The Case That Won’t Go Away : Lawyers Who Represented 240 Malibu Homeowners in Big Rock Suit Say That Although a Settlement Has Been Reached, the Land Is Still Moving and the Heartache Remains

Long after the last cent of the $97-million Big Rock Mesa landslide settlement is shelled out to Malibu homeowners, Ken Chiate will still be consumed by the case.

As a Big Rock Mesa homeowner, he can’t escape it. The slide, still active, is playing havoc with his sprawling hillside home. His tennis court is cracking. The tilting earth caused a water pipe to burst a few weeks ago. His swimming pool is steadily shifting. His master bathroom is useless.

Richard Norton doesn’t have to live on Big Rock Mesa to realize that the case won’t go away. He gets constant questions from his clients: How much will they have to pay the appraisers to determine the damage to their homes? How much can Los Angeles County continue to assess them for the improvements to stabilize the hillside? When will the get their money?

Five years after attorneys Chiate and Norton agreed to represent 240 Malibu homeowners in the huge, protracted legal battle over who should pay for damage caused by a massive 1983 landslide, there are still more questions than answers.

Thus, the two lawyers can say that although they won a victory for their clients, it didn’t merit a celebration. After the settlement last month, Norton said the many loose ends still dangling eliminated any desire to uncork champagne. He said the agreement merited “maybe some cheap white wine” at best.

Land Still Moving

“Only the litigation in Big Rock is over,” Chiate said. “The land is still moving and the despair and uncertainty remain. Big Rock is not over for anyone.”

Chiate and Norton have been credited by many of the key players in the settlement as the architects of the deal that erased the need for a colossal trial involving 275 lawyers that was expected to last up to five years. Despite the $97-million settlement, there doesn’t appear to be much joy on Big Rock, among the homeowners or the attorneys.

Chiate and Norton set out to prove that Los Angeles County, the California Department of Transportation and several other government agencies were responsible for the slide, one of the worst in state history.

But under the settlement they negotiated with attorneys from the county, the state and insurance agencies last month, none of the parties will admit responsibility for the landslide and the homeowners must waive future claims for slide damage.

Signed Reluctantly

In addition, the county can continue to assess the property owners untold thousands of dollars for a long-running project to pump water from the ground to stabilize the shifting hillside. As a result, many of the homeowners signed the settlement reluctantly, saying that that the financial agreement, which will pay the homeowners an average of $300,000, is just not enough.

“There’s no doubt that this is a substantial economic compromise for my clients,” Norton said. “I’m not a person who makes deals. I like to have a jury decide right and wrong.” But because the case threatened to drag on so long, “this deal is something that I enthusiastically recommended,” he said. “It was the only realistic way for this case to be resolved.”

It was natural that Norton, whose firm, Fadem, Berger & Norton specializes in land-use litigation, would be involved in Big Rock Mesa. Norton, 42, has handled dozens of lawsuits involving landslides throughout Southern California. He won a multimillion-dollar settlement from the city of Los Angeles for some Potrero Canyon homeowners in Pacific Palisades shortly after the Big Rock Mesa slide.

But Chiate’s entry into the Big Rock legal sweepstakes was unexpected. In his law career he has usually fought for the other side. Chiate, 47, handles product liability cases for Lillick & McHose and has worked on numerous fuel tank explosion and Jeep roll-over cases for the Ford Motor Co. and American Motors Co.

He got involved in Big Rock only because he lived on Big Rock Mesa and decided to file damage claims on his own behalf and for some of his affluent neighbors, including singer Olivia Newton-John.

Thus began a sometimes rancorous but usually cooperative relationship between the two men. They decided to pool their resources although they represented different clients with different interests, despite their contrasting personal styles: Norton, studious and measured; Chiate, clever and caustic.

Other attorneys involved in the settlement, including some who battled them day and night for the better part of five years, said that the two men, along with Norton’s partner Marlena Mouser and Chiate’s associate John Cadarette, presented an extremely formidable legal team .

One lawyer called Chiate “dangerously brilliant,” and almost every attorney involved in the case acknowledged that Norton has few peers in the field of land-use litigation. Some attorneys involved in the settlement felt differently. One said his true feelings about the two lawyers couldn’t be printed in a family newspaper.

