Delay Sought in Lawsuits Over Landslide : Negotiation: Dana Point asks homeowners for more time to seek settlement of claims filed after February disaster that destroyed 5 homes and blocked PCH.

City officials will ask a group of homeowners to delay suing for millions of dollars in damages caused by a massive February landslide that destroyed five bluff-top homes and still threatens 45 others.

The City Council on Tuesday night authorized the city attorney to seek a six-month delay in hope of reaching a settlement with the homeowners, who recently filed 29 claims asserting that the city was partly responsible for the Feb. 22 landslide.

Homeowners contend that the slide was caused by leaky underground water pipes and the failure of the cities of San Clemente and Dana Point to investigate the condition of the hillside. The slide occurred along the city’s southern boundary, cascading dirt and rubble 75 feet down the hillside onto Pacific Coast Highway.

The city has denied any responsibility, insisting that the coastal bluffs were prone to failure. However, the city has been negotiating with the homeowners to design a plan to clear the highway and stabilize the damaged bluffs.

The proposed six-month delay would give the city and homeowners a chance to agree on how to proceed without costly court battles, said Andy Anderson, the city’s emergency services coordinator.

“The whole intent is to avoid unnecessary litigation,” Anderson said. “We want to avoid a confrontation and adversarial relationship nobody wants.”

The homeowners, many represented by San Diego-based attorney Patrick E. Catalano, acknowledged when they filed the claims on July 15 that they were hoping to avoid taking the claims a step further by filing lawsuits.

The claims against the cities of Dana Point, San Clemente and several South County water and sewer agencies were necessary only to meet a deadline to preserve their right to sue, the homeowners said.

By state law, the homeowners had to file claims within six months of the slide or give up the right to seek damages from the cities and other agencies, said Dana Point City Atty. Jerry M. Patterson.

Similarly, the city has 45 days to respond to the claims, a deadline Patterson hopes homeowners will agree to extend until Feb. 28, 1994. Without the delay, the city would be forced to deny the claims, setting the stage for lawsuits to be filed in court, Patterson said.

“This keeps the parties from getting litigious and allows the negotiations to continue,” Patterson said.

Dana Point officials have designed a plan to clear debris from the highway and restore the bluffs through a combination of retaining walls and underground cables.

The California Coastal Commission is expected to rule Sept. 14 on the city’s request for a project permit.

Federal highway officials have indicated that the funding to clear the highway, estimated at $2 million, has been approved. All that remains is for the homeowners to approve the restoration plan and grant the city permission to work on their property, Anderson said.

“The crux of the issue now is we have their permisson to do the work,” Anderson said. “It will be done on the private property of eight homeowners.”