water that triggered the September, 1983, landslide on Big Rock Mesa.

The slide caused some homes to collapse, cracked walls, floors, driveways, tennis courts and the winding roads in the expensive neighborhood. About 30 homes were condemned by the county as unsafe and the value of the others, many priced at more than $1 million, plummeted.

The county filed more than 300 countersuits against past and present homeowners, arguing that they were to blame for the disaster because they did not drain water from the mesa and contributed to the slide by using septic tanks, showers and toilets and refused to allow the county to build sewers there.

Caltrans agreed last year to pay $25 million to the homeowners to settle the lawsuits after the state was found liable by a Superior Court jury of contributing to the landslide by cutting through the hillside to build Pacific Coast Highway. Under Tuesday’s agreement, Caltrans will pay an additional $15 million. Those funds must still be approved by the Legislature and Gov. George Deukmejian.

The $35-million county portion of the agreement is the same settlement figure suggested early last year by Chiate and Richard Norton, the homeowners’ chief attorneys, and rejected by the the county’s lawyers. The county had suffered a series of legal setbacks in the Big Rock litigation recently, however, and gave indications last week that it would settle.

Suits Separated

The state Supreme Court ruled last year that a case won by the county against one Big Rock Mesa homeowner was not binding on the rest of the lawsuits. An attempt by the county to have the case dismissed was rebuffed by Superior Court Judge Maurice Hogan Jr.

Still, until last week, attorneys for the homeowners and the county were unable to reach any agreement or decide how the case should be tried. Chiate called the potential mega-trial a “mega-disaster,” and he and Norton had accused the county of wasting taxpayers’ money.

Hogan was scheduled to preside over the huge trial next month, and it was expected to be one of the longest and most expensive civil trials in the nation.

The trial would have involved more than 275 lawyers and was expected to last between two and five years. Attorneys’ fees in the case were expected to be more than $100 million.

Times City-County Bureau Chief Bill Boyarsky contributed to this story.