“They are creative, inventive lawyers who managed to apply the maximum amount of pressure they could . . . to reach a resolution for their clients,” said David Casselman, one of the attorneys hired by the county, who argued openly with the two men during a recent trial. “They were the toughest I’ve ever come up against.”

Peter Anderson, who handled settlement negotiations for the county, said the pair remained undaunted during years of heated negotiations and numerous trials in the case.

“We’re merely gladiators in three-piece suits, and those two did very well in the battle,” Anderson said. “They are both excellent attorneys and the best measure of that is that they won a fine settlement for their clients.”

Now that most of the case is behind them, Chiate and Norton laugh about their relationship, likening themselves to Mutt and Jeff. But they admit to some rocky times during the lengthy legal odyssey. They fought. And negotiated. Fought. And negotiated.

Millions in Fees

But mostly, they plotted strategy. They traded good cop, bad cop roles during settlement conferences, taking turns storming out of meetings, while the other adopted a peace-keeping role.

And they both believed they would win--several years ago.

“We went wrong like everybody else did in this case, in underestimating the scale of the problems involved,” Norton said. “Big Rock was a $100-million plus problem and we didn’t anticipate the scale of effort required for that kind of problem, nor the county’s and Caltrans’ interest.”

Instead it took eight separate trials involving Big Rock homeowners and the threat of the largest civil trial in the nation to finally reach an agreement in the case.

A quick tour of Norton’s law office mirrors the magnitude of the 5-year-old case. Four rooms, including one labeled Big Rock, have been set aside to store documents in the case. There is even a separate Big Rock phone line.

For their efforts, their law firms will be well compensated. Chiate’s firm, which represented nearly 190 homeowners, will receive more than $10 million, while Norton’s company, which handled about 50 property owners, will take in about $5.5 million.

The settlement comes after several enormous setbacks, including one that threatened to imperil all the homeowner suits against the government agencies last year. The state Court of Appeal overturned a nearly $3-million judgment against Los Angeles County in a test case that could have made taxpayers liable for more than $200 million being sought by the homeowners.

‘Back to Zero’

Norton, who had won the case for August and Margaret Hansch in Los Angeles Superior Court three years earlier, likened the appeals court decision to a case “where a victory for all the people was just one motion away, and then, just like that, we were completely back to zero. There’s no way to overstate the impact of that decision.”

But the state Supreme Court, while upholding the appeals court decision, declined to make the ruling law, clearing the way for subsequent trials for the remaining Malibu property owners, and opening a route for the agreement.

Chiate said a key factor in the settlement was the attorneys’ decision to pursue a separate settlement with the homeowners’ insurance carriers. He said the threat of a separate agreement that would have allowed the homeowners to continue litigation against government agencies helped convince the defendants that they would face economic disaster if they didn’t settle. Ultimately, the county agreed to pay the homeowners $35 million, Caltrans will pay $40 million and the insurance companies will pay the remaining $22 million.

An appraiser must still be hired to decide the extent of the damage to each home and determine the amount each property owner should receive.

On Tuesday, the County Board of Supervisors approved an elaborate storm drain project on Big Rock to prevent a repeat of the devastating 1983 landslide, but still hasn’t determined how much each homeowner will be assessed for the work. And the Legislature must still approve Caltrans’ portion of the settlement.

Despite the agreement, the lawyers admit that they are frustrated but not surprised by the response of many homeowners, who have openly criticized the agreement. “It’s just not right that we have to settle for a lot less money than we deserve,” said homeowner Libby Sparks. “But people here are just so sick of the whole situation that they want to put it behind them.”

Said Norton: “Some of these people lost their homes, something that they’ve worked their whole lives for. We didn’t solve that problem. We only got them partial compensation. But that doesn’t make the hurt go away.”

Or the landslide. Chiate said it would take more than $500,000 just to stabilize the hillside on which his home rests. Meanwhile, the cracks are getting bigger. The shifting increases. And the uneasiness remains. The battle of Big Rock could last longer than the foundation under his house.

“No settlement is in the best interest of any one party,” he said. “And to get any settlement in this case, all the parties have to walk away a little unhappy. I know that as well as anyone.”