Bottom Line Pushed County to Settle Suit by Landslide Victims
Los Angeles County faced economic disaster if it continued to resist settling with 240 landslide victims on Big Rock Mesa in Malibu, but it still took some intense lobbying of county officials to arrive at a tentative $97-million agreement, several of the chief negotiators said Wednesday.
The county faced costs of more than $200 million if it lost a massive trial scheduled to begin next month, plus another $20 million in legal fees if the case lasted more than three years as expected.
Eventually, the county yielded, both because of the costs it faced and from pressure to settle from the California Department of Transportation and dozens of insurance firms, which had already suffered huge financial setbacks in the case.
“It was a case where the bottom line became how to stop the economic hemorrhaging,” said attorney Al Buckner, who represented several of the insurance companies. “Ultimately, it became a numbers game.”
The settlement announced Tuesday ended nearly five years of litigation to decide who was responsible for the damage to and destruction of 250 Malibu homes during a 1983 landslide. Under the terms, the county will pay the property owners $35 million, Caltrans will furnish $40 million and the insurance companies will contribute the remaining $22 million.
Particularly persuasive in the negotiations was attorney Karl Samuelian, one of Gov. George Deukmejian’s chief fund-raisers who was hired by the county to work on the case last year, and the Superior Court judge in the case, Robert I. Weil.
Weil, who has been trying to get a settlement in the Big Rock case for more than three years, is credited by all the lawyers in the case with breaking the log jam. He interrupted a vacation to attend the key settlement meeting last week.
“Maybe it was the Christmas spirit or maybe it was the holidays, but somehow they all decided that maybe it would be wise to abandon these extreme positions,” Weil said. “I’m paid to do only one thing, and that’s keep the puck out of the net. The net is going to trial.
“When all the sides looked at what they faced, it was my job to show them that it might be better (to settle) than slugging it out for three or four years. This settlement fits what I call the equal-stink test, where if everyone thinks it stinks a little and is a little unhappy with it, then it’s probably the right settlement. I think that’s what we have here.”
Samuelian presented his case to the Board of Supervisors during a closed meeting Tuesday, emerging with the final piece needed to swing the deal.
“The cost of the defense and the uncertainty of what the future would bring, I think, culminated in the settlement,” Samuelian said. “I was one of the few people in a detached position who could assess the case in global terms.”
The homeowners had sued the county and the state for approving development of Big Rock Mesa with seepage pits and horizontal drains rather than sewers. They claimed that the county’s action contributed to a rise in ground water that triggered the September, 1983, landslide.
The county responded by filing more than 300 countersuits against past and present Big Rock Mesa homeowners, arguing that property owners caused the slide by allowing water to build up from septic tanks, showers and toilets instead of following drainage procedures.
The tentative settlement will erase the need for the massive trial with more than 275 lawyers involved.
It also means that none of the parties involved will have to admit responsibility for the landslide at a time when the homeowners’ attorneys said they had some explosive evidence to show a jury. The lawyers said they could show from internal county memos that county officials were aware of the potential danger to Big Rock homeowners and failed to warn them two years before the landslide struck and turned some million-dollar homes into rubble.
However, the homeowners were ready for a settlement, said Richard Norton, one of the homeowners’ lead attorneys.
“There was a series of interdependent pieces that had to fall into place before we could reach an agreement,” he said. “But the key factor in all this is that the case had grown to a point where it had become completely unmanageable. It was beyond control in both its size and its cost.”
Combatants in the massive legal struggle point to a meeting held in Santa Monica on Dec. 29 as one of the turning points in the proposed settlement although that was not the meeting’s initial purpose.
It was held to find a way for the attorneys to reach a settlement involving 16 additional Big Rock Mesa homeowners who had declined to participate in the settlement. Those property owners are still trying to reach a separate agreement.
Six at Meeting
Present at the meeting was Judge Weil and five attorneys representing 170 of the homeowners’ insurance companies involved in the case: Buckner, Charles Bennett, Raoul Martinez, Jon Kodani and Gene Weisberg. The meeting came three days after Weil spent most of Dec. 26 on the phone with settlement lawyers, trying to get them to agree to specific payment figures for the homeowners.
Although parts of the settlement had already been worked out, the attorneys spent all day in Kodani’s law office trying to figure out a way to achieve a “global” agreement that would finally dispense with the entire case.
The lawyers were reluctant to strike a deal that left out the 16 holdout homeowners but decided to work through lunch and ended up spending nearly eight hours conferring and arguing. They made more than a dozen calls to Norton and to Peter Anderson, an attorney in Samuelian’s firm.
By the end of the day, a tentative settlement had been reached, dependent on the county’s approval of the $35 million the following Tuesday. The county’s offer, in turn, was based on the insurers agreeing to add $22 million to the pot. Caltrans had already said its settlement cost was based on the county’s decision to pay a certain amount. The attorneys reluctantly agreed to leave the other 16 homeowners out of the settlement and resolve as much of the case as they could.
“But for that week and that meeting, we would still be sitting in a settlement conference,” Buckner said. “By the time we broke, we knew we had a deal. As long as everybody did what they said they would do.”
For his efforts, the lawyers gave Judge Weil one of the baseball caps they had made with an emblem of a leaking toilet. The emblem is inscribed, “The Battling Bastards of Big Rock.”
KEY FIGURES IN THE BIG ROCK AGREEMENT
Karl Samuelian, of Parker, Milliken, Clark, O’Hara & Samuelian. Gov. Deukmejian’s chief fund-raiser. Samuelian, an attorney hired by the county, is credited with persuading the county counsel’s office and the Board of Supervisors to settle for $35 million.
Superior Court Judge Robert I. Weil. Weil is credited by all with getting the players to come up with the final money figures they needed to reach a settlement. He took calls day and night.
Al Buckner of Simon, Buckner & Haile. Buckner represented seven insurance firms for 21 Big Rock homeowners; was one of the six attorneys involved in a key settlement meeting.