McColl Settlement Talks Fail; Case Sent Back to Trial Judge

Once-promising settlement talks over the city of Fullerton’s potential responsibility for the McColl hazardous waste dump have broken down, raising the likelihood that the already-prolonged dispute will move toward trial.

Two other groups of defendants--developers and oil companies--reportedly have already agreed to multimillion-dollar payments to settle their portion of the case, making Fullerton the sole remaining defendant.

About a dozen lawyers met this week in a last-ditch attempt to salvage an agreement in the last remaining portion of a second round of lawsuits involving the McColl dump. But the effort was thwarted primarily by a dispute--not between Fullerton and the 700 homeowners near the site who are suing, but between the city and some of its insurers, sources said.

The city’s financial responsibility is the last major question mark remaining in a dispute that is rooted in the World War II-era dumping of jet fuel waste at the McColl site in the western hills of the city, a site still awaiting cleanup four decades later.

Negligence Alleged

The lawsuits alleged that developers were negligent in building near the dump and that the city issued construction permits for the developments and failed to warn property buyers of the hazards.

Among the legal issues still in contention are guarantees being sought by some of the city’s insurers that they will be safeguarded from any future liability arising from the McColl controversy, guarantees that the city did not offer, sources close to the case said.

“We struck out,” said Superior Court Judge Jerrold S. Oliver, who is overseeing the settlement talks. “First we had a settlement, then we didn’t have a settlement.”

Frustrated by the turn of events, Oliver said he is sending the case back to its Superior Court trial judge, Tully H. Seymour. Seymour said Wednesday that he will now have to proceed toward trial with the remaining portion of the case.

Oliver, who is retiring from the bench next month, said a “fruitless” meeting late Tuesday “was the last try at settling this thing as far as I’m concerned. . . . There’s got to be some change in attitude among the parties if they’re going to avoid a trial.”

Attorney Richard G. Montevideo of Costa Mesa, representing Fullerton in the dispute, said this week’s settlement talks “didn’t go well, but there’s still a chance. . . . It’s always been a tough road to hoe in this case for the city.”

The responsibility of the city remains the main hurdle in the resolution of what has become known in legal circles as “McColl II.”

An initial round of lawsuits resulted in total payments of about $14 million to more than a hundred homeowners around the McColl site by numerous defendants, including the city, the county, developers who put up housing tracts on three sides of the site, and oil companies believed to have contaminated the area in the first place.

A second group of homeowners not involved in the first lawsuits filed suit in 1986, also claiming that they should have been warned about the contaminated state of the dump and the health problems it could cause. Residents near the site in the past have complained of headaches, nausea and respiratory problems and, in some cases, a high rate of miscarriages.

Developers and oil companies have agreed in recent months to make cash payments to 701 residents in the second lawsuit. But exact terms of the agreements have remained sketchy because the pacts have been sealed under court order.

Attorneys Manuel Hidalgo and Robert H. Sulknik, representing the residents, declined comment on the progress of the McColl II case.

But Hidalgo, asked about the reported dispute between the city and its insurers, said: “That’s something we (attorneys for the the residents) have no say in--there’s no fight over our end of the deal. . . . We’re not the issue anymore, and it’s a very sad state of affairs.”

He added: “I sincerely do not believe that this case will not settle. We’ve come so close, it would be an economic waste.”

No future settlement talks have been scheduled.